EXHIBIT 10.20
LEASE AGREEMENT
Dated as of June 1, 2000
between
FU/DG INDIANOLA, LLC,
a Delaware limited liability company, as Lessor
and
DOLLAR GENERAL CORPORATION,
a Tennessee corporation, as Lessee
Property:
U.S. Highway 82
Indianola, Mississippi
Sunflower County
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..........................................................1
Section 1.01. Definitions.......................................1
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ARTICLE II LEASE OF PROPERTY...................................................1
Section 2.01 Demise and Lease..................................1
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ARTICLE III RENT...............................................................2
Section 3.01 Interim Rent and Base Lease.......................2
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Section 3.02 Supplemental Rent.................................2
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Section 3.03 Method of Payment.................................2
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Section 3.04 Late Payment......................................3
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Section 3.05 Net Lease, No Setoff, Etc.........................3
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Section 3.06 Minimum Rent......................................4
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ARTICLE IV RIGHT OF
FIRST REFUSAL................................................................4
Section 4.01 Right of First Refusal............................4
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Section 4.02 Non-Applicability of Section 4.01.................5
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Section 4.03 Miscellaneous.....................................5
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ARTICLE V RENEWAL OPTIONS......................................................6
Section 5.01 Renewal Options...................................6
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Section 5.02 Lease Provisions Applicable During Renewal........6
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ARTICLE VI LESSEE'S ACCEPTANCE OF
PROPERTY, ENFORCEMENT OF WARRANTIES........................................7
Waivers...........................................7
Section 6.01 -------
Lessee's Right to Enforce Warranties..............7
Section 6.02 ------------------------------------
ARTICLE VII LIENS..............................................................8
Section 7.01 Liens.............................................8
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ARTICLE VIII USE AND REPAIR....................................................9
Section 8.01 Use...............................................9
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Section 8.02 Maintenance.......................................9
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Section 8.03 Alterations......................................10
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Section 8.04 Title to Alterations.............................11
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Section 8.05 Compliance with Law; Environmental Compliance;
Engineering Matters..............................11
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Section 8.06 Payment of Impositions...........................13
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Section 8.07 Adjustment of Impositions........................14
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Section 8.08 Utility Charges..................................14
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ARTICLE IX INSURANCE..........................................................15
Section 9.01 Coverage.........................................15
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ARTICLE X RETURN OF PROPERTY TO LESSOR........................................16
Section 10.01. Return of Property to Lessor.....................16
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ARTICLE XI ASSIGNMENT BY LESSEE...............................................18
ARTICLE XII LOSS; DESTRUCTION; CONDEMNATION OR DAMAGE.........................19
Section 12.01. Event of Loss....................................19
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Section 12.02. Application of Payments Upon an Event of Loss
When Lease Continues.............................21
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Section 12.03. Application of Payments Not Relating to
an Event of Loss.................................21
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Section 12.04. Other Dispositions...............................21
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Section 12.05. Negotiations.....................................23
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ARTICLE XIII CONVEYANCE OF PROPERTY TO LESSEE.................................24
Section 13.01. Conveyance of Property to Lessee.................24
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ARTICLE XIV SUBLEASE..........................................................24
Section 14.01. Subleasing Permitted; Lessee Remains Obligated...24
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Section 14.02. Provisions of Subleases..........................25
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ARTICLE XV INSPECTION.........................................................25
Section 15.01. Inspection.......................................25
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ARTICLE XVI LEASE EVENTS OF DEFAULT...........................................26
Section 16.01. Lease Events of Default..........................26
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ARTICLE XVII ENFORCEMENT......................................................27
Section 17.01. Remedies.........................................27
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Section 17.02. Survival of Lessee's Obligations.................29
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Section 17.03. Remedies Cumulative; No Waiver; Consents.........29
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Section 17.04. Lessee's Right of Rejectable Offer...............30
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ARTICLE XVIII RIGHT TO PERFORM FOR LESSEE.....................................31
Section 18.01. Right to Perform for Lessee......................31
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ARTICLE XIX INDEMNITIES.......................................................31
Section 19.01. General Indemnification..........................31
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Section 19.02. General Tax Indemnification......................33
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Section 19.03 Special Tax Indemniw.............................42
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Section 19.04. Withholdings.....................................43
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Section 19.05. Survival.........................................44
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ARTICLE XX LESSEE REPRESENTATIONS AND WARRANTIES..............................44
Section 20.01. Representations and Warranties...................44
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Section 20.02. Defense of Title.................................49
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ARTICLE XXI (INTENTIONALLY OMITTED]...........................................52
ARTICLE XXII LESSOR REPRESENTATIONS, WARRANTIES AND
COVENANTS........................................52
ARTICLE XXIII SUBSTITUTION OF PROPERTIES.......................55
Section 23.01. Criteria for a Substitute Property...............55
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Section 23.02. Lessee and Lessor Deliveries.....................56
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ARTICLE XXIV PURCHASE PROCEDURE...............................................59
Section 24.01. Purchase Procedure...............................59
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ARTICLE XXV TRANSFER OF LESSOR'S INTEREST.....................................60
Section 25.01. Permitted Transfer...............................60
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Section 25.02. Effects of Transfers.............................61
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ARTICLE XXVI PERMITTED FINANCING..............................................61
Section 26.01. Financing During Term............................61
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Section 26.02. Counterparts, Memorandum.........................62
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ARTICLE XXVII MISCELLANEOUS..................................................63
Section 27.01. Binding Effect: Successors and Assigns Survival..63
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Section 27.02. Quiet Enjoyment..................................63
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Section 27.03. Notices..........................................63
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Section 27.04. Severability.....................................63
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Section 27.05. Amendments, Complete Agreements..................64
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Section 27.06. Headings.........................................64
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Section 27.07. Governing Law....................................64
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Section 27.08. Estoppel Certificates............................65
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Section 27.09. Easements........................................65
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Section 27.10. No Joint Venture.................................66
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Section 27.11 No Accord and Satisfaction.......................66
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Section 27.12. No Merger........................................66
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Section 27.13. Lessor Bankruptcy................................66
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Section 27.14. Naming and Signage of the Property...............66
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Section 27.15. Investments......................................67
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Section 27.16. Further Assurances...............................67
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Section 27.17. Conveyance Expenses..............................67
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Section 27.18. Independent Covenants............................67
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Section 27.19. Lessor Exculpation...............................67
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Section 27.20. Holding Over.....................................68
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Section 27.21. Survival.........................................68
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Section 27.22. [INTENTIONALLY OMITTED]..........................68
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Section 27.23. Lease Subordinate................................68
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Section 27.24. Intent of Parties;Security Interest..............68
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Section 27.25. Certain Rights of Agent..........................69
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Section 27.26. Counterparts, Memorandum.........................70
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Section 27.27. Confidentiality..................................70
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Appendix A Definitions
SCHEDULES AND EXHIBITS
Schedule 3.01 -- Basic Rent Schedule
Schedule 8.05(d) -- Certain Environmental Action
Schedule 8.05(e) -- Certain Engineering Action
Schedule 9.01(a) -- Insurance Coverage
Schedule 12.01 -- Termination Values
Schedule 20.01(g) -- Environmental Matters
Schedule 20.01(m) -- Patent or Trademark Claims
Schedule 20.01(r) -- Material Adverse Litigation
Exhibit A -- Form of Assignment and Assumption Agreement
Exhibit B -- Description of Land
Exhibit C -- Form of Estoppel Agreement
Exhibit D -- Form of Reaffirmation
THIS LEASE AGREEMENT (this "Agreement") is made and entered into as of June
1, 2000, by and between FU/DG INDIANOLA, LLC, a Delaware limited liability
company, as Lessor ("Lessor"), having its principal place of business at One
First ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and DOLLAR
GENERAL CORPORATION, a Tennessee corporation, as Lessee ("Lessee"), having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
RECITALS:
A. Upon satisfaction of applicable conditions precedent, Lessor shall
acquire the Property on the Closing Date; and
▇. ▇▇▇▇▇▇ desires to let and lease to Lessee, and Lessee desires to hire
and lease from Lessor, the Property.
TERMS
NOW THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The capitalized terms used herein and not otherwise defined shall have the
meanings assigned thereto in Appendix A hereto for all purposes hereof.
ARTICLE II
LEASE OF PROPERTY
Section 2.01. Demise and Lease.
(a) Lessor demises on the Closing Date and leases the Property to Lessee,
and Lessee does rent and lease the Property from Lessor, for the Interim Term,
if any, and the Base Term and, subject to the exercise by Lessee of its renewal
options as provided in Article V hereof, for the Renewal Terms.
(b) Lessee may from time to time own or hold under lease or license from.
Persons other than Lessor furniture, equipment and personal property, including
Lessee's Equipment and Personalty, located on or about the Property, which shall
not be subject to this Lease. Lessor shall from time to time, upon the
reasonable request of Lessee, promptly acknowledge in writing to Lessee or other
Persons that Lessor does not own or, except as provided in Article X, have any
other right or interest in or to such furniture, equipment and personal
property, including
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Lessee's Equipment and Personalty, and Lessor hereby waives for itself and all
other Persons claiming by or through Lessor any such right, title or interest in
Lessee's Equipment and Personalty.
ARTICLE III
RENT
Section 3.01. Interim Rent and Base Rent.
In the event that the Rent Commencement Date shall be other than the first
day of any calendar month, Lessee shall pay to Lessor on the last Business Day
of the month in which Rent Commencement Date falls, arrears rent for the Interim
Term equal to the amount set forth in Schedule 3.01 ("Interim Rent"). Lessee
shall pay to Lessor Base Rent on each Rent Payment Date during the Base Term in
the amount set forth in Schedule 3.01, and shall pay to Lessor Renewal Rent on
each Rent Payment Date during any Renewal Term as prescribed by Article V. Each
installment of Interim Rent, Base Rent and Renewal Rent is payable monthly in
arrears.
Section 3.02. Supplemental Rent.
Lessee shall pay to the Rent Account described in Section 3.03 below, or to
such other Person as shall be entitled thereto in the manner contemplated
herein, any and all Supplemental Rent as the same shall become due and payable.
In the event of Lessee's failure to pay when due and payable any Supplemental
Rent, Lessor or such other Person shall have all rights, powers and remedies
provided for herein or by law or in equity or otherwise in the case of
nonpayment of Rent, subject to the terms of the Intercreditor Agreement.
Section 3.03. Method of Payment.
Interim Rent, Base Rent and Renewal Rent shall be paid in immediately
available funds as of the relevant payment date to such account as Lessor or its
assignee may from time to time designate (the "Rent Account") pursuant to
written direction on at least ten (10) Business Days' prior written notice to
Lessee. Lessee shall promptly pay Supplemental Rent to the Rent Account or to
the party entitled thereto, and Lessee shall pay to such Rent Account or
Lessor's assignee any Make-Whole Premium which is due and payable under this
Lease. Each such payment of Rent shall be made by Lessee by wire or other
transfer of funds consisting of lawful currency of the United States of America
which shall be immediately available no later than 4:00 PM (New York City time)
at the place of receipt on the scheduled date when such payment shall be due,
unless such scheduled date shall not be a Business Day, in which case such
payment shall be made at such time on the immediately preceding Business Day,
with the same force and effect as though made on such scheduled dates. If any
payment of Base Rent or Supplemental Rent is received after 4:00 PM (New York
City time) on the date when such rent is due, such rent shall be deemed received
on the next succeeding Business Day.
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Section 3.04. Late Payment.
If any payment of Base Rent is not paid on the due date of such payment,
then Lessee shall pay interest thereon at the interest rate provided for in the
Notes (whether or not such notes shall be cancelled); provided, that if such
payment is not paid by the third (3rd) day of each calendar month, then for each
day thereafter until such Base Rent is paid, interest shall accrue on the Base
Rent due but unpaid at the Default Rate. If any payment of any Supplemental Rent
payable to Lessor shall be delinquent by more than fifteen days, Lessee shall
pay interest thereon from the date such payment became due and payable to the
date of receipt thereof by Lessor at a rate per annum equal to the Default Rate.
In addition, if any payment of Rent shall not be paid by the third (3rd) day of
each calendar month, Lessee shall pay to the Person entitled thereto as a late
charge and as Supplemental Rent an amount equal to four percent (4%) of the
unpaid Rent actually due and payable thereon. Lessee acknowledges its
responsibility to pay interest and late charges and penalties owed to any third
party by reason of Lessee's failure to pay when due Interim Rent, Base Rent,
Renewal Rent or Supplemental Rent owed to such party.
Section 3.05. Net Lease, No Setoff, Etc.
This Lease is a net lease and it is agreed and intended that Interim Rent,
Base Rent, Renewal Rent, Supplemental Rent and any other amounts payable
hereunder by Lessee shall be paid without notice, demand, counterclaim, setoff,
deduction or defense and without abatement, suspension, deferment, diminution or
reduction and that Lessee's obligation to pay all such amounts, throughout the
Interim Term, the Base Term and all applicable Renewal Terms is absolute and
unconditional. The obligations and liabilities of Lessee hereunder shall in no
way be released, discharged or otherwise affected for any reason, including
without limitation:
(a) any defect in the condition, merchantability, design, quality or fitness
for use of the Property or any part thereof, or the failure of the Property
to comply with all Applicable Laws, including any inability to occupy or
use the Property by reason of such noncompliance; (b) any damage to,
removal, abandonment, salvage, loss, condemnation, theft, scrapping or
destruction of or any requisition or taking of the Property or any part
thereof, or any environmental conditions on the Property or any property in
the vicinity of the Property; (c) any restriction, prevention or
curtailment of or interference with any use of the Property or any part
thereof including eviction; (d) any defect in title to or rights to the
Property or any Lien on such title or rights to the Property; (e) any
change, waiver, extension, indulgence or other action or omission or breach
in respect of any obligation or liability of or by any Person; (f) any
bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceedings relating to Lessee or
any other Person, or any action taken with respect to this Lease by any
trustee or receiver of Lessee or any other Person, or by any court, in any
such proceeding; (g) any right or claim that Lessee has or might have
against any Person or any vendor, manufacturer, contractor of or for the
Property; (h) any failure on the part of Lessor or any other Person to
perform or comply with any of the terms of this Lease, any other Operative
Document or of any other agreement; (i) any invalidity, unenforceability,
rejection or disaffirmance of this Lease by operation of law or otherwise
against or by Lessee or any provision hereof or any of the other Operative
Documents or any provision of any thereof; (j) the impossibility of
performance by Lessee, Lessor, any other Person or all of them; (k) subject
to Applicable Law, any action by any court, administrative agency or other
Governmental Authority; (l) any interference, interruption or cessation in
the use, possession or quiet enjoyment of the Property; or (m) any
3
other occurrence whatsoever, whether similar or dissimilar to the foregoing,
whether foreseeable or unforeseeable, and whether or not Lessee shall have
notice or knowledge of any of the foregoing. Unless the Lease is earlier
terminated in accordance with its terms, this Lease shall be noncancellable by
Lessee for any reason whatsoever and, Lessee, to the extent now or hereafter
permitted by Applicable Laws, waives all rights now or hereafter conferred by
Applicable Law to quit, terminate or surrender this Lease or to any diminution,
abatement or reduction of Rent payable hereunder. Under no circumstances or
conditions shall Lessor or any Person other than Lessee be expected or required
to make any payment of any kind hereunder or have any obligations hereunder with
respect to the use, possession, control, maintenance, alteration, rebuilding,
replacing, repair, restoration or operation of all or any part of the Property,
so long as the Property or any part thereof is subject to this Lease, and Lessee
expressly waives the right to perform any such action at the expense of Lessor
or any other Person pursuant to any law.
Section 3.06. Minimum Rent.
Anything contained in this Lease or any other Operative Document to the
contrary notwithstanding, payments of Interim Rent and Base Rent shall be
required to be paid at times and in amounts at least sufficient to pay in full
any payments required to be made in respect of (i) principal (other than any
balloon or accelerated payment) and interest arising under the Debt Documents,
and (ii) Head Lease Fixed Rate Interim Rent, Head Lease Base Rent and Head Lease
Fixed Rate Renewal Rent under the Head Lease. Further, each payment of
Termination Value or other amount due on or with respect to a termination of the
Lease upon a Casualty or Condemnation shall be payable at such time and in such
amount that is at least sufficient to pay in full as of the date such payment is
due, the aggregate unpaid principal under the Debt Documents, together with all
unpaid interest thereon accrued through the date on which such payment is made,
and any Termination Value under the Head Lease (or other amount computed in
reference to Termination Value or payable in respect of a Casualty or
Condemnation or other termination of the Head Lease), together with any accrued
but unpaid Head Lease Interim Rent, Head Lease Base Rent and Head Lease Fixed
Rate Renewal Rent. Lessee acknowledges that an amount equal to the Make-Whole
Premium shall be required to be paid by it in connection with the repayment of
the Indebtedness after the occurrence of a Lease Event of Default.
ARTICLE IV
RIGHT OF FIRST REFUSAL
Section 4.01. Right of First Refusal.
(a) Provided that no Lease Event of Default exists and no Lease Default has
occurred and is continuing, if Lessor should at any time during the Term receive
a bona fide offer to purchase the Lessor Property (the "Refusal Offer") from a
third party and Lessor desires to accept such offer, Lessor shall deliver to
Lessee a written notice (the "Acquisition Notice") setting forth the name of the
prospective purchaser and the terms and conditions of such Refusal Offer.
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(b) Lessee shall have twenty (20) days from receipt of the Refusal Offer to
elect to acquire the Lessor Property pursuant to the terms and conditions
of such Refusal Offer (the "Right of First Refusal") by delivering written
notice thereof to Lessor. Delivery of such written notice shall obligate
Lessee to purchase the Lessor Property on the date which is sixty (60) days
after receipt of the Refusal Offer (or any earlier date requested by Lessee
and acceptable to Lessor) and on the terms and conditions set forth in the
Refusal Offer. If Lessee elects (or is required under the Refusal Offer) to
purchase the Lessor Property subject to the lien of the Mortgage, Lessee
shall be obligated to comply with the applicable provisions of the Debt
Documents and in all events Lessee recognizes that the Right of First
Refusal is subject to the terms of the Debt Documents and Head Lease. In
the event Lessee shall not elect to exercise its Right of First Refusal,
fails to timely deliver notice within the twenty (20) day period or a Lease
Event of Default exists or Lease Default shall have occurred and be
continuing at the date of exercise or at any time thereafter and prior to
the conveyance of the Lessor Property, Lessee shall conclusively be deemed
to have waived its Right of First Refusal as to the transaction described
in the Refusal Offer in question and Lessor may thereupon proceed to sell
the Lessor Property on the terms and conditions and to the party specified
in the Refusal Offer in question. The Right of First Refusal shall be
applicable to any future sales, and this Lease shall remain in full force
and effect. Modifications may be made in the offer outlined in the Refusal
Offer without the necessity of resubmitting the offer to Lessee; provided,
that the purchase price is not reduced, the payment terms are not changed,
and that the Closing Date is not extended for a period in excess of one
hundred eighty (180) days.
Section 4.02. Non-Applicability of Section 4.01.
(a) Section 4.01 shall not apply to a sale, transfer, conveyance,
assignment or other disposition to the purchaser at a foreclosure sale in
connection with the foreclosure, or to any transferee in connection with a deed
in lieu of foreclosure of the related Mortgage or with respect to any sale,
transfer, conveyance, assignment or disposition which occurs during the
existence of a Lease Event of Default.
(b) Notwithstanding anything herein to the contrary, the Right of First
Refusal shall not be applicable if the Lessee has failed to timely exercise each
option to extend the Term for each Renewal Term elected.
(c) This Article IV shall not be construed as applying to any Refinancing
or reducing or modifying in any way the restrictions on transfer set forth in
Article XIII or otherwise in any Operative Document.
(d) Any purchase of the Lessor Property under this Article IV will be
subject to the terms and provisions of the other Operative Documents.
Section 4.03. Miscellaneous.
(a) If Lessee is the purchaser under this Article IV, then (and
notwithstanding any terms of a bona fide offer to purchase received by Lessor)
such purchase shall be on an "as is, where is" basis without any representations
or warranties (other than against Lessor's Liens arising under the Lessor) and
the Lessee shall and hereby agrees to release, indemnify and hold
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harmless the Lessor and each other Indemnitee from and against any and all
claims arising from or related to the condition of the Property, including, but
not limited to, claims arising under Environmental Laws.
(b) Lessee's failure to elect to purchase the Lessor Property shall under
no circumstances constitute a waiver on the part of Lessee to exercise its
rights under this Article IV, with respect to any subsequent sale, transfer,
conveyance, assignment or other disposition of the Lessor Property.
ARTICLE V
RENEWAL OPTIONS
Section 5.01. Renewal Options.
(a) Lessor hereby grants to Lessee the option to extend the term of this
Lease for the following periods (each, a "Renewal Term"):
(i) for a period of five (5) years commencing on the date that is the
day after the expiration of the Base Term and ending on the fifth (5th)
anniversary of the expiration of the Base Term (the "First Renewal Term");
and
(ii) for five (5) successive terms of five (5) years each (each, an
"Additional Renewal Term"), with each such Additional Renewal Term
commencing on the date that is the day after the expiration of the
preceding Renewal Term.
(b) In order to exercise its option to extend this Lease for any Renewal
Term, the following procedure shall be followed:
(i) Lessee shall give Lessor irrevocable written notice of its intent
to exercise its option to extend the term of this Lease not less than
twelve (12) months prior to the expiration of the Base Term or nine (9)
months prior to the expiration of any then current Renewal Term, as the
case may be (the "Intent to Renew Date"), time being of the essence.
(ii) The monthly Renewal Rent (the "Renewal Rent") payable for each
Renewal Term shall be equal to Fair Market Rental Value.
(c) The right of Lessee to extend the term of this Lease for any Renewal
Term is contingent upon there not being any Lease Default or Lease Event of
Default in existence on the date of Lessee's exercise of'such right.
Section 5.02. Lease Provisions Applicable During Renewal.
All the provisions of this Lease shall be applicable during each Renewal
Term, except the number of Renewal Terms shall be correspondingly reduced.
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ARTICLE VI
LESSEE'S ACCEPTANCE OF PROPERTY, ENFORCEMENT OF WARRANTIES
Section 6.01. Waivers.
The Property is demised and let by Lessor "AS IS" in its present condition,
subject to (a) the rights of any parties in possession thereof, (b) the state of
the title thereto existing at the time of the commencement of the Lease Term
(other than defects in, or exceptions to, title, if any, created by Lessor not
otherwise arising from or contemplated by the Operative Documents), (c) any
state of facts which an accurate survey or physical inspection might show, (d)
all Applicable Laws, (e) any violations of Applicable Laws which may exist at
the commencement of the Lease Term and (f) the presence of any Hazardous
Materials at, on or under the Property or at, on or under any property in the
vicinity of the Property. Lessee currently occupies the Property and
acknowledges the same to be satisfactory. NO PARTICIPANT HAS MADE OR SHALL BE
DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL
BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY,
COMPLIANCE WITH ANY PLANS AND SPECIFICATIONS, CONDITION, DESIGN, OPERATION,
LOCATION, USE, DURABILITY, MERCHANTABILITY, CONDITION OF TITLE, OR FITNESS FOR
USE OF THE PROPERTY (OR ANY PART THEREOF) FOR ANY PARTICULAR PURPOSE, OR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PROPERTY (OR ANY PART THEREOF) AND NO PARTICIPANT OR ANY AFFILIATE SHALL BE
LIABLE FOR ANY LATENT, HIDDEN OR PATENT DEFECT THEREIN OR FOR THE FAILURE OF THE
PROPERTY TO BE CONSTRUCTED IN ACCORDANCE WITH ANY PLANS AND SPECIFICATIONS
THEREFOR, FOR THE COMPLIANCE OF THE PLANS AND SPECIFICATIONS FOR THE PROPERTY
WITH APPLICABLE LAWS, FOR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO
OTHERWISE COMPLY WITH ANY APPLICABLE LAWS OR FOR ANY OTHER MATTER RELATING TO OR
ARISING OUT OF THE PROPERTY OR UNDER THE OPERATIVE DOCUMENTS. It is acknowledged
that Lessee(or an Affiliate of Lessee) and others have occupied the Property as
tenant or owner immediately prior to entering into this Lease and that Lessee
has inspected the Property, is satisfied with the results of its inspections of
the Property and is entering into this Lease solely on the basis of the results
of its own inspections and all risks incident to the matters discussed in the
preceding sentence. The provisions of this Article VI have been negotiated, and
the foregoing provisions are intended to be a complete exclusion and negation of
any representations or warranties by any Participant or any Affiliate thereof,
express or implied, with respect to the Property, that may arise pursuant to any
law now or hereafter in effect, or otherwise and specifically negating any
warranties under the Uniform Commercial Code.
Section 6.02. Lessee's Right to Enforce Warranties.
(a) Subject to Section 6.02(b) below, Lessor hereby assigns and sets over
to Lessee, and Lessee hereby accepts the assignment of all of Lessor's right,
title and interest, and estate in, to and under, any and all warranties and
other claims ("Warranties") against dealers, manufacturers, vendors, contractors
and subcontractors relating to the construction, manufacture,
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sale, use, operation or maintenance of the Property or any portion thereof now
existing or hereafter acquired (excluding from such assignment any such
warranties and claims which by their terms are not assignable without loss of
some or all of the benefits of such warranties or claims or require the consent
of any Person where such consent has not be obtained); provided, however, that
no assignor shall have no obligations under, or liabilities with respect to, any
such warranties and claims. To the extent that any Warranties are not hereby
assigned to Lessee, Lessor, at the risk, cost and expense of Lessee, agrees to
cooperate with Lessee and act at the reasonable direction of Lessee to
administer and prosecute any claim arising from or in connection with any
Warranty.
(b) Unless Lease Event of Default exists or a Lease Default shall have
occurred and be continuing, Lessor authorizes Lessee (directly or through
agents) at Lessee's expense to, and Lessee shall, assert diligently for the
benefit of Lessor (or other assignor or owner), during the Lease Term, Lessor's
rights (or such other assignor or owner) (if any) under any applicable Warranty
and any other claim that Lessee or Lessor (or such other assignor or owner) may
have against any dealer, vendor, manufacturer, contractor or subcontractor with
respect to the Property or any portion thereof.
(c) Unless a Lease Event of Default exists or a Lease Default shall have
occurred and be continuing, Lessor agrees, at Lessee's risk and expense, to
cooperate with Lessee and take all reasonable action necessary as specifically
requested by Lessee to enable Lessee to enforce all of Lessor's rights (if any)
under this Section 6.02.
ARTICLE VII
LIENS
Section 7.01. Liens.
Lessee shall not directly or indirectly create, incur, assume or suffer to
exist any Lien on or with respect to (i) any and all of the Property, title
thereto or any interest therein, (ii) this Lease or the leasehold interest
created hereby, (iii) Rent, title thereto or any interest therein or (iv) the
rentals payable with respect to the subletting of the Property, except Permitted
Liens and Permitted Encumbrances. Lessee shall promptly, but not later than
thirty (30) days after Lessee has Actual Knowledge of the occurrence thereof, at
its own expense, take such action as may be necessary duly to discharge or
eliminate or bond in a manner reasonably satisfactory to Lessor any such Lien
(other than Permitted Liens and Permitted Encumbrances).
NOTHING CONTAINED IN THIS LEASE SHALL BE CONSTRUED AS CONSTITUTING THE
CONSENT OR REQUEST OF LESSOR OR ANY AFFILIATE THEREOF, EXPRESS OR IMPLIED, TO OR
FOR THE PERFORMANCE BY ANY CONTRACTOR, LABORER, MATERIALMAN OR VENDOR OF ANY
LABOR OR SERVICES OR FOR THE FURNISHING OF ANY MATERIALS FOR ANY CONSTRUCTION,
ALTERATION, ADDITION, REPAIR OR DEMOLITION OF OR TO THE PROPERTY OR ANY PART
THEREOF, WHICH WOULD RESULT IN ANY LIABILITY OF ANY SUCH PERSON FOR PAYMENT
THEREFOR. NOTICE IS HEREBY GIVEN THAT NO PARTICIPANT OR ANY AFFILIATE WILL BE
LIABLE FOR ANY
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LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO
ANYONE HOLDING AN INTEREST IN THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANICS OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY PARTICIPANT OR ANY
AFFILIATE THEREOF IN AND TO THE PROPERTY.
ARTICLE VIII
USE AND REPAIR
Section 8.01. Use.
The Property and each portion thereof is intended to be used as a
distribution center in connection with the ordinary and customary operations of
Lessee and shall not (i) be used in a discriminatory manner taking into account
other properties owned, leased or operated by Lessee, (ii) be used in a manner
that would cause the Property or the Equipment to be "tax-exempt use property"
within the meaning of Section 168(h) of the Code or "tax-exempt bond financed
property" within the meaning of Section 168(g)(5) of the Code, (iii) be used in
a manner that would constitute a nuisance or cause or increase the risk of
causing any environmental liability with respect thereto, (iv) be used in a
manner that would invalidate any Warranty on or with respect to the Property or
any portion thereof or any insurance policy maintained or required to be
maintained on or in respect of the Property, (v) be used in a manner that would
violate any Applicable Laws, (vi) be used for the mining for removal of any oil,
gas, minerals or dirt or (vii) other than in the ordinary course of the business
of Lessee be used in a manner that involves the storage, handling or disposing
of Hazardous Materials (provided that all such storage, handling or disposing
shall comply with Environmental Laws). In the event that Lessee desires to
change the use of the Property or any portion thereof other than as a
distribution center in connection with its ordinary and customary operations,
Lessee shall provide notice to Lessor of the intended use, which use shall
comply with clauses (ii) through (vii) above. In addition, the Property shall
not be used in connection with manufacturing activities other than light
assembly, and any change of use shall not increase the level at which Hazardous
Materials are used on the Property, increase the risks that the Property or any
Indemnitee shall be subjected to any environmental or other Claim or that any
Hazardous Material will be released or discharged at or from the Property or
that Remedial Action will be required with respect to any portion of the
Property. Further, any change in use with respect to the Facility shall not
result in structural alterations or modifications to the Property or any portion
thereof or impair the utility, remaining useful life or current or residual
value of the Property or any portion thereof.
Section 8.02. Maintenance.
Lessee, at its own expense, shall at all times, (i) maintain the Property
and each portion thereof in good condition and repair, in at least the condition
as existed on the Closing Date, ordinary wear and tear excepted, (ii) maintain
the Property and each portion thereof on a nondiscriminatory basis taking into
account other properties owned, leased or operated by Lessee, (iii) maintain the
Property and each portion thereof in accordance with the requirements of all of
the other Operative Documents, applicable Warranties and all insurance policies
relating
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to the Property maintained with respect to the Property or required to be
maintained hereunder and in compliance with Applicable Laws, (iv) make repairs,
improvements, replacements (of parts, equipment, components, fixtures and
improvements) and alterations to the Property as may be required by Applicable
Laws and as necessary to keep the same in the condition required by the
preceding clauses (i) through (iii), whether interior or exterior or relating to
parking areas, road access or otherwise, structural or non-structural, ordinary
or extraordinary, foreseen or unforeseen and regardless of whether such
expenditures would constitute expenses under GAAP if made by the owner of the
Property. Without limitation of the foregoing and subject to Article XII, Lessee
shall replace any Equipment that has become lost, stolen, destroyed, worn out or
otherwise not usable in accordance with its intended purposes in the same manner
as such Equipment is available for use on the Closing Date. Except to the extent
replaced in accordance with the maintenance and other obligations of the Lessee
hereunder, no portion of the Equipment shall be removed from the Property.
Section 8.03. Alterations.
(a) Provided that no Lease Event of Default has occurred and is continuing,
at any time and from time to time, Lessee, at its sole cost and expense (1) may
make non-structural and structural Alterations to the Property, without any
notice or consent; and (2) shall make structural or non-structural Alterations
required by Applicable Law; provided that notice thereof shall be provided to
the Lessor if the estimated cost of any Alteration exceeds $500,000.00; provided
further that no elective Alteration shall (i) impair the utility, remaining
useful life or current or residual fair market value of the Property or any
portion thereof, in each case assuming that the Improvements are then being
operated and maintained in accordance with this Article VIII, (ii) cause the
Property or any portion thereof to be characterized as "limited use property"
(as described in Section 4.09 of Revenue Procedure 75-28 or Revenue Procedure
76-30), (iii) result in the removal of any built-in equipment or fixtures
currently on the Property (unless such equipment or fixtures are replaced with
similar equipment and fixtures) or any parts on or attached to the Equipment
(unless such parts are replaced with similar or improved parts), (iv) reduce the
square feet of the Improvements on the Property, or (v) increase in any material
respect the risk of liability to the Lessor or any Indemnitee under any
Environmental Laws, other Applicable Laws or otherwise.
(b) Every Alteration shall comply with the following terms (which
compliance shall be at Lessee's sole cost and expense): (i) to the extent
costing more than $500,000.00 the Alteration shall be made under the supervision
of a certified architect or civil engineer who shall be licensed in the
appropriate jurisdiction, (ii) the structural integrity of the existing
Improvements will not be impaired and the value, utility and remaining useful
life of the Equipment will not be adversely affected, (iii) Lessee shall obtain
any licenses or permits required, copies of which shall be delivered to Lessor
upon written request, (iv) such Alterations will not encroach upon any adjacent
premises unless appropriate easements and consents shall have been obtained and,
to the extent necessary or prudent filed in all appropriate land records or
other recording offices. In connection with any Alteration, Lessee shall perform
and complete all work in a good and workmanlike manner in compliance with
Applicable Laws without the imposition of any Liens, assessments or encumbrances
other than Permitted Liens or Permitted Encumbrances. Lessee shall either (i)
maintain or cause to be maintained at all times during construction (x)
builder's risk insurance naming Agent as the named insured and (y) commercial
10
general liability insurance required under this Lease naming each Indemnitee as
additional insureds or (ii) self insure the risks otherwise insured by the
policies required hereunder, which self insurance shall be subject to, and
available only upon satisfaction of, the provisions of Section 9.01(b).
Section 8.04. Title to Alterations.
Title to Alterations shall without further act vest in Lessor (except to
the extent replacing or becoming a part of the Equipment, in which case title to
such Alterations shall vest in the Head Lessor) and shall be deemed to
constitute a part of the Property and be subject to this Lease in the following
cases:
(a) such Alteration shall be in replacement of or in substitution for a
portion of the Improvements or other Property as of the date hereof,
(b) such Alteration shall be required to be made pursuant to the terms of
Section 8.02; or
(c) such Alteration shall be Nonseverable.
Lessee shall, at Lessor's request and at Lessee's sole cost and expense,
execute and deliver any deeds, bills of sale or assignments reasonably requested
by Lessor to evidence the vesting of title in and to such Alterations in Lessor
(or Head Lessor to the extent relating to the Equipment). If an Alteration is
not within any of the categories set forth in Section 8.04(a) through Section
8.04(c), then title to such Alteration shall vest in Lessee and may be removed
by Lessee to the extent permitted in accordance with Article X hereof. All
Alterations to which title shall vest in Lessee as aforesaid, and all Lessee's
Equipment and Personalty, so long as removal thereof shall not result in the
violation of any Applicable Laws or this Lease, may be removed at any time by
Lessee; provided that Lessee shall, at its expense, repair any damage to the
Property caused by the removal of such Alteration or Lessee's Equipment and
Personalty and shall restore the Property to substantially the same condition as
existed prior to such Alteration being made. Lessee shall provide "AS-BUILT"
plans and a new survey (meeting the requirements of the original survey) for any
Alterations costing in excess of $2,000,000 determined on an aggregate basis.
Once such $2,000,000 aggregate threshold has been met, Lessee shall be required
to provide "AS-BUILT" plans and a new survey on each other occasion where
additional Alterations in the aggregate exceed $2,000,000.
Section 8.05. Compliance with Law; Environmental Compliance; Engineering
Matters.
(a) Lessee, at Lessee's expense, shall comply in all material respects at
all times with all Applicable Laws, including Environmental Laws,
shall conduct its operations on the Property in accordance in all
material respects with Applicable Laws and shall cause all of its
activities on the Property, and use reasonable efforts to cause all of
its activities about the Property, to comply in all material respects
with Applicable Laws. Such compliance includes, without limitation,
Lessee's obligation, at its expense, to take Remedial Action when
required by Applicable Laws (in accordance with Applicable Law and
this Lease) whether such requirement is now or
11
hereafter existing. In the event that Lessee is required or elects to enter into
any plan relating to a material remediation of the Property with respect to any
Environment Laws, Lessee shall on a quarterly basis (or more frequently if
reasonably requested by Lessor) apprise Lessor of the status of such remediation
plan and provide copies of all material correspondence, plans, proposals,
contracts and other documents relating to such action and plan or proposed plan.
(b) Lessee shall notify Lessor within ten (10) days if(i) Lessee becomes aware
of the presence of any Hazardous Material at, on, under, emanating from, or
migrating to, the Property in any quantity or manner, which could
reasonably be expected to violate in any material respect any Environmental
Law or give rise to any liability or the obligation on the part of the
Lessee or Lessor to take Remedial Action or other obligations under any
Environmental Law, or (ii) Lessee receives any notice, claim, demand or
other communication from a Governmental Authority or a third party
regarding the presence of any Hazardous Material at, on, under, within,
emanating from or migrating to the Property which could reasonably be
expected to violate any Environmental Law or give rise to any liability or
to remediation or other obligations under any Environmental Law. If any
event described in this subclause (b) requires Remedial Action, the
provisions set forth in subclause (c) below will apply mutatis mutandis.
(c) (i) In the event there exists any site condition,
circumstance, activity, practice, incident, action or plan, whether
ongoing or in the past, and that is reasonably likely to result in:
(a) a current or future violation of or liability under any
Environmental Law, or (b) the presence, on or after the date hereof,
of any Hazardous Material that requires Remedial Action at, on, under,
in connection with, or which is migrating from, the Property ("Areas
of Environmental Concern"), then Lessee, at its sole cost and expense,
shall, as soon as reasonably practicable, but in any event within six
months of the identification of such Area of Environmental Concern, or
such later date as may be required by the applicable governmental
agency or agencies, develop and finalize a work plan prepared by an
Approved Environmental Consultant which sets forth all Remedial Action
to be undertaken in connection with each Area of Environmental Concern
identified at or relating to the Property (the "Plan"), and shall
provide such Plan to Lessor. Lessor shall have the right to review and
comment on such Plan prior to submission of the Plan to the applicable
governmental agency or agencies. Lessee shall promptly perform, or
cause to be performed on its behalf, all Remedial Action required
under the Plan or otherwise necessary under the terms of this Lease to
obtain Final Governmental Approval (as hereinafter defined) and shall
diligently pursue such Remedial Action to completion, in accordance
with the requirements of any Environmental Law or applicable
governmental agency. Lessee shall on a quarterly basis (or more often
if reasonably requested) apprise Lessor of the status of such Plan,
and provide copies of all material correspondence, drafts of such
Plan, agreements, documents, notices and other documentation existing
with respect to the Plan and/or Area of Environmental Concern. In
addition to the requirements in subparagraphs (a) and (b) above, and
in connection with any actions undertaken pursuant to this Agreement,
Lessee shall in all material respects at all times comply with all
applicable Environmental Laws and with all other applicable federal,
state and local laws and shall use an Approved Environmental
Consultant to perform any Remedial Action.
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(ii) Within thirty (30) days prior to the date that Remedial
Action shall be required to be completed with respect to any Area of
Environmental Concern (the "Required Remedial Action Date"), Lessee
shall request and when obtained submit to Lessor written confirmation
from the applicable governmental agency that no further Remedial
Action is required to be taken ("Final Governmental Approval").
(iii) In the event that Final Governmental Approval is not
received by Lessor by the Required Remedial Action Date, Lessee shall
provide Lessor, within thirty (30) days after the Required Remedial
Action Date, with a bond, letter of credit or similar financial
assurance, in each case satisfactory to the Lessor that sufficient
funds are available to pay for the completion of any remaining
Remedial Action required of Lessee and to obtain receipt of Final
Governmental Approval; provided, however, so long as Lessee maintains
at least an Investment Grade rating and acknowledges to Lessor its
intent to complete such Remedial Action, no bond, letter of credit or
similar financial assurance shall be required. Lessee covenants to
notify the Lessor in the event that Lessee does not have at least an
Investment Grade rating.
(d) Based upon the initial Environmental Reports required to be delivered
to Lessor with respect to the Property, the Lessee shall be required to perform
the acts set forth on Schedule 8.05(d) hereof. All such acts shall be required
to be performed within six (6) months of the Closing Date, and upon completion
of such acts, Lessee shall provide prompt notice to Lessor.
(e) Engineering reports prepared on behalf of Lessor with respect to the
Real Property evidenced certain defects and matters to be corrected as set forth
on Schedule 8.05(e). Lessee shall proceed with reasonable diligence to perform
the tasks and correct the matters described in Schedule 8.05(e) in a good and
workmanlike manner and otherwise so as to comply with the terms of the Lease;
provided, that such tasks shall be performed and matters corrected as aforesaid
in any event by the date that is six (6) months from the Closing Date.
Section 8.06. Payment of Impositions.
Lessee, in accordance with Section 19.02, shall pay or cause to be paid all
Impositions before any fine, penalty, premium, further interest or cost may be
assessed or added for nonpayment, such payments to be made directly to the
taxing authorities where feasible. If requested, Lessee shall deliver, to Lessor
copies of receipts, canceled checks or other documentation reasonably
satisfactory, to Lessor evidencing payment of Impositions and Lessee agrees to
maintain in its records evidence of payment of real estate, personal property
and other ad valorem taxes for a period of no less than eight (8) years. If any
such Imposition may, at the option of the taxpayer, lawfully be paid in
installments (regardless of whether interest shall accrue on the unpaid balance
of such Imposition), Lessee may exercise the option to pay the same in
installments; provided, however, upon return of the Property or any portion
thereof under the terms of this Lease, Lessee shall pay any accrued but unpaid
Impositions on the Property (together with accrued interest, if any) or such
portion thereof that is being returned and shall pay all unpaid installments
(together with accrued interest, if any) whether or not due. If a Lease Event of
Default exists or a Lease Default shall have occurred and be continuing, Lessee
shall pay to the Lessor, in monthly installments in amounts equal to the
Impositions (or estimated
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to equal such Impositions) (together with accrued interest, if any) to be held
and applied by the Lessor, including on such initial payment date such
additional amount as shall be necessary to assure that together with the
upcoming months' installment, the full amount of each Imposition (together with
accrued interest, if any) shall have been received by Lessor prior to the due
date of such Imposition. Lessee shall have the right to contest any Imposition,
subject to the following: (i) such contest shall be at its sole cost, risk and
expense, (ii) if the Imposition being contested is in the amount of $500,000.00
or more, Lessee shall provide notice to Lessor within ten (10) days of such
Imposition and contest and the grounds thereof, (iii) such contest shall be by
appropriate legal proceedings conducted in good faith and with due diligence,
(iv) such contest will operate to suspend the collection of, or other
realization upon, such Imposition, from any Property or other interest of Lessor
or any assignee, or from any Rent (or otherwise affect Lessee's obligation to
pay, and Lessor's right to receive, Rent), (v) such contest will not adversely
affect the Agent's Lien on any Property, the Head Lessor's rights under the Head
Lease or with respect to the Equipment or Lessor's right to any Property, (vi)
such contest will not interfere with the possession, use or occupancy or sale of
any Property, (vii) such contest will not subject any Indemnitee to any civil or
criminal liability or require the disclosure of Confidential Information of such
Indemnitee except upon terms and conditions acceptable to such Indemnitee, and
(viii) Lessee shall not postpone the payment of any Imposition for such length
of time as shall permit the Property to become subject to a Lien created by such
item being contested that is prior to the Lien securing the Indebtedness or any
rights of Head Lessor in connection with the Equipment. Lessee shall pay any
Imposition (and related costs) promptly after foregoing any contest or after
receipt of a final adverse judgment, or after notice from Lessor that such
contest is not being performed in accordance with the terms hereof.
Section 8.07. Adjustment of Impositions.
Impositions with respect to the Property for a billing period during which
Lessee's obligation to indemnify Lessor pursuant to this Lease expires or
terminates as to the Property shall be adjusted and prorated on a daily basis
between Lessor and Lessee, whether or not such Imposition is imposed before or
after such expiration or termination, and Lessee's obligation to pay its pro
rata share thereof shall survive such expiration or termination; provided, that
Lessee shall be required to pay any Impositions (together with accrued interest,
if any) which it has elected to or has been permitted to pay in installments,
until the due date of such installments.
Section 8.08. Utility Charges.
Lessee shall pay or cause to be paid all charges for electricity, power,
gas, oil, water, telephone, sanitary sewer services and all other utilities used
in or on the Property prior to and during the Lease Term, and such obligation on
the part of Lessee shall survive the expiration or earlier termination of this
Lease until all such outstanding balances for services rendered prior to or
during the term of this Lease have been paid. Lessee shall have the right to
select such service providers for the Property.
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ARTICLE IX
INSURANCE
Section 9.01. Coverage.
(a) Lessee shall maintain insurance and insure the Property and the
operations and liabilities related thereto at least to the same standards as
applicable to comparable properties owned, operated or leased by it in
accordance with prudent practice. Without limiting the foregoing, subject to
Section 9.01(b), Lessee shall maintain minimum insurance of the types, in the
amounts and meeting the requirements set forth on Schedule 9.01(a) attached
hereto and made a part hereof. Lessee represents that Schedule 9.01(a) sets
forth the insurance maintained by Lessee as of the Closing Date, including
self-insurance and deductible amounts, and that such insurance is in full force
and effect as of the Closing Date.
(b) Subject to the approval of Lessor on the Rent Commencement Date, so
long as (i) no Lease Event of Default exists or Lease Default has occurred and
is continuing, (ii) Lessee's Adjusted Net Worth equals Two Hundred Million
Dollars ($200,000,000.00) or more and (iii) the long term senior unsecured debt
of Lessee, if then rated, does not have a rating of less than Investment Grade
and (iv) Lessee meets the self-insurance requirements of the NAIC for a "Bond
Lease Credit Tenant Loan" on a continuing basis, Lessee shall be entitled to
self-insure and/or have deductible amounts as it may elect (the "Self-Insurance
Amount") against any and all risks it would otherwise be required to insure
against under Section 9.01(a). Notwithstanding the foregoing, in the event that
the Agent shall have determined that there has occurred a material adverse
change in the credit quality of Lessee or a significant economic downturn in
Lessee's particular industry, or the Agent otherwise determines in its
reasonable discretion and based on quantitative criteria that the Self-Insurance
Amount exceeds industry standards or an acceptable level as reasonably
determined by the Holders, then the Agent shall provide notice to the Lessee
setting forth the revised Self-Insurance Deductible Amount, specifying the
reason or reasons for the downward adjustment to the Self-Insurance Amount and
specifying any additional insurance required to be obtained by the Lessee
hereunder. From the date of such notice, the Lessee shall have thirty (30) days
in which to arrange for the insurance coverage to be obtained by the Lessee as
required by Lessor, such insurance to be on the terms and conditions otherwise
set forth where the Lessee's self-insurance right is not available or is not
needed. Notwithstanding the fact that Lessee may at any time be permitted to
self-insure pursuant to this Section 9.01(b), to the extent that (i) Lessee
maintains a policy or policies of commercial general liability insurance with
respect to the Property, Lessee shall cause each Indemnitee to be named as an
additional insured on such policy or policies and (ii) Lessee maintains a policy
or policies of property insurance with respect to the Property, Lessee shall
cause Agent (so long as any obligation under the Debt Documents remains to be
satisfied) and, thereafter, Lessor to be named as a named insured on such policy
or policies to the extent of their interests. So long as no Lease Default or
Lease Event of Default exists, any loss payable under insurance policies
maintained in respect of damage to the Property shall be paid to Lessee for
losses less than $500,000.
(c) Nothing in this Article IX shall prohibit the Lessee from maintaining
at its expense insurance on or with respect to the Property, naming the Lessee
as insured and/or loss
15
payee for an amount greater than the insurance required to be maintained under
this Section 9.01, unless such insurance would conflict with or otherwise limit
the availability of or coverage afforded by insurance required to be maintained
under Section 9.01. Nothing in this Section 9.01 shall prohibit the Lessor from
maintaining at its expense other insurance on or with respect to the Property or
the operation, use and occupancy of the Property, naming the Lessor as insured
and/or payee, unless such insurance would conflict with, cause the Lessor to be
a coinsurer or otherwise limit or adversely affect the ability to obtain, or the
cost of, the insurance required to be maintained under Section 9.01.
(d) Copies of policies required to be maintained under Schedule 9.01 (or
certificates thereof indicating compliance with the provisions of this Article
IX) shall be delivered to Lessor on each anniversary of the Closing Date and, in
any event, thirty (30) days prior to the expiration of the applicable policy.
(e) Irrespective of the cause thereof, no Participant or any Affiliate of
the foregoing shall be liable for any loss or damage to any buildings or other
portion of the Property resulting from fire, explosion or any other casualty or
event or circumstance. In the event of Lessee's failure to obtain or maintain
the insurance called for under this Lease, Lessor shall have the right, together
with Lessor's remedies set forth herein, to obtain the policies of insurance
required under this Lease and to ▇▇▇▇ Lessee for the premium payments therefore,
together with interest at the Default Rate, in each case as Supplemental Rent.
No Person other than Lessee shall have any obligation to maintain insurance of
any nature or type whatsoever.
(f) If the Property is in an area designated as 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 Applicable Law concerning flood insurance to the extent it applies to the
Property or any portion thereof.
ARTICLE X
RETURN OF PROPERTY TO LESSOR
Section 10.01. Return of Property to Lessor.
Lessee shall, upon the expiration or termination of this Lease, and at its
own expense, return the Property and each portion thereof, including without
limitation the Equipment, to Lessor by surrendering the same into the possession
of Lessor:
(a) free and clear of all Liens, except that Lessee shall have no
responsibility or liability in respect of (i) Lessor Liens, (ii) any Lien
created by the Debt Documents and (iii) any Lien created by the Head Lease; and
(b) in compliance with all Applicable Laws and in compliance with the
maintenance conditions required by this Lease. All Alterations and Lessee's
Equipment and Personalty not removed by Lessee by the last day of the Lease Term
(but in the event of a termination other than
16
upon the expiration of the Base Term or any Renewal Term, within thirty (30)
days after said termination of this Lease), other than those Alterations as to
which title shall vest in Lessor pursuant to Section 8.04 (which may not be
removed), shall be deemed abandoned in place by Lessee and shall become the
property of Lessor. Lessee shall pay or reimburse Lessor for any reasonable,
actual, out-of-pocket costs incurred by Lessor (i) in connection with the
removal or disposal of such relinquished property (less the actual salvage value
thereof), or (ii) to bring any Property into compliance with all Applicable Laws
and the provisions hereof. The return of the Property shall survive the
expiration or termination of this Lease.
Upon the return of the Property, Lessee shall deliver therewith:
(i) all transferable licenses, permits and the like by general
assignment, without warranty or recourse;
(ii) as built-drawings including plans for HVAC, mechanical and
electrical systems, to the extent available and a survey;
(iii) keys to the Property;
(iv) to the extent permitted by Applicable Law and contact or
warranty, assignment of all maintenance contracts and existing warranties
applicable to the Property or any portion thereof by general assignment,
without warranty or recourse;
(v) a Phase I Environmental Site Assessment recently prepared (no more
than sixty (60) days prior to the date of return) by an Approved
Environmental Consultant which Phase I Environmental Site Assessment shall
evidence no Areas of Environmental Concern requiring further assessment or
Remedial Action; and
(vi) unless otherwise directed by the Lessor, the Equipment shall be
disassembled and placed in a state of readiness so as to permit such
Equipment to be picked up by a shipper designated by Lessor for immediate
loading without the necessity of additional labor, cost or expense.
In the event that the Property is not timely returned meeting the
requirements hereof, Lessee shall be required to continue paying Rent as
provided herein.
Notwithstanding anything herein to the contrary, Lessee may elect to return
the Equipment on any anniversary of the commencement date of the Base Term or
any applicable Renewal Term commencing with the twelfth anniversary of the
commencement date of the Base Term. In the event that the Lessee desires to
elect to return such Equipment, the Lessee shall provide written notice to
Lessor and Head Lessor at least one (1) year prior to the anniversary of the
commencement date of the Base Term (or any Renewal Term, as the case may be) in
which Lessee desires to return the Equipment. Upon the return of the Equipment,
Lessee shall be required to disassemble and place such Equipment in a state of
readiness to permit such Equipment to be picked up by a shipper designated by
Lessor for immediate loading without the necessity of additional labor, cost or
expense. In addition, Lessee shall otherwise have fulfilled
17
its obligations under this Section 10.01 with respect to the Equipment. Upon
proper election of Lessor to return the Equipment and timely compliance by
Lessee with the provisions hereof, "Property" shall no longer be deemed to
include the Equipment or any interest therein.
ARTICLE XI
ASSIGNMENT BY LESSEE
Section 11.01. Assignment by Lessee. So long as no Lease Default or Lease
Event of Default has occurred and is continuing, Lessee may, at Lessee's sole
expense, without the consent of Lessor, assign this Lease to any Person;
provided, however, that any such Person or other Person is not (I) a tax-exempt
entity (within the meaning of Section 168(h) of the Code) or (II) a debtor or
debtor-in-possession in a voluntary or involuntary bankruptcy proceeding at the
commencement of the assignment; provided, however, that no such assignment shall
become effective until (i) a fully executed copy of an assignment and assumption
agreement, substantially in the form of Exhibit A attached hereto, shall have
been delivered to Lessor, and (ii) such assignee shall have executed such
instruments and other documents and provided such further assurances as Lessor
shall reasonably request to ensure that such assignment is expressly subject and
subordinate to the Assignment of Lease, the other Debt Documents, the Head Lease
and this Lease and is enforceable in accordance with its terms. Any assignee
shall assume in writing any obligations of Lessee arising from and after the
effective date of the assignment. Notwithstanding any such assignment, Lessee
shall not be released from its primary liability hereunder and shall continue to
be obligated for all obligations of "Lessee" in this Lease, which obligations
shall continue in full force and effect as obligations of a principal and not of
a guarantor or surety, as though no assignment had been made. Lessee will have
the right, subsequent to any assignment (a) to receive a duplicate copy of each
notice of default sent by Lessor to Lessee or any assignee (but such notice
shall be effective as against the Lessee, as well as any subsequent assignees,
even if a copy has not been delivered to such requesting assignee), and (b) to
cure any default by Lessee or other assignee under the Lease within the cure
period provided for hereunder. Lessee's liability hereunder shall continue
notwithstanding the rejection of this Lease by an assignee of this Lease
pursuant to Section 365 of Title 11 of the United States Code, any other
provision of the Bankruptcy Code, or any similar law relating to bankruptcy,
insolvency, reorganization or the rights of creditors, which arises subsequent
to such assignment. In the event Lessee assigns this Lease and it shall
thereafter be rejected in a bankruptcy or similar proceeding, a new lease
identical to this Lease shall be reinstituted as between Lessor and Lessee
without further act of any party; provided Lessor shall not be obligated to
deliver to Lessee possession of the Property. Nothing herein shall be construed
to permit Lessee to mortgage, pledge, hypothecate or otherwise collaterally
assign in any manner or nature whatsoever Lessee's interest under this Lease in
whole or in part. Lessee shall provide written notice to Lessor, Agent and Head
Lessor of any assignment of this Lease within ten (10) Business Days prior to
the effective date thereof and an executed copy of the agreement of assignment
and assumption within thirty (30) days after the execution thereof. To the
extent an assignee of this Lease fails to perform on behalf of Lessee the
obligations of Lessee hereunder, and Lessee performs such obligations, then
Lessee shall be subrogated to the rights of Lessor as against such assignee in
respect of such performance.
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ARTICLE XII
LOSS; DESTRUCTION; CONDEMNATION OR DAMAGE
Section 12.01. Event of Loss.
If there shall occur an Event of Loss with respect to the Property, Lessee
shall give Lessor prompt written notice thereof and elect, within thirty (30)
days after the occurrence of the Event of Loss, one of the following options
(provided that Lessee's election of proceeding under clauses (b) or (c) shall be
effective only if restoration or substitution, as the case may be, can be
completed by the time specified in such clauses (b) and (c)):
(a) Offer to purchase the Property from Lessor, on a date specified in such
notice, which date shall be a date for which a value is set forth on Schedule
12.01 hereto (the "Termination Value Date") occurring not less than ninety (90)
days and not not than one hundred fifty (150) days after the date of such Event
of Loss, for a purchase price equal to the sum of (i) the Termination Value for
the Property, determined as of such Termination Value Date, plus (ii) all unpaid
Rent with respect to the Property due and (without duplication) all Rent with
respect to the Property accruing, but unpaid through such Termination Value
Date, plus (iii) an amount equal to the reasonable out-of-pocket expenses of any
Indemnitee relating to the purchase, if any, by Lessee as a result of such Event
of Loss including reasonable attorneys' fees and costs actually incurred. Lessor
shall have sixty (60) days from the date of receipt of Lessee's offer to decide
whether to reject such offer, otherwise Lessor shall be deemed to have accepted
such offer;
(b) Restore and rebuild the Improvements and Fixtures and repair and
replace the Equipment damaged or destroyed as a result of such Event of Loss so
as to have at least a value, utility, condition, operating function and
remaining useful life equal to the value, utility, condition, operating function
and remaining useful life of the Property immediately prior to such Event of
Loss (assuming compliance with this Lease), and in all events in the condition
required by Section 8.02, such restoration and replacement to be completed the
earlier to occur of (x) the first anniversary of the Event of Loss, or (y) six
months prior to the expiration of the Lease Term (and Lessee shall remain liable
for the completion of such restoration beyond the expiration of the Lease Term
to the extent not completed prior to such expiration and shall pay Base Rent (or
Renewal Rent as the case may be) and Supplemental Rent with respect to the
Property from the date of expiration to the date of completion); or
(c) Offer to substitute for the Property a Substitute Property in
compliance with Article XXIII, such substitution to be completed within the
earlier of (A) one hundred eighty (180) days after an Event of Loss and (B) six
months prior to the expiration of the Lease Term. Upon consummation of the
substitution under Article XXI, Net Proceeds, if any, relating to the Withdrawn
Property shall be paid to or retained by Lessee. Lessor shall have thirty (30)
days from the date of receipt of Lessee's offer to accept such offer, if such
offer is not accepted within such time period, then Lessor shall be deemed to
have rejected such offer and Lessee shall proceed under clauses (a) or (b).
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If Lessee makes an offer to purchase pursuant to clause (a) above of this
Section 12.01, and Lessor accepts such offer or is deemed to accept such offer
(taking into account the last sentence of Section 12.01(a)) within the sixty
(60) day period referred to in the last sentence of clause (a) above, Lessee
shall pay to Lessor the Termination Value and Rent described in said clause (a)
not later than the Termination Value Date; provided that any Net Proceeds
related to the Property then held by Lessor (or its assignee or designee) shall
be credited against the portion of such Termination Value payable to Lessor and
the balance of Net Proceeds, if any, shall be paid to or retained by Lessee.
Concurrently with the payment in full of the amounts payable pursuant to said
clause (a), the terms of Article XIII shall be complied with.
In the event Lessee has made the election described in either (b) or (c)
above and, notwithstanding diligent efforts in good faith, has failed to comply
with terms thereof within the periods described, then Lessee shall be deemed to
have made the offer described in (a) above to purchase the Property and the
Termination Value Date shall be deemed to be the next succeeding date set forth
on Schedule 12.01 occurring thirty (30) days after the expiration of the period
described in (b) or (c) (as applicable), or if there is no such date, the last
date on Schedule 12.01, as the case may be.
In the event Lessor rejects the offer of Lessee to purchase the Property as
provided in clause (a) of this Section 12.01, the following amount shall be paid
to or retained by Lessor on such Termination Value Date: (A) all Net Proceeds
related to the Property; provided that, if Lessee is self-insured (as permitted
above) by means of deductibles, retained risks or no insurance whatsoever,
Lessee shall pay such amounts and any additional amounts so that Lessor receives
in total (including any Net Proceeds) an amount that would have been paid by a
third-party insurer under a customary commercial all-risk full replacement-value
insurance policy substantially similar to that described in Schedule 9.01
without deductibles or retained risks replacement value of the Improvements
immediately preceding the Event of Loss, shall be as mutually agreed between
Lessee and Lessor and, failing such agreement within fifteen (15) days of the
request of either party to do so, by the Appraisal Procedure), plus (B) unpaid
Rent due with respect to the Property on such Termination Value Date.
Upon payment in full of the amounts set forth in clauses (A) and (B) of the
preceding sentence (in the event Lessor rejected Lessee's offer) or clause (a)
of the first sentence of this Section 12.01 (in the event Lessor accepted
Lessee's offer to purchase), (1) the Lease Term shall end, and (2) the
obligations of Lessee hereunder (other than any obligations expressed herein as
surviving termination of this Lease) with respect to such Property shall
terminate as of the date of such payment.
If Lessor elects to reject the offer of Lessee hereunder to purchase the
Property pursuant to this Section 12.01 while the Indebtedness under the Debt
Documents is outstanding or the Head Lease has not expired by its terms of
otherwise been terminated, any notice of rejection shall only be effective, and
Lessor shall only be entitled to reject such offer, if such notice is
concurrently consented to in writing by the Agent on behalf of the Holders or by
the Head Lessor or both the Agent and the Head Lessor, as the case may be, and
absent such required consent by the applicable Persons within the sixty (60) day
period referred to in the last sentence of the clause (a) above, Lessor shall be
deemed to have accepted Lessee's offer.
20
Section 12.02. Application of Payments Upon an Event of Loss When Lease
Continues.
Subject to Section 12.04, payments received at any time by Lessor or Lessee
from any Governmental Authority or other Person with respect to any Event of
Loss in a case in which this Lease will not terminate (and there will occur no
abatement or reduction of rent) because Lessee has elected to proceed under
clause (b) of Section 12.01, shall be paid to Lessee to be applied, as
necessary, to the repair or restoration of the Property as described in clause
(b) of Section 12.01. Any excess insurance proceeds remaining thereafter shall
be retained by Lessee and any excess condemnation award remaining thereafter
shall be paid to Lessor to be applied to reduce the Indebtedness.
Section 12.03. Application of Payments Not Relating to an Event of Loss.
In case of a Condemnation or Casualty which is not an Event of Loss or
which does not result in a termination of this Lease in accordance with the
above provisions of Article XII, this Lease shall remain in full force and
effect, without any abatement or reduction of Rent; provided, however, Lessee
acknowledges that any Condemnation or Casualty with respect to the Equipment
that does not result in an Event of Loss with respect to the Property shall
require that the Equipment be replaced, repaired, restored so as to have at
least a value, utility, condition, operating function and remaining useful life
equal to the value, utility, condition, operating function and remaining useful
life of the Equipment immediately prior to such occurrence (assuming compliance
with this Lease). Subject to Section 12.04, all Net Casualty Proceeds and all
Net Condemnation Proceeds, as the case may be, shall be paid to Lessee to be
applied, as necessary, to the repair, restoration and replacement of the
Property so such Property (including the Equipment) shall have a value, utility,
condition, operating function and remaining useful life to the value, utility,
condition, operating function and remaining useful life existing immediately
prior to such Casualty or Condemnation (assuming compliance with this Lease).
Any excess insurance proceeds remaining thereafter shall be retained by Lessee
and any excess condemnation award remaining thereafter shall be paid to Lessor
to be applied to reduce the Indebtedness.
Section 12.04. Other Dispositions.
(a) If Net Casualty Proceeds or Net Condemnation Proceeds exceed
$500,000.00 (each, as applicable, the "Restoration Fund") in respect of such
Casualty or Condemnation, as the case may be, then all Net Casualty Proceeds or
Net Condemnation Proceeds shall be paid to the Proceeds Trustee for release to
Lessee as restoration progresses, subject to and in accordance with Section
12.04(b). Lessor and Lessee hereby authorize and direct any insurer, to make
payment under policies of casualty insurance required to be maintained by Lessee
pursuant to Section 9.01(a) directly to the Proceeds Trustee instead of to
Lessor; and each of Lessee and Lessor hereby appoints the Proceeds Trustee as
its attorney-in-fact to endorse any draft therefor for the purposes set forth in
this Lease. In the event that a Casualty shall occur at such time as Lessee is
self-insured (as permitted above) by means of deductibles, retained risks or no
insurance where Net Casualty Proceeds would have exceeded $500,000.00 from a
third-party insurer under a customary commercial all-risk full replacement-value
insurance policy substantially similar to that described in Schedule 9.01,
Lessee shall, within thirty (30) days of
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the Casualty, pay to the Proceeds Trustee the amount of the proceeds that would
have been payable had such insurance been in effect (determined in the manner
provided in the fourth full paragraph of Section 12.01) and such amount shall
constitute a part of the Restoration Fund for all purposes hereof.
Notwithstanding the foregoing provisions of this Article XII, so long as a Lease
Event of Default exists or a Lease Default shall have occurred and be
continuing, any amount that would otherwise be payable to or for the account of
Lessee pursuant to this Article XII shall be paid to the Servicer (if a Servicer
has been and continues to be engaged to receive Rent) as security for the
obligations of Lessee under this Lease and at such time thereafter as the Lease
Event of Default shall have been waived and the Lease Default shall no longer be
continuing, unless Lessor shall be exercising its remedies under Section 17.01,
such amount shall be paid promptly to Lessee or the Proceeds Trustee in
accordance with this Lease.
(b) The Restoration Fund, if any, shall be disbursed by the Proceeds
Trustee by wire transfer of immediately available funds within five (5) Business
Days of the last submission made pursuant to and in accordance with the
following conditions (provided that there shall be no more than one disbursement
during each month):
(i) At the time of any disbursement, no Lease Event of Default exists
and no Lease Default shall have occurred and be continuing and no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, unbonded or not insured over.
(ii) Disbursements (subject to the holdback in Section 12.04(b)(iv)
below) shall be made from time to time in an amount not exceeding the hard
and soft costs of the work and costs incurred since the last disbursement
upon receipt of (1) satisfactory evidence, including architects' or
engineers' certificates, of the stage of completion, of the estimated cost
of completion and of performance of the work to date in a good and
workmanlike manner in accordance with the contracts, plans and
specifications, (2) partial releases of liens in respect of the
disbursement made pursuant to the immediately preceding request, and (3)
other reasonable evidence of costs incurred (whether or not paid) so that
the Proceeds Trustee is able to verify that the amounts disbursed from time
to time are represented by work that is completed in place or delivered to
the site and free and clear of (or such claims have been bonded or insured
over), mechanics' and materialmen's lien claims.
(iii) Each request for disbursement shall be accompanied by a
certificate of Lessee (1) agreeing to use amounts disbursed for the costs
described in Section 12.04(b)(ii), (2) describing the work, materials or
other costs or expenses for which payment is requested, (3) stating the
costs incurred in connection therewith, (4) to the extent Lessee has not
paid amounts equal to self-insured retentions to the Proceeds Trustee,
stating that Lessee has paid costs and expenses for such work in an amount
equal to the self insured and/or deductible amounts (and attaching thereto
evidence thereof reasonable satisfactory to Lessor) and (5) stating that
Lessee has not previously received payment for such work or expense and the
certificate to be delivered by Lessee upon completion of the work shall, in
addition, state that the work has been substantially completed and complies
with the applicable requirements of this Lease.
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(iv) The Proceeds Trustee shall retain ten percent (10%) of the
amounts otherwise disbursable until the repair, restoration and replacement
are at least fifty percent (50%) complete, and thereafter five percent (5%)
until the repair, restoration and replacement are substantially complete.
(v) The Restoration Fund shall be kept by the Proceeds Trustee in a
separate interest-bearing federally insured account or invested in
Permitted Investments (as directed by, or on behalf of, Lessee).
(vi) At all times the undisbursed balance of the Restoration Fund held
by the Proceeds Trustee shall be not less than the cost of completing the
repair, restoration and replacement, free and clear of all liens (other
than Permitted Liens, which term for purposes hereof shall exclude Liens of
the type described in clause (d) of the definition of Permitted Liens other
than Liens for amounts not yet due or that are bonded over or insured
over), and in the case of any deficiency, the Lessee shall be required to
deposit an amount equal to such deficiency into the Restoration Fund.
(vii) In addition, prior to commencement of repair, restoration and
replacement and at any time during such repair, restoration and
replacement, if the estimated cost of repair, restoration and replacement,
as reasonably determined by the Proceeds Trustee, exceeds the then amount
of the Restoration Fund, the amount of such excess shall be paid by Lessee
to the Proceeds Trustee to be added to the Restoration Fund or Lessee shall
fund at its own expense the costs of such repair, restoration and
replacement until the remaining Restoration Fund is sufficient for the
completion of the repair, restoration and replacement. in the case of
Casualty, any sum in the Restoration Fund which remains in the Restoration
Fund upon the completion of repair, restoration and replacement shall be
paid to Lessee. In the case of Condemnation, any sum in the Restoration
Fund which remains in the Restoration Fund upon the completion of repair,
restoration and replacement shall be paid to Lessor. Lessor shall use such
remaining sum to reduce the Indebtedness, if any.
The Proceeds Trustee shall be retained at the cost, expense and risk
of the Lessee.
Section 12.05. Negotiations.
In the event the Property becomes subject to Condemnation or requisition
proceedings, Lessee shall control the negotiations with the relevant
Governmental Authority, unless: (i) a Lease Event of Default exists or a Lease
Default shall have occurred and be continuing, or (ii) the Net Condemnation
Proceeds will likely be in excess of $500,000.00 (which determination shall be
made in Lessor's reasonable discretion), in which case Lessor (or if the Debt
Documents are in effect, the Agent) at Lessee's expense may elect in writing to
control such negotiations; provided that in any event Lessor may elect to
participate at Lessee's expense in such negotiations. Lessee shall give to
Lessor such information, and copies of such documents, which relate to such
proceedings and are in the possession of Lessee, as are reasonably requested by
Lessor. Lessor shall use good faith efforts to be reasonable when incurring
expenses payable by Lessee hereunder and shall confer with Lessee as to any
negotiations with Governmental Authorities material to Lessee's operations.
Notwithstanding the foregoing,in jurisdictions
23
where a separate award may be granted for Lessee's Equipment and Personalty,
moving and relocation expenses, business loss, business damages, loss of
goodwill, unamortized costs of any Alterations title for which has not vested in
Lessor or Head Lessor pursuant to the terms of this Lease, and Lessee's
attorneys' fees, costs and expenses in the proceedings, Lessee may assert claims
for and control the negotiations pertaining to such interests; provided that the
Lessor's award in respect to the Property is not diminished by the award to
Lessee. Similarly, and notwithstanding the foregoing, in jurisdictions where a
separate award may be granted for any portion of the Equipment, Head Lessor may
assert claims for and control the negotiations pertaining to such interests;
provided that the Lessor's award in respect to the Property is not diminished by
the award to Head Lessor; provided, further, if a Lease Event of Default exists
or a Lease Default shall have occurred and be continuing, such award shall be
paid to the Proceeds Trustee to be applied as set forth in the Intercreditor
Agreement.
ARTICLE XIII
CONVEYANCE OF PROPERTY TO LESSEE
Section 13.01. Conveyance of Property to Lessee.
Upon the purchase of Lessor's rights in the Property by Lessee pursuant to
Article XII or Section 17.04, Lessor shall convey to Lessee or its designee (x)
such Property "as-is," "where-is" and in then present physical condition by a
limited warranty deed with a warranty against grantor's acts and a ▇▇▇▇ of sale
with respect to the Equipment and (y) all rights, title and interest of Lessor
in and to any Net Proceeds (if any), with respect to the Property, free and
clear of (i) all Lessor Liens arising under the Lessor but with no other
representation or warranty of any kind and (ii) the Liens created by the Debt
Documents and the Head Lease.
ARTICLE XIV
SUBLEASE
Section 14.01. Subleasing Permitted; Lessee Remains Obligated.
Provided that no Lease Event of Default exists and no Lease Default shall
have occurred and be continuing at the time the sublease is entered into, upon
ten (10) days' prior written notice to Lessor, Lessee may at any time and from
time to time sublease all or any portion of the Property to one or more Persons
or permit the occupancy of the Property or any portion or portions thereof by
one or more Persons; provided, that each such Person must not be (i) a
tax-exempt entity (within the meaning of Section 168(h) of the Code) or (ii) a
debtor or debtor-in-possession in a voluntary or involuntary bankruptcy
proceeding at the commencement of the Sublease (defined below) term; provided,
further, there shall be no more than five (5) Subleases permitting occupancy by
Persons other than the Lessee at any time, and no Sublease shall result in any
structural alteration or modification to the Property or any portion thereof.
Any such sublease, sub-sublease, license, occupancy agreement or similar
agreement (each, a "Sublease") shall not release Lessee from its primary
liability for the performance of its duties and obligations hereunder, and
Lessee shall continue to be obligated for all obligations of "Lessee" in this
Lease, which obligations shall continue in full effect as obligations of a
principal
24
and not a guarantor or surety, as though no Sublease had been made. Lessee shall
furnish to Lessor within thirty (30) days after the execution of each Sublease
(i) a copy of such Sublease (and the previously executed Subleases still in
effect, if applicable) and (ii) such other instruments and documents as the
Lessor shall reasonably request to ensure that such Sublease is expressly
subject and subordinate to the Debt Documents, the Lease and the Head Lease and
meets the requirements hereof.
Section 14.02. Provisions of Subleases.
Each Sublease shall:
(a) be expressly subject and subordinate to this Lease, any mortgage
encumbering the Property and the Head Lease;
(b) not extend beyond the Lease Term minus one day;
(c) not conflict with or result in a conflict with or violation of any
provision of the Lease, any Debt Documents or the Head Lease; and
(d) the sublessee shall be bound by all covenants contained in Sections
8.01, 8.02 and 8.05 with respect to subleased premises to the same extent as if
the sublessee were the Lessee.
Any Sublease shall not have any term or provision that conflicts with any
term or provision hereof or any other Operative Document and, to the extent that
such Sublease has obligations not in conflict with, but different from, the
obligations of Lessee hereunder, such sublease must establish an arrangement to
permit the obligations of Lessee hereunder to be fulfilled in a manner
reasonably acceptable to Lessor.
ARTICLE XV
INSPECTION
Section 15.01. Inspection.
Upon three (3) days prior written notice to Lessee (or promptly after
notice (which may be by telephone or facsimile transmission) if a Lease Default
or Lease Event of Default shall exist) Lessor, Agent, each Holder, FSL Group and
Head Lessor, and their respective representatives and agents (each, an
"Inspecting Party"), may, in a commercially reasonable manner, inspect the
Property, including, without limitation, the right to cause consultants to make
structural, environmental (to the extent necessary to verify compliance with the
provisions of this Lease) and/or other inspections or tests (it being understood
that all Subleases shall provide for such inspection rights by the Inspecting
Parties). The Inspecting Party shall minimize damage and repair any damage
caused by any inspection or test performed pursuant to Section 15.01. All such
inspections and tests shall be at the Inspecting Party's expense, unless (i) a
Lease Event of Default exists or a Lease Default shall have occurred and be
continuing or (ii) such inspection and/or test results establish that Lessee is
required to take any action in order to comply with the Lease. In either such
case, the cost of such inspection and/or test shall be promptly paid by Lessee
no later than thirty (30) days from the date of invoice. Further, upon
25
prior notice to Lessee, each Inspecting Party, at its expense, may inspect the
books and records relating to the maintenance and care of the Property during
the term of this Lease, that are in the possession of Lessee, which shall be
made available at the Property or the headquarters of the Lessee. Except in
connection with any inspection or test during the existence of a Lease Default
or Lease Event of Default, each Participant agrees to conduct any inspection or
test in a manner that will minimize interference with the business and
operations conducted by Lessee on the Property, and any such inspection or test
(other than during the existence of a Lease Default or Lease Event of Default)
shall be conducted during normal business hours.
ARTICLE XVI
LEASE EVENTS OF DEFAULT
Section 16.01. Lease Events of Default.
The following events shall constitute a "Lease Event of Default":
(a) Lessee shall fail to make any payment of Interim Rent, Base Rent or
Renewal Rent or Termination Value within three (3) days of the date when due;
(b) Lessee shall fail to make any payment of Supplemental Rent when due and
such failure shall continue for five (5) days;
(c) Lessee shall fail to make any payment required under any other
Operative Document, other than any amount described in clause (a) or clause (b)
of this Article XVI, and such failure shall continue for a period of ten (10)
days after notice of such failure to Lessee from Lessor or other Person to whom
Lessee is required to make such payment;
(d) Lessee shall fail to timely perform or observe any covenant or
agreement (other than any covenant or agreement whereby the breach thereof
constitutes a Lease Event of Default under any other provision of this Section
16.01) to be performed or observed by it hereunder or under any other Operative
Document to which it is a party and such failure shall continue for a period of
thirty (30) days after written notice thereof from Lessor, the Agent or the Head
Lessor; provided that the continuation of such a failure for thirty (30) days
after such notice shall not constitute a Lease Event of Default up to an
additional thirty (30) days so long as such failure cannot reasonably be cured
within such thirty (30) day period, and Lessee shall be diligently and
continuously prosecuting the cure of such failure and shall have advised the
Lessor in writing of the steps it is taking and will take to remedy such Lease
Default. The parties hereto acknowledge that the foregoing cure period shall not
be construed to limit the period set forth in Section 8.05 afforded to Lessee
thereunder to take any required Remedial Action and obtain Final Governmental
Approval;
(e) except to the extent the Lessee is permitted to self-insure pursuant to
Section 9.01 and Schedule 9.01, Lessee shall fail to carry or maintain in full
force any insurance required hereunder;
26
(f) any representation or warranty made by Lessee herein or in any
Operative Document to which Lessee is a party or delivered in connection with
the foregoing shall prove to have been incorrect in any material respect when
such representation or warranty was made;
(g) (A) Lessee makes any general arrangement or assignment for the benefit
of creditors; (B) Lessee becomes a "debtor" as defined in 11 U.S.C. ss. 101 or
any successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (C) the appointment of a
trustee or receiver to take possession of substantially all of the assets of
Lessee where possession is not restored to Lessee within sixty (60) days; or (D)
the attachment, execution or other judicial seizure of substantially all of the
assets of Lessee where such seizure is not discharged within sixty (60) days; or
(h) Lessee shall have assigned or otherwise transferred its right, title
and interest in and to this Lease, or subleased the Property, in violation of
Article XI or Section 14.01, as the case may be.
ARTICLE XVII
ENFORCEMENT
Section 17.01. Remedies.
Upon the occurrence of any Lease Event of Default and at any time
thereafter, Lessor may, at its option, by notice to Lessee do one or more of the
following as Lessor in its sole discretion shall determine:
(a) Lessor may, by notice to Lessee, terminate this Lease as of the date
specified in such notice; provided (i) no reletting, reentry or taking of
possession of any or all of the Property by Lessor will be construed as an
election on Lessor's part to terminate this Lease unless a written notice of
such intention is given to Lessee, (ii) notwithstanding any reletting, reentry
or taking of possession, Lessor may at any time thereafter elect to terminate
this Lease with respect to any or all of the Property, and (iii) no act or thing
done by Lessor or any of its agents, representatives or employees and no
agreement accepting a surrender of any or all of the Property shall be valid
unless the same be made in writing and executed by Lessor;
(b) Lessor may (i) demand that Lessee, and Lessee shall upon the written
demand of Lessor, return the Property promptly to Lessor in the manner and
condition required by, and otherwise in accordance with all of the provisions
of, Article X as if the Property were being returned at the end of the Lease
Term, and Lessor shall not be liable for the reimbursement of Lessee for any
costs and expenses incurred by Lessee in connection therewith, and (ii) without
prejudice to any other remedy which Lessor may have for possession of the
Property, enter upon the Property and take immediate possession of (to the
exclusion of Lessee and any sublessee) the Property and expel or remove Lessee
and any other Person who may be occupying the same, by summary proceedings or
otherwise, all without liability to Lessee for or by reason of such entry or
taking of possession, whether for the restoration of damage to property caused
by such taking or otherwise and in addition to Lessor's other damages. Lessee
shall be responsible for the reasonably necessary costs and expenses of
reletting actually incurred. The provisions of this
27
Section 17.01(b) shall operate as a notice to quit and shall be deemed to
satisfy any other requirement or provisions of Applicable Laws which may require
Lessor to provide a notice to quit or of Lessor's intention to re-enter any or
all of the Property and any such requirements or provisions are hereby waived by
Lessee. Whether or not the Lease is terminated, Lessor shall be entitled to
enter the Property and may remove the Equipment;
(c) Lessor may hold, keep idle or lease to others the Property as Lessor in
its sole discretion may determine, free and clear of any rights of Lessee and
without any duty to account to Lessee with respect to such action or inaction or
for any proceeds with respect to such action or inaction;
(d) Lessor may sell the Property (or any portion thereof) at public or
private sale, as Lessor may determine, free and clear of any rights of Lessee
and without any duty to account to Lessee with respect to such action or
inaction or any proceeds with respect thereto (except to the extent required by
the next succeeding sentence if Lessor shall elect to exercise its rights
thereunder), in which event Lessee's obligation to pay Base Rent or Renewal
Rent, as the case may be, hereunder for periods commencing after the Termination
Value Date next succeeding the date of such sale shall be terminated. If Lessor
shall have sold any of the Property pursuant to the above terms of this Section
17.01(d), Lessor may demand that Lessee pay to Lessor, and Lessee shall pay to
Lessor as Supplemental Rent, on the date of such sale, as liquidated damages for
loss of a bargain and not as a penalty (the parties agreeing that Lessor's
actual damages would be difficult to predict, but the liquidated damages
described below represent a reasonable approximation of such amount), in lieu of
Base Rent (or Renewal Rent, as the case may be) in respect of the Property due
for the period commencing on the Termination Value Date next succeeding the date
of sale, an amount equal to (i) all unpaid Rent due on or prior to, and (without
duplication) all unpaid Rent accruing but unpaid through, such Termination Value
Date, plus (ii) an amount equal to the excess, if any, of (I) the Termination
Value for the Property (or allocable portion thereof) determined as of the
Termination Value Date next succeeding the date of sale plus any Make-Whole
Premium over (II) the net proceeds of such sale (after deduction of all costs
and expenses of such sale including, without limitation, sales or transfer
taxes, recording fees and stamp and documentary taxes, costs incurred to ready
the Property for sale and brokers' and attorneys' fees), plus (iii) interest at
the Default Rate on all of the foregoing amounts from such Termination Value
Date until the date of actual payment;
(e) Lessor may, whether or not Lessor shall have exercised or shall
thereafter at any time exercise any of its rights under Section 17.01(a), (b) or
(c), demand by written notice to Lessee specifying a payment date (the "Final
Payment Date") not earlier than twenty (20) days after the date of such notice,
that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the Final Payment
Date, as liquidated damages for loss of a bargain and not as a penalty (the
parties agreeing that Lessor's actual damages would be difficult to predict, but
the aforementioned liquidated damages represent a reasonable approximation of
such amount), in lieu of Base Rent for periods commencing after the Final
Payment Date, an amount equal to the sum of (i) all unpaid Rent with respect to
the Property due on or prior to, and (without duplication) all unpaid Rent
accruing but unpaid through, such Termination Value Date plus (ii) the following
(together with interest on such sum at the Default Rate from the Final Payment
Date specified in such notice to the date of actual payment): an amount equal to
the excess, if any, of the Termination Value for the Property (or allocable
portion thereof) determined as of the Termination Value
28
Date next succeeding the Final Payment Date plus any Make-Whole Premium over, at
the Lessor's option, the Fair Market Sales Value or Fair Market Rental Value
(determined on an "as-is,"" where-is" basis and, in the event of any dispute,
based upon an appraisal prepared by an appraiser selected by Lessor) for the
Property (or allocable portion thereof), and in the case of Fair Market Rental
Value determined over the remainder of the Base Term after discounting such Fair
Market Rental Value to the present value as of such Final Payment Date at the
Reference Rate.
(f) Lessor may retain and apply against Lessor's damages all sums which
Lessor would, absent such Lease Event of Default, be required to pay to, or turn
over to, Lessee pursuant to the terms of this Lease;
(g) Lessor may exercise any other right or remedy that may be available to
it under Applicable Laws or in equity, or proceed by appropriate court action
(legal or equitable) to enforce the terms hereof or to recover damages for the
breach hereof. Separate suits may be brought to collect any such damages for any
period or periods with respect to which Rent shall have accrued, and such suits
shall not in any manner prejudice Lessor's right to collect any such damages for
any subsequent period, or Lessor may defer any such suit until after the
expiration of the Base Term or the then current Renewal Term, in which event
such suit shall be deemed not to have accrued until the expiration of the Base
Term, or the then current Renewal Term.
Section 17.02. Survival of Lessee's Obligations.
No repossession of any or all of the Property or exercise of any remedy
under this Lease, including termination of this Lease, shall, except as
specifically provided herein, relieve Lessee of any of its liabilities and
obligations hereunder, including the obligation to pay Rent. In addition, except
as specifically provided herein, Lessee shall be liable for any and all unpaid
Rent due hereunder before, after or during the exercise of any of the foregoing
remedies, including all reasonable legal fees and expenses and other costs and
expenses incurred by any Participant by reason of the occurrence of any Lease
Default or Lease Event of Default or the exercise of Lessor's remedies with
respect thereto, and including all costs and expenses incurred in connection
with the return of the Property in the manner and condition required by, and
otherwise in accordance with the provisions of, Article X as if the Property
were being returned at the end of the Lease Term. At any sale of any or all of
the Property or any other rights pursuant to Section 17.01, any Participant
(excluding the Lessor in the case of any event of default by the Lessor under
the Debt Documents not arising from a Lease Event of Default) or Affiliate
thereof may bid for and purchase the Property or any portion thereof.
Section 17.03. Remedies Cumulative; No Waiver; Consents.
To the extent permitted by, and subject to the mandatory requirements of,
Applicable Laws, each and every right, power and remedy herein specifically
given to Lessor (and any assignee) or otherwise in this Lease shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by Lessor, and the exercise or the
beginning of the exercise of any power or
29
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any right, power or remedy; provided, however, Lessor
shall not be entitled to duplicative damages in the case of the cumulative
exercise of remedies. No delay or omission by Lessor in the exercise of any
right, power or remedy or in the pursuit of any remedy shall impair any such
right, power or remedy or be construed to be a waiver of any default on the part
of Lessee or to be an acquiescence therein. Lessor's (or any other Person's)
consent to any request made by Lessee shall not be deemed to constitute or
preclude the necessity for obtaining Lessor's (or such other Person's) consent,
in the future, to all similar requests. No express or implied waiver by Lessor
of any Lease Default or Lease Event of Default shall in any way be, or be
construed to be, a waiver of any future or subsequent Lease Default or Lease
Event of Default.
Section 17.04. Lessee's Right of Rejectable Offer.
Upon the occurrence and during the continuance of a Lease Event of Default
(but so long as no Lease Event of Default shall have occurred under Section
16.01(g)), Lessee shall have the right for a period equal to ten (10) days from
the date of Lessee's knowledge of such Lease Event of Default to offer to buy
the Property from the Lessor for an amount equal to the greater of the Fair
Market Sales Value thereof (determined on an "as is," "where is" basis, and in
the event of any dispute, based upon an appraisal prepared by an appraiser
selected by Lessor) or Termination Value, together with any Make-Whole Premium.
In the event that Lessor accepts such offer within fifteen (15) Business Days of
receipt of the offer (or Lessor is deemed to have accepted such offer), Lessee
shall be required to pay the purchase price as set forth above, together with
all unpaid Rent due on or prior to, and (without duplication) all unpaid Rent
accruing but unpaid through the date the purchase price is paid and interest at
the Default Rate on the foregoing amounts until the date of actual payment
together with other amounts owing by the Lessee under the Operative Documents
and all costs and expenses attendant to any Lease Event of Default.
Notwithstanding anything herein to the contrary, if such offer shall not have
been rejected within the fifteen (15) Business Days referenced above then such
offer shall be deemed to have been accepted by Lessor and the provisions of
Section 13.01 shall apply without further action unless the Lessee and Lessor
shall have otherwise agreed in writing that such offer shall not be deemed to
have been accepted and shall continue for an additional period, which period
shall be specified by such parties.
If Lessor elects to reject the offer of Lessee hereunder to purchase the
Property pursuant to this Section 17.04 while the Indebtedness under the Debt
Documents is outstanding or the Head Lease has not expired by its terms or
otherwise been terminated, any notice of rejection shall only be effective, and
Lessor shall only be entitled to reject such offer, if such notice is
concurrently consented to in writing by the Agent on behalf of the Holders or by
the Head Lessor or both the Agent and the Head Lessor, as the case may be, and
absent such required consent by the applicable Persons within the time period
prescribed herein, Lessor shall be deemed to have accepted Lessee's offer.
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ARTICLE XVIII
RIGHT TO PERFORM FOR LESSEE
Section 18.01. Right to Perform for Lessee.
If Lessee shall fail to perform or comply with any of its agreements
contained herein within the applicable periods permitted herein prior to such
failure to perform or comply constituting a Lease Default or Lease Event of
Default, Lessor or Agent may (but shall not be required to) perform or comply
with such agreement, and Lessor shall not thereby be deemed to have waived any
default caused by such failure, and the amount of payment required to be made by
Lessee hereunder and made by Lessor or Agent on behalf of Lessee, and the
reasonable costs and expenses of Lessor and Agent (including reasonable
attorneys' fees and expenses) incurred in connection with the performance of or
compliance with such agreement, as the case may be, together with interest
thereon at the Default Rate, shall be deemed Supplemental Rent, payable by
Lessee to Lessor or Agent upon demand. In addition, during the continuance of a
Lease Default or Lease Event of Default in respect of Lessee's obligations under
Section 8.02 and/or Section 8.05, then, in addition to the rights above and at
the cost of Lessee, (a) Lessor and Agent shall have the right to hire Persons
(as selected by Lessor or Agent in its reasonable discretion) to cure such Lease
Default or Lease Event of Default, and to take any and all other actions
necessary to cure such Lease Default or Lease Event of Default, and (b) Lessee
shall cooperate with Lessor and Agent, and the Persons hired by Lessor or Agent,
in the performance of such cure, including, without limitation, (i) providing
access to the subject Property at reasonable times every day of the week, (ii)
making available water, electricity and other utilities existing at or on the
subject Property, and (iii) restricting or closing the Property, but only if
such restriction or closure is reasonably necessary for the performance of such
cure and provided that such closure shall be done for and during a time period
and in such manner that balances the need for the maintenance or repair of the
Property (and doing so in a safe manner) and the continuing operations of the
Property.
ARTICLE XIX
INDEMNITIES
Section 19.01. General Indemnification.
(a) Lessee agrees to assume liability for, and to indemnity, protect,
defend, save and keep harmless each Indemnitee, on an After-Tax Basis, from and
against any and all Claims that may be suffered, imposed on or asserted against
any Indemnitee, arising out of (i) the acquisition, ownership, leasing,
subleasing, assignment, transfer of title, sale, financing (including without
limitation any Make-Whole Premium) refinancing, renewal, return, disposition,
operation, possession, use, non-use, maintenance, modification, alteration,
reconstruction, restoration, substitution or replacement of the Property (or any
portion thereof) or the Lease, or from the granting by Lessor at Lessee's
request of easements, licenses or any rights with respect to all or any part of
the Property, or from the construction, design, purchase or condition of the
Property (including any Claims arising, directly or indirectly, out of the
actual or alleged presence, use, storage, generation, Release of any Hazardous
Materials, and any Claims
31
for patent, trademark or copyright infringement and latent or other defects,
whether or not discoverable), including any liability under Applicable Laws
(including, without limitation, any Claims arising directly or indirectly out of
any actual or alleged violation, now or hereafter existing, of any Environmental
Laws), (ii) the Operative Documents or any modification, amendment or supplement
thereto, (iii) the non-compliance of the Property with Applicable Laws
(including because of the existence of the Permitted Liens or Permitted
Encumbrances), (iv) any matter relating to all or any part of the Property or
any operations thereon, including matters relating to Environmental Laws or
Hazardous Materials, (v) the breach by Lessee of its representations,
warranties, covenants and obligations in this Lease or any other Operative
Documents whether or not such Claim arises or accrues prior to the date of this
Lease, (vi) the business and activities of Lessee, (vii) the business and
activities of any other Person on or about the Property (whether as an invitee,
sublessee, licensee or otherwise), (viii) the cost of assessment, containment
and/or removal of any and all Hazardous Materials from all or any portion of the
Property or any surrounding areas for which Lessee has any legal obligation, the
cost of any actions taken in response to a Release of any Hazardous Materials
on, in, under or affecting any portion of the Property or any surrounding areas
for which Lessee has any legal obligation to prevent or minimize such Release so
that it does not migrate or otherwise cause or threaten danger to present or
future public health, safety, welfare or the environment, and costs incurred to
comply with Environmental Laws in connection.with all or any portion of the
Property or any surrounding areas for which Lessee has any legal obligation, and
(ix) a Lease Default or Lease Event of Default (including Claims arising from
such event's causing a default under the Head Lease or Debt Documents). Lessee
acknowledges that the foregoing includes. any costs incurred by any Indemnitee
in performing any inspections of any Property if such inspection reveals a
violation by Lessee of Section 8.05.
(b) In case any Claim shall be made or brought against any Indemnitee, such
Indemnitee shall give prompt notice thereof to Lessee; provided that failure to
so notify Lessee shall not reduce Lessee's obligations to indemnify any
Indemnitee hereunder unless and only to the extent such failure results in
additional liability on Lessee's part. Lessee shall be entitled, at its expense,
acting through counsel selected by Lessee (and reasonably satisfactory to such
Indemnitee), to participate in, or, except as otherwise provided, to assume and
control (if it promptly so elects upon notice of the Claim), and, to the extent
that Lessee desires to assume and control, in consultation with Indemnitee, the
negotiation, litigation and/or settlement of any such Claim (subject to the
provisions of the last sentence of subparagraph (c) of this Section 19.01). Such
Indemnitee may (but shall not be obligated to) participate at its own expense
(unless Lessee is not properly performing its obligations hereunder and then at
the expense of Lessee) and with its own counsel in any proceeding conducted by
Lessee in accordance with the foregoing, in which case Lessee shall keep such
Indemnitee and its counsel fully informed of all proceedings and filings and
afford such Indemnitee and counsel reasonable opportunity for comment.
Notwithstanding the foregoing, Lessee shall not be entitled to assume and
control the defense of any Claim if (i) a Lease Event of Default exists or a
Lease Default has occurred and is continuing, (ii) the proceeding involves
possible imposition of any criminal liability or penalty or unindemnified civil
penalty on such Indemnitee, (iii) the proceeding involves the granting of
injunctive relief against the Indemnitee not related to the transactions
contemplated by the Operative Documents, (iv) a significant counterclaim is
available to the Indemnitee that would not be available to and cannot be
asserted by Lessee, (v) a conflict of interest exists between the
32
Indemnitee and Lessee with respect to the Claim, or (vi) the defense of such
Claim would require the delivery of material confidential and proprietary
information of such Indemnitee that would otherwise not be available to Lessee
or its counsel.
(c) Each Indemnitee shall at Lessee's expense supply Lessee with such
non-confidential and non-privileged information and documents reasonably
requested by Lessee in connection with any Claim for which Lessee may be
required to indemnify any Indemnitee under this Section 19.01 and otherwise
necessary for the performance of its obligations hereunder. So long as no Lease
Event of Default exists and no Lease Default shall have occurred and be
continuing, no Indemnitee shall enter into any settlement or other compromise
with respect to any Claim for which indemnification is required under this
Section 19.01 without the prior wntten consent of Lessee which consent shall not
be unreasonably withheld or delayed. Lessee shall have the authority to settle
or compromise any Claim against an Indemnitee hereunder; provided that no
admission of wrongdoing shall be required of such Indemnitee and such Indemnitee
shall be released of all liability in connection with any such Claim pursuant to
a release in form and substance acceptable to such Indemnitee.
(d) Upon payment in full of any Claim by Lessee pursuant to this Section
19.01 to or on behalf of an Indemnitee, Lessee, without any further action,
shall be subrogated to any and all Claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense or claims against another Indemnitee for which
Lessee would have indemnity obligations hereunder), and such Indemnitee shall
execute such instruments of assignment and conveyance, evidence of Claims and
payment and such other documents, instruments and agreements as may be necessary
to preserve any such Claims and otherwise reasonably cooperate with Lessee to
enable Lessee to pursue such Claims.
(e) Notwithstanding anything to the contrary contained herein, Lessee shall
not be required to indemnify any Indemnitee under this Section 19.01 for any
Claim to the extent resulting from the affirmative negligence (i.e., negligence
arising from actions taken by such Indemnitee rather than resulting from such
Indemnitee's failure to act), willful misconduct or breach in any material
respect of a representation or warranty of such Indemnitee.
Section 19.02. General Tax Indemnification.
(a) Except as provided in Section 19.02(b), Lessee agrees to indemnify each
Tax Indemnitee against, and hold each Tax Indemnitee harmless from, on an
After-Tax Basis, and to pay in accordance with Section 19.02(f) (i) any and all
Taxes of any United States federal taxing authority, state or political
subdivision or taxing authority, thereof or therein which are imposed or levied
upon or assessed against or with respect to or in connection with (A) any such
Tax Indemnitee, the Lessee, any tenant, subtenant or other user of the Property,
any Secured Note or any amounts and expenses payable thereunder, any financing
or refinancing, in any case arising under, out of or in connection with or
relating to the Operative Documents, the Property or any portion thereof or the
transactions or activities contemplated by the Operative Documents, (B) the
Property, or any part or interest therein, or any additions, modifications or
improvements thereto, or any estate, right, title, or any occupancy, operation,
possession of or sales from or any other activity conducted on or about the
Property or any damage to, removal, abandonment, salvage, loss, condemnation,
theft, scrapping, destruction of any requisition or taking thereof
33
(C) Interim Rent, Base Rent, Renewal Rent, Supplemental Rent or other sums
payable under this Lease or any other Operative Document (including, in each
case, any amendment, supplement, waiver or consent thereto), (D) this Lease or
any other Operative Document (including, in each case, any amendment,
supplement, waiver or consent thereto) or the leasehold estate hereby created or
any interest therein, or which arise in respect of the operation, possession or
use or disposition, after the acquisition thereof by a Tax Indemnitee, of all or
any portion of the Property or any part thereof or interest therein, or which
arise at the end of the Lease Term, if any, or (E) any leasing, subleasing,
sub-subleasing or use of the Property or any part thereof or interest therein,
(ii) other governmental charges or Taxes imposed upon the Property or any part
thereof or interest therein or upon a Tax Indemnitee as a result of ownership of
the Property or any part thereof or interest therein (including, without
limitation, sewer or water assessments), (iii) payments required to be made to a
governmental or quasi-governmental authority (or private entity in lieu thereof)
which are in lieu of each of the foregoing (whether or not expressly so
designated) and (iv) any interest, penalties or additions to tax payable by the
Tax Indemnitee in connection with any of the foregoing (any such amounts
described in the foregoing clauses, being deemed to be a "Tax" for purposes of
this Section 19.02).
(b) Notwithstanding anything to the contrary contained herein, Lessee will
have no obligation under this Section 19.02 with respect to amounts described in
any one or more of the following:
(i) in the case of any Tax Indemnitee, (A) Taxes (other than Taxes
that are, or are in the nature of, sales, use, property, ad valorem,
rental, stamp, transfer, ad valorem, excise or license taxes and other than
any withholding tax arising from a change in Applicable Law after the
Closing Date) imposed on the net income of such Tax Indemnitee by the
United States federal government under the Code (including any taxes that
are, or are in the nature of minimum or alternative minimum taxes, and any
taxes on or measured by any items of tax preference), (B) Taxes (other than
taxes that are, or are in the nature of, sales, use, property, ad valorem,
rental, stamp, transfer, excise or license taxes and other than any
withholding tax arising from a change in Applicable Law after the Closing
Date) imposed on such Tax Indemnitee by the state in which the Property is
located or any local jurisdiction therein on, based on or measured by net
income (including any minimum taxes or taxes on items of tax preference) or
net receipts or gross income or gross receipts, or taxes that are in the
nature of intangibles taxes or (C) Taxes (other than taxes that are, or are
in the nature of, sales, use, property, ad valorem, rental, stamp,
transfer, excise or license taxes and other than any withholding tax
arising from a change in Applicable Law after the Closing Date) imposed on
such Tax Indemnitee by the state in which the Property is located or any
local jurisdiction therein that are imposed on capital or net worth, excess
profits or conduct of business, or (D) Taxes imposed by any foreign or
domestic government or taxing authority (other than the United States or
any states or any local government or taxing authority in any of the
states), except in each case, to the extent imposed as a result of (v) the
execution or delivery, of any Operative Document in such jurisdiction, (w)
the identity, organization, activities or presence of the Lessee or any
Affiliate of the Lessee in such jurisdiction, (x) the Lessee's or any
Affiliate's of the Lessee making of any payment (or being deemed to have
made payments) under the Operative Documents from the jurisdiction imposing
such Taxes or (y) a change in Applicable Law after the Closing Date;
provided that there
34
shall not be excluded under this clause (i) any amounts necessary to make
any payment required to be made under the Operative Documents on an
After-Tax Basis; provided further, that there shall not be excluded under
this clause (i) any Taxes which are in lieu of or in replacement of any
Taxes otherwise indemnified herein;
(ii) Taxes with respect to any Tax Indemnitee attributable to any (1)
voluntary sale, assignment, transfer or other disposition (collectively, a
"Transfer") by such Tax Indemnitee of any interest in the Property or any
part thereof or any interest therein or any interests or obligations
arising under the Operative Documents (other than to the Lessee, an
Affiliate or any designee of the foregoing), (2) any involuntary transfer
of any of the foregoing interests resulting from any bankruptcy or other
proceeding for the relief of debtors in which such Tax Indemnitee is a
debtor, (3) any foreclosure by a creditor of such Tax Indemnitee; provided,
however, this clause (ii) shall not apply to any such sale, assignment,
transfer or other disposition occurring as a result of and so long as a
Lease Default or Lease Event of Default has occurred and is continuing (it
being understood that any transfer or disposition expressly permitted by
Articles XI, XIII or XIV of the Lease arising by operation of the Operative
Documents or requested by the Lessee is not a voluntary sale, assignment,
transfer or other disposition and any transfer in connection with a
Casualty or Condemnation, an assignment, sublease or transfer by Lessee of
any interest in the Property or merger, consolidation or other
restructuring of Lessee or at the direction of Lessee shall not be deemed
to be a voluntary sale, assignment, transfer or other disposition);
(iii) Taxes imposed against or payable by a Tax Indemnitee to the
extent imposed with respect to any period after the expiration or earlier
termination of this Lease (in either case provided that, if required,
possession of the Property has been returned and the Lessee's obligation to
pay Base Rent or Renewal Rent, as the case may be, under the Lease has been
extinguished) other than pursuant to the exercise of remedies in connection
with a Lease Default or Lease Event of Default; provided that the exclusion
in this clause (iii) shall not apply to the extent such Taxes are imposed
with respect to any payments due under the Operative Documents after such
expiration or earlier termination;
(iv) Taxes imposed against or payable by such Tax Indemnitee as a
result of the gross negligence, willful misconduct or fraud of such Tax
Indemnitee;
(v) any Tax that would have been imposed on a particular Tax
Indemnitee without regard to the transactions contemplated by the Operative
Documents;
(vi) Taxes or liabilities resulting from any prohibited transaction
described in Section 466 or 407 of ERISA or Section 4975(c) of the Code or
any successor provisions thereto that may arise in connection with any
transaction contemplated by the Operative Documents, other than any such
Taxes that are imposed as a result of a breach of a representation by, or
an act or omission of, the Lessee;
(vii) Taxes that would not have been imposed but for an amendment,
supplement, modification, consent or waiver to any Operative Document to
which Lessee
35
or any Affiliate thereof is not a party or that has not been initiated or
consented to by Lessee or any Affiliate thereof in waiting unless in each
case (1) such amendment, supplement, modification, consent or waiver is
required or permitted by the Operative Documents or Applicable Law, (2) is
necessary or appropriate to, and is in conformity with any other amendment,
supplement, modification, consent or waiver to any Operative Documents
initiated, requested by or consented to by the Lessee or any Affiliate
thereof in writing or (3) arises from a Lease Event of Default;
(viii) With respect to any Tax lndenmitee, Taxes resulting from or
that would not have been imposed but for the existence of Lessor Liens
arising under such Tax Indemnitee;
(ix) With respect to any Tax Indemnity, Taxes that could not have been
imposed but for any failure of such Tax Indemnitee to comply with Section
19.02(h) hereof but only so long as such compliance would not expose such
Tax Indemnitee (in the Tax Indemnitee's good faith opinion) to any cost or
expense for which Lessee shall not have agreed to indemnify such Tax
Indemnitee; provided, however, that the exclusion set forth in this clause
(xiv) shall not apply if such failure to comply is due to a failure of the
Lessee to provide reasonable assistance or response in complying with such
request.
(c) Reimbursement. If Lessee shall have paid any amount pursuant to the
Lease or any other Operative Document or Applicable Laws with respect to or on
account of Taxes not subject to indemnification pursuant to this Section 19.02,
the Tax Indemnitee on whose behalf such Taxes were paid shall pay to Lessee
within thirty (30) days (the "Reimbursement Date") of written notice of such
payment by Lessee the amount so paid by Lessee (or Person making payment on
behalf of Lessee), together with interest thereon at the Default Rate after the
Reimbursement Date.
(d) Calculation of General Tax Indemnity Payments. Any payment or indemnity
to or for the benefit of any Tax Indemnitee with respect to any Tax which is
subject to indemnification under Section 19.02(a) shall (A) reflect the current
net savings available to such Tax Indemnitee or any Affiliate thereof (computed
at the highest marginal rates of federal, state and local tax then applicable to
corporations) resulting from the current deduction of such indemnified Tax, but
only to the extent that such indemnified Tax is deductible for federal, state
and local tax purposes, and (B) include, after taking into account the savings
described in clause (A), the amount necessary to hold such Tax Indemnitee
harmless on an After-Tax Basis. If, by reason of any payment made to or for the
account of a Tax Indemnitee by Lessee pursuant to Section 19.01 or this Section
19.02, or the event or circumstance giving rise to such payment, such Tax
Indeninitee or any Affiliate thereof or any transferee, successor or assignee
thereof, actually realizes a net tax benefit, savings, deduction or credit not
taken into account in computing such payment; provided no Lease Default or Lease
Event of Default has occurred and is continuing (in which case any amount
payable to Lessee on account of such tax benefit, savings, deduction or credit
shall not be due unless and until such Lease Default or Lease Event of Default
is cured), such Tax Indemnitee shall promptly pay to Lessee an amount equal to
the sum of (I) the net reduction in Taxes, if any, realized by such Tax
Indemnitee or any Affiliate thereof which is attributable to such net tax
benefit, savings, deduction or credit and (II) the net reduction in any Taxes
realized by such Tax Indemnitee or any Affiliate thereof as the result of
36
any payment made by such Tax Indemnitee pursuant to this sentence.
Notwithstanding the foregoing, no Tax Indemnitee shall be required to make any
payment to the Lessee pursuant to this Section 19.02(d) to the extent payments
by the Tax Indemnitee to the Lessee under this Section 19.02(d) (without regard
to amounts necessary to make such payments on an After-Tax Basis) would exceed,
in the aggregate, at any time, the amount of all prior payments made by or on
behalf of the Lessee to such Tax Indemnitee (without regard to amounts necessary
to make such payments on an After-Tax Basis) less the amount of all prior
payments made by the Tax Indemnitee to the Lessee (without regard to amounts
necessary to make such payments on an After-Tax Basis) pursuant to this Section
19.02(d), but any such excess shall reduce pro tanto any amount (without regard
to amounts necessary to make such payments on an After-Tax Basis) that the
Lessee is subsequently obligated to pay such Tax Indemnitee pursuant to this
Section 19.02.
(e) Contests. If any written claim shall be made against any Tax indemnitee
or if any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Taxes as to which Lessee may have an
indemnity obligation pursuant to Section 19.02, such Tax Indemnitee shall
promptly notify Lessee in writing and shall not take any action with respect to
such claim or Tax without the consent of Lessee for thirty (30) days after
sending such notice to Lessee; provided that, in the case of any such claim or
proceeding, if such Tax Indemnitee shall be required by law or regulation to
take action prior to the end of such 30-day period, such Tax Indemnitee shall,
in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall not
take any action with respect to such claim or Tax without the consent of Lessee
(not to be unreasonably withheld) before ten (10) days from the receipt of such
notice by Lessee unless the Tax Indemnitee shall be required by law or
regulation to take action prior to the end of such 10 day period; provided, that
failure to so notify Lessee shall not affect Lessee's obligations to indemnify
hereunder except to the extent that Lessee is precluded from any contest and
actually and materially harmed thereby. If requested by Lessee in a written
request to such Tax Indemnitee within thirty (30) days (or such shorter period
referred to in the proviso to the first sentence in this Section 19.02(e)) after
its receipt of such notice, such Tax Indemnitee (i) in the case of a Tax which
may be contested independently (without joinder, contribution or otherwise) from
any Tax that is not subject to indemnification by the Lessee, shall permit
Lessee to in good faith contest (including, without limitation, by pursuit of
appeals and administrative procedures) (any such contest a "Lessee-Controlled
Contest"), or (ii) in the case or a contest which is not a Lessee-Controlled
Contest shall itself or, at such Tax Indemnitee's request, the Lessee shall, in
good faith contest (including, without limitation, by pursuit of appeals and
administrative procedures), the validity, applicability or amount of such
Indemnified Taxes (A) by resisting payment thereof, (B) by not paying the same
except under protest (which protest must be pursued using reasonable efforts in
appropriate administrative and/or judicial proceedings) if protest shall be
necessary and proper or (C) if payment shall be made, by using reasonable
efforts to obtain a refund thereof in appropriate administrative and/or judicial
proceedings; provided that in no event shall such Tax Indemnitee be required to
contest any claim for any Tax unless (1) it is not a Lessee-Controlled Contest;
(2) the amount at issue (taking into account all similar and logically related
claims with respect to the transactions contemplated by the Operative Documents
that have been or could have been raised in an audit by the taxing authority in
question for any other taxable period with respect to which an assessment of a
tax deficiency is not barred by a statute or limitations, including, without
limitations, such claims
37
that may arise in future periods) exceeds $25,000.00; (3) the Tax that is the
subject of such contest is a Tax for which Lessee may have an indemnity
obligation hereunder; (4) Lessee shall have agreed to pay such Tax Indemnitee
and shall pay on an After-Tax Basis as incurred all reasonable costs and
expenses that such Tax Indemnitee shall incur in connection with contesting such
claim (including, without limitation, all reasonable costs, expenses, legal and
accounting fees and disbursements); (5) the action to be taken will not result
in any material danger of a sale, forfeiture or loss of, or the creation of any
Lien against the Property (except if Lessee shall have adequately bonded such
Lien (in a manner reasonably acceptable to such Tax Indemnitee) or otherwise
made provision to protect the interests of such Tax Indemnitee and Lessor in the
Property or any interest therein (in a manner reasonably acceptable to such Tax
Indemnitee) and that there is no risk that criminal or unindemnified or punitive
civil liability may be imposed with respect to such Tax Indemnitee; (6) if such
contest shall involve payment of the claim, Lessee shall advance the amount
thereof plus interest, penalties and additions to tax with respect thereto to
such Tax Indemnitee on an interest-free basis (with no additional net after tax
cost to such Tax Indemnitee and without taking into account any net tax savings
associated with such advance); (7) no Lease Default or Lease Event of Default
under this Lease shall have occurred and be continuing (it being agreed that in
such case, the Tax Indemnitee shall consult in good faith with Lessee to
determine whether Lessee can provide to the Tax Indemnitee reasonably
satisfactory security to cover its indemnity obligations with respect to amounts
to be contested and its obligations under the foregoing clause (4) of this
proviso, in which case, such Event of Default shall not deprive Lessee of its
contest rights hereunder); and (8) in the case of a contest which must be
contested in the name of the Tax Indemnitee, prior to initiating the contest the
Lessee shall have furnished the Tax Indemnitee with an opinion of an independent
tax advisor selected by the Lessee and reasonably acceptable to the Tax
Indemnitee ("Tax Counsel") to the effect that a reasonable basis exists for such
contest. In no event shall the Tax Indemnitee be required to contest any claim
required to be brought in its own name if the subject matter of such claim shall
be of a continuing nature and shall have previously been the subject of an
adverse final determination under the contest provisions of this Section
19.02(e), unless the Lessee shall have delivered to such Tax Indemnitee an
opinion of Tax Counsel to the effect that as a result of a change in law or fact
it is more likely than not that the Tax Indemnitee will prevail in the contest
of such claim. Notwithstanding anything herein to the contrary, no Tax
Indemnitee shall be required to provide to Lessee or its counsel any
confidential information regarding its or any Affiliate's federal or state
income tax reporting, and, in no event shall any contest related to federal,
state or local income taxes of any Tax Indemnitee be subject to a
Lessee-Controlled Contest unless requested by such Tax Indemnitee.
Lessee shall conduct any Lessee-Controlled Contest and the relevant Tax
Indemnitee shall control any contest other than a Lessee-Controlled Contest,
unless the Tax Indemnitee requests that the Lessee control such contest or
declines in writing to control such contest. The party conducting the contest
("Controlling Party") shall consult in good faith with the other party
("Noncontrolling Party") and its counsel with respect to the contest of such
claim for Taxes (or claim for refund) and shall permit review and comment on any
material filings or other submissions (in the case of any Tax Indemnitee
controlled contest so long as such filing or submission does not relate to any
other contest of such Tax Indemnitee that is not subject to indemnity hereunder
unless the portion of the filing or submission relating to such other contest
can be readily severed from the portion of the filing or submission to be
disclosed) but the
38
decisions regarding all actions to be taken shall be made by the Controlling
Party in its sole judgment (exercised in good faith). In addition, the
Controlling Party shall keep the Noncontrolling Party reasonably informed as to
the progress of the contest. The Controlling Party shall be responsible for the
selection of counsel, which counsel must be reasonably satisfactory to the
Noncontrolling Party.
Notwithstanding anything contained in this Section 19.02, a Tax Indemnitee
shall not be required to contest any claim or permit Lessee to contest any claim
and may settle any contest without the consent of Lessee if such Tax Indemnitee
(A) shall waive its right to indemnity under this Section 19.02 with respect to
such claim for such Tax (and any claim made by any taxing authority with respect
to other taxable periods that is based upon the resolution of such claim, or the
contest of which is materially prejudiced by the resolution of such claim), and
(B) shall pay to Lessee any amount of Tax previously paid or advanced by Lessee
pursuant to this Section 19.02 other than the costs and expenses of the contest
of such claim paid by the Lessee in accordance with clause (x) of the proviso to
the second preceding paragraph, together with interest thereon at the Applicable
Federal Rate for the period such payments or advances were held.
If any Tax Indemnitee or any Affiliate thereof shall obtain a refund
(including by way of credit) of all or any part of any Tax with respect to which
the Lessee shall have paid on behalf of such Tax Indemnitee or reimbursed such
Tax Indemnitee, then such Tax Indemnitee shall, so long as no Lease Default or
Lease Event of Default shall have occurred and be continuing, pay to the Lessee
any such refund (including any applicable interest received with respect to such
refund or that would have been received with respect to such refund but for a
counterclaim or other claim not indemnified by Lessee hereunder) plus any tax
savings realized by such Tax Indemnitee as a result of a payment pursuant to
this sentence (it being understood that the calculation of such tax savings
shall take into account any additional income Taxes incurred by such Tax
Indemnitee as a result of the receipt or accrual of such refund). A Tax
Indemnitee shall not be obligated pursuant to this Section 19.02(e) to make a
payment (i) before such time as the Lessee shall have made all payments then due
under the Operative Documents and any Lease Default or Lease Event of Default
that shall have occurred shall no longer be continuing or (ii) in excess of the
amounts paid by Lessee to such Tax Indemnitee pursuant to this Section 19.02(e)
in respect of the Taxes giving rise to such tax savings (minus any amounts
previously paid to Lessee by such Tax Indemnitee pursuant to this Section
19.02(e) plus any applicable interest that would have been received with respect
to such refund but for a counterclaim or other claim not indemnified by Lessee
hereunder); provided that any such amounts not paid to Lessee pursuant to the
limitation contained in clause (ii) of this sentence shall be carried forward to
reduce, pro tanto, any future amounts that may become payable by the Lessee to
such Tax Indemnitee pursuant to this Section 19.02(e) in respect of the Taxes
giving rise to such tax savings. The disallowance, loss, recapture or reduction
of any credit, refund or other tax savings with respect to which a Tax
Indemnitee has made a payment to the Lessee under this Section 19.02(e) shall be
treated as a Tax for which the Lessee is obligated to indemnify such Tax
Indemnitee hereunder, without regard to the exclusions set forth in Section
19.02(b). The Tax Indemnitee shall make any payments to the Lessee under this
Section 19.02(e) within thirty (30) days of the receipt of such refund.
39
(f) Payments. Any Taxes indemnified hereunder shall be paid by Lessee, to
the extent allowed, directly to the appropriate taxing authority on or before
the time, and in the manner, prescribed by Applicable Laws. Any amount payable
to a Tax Indemnitee pursuant to this Section 19.02 shall be paid within thirty
(30) days after receipt of a written demand therefore from such Tax Indemnitee
accompanied by a written statement describing in reasonable detail the amount so
payable, but not before the date such Tax is due; provided, if any such amount
is subject to contest hereunder, then such amount shall be paid within three (3)
days of the resolution of the contest (or the earlier due date thereof). Any
payments to be made by Lessee pursuant to this Section 19.02 that are not paid
to the appropriate Governmental Authority shall be made directly to the Tax
Indemnitee entitled thereto, and any payments to be made to Lessee pursuant to
this Section 19.02 shall be made directly to Lessee, in each case in immediately
payable funds at such bank or to such account as specified by the payee in
written directions to the payor, or, if no such directions shall have been
given, by check of the payor payable to the order of the payee and mailed to the
payee by certified mail, postage prepaid at its address as set forth in this
Lease. Any amount payable under this Section 19.02 that is not paid when due
shall bear interest at the Default Rate.
(g) Verification. At Lessee's request, the amount of any indemnity payment
by Lessee pursuant to this Section 19.02 or any payment by a Tax Indemnitee to
Lessee pursuant to this Section 19.02 shall be verified by the certified public
accountant who regularly prepares the tax returns for such Tax Indemnitee, who
shall verify and certify in writing the accuracy of the Tax Indemnitee's
computations. Notwithstanding the foregoing, Lessor may request verification by
a separate nationally recognized United States or international accounting firm
selected by the Tax Indemnitee and reasonably acceptable to Lessee. The person
or persons required to perform such verification (the "Verifier") shall be asked
to verify, after consulting with the Tax Indemnitee, whether the Tax
Indemnitee's computations are correct and to report its conclusions to both
Lessee and the Tax Indemnitee. Each Tax Indemnitee and Lessee hereby agrees to
provide the Verifier with all information and materials as shall be reasonably
necessary or desirable in connection therewith; provided, however, that in no
case shall the Verifier or any other Person be entitled to see the tax returns
or the books and records of the Tax Indemnitee other than necessary excerpts
thereof with respect to which the Verifier or such other Person has agreed to
treat as confidential under an agreement in form and substance acceptable to the
Tax Indemnitee. The fee of such Verifier (if such Verifier is an independent
accounting firm) shall be paid by Lessee unless such verification discloses an
error adverse to Lessee of 10% or more of the amount determined by such
Verifier, in which case such fees shall be paid by the applicable Tax
Indemnitee. The Verifier shall be requested to make its determination within
thirty (30) days of its appointment. In the event such Verifier shall determine
that such computations are incorrect, then such Verifier shall determine what it
believes to be the correct computations. Notwithstanding anything herein to the
contrary, the sole responsibility of the Verifier shall be to verify the
computations of the amount payable; interpretations of this Agreement or any
other Operative Documents are not within the scope of such Verifier's
responsibilities.
(h) Forms,etc. Each Tax Indemnitee agrees to furnish to Lessee from time to
time, at the written request and expense of Lessee, such duly executed and
properly completed forms as may be necessary or appropriate in order to claim
any reduction of or exemption from any withholding or other Tax imposed by any
taxing authority in respect of any payments otherwise
40
required to be made by Lessee, as the case may be, pursuant to this Lease, which
reduction or exemption is available to such Tax Indemnitee; provided that no Tax
Indemnitee shall have any obligation to comply with any request or take any
other action pursuant to this Section 19.02(h) if in order to comply with such
request or take such action the Tax Indemnitee would be required to make any
inaccurate statement or would be exposed (in Tax Indemnitee's good faith
opinion) to any cost or expense for which Lessee shall not have agreed to
indemnify such Tax Indemnitee or would subject such Tax Indemnitee to any
material risk of audit of Taxes not subject to indemnity hereunder.
(i) Non-Parties. If any Tax Indemnitee is not a party to this Lease, Lessee
may require the Tax Indemnitee, before making any payment to such Tax Indemnitee
under this Section 19.02, to provide the Lessee in writing with an agreement
executed by the Tax Indemnitee, as follows:
In consideration of the rights of the undersigned to payments from the
Lessee pursuant to Section 19.02 of the Lease Agreement, dated as of June
1, 2000, between the Lessor thereof and the Lessee thereof, the undersigned
hereby agrees and covenants that it is a "Tax Indemnitee" for the purposes
of and shall be subject to the terms and conditions of Section 19.02 of the
Lease and will make all payments and take such other actions as are
required under Section 19.02 of the Lease.
(j) Filings. If any report, return or statement (a "Filing") is required to
be filed with respect to any Tax that is subject to indemnification under this
Section 19.02 and, Lessee shall promptly provide notice to the appropriate Tax
Indemnitee and, if permitted by Applicable Laws to do so, Lessee shall timely
file or cause to be filed such Filing with respect to such Tax (except for any
such Filing that a Tax Indemnitee has notified Lessee in writing that such Tax
Indemnitee intends to file a copy of which shall be promptly furnished to Lessee
after filing) and will (if ownership of the Property or any part thereof or
interest therein is required to be shown on such Filing) show the ownership of
the Property in the name of Lessor or the Head Lessor, as the case may be, and
send a copy of such Filing to the appropriate Tax Indemnitee, and Tax
Indemnnitee shall furnish Lessee, at Lessee's request, with such information,
not within the control of Lessee, as is in such Tax Indemnitee's control or is
reasonably available to such Tax Indemnnitee and necessary to file such Filing;
provided, however, Lessee shall pay all reasonable out-of-pocket expenses of the
Tax Indemnitee in connection therewith. If Lessee is not permitted by Applicable
Laws to file any such Filing, Lessee will promptly notify the appropriate Tax
Indemnitee of such requirement in writing and prepare and deliver to the
appropriate Tax Indemnitee a proposed form of such Filing within a reasonable
time, and in all events at least fifteen (15) days prior to the time such Filing
is required to be filed. In the case of any Filing either required to reflect
items in addition to Taxes imposed on or indemnified against by the Lessee under
this Section 19.02 or which the Tax Indemnitee has notified Lessee in writing
that it will prepare and file, Lessee shall, upon the written request of such
Tax Indemnitee, provide such Tax Indemnitee with such information as is within
Lessee's reasonable control or access with respect to such Filing. Lessee shall
hold each Tax Indeinnitee harmless from and against any liabilities, including,
but not limited to penalties, additions to tax, fines and interest, arising out
of any insufficiency or inaccuracy in any such Filing, if such insufficiency or
inaccuracy is attributable to Lessee. Lessee agrees to provide the Lessor with
evidence of the
41
payment of all ad valorem property and other similar Taxes with respect to the
Property or any portion thereof within thirty (30) days of the date that each
such Tax shall become due.
Section 19.03 Special Tax Indemnity.
(a) Representations, Warranties and Covenants. Lessee hereby represents,
warrants and covenants to each of Head Lessor and Lessor as follows: (i) under
current law, neither the Property as a whole nor the Equipment constitutes
"limited use property" within the meaning of Revenue Procedure 76-30, 1976-2C.B.
647; (ii) neither Lessee nor any Affiliate will claim any depreciation or cost
recovery deductions with respect to the Property or any portion thereof, and has
taken or will take any other action in connection with filing its or their
federal income tax returns that would be a primary factor resulting in a Loss or
Inclusion (in each case, as defined in Section 19.03(b) below); (iii) as of the
Closing Date with respect to the (I) Improvements and Fixtures and (II) the
Equipment, such property will not require any improvement, modification or
addition in order to be rendered complete for its intended use by Lessee; (iv)
all written information supplied, caused to be supplied or to be supplied to any
appraiser by or on behalf of Lessee or any Affiliate of Lessee with respect to
the Property or any portion thereof was or will be, as the case may be, true and
accurate when supplied; and (v) at no time during the Term will the Property or
any portion thereof constitute "tax-exempt use property" within the meaning of
Section 168(h) of the Code.
(b) Indemnity Payment Conditions. If, by reason of any act or omission of
Lessee or by any other Person in possession of the Property or any portion
thereof or by reason of the inaccuracy or breach by Lessee of any of the
representations, warranties and covenants contained in this Section 19.03, any
anticipated depreciation deductions are lost, disallowed, eliminated, reduced,
recaptured, compromised, delayed or otherwise made unavailable to Lessor (or
Head Lessor with respect to the Equipment), as the case may be, (a "Loss") or
Lessor or Head Lessor incurs a tax detriment because it is required to include
amounts in income other than Anticipated Lease Income (an "Inclusion"), Lessee
shall, upon notice from Lessor or Head Lessor promptly pay such Person on demand
in immediately available funds, as an indemnity an amount which, on an After-Tax
Basis, shall be equal to the sum of (x) the increase in federal, state and local
income tax liability for the respective taxable year attributable to such Loss
or Inclusion plus (y) the amounts of interest, penalties and additions to tax
(including, without limitation, any additions to tax because of underpayment of
estimated tax), which are assessed against Lessor or Head Lessor for such
taxable year by the Internal Revenue Service ("IRS") or any relevant state,
local or foreign taxing authority and which are attributable to such Loss or
Inclusion.
(c) Right to Contest. Lessor or Head Lessor (in each case, the "Tax Party")
shall notify Lessee in writing of any actual or proposed claim, adjustment or
other action of any tax authority received by such Tax Party in writing with
respect to which Lessee may be required to provide indemnification under this
Section 19.03 ("Proposed Adjustment") (but failure of any Tax Party to so notify
Lessee shall not relieve Lessee of its obligations hereunder except to the
extent that Lessee is precluded from any contest and actually and materially
harmed thereby). If Lessee shall request in writing within thirty (30) days
after such Tax Party's notice described above that the Proposed Adjustment be
contested (or such shorter period in which the Tax Party may be required to take
action), such Tax Party shall contest the Proposed Adjustment; provided,
42
however, that: (i) prior to taking such action, Lessee shall have furnished such
Tax Party with an opinion of independent tax advisor chosen by Lessee and
reasonably acceptable to such Person, to the effect that such Person has a
reasonable possibility of success in contesting the claim; (ii) prior to taking
such action, Lessee shall have (A) acknowledged its obligation to indemnify such
Tax Party hereunder in the event such Person does not prevail in such contest
and (B) agreed to reimburse such Person, promptly on demand, all costs and
expenses that such Person may incur in connection with contesting such claim,
including without limitation reasonable attorneys' and accountants' fees and
expenses; (iii) no Lease Event of Default shall exist and be continuing, (iv)
such Person shall not be obligated to contest any proposed amount that is less
than S25,000.00; and (v) such Person shall in all events control the contest,
and Lessee shall not have any right to inspect the books and records of such
Person, but shall have reasonable opportunity to review and comment on portions
of documentation, protests, memoranda or briefs relating exclusively to a
Proposed Adjustment. In the event such Tax Party shall pay the tax claimed and
then seek a refund, such Person may require Lessee to advance funds sufficient
to pay the tax that would be indenmified by Lessee hereunder if the claim were
resolved adversely to such Person, in which case, to the extent the refund claim
is successful, such funds received form the taxing authority an attributable
thereto, to the extent not required to be applied to an indemnity payable
hereunder, shall be refunded to Lessee. Notwithstanding anything to the contrary
in this Section 19.03(c) such Tax Party may at any time decline to take any
further action with respect to a Proposed Adjustment or may settle any contest
without the consent of Lessee; provided, however, that if Lessee shall have duly
complied with all the terms of this Section 19.03(c), and Lessee shall
reasonably withhold in writing its consent to all or part of such assessment or
settlement based upon its evaluation of the merits, Lessee shall not be
obligated to indemnify such Tax Party for the portion of such assessment or
settlement to which Lessee has reasonably withheld its consent.
(d) Consolidated Group. In the case of any flow-through entity, "Lessor"
shall include the member or other equity owners of Lessor required to report the
gross or net income of Lessor and/or other items of income, expense, deduction
and credit with respect thereto, and "Lessor," "Head Lessor" and respective
owners thereof shall include the consolidated group of which any such Person is
a part for income tax purposes.
Section 19.04. Withholdings.
Notwithstanding anything herein to the contrary, Lessee agrees that each
payment of Rent shall be free and clear of, and without deduction for any
withholdings of any nature whatsoever unless required by Applicable Law. If any
deduction or withholding is required with respect to a payment of Rent by
Lessee, Lessee shall pay an additional amount such that the net amount actually
received by the Tax Indemnitee, after deduction or withholding, will be equal on
an After-Tax Basis to all such amounts that would be received by the Tax
Indemnitee if no such deduction or withholding had been required; provided, that
the Lessee shall not be obligated to pay any additional amount pursuant to this
Section 19.04 if due to the failure of a Tax Indemnitee to comply with Section
19.02(b) to relief or exemption from such withholding tax on Rent.
Further, notwithstanding anything to the contrary contained, Lessee agrees
that each payment under the Debt Documents and under the Head Lease shall be
free and clear of, and
43
without deduction for, any withholdings of any nature whatsoever. If any
deduction or withholding is required with respect to a payment under the Debt
Documents or under the Head Lease, Lessee shall pay an additional amount such
that the net amount actually received by the Tax Indemnitee, after deduction or
withholding, will be equal on an After-Tax Basis to all such amounts that would
be received by the Tax Indemnitee if no such deduction or withholding had been
required; provided, that the Lessee shall not be obligated to pay any additional
amount pursuant to this Section 19.04 if due to the failure of a Tax Indemnitee
to comply with Section 19.02(h) as a precondition to relief or exemption from
such withholding tax or deduction.
Section 19.05. Survival.
Notwithstanding anything herein to the contrary, the provisions of this
Article XIX shall survive the earlier termination of this Lease and the right to
collect any other payment that shall have occurred but shall be unpaid by the
Lessor hereunder or under any Operative Document shall survive the earlier
termination of this Lease and each other Operative Document.
ARTICLE XX
LESSEE REPRESENTATIONS AND WARRANTIES
Section 20.01. Representations and Warranties.
Lessee represents and warrants to Lessor and each Participant that the
following are true and correct as of the date hereof:
(a) Due Organization. Lessee is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation.
Lessee has the corporate power and authority to conduct its business as now
conducted, to own or hold under lease its property and to enter into and perform
its obligations under the Operative Documents to which it is or is to become a
party, and the Lessee further has the authority to lease the Property under this
Lease. Lessee is duly qualified to do business and is in good standing as a
foreign corporation in the jurisdiction in which the Property is located and
Lessee in each other jurisdiction where the failure to so qualify would have a
material adverse effect on its ability to perform its obligations under the
Operative Documents to which it is a party.
(b) Due Authorization; No Conflict. Each of the Operative Documents to
which Lessee is a party has been duly authorized by all necessary corporate
action on the part of Lessee and has been duly executed and delivered by Lessee,
and the execution, delivery and performance thereof by Lessee will not, (i)
require any approval of the stockholders of Lessee or any approval or consent of
any trustee or holder of any indebtedness or obligation of Lessee, other than
such consents and approvals as have been obtained, (ii) contravene any
Applicable Law binding on Lessee or (iii) contravene or result in any breach of
or constitute any default under Lessee's charter or by-laws or other
organizational documents, or any indenture, judgment, order, mortgage, loan
agreement, contract, partnership or joint venture agreement, lease or other
agreement or instrument to which Lessee is a party or by which Lessee is bound,
44
or result in the creation of any Lien (other than pursuant to the Operative
Documents) upon any of the property of Lessee.
(c) Governmental Actions. All Governmental Action and other consents,
approvals, waivers, registrations, authorizations and other action required or
necessary pursuant to any legal requirement or contract, indenture, instrument
or agreement to which Lessee is a party or its property is bound in connection
with the execution, delivery and performance by Lessee of the Operative
Documents to which it is a party, has been obtained, given or made.
(d) Enforceability. Each of the Operative Documents to which Lessee is or
is to become a party constitutes the legal, valid and binding obligation of
Lessee, enforceable against Lessee in accordance with the terms thereof, except
as enforceability may be limited by bankruptcy, moratorium, fraudulent
conveyance, insolvency, equitable principles or other similar laws affecting the
enforcement of creditors' rights in general.
(e) Investment Company. Lessee is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(f) Securities Act. None of Lessee, any Affiliate thereof or any agent of
the foregoing has offered any interest in the Property or the Lease, or any
securities of Lessee to, or solicited any offer to acquire any of the same from,
any Person, in violation of Section 5 of the Securities Act, nor has it
authorized any Person to take any such action, and none of Lessee, any Affiliate
thereof or any agent of the foregoing has taken any action that would subject
any interest in the Property, the Notes, the Lessor or the Lease to the
registration requirements of Section 5 of the Securities Act. Nothing herein is
intended to imply or shall be construed to suggest that the interests in Lessor
constitute securities.
(g) Environmental Matters. Except as disclosed in the
Environmental Reports and further described in Schedule 20.01(g), (i) Lessee
has complied and is now complying in all material respects with all
Environmental Laws, and no permits under Environmental Laws are required to
mortgage, lease or transfer the Property or to operate the Property in the
manner in which the Property is currently operated (other than permits that have
already been issued and are in full force and effect or for which application
has been submitted or will be submitted within 30 days of the Closing Date);
(ii) there are no known circumstances that may interfere in any material respect
with Lessee's ability to operate and maintain the Property as contemplated by
the Operative Documents in compliance with applicable Environmental Laws or that
may give rise to any liability under applicable Environmental Laws; (iii) there
are no pending or, to the Actual Knowledge of Lessee, threatened Claims against
Lessee (with respect to the Property) or the Property itself with respect to
Environmental Laws; (iv) during Lessee's occupancy of the Property there have
been no known Releases on or from the Property in violation of applicable
Environmental Laws and such Property is, to the Actual Knowledge of Lessee, free
from all contamination in material violation of Environmental Laws arising from,
relative to, or resulting from any Hazardous Materials; (v) to Lessee's
knowledge after due inquiry, there are not now any underground storage tanks or
incinerators located at, on or under the Property; (vi) to the Actual Knowledge
of Lessee there is no asbestos contained in, forming part of or contaminating
any part of the Property that could reasonably be expected to result in a
material liability under
45
any Environmental Laws; (vii) to the Actual Knowledge of Lessee no
polychlorinated biphenyls (PCBs) are used, stored, located at or contaminate any
part of the Property that could reasonably be expected to result in a material
liability under any Environmental Laws; and (viii) to the Actual Knowledge of
Lessee there exists no condition affecting the Property, the improvements, or
Lessee that could reasonably be expected to result in a material liability under
any Environmental Laws.
(h) Bankruptcy. No bankruptcy, reorganization, arrangement or insolvency
proceedings are pending, threatened or contemplated by Lessee or any Affiliate
thereof, and neither Lessee nor any Affiliate has made a general assignment for
the benefit of creditors.
(i) No Lease Event of Default. No Lease Default or Lease Event of Default
exists.
(j) ERISA. No member of the ERISA Group sponsors, maintains, contributes to
or is required to contribute to any pension plan subject to Title IV of ERISA
and no member of the ERISA Group has at any time in the past sponsored,
maintained, contributed to or been required to contribute to any such plan.
(k) Necessary Real Property. Lessee and each of its Subsidiaries has good
record and marketable title in fee simple to, or valid leasehold interest in,
all real property necessary or used in the ordinary conduct of its business
except to the extent such failure of title or interest would not have a Material
Adverse Effect.
(l) Tax Filings. Each of the Lessee and its Subsidiaries has filed all
Federal and other tax returns and reports required to be filed by it having
amounts to be reported by it (whether gross, net or otherwise) in excess of
$100,000 and has paid all Federal and other taxes, assessments, fees and other
governmental charges levied or imposed upon it or its properties, income or
assets otherwise due and payable in an amount in excess of $200,000, except
those which are being or will be contested in good faith by appropriate
proceedings, and no notice of lien has been filed or recorded.
(m) Patents, Trademarks. Each of Lessee and its Subsidiaries owns or is
licensed or otherwise has the right to use all patents, trademarks, service
marks, trade names, copyrights, franchises, authorizations and other
intellectual property rights that are reasonably necessary for the operation of
its businesses, without known conflict with rights of any other Person, other
than conflicts, either individually or in the aggregate, which could not
reasonably be expected have a Material Adverse Effect. Except as specifically
disclosed in Schedule 20.01(m), no claim or litigation regarding any of the
foregoing is pending, or to the knowledge of Lessee, threatened, which, in
either case, could reasonably be expected to have a Material Adverse Effect.
(n) Property-Related Representations and Warranties. With respect to the
Property:
(i) The Property and the Improvements and the intended use thereof by
Lessee and those claiming by, through or under Lessee, comply in all
material respects with all Applicable Laws, including without limitation
restrictive covenants, conditions, zoning ordinances, subdivision and
building codes, flood disaster laws, applicable Environmental Laws and all
other ordinances, orders or legal requirements issued by any
46
state, federal or municipal authorities having jurisdiction over the
Property. The Property is not part of a tax parcel covering any real estate
other than the Property. The Property and the Improvements do not require
(or have necessary, easements or appurtenant rights) any rights over, or
restrictions against, other property in order to comply with any of the
aforesaid governmental ordinances, orders or requirements.
(ii) All utility services necessary and sufficient for the use,
occupancy, and operation of the Property for its intended purposes are
available to the Property, including water, storm sewer, sanitary sewer,
gas or propane (if applicable), electric and telephone facilities, through
public rights-of-way or perpetual private easements.
(iii) All streets, roads, highways, bridges and waterways necessary
for access to and full use, occupancy, and operation of the Property for
its current use and purposes have been completed, have been dedicated to
and accepted by the appropriate municipal authority (if applicable) and are
open and available to the Property and the Improvements without further
condition or cost to Lessor.
(iv) All curb cuts, driveways and traffic signals located on the
Property and shown on the survey delivered to Lessor prior to the execution
and delivery of this Lease and material to the use and value of the
Property for its intended purposes are existing and have been fully
approved by the appropriate Governmental Authority.
(v) The Improvements and Fixtures are structurally sound, and the
Improvements, the Fixtures and the Equipment are in good repair and free of
material detects in materials and workmanship and have been constructed and
installed in substantial compliance with the plans and specifications
relating thereto. All major building systems located within the
Improvements, including, without limitation, the heating and air
conditioning systems and the electrical and plumbing systems, are in good
working order and condition.
(vi) There are no security agreements or financing statements
affecting the Property other than Permitted Liens.
(vii) No part of the Property has been taken in Condemnation, eminent
domain or like proceeding nor is any such proceeding pending or, to
Lessee's Actual Knowledge and belief, threatened in writing or
contemplated.
(viii) There are no other leases, subleases or licenses (other than
the Lease and Permitted Encumbrances) in existence in connection with the
Property.
(ix) There is a valid permanent Certificate of Occupancy or its
equivalent, in each case issued and outstanding for all Improvements.
(x) The Permitted Encumbrances, individually and in the aggregate, do
not materially adversely affect the use of the Property or materially
interfere with the current use or operation of the Property.
47
(xi) There are no unpaid charges, debts, liabilities, claims or
obligations arising from or in connection with the construction,
development, occupancy, ownership, use or operation of the Property which
could give rise to a construction, mechanic's or materialmen's lien or
other statutory lien against all or a portion of the Property, except as
relate to work to be paid, and which will be paid, prior to becoming
delinquent, by Lessee in the ordinary course of business.
(xii) There are no material suits, actions, writs, decrees,
injunctions, orders, judgments, claims or proceedings pending or, to the
Actual Knowledge of Lessee, threatened or contemplated, against, arising
out of, or relating to the Property.
(xiii) To the Actual Knowledge of Lessee, all information, books,
records and other documents regarding the Property and the Lessee
heretofore delivered to Lessor by Lessee or its agents, when taken as a
whole, are true and correct in all material respects, fairly present the
information contained in such documents as of the date thereof and did not
omit to state a material fact required to be stated therein or necessary to
make the statements therein not materially misleading.
(xiv) Other than ▇▇▇▇▇▇ Enterprises ("Oral Licensee"), which is
Lessee's primary carrier and which uses the portion of the Property known
as shop maintenance, to the Actual Knowledge of Lessee, there are no
adverse or other parties in possession of the Property. Lessee shall
deliver a subordination letter on the Closing Date pursuant to which the
Oral Licensee acknowledges and agrees that its interest in the Property is
terminable at will and without advance notice and is subject and
subordinate to the interests of all Persons arising under the Operative
Documents.
(xv) Upon execution and delivery of the Lease (i) the Lessee will have
unconditionally accepted the Property subject to the Lease and will have a
valid and existing leasehold interest in the Property, subject only to
Permitted Liens, and (ii) no offset will exist with respect to any Rent or
other sums payable wider the Lease.
(o) Insurance. The properties of Lessee and its Subsidiaries are insured
with financial sound and reputable insurance companies, in such amounts and with
such deductibles covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
Lessee or such Subsidiaries operate (after giving effect to self-insurance
permitted hereunder).
(p) Financial Statements. The most recent audited financial statements of
Lessee and its consolidated Subsidiaries (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) are complete and accurate and fairly
present the financial condition of Lessee and its consolidated Subsidiaries as
of the dates thereof and results of operations for the periods covered thereby;
and since January 28, 2000 there have been no changes in the business,
operations, property or financial or other condition of Lessee and its
Subsidiaries on a consolidated basis that could reasonably be expected to have a
Material Adverse Effect.
48
(q) Location of Office. The principal place of business, chief executive
office and office of the Lessee where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each other
Operative Document are kept are located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, and the state of organization of Lessee is Tennessee.
(r) No Litigation. Except as disclosed in Schedule 20.01(r), there is no
litigation against any Lessee or any of its Subsidiaries that could reasonably
be expected to have a Material Adverse Effect.
Section 20.02. Defense of Title.
If, while the Debt Documents and the Head Lease are in force, the title to
the Mortgaged Property, the Equipment or the interest of the Holders, Agent or
Head Lessor shall be the subject of any action at law or in equity, or be
attacked, or endangered, clouded or adversely affected in any material manner,
Lessee, at Lessee's expense, shall take all necessary and proper steps for the
defense of said title or interest, including the employment of counsel selected
by Lessee and approved by the Agent (and/or the Head Lessor as provided in the
Intercreditor Agreement), the prosecution or defense of litigation, and the
compromise or discharge of claims made against said title or interest; provided,
however, that Lessee shall not be required to defend such title or interest to
the extent the claim against such title or interest was caused by any act or
acts of the Holders, Agent, Servicer, the Head Lessor or Lessor. Notwithstanding
the foregoing, in theo event that the Agent (and/or the Head Lessor to the
extent related to the Equipment), acting in good faith, determines that Lessee
is not adequately performing its obligations under this Section 20.02, the Agent
(and/or the Head Lessor to the extent related to the Equipment) may, without
limiting or waiving any other rights or remedies, after giving five (5) Business
Days' notice to Lessor and Lessee, take such steps with respect thereto as the
Agent (and/or the Head Lessor to the extent related to the Equipment) shall deem
necessary or proper and any reasonable out-of-pocket costs and expenses incurred
by the Agent (and/or the Head Lessor to the extent related to the Equipment) in
connection therewith, together wit interest thereon at the Default Rate from the
date incurred by the Agent (and/or the Head Lessor as provided in the
Intercreditor Agreement) until actually paid by Lessee, shall be immediately
paid by Lessee on demand and shall be an obligation wider this Lease.
Notwithstanding anything herein to the contrary, no Person shall be
entitled to take action that shall be binding on the Lessor, in the case of its
interest in the Real Property without the consent of the Holders, and in the
case of the Equipment without the consent of the Head Lessor. Each of the
Persons referred to above agree to cooperate with the Lessee at its cost,
expense and risk in the prosecution or defense of a Claim under applicable title
insurance.
Section 20.03 Certain Covenants of Lessee.
Lessee hereby covenants and agrees with each Participant, that, from and
after the date of this Lease until the Lessee Obligations are paid in full:
(a) Financial and Other Information. Lessee shall deliver to each
Participant the following financial and other information:
49
(i) Quarterly Statements -- within 45 days after the end of each
quarterly fiscal period in each fiscal year of Lessee (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of
(A) a consolidated balance sheet of Lessee as at the end of such
quarter, and
(B) consolidated statements of income, changes in shareholders'
equity (to the extent prepared) and cash flows of Lessee, for such
quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by an Authorized Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of Lessee's Quarterly Report on Form I0-Q, if any, prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 20.03;
(ii) Annual Statements -- within 90 days after the end of each fiscal
year of Lessee, duplicate copies of.
(A) a consolidated balance sheet of Lessee and its subsidiaries,
if any, as at the end of such year, and
(B) consolidated statements of income, changes in shareholders'
equity and cash flows of Lessee and its subsidiaries, if any, for such
year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, provided that
the delivery within the time period specified above of Lessee's Annual Report on
Form 10-K for such fiscal year (together with Lessee's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefore and filed with the
Securities and Exchange Commission, if any, shall be deemed to satisfy the
requirements of this Section 20.03(b).
50
(b) Consolidation. Merger. Sale. etc. Lessee shall not consolidate with any
Person, merge into any Person, or convey, transfer, lease or otherwise dispose
of to any Person all or substantially all of its assets in any single
transaction (or series of related transactions), unless:
(i) in each case, such Person (the "Surviving Corporation") shall be a
corporation or organization organized under the laws of the United States
of America, a state or commonwealth thereof or the District of Columbia and
shall have assumed in writing each obligation, and succeeded to each right,
of Lessee under the Operative Documents to which Lessee is a party;
(ii) no Lease Default or Lease Event of Default shall exist prior to
or after giving effect to such transaction;
(iii) the Surviving Corporation shall have delivered to each of the
Participants (including the Agent) an Officers' Certificate stating that
such transaction complies with the terms and conditions of this Section
20.03(b) and that all Governmental Action, if any, required prior to the
consummation of such transaction in connection with such transaction have
been obtained unless the failure to obtain such Governmental Action would
not have a Material Adverse Effect on the ability of the Surviving
Corporation to perform its obligations under the Operative Documents; and
the Surviving Corporation shall represent and warrant to each of the
Participants and shall have caused to be delivered to each of the
Participants an opinion of counsel, in form and substance. reasonably
satisfactory to each of the Participants, that (x) the Surviving
Corporation is a corporation in good standing in the state of its
incorporation; (y) all documents executed and delivered by Surviving
Corporation pursuant to this Section 20.03(b) have been duly authorized,
executed and delivered by the Surviving Corporation and constitute the
valid, legal and binding obligations of Surviving Corporation; and (z) all
of the Operative Documents to which Lessee is a party will, upon the
consummation of such transaction, be the valid, legal and binding
obligations of Surviving Corporation, subject in each case to customary
exceptions for creditors' rights as well as such other customary exceptions
as were contained in the legal opinions delivered concurrently with the
execution and delivery of the Lease and the other Operative Documents being
executed and delivered as of the date hereof;
(iv) Upon the consummation of such transaction, the Surviving
Corporation, if other than Lessee, shall succeed to, and be substituted
for, and may exercise every right and power of, Lessee immediately prior to
such transaction under each Operative Document to which Lessee was a party
immediately prior to such transaction, with the same effect as if the
Surviving Corporation had been named herein and therein.
(v) After giving full effect to the transaction, the Surviving
Corporation shall have a Lessee's Adjusted Net Worth at least equal to the
Lessee's Adjusted Net Worth prior to the consummation of such transaction
and a senior long-term unsecured debt rating by the Rating Agencies at
least equal to the following:
51
(A) if Lessees s senior long-term unsecured debt rating prior to
such transaction is higher than or equal to A- by Standard & Poor's,
or the equivalent by ▇▇▇▇▇'▇, then the Surviving Corporation's
post-merger senior long-term unsecured debt rating must be equal to or
higher than BBB+ by Standard & Poor's or the equivalent by ▇▇▇▇▇'▇;
(B) if Lessee's senior long-term unsecured debt rating prior to
the merger is equal to or less than BBB+ by Standard & Poor's or the
equivalent by ▇▇▇▇▇'▇, then the Surviving Corporation's post-merger
senior long-term unsecured debt rating must be no less than the next
lower level then the premerger rating, but in no event lower than BBB-
by Standard & Poor's or the equivalent by ▇▇▇▇▇'▇, provided, however,
if the Lessee's senior long-term unsecured debt rating prior to the
merger is below Investment Grade, then the Surviving Corporation's
post-merger long-term unsecured debt rating shall be no lower than the
Lessee's senior long-term unsecured debt rating prior to the merger;
and
(C) if Lessee is unrated prior to the merger, then the Surviving
Corporation shall have an Adjusted Net Worth equal to the pre-merger
Adjusted Net Worth of Lessee.
ARTICLE XXI
[INTENTIONALLY OMITTED]
ARTICLE XXII
LESSOR REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 22.01. Representations and Warranties
The Lessor represents and warrants to Lessee and each Participant that the
following are true and correct as of the date hereof:
(a) Due Organization; Lessor is a Delaware limited liability company and is
duly organized and validly existing and in good standing under the laws of the
State of Delaware and the jurisdiction in which the Property is located and has
the power and authority to enter into and perform its obligations under each of
the Operative Documents to which it is a party.
(b) Due Authorization: No Conflict. Each of the Operative Documents to
which Lessor is a party has been duly authorized by all necessary action on the
part of Lessor and has been duly executed and delivered by Lessor and the
execution, delivery and performance thereof by Lessor will not (i) require any
approval of the membership of Lessor, other than approvals as have been
obtained, (ii) contravene any Applicable Law binding on Lessor or (iii)
contravene or result in a breach of or constitute a default under Lessor's
organizational documents or operating
52
agreement, or any indenture, judgment, order, mortgage, Note Purchase Agreement,
contract, lease or other agreement or instrument to which Lessor is a party or
by which Lessor is bound, or result in the creation of any Lien (other than
pursuant to the Operative Documents) upon any of the property of Lessor.
(c) Governmental Actions. All Governmental Actions and other consents,
approvals, waivers, registrations, authorizations and other action required or
necessary or prudent pursuant to any legal requirement or contract, indenture,
instrument or agreement to which Lessor is a party or its property is bound in
connection with the execution, delivery and performance by Lessor of the
Operative Documents to which it is a party, has been obtained, given or made.
(d) Enforceability. Each of the Operative Documents to which Lessor is or
is to become a party constitutes the legal, valid and binding obligation of
Lessor, enforceable against Lessor in accordance with the terms thereof, except
as enforceability may be limited by bankruptcy, moratorium, fraudulent
conveyance, insolvency, equitable principles or similar laws affecting the
enforcement of creditors' rights in general.
(e) Investment Company. Lessor is not an "investment company" or a company
"controlled by" an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(f) No Litigation. There is no action or proceeding pending or, to
Lessor's. knowledge, threatened, to which it is or will be a party.
(g) Use of Proceeds. Except as expressly contemplated by the Operative
Documents, the proceeds of the Loans from the Holders shall not be used by
Lessor for any purpose other than to finance the acquisition of the Lessor's
purchase of the Property (excluding the Equipment), and fees, expenses and other
disbursements related thereto and the transactions contemplated by the Operative
Documents.
(h) Securities Matters. Neither Lessor, nor any Person authorized by Lessor
to act on its behalf has offered or sold any membership in Lessor, the Notes or
in any other security, the offering of which for the purposes of the Securities
Act would be deemed to be part of the same offering as the offering of the
aforementioned securities to, or solicited any offer to acquire any of the same
from, any Person, other than in the case of the membership interests of Lessor,
First Union Development Corporation, and in the case of the Notes, the Agent and
the Holders; and neither Lessor nor any Person authorized by Lessor to act on
its behalf will take action that would subject, as a direct result of such
action alone, the issuance or sale of any of the aforementioned securities to
the provisions of Section 5 of the Securities Act.
(i) Principal Place of Business. Lessor's principal place of business,
chief executive office and the office where the documents, accounts and records
relating to the transactions contemplated by this Lease and each other Operative
Document are kept are located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Vice President, facsimile number (704)
383-8108, with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President and
53
Assistant General Counsel, First Union Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
(j) Lessor Liens. The Property is free and clear of all Lessor Liens other
than any Lessor Liens contemplated by the Operative Documents.
(k) Single Purpose Entity. Lessor is a Single Purpose Entity.
Section 22.02. Lessor Covenants.
(a) No Amendment. Without the consent of Lessee, Agent and Head Lessor,
Lessor shall not cause or permit an amendment to the articles of organization or
operating agreement of Lessor, except for amendments of a purely ministerial or
administrative nature.
(b) Transfer. Except as provided below, without the consent of the Lessee,
Agent and Head Lessor, Lessor shall restrict each member of Lessor from
transferring all or any portion of its right, title and interest in and to the
Lessor unless:
(i) such transferee is a United States person within the meaning of
Section 7701(a)(30) of the Code or otherwise is exempt from U.S. federal
income tax withholding requirements as of the date of transfer;
(ii) no transferee shall be or shall have been in a lawsuit or
other adversarial proceeding against Lessor, Agent, any Holder or any
Affiliate of the foregoing within the immediately preceding ten (10)
year period prior to the transfer;
(iii) such transferee shall execute a joinder, assumption
agreement or the operating agreement of Lessor pursuant to which it
agrees to undertake all covenants and obligations of the transferor
arising after the date of such transfer, including without limitation
those obligations arising under the Indemnity Agreement, and agrees to
be bound by the restrictions on transfers set forth in this Section
22.02;
(iv) such transfer will not contravene or violate any Applicable
Law, including the Securities Act;
(v) the transferor shall have given at least ten (1O) days' prior
notice to Lessee, Agent and Head Lessor of such transfer; and
(vi) at the date of any transfer, the transferor shall certify to
each of Lessee, Agent and Head Lessor that the conditions to the
proposed transfer prescribed by this Section 22.02 to be met by the
transferor or the transferee respectively, have been satisfied.
(c) Tax Matters. Lessor covenants that its status shall not
result in a Loss or Income Inclusion to Head Lessor, and Lessor shall
not take any action that would result in the inaccuracy
54
of any representations and warranties contained in Section 19.03(b) if such
representations and warranties were deemed to have been made by it.
ARTICLE XXIII
SUBSTITUTION OF PROPERTIES
Section 23.01. Criteria for a Substitute Property.
Subject to the following conditions, Lessee shall have the right as
described in Section 12.01(c) to offer to Lessor to substitute under this Lease
the Property after a Casualty. In any such instance in which Lessor has accepted
such offer, Lessee may withdraw from this Lease the Property (for purposes of
this Article, a "Withdrawn Property"), and substitute therefore a Substitute
Property, such right on the part of Lessee shall be subject to Section 21.02 and
the following:
(a) the Fair Market Sales Value and Fair Market Rental Value of the
Substitute Property (taking into account individually in such determination the
separate property that will comprise the Equipment, which must have a Fair
Market Sales Value, Fair Market Rental Value, utility and remaining useful life
as the portion of the Equipment constituting a portion of the Withdrawn
Property) (assuming compliance with the Lease) must be at least equal to the
Fair Market Sales Value and Fair Market Rental Value of the Withdrawn Property
as of the date immediately preceding the date of Casualty or Condemnation
(assuming compliance with the Lease and assuming that it is unencumbered by this
Lease), which Fair Market Sales Values and Fair Market Rental Values shall be as
determined by the Appraisal Procedure;
(b) the Fair Market Sales Value (Dark) of the Substitute Property must be
at least equal to the Fair Market Sales Value (Dark) of the Withdrawn Property
as of the scheduled maturity date of the Notes, which Fair Market Sales Value
(Dark) shall be as determined by the Appraisal Procedure;
(c) the remaining useful life of the Substitute Property shall be at least
equivalent to the remaining "useful life" of the Withdrawn Property (which shall
be separately determined with respect to any Head Lessor Property), as detemined
by the Appraisal Procedure (and calculated prior to the Event of Loss and
assuming compliance with this Lease);
(d) to the extent not considered by the Appraisal Procedure, the Substitute
Property and each component thereof shall be free of any liabilities, title
defects, and other conditions that would adversely affect such Substitute
Property's fair market value;
(e) notwithstanding anything to the contrary contained herein, in no event
shall Lessee have the right to offer to substitute a Substitute Property for the
Property if a Lease Event of Default exists or a Lease Default shall have
occurred and be continuing or giving effect to the substitution will occur or if
such substitution would adversely affect any rights of any parties having an
interest in the residual value insurance policy issued by FSL Group in
connection with the closing of the Overall Transaction;
55
(f) the transaction shall constitute a tax-free exchange under Section 1031
of the Code which will result in no adverse tax consequence to any Indemnitee
(in each case as determined by such Indemnitee) and further shall not result in
any adverse accounting treatment to any Indemnitee (in each case as determined
by such Indemnitee);
(g) the exercise of ownership rights with respect to the Substitute
Property by Lessor (and with respect to the Equipment constituting a portion of
such Substitute Property ownership rights of Head Lessor) and the ability of
Agent, Lessor and Head Lessor to exercise rights and remedies under the
Operative Documents in the jurisdiction in which the Substitute Property is
located shall in all respects be similar, or no less favorable, than such
ability to exercise rights and remedies in the jurisdiction in which the
Withdrawn Property is located;
(h) such Substitute Property is located in the continental United States
and is acceptable to the Lessor, and on the date on which the substitution is
effected the Substitute Property is in a condition that complies with all
applicable requirements of this Lease and the Debt Documents with respect to the
Substituted Property;
(i) the transactions contemplated in connection with the substitution of
the Withdrawn Property for the Substitute Property shall not expose any
Indemnitee to a risk of any Claim materially different or in excess of the risk
of exposure to any such Claim with respect to the Withdrawn Property, and in no
event shall expose any Indemnitee to any unindemnifted Claim; and
(j) prior to the proposed substitution Lessee shall execute and deliver to
FSL Group and Agent (i) a copy of the "Phase I" environmental assessment report
described in ss. 23.02(b) hereto, (ii) a copy of a final as-built survey
described in ss. 23.02(e) hereto, and (iii) a copy of a title commitment issued
by the relevant title insurance company, each of which shall be acceptable to
FSL Group and Agent and each naming FSL Group and Agent as a party entitled to
rely thereon.
Section 23.02. Lessee and Lessor Deliveries.
In connection with any substitution of the Property, Lessee shall execute
(where appropriate) and deliver to Lessor for Lessor's review and approval in
Lessor's reasonable direction:
(a) title insurance policies insuring Lessor's and the Agent's interest in
the Substitute Property and the Mortgage Lien on such Substitute Property with
no exceptions other than Permitted Liens (provided that all Permitted
Encumbrances shall be acceptable to Agent and Head Lessor), title insurance
exceptions comparable to those permitted with respect to the Properties as of
the Closing Date and other exceptions satisfactory to Agent, Lessor and Head
Lessor;
(b) a "Phase I" Environmental Site Assessment report in form substantially
similar to the form of such report delivered to Lessor on or before the Closing
Date in respect of the Properties and in substance satisfactory to Lessor;
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(c) a report by an engineering firm or consultant describing the condition
of the Substitute Property, satisfactory in form and substance to Lessor;
(d) an amendment to this Lease and any memorandum hereof duly executed and
acknowledged in form and substance satisfactory to Lessor and Lessee to replace
the description of the Withdrawn Property with the description of the Substitute
Property and to correct Exhibit B and such other amendments as may be required
to the other Operative Documents or otherwise reasonably requested by any
Participant;
(e) a copy of a final as-built survey of the Substitute Property, dated as
of recent date, satisfactory in form and substance to Lessor and meeting the
survey requirements employed in connection with Lessor's acquisition of the
Withdrawn Property;
(f) certificates of insurance, if any, required with respect to the
Substitute Property pursuant to the terms of this Lease;
(g) one or more appraisals by a Qualified Appraiser of the Substitute
Property acceptable to Lessor and Agent and containing such opinions and
covering such matters similar to those delivered in appraisals delivered on the
Closing Date as Lessor and Agent may request;
(h) a deed conveying fee title to the Substitute Property executed and
delivered in favor of Lessor and in substance (with respect to warranties, if
any) substantially similar to the deeds delivered to Lessor on the Closing Date
with respect to the Withdrawn Property;
(i) a ▇▇▇▇ of sale with respect to the portion of the Substitute Property
constituting Equipment executed and delivered in favor of Head Lessor and in
substance (with respect to warranties, if any) substantially similar to the ▇▇▇▇
of Sale delivered to Head Lessor on the Closing Date with respect to the portion
of the Withdrawn Property constituting Equipment;
(j) a legal opinion relating to the due authorization, execution and
delivery of the amendment to the Lease, deed, bills of sale and other documents
required to be delivered in connection herewith, respectively, in each case
substantially similar to the opinions of counsel delivered to Lessor, Agent,
Head Lessor and other parties on the Closing Date;
(k) a deed with covenants against grantor's acts and other affidavits,
documents and certificates appropriate to convey the Withdrawn Property on an
"as-is" basis in favor of Lessee or its designee;
(I) a satisfaction of mortgage, a release of lien, UCC termination
statements and other documents appropriate to release the Withdrawn Property
from the liens created by the Debt Documents, in each case in form and substance
satisfactory to the Agent in its reasonable discretion;
(in) a ▇▇▇▇ of sale and UCC termination statements sufficient to transfer
to Lessee or its designee the Equipment free and clear of Lessor Liens arising
through the Head Lessor in form and substance satisfactory to the relevant
Participants, such conveyance to be on an "as-is" basis;
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(n) a certificate of Lessee stating that all representations and warranties
in Section 20.01 of this Lease are true and correct in all material respects as
of the date of substitution with respect to the Substitute Property;
(o) the filing of Debt Documents in form and substance similar to the
original Debt Documents, except to the extent required to meet local custom and
Applicable Laws in the jurisdiction in which such Substitute Property is
located;
(p) the filing of UCC financing statements against such parties and in such
jurisdictions as may be required by Agent and relevant Participants; and
(q) satisfaction of any other conditions precedent required to be satisfied
in connection with the original acquisition of the Withdrawn Property and
satisfaction of such other conditions precedent, including the delivery of such
other documents, agreements, certificates, reports and opinions and the
providers thereof, as may be reasonably required by the relevant Participants.
All of the foregoing (including the providers thereof) shall also be
submitted to and be subject to the reasonable approval of the Lessor and other
relevant Participants. All reports and other information required under Section
23.02 shall name the Lessor and its assigns as parties entitled to rely thereon.
The Lessor and other relevant Participants shall have forty-five (45) days
in which to consent to the foregoing deliveries. The failure of Lessor to
respond within such 45-day period shall be deemed rejection. The closing for the
transfer of the Withdrawn Property and the acquisition of the Substitute
Property shall occur at a time which is mutually acceptable to Lessee and the
relevant Participants. Upon Lessee's satisfaction of Sections 23.01 and 23.02,
Lessor shall, within two (2) Business Days after its approval of any instrument
delivered in accordance with the above provisions of this Article XXIII for
execution and delivery, by Lessor, execute and deliver such instrument to
Lessee. If Lessor shall object (or be deemed to object) to any proposed
Substitute Property then Lessee may submit an alternative proposed Substitute
Property, and, in that event, the period within which Lessee must effect a
substitution hereunder shall be extended for an additional forty-five (45) days;
Lessee may in good faith submit successive alternative proposed Substitute
Properties and shall be entitled to extensions of the period within which
substitutions must be effected in accordance with the above provisions of this
Section.
In connection with any Withdrawn Property and Substitute Property (or
proposed Substitute Property) Lessee shall pay on demand to (i) such Participant
an amount equal to the reasonable expenses of such Participant, including
reasonable attorneys' fees and expenses incurred in connection with such
Withdrawn Property or Substitute Property, and a reasonable underwriting fee to
the Holders and (ii) FSL Group an amount equal to the reasonable expenses of FSL
Group, including reasonable attorneys' fees, internal and external underwriting
costs, and any other costs related to the preparation and issuance of an
endorsement to any insurance policy provided to Lessee by FSL Group.
Notwithstanding anything herein to the contrary, Lessee shall Indemnitee each
Indemnitee in connection with the transactions contemplated by this Article
XXIII, whether or not any such transactions are consummated.
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ARTICLE XXIV
PURCHASE PROCEDURE
Section 24.01. Purchase Procedure.
In the event of the purchase of Lessor's interest in the Property by Lessee
pursuant to any provision of this Lease, the terms and conditions of this
Section 24.01 shall apply.
(a) On the Closing Date fixed for the purchase of Lessee's interest in
the Property:
(i) Lessee shall pay to Lessor, in lawful money of the United States,
at Lessor's address, hereinabove stated or at any other place in the United
States which Lessor may designate (or, if assigned, to Lessor's assignee
and to such account and in such manner as provided by such assignee), the
applicable purchase price;
(ii) Lessor shall execute and deliver to Lessee a deed with covenants
against grantor's acts, assignment and/or such other instrument or
instruments as may be appropriate, which shall transfer Lessor's interest
in the Property, subject to, (A) Permitted Liens, (B) Lessor Liens
attributable to Lessor attaching to the Property after the Closing Date
which shall not have been created or caused by Lessor (unless consented to
by Lessee), (C) all Applicable Laws, and, (D) if such purchase is pursuant
to Article XII or in other circumstances where the obligations under the
Loan Documents are required to be fully paid, free of the liens created by
the Debt Documents; and
(iii) If the Equipment is being acquired as a part of such
transaction, Head Lessor shall execute and deliver to Lessee a ▇▇▇▇ of sale
transferring the Equipment to Lessee free and clear of Lessor Lien's
attributable to Head Lessor attaching to the Equipment after the Closing
Date (which shall not have been created or caused by Lessor unless
consented to by Lessee), and such transfer shall be "as-is," "where-is" and
in then-present physical condition.
(iv) Upon receipt by Lessor, Agent, each Holder and Head Lessor of all
amounts due such Persons under any Operative Documents, each such Person
shall execute and deliver such other instruments of conveyance, releases,
UCC termination statements, affidavits and other documents and agreements
as may be reasonably required to consummate the conveyance of the Property,
all in form and substance as is reasonably acceptable to the Person
required to execute and deliver the same.
(b) Lessee shall pay all reasonable costs, charges and expenses incident to
such transfer, including, without limitation, all survey costs, title report
costs, recording fees, transfer taxes, title insurance premiums and federal,
state and local taxes if applicable but excluding net income taxes (except to
the extent relevant in measuring damages in the case of a Lease Event of
Default).
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ARTICLE XXV
TRANSFER OF LESSOR'S INTEREST
Section 25.01. Permitted Transfer.
Subject to Article IV, Lessor may transfer all, but not less than all, of
its right, title and interest in and to the Property (including its leasehold
interest in the Equipment) and its rights under this Lease and the other
documents relating thereto with respect to such Property, on the following terms
and conditions, each of which shall be satisfied prior to the effective date of
the transfer (other than a transfer by a deed-in-lieu of foreclosure or similar
transfer made in connection with an exercise of remedies under the Debt
Documents):
(a) with respect to a transfer of the Property, the Lease or any interest
therein, the transferee must be a Person that shall be able to represent that it
is a Single Purpose Entity, which shall be true (and the transferee shall make
such representations and warranties to Lessee immediately prior to the
effectiveness of the closing of such transfer);
(b) such transfer shall be in compliance with the terms of the Note
Purchase Agreement and with Applicable Laws, shall comply with and not violate
any provisions of the Head Lease and shall not create a relationship which would
violate Applicable Laws;
(c) such transferee shall execute a joinder or assumption agreement
pursuant to which it agrees to undertake all the covenants and obligations of
Lessor under the Operative Documents arising after the date of transfer, such
joinder or assumption agreement to be in form and substance reasonably
satisfactory to Lessee and other relevant Participants, and such transferee and
the equity owners thereof shall execute an indemnity agreement in form and
substance similar to the Indemnity Agreement;
(d) such transferee is a "United States person" within the meaning of
Section 7701(a)(30) of the Code or otherwise is exempt from U.S. federal income
withholding requirements as of the date of the transfer. Neither the transferee
nor any member or equity owner thereof or any Affiliate shall be or shall have
been in a lawsuit or other adversarial proceeding against Lessee or any
Affiliate within the immediately preceding ten (10) years prior to the date of
the transfer;
(e) such transfer will not contravene or violate any Applicable Law,
including the Securities Act;
(1) the transferor shall have given at least sixty (60) days' prior notice
to Lessee, Agent and Head Lessor of such transfer, which notice shall contain
such information and evidence as shall be reasonably necessary to establish
compliance with this Article XXV and the name and address of the transferee for
notices;
(g) the transferor and the transferee shall each have delivered to Lessee,
Agent, FSL Group (if required) and Head Lessor an Officer's Certificate to the
effect that the conditions to
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the proposed transfer prescribed by this Article XXV to be met by the transferor
or the transferee, respectively, have been satisfied;
(h) the transferor and the transferee shall pay all expenses in connection
with such transfer, including reasonable attorneys' fees and expenses;
(i) to the extent required under the documents evidencing the residual
guaranty provided by FSL Group on behalf of the Holders, the consent of FSL
Group shall have been provided; and
(j) the Lessee shall have ratified and reaffirmed its obligations hereunder
in a form substantially similar to that in Exhibit D attached hereto.
Notwithstanding anything herein to the contrary, the obligations set forth
above shall not apply to any sale or other transfer of the Property or any
portion thereof otherwise permitted pursuant to the terms of this Lease and
shall not apply in connection with the exercise of remedies after the occurrence
of an Event of Default.
Section 25.02. Effects of Transfers.
From and after any transfer effected in accordance with this Article XXV,
the transferor shall be released, to the extent of the interest transferred and
the obligations assumed by the transferee, from its liability arising after the
date of such transfer hereunder and under the other documents to which it is a
party relating to the interests being transferred. Such release shall be in
respect of obligations (that are assumed by the transferee) arising on or after
the date of such transfer. Upon any transfer by Lessor as above provided, any
such transferee shall be deemed the "Lessor" for all purposes of such documents
and each reference herein to Lessor shall thereafter be deemed a reference to
such transferee for all purposes, except as provided in the preceding sentence.
Lessee agrees to execute any and all documents reasonably appropriate to
effectuate the contemplated transfer by Lessor, including, without limitation,
an amendment to this Lease providing that the new Lessor shall be Lessor and the
existing Lessor shall be released from its liabilities arising after the date of
such transfer.
ARTICLE XXVI
PERMITTED FINANCING
Section 26.01. Financing During Term.
Lessee hereby expressly consents to the Lien imposed in favor of the
Indebtedness pursuant to the Debt Documents and such Indebtedness as in effect
on the date hereof. In connection with any refinancing of the initial
Indebtedness during the Base Term and during any Renewal Term, Lessor shall be
free to encumber the Property to the extent not violative of any other Operative
Document; provided, that under no circumstances shall there be any second
mortgage or subordinated financing nor shall any such refinancing adversely
affect the rights and privileges of Lessee under this Lease in any respect, or
increase the nature, scope or amount of
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any obligations of Lessee in excess of those existing prior to any such
refinancing or increase the nature, scope or amount of any payment obligations
of Lessee in excess of those existing prior to any such refinancing; provided,
further Lessee acknowledges that an increase in the principal amount over the
principal outstanding on the Indebtedness, an increase in the interest rate over
the interest rate applicable to the Notes, the imposition of additional
covenants on the Lessor over covenants in the Debt Documents, additional or
different provisions relating to events of default, remedies, late charges,
default rate interests, intercreditor matters and other covenants and provisions
that do not alter the terms and conditions of this Lease shall not be deemed to
violate the foregoing proviso. In connection with any refinancing, Lessee shall
not be obligated for any make-whole premium or similar amount in excess of its
obligations related to Make-Whole Premium as if no refinancing occurred.
Further, any such refinancing shall not adversely affect the rights and
privileges of Head Lessor under the Head Lease or any Operative Document without
the consent of the Head Lessor. Any refinancing shall be subject to the
implementation of an intercreditor arrangement in form and substance acceptable
to the relevant Participants and evidenced by documentation acceptable to each
relevant Participant and the new lenders. Lessee and its Affiliates will have no
obligation to amend this Lease or any other Operative Documents to facilitate
such refinancing (except to amend the definitions of "Debt Documents,"
"Holders," "Indebtedness," "Mortgage," "Note," "Agent," etc. to mean the
replacement documents, the new lender, the new indebtedness and the references
to the sections therein and to make any other amendments required by the
relevant parties that do not violate the provisions of this Section 26.01); but
shall execute and deliver a subordination and attornment agreement to any lender
to Lessor permitted by the above terms of this Section 26.01 if such lender(s)
shall in turn deliver a. nondisturbance agreement to Lessee, in each case with
terms substantially similar to the SNIDA. Lessee agrees to reasonably cooperate
with any refinancing by Lessor permitted hereunder. Such cooperation shall
include, without limitation, (i) naming such new lender(s) as Additional
Insured(s); and (ii) subject to such lenders entering into an intercreditor
agreement in form and substance acceptable to the relevant Participants, making
payments of Base Rent and/or Supplemental Rent to or at the direction of such
lender(s).
Notwithstanding anything herein to the contrary, Lessee acknowledges that
the maturity of the financing under the Debt Documents is twenty-two (22) years
from the commencement of the Base Term. In the event that the Lessee has elected
any Renewal Term, it shall be necessary for the Lessor to arrange a refinancing
in order to preserve its equity or residual interest in the Property. To
facilitate such required refinancing, Lessee, at the cost and expense of Lessor,
shall cooperate with Lessor in order to consummate a refinancing of the
Indebtedness. In that regard, the Lessee shall not take any discretionary action
that would interfere or adversely affect in any material respect the ability of
the Lessor to refinance such Indebtedness, provided that a nondisturbance
agreement in form and substance substantially similar to the SNDA will be
executed and delivered by the replacement agent and holders.
Section 26.02. Counterparts, Memorandum.
This Lease may be simultaneously executed in multiple counterparts, each of
which, when so executed and delivered, shall constitute an original, fully
enforceable counterpart for all purposes. Lessee and Lessor agree that a
memorandum of this Lease (and any amendment hereof) shall be executed and
recorded, at Lessee's expense, in the land records of the jurisdiction in which
the Property is situate.
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ARTICLE XXVII
MISCELLANEOUS
Section 27.01. Binding Effect: Successors and Assigns Survival.
The terms and provisions of this Lease, and the respective rights and
obligations hereunder of Lessor and Lessee, shall be binding upon their
respective successors, legal representatives and assigns (including, in the case
of Lessor, any Person to whom Lessor may transfer the Property) and inure to the
benefit of their respective permitted successors and assigns, and the rights
hereunder of the Agent shall inure (subject to such conditions as are contained
herein) to the benefit of its permitted successors and assigns. Each Participant
and other Person referred to herein as an Indemnitee are intended to be, and
shall be third party beneficiaries under this Lease. Without limiting the
foregoing, each such Person shall be entitled to enforce provisions under
Article XIX to the extent any Claim is made against it.
Section 27.02. Quiet Enjoyment.
Lessor covenants that, so long as Lessee shall faithfully perform the
agreements, terms and conditions of this Lease, Lessee shall and may peaceably
and quietly have, hold and enjoy the Property for the Lease Term hereby granted
without molestation or disturbance by or from Lessor, free of any encumbrance or
lien granted by Lessor except for Permitted Liens and Permitted Encumbrances.
Section 27.03. Notices.
Unless otherwise specifically provided herein, all notices, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof to be given to any Person shall be in writing
sent to either (i) that Person's Address, and a copy thereof shall be sent to
each Person to receive a copy pursuant to the definition of "Address," by a
nationally recognized overnight courier service, and any such notice shall be
deemed received one (1) Business Day after delivery to a nationally recognized
courier service specifying overnight delivery, or (ii) that Person's fax number,
and a second copy thereof shall be sent to each Person required to receive a
copy pursuant to the definition of "Address," by a nationally recognized
overnight courier service, specifying overnight delivery, prepaid, and any such
notice shall be deemed received after the earlier of (x) the confirmation of
receipt of such fax, or (y) one (1) Business Day after delivered to such
courier. From time to time any party may designate a new Address or fax number
for purposes of notice hereunder by giving fifteen (15) days' written notice
thereof to each of the other parties hereto. All notices given hereunder shall
be irrevocable unless expressly specified otherwise.
Section 27.04. Severability.
Any provision of this Lease that shall be prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
63
any other jurisdiction, and each party hereto shall remain liable to perform its
obligations hereunder except to the extent of such unenforceability. To the
extent permitted by Applicable Law, Lessee hereby waives any provision of law
that renders any provision hereof prohibited or unenforceable in any respect.
Section 27.05. Amendments, Complete Agreements.
Neither this Lease nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, but may be terminated, amended,
supplemented, waived or modified only by an instrument in writing signed by the
party against which the enforcement of the termination, amendment, supplement,
waiver or modification shall be sought and by the Agent and Head Lessor
(provided that the consent of the Agent shall not be required to the extent
relating solely to the Head Lease) (or its successors and/or assigns). This
Lease is intended by the parties as a final expression of their lease agreement
and as a complete and exclusive statement of the terms thereof, all
negotiations, considerations and representations between the parties having been
incorporated herein. No representations, undertakings or agreements have been
made or relied upon in the making of this Lease other than those specifically
set forth in the Operative Documents and the deliveries made in connection
therewith.
Section 27.06. Headings.
The Table of Contents and headings of the various Articles and Sections of
this Lease are for convenience of reference only and shall not modify, define or
limit any of the terms or provisions hereof.
Section 27.07. Governing Law.
This Lease shall be governed by, and construed in accordance with, the laws
of the State in which the Property is situated.
EACH PARTY HERETO SUBMITS TO NON-EXCLUSIVE PERSONAL JURISDICTION IN THE
STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED
IN THE STATE OF NEW YORK (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR
THE ENFORCEMENT OF SUCH PERSON'S OBLIGATIONS HEREUNDER AND WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION TO ENFORCE OBLIGATIONS OWING TO ANY PERSON HEREUNDER. EACH PARTY
HERETO HEREBY WAIVES AND AGREES NOT TO ASSERT AS A DEFENSE IN ANY ACTION, SUIT
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS LEASE (A) THAT IT IS NOT
SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN THOSE IN THOSE COURTS OR THAT IT IS EXEMPT OR
IMMUNE FROM EXECUTION, (B) THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR (C) THAT THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS
IMPROPER. EACH PARTY
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HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATED TO THE ENFORCEMENT OF THIS LEASE.
THE PARAGRAPH SET FORTH ABOVE SHALL APPLY TO ANY SIGNATORY HERETO AND THE
SUCCESSORS AND ASSIGNS OF ANY PARTY OR SIGNATORY HERETO.
Section 27.08. Estoppel Certificates.
Each party hereto agrees that at any time and from time to time during the
Lease Term (but on no more than two occasions during each Lease Year), it will
promptly, but in no event later than ten (10) days after receipt of request by
the other party hereto, execute, acknowledge and deliver to such other party a
certificate in the form of Exhibit C attached hereto (in each case, to the
extent the items set forth therein are true as of the date of such
certification). In addition, each party agrees to include in such certificate
such other items as may be reasonably requested under the circumstances giving
rise to the delivery of such certificate (in each case, to the extent the items
set forth therein are true as of the date of such certification). Such
certificate may be relied upon by any bona fide, permitted purchaser of, or
mortgagee with respect to, Lessor's or Lessee's interest in the Property (direct
or indirect), or any prospective sublessee of Lessee in respect of the Property.
Section 27.09. Easements.
So long as no Lease Default or Lease Event of Default has occurred and is
then continuing, and provided that no such action could reasonably be expected
to have an adverse effect upon Lessee's ability to perform its obligations under
the Operative Documents, or on the Fair Market Rental Value or Fair Market Sales
Value of the Property (or any portion thereof, including the Equipment), Lessor
will join with Lessee from time to time at the request of Lessee (and at
Lessee's sole cost and expense) to:
(a) subject to the terms of Article XII, sell, assign, convey or otherwise
transfer an interest in any or all of the Property to any Person legally
empowered to take such interest under the power of eminent domain (and the to
extent required with respect to the Equipment, the Head Lessee will cause Head
Lessor to execute a ▇▇▇▇ of sale with respect to the Equipment, to the extent
subject to such eminent domain proceeding, such ▇▇▇▇ of sale to be "as-is,"
"where-is" and without representation or warranty other than a warranty as to no
Lessor Liens arising under Head Lessor), and dedicate or transfer unimproved
portions of any or all or the Property for road, highway or other public
purposes so long as not adversely effecting access to or the value of the
Property;
(b) upon approval by Lessor, which approval shall not unreasonably be
withheld, (i) grant new (or release existing) easements, servitudes, licenses,
rights of way and other rights and privileges in the nature of easements, with
respect to the Property, and (ii) execute amendments to any covenants and
restrictions affecting the Property; and
65
(c) execute and deliver any instrument, in form and substance reasonably
acceptable to Lessor (and to the extent affecting or having the potential to
affect the Equipment, in form and substance reasonably acceptable to Head
Lessor), necessary or appropriate to make or confirm the grants, releases or
other actions described above in Section 27.09(a) and Section 27.09(b).
Section 27.10. No Joint Venture
Any intention to create a joint venture or partnership relation between
Lessor and Lessee is hereby expressly disclaimed.
Section 27.11 No Accord and Satisfaction.
The acceptance by Lessor or any other Person of any sums from Lessee
(whether as Rent or otherwise) in amounts which are less than the amounts due
and payable by Lessee hereunder is not intended, nor shall be construed, to
constitute an accord and satisfaction, or compromise, of any dispute between
such parties regarding sums due and payable by Lessee hereunder, unless Lessor
or any other Person specifically deems it as such in writing.
Section 27.12. No Merger.
In no event shall the leasehold interests, estates or rights of Lessee
hereunder or of the Agent or Head Lessor merge with any interests, estates or
rights of Lessor in or to any and all of the Property, it being understood that
such leasehold interests, estates and rights of Lessee~ hereunder, and of the
Agent or Head Lessor shall be deemed to be separate and distinct from Lessor's
interests, estates and rights in or to the Property, notwithstanding that any
such interests, estates or rights shall at any time or times be held by or
vested in the same Person.
Section 27.13. Lessor Bankruptcy.
During the Lease Term the parties hereto agree that if Lessee elects to
remain in possession of any and all of the Property after the rejection of the
Lease by Lessor under Section 365(h) of the Bankruptcy Code all of the terms and
provisions of this Lease shall be effective during such period of possession by
Lessee.
Section 27.14. Naming and Signage of the Property.
So long as no Lease Event of Default shall have occurred and be continuing,
Lessee shall have the sole and exclusive right, at any time and from time to
time, to select the name or names of the Property and the Improvements, and the
sole and exclusive right to determine not to use any name in connection with the
Property, as well as all rights in respect of signage for or in connection with
the Property, in any case so long as in compliance with Applicable Laws, Lessor
shall not have or acquire any right or interest with respect to any such name or
names used at any time by Lessee, or any trade name, trademark service ▇▇▇▇ or
other intellectual property of any type of Lessee.
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Section 27.15. Investments.
Any moneys held by Lessor (or by the Agent, Servicer or Proceeds Trustee)
pursuant to this Lease, including Sections 8.06 and 12.04, except when there
exists a Lease Default or Lease Event of Default shall, until paid to Lessee, be
invested by Lessor or, if the Debt Documents are in effect, by the Agent or
Proceeds Trustee, as the case may be, in Permitted Investments as directed by or
on behalf of Lessee. Any gain (including interest received) realized as a result
of any such investment (net of any fees, commissions, Taxes and other expenses,
if any, incurred in connection with such investment) shall be retained with, and
distributed and re-invested in the same manner, as the original principal
amount. None of Lessor, Agent, Servicer, Proceeds Trustee or any other Person
(other than Lessee) holding, investing and reinvesting monies at any time under
this Lease shall have any liability for any losses arising from any such
Permitted Investments or reinvestments and any losses incurred in holding,
investing and reinvesting monies shall be subject to indemnity from Lessee. At
such time as there no longer exists a requirement under this Lease for the
Lessor, Agent or other holder of any proceeds to hold such proceeds, and no
Lease Default or Lease Event of Default is continuing, such amounts, together
with any income thereon, shall be disbursed to Lessee or other Person entitled
thereto pursuant to the relevant terms of the Operative Documents.
Section 27.16. Further Assurances.
Lessor and Lessee, at the cost and expense of the Lessee, will cause to be
duly taken, executed, acknowledged and delivered as promptly as reasonably
practicable all such farther acts, documents and assurances as any party to any
Operative Document reasonably may request from time to time in order to carry
out more effectively the intent and purposes of this Lease and the other
Operative Documents.
Section 27.17. Conveyance Expenses.
All transfer taxes, title insurance premiums, and other costs, fees and
expenses (including reasonable attorneys fees and expenses) incurred in
connection with the transfer of any or all of the Property to Lessee under
Articles XI, XII, XII] or XXIII or otherwise arising under this Lease shall be
paid by Lessee. All such amounts incurred in connection with a transfer to
Lessee or its designee under Article IV shall be paid in accordance with the
terms of the relevant offer.
Section 27.18. Independent Covenants.
The covenants of Lessor and Lessee herein are independent and several
covenants and not dependent on the performance of any other covenant in this
Lease.
Section 27~19. Lessor Exculpation.
Anything to the contrary in this Lease notwithstanding, the covenants
contained in this Lease to be performed by Lessor shall not be binding on any
member of Lessor. Covenants of Lessor under this Lease are made for the purpose
of binding only all of Lessor's right, title and interest in and to the Property
and any proceeds thereof, and, except as expressly provided below, none of the
Lessor nor any of its Affiliates or any successors and assigns thereof shall
67
have any liability under this Lease in excess of such Person's interest in the
Property and the proceeds thereof. Lessor shall be fully liable to the extent of
its assets with respect to (i) Lessor Liens arising by, through or under the
Lessor or any equity owner thereof or (ii) any breach of the Lessor of its
covenants under Section 22.02, 25.01, 26.01 or 27.02 (to the extent the Lessor
acts at the written direction of the equity owner of Lessor).
Section 27.20. Holding Over.
Lessee covenants that if for any reason Lessee or any subtenant of Lessee
shall fail to vacate and surrender possession of the Property or any part
thereof on or before the applicable return date or the expiration or earlier
termination of this Lease (the "Lease Expiration Date"), then Lessee's continued
possession of the Property shall be as a tenant at sufferance, during which
time, without prejudice and in addition to any other rights and remedies Lessor
may have hereunder or at law, Lessee shall pay to Lessor an mount equal to: (a)
one hundred twenty-five percent (125%) of the total monthly amount of Rent
payable hereunder immediately prior to such termination (the "Existing Rent")
for the first thirty (30) days during which Lessee holds over, and (b) one
hundred fifty percent of the Existing Rent thereafter. The provisions of this
Section shall not in any way be deemed to (i) permit Lessee to remain in
possession of the Property after the Lease Expiration Date or sooner termination
of this Lease, or (ii) imply any right of Lessee to use or occupy the Property
upon expiration or termination of this Lease and no acceptance by Lessor of
payments from Lessee after the Lease Expiration Date shall be deemed to be other
than on account of the amount to be paid by Lessee in accordance with the
provisions of this Section. Lessee's obligations under this Section shall
survive the expiration or earlier termination of this Lease.
Section 27.21. Survival.
All representations and warranties made herein and all indemnity,
reimbursement and other obligations arising hereunder relating to the payment of
costs or expenses incurred by any Person shall survive the closing and
termination of this Lease and shall be deemed to extend any applicable statute
of limitations to the extent that a third party has made a Claim against any
Person entitled to indemnity or reimbursement hereunder where such third party
is legally entitled to bring any such Claim under any statute of limitations
applicable thereto.
Section 27.22. [INTENTIONALLY OMITTED]
Section 27.23. Lease Subordinate.
This Lease, the leasehold estate of Lessee created hereby and all rights of
Lessee hereunder are and shall be subject and subordinate to the Mortgage, the
Head Lease and all renewals, modifications, consolidations, replacements and
extensions of the Mortgage and the Head Lease; provided, that the relevant
parties shall have executed and delivered the SNDA.
Section 27.24. Intent of Parties; Security Interest.
The parties hereto intend for this Lease to constitute a true lease for
income tax purposes and for purposes of commercial law. In the event that for
any reason this Lease shall not be
68
construed to constitute a true lease and shall constitute a financing for
commercial law or other purposes, the Lessee hereby grants to Lessor a first
priority security interest in and to the Equipment and agrees to take such
action at its expense as may be necessary, prudent or requested by Lessor to
perfect and preserve the first priority perfected nature of the security
interest intended to be granted hereby.
Section 27.25. Certain Rights of Agent.
Notwithstanding anything to the contrary contained in the Lease or any
other Operative Document, so long as any obligation of the Lessor under the Debt
Documents remains unsatisfied, the following provisions shall apply:
(a) In the event that any event or circumstance shall arise regarding which
Lessee may predicate a claim of a default or breach by Lessor of any of its
obligations under the Lease, upon serving notice on Lessor, Lessee shall at the
same time serve a duplicate counterpart of such notice to the Agent and the Head
Lessor pursuant to the provisions of Section 27.03, and no notice by Lessee to
Lessor shall be deemed to have been served unless and until such duplicate
counterparts thereof have also been served on the Agent and Head Lessor.
(b) Lessee specifically agrees not to terminate the Lease as a result of
any default by Lessor without the prior written consent of Agent and each other
relevant Participant.
(c) The Agent shall have the right within the period provided to Lessor to
remedy or cause to be remedied any default or matter on which Lessee may
predicate a claim of a default, but in no event less than thirty (30) days from
the date notice is served on such Participant (and if such default cannot
reasonably be cured within such thirty (30) day period, such longer period as
may reasonably be required to cure such default so long as any Participant is
proceeding in good faith and with due diligence to cure such default), and
Lessee shall accept such performance as if the same had been performed by
Lessor. In that regard, Lessor constitutes and appoints Agent and its respective
designees as Lessor's agent and attorney in-fact with full power, in Lessor's
name, place and stead, and at Lessor's cost and expense to perform any of
Lessor's obligations according to the provisions of this Lease. Such appointment
is coupled with an interest and is irrevocable. In this regard, each Agent and
its designees are irrevocably granted full and complete access and right of
entry to the Property by Lessor and Lessee for purposes of curing any default of
Lessor declared to exist by Lessee under the terms of this Lease.
(d) At the written request of Agent or any relevant Participant, as the
case may be, within ninety (90) days prior to the termination of this Lease for
any reason, Lessee shall enter into a new or direct Lease of the Property with
Agent and each relevant Participant, as the case may be, or any of their
respective designees, which designee will be approved by Lessee, with such
approval not to be unreasonably withheld, effective upon termination of the
Lease. Such new or direct lease shall be effective as of the date of termination
of this Lease, and shall be for the remainder of the term of this Lease at the
rent and on all other agreements, terms, covenants and conditions of this Lease;
provided, however, that no provision shall be contained in the new lease which
relates to any default under this Lease that cannot reasonably be cured by Agent
or such relevant Participant, as the case may be. On the execution of such new
or direct lease, Lessee shall pay any and all sums which would at the time of
execution and delivery thereof be
69
due under this Lease. Agent and such relevant Participant shall pay all
necessary and reasonable expenses, including reasonable attorneys' fees and
expenses incurred by Lessee in connection with Lessor's default as well as in
connection with the preparation, execution and delivery of such new or direct
lease.
(e) Except as otherwise expressly provided, no Participant shall be liable
to perform any of Lessor's obligations under this Lease unless and until either
such Person or any designee thereof shall become the owner of the Property and
then only so long as it remains the owner of the Property.
Section 27.26. Counterparts, Memorandum.
This Lease may be simultaneously executed in multiple counterparts, each of
which when so executed and delivered, shall constitute an original, fully
enforceable counterpart for all purposes. Lessee and Lessor agree that a
memorandum of this Lease (and any amendment hereof) shall be executed and
recorded at the direction of either Lessor or Lessee, but at Lessee's expenses,
in the land records of the jurisdiction in which the Property is situated.
Section 27.27. Confidentiality.
Lessor and Lessee shall hold all non-public information arising from this
Lease in accordance with their customary procedures for handling confidential
information (except to the extent required by Applicable Law).
The parties hereto agree that no press release or other public disclosure
shall be made by either of them or any of their respective agents concerning
this transaction without the pnor written consent of the other. However, Lessee
agrees that a "tombstone" type advertisement may be placed by Lessor or any
Holder afler consummation of the transactions contemplated hereby; provided.
however, that Lessor or such Holder agrees to inform Lessee thereof prior to
placing such advertisement.
(Remainder of page intentionally left blank.]
70
IN WITNESS WHEREOF, Lessor and Lessee have duly authorized, executed and
delivered this Lease as of the date first hereinabove set forth.
LESSOR:
FU/DG INDIANOLA, LLC
By:
Name:
Title:
LESSEE:
DOLLAR GENERAL CORPORATION
By:
Name:
Title:
71
IN WITNESS WHEREOF, Lessor and Lessee have duly authorized, executed and
delivered this Lease as of the date first hereinabove set forth.
LESSOR:
FU/DG INDIANOLA, LLC
By:
Name:
Title:
LESSEE:
DOLLAR GENERAL CORPORATION
By:
Name:
Title:
72
APPENDIX A
Unless otherwise specified or the context otherwise requires. the following
rules of usage (the "Rules of Usage") shall apply:
(a) any term defined below by reference to another instrument or document
shall continue to have the meaning ascribed thereto whether or not such other
instrument or document remains in effect;
(b) words which include a number of constituent parts, things or elements,
shall be construed as referring separately to each constituent part, thing or
element thereof, as well as to all of such constituent parts. things or elements
as a whole;
(c) references to any Person include such Person's successors and assigns
and in the case of an individual, the word "successors" includes such Person's
heirs. devisees. legatees, executors, administrators and personal
representatives;
(d) words importing the singular include the plural and vice versa:
(e) words importing a gender include any gender;
(f) the words "consent," "approve," "agree" and "request," and derivations
thereof or words of similar import, mean the prior written consent, approval,
agreement or request of the Person in question;
(g) a reference to a part, clause, party, section, article, exhibit or
schedule is a reference to a part and clause of, and a party, section, article,
exhibit and schedule to, such Operative Document:
(h) a reference to any statute, regulation, proclamation, ordinance or law
includes all statutes, regulations, proclamations, ordinances or laws varying,
consolidating or replacing them, and a reference to a statute includes all
regulations, proclamations and ordinances issued or otherwise applicable under
that statute;
(i) a reference to a document includes an amendment or supplement to, or
replacement or novation of, that document;
(j) a reference to a party to a document includes that party's permitted
successors and assigns;
(k) the words "including" and "includes," and words of similar import,
shall be deemed to be followed by the phrase "without limitation;"
(l) the words "hereof' and "hereunder," and words of similar import, shall
be deemed to refer to the Operative Document as a whole and not to the specific
section or provision where such word appears;
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(m) as the context shall require except in the case of an Event of Loss and
other relevant circumstances which contemplate an occurrence with respect to the
entire Property, a reference to the "Property" or "Improvements" shall be deemed
to be followed by the phrase "or a portion thereof;"
(n) the Schedules and Exhibits of the Operative Documents are incorporated
in the Operative Documents to which such Schedules and Exhibits are attached:
(o) the titles and headings of Articles, Sections, Schedules, Exhibits,
subsections, paragraphs and clauses are inserted as a matter of convenience and
shall not affect the construction of the Operative Documents;
(p) references to any Operative Document includes all amendments,
supplements, consolidations, replacements, restatements, extensions, renewals
and other modifications thereof, in whole or in part; and
(q) any term defined in any Operative Document and used in any other
Operative Document but not defined therein shall have the meaning given such
term in the Operative Document in which such term is defined.
"Actual Knowledge" with respect to any Person, shall mean the present,
conscious, actual knowledge of, or receipt of notice by (i) senior officers of
such Person or the officers or employees of such Person charged with the
oversight on its behalf of the Overall Transaction or (ii) with respect to a
matter covered by a representation and warranty, those officers having
responsibility for the matters covered by such representation and warranty.
"Additional Renewal Term" shall have the meaning specified in Section 5.01
of the Lease.
"Address" shall mean, subject to the rights of the party in question to
change its Address in accordance with the terms of the Operative Documents:
(i) with respect to the Lessor, to FU/DG Indianola, LLC, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice
President, facsimile number (▇▇▇)▇▇▇-▇▇▇▇ with a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President and Assistant General Counsel, First Union
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇;
(ii) with respect to Lessee, to Dollar General Corporation, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: Treasurer, facsimile number
(▇▇▇) ▇▇▇-▇▇▇▇, with a copy to the same address, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
General Counsel, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇;
(iii) with respect to Head Lessor, to First Union Commercial
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President, Attn: facsimile number (▇▇▇) ▇▇▇-▇▇▇▇ with
a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President and Assistant General
Counsel, First Union Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇;
A-2
(iv) with respect to the Agent, to Wilmington Trust Company, ▇▇▇▇▇▇
Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, Morris, James, Hitchens & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 19899:2306, facsimile
number (▇▇▇) ▇▇▇-▇▇▇▇; and
(v) with respect to the Servicer, to First Union National Bank. First
Union Capital Markets, NC1075, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Dollar General, Facsimile (▇▇▇) ▇▇▇-▇▇▇▇ with a copy
to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President and Assistant General Counsel,
First Union Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇.
"Adjusted Net Worth" means the consolidated net worth of such Person in
accordance with GAAP as determined for the most recent quarter for which
financial statements are available (which in the case of any year end financial
statements shall be audited) for such Person preceding the period of
determination less (i) the amount of any and all guarantees made by such Person
of obligations (which obligations would be on-balance sheet with respect to the
below-described Affiliate) of (x) any Affiliate of such Person that holds
beneficially or of record, five percent (5%) or more of the equity securities of
such Person and (y) any Affiliate of any such Affiliate (other than Person and
any subsidiaries of such Person whose financial statements are consolidated with
such Person's financial statements) and (ii) intangible assets (including,
without limitation, franchises, patents, patent applications, trademarks, brand
names, good will and research and development expense), in the case of the
foregoing as determined GAAP.
"Affiliate" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under common control with, such Person
and shall include, if such Person is an individual, members of the Family of
such Person and trusts for the benefit of such individual. For purposes of this
definition, the term, "control" (including the correlative meanings of the terms
"controlling" "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
"After-Tax Basis" means, with respect to any payment received or accrued by
any Person, the amount of such payment (the "base payment") supplemented by a
further payment (the "additional payment") to that Person so that the sum of the
base payment plus the additional payment shall, after taking into account the
amount of all Taxes required to be paid by such Person in respect of the receipt
or accrual of the base payment and the additional payment (after any current
credits or deductions arising therefrom and the timing thereof), be equal to the
amount required to be received. Such calculations shall be made on the
assumption that the recipient is subject to U.S. federal, state and local income
taxation at the highest marginal rates applicable to individuals or corporations
(as the case may be) resident or domiciled in the jurisdiction where the
recipient of such payment is located (or where the recipient indicates such
payment will be required to be reported, if different).
A-3
"Agent" shall mean Wilmington Trust Company, a Delaware banking
corporation, and each successor Agent, as Agent under the Note Purchase
Agreement, and to the extent provided therein, under any other Operative
Document.
"Alterations, shall mean alterations, improvements, installations
demolitions, modifications, changes and additions to the Property, but shall not
include Lessee's Equipment and Personality.
"Anticipated Lease Income" shall mean the amounts expected to be included
in gross income with respect to this Lease including only (i) Interim Rent, Base
Rent and Renewal Rent, if any, (ii) payments as a consequence of a sale or other
disposition (other than in the case of the exercise of remedies after a Lease
Event of Default) of the Property and (iii) an amount received pursuant to the
indemnity set forth in Section 19.03.
"Applicable Laws" shall mean all existing and future applicable laws
(including common laws), rules, regulations, statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of any Governmental
Authorities, and applicable judgments, decrees, injunctions, writs, orders or
like action of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to the environment and those pertaining to the construction, use or
occupancy of the Property). Applicable Laws shall include Environmental Laws.
"Appraisal" shall mean any appraisal required to be delivered on or prior
to the Closing Date and any other appraisal provided by the Appraisal Procedure.
"Appraisal Procedure" shall mean the following procedure for determining
any one or more of the Fair Market Sales Value of the Real Property or
Equipment, the Fair Market Rental Value of the Real Property or Equipment or any
other amount which may, pursuant to any provision of any Operative Document, be
determined by the Appraisal Procedure: one Qualified Appraiser, chosen by the
Lessor and approved by FSL Group, which approval shall not unreasonably be
withheld, delayed or conditioned, but if the Lessee shall fail to agree with the
selection of the Lessor's Qualified Appraiser then Lessee shall have the right
to engage a Qualified Appraiser. However, if the Lessee fails to choose a
Qualified Appraiser within twenty (20) Business Days after written notice from
the Lessor of the selection of its Qualified Appraiser followed by a second
notice (which notice shall specifically state that failure to select a Qualified
Appraiser within ten (10) Business Days shall prohibit appointment of a
Qualified Appraiser by the addressed party) given at least ten (10) Business
Days prior to the expiration of such twenty-day period, then the appraisal by
such appointed Qualified Appraiser shall be binding on the parties. If the two
Qualified Appraisers cannot agree on a value within twenty (20) Business Days
after the appointment of the second Qualified Appraiser, then a third Qualified
Appraiser shall be selected by the two Qualified Appraisers or, failing
agreement as to such third Qualified Appraiser within thirty (30) Business Days
after the appointment of the second Qualified Appraiser, by the American
Arbitration Association office in New York, New York. Each of the three
Qualified Appraisers shall use its best efforts to cause its appraisal to be
given within twenty (20) Business Days of the appointment of the third Qualified
Appraiser (and in any event, as soon as practicable thereafter) and the
appraisal of the Qualified Appraiser most different from the mean average of the
other two shall be discarded and such mean average of
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the remaining two Qualified Appraisers shall be binding on the parties;
provided, that if the highest appraisal and the lowest appraisal are equidistant
from the third appraisal, the third appraisal shall be binding on the parties.
The fees and expenses of each Qualified Appraiser shall be borne equally by the
parties for whom such appraisal is being prepared. Notwithstanding the
foregoing, in the case of any appraisal arising from any Lease Event of Default,
the Lessee shall bear all costs and expenses of the Qualified Appraiser, and in
such case, the party whose default has necessitated the Appraisal shall have no
right to object to or choose a Qualified Appraiser and such Qualified Appraiser
shall be chosen at the sole discretion of the non-defaulting party.
"Approved Environmental Consultant" shall mean IVI Environmental, Inc. with
respect to any environmental report provided on the Closing Date, and any other
environmental consultant selected by Lessee and acceptable to Lessor that is
registered as a "Registered Environmental Property Assessor" by the National
Registry of Environmental Professionals, certified as a "Certified Environmental
Professional" by the Academy of Board Certified Environmental Professionals, or
holds an equivalent designation or certification by an equivalent certifying
organization.
"Acquisition Notice" shall have the meaning specified in Section 4.01(a) of
the Lease.
"Areas of Environmental Concern" shall have the meaning specified in
Section 8.05(c) of the Lease.
"Assignment of Head Lease" shall mean the Assignment of Head Lease Rights
dated as of June 1,2000, by and between the Head Lessee, as assignor, and the
Agent, as assignee, for the benefit of the Holders.
"Assignment of Lease" shall mean the Lease Assignment and Agreement dated
as of June 1, 2000, by and among the Lessor, as assignor, and the Agent, as
assignee, for the benefit of the Holders and the Head Lessor, with respect to
the Lease.
"Authorized Officer" shall mean with respect to a Person if the Person is
not an individual, any officer or principal of the Person, any trustee of the
Person (if the Person is a trust), any general partner or joint venturer of the
Person (if the Person is a partnership or joint venture) or any manager of a
manager-managed limited liability company or any member of a member-managed
limited liability company, in each case who shall be duly authorized to execute
the Operative Documents or take other action with respect thereto, as the case
may be.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978 as amended
and as may be further amended.
"Base Rent" shall mean, for the Base Term, the rent payable pursuant to
Section 3.01 of the Lease, as such Base Rent may be required to be adjusted in
accordance with the first paragraph of Section 6 of the SNDA Agreement.
"Base Term" shall mean the period commencing on the day next succeeding the
last day of the Interim Term and ending on June 30, 2022, or such shorter period
as may result from the earlier termination of the Lease as provided therein.
A-5
"▇▇▇▇ of Sale" as the context applies, shall mean either of the ▇▇▇▇ of
Sale dated on or about the Closing Date executed by Seller on behalf of Head
Lessor with respect to the Equipment or the ▇▇▇▇ of Sale dated on or about the
Closing Date executed by Seller on behalf of Lessor with respect to the
Improvements and Fixtures, and "Bills of Sale" shall mean both of the
above-referenced Bills of Sale.
"Board of Directors" with respect to a corporation, means either the Board
of Directors or any duly authorized committee of that Board which pursuant to
the by-laws of such corporation has the same authority as that Board as to the
matter at issue.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banks are authorized to be closed in the State of New York, the
State of North Carolina or the State of Tennessee.
"Casualty" shall mean any damage or destruction caused to any Property by
any reason, whether or not constituting an Event of Loss
"Claims" shall mean Liens (including, without limitation, lien removal and
bonding costs) liabilities, obligations, damages, losses, demands, penalties,
assessments, payments, fines, claims, actions, suits, judgments, settlements,
costs, expenses and disbursements (including, without limitation, reasonable
legal fees and expenses and costs of investigation) of any kind and nature
whatsoever.
"Closing Date" shall mean the date on which the Real Property is acquired
by the Lessor and the Equipment is acquired by the Head Lessor.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Condemnation" shall mean any condemnation, requisition or other taking or
sale of the use, occupancy or title to any or all of the Property, by or on
account of any eminent domain proceeding or other action by any Governmental
Authority or other Person under the power of eminent domain or otherwise or any
transfer in lieu of or in anticipation thereof.
"Confidential Information" shall mean all federal, state and local tax
returns of any relevant Person and all work papers and support information
related thereto; provided that "Confidential Information" shall exclude any
items of income or expense of any Person for which an adjustment has been
proposed and for which Lessee is obligated to provide as indemnity under Article
XIX of the Lease to the extent the proposed adjustment does not relate to any
other item of income or expense of such Person or such item of income and
expense can be severed by the authority proposing the adjustment from any
proposed adjustment to any other item of income and expense of such Person.
"Controlling Party" shall have the meaning specified in Section 19.02(e) of
the Lease.
"Credit Party" shall mean Dollar General Corporation and its respective
successors and assigns.
A-6
"Debt Documents" shall mean (i) the Note, (ii) the Mortgage, (iii) Note
Purchase Agreement, (iv) the Assignment of Lease, (v) the Assignment of Head
Lease, (vi) the SNDA Agreement, (vii) the Intercreditor Agreement and (viii) UCC
financing statements required to be filed in connection with any of the
foregoing.
"Default Rate" shall mean three percent (3%) above the annual rate of
interest set by First Union National Bank (or any successor thereto) as its
"prime rate" from time to time. Such prime rate is not the lowest or best rate
offered to customers of First Union National Bank.
"Environmental Laws" shall mean and include the Resource Conservation and
Recovery Act of 1976 (RCRA), 42 ▇.▇.▇.▇▇., 6901-6987, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 ▇.▇.▇.▇▇, 9601-9657, (CERCLA), the Hazardous
Materials Transportation Act of 1975, 49 ▇.▇.▇.▇▇. 1801-1812, the Toxic
Substances Control Act, l5 U.S.C. 2601-2671. the Clean Air Act, 42 ▇.▇.▇.▇▇.,
7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
▇.▇.▇.▇▇., 136 et seq and all other federal, state, or local laws, ordinances,
rules, orders, statutes, codes and regulations applicable to the Property and
relating to the environment (i) relating to the environment, human health or
natural resources; (ii) regulating, controlling or imposing liability or
standards of conduct concerning Hazardous Materials; or (iii) regulating the
clean-up or other remediation of the Property, as any of the foregoing may have
been or may be amended, supplemented or supplanted from time to time.
"Environmental Reports" shall mean the reports and information covering the
Property prepared by the Approved Environmental Consultant as a condition
precedent to closing the transactions contemplated by the Operative Documents
and any subsequent report or information covering the Property prepared by an
Approved Environmental Consultant and delivered by the Lessee to the Lessor or
Agent.
"Equipment" shall mean that property described on Exhibit B hereto with
such alterations, modifications, replacements, substitutions or other
improvements that may result with respect thereto in accordance with the terms
of the Operative Documents.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974.
"ERISA Group" means Dollar General Corporation and: (i) each corporation,
trade or business which is a member, with Dollar General Corporation, of a
controlled group of corporations within the meaning of Code Section 414(b) and
the regulations issued thereunder; (ii) each group of trades or businesses
(whether or not incorporated) under common control with Dollar General
Corporation, determined in accordance with Code Section 414(c) and the
regulations issued thereunder; (iii) each organization (whether or not
incorporated) which is a member with Dollar General Corporation of an affiliated
service group as defined in Code Section 414(m) and the regulations issued
thereunder; and (iv) any other entity, to the extent required to be aggregated
with Dollar General Corporation under regulations issued pursuant to Code
Section 414(o).
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"Event of Loss" shall mean (y) the damage, by fire or otherwise, and
whether total or partial, that (A) the Lessee in its commercially reasonable
discretion shall determine that as a result of such damage the Property is no
longer useful for its intended purpose, and (B) the cost of repair or
restoration would exceed seventy-five percent (75%) of the Property Cost for
such Property or (z) the permanent or material taking by Condemnation effecting
(A) title to all or substantially all of the Property, or (B) the principal
points of ingress or egress of the Property to public roadways, or (C) such a
material part of the Land or the Improvement so as to have a material and
adverse effect on the business of the Lessee. Any decision regarding whether the
restoration of the balance of the Property is uneconomic or impractical shall be
made by Lessee in good faith and evidenced by an Officer's Certificate of Lessee
delivered to Lessor.
"Existing Rent" shall have the meaning specified in Section 27.20 of the
Lease.
"FSL Group" shall mean Financial Structures Limited, a company organized
under the laws of Bermuda.
"Fair Market Rental Value" with respect to the Property (or any portion
thereof) shall mean the fair market monthly rental value that would be obtained
in an arm's-length transaction between an informed and willing lessee and an
informed and willing lessor, in each case under no compulsion to lease, and
neither of which is related to Lessor or Lessee or an Affiliate thereof, for the
lease of such Property on the terms set forth, or referred to, in Article V of
the Lease. Except for any determination to be made in connection with a Lease
Event of Default (which shall be made based upon the actual condition of the
Property (or relevant portion thereof)), such fair market rental value shall be
calculated as the value for the use of such Property (or relevant portion
thereof) assuming that such Property (or relevant portion thereof) is in the
condition and repair required to be maintained by the terms of the Lease.
"Fair Market Sales Value" with respect to the Property (or any portion
thereof) shall mean the fair market sales value that would be obtained in an
arm's-length transaction between an informed and willing buyer (other than a
lessee currently in possession) and an informed and willing seller, under no
compulsion, respectively, to buy or sell, and neither of which is related to
Lessor or Lessee, for the purchase of the Property (or relevant portion
thereof). Except for any determination to be made in connection with a Lease
Event of Default (which shall be made based upon the actual condition of the
Property (or relevant portion thereof)), such Fair Market Sales Value shall be
calculated as the value for such Property (or relevant portion thereof) using
the same methodology as used in the appraisals delivered on or before the
Closing Date (and if more than one methodology is used i.e., based on a
methodology that includes as an assumption that the Lease is in effect and a
methodology that includes an assumption that the Lease is not in effect and no
opinion is given as to one value, then using the methodology that results in the
highest value) and assuming that the Property (or relevant portion thereof) is
in the condition and repair required to be maintained by the terms of the Lease.
"Fair Market Sales Value (Dark)" with respect to the Real Property shall
mean the fair market sales value that would be obtained in an arm's-length
transaction between an informed and willing buyer and an informed and willing
seller, under no compulsion, respectively, to buy or sell, and neither of which
is related to Lessor or Lessee, for the purchase of the Real Property, assuming
that the Real Property (i) is in the condition and repair required to be
maintained by the
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terms of the Lease, (ii) is unencumbered by the Lease or any other tenancy and
(iii) is vacant and available for immediate occupancy.
"Filing" shall have the meaning specified in Section 19.020) of the Lease.
"Final Governmental Approval" shall have the meaning specified in Section
8.05(c) of the lease.
"Final Payment Date" shall have the meaning specified in Section 17.01(e)
of the Lease.
"First Renewal Term" shall have the meaning specified in Section 5.01 of
the Lease.
"Fitch" shall mean Fitch IBCA Inc. and its successors.
"Fixtures" shall have the meaning specified in the term "Property."
"GAAP" shall mean generally accepted accounting principles in the United
States, as in effect from time to time, consistently applied.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments or decrees (to the extent directly applicable to the Property or any
portion thereof, the Lessor or the Lessee), licenses, exemptions, required by,
any Governmental Authority, or required by any Applicable Laws, and shall
include, without limitation, all sitings, environmental and operating permits
and licenses that are required for the use, occupancy, zoning and operation of
the Property.
"Governmental Authority" shall mean any federal, state, county, municipal
or other governmental or regulatory authority, agency, board, body,
instrumentality, court or quasi governmental authority (or private entity in
lieu thereof).
"Hazardous Material" shall mean any substance, waste or material (including
those that are toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous, including petroleum, its
derivatives, by-products and other hydrocarbons and asbestos), in each case that
is or becomes defined by any Governmental Authority as a hazardous substance,
hazardous material, toxic pollutant, toxic substance or hazardous waste and is
either (a) regulated by any Governmental Authority, including any agency,
department, commission, board or instrumentality of the United States andlor
each State in which the Property is situated, or (b) may form the basis of
liability under any Environmental Law.
"Head Lessor" shall mean First Union Commercial Corporation, a North
Carolina corporation.
"Holder" shall mean, as of any particular date, any holder of one or more
Note as of such date.
"Impositions" shall mean, collectively, all real estate taxes on the
Property, all ad valorem, sales and use, single business, gross receipts,
transaction privilege, rent or similar taxes levied or incurred with respect to
the Property, or the use, lease, ownership or operation thereof.
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personal property tax on any Property that is classified by government
authorities as personal property, assessments (including all assessments for
public improvements or benefits, whether or not commenced or completed within
the Lease Term), water, sewer, utilities or other rents and charges, excises,
levies, fees and all other governmental charges of any kind or nature
whatsoever, general or special, foreseen or unforeseen, ordinary or
extraordinary, with respect to the Property or any part thereof and/or the Rent,
including all interest and penalties thereon, which at any time prior to, during
or with respect to the Lease Term may be assessed or imposed, on or with respect
to or be a Lien upon Lessor or the Property or any part thereof or any rent
therefrom or any estate, title or interest therein. Impositions shall exclude,
however, and nothing contained in the Lease or any other Operative Document
shall be construed to require Lessee to pay, (i) any tax imposed on any
Participant based on the net income of such Participant, except to the extent
that any tax described in this clause (i) is levied, assessed or imposed as a
total or partial substitute for a tax, assessment, levy or charge upon the
Property, the Rent or any part thereof or interest therein which Lessee would
otherwise be required to pay thereunder or except to the extent arising from a
transfer of the Property or any portion thereof upon the exercise of remedies
upon a Lease Event of Default; (ii) any tax imposed with respect to the sale,
exchange or other disposition of the Property or any portion thereof by Lessor
or the Holders or Agent or the proceeds thereof except a transfer arising from
the exercise of remedies upon a Lease Event of Default; or (iii) any gross
receipts, transaction privilege, doing business or similar tax, assessment, levy
or charge upon Lessor, the Property or any part of any thereof or interest
therein, but solely to the extent that the same is levied, assessed or imposed
as a total or partial substitute for a tax, assessment, levy or charge described
in clause (i) or clause (ii) which Lessee would otherwise not be required to pay
hereunder.
"Improvements" shall have the meaning specified in the term "Property."
"Inclusion" shall have the meaning specified in Section 19.03(b) of the
Lease.
"Indebtedness" shall mean the indebtedness evidenced by the Notes and
secured by the Mortgage, and any replacement indebtedness thereof.
"Indemnitee" shall mean Lessor. any Holder, Agent, Servicer, any trustee
under a Mortgage which is a deed of trust, the Proceeds Trustee, Head Lessor,
each of their assignees or other transferees and each of their Affiliates and
their respective officers, directors, employees, shareholders, members or other
equity owners.
"Indemnity Agreement" shall mean that Indemnity Agreement dated as of June
1, 2000 made by Lessor and First Union Development Corporation, as the sole
member of Lessor for the benefit of Head Lessor, and any similar indemnity
agreement entered into by any successor Lessor and any member thereof or any
successor member of member of the Lessor.
"Initial Appraiser" shall mean Sheets ▇▇▇▇▇▇▇▇▇▇▇ & Associates with respect
to the Real Property and Collateral Evaluation Associates, Inc., with respect to
the Equipment.
"Inspecting Parties" shall have the meaning specified in Article XV of the
Lease.
"Intent to Renew Date" shall have the meaning specified in Section 5.01
(b)(i) of the Lease.
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"Interim Rent" shall mean, for the Interim Term, the rent payable under
Section 3.01 of the Lease.
"Interim Term" shall mean the period commencing on the Closing Date and
ending on June 30, 2000, or such shorter period as may result from earlier
termination of the Lease as provided therein.
"Investment Grade," with respect to any Person, so long as the senior
unsecured obligations of such Person shall be publicly rated, shall mean that
the senior unsecured obligations of such Person shall have a public rating of
BBB+ (or higher) by Standard & Poor's and Baal (or higher) by Moody's, and if
the senior unsecured obligations of such Person shall not be rated, such Person
shall have a confidential debt rating, or a private internal classification, a
private debt credit assessment by the Securities Valuation Office of NAIC or a
NAIC I designation by the Securities Valuation Office of NAIC.
"Issuer" shall mean FU/DG Indianola, LLC, a Delaware limited liability
company, as issuer under the Note Purchase Agreement.
"Land" shall have the meaning specified in the term "Property."
"Lease" shall mean the Lease Agreement dated as of June 1, 2000, between
Lessor, as lessor, and Lessee, as lessee.
"Lease Default" shall mean any event, condition or failure which, with
notice or lapse of time or both, would become a Lease Event of Default.
"Lease Event of Default" shall have the meaning specified in Article XVI of
the Lease.
"Lease Expiration Date" shall have the meaning specified in Section 27.20
of the Lease.
"Lease Term" shall mean the full term of the Lease, including the Interim
Term, Base Term and any Renewal Terms as to which Lessee exercises a renewal
option pursuant to Article V of the Lease, or such shorter period as may result
from earlier termination of the Lease as provided therein.
"Lease Year" shall mean each consecutive period of twelve (12) full
calendar months occurring after the Closing Date; provided, however, that, if
the Closing Date shall not be the first day of a month, then the first Lease
Year shall also include the partial month in which the Closing Date occurs.
"Lessee" shall mean Dollar General Corporation, a Tennessee corporation.
"Lessee-Controlled Contest" shall have the meaning specified in Section
19.02(e) of the Lease.
"Lessee's Equipment and Personality" shall mean all Lessee's personal
property and trade fixtures including, without limitation, Lessee's inventory,
non-building equipment, non-
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building machinery, racking, shelving, conveyer equipment, lifts, tractors,
trailers and other vehicles used in the operation of Lessee's distribution
center and trucking operation.
"Lessee Obligation" shall mean each and every obligation of the Lessee in
whatever capacity arising under each Operative Document to which Lessee is a
party and, in the event that any payment made by Lessee in connection with any
Lessee Obligation shall be required to be restored or is rescinded or disgorged,
such restoration, rescission or disgorgement shall result in such obligations
becoming a Lessee Obligation.
"Lessor" shall mean FU/DG Indianola, LLC, a Delaware limited liability
company, and as the context may require, in such other capacity as may be
described in any other Operative Document.
"Lessor Liens" shall mean Liens on or against the Property or the Lease or
any payment of Rent (a) which result from any act of, or any Claim against,
Lessor or Head Lessor, or which result from any violation by Lessor or Head
Lessor of any of the terms of the Operative Documents other than a violation due
to a default by Lessee under the Lease or, with respect to the Head Lessor, a
default by the Head Lessee under the Head Lease, (b) which result from Liens in
favor of any taxing authority by reason of any Tax owing and payable by Lessor
or Head Lessor, except that Lessor Liens shall not include any Lien resulting
from any Tax for which Lessee is obligated to indemnify Lessor or Head Lessor
(or any other Indemnitee), or (c) which result from any expenses owed, caused or
occasioned by Lessor or Head Lessor or any of their employees or agents which
are not indemnified by Lessee pursuant to Section 19.01 of the Lease, but shall
exclude Permitted Liens and any Liens created by the Debt Documents and the Head
Lease.
"Lessor Property" shall mean the right, title and interest of the Lessor in
the Property, including Lessor's leasehold interest in the Equipment.
"Lien" shall mean any lien, mortgage, pledge, charge, security interest or
encumbrance of any kind, or any other type of preferential arrangement that has
the practical effect of creating a security interest, including, without
limitation, any thereof arising under any conditional sale agreement, capital
lease or other title retention agreement.
"Loan" shall have the meaning specified in the recitals to the Note
Purchase Agreement.
"Loss" shall have the meaning specified in Section 19.03(b) of the Lease.
"Make-Whole Premium" in respect of a prepayment of the principal of any
Secured Note and accrued interest, if any (such prepaid principal amount of such
Note being hereinafter referred to as the "Prepaid Principal"), shall be
calculated by the Issuer and certified to the Agent in an Officer's Certificate
and mean the greater of(a) one percent (1%) and (b) the excess of:
(i) the sum of the respective present values as of the date such
Make-Whole Premium becomes due and payable of: (A) each payment of a
scheduled installment of principal required to be made with respect to such
Prepaid Principal during the remaining term to maturity of such Note, (B)
without duplication, the payment of the principal balance, if any, required
to be made at final maturity with respect to such Prepaid
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Principal, and (C) each payment of interest which would be required to be
paid during the remaining term to maturity of such Note with respect to
such Prepaid Principal, determined, in the case of each such required
principal payment prior to maturity, principal payment at final maturity
and interest payment, by discounting the amount thereof (on a monthly
basis) from the date fixed therefor back to the date such Make-Whole
Premium becomes due and payable at the Reference Rate (assuming for such
purpose that all such payments were made when due pursuant to the terms
thereof and hereof, and that no other payment with respect to such Prepaid
Principal was made),minus
(ii) the outstanding principal amount of the Note plus accrued
interest, if any.
"Material Adverse Effect" shall mean any event, state of facts,
circumstance or condition (a) with respect to any Person regarding whom a
determination is to be made that could reasonably be expected to result in a
decrease of at least five percent (5%) in the tangible net worth of such Person
(excluding for these purposes good will, intangible assets and any upward
adjustments in any asset from book value) based upon GAAP consistently applied,
(b) that could reasonably be expected to result in the invalidity or
unenforceability of any Operative Document or the inability of any Person to
exercise rights and remedies intended to afford such parties of the practical
realization of the benefits intended to be available to them under the
Operative Documents, (c) that could reasonably be expected to result in the
invalidity or failure of priority or enforceability of any Lien on any Property
created, or intended to be created by, any of the Operative Documents or (d)
that could reasonably be expected to result in a decline of the value of the
Land, Improvements and Fixtures or useful life thereof by five percent (5%) or
more or the loss of use, or inability of the Lessee or the Head Lessee, as the
case may be, to use, five percent (5%) of the Land, Improvements and Fixtures
for the purposes for which it was intended.
"Memorandum of Lease" shall mean that certain Memorandum of Lease dated as
of June 1, 2000, between Lessor and Lessee related to the Property.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Mortgage" shall mean that certain Deed of Trust and Security Agreement
dated as of June 1, 2000 herewith, relating to the Real Property as the same may
be renewed, amended, modified, consolidated, replaced or extended.
"Mortgaged Property" shall mean the property the subject of the Mortgage.
"NAIC" shall mean the Securities Valuation Office of the National
Association of the Insurance Commissioners and any successor thereto.
"Net Casualty Proceeds" with respect to the Property (or any portion
thereof), shall mean the compensation and/or insurance payments net of the
reasonable expenses of collecting such amounts incurred by any Person and
received by the Lessee or its assignee or designee (including the Agent) in
respect of the Property (or any portion thereof) by reason of and on account of
a Casualty.
▇- ▇▇
"Net Condemnation Proceeds" with respect to the Property (or any portion
thereof), shall mean any award or compensation net of the reasonable expenses of
collecting such amounts incurred by any Person and received by the Lessee or its
assignee or designee (including the Agent) in respect of the Property (or any
portion thereof) by reason of and on account of a Condemnation.
"Net Proceeds" shall mean Net Casualty Proceeds or Net Condemnation
Proceeds as the context may require.
"Noncontrolling Party" shall have the meaning specified in Section 19.02(e)
of the Lease.
"Nonseverable" shall describe an elective Alteration or part of an elective
Alteration which cannot be removed from the existing Improvements, the Land or
the Equipment without causing material damage to the Property, provided, that
Lessee's Equipment and Personality and the Equipment shall not be construed as
Nonseverable.
"Note Purchase Agreement" shall mean the Note Purchase Agreement dated as
of June 1, 2000 among the Issuer, the Holders and the Agent.
"Note Purchase Agreement Default" shall mean a "Default" as defined in the
Note Purchase Agreement.
"Note Purchase Agreement Event of Default" shall mean an "Event of Default"
as defined in the Note Purchase Agreement.
"Notes" shall mean the Notes issued under the Note Purchase Agreement and
secured by the Mortgage.
"NRSRO" shall mean a nationally recognized statistical rating organization,
which as of this date would include Standard & Poor's, ▇▇▇▇▇'▇ and Fitch IBCA
Inc.
"Officer's Certificate" of a Person or any Person signing on behalf of a
Person shall mean a certificate signed, in the case of a partnership, by a
general partner of such partnership, or in the ease of a limited liability
company, by a member of such limited liability company, or in the case of a
corporation, by an Authorized Officer of such Person. Each Officer's Certificate
delivered to any Person wider any Operative Agreement shall include a statement
that the signatory (a) has reviewed the activities of the entity on whose behalf
the Officer's Certificate is being given with respect to the subject matter for
which such Officer's Certificate is requested, (b) is familiar with the
provisions of the relevant Operative Document to which the requested Officer's
Certificate relates and (c) has, in such signatory's opinion, made such
examination or investigation as is necessary to enable such signatory to act on
an informed basis in responding to such request.
"Operative Documents" shall mean the Sale and Purchase Agreement, the Debt
Documents, the Lease, the Memorandum of Lease, the SNDA Agreement, the Deed, the
Bills of Sale and other instruments of transfer in connection with the Property,
including the Equipment, The Head Lease, the Intercreditor Agreement, the
Indemnity Agreement, the Special Indemnity
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Agreement and the UCC financing statements required to be executed and delivered
in connection with the foregoing, collectively.
"Oral Licensee" shall have the meaning specified in Section 20.0l(n)(xiv)
of the Lease.
"Overall Transaction" shall mean all the transactions and activities
referred to in or contemplated by the Operative Documents.
"Participant" shall mean shall mean Lessor, any Holder, Agent, Servicer,
any trustee under a Mortgage which is a deed of trust, the Proceeds Trustee,
Head Lessor, each of their assignees or other transferees and each of their
Affiliates and their respective officers, directors, employees, shareholders,
members or other equity owners.
"Permits" shall mean as to the Property all licenses, authorizations,
certificates, variances, concessions, grants, registrations, consents, permits
and other approvals issued by a Governmental Authority now or hereafter
pertaining to the ownership, management, occupancy, use or operation of such
Property, including certificates of occupancy.
"Permitted Encumbrances" shall mean the easements, rights of way,
reservations. servitudes and rights of others against the Property which are
listed in the Title Policy issued to the Lessor or the Agent (as applicable).
"Permitted Investments" shall mean any one or more of the following
obligations or securities having (a) a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (b) bearing interest that may either
be fixed or variable but which is tied to a single interest rate index plus a
single fixed rate spread (if any) and move proportionately with that index, and
(c) having the required ratings, if any, provided for in this definition:
(i) investments in direct obligations of the United States of America
or any agency thereof having maturities of less than one year;
(ii) investments in commercial paper maturing within one year from the
date of creation thereof of the highest credit rating of a Rating Agency
(or, in the case of Standard & Poor's, one of the two highest credit
ratings);
(iii) investments in bankers' acceptances, certificates of deposit and
commercial money market funds having maturities of less than one year
issued by commercial banks in the United States of America having capital
and surplus in excess of $50,000,000;
(iv) repurchase obligations with a term of not more than one year for
underlying securities of the types described in clauses (i) and (iii) above
entered into with a counterparty whose short-term securities are of the
highest credit rating of any NRSRO (or, in the case of Standard & Poor's,
one of the two highest credit ratings); and
(v) freely redeemable shares in money market funds which invest solely
in securities of the types described in clauses (i), (ii), (iii) and (iv)
and rated in the highest
A-I5
rating category by any NRSRO (or, in the case of Standard & Poor's, one of
the two highest rating categories).
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties under the
Operative Documents.
(b) Liens for Taxes either not yet due or being contested in good
faith and by appropriate proceedings. so long as such proceedings shall not
involve any material danger of the sale, forfeiture or loss of any part of
the Property, title thereto or any interest therein and are undertaken in
accordance with the terms of any documents securing the Indebtedness
(including, without limitation, posting of any Notes or other collateral to
the extent required by such documents),
(c) materialmen's, mechanics', workers', repairmen's, employees or
other like Liens for amounts either not yet due or being contested in good
faith and by appropriate proceedings so long as such proceedings shall not
involve any material danger of the sale, forfeiture or loss of any part of
the Property, title thereto or any interest therein; provided, Lessee
agrees that it shall pay, discharge of record or note any such Lien within
thirty (30) days after knowledge of the filing thereof,
(d) Liens arising out of judgments or awards with respect to which at
the time an appeal or proceeding for review is being prosecuted in good
faith and either which have been bonded or for the payment of which
adequate reserves shall have been provided to Lessor's reasonable
satisfaction: provided, that, if the long-term unsecured debt is then rated
by either Rating Agency, such debt, shall not be rated Investment Grade,
then any such amount in excess of Two Hundred Fifty Thousand Dollars
($250,000), shall be bonded or discharged by Lessee within thirty (30) days
after Lessee's, knowledge thereof, and
(e) assignments and subleases that comply with the terms of the Lease.
"Person" shall mean an individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
non-incorporated organization or government or any agency or political
subdivision thereof.
"Plan" shall have the meaning specified in Section 8.05(c) of the Lease.
"Proceeds Trustee" shall mean the Servicer or, if a Property affected by a
Casualty or a Condemnation shall not at the time in question be encumbered by a
Mortgage, a federally insured bank or other financial institution, selected by
Lessor and reasonably satisfactory to Lessee.
"Property" shall mean the real property whose parcel or parcels of land are
described on Exhibit B to the Lease (the "Land"), together with all buildings,
structures and other improvements of every kind situated on the Land
(collectively, the "Improvements"), together with all easements, rights and
appurtenances relating to the Land or the Improvements, and
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together with all fixtures, including all components thereof, on and in respect
to the Improvements, including, without limitation, all built-in equipment used
in the operation of the Property, together with all replacements. modifications,
alterations and additions thereto (collectively, the "Fixtures"); provided, that
in no event shall "Property" include Lessee's Equipment and Personality. As the
context requires, Property shall include the Equipment or the right, title and
interest of the Lessor in the Property. including the Lessor's leasehold
interest in the Equipment.
"Proposed Adjustment" shall have the meaning specified in Section 19.03(c)
of the Lease.
"Qualified Appraiser" with respect to the Real Property, means an
independent appraiser who shall be a member of The Appraisal Institute (or its
successor organization) with not less than ten (10) years' experience appraising
properties similar to the Land, Improvements and Fixtures constituting a portion
of the Property in the market in which the Property is located.
"Rating Agencies" shall mean ▇▇▇▇▇'▇, Standard & Poor's and Fitch IBCA
Inc., or at the Lender's election, another NRSRO.
"Real Property" shall mean all real property and other property, if any,
subject to the Lease, specifically including the Land, Improvements and
Fixtures, but excluding the Equipment.
"Reference Rate" shall mean, with respect to any specified amount: (I)
first, a yield shall be computed by using linear interpolation to the Remaining
Weighted Average Life (defined below) between the Reference Treasury Yields
(defined below) of two maturities, (i) one maturity as close as possible to, but
less than or equal to, the Remaining Weighted Average Life of such specified
amount and (ii) the other maturity as close as possible to, but greater than,
the Remaining Weighted Average Life of such specified amount, provided, that if
the Remaining Weighted Average Life is less than or equal to the shortest
maturity of the Reference Treasury Yields, the yield shall equal such Reference
Treasury Yield or the shortest maturity; (II) such determined yield then being
expressed as a monthly equivalent as a decimal, with the result being the
applicable Reference Rate. "H.15(519)" means the weekly statistical release
designated as such, or any successor publication, of the Board of Governors of
the Federal Reserve System, or if such statistical release is no longer
published, any publicly available source of similar market data. In the case
that Reference Rate is being used for the determination of Make-Whole Premium,
the date of determination of a Make-Whole Premium is the fifth Business Day
preceding the date such amount becomes due and payable. "Remaining Weighted
Average Life" with respect to any specified amount shall mean, as applicable to
a prepayment date, the number of years obtained by computing the quotient of(A)
the Remaining Dollar Years (defined below) by (B) the aggregate principal or
other relevant amount of such specified amount then outstanding. The term
"Remaining Dollar Years" of such specified amount shall mean the product
obtained by multiplying (1) the amount of each then remaining principal payment
or other relevant payment amount for such specified amount (including the
principal payment at final maturity), by (2) the number of years (rounded to the
nearest one-twelfth) which will elapse between such prepayment date and the date
such payment of principal is due. The term "Reference Treasury Yields" shall
mean the most recent weekly Average yields of those
A-17
elements of the Treasury constant maturity series as published in the most
recent H.15(5l9) corresponding to "on the run" United States Treasury securities
traded in the public markets at the time of determination: provided, if a
determination is being made in connection with any prepayment of the Notes
arising from a Lease Event of Default, an additional 50 basis points shall be
added thereto.
"Refinancing" shalt mean any refinancing of the Indebtedness.
"Refusal Offer" shall have the meaning specified in Section 4.01(a) of the
Lease.
"Reimbursement Date" shall have the meaning specified in Section 19.02(c)
of the Lease.
"Release" shall mean the release under applicable Environmental Laws or
threatened release of any Hazardous Material into or upon or under any land or
water or air, or otherwise into the environment, including, without limitation,
by means of burial, disposal, discharge, emission, injection, spillage, leakage,
seepage, leaching, dumping, pumping, pouting, escaping, emptying, placement and
the like.
"Remedial Action" means the investigation, clean-up, remediation or removal
required by Environmental Law of contamination, environmental degradation or
damage caused by, related to or arising from the existence, generation, use,
handling, treatment, storage, transportation, disposal, discharge, release
(including a continuous release), or emission of Hazardous Material, including,
without limitation, investigations, response and remedial actions required under
CERCLA, corrective action required under the Resource Conservation and Recovery
Act of 1976, as amended, the investigation, removal or closure of any
underground storage tanks, and any related soil or groundwater investigation,
cleanup remediation or removal, and other investigation, clean-up, removal or
remediation required under or necessary to comply with any Environmental Laws.
"Renewal Rent" shall mean the meaning specified in Section 5.01(b) of the
Lease.
"Renewal Term" shall have the meaning specified in Section 5.01 of the
Lease.
"Rent" shall mean Interim Rent, Base Rent, Renewal Rent and Supplemental
Rent. collectively.
"Rent Account" shall have the meaning specified in Section 3.03 of the
Lease.
"Rent Commencement Date" shall mean the Closing Date, which shall be the
date on which Interim Rent and Head Lease Interim Rent commence under the Lease
and Head Lease respectively, unless such day is the first calendar day `of a
month, in which case, Base Rent and Head Lease Base Rent shall commence under
the Lease and the Head Lease respectively.
"Rent Commencement Date" shall mean the Closing Date.
"Rent Payment Date" shall mean the last Business Day of each month during
the Lease Term or the Head Lease Term, as the case may be.
A-18
"Required Remedial Action Date" shall have the meaning specified in Section
8.05(c) of the Lease.
"Restoration Fund" shall have the meaning specified in Section 12.04(a) of
the Lease.
"Right of First Refusal" shall have the meaning specified in Section 4.01
of the Lease.
"Sale and Purchase Agreement" shall mean the Sale and Purchase Agreement
dated as of June 1, 2000 between together with Lessee, as a seller, and Lessor
and Head Lessor, as purchaser with respect to the Property and acknowledged and
agreed by the Holders.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Self-Insurance Amount" shall have the meaning specified in Section 9.0
1(b) of the Lease.
"Seller" shall mean Atlantic Financial Group, Ltd., a Texas limited
partnership, and Lessee collectively.
"Servicer" shall mean First Union National Bank, a national banking
association, any replacement thereof and the successors and assigns of the
foregoing.
"Single Purpose Entity" shall mean a Person, other than an individual,
which (i) is formed or organized solely for the purpose of holding an ownership
interest in the Property (except the portion of the Property constituting
Equipment, in which case such Person shall hold a leasehold estate therein and
any other rights, titles or benefits relating to the Equipment arising from or
out of the Head Lease or any option thereunder), (ii) does not engage in any
business unrelated to the Property, (iii) does not have any assets other than
those related to its interest in the Property, receipts therefrom or proceeds
therefrom or any indebtedness other than as permitted by the other Operative
Documents, (iv) has its own separate books and records and has its own accounts
in each case which are separate and apart from the books and records and
accounts of any other Person, and (v) at all times has, or in the case of a
limited partnership, has a corporate general partner which has, or in the case
of a limited liability company, has a corporate manager (or, if the manager of
the limited liability company is a partnership, such partnership has a corporate
general partner) which has, one independent manager or independent director
"SNDA Agreement" shall mean the Lease Subordination, Non-Disturbance and
Attorrnment Agreement dated as of June 1, 2000 among the Lessor, Lessee, the
Head Lessor and the Agent.
"Special Indemnity Agreement" shall mean that Indemnity Agreement dated as
of June 1, 2000 made by Lessee for the benefit of the Head Lessor and
acknowledged by the Agent and Holders which provides for the exercise of certain
rights and remedies against the Lessee and the Equipment as indemnity claims in
the event of a Lease Event of Default.
"Special Purpose Representations and Warranties" shall have the meaning
specified in Section 25.01(a) of the Lease.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
A-l9
"Sublease" shall have the meaning given such term in Section 14.01 of the
Lease.
"Substitute Property" shall mean a property that is substituted by Lessee
pursuant to Article XXIII or Section 12.01 of the Lease for an Affected Property
in accordance with Article XXIII of the Lease and that is substituted as
collateral by Lessor pursuant to Section 20.07 of the Note Purchase Agreement.
"Supplemental Rent" shall mean the Make-Whole Premium and any and all
amounts, liabilities, obligations, late charges and Impositions other than Base
Rent which Lessee assumes or agrees or is otherwise obligated to pay under the
Lease and the Operative Documents (whether or not designated as Supplemental
Rent) to any Person, including Fair Market Sales Value payments, Termination
Value payments, and indemnities and damages for breach of any covenants,
representations, warranties or agreements.
"Surviving Corporation" shall have the meaning specified in Section
20.03(b) of the Lease.
"Tangible Net Worth" means with respect to any Person, as of any date of
determination, the sum of capital stock and additional paid-in capital (net of
treasury stock) plus retained earnings or capital surplus, as the case may be
(or minus any accumulated deficit), minus intangible assets (including, without
limitation, franchises, patents, patent applications. trademarks, branch names,
good will and research and development) determined on a consolidated basis and
in conformity with GAAP.
"Tax Counsel" shall have the meaning specified in Section 19.02(e) of the
Lease.
"Tax Indemnitee" shall mean Lessor, any Holder, Agent, Servicer, any
trustee under a Mortgage which is a deed of trust, the Proceeds Trustee, Head
Lessor, each of their assignees or other transferees and each of their
Affiliates and their respective officers, directors, employees, shareholders,
members or other equity owners.
"Tax Party" shall have the meaning specified in Section 19.03(c) of the
Lease.
"Taxes" shall mean any and all present and future taxes, including income
(gross or net), gross or net receipts, sales, use, value added, franchise, doing
business, transfer, capital, property (tangible or intangible), municipal
assessments, excise and stamp taxes, levies, imposts, duties, charges,
assessments or withholding, together with any penalties, fines or interest
thereon or additions thereto (any of the foregoing being referred to herein
individually as a "Tax"), imposed by any Governmental Authority. Taxes shall
include the costs of any contest or appeal pursued which reduces the Taxes (or
attempts to do so) including reasonable attorney's fees and costs incident
thereto. Without limiting the foregoing, if at any time during the tern of the
Lease the methods of taxation prevailing at the execution thereof shall be
changed or altered so that in lieu of or as a supplement or addition to or a
substitute for the whole or any part of the real estate taxes or assessments now
or from time to time, thereafter levied, assessed or imposed by applicable
taxing authorities for the funding of governmental services, there shall be
imposed
A-20
(i) a tax, assessment, levy, imposition or charge, wholly or partially as a
capital levy or otherwise, on the rents received from or otherwise attributable
to the Property, or (ii) a tax, assessment, levy (including but not limited to
any municipal, state or federal levy), imposition or charge measured by or based
in whole or in part upon the Property or the Lease or the Head Lease, and
imposed on the Lessor under the Lease, the Head Lessor under the Head Lease or
any portion thereof, or (iii) a license fee or other fee or tax measured by the
rent payable under the Lease or the Head Lease, or (iv) any other tax,
assessment, levy, charge, fee or the like payable with respect to the Property,
the rents, issues and profits thereof, the Lease, the Head Lease or the rents
and charges payable pursuant thereto, then all such taxes, assessment, levies,
impositions and/or charges, or the part thereof so measured or based shall be
deemed to be Taxes.
"Term" shall mean the Interim Term, the Base Term and any Renewal Term.
"Termination Value" shall mean on the Termination Value Date or the date
payment is to be made under Section 12.01 if Lessor rejects Lessee's offer to
purchase, as the case may be, (i) during the Base Term, the value listed on
Schedule 12.01 to the Lease for such Property as of such date and (ii) during a
Renewal Term, the Fair Market Sales Value of such Property as of such date.
"Termination Value Date" shall have the meaning specified in Section 12.0
1(a) of the Lease and after the expiration of the Base Term shall mean the first
day of each month during a Renewal Term.
"Title Insurance Company" shall mean Old Republic National Title Insurance
Company
"Title Policy" shall mean the title insurance policy issued by the Title
Insurance Company to Lessor pursuant to the Sale and Purchase Agreement, and to
the Agent pursuant to the Note Purchase Agreement on the Closing Date.
"Transfer" shall have the meaning specified in Section 19.02(b) of the
Lease.
"UCC" shall mean the Uniform Commercial Code as enacted in the state in
which Property is located, or any other applicable Uniform Commercial Code.
"Verifier" shall have the meaning specified in Section 19.02(g) of the
Lease.
"Warranties" shall have the meaning specified in Section 6.02 of the Lease.
"Withdrawn Property" shall have the meaning specified in Section 23.01 of
the Lease.
A-21
3.01 - Base Rent Schedule
Note: Base Rent is due on the last business day of the month.
Month end Indianola
Period Date Rent Schedule
Interim 30-Jun-00 $384,404.10
1 31-Jul-00 $397,659.41
2 31-Aug-00 $397,659.41
3 30-Sep-00 $397,659.41
4 31-Oct-00 $397,659.41
5 30-Nov-00 $397,659.41
6 31-Dec-00 $397,659.41
7 31-Jan-01 $397,659.41
8 28-Feb-01 $397,659.41
9 31-Mar-01 $397,659.41
10 30-Apr-01 $397,659.41
11 31-May-01 $397,659.41
12 30-Jun-01 $397,659.41
13 31-Jul-01 $397,659.41
14 31-Aug-01 $397,659.41
15 30-Sep-01 $397,659.41
16 31-Oct-01 $397,659.41
17 30-Nov-01 $397,659.41
13 31-Dec-01 $397,659.41
19 31-Jan-02 $397,659.41
20 28-Feb-02 $397,659.41
21 31-Mar-02 $397,659.41
22 30-Apr-02 $397,659.41
23 31-May-02 $397,659.41
24 30-Jun-02 $397,659.41
25 31-Jul-02 $397,659.41
26 31'Aug-02 $397,659.41
27 30-Sep-02 $397,659.41
23 31-Oct-02 $397,659.41
29 30-Nov-02 $397,659.41
30 31-Dec-02 $397,659.41
31 31-Jan-03 $397,659.41
32 28-Feb-03 $397,659.41
33 31-Mar-03 $397,659.41
34 30-Apr-03 $397,659.41
35 31-May-03 $397,659.41
36 30-Jun-03 $397,659.41
37 31-Jul-03 $397,659.41
38 31-Aug-03 $397,659.41
39 30-Sep-03 $397,659.41
1
3.01 - Base Rent Schedule
Note: Base rent is due on the last business day of the month.
Month End Indianola
Period Date Rent Schedule
40 31-Oct-03 $397,659.41
41 30-Nov-03 $397,659.41
42 31-Dec-03 $397,659.41
43 31-Jan-04 $397,659.41
44 29-Feb-04 $397,659.41
45 31-Mar-04 $397,659.41
46 30-Apr-04 $397,659.41
47 31-May-04 $397,659.41
48 30-Jun-04 $397,659.41
49 31-Jul-04 $397,659.41
50 31-Aug-04 $397,659.41
51 30-Sep-04 $397,659.41
52 31-Oct-04 $397,659.41
53 30-Nov-04 $397,659.41
54 31-Dec-04 $397,659.41
55 31-Jan-05 $397,659.41
56 23-Feb-05 $397,659.41
57 31-Mar-05 $397,659.41
58 30-Apr-05 $397,659.41
59 31-May-05 $397,659.41
60 30-Jun-05 $397,659.41
61 31-Jul-05 $397,659.41
62 31-Aug-05 $397,659.41
63 30-Sep-05 $397,659.41
64 31-Oct-05 $397,659.41
65 30-Nov-05 $397,659.41
66 31-Dec-05 $397,659.41
67 31-Jan-06 $397,659.41
68 28-Feb-06 $397,659.41
69 31-Mar-06 $397,659.41
70 30-Apr-06 $397,659.41
71 31-May-06 $397,659.41
72 30-Jun-06 $397,659.41
73 31-Jul-06 $397,659.41
74 31-Aug-06 $397,659.41
75 30-Sep-06 $397,659.41
76 31-Oct-06 $397,659.41
77 30-Nov-06 $397,659.41
78 31-Dec-06 $397,659.41
79 31-Jan-07 $397,659.41
2
3.01 - Base Rent Schedule
Note: Base Rent is due on the last business day of the month.
Month End Indianola
Period Date Rent Schedule
80 28-Feb-07 $397,659.41
81 31-Mar-07 $397,659.41
82 30-Apr-07 $397,659.41
83 31-May-07 $397,659.41
84 30-Jun-07 $397,659.41
85 31-Jul-07 $338,051.76
86 31-Aug-07 $338,051.76
87 30-Sep-07 $338,051.76
88 31-Oct-07 $338,051.76
89 30-Nov-07 $338,051.76
90 31-Dec-07 $338,051.76
91 31-Jan-08 $338,051.76
92 29-Feb-08 $338,051.76
93 31-Mar-08 $338,051.76
94 30-Apr-08 $338,051.76
95 31-May-08 $338,051.76
96 30-Jun-08 $338,051.76
97 31-Jul-08 $338,051.76
98 31'Aug-08 $338,051.76
99 30-Sep-08 $333,051.76
100 31-Oct-08 $338,051.76
101 30-Nov-08 $338,051.76
102 31-Dec-08 $338,051.76
103 31-Jan-09 $338,051.76
104 28-Feb-09 $338,051.76
105 31-Mar-09 $333,051.76
106 30-Apr-09 $338,051.76
107 31-May-09 $333,051.76
108 30-Jun-09 $338,051.76
109 31-Jul-09 $264,930.98
110 31-Aug-09 $264,930.98
111 30-Sep-01 $264,930.93
112 31-Oct-09 $264,930.98
113 30-Nov-09 $264,930.98
114 31-Dec-09 $264,930.98
115 31-Jan-10 $264,930.98
116 28-Feb-10 $264,930.98
117 31-Mar-10 $264,930.98
118 30-Apr-10 $264,930.98
119 31-May-10 $264,930.98
3
301 - Base Rent Schedule
Rent is due on the last business day of the month.
Month End Indianola
Period Date Rent Schedule
120 30-Jun-lO 264,930.98
121 31-Jul-10 264,930.98
122 31-Aug-10 264,930.98
123 30-Sep-10 264,930.98
124 31-Oct-10 264,930.98
125 30-Nov-10 264,930.98
126 31-Dec-10 264,930.98
127 31-Jan-11 264,930.98
128 28-Feb-11 264,930.98
129 31-Mar-11 264,930.98
130 30-Apr-11 264,930.98
131 31-May-11 264,930.98
132 30-Jun-11 264,930.98
133 31-Jul-11 264,930.98
134 31-Aug-11 264,930.98
135 30-Sep-11 264,930.93
136 31-Oct-11 264,930.98
137 30-Nov-11 264,930.98
138 31-Dec-11 264,930.98
139 31-Jan-12 264,930.98
140 29-Feb-12 264,930.98
141 31-Mar-12 264,930.98
142 30-Apr-12 264,930.98
143 31-May-12 264,930.98
144 30-Jun-12 264,930.98
145 31-Jul-12 264,930.98
146 31-Aug-12 264,930.98
147 30-Sep-12 264,930.98
148 31-Oct-12 264,930.98
149 30-Nov-12 264,930.98
150 31-Dec-12 264,930.98
151 31-Jan-13 264,930.98
152 28-Feb-13 264,930.98
153 31-Mar-13 264,930.98
154 30-Apr-13 264,930.98
155 31-May-13 264,930.98
156 30-Jun-13 264,930.98
157 31-Jul-13 264,930.98
158 31-Aug-13 264,930.98
159 30-Sep-13 264,930.98
4
3.01 - Base Rent Schedule
Note: Base Rent is due on the last business day of the month.
Month End Indianola
Period Date Rent Schedule
160 31-Oct-13 $264,930.98
161 30-Nov-13 $264,930.98
162 31-Dec-13 $264,930.98
163 31-Jan-14 $264,930.98
164 28-Feb-14 $264,930.98
165 31-Mar-14 $264,930.98
166 30-Apr-14 $264,930.98
167 31-May-14 $264,930.98
168 30-Jun-14 $264,930.98
169 31-Jul-14 $264,930.98
170 31-Aug-14 $264,930.98
171 30-Sep-14 $264,930.98
172 31-Oct-14 $264,930.98
173 30-Nov-14 $264,930.93
174 31-Dec-14 $264,930.98
175 31-Jan-14 $264,930.98
176 28-Feb-15 $264,930.98
177 31-Mar-15 $264,930.98
178 30-Apr-15 $264,930.98
179 31-May-15 $264,930.98
180 30-Jun-15 $264,930.98
181 31-Jul-15 $264,930.98
182 31-Aug-15 $264,930.98
183 30-Sep-15 $264,930.98
184 31-Oct-15 $264,930.98
185 30-Nov-15 $264,930.98
186 31-Dec-15 $264,930.98
187 31-Jan-16 $264,930.98
188 29-Feb-16 $264,930.98
189 31-Mar-16 $264,930.98
190 30-Apr-16 $264,930.98
191 31-Mar-16 $264,930.98
192 30-Jun-16 $264,930.98
193 31-Jul-16 $264,930.98
194 31-Aug-16 $264,930.98
195 30-Sep-16 $264,930.98
196 31-Oct-16 $264,930.98
197 30-Nov-16 $264,930.98
198 31-Dec-16 $264,930.38
199 31-Jan-17 $264,930.98
5
3.01- Base Rent Schedule
Note: Base Rent is due on the last business day of the month.
Month End Indianola
Period Date Rent Schedule
200 28-Feb-17 $264,930.98
201 31-Mar-17 $264,930.98
202 30-Apr-17 $264,930.98
203 31-May-17 $264,930.98
204 30-Jun-17 $264,930.98
205 31-Jul-17 $264,930.98
206 31-Aug-17 $264,930.98
207 30-Sep-17 $264,930.98
208 31-Oct-17 $264,930.98
209 30-Nov-17 $264,930.93
210 31-Dec-17 $264,930.98
211 31-Jan-18 $264,930.98
212 28-Feb-13 $264,930.98
213 31-Mar-18 $264,930.98
214 30-Apr-18 $264,930.98
215 31-May-18 $264,930.93
216 30-Jun-18 $264,930.98
217 31-Jul-18 $264,930.98
218 31-Aug-18 $264,930.98
219 30-Sep-18 $264,930.98
220 31-Oct-18 $264,930.98
221 30-Nov-18 $264,930.98
222 31-Dec-18 $264,930.98
223 31-Jan-19 $264,930.98
224 28-Feb-19 $264,930.98
225 31-Mar-19 $264,930.98
226 30-Apr-19 $264,930.98
227 31-May-19 $264,930.98
228 30-Jun-19 $264,930.98
229 31-Jul-19 $264,930.98
230 31-Aug-19 $264,930.98
231 30-Sep-19 $264,930.98
232 31-Oct-19 $264,930.98
233 30-Nov-19 $264,930.98
234 31-Dec-19 $264,930.98
235 31-Jan-20 $264,930.98
236 29-Feb-20 $264,930.98
237 31-Mar-20 $264,930.98
238 30-Apr-20 $264,930.98
239 31-May-20 $264,930.98
6
3.01- Base Rent Schedule
Rent is due on the last business day of the month.
Month End Indianola
Period Date Rent Schedule
240 30-Jun-20 $264,930.98
241 31-Jul-20 $264,930.98
242 31-Aug-20 $264,930.98
243 30-Sep-20 $264,930.98
244 31-Oct-20 $264,930.98
245 30-Nov-20 $264,930.98
246 31-Dec-20 $264,930.98
247 31-Jan-21 $264,930.98
248 28-Feb-21 $264,930.98
249 31-Mar-21 $264,930.98
250 30-Apr-21 $264,930.98
251 31-May-21 $264,930.98
252 30-Jun-21 $264,930.98
253 31-Jul-21 $264,930.98
254 31-Aug-21 $264,930.98
255 30-Sep-21 $264,930.98
256 31-Oct-21 $264,930.98
257 30-Nov-21 $264,930.98
258 31-Dec-21 $264,930.98
259 31-Jan-22 $264,930.98
260 28-Feb-22 $264,930.98
261 31-Mar-22 $264,930.98
262 30-Apr-22 $264,930.98
263 31-May-22 $264,930.98
264 30-Jun-22 $264,930.98
7
Schedule 8.05(d)
Indianola, MS Property:
(i) Either (a) (x) complete, to the reasonable satisfaction of the Lessor,
installation of secondary containment structures over the waste oil and
diesel fuel aboveground storage tanks at the truck repair shop at the
Premises and (y) install appropriate covering over all outdoor aboveground
storage tanks and associated secondary containment areas at the truck
repair shop; or (b) move such tanks to inside the truck repair shop.
(ii) Clean to the reasonable satisfaction of the Lessor any and all oil stains
on the truck repair shop concrete floor.
Schedule 8.05(e)
Indianola, MS Property:
(i) Repair and seal to the reasonable satisfaction of the Lessor all expansion
joints at the warehouse areas to a state of good working order; repair and
seal to the reasonable satisfaction of the Lessor all cracks and other
deficiencies in the exterior joints located at the front office area; and
repair and seal to the reasonable satisfaction of the Lessor all expansion
joints in the building and at the office area exteriors to a state of good
working order.
(ii) Repair to the reasonable satisfaction of the Lessor the puncture in the
roof membrane near the mechanical equipment; obtain a manufacturer's roof
warranty; and conduct periodic cleaning of the roof drain perimeters for
the purpose of removing debris for proper drainage.
(iii)Repair to the reasonable satisfaction of the Lessor evidence of leakage in
fire sprinkler systems valving and piping.
Schedule 9.01(a)
Insurance Coverage
Property o All risk, extended coverage.
o Ordinance or law coverage and boiler
and machinery, if applicable.
o Replacement cost basis, with an agreed
value equal to full insurable
replacement value of the Improvements,
Fixtures and Equipment.
o Agent named as loss payee.
o Lessor may require, based on reasonable
good faith opinion, on annual basis
that Lessee increase amount. Lessee
pays costs of any appraisal for
Lessor's determination.
Commercial General Liability o Coverage of all claims arising out of
Lessee's or any third party's use and
occupancy of Property (including any
sublease) and which are customarily
covered under standard CGL policy.
o Combined single limit of $1,000,000.00
per occurrence; aggregate limit of
$10,000,000.00; excess umbrella
liability insurance of at least
$20,000,000.00; aggregate limit per
location of $20,000,000.00.
o Lessor may require, based on reasonable
good faith opinion, on annual basis
that Lessee increase amount.
o Limits on amounts shall not limit
liability of Lessee under the Lease.
Workers' Compensation o As per applicable statute.
Employers' Liability o Limit per employee of at least
$100,000.00; $500,000.00 per
occurrence.
Builder's Risk o All risk, extended coverage for any
period of construction at the Property
if not otherwise insures by property
insurance policy.
o For value of alterations and/or
additions.
Flood o If Property is in special flood hazard
zone, in highest amount available.
o If Property is not in special flood
hazard zone, in amount of at least
$250,000.00.
o Notwithstanding the above, Lesse shall
comply with Section 9.01 (f) of Lease.
Earthquake o If Property is in earthquake zone, in
amount greater of (x) amount sufficient
to prevent Lessor and Lessee from
becoming coinsurers of any loss or (y)
100% of replacement value; deductible
must be reasonable acceptable to
Lessor; replacement cost endorsement to
be included.
o If Property is not in earthquake zone,
in amount of $250,000.00.
Other Insurance o Lessor may, from tine, reasonably
require other insurance so long as such
other insurance is customarily required
to be carried on similar properties in
the industry and similar geographic
region.
Insurance Companies o Any insurance shall be provided by one
or more insurers (x) with a claims
paying rating of at least A by S&P or
the equivalent rating by ▇▇▇▇▇'▇ and
(y) a general policy rating of at least
A and financial class of at least XI by
AM. Best Company, Inc. If an insurer
shall fail to meet such requirements,
Lessee shall have 60 days to replace
such insurer with an insurer meeting
the above requirements.
Endorsements
o Lessor, Agent, Holders and Head Lessor
named as additional insureds under
liability policies required under the
Lease.
o Each policy shall be primary without
right of contribution.
o Insurer shall waive all rights of
subrogation against Lessor, Agent.
Holders and Head Lessor, unless such
parties have caused the loss/liability
by gross negligence or willful
misconduct.
o With respect to additional tnsureds and
additional loss payees, a policy shall
operate and be so construed as if a
separate policy.
o Insurer, upon cancellation or
non-renewal, must give 30 day written
notice to Lessor, Agent, Holders and
Head Lessor.
o Lessor, Agent, Holders and Head Lessor
shall not be liable for any premiums or
assessments.
o No act or omission, whether or not
negligent, of Lessee or any indemnitee
shall affect enforceability or validity
of any policy with any other Indemnitee.
Adjustment o So long as no Lease Event of Default
shall exist. Lessee shall, at Lessee's
own cost and expense, adjust all
losses.
Self-Insurance o Deductible is $500,000.00 for Property
and $1,000,000.00 for Commercial
General Liability.
o So long as requirements for self
insurance are satisfied, there will be
no limit on amounts of self insurance.
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
Interim 30-Jun-00 104.000% $43,579,175.12
1 31-Jul-00 104.000% $43,579,175.12
2 31-Aug-00 103.814% $43,501,235.45
3 30-Sep-00 103.628% $43,423,295.77
4 31-Oct-00 103.442% $43,345,356.09
5 30-Nov-00 103.255% $43,266,997.38
6 31-Dec-00 103.069% $43,189,057.70
7 31-Jan-01 102.883% $43,111,118.02
8 28-Feb-01 102.696% $43,032,759.31
9 31-Mar-01 102.510% $42,954,819.64
10 30-Apr-01 102.324% $42,876,879.96
11 31-Mar-01 102.137% $42,798,521.25
12 30-Jun-01 101.951% $42,720,581.57
13 31-Jul-01 101.765% $42,642,641.89
14 31-Aug-01 101.578% $42,564,283.18
15 30-Sep-01 101.392% $42,486,343.50
16 31-Oct-01 101.206% $42,408,403.82
17 30-Nov-01 101.020% $42,330,464.15
18 31-Dec-01 100.833% $42,252,105.44
19 31-Jan-02 100.647% $42,174,165.76
20 28-Feb-02 100.461% $42,096,226.08
21 31-Mar-02 100.274% $42,017,867.37
22 30-Apr-02 100.088% $41,939,927.69
23 31-May-02 99.902% $41,861,988.01
24 30-Jun-02 99.715% $41,783,629.30
25 31-Jul-02 99.529% $41,705,689.63
26 31-Aug-02 99.343% $41,627,749.95
27 30-Sep-02 99.156% $41,549,391.24
28 31-Oct-02 98.970% $41,471,451.56
29 30-Nov-02 98.784% $41,393,511.88
30 31-Dec-02 98.597% $41,315,153.17
31 31-Jan-03 98.411% $41,237,213.49
32 28-Feb-03 98.225% $41,159,273.81
33 31-Mar-03 98.039% $41,081,334.14
34 30-Apr-03 97.852% $41,002,975.43
35 31-May-03 97.666% $40,925,035.75
36 30-Jun-03 97.480% $40,847,096.07
37 31-Jul-03 97.293% $40,768,737.36
1
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
38 31-Aug-03 97.107% $40,690,797.68
39 30-Sep-03 96.921% $40,612,858.00
40 31-Oct-03 96.734% $40,534,499.29
41 30-Nov-03 96.548% $40,456,559.62
42 31-Dec-03 96.362% $40,378,619.94
43 31-Jan-04 96.175% $40,300,261.23
44 29-Feb-04 95.989% $40,222,321.55
45 31-Mar-04 95.803% $40,144,381.87
46 30-Apr-04 95.616% $40,066,023.16
47 31-May-04 95.430% $39,988,083.48
48 30-Jun-04 95.244% $39,910,143.80
49 31-Jul-04 95.058% $39,832,204.13
50 31-Aug-04 94.871% $39,753,845.42
51 30-Sep-04 94.685% $39,675,905.74
52 31-Oct-04 94.499% $39,597,966.06
53 30-Nov-04 94.312% $39,519,607.35
54 31-Dec-04 94.126% $39,441,667.67
55 31-Jan-O5 93.940% $39,363,727.99
56 28-Feb-05 93.753% $39,285,369.28
57 31-Mar-05 93.567% $39,207,429.61
58 30-Apr-05 93.381% $39,129,489.93
59 31-May-05 93.194% $39,051,131.22
60 30-Jun-05 93.008% $38,973,191.54
61 31-Jul-05 92.822% $38,895,251.86
62 31-Aug-05 92.635% $38,816,893.15
63 30-Sep-05 92.449% $38,738,953.47
64 31-Oct-05 92.263% $38,661,013.79
65 30-Nov-05 92.077% $38,583,074.12
66 31-Dec-05 91.890% $38,504,715.41
67 31-Jan-06 91.704% $38,426,775.73
68 28-Feb-06 91.518% $38,348,836.05
69 31-Mar-06 91.331% $38,270,477.34
70 30-Apr-06 91.145% $38,192,537.66
71 31-May-06 90.959% $38,114,597.98
72 30-Jun-06 90.772% $38,036,239.27
73 31-Jul-06 90.586% $37,958,299.60
74 31-Aug-06 90.400% $37,880,359.92
75 30-Sep-06 90.213% $37,802,001.21
2
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
76 31-Oct-06 90.027% $37,724,061.53
77 30-Nov-06 89,841% $37,646,121.85
78 31-Dec-06 89.654% $37,567,763.14
79 31-Jan-07 89.468% $37,489,823.46
80 28-Feb-07 89.282% $37,411,883.78
81 31-Mar-07 89.096% $37,333,944.11
82 30-Apr-07 88.909% $37,255,585.40
83 31-May-07 88.723% $37,177,645.72
84 30-Jun-07 88.537% $37,099,706.04
85 31-Jul-07 88.350% $37,021,347.33
86 31-Aug-07 88,164% $36,943,407.65
87 30-Sep-07 87.978% $36,865,467.97
88 31-Oct-07 87.791% $36,787,109.26
89 30-Nov-07 87.605% $36,709,169.59
90 31-Dec-07 87.419% $36,631,229.91
91 31-Jan-08 87.232% $36,552,871.20
92 29-Feb-08 87.046% $36,474,931.52
93 31-Mar-08 86.860% $36,396,991.84
94 30-Apr-08 86.674% $36,319,052.16
100 31-Oct-08 85.556% $35,850,576.03
101 30-Nov-08 85.369% $35,772,217.32
102 31-Dec-08 85.183% $35,694,277.64
103 31-Jan-09 84.997% $35,616,337.96
104 28-Feb-09 84.810% $35,537,979.25
105 31-Mar-09 84.624% $35,460,039.58
106 30-Apr-09 84.438% $35,382,099.90
107 31-May-09 84.251% $35,303,741.19
108 30-Jun-09 84.065% $35,225,801.51
109 31-Jul-09 83.879% $35,147,861.83
110 31-Aug-09 83.693% $35,069,922.15
111 30-Sep-09 83.506% $34,991,563.44
112 31-Oct-09 83.320% $34,913,623.76
113 30-Nov-09 83.134% $34,835,684.09
3
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
114 31-Dec-09 82.947% $34,757,325.38
115 31-Jan-10 82.761% $34,679,385.70
116 28-Feb-10 82.575% $34,601,446.02
117 31-Mar-10 82.388% $34,523,087.31
118 30-Apr-10 82.202% $34,445,147.63
119 31-Mar-10 82.016% $34,367,207.95
120 30-Jun-10 81.829% $34,288,849.24
121 31-Jul-10 81.643% $34,210,909.57
122 31-Aug-10 81.457% $34,132,969.89
123 30-Sep-10 81.270% $34,054,611.18
124 31-Oct-10 81.084% $33,976,671.50
125 30-Nov-10 80.898% $33,898,731.82
126 31-Dec-10 80.712% $33,820,792.14
127 31-Jan-11 80.525% $33,742,433.43
128 28-Feb-il 80.339% $33,664,493.75
129 31-Mar-11 80.153% $33,586,554.08
130 30-Apr-11 79.966% $33,508,195.37
131 31-May-11 79.780% $33,430,255.69
132 30-Jun-11 79.594% $33,352,316.01
133 31-Jul-11 79.407% $33,273,957.30
134 31-Aug-11 79.221% $33,196,017.62
135 30-Sep-11 79.035% $33,118,077.94
136 31-Oct-11 78.848% $33,039,719.23
137 30-Nov-11 78.662% $32,961,779.56
138 31-Dec-11 78.476% $32,883,839.88
139 31-Jan-12 78.289% $32,805,481.17
140 29-Feb-12 78.103% $32,727,541.49
141 31-Mar-12 77.917% $32,649,601.81
142 30-Apr-12 77.731% $32,571,662.13
143 31-May-12 77.544% $32,493,303.42
144 30-Jun-12 77.358% $32,415,363.74
145 31-Jul-12 77.172% $32,337,424.07
146 31-Aug-12 76.985% $32,259,065.36
147 30-Sep-12 76.799% $32,181,125.68
148 31-Oct-12 76.613% $32,103,186.00
149 30-Nov-12 76.426% $32,024,827.29
150 31-Dec-12 76,240% $31,946,887.61
151 31-Jan-13 76.054% $31,868,947.93
4
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
152 28-Feb-13 75.867% $31,790,589.22
153 31-Mar-13 75.681% $31,712,649.55
154 30-Apr-13 75.495% $31,634,709.87
155 31-May-13 75.308% $31,556,351.16
156 30-Jun-13 75.122% $31,478,411.48
157 31-JuI-13 74.936% $31,400,471.80
158 31-Aug-13 74.750% $31,322,532.12
159 30-Sep-13 74.563% $31,244,173.41
160 31-Oct-13 74.377% $31,166,233.73
161 30-Nov-13 74.191% $31,088,294.06
162 31-Dec-13 74.004% 331,009,935.35
163 31-Jan-14 73.818% $30,931,995.67
164 28-Feb-14 73,632% $30,854,055.99
165 31-Mar-14 73.445% $30,775,697.28
166 30-Apr-14 73.259% $30,697,757.60
167 31-May-14 73.073% $30,619,817.92
168 30-Jun-14 72.886% $30,541,459.21
169 31-Jul-14 72.700% $30,463,519.54
170 31-Aug-14 72.514% $30,385,579.86
171 30-Sep-14 72.327% $30,307,221.15
172 31-Oct-14 72.141% $30,229,281.47
173 30-Nov-14 71.955% $30,151,341.79
174 31-Dec-14 71.769% $30,073,402.11
175 31-Jan-14 71.582% $29,995,043.40
176 28-Feb-15 71.396% $29,917,103.72
177 31-Mar-15 71.210% $29,839,164.05
178 30-Apr-15 71.023% $29,760,805.34
179 31-May-15 70.837% $29,682,865.66
180 30-Jun-iS 70.651% $29,604,925.98
181 31-Jul-i5 70.464% $29,526,567.27
182 31-Aug-15 70.278% $29,448,627.59
183 30-Sep-15 70.092% $29,370,687.91
184 31-Oct-15 69.905% $29,292,329.20
185 30-Nov-15 69.719% $29,214,389.53
186 31-Dec-15 69.533% $29,136,985
187 31-Jan-16 69.347% $29,058,510.17
188 29-Feb-16 69.160% $28,980,151.46
189 31-Mar-16 68.974% $28,902,211.78
5
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
190 30-Apr-16 68.788% $28,824,272.10
191 31-May-16 68.601% $28,745,913,39
192 30-Jun-16 68.415% $28,667,973.71
193 31-Jul-16 68.229% $28,590,034.04
194 31-Aug-16 68.042% $28,511,675.33
195 30-Sep-16 67.856% $28,433,735.65
196 31-Oct-16 67.670% $28,355,795.97
197 30-Nov-16 67.483% $28,277,437.26
198 31-Dec-16 67.297% $28,199,497.58
199 31-Jan-17 67.111% $28,121,557.90
200 28-Feb-17 66.924% $28,043,199.19
201 31-Mar-17 66.738% $27,965,259.52
202 30-Apr-17 66.552% $27,887,319.84
203 31-May-17 66.366% $27,809,380.16
204 30-Jun-17 66.179% $27,731,021.45
205 31-Jul-17 65.993% $27,653,081.77
206 31-Aug-17 65.807% $27,575,142.09
207 30-Sep-17 65.620% $27,496,783.38
208 31-Oct-17 65.434% $27,418,843.71
209 30-Nov-17 65.248% $27,340,904.03
210 31-Dec-17 65.061% $27,262,545.32
211 31-Jan-17 64.875% $27,184,605.64
212 28-Feb-18 64.689% $27,106,665.96
213 31-Mar-18 64.502% $27,028,307.25
214 30-Apr-18 64.316% $26,950,367.57
215 31-May-18 64.130% $26,872,427.89
216 30-Jun-18 63.943% $26,794,069.18
217 31-Jul-18 63.757% $26,716,129.51
218 31-Aug-18 63.571% $26,638,189.83
219 30-Sep-18 63.385% $26,560,250.15
220 31-Oct-18 63.198% $26,481,891.44
221 30-Nov-18 63.012% $26,403,951.76
222 31-Dec-18 62.826% $26,326,012.08
223 31-Jan-19 62.639% $26,247,653.37
224 28-Feb-19 62.453% $26,169,713.70
225 31-Mar-19 62.267% $26,091,774.02
226 30-Apr-19 62.080% $26,013,415.31
227 31-Mar-19 61.894% $25,935,475.63
6
Schedule 12.01 - Termination Values
Note: Termination Value equals Termination Value % times the Purchase Price of
the Real Estate and the Equipment, which totaled $41,903,053.
Indianola Lease Indianola Lease
Month End Termination Value Termination Value
Period Date (%) (Dollar Value)
228 30-Jun-19 61.708% $25,857,535.95
229 31-Jul-19 61.521% $25,779,177.24
230 31-Aug-19 61.335% $25,701,237.56
231 30-Sep-19 61.149% $25,623,297.88
232 31-Oct-19 60.962% $25,544,939.17
233 30-Nov-19 60.776% $25,466,999.50
234 31-Dec-19 60.590% $25,389,059.82
235 31-Jan-20 60.404% $25,311,120.14
236 29-Feb-20 60.217% $25,232,761.43
237 31-Mar-20 60.031% $25,154,821.75
238 30-Apr-20 59.845% $25,076,882.07
239 31-May-20 59.658% $24,998,521.36
240 30-Jun-20 59.472% $24,920,583.69
241 31-Jul-20 59.286% $24,842,644.01
242 31-Aug-20 59.099% $24,764,285.30
243 30-Sep-20 58.913% $24,686,345.62
244 31-Oct-20 58.727% $24,608,405.94
245 30-Nov-20 58.340% $24,530,047.23
246 31-Dec-20 58.354% $24,452,107.55
247 31-Jan-21 58.168% $24,374,167.87
248 28-Feb-21 57.981% $24,295,809.16
249 31-Mar-21 57.795% $24,217,869.49
250 30-Apr-2i 57.609% $24,139,929.81
251 31-May-21 57.423% $24,061,990.13
252 30-Jun-21 57.236% $23,983,631.42
253 31-Jul-21 57.050% $23,905,691.74
254 31-Aug -21 56.864% $23,827,752.06
255 30-Sep-21 56.677% $23,749,393.35
256 31-Oct-21 56.491% $23,671,453.68
257 30-Nov-21 56.305% $23,593,514.00
258 31-Dec-21 56.118% $23,515,155.29
259 31-Jan-22 55.932% 323,437,215.61
260 28-Feb-22 55.746% $23,359,275.93
261 31-Mar-22 55.559% $23,280,917.22
262 30-Apr-22 55.373% $23,202,977.54
263 31-May-22 55.187% $23,125,037.86
264 30-Jun-22 55.000% $23,046,679.15
7
Schedule 20.0 1(e)
Environmental Matters
Indianola, MS Property:
(i) Aboveground Storage Tanks: Pursuant to ss. 8.05(d) herein, Lessee shall
either (a)(x) complete, to the reasonable satisfaction of the Lessor,
installation of secondary containment structures over the waste oil and
diesel fuel aboveground storage tanks at the truck repair shop at the
Premises and (y) install appropriate covering over all outdoor aboveground
storage tanks and associated secondary containment areas at the truck
repair shop; or (b) move such tanks to inside the truck repair shop.
(ii) Oil Stains: Pursuant toss.8.05(d) herein. Lessee shall clean to the
reasonable satisfaction of the Lessor any and all oil stains on the truck
repair shop concrete floor;
Schedule 20.01(m) Patent or Trademark Claims
1. ▇▇▇▇ ▇▇▇▇▇▇▇, Inc. - Notice of infringement dated April 26,2000 of U.S.
patent-
2. Letnelson Medical, Education & Research Foundation, L.P. - Notice of
infringement dated February 16, 1999 of various U.S. patents.
3. Roman, Inc. - Notice of copyright infringement dated May 14, 1999.
4. Quality Artworks - Notice of copyright infringement dated October 18, 1999.
The vendor has assumed all responsibility for this claim of infringement.
5. Hallmark Cards, Inc. - Notice of copyright infringement dated November 5,
1999. The vendor has assumed all responsibility for this claim of
infringement.
Schedule 20.01 (r)
Lease Agreement
Material Adverse Litigation
None.
EXHIBIT A
TO
LEASE AGREEMENT
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (as this agreement may be amended,
supplemented or otherwise modified from time to time with the terms hereof, this
"Agreement") dated as of [ ], 2000, between DOLLAR GENERAL CORPORATION, a
corporation organized under the laws of Tennessee ("Transferor"), and [ ], a [ ]
organized under the laws of [ ] ("Transferee").
WITNESSETH:
WHEREAS, the parties hereto desire to effect (a) the transfer by Transferor
to Transferee of the right, title and interest of the Transferor in, under and
with respect to that certain Lease Agreement dated as of June 1, 2000 (the
"Lease") between Transferor, as Lessee, and FU/▇▇ ▇▇▇▇▇▇, LLC, a Delaware
limited liability company, as Lessor, and the proceeds therefrom and (b) the
assumption by Transferee of the obligations of Transferor accruing thereunder;
NOW, THEREFORE, it is hereby agreed as follows:
1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given such terms in the Lease and Appendix A
thereto, and the rules of usage set forth therein shall apply hereto.
2. Assignment. Transferor does hereby sell, convey, assign, transfer and
set over unto Transferee, as of the date hereof, its right, title and interest
in the Lease and any proceeds therefrom, together with all other documents and
instruments evidencing such right, title and interest.
3. Assumption. Transferee hereby undertakes, for the benefit of Transferor
and its successors and assigns, all of the duties and obligations of Transferor
whenever accrued (other than duties and obligations of Transferor required to be
performed by it on or prior to the date hereof under the Lease) pursuant to the
Lease, and hereby confirms that it shall be deemed a party to the Lease.
4. Obligations of Transferor. Transferor shall not be released from its
primary liability as Lessee under the Lease and shall continue to be obligated
for all obligations of "Lessee" under the Lease, which obligations shall
continue in flaIl force and effect as obligations of a principal and not of a
guarantor or surety, as though no assignment had been made and notwithstanding
the rejection of the Lease by the Transferee or its successor or assign pursuant
to Section 365 of Title 11 of the United States Code, any provision of the
Bankruptcy Code, or any similar law relating to bankruptcy, insolvency,
reorganization or the rights of creditors.
5. Payments. Transferor hereby covenants and agrees to pay over to
Transferee, if and when received following the date hereof, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of Transferor that, under Section 2 hereof, belong to Transferee, and
Transferee hereby covenants and agrees to pay over to Transferor, if and when
received following the date hereof, any amounts (including any sums payable as
interest in respect thereof) paid to or for the benefit of Transferee that,
under Section 2 hereof, belong to Transferor.
6. Representations and Warranties of Transferee. Transferee represents and
warrants to each party to the Lease that:
(a) it has all requisite power and authority and legal right to enter
and carry out the transactions contemplated hereby and to carry out and
perform the obligations of the Transferor pursuant to the Lease as assumed
by the Transferee pursuant hereto;
(b) except for modifications required due to the identity of the
Transferee, which modifications are set forth on Schedule 1 hereto, on and
as of the date hereof, the representations and warranties of the Transferor
set forth in Section 20.01 of the Lease if made by the Transferee are true
and correct as to the Transferee;
(c) it is not a tax-exempt entity (within the meaning of Section
168(h) of the Code); and
(d) it is not a debtor or debtor-in-possession in a voluntary or
involuntary bankruptcy proceeding as of the date of this Agreement.
(e) it is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation. Transferee has
the corporate power and authority to conduct its business as now conducted,
to own or hold under lease its property, and Transferee further has the
authority to receive the interests of the Transferor under this Agreement.
Transferee is duly qualified to do business and is in good standing as a
foreign corporation in the jurisdiction in which the Property is located,
and it is in good standing as a foreign corporation in each jurisdiction
where the failure to so qualify would have a material adverse effect on its
ability to perform its obligations under this Agreement.
(f) it has been duly authorized by all necessary corporate action to
enter into this Agreement and this Agreement has been duly executed and
delivered by Transferee and the execution, delivery and performance thereof
by Transferee will not, (i) require any approval of the stockholders of
Transferee or any approval or consent of any trustee or holder of any
indebtedness or obligation of Transferee, other than such consents and
approvals as have been obtained, (ii) contravene any Applicable Law binding
on such Transferee or (iii) contravene or result in any breach of or
constitute any default under Transferee's charter or by-law's or other
organizational documents, or any indenture, judgment, order, mortgage. loan
agreement, contract, partnership or joint venture agreement, lease or other
agreement or instrument to which Transferee is a party or by
2
which Transferee is bound, or result in the creation of any Lien (other
than pursuant to the Lease) upon any of the property of Transferee.
(g) all Governmental Action and other consents, approvals, waivers,
registrations, authorizations and other action required or necessary
pursuant to any legal requirement or contract, indenture, instrument or
agreement to which Transferee is a party or its property is bound in
connection with the execution, delivery and performance by Transferee of
this Agreement, has been obtained, given or made.
(h) this Agreement constitutes the legal, valid and binding obligation
of Transferee, enforceable against Transferee in accordance with the terms
thereof, except as enforceability may be limited by bankruptcy, moratorium,
fraudulent conveyance, insolvency, equitable principles or other similar
laws affecting the enforcement of creditors' rights in general.
(i) Transferee has not offered any interest in the Property or this
Agreement, or any securities of Transferee to, or solicited any offer to
acquire any of the same from, any Person, in violation of Section 5 of the
Securities Act, nor has it authorized any Person to take any such action,
and Transferee has taken no action that would subject any interest in the
Property, the Bond, or this Agreement to the registration requirements of
Section 5 of the Securities Act. Nothing herein is intended to imply or
shall be construed to suggest that the interests in this Agreement
constitute securities.
7. Default. Each of Transferor and Transferee represents and warrants for
the benefit of the Participants that no Lease Default or Lease Event of Default
exists and that the transfer contemplated hereby complies with the provisions of
Article XI of the Lease.
8. Reliance. The representations, warranties, covenants and agreements of
the Transferee are made for the benefit of, and may be relied upon by the
parties to the Lease.
9. Successors and Assigns. This Agreement shall be binding upon the
Transferor and its successors and assigns and shall be binding upon and inure to
the benefit of the Transferee and its successors and assigns.
10. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State in which the Property is situated.
EACH PARTY HERETO SUBMITS TO NON-EXCLUSIVE PERSONAL JURISDICTION IN THE
STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED
IN THE STATE OF NEW YORK (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR
THE ENFORCEMENT OF SUCH PERSON'S OBLIGATIONS HEREUNDER AND WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR
LITIGATION TO ENFORCE OBLIGATIONS OWING TO ANY PERSON HEREUNDER. EACH PARTY
HERETO HEREBY WAIVES AND AGREES NOT
3
TO ASSERT AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT (A) THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR
THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE
IN THOSE IN THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (B) THAT
THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR (C) THAT
THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS IMPROPER. EACH PARTY HERETO
HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATED TO THE ENFORCEMENT OF THIS AGREEMENT.
THE PARAGRAPH SET FORTH ABOVE SHALL APPLY TO ANY SIGNATORY HERETO AND THE
SUCCESSORS AND ASSIGNS OF ANY PARTY OR SIGNATORY HERETO.
11. Reliance. Each Participant shall be entitled to rely on this Agreement
and shall be a third party beneficiary hereof.
[Remainder of Page Intentionally Left Blank]
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
DOLLAR GENERAL CORPORATION,
as Transferor
By:______________________________
Name:
Title:
[Transferee]
By:______________________________
Name:
Title:
5
Exhibit B
Lease Agreement
Mississippi Real Property
Land in Sunflower County Mississippi, some of which is located within the
corporate limits of the City of Indianola, Mississippi, being more particularly
described according to the survey of G. ▇▇▇▇▇ ▇▇▇▇▇▇▇, dated February 10, 2000,
as follows:
240.00 acres, more or less, located in the Southwest Quarter (SW 1/4) of
Section 25, Northwest Quarter (NW 1/4) of Section 36, Southeast Quarter (SE 1/4)
of Section 26 and Northeast Quarter (NE 1/4) of Section 35, all in Township 19
North, Range 5 West, Sunflower County, Mississippi and being further described
as follows:
Commence at the Southwest corner of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇; thence North 89(degree) 42' 40" East
2412.65 feet to a railroad iron; thence North 01(degree) 46' 00" East 2321.41
feet to a point; thence South 56(degree) 25' 00" East 1821.32 feet to a point;
thence North 88(degree) 50' 41" East 245.66 feet to a 1/2" rebar on the South
right-of-way line of Beaver Dam Road and said point being the POINT OF BEGINNING
of the parcel herein described; thence South 00(degree) 04' 59" West 631.62 feet
to a 1/2" rebar on the North right-of-way line of U.S. Highway 82; thence along
the North right-of-way line of U.S. Highway 82 the next two calls - North
72(degree) 32' 38" East 2193.34 feet to a 1/2" rebar; thence along a curve to
the right having a radius of 8628.22 feet, a chord bearing of North 75(degree)
10'42" East and a chord distance of 793.18 feet, for an arc distance of 793.46
feet to a 1" iron pipe; thence North 5(degree) 11' 43" West 270.00 feet to a
1/2" rebar; thence North 75(degree) 54' 38" East 170.25 feet to a 1/2" rebar;
thence North 03(degree) 16' 00" West 648.18 feet to a 1/2" rebar; thence North
04(degree) 43' 32" West 895.60 feet to a 1/2" rebar; thence North 04(degree) 36'
12" West 750.19 feet to a 1/2" rebar on the South right-of-way line of Beaver
Dam Road; thence North 89(degree) 43' 03" West 2255.17 feet along the South
right-of-way line of Beaver Dam Road to a 1/2" rebar; thence along a curve to
the left having a radius of 5689.58 feet, a chord bearing of South 89(degree)
30' 15" West and chord distance of 154.56 feet, for an arc distance of 154.57
feet to a 1/2" rebar; thence South 88(degree) 43' 34" West 18.53 feet along the
South right-of-way line of Beaver Dam Road to a 1/2" rebar; thence South
88(degree) 50' 41" West 962.13 feet along said South right-of-way line of Beaver
Dam Road to a 1/2" rebar and the POINT OF BEGINNING.
Being the part of the property conveyed to Atlantic Financial Group, Ltd.,
a Texas limited partnership, by deed from Sunflower County Economic Development.
District as recorded in Book S-33 at page 475 in the office of the Chancery
Clerk of Sunflower County, Mississippi.
EXHIBIT C
FORM OF
ESTOPPEL CERTIFICATE
The undersigned, DOLLAR GENERAL CORPORATION ("Lessee"), a Tennessee
corporation, is the Lessee under that certain Lease Agreement (the "Lease")
dated June 1, 2000 between the Lessee and FU/DG INDIANOLA, LLC, a Delaware
limited liability company, as the Lessor (the "Lessor") of certain real property
located in Sunflower County, Mississippi as described on attached Schedule 1
(the "Description of Property"). With the understanding that the 5arties listed
on Schedule 2 hereto will be and are entitled to rely upon the covenant,
representations and statements made herein, Lessee hereby covenants, represents
and warrants as follows (terms used herein which are not otherwise defined
herein shall have the meaning ascribed to them in the Lease and Appendix A
thereto):
I. The Property, which is the subject of the Lease, is described in
Schedule 1 hereto.
2. The Lessee is the owner and holder of all rights, title and interest in
the leasehold estate created by the Lease and has no actual knowledge of any
Liens thereon other than Pennitted Liens.
3. The Lessor does not have any unsatisfied obligations to the Lessee
arising under the Lease and, to Lessee's knowledge, no breach on the part of the
Lessor exists thereunder. No defense or right of termination, offset, abatement
or counterclaim exists with respect to any Rents or other sums payable or to
become payable by the Lessee under the Lease.
4. All material permits and a certificate of occupancy, if any, required
for the operation of the Property by the Lessee have been obtained, and the
Property may be used for the purposes contemplated by the Lease.
5. Attached hereto is a true and correct copy of the Lease and all
amendments, if any, thereto: [If no amendments, state "No Amendments".] The
Lease is in full force and effect in accordance with such terms and has not been
modified, supplemented, canceled or amended in any respect except as stated
above.
6. The term of the Lease commenced on ___________,____________________,and
continues through _________ unless extended as provided in the Lease. Lessee has
commenced paying Rent without offset or abatement. The Lessee is obligated to
pay Base Rent in such installments and amounts as set forth in Schedule 3.01 to
the Lease, which obligation is continuing and is not past due or delinquent in
any respect. No installment of Base Rent has been or will be prepaid more than
thirty (30) days before it comes due.
7. The Property comprises a warehouse and distribution facility with office
space and a truck maintenance facility ancillary thereto or other use consistent
with Section 8.01 of the Lease.
8. No event exists which constitutes a Lease Default to Lease Event of
Default by the Leesee.
9. The execution and delivery of this Certificate shall in no way expand
the rights or obligations of the Lessor and Lessee arising under the Lease.
10. There are no occupants of the Property other than Lessee and the
permitted sublessees or users pursuant to the Lease set forth on Schedule 3
hereto. Except as otherwise described on Schedule 3, Lessee has not assigned its
rights under the Lease.
11. Such other matters as may be reasonably requested by Lessor, the Agent,
any Holder or the Head Lessor.
12. This Certificate shall inure to the benefit of and be binding upon the
parties set forth in Schedule 2, and their respective successors and assigns,
and to no other person or entities.
IN WITNESS WHEREOF, this Certificate has been duly executed and delivered
by the undersigned as of June 1, 2000.
LESSEE:
DOLLAR GENERAL CORPORATION
a Tennessee corporation
By ___________________________
Name__________________________
Title_________________________
2
Schedule 1
Description of Property
3
Schedule 2
Parties Entitled to Rely
4
Schedule 3
Users Pursuant to the Lease
5
EXHIBIT D
REAFFIRMATION AGREEMENT
THIS REAFFIRMATION AGREEMENT dated as of [date] (this "Reaffirmation") is
given by Dollar General Corporation, a Tennessee corporation ("Lessee"),
pursuant to the requirements of Section 25.01 of that certain Lease Agreement
dated as of June 1, 2000 (the "Lease") between FU/DG Indianola, LLC, a Delaware
limited liability company, as Lessor (the "Lessor") and Lessee, and is made for
the benefit of the Participants with respect to the transfer of Lessor's
interests to __________________________, a ____________________, (the
"Transferee") pursuant to Article XXV of the Lease. Capitalized terms used
herein and not otherwise defined herein shall have the meaning provided in the
Lease and Appendix A thereto.
NOW, THEREFORE, Lessee hereby acknowledges and agrees as follows:
SECTION 1. Reaffirmation. Lessee acknowledges the transfer of Lessor's
interests to Transferee pursuant to Article XXV of the Lease (the "Transfer")
and affirms that, taking into account the Transfer, (i) Lessee remains obligated
under the Lease for the payment and performance of each Lessee Obligation and
that each Lessee Obligation remains in full force and effect in all respects and
is not affected by the Transfer, and (ii) the Lease is in full force and effect
in all respects and, to Lessee's knowledge, no Lease Default or Lease Event of
Default exists thereunder.
SECTION 2. Governing Law. etc. The provisions of Section 27.07 of the Lease
are incorporated herein by reference and are applicable to this Reaffirmation.
SECTION 3. Reliance. Lessee acknowledges and agrees that each Participant
shall be entitled to rely on this Reaffirmation.
Transferee hereby acknowledges and agrees as follows:
SECTION 4. Lessee's Estate. Transferee acknowledges the leasehold estate
and all other rights of Lessee under the Lease. Transferee shall be obligated
and agrees to perform the terms and conditions of the Lease and to assume the
Lessor's obligations of the transfers arising under the Lease from and after the
date hereof to the same extent and with the same effect as if Transferee were a
party thereto.
SECTION 5. Reliance. Transferee acknowledges and agrees that Lessee shall
be entitled to rely on this Reaffirmation.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Lessee and Transferee caused this Reaffirmation to
be duly executed by its respective officers thereunto duly authorized as of the
day and year first above written.
DOLLAR GENERAL CORPORATION,
as Lessee
By:____________________________
Name:
Title:
-------------------------------
as Transferee
By:____________________________
Name:
Title:
June 1,2000
To: Dollar General Corporation
Re: Rent Account Written Direction for Dollar General Sale-Leaseback
Ladies and Gentlemen:
Pursuant to Section 3.03 of that certain Lease Agreement dated June 1, 2000
(the "Lease"; capitalized terms used but not defined herein shall have the
meanings given such terms in the Lease and/or Appendix A thereto) between FU/DG
Indianola, LLC, a Delaware limited liability company, as Lessor (the "Lessor"),
and Dollar General Corporation, a Tennessee corporation, as Lessee (the
"Lessee"), instructions are hereby given with respect to the payment of Rent to
the Rent Account.
Lessor, Head Lessor, Holders and the Agent instruct Lessee from this time
forward unless otherwise directed by Lessor, Head Lessor, Holders and the Agent
to make all payments of Rent in immediately available funds as of the relevant
payment date to the account of First Union National Bank solely in its capacity
as Servicer, Head Lessor, Holders and the Agent, Account No. 2020000451297, ABA
▇▇▇▇▇▇▇▇▇, Ref: Dollar General (Loan # ▇▇-▇▇▇▇▇▇▇), Attn: ▇▇▇▇ ▇▇▇▇▇▇▇. in the
manner set forth in Section 3.03 of the Lease.
[Rest of Page Intentionally Left Blank]
Page 2 of 3
Rent Account Written Direction
The foregoing written direction relating to the Rent Account is hereby accepted
by:
FIRST UNION NATIONAL BANK,
in its capacity as Servicer
By: /s/ ▇▇▇▇▇ Trayio
-----------------
Name ▇▇▇▇▇ Trayio
----------------
Title: Vice President
-------------
Acknowledged and agreed to by:
WILMINGTON TRUST COMPANY,
as Agent on behalf of theHolders
By:__________________________
Name_________________________
Title:_______________________
FIRST UNION COMMERCIAL CORPORATION, as Head Lessor
By:__________________________
Name_________________________
Title:_______________________
FU/DG INDIANOLA. LLC,
as Lessor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name ▇▇▇▇▇. ▇. ▇▇▇▇▇
------------------------
Title:______________________
Page 2 of 3
Rent Account Written Direction
The foregoing written direction relating to the Rent Account is hereby accepted
by:
FIRST UNION NATIONAL BANK.
in its capacity as Servicer
By:__________________________
Name_________________________
Title:_______________________
Acknowledged and agreed to by:
WILMINGTON TRUST COMPANY.
as Agent on behalf of the Holders
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name: /s/ ▇▇▇▇▇▇. ▇. ▇▇▇▇▇▇▇▇▇
-------------------------
Title: Vice President
------------------------
FIRST UNION COMMERCIAL CORPORATION, as Head Lessor
By:__________________________
Name_________________________
Title:_______________________
FU/DG INDIANOLA, as Lessor
By:__________________________
Name_________________________
Title:_______________________
Page 2 of 3
Rent Account Written Direction
The foregoing written direction relating to the Rent Account is hereby accepted
by:
FIRST UNION NATIONAL BANK.
in its capacity as Servicer
By:__________________________
Name_________________________
Title:_______________________
Acknowledged and agreed to by:
WILMINGTON TRUST COMPANY.
as Agent on behalf of the Holders
By:__________________________
Name_________________________
Title:_______________________
FIRST UNION COMMERCIAL CORPORATION, as Head Lessor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Vice President
------------------------
FU/DG INDIANOLA, as Lessor
By:__________________________
Name_________________________
Title:_______________________
Page 2 of 3
Rent Account Written Direction
The foregoing written direction relating to the Rent Account is hereby accepted
by:
FIRST UNION NATIONAL BANK.
in its capacity as Servicer
By:__________________________
Name_________________________
Title:_______________________
Acknowledged and agreed to by:
WILMINGTON TRUST COMPANY.
as Agent on behalf of the Holders
By:__________________________
Name ________________________
Title: ______________________
FIRST UNION COMMERCIAL CORPORATION, as Head Lessor
By:__________________________
Name_________________________
Title:_______________________
FU/DG INDIANOLA, as Lessor
By:____________________________
Name: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Title: ________________________
Page 3 of 3
Rent Account Written Direction
PRINCIPAL LIFE INSURANCE
COMPANY, as a Holder
By:__________________________
Name: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Title:_______________________
By:__________________________
Name:________________________
Title:_______________________
MONY CAPITAL MANAGEMENT, as a Holder
By:__________________________
Name:________________________
Title:_______________________
PAN AMERICAN LIFE INSURANCE
COMPANY, as a Holder
By:__________________________
Name:________________________
Title:_______________________
FIRST UNION SECURITIES, INC., as a Holder
By:__________________________
Name:________________________
Title:_______________________
Signatures for MONY and PAL forthcoming from ▇▇▇▇▇ ▇▇▇▇▇ & Plan
Page 3 of 3
Rent Account Written Direction
PRINCIPAL LIFE INSURANCE
COMPANY, as a Holder
By:__________________________
Name: _______________________
Title:_______________________
By:__________________________
Name:________________________
Title:_______________________
MONY CAPITAL MANAGEMENT, as a Holder
By:__________________________
Name:________________________
Title:_______________________
PAN AMERICAN LIFE INSURANCE
COMPANY, as a Holder
By:__________________________
Name:________________________
Title:_______________________
FIRST UNION SECURITIES, INC., as a Holder
By:__________________________
Name: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Title:Vice President
-----------------------
Page 3 of 3
Rent Account Written Direction
PRINCIPAL LIFE INSURANCE
COMPANY, as a Holder
By:__________________________
Name: _______________________
Title:_______________________
By:__________________________
Name:________________________
Title:_______________________
MONY CAPITAL MANAGEMENT, as a Holder
By:__________________________
Name:________________________
Title:_______________________
PAN AMERICAN LIFE INSURANCE
COMPANY, as a Holder
By:__________________________
Name: /S/ ▇▇▇▇ Iuges, Jr., C.F.A
-----------------------
Title: Senoir Vice President-Investments
---------------------------------
FIRST UNION SECURITIES, INC., as a Holder
By:__________________________
Name:________________________
Title:_______________________
Page 3 of 3
Rent Account Written Direction
PRINCIPAL LIFE INSURANCE
COMPANY, as a Holder
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title:Counsel
------------------------------------
By:_______________________________________
Name:_____________________________________
Title:____________________________________
MONY LIFE INSURANCE COMPANY, as a Holder
By:_______________________________________
Name: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Title: Investment Vice President
-----------------------------------
PAN AMERICAN LIFE INSURANCE
COMPANY, as a Holder
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇., C.P.A.
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇., C.P.A.
------------------------------------
Title: Senior Vice President - Investments
-----------------------------------
FIRST UNION SECURITIES, INC., as a Holder
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FORM OF
REVOLVING NOTE
$______________ June ____, 2000
FOR VALUE RECEIVED, CNL APF PARTNERS, LP, a Delaware limited partnership
(the "Borrower"), hereby promises to pay to the order of
_________________________, its successors and permitted assigns (the "Lender"),
at the office of Bank of America, N.A., as Administrative Agent (the
"Administrative Agent"), as set forth in the Amended and Restated Credit and
Reimbursement Agreement dated June ___ 2000 among the Borrower, the Parents (as
defined therein), the Guarantors (as defined therein), the Issuing Lender (as
defined therein), the Lender Parties (as defined therein), the Administrative
Agent and Banc of America Securities, LLC, as Sole Lead Arranger and as Book
Manager (as the same may be amended, modified, extended or restated from time to
time, the "Credit Agreement"; all capitalized terms not otherwise defined herein
shall have the meanings set forth in the Credit Agreement and the terms and
conditions of the Credit Agreement are expressly incorporated herein and made a
part hereof), the principal sum of _____________Dollars ($________________)(or
such lesser amount as shall equal the aggregate unpaid principal amount of the
Revolving Loans made by the Lender to the Borrowers under the Credit Agreement),
in lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such
Revolving Loan, at such office, in like money and funds, for the period
commencing on the date of such Revolving Loan until such Revolving Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit Agreement
and evidences Revolving Loans made by the Lender thereunder and is entitled to
the benefits thereof.
Upon the occurrence and during the continuance of an Event of Default the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement and this Note,
all other Indebtedness of the Borrower to the Lender Parties owing under the
Credit Documents shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower. In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrowers agree to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
The date, amount, type, interest rate and Interest Period (if
applicable) of each Revolving Loan made by the Lender to the Borrowers, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books, and each such recordation or endorsement shall be
conclusive and binding absent manifest error; provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrowers to make a payment when due of any amount owing
hereunder or under this Revolving Note in respect of the Revolving Loans to be
evidenced by this Revolving Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed as
of the date first above written.
CNL APF PARTNERS, LP, a Delaware limited partnership
By: CNL APE GP, CORP.,
a Delaware corporation, its general partner
By ______________________________
Name ____________________________
Title ___________________________
FORM OF
BRDGE NOTE
$______________ June ____. 2000
FOR VALUE RECEIVED, CNL APF PARTNERS, LP, a Delaware limited partnership
(the"Borrower"), hereby promises to pay to the order of _________________, its
successors and permitted assigns (the "Bridge Lender"), at the office of Bank of
America, NA., as Administrative Agent (the "Administrative Agent"), as set forth
in the Amended and Restated Credit and Reimbursement Agreement dated June ___
2000 among the Borrower, the Parents (as defined therein), the Guarantors (as
defined therein), the Issuing Lender (as defined therein), the Lender Parties
(as defined therein), the Administrative Agent and Banc of America Securities,
LLC, as Sole Lead Arranger and Book Manager (as the same may be amended,
modified, extended or restated from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement and the terms and conditions of the Credit Agreement are
expressly incorporated herein and made a part hereof), the principal sum of
________ Dollars ($_________) (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Revolving Loans made by the Bridge
Lender to the Borrowers under the Credit Agreement), in lawful money of the
United States of America and in immediately available funds, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Bndge Loan, at such office, in like
money and funds, for the period commencing on the date of such Bndge Loan until
such Bridge Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
This Bridge Note is one of the Bridge Notes referred to in the Credit
Agreement and evidences Bridge Loans made by the Bridge Lender thereunder and is
entitled to the benefits thereof.
Upon the occurrence and during the continuance of an Event of Default the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement and this Note,
all other Indebtedness of the Borrower to the Lender Panics owing under the
Credit Documents shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Borrower. In the event this Bridge Note is not paid when due at any stated or
accelerated maturity, the Borrowers agree to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
The date, amount, type, interest rate and Interest Period (if applicable)
of each Bridge Loan made by the Bridge Lender to the Borrowers, and each payment
made on account of the principal thereof, shall be recorded by the Bridge Lender
on its backs, and each such recordation or endorsement shall be conclusive and
binding absent manifest error; provided that the failure of the Bridge Lender to
make any such recordation or endorsement shall not affect the obligations of the
Borrowers to make a payment when due of any amount owing hereunder or under this
Bridge Note in respect of the Bridge Loans to be evidenced by this Bridge Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
IN WITNESS WHEREOF, the Borrowers have caused this Bndge Note to be
executed as of the date first above written.
CNL APE PARTNERS, LP,
a Delaware limited partnership
By: CNL APE GP, CORP.,
a Delaware corporation, its general partner
By ___________________________
Name _________________________
Title ________________________
