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EXHIBIT 10.30
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LEASE AGREEMENT
Dated as of February 26, 2001
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Owner Trustee under the Storage Centers Trust 2001,
as Lessor
and
SHURGARD STORAGE CENTERS, INC.,
as Lessee
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This 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 Secured Parties (the "Agent") under a Security
Agreement dated as of February 26, 2001, between First Security Bank, National
Association, as Owner Trustee under the Storage Centers Trust 2001 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................................................................................................................1
1.1 Definitions.........................................................................................1
1.2 Interpretation......................................................................................2
ARTICLE II...............................................................................................................2
2.1 Property............................................................................................2
2.2 Lease Term..........................................................................................2
2.3 Title...............................................................................................3
2.4 Lease Supplements...................................................................................3
ARTICLE III..............................................................................................................3
3.1 Rent................................................................................................3
3.2 Payment of Basic Rent...............................................................................4
3.3 Supplemental Rent...................................................................................4
3.4 Performance on a Non-Business Day...................................................................4
3.5 Rent Payment Provisions.............................................................................4
ARTICLE IV...............................................................................................................5
4.1 Taxes; Utility Charges..............................................................................5
ARTICLE V................................................................................................................5
5.1 Quiet Enjoyment.....................................................................................5
ARTICLE VI...............................................................................................................5
6.1 Net Lease...........................................................................................5
6.2 No Termination or Abatement.........................................................................6
ARTICLE VII..............................................................................................................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...............................................................................................................10
10.1 Maintenance and Repair; Return.....................................................................10
10.2 Environmental Inspection...........................................................................12
ARTICLE XI..............................................................................................................12
11.1 Modifications......................................................................................12
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ARTICLE XII.............................................................................................................13
12.1 Warranty of Title..................................................................................13
ARTICLE XIII............................................................................................................14
13.1 Permitted Contests Other Than in Respect of Indemnities............................................14
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal Requirements....................15
ARTICLE XIV.............................................................................................................15
14.1 Public Liability and Workers' Compensation Insurance...............................................15
14.2 Permanent Hazard and Other Insurance...............................................................15
14.3 Coverage...........................................................................................16
14.4 Additional Insurance Requirements..................................................................17
ARTICLE XV..............................................................................................................17
15.1 Casualty and Condemnation..........................................................................17
15.2 Environmental Matters..............................................................................19
15.3 Notice of Environmental Matters....................................................................20
ARTICLE XVI.............................................................................................................20
16.1 Termination Upon Certain Events....................................................................20
16.2 Procedures.........................................................................................21
ARTICLE XVII............................................................................................................21
17.1 Lease Events of Default............................................................................21
17.2 Surrender of Possession............................................................................25
17.3 Reletting..........................................................................................25
17.4 Damages............................................................................................25
17.5 Power of Sale......................................................................................26
17.6 Final Liquidated Damages...........................................................................26
17.7 Environmental Costs................................................................................27
17.8 Waiver of Certain Rights...........................................................................27
17.9 Assignment of Rights Under Contracts...............................................................27
17.10 Remedies Cumulative................................................................................28
ARTICLE XVIII...........................................................................................................28
18.1 Lessor's Right to Cure Lessee's Lease Defaults.....................................................28
ARTICLE XIX.............................................................................................................28
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option....................................28
19.2 No Purchase or Termination With Respect to Less than All of a Property.............................29
ARTICLE XX..............................................................................................................29
20.1 Purchase Option or Sale Option-General Provisions..................................................29
20.2 Lessee Purchase Option.............................................................................30
20.3 Third Party Sale Option............................................................................31
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ARTICLE XXI.............................................................................................................31
21.1 [Intentionally Omitted]............................................................................31
ARTICLE XXII............................................................................................................32
22.1 Sale Procedure.....................................................................................32
22.2 Application of Proceeds of Sale....................................................................34
22.3 Indemnity for Excessive Wear.......................................................................35
22.4 Appraisal Procedure................................................................................35
22.5 Certain Obligations Continue.......................................................................36
ARTICLE XXIII...........................................................................................................36
23.1 Holding Over.......................................................................................36
ARTICLE XXIV............................................................................................................36
24.1 Risk of Loss.......................................................................................36
ARTICLE XXV.............................................................................................................37
25.1 Assignment.........................................................................................37
25.2 Subleases..........................................................................................37
ARTICLE XXVI............................................................................................................38
26.1 No Waiver..........................................................................................38
ARTICLE XXVII...........................................................................................................38
27.1 Acceptance of Surrender............................................................................38
27.2 No Merger of Title.................................................................................38
ARTICLE XXVIII..........................................................................................................38
28.1 Incorporation of Covenants.........................................................................38
ARTICLE XXIX............................................................................................................39
29.1 Notices............................................................................................39
ARTICLE XXX.............................................................................................................40
30.1 Miscellaneous......................................................................................40
30.2 Amendments and Modifications.......................................................................40
30.3 Successors and Assigns.............................................................................40
30.4 Headings and Table of Contents.....................................................................40
30.5 Counterparts.......................................................................................40
30.6 GOVERNING LAW......................................................................................40
30.7 Calculation of Rent................................................................................40
30.8 Memoranda of Lease and Lease Supplements...........................................................41
30.9 Allocations between the Lenders and the Holders....................................................41
30.10 Limitations on Recourse............................................................................41
30.11 WAIVERS OF JURY TRIAL..............................................................................42
30.12 Exercise of Lessor Rights..........................................................................42
30.13 SUBMISSION TO JURISDICTION; VENUE..................................................................42
30.14 USURY SAVINGS PROVISION............................................................................42
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EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
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LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of February 26, 2001 (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 ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as Owner Trustee under the Storage Centers Trust 2001, as
lessor (the "Lessor"), and SHURGARD STORAGE CENTERS, INC., a Washington
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 Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one or more third parties designated by Lessee and
(ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Basic Term shall commence with respect to each Property
upon the Property Closing Date with respect thereto; provided, Basic Rent with
respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions.
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 February 26, 2001
(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
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Lenders and respecting the Security Documents, as the agent for the Secured
Parties. Unless otherwise indicated, references in this Lease to articles,
sections, paragraphs, clauses, appendices, schedules and exhibits are to the
same contained in this Lease.
1.2 Interpretation.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.
ARTICLE II
2.1 Property.
Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 Lease Term.
(a) Basic 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 fourth 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.
(b) Renewal Term. To the extent no Default or Event of Default
has occurred and is continuing, at any time during the period from
ninety (90) days prior to the first anniversary of the Initial Closing
Date to and including such anniversary date, but at no other time,
Lessee shall have the option to request in writing that the Financing
Parties extend the term of this Lease for each Property for one (1)
additional term of one (1) year's duration from the Basic Term
Expiration Date (the "Renewal Term"); provided, that the expiration date
for the Renewal Term for each Property shall in no event be later than
the fifth 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.
Each of the Financing Parties shall provide the Agent, not less
than 30 days following such request, with written notice regarding
whether it has approved the extension of the term of this Lease for the
Renewal Term. Each such decision by a Financing Party shall be in its
sole discretion and each Financing Party that fails to give timely
written notice hereunder shall be deemed not have agreed to such
extension. If all of the Financing Parties timely agree in writing to
such extension, then the Renewal Term shall become effective upon the
expiration of the Basic Term described above. If any
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Financing Party fails to agree in writing to such extension, then the
Basic Term shall not be extended for the Renewal Term.
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
each individual Property Lessee shall have no obligation to pay Basic
Rent with respect to such Property until the Rent Commencement Date with
respect to such Property (notwithstanding that Basic Rent for such
Property shall accrue from and including the Scheduled Interest Payment
Date immediately preceding such Rent Commencement Date).
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately
available funds on the due date therefor (or within the applicable grace
period) to such account or accounts at such bank or banks as Agent shall
from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall not
delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00 Noon,
Pacific time, on the applicable date for payment of such amount.
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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 Agent (on behalf of 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 specified in the Operative Agreements, 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. It shall be an
additional Supplemental Rent obligation of Lessee to pay to the appropriate
Person all rent and other amounts when such become due and owing from time to
time under each Ground Lease and without the necessity of any notice from Lessor
with regard thereto. The expiration or other termination of Lessee's obligations
to pay Basic Rent hereunder shall not limit or modify the obligations of Lessee
with respect to Supplemental Rent. Unless expressly provided otherwise in this
Lease, in the event of any failure on the part of Lessee to pay and discharge
any Supplemental Rent as and when due, Lessee shall also promptly pay and
discharge any fine, penalty, interest or cost which may be assessed or added for
nonpayment or late payment of such Supplemental Rent, all of which shall also
constitute Supplemental Rent.
3.4 Performance on a Non-Business Day.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date or, to the extent such Basic Rent is not due on a
Scheduled Interest Payment Date, then on the next succeeding Business Day. 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
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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.
Except for Excluded Taxes, 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 reasonable evidence of all
such payments referenced in the foregoing sentence. Lessee shall be entitled to
receive any credit or refund with respect to any Imposition or utility charge
paid by Lessee. Unless an Event of Default shall have occurred and be
continuing, the amount of any credit or refund received by Lessor on account of
any Imposition or utility charge paid by Lessee, net of the costs and expenses
incurred by Lessor in obtaining such credit or refund, shall be promptly paid
over to Lessee. All charges for Impositions or utilities imposed with respect to
any Property for a period during which this Lease expires or terminates shall be
adjusted and prorated on a daily basis between Lessor and Lessee, and each party
shall pay or reimburse the other for such party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment.
Subject to the rights of Lessor contained in Sections 17.2, 17.3 and
20.3 and the other terms of this Lease and the other Operative Agreements and so
long as no Event of Default shall have occurred and be continuing, Lessee shall
peaceably and quietly have, hold and enjoy each Property for the applicable
Term, free of any claim or other action by Lessor or anyone rightfully claiming
by, through or under Lessor (other than Lessee) with respect to any matters
arising from and after the applicable Basic Term Commencement Date.
ARTICLE VI
6.1 Net Lease.
This Lease shall constitute a net lease, and the obligations of
Lessee hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of each Property.
Any present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement,
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suspension, deferment, reduction, setoff, counterclaim, or defense with respect
to the Rent, nor shall the obligations of Lessee hereunder be affected (except
as expressly herein permitted and by performance of the obligations in
connection therewith) for any reason whatsoever, including without limitation by
reason of: (a) any damage to or destruction of any Property or any part thereof;
(b) any taking of any Property or any part thereof or interest therein by
Condemnation or otherwise; (c) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of any Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (d) any title defect, Lien or any matter affecting
title to any Property; (e) any eviction by paramount title or otherwise; (f) any
default by Lessor hereunder; (g) any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding relating to or
affecting the Agent, any Lender, Lessor, Lessee, any Holder or any Governmental
Authority; (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental Authority or any other Person; (j)
Lessee's acquisition of ownership of all or part of any Property; (k) breach of
any warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or dissimilar to the foregoing and whether or not Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of Lessee hereunder shall be covenants, agreements and obligations
that are separate and independent from any obligations of Lessor hereunder and
shall continue unaffected unless such covenants, agreements and obligations
shall have been modified or terminated in accordance with an express provision
of this Lease. Lessor and Lessee acknowledge and agree that the provisions of
this Section 6.1 have been specifically reviewed and subjected to negotiation.
Nothing in this Section 6.1, however, shall affect any claim, action or right
that Lessee may have against Lessor or any other Person, however arising.
6.2 No Termination or Abatement.
Lessee shall remain obligated under this Lease in accordance with
its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
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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 (other
than for accounting purposes) (A) this Lease will be treated as a
financing arrangement and (B) Lessee will be treated as the owner of the
Properties and will be entitled to all tax benefits ordinarily available
to owners of property similar to the Properties for such tax purposes.
Notwithstanding the foregoing, neither party hereto has made, or shall
be deemed to have made, any representation or warranty as to the
availability of any of the foregoing treatments under applicable
accounting rules, tax, bankruptcy, regulatory, commercial or real estate
law or under any other set of rules. 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 of Lessee now existing or
hereafter arising under any and all Operative Agreements, Lessee hereby
conveys, grants, assigns, transfers, hypothecates, mortgages and sets
over to Lessor, for the benefit of the Secured Parties, 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 (or to the extent
applicable, a leasehold interest pursuant to a Ground Lease) 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
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interest, mortgage lien and deed of trust under applicable law. Lessee
shall promptly take such actions as necessary (including without
limitation the filing of Uniform Commercial Code Financing Statements,
Uniform Commercial Code Fixture Filings and memoranda (or short forms)
of this Lease and the various Lease Supplements) to ensure that the
lien, security interest, mortgage and deed of trust in each Property and
the other items referenced above will be deemed to be a perfected lien,
security interest, mortgage lien and deed of trust of first priority
under applicable law and will be maintained as such throughout the Term.
ARTICLE VIII
8.1 Condition of the Properties.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY
"AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR
OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF TITLE,
(B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF
FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW,
(D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS
WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE APPLICABLE LEASE
SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER 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.
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8.2 Possession and Use of the Properties.
(a) At all times during the Term with respect to each Property,
such Property shall be a Permitted Facility and shall be used by Lessee
in the ordinary course of its business. Lessee shall pay, or cause to be
paid, all charges and costs required in connection with the use of the
Properties as contemplated by this Lease. Lessee shall not commit or
permit any waste of the Properties or any part thereof.
(b) The address stated in Section 29.1 of this Lease is the
principal place of business and chief executive office of Lessee (as
such terms are used in Section 9-103(3) of the Uniform Commercial Code
of any applicable jurisdiction), and Lessee will provide Lessor with
prior written notice of any change of location of its 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 or a copy of
the Ground Lease (if any). The Equipment and Improvements respecting
each particular Property will be located only at the location identified
in the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment
to or in any other item of equipment or personal property or to or in
any real property in a manner that could give rise to the assertion of
any Lien on such item of Equipment by reason of such attachment or the
assertion of a claim that such item of Equipment has become a fixture
and is subject to a Lien in favor of a third party that is prior to the
Liens thereon created by the Operative Agreements.
(d) On the 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 which shall comprise the Property, an
Improvement Schedule that has a general description of the Improvements
which shall comprise the Property and a legal description of the Land to
be leased hereunder (or in the case of any Property subject to a Ground
Lease, to be subleased hereunder) as of such date. Each Property subject
to a Ground Lease shall be deemed to be ground subleased from Lessor to
Lessee as of the Basic Term Commencement Date, and such ground sublease
shall be in effect until this Lease is terminated or expires, in each
case in accordance with the terms and provisions hereof. Lessee shall
satisfy and perform all obligations imposed on Lessor under each Ground
Lease. Simultaneously with the execution and delivery of each Lease
Supplement, such Equipment, Improvements, Land, ground subleasehold
interest, 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.
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(e) At all times during the Term with respect to each Property,
Lessee will comply in all material respects 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 such Property and the applicable property
subject to a Ground Lease to constitute (and for the duration of the Term to
continue to constitute) all of the equipment, facilities, rights, other personal
property and other real property necessary or appropriate to operate, utilize,
maintain and control a Permitted Facility in a commercially reasonable manner.
ARTICLE IX
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards.
Subject to the terms of Article XIII relating to permitted contests,
Lessee, at its sole cost and expense, shall (a) comply with all applicable Legal
Requirements (including without limitation all Environmental Laws) 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, 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.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and in the repair and condition as when originally
delivered to Lessor and make all necessary repairs thereto and
replacements thereof, of every kind and nature whatsoever, whether
interior
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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 necessary for the continued
operation of such Property in the manner described in Section 10.1(a)
above beyond the boundaries of the Land (comprising part of such
Property) described in the applicable Lease Supplement, except for the
temporary removal of Equipment and other personal property for repair or
replacement.
(c) If any component affixed to any Property necessary for the
continued operation of such Property in the manner described in Section
10.1(a) above becomes worn out, lost, destroyed, damaged beyond repair
or otherwise permanently rendered unfit for use, Lessee, at its own
expense, will within a reasonable time replace such component with a
replacement component which is free and clear of all Liens (other than
Permitted Liens) and has a value, utility and useful life at least equal
to the component replaced (assuming the component replaced had been
maintained and repaired in accordance with the requirements of this
Lease). All components which are affixed 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 at their sole risk 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) [intentionally omitted].
(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
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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 eighty (180) days nor less than sixty (60) days prior
to the Expiration Date, Lessee shall cause to be delivered to Lessor a Phase I
environmental site assessment recently prepared (no more than thirty (30) days
prior to the date of delivery of such report) by an independent recognized
professional reasonably acceptable to Lessor, and in form, scope and content
reasonably satisfactory to Lessor. The cost incurred respecting such Phase I
environmental site assessment 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, as determined by Lessee in its
reasonable, good faith opinion; (ii) each Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) no
Modification shall adversely affect the structural integrity of any
Property; (iv) to the extent required by Section 14.2(a), Lessee shall
maintain builders' risk insurance at all times when a Modification is in
progress; (v) subject to the terms of Article XIII relating to permitted
contests, Lessee shall pay all costs and expenses and discharge any
Liens arising with respect to any Modification; (vi) each Modification
shall comply with the requirements of this Lease (including without
limitation Sections 8.2 and 10.1); and (vii) no Improvement shall be
demolished or otherwise rendered unfit for use unless Lessee shall
finance the proposed replacement Modification outside of this lease
facility; provided, further, Lessee shall not make any Modification
(unless required by any Legal Requirement) (A) to the extent any such
Modification, individually or in the aggregate, shall have or could
reasonably be expected to have a Material Adverse Effect or (B) if an
Event of Default has occurred and is continuing. All Modifications
required pursuant to Legal Requirements, Insurance Requirements and/or
manufacturer's specifications and standards and all other
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Modifications that are not severable from the applicable Property
without material damage or other material loss of value 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. Title to all other
Modifications shall vest with Lessee; provided, if Lessee fails to
remove any such Modification prior to the Expiration Date or earlier
termination of this Lease, title to such Modifications shall revert to
Lessor. Lessee, at its sole cost and expense, shall repair or pay for
any repairs of any damage to any Property relating to the removal, or
attempted removal, of any Modification. Lessee shall not remove or
attempt to remove any Modification titled to Lessor from any Property.
Each Ground Lease for a Property shall expressly provide for the
provisions of this paragraph.
(b) The construction process provided for in the 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)
immediately and without further action to vest in and become the
property of Lessor and to be subject to the terms of this Lease
(provided, respecting each Property subject to a Ground Lease, Lessor's
interest therein is acknowledged to be a leasehold interest pursuant to
such Ground Lease) from and after the date hereof or such date of
incorporation into any Property. Lessee agrees that, subject to the
terms of Article XIII relating to permitted contests, Lessee shall not
directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment,
levy, title retention agreement or claim upon any Property, any
component thereof or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent, any Lender or any Holder pursuant to any Operative
Agreement, other than Permitted Liens. Lessee shall promptly notify
Lessor in the event it receives actual knowledge that a Lien other than
a Permitted 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 Liens that are expressly set forth as title exceptions on the title
commitment issued under Section 5.3(g) of the Participation Agreement
with respect to the applicable Property, to the extent such title
commitment has been approved by the Agent. 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
Secured Parties) and
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(ii) file, or cause to be filed, all necessary documents under the
applicable real property law and Article 9 of the Uniform Commercial
Code to perfect such title and Liens.
(b) Without limiting the rights or obligations of the
Construction Agent under the Agency Agreement, 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. (The preceding sentence shall not be
construed to prohibit Liens that would otherwise be Permitted Liens).
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)
other than such Liens being contested, there shall not be imposed a Lien (other
than Permitted Liens) on any Property and no part of any Property nor any Rent
would be in any imminent 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.
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13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal
Requirements.
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions (other than
Excluded Taxes), 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.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance.
(a) During the Term for each Property, Lessee shall procure and
carry, at Lessee's sole cost and expense, commercial general liability
and umbrella liability insurance for claims for injuries or death
sustained by persons or damage to property while on such Property or
respecting the Equipment and such other public liability coverages as
are acceptable to the Lessor and the Agent and 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 $5,000,000. 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.
(b) During the Term, Lessee shall, in the operation and use of
each Property, maintain workers' compensation insurance consistent with
that carried by similarly situated companies conducting business similar
to that conducted by Lessee and containing minimum liability limits of
no less than the minimum amounts required under applicable state
statutes. In the operation of each Property, Lessee shall comply with
all workers' compensation laws applicable to Lessee, and protect Lessor,
each Holder, the Agent and each Lender against any liability under such
laws.
14.2 Permanent Hazard and Other Insurance.
(a) During the Term for each Property, Lessee shall keep such
Property insured against all risk of physical loss or damage by fire and
other risks and shall maintain builders' risk insurance during
construction of any Improvements or
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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 or leased, as applicable, by
Lessee and (ii) are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies
shall name Lessee as the insured and shall be endorsed to name Lessor
and the Agent (on behalf of the Secured Parties) as a named additional
insured and loss payee; provided, so long as no Default or Event of
Default has occurred and is continuing, any loss payable under the
insurance policies required by this Section 14.2 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.
14.3 Coverage.
(a) As of the date of this Lease and annually thereafter during
the Term, Lessee shall furnish the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) with certificates
prepared by the insurers or insurance broker of Lessee showing the
insurance required under Sections 14.1 and 14.2 to be in effect, naming
(to the extent of their respective interests) Lessor, the Holders, the
Agent and the Lenders as additional insureds and loss payees and
evidencing the other requirements of this Article XIV. All such
insurance shall be at the cost and expense of Lessee and provided by
nationally recognized, financially sound insurance companies having an
A+ or better rating by A.M. Best's Key Rating Guide. Lessee shall cause
such certificates to include a provision for thirty (30) days' advance
written notice by the insurer to the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) in the event of
cancellation or material alteration of such insurance. If an Event of
Default has occurred and is continuing and the Agent (on behalf of
Lessor and the other beneficiaries of such insurance coverage) so
requests, Lessee shall deliver to the Agent (on behalf of Lessor and the
other beneficiaries of such insurance coverage) copies of all insurance
policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies required
by Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate
clause pursuant to which any such policy shall provide that it will not
be invalidated should Lessee 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
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waives any and all such rights against Lessor, the Holders, the Agent
and the Lenders to the extent of payments made to any such Person under
any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Article XIV, except that Lessor may carry
separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would apply
to a loss covered under Lessee's policy and (ii) each such insurance
policy will not cause Lessee's insurance required under this Article XIV
to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof or otherwise
maintain the coverage required by such Sections without any lapse in
coverage.
14.4 Additional Insurance Requirements.
Not in limitation of any provision of the Operative Agreements but in
addition thereto, Lessee shall obtain, if requested by the Lessor, any and all
additional insurance policies (including without limitation with respect to
Condemnation) with regard to the Properties or otherwise with respect to the
type of transactions contemplated by the Operative Agreements as are customary
for the Lessee or for the self-storage industry in the respective locations of
the Properties.
ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is
obligated to deliver or is deemed to have delivered, a Termination
Notice), and prior to the occurrence and continuation of a Default or an
Event of Default, Lessee shall be entitled to receive (and Lessor hereby
irrevocably assigns to Lessee all of Lessor's right, title and interest
in) any condemnation proceeds, award, compensation or insurance proceeds
under Sections 14.2(a) or 14.2(b) hereof to which Lessee or Lessor may
become entitled by reason of their respective interests in a Property
(i) if all or a portion of such Property is damaged or destroyed in
whole or in part by a Casualty or (ii) if the use, access, occupancy,
easement rights or title to such Property or any part thereof is the
subject of a Condemnation; provided, however, if a Default or an Event
of Default shall have occurred and be continuing, 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 the Agent for the benefit of the Lessor within
three (3) Business Days of the Lessee's receipt thereof and held by the
Agent for the benefit of the Lessor in accordance with the terms
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of this Article XV. All amounts held by the Agent for the benefit of the
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. In the event the
Lessee satisfies all of its obligations with respect to such Casualty or
Condemnation under the Operative Agreements and all of its other
obligations which should have been satisfied pursuant to the Operative
Agreements as of the date of such Casualty or Condemnation, and all
Defaults or Event of Defaults then in existence have been cured or
waived, all amounts so held by the Agent for the benefit of the Lessor
shall be paid over to Lessee.
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or
insurance payment on account of any such Casualty or Condemnation and
shall pay all expenses thereof. At Lessee's reasonable request, and at
Lessee's sole cost and expense, Lessor and the Agent shall participate
in any such proceeding, action, negotiation, prosecution or adjustment.
Lessor and Lessee agree that this Lease shall control the rights of
Lessor and Lessee in and to any such award, compensation or insurance
payment.
(c) [intentionally omitted].
(d) In the event of a Casualty or a Condemnation, this Lease
shall terminate with respect to the applicable Property in accordance
with Section 16.1 if Lessee elects such termination in its discretion or
is required to elect such termination pursuant to the terms of Section
15.1(g) hereof.
(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.
(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
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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 deliver
a Termination Notice in accordance with Article VXI hereof and to
exercise its Purchase Option for such Property on a Payment Date that is
not more than 60 days after the date of such Termination Notice
(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 to
the Agent for the benefit of the Lessor any award, compensation or
insurance proceeds received on account of any Casualty or Condemnation
with respect to any Property; provided, further, that if no Default or
Event of Default has occurred and is continuing, any Excess Proceeds
shall be paid to Lessee. If a Default or an Event of Default has
occurred and is continuing and any Loans, 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 the Agent for the benefit of the
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.
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 $25,000, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense, promptly and diligently undertake and 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
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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 any remedial
action by Lessee required under applicable Environmental Laws, 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 and not more
than one hundred eighty (180) days prior to any time that Lessee elects to cease
operations with respect to any Property or to remarket any Property pursuant to
Section 20.1 hereof or any other provision of any Operative Agreement, Lessee at
its expense shall cause to be delivered to Lessor a Phase I environmental site
assessment respecting such Property recently prepared (no more than thirty (30)
days prior to the date of delivery of such report) 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 Phase I environmental site
assessment, Lessee shall be obligated to purchase such Property for its
Termination Value and shall not be permitted to exercise (and Lessor shall have
no obligation to honor any such exercise) any rights under any Operative
Agreement regarding a sale of such Property to a Person other than Lessee.
15.3 Notice of Environmental Matters.
Promptly, but in any event within ten (10) Business Days from the
date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
notice of any pending or threatened claim, action or proceeding involving any
Environmental Law or any Release on or in connection with any Property or
Properties. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within ten (10) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any 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 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.
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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 or more of the following events (each a "Lease Event of
Default") shall occur and be continuing:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) days after receipt
of written notice that the same has become due and payable or (ii) any
Termination Value or Maximum Amount, 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 Maximum Amount,
or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or any
other Credit Party shall fail to make any payment of any amount under
any Operative Agreement which has become due and payable within three
(3) days after receipt of written notice that such payment is due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or to deliver any requisite annual certificate
with respect thereto within ten (10) days of the date such certificate
is due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease (including
without limitation the Incorporated Covenants) or any other Operative
Agreement to which Lessee is a party other than those set forth in
Sections 17.1(a), (b) or (c) hereof, or any other Credit Party shall
fail to observe or perform any term, covenant, obligation or condition
of such Credit Party under any Operative Agreement other than those set
forth in Section 17.1(b) hereof and such failure shall continue for
fifteen (15) days (or with respect to the Incorporated Covenants, the
grace period, if any, applicable thereto) after notice thereof to the
Lessee
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or such Credit Party or (ii) any representation or warranty made by
Lessee or any other Credit Party set forth in this Lease (including
without limitation the Incorporated Representations and Warranties) or
in any other Operative Agreement or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material respect when made
or deemed made;
(e) An Agency Agreement Event of Default shall have occurred and
be continuing or any Credit Agreement Event of Default described in
Section 6(a), 6(b), 6(c) or 6(g) of the Credit Agreement shall have
occurred and be continuing;
(f) (i) Any Credit Party or any Relevant Subsidiary shall fail
to pay when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) any Indebtedness of such Credit Party
or such Relevant Subsidiary or any interest or premium thereon in a
cumulative amount in excess of $1,000,000 and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or (ii) any
Credit Party or any Relevant Subsidiary shall fail to perform any term
or covenant on its part to be performed under any agreement or
instrument relating to any such Indebtedness and required to be
performed or a default or event of default (however defined) shall occur
under any such agreement or instrument and such failure or default shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure to perform or
default is to accelerate or to permit the acceleration of the maturity
of such Indebtedness, or (iii) any such Indebtedness shall be declared
to be due and payable or required to be prepaid (other than by regularly
scheduled required prepayment) prior to the stated maturity thereof;
(g) Any Credit Party or any Relevant Subsidiary shall: (i) file
a petition seeking relief for itself under the Bankruptcy Code or file
an answering consenting to, admitting the material allegations of or
otherwise not controverting, or fail timely to controvert a petition
filed against it seeking relief under the Bankruptcy Code; or (ii) file
such petition or answer with respect to relief under the provisions of
any other now existing or future applicable bankruptcy, insolvency, or
other similar law of the United States of America or any State thereof
or of any other country or jurisdiction providing for the
reorganization, winding-up or liquidation of corporations or an
arrangement, composition, extension or adjustment with creditors;
(h) An order for relief shall be entered against any Credit
Party or any Relevant Subsidiary under the Bankruptcy Code which order
is not stayed; or upon the entry of an order, judgment or decree by
operation of law or by a court having jurisdiction in the premises which
is not stayed adjudging it a bankrupt or insolvent under, or ordering
relief against it under, or approving as properly filed by a petition
seeking relief against it under the provisions of any other now existing
or future applicable bankruptcy, insolvency or other similar law of the
United States of America or any State thereof or of any other country or
jurisdiction providing for the reorganization, winding-up or liquidation
of corporations or any arrangement, composition, extension or
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adjustment with creditors; or appointing a receiver, liquidator,
assignee, sequestrator, trustee or custodian of any Credit Party or any
Relevant Subsidiary or of any substantial part of any of their property,
or ordering the reorganization, winding-up or liquidation of any of
their affairs; or upon the expiration of 90 days after the filing of any
involuntary petition against any Credit Party or any Relevant Subsidiary
seeking any of the relief specified in Section 17.1(g) or this Section
17.1(h) without the petition being dismissed prior to that time;
(i) Any Credit Party or any Relevant Subsidiary shall (i) make a
general assignment for the benefit of its creditors or (ii) consent to
the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, or custodian of all or a substantial part of the
property of any Credit Party or any Relevant Subsidiary, as the case may
be, or (iii) admit its insolvency or inability to pay its debts
generally as they become due, or (iv) fail generally to pay its debts as
they become due, or (v) take any action (or suffer any action to be
taken by its directors or shareholders) looking to the dissolution or
liquidation of any Credit Party or, looking to the dissolution or
liquidation of any Relevant Subsidiary if such dissolution or
liquidation would have a Material Adverse Effect;
(j) Intentionally Omitted;
(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 incomplete in any material respect when made or delivered and
if (i)(A) such report, certificate, financial statement or other
instrument is capable of being made true and complete and (B) such
falsity or incompleteness of such report, certificate, financial
statement or other instrument does not have a Material Adverse Effect,
such Credit Party fails to make such report, certificate, financial
statement or other instrument true and complete within 30 days after
written notice thereof from the Agent or (ii)(1) such report,
certificate, financial statement or other instrument is capable of being
made true and complete and (2) the falsity or incompleteness of such
report, certificate, financial statement or other instrument results in
a Material Adverse Effect, such Credit Party fails to make such report,
certificate, financial statement or other instrument true and complete
within 10 days after written notice thereof from the Agent;
(l) Any Lessee Credit Agreement Event of Default shall have
occurred and be continuing and shall not have been waived;
(m) A final judgment or order shall have been entered against
any Credit Party or any Relevant Subsidiary (by a court or other
tribunal having jurisdiction) for the payment of money in excess of
$5,000,000 and such judgment or order shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal; provided,
however, that no judgment or order referred to in this Section 17.1(m)
shall constitute an Event of Default if such judgment or order is
covered by insurance with respect to which no subrogation right exists
against any Credit Party or any Relevant Subsidiary;
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(n) Any Credit Party, any Relevant Subsidiary or any member of a
Controlled Group shall fail to pay when due an amount or amounts which
it shall have become liable to pay to the PBGC or to a Plan under
Section 515 of ERISA or Title IV of ERISA other than premiums under
Section 4007 of ERISA unless such failure would not have a Material
Adverse Effect; or notice of intent to terminate a Plan or Plans (other
than a multiemployer plan, as defined in Section 4001(a)(3) of ERISA)
having aggregate Unfunded Vested Liabilities in excess of $1,000,000
shall be filed under Title IV of ERISA by any Credit Party, or any
Relevant Subsidiary or any member of a Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate any Plan or
Plans which termination could reasonably be expected to result in
liability of any Credit Party or any Relevant Subsidiary unless such
liability would not have a Material Adverse Effect;
(o) Any Operative Agreement shall cease to be in full force and
effect other than by agreement of each of the parties thereto;
(p) 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;
(q) A substantial portion of the properties of any Credit Party
or any Relevant Subsidiary shall be condemned, seized or appropriated
and such action will have a Material Adverse Effect;
(r) Any Government Action or registration or filing with any
Governmental Authority now or hereafter required in connection with the
performance by any Credit Party or any Relevant Subsidiary of its
obligations set forth in the Operative Agreements shall be revoked,
withdrawn or withheld or shall fail to remain in full force and effect
unless such revocation, withdrawal or withholding does not have a
Material Adverse Effect;
(s) Any act of any Governmental Authority shall deprive any
Credit Party or any Relevant Subsidiary of any right, privilege, or
franchise or restrict the exercise thereof and such act is not revoked
or rescinded within 60 days after it becomes effective or within 30 days
after notice from Agent, whichever first occurs unless such act does not
have a Material Adverse Effect;
(t) Lessee's common stock shall not be listed on the New York
Stock Exchange; or
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(u) Lessee shall cease to be qualified as a "real estate
investment trust" under the Code or to be entitled to receive the tax
benefits resulting from such qualification.
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 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
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
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to relet all or any of the Properties, the reletting of all or any portion
thereof, nor the failure of Lessor to collect or receive any rentals due upon
any such reletting, shall relieve Lessee of its liabilities and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. If any Lease Event of Default shall have occurred and be continuing
and notwithstanding any termination of this Lease pursuant to Section 17.1,
Lessee shall forthwith pay to Lessor all Rent and other sums due and payable
hereunder to and including without limitation the date of such termination.
Thereafter, on the days on which the Basic Rent or Supplemental Rent, as
applicable, are payable under this Lease or would have been payable under this
Lease if the same had not been terminated pursuant to Section 17.1 and until the
end of the Term hereof or what would have been the Term in the absence of such
termination, Lessee shall pay Lessor, as current liquidated damages (it being
agreed that it would be impossible accurately to determine actual damages) an
amount equal to the Basic Rent and Supplemental Rent that are payable under this
Lease or would have been payable by Lessee hereunder if this Lease had not been
terminated pursuant to Section 17.1, less the net proceeds, if any, which are
actually received by Lessor with respect to the period in question of any
reletting of any Property or any portion thereof; provided, that Lessee's
obligation to make payments of Basic Rent and Supplemental Rent under this
Section 17.4 shall continue only so long as Lessor shall not have received the
amounts specified in Section 17.6. In calculating the amount of such net
proceeds from reletting, there shall be deducted all of Lessor's, any Holder's,
the Agent's and any Lender's reasonable expenses in connection therewith,
including without limitation repossession costs, brokerage or sales commissions,
fees and expenses for counsel and any necessary repair or alteration costs and
expenses incurred in preparation for such reletting. To the extent Lessor
receives any damages pursuant to this Section 17.4, such amounts shall be
regarded as amounts paid on account of Rent. Lessee specifically acknowledges
and agrees that its obligations under this Section 17.4 shall be absolute and
unconditional under any and all circumstances and shall be paid and/or
performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.5 Power of Sale.
Without limiting any other remedies set forth in this Lease, Lessor
and Lessee agree that Lessee has granted, pursuant to Section 7.1(b) hereof and
each Lease Supplement, a Lien against the Properties WITH POWER OF SALE, and
that, upon the occurrence and during the continuance of any Lease Event of
Default, Lessor shall have the power and authority, to the extent provided by
law, after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of the Properties.
17.6 Final Liquidated Damages.
If a Lease Event of Default shall have occurred and be continuing,
whether or not this Lease shall have been terminated pursuant to Section 17.1
and whether or not Lessor shall have collected any current liquidated damages
pursuant to Section 17.4, Lessor shall have the right to recover, by demand to
Lessee and at Lessor's election, and Lessee shall pay to Lessor, as and for
final liquidated damages, but exclusive of the indemnities payable under Section
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
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impossible accurately to determine actual damages) the Termination Value (except
to the extent total damages are limited by Section 2.1 of the Agency Agreement).
Upon payment of the amount specified pursuant to the first sentence of this
Section 17.6, Lessee shall be entitled to receive from Lessor, either at
Lessee's request or upon Lessor's election, in either case at Lessee's cost, an
assignment of Lessor's entire right, title and interest in and to the
Properties, Improvements, Fixtures, Modifications, Equipment and all components
thereof, in each case in recordable form and otherwise in conformity with local
custom and free and clear of the Lien of this Lease (including without
limitation the release of any memoranda of Lease and/or the Lease Supplement
recorded in connection therewith) and any Lessor Liens. The Properties shall be
conveyed to Lessee "AS-IS, WHERE-IS" and in their then present physical
condition. If any statute or rule of law shall limit the amount of such final
liquidated damages to less than the amount agreed upon, Lessor shall be entitled
to the maximum amount allowable under such statute or rule of law; provided,
however, Lessee shall not be entitled to receive an assignment of Lessor's
interest in the Properties, the Improvements, Fixtures, Modifications, Equipment
or the components thereof unless Lessee shall have paid in full the Termination
Value. Lessee specifically acknowledges and agrees that its obligations under
this Section 17.6 shall be absolute and unconditional under any and all
circumstances and shall be paid and/or performed, as the case may be, without
notice or demand and without any abatement, reduction, diminution, setoff,
defense, counterclaim or recoupment whatsoever.
17.7 Environmental Costs.
If a Lease Event of Default shall have occurred and be continuing,
and whether or not this Lease shall have been terminated pursuant to Section
17.1, Lessee shall pay directly to any third party (or at Lessor's election,
reimburse Lessor) for the cost of any environmental testing and/or remediation
work reasonably 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
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demand immediately assign, transfer and set over to Lessor all of Lessee's
right, title and interest in and to each agreement executed by Lessee in
connection with the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties (including without limitation all right, title and interest of
Lessee with respect to all warranty, performance, service and indemnity
provisions), as and to the extent that the same relate to the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties or any of them.
17.10 Remedies Cumulative.
The remedies herein provided shall be cumulative and in addition
to (and not in limitation of) any other remedies available at law, equity or
otherwise, including without limitation any mortgage foreclosure remedies.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessee's Lease Defaults.
Lessor, without waiving or releasing any obligation or Lease Event
of Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
without limitation the failure by Lessee to maintain the insurance required by
Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon any
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All
reasonable out-of-pocket costs and expenses so incurred (including without
limitation fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by Lessor,
shall be paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.
Subject to Section 19.2, in connection with any termination of this
Lease with respect to any Property pursuant to the terms of Section 16.2, or in
connection with Lessee's exercise of its Purchase Option, upon the date on which
this Lease is to terminate with respect to any Property, and upon tender by
Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by 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.
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19.2 No Purchase or Termination With Respect to Less than All of a
Property.
Lessee shall not be entitled to exercise its Purchase Option or the
Sale Option separately with respect to a portion of any Property consisting of
Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease but
shall be required to exercise its Purchase Option or the Sale Option with
respect to an entire Property.
ARTICLE XX
20.1 Purchase Option or Sale Option-General Provisions.
Not less than one hundred twenty (120) days and no more than two
hundred forty (240) days prior to the Expiration Date or (respecting the
Purchase Option only) not less than 30 days nor more than 45 days prior to any
Payment Date, Lessee may give Lessor irrevocable written notice (the "Election
Notice") that Lessee is electing to exercise either (a) (i) in the case of the
Expiration Date, the option to purchase all, but not less than all, the
Properties on the Expiration Date or (ii) in the case of any Payment Date (other
than the Expiration Date), the option to purchase one or more of the Properties
on the applicable Payment Date specified in the Election Notice (the "Purchase
Option") or (b) with respect to an Election Notice given in connection with the
Expiration Date only, the option to remarket all, but not less than all, the
Properties to a Person other than Lessee or any Affiliate of Lessee and cause a
sale of such Properties to occur on the Expiration Date pursuant to the terms of
Section 22.1 (the "Sale Option"). If Lessee does not give an Election Notice
indicating the Purchase Option or the Sale Option at least one hundred twenty
(120) days and not more than two hundred forty (240) days prior to the
Expiration Date, then Lessee shall be deemed to have elected the Purchase
Option. If Lessee shall either (A) elect (or be deemed to have elected) to
exercise the Purchase Option or (B) 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.
Notwithstanding the foregoing, the Lessee shall not be permitted to
elect to exercise the Purchase Option with respect to some, but not all, of the
Properties (a "Limited Purchase Option"), if (x) there would be less than ten
(10) total Properties after giving effect to the requested purchase or (y) the
aggregate Property Cost of all Properties in the Property Pool is greater than
or equal to twenty percent (20%) of the aggregate Property Cost of all
Properties for which the Completion Date has occurred; provided, however, the
Lessee may exercise such Limited Purchase Option if (i) such Election Notice
seeks to exercise such Limited Purchase Option with respect to a Property or
Properties in the Property Pool and (ii) after giving effect to the purchase of
such Property or Properties by the Lessee, the aggregate Property Cost of all
Properties in the Property Pool is less than twenty percent (20%) of the
aggregate Property Cost of all Properties for which the Completion Date has
occurred.
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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 such Property or Properties) and provided, that the
Election Notice has been appropriately given specifying the Purchase Option,
Lessee shall purchase all the Properties on the Expiration Date or one or more
Properties on the applicable Payment Date at a price equal to the Termination
Value for such Property or Properties (which the parties do not intend to be a
"bargain" purchase price); provided, however, if one or more Properties are
being purchased prior to the Expiration Date pursuant to the terms of this
Article XX the Financing Parties agree that, with respect to the first such
purchase, the Termination Value for such Property or Properties shall include
the full amount of the Initial Holder Advance.
Subject to Section 19.2, in connection with any termination of this
Lease with respect to any Property pursuant to the terms of Section 16.2, or in
connection with Lessee's exercise of its Purchase Option, upon the date on which
this Lease is to terminate with respect to a Property or all of the Properties,
and upon tender by Lessee of the amounts set forth in Section 16.2(b) or this
Section 20.2, as applicable, Lessor shall execute, acknowledge (where required)
and deliver to Lessee (or to such other Person as Lessee shall designate), at
Lessee's cost and expense, each of the following: (a) a termination or
assignment (as requested by the Lessee) of each applicable Ground Lease and
special or limited warranty Deeds conveying each Property (to the extent it is
real property not subject to a Ground Lease) to Lessee (or such other Person)
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 (or such other Person) free and clear of the
Lien of this Lease, the Lien of the Credit Documents and any Lessor Liens; (c)
any real estate tax affidavit or other document required by law to be executed
and filed in order to record the applicable Deed and/or the applicable Ground
Lease termination; (d) FIRPTA affidavits; and (e) such other instruments and
documents as may be necessary in the jurisdiction in which each such Property is
located to consummate such transfer. All of the foregoing documentation must be
in form and substance reasonably satisfactory to Lessor. The applicable Property
shall be conveyed to Lessee (or such other Person) "AS-IS, WHERE-IS" and in then
present physical condition.
If any Property is the subject of remediation efforts respecting
Hazardous Substances at the Expiration Date which could materially and adversely
impact the Fair Market Sales Value of such Property (with materiality determined
in Lessor's discretion), then Lessee shall be obligated to 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
actual out-of-pocket costs and expenses reasonably 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.
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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 and not
more than two hundred forty (240) days prior to the date of delivery,
Lessee shall cause to be delivered to Lessor a Phase I environmental
site assessment for each of the Properties recently prepared (no more
than thirty (30) days old prior to the date of delivery of such report)
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 Phase I environmental site
assessment shall be paid by either (i) sales proceeds from the
Properties, (ii) Lessor (but only the extent amounts are available
therefor within the Available Commitments and the Available Holder
Commitments or each Lender and each Holder approves the necessary
increases of its Available Commitment and its Available Holder
Commitment, respectively, 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
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 assessment by the date sixty (60) days prior to the
Expiration Date or in the event that such environmental assessment shall
reveal the existence of any material violation of Environmental Laws,
other material Environmental Violation or potential material
Environmental Violation (with materiality determined in each case 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].
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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 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. 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 to the extent amounts are available therefor within the Available
Commitments and the Available Holder Commitments or each Lender and each
Holder approves the necessary increases in its Available Commitment and
its Available Holder Commitment, respectively, 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 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 the bids
submitted by Lessee if such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all the Properties,
and represent bona fide offers from one 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 or
more third parties or if there are no bids, Lessor may elect to retain
one or more of the Properties by giving Lessee prior written notice of
Lessor's election to retain the same, and promptly upon receipt of such
notice, Lessee shall surrender, or cause to be surrendered, each of the
Properties specified in such notice in accordance with the terms and
conditions of Section 10.1. Upon acceptance of any bid, Lessor agrees,
at Lessee's request and expense, to execute a contract of sale 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
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Properties free and clear of the Lien of this Lease and any Lessor Liens
attributable to Lessor, without recourse or warranty (of title or
otherwise), for cash on the Sale Date to the purchaser or purchasers
offering the highest cash sales price, as identified by Lessee or
Lessor, as the case may be; provided, however, solely as to Lessor or
the Trust Company, in its individual capacity, any Lessor Lien shall not
constitute a Lessor Lien so long as Lessor or the Trust Company, in its
individual capacity, is diligently and in good faith contesting, at the
cost and expense of Lessor or the Trust Company, in its individual
capacity, such Lessor Lien by appropriate proceedings in which event the
applicable Sale Date, all without penalty or cost to Lessee, shall be
delayed for the period of such contest. To effect such transfer and
assignment, Lessor shall execute, acknowledge (where required) and
deliver to the appropriate purchaser each of the following: (a) special
or limited warranty Deeds conveying each such Property (to the extent it
is real property titled to Lessor) and an assignment of the Ground Lease
conveying the leasehold interest of Lessor in each such Property (to the
extent it is real property and subject to a Ground Lease) to the
appropriate purchaser free and clear of the Lien of this Lease, the Lien
of the Credit Documents and any Lessor Liens; (b) a ▇▇▇▇ 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/or each Ground
Lease assignment; (d) FIRPTA affidavits, as appropriate; and (e) such
other instruments and documents as may be necessary in the jurisdiction
in which each such Property is located to consummate such transfer. 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. Lessee shall not take or fail to take any
action which would have the effect of unreasonably discouraging bona
fide third party bids for any Property. If each of the Properties is not
either (i) sold on the Sale Date in accordance with the terms of this
Section 22.1, or (ii) retained by Lessor pursuant to an affirmative
election made by Lessor pursuant to the second sentence of the second
paragraph of this Section 22.1(a), then (x) Lessee shall be obligated to
pay Lessor on the Sale Date an amount equal to the aggregate Termination
Value for all the Properties less any sales proceeds received 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 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 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
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paid for all the Properties on such date exceeds the sum of the
aggregate Property Cost for all the Properties, then Lessee shall retain
such excess (and, to the extent such excess is received by Lessor, it
shall immediately be remitted to Lessee). 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
or more third party purchasers on the Sale Date or retained by Lessor in
connection with an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then in either case on the applicable
Sale Date Lessee shall provide Lessor or such third party purchaser
(unless otherwise agreed by such third party purchaser) with (i) all
permits, certificates of occupancy, governmental licenses and
authorizations necessary to use, operate, repair, access and maintain
each such Property for the purpose it is being used by Lessee, and (ii)
such manuals, permits, easements, licenses, intellectual property,
know-how, rights-of-way and other rights and privileges in the nature of
an easement as are reasonably necessary or desirable in connection with
the use, operation, repair, access to or maintenance of each such
Property for its intended purpose or otherwise as Lessor or such third
party purchaser(s) shall reasonably request (and a royalty-free license
or similar agreement to effectuate the foregoing on terms reasonably
agreeable to Lessor or such third party purchaser(s), as applicable).
All assignments, licenses, easements, agreements and other deliveries
required by clauses (i) 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. Lessee shall
also execute any documentation requested by Lessor or such third party
purchaser(s), as applicable, evidencing the continuation or assignment
of each Ground Lease.
22.2 Application of Proceeds of Sale.
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 out-of-pocket 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);
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(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 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 qualified
appraisers, one chosen by Lessee and one chosen by Lessor, shall mutually agree
thereupon, but if either party shall fail to choose an appraiser within twenty
(20) days after notice from the other party of the selection of its appraiser,
then the appraisal by such appointed appraiser shall be binding on Lessee and
Lessor. If the two (2) appraisers cannot agree within twenty (20) days after
both shall have been appointed, then a third appraiser shall be selected by the
two (2) appraisers or, failing agreement as to such third appraiser within
thirty (30) days after both shall have been appointed, by the American
Arbitration Association. The decisions of the three (3) appraisers shall be
given within twenty (20) days of the appointment of the third appraiser and the
decision of the appraiser most different from the average of the other two (2)
shall be discarded and such average shall be binding on Lessor and Lessee;
provided, that if the highest appraisal and the lowest appraisal are equidistant
from the third appraisal, the third appraisal shall be binding on Lessor and
Lessee. The fees and expenses of the appraiser appointed by Lessee shall be paid
by Lessee; the fees and expenses of the appraiser appointed by Lessor shall be
paid by Lessor (such fees and expenses not being indemnified pursuant to Section
11 of the Participation Agreement); and the fees and expenses of the third
appraiser shall be divided equally between Lessee and Lessor.
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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
Property. Nothing contained in this Article XXIII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to any Property (unless such Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of such Property or
exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss.
During the Term, unless Lessee shall not be in actual possession of
any Property in question solely by reason of Lessor's exercise of its remedies
of dispossession under Article XVII, the risk of loss or decrease in the
enjoyment and beneficial use of such Property as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
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ARTICLE XXV
25.1 Assignment.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor, which consent may be granted or
withheld in the sole discretion of each such Person.
(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. As of the date of each Lease Supplement, Lessee shall lease
the respective Property described in such Lease Supplement from Lessor,
and any existing tenant respecting such Property shall automatically be
deemed to be a subtenant of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any Lender,
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 Person
subject to the applicable terms of the Operative Agreements including
without limitation this Section 25.2. All subleasing shall be done on
market terms (provided that a sublease will be deemed to be on market
terms if the sublease rent required to be paid thereunder is greater
than or equal to the sum of the Basic Rent and the Supplemental Rent for
the applicable Property under this Lease) and shall in no way diminish
the fair market value or useful life of any applicable Property.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder
and Lessee shall remain directly and primarily liable under this Lease
as to such Property, or portion thereof, so sublet. During the Basic
Term, the term of any such sublease shall not extend beyond the Basic
Term. During the Renewal Term, the term of any such sublease shall not
extend beyond the Renewal Term. Each sublease shall be expressly subject
and subordinate to this Lease.
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(d) Lessor acknowledges that in the ordinary course and
operation of the Properties Lessee shall sublease portions of the
Properties to its self-storage customers, cellular telephone
transmission companies and billboard companies. Lessor acknowledges and
agrees that such subleases in the ordinary course of Lessee's business
shall not be subject to the requirements or restrictions of this Section
25.
ARTICLE XXVI
26.1 No Waiver.
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 Acceptance of Surrender.
No surrender to Lessor of this Lease or of all or any portion of
any Property or of any part of any thereof or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by Lessor and no act
by Lessor or the Agent or any representative or agent of Lessor or the Agent,
other than a written acceptance, shall constitute an acceptance of any such
surrender.
27.2 No Merger of Title.
There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 Incorporation of Covenants.
Reference is made to the Lessee Credit Agreement and the
representations and warranties of Lessee contained in Article 6 of the Lessee
Credit Agreement (hereinafter referred to as the "Incorporated Representations
and Warranties") and the covenants contained in Articles
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7 and 8 of the Lessee Credit Agreement (hereinafter referred to as the
"Incorporated Covenants"). Lessee agrees with Lessor that the Incorporated
Representations and Warranties and the Incorporated Covenants (and all other
relevant provisions of the Lessee Credit Agreement related thereto, including
without limitation the defined terms contained in Article 1 thereof which are
used in the Incorporated Representations and Warranties and the Incorporated
Covenants, hereinafter referred to as the "Additional Incorporated Terms") are
hereby incorporated by reference into this Lease to the same extent and with the
same effect as if set forth fully herein and shall inure to the benefit of
Lessor, without giving effect to any waiver, amendment, modification or
replacement of the Lessee Credit Agreement or any term or provision of the
Incorporated Representations and Warranties or the Incorporated Covenants
occurring subsequent to the date of this Lease, except to the extent otherwise
specifically provided in the following provisions of this paragraph. In the
event a waiver is granted under the Lessee Credit Agreement or an amendment or
modification is executed with respect to the Lessee Credit Agreement, and such
waiver, amendment and/or modification affects the Incorporated Representations
and Warranties, the Incorporated Covenants or the Additional Incorporated Terms,
then such waiver, amendment or modification shall be effective with respect to
the Incorporated Representations and Warranties, the Incorporated Covenants and
the Additional Incorporated Terms as incorporated by reference into this Lease
unless the Agent (acting upon the direction of the Majority Secured Parties)
gives notice to the Lessee otherwise. In the event of any replacement of the
Lessee Credit Agreement with a similar credit facility (the "New Facility"), the
representations and warranties, covenants and additional terms contained in the
New Facility which correspond to the representations and warranties and
covenants contained in Article 6 and Articles 7 and 8, respectively, and such
additional terms (each of the foregoing contained in the Lessee Credit
Agreement) shall become the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms unless the Agent
(acting upon the direction of the Majority Secured Parties) gives notice to the
Lessee otherwise; provided that if such notice is given by the Agent to the
Lessee or if the Lessee Credit Agreement is terminated and not replaced, then
the representations and warranties and covenants contained in Article 6 and
Articles 7 and 8, respectively, and such additional terms (each of the foregoing
contained in the Lessee Credit Agreement (together with any modifications or
amendments approved in accordance with this paragraph)) shall continue to be the
Incorporated Representations and Warranties, the Incorporated Covenants and the
Additional Incorporated Terms hereunder.
ARTICLE XXIX
29.1 Notices.
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
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ARTICLE XXX
30.1 Miscellaneous.
Anything contained in this Lease to the contrary notwithstanding,
all claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease and
such jurisdiction or of such provision or of any other provision hereof in any
other jurisdiction.
30.2 Amendments and Modifications.
Neither this Lease nor any Lease Supplement may be amended, waived,
discharged or terminated except in accordance with the provisions of Section
12.4 of the Participation Agreement.
30.3 Successors and Assigns.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 Headings and Table of Contents.
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 Counterparts.
This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which shall together constitute one and
the same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF WASHINGTON
(WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW),
EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS
LOCATED ARE REQUIRED TO APPLY.
30.7 Calculation of Rent.
All calculation of Rent payable hereunder shall be computed based
on the actual number of days elapsed over a year of three hundred sixty (360)
days or, to the extent such Rent
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is based on the Prime Lending Rate, three hundred sixty-five (365) (or three
hundred sixty-six (366), as applicable) days.
30.8 Memoranda of Lease and Lease Supplements.
This Lease shall not be recorded against any Property; provided,
Lessor and Lessee shall promptly record (a) a memorandum of this Lease and the
applicable Lease Supplement (in substantially the form of Exhibit B attached
hereto) or a short form lease (in form and substance reasonably satisfactory to
Lessor) regarding each Property promptly after the acquisition thereof in the
local filing office with respect thereto 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 within the Available
Commitments and the Available Holder Commitments or each Lender and each Holder
approves the necessary increases in its Available Commitment and its Available
Holder Commitment, respectively, 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 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 interest in the Properties (and in no
circumstance to the Agent, the Lenders, the Holders or otherwise to Lessor) for
the collection of any judgment requiring the payment of money by Lessor in the
event of liability by Lessor, and no other property or assets of Lessor or any
shareholder, owner or partner (direct or indirect) in or of Lessor, or any
director, officer, employee, beneficiary, Affiliate of any of the foregoing
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of the remedies of Lessee under or with respect to this Lease, the
relationship of Lessor and Lessee hereunder or Lessee's use of the Properties or
any other liability of Lessor to Lessee. Nothing in this Section shall be
interpreted so as to limit the terms of Sections 6.1 or 6.2 or the provisions of
Section 12.9 of the Participation Agreement or to limit Lessee's recourse
against Lessor for claims for Lessor's gross negligence or willful misconduct.
41
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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.
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 ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇
▇▇▇▇▇ ▇▇ SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH
DOCUMENTS OR AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM
NONUSURIOUS AMOUNT PERMITTED UNDER APPLICABLE LAW, WITHOUT THE NECESSITY OF
EXECUTION OF ANY AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER
RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST WITH RESPECT TO THE
OBLIGATIONS OWED HEREUNDER OR UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM
THIS PROVISION, BE IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO
THE AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE
APPLIED TO THE REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND
NOT TO THE PAYMENT OF INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR
THEREOF, IF AND TO THE EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE
EXCEEDS THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND
PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT
INCLUDE THE RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE
DATE OF SUCH DEMAND, AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY
UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE
PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED,
PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING
WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF
INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS
AMOUNT PERMITTED BY APPLICABLE LAW.
[signature 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, as
Owner Trustee under the Storage Centers Trust
2001, as Lessor
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Title: Vice President
-----------------------------------------
SHURGARD STORAGE CENTERS, INC., as Lessee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Title: CFO
-----------------------------------------
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
-----------------------------------------
50
STATE OF UTAH )
) ss.
COUNTY OF Salt Lake )
On this _____ day of _________________, 2001, before me, the undersigned, a
Notary Public in and for the State of Utah, duly commissioned and sworn,
personally appeared ▇▇▇ ▇. ▇▇▇▇▇, to me known to be the person who signed as
Vice President of First Security Bank of N.A., the national banking association
that executed the within and foregoing instrument, and acknowledged said
instrument to be the free and voluntary act and deed of said national banking
association for the uses and purposes therein mentioned, and on oath stated that
▇▇▇ ▇. ▇▇▇▇▇ was duly elected, qualified and acting as said officer of the
national banking association, that ▇▇▇ ▇. ▇▇▇▇▇ was authorized to execute said
instrument and that the seal affixed, if any, is the seal of said national
banking association.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day and
year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
(Signature of Notary)
--------------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of Utah,
residing at_________________________________.
My appointment expires:_____________________.
51
STATE OF WASHINGTON )
) ss.
COUNTY OF King )
On this 2nd day of February 2001, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared ▇▇▇▇▇▇▇ ▇▇▇▇, to me known to be the person who signed as Senior Vice
President & CFO of Shurgard Storage Centers, Inc., the corporation that executed
the within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said corporation for the uses and purposes
therein mentioned, and on oath stated that he was duly elected, qualified and
acting as said officer of the corporation, that he was authorized to execute
said instrument and that the seal affixed, if any, is the seal of said
corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day and
year first above written.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
(Signature of Notary)
▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
Washington, residing at Seattle.
My appointment expires: April 3, 2002.
---------------------