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EXHIBIT 10.34
MASTER LEASE AGREEMENT
Dated as of March 9, 2000
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the VS Trust 2000-1,
as Lessor
and
VERITAS OPERATING CORPORATION,
as Lessee
This Master Lease Agreement is subject to a security interest in favor of Bank
of America, N.A., as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent") under a Security Agreement dated as of March 9, 2000,
between First Security Bank, National Association, not individually, but solely
as the Owner Trustee under the VS Trust 2000-1 and the Agent, as amended,
modified, extended, supplemented, restated and/or replaced from time to time in
accordance with the applicable provisions thereof. This Lease Agreement has been
executed in several counterparts. To the extent, if any, that this Lease
Agreement constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no security
interest in this Lease Agreement may be created through the transfer or
possession of any counterpart other than the original counterpart containing the
receipt therefor executed by the Agent on the signature page hereof.
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TABLE OF CONTENTS
ARTICLE I ...................................................................................2
1.1 Definitions...................................................................2
1.2 Interpretation................................................................2
ARTICLE II ..................................................................................2
2.1 Property......................................................................2
2.2 Lease Term....................................................................2
2.3 Title.........................................................................3
2.4 Lease Supplements.............................................................3
ARTICLE III .................................................................................3
3.1 Rent..........................................................................3
3.2 Payment of Basic Rent.........................................................4
3.3 Supplemental Rent.............................................................4
3.4 Performance on a Non-Business Day.............................................5
3.5 Rent Payment Provisions.......................................................5
ARTICLE IV ..................................................................................5
4.1 Taxes; Utility Charges........................................................5
ARTICLE V ...................................................................................6
5.1 Quiet Enjoyment...............................................................6
ARTICLE VI ..................................................................................6
6.1 Net Lease.....................................................................6
6.2 No Termination or Abatement...................................................7
ARTICLE VII .................................................................................7
7.1 Ownership of the Properties...................................................7
ARTICLE VIII ................................................................................8
8.1 Condition of the Properties...................................................8
8.2 Possession and Use of the Properties..........................................9
8.3 Integrated Properties........................................................10
ARTICLE IX .................................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements and Manufacturer's
Specifications and Standards.................................................10
ARTICLE X ..................................................................................11
10.1 Maintenance and Repair; Return...............................................11
10.2 Environmental Inspection.....................................................12
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ARTICLE XI .................................................................................13
11.1 Modifications................................................................13
ARTICLE XII ................................................................................14
12.1 Warranty of Title............................................................14
ARTICLE XIII ...............................................................................15
13.1 Permitted Contests Other Than in Respect of Indemnities......................15
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal
Requirements.................................................................15
ARTICLE XIV ................................................................................16
14.1 Public Liability and Workers' Compensation Insurance.........................16
14.2 Permanent Hazard and Other Insurance and Insurance Coverage to be Maintained
by Other Parties.............................................................16
14.3 Coverage.....................................................................17
14.4 Additional Insurance Requirements............................................18
ARTICLE XV .................................................................................19
15.1 Casualty and Condemnation....................................................19
15.2 Environmental Matters........................................................21
15.3 Notice of Environmental Matters..............................................22
ARTICLE XVI ................................................................................22
16.1 Termination Upon Certain Events..............................................22
16.2 Procedures...................................................................23
ARTICLE XVII ...............................................................................23
17.1 Lease Events of Default......................................................23
17.2 Surrender of Possession......................................................26
17.3 Reletting....................................................................27
17.4 Damages......................................................................27
17.5 Power of Sale................................................................28
17.6 Final Liquidated Damages.....................................................28
17.7 Environmental Costs..........................................................29
17.8 Waiver of Certain Rights.....................................................29
17.9 Assignment of Rights Under Contracts.........................................29
17.10 Remedies Cumulative..........................................................29
ARTICLE XVIII ..............................................................................31
18.1 Lessor's Right to Cure Lessee's Lease Defaults...............................31
ARTICLE XIX ................................................................................32
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option..............32
19.2 [Intentionally Omitted]......................................................32
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ARTICLE XX .................................................................................32
20.1 Purchase Option or Sale Option-General Provisions............................32
20.2 Lessee Purchase Option.......................................................33
20.3 Third Party Sale Option......................................................34
ARTICLE XXI ................................................................................35
21.1 [Intentionally Omitted]......................................................35
ARTICLE XXII ...............................................................................35
22.1 Sale Procedure...............................................................35
22.2 Application of Proceeds of Sale..............................................38
22.3 Indemnity for Excessive Wear.................................................38
22.4 Appraisal Procedure..........................................................38
22.5 Certain Obligations Continue................................................39
ARTICLE XXIII ..............................................................................39
23.1 Holding Over.................................................................39
ARTICLE XXIV ...............................................................................40
24.1 Risk of Loss.................................................................40
ARTICLE XXV ................................................................................40
25.1 Assignment...................................................................40
25.2 Subleases....................................................................40
ARTICLE XXVI ...............................................................................41
26.1 No Waiver....................................................................41
ARTICLE XXVII ..............................................................................41
27.1 Acceptance of Surrender......................................................41
27.2 No Merger of Title...........................................................42
ARTICLE XXVIII .............................................................................42
28.1 [RESERVED]...................................................................42
ARTICLE XXIX ...............................................................................42
29.1 Notices......................................................................42
ARTICLE XXX ................................................................................42
30.1 Miscellaneous................................................................42
30.2 Amendments and Modifications.................................................42
30.3 Successors and Assigns.......................................................42
30.4 Headings and Table of Contents...............................................43
30.5 Counterparts.................................................................43
30.6 GOVERNING LAW................................................................43
30.7 Calculation of Rent..........................................................43
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30.8 Recording of Lease...........................................................43
30.9 Allocations between the Lenders and the Holders..............................43
30.10 Limitations on Recourse......................................................44
30.11 WAIVERS OF JURY TRIAL........................................................44
30.12 Exercise of Lessor Rights....................................................44
30.13 SUBMISSION TO JURISDICTION; VENUE............................................44
30.14 USURY SAVINGS PROVISION......................................................45
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Legal Description of Property
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NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, ENFORCEMENT OF THIS INSTRUMENT
IS LIMITED TO A DEBT AMOUNT OF $40,000,000.00 UNDER CHAPTER 287 OF MINNESOTA
STATUTES.
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT dated as of March 9, 2000 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, not individually, but solely as the Owner Trustee under
the VS Trust 2000-1, as lessor (the "Lessor"), and VERITAS OPERATING CORPORATION
(formerly known as Veritas Software Corporation), a Delaware corporation, having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as lessee (the "Lessee").
W I T N E S S E T H:
- - - - - - - - - -
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Construction Agency Agreement, Lessor will (i) purchase
certain real property more particularly described on Exhibit B attached hereto
and made a part hereof, some of which will (or may) have existing Improvements
thereon, from one (1) or more third parties designated by Lessee and (ii) fund
the acquisition, installation, testing, use, development, construction,
operation, maintenance, repair, refurbishment and restoration of the Properties
by the Construction Agent; and
B. WHEREAS, the Basic Term shall commence with respect to each Property
upon the Property Closing Date with respect thereto; provided, Basic Rent with
respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property; and
D. WHEREAS, Lessor and Lessee intend that for all tax and real estate
purposes this Lease is a financing arrangement by and between Lessee, as debtor,
and the Financing Parties, in their respective capacities as creditors, under
the Participation Agreement; and
E. WHEREAS, the debt secured by this Lease is the same debt as the debt
secured by that certain Mortgage, Assignment of Leases, Security Agreement and
Financing Statement dated of even date herewith executed by Lessee and Owner
Trustee in favor of Agent, for which mortgage registry tax has already been
paid, as evidenced by receipt #____________, and therefore this Lease is an
instrument given as additional security for the same debt for which mortgage
registry tax has been paid, and is exempt from mortgage registry tax pursuant to
Minnesota Statutes Section 287.04(c);
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NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
For purposes of this Lease, capitalized terms used in this Lease
and not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Participation Agreement dated as of March 9, 2000 (as
amended, modified, extended, supplemented, restated and/or replaced from time to
time in accordance with the applicable provisions thereof, the "Participation
Agreement") among Lessee, the various parties thereto from time to time, as the
Guarantors, Lessor, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and Bank of America, N.A., as agent for the Lenders and respecting the
Security Documents, as the agent for the Lenders and the Holders, to the extent
of their interests. Unless otherwise indicated, references in this Lease to
articles, sections, paragraphs, clauses, appendices, schedules and exhibits are
to the same contained in this Lease.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
The basic term of this Lease with respect to each Property (the
"Basic Term") shall begin upon the Property Closing Date for such Property (in
each case the "Basic Term Commencement Date") and shall end on the fifth (5th)
annual anniversary of the Initial Closing Date (the "Basic Term Expiration
Date"), unless the Basic Term is earlier terminated or the term of this Lease is
renewed (as described below) in accordance with the provisions of this Lease.
Notwithstanding the foregoing, Lessee shall not be obligated to pay Basic Rent
until the Rent Commencement Date with respect to such Property.
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Upon the written request of Lessee and with the consent of all of
the Financing Parties, in their sole discretion, the term of this Lease for each
Property may be extended for up to two (2) additional terms each of one (1)
year's duration from the Basic Term Expiration Date (each, a "Renewal Term");
provided, that the expiration date for the final Renewal Term for each Property
shall not be later than the seventh (7th) annual anniversary of the Initial
Closing Date, unless such later expiration date has been expressly agreed to, at
the request of Lessee, in writing by each of Lessor, the Agent, the Lenders and
the Holders in their sole discretion.
2.3 TITLE.
Each Property is leased to Lessee without any representation or
warranty, express or implied, by Lessor and subject to the rights of parties in
possession (if any), the existing state of title (including without limitation
the Permitted Liens) and all applicable Legal Requirements. Lessee shall in no
event have any recourse against Lessor for any defect in Lessor's title to any
Property or any interest of Lessee therein other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS.
On or prior to each Basic Term Commencement Date, Lessee and Lessor
shall each execute and deliver a Lease Supplement for the Property to be leased
effective as of such Basic Term Commencement Date in substantially the form of
Exhibit A hereto.
ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent in arrears on each Payment Date,
and on any date on which this Lease shall terminate with respect to any
or all Properties during the Term; provided, however, with respect to
the Properties in the aggregate Lessee shall have no obligation to pay
Basic Rent until the Rent Commencement Date (notwithstanding that Basic
Rent for such Property shall accrue from and including the Scheduled
Interest Payment Date immediately preceding such Rent Commencement
Date).
(b) Each payment of Rent payable by Lessee to Lessor under this
Lease or any other Operative Agreement shall be made by Lessee to the
Agent as the designee of Lessor under Section 5.8 of the Participation
Agreement to such account or accounts as the Agent may designate from
time to time prior to 12:00 Noon, Dallas, Texas time, in immediately
available funds consisting of lawful currency of the United States of
America on the date when such payment shall be due. Payments received
after 12:00 p.m., Charlotte, North Carolina time, on the date due shall,
for the purpose of Section 17.1 hereof be deemed received on such day;
provided, however, that for the purposes of the second sentence of
Section 3.3 hereof, such payments shall be deemed received on the
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next succeeding Business Day and, unless the Agent is otherwise able to
invest or employ such funds on the date received, subject to interest at
the Overdue Rate.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall not
delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) On or prior to each Payment Date, Lessor shall deliver, or
cause to be delivered, to Lessee a notice of the exact amount of the
Basic Rent due on such date (the "Invoice"). For the purposes of this
Section 3.1(d), delivery of the Invoice by facsimile transmission,
receipt confirmed, will be sufficient.
3.2 PAYMENT OF BASIC RENT.
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable, and if
Lessee fails to pay any Supplemental Rent within three (3) days after the same
is due, Lessor shall have all rights, powers and remedies provided for herein or
by law or equity or otherwise in the case of nonpayment of Basic Rent. All such
payments of Supplemental Rent shall be in the full amount thereof, without
setoff, deduction or reduction. Lessee shall pay to the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
(a) any and all payment obligations (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by any Person to the
Agent, any Lender, any Holder or any other Person, (b) interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due
(subject to the applicable grace period) for the period for which the same shall
be overdue and on any payment of Supplemental Rent not paid when due or demanded
by the appropriate Person (subject to any applicable grace period) for the
period from the due date or the date of any such demand, as the case may be,
until the same shall be paid and (c) amounts referenced as Supplemental Rent
obligations pursuant to Section 8.3 of the Participation Agreement. The
expiration or other termination of Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any Supplemental
Rent as and when due, Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added for nonpayment or late
payment of such Supplemental Rent, all of which shall also constitute
Supplemental Rent. During the Construction Period, such Impositions and utility
charges shall be included in the Property Cost to be paid by Lessor; provided,
however, the Lessor shall pay such amounts
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described in this Section 3.3 only if funds are made available by the Lenders
and the Holders in an amount sufficient to allow such payment.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date. If any Supplemental Rent is required hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
Lessee shall make payment of all Basic Rent and Supplemental Rent
when due (subject to the applicable grace periods) regardless of whether any of
the Operative Agreements pursuant to which same is calculated and is owing shall
have been rejected, avoided or disavowed in any bankruptcy or insolvency
proceeding involving any of the parties to any of the Operative Agreements. Such
provisions of such Operative Agreements and their related definitions are
incorporated herein by reference and shall survive any termination, amendment or
rejection of any such Operative Agreements.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
Subject to Lessee's rights of permitted contest pursuant to
Section 13.1, Lessee shall pay or cause to be paid all Impositions with respect
to the Properties and/or the use, occupancy, operation, repair, access,
maintenance or operation thereof and all charges for electricity, power, gas,
oil, water, telephone, sanitary sewer service and all other rents, utilities and
operating expenses of any kind or type used in or on any Property and related
real property during the Term. Upon Lessor's request, Lessee shall provide from
time to time Lessor with evidence of all such payments referenced in the
foregoing sentence. Lessee shall be entitled to receive any credit or refund
with respect to any Imposition or utility charge paid by Lessee. Unless an Event
of Default shall have occurred and be continuing, the amount of any credit or
refund received by Lessor on account of any Imposition or utility charge paid by
Lessee, net of the costs and expenses incurred by Lessor in obtaining such
credit or refund, shall be promptly paid over to Lessee. All charges for
Impositions or utilities imposed with respect to any Property for a period
during which this Lease expires or terminates shall be adjusted and prorated on
a daily basis between Lessor and Lessee, and each party shall pay or reimburse
the other for such party's pro rata share thereof. During the Construction
Period, the costs of Impositions and all other utility and other charges or
expenses referenced in this Section 4.1 shall be paid by Lessor; provided,
however, the Lessor shall pay such amounts described in this Section 4.1 only if
funds are made available by the Lenders and the Holders in an amount sufficient
to allow such payment.
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ARTICLE V
5.1 QUIET ENJOYMENT.
Subject to the rights of Lessor contained in Sections 17.2, 17.3
and 20.3 and the other terms of this Lease and the other Operative Agreements
and so long as no Event of Default shall have occurred and be continuing, Lessee
shall peaceably and quietly have, hold and enjoy each Property for the
applicable Term, free of any claim or other action by Lessor or anyone
rightfully claiming by, through or under Lessor (other than Lessee) with respect
to any matters arising from and after the applicable Basic Term Commencement
Date.
ARTICLE VI
6.1 NET LEASE.
This Lease shall constitute a net lease, and the obligations of
Lessee hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of each Property.
Any present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement, suspension, deferment,
reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall
the obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) for any
reason whatsoever, including without limitation by reason of: (a) any damage to
or destruction of any Property or any part thereof; (b) any taking of any
Property or any part thereof or interest therein by Condemnation or otherwise;
(c) any prohibition, limitation, restriction or prevention of Lessee's use,
occupancy or enjoyment of any Property or any part thereof, or any interference
with such use, occupancy or enjoyment by any Person or for any other reason; (d)
any title defect, Lien or any matter affecting title to any Property; (e) any
eviction by paramount title or otherwise; (f) any default by Lessor hereunder;
(g) any action for bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding relating to or affecting the Agent, any Lender,
Lessor, Lessee, any Holder or any Governmental Authority; (h) the impossibility
or illegality of performance by Lessor, Lessee or both; (i) any action of any
Governmental Authority or any other Person; (j) Lessee's acquisition of
ownership of all or part of any Property (except for any such acquisition of
ownership pursuant to and in accordance with the terms of this Lease); (k)
breach of any warranty or representation with respect to any Property or any
Operative Agreement; (l) any defect in the condition, quality or fitness for use
of any Property or any part thereof; or (m) any other cause or circumstance
whether similar or dissimilar to the foregoing and whether or not Lessee shall
have notice or knowledge of any of the foregoing. Notwithstanding the foregoing
provisions, nothing contained in this Section 6.1 shall provide Lessor with any
right to payment by Lessee under this Lease prior to the Completion Date which
is contrary to Lessor's remedies under the Construction Agency Agreement; it
being the express intention of the parties hereto that Lessee's liability
hereunder shall not exceed the liability of the Construction Agent under the
Construction Agency Agreement prior to the Completion Date. The parties intend
that the
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obligations of Lessee hereunder shall be covenants, agreements and obligations
that are separate and independent from any obligations of Lessor hereunder and
shall continue unaffected unless such covenants, agreements and obligations
shall have been modified or terminated in accordance with an express provision
of this Lease. Lessor and Lessee acknowledge and agree that the provisions of
this Section 6.1 have been specifically reviewed and subjected to negotiation.
6.2 NO TERMINATION OR ABATEMENT.
Lessee shall remain obligated under this Lease in accordance with
its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted hereunder or under the
terms of the Operative Agreements) or (b) to avail itself of any abatement,
suspension, deferment, reduction, setoff, counterclaim or defense with respect
to any Rent. Lessee shall remain obligated under this Lease in accordance with
its terms and Lessee hereby waives any and all rights now or hereafter conferred
by statute or otherwise to modify or to avoid strict compliance with its
obligations under this Lease. Notwithstanding any such statute or otherwise,
Lessee shall be bound by all of the terms and conditions contained in this
Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
(a) Lessor and Lessee intend that for federal and all state and
local income tax purposes, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes and all other purposes (A) this
Lease will be treated as a financing arrangement, (B) Lessee will be
treated as the beneficial owner of the Properties and will be entitled
to all tax benefits ordinarily available to owners of property similar
to the Properties for such tax purposes and (C) this Lease is intended
by Lessee to be treated as an operating lease for Lessee's financial
statement reporting purposes. Notwithstanding the foregoing, neither
party hereto has made, or shall be deemed to have made, any
representation or warranty as to the availability of any of the
foregoing treatments under applicable accounting rules, tax, bankruptcy,
regulatory, commercial or real estate law or under any other set of
rules. Lessee shall claim the cost recovery deductions associated with
each Property, and Lessor shall not, to the extent not prohibited by
Law, take on its tax return a position inconsistent with Lessee's claim
of such deductions.
(b) For all purposes described in Section 7.1(a), Lessor and
Lessee intend this Lease to constitute a finance lease and not a true
lease. In order to secure the obligations
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of Lessee now existing or hereafter arising under any and all Operative
Agreements, Lessee hereby conveys, grants, assigns, transfers,
hypothecates, mortgages and sets over to Lessor, for the benefit of all
Financing Parties, a first priority security interest (but subject to
the security interest in the assets granted by Lessee in favor of the
Agent in accordance with the Security Agreement) in and lien on all
right, title and interest of Lessee (now owned or hereafter acquired) in
and to all Properties to the extent such is personal property and
irrevocably grants and conveys a lien, deed of trust and mortgage on all
right, title and interest of Lessee (now owned or hereafter acquired) in
and to all Properties to the extent such is a real property. Lessor and
Lessee further intend and agree that, for the purpose of securing the
obligations of Lessee and/or the Construction Agent now existing or
hereafter arising under the Operative Agreements, (i) this Lease shall
be a security agreement and financing statement within the meaning of
Article 9 of the Uniform Commercial Code respecting each of the
Properties and all proceeds (including without limitation insurance
proceeds thereof) to the extent such is personal property and an
irrevocable grant and conveyance of a lien, deed of trust and mortgage
on each of the Properties and all proceeds (including without limitation
insurance proceeds thereof) to the extent such is real property; (ii)
the acquisition of title by Lessor in each Property referenced in
Article II constitutes a grant by Lessee to Lessor of a security
interest, lien, deed of trust and mortgage in all of Lessee's right,
title and interest in and to each Property and all proceeds (including
without limitation insurance proceeds thereof) of the conversion,
voluntary or involuntary, of the foregoing into cash, investments,
securities or other property, whether in the form of cash, investments,
securities or other property, and an assignment of all rents, profits
and income produced by each Property; and (iii) notifications to Persons
holding such property, and acknowledgments, receipts or confirmations
from financial intermediaries, bankers or agents (as applicable) of
Lessee shall be deemed to have been given for the purpose of perfecting
such lien, security interest, mortgage lien and deed of trust under
applicable law. Lessee shall promptly take such actions as Lessor may
reasonably request (including without limitation the filing of Uniform
Commercial Code Financing Statements, Uniform Commercial Code Fixture
Filings, this Lease and the various Lease Supplements and any memoranda
(or short form) of this Lease and the various Lease Supplements) to
ensure that the lien, security interest, lien, mortgage lien and deed of
trust in each Property and the other items referenced above will be
deemed to be a perfected lien, security interest, mortgage lien and deed
of trust of first priority under applicable law and will be maintained
as such throughout the Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY
"AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR
OF LESSOR LIENS) AND IN EACH CASE
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SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN
POSSESSION THEREOF (IF ANY), (C) ANY STATE OF FACTS REGARDING ITS PHYSICAL
CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL
REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY EXIST ON THE
DATE HEREOF AND/OR THE DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR
NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT
LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR OF LESSOR LIENS) OR SHALL BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY,
USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY
PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR
COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY
PART THEREOF), AND NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER
SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE
OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT.
LESSEE HAS OR PRIOR TO THE BASIC TERM COMMENCEMENT DATE WILL HAVE BEEN AFFORDED
FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY),
IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE
CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO
THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL
RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN
LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS, ON THE ONE HAND, AND LESSEE, ON
THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
(a) At all times following the Completion Date, the Properties
in the aggregate shall constitute a Permitted Facility and shall be used
by Lessee in the ordinary course of its business. Lessee shall pay, or
cause to be paid, all charges and costs required in connection with the
use of the Properties as contemplated by this Lease. Lessee shall not
commit or permit any waste of the Properties or any part thereof.
(b) The address stated in Section 6.2(i) of the Participation
Agreement is the principal place of business and chief executive office
of Lessee (as such terms are used in Section 9-103(3) of the Uniform
Commercial Code of any applicable jurisdiction), and Lessee will provide
Lessor with prior written notice of any change of location of its
principal place of business or chief executive office. Regarding a
particular Property, each Lease Supplement correctly identifies the
initial location of the related Equipment (if any) and Improvements (if
any) and contains an accurate legal description for the related parcel
of Land. The Equipment and Improvements respecting each particular
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Property will be located only at the location identified in the
applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment
to or in any other item of equipment or personal property or to or in
any real property in a manner that could give rise to the assertion of
any Lien (in favor of a third party that is prior to the Liens thereon
created by the Operative Agreements) on such item of Equipment by reason
of such attachment or the assertion of a claim that such item of
Equipment has become a fixture and is subject to a Lien in favor of a
third party that is prior to the Liens thereon created by the Operative
Agreements.
(d) On the Basic Term Commencement Date for each Property,
Lessor and Lessee shall execute a Lease Supplement in regard to such
Property which shall contain an Equipment Schedule that has a general
description of the Equipment (if any) which shall comprise the Property,
an Improvement Schedule that has a general description of the
Improvements (if any) which shall comprise the Property and a legal
description of the Land (if any) which shall comprise the Property.
Simultaneously with the execution and delivery of each Lease Supplement,
such Equipment, Improvements, Land, all additional Equipment and all
additional Improvements which are financed under the Operative
Agreements after the Basic Term Commencement Date and the remainder of
such Property shall be deemed to have been accepted by Lessee for all
purposes of this Lease and to be subject to this Lease.
(e) At all times during the Term with respect to each Property,
Lessee will comply with all obligations under and (to the extent no
Event of Default exists and provided that such exercise will not impair
the value, utility or remaining useful life of such Property) shall be
permitted to exercise all rights and remedies under, all operation and
easement agreements and related or similar agreements applicable to such
Property.
8.3 INTEGRATED PROPERTIES.
On the Rent Commencement Date for each Property, Lessee shall, at
its sole cost and expense, cause each such Property to constitute (and for the
duration of the Term continue to constitute) all of the equipment, facilities,
rights, other personal property and other real property necessary or appropriate
to operate, utilize, maintain and control a Permitted Facility in a commercially
reasonable manner.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including
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without limitation all Environmental Laws (except as set forth in Section 15.2))
and all Insurance Requirements relating to the Properties, (b) procure, maintain
and comply with all licenses, permits, orders, approvals, consents and other
authorizations required for the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of the Properties and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property, unless the
failure to procure, maintain and comply with such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not have and
could not reasonably be expected to have a Material Adverse Effect. Lessor
agrees to take such actions as may be reasonably requested by Lessee in
connection with the compliance by Lessee of its obligations under this Section
9.1. Notwithstanding the foregoing, Lessee shall be deemed to be in compliance
with all Environmental Laws for purposes of this Lease notwithstanding any
Environmental Violation if the severity of such Environmental Violation is less
than federal, state and local standards requiring remediation or removal or, if
such standards are exceeded, remediation or removal is proceeding in accordance
with all applicable Environmental Laws.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and make all necessary repairs thereto and replacements
thereof, of every kind and nature whatsoever, whether interior or
exterior, ordinary or extraordinary, structural or nonstructural or
foreseen or unforeseen, in each case as required by Section 9.1 and on a
basis consistent with the operation and maintenance of properties or
equipment comparable in type and function to the applicable Property,
such that such Property is capable of being immediately utilized by a
third party and in compliance with standard industry practice subject,
however, to the provisions of Article XV with respect to Casualty and
Condemnation.
(b) Lessee shall not use or locate any component of any Property
outside of the Approved State therefor. Lessee shall not move or
relocate any component of any Property beyond the boundaries of the Land
described in the Lease Supplement with regard to the Land, except for
the temporary removal of Equipment and other personal property for
repair or replacement.
(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered unfit
for use, Lessee, at its own expense, will within a reasonable time
replace such component with a replacement component which is free and
clear of all Liens (other than Permitted Liens and Lessor
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Liens) and has a value, utility and useful life at least equal to the
component replaced (assuming the component replaced had been maintained
and repaired in accordance with the requirements of this Lease). Except
as otherwise provided in Section 11.1, all components which are added to
any Property shall immediately become the property of (and title thereto
shall vest in) Lessor and shall be deemed incorporated in such Property
and subject to the terms of this Lease as if originally leased
hereunder.
(d) Upon reasonable advance notice, Lessor and its agents shall
have the right to inspect each Property and all maintenance records with
respect thereto at any reasonable time during normal business hours but
shall not, in the absence of an Event of Default, materially disrupt the
business of Lessee.
(e) Lessee shall cause to be delivered to Lessor (at Lessee's
sole expense) one or more additional Appraisals (or reappraisals of
Property) as Lessor may request if any one of Lessor, the Agent, the
Trust Company, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such Appraisals (or reappraisals)
and upon the occurrence of any Event of Default.
(f) Lessor shall under no circumstances be required to build any
improvements or install any equipment on any Property, make any repairs,
replacements, alterations or renewals of any nature or description to
any Property, make any expenditure whatsoever in connection with this
Lease or maintain any Property in any way. Lessor shall not be required
to maintain, repair or rebuild all or any part of any Property, and
Lessee waives the right to (i) require Lessor to maintain, repair, or
rebuild all or any part of any Property, or (ii) make repairs at the
expense of Lessor pursuant to any Legal Requirement, Insurance
Requirement, contract, agreement, covenant, condition or restriction at
any time in effect.
(g) Lessee shall, upon the expiration or earlier termination of
this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) pursuant to the
exercise of the applicable remedies upon the occurrence of a Lease Event
of Default, to Lessor or (ii) pursuant to the second paragraph of
Section 22.1(a) hereof, to Lessor or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease (including
without limitation the obligations of Lessee at the time of such
surrender under Sections 9.1, 10.1(a) through (f), 10.2, 11.1, 12.1,
22.1 and 23.1).
10.2 ENVIRONMENTAL INSPECTION.
If Lessee has not given notice of exercise of its Purchase Option
on the Expiration Date pursuant to Section 20.1 or for whatever reason Lessee
does not purchase a Property in accordance with the terms of this Lease, then
not more than one hundred twenty (120) days nor less than sixty (60) days prior
to the Expiration Date, Lessee shall cause to be delivered to Lessor
environmental site assessments recently prepared (no more than thirty (30) days
prior to the date of delivery) by an independent recognized professional
reasonably acceptable to Lessor,
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and in form, scope and content reasonably satisfactory to Lessor. The cost
incurred respecting such environmental site assessments shall be paid for in
accordance with the provisions set forth in Section 20.3(b).
ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make modifications,
alterations, renovations, improvements and additions to any Property or
any part thereof and substitutions and replacements therefor
(collectively, "Modifications"), and Lessee shall make any and all
Modifications required to be made pursuant to all Legal Requirements,
Insurance Requirements and manufacturer's specifications and standards;
provided, that: (i) no Modification shall materially impair the value,
utility or useful life of any Property from that which existed
immediately prior to such Modification; (ii) each Modification shall be
done expeditiously and in a good and workmanlike manner; (iii) no
Modification shall adversely affect the structural integrity of any
Property; (iv) to the extent required by Section 14.2(a), Lessee shall
maintain builders' risk insurance at all times when a Modification is in
progress; (v) subject to the terms of Article XIII relating to permitted
contests, Lessee shall pay all costs and expenses and discharge any
Liens arising with respect to any Modification; (vi) each Modification
shall comply with the requirements of this Lease (including without
limitation Sections 8.2 and 10.1); and (vii) except as otherwise
contemplated or provided in any Operative Agreement, no Improvement
shall be demolished or otherwise rendered unfit for use unless Lessee
shall finance the proposed replacement Modification outside of this
lease facility; provided, further, Lessee shall not make any
Modification (unless required by any Legal Requirement) to the extent
any such Modification, individually or in the aggregate, shall have or
could reasonably be expected to have a Material Adverse Effect. Lessee
shall not remove or attempt to remove any Modification from any
Property. Title to each Modification shall vest in Lessee to the extent
such Modification (a) is not financed pursuant to the Operative
Agreements, (b) is not a fixture or other real estate interest, (c) is
readily removable without causing material damage to any Property, (d)
is not required in order for the applicable Property to comply with any
Legal Requirement, any Insurance Requirement or any requirement of
Section 8.3 of this Lease and (e) is not necessary to conform to any
applicable manufacturer's specification and/or standard. Title to all
other Modifications shall immediately and without further action upon
their incorporation into the applicable Property (1) become property of
Lessor, (2) be subject to this Lease and (3) be titled in the name of
Lessor. Lessee at its sole cost and expense shall repair in a good and
workmanlike manner any and all damage done to any Property due to the
removal, detachment, attempted removal or attempted detachment of any
Modification from a Property and all such repairs shall be completed by
the earlier of (a) thirty (30) days after such removal, detachment,
attempted removal or attempted detachment of the applicable Modification
from the applicable Property and (b) the Expiration Date. Lessee
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shall not remove, detach or attempt to remove or detach any Modification
from any Property except in accordance with the provisions of this
Section 11.1. The Lessor acknowledges Lessee's right to finance and to
secure under the Uniform Commercial Code, inventory, furnishings,
furniture, equipment, machinery, leasehold improvements and other
personal property located at the Properties, other than the Equipment
and modifications required to be titled in the name of Lessor and
excluding in all cases fixtures, and Lessor agrees, at Lessee's cost and
expenses, to execute Lessor waiver forms, releases of Lessor Liens and
other similar documentation (in form and substance reasonably
satisfactory to Lessor and the Agent) in favor or any purchase money
seller, lessor or lender who has financed or may finance in the future
such items.
(b) The construction process provided for in the Construction
Agency Agreement is acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements,
all replacement components to each Property and all Modifications, other
than Modifications titled in Lessee's name pursuant to Section 11.1(a))
immediately and without further action to vest in and become the
property of Lessor and to be subject to the terms of this Lease from and
after the date hereof or such date of incorporation into any Property.
Lessee agrees that, subject to the terms of Article XIII relating to
permitted contests, Lessee shall not directly or indirectly create or
allow to remain, and shall promptly discharge at its sole cost and
expense, any Lien, defect, attachment, levy, title retention agreement
or claim upon any Property, any component thereof or any Modifications
(other than Modifications titled in Lessee's name pursuant to Section
11.1(a)) or any Lien, attachment, levy or claim with respect to the Rent
or with respect to any amounts held by Lessor, the Agent, any Lender or
any Holder pursuant to any Operative Agreement, other than Permitted
Liens and Lessor Liens. Lessee shall promptly notify Lessor in the event
it receives actual knowledge that a Lien other than a Permitted Lien or
Lessor Lien has occurred with respect to a Property, the Rent or any
other such amounts, and Lessee represents and warrants to, and covenants
with, Lessor that the Liens in favor of Lessor and/or the Agent created
by the Operative Agreements are (and until the Financing Parties under
the Operative Agreements have been paid in full shall remain) first
priority perfected Liens subject only to Permitted Liens and Lessor
Liens. At all times subsequent to the Basic Term Commencement Date
respecting a Property, Lessee shall (i) cause a valid, perfected, first
priority Lien on each applicable Property to be in place in favor of the
Agent (for the benefit of the Lenders and the Holders) and (ii) file, or
cause to be filed, all necessary documents under the applicable real
property law and Article 9 of the Uniform Commercial Code to perfect
such title and Liens.
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(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES.
Except to the extent otherwise provided for in Section 11 of the
Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the applicable Properties, Lessor, each Holder, the Agent and each Lender; (b)
there shall be no substantial risk of the imposition of a Lien (other than
Permitted Liens and Lessor Liens) on any Property and no part of any Property
nor any Rent would be in any danger of being sold, forfeited, lost or deferred;
(c) at no time during the permitted contest shall there be a risk of the
imposition of criminal liability or material civil liability on Lessor, any
Holder, the Agent or any Lender for failure to comply therewith; and (d) in the
event that, at any time, there shall be a material risk of extending the
application of such item beyond the end of the Term, then Lessee shall deliver
to Lessor an Officer's Certificate certifying as to the matters set forth in
clauses (a), (b) and (c) of this Section 13.1. Lessor, at Lessee's sole cost and
expense, shall execute and deliver to Lessee such authorizations and other
documents as may reasonably be required in connection with any such contest and,
if reasonably requested by Lessee, shall join as a party therein at Lessee's
sole cost and expense.
13.2 IMPOSITIONS, UTILITY CHARGES, OTHER MATTERS; COMPLIANCE WITH LEGAL
REQUIREMENTS.
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all
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Impositions, utility charges and such other matters to be timely paid, settled
or compromised, as appropriate, with respect to each Property and (b) each
Property to comply with all applicable Legal Requirements; provided, that during
the Construction Period, the costs of such compliance for any Property shall be
paid by Lessor; provided, further, the Lessor shall pay such amounts described
in this Section 13.2 only if funds are made available by the Lenders and the
Holders in an amount sufficient to allow such payment.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
During the Term for each Property, Lessee shall procure and
carry, at Lessee's sole cost and expense, commercial general liability and
umbrella liability insurance for claims for injuries or death sustained by
persons or damage to property while on such Property or respecting the Equipment
and such other public liability coverages (including automobile liability and
other liability coverages) as are then customarily carried by similarly situated
companies conducting business similar to that conducted by Lessee. Such
insurance shall be on terms and in amounts that are no less favorable than
insurance maintained by Lessee with respect to similar properties and equipment
that it owns and are then carried by similarly situated companies conducting
business similar to that conducted by Lessee, and in no event shall have a
minimum combined single limit per occurrence coverage (i) for commercial general
liability of less than $2,000,000 and (ii) for umbrella liability of less than
$15,000,000. The policies shall name Lessee as the insured and shall be endorsed
to name Lessor, the Holders, the Agent and the Lenders as additional insureds.
The policies shall also specifically provide that such policies shall be
considered primary insurance which shall apply to any loss or claim before any
contribution by any insurance which Lessor, any Holder, the Agent or any Lender
may have in force. In the operation of the Properties, Lessee shall comply with
applicable workers' compensation laws and protect Lessor, each Holder, the Agent
and each Lender against any liability under such laws.
14.2 PERMANENT HAZARD AND OTHER INSURANCE AND INSURANCE COVERAGE TO BE
MAINTAINED BY OTHER PARTIES.
(a) During the Term for each Property, Lessee shall keep such
Property insured against all risk of physical loss or damage by fire and
other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in each case in
amounts no less than the then current replacement value of such Property
(assuming that such Property was in the condition required by the terms
of this Lease immediately prior to such loss) and on terms that (i) are
no less favorable than insurance covering other similar properties owned
by Lessee and (ii) are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies
shall name Lessee as the insured and shall be endorsed to name Lessor
and the Agent (on behalf of the Lenders and the Holders) as a named
additional insured and loss payee, to the extent of their respective
interests; provided, so long as no Material
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Default or Event of Default exists, any loss payable under the insurance
policies required by this Section for losses up to $1,000,000 will be
paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any amendments
or supplements thereto or is in a zone designated A or V, then Lessee
shall comply with the National Flood Insurance Program as set forth in
the Flood Disaster Protection Act of 1973. In addition, Lessee will
fully comply with the requirements of the National Flood Insurance Act
of 1968 and the Flood Disaster Protection Act of 1973, as each may be
amended from time to time, and with any other Legal Requirement,
concerning flood insurance to the extent that it applies to any such
Property. During the Term, Lessee shall, in the operation and use of
each Property, maintain (i) workers' compensation insurance consistent
with that carried by similarly situated companies conducting business
similar to that conducted by Lessee and containing minimum liability
limits of no less than $100,000 and (ii) automobile liability insurance
in form and substance reasonably satisfactory to Lessor. In the
operation of each Property, Lessee shall comply with workers'
compensation laws applicable to Lessee, and protect Lessor, each Holder,
the Agent and each Lender against any liability under such laws.
(c) Lessee shall cause the general contractor and each
subcontractor hired with respect to the construction of the Improvements
and all other consultants, engineers and architects hired in connection
with any Property to carry general liability insurance, professional
liability insurance (if applicable and if obtainable pursuant to
commercially reasonable efforts), workers compensation insurance and
automobile liability insurance, in each case in form and substance
reasonably satisfactory to Lessor.
14.3 COVERAGE.
(a) As of the date of this Lease and annually thereafter during
the Term, Lessee shall furnish the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) with ACCORD Evidence of
Insurance and, if requested by Lessor, certified copies of insurance
policies showing the insurance required under Sections 14.1 and 14.2 to
be in effect, naming (to the extent of their respective interests)
Lessor, the Holders, the Agent and the Lenders as additional insureds
and loss payees and evidencing the other requirements of this Article
XIV. All such insurance shall be at the cost and expense of Lessee and
provided by nationally recognized, financially sound insurance companies
having a rating by A.M. Best's Key Rating Guide of at least an (i) A-
and a Financial Performance Rating of at least a IX (regarding all
hazard insurance coverages) and (ii) A- and a Financial Performance
Rating of at least a IX (regarding all liability insurance coverages).
Lessee shall cause such evidence of insurance to include a provision for
thirty (30) days' advance written notice by the insurer to the Agent (on
behalf of Lessor and the other beneficiaries of such insurance coverage)
in the event of cancellation or material alteration of such insurance.
If an Event of Default has occurred and is continuing and the Agent (on
behalf of Lessor and the other beneficiaries of such
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insurance coverage) so requests, Lessee shall deliver to the Agent (on
behalf of Lessor and the other beneficiaries of such insurance coverage)
copies of all insurance policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies required
by Sections 14.1, 14.2(a), 14.2(b) and 14.2(c) shall include an
appropriate clause pursuant to which any such policy shall provide that
it will not be invalidated should Lessee or any Contractor, as the case
may be, waive, at any time, any or all rights of recovery against any
party for losses covered by such policy or due to any breach of
warranty, fraud, action, inaction or misrepresentation by Lessee or any
Person acting on behalf of Lessee. Lessee hereby waives any and all such
rights against Lessor, the Holders, the Agent and the Lenders to the
extent of payments made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Article XIV, except that Lessor may carry
separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would apply
to a loss covered under Lessee's policy and (ii) each such insurance
policy will not cause Lessee's insurance required under this Article XIV
to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Sections 14.2(a) and 14.2(b),
shall renew or replace each policy prior to the expiration date thereof
or otherwise maintain the coverage required by such Sections without any
lapse in coverage; provided, that during the Construction Period, the
cost of such insurance shall be paid by Lessor; provided, further, the
Lessor shall pay such amounts described in this Section 14.3(d) only if
funds are made available by the Lenders and the Holders in an amount
sufficient to allow such payment. Notwithstanding the foregoing, during
the Construction Period, the Construction Agent shall cause the
insurance coverages referenced in Sections 14.1, 14.2(a), 14.2(b) and
14.2(c) to be procured.
14.4 ADDITIONAL INSURANCE REQUIREMENTS.
Not in limitation of any provision of the Operative Agreements
but in addition thereto, Lessee shall obtain any and all additional insurance
policies with regard to the Properties or otherwise with respect to the
transactions contemplated by the Operative Agreements as reasonably requested
from time to time by Lessor.
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ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to this Article XV and Article XVI (in the event
Lessee delivers, or is obligated to deliver or is deemed to have
delivered, a Termination Notice), and prior to the occurrence and
continuation of a Material Default or an Event of Default, Lessee shall
be entitled to receive directly (and Lessor hereby irrevocably assigns
to Lessee all of Lessor's right, title and interest in) any condemnation
proceeds, award, compensation or insurance proceeds under Sections
14.2(a) or 14.2(b) hereof to which Lessee or Lessor or any additional
insured Person under Sections 14.2(a) or 14.2(b) may become entitled by
reason of their respective interests in a Property (i) if all or a
portion of such Property is damaged or destroyed in whole or in part by
a Casualty or (ii) if the use, access, occupancy, easement rights or
title to such Property or any part thereof or any appurtenance thereto
is the subject of a Condemnation; provided, however, if a Material
Default or an Event of Default shall have occurred and be continuing or
if such award, compensation or insurance proceeds shall exceed
$1,000,000, then such award, compensation or insurance proceeds shall be
paid directly to Lessor or, if received by Lessee, shall be held in
trust for Lessor, and shall be paid over by Lessee to Lessor and held in
accordance with the terms of this Article XV or, if applicable, applied
to the repayment of the Property Cost in accordance with Section 16 on
the Termination Date. All amounts held by Lessor hereunder on account of
any award, compensation or insurance proceeds either paid directly to
Lessor or turned over to Lessor shall be held as security for the
performance of Lessee's obligations hereunder and under the other
Operative Agreements and when all such obligations of Lessee with
respect to such matters (and all other obligations of Lessee which
should have been satisfied pursuant to the Operative Agreements as of
such date) have been satisfied, all amounts so held by Lessor shall be
paid over to Lessee.
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or
insurance payment on account of any such Casualty or Condemnation and
shall pay all expenses thereof; provided, that during the Construction
Period, such expenses shall be paid by Lessor; provided, further, the
Lessor shall pay such amounts described in this Section 15.1(b) only if
funds are made available by the Lenders and the Holders in an amount
sufficient to allow such payment. At Lessee's reasonable request, and at
Lessee's sole cost and expense, Lessor and the Agent shall participate
in any such proceeding, action, negotiation, prosecution or adjustment;
provided, that during the Construction Period, such expenses shall be
paid by Lessor; provided, further, the Lessor shall pay such amounts
described in this Section 15.1(b) only if funds are made available by
the Lenders and the Holders in an amount sufficient to allow such
payment. Lessor and Lessee agree that this Lease shall control the
rights of Lessor and Lessee in and to any such award, compensation or
insurance payment.
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(c) If Lessee shall receive notice of a Casualty or a
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed twenty-five percent
(25%) of the Property Cost of such Property, Lessee shall give notice
thereof to Lessor promptly after Lessee's receipt of such notice. In the
event such a Casualty or Condemnation occurs (regardless of whether
Lessee gives notice thereof), then Lessee shall be deemed to have
delivered a Termination Notice to Lessor and the provisions of Sections
16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation (regardless of
whether notice thereof must be given pursuant to paragraph (c)), this
Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall continue in
full force and effect following a Casualty or Condemnation with respect
to the affected Property, Lessee shall, at its sole cost and expense
(subject to reimbursement in accordance with Section 15.1(a)) promptly
and diligently repair any damage to the applicable Property caused by
such Casualty or Condemnation in conformity with the requirements of
Sections 10.1 and 11.1, using the as-built Plans and Specifications or
manufacturer's specifications for the applicable Improvements, Equipment
or other components of the applicable Property (as modified to give
effect to any subsequent Modifications, any Condemnation affecting the
applicable Property and all applicable Legal Requirements), so as to
restore the applicable Property to the same or a greater remaining
economic value, useful life, utility, condition, operation and function
as existed immediately prior to such Casualty or Condemnation (assuming
all maintenance and repair standards have been satisfied). In such
event, title to the applicable Property shall remain with Lessor. Lessor
shall make disbursements from time to time of any award, compensation or
insurance proceeds held by it to Lessee for application to the cost of
restoration subject to the satisfaction of the following conditions: (i)
Lessor shall have received a fully executed counterpart of a requisition
therefor (in form and substance reasonably satisfactory to Lessor),
requesting funds in an amount not exceeding the cost of work completed
or insured since the last disbursement, together with reasonably
satisfactory evidence of the state of completion and of performance of
the work in a good and ▇▇▇▇▇▇▇-like manner and in accordance with the
as-built Plans and Specifications, (ii) at the time of any such
disbursement, no Lease Default or Lease Event of Default shall have
occurred and be continuing, and no mechanic's or materialmen's liens
shall have been filed and remain undischarged, except those discharged
by the disbursement of the requested funds or which are otherwise
bonded, (iii) Lessor shall be reasonably satisfied that sufficient funds
are available to complete such restoration and (iv) Lessor shall have
good and marketable title to all Properties, subject only to Permitted
Liens. Provided no Lease Default or Lease Event of Default shall have
occurred and be continuing, any award, compensation or insurance
proceeds remaining after restoration of any Property as herein provided
shall be paid to Lessee.
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(f) In no event shall a Casualty or Condemnation affect Lessee's
obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth in Section
15.1(a) or Section 15.1(e), if during the Term with respect to a
Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, the applicable Property cannot
reasonably be restored, repaired or replaced on or before the day one
hundred eighty (180) days prior to the Expiration Date or the date nine
(9) months after the occurrence of such Casualty or Condemnation (if
such Casualty or Condemnation occurs during the Term) to the same or a
greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied) or on or before such day such Property is not in fact so
restored, repaired or replaced, then Lessee shall be required to
exercise its Purchase Option for such Property on the next Payment Date
(notwithstanding the limits on such exercise contained in Section 20.2)
and pay Lessor the Termination Value for such Property; provided, if any
Default or Event of Default has occurred and is continuing, Lessee shall
also promptly (and in any event within three (3) Business Days) pay
Lessor any award, compensation or insurance proceeds received on account
of any Casualty or Condemnation with respect to any Property; provided,
further, that if no Material Default or Event of Default has occurred
and is continuing, any Excess Proceeds shall be paid to Lessee. If a
Material Default or an Event of Default has occurred and is continuing
and any Loans, Holder Advances or other amounts are owing with respect
thereto, then any Excess Proceeds (to the extent of any such Loans,
Holder Advances or other amounts owing with respect thereto) shall be
paid to Lessor, held as security for the performance of Lessee's
obligations hereunder and under the other Operative Agreements and
applied to such obligations upon the exercise of remedies in connection
with the occurrence of an Event of Default, with the remainder of such
Excess Proceeds in excess of such Loans, Holder Advances and other
amounts owing with respect thereto being distributed to the Lessee.
(h) The provisions of Sections 15.1(a) through 15.1(g) shall not
apply to any Property until after the Construction Period Termination
Date applicable to such Property and the applicable provisions of the
Construction Agency Agreement shall apply to a Casualty or Condemnation
affecting a Construction Period Property.
15.2 ENVIRONMENTAL MATTERS.
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation and
which, in the reasonable opinion of Lessee, the cost to undertake any legally
required response, clean up, remedial or other action will or might result in a
cost to Lessee of more than $50,000, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such
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Environmental Violation, either deliver to Lessor a Termination Notice with
respect to the applicable Property or Properties pursuant to Section 16.1, if
applicable, or, at Lessee's sole cost and expense, promptly and diligently
undertake and diligently complete any response, clean up, remedial or other
action (including without limitation the pursuit by Lessee of appropriate action
against any off-site or third party source for contamination) necessary to
remove, cleanup or remediate the Environmental Violation in accordance with all
Environmental Laws. Any such undertaking shall be timely completed in accordance
with prudent industry standards. If Lessee does not deliver a Termination Notice
with respect to such Property pursuant to Section 16.1, Lessee shall, upon
completion of remedial action by Lessee, cause to be prepared by a reputable
environmental consultant acceptable to Lessor a report describing the
Environmental Violation and the actions taken by Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in full compliance with applicable
Environmental Law. Not less than sixty (60) days prior to any time that Lessee
elects to cease operations with respect to any Property or to remarket any
Property pursuant to Section 20.1 hereof or any other provision of any Operative
Agreement, Lessee at its expense shall cause to be delivered to Lessor
environmental site assessments respecting such Property recently prepared (no
more than thirty (30) days prior to the date of delivery) by an independent
recognized professional acceptable to Lessor in its reasonable discretion and in
form, scope and content satisfactory to Lessor in its reasonable discretion.
Notwithstanding any other provision of any Operative Agreement, if Lessee fails
to comply with the foregoing obligation regarding the environmental site
assessments, Lessee shall be obligated to purchase such Property for its
Termination Value and shall not be permitted to exercise (and Lessor shall have
no obligation to honor any such exercise) any rights under any Operative
Agreement regarding a sale of such Property to a Person other than Lessee.
15.3 NOTICE OF ENVIRONMENTAL MATTERS.
Promptly, but in any event within five (5) Business Days from the
date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
notice of any pending or threatened claim, action or proceeding involving any
Environmental Law or any Release on or in connection with any Property or
Properties. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property.
Lessee shall also promptly provide such detailed reports of any such material
environmental claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
If Lessee has delivered, or is deemed to have delivered, written
notice of a termination of this Lease with respect to the applicable Property to
Lessor in the form described
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in Section 16.2(a) (a "Termination Notice") pursuant to the provisions of this
Lease, then following the applicable Casualty, Condemnation or Environmental
Violation, this Lease shall terminate with respect to the affected Property on
the applicable Termination Date.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of termination
of this Lease with respect to the affected Property on a Payment Date
not more than sixty (60) days after Lessor's receipt of such Termination
Notice (the "Termination Date"); and (ii) a binding and irrevocable
agreement of Lessee to pay the Termination Value for the applicable
Property and purchase such Property on such Termination Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey
such Property or the remaining portion thereof, if any, to Lessee (or
Lessee's designee), all in accordance with Section 20.2.
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
If any one (1) or more of the following events (each a "Lease
Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) days after the
same has become due and payable or (ii) any Termination Value, on the
date any such payment is due and payable, or any payment of Basic Rent
or Supplemental Rent due on the due date of any such payment of
Termination Value, or (iii) any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or any
other Credit Party shall fail to make any payment of any amount under
any Operative Agreement which has become due and payable within three
(3) days after receipt of notice that such payment is due;
(c) (i) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or (ii) Lessee shall fail to deliver any
requisite ACCORD Evidence of Insurance or certified copy of any
insurance policy required thereunder when due under the terms hereof and
such failure to deliver shall continue unremedied for a period of ten
(10) days after an officer of Lessee becoming aware of such failure to
deliver, or notice from the Agent of such failure to deliver;
(d) Any representation or warranty made by Lessee set forth in
this Lease or in any other Operative Agreement or in any document
entered into in connection
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herewith or therewith or in any document, certificate or financial or
other statement delivered in connection herewith or therewith shall be
false or inaccurate in any material way when made;
(e) An Construction Agency Agreement Event of Default shall have
occurred and be continuing;
(f) (i) Any Credit Party or any Subsidiary of any Credit Party
shall default (beyond applicable periods of grace and/or notice and
cure) in the payment when due of any principal of or interest on any
Indebtedness having an outstanding principal amount of at least
$10,000,000; or any other event or condition shall occur which results
in a default of any such Indebtedness or enables the holder of any such
Indebtedness or any Person acting on such holder's behalf to accelerate
the maturity thereof; or (ii) any Mountain View Lease Event of Default
shall have occurred and be continuing;
(g) The liquidation or dissolution of any Credit Party, or the
suspension of the business of any Credit Party, or the filing by any
Credit Party of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under the United States Bankruptcy Code, as amended, or under any
other insolvency act or law, state or federal, now or hereafter
existing, or any other action of any Credit Party indicating its consent
to, approval of or acquiescence in, any such petition or proceeding; the
application by any Credit Party for, or the appointment by consent or
acquiescence of any Credit Party of a receiver, a trustee or a custodian
of any Credit Party for all or a substantial part of its property; the
making by Lessee of any assignment for the benefit of creditors; the
admission by any Credit Party in writing of its inability to pay its
debts as they mature or is generally not paying its debts and other
financial obligations as they become due and payable; or any Credit
Party taking any corporate action to authorize any of the foregoing;
(h) The filing of an involuntary petition against any Credit
Party in bankruptcy or seeking reorganization, arrangement, readjustment
of its debts or for any other relief under the United States Bankruptcy
Code, as amended, or under any other insolvency act or law, state or
federal, now or hereafter existing; or the involuntary appointment of a
receiver, a trustee or a custodian of any Credit Party for all or a
substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of
the property of any Credit Party, and the continuance of any of such
events for ninety (90) days undismissed or undischarged;
(i) The adjudication of any Credit Party as bankrupt or
insolvent;
(j) The entering of any order in any proceedings against any
Credit Party or any Subsidiary of any Credit Party decreeing the
dissolution, divestiture or split-up of any Credit Party or any
Subsidiary of any Credit Party, and such order remains in effect for
more than sixty (60) days;
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(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of any Credit Party
pursuant to the terms of this Lease or any other Operative Agreement is
false or misleading in any material respect when made or delivered;
(l) The Lessee or any other Credit Party shall
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 8.3A(b),
8.3A(h), 8.3A(i) or 8.3B(a) through 8.3B(o) of the Participation
Agreement, inclusive;
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Sections 8.3A(a)(i),
(ii), (iii) or (iv) of the Participation Agreement and such
default shall continue unremedied for a period of at least five
(5) days after the earlier of an officer of such Credit Party
becoming aware of such default or notice thereof by the Agent;
or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to
in subsections (a), (b), (c), (l)(i) or (l)(ii) of this Section
17.1) contained in this Lease or any other Operative Agreement
and such default shall continue unremedied for a period of at
least thirty (30) days after the earlier of an officer of such
Credit Party becoming aware of such default or notice thereof by
the Agent; provided, however, that if such default is of a
nature that is not capable of being cured within such thirty
(30) day period, and the Lessee or any other such Credit Party
promptly commences appropriate steps to cure such default within
such thirty (30) day period and continues to pursue such cure
with diligence and good faith thereafter, unless the Agent shall
determine that such delay could reasonably be expected to have a
Material Adverse Effect, such thirty (30) day period shall be
extended for an additional sixty (60) days;
(m) A final judgment or judgments for the payment of money shall
be rendered by a court or courts against any Credit Party or any
Subsidiary of any Credit Party or any of their assets in excess of
$10,000,000 in the aggregate, and (i) the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within thirty (30) days from
the date of entry thereof, or (ii) any Credit Party or any such
Subsidiary shall not, within said period of thirty (30) days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during
such appeal, or (iii) such judgment or judgments shall not be discharged
(or provisions shall not be made for such discharge) within thirty (30)
days after a decision has been reached with respect to such appeal and
the related stay has been lifted;
(n) Any Credit Party or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of
$5,000,000 which it shall have become liable to pay to the PBGC or to a
Pension Plan under Title IV of ERISA; or
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notice of intent to terminate a Pension Plan or Pension Plans having
aggregate Unfunded Liabilities in excess of $5,000,000 shall be filed
under Title IV of ERISA by any Credit Party or any member of the
Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to administer
any such Pension Plan or Pension Plans or a proceeding shall be
instituted by a fiduciary of any such Pension Plan or Pension Plans
against any Credit Party or any member of the Controlled Group to
enforce Section 515 or 4219(c)(5) of ERISA; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Pension Plan or Pension Plans must be
terminated;
(o) Any Change of Control shall occur;
(p) Any Operative Agreement shall cease to be in full force and
effect; or
(q) Except as to any Credit Party which is released in connection
with the Operative Agreements, the guaranty given by any Guarantor under the
Participation Agreement or any material provision thereof shall cease to be in
full force and effect, or any Guarantor or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under such
guaranty, or any Guarantor shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any guaranty;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination (provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g), (h) or (i), and this Lease shall terminate, and
all rights of Lessee under this Lease shall cease. Lessee shall, to the fullest
extent permitted by law, pay as Supplemental Rent all reasonable costs and
expenses incurred by or on behalf of Lessor or any other Financing Party,
including without limitation reasonable fees and expenses of counsel, as a
result of any Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 SURRENDER OF POSSESSION.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender to
Lessor possession of the Properties. Lessor may enter upon and repossess the
Properties by such means as are available at law or in equity, and may remove
Lessee and all other Persons and any and all personal property and Lessee's
equipment and
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personalty and severable Modifications from the Properties. Lessor shall have no
liability by reason of any such entry, repossession or removal performed in
accordance with applicable law. Upon the written demand of Lessor, Lessee shall
return the Properties promptly to Lessor, in the manner and condition required
by, and otherwise in accordance with the provisions of, Section 22.1(c) hereof.
17.3 RELETTING.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
17.4 DAMAGES.
Neither (a) the termination of this Lease as to all or any of the
Properties pursuant to Section 17.1; (b) the repossession of all or any of the
Properties; nor (c) the failure of Lessor to relet all or any of the Properties,
the reletting of all or any portion thereof, nor the failure of Lessor to
collect or receive any rentals due upon any such reletting, shall relieve Lessee
of its liabilities and obligations hereunder, all of which shall survive any
such termination, repossession or reletting. If any Lease Event of Default shall
have occurred and be continuing and notwithstanding any termination of this
Lease pursuant to Section 17.1, Lessee shall forthwith pay to Lessor all Rent
and other sums due and payable hereunder to and including without limitation the
date of such termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated pursuant to
Section 17.1 and until the end of the Term hereof or what would have been the
Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section 17.1, less
the net proceeds, if any, which are actually received by Lessor with respect to
the period in question of any reletting of any Property or any portion thereof;
provided, that Lessee's obligation to make payments of Basic Rent and
Supplemental Rent under this Section 17.4 shall continue only so long as Lessor
shall not have received the amounts specified in Section 17.6. In calculating
the amount of such net proceeds from reletting, there shall be deducted all of
Lessor's, any Holder's, the Agent's and any Lender's reasonable expenses in
connection therewith, including without limitation repossession costs, brokerage
or sales commissions, fees and expenses for counsel and any necessary repair or
alteration costs and expenses incurred in preparation for such reletting. To the
extent Lessor receives any damages pursuant to this Section 17.4, such amounts
shall be regarded as amounts paid on account of Rent. Lessee specifically
acknowledges and agrees that its obligations under
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this Section 17.4 shall be absolute and unconditional under any and all
circumstances and shall be paid and/or performed, as the case may be, without
notice or demand and without any abatement, reduction, diminution, setoff,
defense, counterclaim or recoupment whatsoever.
17.5 POWER OF SALE.
Without limiting any other remedies set forth in this Lease,
Lessor and Lessee agree that Lessee has granted, pursuant to Section 7.1(b)
hereof and each Lease Supplement, a Lien against the Properties WITH POWER OF
SALE, and that, upon the occurrence and during the continuance of any Lease
Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be foreclosed) in all
or any part of the Properties.
17.6 FINAL LIQUIDATED DAMAGES.
Subject to the limitations of the Construction Agency Agreement,
if a Lease Event of Default shall have occurred and be continuing, whether or
not this Lease shall have been terminated pursuant to Section 17.1 and whether
or not Lessor shall have collected any current liquidated damages pursuant to
Section 17.4, Lessor shall have the right to recover, by demand to Lessee and at
Lessor's election, and Lessee shall pay to Lessor, as and for final liquidated
damages, but exclusive of the indemnities payable under Section 11 of the
Participation Agreement (which, if requested, shall be paid concurrently), and
in lieu of all current liquidated damages beyond the date of such demand (it
being agreed that it would be impossible accurately to determine actual damages)
the Termination Value. Upon payment of the amount specified pursuant to the
first sentence of this Section 17.6, Lessee shall be entitled to receive from
Lessor, either at Lessee's request or upon Lessor's election, in either case at
Lessee's cost, an assignment of Lessor's entire right, title and interest in and
to the Properties, Improvements, Fixtures, Modifications, Equipment and all
components thereof, in each case in recordable form and otherwise in conformity
with local custom and free and clear of the Lien of this Lease (including
without limitation the release of the Lease and any memoranda of Lease and/or
the Lease Supplement recorded in connection therewith) and any Lessor Liens. The
Properties shall be conveyed to Lessee "AS-IS, WHERE-IS" and in their then
present physical condition. Concurrent with such conveyance, Lessor shall assign
(free and clear of all Lessor Liens but subject to any and all other Liens) to
Lessee all right, title and interest of Lessor in and to the Indemnity Agreement
regarding matters and events arising from and after the date of such assignment
(provided, Lessor shall retain its right, title and interest in and to the
Indemnity Agreement regarding matters and events arising during the period when
Lessor held title to any Property). If any statute or rule of law shall limit
the amount of such final liquidated damages to less than the amount agreed upon,
Lessor shall be entitled to the maximum amount allowable under such statute or
rule of law; provided, however, Lessee shall not be entitled to receive an
assignment of Lessor's interest in the Properties, the Improvements, Fixtures,
Modifications, Equipment or the components thereof unless Lessee shall have paid
in full the Termination Value. Lessee specifically acknowledges and agrees that
its obligations under this Section 17.6 shall be absolute and unconditional
under any and all circumstances and shall be paid and/or
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performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 ENVIRONMENTAL COSTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting any Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor, and shall indemnify and
hold harmless Lessor and each other Indemnified Person therefrom. Lessee shall
pay all amounts referenced in the immediately preceding sentence within ten (10)
days of any request by Lessor for such payment. The provisions of this Section
17.7 shall not limit the obligations of Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 WAIVER OF CERTAIN RIGHTS.
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of
re-entry or the institution of legal proceedings to obtain re-entry or
possession; (b) any right of redemption, re-entry or possession; (c) the benefit
of any laws now or hereafter in force exempting property from liability for rent
or for debt; and (d) any other rights which might otherwise limit or modify any
of Lessor's rights or remedies under this Article XVII.
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor all of Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Properties (including without limitation
all right, title and interest of Lessee with respect to all warranty,
performance, service and indemnity provisions), as and to the extent that the
same relate to the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties or any of them.
17.10 REMEDIES CUMULATIVE.
Lessor shall be entitled to enforce payment of all amounts and
performance of obligations evidenced hereby and to exercise all rights and
powers under this instrument or under any of the other Operative Agreements or
other agreement or any laws now or hereafter in force, notwithstanding some or
all of the obligations evidenced hereby may now or hereafter be otherwise
secured, whether by mortgage, security agreement, pledge, lien, assignment or
otherwise. Neither the acceptance of this instrument nor its enforcement, shall
prejudice or in
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any manner affect Lessor's right to realize upon or enforce any other security
now or hereafter held by the Lessor, it being agreed that Lessor shall be
entitled to enforce this instrument and any other security now or hereafter held
by Lessor in such order and manner as Lessor may determine in its absolute
discretion. No remedy herein conferred upon or reserved to Lessor is intended to
be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Operative Agreements to Lessor or to which
it may otherwise be entitled, may be exercised, concurrently or independently,
from time to time and as often as may be deemed expedient by Lessor. In no event
shall Lessor, in the exercise of the remedies provided in this instrument, be
deemed a "mortgagee in possession," and Lessor shall not in any way be made
liable for any act, either of commission or omission, in connection with the
exercise of such remedies.
17.11 ASSIGNMENT OF RENTS AND APPOINTMENT OF RECEIVER.
(a) Upon the occurrence of any Lease Event of Default, the Lessor
may, in addition to all other rights in this Lease, at its option, at any time:
(i) without regard to waste, adequacy of the security or
solvency of the Lessee, apply for, and the Lessee hereby
consents to, the appointment of a receiver of the Property,
whether or not foreclosure proceedings have been commenced, and
whether or not a foreclosure sale has occurred. The receiver
shall have authority to make leases for terms which extend
beyond the receivership; and
(ii) with or without exercising the rights set forth
above, give or require the Lessee to give notice to any or all
tenants under leases authorizing and directing them to pay all
rents under leases for all or any portion of the Property (the
"Revenues") directly to the Lessor.
(b) The exercise of any of the foregoing rights or remedies and
the application of the Revenues pursuant to this Section 17.11 shall not cure or
waive any Lease Event of Default (or notice of default) or invalidate any act
done pursuant to such notice.
(c) Anything in this Lease to the contrary notwithstanding, all
Revenues collected by the Lessor or the receiver each month shall be applied as
follows:
(i) to payment of all reasonable fees of the receiver
approved by the court;
(ii) to payment of all tenant security deposits then
owing to tenants under any of the leases pursuant to the
provisions of Minn. Stat. Section 504.20;
(iii) to payment of all prior or current real estate
taxes and special assessments with respect to the Property, or
if this Lease or any other instrument
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relating to the obligations of Lessee under the Participation
Agreement requires periodic escrow payments for such taxes and
assessments, to the escrow payments then due;
(iv) to payment of all premiums then due for the
insurance required with respect to the Property, or if this
Lease or any other instrument relating to the obligations of
Lessee under the Participation Agreement requires periodic
escrow payments for such premiums, to the escrow payments then
due;
(v) to payment of expenses incurred for normal
maintenance of the Property;
(vi) if received prior to any foreclosure sale of the
Property pursuant to this Lease, to the Lessor for payment of
the indebtedness secured hereby, but no such payment made after
acceleration of the indebtedness secured hereby shall affect
such acceleration;
(vii) if received during or with respect to the period
of redemption after a foreclosure sale of the Property pursuant
to this Lease:
(1) if the purchaser at the foreclosure sale is
not the Lessor, first to the Lessor to the extent of any
deficiency of the sale proceeds to repay the
indebtedness secured hereby, second to the purchaser as
a credit to the redemption price, but if the Property is
not redeemed, then to the purchaser of the Property;
(2) if the purchaser at the foreclosure sale is
the Lessor, to the Lessor to the extent of any
deficiency of the sale proceeds to repay the
indebtedness secured hereby and the balance to be
retained by the Lessor as a credit to the redemption
price, but if the Property is not redeemed, then to the
Lessor, whether or not any such deficiency exists.
The rights and powers of the Lessor and receivers under this Lease and the
application of rents under this Section 17.11 shall continue until expiration of
the redemption period from any foreclosure sale, whether or not any deficiency
remains after a foreclosure sale.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and may, to the fullest extent permitted by law,
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and notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon
any Property, and take all such action thereon as may be necessary or
appropriate therefor. No such entry shall be deemed an eviction of any lessee.
All out-of-pocket costs and expenses so incurred (including without limitation
fees and expenses of counsel), together with interest thereon at the Overdue
Rate from the date on which such sums or expenses are paid by Lessor, shall be
paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE OPTION.
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to any Property, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by deed or other appropriate instrument) of
Lessor's entire interest in such Property, in each case in recordable form and
otherwise in conformity with local custom and free and clear of any Lessor Liens
attributable to Lessor but without any other warranties (of title or otherwise)
from Lessor. Such Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in
then present physical condition.
19.2 [INTENTIONALLY OMITTED]
ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
Not less than one hundred twenty (120) days and no more than one
hundred eighty (180) days prior to the Expiration Date or (respecting the
Purchase Option only) any Payment Date, Lessee may give Lessor irrevocable
written notice (the "Election Notice") that Lessee is electing to exercise
either (a) the option to purchase all, but not less than all, the Properties on
the Expiration Date or on the Payment Date specified in the Election Notice or
in accordance with the Parcel Sale Requirements, the option to purchase at least
one year prior to the Expiration Date one or more, but less than all, the
Properties (or a portion of any Property) on the Payment Date specified in the
Election Notice for purchase (the "Purchase Option") or (b) with respect to an
Election Notice given in connection with the Expiration Date only, the option to
remarket all, but not less than all, the Properties to a Person other than
Lessee or any Affiliate of Lessee and cause a sale of such Properties to occur
on the Expiration Date pursuant to the terms of Section 22.1 (the "Sale
Option"). Regarding the purchase of one or more, but less than all, the
Properties (or a portion of any Property), at Lessee's option and without the
consent of any Financing Party, Lessee may provide irrevocable written notice to
Lessor not less than one hundred twenty (120) days and no more than one hundred
eighty days prior to any Payment Date
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(in all cases at least one year prior to the Expiration Date) that Lessee
desires to purchase one or more, but less than all, the Properties (or a portion
of any Property), if (i) such Property or portion of any Property to be
purchased by Lessee has a separate legal and tax parcel, (ii) the conveyance of
such Property or portion of such Property will not impair the access, use,
occupancy or fair market value of the Properties remaining in the Trust, (iii)
the Properties remaining in the Trust (A) shall constitute one or more legal and
tax parcels, (B) shall contain at least one building, (C) shall be viable as a
separate property in compliance with Legal Requirements and (D) shall have a
fair market value of 100% or more of the Property Cost allocable to such
remaining Properties and (iv) at the time of sale to Lessee of such Property or
portion of any Property, no Default or Event of Default shall have occurred and
be continuing (other than those that will be cured by the payment of the
Termination Value for such Property (or a portion of any Property)) (the terms
referenced in the foregoing subsections (i), (ii), (iii) and (iv), may be
referred to as the "Parcel Sale Requirements"). To the extent the Parcel Sale
Requirements are satisfied, Lessor shall sell such Property or portion of such
Property to Lessee. If Lessee does not give an Election Notice indicating the
Purchase Option or the Sale Option at least one hundred twenty (120) days and
not more than one hundred eighty (180) days prior to the Expiration Date, then,
unless such Expiration Date is the final Expiration Date to which the Term may
be extended, the term of this Lease shall be extended in accordance with Section
2.2 hereof; if such Expiration Date is the final Expiration Date, then Lessee
shall be deemed to have elected the Purchase Option. If Lessee shall either (i)
elect (or be deemed to have elected) to exercise the Purchase Option or (ii)
elect the Sale Option and fail to cause all, but not less than all, the
Properties to be sold in accordance with the terms of Section 22.1 on the
Expiration Date, then in either case Lessee shall pay to Lessor on the date on
which such purchase or sale is scheduled to occur an amount equal to the
Termination Value for all, but not less than all, the Properties (which the
parties do not intend to be a "bargain" purchase price) and, upon receipt of
such amounts and satisfaction of such obligations, Lessor shall transfer to
Lessee all of Lessor's right, title and interest in and to all, but not less
than all, the Properties in accordance with Section 20.2.
20.2 LESSEE PURCHASE OPTION.
Provided, no Default or Event of Default shall have occurred and
be continuing (other than those that will be cured by the payment of the
Termination Value for all the Properties) and provided, that the Election Notice
has been appropriately given specifying the Purchase Option, Lessee shall
purchase all the Properties (or if applicable, and upon satisfaction of all
Parcel Sale Requirements, one or more, but less than all, the Properties or a
portion of any Property pursuant to a notice provided in accordance with Section
20.1) on the Expiration Date or Payment Date at a price equal to the Termination
Value for such Properties (which the parties do not intend to be a "bargain"
purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to a Property or all of the
Properties, and upon tender by Lessee of the amounts set forth in Section
16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge
(where
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required) and deliver to Lessee, at Lessee's cost and expense, each of the
following: (a) a special or limited warranty Deed conveying each Property to
Lessee free and clear of the Lien of this Lease, the Lien of the Credit
Documents and any Lessor Liens; (b) a ▇▇▇▇ of Sale conveying each Property (to
the extent it is personal property) to Lessee free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed; and (d) FIRPTA affidavits. All of the
foregoing documentation must be in form and substance reasonably satisfactory to
Lessor. The applicable Property shall be conveyed to Lessee "AS-IS, WHERE-IS"
and in then present physical condition.
If any Property is the subject of remediation efforts respecting
Hazardous Substances at the Expiration Date which could materially and adversely
impact the Fair Market Sales Value of such Property (with materiality determined
in each case in Lessor's reasonable discretion), then Lessee shall be obligated
to purchase each such Property pursuant to Section 20.2.
On the Expiration Date and/or any Payment Date on which Lessee
has elected to exercise its Purchase Option, Lessee shall pay (or cause to be
paid) to Lessor, the Agent and all other parties, as appropriate, the sum of all
costs and expenses incurred by any such party in connection with the election by
Lessee to exercise its Purchase Option and all Rent and all other amounts then
due and payable or accrued under this Lease and/or any other Operative
Agreement.
20.3 THIRD PARTY SALE OPTION.
(a) Provided, that (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake
to cause a sale of the Properties on the Expiration Date (all as
specified in the Election Notice) in accordance with the provisions of
Section 22.1 hereof.
(b) In the event Lessee exercises the Sale Option then, as soon
as practicable and in all events not less than sixty (60) days prior to
the Expiration Date, Lessee shall cause to be delivered to Lessor
environmental site assessments for each of the Properties recently
prepared (no more than thirty (30) days old prior to the Sale Date) by
an independent recognized professional reasonably acceptable to Lessor
and in form, scope and content reasonably satisfactory to Lessor. Lessor
(at the direction of the Agent) shall elect whether the costs incurred
respecting the above-referenced environmental site assessments shall be
paid by either (i) sales proceeds from the Properties, (ii) Lessor (but
only the extent amounts are available therefor with respect to the
Available Commitments and the Available Holder Commitments or each
Lender and each Holder approves the necessary increases in the Available
Commitments and the Available Holder Commitments to fund such costs) or
(iii) Lessee; provided, amounts funded by the Lenders and the Holders
with respect to the foregoing shall be added to the Property Cost of
each applicable Property; provided, further, amounts funded by Lessee
with respect to
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the foregoing shall be a part of (and limited by) the Maximum Residual
Guarantee Amount. In the event that Lessor shall not have received such
environmental site assessments by the date sixty (60) days prior to the
Expiration Date or in the event that such environmental assessment shall
reveal the existence of any material violation of Environmental Laws,
other material Environmental Violation or potential material
Environmental Violation (with materiality determined in each case by
Lessor in its reasonable discretion), then Lessee on the Expiration Date
shall pay to Lessor an amount equal to the Termination Value for all the
Properties and any and all other amounts due and owing hereunder. Upon
receipt of such payment and all other amounts due under the Operative
Agreements, Lessor shall transfer to Lessee all of Lessor's right, title
and interest in and to all the Properties in accordance with Section
19.1.
ARTICLE XXI
21.1 [INTENTIONALLY OMITTED].
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of all the Properties in
connection with a sale to one (1) or more third party purchasers to be
consummated on the Expiration Date or such earlier date as is acceptable
to the Agent and the Lessee (the "Sale Date") for the highest price
available, shall notify Lessor promptly of the name and address of each
prospective purchaser and the cash price which each prospective
purchaser shall have offered to pay for each such Property and shall
provide Lessor with such additional information about the bids and the
bid solicitation procedure as Lessor may reasonably request from time to
time. On the Sale Date, all Properties then subject to this Lease shall
be sold for one aggregate cash price amount for all such Properties,
without differentiation of such amount on a Property-by-Property basis.
All such prospective purchasers must be Persons other than Lessee or any
Affiliate of Lessee. On the Sale Date, Lessee shall pay (or cause to be
paid) to Lessor and all other parties, as appropriate, all Rent and all
other amounts then due and payable or accrued under this Lease and/or
any other Operative Agreement and Lessor (at the direction of the Agent)
shall elect whether the costs and expenses incurred by Lessor and/or the
Agent respecting the sale of one or more Properties shall be paid by
either (i) sales proceeds from the Properties, (ii) Lessor (but only the
extent amounts are available therefor with respect to the Available
Commitments and the Available Holder Commitments or each Lender and each
Holder approves the necessary increases in the Available Commitments and
the Available Holder Commitments to fund such costs and expenses) or
(iii) Lessee; provided, amounts funded by the Lenders and the Holders
with respect to such costs and expenses shall be added to the Property
Cost of each applicable Property; provided, further, amounts funded by
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Lessee with respect to such costs and expenses shall be a part of (and
limited by) the Maximum Residual Guarantee Amount.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
that notwithstanding the foregoing, Lessor may not reject any bid
submitted by Lessee if such bid, in the aggregate, is greater than or
equal to the sum of the Limited Recourse Amount for all the Properties,
and represents a bona fide offer from one (1) or more third party
purchasers. If the highest price which a prospective purchaser or the
prospective purchasers shall have offered to pay for all the Properties
on the Sale Date is less than the sum of the Limited Recourse Amount for
all the Properties or if such bids do not represent bona fide offers
from one (1) or more third parties or if there are no bids, Lessor may
elect to retain one or more of the Properties by giving Lessee at least
five (5) Business Days prior written notice of Lessor's election to
retain the same, and promptly upon receipt of such notice, Lessee shall
surrender, or cause to be surrendered, each of the Properties specified
in such notice in accordance with the terms and conditions of Section
10.1. If Lessor does not elect to retain all the Properties, then Lessee
shall cause the sale of all of the Properties to be completed on the
Sale Date in accordance with this Section 22.1 and the maximum liability
of the Lessee with respect thereto shall be as provided pursuant to
Section 22.1(b). Upon acceptance of any bid, Lessor agrees, at Lessee's
request and expense, to execute a contract of sale with respect to such
sale, so long as the same is consistent with the terms of this Article
22 and provides by its terms that it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the
Properties pursuant to the provisions of the preceding paragraph, Lessee
shall arrange for Lessor to sell all the Properties free and clear of
the Lien of this Lease and any Lessor Liens, without recourse or
warranty (of title or otherwise), for cash on the Sale Date to the
purchaser or purchasers offering the highest cash sales price, as
identified by Lessee or Lessor, as the case may be. To effect such
transfer and assignment, Lessor shall execute, acknowledge (where
required) and deliver to the appropriate purchaser each of the
following: (a) special or limited warranty Deeds conveying each such
Property (to the extent it is real property titled to Lessor) to the
appropriate purchaser free and clear of the Lien of this Lease, the Lien
of the Credit Documents and any Lessor Liens; (b) a ▇▇▇▇ of Sale
conveying each such Property (to the extent it is personal property)
titled to Lessor to the appropriate purchaser free and clear of the Lien
of this Lease, the Lien of the Credit Documents and any Lessor Liens;
(c) any real estate tax affidavit or other document required by law to
be executed and filed in order to record each Deed; and (d) FIRPTA
affidavits, as appropriate. All of the foregoing documentation must be
in form and substance reasonably satisfactory to Lessor. Lessee shall
surrender the Properties so sold or subject to such documents to each
purchaser in the condition specified in Section 10.1, or in such other
condition as may be agreed between Lessee and such purchaser. Neither
Lessor nor Lessee shall take or fail to take any action which would have
the effect of unreasonably discouraging bona fide third party bids for
any Property. If each of the Properties is not either (i) sold on the
Sale Date in accordance with the terms of this
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Section 22.1, or (ii) retained by Lessor pursuant to an affirmative
election made by Lessor pursuant to the second sentence of the second
paragraph of this Section 22.1(a), then (x) Lessee shall be obligated to
pay Lessor on the Sale Date an amount equal to the aggregate Termination
Value for all the Properties less any sales proceeds received by the
Lessor, and (y) Lessor shall transfer each applicable Property to Lessee
in accordance with Section 20.2.
(b) If the Properties are sold on a Sale Date to one (1) or more
third party purchasers in accordance with the terms of Section 22.1(a)
and the aggregate purchase price paid for all the Properties is less
than the sum of the aggregate Property Cost for all the Properties
(hereinafter such difference shall be referred to as the "Deficiency
Balance"), then Lessee hereby unconditionally promises to pay to Lessor
on the Sale Date all Rent and all other amounts then due and owing
pursuant to the Operative Agreements and the lesser of (i) the
Deficiency Balance, or (ii) the Maximum Residual Guarantee Amount for
all the Properties. On a Sale Date if (x) Lessor receives the aggregate
Termination Value for all the Properties from one (1) or more third
party purchasers, (y) Lessor and such other parties receive all other
amounts specified in the last sentence of the first paragraph of Section
22.1(a) and (z) the aggregate purchase price paid for all the Properties
on such date plus the amount paid by Lessee to Lessor pursuant to the
terms of this Section 22.1(b) exceeds the sum of the aggregate Property
Cost for all the Properties, then Lessor shall promptly pay Lessee such
excess. The obligation to pay any such excess to Lessee shall survive
the termination of this Lease. If one or more of the Properties are
retained by Lessor pursuant to an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then Lessee hereby
unconditionally promises to pay to Lessor on the Sale Date all Rent and
all other amounts then due and owing pursuant to the Operative
Agreements and an amount equal to the Maximum Residual Guarantee Amount
for the Properties so retained. Any payment of the foregoing amounts
described in this Section 22.1(b) shall be made together with a payment
of all other amounts referenced in the last sentence of the first
paragraph of Section 22.1(a).
(c) In the event that all the Properties are either sold to one
(1) or more third party purchasers on the Sale Date or retained by
Lessor in connection with an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then in either case on
the applicable Sale Date Lessee shall provide Lessor or such third party
purchaser (unless otherwise agreed by such third party purchaser) with
(i) all non-proprietary permits, certificates of occupancy, governmental
licenses and authorizations necessary to use, operate, repair, access
and maintain each such Property for the purpose it is being used by
Lessee, and (ii) such non-proprietary manuals, permits, easements,
licenses, intellectual property, know-how, rights-of-way and other
rights and privileges in the nature of an easement as are reasonably
necessary or desirable in connection with the use, operation, repair,
access to or maintenance of each such Property for its intended purpose
or otherwise as Lessor or such third party purchaser(s) shall reasonably
request (and a royalty-free license or similar agreement to effectuate
the foregoing on terms reasonably agreeable to Lessor or such third
party purchaser(s), as applicable). All such assignments, licenses,
easements, agreements and other deliveries required by clauses (i)
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and (ii) of this paragraph (c) shall be in form reasonably satisfactory
to Lessor or such third party purchaser(s), as applicable, and shall be
fully assignable (including without limitation both primary assignments
and assignments given in the nature of security) without payment of any
fee, cost or other charge.
22.2 APPLICATION OF PROCEEDS OF SALE.
In the event Lessee receives any proceeds of sale of any
Property, such proceeds shall be deemed to have been received in trust on behalf
of Lessor and Lessee shall promptly remit such proceeds to Lessor. Lessor shall
apply the proceeds of sale of any Property in the following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
the case may be) for the payment of all reasonable costs and expenses
incurred by Lessor (and/or the Agent, as the case may be) in connection
with the sale (to the extent Lessee has not satisfied its obligation to
pay such costs and expenses);
(b) SECOND, so long as the Credit Agreement is in effect and any
Loans or Holder Advances or any amount is owing to the Financing Parties
under any Operative Agreement, to the Agent to be applied pursuant to
intercreditor provisions among Lessor, the Lenders and the Holders
contained in the Operative Agreements; and
(c) THIRD, to Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR.
If the proceeds of the sale described in Section 22.1 with
respect to the Properties shall be less than the Limited Recourse Amount with
respect to the Properties, and at the time of such sale it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Properties shall have been impaired by greater than normal
and expected wear and tear during the term of the Lease, Lessee shall pay to
Lessor within ten (10) days after receipt of Lessor's written statement (i) the
amount of such excess wear and tear determined by the Appraisal Procedure or
(ii) the amount of the Sale Proceeds Shortfall, whichever amount is less.
22.4 APPRAISAL PROCEDURE.
For determining the Fair Market Sales Value of the Properties or
any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor,
shall mutually agree thereupon, but if either party shall fail to choose an
appraiser within twenty (20) days after notice
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from the other party of the selection of its appraiser, then the appraisal by
such appointed appraiser shall be binding on Lessee and Lessor. If the two (2)
appraisers cannot agree within twenty (20) days after both shall have been
appointed, then a third appraiser shall be selected by the two (2) appraisers
or, failing agreement as to such third appraiser within thirty (30) days after
both shall have been appointed, by the American Arbitration Association. The
decisions of the three (3) appraisers shall be given within twenty (20) days of
the appointment of the third appraiser and the decision of the appraiser most
different from the average of the other two (2) shall be discarded and such
average shall be binding on Lessor and Lessee; provided, that if the highest
appraisal and the lowest appraisal are equidistant from the third appraisal, the
third appraisal shall be binding on Lessor and Lessee. The fees and expenses of
the appraiser appointed by Lessee shall be paid by Lessee; the fees and expenses
of the appraiser appointed by Lessor shall be paid by Lessor (such fees and
expenses not being indemnified pursuant to Section 11 of the Participation
Agreement); and the fees and expenses of the third appraiser shall be divided
equally between Lessee and Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
During the Marketing Period, the obligation of Lessee to pay Rent
with respect to the Properties (including without limitation the installment of
Basic Rent due on the Expiration Date) shall continue undiminished until payment
in full to Lessor of the sale proceeds, if any, the Maximum Residual Guarantee
Amount, the amount due under Section 22.3, if any, and all other amounts due to
Lessor or any other Person with respect to all Properties or any Operative
Agreement. Lessor shall have the right, but shall be under no duty, to solicit
bids, to inquire into the efforts of Lessee to obtain bids or otherwise to take
action in connection with any such sale, other than as expressly provided in
this Article XXII.
ARTICLE XXIII
23.1 HOLDING OVER.
If Lessee shall for any reason remain in possession of a Property
after the expiration or earlier termination of this Lease as to such Property
(unless such Property is conveyed to Lessee), such possession shall be as a
tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at the lesser of the highest lawful rate and one hundred ten
percent (110%) of the last payment of Basic Rent due with respect to such
Property prior to such expiration or earlier termination of this Lease. Such
Basic Rent shall be payable from time to time upon demand by Lessor and such
additional amount of Basic Rent shall be applied by Lessor ratably to the
Lenders and the Holders based on their relative amounts of the then outstanding
aggregate Property Cost for all Properties. During any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be obligated
to perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to the extent given by
law to tenants at sufferance, to continue their occupancy and use of such
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Property. Nothing contained in this Article XXIII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to any Property (unless such Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of such Property or
exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS.
Subject to the terms and limitations of the Construction Agency
Agreement, during the Term, unless Lessee shall not be in actual possession of
any Property in question solely by reason of Lessor's exercise of its remedies
of dispossession under Article XVII, the risk of loss or decrease in the
enjoyment and beneficial use of such Property as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor, except for Lessor's obligation to advance in accordance
with the terms of this Lease insurance proceeds received by Lessor pursuant to
the coverages referenced in Article XIV.
ARTICLE XXV
25.1 ASSIGNMENT.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in
part to any Person (other than to a wholly-owned Subsidiary of Lessee or
the Parent) without the prior written consent of the Agent, the Lenders,
the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1 or
otherwise) or other relinquishment of possession to any Property shall
in any way discharge or diminish any of the obligations of Lessee to
Lessor hereunder and Lessee shall remain directly and primarily liable
under the Operative Agreements as to any rights or obligations assigned
by Lessee or regarding any Property in which rights or obligations have
been assigned or otherwise transferred.
25.2 SUBLEASES.
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor of the execution of such
sublease and shall collaterally assign such sublease to the Lessor as
security for Lessee's obligations hereunder and under any other
Operative Agreement. Any such collateral assignment shall be in form and
substance reasonably acceptable to the Lessor and the Agent. As of the
date of each Lease Supplement, Lessee
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shall lease the respective Properties described in such Lease Supplement
from Lessor, and any existing tenant respecting such Property shall
automatically be deemed to be a subtenant of Lessee and not a tenant of
Lessor.
(b) Without the prior written consent of the Agent, any Lender,
any Holder or Lessor and subject to the other provisions of this Section
25.2, Lessee may sublet any Property or portion thereof to any
wholly-owned Subsidiary of Lessee or to any other Person; provided, all
subleasing shall be done on market terms and shall in no way diminish
the fair market value or useful life of any applicable Property.
(c) No sublease (referenced in this Section 25.2 or otherwise) or
other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder or
diminish the fair market value of any Property. Lessee shall remain
directly and primarily liable under this Lease as to such Property, or
portion thereof, so sublet. During the Basic Term, the term of any such
sublease shall not extend beyond the Basic Term. During any Renewal
Term, the term of any such sublease shall not extend beyond such Renewal
Term. Each sublease shall be expressly subject and subordinate to this
Lease.
ARTICLE XXVI
26.1 NO WAIVER.
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
No surrender to Lessor of this Lease or of all or any portion of
any Property or of any part of any thereof or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by Lessor and no act
by Lessor or the Agent or any representative or agent of Lessor or the Agent,
other than a written acceptance, shall constitute an acceptance of any such
surrender.
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27.2 NO MERGER OF TITLE.
There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 [RESERVED]
ARTICLE XXIX
29.1 NOTICES.
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
ARTICLE XXX
30.1 MISCELLANEOUS.
Anything contained in this Lease to the contrary notwithstanding,
all claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease and
such jurisdiction or of such provision or of any other provision hereof in any
other jurisdiction.
30.2 AMENDMENTS AND MODIFICATIONS.
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
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30.4 HEADINGS AND TABLE OF CONTENTS.
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 COUNTERPARTS.
This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which shall together constitute one (1)
and the same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE REQUIRED
TO APPLY.
30.7 CALCULATION OF RENT.
All calculation of Rent payable hereunder shall be computed based
on the actual number of days elapsed over a year of three hundred sixty (360)
days or, to the extent such Rent is based on the Prime Lending Rate, three
hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
30.8 RECORDING OF LEASE.
This Lease shall be recorded. Lessor and Lessee shall promptly
record this Lease regarding the property identified on Exhibit B attached hereto
and the subject of any Lease Supplement promptly after the acquisition thereof
in the local filing office with respect thereto and as required under applicable
law to sufficiently evidence this Lease and any such Lease Supplement in the
applicable real estate filing records. Lessor (at the direction of the Agent)
shall elect whether the costs and expenses incurred by Lessor and/or the Agent
respecting the recordation of the above-referenced items shall be paid by either
(i) Lessor (but only the extent amounts are available therefor with respect to
the Available Commitments and the Available Holder Commitments or each Lender
and each Holder approves the necessary increases in the Available Commitments
and the Available Holder Commitments to fund such costs and expenses) or (ii)
Lessee; provided, amounts funded by the Lenders and the Holders with respect to
such costs and expenses shall be added to the Property Cost of each applicable
Property; provided, further, amounts funded by Lessee with respect to such costs
and expenses shall be a part of (and limited by) the Maximum Residual Guarantee
Amount.
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
Notwithstanding any other term or provision of this Lease to the
contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts
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received hereunder shall be subject to the inter-creditor provisions between the
Lenders and the Holders contained in the Operative Agreements (or as otherwise
agreed among the Lenders and the Holders from time to time).
30.10 LIMITATIONS ON RECOURSE.
Notwithstanding anything contained in this Lease to the contrary,
Lessee agrees to look solely to Lessor's estate and interest in the Properties,
the proceeds of any sale thereof, any insurance proceeds from insurance coverage
required pursuant to the Lease or any condemnation or similar proceeds received
by Lessor in connection with any Property (and in no circumstance to the Agent,
the Lenders, the Holders or otherwise to Lessor) for the collection of any
judgment requiring the payment of money by Lessor in the event of liability by
Lessor, and no other property or assets of Lessor or any shareholder, owner or
partner (direct or indirect) in or of Lessor, or any director, officer,
employee, beneficiary, Affiliate of any of the foregoing shall be subject to
levy, execution or other enforcement procedure for the satisfaction of the
remedies of Lessee under or with respect to this Lease, the relationship of
Lessor and Lessee hereunder or Lessee's use of the Properties or any other
liability of Lessor to Lessee; provided, that Lessor shall be liable in its
individual capacity for (a) its own willful misconduct or gross negligence and
(b) breach of any of its representations and warranties or covenants under the
Operative Agreements. Nothing in this Section shall be interpreted so as to
limit the terms of Sections 6.1 or 6.2 or the provisions of Section 12.9 of the
Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY
COUNTERCLAIM THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
Lessee hereby acknowledges and agrees that the rights and powers
of Lessor under this Lease have been assigned to the Agent pursuant to the terms
of the Security Agreement and the other Operative Agreements. Lessor and Lessee
hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct
and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(h) and
8.6 of the Participation Agreement, (b) all notices to be given to Lessor shall
be given to the Agent and (c) all notices to be given by Lessor may be given by
the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE
HEREIN, MUTATIS MUTANDIS.
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30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT
IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO
THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY
COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND INTEREST
THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR PAYMENTS SO
CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST." ALL
AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF THIS
PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY
EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF
THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED
FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM
NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF
THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE
AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH
AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF
THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST
WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT
INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND.
ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE
FULL
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STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS
LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED
THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
[signature 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.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under
the VS Trust 2000-1, as Lessor
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
STATE OF UTAH )
) ss:
COUNTY OF SALT LAKE )
The foregoing Lease was acknowledged before me, the undersigned Notary
Public, in the County of Salt Lake this _____ day of ______________,
______, by ▇▇▇ ▇. ▇▇▇▇▇, as Vice President of FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not individually, but
solely as the Owner Trustee under the VS Trust 2000-1, on behalf of the Owner
Trustee.
[Notarial Seal] /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------
Notary Public
My commission expires: Sept. 10, 2002
53
VERITAS OPERATING CORPORATION, as Lessee
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
STATE OF CALIFORNIA )
) ss:
COUNTY OF SANTA ▇▇▇▇▇ )
The foregoing Lease was acknowledged before me, the undersigned Notary
Public, in the County of Santa ▇▇▇▇▇ this 3rd day of March, 2000, by ▇▇▇
▇▇▇▇▇▇▇, as SVP and CFO of VERITAS OPERATING CORPORATION, a Delaware
corporation, on behalf of the corporation.
[Notarial Seal] /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------
Notary Public
My commission expires: September 26, 2003
THIS INSTRUMENT DRAFTED BY:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
54
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
BANK OF AMERICA, N.A.,
as the Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
STATE OF CALIFORNIA )
) ss:
COUNTY OF SAN FRANCISCO )
The foregoing Lease was acknowledged before me, the undersigned Notary
Public, in the County of San Francisco this 22nd day of Feburary, 2000,
by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Corporate Officer of BANK OF AMERICA, N.A., a national
banking association, as the Agent.
[Notarial Seal] /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public
My commission expires: June 30, 2000
55
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. __
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of
___________, ______ between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not individually, but solely as the Owner Trustee
under the VS Trust 2000-1, as lessor (the "Lessor"), and VERITAS OPERATING
CORPORATION, a Delaware corporation, as lessee (the "Lessee").
WHEREAS, Lessor is the owner or will be the owner of the Property
described on Schedule 1 hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of March 9, 2000, among Lessee, the various parties thereto from time
to time, as the Guarantors, Lessor, not individually, except as expressly stated
therein, but solely as the Owner Trustee under the VS Trust 2000-1, the various
banks and other lending institutions which are parties thereto from time to
time, as the Holders, the various banks and other lending institutions which are
parties thereto from time to time, as the Lenders, and Bank of America, N.A., as
the Agent for the Lenders and respecting the Security Documents, as the Agent
for the Lenders and Holders, to the extent of their interests, as such may be
amended, modified, extended, supplemented, restated and/or replaced from time to
time.
SECTION 2. THE PROPERTIES. Attached hereto as Schedule 1 is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule 1-A, an Improvement Schedule attached hereto as Schedule 1-B and a
legal description of the Land attached hereto as Schedule 1-C. Effective upon
the execution and delivery of this Lease Supplement by Lessor and Lessee, the
Leased Property shall be subject to the terms and provisions of the Lease.
Without further action, any and all additional Equipment funded under the
Operative Agreements and any and all additional Improvements made to the Land
shall be deemed to be titled to the Lessor and subject to the terms and
conditions of the Lease and this Lease Supplement.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect to
each Property, Lessee will comply with all obligations under and (to the extent
no Event of Default exists and provided, that such exercise will not impair the
value of such Property) shall be permitted to exercise all rights and remedies
under, all operation and easement agreements and related or similar agreements
applicable to such Property.
A-1
56
SECTION 4. RATIFICATION; INCORPORATION BY REFERENCE. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY
IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. COUNTERPART EXECUTION. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one (1) and the
same instrument.
SECTION 8. MAXIMUM RESIDUAL GUARANTEE AMOUNT. The Maximum Residual
Guarantee Amount shall mean an amount equal to [THE PRODUCT OF THE AGGREGATE
PROPERTY COST FOR ALL OF THE LEASED PROPERTY TIMES _________ PERCENT (__%)].
For purposes of the provisions of this Lease Supplement concerning this
Lease Supplement constituting a security agreement and fixture filing, the
addresses of the debtor (Lessee herein) and the secured party (Lessor herein),
from whom information may be obtained about this Lease Supplement, are as set
forth on the signature pages hereto.
[The remainder of this page has been intentionally left blank.]
A-2
57
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under
the VS Trust 2000-1, as Lessor
By:_________________________________
Name:_______________________________
Title:______________________________
First Security Bank, National
Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇
Vice President
VERITAS OPERATING CORPORATION,
as Lessee
By:_________________________________
Name:_______________________________
Title:______________________________
VERITAS Operating Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Receipt of this original counterpart
of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
BANK OF AMERICA, N.A., as the Agent
By:_________________________________
Name:_______________________________
Title:______________________________
A-3
58
Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Code TX1-492-14-11
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
A-4
59
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, ______, by ________________, as __________________ of FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the VS Trust 2000-1, on
behalf of the Owner Trustee.
[Notarial Seal] ___________________________________
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, ______, by ________________, as __________________ of VERITAS
OPERATING CORPORATION, a Delaware corporation, on behalf of the corporation.
[Notarial Seal] ___________________________________
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ________________ this ____ day of
___________, ______, by _____________, as __________________ of BANK OF AMERICA,
N.A., a national banking association, as the Agent.
[Notarial Seal] ___________________________________
Notary Public
My commission expires: ____________
A-5
60
SCHEDULE 1
TO LEASE SUPPLEMENT NO. __
(Description of the Leased Property)
A-6
61
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. __
(Equipment)
A-7
62
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. __
(Improvements)
A-8
63
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. __
(Land)
A-9
64
EXHIBIT B TO THE LEASE
Description of Property Subject to Lease
That certain real property more particularly described on the legal
description attached as Schedule I hereto, together with all Improvements and
Equipment constructed or located thereon from time to time.
B-1
65
SCHEDULE I
▇▇▇▇ ▇, ▇ ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS PARK, according to the recorded
plat thereof, ▇▇▇▇▇▇ County, Minnesota, except that part of said Lot 5 lying
Northerly of a line described as follows: Commencing at the most northerly
Northwest corner of said Lot 5; thence South 00 degrees 00 minutes 00 seconds
West, assumed bearing, along a West line of said Lot 5 a distance of 46.92 feet
to the beginning of the line to be described; thence North 90 degrees 00 minutes
00 seconds East a distance of 265.37 feet to the Northeasterly line of said Lot
5 and said line there terminating.
B-2