Exhibit 10.3
Amended and Restated Lease Agreement, dated as of August 1. 2003
between Wachovia Development Corporation, as Lessor, and the Company
AMENDED AND RESTATED LEASE AGREEMENT
Dated as of August 1, 2003
between
WACHOVIA DEVELOPMENT CORPORATION,
as Lessor
and
THE PEP BOYS - MANNY, MOE & XXXX
THE PEP BOYS XXXXX XXX & XXXX OF CALIFORNIA,
PEP BOYS - MANNY, MOE & XXXX OF DELAWARE, INC.,
as Lessee
This Amended and Restated Lease Agreement is subject to a security interest in
favor of Wachovia Bank, National Association, as the agent for the Lenders and
respecting the Security Documents, as the agent for the Secured Parties (the
"Agent") under a Security Agreement dated as of August 1, 2003, between
Wachovia Development Corporation and the Agent, as amended, modified, extended,
supplemented, restated and/or replaced from time to time in accordance with the
applicable provisions thereof. This Amended and Restated Lease Agreement has
been executed in several counterparts. To the extent, if any, that this
Amended and Restated 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 Amended and Restated 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 IA AMENDMENT AND RESTATEMENT 1
ARTICLE I 2
1.1 Definitions. 2
1.2 Interpretation. 2
ARTICLE II 2
2.1 Property. 2
2.2 Lease Term. 2
2.3 Title. 2
2.4 Lease Supplements. 3
ARTICLE III 3
3.1 Rent. 3
3.2 Payment of Basic Rent. 3
3.3 Supplemental Rent. 3
3.4 Performance on a Non-Business Day. 4
3.5 Rent Payment Provisions. 4
ARTICLE IV 5
4.1 Taxes; Utility Charges. 5
ARTICLE V 5
5.1 Quiet Enjoyment. 5
ARTICLE VI 5
6.1 Net Lease. 5
6.2 No Termination or Abatement. 6
ARTICLE VII 6
7.1 Ownership of the Properties. 6
ARTICLE VIII 8
8.1 Condition of the Properties. 8
8.2 Possession and Use of the Properties. 8
8.3 Integrated Properties. 9
ARTICLE IX 10
9.1 Compliance With Legal Requirements, Insurance
Requirements and Manufacturer's Specifications
and Standards. 10
ARTICLE X 10
10.1 Maintenance, Repair and Replacement; Return. 10
10.2 Environmental Inspection. 11
ARTICLE XI 12
11.1 Modifications. 12
ARTICLE XII 12
12.1 Warranty of Title. 12
ARTICLE XIII 13
13.1 Permitted Contests Other Than in Respect of
Indemnities. 13
13.2 Impositions, Utility Charges, Other Matters;
Compliance with Legal Requirements. 14
ARTICLE XIV 14
14.1 Public Liability and Workers' Compensation
Insurance. 14
14.2 Permanent Hazard and Other Insurance. 14
14.3 Coverage. 15
14.4 Additional Insurance Requirements. 16
ARTICLE XV 16
15.1 Casualty and Condemnation. 16
15.2 Environmental Matters. 19
15.3 Notice of Environmental Matters. 20
ARTICLE XVI 20
16.1 Termination Upon Certain Events. 20
16.2 Procedures. 20
ARTICLE XVII 21
17.1 Lease Events of Default. 21
17.2 Surrender of Possession. 24
17.3 Reletting. 24
17.4 Damages. 24
17.5 Power of Sale. 25
17.6 Final Liquidated Damages. 25
17.7 Environmental Costs. 26
17.8 Waiver of Certain Rights. 26
17.9 Assignment of Rights Under Contracts. 26
17.10 Remedies Cumulative. 27
17.11 Limitation Regarding Certain Lease
Events of Default. 27
ARTICLE XVIII 27
18.1 Lessor's Right to Cure Lessee's Lease
Defaults. 27
ARTICLE XIX 28
19.1 Provisions Relating to Lessee's Exercise of
its Purchase Option. 28
19.2 No Purchase or Termination With Respect to
Less than All of a Property. 28
ARTICLE XX 28
20.1 Purchase Option or Sale Option-General
Provisions. 28
20.2 Lessee Purchase Option. 29
20.3 Third Party Sale Option. 30
ARTICLE XXI 30
21.1 [Intentionally Omitted]. 30
ARTICLE XXII 31
22.1 Sale Procedure. 31
22.2 Application of Proceeds of Sale. 33
22.3 Indemnity for Excessive Wear. 33
22.4 Appraisal Procedure. 33
22.5 Certain Obligations Continue. 34
ARTICLE XXIII 34
23.1 Holding Over. 34
ARTICLE XXIV 35
24.1 Risk of Loss. 35
ARTICLE XXV 35
25.1 Assignment. 35
25.2 Subleases. 35
ARTICLE XXVI 36
26.1 No Waiver. 36
ARTICLE XXVII 36
27.1 Acceptance of Surrender. 36
27.2 No Merger of Title. 36
ARTICLE XXVIII 37
28.1 Incorporation of Covenants. 37
ARTICLE XXIX 38
29.1 Notices. 38
ARTICLE XXX 38
30.1 Miscellaneous. 38
30.2 Amendments and Modifications. 38
30.3 Successors and Assigns. 38
30.4 Headings and Table of Contents. 38
30.5 Counterparts. 38
30.6 GOVERNING LAW. 38
30.7 Calculation of Rent. 39
30.8 Memoranda of Lease and Lease Supplements. 39
30.9 Allocations between the Lenders and the
Lessor. 39
30.10 Limitations on Recourse. 39
30.11 WAIVERS OF JURY TRIAL. 39
30.12 Exercise of Lessor Rights. 40
30.13 SUBMISSION TO JURISDICTION AND VENUE. 40
30.14 USURY SAVINGS PROVISION. 40
SCHEDULE
SCHEDULE 22.6 - Out Parcels Approved at Closing
EXHIBITS
EXHIBIT A - Amended and Restated Lease Supplement No. ____
EXHIBIT B - Amended and Restated Memorandum of Lease and Lease
Supplement No. ____
AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT dated as of August 1, 2003
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time, this "Lease") is between WACHOVIA DEVELOPMENT CORPORATION, a
North Carolina corporation, having its principal office at One Wachovia Center
301 South College Street, Charlotte, Mecklenburg County, Xxxxx Xxxxxxxx, Xxxxx
Xxxxxxxx 00000, as lessor (the "Lessor"), and THE PEP BOYS - MANNY, MOE & XXXX
a Pennsylvania corporation, having its principal place of business at
0000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, THE PEP BOYS XXXXX
XXX & XXXX OF CALIFORNIA, a California corporation, having its principal place
of business at 0000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 and
PEP BOYS - MANNY, MOE & XXXX OF DELAWARE, INC., a Delaware corporation, having
its principal place of business at 0000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, each as a lessee (jointly and severally, the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the
Participation Agreement (described below), Lessor will obtain title to various
parcels of real property, some of which will (or may) have existing
Improvements thereon, from the Trust; and
B. WHEREAS, the Term shall commence with respect to each Property
upon the Closing 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 IA
AMENDMENT AND RESTATEMENT
This Lease amends and restates in its entirety that certain Lease
Agreement dated as of September 22, 2000 (the "Original Lease") between State
Street Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, but solely as owner trustee under the Trust (the "Owner
Trustee") and the Lessee. The Original Lease has been assigned from the Owner
Trustee to the Lessor pursuant to the terms of the Assignment and
Recharacterization Agreement.
ARTICLE I
1.1 Definitions.
For purposes of this Lease, capitalized terms used in this Lease and
not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Participation Agreement dated as of August 1, 2003
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among The Pep Boys - Manny, Moe & Xxxx, The Pep Boys
Xxxxx Xxx & Xxxx of California, Pep Boys - Manny, Moe & Xxxx of Delaware, Inc.,
jointly and severally, as Lessees, The Pep Boys - Manny, Moe & Xxxx and the
various parties thereto from time to time, as the Guarantors, Lessor, the
various banks and other lending institutions which are parties thereto from
time to time, as the Lenders, and Wachovia Bank, National Association, as agent
for the Lenders and Lessor and respecting the Security Documents, as the agent
for the Secured Parties. Unless otherwise indicated, references in this Lease
to articles, sections, paragraphs, clauses, appendices, schedules and exhibits
are to the same contained in this Lease.
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 term of this Lease with respect to each Property (the "Term") shall
begin upon the Closing Date and shall end on the fifth annual anniversary of
the Closing Date, unless the Term is earlier terminated.
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.
Lessee and Lessor have executed and delivered a Lease Supplement for each
Property to be leased effective as of the Closing Date in substantially the
form of the Amended and Restated Lease Supplement set forth on EXHIBIT A
hereto. The parties hereto agree that references herein to Lease Supplement
shall mean to each "Amended and Restated Lease Supplement" entered into in
connection herewith which amend and restate the corresponding lease
supplements entered into in connection herewith which amend and restate the
corresponding lease supplements entered into in connection with the Original
Lease and that the defined term "Lease Supplement" used herein, as provided in
Appendix A to the Participation Agreement, shall mean such "Amended and
Restated Lease Supplement".
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.
(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, 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.
(d) Lessee shall make all payments of Rent prior to 1:00 p.m.,
Charlotte, North Carolina time, on the applicable date for payment of such
amount.
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 five (5) 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 the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
(a) any and all payment obligations (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by any Person to the
Agent, any Lender, the Lessor or any other Person, (b) interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due
(subject to the applicable grace period and notice) 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 and notice) 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 and (c) amounts
referenced as Supplemental Rent obligations pursuant to Section 8.3 of the
Participation Agreement. 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.
For purposes of this Section 3.3, the term "Person" shall be limited to
the Lessor, the Agent, the Lenders and any other party to any of the Operative
Agreements from time to time or any of their Affiliates, successors, or
assigns, agents, independent contractors, advisors, attorneys, accountants or
others engaged by any part to any Operative Agreement.
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 preceding
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.
The Lessor hereby instructs the Lessee, and the Lessee hereby
acknowledges and agrees, that until such time as the Notes and the Lessor
Advance are paid in full and the Liens evidenced by the Security Documents
(including the Security Agreement and the Mortgage Instruments) have been
released (i) any and all Rent (excluding Excepted Payments) and any and all
other amounts of any kind or type under this Lease due and owing or payable
to any Person shall instead be paid directly to the Agent (excluding Excepted
Payments) or as the Agent may direct from time to time for allocation and
distribution in accordance with the procedures set forth in Section 8.7 of the
Participation Agreement and the Intercreditor Agreement.
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 Closing 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
or other amounts payable by Lessee hereunder, 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 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) breach of any warranty or representation with respect to any
Property or any Operative Agreement; (k) any defect in the condition, quality
or fitness for use of any Property or any part thereof; or (l) 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 subjected 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 including without limitation Section 16.1 hereof) or (b)
to avail itself of any abatement, suspension, deferment, reduction, setoff,
counterclaim or defense with respect to any Rent or other amounts payable by
Lessee hereunder. 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, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes (A) this Lease will be treated as a
financing arrangement and (B) Lessee will be treated as the owner of the
Properties and will be entitled to all tax benefits ordinarily available to
owners of property similar to the Properties for such tax purposes.
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,
bankruptcy, regulatory, commercial or real estate law or under any other set of
rules (except to the extent of the representation and warranty by Lessee in
Section 6.2(b)(ii) of the Participation Agreement). Lessee shall claim the
cost recovery and interest expense deductions associated with each Property,
and Lessor shall not take on its tax return a position inconsistent with
Lessee's claim of such deductions. It is further the intent of Lessor and
Lessee that this Lease conform with and satisfy the requirements of, to the
extent possible, FASB Interpretation No. 46, and the Lessor acknowledges that
the Lessee and its auditors will be relying upon the information provided
pursuant to Sections 8.2(b), (c) and (d) of the Participation Agreement, the
representation of the Lessor contained in the last sentence of Section 6.1(a)
of the Participation Agreement, and the Lessor Confirmation Letters for
purposes of determining consolidation thereunder.
(b) In order to secure the obligations of Lessee now existing or hereafter
arising under any and all Operative Agreements, Lessee hereby conveys, grants,
assigns, transfers, hypothecates, mortgages and sets over to Lessor, for the
benefit of the Secured Parties and subject to Permitted Liens, a first priority
security interest in and lien on all right, title and interest of Lessee (now
owned or hereafter acquired) in and to all Properties, to the extent such is
personal property and irrevocably grants and conveys a lien, deed of trust and
mortgage on all right, title and interest of Lessee (now owned or hereafter
acquired) in and to all Properties to the extent such is real property. Lessor
and Lessee further intend and agree that, for the purpose of securing the
obligations of Lessee now existing or hereafter arising under the Operative
Agreements, (i) this Lease shall be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code
respecting each of the
Properties and all proceeds (including without limitation insurance proceeds
thereof) to the extent such is personal property and an irrevocable grant and
conveyance of a lien, deed of trust and mortgage on each of the Properties and
all proceeds (including without limitation insurance proceeds thereof) to the
extent such is real property; (ii) the acquisition of title by Lessor in each
Property referenced in Article II constitutes a grant by Lessee to Lessor of a
security interest, lien, deed of trust and mortgage in all of Lessee's right,
title and interest in and to each Property and all proceeds (including without
limitation insurance proceeds thereof) of the conversion, voluntary or
involuntary, of the foregoing into cash, investments, securities or other
property, whether in the form of cash, investments, securities or other
property, and an assignment of all rents, profits and income produced by each
Property; and (iii) notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from financial intermediaries,
bankers or agents (as applicable) of Lessee shall be deemed to have been given
for the purpose of perfecting such lien, security interest, mortgage lien and
deed of trust under applicable law. Lessee shall promptly take such actions as
necessary (including without limitation the filing of Uniform Commercial Code
Financing Statements, Uniform Commercial Code Fixture Filings and memoranda (or
short forms) of this Lease and the various Lease Supplements) to ensure that
subject to Permitted Liens that the lien, security interest, mortgage lien and
deed of trust in each Property and the other items referenced above will be
deemed to be a perfected lien, security interest, mortgage lien and deed of
trust of first priority under applicable law and will be maintained as such
throughout the Term.
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 (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR OF LESSOR
LIENS) 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 HAS MADE OR SHALL BE
DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR OF LESSOR
LIENS) 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 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 CLOSING 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 AND EACH LENDER 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 AND THE LENDERS, 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 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 12.2 of the Participation
Agreement 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 principal place of business,
chief executive office and the location of its jurisdiction of organization.
Regarding a particular Property, each Lease Supplement correctly identifies the
initial location of the related Equipment (if any) 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 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 Closing Date, Lessor and Lessee shall execute a
Lease Supplement in regard to each Property which shall contain an Improvement
Schedule that has a general description of the Improvements which shall
comprise a part of such Property and a legal description of the Land to be
leased hereunder. Simultaneously with the execution and delivery of each Lease
Supplement, such Improvements, Land, ground subleasehold interest and all
additional Improvements which are financed under the Operative Agreements after
the Closing 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. Lessor shall,
in Lessor's reasonable discretion, from time to time cooperate with Lessee to
enable Lessee to exercise such rights and remedies including, without
limitation, the execution and delivery of documents reasonably requested by the
Lessee and in form and substance reasonably acceptable to Lessor.
8.3 Integrated Properties.
At all times during the Term, Lessee shall, at its sole cost and
expense, cause each Property to 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 each such Property 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) and
all Insurance Requirements relating to the Properties, (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, and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property unless the
failure to procure, maintain and comply with such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not and
could not reasonably be expected to have 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, Repair and Replacement; 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 (subject
to ordinary wear and tear) 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 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 (including without limitation
any of the Equipment) 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
Lessor 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 and,
provided no Default or Event of Default has occurred and is continuing, shall
use all reasonable efforts to minimize interference with and disruption of
Lessee's business.
(e) 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 or any Lender is
required pursuant to any applicable Legal Requirement to obtain such Appraisals
(or reappraisals) and upon the request of Lessor after the occurrence and
continuance 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 (i) to Lessor pursuant to the exercise of the
applicable remedies upon the occurrence of a Lease Event of Default or (ii)
pursuant to the second paragraph of Section 22.1(a) hereof, to Lessor 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) through (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 eighty (180) 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
ninety (90) days prior to the date of delivery) by an independent recognized
professional reasonably acceptable to Lessor, and in form, scope and content
reasonably satisfactory to Lessor.
ARTICLE XI
11.1 Modifications.
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; provided, further,
Lessee shall not make any Modification (unless required by any Legal
Requirement) to the extent any such Modification, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. 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. 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.
ARTICLE XII
12.1 Warranty of Title.
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements, all
replacement components to each Property and all Modifications) immediately and
without further action to vest in and become the property of Lessor and to be
subject to the terms of this 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 Lender pursuant to any Operative 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 and/or the Agent 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 and Lessor Liens. At all times during the Term, Lessee
shall (i) cause a valid, perfected, first priority Lien on each applicable
Property to be in place in favor of the Agent (for the benefit of the Secured
Parties) and (ii) file, or cause to be filed, all necessary documents under the
applicable real property law and Article 9 of the Uniform Commercial Code to
perfect such title and 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 11 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,
Imposition or utility charge 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, the Agent and each Lender; (b) there shall
not be imposed a Lien (other than Permitted Liens and Lessor 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, 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.
13.2 Impositions, Utility Charges, Other Matters; Compliance with
Legal Requirements.
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility
charges and such other matters to be timely paid, settled or compromised, as
appropriate, with respect to each Property and (b) each Property to comply with
all applicable Legal Requirements in all material respects.
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 such
coverage have a minimum combined single limit per occurrence coverage for
commercial general liability of less than $25,000,000.00 or less than
$50,000,000.00 in the aggregate. The policies shall name Lessee as the insured
and shall be endorsed to name Lessor, 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, 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, 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 generally insured against by similarly situated entities and shall
maintain builders' risk insurance during construction of any Improvements or
Modifications in each case in amounts no less than the Property Cost of such
Property from time to time and on terms (including with regard to deductibles
and self insurance retentions) 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 and the Agent (on behalf of the Secured Parties) as a named
additional insured, mortgagee and loss payee; 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, 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 the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) 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 Agent and the Lenders as additional insureds,
mortgagee 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 and a rating by S&P or
Xxxxx'x of A- or A3, respectively, or better. Lessee shall cause such
certificates to include a provision for thirty (30) days' advance written
notice by the insurer to the Agent (on behalf of Lessor and the other
beneficiaries of such insurance coverage) in the event of cancellation or
material alteration of such insurance. If an Event of Default has occurred and
is continuing and the Agent (on behalf of Lessor and the other beneficiaries of
such insurance coverage) so requests, Lessee shall deliver to the Agent (on
behalf of Lessor and the other beneficiaries of such insurance coverage) 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 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 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. Lessee may
carry the insurance required under this Lease under one or more blanket
policies, subject to the terms and conditions herein.
14.4 Additional Insurance Requirements.
Not in limitation of any provision of the Operative Agreements but in
addition thereto, Lessee shall obtain any and all additional insurance
policies (including without limitation with respect to Condemnation) with
regard to the Property or otherwise with respect to the transactions
contemplated by the Operative Agreements as requested reasonably from time to
time by Lessor provided, however, such additional policies and coverages are
customarily carried by owners of comparable properties in the vicinity of the
applicable Property.
ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of 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 14.2(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 (whether or not a Default or Event of Default has
occurred), 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 and when all such obligations of Lessee with respect to such matters
(and all other obligations of Lessee which should have been satisfied pursuant
to the Operative Agreements as of such date) have been satisfied, all amounts
so held by Lessor shall be paid over to Lessee.
(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 or otherwise has
knowledge 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 promptly after Lessee's receipt of such notice or
obtaining such knowledge. In the event a Casualty or Condemnation occurs
(regardless of whether Lessee is obligated to give notice thereof to Lessor
pursuant to the foregoing sentence), and unless the Casualty or Condemnation is
estimated to affect an amount equal to or less than twenty-five percent (25%)
of the Property Cost of such Property and the Lessee performs a Restoration in
accordance with Section 15.1(e) hereof, then Lessee shall be deemed to have
delivered a Termination Notice to Lessor and the provisions of Sections 16.1
and 16.2 shall apply; provided, however, if no Default or Event of Default has
occurred and is continuing and the lesser of Lessee's bond ratings is not worse
than BB- for Standard and Poors and Ba3 for Xxxxx'x and Lessee delivers written
notice to Lessor within fifteen (15) days of such Casualty or Condemnation, and
proceeds held by Lessor are made available for Restoration in accordance with
Section 15.1(e) hereof then Lessee may restore such Property pursuant to the
terms and conditions of the Operative Agreements, including without limitation
Sections 10.1, 11.1 and 15.1 of this Lease and proceeds held by Lessor shall be
made available for Restoration in accordance with Section 15.1(e) hereof.
(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 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
(subject to reimbursement in accordance with Section 15.1(e)) promptly and
diligently repair any damage to the Property caused by such Casualty or
Condemnation in conformity with the requirements of Sections 10.1 and 11.1
("Restoration"), using the plans and specifications or manufacturer's
specifications for the applicable Improvements, Equipment or other components
of the Property (as modified to give effect to any subsequent Modifications,
any Condemnation affecting the Property and all applicable Legal Requirements),
so as to restore the Property to the same or a greater 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 Property shall remain with Lessor.
(i) If the award, compensation or proceeds
received by or turned over to Lessor, in accordance with 15.1(a), in respect of
any Casualty or Condemnation (collectively, as used in this Section 15.1(e),
"proceeds"), and if a Default or Event of Default shall not have occurred and
be continuing, then Lessor shall make available for expenses related to the
Restoration of the Property, apply all such proceeds it receives pursuant to
the terms of this Lease provided that such Restoration shall be accomplished as
provided in Section 15.1(g) so long as such Restoration can, in the reasonable
judgment of the Agent, be completed within one (1) year after the date of the
Casualty or Condemnation and in such a manner so that the Property will have a
value at least equal to its value prior to the Casualty or Condemnation.
(ii) Any such proceeds held by Lessor for
Restoration shall be made available by Lessor (or at Lessor's election by a
disbursing or escrow agent who shall be selected by Lessor and whose fees shall
be paid by Lessee) from time to time or as requested by Lessee no more
frequently than once a month as the Restoration progresses, upon delivery to
the Agent of the following: (i) evidence reasonably satisfactory to the Agent
of the estimated cost of Restoration; (ii) funds (or assurances reasonably
satisfactory to the Agent that such funds are available) sufficient in addition
to such proceeds to complete and fully pay for the Restoration; and (iii) such
architect's certificates, waivers of lien, contractor's sworn statements, title
insurance endorsements, plats of survey and such other evidence of cost,
payment and performance as the Agent may reasonably require and approve. No
payment made prior to the final completion of Restoration shall exceed ninety
percent (90%) of the value of the work
performed from time to time, as such value shall be determined by the Agent in
its reasonable judgment. Prior to commencement of the work, and from time to
time thereafter, if so requested by the Agent. Lessee shall deposit with
Lessor an amount of funds in excess of the proceeds which, together with such
proceeds, shall at all times be at least sufficient in the reasonable judgment
of the Agent to pay the entire unpaid cost of the Restoration, free and clear
of all Liens or claims of Lien. Any surplus which may remain out of the
proceeds held by Lessor after payment of all costs of the Restoration shall be
paid to Lessee. At Lessee's reasonable request, Lessor will deposit any
proceeds held by it for Restoration into an interest-bearing account which is
backed directly or indirectly by the full faith and credit of The United States
government over which Lessor has sole possession, authority and control, and
otherwise on terms and conditions reasonably satisfactory to the Agent.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III except upon any Lease
termination and Lessee's payment of the Termination Value to Lessor in
accordance with Article XVI hereof.
(g) Notwithstanding anything to the contrary set forth
in Section 15.1(a) or Section 15.1(e), if during the Term a Casualty occurs
with respect to a Property or Lessee receives notice of a Condemnation with
respect to a 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 one (1) year after the occurrence of such Casualty or Condemnation (if
such Casualty or Condemnation occurs during the Term) to the same or a greater
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 five (5) 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 or an Event of Default has occurred and is continuing and
any Loans, the Lessor Advance or other amounts are owing with respect thereto,
then any Excess Proceeds (to the extent of any such Loans, the Lessor Advance
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, the Lessor Advance
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 $75,000, 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, deliver to
Lessor a Termination Notice with respect to the applicable Property or
Properties pursuant to Section 16.1, if applicable, or, subject to Lessee's
right to contest pursuant to Section 13.1 hereof, at Lessee's sole cost and
expense, promptly and diligently undertake and diligently 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 all applicable Environmental Laws. 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 reasonably 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 and not more than one hundred eighty (180) 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 ninety
(90) days prior to the date of delivery) by an independent recognized
professional acceptable to Lessor in its reasonable discretion and in form,
scope and content satisfactory to Lessor in its reasonable discretion.
Notwithstanding any other provision of any Operative Agreement, if Lessee fails
to materially 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 ten (10) 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 which will or might result in a cost of more than $50,000 or any
other penalty involving similar or greater severity. 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 ten (10) Business Days of receipt, copies of all material
written communications with any Governmental Authority relating to any such
Environmental Violation in connection with any Property. Lessee shall also
promptly provide such detailed reports of any 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 in the form described in Section 16.2(a) (a "Termination Notice")
pursuant to the provisions of this Lease or Section 8.2(b) of the Participation
Agreement, then following the applicable Casualty, Condemnation or
Environmental Violation or other relevant event under Section 8.2(b) of the
Participation Agreement, this Lease shall terminate with respect to the
affected Property on the applicable Termination Date.
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)) or any
other Credit Party shall fail to make any payment of any amount under any
Operative Agreement which has become due and payable within five (5) 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;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation 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 any other Credit Party shall fail to observe or perform any
term, covenant, obligation or condition of such Credit Party under any
Operative Agreement other than those set forth in Section 17.1(b) hereof and
such failure shall continue for fifteen (15) days (or with respect to the
Incorporated Covenants, the grace period, if any, applicable thereto), provided
such fifteen (15) day period shall not apply in the case of: (A) any such
failure which is not capable of being cured at all or with such fifteen (15)
day period or which has been the subject of a prior failure within a six (6)
month period or (B) an intentional breach by any Credit Party, or (ii) any
representation or warranty made
by Lessee or any other Credit Party set forth in this Lease (including without
limitation the Incorporated Representations 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 when made or deemed made be
false or misleading in any material respect;
(e) [Intentionally Reserved];
(f) Any Credit Party or any Subsidiary of any Credit Party
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 other event or
condition shall occur which results in a default of any Indebtedness having an
outstanding principal amount of at least $5,000,000 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 any Credit Party, or
the suspension of the business of any Credit Party, or the filing by any Credit
Party 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 any Credit Party
indicating its consent to, approval of or acquiescence in, any such petition or
proceeding; the application by any Credit Party for, or the appointment by
consent or acquiescence of any Credit Party of a receiver, a trustee or a
custodian of any Credit Party for all or a substantial part of its property;
the making by any Credit Party of any assignment for the benefit of creditors;
the inability of any Credit Party or the admission by any Credit Party in
writing of its inability to pay its debts as they mature or any Credit Party is
generally not paying its debts and other financial obligations as they become
due and payable; or any Credit Party taking any corporate action to authorize
any of the foregoing;
(h) The filing of an involuntary petition against any
Credit Party 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 any Credit Party 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 any Credit Party, and the
continuance of any of such events for forty-five (45) days undismissed or
undischarged;
(i) The adjudication of any Credit Party as bankrupt or
insolvent;
(j) The entering of any order in any proceedings against
any Credit Party or any Subsidiary of any Credit Party decreeing the
dissolution, divestiture or split-up of any Credit Party or any Subsidiary of
any Credit Party, and such order remains in effect for more than forty-five
(45) days;
(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of any Credit Party pursuant to
the terms of this Lease or any other Operative Agreement is false or misleading
in any material respect when made;
(l) Any Lessee Credit Agreement Event of Default shall have
occurred and be continuing and shall not have been waived in writing;
(m) A final judgment or judgments for the payment of money
shall be rendered by a court or courts against any Credit Party or any
Subsidiary of any Credit Party in excess of $5,000,000 in any one case or in
excess of $10,000,000 in the aggregate, exclusive of any amounts covered by
insurance, and shall remain undischarged or unvacated for a period in excess of
forty-five (45) days or execution shall at any time not be effectively stayed,
or any judgment other than for the payment of money, or injunction, attachment,
garnishment or execution is rendered against any Credit Party or any of their
assets;
(n) Any Credit Party or any member of the Controlled Group
shall fail to pay when due an amount or amounts aggregating in excess of
$5,000,000 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 $5,000,000
shall be filed under Title IV of ERISA by any Credit Party 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 any Credit Party 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) any Change of Control;
(p) Any Operative Agreement shall cease to be in full force
and effect against any Credit Party; or
(q) Except as to any Credit Party which is released in
connection with the Operative Agreements, the guaranty given by any Guarantor
under the Participation Agreement or any material provision thereof shall cease
to be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any guaranty;
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 advance written notice of such termination
(provided, notwithstanding the foregoing, this Lease shall be deemed to be
automatically terminated without the giving of notice upon the occurrence of a
Lease Event of Default under Sections 17.1(g), (h), (i) or (j)), 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 or any other Financing
Party, including without limitation reasonable fees and expenses of counsel, as
a result of any Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
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 prior 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. Nothing
contained in this Section 17.4 shall be construed to impair or limit the right
of Lessor to demand and receive at any time, during the continuance of a Lease
Event of Default, immediate payment in full of the Termination Value with
respect to all Properties under Section 17.6. In calculating the amount of
such net proceeds from reletting, there shall be deducted all of Lessor'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, 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 OR
OTHERWISE, 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 immediately upon Lessor's
demand pay to Lessor in full, as and for final liquidated damages, but
exclusive of the indemnities payable under Section 11 of the Participation
Agreement (which, if requested, shall be paid concurrently), 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. Such amount shall be paid in lawful money of the United States by wire
transfer of immediately available funds for the Termination Value with respect
to all Properties. 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, but upon 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 Phase I site assessment and
if such assessment recommends testing or/or remediation, then the cost of such
recommended testing and/or remediation work undertaken respecting any Property,
and shall indemnify and hold harmless Lessor and each other Indemnified Person
therefrom provided, however, that Lessor shall use only reputable environmental
consultants to perform such work and shall ensure that such consultant carries
customary insurance covering Lessee and Lessor against any acts or omissions by
or attributable to such consultant. Lessee shall pay all amounts referenced in
the immediately preceding sentence within ten (10) days of any written 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.
17.11 Limitation Regarding Certain Lease Events of Default.
Notwithstanding anything contained herein or in any other Operative Agreement
to the contrary, upon the occurrence and during the continuance of a Lease
Event of Default attributable solely to a Lease Event of Default pursuant to
Section 17.1(o) which is the result of a hostile takeover or any other Lease
Event of Default that occurs solely as a direct result of the occurrence of a
Material Adverse Effect pursuant to subsections (a) or (e) of the definition of
Material Adverse Effect (collectively, a "Limited Recourse Event of Default"),
the maximum aggregate amount that Lessor, or any Person acting by or through
Lessor, including without limitation the Agent and the Lenders, shall be
entitled to recover from the Lessee on account of such Lease Event of Default
attributable solely to a Limited Recourse Event of Default (including without
limitation any indemnity obligation for Claims pursuant to Section 11.1(d) of
the Participation Agreement for enforcement costs and losses arising solely as
a result of such
Limited Recourse Event of Default) shall be an amount equal to the Maximum
Residual Guarantee Amount, provided, this Section 17.11 shall not in any way
limit any other Event of Default or any indemnity payment to any Indemnified
Person, including without limitation (except as expressly set forth above), the
indemnities set forth in Sections 11.1 through 11.5 of the Participation
Agreement and such indemnity payment shall not be included in the calculation
set forth above. Lessee nonetheless acknowledges and agrees that even though
the maximum aggregate recovery from the Lessee is limited as aforesaid, neither
Lessor's nor any other Financing Party's right of recovery from the Property
(as opposed to any recovery from the Credit Parties) is so limited and Lessor
or any other applicable Financing Party shall be entitled to recover 100% of
the amounts owed to Lessor or such other Financing Party in accordance with the
Operative Agreements from its interest in the Property, including without
limitation, to the extent not duplicative, 100% of the Property Cost for the
Property.
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
reasonable 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 special or limited warranty deed
and/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 and
Liens granted for the benefit of the Financing Parties pursuant to the
Operative Agreements 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 and/or Improvements 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 three hundred sixty (360) days and no more than seven
hundred twenty (720) days prior to the Expiration Date or, respecting the
Purchase Option only, not less than sixty (60) days and no more than ninety
(90) days prior to any Payment Date after the third anniversary of the Closing
Date, but in no event less than three hundred sixty (360) days prior to the
Expiration Date (such Expiration Date or, respecting the Purchase Option only,
any such Payment Date after the third anniversary of the Closing Date being
hereinafter referred to as the "Election Date"), Lessee may give Lessor, the
Lenders 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 applicable Election Date (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 applicable Election 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 three hundred sixty
(360) days and not more than seven hundred twenty (720) days prior to the
Expiration Date, then Lessee shall be deemed to have elected for the Purchase
Option to apply on the Expiration Date. 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 all, but not less than all, the Properties to be
sold in accordance with the terms of Section 22.1 on the applicable Election
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, but not less than all, the Properties (which the parties do not intend
to be a "bargain" purchase price) 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 all, but not less than all, 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 all the Properties) and provided, that the Election
Notice has been appropriately given specifying the Purchase Option, Lessee
shall purchase all the Properties on the applicable Election 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) special or limited warranty Deeds conveying each Property
(to the extent it is real property) to Lessee free and clear of the Lien of
this Lease, the Lien of the Credit Documents and any Lessor Liens; (b) a Xxxx
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 (d) FIRPTA affidavits; (e) any assignments or other
transfer instruments reasonably requested by the purchaser to transfer leases,
contracts, licenses, permits, warranties, guaranties and similar rights and
agreements; (f) seller's title affidavits to the title company and (g) such
other documents that are customary for the purchase and sale of real and
personal property in the jurisdiction where each Property is located. All of
the foregoing documentation must be in form and substance reasonably
satisfactory to Lessor and Lessee. The applicable Property shall be conveyed
to Lessee or a third party purchaser an Affiliate of 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 applicable Election 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 purchase
each such Property pursuant to Section 20.2.
On the applicable Election 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 reasonable 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 (including, without limitation, the Termination Value for all
Properties).
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 applicable Election Date (all as specified in
the Election Notice), in accordance with the provisions of Section 22.1 hereof.
Such Election Date on which a sale is required may be hereafter referred to as
the "Sale Date".
(b) In the event Lessee exercises the Sale Option
then, as soon as practicable and in all events not less than sixty (60) days
and not more than one hundred eighty (180) days prior to the Sale 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
ninety (90) days prior to the date of delivery) by an independent recognized
professional reasonably acceptable to Lessor and in form, scope and content
reasonably satisfactory to Lessor. In the event that Lessor shall not have
received such environmental site assessment by the date sixty (60) days prior
to the Sale 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 by Lessor in its reasonable
discretion), then Lessee on the Sale Date shall pay to Lessor an amount equal
to the Termination Value for all 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 all the Properties, at Lessee's
sole cost and expense, in accordance with Section 19.1 and 20.2, without
duplication.
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 all the Properties in
connection with a sale to one (1) or more third party purchasers to be
consummated on 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 (including, without limitation, the Termination Value for
all Properties).
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 all 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 all the
Properties on the Sale Date is less than the sum of the Limited Recourse Amount
for all 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 one or more of the Properties by giving Lessee prior written notice of
Lessor's election to retain the same, and promptly upon receipt of such notice,
Lessee shall surrender, or cause to be surrendered, each of the Properties
specified in such notice in accordance with the terms and conditions of
Section 10.1. Upon acceptance of any bid, Lessor agrees, at Lessee's request
and expense, to execute a contract of sale and any amendments thereto with
respect to such sale, so long as such contract and amendments are consistent
with the terms of this Article 22 and provide by their terms that they are
nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the Properties
pursuant to the provisions of the preceding paragraph, Lessee shall arrange for
Lessor to sell all 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, except for a warranty of title pursuant to a special or limited
warranty deed), 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, any Lessor Lien shall
not constitute a Lessor Lien so long as Lessor is diligently and in good faith
contesting, at the cost and expense of Lessor, 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 such Property (to the extent it is real 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; (b) a Xxxx
of Sale conveying each such 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; (d) FIRPTA affidavits, as appropriate (e) any
assignments or other transfer instruments reasonably requested by the purchaser
to transfer leases, contracts, licenses, permits, warranties, guaranties and
similar rights and agreements; (f) seller's title affidavits to the title
company and (g) such other documents that are customary for the purchase and
sale of real and
personal property in the jurisdiction where each Property is located. All of
the foregoing documentation must be in form and substance reasonably
satisfactory to Lessor and Lessee. 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 for all the Properties 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 all the Properties is
less than the sum of the aggregate Property Cost for all 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
all Rent and all other amounts then due and owing pursuant to the Operative
Agreements and the lesser of (i) the Deficiency Balance, or (ii) the Maximum
Residual Guarantee Amount for all the Properties. On a Sale Date if (x) Lessor
receives the aggregate Termination Value for all the Properties from one (1) or
more third party purchasers, (y) Lessor and such other parties receive 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 the Properties on
such date exceeds the sum of the aggregate Property Cost for all the
Properties, then Lessee may retain such excess. If one or more of 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 all Rent and all
other amounts then due and owing pursuant to the Operative Agreements and an
amount equal to the Maximum Residual Guarantee Amount for the Properties so
retained. 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 all 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 copies or originals
reasonably acceptable to the Agent (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. All assignments of licenses, easements, agreements and other
deliveries required by clauses (i) and (ii) of this paragraph (c) shall be in
form reasonably satisfactory to Lessor or such third party purchaser(s), as
applicable, and shall assign such licenses, easements, agreements and other
deliveries (including without limitation both primary assignments and
assignments given in the nature of security) to the extent assignable without
payment of any fee, cost or other charge.
22.2 Application of Proceeds of Sale.
In the event Lessee receives any proceeds of sale of the Property, such
proceeds shall be deemed to have been received in trust on behalf of Lessor and
Lessee shall promptly remit such proceeds to Lessor. 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); and
(b) SECOND, in accordance with Section 8.7 of the
Participation Agreement and the Intercreditor Agreement.
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 thirty
(30) 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 independent, third party 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
independent, third party 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
ecisions 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 11 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 Sale 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 the lesser of the highest lawful rate and one hundred ten percent
(110%) of the last payment of Basic Rent due with respect to such Property
prior to such expiration or earlier termination of this Lease. Such Basic Rent
shall be payable from time to time upon demand by Lessor and such additional
amount of Basic Rent shall be applied by Lessor ratably to the Lenders and the
Lessor based on their relative amounts of the then outstanding aggregate
Property Cost for all Properties. 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) Except as required pursuant to the Operative
Agreements, 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 and
Lessor, which consent shall be in such parties sole discretion.
(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 the Operative Agreements as to any rights or obligations assigned
by Lessee or regarding any Property in which rights or obligations have been
assigned or otherwise transferred, unless any such Property is no longer
subject to 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 of the execution of such sublease. As
of the Closing Date, Lessee shall lease the respective Property 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 or Lessor and subject to the other provisions of this Section 25.2,
Lessee may sublet any Property or portion thereof but shall not permit any
further sub?subletting. Except as referenced in the immediately preceding
sentence, no other subleases shall be permitted unless consented to in writing
by Lessor. All subleasing shall be 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. The term of any such sublease shall
not extend beyond the 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 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 8 of the Lessee
Credit Agreement (hereinafter referred to as the "Incorporated Representations
and Warranties") and the covenants contained in Sections 7 and 9 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, hereinafter
referred to as the "Additional Incorporated Terms") 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, the Incorporated Covenants or
the Additional Incorporated Terms, then such waiver, amendment or modification
shall be effective with respect to the Incorporated Representations and
Warranties, the Incorporated Covenants and the Additional Incorporated Terms as
incorporated by reference into this Lease only if consented to in writing by
the Agent (acting upon the direction of the Tranche A Lenders). In the event
of any replacement of
the Lessee Credit Agreement with a similar credit facility (the "New Facility")
the representations and warranties, covenants and additional terms contained in
the New Facility which correspond to the representations and warranties,
covenants contained in Section 8 and Sections 7 and 9, respectively, and such
additional terms (each of the foregoing contained in the Lessee Credit
Agreement) shall become the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms only if consented
to in writing by the Agent (acting upon the direction of the Tranche A Lenders)
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 8 and Sections 7 and 9, respectively, and such
additional terms (each of the foregoing contained in 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, the Incorporated Covenants and the Additional Incorporated Terms
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
12.4 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, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), 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.
30.8 Memoranda of Lease and Lease Supplements.
This Lease shall not be recorded; provided, Lessor and Lessee shall
promptly record a memorandum of this Lease and the applicable Lease Supplement
(in substantially the form of EXHIBIT B attached hereto) or a short form lease
(in form and substance reasonably satisfactory to Lessor) 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 Lessor.
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 Lessor contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Lessor
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 interest in the Properties and the
rents, issues and profits therefrom (and in no circumstance to the Agent, the
Lenders 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 12.9 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. Lessor and
Lessee hereby acknowledge and agree that (a) the Agent shall, in its
discretion, direct and/or act on behalf of Lessor pursuant to the provisions
of Sections 8.2(h) and 8.6 of the Participation Agreement, (b) all notices to
be given to Lessor shall be given to the Agent and (c) all notices to be given
by Lessor may be given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION AND VENUE.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO
JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS
MUTANDIS.
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.
/s/WACHOVIA DEVELOPMENT CORPORATION, as Lessor
/s/THE PEP BOYS - MANNY, MOE & XXXX
/s/THE PEP BOYS XXXXX XXX & XXXX OF CALIFORNIA
/s/PEP BOYS - MANNY, MOE & XXXX OF DELAWARE, INC.
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
/s/WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Agent
