LEASE AGREEMENT
Dated as of August 29, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the PFG Real Estate Trust 1997-1,
as Lessor
and
PERFORMANCE FOOD GROUP COMPANY,
as Lessee
This Lease Agreement is subject to a security interest in favor of First
Union National Bank, as the agent for the Lenders and respecting the
Security Documents, as the agent for the Lenders and the Holders, to the
extent of their interests (the "Agent") under a Security Agreement dated as
of August 29, 1997, between First Security Bank, National Association,
not individually except as expressly stated therein, but solely as the Owner
Trustee under the PFG Real Estate Trust 1997-1 and the Agent, as
amended, modified, extended, supplemented, restated and/or replaced
from time to time in accordance with the applicable provisions thereof.
This Lease Agreement has been executed in several counterparts. To the
extent, if any, that this Lease Agreement constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction), no security interest in this Lease Agreement may
be created through the transfer or possession of any counterpart other than
the original counterpart containing the receipt therefor executed by the
Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I 1
1.1 Definitions. 1
1.2 Interpretation. 2
ARTICLE II 2
2.1 Property. 2
2.2 Lease Term. 2
2.3 Title. 3
2.4 Lease Supplements. 3
ARTICLE III 3
3.1 Rent. 3
3.2 Payment of Basic Rent. 4
3.3 Supplemental Rent. 4
3.4 Performance on a Non-Business Day. 5
3.5 Rent Payment Provisions. 5
ARTICLE IV 5
4.1 Taxes; Utility Charges. 5
ARTICLE V 6
5.1 Quiet Enjoyment. 6
ARTICLE VI 6
6.1 Net Lease. 6
6.2 No Termination or Abatement. 7
ARTICLE VII 7
7.1 Ownership of the Properties. 7
ARTICLE VIII 8
8.1 Condition of the Properties. 8
8.2 Possession and Use of the Properties. 9
8.3 Integrated Properties. 10
ARTICLE IX 11
9.1 Compliance With Legal Requirements, Insurance
Requirements and Manufacturer's Specifications
and Standards. 11
ARTICLE X 11
10.1 Maintenance and Repair; Return. 11
10.2 Environmental Inspection. 13
ARTICLE XI 13
11.1 Modifications. 13
ARTICLE XII 14
12.1 Warranty of Title. 14
ARTICLE XIII 15
13.1 Permitted Contests Other Than in Respect of Indemnities. 15
ARTICLE XIV 16
14.1 Public Liability and Workers' Compensation Insurance. 16
14.2 Permanent Hazard and Other Insurance. 17
14.3 Coverage. 18
ARTICLE XV 19
15.1 Casualty and Condemnation. 19
15.2 Environmental Matters. 22
15.3 Notice of Environmental Matters. 23
ARTICLE XVI 24
16.1 Termination Upon Certain Events. 24
16.2 Procedures. 24
ARTICLE XVII 24
17.1 Lease Events of Default. 24
17.2 Surrender of Possession. 28
17.3 Reletting. 28
17.4 Damages. 29
17.5 Power of Sale. 30
17.6 Final Liquidated Damages. 30
17.7 Environmental Costs. 31
17.8 Waiver of Certain Rights. 31
17.9 Assignment of Rights Under Contracts. 31
17.10 Remedies Cumulative. 32
ARTICLE XVIII 32
18.1 Lessor's Right to Cure Lessee's Lease Defaults. 32
ARTICLE XIX 32
19.1 Provisions Relating to Lessee's Exercise of
its Purchase Option. 32
19.2 No Purchase or Termination With Respect to Less than
All of a Property. 33
ARTICLE XX 33
20.1 Purchase Option or Sale Option-General Provisions. 33
20.2 Lessee Purchase Option. 34
20.3 Third Party Sale Option. 35
ARTICLE XXI 36
21.1 [Intentionally Omitted]. 36
ARTICLE XXII 36
22.1 Sale Procedure. 36
22.2 Application of Proceeds of Sale. 39
22.3 Indemnity for Excessive Wear. 39
22.4 Appraisal Procedure. 40
22.5 Certain Obligations Continue. 40
ARTICLE XXIII 41
23.1 Holding Over. 41
ARTICLE XXIV 41
24.1 Risk of Loss. 41
ARTICLE XXV 42
25.1 Assignment. 42
25.2 Subleases. 42
ARTICLE XXVI 43
26.1 No Waiver. 43
ARTICLE XXVII 43
27.1 Acceptance of Surrender. 43
27.2 No Merger of Title. 43
ARTICLE XXVIII 44
28.1 Incorporation of Covenants. 44
ARTICLE XXIX 45
29.1 Notices. 45
ARTICLE XXX 45
30.1 Miscellaneous. 45
30.2 Amendments and Modifications. 45
30.3 Successors and Assigns. 45
30.4 Headings and Table of Contents. 45
30.5 Counterparts. 46
30.6 GOVERNING LAW. 46
30.7 Calculation of Rent. 46
30.8 Memoranda of Lease and Lease Supplements. 46
30.9 Allocations between the Lenders and the Holders. 46
30.10 Limitations on Recourse. 47
30.11 WAIVERS OF JURY TRIAL. 47
30.12 Exercise of Lessor Rights. 47
30.13 SUBMISSION TO JURISDICTION; VENUE;ARBITRATION. 47
30.14 USURY SAVINGS PROVISION. 49
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No.
____
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of August 29, 1997 (as
amended, modified, extended, supplemented, restated and/or replaced
from time to time, this "Lease") is between FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, having its
principal office at 79 South Main Street, Salt Lake City, Utah 84111, not
individually, but solely as the Owner Trustee under the PFG Real Estate
Trust 1997-1, as lessor (the "Lessor"), and PERFORMANCE FOOD
GROUP COMPANY, a Tennessee corporation, having its principal place
of business at 6800 Paragon Place, Suite 500, Richmond, Virginia 23230,
as lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the
Participation Agreement and the Agency Agreement, Lessor will (i)
purchase or ground lease various parcels of real property, some of which
will (or may) have existing Improvements thereon, from one (1) or more
third parties designated by Lessee and (ii) fund the acquisition,
installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of the Properties by the
Construction Agent; and
B. WHEREAS, the Basic Term shall commence with respect
to each Property upon the Property Closing Date with respect thereto;
provided, Basic Rent with respect thereto shall not be payable until the
applicable Rent Commencement Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee
desires to lease from Lessor, each Property;
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
1.1 Definitions.
Capitalized terms used but not otherwise defined in this
Lease have the respective meanings specified in Appendix A to the
Participation Agreement of even date herewith (as such may be amended,
modified, extended, supplemented, restated and/or replaced from time to
time, the "Participation Agreement") among Lessee, the Construction
Agent, First Security Bank, National Association, not individually, except
as expressly stated therein, as the Owner Trustee under the PFG Real
Estate Trust 1997-1, the Holders, the Lenders and the Agent.
1.2 Interpretation.
The rules of usage set forth in Appendix A to the
Participation Agreement shall apply to this Lease.
ARTICLE II
2.1 Property.
Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property,
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, each
Property.
2.2 Lease Term.
The basic term of this Lease with respect to each Property
(the "Basic Term") shall begin upon the Property Closing Date for such
Property (in each case the "Basic Term Commencement Date") and shall
end on the second annual anniversary of the Initial Closing Date (the
"Basic Term Expiration Date"), unless the Basic Term is earlier
terminated or the term of this Lease is renewed (as described below) in
accordance with the provisions of this Lease. Notwithstanding the
foregoing, Lessee shall not be obligated to pay Basic Rent until the Rent
Commencement Date with respect to such Property.
To the extent no Default or Event of Default has occurred
and is continuing, and if Lessee has not provided written notice to Lessor
and the Agent at least one hundred twenty (120) days prior to the first day
of the applicable Renewal Term of its determination to exercise its
purchase option or sale option under Article XX hereof, the term of this
Lease for each Property shall be automatically extended for up to three (3)
additional terms each of one (1) year's duration from the Basic Term
Expiration Date (each, a "Renewal Term"); provided, that the expiration
date for the final Renewal Term for each Property shall not be later than
the fifth annual anniversary of the Initial Closing Date, unless such later
expiration date has been expressly agreed to, at the request of Lessee, in
writing by each of Lessor, the Agent, the Lenders and the Holders in their
sole discretion.
2.3 Title.
Each Property is leased to Lessee without any
representation or warranty, express or implied, by Lessor and subject to
the rights of parties in possession (if any), the existing state of title
(including without limitation the Permitted Liens) and all applicable Legal
Requirements. Lessee shall in no event have any recourse against Lessor
for any defect in Lessor's title to any Property or any interest of Lessee
therein other than for Lessor Liens.
2.4 Lease Supplements.
On or prior to each Basic Term Commencement Date, Lessee and
Lessor shall each execute and deliver a Lease Supplement for the Property
to be leased effective as of such Basic Term Commencement Date in
substantially the form of Exhibit A hereto. Lessee hereby irrevocably
appoints Lessor as Lessee's attorney-in-fact, with power of substitution, in
the name of Lessor or the name of Lessee or otherwise, to execute any
Lease Supplement which Lessee fails or refuses to sign in accordance with
the terms of this Section 2.4 (including without limitation any Lease
Supplement required in connection with any Construction Period Property
upon the occurrence of an Agency Agreement Event of Default).
ARTICLE III
3.1 Rent.
(a) Lessee shall pay Basic Rent in arrears on each
Payment Date, and on any date on which this Lease shall terminate
with respect to any or all Properties during the Term; provided,
however, with respect to each individual Property Lessee shall
have no obligation to pay Basic Rent with respect to such Property
until the Rent Commencement Date with respect to such Property
(notwithstanding that Basic Rent for such Property shall accrue
from and including the Scheduled Interest Payment Date
immediately preceding such Rent Commencement Date).
(b) Basic Rent shall be due and payable in lawful
money of the United States and shall be paid by wire transfer of
immediately available funds on the due date therefor (or within the
applicable grace period) to such account or accounts at such bank
or banks as Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all
or any portion of any Property when delivered by Lessor, whether
or not attributable to any act or omission of Lessor, the
Construction Agent, Lessee or any other Person or for any other
reason whatsoever, shall not delay or otherwise affect Lessee's
obligation to pay Rent for such Property in accordance with the
terms of this Lease.
3.2 Payment of Basic Rent.
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 Supplemental Rent.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable,
and if Lessee fails to pay any Supplemental Rent within three (3) days
after the same is due, 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. All such payments of Supplemental Rent shall
be in the full amount thereof, without setoff, deduction or reduction.
Lessee shall pay to Lessor, as Supplemental Rent due and owing to
Lessor, among other things, on demand, to the extent permitted by
applicable Legal Requirements, (a) any and all unpaid fees, charges,
payments, amounts and other obligations (other than the obligations of
Lessor to pay the principal amount of the Loans and the Holder Amount)
due and owing by Lessor, in any capacity, under the Credit Agreement,
under the Trust Agreement and/or under any other Operative Agreement
(including without limitation any amounts owing to the Lenders under
Section 2.11, Section 2.12, Section 2.13 and Section 9.5 of the Credit
Agreement and any amounts owing to the Holders under Section 3.9 or
Section 3.10 of the Trust Agreement) and (b) interest at the applicable
Overdue Rate on any installment of Basic Rent not paid when due (subject
to the applicable grace period) 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 appropriate Person (subject to any applicable grace
period) 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. It shall be an additional
Supplemental Rent obligation of Lessee to pay to the appropriate Person
all rent and other amounts when such become due and owing from time to
time under each Ground Lease and without the necessity of any notice
from Lessor with regard thereto. The expiration or other termination of
Lessee's obligations to pay Basic Rent hereunder shall not limit or modify
the obligations of Lessee with respect to Supplemental Rent. Unless
expressly provided otherwise in this Lease, in the event of any failure on
the part of Lessee to pay and discharge any Supplemental Rent as and
when due, Lessee shall also promptly pay and discharge any fine, penalty,
interest or cost which may be assessed or added for nonpayment or late
payment of such Supplemental Rent, all of which shall also constitute
Supplemental Rent.
3.4 Performance on a Non-Business Day.
If any Basic Rent is required hereunder on a day that is not
a Business Day, then such Basic Rent shall be due on the corresponding
Scheduled Interest Payment Date. If any Supplemental Rent is required
hereunder on a day that is not a Business Day, then such Supplemental
Rent shall be due on the next succeeding Business Day.
3.5 Rent Payment Provisions.
Lessee shall make payment of all Basic Rent and
Supplemental Rent when due (subject to the applicable grace periods)
regardless of whether any of the Operative Agreements pursuant to which
same is calculated and is owing shall have been rejected, avoided or
disavowed in any bankruptcy or insolvency proceeding involving any of
the parties to any of the Operative Agreements. Such provisions of such
Operative Agreements and their related definitions are incorporated herein
by reference and shall survive any termination, amendment or rejection of
any such Operative Agreements.
ARTICLE IV
4.1 Taxes; Utility Charges.
Lessee shall pay or cause to be paid all Impositions with
respect to the Properties and/or the use, occupancy, operation, repair,
access, maintenance or operation thereof and all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other rents,
utilities and operating expenses of any kind or type used in or on any
Property and related real property during the Term. Upon Lessor's
request, Lessee shall provide from time to time Lessor with evidence of all
such payments referenced in the foregoing sentence. Lessee shall be
entitled to receive any credit or refund with respect to any Imposition or
utility charge paid by Lessee. Unless an Event of Default shall have
occurred and be continuing, the amount of any credit or refund received by
Lessor on account of any Imposition or utility charge paid by Lessee, net
of the costs and expenses incurred by Lessor in obtaining such credit or
refund, shall be promptly paid over to Lessee. All charges for Impositions
or utilities imposed with respect to any Property for a period during which
this Lease expires or terminates shall be adjusted and prorated on a daily
basis between Lessor and Lessee, and each party shall pay or reimburse
the other for such party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment.
Subject to the rights of Lessor contained in Sections 17.2,
17.3 and 20.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by
Lessor or anyone rightfully claiming by, through or under Lessor (other
than Lessee) with respect to any matters arising from and after the
applicable Basic Term Commencement Date.
ARTICLE VI
6.1 Net Lease.
This Lease shall constitute a net lease, and the obligations
of Lessee hereunder are absolute and unconditional. Lessee shall pay all
operating expenses arising out of the use, operation and/or occupancy of
each Property. Any present or future law to the contrary notwithstanding,
this Lease shall not terminate, nor shall Lessee be entitled to any
abatement, suspension, deferment, reduction, setoff, counterclaim, or
defense with respect to the Rent, nor shall the obligations of Lessee
hereunder be affected (except as expressly herein permitted and by
performance of the obligations in connection therewith) for any reason
whatsoever, including without limitation by reason of: (a) any damage to
or destruction of any Property or any part thereof; (b) any taking of any
Property or any part thereof or interest therein by Condemnation or
otherwise; (c) any prohibition, limitation, restriction or prevention of
Lessee's use, occupancy or enjoyment of any Property or any part thereof,
or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (d) any title defect, Lien or any matter affecting
title to any Property; (e) any eviction by paramount title or otherwise; (f)
any default by Lessor hereunder; (g) any action for bankruptcy,
insolvency, reorganization, liquidation, dissolution or other proceeding
relating to or affecting the Agent, any Lender, Lessor, Lessee, any Holder
or any Governmental Authority; (h) the impossibility or illegality of
performance by Lessor, Lessee or both; (i) any action of any
Governmental Authority or any other Person; (j) Lessee's acquisition of
ownership of all or part of any Property; (k) breach of any warranty or
representation with respect to any Property or any Operative Agreement;
(l) any defect in the condition, quality or fitness for use of any Property or
any part thereof; or (m) any other cause or circumstance whether similar or
dissimilar to the foregoing and whether or not Lessee shall have notice or
knowledge of any of the foregoing. The parties intend that the obligations
of Lessee hereunder shall be covenants, agreements and obligations that
are separate and independent from any obligations of Lessor hereunder
and shall continue unaffected unless such covenants, agreements and
obligations shall have been modified or terminated in accordance with an
express provision of this Lease. Lessor and Lessee acknowledge and
agree that the provisions of this Section 6.1 have been specifically
reviewed and subject to negotiation.
6.2 No Termination or Abatement.
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 any Person or any Governmental Authority, or any action with
respect to this Lease or any Operative Agreement which may be taken by
any trustee, receiver or liquidator of any Person or any Governmental
Authority or by any court with respect to any Person, or any Governmental
Authority. Lessee hereby waives all right (a) to terminate or surrender this
Lease (except as permitted under the terms of the Operative Agreements)
or (b) to avail itself of any abatement, suspension, deferment, reduction,
setoff, counterclaim or defense with respect to any Rent. Lessee shall
remain obligated under this Lease in accordance with its terms and 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, Lessee
shall be bound by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 Ownership of the Properties.
(a) Lessor and Lessee intend that (i) for financial
accounting purposes with respect to Lessee (A) this Lease will be
treated as an "operating lease" pursuant to Statement of Financial
Accounting Standards No. 13, as amended, (B) Lessor will be
treated as the owner and lessor of each Property and (C) Lessee
will be treated as the lessee of each Property, but (ii) for federal
and all state and local income tax purposes and bankruptcy
purposes (A) this Lease will be treated as a financing arrangement
and (B) Lessee will be treated as the owner of the Properties.
Notwithstanding the foregoing, neither party hereto has made, or
shall be deemed to have made, any representation or warranty as to
the availability of any of the foregoing treatments under applicable
accounting rules, tax law or bankruptcy law. Lessee shall claim
the cost recovery deductions associated with each Property, and
Lessor shall not, to the extent not prohibited by Law, take on its
tax return a position inconsistent with Lessee's claim of such
deductions.
(b) [Intentionally Omitted].
ARTICLE VIII
8.1 Condition of the Properties.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY
"AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF
TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY),
(C) ANY STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN
ACCURATE SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND
(E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF
AND/OR THE DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE
AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR SHALL
BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE,
HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS
FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION,
WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT NOR ANY
LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO
COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE BASIC TERM
COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH
PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS
LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH
THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE
BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE
MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT,
THE LENDERS AND THE HOLDERS, ON THE ONE (1) HAND, AND LESSEE, ON THE OTHER
HAND, ARE TO BE BORNE BY LESSEE.
8.2 Possession and Use of the Properties.
(a) At all times during the Term with respect to each
Property, such Property shall be a Permitted Facility and shall be
used by Lessee in the ordinary course of its business. Lessee shall
pay, or cause to be paid, all charges and costs required in
connection with the use of the Properties as contemplated by this
Lease. Lessee shall not commit or permit any waste of the
Properties or any part thereof.
(b) The address stated in Section 29.1 of this Lease is
the principal place of business and chief executive office of Lessee
(as such terms are used in Section 9-103(3) of the Uniform
Commercial Code of any applicable jurisdiction), and Lessee will
provide Lessor with prior written notice of any change of location
of its chief place of business or chief executive office. Regarding a
particular Property, each Lease Supplement correctly identifies the
initial location of the related Equipment and Improvements (if any)
and contains an accurate legal description for the related parcel of
Land. The Equipment and Improvements respecting each
particular Property will be located only at the location identified in
the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal
property or to or in any real property (except the Land identified in
the Lease Supplement in which such Equipment is also described)
in a manner that could give rise to the assertion of any Lien on
such item of Equipment by reason of such attachment or the
assertion of a claim that such item of Equipment has become a
fixture and is subject to a Lien in favor of a third party that is prior
to the Liens thereon created by the Operative Agreements.
(d) On the Basic Term Commencement Date for each
Property, Lessor and Lessee shall execute a Lease Supplement in
regard to such Property which shall contain an Equipment
Schedule that has a complete description of each item of
Equipment which is then a part of the Property, an Improvement
Schedule that has a complete description of each Improvement
which is then a part of the Property and a legal description of the
Land to be leased hereunder (or in the case of any Land subject to a
Ground Lease to be subleased hereunder) as of such date. All
Land subject to a Ground Lease shall be deemed to be ground
subleased from Lessor to Lessee as of the Basic Term
Commencement Date, and such ground sublease shall be in effect
until this Lease is terminated or expires, in each case in accordance
with the terms and provisions hereof. Lessee shall satisfy and
perform all obligations imposed on Lessor under each Ground
Lease. Simultaneously with the execution and delivery of each
Lease Supplement, such Equipment, Improvements, Land,
subleasehold interest in Land, all additional Equipment and
Improvements which are financed under the Operative Agreements
after the Basic Term Commencement Date and the remainder of
such Property shall be deemed to have been accepted by Lessee for
all purposes of this Lease and to be subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided that such exercise
will not impair the value, utility or remaining useful life of such
Property) shall be permitted to exercise all rights and remedies
under, all operation and easement agreements and related or similar
agreements applicable to such Property.
8.3 Integrated Properties.
On the Rent Commencement Date for each Property, such
Property and the applicable property subject to a Ground Lease shall
constitute (and for the duration of the Term shall continue to constitute) all
of the equipment, facilities, rights, other personal property and other real
property necessary or appropriate to operate, utilize, maintain and control
a Permitted Facility in a commercially reasonable manner.
ARTICLE IX
9.1 Compliance With Legal Requirements, Insurance
Requirements and Manufacturer's Specifications and Standards.
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all
Environmental Laws), all Insurance Requirements relating to the
Properties and all manufacturer's specifications and standards, including
without limitation the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration
thereof, whether or not compliance therewith shall require structural or
extraordinary changes in any Property or interfere with the use and
enjoyment of any Property, and (b) procure, maintain and comply with all
licenses, permits, orders, approvals, consents and other authorizations
required for the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration
of the Properties, unless the failure to procure, maintain and comply with
such items identified in subparagraphs (a) and (b) could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect. Lessor agrees to take such actions as may be reasonably requested
by Lessee in connection with the compliance by Lessee of its obligations
under this Section 9.1.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) Lessee, at its sole cost and expense, shall maintain
each Property in good condition, repair and working order
(ordinary wear and tear excepted) and in the repair and condition as
when originally delivered to Lessor and make all necessary repairs
thereto and replacements thereof, of every kind and nature
whatsoever, whether interior or exterior, ordinary or extraordinary,
structural or nonstructural or foreseen or unforeseen, in each case
as required by Section 9.1 and on a basis consistent with the
operation and maintenance of properties or equipment comparable
in type and function to the applicable Property, such that such
Property is capable of being immediately utilized by a third party
and in compliance with standard industry practice subject,
however, to the provisions of Article XV with respect to Casualty
and Condemnation.
(b) Lessee shall not use or locate any component of any
Property outside of any Approved State. Lessee shall not move or
relocate any component of any Property beyond the boundaries of
the Land (comprising part of such Property) described in the
applicable Lease Supplement, except for the temporary removal of
Equipment and other personal property for repair or replacement.
(c) If any component of any Property becomes worn
out, lost, destroyed, damaged beyond repair or otherwise
permanently rendered unfit for use, Lessee, at its own expense, will
within a reasonable time replace such component with a
replacement component which is free and clear of all Liens (other
than Permitted Liens) and has a value, utility and useful life at least
equal to the component replaced (assuming the component
replaced had been maintained and repaired in accordance with the
requirements of this Lease). All components which are added to
any Property shall immediately become the property of (and title
thereto shall vest in) Lessor and shall be deemed incorporated in
such Property and subject to the terms of this Lease as if originally
leased hereunder.
(d) Upon reasonable advance notice, Lessor and its
agents shall have the right to inspect each Property and all
maintenance records with respect thereto at any reasonable time
during normal business hours but shall not, in the absence of an
Event of Default, materially disrupt the business of Lessee.
(e) If, at any time, the aggregate appraised value of
Properties then subject to this Lease for which Lessor has received
an as-built Appraisal pursuant to the terms of Section 5.5 of the
Participation Agreement is less than $8,400,000 (the "Base
Amount"), then Lessee will cause an additional as-built Appraisal
or as-built Appraisals to be immediately delivered to Lessor in an
amount sufficient to cause such aggregate appraised value to equal
or exceed the Base Amount. In addition, Lessee shall cause to be
delivered to Lessor (at Lessee's sole expense) one (1) or more
additional Appraisals (or reappraisals of Property) as Lessor may
request if any one (1) of Lessor, the Agent, the Trust Company,
any Lender or any Holder is required pursuant to any applicable
Legal Requirement to obtain such Appraisals (or reappraisals) and
upon the occurrence of any Event of Default.
(f) Lessor shall under no circumstances be required to
build any improvements or install any equipment on any Property,
make any repairs, replacements, alterations or renewals of any
nature or description to any Property, make any expenditure
whatsoever in connection with this Lease or maintain any Property
in any way. Lessor shall not be required to maintain, repair or
rebuild all or any part of any Property, and Lessee waives the right
to (i) require Lessor to maintain, repair, or rebuild all or any part of
any Property, or (ii) make repairs at the expense of Lessor pursuant
to any Legal Requirement, Insurance Requirement, contract,
agreement, covenant, condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier
termination of this Lease with respect to a Property, if Lessee shall
not have exercised its Purchase Option with respect to such
Property and purchased such Property, surrender such Property to
Lessor pursuant to (i) the exercise of the applicable remedies upon
the occurrence of a Lease Event of Default or (ii) the second
paragraph of Section 22.1(a) hereof, or the third party purchaser, as
the case may be, subject to Lessee's obligations under this Lease
(including without limitation the obligations of Lessee at the time
of such surrender under Sections 9.1, 10.1(a)-(f), 10.2, 11.1, 12.1,
22.1 and 23.1).
10.2 Environmental Inspection.
If Lessee has not given notice of exercise of its Purchase
Option on the Expiration Date pursuant to Section 20.1 or for whatever
reason Lessee does not purchase a Property in accordance with the terms
of this Lease, then not more than one hundred twenty (120) days nor less
than sixty (60) days prior to the Expiration Date, Lessee at its expense
shall cause to be delivered to Lessor a Phase I environmental site
assessment recently prepared (no more than thirty (30) days prior to the
date of delivery) by an independent recognized professional reasonably
acceptable to Lessor, the Majority Holders and the Agent, and in form,
scope and content reasonably satisfactory to Lessor, the Majority Holders
and the Agent.
ARTICLE XI
11.1 Modifications.
(a) Lessee at its sole cost and expense, at any time and
from time to time without the consent of Lessor may make
modifications, alterations, renovations, improvements and
additions to any Property or any part thereof and substitutions and
replacements therefor (collectively, "Modifications"), and Lessee
shall make any and all Modifications required to be made pursuant
to all Legal Requirements, Insurance Requirements and
manufacturer's specifications and standards; provided, that: (i) no
Modification shall materially impair the value, utility or useful life
of any Property from that which existed immediately prior to such
Modification; (ii) each Modification shall be done expeditiously
and in a good and workmanlike manner; (iii) no Modification shall
adversely affect the structural integrity of any Property; (iv) to the
extent required by Section 14.2(a), Lessee shall maintain builders'
risk insurance at all times when a Modification is in progress; (v)
subject to the terms of Article XIII relating to permitted contests,
Lessee shall pay all costs and expenses and discharge any Liens
arising with respect to any Modification; (vi) each Modification
shall comply with the requirements of this Lease (including
without limitation Sections 8.2 and 10.1); and (vii) no
Improvement shall be demolished or otherwise rendered unfit for
use unless Lessee shall finance the proposed replacement
Modification outside of this lease facility. All Modifications shall
immediately and without further action upon their incorporation
into the applicable Property (1) become property of Lessor, (2) be
subject to this Lease and (3) be titled in the name of Lessor.
Lessee shall not remove or attempt to remove any Modification
from any Property. Each Ground Lease for a Property shall
expressly provide for the provisions of the foregoing sentence.
Lessee, at its own cost and expense, will pay for the repairs of any
damage to any Property caused by the removal or attempted
removal of any Modification.
(b) The construction process provided for in the
Agency Agreement is acknowledged by Lessor and the Agent to be
consistent with and in compliance with the terms and provisions of
this Article XI.
ARTICLE XII
12.1 Warranty of Title.
(a) Title in each Property (including without limitation
all Equipment, all Improvements, all replacement components to
each Property and all Modifications) shall immediately and
without further action vest in and such shall become the property
of Lessor and be subject to the terms of this Lease (provided,
respecting all Land subject to a Ground Lease, Lessor's interest
therein is acknowledged to be a leasehold interest pursuant to such
Ground Lease) from and after the date hereof or such date of
incorporation into any Property. Lessee agrees that, subject to the
terms of Article XIII relating to permitted contests, 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 any
Property, any component thereof or any Modifications or any Lien,
attachment, levy or claim with respect to the Rent or with respect
to any amounts held by Lessor, the Agent or any Holder pursuant
to any Operative Agreement, other than Permitted Liens and
Lessor Liens. Lessee shall promptly notify Lessor in the event it
receives actual knowledge that a Lien other than a Permitted Lien
or Lessor Lien has occurred with respect to a Property, the Rent or
any other such amounts, and Lessee represents and warrants to, and
covenants with, Lessor that the Liens in favor of Lessor created by
the Operative Agreements are (and until the financing parties under
the Operative Agreements have been paid in full shall remain) first
priority perfected Liens subject only to Permitted Liens.
(b) Nothing contained in this Lease shall be construed
as constituting the consent or request of 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 any Property or any part
thereof. NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE
FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
LESSEE, OR TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES
OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR IN AND TO ANY
PROPERTY.
ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities.
Except to the extent otherwise provided for in Section 13 of
the Participation Agreement, Lessee, on its own or on Lessor's behalf but
at Lessee's sole cost and expense, may contest, by appropriate
administrative or judicial proceedings conducted in good faith and with
due diligence, the amount, validity or application, in whole or in part, of
any Legal Requirement, or utility charges payable pursuant to Section 4.1
or any Lien, attachment, levy, encumbrance or encroachment, and Lessor
agrees not to pay, settle or otherwise compromise any such item, provided,
that (a) the commencement and continuation of such proceedings shall
suspend the collection of any such contested amount from, and suspend
the enforcement thereof against, the applicable Properties, Lessor, each
Holder, the Agent and each Lender; (b) there shall not be imposed a Lien
(other than Permitted Liens) on any Property and no part of any Property
nor any Rent would be in any danger of being sold, forfeited, lost or
deferred; (c) at no time during the permitted contest shall there be a risk of
the imposition of criminal liability or material civil liability on Lessor, any
Holder, the Agent or any Lender for failure to comply therewith; and (d) in
the event that, at any time, there shall be a material risk of extending the
application of such item beyond the end of the Term, then Lessee shall
deliver to Lessor an Officer's Certificate certifying as to the matters set
forth in clauses (a), (b) and (c) of this Section 13.1. Lessor, at Lessee's
sole cost and expense, shall execute and deliver to Lessee such
authorizations and other documents as may reasonably be required in
connection with any such contest and, if reasonably requested by Lessee,
shall join as a party therein at Lessee's sole cost and expense.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance.
During the Term for each Property, Lessee shall procure
and carry, at Lessee's sole cost and expense, commercial general liability
and umbrella liability insurance for claims for injuries or death sustained
by persons or damage to property while on such Property or respecting the
Equipment and such other public liability coverages as are then
customarily carried by similarly situated companies conducting business
similar to that conducted by Lessee. Such insurance shall be on terms and
in amounts that are no less favorable than insurance maintained by Lessee
with respect to similar properties and equipment that it owns and are then
carried by similarly situated companies conducting business similar to that
conducted by Lessee, and in no event shall have a minimum combined
single limit per occurrence coverage (i) for commercial general liability of
less than $1,000,000 and (ii) for umbrella liability of less than
$50,000,000. The policies shall name Lessee as the insured and shall be
endorsed to name Lessor, the Holders, the Agent and the Lenders as
additional insureds. The policies shall also specifically provide that such
policies shall be considered primary insurance which shall apply to any
loss or claim before any contribution by any insurance which Lessor, any
Holder, the Agent or any Lender may have in force. In the operation of
the Properties, Lessee shall comply with applicable workers'
compensation laws and protect Lessor, each Holder, the Agent and each
Lender against any liability under such laws.
14.2 Permanent Hazard and Other Insurance.
(a) During the Term for each Property, Lessee shall
keep such Property insured against all risk of physical loss or
damage by fire and other risks and shall maintain builders' risk
insurance during construction of any Improvements or
Modifications in each case in amounts no less than the Termination
Value from time to time and on terms that (i) are no less favorable
than insurance covering other similar properties owned by Lessee
and (ii) are then carried by similarly situated companies conducting
business similar to that conducted by Lessee. The policies shall
name Lessee as the insured and shall be endorsed to name Lessor,
the Holders and the Agent (on behalf of the Lenders and the
Holders) as a named additional insured and loss payee, to the
extent of their respective interests; provided, so long as no Event of
Default exists, any loss payable under the insurance policies
required by this Section for losses up to $1,000,000 will be paid to
Lessee.
(b) If, during the Term with respect to a Property the
area in which such Property is located is designated a "flood-
prone" area pursuant to the Flood Disaster Protection Act of 1973,
or any amendments or supplements thereto or is in a zone
designated A or V, then Lessee shall comply with the National
Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973. In addition, Lessee will fully comply with
the requirements of the National Flood Insurance Act of 1968 and
the Flood Disaster Protection Act of 1973, as each may be
amended from time to time, and with any other Legal
Requirement, concerning flood insurance to the extent that it
applies to any such Property. During the Term, Lessee shall, in the
operation and use of each Property, maintain workers'
compensation insurance consistent with that carried by similarly
situated companies conducting business similar to that conducted
by Lessee and containing minimum liability limits of no less than
$100,000. In the operation of each Property, Lessee shall comply
with workers' compensation laws applicable to Lessee, and protect
Lessor, each Holder, the Agent and each Lender against any
liability under such laws.
14.3 Coverage.
(a) As of the date of this Lease and annually thereafter
during the Term, Lessee shall furnish Lessor, the Holders and the
Agent with certificates prepared by the insurers or insurance broker
of Lessee showing the insurance required under Sections 14.1 and
14.2 to be in effect, naming (to the extent of their respective
interests) Lessor, the Holders, the Agent and the Lenders as
additional insureds and loss payees and evidencing the other
requirements of this Article XIV. All such insurance shall be at the
cost and expense of Lessee and provided by nationally recognized,
financially sound insurance companies having an A+ or better
rating by A.M. Best's Key Rating Guide. Lessee shall cause such
certificates to include a provision for thirty (30) days' advance
written notice by the insurer to Lessor, the Holders and the Agent
in the event of cancellation or material alteration of such insurance.
If an Event of Default has occurred and is continuing and Lessor so
requests, Lessee shall deliver to Lessor copies of all insurance
policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies
required by Sections 14.1, 14.2(a) and 14.2(b) shall include an
appropriate clause pursuant to which any such policy shall provide
that it will not be invalidated should Lessee or any Contractor, as
the case may be, waive, at any time, any or all rights of recovery
against any party for losses covered by such policy or due to any
breach of warranty, fraud, action, inaction or misrepresentation by
Lessee or any Person acting on behalf of Lessee. Lessee hereby
waives any and all such rights against Lessor, the Holders, the
Agent and the Lenders to the extent of payments made to any such
Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate
insurance concurrent in kind or form or contributing in the event of
loss with any insurance required under this Article XIV, except
that Lessor may carry separate liability insurance at Lessor's sole
cost so long as (i) Lessee's insurance is designated as primary and
in no event excess or contributory to any insurance Lessor may
have in force which would apply to a loss covered under Lessee's
policy and (ii) each such insurance policy will not cause Lessee's
insurance required under this Article XIV to be subject to a
coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums
for the insurance required by Section 14.1 and Section 14.2, shall
renew or replace each policy prior to the expiration date thereof or
otherwise maintain the coverage required by such Sections without
any lapse in coverage.
(e) Lessor and Lessee hereby waive all rights of
recovery and causes of action that either have or may have arisen
or that may arise hereafter against the other, whether caused by
negligence, intentional misconduct, or otherwise, for any damage
to premises, property or business caused by any perils to the extent,
but only to the extent, covered by fire and extended coverage,
building, contents and business interruption insurance, or for which
either party may be reimbursed as a result of such insurance
coverage affecting any loss suffered by such party; provided,
however, that the foregoing waivers shall apply only to the extent
of any recovery made by the parties hereto under any policy of
insurance now or hereafter issued, and provided, further, that the
foregoing waivers shall be ineffective if either (i) such waivers
invalidate any policy of insurance of the parties hereto, now or
hereafter issued or (ii) any Claim has been imposed on, incurred by
or asserted against Lessor for which Lessee is responsible under
any provision of any Operative Agreement (including without
limitation Section 13.1 of the Participation Agreement) and with
respect to which no recovery has been had by Lessor. Lessor and
Lessee will use their best efforts to have their respective insurance
companies waive their respective rights of subrogation as
contemplated herein, provided, the foregoing shall impose no
obligation on Lessor to obtain any insurance with respect to any
Property or other matter described in any Operative Agreement.
Notwithstanding the foregoing provisions of this paragraph, Lessor
waives no right of recovery and/or cause of action respecting
matters described in Section 13.2 of the Participation Agreement,
and Lessee acknowledges the same.
ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of the Agency Agreement
and this Article XV and Article XVI (in the event Lessee delivers,
or is obligated to deliver or is deemed to have delivered, a
Termination Notice), and prior to the occurrence and continuation
of a Default or an Event of Default, Lessee shall be entitled to
receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest in) any condemnation proceeds,
award, compensation or insurance proceeds under Sections 14.2(a)
or (b) hereof to which Lessee or Lessor may become entitled by
reason of their respective interests in a Property (i) if all or a
portion of such Property is damaged or destroyed in whole or in
part by a Casualty or (ii) if the use, access, occupancy, easement
rights or title to such Property or any part thereof is the subject of a
Condemnation; provided, however, if a Default or an Event of
Default shall have occurred and be continuing or if such award,
compensation or insurance proceeds shall exceed $1,000,000, then
such award, compensation or insurance proceeds shall be paid
directly to Lessor or, if received by Lessee, shall be held in trust
for Lessor, and shall be paid over by Lessee to Lessor and held in
accordance with the terms of this paragraph (a). All amounts held
by Lessor hereunder on account of any award, compensation or
insurance proceeds either paid directly to Lessor or turned over to
Lessor shall be held as security for the performance of Lessee's
obligations hereunder and under the other Operative Agreements.
(b) 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
Lessee's reasonable request, and at Lessee's sole cost and expense,
Lessor and the Agent shall participate in any such proceeding,
action, negotiation, prosecution or adjustment. Lessor and Lessee
agree that this Lease shall control the rights of Lessor and Lessee
in and to any such award, compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a
Condemnation of a Property or any interest therein where damage
to the affected Property is estimated to equal or exceed twenty-five
percent (25%) of the Property Cost of such Property, Lessee shall
give notice thereof to Lessor and to the Agent promptly after
Lessee's receipt of such notice. In the event such a Casualty or
Condemnation occurs (regardless of whether Lessee gives notice
thereof), then Lessee shall be deemed to have delivered a
Termination Notice to Lessor and the Agent and the provisions of
Sections 16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation
(regardless of whether notice thereof must be given pursuant to
paragraph (c)), this Lease shall terminate with respect to the
applicable Property in accordance with Section 16.1 if Lessee,
within thirty (30) days after such occurrence, delivers to Lessor
and the Agent a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall
continue in full force and effect following a Casualty or
Condemnation with respect to the affected Property, Lessee shall,
at its sole cost and expense and using, if available, the proceeds of
any award, compensation or insurance with respect to such
Casualty or Condemnation (including without limitation any such
award, compensation or insurance which has been received by the
Agent and which should be turned over to Lessee pursuant to the
terms of the Operative Agreements, and if not available or
sufficient, using its own funds), promptly and diligently repair any
damage to the applicable Property caused by such Casualty or
Condemnation in conformity with the requirements of Sections
10.1 and 11.1, using the as-built Plans and Specifications or
manufacturer's specifications for the applicable Improvements,
Equipment or other components of the applicable Property (as
modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable
Legal Requirements), so as to restore the applicable Property to
substantially the same remaining economic value, useful life,
utility, condition, operation and function as existed immediately
prior to such Casualty or Condemnation (assuming all maintenance
and repair standards have been satisfied). In such event, title to the
applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth
in Section 15.1(a) or Section 15.1(e), if during the Term with
respect to a Property a Casualty occurs with respect to such
Property or Lessee receives notice of a Condemnation with respect
to such Property, and following such Casualty or Condemnation,
the applicable Property cannot reasonably be restored, repaired or
replaced on or before the day one hundred eighty (180) days prior
to the Expiration Date or the date nine (9) months after the
occurrence of such Casualty or Condemnation (if such Casualty or
Condemnation occurs during the Term) to the substantially same
remaining economic value, useful life, utility, condition, operation
and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards
have been satisfied) or on or before such day such Property is not
in fact so restored, repaired or replaced, then Lessee shall be
required to exercise its Purchase Option for such Property on the
next Payment Date (notwithstanding the limits on such exercise
contained in Section 20.2) and pay Lessor the Termination Value
for such Property; provided, if any Default or Event of Default has
occurred and is continuing, Lessee shall also promptly (and in any
event within three (3) Business Days) pay Lessor any award,
compensation or insurance proceeds received on account of any
Casualty or Condemnation with respect to any Property; provided,
further, that if no Default or Event of Default has occurred and is
continuing, any Excess Proceeds shall be paid to Lessee. If a
Default has occurred and is continuing and any Loans, Holder
Advances or other amounts are owing with respect thereto, then
any Excess Proceeds (to the extent of any such Loans, Holder
Advances or other amounts owing with respect thereto) shall be
paid to Lessor, held as security for the performance of Lessee's
obligations hereunder and under the other Operative Agreements
and applied to such obligations upon the exercise of remedies in
connection with the occurrence of an Event of Default, with the
remainder of such Excess Proceeds in excess of such Loans,
Holder Advances and other amounts owing with respect thereto
being distributed to the Lessee.
15.2 Environmental Matters.
Promptly upon Lessee's actual knowledge of the presence
of Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation
and which, in the reasonable opinion of Lessee, the cost to undertake any
legally required response, clean up, remedial or other action will or might
result in a cost to Lessee of more than $15,000, Lessee shall notify Lessor
in writing of such condition. In the event of any Environmental Violation
(regardless of whether notice thereof must be given), Lessee shall, not
later than thirty (30) days after Lessee has actual knowledge of such
Environmental Violation, either deliver to Lessor a Termination Notice
with respect to the applicable Property or Properties pursuant to Section
16.1, if applicable, or, at Lessee's sole cost and expense, promptly and
diligently undertake and complete any response, clean up, remedial or
other action (including without limitation the pursuit by Lessee of
appropriate action against any off-site or third party source for
contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all Environmental Laws.
Any such undertaking shall be timely completed in accordance with
prudent industry standards. If Lessee does not deliver a Termination
Notice with respect to such Property pursuant to Section 16.1, Lessee
shall, upon completion of remedial action by Lessee, cause to be prepared
by a reputable environmental consultant acceptable to Lessor a report
describing the Environmental Violation and the actions taken by Lessee
(or its agents) in response to such Environmental Violation, and a
statement by the consultant that the Environmental Violation has been
remedied in full compliance with applicable Environmental Law. Not less
than sixty (60) days prior to any time that Lessee elects to cease operations
with respect to any Property or to remarket any Property pursuant to
Section 20.1 hereof or any other provision of any Operative Agreement,
Lessee at its expense shall cause to be delivered to Lessor a Phase I
environmental site assessment respecting such Property recently prepared
(no more than thirty (30) days prior to the date of delivery) by an
independent recognized professional acceptable to Lessor, the Majority
Holders and the Agent in their reasonable discretion and in form, scope
and content satisfactory to Lessor, the Majority Holders and the Agent in
their reasonable discretion. Notwithstanding any other provision of any
Operative Agreement, if Lessee fails to comply with the foregoing
obligation regarding the Phase I environmental site assessment, Lessee
shall be obligated to purchase such Property for its Termination Value and
shall not be permitted to exercise (and Lessor shall have no obligation to
honor any such exercise) any rights under any Operative Agreement
regarding a sale of such Property to a Person other than Lessee or any
Affiliate of Lessee.
15.3 Notice of Environmental Matters.
Promptly, but in any event within five (5) Business Days
from the date Lessee has actual knowledge thereof, Lessee shall provide to
Lessor written notice of any pending or threatened claim, action or
proceeding involving any Environmental Law or any Release on or in
connection with any Property or Properties. All such notices shall
describe in reasonable detail the nature of the claim, action or proceeding
and Lessee's proposed response thereto. In addition, Lessee shall provide
to Lessor, within five (5) Business Days of receipt, copies of all material
written communications with any Governmental Authority relating to any
Environmental Law in connection with any Property. Lessee shall also
promptly provide such detailed reports of any such material environmental
claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 Termination Upon Certain Events.
If Lessee has delivered, or is deemed to have delivered,
written notice of a termination of this Lease with respect to the applicable
Property to Lessor and the Agent in the form described in Section 16.2(a)
(a "Termination Notice") pursuant to the provisions of this Lease, then (a)
following the applicable Casualty or Condemnation, this Lease shall
terminate with respect to the affected Property on the applicable
Termination Date or (b) pursuant to the second sentence of Section 15.2,
due to the occurrence of an Environmental Violation, this Lease shall
terminate with respect to the affected Property.
16.2 Procedures.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt
of such Termination Notice (the "Termination Date"); and (ii) a
binding and irrevocable agreement of Lessee to pay the
Termination Value for the applicable Property and purchase such
Property on such Termination Date.
(b) On each Termination Date, Lessee shall pay to
Lessor the Termination Value for the applicable Property, and
Lessor shall convey such Property or the remaining portion
thereof, if any, to Lessee (or Lessee's designee), all in accordance
with Section 20.2.
ARTICLE XVII
17.1 Lease Events of Default.
If any one (1) or more of the following events (each a "Lease Event of
Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic
Rent (except as set forth in clause (ii)) within three (3) days after
the same has become due and payable or (ii) any Termination
Value, on the date any such payment is due and payable, or any
payment of Basic Rent or Supplemental Rent due on the due date
of any such payment of Termination Value, or any amount due on
the Expiration Date;
(b) Lessee shall fail to make payment of any
Supplemental Rent (other than Supplemental Rent referred to in
Section 17.1(a)(ii)) which has become due and payable within
three (3) days after receipt of notice that such payment is due;
(c) Lessee shall fail to maintain insurance as required
by Article XIV of this Lease or to deliver any requisite annual
certificate with respect thereto within ten (10) days of the date such
certificate is due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant or condition of Lessee under this Lease (including
without limitation the Incorporated Covenants) or any other
Operative Agreement to which Lessee is a party other than those
set forth in Sections 17.1(a), (b) or (c) hereof, or Lessee shall fail to
pay, or cause to be paid, any Imposition or shall fail to observe any
Legal Requirement regarding any Property (to the extent the failure
to observe such Legal Requirement results in a Material Adverse
Effect) and such failure shall continue for fifteen (15) days after
notice thereof to the Lessee, or (ii) any representation or warranty
made by Lessee set forth in this Lease (including without
limitation the Incorporated Representation and Warranties) or in
any other Operative Agreement or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material way when
made;
(e) An Agency Agreement Event of Default shall have occurred and be
continuing;
(f) Lessee or any of its Subsidiaries shall default
(beyond applicable periods of grace and/or notice and cure) in the
payment when due of any principal of or interest on any
Indebtedness having an outstanding principal amount of at least
$5,000,000; or any event or condition shall occur which results in
the acceleration of the maturity of any such Indebtedness or
enables the holder of any such Indebtedness or any Person acting
on such holder's behalf to accelerate the maturity thereof;
(g) The liquidation or dissolution of Lessee, or the
suspension of the business of Lessee, or the filing by Lessee of a
voluntary petition or an answer seeking reorganization,
arrangement, readjustment of its debts or for any other relief under
the United States Bankruptcy Code, as amended, or under any
other insolvency act or law, state or federal, now or hereafter
existing, or any other action of Lessee indicating its consent to,
approval of or acquiescence in, any such petition or proceeding;
the application by Lessee for, or the appointment by consent or
acquiescence of Lessee of a receiver, a trustee or a custodian of
Lessee for all or a substantial part of its property; the making by
Lessee of any assignment for the benefit of creditors; the inability
of Lessee or the admission by Lessee in writing of its inability to
pay its debts as they mature; or Lessee taking any corporate action
to authorize any of the foregoing;
(h) The filing of an involuntary petition against Lessee
in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the United
States Bankruptcy Code, as amended, or under any other
insolvency act or law, state or federal, now or hereafter existing; or
the involuntary appointment of a receiver, a trustee or a custodian
of Lessee for all or a substantial part of its property; or the issuance
of a warrant of attachment, execution or similar process against
any substantial part of the property of Lessee, and the continuance
of any of such events for ninety (90) days undismissed or
undischarged;
(i) The adjudication of Lessee as bankrupt or insolvent;
(j) The entering of any order in any proceedings
against Lessee or any Material Subsidiary decreeing the
dissolution, divestiture or split-up of Lessee or any Material
Subsidiary, and such order remains in effect for more than sixty
(60) days;
(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of Lessee pursuant
to the terms of this Lease or any other Operative Agreement is
false or misleading in any material respect when made or
delivered;
(l) Any Lessee Credit Agreement Event of Default
shall have occurred and be continuing and shall not have been
waived;
(m) A final judgment or judgments for the payment of
money shall be rendered by a court or courts against Lessee or any
of its Material Subsidiaries in excess of $5,000,000 in the
aggregate, and (i) the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within forty-five (45) days from the
date of entry thereof, or (ii) Lessee or such Material Subsidiary
shall not, within said period of forty-five (45) days, or such longer
period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed
during such appeal, or (iii) such judgment or judgments shall not
be discharged (or provisions shall not be made for such discharge)
within forty-five (45) days after a decision has been reached with
respect to such appeal and the related stay has been lifted;
(n) Lessee or any member of the Controlled Group
shall fail to pay when due an amount or amounts aggregating in
excess of $2,000,000 which it shall have become liable to pay to
the PBGC or to a Pension Plan under Title IV of ERISA; or notice
of intent to terminate a Pension Plan or Pension Plans having
aggregate Unfunded Liabilities in excess of $2,000,000 shall be
filed under Title IV of ERISA by Lessee or any member of the
Controlled Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate or to cause a trustee to be appointed to
administer any such Pension Plan or Pension Plans or a proceeding
shall be instituted by a fiduciary of any such Pension Plan or
Pension Plans against Lessee or any member of the Controlled
Group to enforce Section 515 or 4219(c)(5) of ERISA; or a
condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Pension Plan
or Pension Plans must be terminated;
(o) (i) As a result of one (1) or more transactions after
the date of this Lease, any "person" or "group" of persons shall
have "beneficial ownership" (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder) of fifty percent
(50%) or more of the outstanding common stock of Lessee; or (ii)
without limiting the generality of the foregoing, during any period
of twelve (12) consecutive months, commencing after the date of
this Lease, individuals who at the beginning of such period of
twelve (12) months were directors of Lessee shall cease for any
reason to constitute a majority of the board of directors of Lessee,
provided, that the relationships among the respective shareholders
of Lessee on the Initial Closing Date shall not be deemed to
constitute all or any combination of them as a "group" for purposes
of clause (o)(i); or
(p) Any Operative Agreement shall cease to be in full force and effect;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate
this Lease by giving Lessee five (5) days notice of such termination, and
this Lease shall terminate, and all rights of Lessee under this Lease shall
cease. Lessee shall, to the fullest extent permitted by law, pay as
Supplemental Rent all costs and expenses incurred by or on behalf of
Lessor, including without limitation reasonable fees and expenses of
counsel, as a result of any Lease Event of Default hereunder.
17.2 Surrender of Possession.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated
pursuant to Section 17.1, Lessee shall, upon thirty (30) days written notice,
surrender to Lessor possession of the Properties. Lessor may enter upon
and repossess the Properties by such means as are available at law or in
equity, and may remove Lessee and all other Persons and any and all
personal property and Lessee's equipment and personalty and severable
Modifications from the Properties. Lessor shall have no liability by reason
of any such entry, repossession or removal performed in accordance with
applicable law. Upon the written demand of Lessor, Lessee shall return
the Properties promptly to Lessor, in the manner and condition required
by, and otherwise in accordance with the provisions of, Section 22.1(c)
hereof.
17.3 Reletting.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated
pursuant to Section 17.1, Lessor may, but shall be under no obligation to,
relet any or all of the Properties, for the account of Lessee or otherwise,
for such term or terms (which may be greater or less than the period which
would otherwise have constituted the balance of the Term) and on such
conditions (which may include concessions or free rent) and for such
purposes as Lessor may determine, and Lessor may collect, receive and
retain the rents resulting from such reletting. Lessor shall not be liable to
Lessee for any failure to relet any Property or for any failure to collect any
rent due upon such reletting.
17.4 Damages.
Neither (a) the termination of this Lease as to all or any of
the Properties pursuant to Section 17.1; (b) the repossession of all or any
of the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease
Event of Default shall have occurred and be continuing and
notwithstanding any termination of this Lease pursuant to Section 17.1,
Lessee shall forthwith pay to Lessor all Rent and other sums due and
payable hereunder to and including without limitation the date of such
termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would
have been payable under this Lease if the same had not been terminated
pursuant to Section 17.1 and until the end of the Term hereof or what
would have been the Term in the absence of such termination, Lessee shall
pay Lessor, as current liquidated damages (it being agreed that it would be
impossible accurately to determine actual damages) an amount equal to the
Basic Rent and Supplemental Rent that are payable under this Lease or
would have been payable by Lessee hereunder if this Lease had not been
terminated pursuant to Section 17.1, less the net proceeds, if any, which
are actually received by Lessor with respect to the period in question of
any reletting of any Property or any portion thereof; provided, that
Lessee's obligation to make payments of Basic Rent and Supplemental
Rent under this Section 17.4 shall continue only so long as Lessor shall
not have received the amounts specified in Section 17.6. In calculating the
amount of such net proceeds from reletting, there shall be deducted all of
Lessor's, any Holder's, the Agent's and any Lender's reasonable expenses
in connection therewith, including without limitation repossession costs,
brokerage or sales commissions, fees and expenses for counsel and any
necessary repair or alteration costs and expenses incurred in preparation
for such reletting. To the extent Lessor receives any damages pursuant to
this Section 17.4, such amounts shall be regarded as amounts paid on
account of Rent. Lessee specifically acknowledges and agrees that its
obligations under this Section 17.4 shall be absolute and unconditional
under any and all circumstances and shall be paid and/or performed, as the
case may be, without notice or demand and without any abatement,
reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.5 Power of Sale.
Without limiting any other remedies set forth in this Lease,
in the event that a court of competent jurisdiction rules that this Lease
constitutes a mortgage, deed of trust or other secured financing as is the
intent of the parties, then Lessor and Lessee agree that Lessee has granted,
pursuant to Section 7.1(b) hereof and each Lease Supplement, a Lien
against the Properties WITH POWER OF SALE, and that, upon the
occurrence and during the continuance of any Lease Event of Default,
Lessor shall have the power and authority, to the extent provided by law,
after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of the Properties.
17.6 Final Liquidated Damages.
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant
to Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to Lessee and at Lessor's election, and Lessee shall
pay to Lessor, as and for final liquidated damages, but exclusive of the
indemnities payable under Section 13 of the Participation Agreement, and
in lieu of all current liquidated damages beyond the date of such demand
(it being agreed that it would be impossible accurately to determine actual
damages) the Termination Value. Upon payment of the amount specified
pursuant to the first sentence of this Section 17.6, Lessee shall be entitled
to receive from Lessor, either at Lessee's request or upon Lessor's
election, in either case at Lessee's cost, an assignment of Lessor's entire
right, title and interest in and to the Properties, Improvements, Fixtures,
Modifications, Equipment and all components thereof, in each case in
recordable form and otherwise in conformity with local custom and free
and clear of the Lien of this Lease (including without limitation the release
of any memoranda of Lease and/or the Lease Supplement recorded in
connection therewith) and any Lessor Liens. The Properties shall be
conveyed to Lessee "AS-IS, WHERE-IS" and in their then present
physical condition. If any statute or rule of law shall limit the amount of
such final liquidated damages to less than the amount agreed upon, Lessor
shall be entitled to the maximum amount allowable under such statute or
rule of law; provided, however, Lessee shall not be entitled to receive an
assignment of Lessor's interest in the Properties, the Improvements,
Fixtures, Modifications, Equipment or the components thereof unless
Lessee shall have paid in full the Termination Value. Lessee specifically
acknowledges and agrees that its obligations under this Section 17.6 shall
be absolute and unconditional under any and all circumstances and shall
be paid and/or performed, as the case may be, without notice or demand
and without any abatement, reduction, diminution, setoff, defense,
counterclaim or recoupment whatsoever.
17.7 Environmental Costs.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated
pursuant to Section 17.1, Lessee shall pay directly to any third party (or at
Lessor's election, reimburse Lessor) for the cost of any environmental
testing and/or remediation work undertaken respecting any Property, as
such testing or work is deemed appropriate in the reasonable judgment of
Lessor. Lessee shall pay all amounts referenced in the immediately
preceding sentence within ten (10) days of any request by Lessor for such
payment. The provisions of this Section 17.7 shall not limit the
obligations of Lessee under any Operative Agreement regarding
indemnification obligations, environmental testing, remediation and/or
work.
17.8 Waiver of Certain Rights.
If this Lease shall be terminated pursuant to Section 17.1,
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 possession; (c) the
benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might
otherwise limit or modify any of Lessor's rights or remedies under this
Article XVII.
17.9 Assignment of Rights Under Contracts.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated
pursuant to Section 17.1, Lessee shall upon Lessor's demand immediately
assign, transfer and set over to Lessor all of Lessee's right, title and
interest in and to each agreement executed by Lessee in connection with
the acquisition, installation, testing, use, development, construction,
operation, maintenance, repair, refurbishment and restoration of the
Properties (including without limitation all right, title and interest of
Lessee with respect to all warranty, performance, service and indemnity
provisions), as and to the extent that the same relate to the acquisition,
installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of the Properties or any
of them.
17.10 Remedies Cumulative.
The remedies herein provided shall be cumulative and in
addition to (and not in limitation of) any other remedies available at law,
equity or otherwise, including without limitation any mortgage foreclosure
remedies.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessee's Lease Defaults.
Lessor, without waiving or releasing any obligation or
Lease Event of Default, may (but shall be under no obligation to) remedy
any Lease Event of Default for the account and at the sole cost and
expense of Lessee, including without limitation the failure by Lessee to
maintain the insurance required by Article XIV, and may, to the fullest
extent permitted by law, and notwithstanding any right of quiet enjoyment
in favor of Lessee, enter upon any Property, and take all such action
thereon as may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of any lessee. All out-of-pocket costs and expenses
so incurred (including without limitation fees and expenses of counsel),
together with interest thereon at the Overdue Rate from the date on which
such sums or expenses are paid by Lessor, shall be paid by Lessee to
Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.
Subject to Section 19.2, in connection with any termination
of this Lease with respect to any Property pursuant to the terms of Section
16.2, or in connection with Lessee's exercise of its Purchase Option, upon
the date on which this Lease is to terminate with respect to any Property,
and upon tender by Lessee of the amounts set forth in Sections 16.2(b) or
20.2, as applicable, Lessor shall execute and deliver to Lessee (or to
Lessee's designee) at Lessee's cost and expense an assignment (by deed or
other appropriate instrument) of Lessor's entire interest in such Property,
in each case in recordable form and otherwise in conformity with local
custom and free and clear of any Lessor Liens attributable to Lessor but
without any other warranties (of title or otherwise) from Lessor. Such
Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in then
present physical condition.
19.2 No Purchase or Termination With Respect to Less than All of a Property.
Lessee shall not be entitled to exercise its Purchase Option or the
Sale Option separately with respect to a portion of any Property consisting
of Land, Equipment, Improvements and/or any subleasehold interest in
Land but shall be required to exercise its Purchase Option or the Sale
Option with respect to an entire Property.
ARTICLE XX
20.1 Purchase Option or Sale Option-General Provisions.
Not less than one hundred twenty (120) days and no more
than one hundred eighty (180) days prior to the Expiration Date or
(respecting the Purchase Option only) any Payment Date after the second
annual anniversary of the date of this Lease, Lessee may give Lessor and
the Agent irrevocable written notice (the "Election Notice") that Lessee is
electing to exercise either (a) the option to purchase all, but not less than
all, the Properties on the Expiration Date or on the Payment Date specified
in the Election Notice (the "Purchase Option") or (b) with respect to an
Election Notice given in connection with the Expiration Date only, the
option to remarket all, but not less than all, the Properties to a Person other
than Lessee or any Affiliate of Lessee and cause a sale of such Properties
to occur on the Expiration Date pursuant to the terms of Section 22.1 (the
"Sale Option"). If Lessee does not give an Election Notice indicating the
Purchase Option or the Sale Option at least one hundred twenty (120) days
and not more than one hundred eighty (180) days prior to the Expiration
Date, then, unless such Expiration Date is the final Expiration Date to
which the Term may be extended, the term of this Lease shall be extended
in accordance with Section 2.2 hereof; if such Expiration Date is the final
Expiration Date, then Lessee shall be deemed to have elected the Purchase
Option. If Lessee shall either (i) elect (or be deemed to have elected) to
exercise the Purchase Option or (ii) elect the Sale Option and fail to cause
the Properties to be sold in accordance with the terms of Section 22.1 on
the Expiration Date, then in either case Lessee shall pay to Lessor on the
date on which such purchase or sale is scheduled to occur an amount equal
to the Termination Value for all of the Properties (which the parties do not
intend to be a "bargain" purchase), in connection therewith, Lessee shall
comply with the terms and provisions of Section 22.1(c) to the same extent
as if Lessor had exercised its option to retain one (1) or more Properties
pursuant to Section 22.1(a) and, upon receipt of such amounts and
satisfaction of such obligations, Lessor shall transfer to Lessee all of
Lessor's right, title and interest in and to the Properties in accordance with
Section 20.2.
20.2 Lessee Purchase Option.
Provided, no Default or Event of Default shall have
occurred and be continuing (other than those that will be cured by the
payment of the Termination Value for the Properties) and provided, that
the Election Notice has been appropriately given specifying the Purchase
Option, Lessee shall purchase all of the Properties on the Expiration Date
or Payment Date at a price equal to the Termination Value for such
Properties (which the parties do not intend to be a "bargain" purchase
price).
Subject to Section 19.2, in connection with any termination
of this Lease with respect to any Property pursuant to the terms of Section
16.2, or in connection with Lessee's exercise of its Purchase Option, upon
the date on which this Lease is to terminate with respect to a Property or
all of the Properties, and upon tender by Lessee of the amounts set forth in
Section 16.2(b) or this Section 20.2, as applicable, Lessor shall execute,
acknowledge (where required) and deliver to Lessee, at Lessee's cost and
expense, each of the following: (a) a termination or assignment (as
requested by the Lessee) of each applicable Ground Lease (such
termination or assignment to be in form and substance reasonably
satisfactory to Lessor, the Majority Holders and the Agent) and special or
limited warranty Deeds conveying each Property (to the extent it is real
property not subject to a Ground Lease) to Lessee free and clear of the
Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (b) a Bill of Sale conveying each Property (to the extent it is
personal property) to Lessee free and clear of the Lien of this Lease, the
Lien of the Credit Documents and any Lessor Liens; (c) any real estate tax
affidavit or other document required by law to be executed and filed in
order to record the applicable Deed and/or the applicable Ground Lease
termination; and (d) FIRPTA affidavits. The applicable Property shall be
conveyed to Lessee "AS-IS, WHERE-IS" and in then present physical
condition.
If any Property is the subject of remediation efforts
respecting Hazardous Substances at the Expiration Date which could
materially and adversely impact the Fair Market Sales Value of such
Property (with materiality determined in Lessor's discretion), then Lessee
shall be obligated to repurchase each such Property pursuant to Section
20.2.
On the Expiration Date and/or any Payment Date on which
Lessee has elected to exercise its Purchase Option, Lessee shall pay (or
cause to be paid) to Lessor, the Agent and all other parties, as appropriate,
the sum of all costs and expenses incurred by any such party in connection
with the election by Lessee to exercise its Purchase Option and all Rent
and all other amounts then due and payable or accrued under this Lease
and/or any other Operative Agreement.
20.3 Third Party Sale Option.
(a) Provided, that (i) no Default or Event of Default
shall have occurred and be continuing and (ii) the Election Notice
has been appropriately given specifying the Sale Option, Lessee
shall undertake to cause a sale of the Properties on the Expiration
Date (all as specified in the Election Notice) in accordance with the
provisions of Section 22.1 hereof.
(b) In the event Lessee exercises the Sale Option then,
as soon as practicable and in all events not less than sixty (60) days
prior to the Expiration Date, Lessee at its expense shall cause to be
delivered to Lessor a Phase I environmental site assessment for
each of the Properties recently prepared (no more than thirty (30)
days old prior to the date of delivery) by an independent
recognized professional acceptable to Lessor, the Majority Holders
and the Agent in their reasonable discretion and in form, scope and
content satisfactory to Lessor, the Majority Holders and the Agent
in their reasonable discretion. In the event that Lessor and the
Agent shall not have received such environmental site assessment
by the date sixty (60) days prior to the Expiration Date or in the
event that such environmental assessment shall reveal the existence
of any material violation of Environmental Laws, other material
Environmental Violation or potential material Environmental
Violation (with materiality determined in each case in Lessor's
discretion), then Lessee on the Expiration Date shall pay to Lessor
an amount equal to the Termination Value for all of the Properties
and any and all other amounts due and owing hereunder. Upon
receipt of such payment and all other amounts due under the
Operative Agreements, Lessor shall transfer to Lessee all of
Lessor's right, title and interest in and to the Properties in
accordance with Section 19.1.
ARTICLE XXI
21.1 [Intentionally Omitted].
ARTICLE XXII
22.1 Sale Procedure.
(a) During the Marketing Period, Lessee, on behalf of
Lessor, shall obtain bids for the cash purchase of the Properties in
connection with a sale to one (1) or more third party purchasers to
be consummated on the Expiration Date (the "Sale Date") for the
highest price available, shall notify Lessor promptly of the name
and address of each prospective purchaser and the cash price which
each prospective purchaser shall have offered to pay for each such
Property and shall provide Lessor with such additional information
about the bids and the bid solicitation procedure as Lessor may
reasonably request from time to time. All such prospective
purchasers must be Persons other than Lessee or any Affiliate of
Lessee. On the Sale Date, Lessee shall pay (or cause to be paid) to
Lessor and all other parties, as appropriate, the sum of all costs and
expenses incurred by Lessor and/or the Agent (as the case may be)
in connection with such sale of one or more Properties, all Rent
and all other amounts then due and payable or accrued under this
Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and
obtain bids by giving Lessee written notice to that effect; provided,
however, that notwithstanding the foregoing, Lessor may not reject
the bids submitted by Lessee if such bids, in the aggregate, are
greater than or equal to the sum of the Limited Recourse Amount
for the Properties, and represent bona fide offers from one (1) or
more third party purchasers. If the highest price which a
prospective purchaser or the prospective purchasers shall have
offered to pay for the Properties on the Sale Date is less than the
sum of the Limited Recourse Amount for the Properties or if such
bids do not represent bona fide offers from one (1) or more third
parties or if there are no bids, Lessor may elect to retain the
Properties by giving Lessee prior written notice of Lessor's
election to retain the Properties, and promptly upon receipt of such
notice, Lessee shall surrender, or cause to be surrendered, each of
the Properties in accordance with the terms and conditions of
Section 10.1. Upon acceptance of any bid, the Lessor agrees, at
Lessee's request and expense, to execute a contract of sale with
respect to such sale, so long as the same is consistent with the
terms of this Article 22 and provides by its terms that it is
nonrecourse to Lessor.
Unless Lessor shall have elected to retain the Properties
pursuant to the provisions of the preceding paragraph, Lessee shall
arrange for Lessor to sell the Properties free and clear of the Lien
of this Lease and any Lessor Liens attributable to Lessor, without
recourse or warranty (of title or otherwise), for cash on the Sale
Date to the purchaser or purchasers offering the highest cash sales
price, as identified by Lessee or Lessor, as the case may be;
provided, however, solely as to Lessor or the Trust Company, in its
individual capacity, any Lessor Lien shall not constitute a Lessor
Lien so long as Lessor or the Trust Company, in its individual
capacity, is diligently and in good faith contesting, at Lessor's cost
and expense, such Lessor Lien by appropriate proceedings in
which event the applicable Sale Date, all without penalty or cost to
Lessee, shall be delayed for the period of such contest. To effect
such transfer and assignment, Lessor shall execute, acknowledge
(where required) and deliver to the appropriate purchaser each of
the following: (a) special or limited warranty Deeds conveying
each Property (to the extent it is real property titled to Lessor) and
an assignment of the Ground Lease conveying the leasehold
interest of Lessor in each Property (to the extent it is real property
and subject to a Ground Lease) to the appropriate purchaser free
and clear of the Lien of this Lease, the Lien of the Credit
Documents and any Lessor Liens; (b) a Bill of Sale conveying each
Property (to the extent it is personal property) titled to Lessor to
the appropriate purchaser free and clear of the Lien of this Lease,
the Lien of the Credit Documents and any Lessor Liens; (c) any
real estate tax affidavit or other document required by law to be
executed and filed in order to record each Deed and/or each
Ground Lease assignment; and (d) FIRPTA affidavits, as
appropriate. Lessee shall surrender the Properties so sold or
subject to such documents to each purchaser in the condition
specified in Section 10.1, or in such other condition as may be
agreed between Lessee and such purchaser. Lessee shall not take
or fail to take any action which would have the effect of
unreasonably discouraging bona fide third party bids for any
Property. If each of the Properties is not either (i) sold on the Sale
Date in accordance with the terms of this Section 22.1, or (ii)
retained by Lessor pursuant to an affirmative election made by
Lessor pursuant to the second sentence of the second paragraph of
this Section 22.1(a), then (x) Lessee shall be obligated to pay
Lessor on the Sale Date an amount equal to the aggregate
Termination Value less any sales proceeds received, and (y) Lessor
shall transfer each applicable Property to Lessee in accordance
with Section 20.2.
(b) If the Properties are sold on a Sale Date to one (1)
or more third party purchasers in accordance with the terms of
Section 22.1(a) and the aggregate purchase price paid for the
Properties is less than the sum of the aggregate Property Cost for
the Properties (hereinafter such difference shall be referred to as
the "Deficiency Balance"), then Lessee hereby unconditionally
promises to pay to Lessor on the Sale Date the lesser of (i) the
Deficiency Balance, or (ii) the Maximum Residual Guarantee
Amount for all of the Properties. On a Sale Date if (x) Lessor
receives the Termination Value for all Properties from one (1) or
more third party purchasers, (y) Lessor receives all other amounts
specified in the last sentence of the first paragraph of Section
22.1(a) and (z) the aggregate purchase price paid for all such
Properties on such date exceeds the sum of the aggregate Property
Cost for such Properties, then Lessee may retain such excess. If
the Properties are retained by Lessor pursuant to an affirmative
election made by Lessor pursuant to the provisions of Section
22.1(a), then Lessee hereby unconditionally promises to pay to
Lessor on the Sale Date an amount equal to the Maximum Residual
Guarantee Amount for the Properties. Any payment of the
foregoing amounts described in this Section 22.1(b) shall be made
together with a payment of all other amounts referenced in the last
sentence of the first paragraph of Section 22.1(a).
(c) In the event that the Properties are either sold to one
(1) or more third party purchasers on the Sale Date or retained by
Lessor in connection with an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then in either case on
the applicable Sale Date Lessee shall provide Lessor or such third
party purchaser (unless otherwise agreed by such third party
purchaser) with (i) all permits, certificates of occupancy,
governmental licenses and authorizations necessary to use, operate,
repair, access and maintain each such Property for the purpose it is
being used by Lessee, and (ii) such manuals, permits, easements,
licenses, intellectual property, know-how, rights-of-way and other
rights and privileges in the nature of an easement as are reasonably
necessary or desirable in connection with the use, operation, repair,
access to or maintenance of each such Property for its intended
purpose or otherwise as Lessor or such third party purchaser(s)
shall reasonably request (and a royalty-free license or similar
agreement to effectuate the foregoing on terms reasonably
agreeable to Lessor or such third party purchaser(s), as applicable).
All assignments, licenses, easements, agreements and other
deliveries required by clauses (i), (ii) and (iii) of this paragraph (c)
shall be in form reasonably satisfactory to Lessor or such third
party purchaser(s), as applicable, and shall be fully assignable
(including without limitation both primary assignments and
assignments given in the nature of security) without payment of
any fee, cost or other charge. Lessee shall also execute any
documentation requested by Lessor or such third party
purchaser(s), as applicable, evidencing the continuation or
assignment of each Ground Lease.
22.2 Application of Proceeds of Sale.
Lessor shall apply the proceeds of sale of any Property in the following
order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the
Agent, as the case may be) for the payment of all reasonable costs
and expenses incurred by Lessor (and/or the Agent, as the case
may be) in connection with the sale (to the extent Lessee has not
satisfied its obligation to pay such costs and expenses);
(b) SECOND, so long as the Credit Agreement is in
effect and any Holder Advances or any amount is owing to the
Holders under any Operative Agreement, to the Agent to be
applied pursuant to intercreditor provisions between the Lenders
and the Holders contained in the Operative Agreements; and
(c) THIRD, to Lessee.
22.3 Indemnity for Excessive Wear.
If the proceeds of the sale described in Section 22.1 with
respect to the Properties shall be less than the Limited Recourse Amount
with respect to the Properties, and at the time of such sale it shall have
been reasonably determined (pursuant to the Appraisal Procedure) that the
Fair Market Sales Value of the Properties shall have been impaired by
greater than expected wear and tear during the term of the Lease, Lessee
shall pay to Lessor within ten (10) days after receipt of Lessor's written
statement (i) the amount of such excess wear and tear determined by the
Appraisal Procedure or (ii) the amount of the Sale Proceeds Shortfall,
whichever amount is less.
22.4 Appraisal Procedure.
For determining the Fair Market Sales Value of the
Properties or any other amount which may, pursuant to any provision of
any Operative Agreement, be determined by an appraisal procedure,
Lessor and Lessee shall use the following procedure (the "Appraisal
Procedure"). Lessor and Lessee shall endeavor to reach a mutual
agreement as to such amount for a period of ten (10) days from
commencement of the Appraisal Procedure under the applicable section of
the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by
Lessor, shall mutually agree thereupon, but if either party shall fail to
choose an appraiser within twenty (20) days after notice from the other
party of the selection of its appraiser, then the appraisal by such appointed
appraiser shall be binding on Lessee and Lessor. If the two (2) appraisers
cannot agree within twenty (20) days after both shall have been appointed,
then a third appraiser shall be selected by the two (2) appraisers or, failing
agreement as to such third appraiser within thirty (30) days after both shall
have been appointed, by the American Arbitration Association. The
decisions of the three (3) appraisers shall be given within twenty (20) days
of the appointment of the third appraiser and the decision of the appraiser
most different from the average of the other two (2) shall be discarded and
such average shall be binding on Lessor and Lessee; provided, that if the
highest appraisal and the lowest appraisal are equidistant from the third
appraisal, the third appraisal shall be binding on Lessor and Lessee. The
fees and expenses of the appraiser appointed by Lessee shall be paid by
Lessee; the fees and expenses of the appraiser appointed by Lessor
shall be paid by Lessor (such fees and expenses not being indemnified
pursuant to Section 13 of the Participation Agreement); and the fees and
expenses of the third appraiser shall be divided equally between Lessee
and Lessor.
22.5 Certain Obligations Continue.
During the Marketing Period, the obligation of Lessee to
pay Rent with respect to the Properties (including without limitation the
installment of Basic Rent due on the Expiration Date) shall continue
undiminished until payment in full to Lessor of the sale proceeds, if any,
the Maximum Residual Guarantee Amount, the amount due under Section
22.3, if any, and all other amounts due to Lessor or any other Person with
respect to all Properties or any Operative Agreement. Lessor shall have
the right, but shall be under no duty, to solicit bids, to inquire into the
efforts of Lessee to obtain bids or otherwise to take action in connection
with any such sale, other than as expressly provided in this Article XXII.
ARTICLE XXIII
23.1 Holding Over.
If Lessee shall for any reason remain in possession of a
Property after the expiration or earlier termination of this Lease as to such
Property (unless such Property is conveyed to Lessee), such possession
shall be as a tenancy at sufferance during which time Lessee shall continue
to pay Supplemental Rent that would be payable by Lessee hereunder
were the Lease then in full force and effect with respect to such Property
and Lessee shall continue to pay Basic Rent at one hundred ten percent
(110%) of the Basic Rent that would otherwise be due and payable at such
time. Such Basic Rent shall be payable from time to time upon demand
by Lessor and such additional ten percent (10%) amount shall be applied
by Lessor to the payment of the Loans pursuant to the Credit Agreement
and the Holder Advances pursuant to the Trust Agreement pro rata
between the Loans and the Holder Advances. During any period of
tenancy at sufferance, Lessee shall, subject to the second preceding
sentence, be obligated to perform and observe all of the terms, covenants
and conditions of this Lease, but shall have no rights hereunder other than
the right, to the extent given by law to tenants at sufferance, to continue
their occupancy and use of such Property. Nothing contained in this
Article XXIII shall constitute the consent, express or implied, of Lessor to
the holding over of Lessee after the expiration or earlier termination of this
Lease as to any Property (unless such Property is conveyed to Lessee) and
nothing contained herein shall be read or construed as preventing Lessor
from maintaining a suit for possession of such Property or exercising any
other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss.
During the Term, unless Lessee shall not be in actual
possession of any Property in question solely by reason of Lessor's
exercise of its remedies of dispossession under Article XVII, the risk of
loss or decrease in the enjoyment and beneficial use of such Property as a
result of the damage or destruction thereof by fire, the elements, casualties,
thefts, riots, wars or otherwise is assumed by Lessee, and Lessor shall in
no event be answerable or accountable therefor.
ARTICLE XXV
25.1 Assignment.
(a) Lessee may not assign this Lease or any of its rights
or obligations hereunder or with respect to any Property in whole
or in part to any Person without the prior written consent of the
Agent, the Lenders, the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section
25.1 or otherwise) or other relinquishment of possession to any
Property shall in any way discharge or diminish any of the
obligations of Lessee to Lessor hereunder and Lessee shall remain
directly and primarily liable under this Lease as to any assignment
regarding this Lease.
25.2 Subleases.
(a) Promptly, but in any event within five (5) Business
Days, following the execution and delivery of any sublease
permitted by this Article XXV, Lessee shall notify Lessor and the
Agent of the execution of such sublease. As of the date of each
Lease Supplement, Lessee shall lease the respective Properties
described in such Lease Supplement from Lessor, and any existing
tenant respecting such Property shall automatically be deemed to
be a subtenant of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any
Lender, any Holder or Lessor and subject to the other provisions of
this Section 25.2, Lessee may sublet (i) any Property or portion
thereof to any wholly-owned Subsidiary of Lessee and/or (ii) up to
twenty-five percent of the total square footage of the Properties to
any Person that is not a wholly-owned Subsidiary of Lessee.
Except as referenced in the immediately preceding sentence, no
other subleases shall be permitted unless consented to in writing by
the Lessor, the Agent and the Majority Holders. All subleasing
shall be done on market terms and shall in no way diminish the fair
market value or useful life of any applicable Property.
(c) No sublease (referenced in this Section 25.2 or
otherwise) or other relinquishment of possession to any Property
shall in any way discharge or diminish any of Lessee's obligations
to Lessor hereunder and Lessee shall remain directly and primarily
liable under this Lease as to such Property, or portion thereof, so
sublet. During the Basic Term, the term of any such sublease shall
not extend beyond the Basic Term. During any Renewal Term, the
term of any such sublease shall not extend beyond such Renewal
Term. Each sublease shall be expressly subject and subordinate to
this Lease.
ARTICLE XXVI
26.1 No Waiver.
No failure by Lessor or 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.
ARTICLE XXVII
27.1 Acceptance of Surrender.
No surrender to Lessor of this Lease or of all or any portion
of any Property or of any part of any thereof or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by Lessor
and the Agent and no act by Lessor or the Agent or any representative or
agent of Lessor or the Agent, other than a written acceptance, shall
constitute an acceptance of any such surrender.
27.2 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) any right, title or interest in any Property,
(c) any Notes, or (d) a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 Incorporation of Covenants.
Reference is made to the Lessee Credit Agreement and the
representations and warranties of Lessee contained in Section 3 of the
Lessee Credit Agreement (hereinafter referred to as the "Incorporated
Representations and Warranties") and the covenants contained in Sections
4 and 5 of the Lessee Credit Agreement (hereinafter referred to as the
"Incorporated Covenants"). Lessee agrees with Lessor that the
Incorporated Representations and Warranties and the Incorporated
Covenants (and all other relevant provisions of the Lessee Credit
Agreement related thereto, including without limitation the defined terms
contained in Section 1 thereof which are used in the Incorporated
Representations and Warranties and the Incorporated Covenants) are
hereby incorporated by reference into this Lease to the same extent and
with the same effect as if set forth fully herein and shall inure to the
benefit of Lessor, without giving effect to any waiver, amendment,
modification or replacement of the Lessee Credit Agreement or any term
or provision of the Incorporated Representations and Warranties or the
Incorporated Covenants occurring subsequent to the date of this Lease,
except to the extent otherwise specifically provided in the following
provisions of this paragraph. In the event a waiver is granted under the
Lessee Credit Agreement or an amendment or modification is executed
with respect to the Lessee Credit Agreement, and such waiver, amendment
and/or modification affects the Incorporated Representations and
Warranties or the Incorporated Covenants, then such waiver, amendment
or modification shall be effective with respect to the Incorporated
Representations and Warranties and the Incorporated Covenants as
incorporated by reference into this Lease only if consented to in writing by
the Lessor, the Agent and the Majority Holders. In the event of any
replacement of the Lessee Credit Agreement with a similar credit facility
(the "New Facility") the representations and warranties and covenants
contained in the New Facility which correspond to the representations and
warranties and covenants contained in Section 3 and Sections 4 and 5,
respectively, of the Lessee Credit Agreement shall become the
Incorporated Representations and Warranties and the Incorporated
Covenants hereunder only if consented to in writing by Lessor, the Agent
and the Majority Holders and, if such consent is not granted or if the
Lessee Credit Agreement is terminated and not replaced, then the
representations and warranties and covenants contained in Section 3 and
Sections 4 and 5, respectively, of the Lessee Credit Agreement (together
with any modifications or amendments approved in accordance with this
paragraph) shall continue to be the Incorporated Representations and
Warranties and the Incorporated Covenants hereunder.
ARTICLE XXIX
29.1 Notices.
All notices required or permitted to be given under this
Lease shall be in writing and delivered as provided in the Participation
Agreement.
ARTICLE XXX
30.1 Miscellaneous.
Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor
arising from events commencing prior to the expiration or earlier
termination of this Lease shall survive such expiration or earlier
termination. If any provision of this Lease shall be held to be
unenforceable in any jurisdiction, such unenforceability shall not affect the
enforceability of any other provision of this Lease and such jurisdiction or
of such provision or of any other provision hereof in any other jurisdiction.
30.2 Amendments and Modifications.
Neither this Lease nor any Lease Supplement may be
amended, waived, discharged or terminated except in accordance with the
provisions of Section 14.5 of the Participation Agreement.
30.3 Successors and Assigns.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 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.
30.5 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 (1) and the same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NORTH CAROLINA, EXCEPT TO THE EXTENT THE LAWS OF
THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED
ARE REQUIRED TO APPLY.
30.7 Calculation of Rent.
All calculation of Rent payable hereunder shall be
computed based on the actual number of days elapsed over a year of three
hundred sixty (360) days or, to the extent such Rent is based on the Prime
Lending Rate, three hundred sixty-five (365) (or three hundred sixty-six
(366), as applicable) days.
30.8 Memoranda of Lease and Lease Supplements.
This Lease shall not be recorded; provided, Lessor and
Lessee shall promptly record (a) a memorandum of this Lease and the
applicable Lease Supplement (in substantially the form of Exhibit B
attached hereto) regarding each Property promptly after the acquisition
thereof in the local filing office with respect thereto, in all cases at
Lessee's cost and expense, and as required under applicable law to
sufficiently evidence this Lease and any such Lease Supplement in the
applicable real estate filing records.
30.9 Allocations between the Lenders and the Holders.
Notwithstanding any other term or provision of this Lease
to the contrary, the allocations of the proceeds of the Properties and any
and all other Rent and other amounts received hereunder shall be subject
to the inter-creditor provisions between the Lenders and the Holders
contained in the Operative Agreements (or as otherwise agreed among the
Lenders and the Holders from time to time).
30.10 Limitations on Recourse.
Notwithstanding anything contained in this Lease to the
contrary, Lessee agrees to look solely to Lessor's estate and interest in the
Properties (and in no circumstance to the Agent, the Lenders, the Holders
or otherwise to Lessor) for the collection of any judgment requiring the
payment of money by Lessor in the event of liability by Lessor, and no
other property or assets of Lessor or any shareholder, owner or partner
(direct or indirect) in or of Lessor, or any director, officer, employee,
beneficiary, Affiliate of any of the foregoing shall be subject to levy,
execution or other enforcement procedure for the satisfaction of the
remedies of Lessee under or with respect to this Lease, the relationship of
Lessor and Lessee hereunder or Lessee's use of the Properties or any other
liability of Lessor to Lessee. Nothing in this Section shall be interpreted
so as to limit the terms of Sections 6.1 or 6.2 or the provisions of Section
14.10 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST
EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.
30.12 Exercise of Lessor Rights.
Lessee hereby acknowledges and agrees that the rights and
powers of Lessor under this Lease have been assigned to the Agent
pursuant to the terms of the Security Agreement and the other Operative
Agreements.
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
(a) Any legal action or proceeding with respect to this
Lease may be brought in the courts of the State of North Carolina in
Mecklenburg County or of the United States for the Western District
of North Carolina, and, by execution and delivery of this Lease, each
of the parties to this Lease hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the parties to this
Lease further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to
Section 29.1, such service to become effective three (3) days after
such mailing. Nothing herein shall affect the right of any party to
serve process in any other manner permitted by Law or to commence
legal proceedings or to otherwise proceed against any party in any
other jurisdiction.
(b) Each of the parties to this Lease hereby irrevocably
waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising
out of or in connection with this Lease brought in the courts referred
to in subsection (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Notwithstanding the provisions of Section 30.13(a) to
the contrary, upon demand of any party hereto, whether made before
or after institution of any judicial proceeding, any Dispute between
or among parties to this Lease shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from this
Lease executed in the future, or claims arising out of or connected
with the transaction reflected by this Lease.
Arbitration shall be conducted under and governed by the
Arbitration Rules of the AAA and Title 9 of the United States Code.
All arbitration hearings shall be conducted in Charlotte, North
Carolina. The expedited procedures set forth in Rule 51 et seq. of
the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court
having jurisdiction. The panel from which all arbitrators are selected
shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state
where the hearing will be conducted or if such person is not
available to serve, the single arbitrator may be a licensed attorney.
Notwithstanding the foregoing, this arbitration provision does not
apply to disputes under or related to swap agreements.
Notwithstanding the preceding binding arbitration
provisions, the parties to this Lease agree to preserve, without
diminution, certain remedies that the Agent on behalf of the
Lenders and the Holders may employ or exercise freely,
independently or in connection with an arbitration proceeding or
after an arbitration action is brought. The Agent on behalf of the
Lenders and the Holders shall have the right to proceed in any
court of proper jurisdiction or by self-help to exercise or prosecute
the following remedies, as applicable (i) all rights to foreclose
against any real or personal property or other security by exercising
a power of sale granted under any Operative Agreement or under
applicable Law or by judicial foreclosure and sale, including a
proceeding to confirm the sale; (ii) all rights of self-help including
peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining
provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver
and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of
these remedies does not limit the power of an arbitrator to grant
similar remedies that may be requested by a party in a Dispute.
The parties hereto agree that they shall not have a remedy
of special, punitive or exemplary damages against the other in any
Dispute and hereby waive any right or claim to special, punitive or
exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is
resolved by arbitration or judicially.
By execution and delivery of this Lease, each of the parties
hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction
relating to any arbitration proceedings conducted under the
Arbitration Rules in Charlotte, North Carolina and irrevocably
agrees to be bound by any final judgment rendered thereby in
connection with this Lease from which no appeal has been taken or
is available.
30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN
STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO
THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY
COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND INTEREST
THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR PAYMENTS SO
CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST." ALL
AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN
NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION
PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY
INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS
LEASE OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMISSIBLE UNDER
APPLICABLE LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE
AGREEMENTS OR ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE
BE PAYABLE IN EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION
SHALL BE SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS
UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE
MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER APPLICABLE LAW, WITHOUT THE
NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF
LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS
INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR UNDER APPLICABLE
LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF THE MAXIMUM
LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF
THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF
INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE
EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT
OF PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY
AMOUNTS EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE
RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF
SUCH DEMAND, AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY
UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED
TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE
AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE FULL STATED TERM
(INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS LEASE
SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED
THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
[Signature pages follow]
IN WITNESS WHEREOF, the parties have caused this Lease to be
duly executed and delivered as of the date first above written.
PERFORMANCE FOOD GROUP COMPANY
By: /s/ Roger L. Boeve
Name: Roger L. Boeve
Title: Executive VP. / Chief
Financial Officer
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not individually, but solely as
the Owner Trustee under the
PFG Real Estate Trust 1997-1,
as Lessor
By: /s/ Nancy M. Dahl
Name: Nancy M. Dahl
Title: Vice President
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
Name:
Title: