EXHIBIT (D)(4)
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LEASE AGREEMENT
Dated as of January 21, 2000
between
XXXXXX AFFORDABLE HOUSING OF FLORIDA, INC.,
as the Lessor
and
ECHELON COMMERCIAL LLC,
as the Lessee
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease"), dated as of January 21, 2000, between
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XXXXXX AFFORDABLE HOUSING OF FLORIDA, INC., a Florida corporation having an
address at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx XX 00000 (the "Lessor"), and ECHELON
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COMMERCIAL LLC, a Delaware limited liability company having an address at 000
Xxxxxxxx Xxxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx XX 00000 (the "Lessee"),
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W I T N E S S E T H:
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee desires
to lease from the Lessor, the Properties (as hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
I.1 Definitions. Unless a clear contrary intention appears, terms defined
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herein have the respective indicated meanings when used herein.
"Accrued Rent" means (i) the amount of Basic Rent which would have been
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payable pursuant to the definition of "Basic Rent" without reduction, however,
for Average Cash Collateral Balance provided for in clause (y) of such
definition, less (ii) the Basic Rent actually payable pursuant to the definition
of Basic Rent.
"Affiliate" means, when used with respect to any Person, any other Person
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directly or indirectly Controlling or Controlled by or under direct or indirect
common control with such Person.
"After Tax Basis" means, with respect to any payment to be received, the
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amount of such payment increased so that, after deduction of the amount of all
taxes required to be paid by the recipient (including any Taxes otherwise
excluded by this Lease and assuming for this purpose that such recipient was
subject to taxation at the maximum marginal federal, state and local tax rates
applicable to such recipient for the year in which such income is taxable) with
respect to the receipt by the recipient of such amounts, such increased payment
(as so reduced) is equal to the payment otherwise required to be made.
"Applicable Law" means all existing and future applicable laws, rules,
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regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations
by, any Governmental Authority, 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
1
to health, safety or the environment (including, without limitation, wetlands)
and those pertaining to the construction, use or occupancy of the Property
(including all building, zoning and fire codes and the Americans with
Disabilities Act of 1990, 42 U.S.C. (S)(S) 1201 et seq. and any other similar
Federal, state or local laws or ordinances and the regulations promulgated
thereunder) and any restrictive covenant or deed restriction or easement of
record affecting any Property.
"Appraisal" means an appraisal of any Property, which appraises the fair
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market value of the Property as of the Commencement Date and complies with all
FIRREA requirements, in form and substance satisfactory to the Lessor, prepared
by a reputable appraiser selected by the Lessor.
"Architect" means, with respect to any Property, the architect acting in
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such capacity.
"Average Cash Collateral Account Balance" means the average amount on
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deposit in the Cash Collateral Account for any month, determined as one-half of
the sum of (i) the amount on deposit in the Cash Collateral Account as of the
first calendar day of such month, and (ii) the amount on deposit in the Cash
Collateral Account as of the last calendar day of such month.
"Average Lease Balance" means the average Lease Balance for any month,
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determined as one-half of the sum of (i) the Lease Balance as of the first
calendar day of such month, and (ii) the Lease Balance as of the last calendar
day of such month.
"Basic Rent" means (A) from the Commencement date and until January 31,
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2003, the monthly amount determined as (i) the product of (x) the Lease Rate,
multiplied by (y) the Average Lease Balance for such month reduced by the
Average Cash Collateral Balance for such month, plus (ii) the interest and other
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earnings with respect to amounts on deposit in the Cash Collateral Account, and
(B) from and after February 1, 2003 and until the Expiration Date, the amount
determined pursuant to clause (i) of this definition plus a monthly amount equal
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to twenty-five percent of the Supplemental Rent for such month, as adjusted and
pro-rated for the months which include the Commencement Date and the Expiration
Date.
"Borrower" means the obligor under a Note.
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"Borrowers" means all of the obligors under the Notes.
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"Business Day" means each day which is not a day on which banks in New
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York, New York are generally authorized or obligated, by law or executive order,
to close.
"Carillon Parcels" means those ten parcels of land identified as the
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Carillon Parcels on Schedule 1 attached hereto.
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"Cash Collateral Account" means the Cash Collateral Account maintained
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pursuant to the Cash Collateral Agreement.
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"Cash Collateral Agreement" means the Cash Collateral Agreement, dated as
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of the Commencement Date, between the Lessor and the Lessee, in the form
attached hereto as Exhibit A or as mutually agreed between the Lessor and the
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Lessee.
"Casualty" means any damage or destruction of all or any portion of any
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Property as a result of a fire or other casualty.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
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Liability Act of 1980, 42 U.S.C. (S)(S) 9601 et seq., as amended by the
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Superfund Amendments and Reauthorization Act of 1986.
"Certifying Party" is defined in Section 25.1 of this Lease.
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"Claims" means any and all obligations, liabilities, losses, actions,
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suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including, without limitation, reasonable legal fees and expenses) of
any nature whatsoever.
"Code" means the Internal Revenue Code of 1986, as amended from time to
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time, or any successor statute thereto.
"Collateral Documents" means, with respect to each Loan, each and every
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document or account or security evidencing, securing or otherwise relating to
such Loan, including, without limitation, any mortgage, security agreement, UCC
financing statements, regulatory agreement, assignment of rents, pledge
agreement, guaranty, indemnification agreement, assignment of management
agreement, assignment of stock or partnership units, title insurance policies,
tax and insurance escrows, letters of credit, certificates of deposit or
deposits or escrows of any kind, fire and casualty insurance policies (or
certificates evidencing such policies), flood hazard insurance policies, other
insurance and other documents, agreements or instruments under which legal
rights or obligations are created or exist, if any, provided to the Lessor to
evidence or secure the Loan and held by the Lessor.
"Commencement Date" means the date of the "Closing" as defined in the
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Subscription Agreement.
"Condemnation" means any condemnation, requisition, confiscation, seizure
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or other taking or sale of the use, access, occupancy, easement rights or title
to any Property or any part thereof, wholly or partially (temporarily or
permanently), by or on account of any actual or threatened eminent domain
proceeding or other taking of action by any Person having the power of eminent
domain, including an action by a Governmental Authority to change the grade of,
or widen the streets adjacent to, such Property or alter the pedestrian or
vehicular traffic flow to the Property so as to result in change in access to
the Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
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be deemed to have occurred on the earliest of the dates that use, occupancy or
title vests in the condemning authority.
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"Control" means (including the correlative meanings of the terms
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"controlled by" and "under common control with"), as used with respect to any
Person, 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. A Person shall be
deemed to be controlling another Person if the first Person, or wholly owned
subsidiary of that Person, owns 51% or more of the other Person.
"Debt" means, for any Person, (i) all indebtedness of such Person for
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borrowed money or for the deferred purchase price of property or services, (ii)
all obligations of such Person under any conditional sale or other title
retention agreement relating to property purchased by such Person, (iii) all
indebtedness for borrowed money or for the deferred purchase price of property
or services secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on any
property owned by such Person, whether or not such indebtedness has been
assumed, and (iv) all obligations of such Person as lessee under leases that
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases.
"Default" means any event or condition which, with the lapse of time or the
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giving of notice, or both, would constitute an Event of Default.
"Development Properties" means those of the Properties identified as
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Catalina, The Reserve, Memorial Creek, Woodland Park, Mission Ranch and
Northlake on Schedule 1.
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"Dollars" and "$" mean dollars in lawful currency of the United States of
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America.
"Early Buy-Out Option" is defined in Section 22.1 of this Lease.
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"Early Buy-Out Closing Date" is defined in Section 22.1 of this Lease.
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"Early Buy-Out Notice" is defined in Section 22.1 of this Lease.
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"Early Buy-Out Price" for any Property as of the date of this Lease is the
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amount set forth for such Property on Schedule 6. The "Early Buy-Out Price" for
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any Property or Loan subsequent to the Commencement Date is the sum of (a) the
then outstanding balance of the Senior Loan with respect to such Property or
Loan, plus (b) an amount equal to the Lessor's Cost for such Property or Loan,
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plus (c) the Lessor's Cost for such Property less (the amount in the Cash
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Collateral Account multiplied by a fraction, the numerator being the Lessor's
Cost for such Property or Loan and the denominator being the aggregate of the
Lessor's Costs for the remaining Properties and Loans) multiplied by .0033333
for each calendar month (pro rated for any partial month on the basis of a 30-
day month and 360 day year) elapsed since the Commencement Date, compounded
monthly, plus (d) all accrued and unpaid Basic Rent and Supplemental Rent with
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respect to such Property owing on the Early Buy-Out Closing Date or other date
of payment of the Early Buy-Out Price.
"Employee Benefit Plan" means an employee benefit plan (within the meaning
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of Section 3(3) of ERISA, including any multiemployer plan (within the meaning
of Section 3(37)(A) of
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ERISA)), or any "plan" as defined in Section 4975(e)(1) of the Code and as
interpreted by the Internal Revenue Service and the Department of Labor in
rules, regulations, releases or bulletins in effect on the Documentation Date.
"Environmental Audit" means a Phase One environmental site assessment (the
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scope and performance of which meets or exceeds ASTM Standard Practice E1527-93
Standard Practice for Environmental Site Assessments: Phase One Environmental
Site Assessment Process) of the Property, and, if called for by the Lessor, a
Phase Two environmental site assessment.
"Environmental Law" means, whenever enacted or promulgated, any applicable
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Federal, state, county or local law, statute, ordinance, rule, regulation,
license, permit, authorization, approval, covenant, criteria, administrative or
court order, judgment, decree, injunction, code or requirement or any agreement
with a Governmental Authority:
(x) relating to pollution (or the cleanup, removal, remediation or
encapsulation thereof, or any other response thereto), or the regulation or
protection of human health, safety or the environment, including air,
water, vapor, surface water, groundwater, drinking water, land (including
surface or subsurface), plant, aquatic and animal life, or
(y) concerning exposure to, or the use, containment, storage, recycling,
treatment, generation, discharge, emission, Release or threatened Release,
transportation, processing, handling, labeling, containment, production,
disposal or remediation of any Hazardous Substance, Hazardous Condition or
Hazardous Activity.
Applicable laws include, but are not limited to, CERCLA; the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. (S) 6901 et seq.; the Federal
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Water Pollution Control Act, 33 U.S.C. (S) 1251 et seq.; the Clean Air Act, 42
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U.S.C. (S)(S) 7401 et seq.; the National Environmental Policy Act, 42 U.S.C. (S)
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4321; the Refuse Act, 33 U.S.C. (S)(S) 401 et seq.; the Hazardous Materials
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Transportation Act of 1975, 49 U.S.C. (S)(S) 1801-1812; the Toxic Substances
Control Act, 15 U.S.C. (S)(S) 2601 et seq.; the Federal Insecticide, Fungicide,
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and Rodenticide Act, 7 U.S.C. (S)(S) 136 et seq.; the Safe Drinking Water Act,
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42 U.S.C. (S)(S) 300f et seq., and the Occupational Safety and Health Act of
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1970, each as amended and as now or hereafter in effect, and their state and
local counterparts or equivalents, including any regulations promulgated
thereunder.
"Environmental Violation" means any activity, occurrence or condition that
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violates or results in non-compliance with any Environmental Law with respect to
or affecting the Property.
"Equipment" means equipment, apparatus, furnishings, fittings and personal
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property of every kind and nature whatsoever purchased, leased or otherwise
acquired by the Lessee, and now or subsequently attached to, contained in or
used or usable in any way in connection with any operation or letting of the
Property, including but without limiting the generality of the foregoing, all
screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs,
storm doors and windows, shelving, furniture and furnishings, heating,
electrical, and mechanical equipment, lighting, switchboards, plumbing,
ventilation, air conditioning and air-cooling apparatus, refrigerating, and
incinerating equipment, escalators, elevators, loading and unloading equipment
and systems, stoves, ranges, laundry equipment, cleaning systems (including
window
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cleaning apparatus), telephones, communication systems (including satellite
dishes and antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems, motors,
engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and
fixtures of every kind and description.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time or any successor Federal statute.
"Event of Default" is defined in Section 19.1 of this Lease.
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"Event of Loss" is defined in Section 18.1 of this Lease.
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"Excess Proceeds" means, with respect to any Property or Loan, the Net
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Proceeds received by the Lessor less the Early Buy-Out Price.
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"Expiration Date" means, unless this Lease shall have been earlier
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terminated in accordance with the provisions of this Lease, the earlier of (i)
the date that the last Property is sold pursuant to the terms of Articles XXI or
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XXII or otherwise pursuant to the terms of this Lease, or (ii) January 31,
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2010.
"Fair Market Sales Value" means (i) the Fair Market Sales Value as mutually
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determined by the Lessor and the Lessee, or (ii) in the event that the Lessor
and the Lessee cannot mutually agree upon a Fair Market Sales Value, the Fair
Market Sales Value as determined as follows: the Lessor and the Lessee shall
each retain an MAI appraisal firm to appraise the Property or Properties (or
Loan or Loans) in question. If the two appraisals vary by less than five
percent, the market value shall be the average of the two. If the appraisals
vary by more than five percent, then the two appraisal firms shall choose
another appraisal firm, which firm shall render its opinion of value. If a third
firm is retained, the Fair Market Sales Value shall be the average of the two
appraisals closest in value. If the Lessee fails to retain an appraiser within
ten days of the Lessor's written request, the Fair Market Sales Value shall be
determined by the Lessor's appraiser and, in such case, the determination so
made shall be conclusive and binding on the Lessor and the Lessee. If the Lessor
fails to retain an appraiser within ten days of the Lessee's written request,
the Fair Market Sales Value shall be determined by the Lessee's appraiser and,
in such case, the determination so made shall be conclusive and binding on the
Lessor and the Lessee.
"Fixtures" means all fixtures relating to the Improvements, including all
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components thereof, located in or on the Improvements, together with all
replacements, modifications, alterations and additions thereto.
"Full Collateralization" means that the balance in the Cash Collateral
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Account is equal to or greater than the sum of (a) the Lease Balance, and (b)
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Recourse Debt.
"GAAP" means United States generally accepted accounting principles in
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effect from time to time.
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"Governmental Action" means all permits, authorizations, registrations,
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consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the full
use, occupancy, zoning and operation of any Property.
"Governmental Authority" means any nation or government, any state or other
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political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Gross Proceeds" is defined in Section 22.1(g) of this Lease.
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"Guarantor" means AFG Investment Trust A, AFG Investment Trust B, AFG
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Investment Trust C, and AFG Investment Trust D, each a Delaware business trust.
"Guarantee" means the Guarantee, dated as of the Commencement Date,
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between the Guarantor and the Lessor, in the form attached hereto as Exhibit B
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or as mutually agreed between the Lessor and the Lessee.
"Guarantee Event of Default" means any event of default under the
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Guarantee.
"Hazardous Activity" means any activity, process, procedure or undertaking
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that directly or indirectly (i) produces, generates or creates any Hazardous
Substance; (ii) causes or results in (or threatens to cause or result in) the
Release of any Hazardous Substance into the environment (including air, water
vapor, surface water, groundwater, drinking water, land (including surface or
subsurface), plant, aquatic and animal life; (iii) involves the containment or
storage of any Hazardous Substance; or (iv) would be regulated as hazardous
waste treatment, storage or disposal within the meaning of any Environmental
Law.
"Hazardous Condition" means any condition that violates or threatens to
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materially violate, or that results in or threatens to result in a requirement
to clean up or remediate any Property under, any Environmental Law.
"Hazardous Substance" means any of the following: (i) any petroleum or
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petroleum product, explosives, radioactive materials, asbestos,
ureaformaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any
substance, material, product, derivative, compound or mixture, mineral,
chemical, waste, gas, medical waste, or pollutant, that is toxic, harmful or
hazardous to the environment or human health or safety, as defined under any
Environmental Law; or (iii) any substance, material, product, derivative,
compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant
that would support the assertion of any claim under any Environmental Law,
whether or not defined as hazardous as such under any Environmental Law.
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"Xxxxxx Guarantee" means the Guarantee, dated as of the Commencement Date,
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between Xxxxxx Financial, Inc. and the Lessee, in the form attached hereto as
Exhibit C or as mutually agreed between the Lessor and the Lessee.
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"Impositions" means any and all liabilities, losses, expenses and costs of
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any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever ("Taxes") (including,
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without limitation, (i) real and personal property taxes, including personal
property taxes on the Properties covered by this Lease that are classified by
any Governmental Authorities as personal property, and real estate or ad valorem
taxes in the nature of property taxes; (ii) sales taxes, use taxes and other
similar taxes (including rent taxes and intangibles taxes); (iii) any excise
taxes; (iv) transfer taxes, conveyance taxes, mortgage taxes, intangible taxes,
stamp taxes and documentary recording taxes and fees; (v) assessments on the
Properties, including all assessments for public improvements or benefits,
whether or not such improvements are commenced or completed within the Term);
and (vi) any Tax, Lien and assessment or charge asserted, imposed or possessed
by the PBGC, and in each case all interest, additions to tax and penalties
thereon, which at any time may be levied, assessed or imposed by any
Governmental Authority upon or with respect to (a) any Indemnitee, any Property
or any part thereof or interest therein, or the Lessee or any sublessee or user
of the Property; (b) the financing, refinancing, demolition, construction,
substitution, subleasing, assignment, control, condition, occupancy, servicing,
maintenance, repair, ownership, possession, purchase, rental, lease, activity
conducted on, delivery, insuring, use, operation, improvement, transfer, return
or other disposition of any Property or any part thereof or interest therein;
(c) the rentals, receipts or earnings arising from the Properties or any part
thereof or interest therein; (d) the Loan Documents or any payment made or
accrued pursuant thereto; (e) the income or other proceeds received with respect
to the Property or any part thereof or interest therein upon the sale or
disposition thereof; (f) any contract relating to the construction, acquisition
or delivery of the Improvements or any part thereof or interest therein; or (g)
otherwise in connection with the transactions contemplated by the Transaction
Documents).
The term "Imposition" shall not mean or include the following:
(i) Taxes and impositions (other than Taxes that are, or are in the nature
of, sales, use, rental, transfer or property taxes) that are imposed by the
United States federal government and that are based upon or measured by the
gross or net income or gross or net receipts (including any minimum taxes) of a
Property; provided that this clause (i) shall not be interpreted to prevent a
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payment from being made on an After Tax Basis if such payment is otherwise
required to be so made;
(ii) any Tax or imposition for so long as, but only for so long as, it is
being contested in accordance with the provisions of Section 24.4(b) of this
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Lease, provided that the foregoing shall not limit the Lessee's obligation under
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Section 24.4(b) of this Lease to advance to such Indemnitee amounts with respect
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to Taxes that are being contested in accordance with Section 24.4(b) of this
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Lease or any expenses incurred by such Indemnitee in connection with such
contest;
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(iii) Taxes imposed on or with respect to or payable by any Indemnitee
based on, measured by or imposed with respect to any fees received by such
Indemnitee;
(iv) any Taxes imposed against or payable by an Indemnitee resulting from,
or that would not have been imposed but for, the gross negligence or willful
misconduct of such Indemnitee itself (as opposed to gross negligence or willful
misconduct imputed to such Indemnitee), but not Taxes imposed as a result of
ordinary negligence of such Indemnitee; and
(v) any Taxes that are or are in the nature of franchise, income, value
added, gross receipts, privilege and doing business taxes, license and
registration fees.
"Improvements" means all buildings, structures, Fixtures and other
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improvements of every kind existing at any time and from time to time on or
under the Land, together with any and all appurtenances to such buildings,
structures or improvements, including sidewalks, utility pipes, conduits and
lines, parking areas and roadways, and including all Modifications and other
additions to or changes in the Improvements at any time.
"Indemnitee" means the Lessor and their respective successors, permitted
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assigns, directors, shareholders, partners, officers, employees, agents and
Affiliates.
"Institutional Lender" means a savings bank, a savings and loan
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association, a commercial bank or trust company (whether acting individually or
in a fiduciary capacity), or an insurance company, in each case organized and
existing under the laws of its state or country of formation or any political
subdivision thereof or the United States or any state thereof, a real estate
investment trust, a religious, educational or eleemosynary institution, a
governmental agency, body or entity, an employee, benefit, pension or retirement
plan or fund, a commercial credit corporation, an investment bank, a commercial
bank or trust company acting as trustee or fiduciary of various pension funds or
tax-exempt funds, or as trustee in connection with the issuance of any bonds or
any other debt financing, a special purpose corporation or other entity
established for the purpose of securitized financing which is controlled by any
other Institutional Lender, or a corporation or other entity which is owned
wholly by any other Institutional Lender or a subtrustee of any such commercial
bank or trust company acting as such trustee, or any combination of the
foregoing; provided, however, that (i) each of the above entities, or any
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combination of such entities, shall qualify as an Institutional Lender for
purposes of this Lease only if each such entity, or combination of such
entities, or the parent or parents of such entity or entities, shall have
individual or combined assets, as the case may be, of not less than Five Hundred
Million Dollars ($500,000,000), and (ii) unless an Event of Default has occurred
and is continuing, an Affiliate of the Lessor shall not qualify as an
Institutional Lender.
"Insurance Requirements" means all terms and conditions of any insurance
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policy required by this Lease to be maintained by the Lessee and the Lessor, and
all reasonable and appropriate requirements of the issuer of any such policy.
"Investment Company Act" means the Investment Company Act of 1940, as
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amended, together with the rules and regulations promulgated thereunder.
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"Land" means the real property interests more fully described on Schedule 1
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attached hereto.
"Lease" means this Lease Agreement.
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"Lease Balance" means, at any time, the aggregate of the Lessor's Cost for
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all Properties and all the Loans then covered by the terms of this Lease, as
adjusted as Properties and Loans are sold pursuant to the terms of Articles XXI
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or XXII or otherwise pursuant to the terms of this Lease.
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"Lease Expenses" is defined in Section 28.2 of this Lease.
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"Lease Rate" means (a) during the period from the Commencement Date
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through January 31, 2003, .0058333 with respect to that amount of the Average
Lease Balance (reduced by amounts on deposit in the Average Cash Collateral
Account Balance), up to and including $34,000,000 and .008333 with respect to
that amount of the Average Lease Balance (reduced by amounts on deposit in the
Average Cash Collateral Account Balance), which is in excess of $34,000,000, and
(b) during the period from February 1, 2003 through the Expiration Date, a rate
equal to the rate determined in clause (a) of this definition multiplied by
1.25.
"Lessee" means Echelon Commercial LLC.
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"Lessor" means Xxxxxx Affordable Housing of Florida, Inc.
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"Lessor's Cost" means, with respect to any Property, the amount set forth
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on Schedule 2.
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"Lessor Lien" means any Lien, true lease or sublease or disposition of
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title arising as a result of (a) any Claim against the Lessor not resulting from
the transactions contemplated by the Loan Documents, (b) any act or omission of
the Lessor which is not required by the Loan Documents or is in violation of any
of the terms of the Loan Documents, (c) any Claim against the Lessor with
respect to Taxes or Transaction Expenses against which Lessee is not required to
indemnify the Lessor pursuant to this Lease, or (d) any Claim against the Lessor
arising out of any transfer by the Lessor of all or any portion of the interest
of the Lessor in any Property or the Properties other than the transfer of title
to or possession of any Property by the Lessor pursuant to and in accordance
with this Lease.
"Lien" means any mortgage, deed of trust, pledge, security interest,
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encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any irrevocable license, conditional sale or other title retention
agreement, any lease in the nature thereof, or any other right of or arrangement
with any creditor to have its claim satisfied out of any specified property or
asset with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded, or the
filing of, or agreement to execute as "debtor", any financing or continuation
statement under the Uniform Commercial Code of any jurisdiction or any federal,
state or local lien imposed pursuant to any Environmental Law.
"Loan" means any one of the Loans.
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"Loans" means the loans described on Schedule 1 hereto.
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"Loan Documents" means those documents evidencing the Senior Loans, which
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as of the Commencement Date are those documents more fully described on Schedule
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3 (which documents shall include the consents of the Senior Lenders to (i) the
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transfers of the Properties to, and the assumption of the Senior Loans by, the
Lessor, and (ii) this Lease) and, subsequent to the Commencement Date, shall
include any amendments, modifications, additions thereto or replacements
thereof .
"Loss Notice" is defined in Section 18.1 of this Lease.
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"Major Sublease" means a lease, or an amendment or modification of any
--------------
Sublease, to be entered into after the date of this Lease which (i) requires the
consent of a Senior Lender, or (ii) covers an area of twenty-five thousand
rentable square feet or more (including, for purposes of determining whether a
lease or an amendment or modification of any Sublease is a Major Sublease, any
area covered by options) in one or more of the Properties.
"Memorandum of Lease" means the Memorandum of Lease, dated as of the
-------------------
Commencement Date, between the Lessor and the Lessee with respect to this
Lease, in the form attached hereto as Exhibit D or as mutually agreed between
---------
the Lessor and the Lessee.
"Material Adverse Effect" means a materially adverse effect on (i) the
-----------------------
business, assets, operations or condition, financial or otherwise, of the Lessee
or the Guarantor, (b) the ability of the Lessee or the Guarantor to perform any
of its obligations under the document to which it is or will be a party in the
transactions contemplated by this Lease, (c) the value or condition of the
Properties, the Loans or the Lessor's interests therein or title thereto, taken
as a whole, or (d) the rights of or benefits available to the Lessor under this
Lease.
"Material Assets" means with respect to any Person all material interests
---------------
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
----------------
January 21, 2000, by and among ETA Holding LLC, EIN Acquisition Corp., and
Echelon International Corporation.
"Modifications" is defined in Section 13.1(a) of this Lease.
------------- ---------------
"Net Proceeds" means (i) in connection with any Casualty or Condemnation,
------------
the net amounts paid to the Lessor less the reasonable expense of claiming and
collecting such amounts, and (ii)in connection with the Lessee's exercise of
the Early Buy-Out Option under Article XXII of this Lease, as defined in Section
------------ -------
22.1(g).
-------
"Note" means any one of the Notes.
----
"Notes" means, with regard to the Loans, the originally executed promissory
------
notes or bonds or other evidence of indebtedness with respect to the Loans.
-11-
"Overdue Rate" means a monthly rate equal to the Lease Rate plus .17%,
------------
compounded monthly.
"Parent" shall mean Echelon Development LLC, a Delaware limited liability
------
company and the sole member of the Lessee.
"Parent Guarantee" means the Guarantee, dated as of the Commencement Date,
----------------
between the Parent and the Lessor, in the form attached hereto as Exhibit E or
---------
as mutually agreed between the Lessor and the Lessee.
"Payment Date" means those dates which are determined as (i) the first day
------------
of the calendar month next following the ninetieth day following the
Commencement Date, and (ii) the first day of each third calendar month
thereafter, and (iii) the Expiration Date or the date of any earlier
termination of this Lease.
"PBGC" means the Pension Benefit Guaranty Corporation, or any federal
----
agency or authority of the United States from time to time succeeding to its
functions under ERISA.
"Permitted Liens" means with respect to the Property:
---------------
(i) the respective rights and interests of the Senior Lenders under the
Loan Documents as provided in the Loan Documents;
(ii) the rights of any Sublessee under a Sublease expressly permitted by
the terms of this Lease;
(iii) Liens for Taxes that either are not yet due or are being contested in
accordance with the provisions of Section 24.4(k) of this Lease;
---------------
(iv) Liens arising by operation of law, materialmen's, mechanics',
workers', repairmen's, employees', carriers', warehousemen's and other like
Liens relating to the construction of the Improvements or in connection
with any Modifications or arising in the ordinary course of business for
amounts that either are not more than 60 days past due or are being
diligently contested in good faith by appropriate proceedings, so long as
such proceedings satisfy the conditions for the continuation of proceedings
to contest Taxes set forth in Section 24.4(k) of this Lease and are
---------------
"insured over" by an acceptable title insurance company;
(v) Liens of any of the types referred to in clause (iv) above that have
-----------
been bonded for not less than the full amount in dispute (or as to which
other security arrangements satisfactory to the Lessor have been made),
which bonding (or arrangements) shall comply with Applicable Laws, and has
effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to which
appeals or other proceedings for review are being prosecuted in good faith
and for the payment of which
-12-
adequate reserves have been provided as required by GAAP by cash delivered
to the Lessor or other appropriate provisions have been made, so long as
such proceedings have the effect of staying the execution of such judgments
or awards and satisfy the conditions for the continuation of proceedings to
contest set forth in Section 15.1 of this Lease;
------------
(vii) easements, rights of way and other encumbrances on title to real
property existing as of the date of this Lease approved by the Lessor;
(viii) Lessor Liens; and
(ix) Liens created by the Lessee with the consent of the Lessor.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization,
governmental authority or any other entity.
"Plan" means an Employee Benefit Plan.
----
"Prepaid EBO Amount" is defined in Section 22.3 of this Lease.
------------------
"Properties" means all of (a) the Land; (b) the Improvements at any time
----------
located on or under the Land; (c) all miscellaneous property related to the Land
and Improvements and acquired by the Lessor pursuant to the Subscription
Agreement, including but not limited to security deposits; books and records;
contract rights, claims and counterclaims against third parties; appraisals;
surveys; site plans; plans and specifications (including construction and as-
built plans and specifications); landscape designs and architectural drawings;
licenses and permits; warranties and guaranties; general intangibles and good
will; utility agreements; and development rights or orders, and all other assets
acquired by Lessor under the Subscription Agreement; and (d) all of the
Equipment. The term "Properties" (i) when the context of this Lease requires,
shall also include the Loans, and (ii) shall not include any Property or Loan
from and after the date on which such Property or Loan is sold pursuant to
Article XXI or XXII or otherwise pursuant to the terms of this Lease.
----------- ----
"Property" means any one of the Properties at a discrete address or
--------
location.
"Purchase Notice" is defined in Section 21.1 of this Lease.
--------------- ------------
"Purchase Option" is defined in Section 21.1 of this Lease.
--------------- ------------
"Purchase Option Closing Date " is defined in Section 21.1 of this Lease.
----------------------------- ------------
"Purchase Option Price" shall be the greater of (i) the aggregate of the
---------------------
Fair Market Sales Value for each of the Properties and the Loans determined as
of a date not earlier than sixty days prior to the Purchase Option Closing Date,
and (ii) the aggregate of the Early Buy-Out Prices for the Properties and the
Loans as of the Purchase Option Closing Date.
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"Purchase and Sale Agreement" means the Purchase and Sale Agreement, dated
---------------------------
as of January 21, 2000, by and among Echelon International Corporation and
certain of its Subsidiaries and Echelon Residential LLC.
"Recourse Debt" means the amount of the Senior Loans secured by the
-------------
Development Properties and the amount of the Senior Loans held by Salomon
Brothers Realty Corp. (and any other obligations under the Loan Documents with
respect to the Development Properties and to Salomon Brothers Realty Corp.,
including but not limited to claims under environmental indemnities), which are
recourse to assets or interests of the Lessor (including but not limited to the
interest of the Lessor in the amount on deposit in the Cash Collateral Account)
other than the Properties; provided, however, that with respect to any Senior
-------- -------
Loan secured by a Development Property or held by Salomon Brothers Realty Corp.,
at such time that a permanent certificate of occupancy (or local equivalent) is
issued or at any time thereafter, Recourse Debt for such Property shall be
deemed to be the amount, if any, by which the amount of the Senior Loan exceeds
seventy percent of the Fair Market Sales Value for such Property. Recourse Debt
shall include all amounts reasonably determined by the Lessor which are, or are
likely to be, payable to Senior Lenders (i) pursuant to any indemnities provided
for in the Loan Documents, (ii) on the basis of claims made by Senior Lenders
based on exceptions or "carve outs" to the non-recourse terms of any Senior
Loan. Based on the Lessor's valuations as of the date of this Lease (which
valuations the Lessee acknowledges are subject to change over Term) of the
Properties which are subject to Senior Loans held by Salomon Brothers Realty
Corp., the Lessor acknowledges that the Senior Loans held by Salomon Brothers
Realty Corp. are not included within the definition of "Recourse Debt". In the
event that after the date of this Lease any Senior Loan held by Salomon Brothers
Realty Corp. is amended to provide that such Senior Loan is non-recourse (on
terms reasonably satisfactory to the Lessor), or if Salomon Brothers Realty
Corp. acquires any additional Senior Loan which is non-recourse by its terms,
then such Senior Loan shall not be included within the definition of "Recourse
Debt". Further, the Lessor acknowledges that the terms of the Senior Loans held
by Northwestern Mutual Life Insurance Company as of the date of this Lease are
not recourse to the assets of the "mortgagor" thereunder.
"Refinancing Proceeds" is defined in Section 20.2 of this Lease.
-------------------- ------------
"Release" means any release, pumping, pouring, emptying, injecting,
-------
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
"Rent" means, collectively, (i) Basic Rent, (ii) Supplemental Rent, and
----
(iii) beginning February 1, 2003, Accrued Rent.
"Requesting Party" is defined in Section 25.1 of this Lease.
---------------- ------------
"Required Modification" is defined in Section 13.1 of this Lease.
--------------------- ------------
"Responsible Employee" means the President, any Vice President, the
--------------------
Treasurer or the Controller of any Person.
-14-
"Restricted Payments" means (i) any dividend or other distribution, direct
-------------------
or indirect, on account of any shares of any class of capital stock of, or
partnership or membership or other equity interest in, the Lessee now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of capital stock of, or partnership or membership or other
equity interest in, the Lessee now or hereafter outstanding, (iii) any payment
made to redeem, purchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any capital
stock of, or partnership or membership or other equity interest in, the Lessee
now or hereafter outstanding, and (iv) any payment made to acquire, directly or
indirectly, any real property (other than one of the Properties acquired
pursuant to the terms of this Agreement); provided, however, that the foregoing
-------- -------
shall not be deemed to limit or restrict any distributions or payments to the
Parent.
"Senior Loans" means the obligations to the Senior Lenders evidenced and
------------
secured by the Loan Documents, the principal balances of which as of the date of
this Lease are set forth on Schedule 3, and subsequent to the Commencement Date
----------
shall include any amendments, modifications, additions thereto or replacements
thereof or any new loan secured by the Properties.
"Senior Lenders" means the holders of the Senior Loans described on
--------------
Schedule 3.
----------
"Significant Casualty" means: (a) a Casualty that renders a Property
--------------------
unsuitable for continued use as property of the type of such Property
immediately prior to such Casualty, (b) a Casualty that is so substantial in
nature that restoration of the Property to substantially its condition as
existed immediately prior to such Casualty would be impracticable or impossible,
or (c) a Casualty which results in an insurance settlement with respect to a
Property on the basis of a total loss of the Improvements.
"Significant Condemnation" means (a) a Condemnation that involves a taking
------------------------
of the Lessor's entire title to a Property, or (b) a Condemnation that in the
reasonable, good faith judgment of the Lessor, after consultation with Lessee
about potential remediation efforts, either (i) renders a Property unsuitable
for continued use as property of the type of such Property immediately prior to
such Condemnation or (ii) is such that restoration of the Property to
substantially its condition as existed immediately prior to such Condemnation
would be impracticable or impossible to effect, or (c) in the case of a
temporary Condemnation, a temporary Condemnation which, in the reasonable, good
faith judgment of the Lessor, (i) will provide for an award or awards
insufficient to pay the Rent applicable to such Property during the period of
such taking, or (ii) extends beyond the Term.
"Stipulated Loss Value" means (a) with respect to a determination of such
---------------------
value made prior to February 2, 2003, the Early Buy-Out Price for the relevant
Property, and (b) with respect to a determination of such value made on or after
February 2, 2003, the Purchase Option Price allocable to the relevant Property.
-15-
"Subleases" means those leases described in Schedule 4 and any leases,
--------- ----------
subleases or other occupancy agreements entered into after the Commencement Date
with respect to any Property.
"Sublessees" means those parties holding the tenant's interest under the
----------
Subleases.
"Subordination of Management Contracts Agreement" means the Subordination
-----------------------------------------------
of Management Contracts Agreement, dated as of the Commencement Date, between
the Lessor, the Lessee and the Parent, in the form attached hereto as Exhibit F
---------
or as mutually agreed between the Lessor and the Lessee.
"Subscription Agreement" means the Subscription Agreement, dated as of
----------------------
January 21, 2000, by and among Echelon International Corporation and certain of
its Subsidiaries and the Lessor.
"Subsidiary" of any Person means a corporation or other entity of which
----------
securities or other ownership interests having ordinary voting power (other than
securities or other ownership interests having such power by reason of the
happening of a contingency) to elect the majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person, by such Person and one or more of its
Subsidiaries or by one or more of such Person's Subsidiaries.
"Substituted Equipment" is defined in Section 13.2 of this Lease.
--------------------- ------------
"Supplemental Rent" means all amounts, liabilities and obligations (other
-----------------
than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor or
directly to third parties pursuant to the terms of this Lease, including but not
limited to (i) all amounts payable to the Senior Lenders under the terms of the
Loan Documents, as more fully described in Section 8.2 this Lease, (ii) Taxes,
-----------
(iii) the obligation to discharge all Liens except Lessor Liens, (iv) all
amounts paid by Lessor as a result of the failure by the Lessee to make a
payment or perform an obligation under this Lease, and (v) all other amounts
payable by the Lessee to the Lessor under this Lease.
"Taxes" is defined in the definition of Impositions.
-----
"Term" is defined in Section 2.2 of this Lease.
---- -----------
"Transaction Documents" shall mean this Lease, the Cash Collateral
---------------------
Agreement, the Guarantee, the Xxxxxx Guarantee, the Memorandum of Lease, the
Parent Guarantee and the Subordination of Management Contracts Agreement, and
all other documents executed and delivered in connection herewith or therewith.
"Transaction Expenses" is defined in Section 28.1 of this Lease.
-------------------- ------------
"Transfer Date" is defined in Section 18.2 of this Lease.
------------- ------------
-16-
"Underlying Agreements" means those agreements defined as "Contracts" in
---------------------
the Subscription Agreement and assumed by the Lessor pursuant to the terms of
the Subscription Agreement.
"Uniform Commercial Code" and "UCC" mean the Uniform Commercial Code as in
----------------------- ---
effect in any applicable jurisdiction.
I.2 Interpretation. As used in this Lease, unless a clear contrary
--------------
intention appears:
(i) the singular number includes the plural number and vice versa;
---- -----
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Lease, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument means such
agreement, document or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof and, if applicable, the
terms of the other Loan Documents and reference to any promissory note
includes any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision of
any Applicable Law means that provision of such Applicable Law from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other
provision;
(vi) reference in this Lease to any Article, Section, Appendix,
Schedule or Exhibit means such Article or Section thereof or Appendix,
Schedule or Exhibit thereto;
(vii) "hereunder", "hereof", "hereto" and words of similar import
shall be deemed references to this Lease as a whole and not to any
particular Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term;
(ix) relative to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding".
I.3 Accounting Terms. Unless expressly otherwise provided, accounting
----------------
terms shall be construed and interpreted, and accounting determinations and
computations shall be made, in accordance with GAAP.
-17-
I.4 Business Day. If any payment provided for hereunder (including but not
------------
limited to Rent) becomes due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day.
I.5 Conflict with Loan Documents. If there is any conflict between any of
----------------------------
the terms of this Lease and the terms of any Loan Documents or any Subleases,
this Lease shall be interpreted and construed, if possible, so as to avoid or
minimize such conflict but, to the extent (and only to the extent) of such
conflict, terms of the Loan Documents or the Subleases, as the case may be,
shall prevail and control; provided, however, that in the case of any Sublease,
-------- -------
such Sublease shall control only to the extent that such Sublease existed as of
the Commencement Date or was entered into pursuant to the terms of this Lease..
I.6 Legal Representation of the Parties. This Lease was negotiated by the
-----------------------------------
parties with the benefit of legal representation and any rule of construction or
interpretation otherwise requiring this Lease to be construed or interpreted
against any party shall not apply to any construction or interpretation hereof
or thereof.
ARTICLE II
LEASE
II.1 Lease and Acceptance of Property. Subject to the terms and conditions
--------------------------------
of this Lease, on the Commencement Date the Lessor shall demise and lease to the
Lessee for the Term the Lessor's interest in the Properties, and the Lessee
hereby accepts the Properties and agrees, expressly for the direct benefit of
the Lessor, to lease from the Lessor for the Term, the Lessor's interest in the
Properties. To the extent that any of the Properties are subject to Pending
Transactions (as defined in the Subscription Agreement) as of the date of this
Lease and are sold or refinanced prior to the Commencement Date, such Properties
will be excluded from the definition of Properties hereunder and any proceeds
payable to the Lessor with respect thereto pursuant to Section 2.3 of the
Subscription Agreement shall be applied by the Lessor in accordance with Section
2.3 of the Subscription Agreement.
II.2 Lease Term. The term of this Lease (the "Term") shall commence on
---------- ----
(and include) the Commencement Date and end on (but exclude) the Expiration
Date.
II.3 Title. Each Property is leased to the Lessee without any
-----
representation or warranty, express or implied (except as set forth specifically
in this Lease), by the Lessor and subject to (i) the Subleases and the rights of
parties in possession, (ii) the Underlying Agreements, (iii) the existing state
of title (including, without limitation, Permitted Liens other than Lessor
Liens), (iv) the Loan Documents and the rights of the Senior Lenders thereunder,
and (v) all Applicable Laws. The Lessee shall in no event have any recourse
against the Lessor for any defect in or exception to title to the Property other
than to the extent resulting from Lessor Liens.
-18-
ARTICLE III
CONDITIONS PRECEDENT
III.1 Conditions Precedent to the Commencement Date. The occurrence of the
---------------------------------------------
Commencement Date is subject to the satisfaction or waiver of the following
conditions precedent:
(a) Transaction Documents. All Transaction Documents shall have been
---------------------
executed and delivered by the parties thereto.
(b) Opinions of Local Counsel. Counsel to the Lessee in each
-------------------------
jurisdiction in which any Property is located shall have issued to the Lessor
its opinion, in form attached hereto as Exhibit G or otherwise in form and
substance reasonably satisfactory to the Lessor, as to the Lease satisfying
state-specific requirements for a lease and the Memorandum of Lease being in
proper form for recording.
(c) Governmental Approvals. All necessary (or, in the reasonable opinion
----------------------
of the Lessor, advisable) Governmental Actions, in each case required by any
Applicable Law, shall have been obtained or made and be in full force and
effect.
(d) Litigation. No action or proceeding shall have been instituted, nor
----------
shall any action or proceeding be threatened, before any Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any Governmental Authority (i) to set aside, restrain, enjoin or
prevent the full performance of this Lease or any transaction contemplated
hereby or by the Transaction Documents, or (ii) which is reasonably likely to
materially and adversely affect the Lessee.
(e) Violations of Applicable Law. The transactions contemplated by the
----------------------------
Transaction Documents do not and will not violate any Applicable Law the
violation of which could have a Material Adverse Effect and do not and will not
subject the Lessor to any material adverse regulatory prohibitions or
constraints.
(f) Recordation. The Lessor shall have received evidence reasonably
-----------
satisfactory to it that the Memorandum of Lease shall have been or is being
recorded with the appropriate Governmental Authorities.
(g) Evidence of Insurance. The Lessor shall have obtained evidence of
---------------------
insurance with respect to each Property and with respect to environmental
liability required to be maintained pursuant to this Lease setting forth the
respective coverages, limits of liability, carrier, policy number and period of
coverage, and otherwise satisfying the requirements set forth in Article XVI.
-----------
(h) Secretary's or Assistant Secretary's Certificates. The Lessee shall
-------------------------------------------------
have delivered to the Lessor a certificate of the Secretary or an Assistant
Secretary of the managing trustee of each Guarantor and the Lessee attaching and
certifying as to (i) the constituent documents of
-19-
such Person, (ii) resolutions of the governing body of each such Person
authorizing the execution, delivery and performance of this Lease and the other
Transaction Documents to which such Person is a party and (iii) the incumbency
and signature of persons authorized to execute and deliver this Lease and the
other Transaction Documents to which such Person is a party.
(i) Opinion of Counsel to the Lessee, the Guarantor and the Parent. On or
--------------------------------------------------------------
prior to the Commencement Date, the Lessor shall have received an opinion of
external counsel for the Lessee, the Guarantor and the Parent, in form attached
hereto as Exhibit H or otherwise in form and substance reasonably satisfactory
to the Lessor, as to organization, qualification, authorization, execution and
delivery, enforceability, non-contravention, required consents and such other
matters as may be reasonably required by the Lessor.
(j) Consummation of Merger. The Merger (as such term is defined in the
----------------------
Merger Agreement) has been completed on the terms provided for in the Merger
Agreement.
(k) Consummation of Purchase and Sale Agreement. The "Closing" (as such
-------------------------------------------
term is defined in the Purchase and Sale Agreement) has been completed on the
terms provided for in the Purchase and Sale Agreement.
(l) Consummation of Subscription Agreement. The "Closing" (as such term
--------------------------------------
is defined in the Subscription Agreement) has been completed on the terms
provided for in the Subscription Agreement, without waiver of closing conditions
or requirements except to the extent specifically approved by the Lessee.
(m) Transfer of Security Deposits. The Lessor shall have transferred to
-----------------------------
the Lessee any security deposits with respect to the Subleases received by the
Lessor whether in cash or as a credit to the Transfer Value pursuant to Section
2.1 of the Subscription Agreement.
(n) Place of Delivery. All documents and instruments required to be
-----------------
delivered on the Commencement Date shall be delivered at the offices of White &
Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other location as may be determined by the Lessor and the Lessee.
ARTICLE IV
REPRESENTATIONS OF THE LESSOR
The Lessor represents and warrants to the Lessee that, as of the
Commencement Date:
I.1 Status. The Lessor (i) is a is a duly organized and validly existing
------
corporation in good standing under the laws of the State of Delaware, and (ii)
has the power and authority to own and lease properties and to conduct the
business in which it is currently engaged.
IV.1 Power and Authority. The Lessor has the corporate power and authority
-------------------
to execute, deliver and carry out the terms and provisions of this Lease and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Lease and has duly
-20-
executed this Lease and, assuming the due authorization, execution and delivery
hereof on the part of the Lessee, this Lease constitutes a legal, valid and
binding obligation enforceable against it in accordance with its terms, except
as the same may be limited by insolvency, bankruptcy, reorganization or other
laws relating to or affecting the enforcement of creditors' rights generally and
by equitable principles whether enforcement is sought by proceedings in equity
or at law and except as the same may be limited by certain circumstances under
law or court decisions in respect of provisions providing for indemnification of
a party with respect to liability where such indemnification is contrary to
public policy.
IV.2 No Legal Bar. Neither the execution, delivery and performance by the
------------
Lessor of this Lease nor compliance with the terms and provisions hereof, nor
the consummation by the Lessor of the transactions contemplated herein (i) will
result in a violation by the Lessor of any provision of any Applicable Law that
would have a Material Adverse Effect on (x) the validity or enforceability of
this Lease, or the title to, or value or condition of, the Properties, or (y)
the consolidated financial position, business or consolidated results of
operations of the Lessor or the ability of the Lessor to perform its obligations
under this Lease, (ii) will conflict with or result in any breach which would
constitute a default under, or (other than pursuant to the Loan Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Lessor pursuant to the terms
of any indenture, loan agreement or other agreement for borrowed money to which
the Lessor is a party or by which it or any of its property or assets is bound
or to which it may be subject (other than Permitted Liens), or (iii) will
violate any provision of the certificate of incorporation or by-laws of the
Lessor.
IV.3 Litigation. There are no actions, suits or proceedings pending or, to
----------
the knowledge of the Lessor, threatened (i) that are reasonably likely to have a
Material Adverse Effect on the Properties or on the ability of the Lessor to
perform its obligations under this Lease or (ii) that question the validity of
this Lease or the rights or remedies of the Lessee with respect to the Lessor or
the Properties.
IV.4 Governmental Approvals. No Governmental Action by any Governmental
----------------------
Authority having jurisdiction over the Lessor or the Properties is required to
authorize or is required in connection with (i) the execution, delivery and
performance by the Lessor of this Lease, or (ii) the legality, validity,
binding effect or enforceability against the Lessor of this Lease.
ARTICLE V
REPRESENTATIONS OF THE LESSEE
The Lessee represents and warrants to the Lessor that, as of the
Commencement Date:
V.1 Status. The Lessee (i) is a duly organized and validly existing
------
limited liability company in good standing under the laws of the State of
Delaware, and (ii) has the power and authority to own and lease properties and
to conduct the business in which it is currently engaged.
-21-
V.2 Power and Authority. The Lessee has the limited liability company
-------------------
power and authority to execute, deliver and carry out the terms and provisions
of this Lease and has taken all necessary action to authorize the execution,
delivery and performance of this Lease and has duly executed this Lease and,
assuming the due authorization, execution and delivery hereof on the part of the
Lessor, this Lease constitutes a legal, valid and binding obligation enforceable
against it in accordance with its terms, except as the same may be limited by
insolvency, bankruptcy, reorganization or other laws relating to or affecting
the enforcement of creditors' rights generally and by equitable principles
whether enforcement is sought by proceedings in equity or at law and except as
the same may be limited by certain circumstances under law or court decisions in
respect of provisions providing for indemnification of a party with respect to
liability where such indemnification is contrary to public policy.
V.3 Separate Existence. The Lessee has, since its formation, maintained
------------------
itself as an entity separate from any other entity and, in particular, has: (i)
maintained books and records, financial statements, and accounts separate from
those of any other Person; (ii) not commingled its assets or funds with those of
any other Person; (iii) held all of its assets in its own name; (iv) conducted
its business in its own name; (iv) paid its liabilities out of its own funds;
(v) observed all corporate formalities; (vi) maintained an arm's-length
relationship with its Affiliates, if any; (vii) prepared and maintained
financial statements separate from its Affiliates, if any, except as may have
been required by applicable law; (viii) paid the salaries of its own employees
and fees for its directors and officers from its own funds; (ix) not guaranteed
or become obligated for the debts of any other entity, or held out its credit as
being available to satisfy the obligations of others; (x) allocated and charged
fairly and reasonably any overhead for shared office space; (xi) used separate
stationery, invoices and checks, each bearing its own name; (xii) not pledged
its assets for the benefit of any other entity nor made any loans or advances to
any Person; (xiii) held itself out to creditors and the public as a legal entity
separate from any other Person and corrected any known misunderstanding
regarding such separate identity; (xiv) maintained adequate capital in light of
its contemplated business purpose, transactions and liabilities; (xv) unless
otherwise required by applicable law, filed its tax returns separately from
those of any other Person; (xvi) not purchased or held evidence of indebtedness
issued by any other Person; (xvii) not identified itself as a division of any
other Person, nor acquired or held any subsidiary; (xviii) not acquired any
securities of any Person; (xvix) not borrowed money or incurred indebtedness
other than normal trade accounts payable and lease obligations in the normal
course of its business nor granted consensual Liens on any of its property,
except the Senior Loans; (xix) not filed a voluntary petition or otherwise
initiated proceedings to become bankrupt or insolvent, or consented to the
institution of bankruptcy or insolvency proceedings, or file a petition seeking
or consenting to reorganization or relief as debtor under any applicable federal
or state law relating to bankruptcy, insolvency, or other relief for debtors, or
sought or consented to the appointment of any receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) or made any
general assignment for the benefit of creditors of the Borrower, or admitted in
writing the inability to pay its debts generally as they become due or declared
or effected a moratorium on t debts or taken any action in furtherance of any
such action; (xx) not merged or consolidated with any other Person; and (xxi)
not pledged its assets for the benefit of any other Person.
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V.4 No Legal Bar. Neither the execution, delivery and performance by the
------------
Lessee of this Lease nor compliance with the terms and provisions hereof, nor
the consummation by the Lessee of the transactions contemplated herein (i) will
result in a violation by the Lessee of any provision of any Applicable Law that
would have a Material Adverse Effect on (x) the validity or enforceability of
this Lease, or the title to, or value or condition of, the Properties, or (y)
the consolidated financial position, business or consolidated results of
operations of the Lessee or the ability of the Lessee to perform its obligations
under this Lease, (ii) will conflict with or result in any breach which would
constitute a default under, or (other than pursuant to the Loan Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Lessee pursuant to the terms
of any indenture, loan agreement or other agreement for borrowed money to which
the Lessee is a party or by which it or any of its property or assets is bound
or to which it may be subject (other than Permitted Liens), or (iii) will
violate any provision of the constituent documents of the Lessee.
V.5 Litigation. There are no actions, suits or proceedings pending or, to
----------
the knowledge of the Lessee, threatened (i) that are reasonably likely to have a
Material Adverse Effect on the Properties or on the ability of the Lessee to
perform its obligations under this Lease or (ii) that question the validity of
this Lease or the rights or remedies of the Lessor with respect to the Lessee or
the Properties.
V.6 Governmental Approvals. No Governmental Action by any Governmental
----------------------
Authority having jurisdiction over the Lessee or the Properties is required to
authorize or is required in connection with (i) the execution, delivery and
performance by the Lessee of this Lease, or (ii) the legality, validity,
binding effect or enforceability against the Lessee of this Lease.
V.7 Investment Company Act. The Lessee is not an "investment company" or
----------------------
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act.
V.8 Public Utility Holding Company Act. The Lessee is not a "holding
----------------------------------
company" or a "subsidiary company", or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company", within the meaning of the
Public Utility Company Act of 1935, as amended.
V.9 Insurance. The Lessee has obtained insurance coverage covering each
---------
Property which satisfies the terms of this Lease, the premiums (to the extent
not fully paid) have been paid for the current quarterly payment required by the
terms of the policies and the Lessee shall have made the deposit with the Lessor
required by the terms of Section 16.5(c), any such coverage is in full force and
---------------
effect, and no notice of cancellation has been received by the Lessee or its
agents.
V.10 Defaults. No Default or Event of Default or similar event has
--------
occurred and is continuing hereunder or under any material bond, debenture, note
or other evidence of indebtedness or material mortgage, deed of trust, indenture
or loan agreement or other instrument to which the Lessee is a party or is
subject to or bound.
-23-
V.11 Tax Returns. Each of the Guarantor and its Subsidiaries has filed or
-----------
caused to be filed all Federal, state, local and foreign tax returns required to
have been filed by it and has paid or caused to be paid all taxes shown to be
due and payable on such returns or on any assessments received by it, except
taxes that are being contested in good faith by appropriate proceedings and for
which the Guarantor or such Subsidiary shall have set aside on its books
adequate reserves, and there are no tax liens outstanding with respect to the
Guarantor and its Subsidiaries or any of their properties.
V.12 No Material Misstatements. No information, report, financial
-------------------------
statement, exhibit or schedule furnished by or on behalf of the Lessee to the
Lessor in connection with the negotiation of this Lease or included therein or
delivered pursuant thereto contained, contains or will contain any misstatement
of a material fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading. Notwithstanding the
foregoing, any financial projections provided by the Lessee are based upon
assumptions believed to be reasonable at the time by the management of the
Lessee and are not intended to be guarantees of future results.
V.13 Chief Place of Business. The chief place of business and chief
-----------------------
executive office (as such term is defined in Article 9 of the UCC) of the Lessee
is located at 000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xx. Xxxxxxxxxx XX 00000.
ARTICLE VI
PAYMENT OF RENT
VI.1 Basic Rent. The Lessee shall pay Basic Rent for each calendar month
----------
and for any portion of a calendar month since the date of the last such payment
of Basic Rent, such Basic Rent to be payable (i) on each Payment Date during the
Term; (ii) on the date required under Section 21.1 in connection with the
------------
Lessee's exercise of the Purchase Option; (iii) on the date required under
Section 22.1 in connection with the Lessee's exercise of the Early Buy-Out
------------
Option; and (iv) on any date on which this Lease shall terminate.
VI.2 Supplemental Rent. The Lessee shall pay to the Lessor or to the
-----------------
appropriate third parties, as the case may be, Supplemental Rent in the amounts
and on the dates provided for herein.
VI.3 Payment of Rent. Rent shall be due and payable in lawful money of the
---------------
United States and shall be paid by check or wire transfer of immediately
available funds, on the due date therefor to such account or accounts at such
bank or banks or to the Lessor, or in such other manner, as the Lessor shall
from time to time direct in a written notice to the Lessee. Rent shall be paid
absolutely net to the Lessor, so that this Lease shall yield to the Lessor the
full amount thereof, without setoff, deduction or reduction. Neither the
Lessee's inability or failure to take possession of all or any portion of the
Property when delivered by the Lessor, whether or not attributable to any act or
omission of the Lessor or the Lessee or for any other reason whatsoever, shall
delay or otherwise affect the Lessee's obligation to pay Rent for the Property
in accordance
-24-
with the terms of this Lease. In addition, the Lessee shall pay to the Lessor as
Supplemental Rent, on demand, to the extent permitted by Applicable Law,
interest at the Overdue Rate on any payment of Rent not paid when due for the
period for which the same shall be overdue until the same shall be paid.
VI.4 Method of Payment. Subject to Section 8.2, each payment of Rent or
----------------- -----------
any other amount due hereunder shall be made by the Lessee to the Lessor prior
to 2:00 p.m., New York time, at the place of payment designated in writing by
the Lessor in funds consisting of lawful currency of the United States of
America which shall be immediately available 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 on the next succeeding Business Day.
Payments received after 2:00 p.m., New York time on the date due shall for all
purposes hereof be deemed received on the next succeeding Business Day and,
unless the Lessor is otherwise able to invest or employ such funds on the date
received, subject to interest at the Overdue Rate.
VI.5 Application of Supplemental Rent. All payments of Supplemental Rent
--------------------------------
received by the Lessor shall be distributed promptly by the Lessor upon receipt
thereof to the Persons entitled thereto.
VI.6 Application of Cash Collateral. If (x) the Lessee provides to the
------------------------------
Lessor projections of income and expenses for any period of ninety days forward
which, taking into account the cash and liquid assets available to the Lessee
and the Parent, support that the Lessee and the Parent will have inadequate
funds to pay all anticipated expenses (including Basic Rent and Supplemental
Rent) over the period of such projections, (y) the Guarantor is in compliance
with the financial covenants in the Guarantee, and (z) no Event of Default has
occurred which is continuing, then the Lessee shall be entitled to direct the
Lessor to apply funds in the Cash Collateral Account to (i) one installment of
Basic Rent due on a Payment Date determined by the Lessee at any time that the
Lease Balance reduced by amounts on deposit in the Cash Collateral Account is
-------
less than $34,000,000.00 and prior to Full Collateralization, and (ii) a second
installment of Basic Rent due on any Payment Date determined by the Lessee at
any time that the Lease Balance reduced by amounts on deposit in the Cash
-------
Collateral Account and increased by the amount of Recourse Debt is less than
---------
$20,000,000.00 and prior to Full Collateralization. Upon Full Collateralization,
payments of Basic Rent shall be paid directly and solely from interest earned on
the amounts on deposit in the Cash Collateral Account.
VI.7 Accrued Rent. Accrued Rent shall be determined on February 1, 2003,
------------
and shall be payable by the Lessee to the Lessor in equal installments on each
Payment Date thereafter in an amount sufficient to pay the full amount thereof
over the then balance of the Term. To the extent that all Properties are sold
pursuant to the terms of Articles XXI or XXII or otherwise pursuant to the
------------ ----
terms of this Lease prior to February 1, 2003, the Lessee shall be relieved of
the requirement to pay Accrued Rent hereunder in the form of a discount on the
last Early Buy-Out Price paid hereunder. No Accrued Rent shall be payable
hereunder at any time prior to February 1, 2003.
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ARTICLE VII
QUIET ENJOYMENT; RIGHT TO INSPECT
VII.1 Quiet Enjoyment. Subject to Sections 2.3 and 7.2, and subject to
--------------- ------------ ---
the rights of the Lessor contained herein and in the other Transaction
Documents, the Lessee shall peaceably and quietly have, hold and enjoy the
Properties for the Term, free of any claim or other action by the Lessor or
anyone claiming by, through or under the Lessor (other than the Lessee, the
Senior Lenders pursuant to the Senior Loan Documents, and Sublessees) with
respect to any matters arising from and after the Commencement Date. Such right
of quiet enjoyment is independent of, and shall not affect the Lessor's rights
otherwise to initiate legal action to enforce, the obligations of the Lessee
under this Lease.
VII.2 Right to Inspect. The Lessee shall, upon reasonable notice from the
----------------
Lessor (except that no notice shall be required if a Default under this Lease
has occurred and is continuing or the Lessor has a reasonable basis to believe
that a default has occurred and is continuing), permit the Lessor, the Senior
Lenders, and their authorized representatives to inspect any Property during
normal business hours, provided that such inspections shall not unreasonably
interfere with the Lessee's business operations at such Property and shall be
subject to the rights if any, of Sublessees; provided that as long as no Default
--------
has occurred and is continuing, the Lessor's right to inspect shall be limited
to no more than once per quarter.
ARTICLE VIII
NET LEASE, ETC.
VIII.1 Net Lease. This Lease shall constitute a net lease. Any present or
---------
future law to the contrary notwithstanding, this Lease shall not terminate, nor
shall the Lessee be entitled to any abatement, suspension, deferment, reduction,
setoff, counterclaim, or defense with respect to the Rent, nor shall the
obligations of the Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (i) any defect in the condition, merchantability, design,
construction, quality or fitness for use of the Property or any part thereof, or
the failure of any Property to comply with all Applicable Laws, including any
inability to occupy or use any Property by reason of such non-compliance; (ii)
any damage to, removal, abandonment, salvage, loss, contamination of or Release
from, scrapping or destruction of or any requisition or taking of any Property
or any part thereof; (iii) any restriction, prevention or curtailment of or
interference with any use of any Property or any part thereof including
eviction; (iv) any defect in title to or rights to any Property or any Lien on
such title or rights or on any Property (other than Lessor Liens); (v) any
change, waiver, extension, indulgence or other action or omission or breach in
respect of any obligation or liability of or by the Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to the Lessee or any other Person, or any action
taken with respect to this Lease by any trustee or receiver of the Lessee or any
other Person, or by any court, in any such proceeding; (vii) any claim that the
Lessee has or might have against any Person, including without limitation the
Lessor and any vendor, manufacturer,
-26-
contractor of or for any portion of any Property; (viii) any failure on the part
of the Lessor to perform or comply with any of the terms of this Lease or of any
other agreement; (ix) any invalidity or unenforceability or illegality or
disaffirmance of this Lease against or by the Lessee or any provision hereof or
any of the other Loan Documents or any provision of any thereof; (x) the
impossibility or illegality of performance by the Lessee, the Lessor, or both of
them; (xi) any action by any court, administrative agency or other Governmental
Authority; (xii) any restriction, prevention or curtailment of or interference
with the construction on or any use of any Property or any part thereof; or
(xiii) any other cause or circumstances, whether or not the Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of the Lessee hereunder shall be covenants and agreements that are
separate and independent from any obligations of the Lessor hereunder or under
any other Transaction Documents and the obligations of the Lessee shall continue
unaffected unless such obligations shall have been modified or terminated in
accordance with an express provision of this Lease. Nothing contained herein is
intended to obviate or otherwise diminish any right the Lessee may have to bring
an action, either at law or in equity, to remedy any breach by the Lessor of the
Lessor's obligations hereunder.
VIII.2 Senior Lenders. Until such time as (i) the Lessor has asserted a
--------------
Default under the terms of this Lease, or (ii) an Event of Default has occurred
and is continuing, the Lessor agrees that the Lessee shall pay on behalf of the
Lessor, as Supplemental Rent, directly to the Senior Lenders on or before the
date such payments are due hereunder all amounts, liabilities and obligations
due and payable by the Lessor to the Senior Lenders under the terms of the Loan
Documents, including but not limited to all interest, whether at the stated or
default rate; principal; extension fees; assumption fees; prepayment fees and
yield indemnity charges (including but not limited to those due in connection
with an Event of Loss or the exercise by the Lessee of a Purchase Option or an
Early Buy-Out Option); expenses of Senior Lenders for professional or other fees
and expenses, recording fees and title insurance premiums; and claims for
indemnity, all on the terms provided for in the Loan Documents. At the time such
payments of Supplemental Rent are made directly to Senior Lenders, the Lessee
shall simultaneously deliver to the Lessor evidence of such payment in form
reasonably satisfactory to the Lessor. If (i) the Lessor has asserted a Default
under the terms of this Lease, or (ii) if an Event of Default has occurred and
is continuing, then the Lessee shall pay directly to the Lessor the Supplemental
Rent due to Senior Lenders. In such case, the Lessee shall pay to the Lessor any
and all Supplemental Rent due to Senior Lenders (i) in the case of all payments
or obligations for which a payment date is specified in the Loan Documents, not
less than five days prior to the date on which the payment due under the Loan
Documents giving rise to such Supplemental Rent obligation shall be due and
payable to any Senior Lender, and (ii) in the case of payments or obligations
which are not scheduled in the Loan Documents, within the lesser of (x) ten days
following the Lessor's demand therefor, or (y) two Business Days immediately
preceding the date on which the payment due under the Loan Documents giving rise
to such Supplemental Rent obligation shall be due and payable to any Senior
Lender. In addition, the Lessee shall pay to the Lessor as Supplemental Rent,
among other things, on demand, to the extent permitted by Applicable Law, the
default rate interest specified in the relevant Loan Documents on any
installment of Supplemental Rent not paid when due for the period for which the
same shall be overdue until the same shall be paid. Unless expressly provided
otherwise in this Lease, in the
-27-
event of any failure on the part of the Lessee to pay and discharge any
Supplemental Rent as and when due hereunder, the Lessee shall also promptly pay
and discharge any fine, penalty, interest or cost which may be assessed or added
under any Loan Document for nonpayment or late payment of such Supplemental
Rent, all of which shall also constitute Supplemental Rent.
VIII.3 No Termination or Abatement. The Lessee shall remain obligated
---------------------------
under this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting the Lessor, or any action with respect to this Lease which
may be taken by any trustee, receiver or liquidator of the Lessor or by any
court with respect to the Lessor. The Lessee hereby waives all right (i) to
terminate or surrender this Lease (except as provided herein) or (ii) to avail
itself of any abatement, suspension, deferment, reduction, setoff, counterclaim
or defense with respect to any Rent. The Lessee shall remain obligated under
this Lease in accordance with its terms during the Term (and following the
expiration of the Term with respect to those obligations which this Lease
provides survive the expiration or termination of this Lease) and the Lessee
hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, the Lessee shall be
bound by all of the terms and conditions contained in this Lease.
ARTICLE IX
SUBLEASES AND UNDERLYING AGREEMENTS
IX.1 The Subleases. As of the Commencement Date, the Lessor hereby
-------------
assigns to the Lessee all right, title and interest in the Subleases for the
Term, and the Lessee hereby assumes, and agrees to comply with, all covenants
and obligations on the part of the "landlord" or "lessor" under the terms of the
Subleases during the Term. The Lessee shall take such actions with respect to
the Subleases and Sublessees during the Term as the Lessee deems reasonable and
prudent in order to maintain the Subleases in full force and effect and to
maintain the rental income therefrom. The Lessee shall receive and collect all
rent due under the Subleases, which rent shall be received and held by the
Lessee subject to application to the Lessee's obligation to pay Rent hereunder.
IX.2 Further Subletting. The Lessee shall market any untenanted and
------------------
otherwise available space in the Properties for leasing on market terms and
conditions, as reasonably determined by the Lessee, to any Person (other than an
Affiliate) that the Lessee may reasonably determine to be a creditworthy and
reputable tenant. The intention of the Lessor and the Lessee being that a direct
leasing by the Lessor to any Person (as opposed to a sublease by the Lessee to
such Person) will enhance the marketability of the Properties, the Lessor
agrees, on the terms and conditions hereinafter provided in this Section 9.2, to
-----------
execute any such lease on the condition that, simultaneously with the execution
and delivery of any such lease, (i) the Lessor shall assign to the Lessee all
right, title and interest in the lease for the Term, (ii) the Lessee shall
assume, and agree to comply with, all covenants and obligations on the part of
the "landlord" or "lessor" under the terms of the leases during the Term, and
(iii) such lease shall thereafter be deemed a
-28-
Sublease for all purposes of this Lease. In the case of any proposed lease other
than a Major Sublease, the Lessor agrees to execute and return such lease to the
Lessee within two Business Days following receipt thereof. The terms and
conditions of, and the tenant or lessee under, a Major Sublease shall be subject
to approval by the Lessor, which approval shall not be unreasonably withheld or
delayed. The Lessor agrees, within five Business days following receipt of a
proposed Major Sublease delivered in accordance with the instructions for notice
of Major Subleases set forth on Schedule 7, either (i) to execute and return
----------
such Major Sublease to the Lessee (on the terms proposed and with such
immaterial changes as may later be requested by the Lessee), or (ii) to advise
the Lessee in writing of the Lessor's specific grounds for objecting to such
Major Sublease. Upon Full Collateralization, the Lessor's grounds for objecting
to a Major Sublease shall not include the financial terms of, or the
creditworthiness of the tenant under, such Major Sublease.
IX.3 Effect of Sublease. No sublease or other relinquishment of possession
------------------
of any Property shall in any way discharge or diminish any of the Lessee's
obligations to the Lessor hereunder, and the Lessee shall remain directly and
primarily liable under this Lease as to the Property or portion thereof so
sublet. The Lessor hereby expressly agrees that any obligations or covenants
under this Lease may be performed by any Sublessee directly, and the Lessor
agrees that any such performance will be accepted in satisfaction of the
obligations or covenants in this Lease.
IX.4 The Underlying Agreements. As of the Commencement Date, the Lessor
-------------------------
hereby assigns to the Lessee all right, title and interest in the Underlying
Agreements for the Term, and the Lessee hereby assumes, and agrees to comply
with, all covenants and obligations on the part of the "owner" under the terms
of the Underlying Agreements. The Lessee shall take all such actions with
respect to the Underlying Agreements and the parties thereto during the Term as
the Lessee deems reasonable and prudent in order to maintain the Underlying
Agreements in full force and effect to the extent that the Underlying Agreements
are necessary or appropriate to the management or maintenance of the Properties.
The Lessee shall pay or collect, as the case may be, all amounts receivable or
payable pursuant to the terms of the Underlying Agreements and all amounts
received shall be held by the Lessee subject to application to the Lessee's
obligation to pay Rent hereunder.
IX.5 Further Agreements. The Lessee may also, with the prior written
------------------
consent of the Lessor, which consent shall not be unreasonably withheld, enter
into further or additional agreements with respect to the management or
maintenance of the Properties by third parties; provided, however, that the
-------- -------
Lessor consents to the terms of such agreements; provided, further, that the
-------- -------
consent of the Lessor not shall be required so long as the aggregate of
obligations under such further or additional agreements do not exceed
$500,000.00 in any twelve-month period. Any such agreements shall expressly (i)
be made subject to and subordinated to this Lease and to the rights of the
Lessor hereunder, (ii) be at market rates and with third parties which are not
Affiliates of the Lessee (except that the Lessee or an Affiliate of the Lessee
may enter into management contracts with respect to those Properties which are
residential in nature) and, and (iii) be terminable by the Lessor without
penalty upon the expiration or earlier termination of this
-29-
Lease. Upon Full Collateralization, the Lessor's grounds for objecting to
further agreements shall not include the financial terms of such agreements or
the creditworthiness of the parties thereto.
IX.6 Effect of Agreements. No Underlying Agreement or further or
--------------------
additional agreements with respect to the management or maintenance of the
Properties by third parties shall in any way discharge or diminish any of the
Lessee's obligations to the Lessor hereunder, and the Lessee shall remain
directly and primarily liable under this Lease. The Lessor hereby expressly
agrees that any obligations or covenants under this Lease may be performed by
any third party directly, and the Lessor agrees that any such performance will
be accepted in satisfaction of the obligations or covenants in this Lease.
ARTICLE X
LESSEE ACKNOWLEDGMENTS
X.1 Condition of the Property. THE LESSEE ACKNOWLEDGES AND AGREES THAT IT
-------------------------
IS LEASING THE PROPERTIES "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY THE LESSOR (EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE)
AND SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN
POSSESSION THEREOF, (C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL
INSPECTION MIGHT SHOW, AND (D) VIOLATIONS OF APPLICABLE LAW WHICH MAY EXIST ON
THE DATE HEREOF OR ON THE COMMENCEMENT DATE. EXCEPT AS EXPRESSLY SET FORTH IN
THIS LEASE, THE LESSOR HAS NOT MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) AND SHALL NOT BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE (OTHER THAN FOR LESSOR
LIENS), VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS FOR
USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY
OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY
PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR
PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE FAILURE OF THE
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAW.
X.2 Risk of Loss. During the Term, the risk of loss of or decrease in the
------------
enjoyment and beneficial use of each Property as a result of the damage or
destruction thereof by Casualty, Condemnation, Environmental Violations or
otherwise is assumed by the Lessee, and the Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XI
POSSESSION AND USE OF THE PROPERTY, ETC.
XI.1 Possession and Use of the Property. Each Property shall be used in a
----------------------------------
manner consistent with (i) the standards applicable to properties of a similar
nature in the geographic area
-30-
in which such Property is located and in any event not less than the standards
applied by the Lessee for other comparable properties owned or leased by the
Lessee and (ii) the term and conditions of the Loan Documents. The Lessee shall
pay, or cause to be paid, all charges and costs required in connection with the
use of each Property as contemplated by this Lease. The Lessee shall not commit
or permit any waste of any Property or any part thereof.
XI.2 Development Properties. The Lessee shall continue the development and
----------------------
construction of the Development Properties in accordance with the existing plans
and specifications therefor and, in connection therewith, shall be entitled as
the Lessor's sole agent to request advances of the Senior Loans applicable to
the Development Properties on the terms provided in the Loan Documents. The
Lessee shall provide to the Lessor a plan and cost review acceptable to the
Lessor in the Lessor's sole discretion for construction of the Improvements on
each of the Development Properties within thirty days following the Commencement
Date. If the Lessee has not delivered an acceptable plan and cost review within
thirty days following the Commencement Date for any Development Property, then
the Lessor shall be entitled to revoke the grant of agency provided for in this
Section 11.2. In addition, the Lessee shall pay as Supplemental Rent hereunder
------------
the costs and expenses of the Lessor's consultant to monitor the progress of
construction on the Development Properties. The Lessee shall be permitted to
make or approve immaterial changes to the plans and specifications provided that
such changes do not affect the intended use or have a material impact on the
construction budget. The Lessee shall provide to the Lessor copies of all draw
requests submitted pursuant to the Loan Documents and quarterly reports, which
reports shall be in form and substance reasonably satisfactory to the Lessor, as
to the progress of construction and advances of the Senior Loans, and in the
event that the Lessor in its sole discretion finds the progress of construction
or advances of the Senior Loans unsatisfactory, the Lessor shall be entitled to
revoke the grant of agency provided for in this Section 11.2. The Lessor agrees
------------
to promptly execute and deliver any documents reasonably required by the Lessee
in connection with the Lessee's exercise of rights under this Section 11.2.
------------
XI.3 Compliance with Applicable Laws and Insurance Requirements. Subject
----------------------------------------------------------
to the terms hereof relating to permitted contests, the Lessee, at its sole cost
and expense, shall (a) comply in all respects with all Applicable Laws
(including all Environmental Laws) and Insurance Requirements relating to the
Properties, the violation of which could have a Material Adverse Effect,
including the use, construction, operation, maintenance, repair and restoration
thereof, whether or not compliance therewith shall require structural or
extraordinary changes in the applicable Improvements or interfere with the use
and enjoyment of a Property, and (b) procure, maintain and comply with all
material licenses, permits, orders, approvals, consents and other authorizations
required for the construction, use, maintenance and operation of a Property and
for the use, operation, maintenance, repair and restoration of the applicable
Improvements.
XI.4 Utility Charges. The Lessee shall pay or cause to be paid all charges
---------------
for electricity, power, gas, oil, water, telephone, sanitary sewer service and
all other rents and utilities used in or on the Properties during the Term. The
Lessee shall be entitled to receive any credit or refund with respect to any
utility charge paid by the Lessee. To the extent that the Lessee has requested
that the Lessor join with the Lessee in pursuing any such credit or refund
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on account of any utility charges paid by the Lessee, the amount of any such
credit or refund received by the Lessor, net of the costs and expenses
reasonably incurred by the Lessor in obtaining such credit or refund, shall be
promptly paid over to the Lessee.
XI.5 XxXxxxx Station. On the basis of the Phase I report, dated December,
---------------
1997, by ATC Associates on the Property identified as "XxXxxxx Station" on
Schedule 1, the Lessee agrees to keep the drinking fountain at such Property
----------
identified in such report capped off and to prohibit absolutely the use of such
drinking fountain during the term of this Lease.
ARTICLE XII
MAINTENANCE AND REPAIR; RETURN
XII.1 Maintenance and Repair; Return.
------------------------------
(a) The Lessee, at its sole cost and expense, shall maintain each
Property in good condition (ordinary wear and tear excepted) and make all
necessary repairs thereto, of every kind and nature whatsoever, whether interior
or exterior, ordinary or extraordinary, structural or nonstructural or foreseen
or unforeseen, in each case (i) as required by all Applicable Laws, the Loan
Documents and Insurance Requirements, and (ii) on a basis consistent with the
operation and maintenance of properties comparable in type and location to such
Property and in no event less than the standards applied by the Lessee in the
operation and maintenance of other comparable properties owned or leased by the
Lessee or its Affiliates.
(b) The Lessor shall under no circumstances be required to build any
improvements on the Property, make any repairs, replacements, alterations or
renewals of any nature or description to the Property, make any expenditure
whatsoever in connection with this Lease or maintain the Property in any way.
The Lessor shall not be required to maintain, repair or rebuild all or any part
of the Property, and the Lessee waives any right to (i) require the Lessor to
maintain, repair, or rebuild all or any part of the Property, or (ii) make
repairs at the expense of the Lessor pursuant to any Applicable Laws, the Loan
Documents, Insurance Requirement, contract, agreement, or covenant, condition or
restriction in effect at any time during the Term.
(c) The Lessee shall, upon the expiration or earlier termination of this
Lease, vacate and surrender the Properties to the Lessor in its then-current,
"AS IS" condition, subject to the Lessee's obligations under Sections 11.3,
-------------
12.1(a), 13.1, 14.1, 17.1(a) and 17.2, unless the Lessee has purchased the
------- ---- ---- ------- ----
Property from the Lessor as provided herein. Upon the expiration or earlier
termination of this Lease, (i) the Lessee shall be deemed to assign to the
Lessor all right, title and interest in the Subleases, and the Lessor shall be
deemed to assume, and agree to comply with, all covenants and obligations on the
part of the "landlord" or "lessor" under the terms of the Subleases thereafter
arising, and (ii) the Lessee shall be deemed to assign to the Lessor all right,
title and interest in the Underlying Agreements, and the Lessor shall be deemed
to assume, and agree to comply with, all covenants and obligations on the part
of the "owner" under the terms of the Underlying Agreements thereafter arising.
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ARTICLE XIII
MODIFICATIONS, ETC.
XIII.1 Modifications. The Lessee, at its sole cost and expense, may at
-------------
any time and from time to time make alterations, renovations, improvements and
additions to any Property or any part thereof and substitutions and replacements
therefor (collectively, "Modifications"); provided, however, that: (i) except
-------------- -------- -------
for any Modification required to be made pursuant to any Applicable Law (a
"Required Modification"), no Modification shall impair the value, utility or
----------------------
useful life of the Property or any part thereof from that which existed
immediately prior to such Modification; (ii) the Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) the Lessee shall
comply with all Applicable Laws (including all Environmental Laws), the Loan
Documents and Insurance Requirements applicable to the Modification, including
the obtaining of all permits and certificates of occupancy and consents, if
required, of Senior Lenders, and the structural integrity of the Property shall
not be adversely affected; (iv) subject to the terms of Article XV relating to
----------
permitted contests, the Lessee shall pay all costs and expenses and shall
discharge (or cause to be insured or bonded over) within forty-five days after
the same shall be filed (or otherwise become effective) any Liens arising with
respect to the Modification; (v) such Modifications shall comply with Sections
--------
11.3 and 12.1(a); and (vi) the Lessee shall be required to obtain the prior
---- -------
written approval of the Lessor, which approval shall not be unreasonably
withheld, with respect to any alterations (other than Required Modifications and
other than with respect to the development of the Development Properties in
accordance with plans and specifications as of the Commencement Date, as the
same may be changed pursuant to Section 11.2) that shall (A) require the consent
------------
of the Senior Lenders under the terms of the Senior Loan Documents, (B)
materially affect any structural element of the applicable Improvements or major
building system therein, or (C) cost in excess of $1,000,000 for the relevant
Property during the term of the Lease, or (D) materially change the nature of
the applicable Improvements for the purposes contemplated by the Lessor and the
Lessee as of the Commencement Date. All Modifications shall remain part of the
realty and shall be subject to this Lease and title thereto shall immediately
vest in the Lessor; provided, however, that Modifications that meet each of the
-------- -------
following conditions shall not be subject to this Lease: (x) such Modifications
are not Required Modifications, and (y) such Modifications are readily removable
without impairing the value, utility or remaining useful life of the Property.
The Lessee may place upon a Property any trade fixtures, machinery, equipment or
other property belonging to the Lessee or third parties and may remove the same
at any time during the Term, subject, however, to the terms of Section 12.1(a),
---------------
and the Lessor hereby waives any Liens, to which it may be entitled pursuant to
any statutory or common law, in such trade fixtures, machinery, equipment or
other property; provided that such trade fixtures, machinery, equipment or other
--------
property do not materially impair the value, utility or remaining useful life of
the Property; and provided, further, that the Lessee shall keep and maintain at
-------- -------
the Property and shall not remove from the Property any Equipment financed or
otherwise paid for (directly or indirectly) by the Lessor pursuant to this Lease
except as provided in Section 13.2.
------------
XIII.2 Substitutions and Replacements. The Lessee shall have the option,
------------------------------
as hereinafter provided, to substitute equipment of "like kind" and of at least
equal utility ("Substituted Equipment"), for Equipment subject to this Lease.
With respect to any item of Substituted
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Equipment having a value of $250,000.00 or more, on the date of any such
substitution Lessee shall deliver to Lessor a Xxxx of Sale identifying such
Substituted Equipment and transferring to Lessor all right, title and interest
in and to the Substituted Equipment. With respect to any item of Substituted
Equipment having a value of in excess of $5,000.00 but less than $250,000.00,
Lessee shall deliver to Lessor on the first Business Day of each calendar
quarter a Xxxx of Sale or Bills of Sale identifying all such items of
Substituted Equipment substituted by the Lessee during such calendar quarter and
transferring to Lessor all right, title and interest in and to the Substituted
Equipment. Such Substituted Equipment shall become subject to this Lease. Upon
the substitution of Equipment as provided herein, Lessor shall transfer to
Lessee at Lessee's expense all of the Lessor's right, title and interest in and
to original Equipment subject to the substitution without any representation or
warranty other than the absence of Lessor Liens.
ARTICLE XIV
WARRANT OF TITLE; EASEMENTS
XIV.1 Warrant of Title. The Lessee agrees that except as otherwise
----------------
provided herein and subject to the terms of Article XV relating to permitted
----------
contests, the Lessee shall not directly or indirectly create or allow to remain,
and shall promptly discharge at its sole cost and expense, any Lien (other than
Lessor Liens), defect, attachment, levy, title retention agreement or claim upon
the Property or any Modifications or any Lien, attachment, levy or claim with
respect to the Rent, other than Permitted Liens
XIV.2 No Consent to Work. Nothing contained in this Lease shall be
------------------
construed as constituting the consent or request of the Lessor, expressed or
implied, to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the furnishing
of any materials for any construction, alteration, addition, repair or
demolition of or to the Properties or any part thereof. NOTICE IS HEREBY GIVEN
THAT THE LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING THE
PROPERTY OR ANY PART THEREOF THROUGH OR UNDER THE LESSEE, AND THAT NO MECHANIC'S
OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR
AFFECT THE INTEREST OF THE LESSOR IN AND TO THE PROPERTIES.
ARTICLE XV
PERMITTED CONTESTS
XV.1 Permitted Contests in Respect of Applicable Law. If, to the extent
-----------------------------------------------
and for so long as (a) a test, challenge, appeal or proceeding for review of any
Applicable Law relating to any Property shall be prosecuted diligently and in
good faith in appropriate proceedings by the Lessee or (b) compliance with such
Applicable Law shall have been excused or exempted by a valid nonconforming use,
variance permit, waiver, extension or forbearance, the Lessee shall not be
required to comply with such Applicable Law but only if and so long as any such
test,
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challenge, appeal, proceeding, waiver, extension, forbearance or noncompliance
shall not, in the reasonable opinion of the Lessor, involve (A) any risk of
criminal liability being imposed on the Lessor or the Property, or (B) any risk
of (1) foreclosure, forfeiture or loss of the Property, or any material part
thereof, or (2) the nonpayment of Rent or (C) any substantial danger of (1) the
sale of, or the creation of any Lien (other than a Permitted Lien) on, any part
of the Property, (2) civil liability being imposed on the Lessor or the
Property, or (3) enjoinment of, or interference with, the use, possession or
disposition of the Property in any material respect. The Lessor will not be
required to join in any proceedings pursuant to this Section 15.1 unless a
------------
provision of any Applicable Law requires that such proceedings be brought by or
in the name of the Lessor; and in that event the Lessor will join in the
proceedings or permit them or any part thereof to be brought in its name if and
so long as (i) no Default has occurred and is continuing and (ii) the Lessee
pays all related expenses and indemnifies the Lessor to its satisfaction.
ARTICLE XVI
INSURANCE
XVI.1 Public Liability and Workers' Compensation Insurance.
----------------------------------------------------
(a) The Lessee shall procure and carry from a financially sound and
responsible insurance company, at the Lessee's sole cost and expense, commercial
general liability insurance for claims for bodily injury or death sustained by
persons or damage to property while on the Property and such other public
liability coverages on terms and in amounts that are no less favorable than set
forth on Schedule 5 hereto. Any such policy shall be endorsed to name the
----------
Lessor as an additional insured. Any such policy shall also specifically
provide that the policy shall be considered primary insurance which shall apply
to any loss or claim before any contribution by any insurance which the Lessor
may have in force.
(b) The Lessee shall, in the operation of the Properties including in
connection with any Modifications thereof), comply with, or cause the applicable
contractor to comply with, all applicable workers' compensation laws.
XVI.2 Property and Other Insurance. The Lessee shall procure and carry
----------------------------
from a sound and responsible insurance company, at the Lessee's sole cost and
expense, property and other insurance for each Property insured against loss or
damage by fire, flood and other risks on terms and in amounts that are no less
favorable than as set forth on Schedule 5 hereto.
----------
XVI.3 Business Interruption and Rental Insurance. The Lessee shall
-------------------------------------------
procure and carry from a sound and responsible insurance company, at the
Lessee's sole cost and expense, business interruption and /or loss of rental
income insurance on terms and in amounts that are no less favorable than as set
forth on Schedule 5 hereto.
----------
XVI.4 Environmental Insurance. The Lessee shall procure and carry from a
-----------------------
sound and responsible insurance company, at the Lessee's sole cost and expense,
environmental insurance on terms and in amounts that are no less favorable than
as set forth on Schedule 5 hereto throughout the Term of this Lease.
----------
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XVI.5 Insurance Coverage.
------------------
(a) The Lessee shall furnish the Lessor with certificates showing the
insurance procured under Sections 16.1 , 16.2, 16.3 and 16.4 to be in effect and
------------- ---- ---- ----
naming the Lessor as additional insured with respect to liability coverage
(excluding worker's compensation insurance) and naming the Lessor as loss payee
with respect to property coverage. All such insurance shall be at the cost and
expense of the Lessee. Such certificates shall include a provision for no less
than thirty days' advance written notice by the insurer to the Lessor in the
event of cancellation or reduction of such insurance.
(b) The Lessee agrees that the insurance policy or policies obtained
under Section 16.2, shall include an appropriate clause pursuant to which such
policy shall provide that it will not be invalidated should the Lessee waive, in
writing, prior to a loss, any or all rights of recovery against any party for
losses covered by such policy, and that the insurance in favor of the Lessor and
its rights under and interests in said policies shall not be invalidated or
reduced by any act or omission or negligence of the Lessee or any other Person
having any interest in the Property. The Lessee hereby waives any and all such
rights against the Lessor to the extent of payments made under such policies.
(c) If the policies of insurance required by this Article XVI provide
for the payment of premiums on other than an annual basis, then (x) such
premiums shall be paid no less frequently than quarterly, and (ii) the Lessee
shall maintain with the Lessor as of the Commencement Date and at all times
thereafter an amount sufficient to pay the next quarterly installment of
premiums, which amount shall be maintained in an escrow account by the Lessor.
(d) Subject to the terms of the Loan Documents and the Subleases, all
proceeds of insurance maintained pursuant to Section 16.2 on account of any
------------
damage to or destruction of any Property or any part thereof shall be paid over
to the Lessor or as it may direct; provided that if no Event of Default, or
--------
Event of Loss shall have occurred and be continuing and, so long as the Lessee
is diligently repairing the damage to the Property caused by the applicable
Casualty, all such proceeds will be disbursed to the Lessee on a progress-
payment basis and otherwise on standard commercial terms to effect the repair of
the Improvements or the Equipment.
ARTICLE XVII
CASUALTY AND CONDEMNATION;
ENVIRONMENTAL MATTERS
XVII.1 Casualty and Condemnation.
-------------------------
(a) Subject to the provisions of this Article XVII, if all or a portion
------------
of any Property (having a value in excess of the lesser of (x) ten percent of
the Stipulated Loss Value of such Property or (y) $1,000,000.00) is damaged or
destroyed in whole or in part by a Casualty or if the use, access, occupancy,
easement rights or title to such Property or any part thereof, is the subject
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of a Condemnation, then the Lessee shall (i) reconstruct, refurbish and repair
the Property upon submission to the Lessor of an Architect's certificate to the
effect that the Property can be fully restored to the condition required under
this Lease prior to the end of the Term and as to the cost of such restoration,
or (ii) pay to Lessor the Stipulated Loss Value for such Property.
(b) The Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal, and shall be entitled to control adjustment of, any
claim for any award, compensation or insurance payment on account of any such
Casualty or Condemnation, if the Lessee has agreed to repair the damage to the
Improvements, unless an Event of Default shall have occurred and be continuing,
in which case losses shall be adjusted by the Lessor. Losses shall also be
adjusted by the Lessor in circumstances where the Lessee is not required to, and
has not agreed to, repair the damage to the Improvements, unless the Lessee has
purchased the Property pursuant to the terms of this Lease. The Lessee shall
pay all reasonable expenses of the Lessor in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award, compensation or
insurance payment on account of any Casualty or Condemnation. At the Lessee's
reasonable request, and at the Lessee's sole cost and expense, the Lessor shall
participate in any such proceeding, action, negotiation, prosecution or
adjustment which the Lessee is entitled to control. The Lessor and the Lessee
agree that this Lease shall control the rights of the Lessor and the Lessee in
and to any such award, compensation or insurance payment.
(c) If the Lessor or the Lessee shall receive notice of a Casualty or of
an actual, pending or threatened Condemnation of the Property or any interest
therein, the Lessor or the Lessee, as the case may be, shall give notice thereof
to the other promptly after the receipt of such notice.
(d) If, pursuant to this Section 17.1 and Section 18.1, this Lease shall
------------ ------------
continue in full force and effect following a Casualty or Condemnation with
respect to such Property, the Lessee shall, at its sole cost and expense (and,
without limitation, if any award, compensation or insurance payment is not
sufficient to restore the Property in accordance with this paragraph, the Lessee
shall pay the shortfall), promptly and diligently repair any damage to the
Property caused by such Casualty or Condemnation in conformity with the
requirements of Sections 12.1 and 13.1 using the as-built plans and
------------- ----
specifications for the Property (as modified to give effect to any subsequent
Modifications, any Condemnation affecting the Property and all Applicable Laws)
so as to restore the Property to at least the same condition, operation,
function and value as existed immediately prior to such Casualty or Condemnation
with such Modification as the Lessee may elect in accordance with Section 13.1.
------------
In such event, title to the Property shall remain with the Lessor. Upon
completion of such restoration, the Lessee shall furnish the Lessor an
Architect's certificate of substantial completion and a Responsible Employee's
Certificate confirming that such restoration has been completed pursuant to this
Lease.
(e) In no event shall a Casualty or Condemnation affect the Lessee's
obligations to pay Rent pursuant to Articles VI or to perform its obligations
-----------
and pay any amounts due pursuant to Article XXII .
------------
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(f) Subject to the terms of the Loan Documents, any Net Proceeds
received by the Lessee in respect of a Casualty or Condemnation shall be turned
over to the Lessor. Unless a Casualty or Condemnation results in an Event of
Loss, and subject to the terms of the Loan Documents, the Lessor will make any
Net Proceeds available to the Lessee for the repair or restoration of the
Property on a progress-payment basis and otherwise on standard commercial terms.
In the event that the Lessee elects to pay to Lessor the Stipulated Loss Value
for such Property pursuant to Section 17.1(a)(ii), Net Proceeds received by the
-------------------
Lessor shall be credited against the Lessee's payment of the Stipulated Loss
Value. To the extent that Net Proceeds exceed the cost of repair or restoration
or the Stipulated Loss Value, as the case may be, such excess shall be treated
as Excess Proceeds.
XVII.2 Environmental Matters. Promptly upon the Lessee's discovery of the
---------------------
existence of an Environmental Violation not disclosed in the environmental
audits identified in Schedule IX to the Purchase and Sale Agreement, the Lessee
shall notify the Lessor in writing of such Environmental Violation. If the
Lessor elects not to terminate this Lease pursuant to Section 18.1, at the
------------
Lessee's sole cost and expense, the Lessee shall promptly and diligently
commence, or diligently pursue all reasonable commercial efforts to cause
responsible third parties to commence, any response, clean up, remedial or other
action necessary to remove, clean up or remediate the Environmental Violation in
accordance with the terms of Section 11.3. If the Lessor does not deliver a
------------
Termination Notice pursuant to Section 18.1, the Lessee shall, upon completion
------------
of remedial action by the Lessee, cause to be prepared by an environmental
consultant reasonably acceptable to the Lessor a report describing the
Environmental Violation and the actions taken by the Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in compliance in all material
respects with applicable Environmental Law. Each such Environmental Violation
shall be remedied prior to the Expiration Date. Nothing in this Article XVII
------------
shall reduce or limit the Lessee's obligations under the indemnity provisions
hereof.
XVII.3 Notice of Environmental Matters. Promptly, but in any event within
-------------------------------
sixty Business Days from the date the Lessee has actual knowledge thereof, the
Lessee shall provide to the Lessor written notice of any pending or threatened
claim, action or proceeding (except to the extent that such claim, action or
proceeding is disclosed in the environmental audits identified in Schedule IX to
the Purchase and Sale Agreement) involving any Environmental Law or any Release
on or in connection with the Properties. All such notices shall describe in
reasonable detail the nature of the claim, action or proceeding and the Lessee's
proposed response thereto. In addition, the Lessee shall provide to the Lessor,
within ninety days of receipt, copies of all written communications with any
Governmental Authority relating to any Environmental Violation in connection
with the Properties. The Lessee shall also promptly provide such detailed
reports of any such environmental claims as may reasonably be requested by the
Lessor. In the event that the Lessor receives written notice of any pending or
threatened claim, action or proceeding involving any Environmental Law or any
Release on or in connection with the Property, the Lessor shall promptly give
notice thereof to the Lessee.
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ARTICLE XVIII
EVENTS OF LOSS
XVIII.1 Transfer upon Certain Events. With respect to any Property, if
----------------------------
any of the following events shall occur ("Event of Loss"):
-------------
(a) a Significant Casualty;
(b) a Significant Condemnation;
(c) an Environmental Violation, the estimated cost of remediation of which
would exceed an amount equal to $500,000.00;
and the Lessor or the Lessee shall have given written notice to the other party
within ninety days following actual knowledge of such Event of Loss, that this
Lease is to be terminated as to such Property as a consequence of the occurrence
of such an event (a "Loss Notice"), then the Lessee shall be obligated to pay to
------------
the Lessor, on or prior to the date occurring sixty days after the date of the
Loss Notice, the Stipulated Loss Value for such Property, and the Lessor shall,
as set forth in Section 18.2, upon receipt of such payment, transfer to the
------------
Lessee on such date of payment all of the Lessor's interest in the Property.
XVIII.2 Transfer Procedures. On the date of the payment by the Lessee of
-------------------
the Stipulated Loss Value pursuant to Section 18.1 (such date, the "Transfer
------------ --------
Date"), this Lease shall terminate as to such Property and, concurrent with the
-----
Lessor's receipt of such payment,
(a) the Lessor shall execute and deliver to the Lessee at the Lessee's
cost and expense a quitclaim deed with respect to the Property and an assignment
of the Lessor's entire interest in the Property (which shall include an
assignment of all of the Lessor's right, title and interest in and to any Net
Proceeds not previously received by the Lessor and existing subleases and
security deposits thereunder), in each case in recordable form and otherwise in
conformity with local custom and free and clear any Lessor Liens attributable to
the Lessor;
(b) the Property shall be conveyed to such Person "AS IS" and in its then
present physical condition;
(c) Net Proceeds received by the Lessor shall be credited against the
Lessee's payment of the Stipulated Loss Value (and to the extent that Net
Proceeds exceed the Stipulated Loss Value, such excess shall be treated as
Excess Proceeds); and
(d) the Lessor shall discharge any Lessor's Liens and execute and deliver
to the Lessee and the Lessee's title insurance company an affidavit as to the
absence of any Lessor Liens.
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ARTICLE XIX
EVENTS OF DEFAULT
XIX.1 Events of Default. The occurrence of any one or more of the
-----------------
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute an "Event of Default":
-----------------
(a) the Lessee shall fail to make any payment of Basic Rent, including
amounts due upon an Event of Loss, when due; provided, however, that with
-------- -------
respect to any two payments due in any twelve-month period prior to February 2,
2003, such failure shall constitute an Event of Default only if such failure
shall continue for a period of five days after the due date;
(b) the Lessee shall fail to make payment of any Supplemental Rent as
and when due (subject to any notice requirements and grace periods provided for
in the Loan Documents) and, in the case where no due date is specified, within
fifteen days following the Lessor's written demand therefor;
(c) the Lessee shall fail to maintain insurance as required by Article
-------
XVI of this Lease;
---
(d) the Lessee shall breach Section 11.5 of this Lease;
(e) the Lessee shall fail to observe or perform any term, covenant or
condition of the Lessee under this Lease or the Loan Documents other than those
described in Section 19.1(a), (b), (c) or (d) hereof, and such failure shall
--------------- --- --- ---
have continued for the lesser of (i) thirty days after the earlier of (x)
delivery to the Lessee of written notice thereof from the Lessor or (y) a
Responsible Employee of the Lessee shall have knowledge of such failure, or (ii)
such lesser period as may be provided for the cure of such default under the
Loan Documents; provided, however, that if such failure is capable of cure but
-------- -------
cannot be cured by payment of money or cannot be cured by diligent efforts
within such thirty-day period but such diligent efforts shall be properly
commenced within the cure period and the Lessee is diligently pursuing, and
shall continue to pursue diligently, remedy of such failure, the cure period
shall be extended for an additional period of time as may be necessary to cure,
not to exceed (i) an additional forty-five days, or (ii) in the case only of a
failure to observe or perform any term, covenant or condition of the Loan
Documents other than those described in Section 19.1(a), (b), (c) or (d), such
--------------- --- --- ----
period (if any) as may be provided for the cure of such default under the Loan
Documents, but in no event beyond the Expiration Date;
(f) any representation or warranty made by the Lessee in this Lease
shall prove to have been inaccurate as of the date of execution of this Lease,
and such inaccuracy shall have a Material Adverse Effect, and if such inaccuracy
can be cured, it shall not have been cured within forty-five days after the
earlier of (i) delivery to the Lessee of written notice thereof from the Lessor
or (ii) a Responsible Employee of the Lessee shall have knowledge of such
inaccuracy;
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(g) the Lessee shall assign, transfer or other pledge or hypothecate its
interest under this Lease;
(h) a Guarantee Event of Default shall have occurred and be continuing;
(i) the Lessee shall (i) admit in writing its inability to pay its debts
generally as they become due, (ii) file a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof, (iii) make a general
assignment for the benefit of its creditors, (iv) consent to the appointment of
a receiver of itself or the whole or any substantial part of its property, (v)
fail to cause the discharge of any custodian, trustee or receiver appointed for
the Lessee or the whole or a substantial part of its property within sixty days
after such appointment, or (vi) file a petition or answer seeking or consenting
to reorganization under the United States bankruptcy laws or any other
applicable insolvency law or statute of the United States of America or any
State or Commonwealth thereof;
(j) insolvency proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof shall be filed against
the Lessee and not dismissed within sixty days from the date of its filing, or a
court of competent jurisdiction shall enter an order or decree appointing,
without the consent of the Lessee, a receiver of the Lessee or the whole or a
substantial part of any of its property and such order or decree shall not be
vacated or set aside within ninety days from the date of the entry thereof;
(k) an event of default, as defined in any agreement, mortgage,
indenture or instrument under which there may be issued, or by which there may
be secured or evidenced, any indebtedness for borrowed money of the Lessee in a
principal amount in excess of $5,000,000 which by its terms is recourse to the
assets or interests of the Lessee, whether such indebtedness now exists or shall
hereafter be created, shall happen and be continuing, if the effect of such
default is to accelerate the maturity of such indebtedness, unless the Lessee is
diligently and in good faith contesting such default in appropriate proceedings;
(l) the Lessee shall fail to comply with the obligations with respect to
the Properties assumed by the Lessee under the terms of the Purchase and Sale
Agreement and such failure shall have continued for thirty days after the
earlier of delivery to the Lessee of written notice thereof from the Lessor;
provided, however, that if such failure is capable of cure but cannot be cured
-------- -------
by payment of money or cannot be cured by diligent efforts within such thirty-
day period but such diligent efforts shall be properly commenced within the cure
period and the Lessee is diligently pursuing, and shall continue to pursue
diligently, remedy of such failure, the cure period shall be extended for an
additional period of time as may be necessary to cure, not to exceed an
additional forty-five days; or
(m) the Lessee shall directly or indirectly contest the validity of this
Lease or the Guaranty in any manner in any court of competent jurisdiction.
-41-
XIX.2 Remedies. Upon the occurrence of any Event of Default and at any
--------
time thereafter, the Lessor may, so long as such Event of Default is continuing,
do one or more of the following as the Lessor in its sole discretion shall
determine, without limiting any other right or remedy the Lessor may have on
account of such Event of Default; provided, however, that the Lessor will not
-------- -------
exercise any of such remedies with respect to an Event of Default arising under
Section 19.1(a) until the Lessor has given the Lessee written notice of such
---------------
Event of Default and the Lessee has failed to cure such Event of Default for a
period of five days thereafter:
(a) The Lessor may, by notice to the Lessee rescind or terminate this
Lease as of the date specified in such notice; however, (i) no reletting,
reentry or taking of possession of any Property (or any portion thereof) or all
the Properties by the Lessor will be construed as an election on the Lessor's
part to terminate this Lease unless a written notice of such intention is given
to the Lessee, (ii) notwithstanding any reletting, reentry or taking of
possession, the Lessor may at any time thereafter elect to terminate this Lease
for a continuing Event of Default and (iii) no act or thing done by the Lessor
or any of its agents, representatives or employees and no agreement accepting a
surrender of the Property shall be valid unless the same be made in writing and
executed by the Lessor.
(b) The Lessor may (i) demand that the Lessee, and the Lessee shall upon
the written demand of the Lessor, return any Property or all the Properties
promptly to the Lessor in the manner and condition required by, and otherwise in
accordance with all of the provisions of, Articles XII and Sections 11.3 hereof
------------ -------------
as if the Properties were being returned at the end of the Term, and the Lessor
shall not be liable for the reimbursement of the Lessee for any costs and
expenses incurred by the Lessee in connection therewith, and (ii) without
prejudice to any other remedy which the Lessor may have for possession of the
Properties, and to the extent and in the manner permitted by Applicable Law,
enter upon the Properties or any Property and take immediate possession (to the
exclusion of the Lessee) thereof or any part thereof and expel or remove the
Lessee and any other Person who may be occupying such Properties or Property, by
summary proceedings or otherwise, all without liability to the Lessee for or by
reason of such entry or taking of possession, whether for the restoration of
damage to property caused by such taking or otherwise and, in addition to the
Lessor's other damages, the Lessee shall be responsible for all costs and
expenses incurred by the Lessor in connection with any reletting, including,
without limitation, reasonable brokers' fees and all costs of any alterations or
repairs made by the Lessor.
(c) The Lessor may, at its option, elect not to terminate this Lease and
to preserve the Lessee's obligation to pay all Rent (together with all costs of
collection) and to enforce the Lessee's obligations under this Lease as and when
the same become due, or are to be performed, and at the option of the Lessor,
upon any abandonment of any Property by the Lessee or re-entry of same by the
Lessor, the Lessor may, in its sole and absolute discretion, elect not to
terminate this Lease and may collect rent due under Subleases and other income
of the Properties, make and collect payments under Underlying Agreements, make
the necessary repairs, and relet any Property or any part thereof for such term
or terms (which may be for a long term extending beyond the Term of this Lease)
and at such rental or rentals and upon such other terms and conditions as the
Lessor in its reasonable discretion may deem advisable; and the net amount of
-42-
such collections and payments by the Lessor, if any, shall be applied to the
Lessee's obligations hereunder in such order, proportion and priority as the
Lessor may elect in the Lessor's sole and absolute discretion and if the net
amount of such collections and payments by the Lessor is insufficient to pay all
Rent to be paid with respect to any period, the Lessee shall pay any deficiency,
as calculated by the Lessor, to the Lessor on demand.
(d) The Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, or proceed by appropriate court action
(legal or equitable) to enforce the terms hereof or to recover damages for the
breach hereof. Separate suits may be brought to collect any such damages for any
period(s), and such suits shall not in any manner prejudice the Lessor's right
to collect any such damages for any subsequent period(s), or the Lessor may
defer any such suit until after the expiration of the Term, in which event such
suit shall be deemed not to have accrued until the expiration of the Term.
(e) Notwithstanding the Lessor's choice of remedies provided for above,
the Lessor may retain and apply against any Rent and the Lessor's damages (i)
all amounts on deposit from time to time in the Cash Collateral Account or
otherwise assigned or pledged as security for the performance of the Lessee's
obligations under this Lease, and (ii) all sums which the Lessor would, absent
such Event of Default, be required to pay to, or turn over to, the Lessee
pursuant to the terms of this Lease.
(f) Waiver of Certain Rights. If this Lease shall be terminated pursuant
------------------------
to Section 19.2, the Lessee waives, to the fullest extent permitted by law, (a)
------------
any notice of re-entry or the institution of legal proceedings to obtain re-
entry or possession; (b) any right of redemption, re-entry or repossession; (c)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt or limiting the Lessor with respect to the
election of remedies; and (d) any other rights which might otherwise limit or
modify any of the Lessor's rights or remedies under this Article XIX.
-----------
XIX.3 The Lessor's Right to Cure the Lessee's Lease Defaults. The Lessor,
------------------------------------------------------
without waiving or releasing any obligation or Event of Default, may (but shall
be under no obligation to), remedy any Event of Default for the account and, at
the sole cost and expense of the Lessee, including the failure by the Lessee to
maintain the insurance required by Article XVI, and may, to the fullest extent
-----------
permitted by law, and notwithstanding any right of quiet enjoyment in favor of
the Lessee, enter upon the Property for such purpose and take all such action
thereon as the Lessor may reasonably determine to be necessary or appropriate
therefor, and the Lessor shall give prompt notice thereof to the Lessee. No
such entry shall be deemed an eviction of the Lessee. All reasonable out-of-
pocket costs and expenses so incurred (including fees and expenses of counsel or
other agents or representatives retained by the Lessor for this purpose),
together with interest thereon at the Overdue Rate from the date on which such
sums or expenses are paid by the Lessor, shall be paid by the Lessee to the
Lessor or to such other Person as may be entitled thereto as Supplemental Rent.
XIX.4 Cure by the Lessee. Notwithstanding anything in Section 19.2 to the
------------------ ------------
contrary, but subject to the restriction set forth in Section 22.2, in the case
------------
of an Event of Default arising
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under Section 19.1(e) or (f), the Lessee may suspend the Lessor's exercise of
--------------- ---
rights and remedies hereunder by giving notice to the Lessor that the Lessee
intends to purchase the Lessor's interest in the Property or Properties giving
rise to the Event of Default on or prior to the date occurring sixty days after
the date of the Lessee's notice by paying the Lessor the Stipulated Loss Value
for such Property or Properties; provided, however, that if the Lessee is
-------- -------
prohibited from exercising its rights provided for in this Section 19.4 by
------------
reason of the restriction set forth in Section 22.2, and unless the Lessor
------------
agrees to waive such restriction, then the Lessor shall not exercise any right
or remedy pursuant to Section 19.2, 19.3, the Guarantee, the Parent Guarantee,
------------ ----
or otherwise until the Lessee shall have had a period of ten days following the
termination of such restriction to exercise its rights under this Section 19.4;
------------
provided, further, that if the Lessor has determined that the Lessee has the
-------- -------
funds and is otherwise capable of curing the Event of Default giving rise to the
exercise of rights under this Section 19.4 and that the obstacles to the
Lessee's ability to cure the Event of Default are not bona fide, then the Lessor
---- ----
shall not be prohibited from exercising any right or remedy pursuant to Section
--- -------
19.2, 19.3, the Guarantee, the Parent Guarantee, or otherwise. The Lessor shall
---- ----
transfer to the Lessee on such date of payment all of the Lessor's interest in
the Property or Properties on terms consistent with those set forth in Section
-------
18.2 (it being understood that the restrictions set forth in Section 22.1(b) and
---- ---------------
(d), 22.4, and 22.5 shall not be applicable to as transfer made pursuant to this
---- ----
Section 19.4).
------------
XIX.5 Default by the Lessor. If any representation or warranty of Lessor
---------------------
in this Lease is or becomes untrue in any material respect, or if the Lessor is
in breach of any covenant or obligation of the Lessor under this Lease, then the
Lessor will be in default under this Lease. If the Lessor fails to cure such
default within thirty days following the Lessee's written notice of such
default, the Lessee will be entitled, at its option, to (a) seek specific
performance of the Lessor's obligations under this Lease, (b) seek recovery of
the Lessee's actual and consequential damages resulting from the Lessor's
default, (c) purchase any or all of the Properties for the Stipulated Loss Value
notwithstanding the restriction set forth in Section 22.2, (d) terminate this
------------
Lease upon the Lessee's notice to the Lessor of the Lessee's intention to
terminate this Lease on a date specified in such notice, and thereupon be
relieved of any further obligations thereafter accruing to the Lessor under this
Lease, including, but not limited to, the obligation to pay Rent, (e) any other
right or remedy now or hereafter existing by law or in equity, or (f) any
combination of the foregoing. Lessor will pay to Lessee all reasonable expenses
incurred by Lessee in connection with any default by Lessor under this Lease,
including Lessee's reasonable attorneys' fees and expenses. To the extent that
the Lessee is prevented from exercising any rights under this Lease as a result
of a default by the Lessor, any time periods provided for in this Lease with
respect to the exercise of such rights shall be tolled during the period of the
Lessor's default.
ARTICLE XX
REFINANCING
XX.1 Refinancing Proposed by Lessee. The Lessor agrees to cooperate with
------------------------------
the Lessee (which cooperation shall include the execution and delivery of
application and loan closing
-44-
documentation) in connection with the application for and closing of a
refinancing loan secured by any Property on terms and from an Institutional
Lender selected by the Lessee; provided, however, that (i) the loan
-------- -------
documentation shall be reasonably satisfactory to the Lessor, and (ii) the loan
documentation shall provide that the loan is non-recourse (subject only to
standard recourse exceptions). In the event of the refinancing of any Property,
the new loan shall be deemed a Senior Loan for all purposes of this Lease.
XX.2 Refinancing Proceeds. Any proceeds of a refinancing of a Property in
--------------------
excess of the Senior Loan being refinanced but less than the Early Buy-Out Price
for the Property shall be applied by the Lessor to reduce the Lessor's Cost for
such Property. Any proceeds of a refinancing of a Property in excess of the
Early Buy-Out Price for such Property shall be "Refinancing Proceeds".
--------------------
Refinancing Proceeds received by the Lessor shall be applied by the Lessor as
follows: (i) at any time that the Lease Balance reduced by amounts on deposit in
-------
the Cash Collateral Account and increased by the amount of Recourse Debt is
---------
$34,000,000.00 or greater, the Guarantor is in compliance with the financial
covenants in the Guarantee, and no Event of Default has occurred which is
continuing, (x) any payment of Refinancing Proceeds shall be retained by the
Lessor and applied by the Lessor to reduce the Lessor's Costs for the Properties
and Loans on a pro rata basis or otherwise as mutually agreed by the Lessor and
the Lessee, and (y) an amount equal to fifteen percent of such payment of
Refinancing Proceeds shall be released to the Lessee from the Cash Collateral
Account (or, to the extent of any insufficiency in the Cash Collateral Account,
the Lessee will be entitled to a release of the next monies deposited in the
Cash Collateral Account) , and (ii) at any time that the Lease Balance reduced
-------
by amounts on deposit in the Cash Collateral Account and increased by the amount
---------
of Recourse Debt is less than $34,000,000.00, the Guarantor is in compliance
with the financial covenants in the Guarantee, and no Event of Default has
occurred which is continuing, (x) any payment of Refinancing Proceeds shall be
retained by the Lessor and applied by the Lessor to reduce the Lessor's Costs
for the Properties and Loans on a pro rata basis or otherwise as mutually agreed
by the Lessor and the Lessee, and (y) an amount equal to twenty-five percent of
such payment of Refinancing Proceeds shall be released to the Lessee from the
Cash Collateral Account (or, to the extent of any insufficiency in the Cash
Collateral Account, the Lessee will be entitled to a release of the next monies
deposited in the Cash Collateral Account); provided, however, that upon Full
-------- -------
Collateralization, one hundred percent of any payments of Refinancing Proceeds
shall be retained by the Lessor and applied by the Lessor to reduce the Lessor's
Costs for the Properties and Loans on a pro rata basis or otherwise as mutually
agreed by the Lessor and the Lessee, and a corresponding amount shall be
released from the Cash Collateral Account to the Lessee; and provided, further,
-------- -------
at any time that an Event of Default has occurred and is continuing, the Lessor
may apply one hundred percent of Refinancing Proceeds to the cure of the Event
of Default or to the Lease Balance, as the Lessor shall determine in its sole
discretion.
XX.3 Refinancing Proposed by Lessor. The Lessee agrees to cooperate with
------------------------------
the Lessor in connection with the application for and closing of a refinancing
loan secured by any Property on terms and from an Institutional Lender selected
by the Lessor; provided, however, that, so long as an Event of Default has not
-------- -------
occurred and is continuing, (i) the loan terms shall be on the same or better
terms as the loan being refinanced, (ii) the loan documentation shall be
reasonably satisfactory to the Lessee, (iii) the loan documentation shall
provide that the loan is
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non-recourse; and (iv) the Refinancing Proceeds of any refinancing shall be
applied in accordance with Section 20.1.
------------
ARTICLE XXI
PURCHASE OPTION
XXI.1 Purchase Option. The Lessee shall have the option (exercisable by
---------------
giving the Lessor irrevocable written notice (the "Purchase Notice") of the
---------------
Lessee's election to exercise such option) to purchase all, and not less than
all, of the Properties and the Loans on or after February 2, 2003, and prior to
the Expiration Date at a purchase price equal to the Purchase Option Price. The
Lessee shall deliver the Purchase Notice to the Lessor not less than 90 days
prior to the proposed closing date for the transfer of the Properties and the
Loans (the "Purchase Option Closing Date"), which date shall in no event be
----------------------------
later than the Expiration Date. If the Lessee exercises its option to purchase
the Properties and the Loans pursuant to this Section 21.1 (the "Purchase
------------ --------
Option"), the Lessor shall transfer to the Lessee or its designee all of the
------
Lessor's right, title and interest in and to the Properties and the Loans upon
receipt of the Purchase Price on the Purchase Option Closing Date. The Lessee
may designate, in a notice given to the Lessor not less than ten Business Days
prior to the closing of such purchase (time being of the essence), the
transferee or transferees to whom the conveyances shall be made (if other than
to the Lessee), in which case such conveyances shall (subject to the terms and
conditions set forth herein) be made to such designee or designees; provided,
--------
however, that such designation of a transferee or transferees shall not cause
-------
the Lessee to be released, fully or partially, from any of its obligations under
this Lease.
ARTICLE XXII
EARLY BUY-OUT OPTION
XXII.1 Early Buy-Out Option. Subject to the fulfillment of each of the
--------------------
conditions set forth in this Section 22.1, the Lessee shall have the option (the
------------
"Early Buy-Out Option") to market and complete the sale of any Property for the
--------------------
Lessor. The Lessee's effective exercise and consummation of the Early Buy-Out
Option shall be subject to the due and timely fulfillment of each of the
following provisions as to the Property as of the dates set forth below.
(a) Subject to Section 22.2, at any time, but not later than 15 days
------------
prior to February 2, 2003, the Lessee shall give to the Lessor written notice of
the Lessee's exercise of an Early Buy-Out Option with respect to any Property
(the "Early Buy-Out Notice"), which notice shall specify a date for closing of
--------------------
title to such Property prior to February 2, 2003 (the "Early Buy-Out Closing
---------------------
Date").
----
(b) The Lessor's obligation to convey any Property upon the exercise of
an Early Buy-Out Option is subject to the condition that, on the date of the
Lessee's notice to the Lessor of the Lessee's exercise of the Early Buy-Out
Option and thereafter until the Early Buy-Out
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Closing Date, no Event of Default or Default shall exist; provided, however,
-------- ------
that such condition shall not apply with respect to an exercise of the Lessee's
rights under Section 19.4.
------------
(c) The Lessee, as the Lessor's exclusive agent for the period prior to
February 2, 2003, may hire brokers and make any Property available for
inspection by prospective purchasers. The Lessee shall promptly upon request
permit inspection of a Property and any maintenance records relating to a
Property by the Lessor and any potential purchasers, and shall otherwise do all
things necessary to sell and deliver possession of the Property to any
purchaser. All such marketing of the Property shall be at the Lessee's sole
expense. The Lessee shall allow the Lessor and any potential qualified
purchaser reasonable access to the Property for the purpose of inspecting the
same.
(d) The Lessee shall deliver to the Lessor, together with the Early Buy-
Out Notice, a written offer or offers by a purchaser or purchasers offering to
purchase the Property. Subject to Article XVIII and Sections 19.4 , 22.4 and
------------- ------------- ----
22.5, prior to February 3, 2002, no such purchaser shall be the Lessee or an
----
Affiliate of the Lessee and any exercise of an Early Buy-Out Option on or
subsequent to February 3, 2002, by the Lessee or an Affiliate of the Lessee
must provide for a exercise with respect to all of the Properties and the Loans.
The written offer must specify (i) subject to Section 22.3, a purchase price
------------
which will yield Net Proceeds (as hereinafter defined) not less than an amount
equal to the Early Buy-Out Price (or shall be supplemented by the Lessee's
commitment to pay cash at the closing sufficient, when added to the amount in
the offer, to yield Net Proceeds equal to the Early Buy-Out Price), and (ii) a
closing date prior to February 2, 2003, unless the Lessor shall otherwise agree
in its sole discretion. All offers shall be on an all-cash basis; provided,
--------
however, that the Lessor (i) agrees to be reasonable in its evaluation of
-------
offers which provide for sufficient cash to pay the Early Buy-Out Price, but
provide for all or part of Excess Proceeds to be on a non-cash basis, and (ii)
agrees that, to the extent that an offer for a Property provides for cash terms
which are sufficient to pay the Early Buy-Out Price and generate Excess
---
Proceeds, then the offer may include an amount not in excess of ten percent of
Gross Proceeds to be paid by a purchase money note or other consideration, on
terms reasonably satisfactory to the Lessor, in which case such purchase money
note or other consideration shall be pledged to the Lessor as additional
security for the obligations of the Lessee hereunder.
(e) In connection with any such sale of the Property, the Lessee will
provide to each Purchaser all customary "seller's" indemnities, representations
and warranties regarding absence of Liens (except Lessor Liens) and the
condition of the Property, including, without limitation, an environmental
indemnity to the extent the same are customarily required by Purchasers;
provided, however, that if necessary to consummate a transaction, the Lessor
-------- -------
will also give customary representations limited to actual knowledge and
warranties regarding absence of Liens (except Lessor Liens) and the condition of
the Property on the condition that the Lessee provides the Lessor a specific
indemnity with respect thereto. The Lessee shall have obtained, at its cost and
expense, all required governmental and regulatory consents and approvals and
shall have made all filings as required by Applicable Law in order to carry out
and complete the transfer of the Property. As to the Lessor, any such sale
shall be made on an "as is, with all faults" basis without representation or
warranty by the Lessor other than the absence of Lessor Liens. Any agreement as
to such sale shall be made subject to the Lessor's rights hereunder.
-47-
(f) Payment of all prorations, credits, reasonable costs and expenses
of the sale of the Property, whether incurred by the Lessor or the Lessee,
including without limitation, the cost of all title insurance, surveys,
environmental reports, appraisals, transfer taxes, the Lessor's reasonable
attorneys' fees, the Lessee's attorneys' fees, commissions (in the case of
commissions payable to an Affiliate of the Lessee, not to exceed customary or
market rates), escrow fees, recording fees, and all applicable documentary and
other transfer taxes shall be payable out of "Gross Proceeds", as hereinafter
defined; provided, however, that to the extent that any costs and expenses of a
-------- -------
sale permitted by this Section 22.1(f) are payable in advance of the closing of
---------------
the sale of the Property, such costs shall be advanced by the Lessee and
reimbursed to the Lessee out of Gross Proceeds.
(g) The sale of the Property shall be consummated on or before the
Early Buy-out Closing Date and the gross proceeds (the "Gross Proceeds") of the
--------------
sale of the Property, less the documented reasonable expenses incurred by the
Lessee under clause (f) and amounts paid to (or as directed by) the Senior
----------
Lender to repay the Senior Loan secured by such Property (the "Net Proceeds")
------------
shall be paid directly to the Lessor; provided, however, that if the Net
-------- -------
Proceeds from such sale or sales are less than the Early Buy-Out Price, then the
shortfall shall be paid by the Lessee on the Early Buy-out Closing Date.
XXII.2 Suspension of Early Buy-Out Option. Notwithstanding anything in
----------------------------------
this Lease to the contrary (other than the rights provided for in Article
-------
XVIII), if at any time prior to February 2, 2002, the aggregate of all payments
-----
of Early Buy-Out Prices received by the Lessor pursuant to this Lease reduce the
Lease Balance to an amount of $10,300,000.00 or less (or would result in such a
reduction if a proposed transaction were given effect), then the right of the
Lessee to exercise an Early Buy-Out Option and the obligation of the Lessor to
convey title thereto shall be suspended until February 2, 2002. In furtherance
of the foregoing, any Early Buy-Out Notice given prior to February 2, 2002,
which would result in the sum of (a) the Lease Balance and (b) the Loan
Balance being reduced to an amount of $10,300,000.00 or less shall be null and
void.
XXII.3 Grossed-Up Early Buy-Out Amounts. To the extent that any Senior
--------------------------------
Lender in connection with the repayment of any Senior Loan shall require the
payment of an amount in excess of principal balance due on the Senior Loan being
repaid, the Lessee shall (i) pay such excess amount (such excess or excesses
with respect to any Senior Lender, a "Prepaid EBO Amount") as Supplemental Rent
due hereunder, in which case such Prepaid EBO Amount shall be credited against
the repayment of the Senior Loan designated by such Senior Lender (or, if the
Lessee does not exercise an Early Buy-Out Option with respect to the Property to
which the Senior Lender has credited the Prepaid EBO Amount, to the last Early
Buy-Out Price paid by the Lessee hereunder), or (ii) to the extent that the
Lessee does not have adequate funds to pay both the Early Buy-Out Price and such
excess, direct the Lessor to apply funds from the Cash Collateral Account to pay
to the Lessor the shortfall in the funds necessary to pay the Early-Buy-Out
Price; provided, however, that funds so applied from the Cash Collateral Account
-------- -------
shall not exceed twenty-five percent of the amount required for the repayment of
such Senior Loan.
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XXII.4 Carillon Parcels. Notwithstanding the requirement set forth in
----------------
Section 22.1(d) that the purchaser or purchasers of a Property which is the
---------------
subject of an Early Buy-Out Option not be the Lessee or an Affiliate, the Lessee
or any Affiliate of the Lessee shall be entitled to acquire one or more of the
Carillon Parcels on the following terms: (i) the first two such parcels
(excluding Block 10, Lot 2 and Block 1, Lot 1) may be purchased by the Lessee or
any Affiliate of the Lessee provided that an amount equal to an additional
thirty-two percent of the Early Buy-Out Price shall be deposited by the Lessee
in the Cash Collateral Account, and (ii) all other parcels (including Block 10,
Lot 2 and Block 1, Lot 1) may be purchased by the Lessee or any Affiliate of the
Lessee provided that an amount equal to an additional ten percent of the Early
Buy-Out Price shall be deposited by the Lessee in the Cash Collateral Account.
This Section 22.4 shall not be deemed to restrict the exercise of the Early Buy-
------------
Out Option with respect to any or all the Carillon Parcels in those cases where
the purchaser or purchasers of a Property which is the subject of an Early Buy-
Out Option is not the Lessee or an Affiliate.
XXII.5 Permitted Purchases by the Lessee. Notwithstanding the requirement
---------------------------------
set forth in Section 22.1(d) that the purchaser or purchasers of a Property
---------------
which is the subject of an Early Buy-Out Option not be the Lessee or an
Affiliate, the Lessee or any Affiliate of the Lessee shall be entitled to
acquire one or more parcels of "4th Street Land" and "9th Street Land" on
Schedule 1 attached hereto provided that an amount equal to an additional
----------
fifteen percent of the Early Buy-Out Price shall be deposited by the Lessee in
the Cash Collateral Account.
XXII.6 Deposits to Cash Collateral Account upon Resale. In the event that
-----------------------------------------------
the Lessee or an Affiliate of the Lessee purchases any Property on the basis of
the exceptions set forth in Sections 19.4, 22.4 or 22.5, then any further sale
------------- ---- ----
or disposition of such Property by the Lessee or its Affiliate occurring during
the Term shall be treated as an exercise of an Early Buy-Out Option, with the
requirement that that percentage of "Excess Proceeds" (determined with reference
to the Early Buy-Out Price as of the date of the original transfer of the
Property to the Lessee or an Affiliate) resulting from such further sale or
disposition which would be deposited to the Cash Collateral Account pursuant to
the terms of Section 30.1, shall be deposited in the Cash Collateral Account.
------------
XXII.7 Full Release by Senior Lender. Notwithstanding the terms of the
-----------------------------
definition of Early Buy-Out Price and this Article XXII which require that the
------------
Senior Loan secured by a Property which is the subject of an exercise of the
Early Buy-Out Option be repaid and satisfied, the transferee of such Property
may instead assume such Senior Loan provided that the Lessor is fully and
completely released from all obligations with respect to such Senior Loan
(including indemnity obligations which the Loan Document provided are to survive
repayment of the Senior Loan), pursuant to assumption and release documentation
reasonably satisfactory to the Lessor.
XXII.8 No Time of the Essence. Except with respect to the last date for
----------------------
giving of notice in Section 22.1(a) and the restriction on exercise of the Early
---------------
Buy-Out Option in Section 22.2, time shall not be deemed to be of the essence
------------
with respect to the dates and obligations provided for in this Article XXII,
and the parties shall be entitled to such reasonable extension or adjournments
as are provided for by law or statute.
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ARTICLE XXIII
PROCEDURES RELATING TO PURCHASE OR EARLY BUY-OUT
XXIII.1 Provisions Relating to the Exercise of Purchase Option and
----------------------------------------------------------
Conveyance Upon Early Buy-Out. (a) In connection with the Lessee's exercise of
-----------------------------
its Purchase Option with respect to the Properties or an Early Buy-Out Option
with respect to any Property, upon the Purchase Option Closing Date or the Early
Buy-Out Closing Date, as the case may be:
(i) the Lessor shall execute and deliver (x) in the case of any
Property to be conveyed directly to the Lessee or its designee, at the
Lessee's cost and expense, a quitclaim deed with respect to the Property,
and (y) in the case of any Property to be conveyed to a Person other than
the Lessee or its designee, at the Lessor's election either (A) at the
Lessor's cost and expense, a quitclaim deed conveying the Property to the
Lessee or an Affiliate or designee of the Lessee (with the transfer costs
attributable to the Lessee's transfer to any third party to be paid by the
Lessee), or (B) at the Lessee's cost and expense, a special warranty deed
(or the equivalent in the case of any state other than Florida) conveying
the Property directly to such Person.
(ii) a quitclaim xxxx of sale with respect to any Equipment and an
assignment of the Lessor's entire interest in the Property (which shall
include an assignment of all of the Lessor's right, title and interest in
and to any Net Proceeds not previously received by the Lessor for that
Property, an assignment of leases of the Property and any security deposits
collected by the Lessor), in each case in recordable form and otherwise in
conformity with local custom and free and clear of any Lessor Liens
attributable to the Lessor;
(iii)the Property shall be conveyed to the Lessee or its designee
"AS IS" and in its then present physical condition;
(iv) the Lessor shall execute and deliver to the Lessee or its
designee and the Lessee's title insurance company an affidavit as to the
absence of Lessor Liens; and
(v) the Lessor shall execute such other documents reasonably
requested by the Lessee or its designee, or otherwise required under local
law, to effect a transfer of the Property and title thereto.
ARTICLE XXIV
INDEMNIFICATION
XXIV.1 General Indemnification.
-----------------------
(a) The Lessee agrees, whether or not any of the transactions contemplated
hereby shall be consummated, to assume liability for, and to indemnify, protect,
defend, save and keep harmless each Indemnitee, on an After Tax Basis, from and
against, any and all Claims that may
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be imposed on, incurred by or asserted against such Indemnitee (whether because
of action or omission by such Indemnitee or otherwise), whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other Person
and whether or not such Claim arises or accrues after the Expiration Date, in
any way relating to or arising out of:
(i) this Lease or any of the transactions contemplated hereby, and
any amendment, modification or waiver in respect hereof;
(ii) any of the Loan Documents or any of the transactions contemplated
thereby, and any amendment, modification or waiver in respect thereof;
(iii)any Property or any part thereof or interest therein;
(iv) the purchase, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, ownership,
management, possession, operation, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing,
disposition, operation, condition, sale (including, without limitation, any
sale pursuant to any provision hereof), return or other disposition of all
or any part or any interest in any Property or the imposition of any Lien
(or incurring of any liability to refund or pay over any amount as a result
of any Lien) thereon, including, without limitation: (A) Claims or
penalties arising from any violation of law or in tort (strict liability or
otherwise), (B) latent or other defects, whether or not discoverable, (C)
any Claim based upon a violation or alleged violation of the terms of any
restriction, easement, condition or covenant or other matter affecting
title to any Property, (D) the making of any Modifications in violation of
any standards imposed by any insurance policies required to be maintained
by the Lessee pursuant to this Lease which are in effect at any time with
respect to the Property or any part thereof, (E) any Claim for patent,
trademark or copyright infringement and (F) Claims arising from any public
improvements with respect to any Property resulting in any change or
special assessments being levied against any Property or any plans to
widen, modify or realign any street or highway adjacent to any Property, or
any Claim for utility "tap-in" fees;
(v) the breach by the Lessee of any covenant, representation or
warranty made by it or deemed made by it in this Lease or any certificate
required hereunder;
(vi) the retaining or employment of any broker, finder or financial
advisor by the Lessee to act on its behalf in connection with the
transactions contemplated hereby;
(vii)the existence of any Lien on or with respect to any Property,
any Improvements, any Basic Rent or Supplemental Rent, title thereto, or
any interest therein including any Liens which arise out of the possession,
use, occupancy, construction, repair or rebuilding of any Property or by
reason of labor or materials furnished or claimed to have been furnished to
the Lessee or the Lessor or any predecessor in title, or any of its
contractors or agents or by reason of the financing of any personalty or
equipment purchased or leased by the Lessee or the Lessor or any
predecessor in title
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Modifications constructed by the Lessee, except Lessor Liens and Liens in
favor of the Lessor;
(viii) subject to the accuracy of Lessor's representation set forth
in Section 5.1, the transactions contemplated by this Lease in respect of
-----------
the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any
prohibited transaction described in Section 4975(c) of the Code; or
(ix) claims by the Senior Lenders relating to the Property under
the terms of the Senior Loan Documents, including, without limitation, any
environmental indemnity claims.
(b) Notwithstanding the terms of clause (a) of this Section 24.1, the
----
Lessee shall not be required to indemnify any Indemnitee under this Section 24.1
------------
for any of the following: (1) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee (it being understood
-------------------
that the Lessee shall be required to indemnify an Indemnitee even if the
ordinary (but not gross) negligence of such Indemnitee caused or contributed to
such Claim), (2) any Claim resulting from Lessor Liens which such Indemnitee is
responsible for discharging under the Loan Documents, any (3) any Claim to the
extent attributable to acts or events occurring after the expiration of the Term
or the purchase of the Property pursuant to this Lease so long as the Lessor is
not exercising remedies against the Lessee in respect of the Loan Documents and
no Event of Default has occurred or is continuing. It is expressly understood
and agreed that the indemnity provided for herein shall survive the expiration
or termination of and shall be separate and independent from any remedy under
this Lease. Without limiting the express rights of any Indemnitee under this
Section 24.1, this Section 24.1 shall be construed as an indemnity only and not
------------ ------------
a guaranty of residual value of the Property.
XXIV.2 Environmental Indemnity.
-----------------------
(a) Without limitation of the other provisions of this Article XXIV, the
------------
Lessee hereby agrees to indemnify, hold harmless and defend each Indemnitee from
and against any and all claims (including without limitation third party claims
for personal injury or real or personal property damage), losses (including but
not limited to, to the extent the Lease Balance has not been fully paid, any
loss of value of the Property), damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, requirements, enforcement actions of any
kind, and all reasonable and documented costs and expenses incurred in
connection therewith (including but not limited to reasonable and documented
attorneys' and/or paralegals' fees and expenses), including, but not limited to,
all costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local government agency, arising in whole or in part, out of
(a) the presence on or under any Property of any Hazardous Substance, or
any releases or discharges of any Hazardous Substance on, under, from or onto
any Property that was not disclosed in the environmental audits identified in
Schedule IX to the Purchase and Sale Agreement,
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(b) any activity, including, without limitation, construction, carried on
or undertaken on or off any Property by the Lessee or any employees, agents,
contractors or subcontractors of the Lessee in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or disposal of
any Hazardous Substances that at any time are located or present on or under or
that at any time migrate, flow, percolate, diffuse or in any way move onto or
under any Property,
(c) loss of or damage to any property or the environment (including,
without limitation, clean-up costs, response costs, remediation and removal
costs, cost of corrective action, costs of financial assurance, fines and
penalties and natural resource damages), or death or injury to any Person, and
all expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or under
Environmental Laws as a result of any Environmental Violation on a Property that
was not disclosed in the environmental audits identified in Schedule IX to the
Purchase and Sale Agreement,
(d) any claim first arising after the Commencement Date concerning lack of
compliance with Environmental Laws, or any act or omission causing an
environmental condition that requires remediation or would allow any
Governmental Authority to record a Lien on the land records, or
(e) any residual contamination on or under the Land, or affecting any
natural resources, and to any contamination of any property or natural resources
arising in connection with the generation, use, handling, storage, transport or
disposal of any such Hazardous Substances, and irrespective of whether any of
such activities were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances.
It is expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under this Lease.
XXIV.3 Proceedings in Respect of Claims. With respect to any amount
--------------------------------
that the Lessee is requested by an Indemnitee to pay by reason of Section 24.1
------------
or 24.2, such Indemnitee shall, if so requested by the Lessee and prior to any
----
payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is in the possession of such Indemnitee to
substantiate the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall promptly notify the Lessee of the commencement
thereof, and the Lessee shall be entitled, at its expense, to participate in,
and, to the extent that the Lessee desires to, assume and control the defense
thereof; provided, however, that the Lessee shall not have any increased
-------- -------
liability as a direct result of an Indemnitee's failure to provide such notice
promptly; provided, further, that the Lessee shall have acknowledged in writing
-------- -------
its obligation to fully indemnify such Indemnitee in respect of such action,
suit or proceeding, and, the Lessee shall keep such Indemnitee fully apprised of
the status of such action suit or proceeding and shall provide such Indemnitee
with all information with respect to such action suit or proceeding as such
Indemnitee
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shall reasonably request, and provided, further, that the Lessee shall not be
-------- -------
entitled to assume and control the defense of any such action, suit or
proceeding if and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) such action, suit or proceeding involves any risk of imposition
of criminal liability or any risk of imposition of material civil liability on
such Indemnitee or will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Lien) on any Property or
any part thereof unless, in the case of civil liability, the Lessee shall have
posted a bond or other security satisfactory to the relevant Indemnitees in
respect to such risk or (y) the control of such action, suit or proceeding would
involve an actual or potential conflict of interest, (B) such proceeding
involves Claims not fully indemnified by the Lessee which the Lessee and the
Indemnitee have been unable to sever from the indemnified claim(s), or (C) an
Event of Default has occurred and is continuing. The Indemnitee may participate
in a reasonable manner at its own expense and with its own counsel in any
proceeding conducted by the Lessee in accordance with the foregoing. The Lessee
shall not enter into any settlement or other compromise with respect to any
Claim which is entitled to be indemnified under Section 24.1, 24.2 or 24.3
------------ ---- ----
without the prior written consent of the Indemnitee which consent shall not be
unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnitee; provided, however, that in the event
-------- -------
that such Indemnitee withholds consent to any settlement or other compromise,
the Lessee shall not be required to indemnify such Indemnitee under Section
-------
24.1, 24.2 or 24.3 to the extent that the applicable Claim (x) is for legal fees
---- ----
and expenses incurred after the date of the proposed settlement or (y) results
in a judgment in excess of such offered money settlement.
Each Indemnitee shall at the expense of the Lessee supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by Section 24.1, 24.2 or 24.3. Unless an
------------ ---- ----
Event of Default shall have occurred and be continuing, no Indemnitee shall
enter into any settlement or other compromise with respect to any Claim which is
entitled to be indemnified under Section 24.1 or 24.3 without the prior written
------------ ----
consent of the Lessee, which consent shall not be unreasonably withheld, unless
such Indemnitee waives its right to be indemnified under Section 24.1 or 24.3
------------ ----
with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section 24.1,
------------
24.2 or 24.3 to or on behalf of an Indemnitee, the Lessee, without any further
---- ----
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 24.1, 24.2 or 24.3
------------------ ----
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable and, if requested by the Lessee, such determination shall be verified
by a nationally recognized independent accounting firm mutually
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acceptable to the Lessee and the Indemnitee at the expense of the Lessee;
provided, however, that if the Lessee has assumed the defense of the related
-------- -------
Claim or is paying the costs of the Indemnitee's defense of the related claim on
an ongoing basis, the Lessee shall not be required to pay such amount to the
applicable Indemnitee until such time as a judgment is entered with respect to
such Claim, the enforcement of which is not stayed or which judgment is not
bonded over, or the Claim is otherwise settled or lost. To the extent the Lessee
suffers any losses or damages as a result of an Indemnitee's failure to provide
the Lessee with prompt notice of the commencement of any action, suit or
proceeding against any Indemnitee in accordance with the first sentence of the
second paragraph of this Section 24.4, the amounts of such losses or damages may
------------
be offset against the Lessee's indemnification obligation to such Indemnitee.
XXIV.4 General Impositions Indemnity.
-----------------------------
(a) Indemnification. The Lessee shall pay and assume liability for, and
---------------
does hereby agree to indemnify, protect and defend the Property and all
Indemnitees, and hold them harmless against, all Impositions on an After Tax
Basis.
(a) Contests. If any claim shall be made against any Indemnitee or if any
--------
proceeding shall be commenced against any Indemnitee (including a written notice
of such proceeding) for any Imposition as to which the Lessee may have an
indemnity obligation pursuant to this Section 24.4, or if any Indemnitee shall
------------
determine that any Imposition to which the Lessee may have an indemnity
obligation pursuant to this Section 24.4 may be payable, such Indemnitee shall
------------
promptly (and in any event, within 30 days) notify the Lessee in writing
(provided that failure to so notify the Lessee within 30 days shall not alter
---------
such Indemnitee's rights under this Section 24.4 except to the extent such
------------
failure precludes or materially adversely affects the ability to conduct a
contest of any indemnified Taxes) and shall not take any action with respect to
such claim, proceeding or Imposition without the written consent of the Lessee
(such consent not to be unreasonably withheld or unreasonably delayed) for 30
days after the receipt of such notice by the Lessee; provided, however, that in
-------- -------
the case of any such claim or proceeding, if such Indemnitee shall be required
by law or regulation to take action prior to the end of such 30-day period, such
Indemnitee shall in such notice to the Lessee, so inform the Lessee, and such
Indemnitee shall not take any action with respect to such claim, proceeding or
Imposition without the consent of the Lessee (such consent not to be
unreasonably withheld or unreasonably delayed) for 10 days after the receipt of
such notice by the Lessee unless the Indemnitee shall be required by law or
regulation to take action prior to the end of such 10-day period.
The Lessee shall be entitled for a period of 30 days from receipt of such
notice from the Indemnitee (or such shorter period as the Indemnitee has
notified the Lessee is required by law or regulation for the Indemnitee to
commence such contest), to request in writing that such Indemnitee contest the
imposition of such Tax, at the Lessee's expense. If (x) such contest can be
pursued in the name of the Lessee and independently from any other proceeding
involving a Tax liability of such Indemnitee for which the Lessee has not agreed
to indemnify such Indemnitee, (y) such contest must be pursued in the name of
the Indemnitee, but can be pursued independently from any other proceeding
involving a Tax liability of such Indemnitee for which the Lessee has not agreed
to indemnify such Indemnitee or (z) the Indemnitee so requests, then
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the Lessee shall be permitted to control the contest of such claim, provided
--------
that in the case of a contest described in clause (y), if the Indemnitee
----------
determines in good faith that such contest by the Lessee could have a material
adverse impact on the business or operations of the Indemnitee and provides a
written explanation to the Lessee of such determination, the Indemnitee may
elect to control or reassert control of the contest, and provided, that by
--------
taking control of the contest, Lessee acknowledges that it is responsible for
the Imposition ultimately determined to be due by reason of such claim, and
provided, further, that in determining the application of clauses (x) and (y) of
-------- ------- ----------- ---
the preceding sentence, each Indemnitee shall take any and all reasonable steps
to segregate claims for any Taxes for which the Lessee indemnifies hereunder
from Taxes for which the Lessee is not obligated to indemnify hereunder, so that
the Lessee can control the contest of the former. In all other claims requested
to be contested by the Lessee, the Indemnitee shall control the contest of such
claim, acting through counsel reasonably acceptable to the Lessee. In no event
shall the Lessee be permitted to contest (or the Indemnitee required to contest)
any claim, (A) if such Indemnitee provides the Lessee with a legal opinion of
counsel reasonably acceptable to the Lessee that such action, suit or proceeding
involves a risk of imposition of criminal liability or will involve a material
risk of the sale, forfeiture or loss of, or the creation of any Lien (other than
a Permitted Lien) on the Property or any part of any thereof unless the Lessee
shall have posted and maintained a bond or other security satisfactory to the
relevant Indemnitee in respect to such risk, (B) if an Event of Default has
occurred and is continuing unless the Lessee shall have posted and maintained a
bond or other security satisfactory to the relevant Indemnitee in respect of the
Taxes subject to such claim and any and all expenses for which the Lessee is
responsible hereunder reasonably foreseeable in connection with the contest of
such claim, (C) unless the Lessee shall have agreed to pay and shall pay, to
such Indemnitee on demand all reasonable out-of-pocket costs, losses and
expenses that such Indemnitee may incur in connection with contesting such
Imposition including all reasonable legal, accounting and investigatory fees and
disbursements, or (D) if such contest shall involve the payment of the Tax prior
to the contest, unless the Lessee shall provide to the Indemnitee an interest-
free advance in an amount equal to the Imposition that the Indemnitee is
required to pay (with no additional net after-tax costs to such Indemnitee). In
addition for Indemnitee controlled contests and claims contested in the name of
the Indemnitee in a public forum, no contest shall be required: (A) unless the
amount of the potential indemnity (taking into account all similar or logically
related claims that have been or could be raised in any audit involving such
Indemnitee for which the Lessee may be liable to pay an indemnity under this
Section 24.4(b)) exceeds $500,000 and (B) unless, if requested by the
---------------
Indemnitee, the Lessee shall have provided to the Indemnitee an opinion of
counsel selected by the Lessee (which may be in-house counsel) (except, in the
case of income taxes indemnified hereunder which shall be an opinion of
independent tax counsel selected by the Indemnitee and reasonably acceptable to
the Lessee) that a reasonable basis exists to contest such claim. In no event
shall a Indemnitee be required to appeal an adverse judicial determination to
the United States Supreme Court.
The party conducting the contest shall consult in good faith with the other
party and its counsel with respect to the contest of such claim for Taxes (or
claim for refund) but the decisions regarding what actions to be taken shall be
made by the controlling party in its sole judgement, provided, however, that if
-------- -------
the Indemnitee is the controlling party and the Lessee recommends the acceptance
of a settlement offer made by the relevant Governmental Authority and such
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Indemnitee rejects such settlement offer then the amount for which the Lessee
will be required to indemnify such Indemnitee with respect to the Taxes subject
to such offer shall not exceed the amount which it would have owed if such
settlement offer had been accepted. In addition, the controlling party shall
keep the noncontrolling party reasonably informed as to the progress of the
contest, and shall provide the noncontrolling party with a copy of (or
appropriate excerpts from) any reports or claims issued by the relevant auditing
agents or taxing authority to the controlling party thereof, in connection with
such claim or the contest thereof.
Each Indemnitee shall at the Lessee's expense supply the Lessee with such
information and documents reasonably requested by the Lessee as are necessary or
advisable for the Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 24.4(b). No Indemnitee shall enter into any
---------------
settlement or other compromise or fail to appeal an adverse ruling with respect
to any claim which is entitled to be indemnified under this Section 24.4 (and
------------
with respect to which contest is required under this Section 24.4(b)) without
---------------
the prior written consent of the Lessee, unless such Indemnitee waives its right
to be indemnified under this Section 26.5 with respect to such claim.
------------
Notwithstanding anything contained herein to the contrary, a Indemnitee
will not be required to contest (and the Lessee shall not be permitted to
contest) a claim with respect to the imposition of any Tax if such Indemnitee
shall waive its right to indemnification under this Section 24.4 with respect to
------------
such claim (and any claim with respect to such year or any other taxable year
the contest of which is materially adversely affected as a result of such
waiver).
(b) Payments. Any Imposition indemnifiable under this Section 24.4 shall
-------- ------------
be paid directly when due to the applicable taxing authority if direct payment
is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to a
Indemnitee pursuant to Section 24.4 shall be paid within thirty days after
------------
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before two Business Days prior to the date that the relevant Taxes are due. Any
payments made pursuant to this Section 24.4 shall be made directly to the
------------
Indemnitee entitled thereto or the Lessee, as the case may be, in immediately
available funds at such bank or to such account as specified by the payee in
written directions to the payor, or, if no such direction shall have been given,
by check of the payor payable to the order of the payee by certified mail,
postage prepaid at its address as set forth in Schedule 7 hereto. Upon the
-----------
request of any Indemnitee with respect to a Tax that the Lessee is required to
pay, the Lessee shall furnish to such Indemnitee the original or a certified
copy of a receipt for the Lessee's payment of such Tax or such other evidence of
payment as is reasonably acceptable to such Indemnitee.
(c) Reports. In the case of any report, return or statement required to be
-------
filed with respect to any Taxes that are subject to indemnification under this
Section 24.4 and of which the Lessee has knowledge, the Lessee shall promptly
------------
notify the Indemnitee of such requirement and, at the Lessee's expense (i) if
the Lessee is permitted (unless otherwise requested by the Indemnitee) by
Applicable Law, timely file such report, return or statement in its own name or
(ii) if such report, return or statement is required to be in the name of or
filed by such Indemnitee
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or the Indemnitee otherwise requests that such report, return or statement for
filing by such Indemnitee in such manner as shall be satisfactory to such
Indemnitee and send the same to the Indemnitee for filing no later than 15 days
prior to the due date therefor. In any case in which the Indemnitee will file
any such report, return or statement, the Lessee shall, upon written request of
such Indemnitee, provide such Indemnitee with such information as is reasonably
necessary to allow the Indemnitee to file such report, return or statement.
(d) Verification. At the Lessee's request, the amount of any indemnity
------------
payment by the Lessee pursuant to this Section 24.5 shall be verified and
------------
certified by an independent public accounting firm mutually acceptable to the
Lessee and the Indemnitee. The costs of such verification shall be borne by the
Lessee unless such verification shall result in an adjustment in the Lessee's
favor of the lesser of (i) $10,000, or (ii) five percent of the payment as
computed by the Indemnitee, in which case such fee shall be paid by the
Indemnitee. In no event shall the Lessee have the right to review the
Indemnitee's tax returns or receive any other confidential information from the
Indemnitee in connection with such verification. Any information provided to
such accountants by any Person shall be and remain the exclusive property of
such Person and shall be deemed by the parties to be (and the accountants will
confirm in writing that they will treat such information as) the private,
proprietary and confidential property of such Person, and no Person other than
such Person and the accountants shall be entitled thereto and all such materials
shall be returned to such Person. Such accounting firm shall be requested to
make its determination within 30 days of the Lessee's request for verifications
and the computations of the accounting firm shall be final, binding and
conclusive upon the Lessee and the Indemnitee. The parties agree that the sole
responsibility of the independent public accounting firm shall be to verify the
amount of a payment pursuant to this Lease and that matters of interpretation of
this Lease are not within the scope of the independent accounting firm's
responsibilities.
ARTICLE XXV
ESTOPPEL CERTIFICATES
XXV.1 Estoppel Certificates. At any time and from time to time upon
---------------------
not less than twenty days' prior request by the Lessor or the Lessee (the
"Requesting Party"), the other party (whichever party shall have received such
------------------
request, the "Certifying Party") shall furnish to the Requesting Party (but in
-----------------
the case of the Lessor, as Certifying Party, not more than four times per year
unless required to satisfy the requirements of any subleases and only to the
extent that the required information has been provided to the Lessor by the
Lessee) a certificate signed by an individual having the office of vice
president or higher in the Certifying Party certifying that this Lease is in
full force and effect (or that this Lease is in full force and effect as
modified and setting forth the modifications); the dates to which the Basic Rent
and Supplemental Rent have been paid; to the best knowledge of the signer of
such certificate, whether or not the Requesting Party is in default under any of
its obligations hereunder (and, if so, the nature of such alleged default); and
such other matters under this Lease as the Requesting Party may reasonably
request. Any such certificate furnished pursuant to this Article XXV may be
-----------
relied upon by the Requesting Party, and any existing or prospective mortgagee,
purchaser or lender, and any accountant or auditor, of, from or to the
Requesting Party (or any Affiliate thereof).
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ARTICLE XXVI
ACCEPTANCE OF SURRENDER
XXVI.1 Acceptance of Surrender. Except as specifically provided for in
-----------------------
this Lease, no surrender to the Lessor of this Lease or of all of the Properties
or any Property or any portion of any Property or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by the Lessor,
and no act by the Lessor or any representative or agent of the Lessor, other
than a written acceptance, shall constitute an acceptance of any such surrender.
ARTICLE XXVII
NO MERGER OF TITLE
XXVII.1 No Merger of Title. There shall be no merger of this Lease or of
------------------
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) the fee estate in any Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
appropriate Person or (c) a beneficial interest in the Lessor.
ARTICLE XXVIII
PAYMENT OF CERTAIN EXPENSES
XXVIII.1 Transaction Expenses. The Lessee shall pay, or cause to be paid
--------------------
(on behalf of the Lessor in the case of amounts incurred by the Lessor), the
following expenses with respect to this Lease, the other Transaction Documents
and the transactions contemplated hereby and thereby ("Transaction Expenses"):
--------------------
(a) any and all Taxes and fees incurred in recording, registering or
filing the Memorandum of Lease, any Transaction Document, any Loan Document or
recording or filing required by the terms of any Loan Document, or any
Transaction Document, any deed, declaration, mortgage, security agreement,
notice or financing statement with any public office, registry or governmental
agency in connection with the transactions contemplated by the Loan Documents;
(b) any title fees, premiums and escrow costs and other expenses relating
to the Senior Lenders' title insurance, Senior Lender's assumption fees, and
otherwise required by the Loan Documents;
(c) any title fees, premiums and escrow costs and other expenses relating
to the Lessee's acquisition of title to the Properties and the Loans pursuant to
the Subscription Agreement (to the extent not paid by the "Transferor" under the
Subscription Agreement);
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(d) all expenses relating to all surveys, Environmental Audits,
inspections and engineering reports, and Appraisals to be delivered on or prior
to the Commencement Date; provided, however, that such expenses incurred in
-------- -------
response to the Lessor's requirements only shall not exceed $200,000.00; and
(e) all fees and expenses of obtaining the consent of the Senior Lenders
to the transactions contemplated by the Subscription Agreement and to this Lease
(to the extent not paid by the "Transferor" under the Subscription Agreement).
XXVIII.2 Lease Expenses. The Lessee shall also pay, or cause to be paid
--------------
(on behalf of the Lessor in the case of amounts incurred by the Lessor), from
time to time, the following expenses arising with respect to the transactions
contemplated by this Lease and the other Transaction Documents ("Lease
-----
Expenses"):
(a) all expenses incurred in entering into any future amendments or
supplements with respect to any of the Loan Documents, whether or not such
amendments or supplements are ultimately entered into, or giving or withholding
of waivers of consents hereto or thereto;
(b) all expenses in obtaining or refinancing any Senior Loan, whether or
not such loan is ultimately entered into or consummated (but excluding such
expenses when the refinancing was initiated by the Lessor and such refinancing
is not entered into or consummated);
(c) all expenses (except as specifically provided in Section 23.1) in
------------
connection with any transfer of any Property by the Lessor to the Lessee or
other Person pursuant to this Lease, including but not limited to the costs of
all appraisals obtained by the Lessor or the Lessee in the process of
determining Fair Market Sales Value, any brokers' fees and any and all stamp,
transfer and other similar taxes, fees and excises, if any, including any
interest and penalties;
(d) any expenses incurred in connection with the Lessor's review of, or
consent to, any matter provided for in this Lease, including but not limited to
any Modification and any Major Lease;
(e) expenses incurred in respect of enforcement of any of its rights or
remedies against the Lessee; and
(f) the reasonable fees and expenses of the Lessor's counsel (including
local counsel, if any, who may be retained by such legal counsel) incurred in
connection with the foregoing; excluding, however, fees and expenses the
Lessor's counsel incurred in connection with the preparation, execution and
delivery of the Transaction Documents.
XXVIII.3 Time of Payment. The Lessee shall pay or cause to be paid
---------------
Transaction Expenses on the Commencement Date (or if the Lessee has not received
written invoices with appropriate back-up therefor prior to the Commencement
Date, such Transaction Expenses shall be paid within thirty days after the
Lessee has received written invoices with appropriate back-up therefor). The
Lessee shall pay or cause to be paid Lease Expenses at the closing of the
relevant transaction or, if there is no closing or if the Lessee has not
received written invoices therefor
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prior to such date, such Lease Expenses shall be paid within thirty days after
the Lessee has received written invoices with appropriate back-up therefor.
ARTICLE XXIX
OTHER COVENANTS AND AGREEMENTS
XXIX.1 Covenants. The Lessee hereby agrees that so long as this Lease
---------
is in effect:
(a) Information. The Lessee will deliver to the Lessor:
-----------
(i) as soon as possible and in any event within ten Business Days
after a Responsible Employee of the Lessee obtains knowledge of the
occurrence of each Event of Default or each event that, with the giving of
notice or time elapse, or both, would constitute an Event of Default
continuing on the date of such statement, a statement of the authorized
officer setting forth details of such Event of Default or event and the
action that the Lessee proposes to take with respect thereto; provided that
the Lessee shall not be obligated to give notice of any Event of Default
which is remedied within ten Business Days after such Responsible Employee
first obtains knowledge;
(ii) promptly upon becoming aware thereof, written notice of the
commencement or existence of any proceeding against the Lessee or any
Affiliate of the Lessee by or before any court or governmental agency that
might, in the reasonable judgment of the Lessee, result in a Material
Adverse Effect on the business, operations or financial conditions of the
Lessee or the ability of the Lessee to perform its obligations under the
Loan Documents;
(iii) as soon as possible and in any event within ten Business Days
after the occurrence of any violation or alleged violation of an
Environmental Law by Lessee, a statement of an authorized officer setting
forth the details of such violation and the action which the Lessee
proposes to take with respect thereto; and
(iv) from time to time such additional information regarding the
business, properties, condition or operations, financial or otherwise, of
the Lessee, or regarding the Property or the status of any construction
thereon, if any, as the Lessor may reasonably request in connection with
the Property.
(b) Compliance with Laws. The Lessee will comply in all material respects
--------------------
with all applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) with respect to its Material
Assets, including the Property, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
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(c) Further Assurances. The Lessee shall take or cause to be taken from
------------------
time to time all action necessary to assure that the intent of the parties
pursuant to this Lease is given effect . The Lessee shall execute and deliver,
or cause to be executed and delivered, to the Lessor from time to time, promptly
upon request therefor, any and all other and further instruments (including
correction instruments and supplemental mortgages, deeds of trust and security
agreements) that may be reasonably requested by the Lessor to cure any
deficiency in the execution and delivery of this Lease.
(d) Preservation of Existence, Etc. The Lessee will preserve and maintain
------------------------------
(i) its existence as a duly organized and validly existing limited liability
company in good standing under the laws of the State of Delaware, and (ii) the
power and authority to own and lease properties and to conduct the business in
which it is currently engaged, and (iii) all rights, privileges and franchises
necessary and desirable in the normal conduct of its business and the
performance of its obligations hereunder and under the Loan Documents; provided
that the Lessee may consolidate with or merge with or into any other corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person, if either the Lessee shall be the continuing corporation, or the
corporation (if other than the Lessee) formed by such consolidation or into
which the Lessee is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Lessee substantially as an entirety
shall expressly assume, by an assumption agreement executed and delivered to the
Lessor, the performance of the Lessee's obligations under each of the Loan
Documents.
(e) Separate Existence. The Lessee will: (i) maintain its books and
------------------
records, financial statements, and accounts separate from those of any other
Person; (ii)not commingle its assets or funds with those of any other Person;
hold all of its assets in its own name; (iii) conduct its business in its own
name; (iv) pay its liabilities out of its own funds; (v) observe all corporate
formalities; (vi) maintain an arm's-length relationship with its Affiliates;
(vii) maintain separate financial statements from any Affiliates; (viii) pay the
salaries of its own employees and fees for its directors and officers out of its
own funds; (ix) not guarantee or become obligated for the debts of any other
Person, or hold out its credit as being available to satisfy the obligations of
others; (x) not acquire obligations or securities of its owners, directors,
officers or Affiliates; (xi) allocate and charge fairly and reasonably any
overhead for shared office space; (xii) maintain stationery, invoices and checks
separate from its Affiliates, each bearing its own name; (xiii) not pledge its
assets for the benefit of any other Person or make any loans or advances to any
other Person; (xiv) hold itself out to creditors and the public as a legal
entity separate from any other Person and correct any known misunderstanding
regarding such separate identity; (xv) maintain adequate capital in light of its
contemplated business purpose, transactions and liabilities; (xvi) unless
otherwise required by applicable law, file its tax returns separately from those
of any other Person; (xvii) not buy or hold evidence of indebtedness issued by
any other Person; (xviii) not identify itself as a division of any other
Person, nor acquire or hold any Subsidiary; (xix) not acquire any securities;
(xx) not borrow money or incurred indebtedness other than normal trade accounts
payable and lease obligations in the normal course of its business nor grant
consensual Liens on its property; (xxi) without the unanimous consent of its
board of directors, not file a voluntary petition or otherwise initiated
proceedings to be adjudicated, bankrupt or insolvent, or consented to the
institution of bankruptcy or insolvency proceedings, or file a petition seeking
or
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consenting to reorganization or relief as debtor under any applicable federal or
state law relating to bankruptcy, insolvency, or other relief for debtors, seek
or consent to the appointment of any receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) of all or
substantial part of its properties or make any general assignment for the
benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due or declare or effect a moratorium on its debts or
take any action in furtherance of any such action; (xxii) not merge or
consolidate with any other Person; (xxiii) not hold itself out as having agreed
to pay or become liable, by guarantee or otherwise, for the debts of another
Person; (xxiv) not pledge its assets for the benefit of any other Person; (xxv)
not effect a change of management or ownership without the written consent of
the Lessee, including fail to maintain at all times at least one "independent"
director; (xxvi) not do or fail to do any act, the effect of which is (a) to
interfere with the normal operation of the Senior Loan Documents or (b) to cause
a breach or default thereunder; (xxvii) provide the Lessee promptly with copies
of any default notices which the Lessee receives from any of its creditors;
(xxviii) pay all of its obligations as they become due in the ordinary course of
its business; and (xxix) cause its directors, officers, managers, agents and
other representatives to act at all times consistently and in furtherance of the
foregoing.
(f) Payment of Taxes. The Lessee and each of its Subsidiaries shall
----------------
promptly pay when due all Taxes owing by the Lessee or such Subsidiary where
such failure could reasonably be expected to have a Material Adverse Effect,
except for such Taxes that are being contested in good faith by appropriate
proceedings and adequate reserves shall have been set aside therefor. The
forgoing shall not be deemed to limit or restrict the Lessee's obligations under
Section 24.4.
------------
(g) Books and Records. The Lessee shall, and shall cause each Subsidiary
-----------------
to, maintain its books and financial statements in accordance with GAAP, and
permit the Lessor to make or cause to be made inspections and audits of any
books, records and papers of the Lessee and its Subsidiaries and to make
extracts therefrom at all such reasonable times and as often as any such Person
may reasonably require; provided that so long as no Event of Default has
--------
occurred and is continuing, the Lessor's right to inspect and audit books and
records shall be limited to no more than once per year.
(h) Fundamental Changes. Subject to the terms of any Sublease, the Lessee
-------------------
shall not, nor shall it permit any Sublessee to, enter into any merger,
consolidation or amalgamation, where it is not the surviving entity, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution); or convey, sell, assign, transfer or otherwise dispose of any of
the capital stock of the Sublessees or all or substantially all of the property,
business or assets of the Sublessees; provided, however, that if no Default or
-------- -------
Event of Default shall have occurred before or after giving effect thereto:
(i) any Sublessee of the Lessee may be merged or consolidated with or
into the Lessee (provided, however, that the Lessee is the surviving
-------- -------
corporation); and
(ii) any Sublessee may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to the
Lessee.
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(i) Employee Benefit Plans. The Lessee shall maintain, and cause each of
----------------------
its Subsidiaries to maintain, each Plan as to which it may have liability, in
compliance with all Applicable Laws.
(j) Subleases. During the Term, the Lessee shall use reasonable efforts to
---------
cause each Sublessee to observe and perform all of their respective obligations
under the Subleases, including the taking of reasonable enforcement actions
against the Sublessees. The Lessor shall assist in those efforts as reasonably
necessary, at the Lessee's expense.
(k) Restricted Payments. Until Full Collateralization, the Lessee shall
-------------------
not make any Restricted Payments.
(l) Transferee Indemnity. In the event Florida Progress Corporation (or
--------------------
its subsidiary, Florida Power Corporation) fails to provide a limited
indemnification agreement to a third party transferee of Bayboro Station
consistent with the recent practice of Echelon International, Inc. and Florida
Progress which practice is to provide terms and conditions substantially as set
forth in the Indemnity Agreement made as of November 1, 1999 between Florida
Progress Corporation and Tampa Xxxxxxxx Warehouse, L.P., the amount of Recourse
Debt shall be increased by $2,000,000 for such period as Lessor continues to own
Bayboro Station.
XXIX.2 Covenants. The Lessor hereby agrees that so long as this Lease
---------
is in effect and no Event of Default has occurred which is continuing:
(a) Further Encumbrances. Lessor will not further encumber any of the
--------------------
Properties or grant any easement or other rights in the nature of easements or
leases on the Properties without the prior written consent of the Lessee. As
long as no Event of Default has occurred and is continuing hereunder, Lessor, at
the request of Lessee, will grant or declare, amend or release easements,
covenants, restrictions for utilities, parking or other matters as necessary or
desirable for the development or operation of the Properties, and execute and
deliver to any Person any instrument appropriate to confirm or effect such
grant, declaration, release or amendment.
(b) Lessor Liens. The Lessor will not directly or indirectly sell,
------------
transfer, or otherwise dispose of, or create, or permit there to be created or
to remain, and will promptly discharge, any Lessor Lien of any nature whatsoever
on, in or with respect to, its interests in the Properties arising by or through
it or its actions.
(c) Quiet Enjoyment. The Lessor shall not conduct any business activities
---------------
or act or fail to act in any manner which would give any third party any claims
which would, in either case, (i) materially interfere with the Lessee's quiet
enjoyment of its rights under this Lease, or (ii) materially restrict the
Lessee's rights under this Lease, including without limitation the right to
exercise any Purchase Option or any Early Buy-Out Option.
(d) Further Assurances. The Lessor shall take or cause to be taken from
------------------
time to time all action necessary to assure that the intent of the parties
pursuant to this Lease is given effect. The Lessor shall execute and deliver, or
cause to be executed and delivered, to the Lessee from
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time to time, promptly upon request therefor, any and all other and further
instruments (including correction instruments and supplemental mortgages, deeds
of trust and security agreements) that may be reasonably requested by the Lessee
to cure any deficiency in the execution and delivery of this Lease.
ARTICLE XXX
APPLICATION OF EXCESS PROCEEDS; CASH COLLATERAL ACCOUNT
XXX.1 Application of Excess Proceeds. Any payments of Excess Proceeds
------------------------------
received by the Lessor shall be applied by the Lessor as follows: (i) at any
time that the Lease Balance reduced by amounts on deposit in the Cash Collateral
-------
Account and increased by the amount of Recourse Debt is $34,000,000.00 or
---------
greater and no Event of Default has occurred which is continuing, (x) fifteen
percent of any payment of Excess Proceeds shall be distributed to the Lessee,
and (y) eighty five percent of any payment of Excess Proceeds shall be deposited
in the Cash Collateral Account to be held in accordance with the terms of the
Cash Collateral Agreement and this Lease, and (ii) at any time that the Lease
Balance reduced by amounts on deposit in the Cash Collateral Account and
-------
increased by the amount of Recourse Debt is less than $34,000,000.00 and no
---------
Event of Default has occurred which is continuing, (x) twenty-five percent of
any payment of Excess Proceeds shall be distributed to the Lessee, and (y)
seventy-five percent of any payment of Excess Proceeds shall be deposited in the
Cash Collateral Account to be held in accordance with the terms of the Cash
Collateral Agreement and this Lease; provided, however, that upon Full
-------- -------
Collateralization, one hundred percent of any payments of Excess Proceeds shall
be distributed to the Lessee; and provided, further, at any time that an Event
-------- -------
of Default has occurred and is continuing, the Lessor may apply one hundred
percent of Excess Proceeds to the cure of the Event of Default or to the Lease
Balance, as the Lessor shall determine in its sole discretion.
XXX.2 Additional Deposit to Cash Collateral Account. The Lessee also
---------------------------------------------
agrees that upon the sale by the Lessee of the Property described on Schedule 1
----------
as the " 7th Avenue Property", the net proceeds of such sale (determined in a
manner consistent with the the determination of Net Proceeds pursuant to Section
-------
22.1) shall be applied by the Lessee as following: (i) the net proceeds up to
----
$3,000,000.00 shall be paid to the Lessor and deposited in the Cash Collateral
Account to be held in accordance with the terms of the Cash Collateral Agreement
and this Lease; (ii) the net proceeds in excess of $3,000,000.00 up to an amount
not to exceed $4,000,000.00 shall be retained by the Lessee; and (iii) the net
proceeds in excess of $4,000,000.00 shall be paid to the Lessor and deposited in
the Cash Collateral Account to be held in accordance with the terms of the Cash
Collateral Agreement and this Lease.
XXX.3 Release from Cash Collateral. At any time that (i) the Lease
----------------------------
Balance reduced by amounts on deposit in the Cash Collateral Account and
-------
increased by the amount of Recourse Debt is less than $34,000,000.00 but prior
---------
to Full Collateralization, (ii) no Material Adverse Effect to the
creditworthiness of the Guarantor as reasonably determined by the Lessor has
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occurred, and (iii) no Event of Default has occurred and is continuing, in
addition to the rights provided for in Section 6.6 the Lessee shall be entitled
-----------
to direct the Lessor to release from the Cash Collateral Account to the partners
or members of the Lessee, or to the partners or members of the Parent, an amount
sufficient to pay the income tax liability of such partners or members arising
out of activities or transactions as required, permitted or contemplated or by
the terms of this Lease; provided, however, that the amount of such release
-------- -------
shall not exceed 5% of the Excess Proceeds payable in connection with the first
$17,000,00.00 of reductions to the Lease Balance.
XXX.4 Deposits to Cash Collateral Account. The Lessee shall have the
-----------------------------------
right, but not the obligation, to make deposits of funds other than Excess
Proceeds into the Cash Collateral Account at any time.
XXX.5 Effect of Full Collateralization. That portion of any Early Buy-
--------------------------------
Out Price determined pursuant to clause (b) of the definition of "Early Buy-Out
Price" accruing and compounding from and after the date of Full
Collateralization and paid by the Lessee in connection with the exercise of any
Early Buy-Out Option shall be applied as a discount to the last Early Buy-Out
Price paid by the Lessee hereunder. Further, upon Full Collateralization, and
provided that no Event of Default has occurred and is continuing, (i) in the
event of any deposit of Excess Proceeds into the Cash Collateral Account, a
corresponding amount shall be released from the Cash Collateral Account to the
Lessee, and (ii) any amounts on deposit in the Cash Collateral Account in excess
of the Lease Balance increased by the amount of Recourse Debt shall be released
---------
to the Lessee.
ARTICLE XXXI
HOLDING OVER
XXXI.1 Holding Over. If the Lessee shall for any reason remain in
------------
possession of the Property after the expiration or earlier termination of this
Lease (unless the Property is conveyed to Lessee or its designee), such
possession shall be as a tenancy at sufferance during which time the Lessee
shall continue to pay Supplemental Rent that would be payable by the Lessee
hereunder were this Lease then in full force and effect with respect to the
Property and the Lessee shall continue to pay Basic Rent at an annual rate equal
to the rate payable hereunder immediately preceding such expiration or earlier
termination; provided, however, that from and after the sixtieth day the Lessee
-------- -------
shall remain in possession of the Property after such expiration or earlier
termination, the Lessee shall pay Basic Rent at an annual rate equal to two
hundred percent of the Basic Rent payable hereunder immediately preceding such
expiration or earlier termination. Such Basic Rent shall be payable from time to
time upon demand by the Lessor. During any period of tenancy at sufferance, the
Lessee shall, subject to the second preceding sentence, be obligated to perform
and observe all of the terms, covenants and conditions of this Lease, but shall
have no rights hereunder other than the right, to the extent given by law to
tenants at sufferance, to continue its occupancy and use of the Property.
Nothing contained in this Article XXXI shall constitute the consent, express or
------------
implied, of the Lessor to the holding over of the Lessee after the expiration or
earlier termination of this Lease as to the Property and nothing contained
herein shall be read or construed as preventing the Lessor from maintaining a
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suit for possession of the Property or exercising any other remedy available to
the Lessor at law or in equity.
ARTICLE XXXII
LOANS
XXXII.1 Agreement to Service. The Lessee agrees to administer and service
--------------------
the Loans, and otherwise act in accordance with this Article XXXII, until the
-------------
Expiration Date.
XXXII.2 Servicing the Loans. The Lessee shall service and administer the
-------------------
Loans and shall collect payments due under the Loans in accordance with its
customary and usual servicing procedures (the "Servicing Standard"); provided,
------------------ --------
however, that the Lessee, in connection with its servicing and administration of
-------
the Loans shall act without regard to any credit or other relationships apart
from the contracts that the Lessee or any of its Affiliates may have with any
Borrower, or any Affiliate of any Borrower.
XXXII.3 Power and Authority. In connection with its servicing and
-------------------
administration of the Loans hereunder, the Lessee shall have full power and
authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration that it may deem (x) necessary or desirable and consistent with
the Servicing Standard and (y) consistent with maximizing the amount ultimately
to be received by the Lessor with respect to the Loans; provided, however, that
-------- -------
the Lessee shall not without the Lessor's consent, which shall not be
unreasonably withheld or delayed, consent or agree to (1) the extension or
deferral of any date on which a Loan or any payment due with respect thereto is
to be paid, (2) any waiver of any covenant in any Collateral Document, (3) any
amendment or modification to any Collateral Document, (4) any change in the
interest rate or interest rate basis or spread applicable to any Loan, or (5)
any release of a guaranty or collateral securing repayment of any Loan, or (6)
the forgiveness of any payment due with respect to any Loan. The Lessee shall
not be obligated to use servicing procedures, offices, employees or accounts for
servicing the Loans thereunder that are separate and apart from the procedures,
offices, employees and accounts used by the Lessee in connection with servicing
and administering its own portfolio of loans and investments. The Lessor
acknowledges that the Loan identified on Schedule 1 as "Xxxxxxxxx" is currently
----------
in default and subject to work-out negotiations.
XXXII.4 Servicing Covenants. The Lessee covenants and agrees, with
-------------------
respect to each Loan, that: (i) it will duly fulfill all obligations on its part
to be fulfilled under or in connection with the Loans and will maintain in
effect all qualifications required in order to service the Loans the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect; (ii) it will not permit any rescission or cancellation of any
obligations under the Loans except as ordered by a court of competent
jurisdiction or other Governmental Authority; (iii) it will do nothing to impair
the rights of the Lessor in the Loans; and (iv) it will not reschedule, revise
or defer payments due on the Loans; without the Lessor's consent (which shall
not be unreasonably withheld or delayed). In the event the Lessee breaches any
covenant or agreement set forth in this Article XXXII, and such breach has a
-------------
Material Adverse Effect on the
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Loans and is not cured within 30 days of the earlier to occur of the discovery
of such event by the Lessee, or receipt by the Lessee of written notice of such
event given by the Lessor, then the Lessor may, at its election, terminate this
the rights and obligations of the Lessee under this Article XXXII.
-------------
XXXII.5 Payments to Lessor. The Lessee shall remain obligated for, and
------------------
shall receive the benefit of, any "swap" resulting from the difference between
(i) interest amounts collected from the Borrowers, and (ii) the component of
"Basic Rent" payable by the Lessee hereunder by virtue of the Lease Balance
includes the Lessor's Cost with respect to each Loan. Any payments on account of
principal received by the Lessee from any Borrower shall be remitted to the
Lessor within two Business Days and applied by the Lessor to reduce the Lessor's
Cost for such Loan. To the extent that such payments of principal received and
applied by the Lessor reduce the Lessor's Cost for any Loan to zero, any further
payments of principal shall be applied by the Lessor to reduce the Lessor's
Costs for the all other Properties and Loans on a pro rata basis or otherwise as
mutually agreed by the Lessor and the Lessee
XXXII.6 Servicing Compensation. The Lessee shall not be entitle to, and
----------------------
shall not receive, any compensation for its servicing activities hereunder.
XXXII.7 Reports and Records for the Lessor.
----------------------------------
(a) Quarterly Servicing Certificate. The Lessee shall forward to the
-------------------------------
Lessor on or before the 45th day following the end of each calendar quarter an
accounting with respect to all payments collected by the Lessee with respect to
the Loans and such other information with respect to the Loans as the Lessee has
determined may have a Material Adverse Effect.
(b) Annual Servicing Certificate. On or before January 31 of each
----------------------------
calendar year, beginning with January 31, 2001, the Lessee will deliver a review
of the activities of the Lessee during the twelve-month period ending on
December 31 of such year, or for the initial period, from the Commencement Date
until December 31, 2000, and a certificate to the effect that its performance
under this Article XXXII was made under the supervision of the officer signing
-------------
such certificate and (b) to the best of such officer's knowledge, based on such
review, the Lessee has fully performed all its obligations under this Article
-------
XXXII throughout such period, or, if there has been a default in the performance
-----
of any such obligation, specifying each such default known to such officer and
the nature and status thereof.
XXXII.8 Purchase Option. It is the intention of the Lessor and the
---------------
Lessee that the Lessee shall have the same rights and obligations, and shall be
subject to the same restrictions, with respect to Loans as are provided with
respect to the Properties pursuant to Article XXI of this Lease.
-----------
XXXII.9 Early Buy-Out Option. It is the intention of the Lessor and the
--------------------
Lessee that the Lessee shall have the same rights and obligations with respect
to Loans as are provided with respect to the Properties pursuant to Article XXII
------------
of this Lease.
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XXXII.10 Provisions Relating to the Exercise of Options. In connection
----------------------------------------------
with the Lessee's exercise of its Purchase Option with respect to the Loans or
an Early Buy-Out Option with respect to any Loan, upon the Purchase Option
Closing Date or the Early Buy-Out Closing Date, as the case may be, at the
Closing the Lessor shall sell, assign and convey to the transferee all right,
title and interest in and to the Loans, together with all the Collateral
Documents as follows:
(i) deliver to the transferee the Note or Notes for the Loan or
Loans being purchased, in each case endorsed by allonge without
representation, warranty or recourse, except a representation that the Note
or Notes have not been pledged other than to the Senior Lender; provided,
--------
however, that if the originals of the Notes are not in the possession of
-------
the Lessor and the Lessor has exhausted all reasonable means to locate such
original Notes, the Lessor may deliver copies of the Notes together with
lost notes certificates;
(ii) deliver originals of the other Collateral Documents (or if
originals are not available and the Lessor has exhausted all reasonable
means to locate the originals of such other Loan Documents, copies
thereof), and an assignment and assumption of loan documents for each Loan
or Loans, in each case without representation, warranty or recourse and in
recordable form when appropriate;
(iii) execute and deliver copies of the UCC financing statements
and assignments of UCC financing statements related to the personal
property;
(iv) deliver and assign to the transferee any escrows held by
the Lessor;
(v) execute and deliver a notice to the Borrower advising the
Borrower of the sale of the Loan; and
(vi) the Lessor shall execute such other documents reasonably
requested by the Lessee or its designee, or otherwise required under local
law, to effect a transfer of the Property and title thereto.
ARTICLE XXXIII
MISCELLANEOUS
XXXIII.1 Survival; Severability; Etc. Anything contained in this Lease to
---------------------------
the contrary notwithstanding, all claims against and liabilities of the Lessee
or the Lessor arising from events commencing prior to the expiration or earlier
termination of this Lease shall survive such expiration or earlier termination
for a period of one year except as to indemnification which shall continue to
survive. If any term or provision of this Lease or any application thereof shall
be declared invalid or unenforceable, the remainder of this Lease and any other
application of such term or provision shall not be affected thereby. If any
right or option of the Lessee
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provided in this Lease would, in the absence of the limitation imposed by this
sentence, be invalid or unenforceable as being in violation of the rule against
perpetuities or any other rule of law relating to the vesting of an interest in
or the suspension of the power of alienation of property, then such right or
option shall be exercisable only during the period which shall end twenty-one
years after the date of death of the last survivor of the descendants of
Xxxxxxxx X. Xxxxxxxxx, the former President of the United States, Xxxxx Xxxx,
the deceased automobile manufacturer, and Xxxx X. Xxxxxxxxxxx, the founder of
the Standard Oil Company, known to be alive on the date of the execution,
acknowledgment and delivery of this Lease.
XXXIII.2 Force Majeure. If the Lessee is prevented from exercising on a
-------------
timely basis any Early Buy-Out Option, or consummating on a timely basis any
sale or purchase on the basis of the exercise of any Early Buy-Out Option, by
natural disaster, fire, declared or undeclared war, riots, mob violence,
insurrections, sabotage, strikes, lockouts, condemnation, temporary restraining
orders or injunctions, the failure or refusal of governmental authorities to
issue permits or take other actions on a timely basis (and, upon Full
Collateralization only, the failure of other third parties to take actions on a
timely basis), or changes after the date hereof in the requirements or
interpretations of relevant laws, in any such case, so long as (i) such cause is
not within the reasonable control of the Lessee, (ii) the Lessee gives notice of
such event to the Lessor within ten days of the Lessee's actual knowledge of the
occurrence thereof, (iii) no Event of Default shall have occurred which is
continuing, then, at the election of the Lessor, either (A) any time periods
provided for in this Lease with respect to the exercise of any Early Buy-Out
Option, or for consummating any sale or purchase on the basis of the exercise of
any Early Buy-Out Option, shall be tolled during the period of such condition or
event, or (B) the Lessor and the Lessee shall enter into a trust, nominee, or
other transaction or arrangement, on terms reasonably satisfactory to the Lessor
and the Lessee, to provide to the Lessee the financial benefits of such Early
Buy-Out Option or Early Buy-Out Options. In addition, in the event that (x) Full
Collateralization is achieved prior to February 1, 2003, and (y) the Lessee is
prevented from exercising on a timely basis all Early Buy-Out Options, or
consummating on a timely basis any sale or purchase on the basis of the exercise
of all Early Buy-Out Options, by an event or condition described above, and (z)
satisfaction of clauses (i), (ii), and (iii) above, then the increases in Basic
Rent as of February 1, 2003, provided for in the definition of "Basic Rent" and
the payment of Accrued Rent shall also be tolled (and, at such time that the
tolling of the payment of Accrued Rent ceases, installments of Accrued Rent
shall be recalculated to provide for equal installments on each Payment Date
thereafter in an amount sufficient to pay the full amount thereof over the then
balance of the Term).
XXXIII.3 Amendments and Modifications. Neither this Lease nor any
----------------------------
provision hereof may be amended, waived, discharged or terminated except by an
instrument in writing in recordable form signed by the Lessor and the Lessee.
XXXIII.4 No Waiver. No failure by the Lessor or the Lessee to insist upon
---------
the strict performance of any term hereof or to exercise any right, power or
remedy upon a default hereunder, and no acceptance of full or partial payment of
Rent during the continuance of any such default, shall constitute a waiver of
any such default or of any such term. To the fullest extent permitted by law,
no waiver of any default shall affect or alter this Lease, and this Lease
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shall continue in full force and effect with respect to any other then existing
or subsequent default.
XXXIII.5 Notices. All notices, demands, requests, consents, approvals and
-------
other communications hereunder shall be in writing (including by facsimile), and
directed to the address of the appropriate party as set forth in Schedule 7
----------
hereto.
XXXIII.6 Successors and Assigns. All the terms and provisions of this
----------------------
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
XXXIII.7 Headings and Table of Contents. The headings and table of
------------------------------
contents in this Lease are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.
XXXIII.8 Counterparts. This Lease may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
XXXIII.9 Brokerage Commissions. Neither Lessor nor Lessee has discussed
---------------------
this Lease or the leasing or sale of the Properties with any brokers, agents or
finders so as to create any legal right of such broker to any commission or
similar fee. Each of Lessee and Lessor hereby indemnifies and agree to hold
harmless the other from and against any claims for any such commission or fee by
any person acting by, through, under or on behalf of the indemnifying party.
XXXIII.10 Florida - Radon Gas Disclosure. Radon is a naturally occurring
------------------------------
radioactive gas that, when it has accumulate din a building in sufficient
quantities, may present health risks to person who are exposed to it over time.
Levels of radon that exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding radon and radon testing
may be obtained from your county public health unit.
XXXIII.11 Treatment as a Lease. The Lessor and the Lessee each agree that
--------------------
this Lease shall be treated for all tax purposes as a lease and that each of the
Lessor and the Lessee will file applicable tax returns to reflect such
treatment. The Lessee represents and warrants that it will not claim ownership
of (or any tax benefits, including depreciation, with respect to) any Property
for any income tax purposes, it being understood that the Lessor is and will
remain the owner of the Properties for such income tax purposes until the
termination of this Lease or, with respect to any Property, the sale of such
Property pursuant to the terms of Articles XXI or XXII or otherwise pursuant to
------------ ----
the terms of this Lease.
XXXIII.12 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND
-------------
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (EXCLUDING ANY
CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF
THE INTERNAL LAWS OF ANOTHER JURISDICTION), EXCEPT AS TO MATTERS RELATING TO THE
CREATION, PERFECTION AND ENFORCEMENT OF LIENS
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AND SECURITY INTERESTS AND THE EXERCISE OF REMEDIES WITH RESPECT THERETO, WHICH
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN
WHICH THE PROPERTY IS LOCATED.
XXXIII.13 SUBMISSION TO JURISDICTION; WAIVERS. THE LESSEE HEREBY
-----------------------------------
IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS LEASE AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGEMENT IN RESPECT THEREOF, TO THE NON-
EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
AFFECTED BY PERSONAL SERVICE OR AS OTHERWISE PERMITTED BY APPLICABLE LAWS;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN
ANY OTHER JURISDICTION; AND
(e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS
SECTION 33.13 ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
-------------
THE LESSEE FURTHER AGREES THAT IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER
DISPUTE RESOLUTION PROCEEDING RELATING TO THIS LEASE, ALL DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF THE LESSEE SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING
AGENTS OF THE LESSEE FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING
PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT
TRIAL OR OTHERWISE). THE LESSEE AGREES THAT THE LESSOR'S COUNSEL IN ANY SUCH
DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER
CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF
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THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. THE
LESSEE IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN
ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED
BY THE LESSOR, ALL PERSONS, DOCUMENTS (WHETHER TANGIBLE. ELECTRONIC OR OTHER
FORM) OR OTHER THINGS UNDER THE LESSEE'S CONTROL RELATING TO THE DISPUTE.
(f) Waiver of Jury Trial. THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY
--------------------
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS LEASE AND/OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF SUCH PARTIES. THE PARTIES HERETO
ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ENTERING INTO THIS LEASE.
[signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
--------------------------------------------------------------------------------
signed, sealed and delivered in the XXXXXX AFFORDABLE HOUSING OF FLORIDA,
presence of: INC.,
_______________________________
Print Name: as the Lessor
_______________________________ By:_________________________________
Print Name: Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice-President
--------------------------------------------------------------------------------
_______________________________ ECHELON COMMERCIAL LLC,
Print Name:
By: Equis Corporation, its manager
_______________________________ By:_________________________________
Print Name: Name: Xxxxx X. Xxxxx
Title: Vice President
--------------------------------------------------------------------------------
-00-
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX
The foregoing instrument was acknowledged before me this 21st day of
January, 2000, by Xxxxxxx X. Xxxxxxxxx, as Executive Vice President of XXXXXX
AFFORDABLE HOUSING OF FLORIDA, INC., a Florida corporation (Lessor), on behalf
of the Lessor, who is personally known to me or who has produced a driver's
license as identification.
_____________________________
Notary Signature
(SEAL)
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX
The foregoing instrument was acknowledged before me this 21st day of
January 21, 2000, by, as Vice President of Equis Corporation, a
_________________, as the Managing Member of ECHELON COMMERICAL LLC, a Delaware
limited liability company (Lessee), on behalf of Lessee, who is personally known
to me or who has produced __________________ as identification.
_____________________________
Notary Signature
(SEAL)
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