MASTER LEASE
AND
DEED OF LEASE
THIS MASTER LEASE And DEED OF LEASE (this "Lease") is made as of July 31,
2001 (the "Effective Date"), by and between ▇▇▇▇▇▇▇ FAMILY, LLC, a Massachusetts
limited liability company ("Lessor"), whose address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and SLA MAIL II, INC., a Massachusetts corporation
("Lessee"), whose address is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
W I T N E S S E T H :
THAT, in consideration of the mutual covenants and agreements herein
contained, Lessor and Lessee hereby covenant and agree as follows:
1. CERTAIN DEFINED TERMS. The following terms shall have the following
meanings for all purposes of this Lease:
"ADA" has the meaning set forth in Section 16.C.
"ADDITIONAL RENTAL" has the meaning set forth in Section 5.B.
"AFFILIATE" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes of
this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
"APPLICABLE REGULATIONS" means all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and approvals of each
Governmental Authority having jurisdiction over Lessee and/or any of the
Properties, including, without limitation, all health, building, fire, safety
and other codes, ordinances and requirements and all applicable standards of the
National Board of Fire Underwriters and the ADA, in each case, as amended, and
any judicial or administrative interpretation thereof, including any judicial
order, consent, decree or judgment applicable to Lessee.
"APPLICABLE RENT REDUCTION PERCENTAGE" means, with respect to any
Property, a fraction, the numerator of which shall be the Purchase Price for the
respective Land Parcel for such Property, and the denominator of which shall be
the sum of the Purchase Price for the Land Parcels for all of the Properties
then subject to this Lease, including such Property.
"BASE ANNUAL RENTAL" means $377,175.39.
"BASE MONTHLY RENTAL" means an amount equal to 1/12 of the applicable Base
Annual Rental.
"BUSINESS DAY" means a day on which banks located in Boston, Massachusetts
are not required or authorized to remain closed (other than a Saturday and
Sunday).
"CODE" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 ET
SEQ., as amended.
"DE MINIMIS AMOUNTS" shall mean, with respect to any given level of
Hazardous Materials, that level or quantity of Hazardous Materials in any form
or combination of forms, the use, storage or release of which does not
constitute a violation of, or require regulation or remediation under, any
Environmental Laws and is customarily employed in the ordinary course of, or
associated with, similar businesses located in the states in which the
Properties are located.
"DEFAULT RATE" means 18% per annum or the highest rate permitted by law,
whichever is less.
"EFFECTIVE DATE" has the meaning set forth in the Preamble.
"ENVIRONMENTAL LAWS" means any present and future federal, state and local
laws, statutes, ordinances, rules and regulations relating to Hazardous
Materials and/or the protection of human health or the environment, by reason of
a Release or a Threatened Release of Hazardous Materials or relating to
liability for or costs of Remediation or prevention of Releases. "Environmental
Laws" includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations, rulings, orders or decrees promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. "Environmental Laws" also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
Governmental Authority of the environmental condition of the property; requiring
notification or disclosure of Releases or other environmental condition of any
of the Properties to any Governmental Authority or other person or entity,
whether or not in connection with transfer of title to or interest in property;
relating to nuisance, trespass or other causes of action related to Hazardous
Materials; and relating to wrongful death, personal injury, or property or other
damage in connection with the physical condition or use of any of the Properties
by reason of the presence of Hazardous Materials in, on, under or above any of
the Properties.
"ENVIRONMENTAL LIENS" has the meaning set forth in Section 16.D(ix).
"EVENT OF DEFAULT" has the meaning set forth in Section 23.
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"EXTENDED TERM" means the period subsequent to the expiration of the
Primary Term which this Lease is actually in effect.
"GAAP" means generally accepted accounting principles consistently
applied.
"GOVERNMENTAL AUTHORITY" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or
quasi-governmental authority of the United States, the states in which the
Properties are located or any political subdivision thereof.
"GUARANTOR" means Uno Restaurant Corporation, a Delaware corporation.
"GUARANTY" means that certain Unconditional Guaranty of Payment and
Performance dated as of the date of this Lease to be executed by Guarantor with
respect to the obligations of Lessee under this Lease, as the same may be
amended from time to time.
"HAZARDOUS MATERIALS" means (i) any toxic substance or hazardous waste,
substance, solid waste, or related material, or any pollutant or contaminant;
(ii) radon gas, asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contains
dielectric fluid containing levels of polychlorinated biphenyls in excess of
federal, state or local safety guidelines, whichever are more stringent, or any
petroleum product; (iii) any substance, gas, material or chemical which is or
may be defined as or included in the definition of "hazardous substances,"
"toxic substances," "hazardous materials," "hazardous wastes," "regulated
substances" or words of similar import under any Environmental Laws; and (iv)
any other chemical, material, gas or substance the exposure to or release of
which is or may be prohibited, limited or regulated by any Governmental
Authority that asserts or may assert jurisdiction over any of the Properties or
the operations or activity at any of the Properties, or any chemical, material,
gas or substance that does or may pose a hazard to the health and/or safety of
the occupants of any of the Properties or the owners and/or occupants of
property adjacent to or surrounding any of the Properties.
"IMPROVEMENTS" shall have the meaning described in Section 32.
"INDEMNIFIED PARTIES" means Lessor and its directors, officers,
shareholders, trustees, beneficial owners, partners, members, and any directors,
officers, shareholders, trustees, beneficial owners, partners, members of any
beneficial owners, partners or members of Lessor, and all employees, agents,
servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any of the foregoing,
including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of the assets and business of
Lessor.
"LAND PARCELS" means the parcels of land described by address, Buyer
Number and Unit Number in EXHIBIT A Attached hereto as the same may be revised
from time to time to reflect removed and substituted Properties and legally
described in EXHIBIT A-1 attached hereto as the same may be revised from time to
time to reflect removed and substituted Properties, and the improvements
thereto, excluding all buildings, foundations and structures, or any fixtures
within or upon those buildings, foundations and structures, and excluding
Personalty and inventory, but including, without implied limitation, pavement
and sidewalks, landscaping improvements, retaining walls and underground utility
supply lines (to the extent owned by Lessor).
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"LEASE TERM" shall have the meaning described in Section 4.
"LESSEE ENTITIES" means, collectively, Lessee and Permitted Lessees and
all Affiliates of Lessee and Permitted Lessees.
"LOSSES" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys'
fees, court costs and other costs of defense).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the net
worth or operation of Lessee, Guarantor or any of the Properties, including,
without limitation, the operations of any of the Properties as a Permitted
Facility and/or the value of any of the Properties, or (ii) Lessee's ability to
perform its obligations under this Lease and the other Sale-Leaseback Documents.
"MATURITY DATE" means July 31, 2021.
"MEMORANDUM" means the memorandum of master lease dated as of the date of
this Lease between Lessor and Lessee with respect to the Properties. A duplicate
original Memorandum will be executed and recorded in the applicable real
property records for each Property. Each Memorandum will contain exhibits with
the addresses and store identification numbers for all of the Properties and the
legal description for the applicable Property.
"NOTICES" means, when used herein, written notice.
"OTHER AGREEMENTS" means, collectively, all agreements and instruments now
or hereafter entered into between, among or by (1) any of the Lessee Entities,
and, or for the benefit (as intended beneficiary or intended third party
beneficiary) of, (2) Lessor; provided, however, the term Other Agreements shall
not include this Lease, the other Sale-Leaseback Documents, agreements between
and among institutional lenders and one or more of the Lessee Entities.
"PARTICIPATION" means the granting of any participations in any document
evidencing loan obligations or any or all servicing rights with respect thereto.
"PERMITTED FACILITY" means a Pizzeria Uno Chicago Bar & Grill restaurant
or any future concept or use to be developed.
"PERMITTED SUBLEASES" means the master subleases of even date herewith of
all the Properties by Lessee, as sublessor, to the Permitted Sublessees, as
sublessees.
"PERMITTED SUBLESSEE" or "PERMITTED SUBLESSEES" means, individually or
collectively, as the context may require, SLA ▇▇▇▇ ▇▇▇▇, Inc., a Florida
corporation, Pizzeria Uno of Norfolk, Inc. a Virginia corporation, and SLA
▇▇▇▇▇▇ Hills, Inc., an Illinois corporation and UNO Restaurants, Inc., a
Massachusetts corporation or their successors or assigns, as provided herein.
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"PERSON" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
"PERSONALTY" means all machinery, appliances, furniture, equipment, trade
fixtures and other personal property of Lessee (excluding inventory) from time
to time situated on or used in connection with the Properties; provided,
however, the term "Personalty" shall not include the HVAC, walk-in coolers,
walk-in freezers, supply fans, exhaust fans, air ducts, hoods, vents, built-in
sinks, built-in countertops, plumbing and electrical fixtures, merchandise
shelving, sign poles and lighting poles, all of which items are intended to be
fixtures as such term is used within the definition of "Properties".
"PRIMARY TERM" means the period commencing on the Effective Date and
expiring on July 31, 2021.
"PROPERTIES" means, collectively, the Land Parcels and all rights,
privileges and appurtenances associated therewith, and all buildings,
foundations, structures, fixtures and other improvements now or hereafter
located on such real estate (excluding Personalty and inventory).
"PROPERTY" means any one of the Properties.
"PURCHASE PRICE" means, with respect to the Land Parcel for any respective
Property, the amount of the purchase price corresponding to such Land Parcel as
set forth on EXHIBIT A to the Sale-Leaseback Agreement.
"REJECTABLE OFFER" has the meaning set forth in Section 21.B.
"REJECTABLE PURCHASE OFFER" has the meaning set forth in Section 58.A.
"REJECTABLE SUBSTITUTION OFFER" has the meaning set forth in Section 57.A.
"RELEASE" means any depositing, discharging, leaking, spilling, injecting,
pumping, pouring, emptying, escaping, dumping or disposing of Hazardous
Materials into the environment, except for De Minimis Amounts.
"REMEDIATION" means any response, remedial, removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Materials, any actions to prevent, cure or mitigate any Release,
any inspection, investigation, study, monitoring, assessment, sampling and
testing, laboratory or other analysis relating to any Hazardous Materials.
"REVERSIONARY INTERESTS" means a reversionary interest in the Improvements
for the benefit of Lessor.
"SALE-LEASEBACK AGREEMENT" means that certain Sale-Leaseback Agreement
dated as of the date hereof between Lessor and Saxet Corporation, a Delaware
Corporation.
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"SALE-LEASEBACK DOCUMENTS" means the Sale-Leaseback Agreement, this Lease,
the Memorandum, the Guaranty, and all other documents executed in connection
therewith or contemplated thereby.
"SUBSTITUTE PROPERTY" means one or more parcels of real estate substituted
for any of the Properties in accordance with the requirements of Section 57,
together with all rights, privileges and appurtenances associated therewith, and
all buildings, structures, fixtures and other improvements located thereon. For
purposes of clarity, where two or more parcels of real property comprise a
Substitute Property, such parcels shall be aggregated and deemed to constitute
the Substitute Property for all purposes of this Lease.
"THREATENED RELEASE" means a substantial likelihood of a Release which
requires action pursuant to Environmental Law to prevent or mitigate damage to
the soil, surface waters, groundwaters, land, stream sediments, surface or
subsurface strata, ambient air or any other environmental medium comprising or
surrounding any of the Properties which may result from such Release.
"TITLE COMPANY" means Chicago Title Insurance Company, or such other
nationally recognized title insurance company reasonably acceptable to Lessor.
"TRANSFER" means any sale, transfer or assignment of any document
evidencing loan obligations, or any or all servicing rights with respect
thereto.
2. DEMISE OF PROPERTIES.
In consideration of the rentals and other sums to be paid by Lessee
and of the other terms, covenants and conditions on Lessee's part to be kept and
performed, Lessor hereby leases and demises to Lessee, and Lessee hereby takes
and hires, the Land Parcels. The Land Parcels are leased and demised to Lessee
"AS IS" and "WHERE IS" without representation or warranty by Lessor and subject
to the rights of parties in possession, to the existing state of title, any
state of facts which an accurate survey or physical inspection might reveal, and
all Applicable Regulations now or hereafter in effect. Lessee has examined each
of the Land Parcels and title to each of the Land Parcels and has found all of
the same satisfactory for all of Lessee's purposes.
3. CHARACTERIZATION OF LEASE. A. Lessor and Lessee intend that:
(i) this Lease constitutes a single master lease of all, but not
less than all, of the Land Parcels and that Lessor and Lessee have
executed and delivered this Lease with the understanding that this Lease
constitutes a unitary, unseverable instrument pertaining to all, but not
less than all, of the Land Parcels, and that neither this Lease nor the
duties, obligations or rights of Lessee may be allocated or otherwise
divided among the Properties by Lessee;
(ii) this Lease is a "true lease" and not a financing lease, capital
lease, mortgage, equitable mortgage, deed of trust, trust agreement,
security agreement or other financing or trust arrangement, and the
economic realities of this Lease are those of a true lease; and
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(iii) the business relationship created by this Lease and any
related documents is solely that of a long-term commercial lease between
landlord and tenant and has been entered into by both parties in reliance
upon the economic and legal bargains contained herein.
▇. ▇▇▇▇▇▇ and Lessee acknowledge and agree that the Lease Term, including
any term extensions provided for in this Lease, is less than the remaining
economic life of each of the Properties.
C. Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a true lease and irrevocably waives any claim
or defense which asserts that this Lease is anything other than a true lease.
Lessee covenants and agrees that it will not assert that this Lease is anything
but a true lease. Lessee stipulates and agrees not to challenge the validity,
enforceability or characterization of the lease of the Land Parcels as a true
lease and further stipulates and agrees that nothing contained in this Lease
creates or is intended to create a joint venture, partnership (either de jure or
de facto), equitable mortgage, trust, financing device or arrangement, security
interest or the like. Lessee shall support the intent of the parties that the
lease of the Land Parcels pursuant to this Lease is a true lease and does not
create a joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the like,
if, and to the extent that, any challenge occurs.
D. Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a master lease of all of the Land Parcels and
irrevocably waives any claim or defense which asserts that this Lease is
anything other than A master lease. Lessee covenants and agrees that it will not
assert that this Lease is anything but a unitary, unseverable instrument
pertaining to the lease of all, but not less than all, of the Land Parcels.
Lessee stipulates and agrees not to challenge the validity, enforceability or
characterization of the lease of the Land Parcels as a unitary, unseverable
instrument pertaining to the lease of all, but not less than all, of the Land
Parcels. Lessee shall support the intent of the parties that this Lease is a
unitary, unseverable instrument pertaining to the lease of all, but not less
than all, of the Land Parcels, if, and to the extent that, any challenge occurs.
E. Lessee represents and warrants to Lessor that (i) the Base Annual
Rental is the fair market value for the use of the Land Parcels and was agreed
to by Lessor and Lessee on that basis, and (ii) the execution, delivery and
performance by Lessee of this Lease does not constitute a transfer of all or any
part of the Land Parcels, other than an estate for years as provided in this
Lease.
F. The expressions of intent, the waivers, the representations and
warranties, the covenants, the agreements and the stipulations set forth in this
Section are a material inducement to Lessor entering into this Lease.
4. LEASE TERM. The Lease Term for all of the Properties shall commence as
of the Effective Date and shall expire on July 31, 2021, unless terminated
sooner as provided in this Lease and as may be extended for four additional
successive periods of five years each as set forth in Section 27 below. The time
period during which this Lease shall actually be in effect is referred to herein
as the "Lease Term."
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5. RENTAL, OTHER PAYMENTS AND SECURITY DEPOSIT. A. If the Effective Date
is a date other than the first day of the month, Lessee shall pay Lessor on the
Effective Date the Base Monthly Rental prorated on the basis of the ratio that
the number of days from the Effective Date through the last day in the month
containing the Effective Date bears to the number of days in such month.
Thereafter, on or before the first day of each succeeding calendar month, Lessee
shall pay Lessor in advance the Base Monthly Rental.
B. All sums of money required to be paid by Lessee under this Lease which
are not specifically referred to as rent ("Additional Rental") shall be
considered rent although not specifically designated as such. Lessor shall have
the same remedies for nonpayment of Additional Rental as those provided herein
for the nonpayment of Base Annual Rental.
6. REPRESENTATIONS AND WARRANTIES OF LESSOR. The representations and
warranties of Lessor contained in this Section are being made to induce Lessee
to enter into this Lease and Lessee has relied and will continue to rely upon
such representations and warranties. Lessor represents and warrants to Lessee as
of the Effective Date as follows:
A. ORGANIZATION, AUTHORITY AND STATUS OF LESSOR. (i) Lessor has been
duly organized and is validly existing and in good standing under the laws
of the State of Massachusetts. All necessary corporate action has been
taken to authorize the execution, delivery and performance by Lessor of
this Lease and the other documents, instruments and agreements provided
for herein.
(ii) The person who has executed this Lease on behalf of Lessor is
duly authorized so to do.
B. ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligation of Lessor, enforceable against Lessor in accordance
with its terms.
7. REPRESENTATIONS AND WARRANTIES OF LESSEE. The representations and
warranties of Lessee contained in this Section are being made to induce Lessor
to enter into this Lease and Lessor has relied, and will continue to rely, upon
such representations and warranties. Lessee represents and warrants to Lessor as
of the Effective Date as follows:
A. ORGANIZATION, AUTHORITY AND STATUS OF LESSEE. (i) Lessee has been
duly organized or formed, is validly existing and in good standing under
the laws of its state of incorporation or formation and is qualified to do
business in any jurisdiction where such qualification is required. All
necessary corporate action has been taken to authorize the execution,
delivery and performance by Lessee of this Lease and of the other
documents, instruments and agreements provided for herein. Lessee is not a
"foreign corporation", "foreign partnership", "foreign trust", "foreign
limited liability company" or "foreign estate", as those terms are defined
in the Internal Revenue Code and the regulations promulgated thereunder.
Lessee's United States tax identification number is correctly set forth on
the signature page of this Lease.
(ii) The person who has executed this Lease on behalf of Lessee is
duly authorized to do so.
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B. ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligation of Lessee, enforceable against Lessee in accordance
with its terms.
C. LITIGATION. There are no suits, actions, proceedings or
investigations pending, or, to the best of its knowledge, threatened
against or involving Lessee, Guarantor, any Permitted Sublessee or any of
the Properties before any arbitrator or Governmental Authority which might
reasonably result in any Material Adverse Effect.
D. ABSENCE OF BREACHES OR DEFAULTS. Neither Lessee, Guarantor nor
any of the Permitted Sublessees is in default under any document,
instrument or agreement to which Lessee, Guarantor or any Permitted
Sublessee is a party or by which Lessee or any Permitted Sublessee, any of
the Properties or any of Lessee's, Guarantor's or any Permitted
Sublessee's property is subject or bound, which default could reasonably
be expected to result in a Material Adverse Effect. The authorization,
execution, delivery and performance of this Lease, the Guaranty and the
other documents, instruments and agreements provided for herein will not
result in any breach of or default under any document, instrument or
agreement to which Lessee or Guarantor is a party or by which Lessee,
Guarantor, any of the Properties or any of Lessee's or Guarantor's
property is subject or bound. The authorization, execution, delivery and
performance of this Lease and the documents, instruments and agreements
provided for herein will not violate any applicable law, statute,
regulation, rule, ordinance, code, rule or order.
E. LIABILITIES OF LESSOR. Lessee is not liable for any indebtedness
for money borrowed by Lessor and has not guaranteed any of the debts or
obligations of Lessor.
8. COVENANTS. Lessee covenants to Lessor for so long as this Lease is in
effect as follows:
For purposes of this Agreement, the following terms shall be defined
as set forth below:
"CAPITAL LEASE" shall mean any lease of any property (whether real,
personal or mixed) by Lessee and any Permitted Sublessee with respect to
one or more of the Properties which lease would, in conformity with GAAP,
be required to be accounted for as a capital lease on the balance sheet of
Lessee. The term "Capital Lease" shall not include any operating lease or
this Lease.
A. NONCONSOLIDATION COVENANTS. (i) Lessee will not assume liability
for any indebtedness for money borrowed by Lessor and does not, and will
not, guarantee any of the debts or obligations of Lessor. Lessee will not
hold itself out as being liable for any obligations or indebtedness of
Lessor.
(ii) Lessee shall not and shall use its best efforts to cause its
affiliates not to hold Lessor out to the public or to any individual
creditors as being a unified entity with assets and liabilities in common
with Lessee.
(iii) Lessee shall conduct its business so as not to mislead others
as to the separate identity of Lessor, and particularly will avoid the
appearance of conducting
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business on behalf of Lessor. Without limiting the generality of the
foregoing, no oral and written communications of Lessee, including,
without limitation, letters, invoices, purchase orders, contracts,
statements and loan applications, will be made in the name of Lessor which
to the extent that to do otherwise would materially bear upon the
maintenance of Lessor's separate identity.
(iv) Lessee will not act in Lessor's name.
(v) Where necessary and appropriate, Lessee shall disclose the
independent business status of Lessor to creditors of Lessee, if any.
(vi) The resolutions, agreements and other instruments of Lessee, if
any, underlying the transactions described in this Lease will be
maintained by Lessee.
(vii) All transactions between Lessee and Lessor will be no less
fair to each party than they could obtain on an arm's-length basis.
(viii) The books, records and accounts of Lessee shall at all times
be maintained in a manner permitting the assets and liabilities of Lessor
to be easily separated and readily ascertained from those of Lessee.
(ix) Lessee will not direct, or otherwise control, the ongoing
business decisions of Lessor.
(x) Lessee will not file or cause to be filed a voluntary or
involuntary petition in bankruptcy on behalf of or against Lessor.
B. COMPLIANCE CERTIFICATE. Within 60 days after the end of each
fiscal year of Lessee, Lessee and Permitted Sublessees shall deliver to
Lessor such compliance certificates as Lessor may reasonably require in
order to establish that Lessee and Permitted Sublessees are in compliance
in all material respects with all of the obligations, duties and covenants
imposed pursuant to Section 8.
9. RENTALS TO BE NET TO LESSOR. The Base Annual Rental payable hereunder
shall be net to Lessor, so that this Lease shall yield to Lessor the rentals
specified during the Lease Term, and that all costs, expenses and obligations of
every kind and nature whatsoever relating to the Properties shall be performed
and paid by Lessee.
10. TAXES AND ASSESSMENTS. Lessee shall pay, or shall cause the Permitted
Sublessees to pay, prior to the earlier of delinquency or the accrual of
interest on the unpaid balance, all taxes and assessments of every type or
nature assessed against, imposed upon or arising with respect to Lessor, any of
the Properties, this Lease, the rental or other payments due under this Lease or
Lessee during the Lease Term which affect in any manner the net return realized
by Lessor under this Lease, including, without limitation, the following:
A. All taxes and assessments upon any of the Properties or any part
thereof and upon any Personalty, whether belonging to Lessor, Lessee or
any Permitted Sublessee, or any tax or charge levied in lieu of such taxes
and assessments;
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B. All taxes, charges, license fees and or similar fees imposed by
reason of the use of any of the Properties by Lessee and the Permitted
Sublessees; and
C. All excise, transaction, privilege, license, sales, use and other
taxes upon the rental or other payments due under this Lease, the
leasehold estate of either party or the activities of either party
pursuant to this Lease.
Notwithstanding the foregoing, but without limiting the preceding
obligation of Lessee to pay and cause to be paid all taxes which are imposed on
the rental or other payments due under this Lease, in no event will Lessee be
required to pay any net income taxes (i.e., taxes which are determined taking
into account deductions for depreciation, interest, taxes and ordinary and
necessary business expenses) or franchise taxes of Lessor (unless imposed in
lieu of other taxes that would otherwise be the obligation of Lessee under this
Lease, including, without limitation, any "gross receipts tax" or any similar
tax based upon gross income or receipts of Lessor with respect to this Lease
which does not take into account deductions from depreciation, interest, taxes
and/or ordinary or necessary business expenses), any transfer taxes of Lessor,
or any tax imposed with respect to the sale, exchange or other disposition by
Lessor, in whole or in part, of any of the Land Parcels or Lessor's interest in
this Lease (other than transfer or recordation taxes imposed in connection with
the transfer of any of the Land Parcels to Lessee, the substitution of a
Substitute Property or the termination of this Lease pursuant to the provisions
of this Lease).
All taxing authorities shall be instructed to send all tax and assessment
invoices to Lessee and Lessee shall promptly provide Lessor with copies of all
tax and assessment invoices received by Lessee. Upon request, Lessee shall also
provide Lessor with evidence that such invoices were paid in a timely fashion.
Lessee may, at its own expense, contest or cause to be contested (in the case of
any item involving more than $1,000.00, after prior written notice to Lessor),
by appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any item
specified in this Section or lien therefor, provided that (i) such proceeding
shall suspend the collection thereof from the applicable Properties or any
interest therein, (ii) none of such Properties nor any interest therein would be
in any danger of being sold, forfeited or lost by reason of such proceedings,
(iii) no Event of Default has occurred, and (iv) Lessee shall have deposited
with Lessor adequate reserves for the payment of the taxes, together with all
interest and penalties thereon, unless paid in full under protest, or Lessee
shall have furnished the security as may be required in the proceeding or as may
be required by Lessor to ensure payment of any contested taxes.
11. UTILITIES. Lessee and the applicable Permitted Sublessee shall
contract, in their own name, for and pay when due all charges for the connection
and use of water, gas, electricity, telephone, garbage collection, sewer use and
other utility services supplied to the Properties during the Lease Term. Under
no circumstances shall Lessor be responsible for any interruption of any utility
service.
12. INSURANCE. Throughout the Lease Term, Lessee shall maintain and cause
the Permitted Sublessees to maintain with respect to each of the Properties, at
their sole expense, the following types and amounts of insurance (which may be
included under a blanket insurance policy if all the other terms hereof are
satisfied):
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A. Insurance against loss, damage or destruction by fire and other
casualty, including theft, vandalism and malicious mischief, flood (for
each of the Properties which is in a location designated by the Federal
Emergency Management Administration as a Special Flood Hazard Area),
earthquake (for each of the Properties which is in an area subject to
destructive earthquakes within recorded history), boiler explosion (for
each of the Properties with a boiler), plate glass breakage, sprinkler
damage (for each of the Properties which has a sprinkler system), all
matters covered by a standard extended coverage endorsement, all matters
covered by a special coverage endorsement commonly known as an "all-risk"
endorsement and such other risks as Lessor may reasonably require,
insuring each of the Properties for not less than 100% of their full
insurable replacement cost.
B. Commercial general liability and property damage insurance,
including a products liability clause, covering Lessor, Lessee and
Permitted Sublessees against bodily injury liability, property damage
liability and automobile bodily injury and property damage liability,
including without limitation any liability arising out of the ownership,
maintenance, repair, condition or operation of the Properties or adjoining
ways, streets or sidewalks and, if applicable, insurance covering Lessor,
Lessee and Permitted Sublessees against liability arising from the sale of
liquor, beer or wine on the Properties. Such insurance policy or policies
shall contain a broad form contractual liability endorsement under which
the insurer agrees to insure Lessee's obligations under Section 19 hereof
to the extent insurable, and a "severability of interest" clause or
endorsement which precludes the insurer from denying the claim of Lessee,
Permitted Sublessees or Lessor because of the negligence or other acts of
the other, shall be in amounts of not less than $1,000,000.00 per injury
and occurrence with respect to any insured liability, whether for personal
injury or property damage, or such higher limits as Lessor may reasonably
require from time to time, and shall be of form and substance satisfactory
to Lessor.
C. Business income insurance or rental interruption insurance, as
requested by Lessor, equal to 100% of the Base Annual Rental for a period
of not less than 12 months.
D. State worker's compensation insurance in the statutorily mandated
limits, employer's liability insurance with limits not less than $500,000
or such greater amount as Lessor may from time to time require and such
other insurance as may be necessary to comply with applicable laws.
E. Such other insurance as may from time to time be reasonably
required by Lessor in order to protect its interests with respect to the
Properties.
All insurance policies shall:
(i) Provide for a waiver of subrogation by the insurer as to
claims against Lessor and its employees and agents;
(ii) Provide that any "no other insurance" clause in the
insurance policy shall exclude any policies of insurance maintained
by Lessor and that the
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insurance policy shall not be brought into contribution with
insurance maintained by Lessor;
(iii) Contain a standard without contribution mortgage clause
endorsement in favor of any party designated by Lessor;
(iv) Provide that the policy of insurance shall not be
terminated, cancelled or substantially modified without at least
thirty (30) days' prior written notice to Lessor and to any other
party covered by any standard mortgage clause endorsement;
(v) Provide that the insurer shall not have the option to
restore the applicable Properties if Lessor or Lessee elects to
terminate this Lease in accordance with the terms hereof;
(vi) Be issued by insurance companies licensed to do business
in the states in which the Properties are located and which are
rated A:VI or better by A.M. Best's Insurance Guide or are otherwise
approved by Lessor; and
(vii) Provide that the insurer shall not deny a claim nor
shall the insurance be cancelled, invalidated or suspended by (1)
any action, inaction, conduct or negligence of Lessor or any other
party covered by any standard mortgage clause endorsement, Lessee,
anyone acting for Lessee or any subtenant or other occupant of any
of the Properties, (2) occupancy or use of any of the Properties for
purposes more hazardous than permitted by such policies, (3) any
foreclosure or other proceedings relating to any of the Properties
or change in title to or ownership of any of the Properties, or (4)
any breach or violation by Lessee or any other person of any
warranties, declarations or conditions contained in such policies or
the applications for such policies.
It is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Lessee for its acts or
omissions as provided in this Lease. All insurance policies (with the exception
of worker's compensation insurance to the extent not available under statutory
law), shall designate Lessor as an additional named insured as its interests may
appear and shall be payable as set forth in Section 21 hereof. All such policies
shall be written as primary policies, with deductibles not to exceed 10% of the
amount of coverage. Any other policies, including any policy now or hereafter
carried by Lessor shall serve as excess coverage. Lessee shall procure and cause
Permitted Sublessees to procure policies for all insurance for periods of not
less than one year and shall provide to Lessor certificates of insurance or,
upon the request of Lessor, duplicate originals of insurance policies evidencing
that insurance satisfying the requirements of this Lease is in effect at all
times. In the event of any transfer by Lessor of Lessor's interest in any of the
Properties or any financing or refinancing of Lessor's interest in any of the
Properties, Lessee shall, upon not less than ten (10) days' prior written
notice, deliver to Lessor certificates of all insurance required to be
maintained and caused to be maintained by Lessee and the Permitted Sublessees
hereunder naming such transferee as an additional named insured to the extent
required herein effective as of the date of such transfer, financing or
refinancing.
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13. TAX AND INSURANCE IMPOUND. Upon the occurrence of an Event of Default,
Lessor may require Lessee to pay to Lessor sums which will provide an impound
account (which shall not be deemed a trust fund) for paying up to the next one
year of taxes, assessments and/or insurance premiums for each of the Properties.
Upon such requirement, Lessor will estimate the amounts needed for such purposes
and will notify Lessee to pay the same to Lessor in equal monthly installments,
as nearly as practicable, in addition to all other sums due under this Lease.
Should additional funds be required at any time, Lessee shall pay the same to
Lessor on demand. Lessee shall advise Lessor of all taxes and insurance bills
which are due and shall cooperate fully with Lessor in assuring that the same
are paid timely. Lessor may deposit all impounded funds in accounts insured by
any federal or state agency and may commingle such funds with other funds and
accounts of Lessor. Interest or other gains from such funds, if any, shall be
the sole property of Lessor. In the event of any default by Lessee, Lessor may
apply all impounded funds against any sums due from Lessee to Lessor. Lessor
shall give to Lessee an annual accounting showing all credits and debits to and
from such impounded funds received from Lessee.
14. PAYMENT OF RENTAL AND OTHER SUMS. All rental and other sums which
Lessee is required to pay hereunder shall be the unconditional obligation of
Lessee and shall be payable in full when due without any setoff, abatement,
deferment, deduction or counterclaim whatsoever. Upon execution of this Lease,
Lessee shall establish arrangements whereby payments of the Base Monthly Rental
and impound payments, if any, are transferred by Automated Clearing House Debit
directly from Lessee's bank account to such account as Lessor may designate. Any
delinquent payment (that is, any payment not made within five calendar days
after the date when due) shall, in addition to any other remedy of Lessor, incur
a late charge of 5% (which late charge is intended to compensate Lessor for the
cost of handling and processing such delinquent payment and should not be
considered interest) and bear interest at the Default Rate, such interest to be
computed from and including the date such payment was due through and including
the date of the payment; provided, however, in no event shall Lessee be
obligated to pay a sum of late charge and interest higher than the maximum legal
rate then in effect.
15. USE. Lessee and the Permitted Sublessees shall occupy the Properties
promptly following the Effective Date and, except as set forth below and except
during periods when any of the Properties is untenantable by reason of fire or
other casualty or condemnation (provided, however, during all such periods while
any of the Properties is untenantable, Lessee shall strictly comply with the
terms and conditions of Section 21 of this Lease). Lessee may cease or permit a
Permitted Sublessee to cease diligent operation of business at any of the
Properties for a period not to exceed 180 days; provided, however, Lessee may
not cease or permit a Permitted Sublessee to cease diligent operation at more
than two Properties at any one time and Lessee may cease or permit a Permitted
Sublessee to cease operation only once with respect to each Property within any
five-year period during the Lease Term. If Lessee or a Permitted Sublessee does
discontinue operation as permitted by this Section, Lessee shall (i) give
written notice to Lessor within 10 days after Lessee or a Permitted Sublessee
elects to cease operation, (ii) provide adequate protection and maintenance of
any such Properties during any period of vacancy, (iii) comply with all
Applicable Regulations and otherwise comply with the terms and conditions of
this Lease other than the continuous use covenant set forth in this Section, and
(iv) pay all costs necessary to restore such Properties to their condition on
the day operation of the business ceased at such time as such Properties are
reopened for business operations or other substituted use approved by Lessor as
contemplated below. Notwithstanding anything herein to the contrary,
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Lessee shall pay the Base Monthly Rental on the first day of each month during
any period in which Lessee discontinues operation.
Lessee shall not, by itself or through any assignment, sublease or other
type of transfer, convert any of the Properties to a use other than a Permitted
Facility during the Lease Term without Lessor's consent, which consent shall not
be unreasonably withheld or delayed. Lessor may consider any or all of the
following in determining whether to grant its consent, without being deemed to
be unreasonable: (i) whether the rental paid to Lessor would be equal to or
greater than the anticipated rental assuming continued existing use, (ii)
whether the proposed rental to be paid to Lessor is reasonable considering the
converted use of the Properties and the customary rental prevailing in the
community for such use, (iii) whether the converted use will be consistent with
the highest and best use of the Properties, and (iv) whether the converted use
will increase Lessor's risks or decrease the value of the Properties.
16. COMPLIANCE WITH LAWS, RESTRICTIONS, COVENANTS AND ENCUMBRANCES.
A. Lessee's and the Permitted Sublessees' use and occupation of each of
the Properties, and the condition thereof, shall, at Lessee's and the Permitted
Sublessees' sole cost and expense, comply in all material respects with all
Applicable Regulations and all restrictions, covenants and encumbrances of
record with respect to each of the Properties. In addition to the other
requirements of this Section, Lessee shall, at all times throughout the Lease
Term, comply with and cause the Permitted Sublessees to comply with all
Applicable Regulations, including, without limitation, in connection with any
maintenance, repairs and replacements of the Properties undertaken by Lessee as
required by Section 17 of this Lease.
B. Lessee will not permit any act or condition to exist on or about any of
the Properties which will increase any insurance rate thereon, except when such
acts are required in the normal course of business and Lessee shall pay for such
increase.
C. Without limiting the generality of the other provisions of this
Section, Lessee agrees that it shall be responsible for complying in all
respects with and causing compliance in all respects with the Americans with
Disabilities Act of 1990, as such act may be amended from time to time, and all
regulations promulgated thereunder (collectively, the "ADA"), as it affects the
Properties, including, but not limited to, making required "readily achievable"
changes to remove any architectural or communications barriers, and providing
auxiliary aides and services within the Properties. Lessee further agrees that
any and all alterations made to the Properties during the Lease Term will comply
with the requirements of the ADA. All plans for alterations which must be
submitted to Lessor under the provisions of Section 18 must include a statement
from a licensed architect or engineer certifying that they have reviewed the
plans, and that the plans substantially comply with all applicable provisions of
the ADA. Any subsequent approval or consent to the plans by Lessor shall not be
deemed to be a representation of Lessor's part that the plans comply with the
ADA, which obligation shall remain with Lessee. Lessee agrees that it will
defend, indemnify and hold harmless the Indemnified Parties from and against any
and all Losses caused by, incurred or resulting from Lessee's failure to comply
with its obligations under this Section.
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D. Lessee represents and warrants to Lessor, as of the Effective Date, to
Lessee's knowledge:
(i) None of the Properties nor Lessee are in violation of, or
subject to, any pending or threatened investigation or inquiry by any
Governmental Authority or to any remedial obligations under any
Environmental Laws, and this representation and warranty would continue to
be true and correct following disclosure to the applicable Governmental
Authorities of all relevant facts, conditions and circumstances, if any,
pertaining to the Properties.
(ii) No permits, licenses or similar authorizations to construct,
occupy, operate or use any buildings, improvements, fixtures and equipment
forming a part of any of the Properties by reason of any Environmental
Laws have been obtained or are required to be obtained, except for such
permits, licenses or authorizations the failure of which to obtain could
reasonably be expected to have a Material Adverse Effect.
(iii) No Hazardous Materials have been used, handled, manufactured,
generated, produced, stored, treated, processed, transferred, disposed of
or otherwise Released in, on, under, from or about any of the Properties,
except in De Minimis Amounts.
(iv) The Properties do not contain Hazardous Materials, other than
in De Minimis Amounts, or underground storage tanks.
(v) There is no threat of any Release migrating to any of the
Properties.
(vi) There is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with any of
the Properties which could reasonably be expected to have a material
adverse effect.
(vii) Lessee has not received any written or oral notice or other
communication from any person or entity (including but not limited to a
Governmental Authority) relating to Hazardous Materials or Remediation
thereof, of possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in connection with any
of the Properties, or any actual or potential administrative or judicial
proceedings in connection with any of the foregoing, in each case with
respect to a condition or event that could reasonably be expected to have
a Material Adverse Effect.
(viii) Lessee has truthfully and fully provided to Lessor, in
writing, any and all information relating to environmental conditions in,
on, under or from the Properties that is known to Lessee and that is
contained in Lessee's files and records, including but not limited to any
reports relating to Hazardous Materials in, on, under to or from any of
the Properties.
(ix) All uses and operations on or of the Properties, whether by
Lessee or any other person or entity, have been in compliance with all
Environmental Laws and permits issued pursuant thereto, except for such
non-compliance which could not reasonably be expected to have a Material
Adverse Effect; there have been no Releases in, on, under to
16
or from any of the Properties, except in De Minimis Amounts; there are no
Hazardous Materials in, on, or under or to Lessee's knowledge, migrating
to any of the Properties, except in De Minimis Amounts; and the Properties
have been kept free and clear of all liens and other encumbrances imposed
pursuant to any Environmental Law (the "Environmental Liens"). Lessee has
not allowed any tenant or other user of any of the Properties to do any
act that materially increased the dangers to human health or the
environment, posed an unreasonable risk of harm to any person or entity
(whether on or off the Properties), impaired the value of any of the
Properties, is contrary to any requirement of any insurer, constituted a
public or private nuisance, constituted waste, or violated any covenant,
condition, agreement or easement applicable to any of the Properties.
E. Lessee covenants to Lessor during the Lease Term that: (i) the
Properties shall not be in violation of or subject to any investigation or
inquiry by any Governmental Authority or to any remedial or other obligations
under any Environmental Laws, except for such violations or investigations or
inquiries which relate to Hazardous Materials in De Minimis Amounts which are or
will be handled in accordance with applicable law. If any such investigation or
inquiry is initiated, Lessee shall promptly notify Lessor; (ii) all uses and
operations on or of each of the Properties, whether by Lessee, a Permitted
Sublessee or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (iii) there shall be no
Releases in, on, under or from any of the Properties, except in De Minimis
Amounts; (iv) there shall be no Hazardous Materials in, on, or under any of the
Properties, except in De Minimis Amounts; (v) Lessee shall keep each of the
Properties free and clear of all Environmental Liens, whether due to any act or
omission of Lessee or any other person or entity; (vi) Lessee shall, at its sole
cost and expense, fully and expeditiously cooperate in all activities pursuant
to subsection F below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (vii)
Lessee shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
any of the Properties as may be reasonably requested by Lessor and where there
is an independent reasonable reason to perform such investigation (including but
not limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Lessor the reports and other results thereof, and Lessor and the
other Indemnified Parties shall be entitled to rely on such reports and other
results thereof; (viii) Lessee shall, at its sole cost and expense, comply with
all reasonable written requests of Lessor to (1) reasonably effectuate
Remediation of any condition (including but not limited to a Release) in, on,
under or from any of the Properties where such Remediation is required under
applicable Environmental Law; (2) comply with any Environmental Law; (3) comply
with any directive from any Governmental Authority; and (4) take any other
reasonable action necessary or appropriate for protection of human health or the
environment where such Remediation is required under applicable Environmental
Law; (ix) Lessee shall not do or allow any Permitted Sublessee or any other
tenant or other user of any of the Properties to do any act that materially
increases the dangers to human health or the environment, poses an unreasonable
risk of harm to any person or entity (whether on or off any of the Properties),
impairs or may impair the value of any of the Properties, is contrary to any
requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to any of the Properties; and (x) Lessee shall immediately notify
Lessor in writing of (A) any presence of Releases or Threatened
17
Releases in, on, under, from or migrating towards any of the Properties; (B) any
non-compliance with any Environmental Laws related in any way to any of the
Properties; (C) any actual Environmental Lien; (D) any required or proposed
Remediation of environmental conditions relating to any of the Properties; and
(E) any written or oral notice or other communication of which Lessee becomes
aware from any source whatsoever (including but not limited to a Governmental
Authority) relating in any way to Hazardous Materials or Remediation thereof,
possible liability of any person or entity pursuant to any Environmental Law,
other environmental conditions in connection with any of the Properties, or any
actual or potential administrative or judicial proceedings in connection with
anything referred to in this Section.
▇. ▇▇▇▇▇▇ and any other person or entity designated by Lessor, including
but not limited to any receiver, any representative of a Governmental Authority,
and any environmental consultant, shall have the right, after five Business
Days' prior written notice to Lessee (except that in the event of an emergency
no such prior notice shall be required) but not the obligation, to enter upon
the Properties at all reasonable times (including, without limitation, in
connection with any Transfer or in connection with a proposed sale or conveyance
of any of the Properties or a proposed financing or refinancing secured by any
of the Properties or in connection with the exercise of any remedies set forth
in this Lease, as applicable) to assess any and all aspects of the environmental
condition of the Properties and its use, including but not limited to conducting
any environmental assessment or audit (the scope of which shall be determined in
the sole and absolute discretion of the party conducting the assessment but
which events shall be reasonable and in proportion to the environmental
conditions at the property) and taking samples of soil, groundwater or other
water, air, or building materials, and conducting other invasive testing;
provided, however, that any such persons (except in emergencies) shall use
reasonable efforts to undertake any such assessments or investigations so as to
minimize the impact on business operations at the Properties. Lessee shall
cooperate with and provide access to Lessor and any other person or entity
designated by Lessor. Any such assessment and investigation shall be at Lessee's
sole cost and expense.
G. Lessee shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless each of the Indemnified Parties for, from and against
any and all Losses (excluding Losses suffered by an Indemnified Party directly
arising out of such Indemnified Party's gross negligence or willful misconduct;
provided, however, that the term "gross negligence" shall not include gross
negligence imputed as a matter of law to any of the Indemnified Parties solely
by reason of the Lessor's interest in any of the Properties or Lessor's failure
to act in respect of matters which are or were the obligation of Lessee under
this Lease) and costs of Remediation (whether or not performed voluntarily),
engineers' fees, environmental consultants' fees, and costs of investigation
(including but not limited to sampling, testing, and analysis of soil, water,
air, building materials and other materials and substances whether solid, liquid
or gas) imposed upon or incurred by or asserted against any Indemnified Parties,
and directly or indirectly arising out of or in any way relating to any one or
more of the following: (i) any presence of any Hazardous Materials in, on,
above, under or from any of the Properties; (ii) any past or present Release or
Threatened Release in, on, above, under or from any of the Properties; (iii) any
activity by Lessee, a Permitted Sublessee, any person or entity affiliated with
Lessee or a Permitted Sublessee or any other tenant or other user of any of the
Properties in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control,
18
management, abatement, removal, handling, transfer or transportation to or from
any of the Properties of any Hazardous Materials at any time located in, under,
on or above any of the Properties; (iv) any activity by Lessee, a Permitted
Sublessee, any person or entity affiliated with Lessee or a Permitted Sublessee
or any other tenant or other user of any of the Properties in connection with
any actual or proposed Remediation of any Hazardous Materials at any time
located in, under, on or above any of the Properties, whether or not such
Remediation is voluntary or pursuant to court or administrative order, including
but not limited to any removal, remedial or corrective action; (v) any
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with any of the Properties or
operations thereon, including but not limited to any failure by Lessee, a
Permitted Sublessee, any person or entity affiliated with Lessee or a Permitted
Sublessee or any other tenant or other user of any of the Properties to comply
with any order of any Governmental Authority in connection with any
Environmental Laws; (vi) the imposition, recording or filing of any
Environmental Lien encumbering any of the Properties; (vii) any administrative
processes or proceedings or judicial proceedings in any way connected with any
matter addressed in this Section; (viii) any Remediation required pursuant to
Environmental Laws relating to injury to, destruction of or loss of natural
resources in any way connected with any of the Properties, including but not
limited to costs to investigate and assess such injury, destruction or loss;
(ix) any acts of Lessee, a Permitted Sublessee, any person or entity affiliated
with Lessee or a Permitted Sublessee or any other tenant or user of any of the
Properties in arranging for disposal or treatment, or arranging with a
transporter for transport for disposal or treatment, of Hazardous Materials
owned or possessed by Lessee, a Permitted Sublessee, any person or entity
affiliated with Lessee or a Permitted Sublessee or any other tenant or user of
any of the Properties, at any facility or incineration vessel owned or operated
by another person or entity and containing such or similar Hazardous Materials;
(x) any acts of Lessee, a Permitted Sublessee, any person or entity affiliated
with Lessee or a Permitted Sublessee or any other tenant or user of any of the
Properties, in accepting any Hazardous Materials for transport to disposal or
treatment facilities, incineration vessels or sites selected by Lessee, a
Permitted Sublessee, any person or entity affiliated with Lessee or a Permitted
Sublessee or any other tenant or user of any of the Properties, from which there
is a Release, or a Threatened Release of any Hazardous Materials which causes
the incurrence of costs for Remediation; (xi) any personal injury, wrongful
death, or property damage arising under any statutory or common law or tort law
theory, relating to the use or presence of Hazardous Materials at the
Properties; and (xii) any misrepresentation or inaccuracy in any representation
or warranty or material breach or failure to perform any covenants or other
obligations pursuant to this Section.
H. The obligations of Lessee and the rights and remedies of the
Indemnified Parties under the foregoing subsections D through G shall survive
the termination, expiration and/or release of this Lease.
17. CONDITION OF PROPERTIES; MAINTENANCE. Lessee, at its own expense, will
maintain and cause the Permitted Sublessees to maintain all parts of each of the
Properties in good repair and sound condition, except for ordinary wear and
tear, and will take all action and will make all structural and non-structural,
foreseen and unforeseen and ordinary and extraordinary changes and repairs or
replacements which may be required to keep all parts of each of the Properties
in good repair and sound condition. Lessee waives any right to (i) require
Lessor to maintain, repair or rebuild all or any part of any of the Properties
or (ii)
19
make repairs at the expense of Lessor, pursuant to any Applicable Regulations at
any time in effect.
18. WASTE; ALTERATIONS AND IMPROVEMENTS. Neither Lessee nor any Permitted
Sublessee shall commit actual or constructive waste upon any of the Properties.
Neither Lessee nor any Permitted Sublessee shall alter the exterior, structural,
plumbing or electrical elements of any of the Properties in any manner without
the consent of Lessor, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, however, Lessee or a Permitted Sublessee may
undertake nonstructural alterations to any of the Properties costing less than
$50,000.00 without Lessor's consent. If Lessor's consent is required hereunder
and Lessor consents to the making of any such alterations, the same shall be
made according to plans and specifications approved by Lessor and subject to
such other conditions as Lessor shall require. All alterations shall be made by
Lessee or a Permitted Sublessee shall be at their sole expense by licensed
contractors and in accordance with all applicable laws governing such
alterations. Any work at any time commenced by Lessee or a Permitted Sublessee
on any of the Properties shall be prosecuted diligently to completion, shall be
of good workmanship and materials and shall comply fully with all the terms of
this Lease. Upon completion of any alterations, Lessee shall promptly provide
Lessor with (i) evidence of full payment to all laborers and materialmen
contributing to the alterations, (ii) to the extent Lessor is required to
preapprove plans and specifications for such alterations, an architect's
certificate certifying the alterations to have been completed in conformity with
the plans and specifications, (iii) a certificate of occupancy (if the
alterations are of such a nature as would require the issuance of a certificate
of occupancy), and (iv) any other documents or information reasonably requested
by Lessor. Any addition to or alteration of any of the Properties shall
automatically be deemed a part of the Properties and belong to Lessor, and
Lessee and the applicable Permitted Sublessee shall execute and deliver to
Lessor such instruments as Lessor may require to evidence the ownership by
Lessor of such addition or alteration. Lessee and the applicable Permitted
Sublessee shall execute and file or record, as appropriate, a "Notice of
Non-Responsibility," or any equivalent notice permitted under applicable law in
the states where the applicable Properties are located.
19. INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold
harmless each of the Indemnified Parties from and against any and all Losses
(excluding Losses suffered by an Indemnified Party arising out of the gross
negligence or willful misconduct of such Indemnified Party; provided, however,
that the term "gross negligence" shall not include gross negligence imputed as a
matter of law to any of the Indemnified Parties solely by reason of the Lessor's
interest in any of the Properties or Lessor's failure to act in respect of
matters which are or were the obligation of Lessee under this Lease) caused by,
incurred or resulting from Lessee's or any Permitted Sublessee's operations of
or relating in any manner to any of the Properties, whether relating to their
original design or construction, latent defects, alteration, maintenance, use by
Lessee, any Permitted Sublessee or any person thereon, supervision or otherwise,
or from any breach of, default under, or failure to perform, any term or
provision of this Lease by Lessee, its officers, employees, agents or other
persons, or to which any Indemnified Party is subject because of Lessor's
interest in any of the Properties, including, without limitation, Losses arising
from (1) any accident, injury to or death of any person or loss of or damage to
property occurring in, on or about any of the Properties or portion thereof or
on the adjoining sidewalks, curbs, parking areas, streets or ways, (2) any use,
non-use or condition in, on or about, or possession, alteration, repair,
operation, maintenance or management of, any of the Properties or any portion
20
thereof or on the adjoining sidewalks, curbs, parking areas, streets or ways,
(3) any representation or warranty made herein by Lessee, in any certificate
delivered in connection herewith or in any other agreement to which Lessee is a
party or pursuant thereto being false or misleading in any material respect as
of the date of such representation or warranty was made, (4) performance of any
labor or services or the furnishing of any materials or other property in
respect to any of the Properties or any portion thereof, (5) any taxes,
assessments or other charges which Lessee is required to pay or cause to be paid
under Section 10, (6) any lien, encumbrance or claim arising on or against any
of the Properties or any portion thereof under any Applicable Regulation or
otherwise which Lessee is obligated hereunder to remove and discharge or cause
to be removed or discharged, or the failure to comply with any Applicable
Regulation, (7) the claims of any invitees, patrons, licensees or subtenants of
all or any portion of any of the Properties or any Person acting through or
under Lessee or any Permitted Sublessee or otherwise acting under or as a
consequence of this Lease or any sublease, (8) any act or omission of Lessee or
any Permitted Sublessee or their agents, contractors, licensees, subtenants or
invitees, (9) any contest referred to in Section 10, and (10) the sale of
liquor, beer or wine on any of the Properties. It is expressly understood and
agreed that Lessee's obligations under this Section shall survive the expiration
or earlier termination of this Lease for any reason.
20. QUIET ENJOYMENT. So long as Lessee shall pay the rental and other sums
herein provided and shall keep and perform all of the terms, covenants and
conditions on its part herein contained, Lessee shall have, subject and
subordinate to Lessor's rights herein, the right to the peaceful and quiet
occupancy of the Properties. Notwithstanding the foregoing, however, in no event
shall Lessee be entitled to bring any action against Lessor to enforce its
rights hereunder if an Event of Default shall have occurred and be continuing.
21. CONDEMNATION OR DESTRUCTION. A. In the event of a taking of all or any
part of any of the Properties for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of condemnation or eminent
domain or by agreement between Lessor, Lessee and those authorized to exercise
such right ("Taking") or the commencement of any proceedings or negotiations
which might result in a Taking or any damage to or destruction of any of the
Properties or any part thereof (a "Casualty"), Lessee will promptly give written
notice thereof to Lessor, generally describing the nature and extent of such
Taking, proceedings, negotiations or Casualty and including copies of any
documents or notices received in connection therewith. Thereafter, Lessee shall
promptly send Lessor copies of all correspondence and pleadings relating to any
such Taking, proceedings, negotiations or Casualty. During all periods of time
following a Casualty, Lessee shall ensure that the subject Property is secure
and does not pose any risk of harm to adjoining property owners or occupants or
third-parties.
B. In the event of (i) a Taking of the whole of any of the Properties,
other than for temporary use, (ii) a Taking of substantially all of any of the
Properties (other than for temporary use) that results in Lessee making a good
faith determination that the restoration and continued use of the remainder of
such Property as a Permitted Facility would be uneconomic (each of (i) and (ii),
a "Total Taking"), or (iii) a Casualty of substantially all of any of the
Properties that results in Lessee making a good faith determination that the
restoration and continued use of such Property as a Permitted Facility would be
uneconomic (a "Total Casualty"), Lessor shall be entitled to receive the entire
award, insurance proceeds or payment in connection therewith
21
without deduction for any estate vested in Lessee by this Lease or any Permitted
Sublessee by the Permitted Subleases. Lessee hereby expressly assigns to Lessor
all of its right, title and interest in and to every such award, insurance
proceeds or payment and agrees that neither Lessee nor any Permitted Sublessee
shall be entitled to any award, insurance proceeds or payment for the value of
Lessee's leasehold interest in this Lease. Lessee shall be entitled to claim and
receive any award or payment from the condemning authority expressly granted for
the taking of Personalty, the interruption of its business and moving expenses,
but only if such claim or award does not adversely affect or interfere with the
prosecution of Lessor's claim for the Total Taking or otherwise reduce the
amount recoverable by Lessor for the Total Taking. Lessee shall be entitled to
claim and receive any insurance proceeds with respect to the Personalty, the
interruption of its business and moving expenses, but only if such claim or
proceeds does not adversely affect or interfere with the prosecution of Lessor's
claim for the Total Casualty or otherwise reduce the amount recoverable by
Lessor for the Total Casualty.
In the event of a Total Taking or Total Casualty, Lessee shall have the
right to terminate this Lease with respect to the applicable Property by notice
(the "Termination Notice") given to Lessor not later than 30 days after the
Total Taking or Total Casualty, as applicable. The Termination Notice must: (i)
specify a date on which this Lease with respect to such Property shall
terminate, which date shall be the last day of a calendar month occurring not
earlier than 120 days and not later than 150 days after the delivery of such
notice (the "Early Termination Date"); (ii) contain a certificate executed by
the president, chief financial officer or treasurer of Lessee which (X)
describes the Total Taking or Total Casualty, (Y) represents and warrants that
either the whole of such Property has been taken, or that substantially all of
such Property has been taken and Lessee has determined in good faith that the
restoration and continued use of the remainder of such Property as a Permitted
Facility would be uneconomic, or that substantially all of such Property has
been damaged or destroyed and Lessee has determined in good faith that the
restoration and continued use of such Property as a Permitted Facility would be
uneconomic, and (Z) contains a covenant by Lessee that neither Lessee or any
Affiliate of Lessee will use such Property for a period of 2 years following the
Early Termination Date; and (iii) if the Early Termination Date shall occur
prior to the commencement of any extension options which may be exercised
pursuant to Section 27, contain either (X) an irrevocable rejectable written
offer (the "Rejectable Offer") of Lessee to purchase Lessor's interest in such
Property and in the net award for such Total Taking or net insurance proceeds
for such Total Casualty, as applicable, after deducting all costs, fees and
expenses incident to the collection thereof, including all costs and expenses
incurred by Lessor in connection therewith (the "Net Award") on the Early
Termination Date for a purchase price equal to the Stipulated Loss Value (as
defined below) for such Property, or (Y) a Rejectable Substitution Offer to
substitute a Substitute Property satisfying the applicable requirements of
Section 57.A for such Property and Lessor's interest in the Net Award. As used
herein, the term "Stipulated Loss Value" shall mean the sum of (a) the product
of the percentage specified on SCHEDULE I attached hereto which corresponds to
the Early Termination Date multiplied by the Purchase Price for such Property,
plus (b) all Base Annual Rental, Additional Rental and other sums and
obligations then due and payable under this Lease, plus (c) in the event of a
Total Casualty only, the Prepayment Charge corresponding to such Property. In
the event of a termination of this Lease with respect to a Property pursuant to
this Section 21.B which does not involve the acceptance (or deemed acceptance)
of a Rejectable Substitution Offer, the Base Annual Rental then in effect shall
be reduced by an amount equal to
22
the product of (x) the Applicable Rent Reduction Percentage for such Property,
and (y) the Base Annual Rental then in effect.
If the Early Termination Date shall occur prior to the commencement of any
extension options which may be exercised pursuant to Section 27, Lessor shall
have 90 days from the delivery of the Termination Notice to deliver to Lessee
written notice of its election to either accept or reject any Rejectable Offer
or Rejectable Substitution Offer contained in the Termination Notice. Lessor's
failure to deliver such notice within such time period shall be deemed to
constitute Lessor's acceptance of the applicable Rejectable Offer or Rejectable
Substitution Offer.
If Lessor accepts the Rejectable Offer or is deemed to have accepted the
Rejectable Offer, then, on the Early Termination Date, Lessor shall sell and
convey, and Lessee shall purchase for the Stipulated Loss Value, Lessor's
interest in such Property and the Net Award. Lessee's obligations under this
Lease with respect to such Property shall not be terminated until the applicable
Stipulated Loss Value is paid in full. Upon such payment, (i) Lessor shall
convey Lessor's interest in such Property to Lessee "as-is" by quit-claim deed,
subject to all matters of record (except for any consensual liens granted by
Lessor other than those granted by Lessor at the request of Lessee), and without
representation or warranty, and (ii) all obligations of either party hereunder
with respect to such Property shall cease as of the Early Termination Date,
provided, however, Lessee's obligations to the Indemnified Parties under any
indemnification provisions of this Lease with respect to such Property
(including, without limitation, Sections 16 and 19) and Lessee's obligations to
pay any sums (whether payable to Lessor or a third party) accruing under this
Lease with respect to such Property prior to the Early Termination Date shall
survive the termination of this Lease with respect to such Property. This Lease
shall, however, continue in full force and effect with respect to all other
Properties.
If Lessor accepts the Rejectable Substitution Offer or is deemed to have
accepted the Rejectable Substitution Offer, then, on the Early Termination Date,
Lessee shall complete such substitution, subject, however, to the satisfaction
of each of the applicable terms and conditions set forth in Section 57. Upon
such substitution (i) Lessee shall be entitled to claim and receive the Net
Award and (ii) all obligations of either party hereunder with respect to the
Property being replaced shall cease as of the Early Termination Date, provided,
however, Lessee's obligations to the Indemnified Parties under any
indemnification provisions of this Lease with respect to such Property
(including, without limitation, Sections 16 and 19) and Lessee's obligations to
pay any sums (whether payable to Lessor or a third party) accruing under this
Lease with respect to such Property prior to the Early Termination Date shall
survive the termination of this Lease with respect to such Property. This Lease
shall, however, continue in full force and effect with respect to all other
Properties.
Lessee shall be solely responsible for the payment of all costs and
expenses incurred in connection with the conveyance of a Property to Lessee
pursuant to this Section 21, including, without limitation, to the extent
applicable, the cost of title insurance, survey charges, stamp taxes, mortgage
taxes, transfer taxes, charges and fees, escrow and recording fees, water
certification charges and costs, City of Chicago Transaction tax, taxes imposed
on Lessor as a result of such conveyance, taxes imposed in connection with the
transfer of a Property to Lessee or the termination of this Lease with respect
to a Property pursuant to the provisions of this
23
Section 21, Lessee's attorneys' fees and the reasonable attorneys' fees and
expenses of counsel to Lessor.
If Lessor rejects the Rejectable Offer or Rejectable Substitution Offer,
or if the Early Termination Date shall occur after the commencement of any
extension options exercised pursuant to Section 27, then (i) the Net Award shall
be paid to and belong to Lessor, (ii) on the Early Termination Date, Lessee
shall pay to Lessor all Base Annual Rental, Additional Rental and other sums and
obligations then due and payable under this Lease, and (iii) all obligations of
either party hereunder shall cease as of the Early Termination Date with respect
to the applicable Property, provided, however, Lessee's obligations to the
Indemnified Parties with respect to such Property under any indemnification
provisions of this Lease with respect to such Property (including, without
limitation, Sections 16 and 19) and Lessee's obligations to pay any sums
(whether payable to Lessor or a third party) accruing under this Lease with
respect to such Property prior to the Early Termination Date shall survive the
termination of this Lease. This Lease shall, however, continue in full force and
effect with respect to all other Properties.
C. In the event of a Taking of all or any part of any of the Properties
for a temporary use ("Temporary Taking"), this Lease shall remain in full force
and effect without any reduction of Base Annual Rental, Additional Rental or any
other sum payable hereunder. Except as provided below, Lessee shall be entitled
to the entire award for a Temporary Taking, whether paid by damages, rent or
otherwise, unless the period of occupation and use by the condemning authorities
shall extend beyond the date of expiration of this Lease, in which case the
award made for such Taking shall be apportioned between Lessor and Lessee as of
the date of such expiration. At the termination of any such Temporary Taking,
Lessee will, at its own cost and expense and pursuant to the terms of Section 18
above, promptly commence and complete the restoration of the Property affected
by such Temporary Taking; provided, however, Lessee shall not be required to
restore such Property if the Lease Term shall expire prior to, or within one
year after, the date of termination of such Temporary Taking, and in such event
Lessor shall be entitled to recover the entire award relating to the Temporary
Taking.
D. In the event of a Taking which is not a Total Taking or a Temporary
Taking ("Partial Taking") or of a Casualty which is not a Total Casualty (a
"Partial Casualty"), all awards, compensation or damages shall be paid to
Lessor, and Lessor shall have the option to (i) terminate this Lease with
respect to the Property affected, by notifying Lessee within 60 days after
Lessee gives Lessor notice of such Partial Casualty or that title has vested in
the taking authority or (ii) continue this Lease in effect, which election may
be evidenced by either a notice from Lessor to Lessee or Lessor's failure to
notify Lessee that Lessor has elected to terminate this Lease with respect to
such Property within such 60-day period. Lessee shall have a period of 60 days
after Lessor's notice that it has elected to terminate this Lease with respect
to such Property during which to elect to continue this Lease with respect to
such Property on the terms herein provided. If Lessor elects to terminate this
Lease with respect to such Property and Lessee does not elect to continue this
Lease with respect to such Property or shall fail during such 60-day period to
notify Lessor of Lessee's intent to continue this Lease with respect to such
Property, then this Lease shall terminate with respect to such Property as of
the last day of the month during which such period expired. Lessee shall then
immediately vacate and surrender such Property, all obligations of either party
hereunder with respect to such Property shall cease as of the date of
termination (provided, however, Lessee's obligations to the Indemnified Parties
24
under any indemnification provisions of this Lease with respect to such Property
(including, without limitation, Sections 16 and 19) and Lessee's obligations to
pay Base Annual Rental, Additional Rental and all other sums (whether payable to
Lessor or a third party) accruing under this Lease with respect to such Property
prior to the date of termination shall survive such termination) and Lessor may
retain all such awards, compensation or damages. The Lease shall continue in
full force and effect with respect to all other Properties. If Lessor elects not
to terminate this Lease with respect to such Property, or if Lessor elects to
terminate this Lease with respect to such Property but Lessee elects to continue
this Lease with respect to such Property, then this Lease shall continue in full
force and effect on the following terms: (i) all Base Annual Rental, Additional
Rental and other sums and obligations due under this Lease shall continue
unabated, and (ii) Lessee shall promptly commence and diligently prosecute
restoration of such Property to the same condition, as nearly as practicable, as
prior to such Partial Taking or Partial Casualty as approved by Lessor. Subject
to reasonable conditions for disbursement imposed by Lessor, Lessor shall
promptly make available in installments as restoration progresses an amount up
to but not exceeding the amount of any award, compensation or damages received
by Lessor after deducting all costs, fees and expenses incident to the
collection thereof, including all costs and expenses incurred by Lessor in
connection therewith (the "Net Restoration Amount"), upon request of Lessee
accompanied by evidence reasonably satisfactory to Lessor that such amount has
been paid or is due and payable and is properly a part of such costs and that
Lessee has complied with the terms of Section 18 above in connection with the
restoration. Prior to the disbursement of any portion of the Net Restoration
Amount with respect to a Partial Casualty, Lessee shall provide evidence
reasonably satisfactory to Lessor of the payment of restoration expenses by
Lessee up to the amount of the insurance deductible applicable to such Partial
Casualty. Lessor shall be entitled to keep any portion of the Net Restoration
Amount which may be in excess of the cost of restoration, and Lessee shall bear
all additional costs, fees and expenses of such restoration in excess of the Net
Restoration Amount. If this Lease is terminated with respect to any Property as
a result of a Partial Casualty, simultaneously with such termination Lessee
shall pay Lessor an amount equal to the insurance deductible applicable to such
Partial Casualty.
E. Any loss under any property damage insurance required to be maintained
by Lessee or any Permitted Sublessee shall be adjusted by Lessor and Lessee. Any
award relating to a Total Taking or a Partial Taking shall be adjusted by Lessor
or, at Lessor's election, Lessee. Notwithstanding the foregoing or any other
provisions of this Section to the contrary, if at the time of any Taking or any
Casualty or at any time thereafter Lessee shall be in default under this Lease
and such default shall be continuing, Lessor is hereby authorized and empowered
but shall not be obligated, in the name and on behalf of Lessee and otherwise,
to file and prosecute Lessee's claim, if any, for an award on account of such
Taking or for insurance proceeds on account of such Casualty and to collect such
award or proceeds and apply the same, after deducting all costs, fees and
expenses incident to the collection thereof, to the curing of such default and
any other then existing default under this Lease and/or to the payment of any
amounts owed by Lessee to Lessor under this Lease, in such order, priority and
proportions as Lessor in its discretion shall deem proper.
F. Notwithstanding the foregoing, nothing in this Section 21 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and
25
characterizations set forth in Lease, including, without limitation, those
provisions set forth in Section 3 of this Lease.
22. INSPECTION. Lessor and its authorized representatives shall have the
right, upon giving reasonable advance notice, to enter any of the Properties or
any part thereof at reasonable times in order to inspect the same and make
photographic or other evidence concerning Lessee's compliance with the terms of
this Lease or in order to show the Properties to prospective purchasers and
lenders. Lessee hereby waives any claim for damages for any injury or
inconvenience to or interference with Lessee's business, any loss of occupancy
or quiet enjoyment of any of the Properties and any other loss occasioned by
such entry so long as Lessor shall have used reasonable efforts not to
unreasonably interrupt Lessee's normal business operations. Lessee shall keep
and maintain and cause the Permitted Sublessees to keep and maintain at the
Properties or Lessee's corporate headquarters full, complete and appropriate
books of account and records of Lessee's business relating to the Properties in
accordance with GAAP. Lessee's and Permitted Sublessees' books and records shall
be open for inspection at reasonable times and upon reasonable notice by Lessor
and its auditors or other authorized representatives.
23. DEFAULT, REMEDIES AND MEASURE OF DAMAGES. A. Each of the following
shall be an event of default under this Lease (each, an "Event of Default"):
(i) If any representation or warranty of Lessee set forth in this
Lease is false as and when made in any material respect, or if Lessee
renders any statement or account which is false as and when made in any
material respect;
(ii) If any rent or other monetary sum due under this Lease is not
paid within five days from the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, Lessor shall
not be entitled to exercise its remedies set forth below unless and until
Lessor shall have given Lessee written notice thereof and a period of five
days from the delivery of such written notice shall have elapsed without
such Event of Default being cured;
(iii) If Lessee fails to pay, prior to delinquency, any taxes,
assessments or other charges, the failure of which to pay will result in
the imposition of a lien against any of the Properties or the rental or
other payments due under this Lease or a claim against Lessor, unless
Lessee is contesting such taxes, assessments or other charges in
accordance with the provisions of Section 10 of this Lease; provided,
however, notwithstanding the occurrence of such an Event of Default,
Lessor shall not be entitled to exercise its remedies set forth below
unless and until Lessor shall have given Lessee written notice thereof and
a period of 5 days from the delivery of such written notice shall have
elapsed without such Event of Default being cured;
(iv) If Lessee becomes insolvent within the meaning of the Code,
files or notifies Lessor that it intends to file a petition under the
Code, initiates a proceeding under any similar law or statute relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts
(collectively, hereinafter, an "Action"), becomes the
26
subject of either a petition under the Code or an Action which is not
dissolved within 90 days after filing, or is not generally paying its
debts as the same become due;
(v) If Lessee vacates or abandons any of the Properties other than
in accordance with the provisions of Section 15 of this Lease;
(vi) If Lessee fails to observe or perform any of the other
covenants, conditions or obligations of this Lease; provided, however, if
any such failure does not involve the payment of any monetary sum, is not
willful or intentional, does not place any rights or property of Lessor in
immediate jeopardy, and is within the reasonable power of Lessee to
promptly cure after receipt of notice thereof, all as determined by Lessor
in its reasonable discretion, then such failure shall not constitute an
Event of Default hereunder, unless otherwise expressly provided herein,
unless and until Lessor shall have given Lessee notice thereof and a
period of 30 days shall have elapsed, during which period Lessee may
correct or cure such failure, upon failure of which an Event of Default
shall be deemed to have occurred hereunder without further notice or
demand of any kind being required. If such failure cannot reasonably be
cured within such 30 day period, as determined by Lessor in its reasonable
discretion, and Lessee is diligently pursuing a cure of such failure, then
Lessee shall have a reasonable period to cure such failure beyond such 30
day period, which shall in no event exceed 90 days after receiving notice
of such failure from Lessor. If Lessee shall fail to correct or cure such
failure within such 90-day period, an Event of Default shall be deemed to
have occurred hereunder without further notice or demand of any kind being
required;
(vii) If there is an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace periods,
under any other Sale-Leaseback Document, any of the Other Agreements or
any of the Permitted Subleases;
(viii) If a final, nonappealable judgment is rendered by a court
against Lessee which has a material adverse effect on either the ability
to conduct business at any of the Properties for its intended use or
Lessee's ability to perform its obligations under this Lease, or is in the
amount of $1,000,000.00 or more that is not covered by insurance, and in
either event is not discharged or provision made for such discharge within
60 days from the date of entry thereof; or
(ix) If Lessee shall fail to maintain or cause to be maintained
insurance in accordance with the requirements of Section 12 of this Lease.
B. Upon the occurrence of an Event of Default, with or without notice or
demand, except the notice prior to default required under certain circumstances
by subsection A. above or such other notice as may be required by statute and
cannot be waived by Lessee (all other notices being hereby waived), Lessor shall
be entitled to exercise, at its option, concurrently, successively, or in any
combination, all remedies available at law or in equity, including without
limitation, any one or more of the following:
27
(i) To terminate this Lease, whereupon Lessee's and Permitted
Sublessees' right to possession of the Properties shall cease and this
Lease, except as to Lessee's liability, and the Permitted Subleases shall
be terminated.
(ii) To reenter and take possession of any or all of the Properties
and, to the extent permissible, all franchises, licenses, area development
agreements, permits and other rights or privileges of Lessee pertaining to
the use and operation of any or all of the Properties and to expel Lessee
and those claiming under or through Lessee, without being deemed guilty in
any manner of trespass or becoming liable for any loss or damage resulting
therefrom, without resort to legal or judicial process, procedure or
action. To extent permitted by applicable law, no notice from Lessor
hereunder or under a forcible entry and detainer statute or similar law
shall constitute an election by Lessor to terminate this Lease unless such
notice specifically so states. If Lessee shall, after default, voluntarily
give up possession of any of the Properties to Lessor, deliver to Lessor
or its agents the keys to any of the Properties, or both, such actions
shall be deemed to be in compliance with Lessor's rights and the
acceptance thereof by Lessor or its agents shall not be deemed to
constitute a termination of this Lease. Lessor reserves the right
following any reentry and/or reletting to exercise its right to terminate
this Lease by giving Lessee written notice thereof, in which event this
Lease will terminate as specified in said notice.
(iv) To bring an action against Lessee for any damages sustained by
Lessor or any equitable relief available to Lessor.
(v) To relet any or all of the Properties or any part thereof for
such term or terms (including a term which extends beyond the original
Lease Term), at such rentals and upon such other terms as Lessor, in its
sole discretion, may determine, with all proceeds received from such
reletting being applied to the rental and other sums due from Lessee in
such order as Lessor may, in it sole discretion, determine, which other
sums include, without limitation, all repossession costs, brokerage
commissions, attorneys' fees and expenses, employee expenses, alteration,
remodeling and repair costs and expenses of preparing for such reletting.
Lessor shall attempt to mitigate damages in a commercially reasonable
manner. Lessor reserves the right following any reentry and/or reletting
to exercise its right to terminate this Lease by giving Lessee written
notice thereof, in which event this Lease will terminate as specified in
said notice.
(vi) To recover from Lessee all rent and other monetary sums then
due and owing under this Lease; and (y) to accelerate and recover from
Lessee the present value (discounted at the rate of 6% per annum) of all
rent and other monetary sums scheduled to become due and owing under this
Lease after the date of such breach for the entire original scheduled
Lease Term, provided, however, in no event shall such recovery be less
than the sum of (i) the product of the percentage specified on SCHEDULE I
attached hereto which corresponds to the month in which such Event of
Default first occurred multiplied by the sum of the Purchase Price for all
of the Properties which are then subject to the Lease plus (ii) the sum of
the Prepayment Charges corresponding to all of the Properties which are
then subject to this Lease.
28
(vii) To recover from Lessee all costs and expenses, including
reasonable attorneys' fees, court costs, expert witness fees, costs of
tests and analyses, travel and accommodation expenses, deposition and
trial transcripts, copies and other similar costs and fees, paid or
incurred by Lessor as a result of such breach, regardless of whether or
not legal proceedings are actually commenced.
(viii) To immediately or at any time thereafter, and with or without
notice, at Lessor's sole option but without any obligation to do so,
correct such breach or default and charge Lessee all costs and expenses
incurred by Lessor therein. Any sum or sums so paid by Lessor, together
with interest at the Default Rate, shall be deemed to be Additional Rental
hereunder and shall be immediately due from Lessee to Lessor. Any such
acts by Lessor in correcting Lessee's breaches or defaults hereunder shall
not be deemed to cure said breaches or defaults or constitute any waiver
of Lessor's right to exercise any or all remedies set forth herein.
(ix) To immediately or at any time thereafter, and with or without
notice, except as required herein, set off any money of Lessee held by
Lessor under this Lease against any sum owing by Lessee or Guarantor
hereunder.
(x) To seek any equitable relief available to Lessor, including,
without limitation, the right of specific performance.
All powers and remedies given by this Section to Lessor, subject to
applicable law, shall be cumulative and not exclusive of one another or of any
other right or remedy or of any other powers and remedies available to Lessor
under this Lease, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements of Lessee contained in
this Lease, and no delay or omission of Lessor to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any other or
subsequent Event of Default or impair any rights or remedies consequent thereto.
Every power and remedy given by this Section or by law to Lessor may be
exercised from time to time, and as often as may be deemed expedient, by Lessor,
subject at all times to Lessor's right in its sole judgment to discontinue any
work commenced by Lessor or change any course of action undertaken by Lessor.
If Lessee shall fail to observe or perform any of its obligations under
this Lease or in the event of an emergency, then, without waiving any Event of
Default which may result from such failure or emergency, Lessor may, but without
any obligation to do so, take all actions, including, without limitation, entry
upon any or all of the Properties to perform Lessee's obligations, immediately
and without notice in the case of an emergency and upon five days written notice
to Lessee in all other cases. All expenses incurred by Lessor in connection with
performing such obligations, including, without limitation, reasonable
attorneys' fees and expenses, together with interest at the Default Rate from
the date any such expenses were incurred by Lessor until the date of payment by
Lessee, shall constitute Additional Rental and shall be paid by Lessee to Lessor
upon demand.
24. LIENS; MORTGAGES, SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.
Lessor's interest in this Lease and/or any of the Properties shall not be
subordinate to any liens or encumbrances placed upon any of the Properties by or
resulting from any act of Lessee, and
29
nothing herein contained shall be construed to require such subordination by
Lessor. Lessee shall keep the Properties free from any liens for work performed,
materials furnished or obligations incurred by Lessee. NOTICE IS HEREBY GIVEN
THAT LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE,
DEED OF TRUST, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART
OF ANY OF THE LAND PARCELS OR LESSEE'S LEASEHOLD INTEREST THEREIN OR THE
PERSONALTY, AND ANY SUCH PURPORTED TRANSACTION WHICH IS NOT APPROVED BY LESSOR
SHALL BE VOID. FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE DEEMED A
TORTIOUS INTERFERENCE WITH LESSOR'S RELATIONSHIP WITH LESSEE AND LESSOR'S
OWNERSHIP OF THE LAND PARCELS. NOTWITHSTANDING THE FOREGOING, LESSEE MAY PLACE
OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, SECURITY INTEREST OR
OTHER ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF LESSEE'S LEASEHOLD
INTEREST OR THE PERSONALTY TO SECURE OBLIGATIONS OF LESSEE OR ITS AFFILIATES TO
INSTITUTIONAL LENDERS FOR INDEBTEDNESS AND OTHER OBLIGATIONS OR ANY REFINANCING
THEREOF ("INSTITUTIONAL LOANS".)
This Lease at all times shall automatically be subordinate to the lien of
any and all ground leases, mortgages, trust deeds and deeds to secure debt now
or hereafter placed upon any of the Properties by Lessor, and Lessee covenants
and agrees to execute and deliver, upon demand, such further instruments
subordinating this Lease to the lien of any or all such ground leases,
mortgages, trust deeds or deeds to secure debt as shall be desired by Lessor, or
any present or proposed mortgagees or lenders under trust deeds or deeds to
secure debt, upon the condition that Lessee shall have the right to remain in
possession of the Properties under the terms of this Lease, notwithstanding any
default in any or all such ground leases, mortgages, trust deeds or deeds to
secure debt or after foreclosure of any or all such mortgages, trust deeds or
deeds to secure debt or termination of any or all such ground leases, so long as
Lessee is not in default under any of the covenants, conditions and agreements
contained in this Lease.
If any landlord, mortgagee, receiver, or other secured party elects to
have this Lease and the interest of Lessee hereunder be superior to any such
ground lease, mortgage, trust deed or deed to secure debt and evidences such
election by notice given to Lessee, then this Lease and the interest of Lessee
hereunder shall be deemed superior to any such ground lease, mortgage, trust
deed or deed to secure debt, whether this Lease was executed before or after
such ground lease, mortgage, trust deed or deed to secure debt and in that event
such landlord, mortgagee, receiver, or other secured party shall have the same
rights with respect to this Lease as if it had been executed and delivered prior
to the execution and delivery of such ground lease, mortgage, trust deed or deed
to secure debt and had been assigned to such landlord, mortgagee, receiver, or
other secured party.
Although the foregoing provisions shall be self-operative and no future
instrument of subordination shall be required, upon request by Lessor, Lessee
shall execute and deliver whatever instruments may be required for such
purposes, and in the event Lessee fails so to do within 10 days after demand,
Lessee does hereby make, constitute and irrevocably appoint Lessor as its agent
and attorney-in-fact and in its name, place and stead so to do, which
appointment shall be deemed coupled with an interest.
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The Permitted Subleases at all times shall automatically be subordinate to
this Lease.
25. ESTOPPEL CERTIFICATE. A. At any time, but not more often than twice
every 12 months, and from time to time, Lessee shall, promptly and in no event
later than 10 days after a request from Lessor, execute, acknowledge and deliver
to Lessor a certificate in the form supplied by Lessor or any present or
proposed mortgagee or purchaser designated by Lessor, certifying: (i) that
Lessee has accepted the Land Parcels (or, if Lessee has not done so, that Lessee
has not accepted the Land Parcels, and specifying the reasons therefor); (ii)
that this Lease is in full force and effect and has not been modified (or if
modified, setting forth all modifications), or, if this Lease is not in full
force and effect, the certificate shall so specify the reasons therefor; (iii)
the commencement and expiration dates of the Lease Term, including the terms of
any extension options of Lessee; (iv) the date to which the rentals have been
paid under this Lease and the amount thereof then payable; (v) whether there are
then any existing defaults by Lessor in the performance of its obligations under
this Lease, and, if there are any such defaults, specifying the nature and
extent thereof; (vi) that no notice has been received by Lessee of any default
under this Lease which has not been cured, except as to defaults specified in
the certificate; (vii) the capacity of the person executing such certificate,
and that such person is duly authorized to execute the same on behalf of Lessee;
(viii) that Lessor has no actual involvement in the management or control of
decision making related to the operational aspects or the day-to-day operations
of the Properties; and (ix) any other information reasonably requested by Lessor
or such present or proposed mortgagee or purchaser.
B. If Lessee shall fail or refuse to sign a certificate in accordance with
the provisions of this Section within 10 days following a written request by
Lessor, Lessee irrevocably constitutes and appoints Lessor as its
attorney-in-fact to execute and deliver the certificate to any such third party,
it being stipulated that such power of attorney is coupled with an interest and
is irrevocable and binding; provided, however, that Lessor's execution and
delivery of such certificate on behalf of Lessee shall not cure any default
arising by reason of Lessee's failure to execute and deliver such certificate.
26. ASSIGNMENT; SUBLETTING. A. Lessor shall have the right to sell or
convey all, but not less than all, of the Land Parcels and the Reversionary
Interests or to assign its right, title and interest as Lessor under this Lease
in whole, but not in part. In the event of any such sale or assignment other
than a security assignment, provided Lessee receives written notice that such
purchaser or assignee has assumed all of Lessor's obligations under this Lease,
Lessee shall attorn to such purchaser or assignee and Lessor shall be relieved,
from and after the date of such transfer or conveyance, of liability for the
performance of any obligation of Lessor contained herein, except for obligations
or liabilities accrued prior to such assignment or sale.
B. Lessee acknowledges that Lessor has relied both on the business
experience and creditworthiness of Lessee and the Permitted Sublessees and upon
the particular purposes for which Lessee and the Permitted Sublessees intend to
use the Properties in entering into this Lease. Without the prior written
consent of Lessor which will not be unreasonably withheld and except as provided
below and for the Permitted Subleases: (i) except as provided in Section 24,
Lessee shall not assign, transfer or convey this Lease or any interest therein,
whether by operation of law or otherwise; (ii) Lessee shall not sublet or
license the use of all or any part of any of the Properties provided, however,
in the event of a foreclosure of any leasehold mortgage,
31
a substitute Lessee may be designated by Lessee's institutional lender without
the consent of Lessor or any Substitute Lessor; and (iii) in the event of a
foreclosure of a mortgage granted by Lessor, a substitute Lessor may be
designated provided Lessee's right of possession of the Properties is not
disturbed without further consent. Nothing contained herein shall limit any
assignment, pledge or transfer of any stock ownership interest in Lease or
Guarantee, and nothing shall limit the transferability of interests in the
Lessee and the Guarantor.
C. Notwithstanding the foregoing, Lessee shall have the right to sublease
any of the Properties, without the prior written consent of Lessor , if the
following conditions are satisfied:
(1) no Event of Default shall have occurred and be continuing under
this Lease as of the effective date of such sublease;
(2) any such sublease shall be subordinate to this Lease
corresponding to the Property to which such sublease relates;
(3) Lessee shall remain liable under this Lease notwithstanding such
sublease; and
(4) the Properties subject to such subleases shall be used as
Permitted Facilities and shall otherwise be operated and maintained in
accordance with the terms and conditions of this Lease.
27. OPTION TO EXTEND; NEW LEASE. A. Lessee shall have the option to
continue this Lease in effect for four additional successive periods of five
years each, provided that, at the time of exercise of such option or at the
expiration of the Lease Term or, if applicable, the preceding extension of the
Lease Term, no Event of Default shall have occurred and be continuing under this
Lease. If Lessee exercises such option, this Lease shall continue for the
applicable period in accordance with the terms and provisions of this Lease then
in effect, except that the Base Annual Rental during each extension period shall
be in an amount set forth on attached EXHIBIT ▇. ▇▇▇▇▇▇ and Lessee agree that
the Base Annual Rental during each extension period represents the then fair
market value of the Land Parcels.
Lessee may only exercise the first extension option by giving notice to
Lessor of Lessee's intention to do so not later than November 30, 2019. If the
first extension option is exercised by Lessee, Lessee may only exercise the
second extension option by giving notice to Lessor of Lessee's intention to do
so not later than August 31, 2025. If the first two extension options are
exercised, Lessee may only exercise the third extension option by giving notice
to Lessor of Lessee's intention to do so not later than August 31, 2030. If the
first three extension options are exercised, Lessee may only exercise the fourth
extension option by giving notice to Lessor of Lessee's intention to do so not
later than August 31, 2035.
28. RIGHT OF FIRST OFFER TO PURCHASE LAND PARCELS AND REVERSIONARY
INTERESTS. If, during the Lease Term, Lessor desires to sell its interest in the
Land Parcels and the Reversionary Interests, as a result of a third party offer
or expression of interest from a third party (which may be solicited by Lessor
and with no requirement that an offer actually be made by such third party),
then, provided no Event of Default has occurred and is continuing, Lessor shall
give Lessee the right to purchase such interest (the "Interest") for a price and
on terms and conditions,
32
determined by Lessor and set forth in a notice given to Lessee (the "ROFO
Notice"). Lessee shall have thirty (30) days after receipt of the ROFO Notice to
elect, in writing, to acquire such Interest at the price and on such terms and
conditions set forth in the ROFO Notice. Lessee's silence shall be deemed a
rejection of its right to acquire such Interest. Any such election by Lessee
shall only be effective if accompanied by Lessee's payment to Lessor of a
non-refundable cash down payment equal to 10% of the price set forth in the ROFO
Notice. If Lessee timely and properly elects to acquire such Interest, the
closing shall take place within one hundred and twenty (120) days after the ROFO
Notice. The balance of the purchase price shall be paid in cash at closing. If
Lessee does not timely elect to acquire such Interest, Lessor shall be free to
sell the Interest to any other Person within one (1) year of Lessee's rejection
or deemed rejection without being required to comply again with the foregoing
provisions of this Section, provided that, if Lessor intends to sell the
Interest after such one (1) year period or within such one (1) year period at a
price less than 95% of the price described in the ROFO Notice or on terms
materially more favorable to a purchaser than those set forth in the ROFO
Notice, Lessor shall give Lessee written notice, setting forth the applicable
purchase price and terms and conditions, and Lessee shall have thirty (30) days
to elect in writing to purchase the Interest at such purchase price and on such
terms and conditions. The right of first offer granted by this Section shall not
survive the expiration or earlier termination of this Lease or the purchase of
the Interests by a third party after Lessee's failure to exercise such right or
Lessee's waiver thereof. Upon the termination of this right of first offer,
Lessee shall execute such instruments as may be reasonably required by Lessor to
provide constructive notice of the termination thereof.
Lessor hereby grants Lessee a right of first refusal to purchase the Land
Parcels and the Reversionary Interests at the same price and upon the same
terms, provisions and conditions as shall be contained in any written bona fide
offer or offers for the amount of purchase thereof which the Lessor shall at any
time during the Original Term or Option Terms of this Lease, or any extension
thereof, be ready and willing to accept (hereinafter "Purchase Terms"). The
Lessor shall give the Lessee written notice by certified mail of all of the
Purchase Terms of each offer that Lessor is considering and the Lessee shall
have thirty (30) days from and after the receipt of such notice from the Lessor
in which to exercise such right of first refusal. In the event that Lessee shall
fail to exercise its right of first refusal, as aforesaid and Lessor shall not
within six (6) months thereafter sell the Land Parcels and the Reversionary
Interests upon such Purchase Terms of the bona fide offer Lessor has selected,
Lessee's right of first refusal shall thereafter be reinstated.
29. NOTICES. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Lease shall
be in writing and given by (i) hand delivery, (ii) facsimile, (iii) express
overnight delivery service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a) receipt, if hand
delivered, (b) transmission, if delivered by facsimile, (c) the next Business
Day, if delivered by express overnight delivery service, or (d) the third
Business Day following the day of deposit of such notice with the United States
Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
33
If to Lessee: SLA Mail II, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lessor: ▇▇▇▇▇▇▇ Family, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above.
30. HOLDING OVER. If Lessee remains in possession of any of the Properties
after the expiration of the term hereof, Lessee, at Lessor's option and within
Lessor's sole discretion, may be deemed a tenant on a month-to-month basis and
shall continue to pay rentals and other sums in the amounts herein provided,
except that the Base Monthly Rental shall be increased by 150%, and to comply
with all the terms of this Lease; provided that nothing herein nor the
acceptance of rent by Lessor shall be deemed a consent to such holding over.
Lessee shall defend, indemnify, protect and hold the Indemnified Parties
harmless from and against any and all Losses resulting from Lessee's failure to
surrender possession upon the expiration of the Lease Term, including, without
limitation, any claims made by any succeeding lessee. The terms of this Section
30 shall survive the expiration of the Lease Term.
31. LANDLORD'S LIEN. Lessor hereby waives any landlord's lien with respect
to Personalty whether arising under any agreement between the Parties hereto or
pursuant to any law, ordinance, regulation or otherwise.
32. REMOVAL OF PERSONALTY / REVERSION. At the expiration of the Lease
Term, and if Lessee is not then in breach hereof, Lessee may remove all
Personalty from the Properties. Lessee shall repair any damage caused by such
removal and shall leave the Properties broom clean and in good and working
condition and repair inside and out. Any property of Lessee left on the
Properties on the tenth day following the expiration of the Lease Term shall, at
Lessor's option, automatically and immediately become the property of Lessor.
The balance improvements, fixtures and appurtenances included in the
Leased Properties, but excluded from the Land Parcels (collectively, the
"Improvements") shall be and remain real property, and to the extent owned by
Lessee, shall be the property of Lessee. Upon the expiration or earlier
termination of this Lease (except in the case of a purchase of Lessor's interest
by Lessee), title to the Improvements shall vest in Lessor so that the
Improvements and the entirety of each of the Properties shall be the property of
Lessor without notice or execution of further instruments and without cost,
expense or obligation of any kind or nature to Lessor.
34
To the extent that the Improvements are owned by Lessee, Lessee shall promptly
execute and acknowledge a release deed or any other documentation required by
Lessor to effectuate the provisions of this paragraph; Lessee's covenant to do
so shall survive the expiration or sooner termination of this Lease. The
foregoing reversionary right for the benefit of Lessor is an appurtenant right
to Lessor's interest in the respective Land Parcels for each Leased Property,
and not a personal right for Lessor, and as such shall not be transferred
separately from Lessor's interest in the respective Land Parcels for each Leased
Property.
33. FINANCIAL STATEMENTS. Within 45 days after the end of each fiscal
quarter and within 120 days after the end of each fiscal year of Lessee and
Guarantor, Lessee shall deliver to Lessor (i) complete financial statements of
Lessee, Guarantor and Permitted Sublessees including a balance sheet, profit and
loss statement, statement of cash flows and all other related schedules for the
fiscal period then ended; and (ii) income statements for the business at each of
the Properties. All such financial statements shall be prepared in accordance
with GAAP and shall be certified to be accurate and complete by Lessee and
Guarantor (or the Treasurer or other appropriate officer of Lessee and
Guarantor). Lessee understands that Lessor will rely upon such financial
statements and Lessee represents that such reliance is reasonable. In the event
that Lessee's, Guarantor's and Permitted Sublessees' property and business at
the Properties is ordinarily consolidated with other business for financial
statement purposes, such financial statements shall be prepared on a
consolidated basis showing separately the sales, profits and losses, assets and
liabilities pertaining to each of the Properties with the basis for allocation
of overhead of other charges being clearly set forth. The financial statements
delivered to Lessor need not be audited, but Lessee shall deliver to Lessor
copies of any audited financial statements of Lessee and Guarantor which may be
prepared, as soon as they are available.
34. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, acts of God, enemy or hostile governmental action, civil commotion,
fire or other casualty beyond the control of the party obligated to perform
shall excuse the performance by such party for a period equal to any such
prevention, delay or stoppage, except the obligations imposed with regard to
rental and other monies to be paid by Lessee pursuant to this Lease and any
indemnification obligations imposed upon Lessee under this Lease.
35. TIME IS OF THE ESSENCE. Time is of the essence with respect to each
and every provision of this Lease in which time is a factor.
36. LESSOR'S LIABILITY. Notwithstanding anything to the contrary provided
in this Lease, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Lease by Lessor, that (i) there
shall be absolutely no personal liability on the part of Lessor, its successors
or assigns and the trustees, members, partners, shareholders, officers,
directors, employees and agents of Lessor and its successors or assigns, to
Lessee with respect to any of the terms, covenants and conditions of this Lease,
(ii) Lessee waives all claims, demands and causes of action against the
trustees, members, partners, shareholders, officers, directors, employees and
agents of Lessor and its successors or assigns in the event of any breach by
Lessor of any of the terms, covenants and conditions of this Lease to be
performed by Lessor, and (iii) Lessee shall look solely to the Properties for
the satisfaction of each and every remedy of Lessee in the event of any breach
by Lessor of any of the terms, covenants and conditions of
35
this Lease to be performed by Lessor, or any other matter in connection with
this Lease or the Properties, such exculpation of liability to be absolute and
without any exception whatsoever.
37. CONSENT OF LESSOR. Unless specified otherwise herein, Lessor's consent
to any request of Lessee may be conditioned or withheld in Lessor's sole
discretion. Lessor shall have no liability for damages resulting from Lessor's
failure to give any consent, approval or instruction reserved to Lessor,
Lessee's sole remedy in any such event being an action for injunctive relief.
38. WAIVER AND AMENDMENT. No provision of this Lease shall be deemed
waived or amended except by a written instrument unambiguously setting forth the
matter waived or amended and signed by the party against which enforcement of
such waiver or amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion. No acceptance by
Lessor of an amount less than the monthly rent and other payments stipulated to
be due under this Lease shall be deemed to be other than a payment on account of
the earliest such rent or other payments then due or in arrears nor shall any
endorsement or statement on any check or letter accompanying any such payment be
deemed a waiver of Lessor's right to collect any unpaid amounts or an accord and
satisfaction.
39. SUCCESSORS BOUND. Except as otherwise specifically provided herein,
the terms, covenants and conditions contained in this Lease shall bind and inure
to the benefit of the respective heirs, successors, executors, administrators
and assigns of each of the parties hereto.
40. NO MERGER. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof, shall not result in a merger of Lessor's and
Lessee's estates, and shall, at the option of Lessor, either terminate any or
all existing subleases or subtenancies, or operate as an assignment to Lessor of
any or all of such subleases or subtenancies.
41. CAPTIONS. Captions are used throughout this Lease for convenience of
reference only and shall not be considered in any manner in the construction or
interpretation hereof.
42. SEVERABILITY. The provisions of this Lease shall be deemed severable.
If any part of this Lease shall be held unenforceable by any court of competent
jurisdiction, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
43. CHARACTERIZATION. A. It is the intent of the parties hereto that the
business relationship created by this Lease and any Lease related documents is
solely that of a long-term commercial lease between landlord and tenant and has
been entered into by both parties in reliance upon the economic and legal
bargains contained herein. None of the agreements contained herein, is intended,
nor shall the same be deemed or construed, to create a partnership between
Lessor and Lessee, to make them joint venturers, to make Lessee an agent, legal
representative, partner, subsidiary or employee of Lessor, nor to make Lessor in
any way responsible for the debts, obligations or losses of Lessee.
▇. ▇▇▇▇▇▇ and Lessee acknowledge and warrant to each other that each has
been represented by independent counsel and has executed this Lease after being
fully advised by said counsel as to its effect and significance. This Lease
shall be interpreted and construed in a fair
36
and impartial manner without regard to such factors as the party which prepared
the instrument, the relative bargaining powers of the parties or the domicile of
any party. Whenever in this Lease any words of obligation or duty are used, such
words or expressions shall have the same force and effect as though made in the
form of a covenant.
44. EASEMENTS. During the Lease Term Lessor shall have the right to grant
utility easements on, over, under and above any of the Properties without the
prior consent of Lessee, provided that such easements will not materially
interfere with Lessee's or a Permitted Sublessee's use.
45. BANKRUPTCY. A. As a material inducement to Lessor executing this
Lease, Lessee acknowledges and agrees that Lessor is relying upon (i) the
financial condition and specific operating experience of Lessee and Lessee's and
Permitted Sublessees' obligation to use each of the Properties specifically in
accordance with system-wide requirements imposed from time to time on Permitted
Facilities, (ii) Lessee's timely performance of all of its obligations under
this Lease notwithstanding the entry of an order for relief under the Code for
Lessee and (iii) all defaults under this Lease as to all Properties being cured
promptly and this Lease being assumed within 60 days of any order for relief
entered under the Code for Lessee, or this Lease being rejected within such 60
day period and the Properties surrendered to Lessor.
Accordingly, in consideration of the mutual covenants contained in this
Lease and for other good and valuable consideration, Lessee hereby agrees that:
(i) All obligations that accrue under this Lease (including the
obligation to pay rent), from and after the date that an Action is
commenced shall be timely performed exactly as provided in this Lease and
any failure to so perform shall be harmful and prejudicial to Lessor;
(ii) Any and all obligations under this Lease that become due from
and after the date that an Action is commenced and that are not paid as
required by this Lease shall, in the amount of such rents, constitute
administrative expense claims allowable under the Code with priority of
payment at least equal to that of any other actual and necessary expenses
incurred after the commencement of the Action;
(iii) Any extension of the time period within which Lessee may
assume or reject this Lease without an obligation to cause all obligations
coming due under this Lease from and after the date that an Action is
commenced to be performed as and when required under this Lease shall be
harmful and prejudicial to Lessor;
(iv) Any time period designated as the period within which Lessee
must cure all defaults and compensate Lessor for all pecuniary losses
which extends beyond the date of assumption of this Lease shall be harmful
and prejudicial to Lessor;
(v) Any assignment of this Lease must result in all terms and
conditions of this Lease being assumed by the assignee without alteration
or amendment, and any assignment which results in an amendment or
alteration of the terms and conditions of this Lease without the express
written consent of Lessor shall be harmful and prejudicial to Lessor;
37
(vi) Any proposed assignment of this Lease to an assignee: (a) that
will not use the Properties specifically in accordance with a franchise,
license and/or area development agreement with the franchisor of Permitted
Facilities, (b) that does not possess financial condition, operating
performance and experience characteristics equal to or better than the
financial condition, operating performance and experience of Lessee as of
the Effective Date, or (c) that does not provide guarantors of the Lease
obligations having a financial condition equal to or better than the
financial condition of Guarantor as of the Effective Date, shall be
harmful and prejudicial to Lessor;
(vii) The rejection (or deemed rejection) of this Lease for any
reason whatsoever shall constitute cause for immediate relief from the
automatic stay provisions of the Code, and Lessee stipulates that such
automatic stay shall be lifted immediately and possession of the
Properties will be delivered to Lessor immediately without the necessity
of any further action by Lessor; and
(viii) This Lease shall at all times be treated as consistent with
the specific characterizations set forth in Section 3 of this Lease, and
assumption or rejection of this Lease shall be (a) in its entirety, (b)
for all of the Properties, and (c) in strict accordance with the specific
terms and conditions of this Lease.
B. No provision of this Lease shall be deemed a waiver of Lessor's
rights or remedies under the Code or applicable law to oppose any assumption
and/or assignment of this Lease, to require timely performance of Lessee's
obligations under this Lease, or to regain possession of the Properties as a
result of the failure of Lessee to comply with the terms and conditions of this
Lease or the Code.
C. Notwithstanding anything in this Lease to the contrary, all
amounts payable by Lessee to or on behalf of Lessor under this Lease, whether or
not expressly denominated as such, shall constitute "rent" for the purposes of
the Code.
D. For purposes of this Section addressing the rights and
obligations of Lessor and Lessee in the event that an Action is commenced, the
term "Lessee" shall include Lessee's successor in bankruptcy, whether a trustee,
Lessee as debtor in possession or other responsible person.
46. NO OFFER. No contractual or other rights shall exist between
Lessor and Lessee with respect to the Properties until both have executed and
delivered this Lease, notwithstanding that deposits may have been received by
Lessor and notwithstanding that Lessor may have delivered to Lessee an
unexecuted copy of this Lease. The submission of this Lease to Lessee shall be
for examination purposes only, and does not and shall not constitute a
reservation of or an option for Lessee to lease or otherwise create any interest
on the part of Lessee in the Properties.
47. OTHER DOCUMENTS. Each of the parties agrees to sign such other
and further documents as may be necessary or appropriate to carry out the
intentions expressed in this Lease.
48. ATTORNEYS' FEES. In the event of any judicial or other
adversarial proceeding between the parties concerning this Lease, to the extent
permitted by law, the prevailing party
38
shall be entitled to recover all of its reasonable attorneys' fees and other
costs in addition to any other relief to which it may be entitled. Lessor shall,
upon demand, be entitled to all attorneys' fees and all other costs incurred in
the preparation and service of any notice or demand hereunder, whether or not a
legal action is subsequently commenced. References in this Lease to Lessor's
attorneys' fees and/or costs shall mean both the fees and costs of independent
counsel retained by Lessor with respect to the matter and the fees and costs
incurred in connection with the matter.
49. ENTIRE AGREEMENT. This Lease and any other instruments or agreements
referred to herein, constitute the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations,
warranties or agreements except as herein provided. Without limiting the
foregoing, Lessee specifically acknowledges that neither Lessor nor any agent,
officer, employee or representative of Lessor has made any representation or
warranty regarding the projected profitability of the business to be conducted
on the Properties. Furthermore, Lessee acknowledges that Lessor did not prepare
or assist in the preparation of any of the projected figures used by Lessee in
analyzing the economic viability and feasibility of the business to be conducted
by Lessee at the Properties.
50. FORUM SELECTION; JURISDICTION; VENUE; CHOICE OF LAW. Lessee
acknowledges that this Lease was partially negotiated in the States of
Massachusetts, Florida, Virginia and Illinois. This Lease was partially executed
and delivered in the States of Massachusetts, Florida, Virginia and Illinois.
There are substantial contacts between the parties and the transactions
contemplated herein and the States of Massachusetts, Florida, Virginia and
Illinois. For purposes of any action or proceeding arising out of this Lease,
the parties hereto expressly submit to the jurisdiction of all federal and state
courts located in the States of Massachusetts, Florida, Virginia or Illinois
depending on situs of the property. Lessee and Lessor consent that they may be
served with any process or paper by registered mail or by personal service
within or without the States of Massachusetts, Florida, Virginia and Illinois in
accordance with applicable law. Furthermore, Lessee and Lessor waive and agree
not to assert in any such action, suit or proceeding that they are not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action, suit
or proceeding is improper. The creation of this Lease and the rights and
remedies of Lessor with respect to the Properties, as provided herein and by the
laws of the states in which the Properties are located, as applicable, shall be
governed by and construed in accordance with the internal laws of the states in
which the Properties are located, as applicable, without regard to principles of
conflicts of law. With respect to other provisions of this Lease, this Lease
shall be governed by the internal laws of the States of Massachusetts, Florida,
Virginia or Illinois, depending on the situs of the Property, without regard to
its principles of conflicts of law. Nothing contained in this Section shall
limit or restrict the right of Lessor or Lessee to commence any proceeding in
the federal or state courts located in the states in which the Properties are
located to the extent Lessor or Lessee deems such proceeding necessary or
advisable to exercise remedies available under this Lease.
51. COUNTERPARTS. This Lease may be executed in one or more counterparts,
each of which shall be deemed an original.
52. MEMORANDUM OF MASTER LEASE. Concurrently with the execution of this
Lease, Lessor and Lessee are executing the Memorandum to be recorded in the
applicable real property
39
records with respect to each of the Properties. Further, upon Lessor's request,
Lessee agrees to execute and acknowledge a termination of lease and/or quit
claim deed in recordable form with respect to each of the Properties to be held
by Lessor until the expiration or sooner termination of the Lease Term.
53. NO BROKERAGE. Lessor and Lessee represent and warrant to each other
that they have had no conversation or negotiations with any broker concerning
the leasing of the Properties. Each of Lessor and Lessee agrees to protect,
indemnify, save and keep harmless the other, against and from all liabilities,
claims, losses, costs, damages and expenses, including attorneys' fees, arising
out of, resulting from or in connection with their breach of the foregoing
warranty and representation.
54. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES. LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF
LESSOR AND LESSEE, LESSEE'S USE OR OCCUPANCY OF ANY OF THE PROPERTIES, AND/OR
ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. THIS
WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS
BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, LESSEE
AND LESSOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHTS THEY
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM EACH
OTHER AND ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR EMPLOYEES OR
ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE
OTHER PARTY OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF
OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED
HERETO. THE WAIVER BY EITHER PARTY OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES
HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
55. INTENTIONALLY DELETED.
56. DOCUMENT REVIEW. In the event Lessee makes any request upon Lessor
requiring Lessor or the attorneys of Lessor to review and/or prepare (or cause
to be reviewed and/or prepared) any documents, plans, specifications or other
submissions in connection with or arising out of this Lease, then Lessee shall
reimburse Lessor or its designee promptly upon Lessor's demand therefor for all
out-of-pocket costs and expenses incurred by Lessor in connection with such
review and/or preparation plus a reasonable processing and review fee.
40
57. SUBSTITUTION. A. Subject to the fulfillment of all of the conditions
set forth in the following subsection B, Lessee shall have the right to deliver
a rejectable offer to Lessor (each, a "Rejectable Substitution Offer") to
substitute a Substitute Property for a Property if:
(i) the terms of Section 21.B of this Lease permit such substitution
(each, a "Casualty/Condemnation Substitution").
From and after the third anniversary of the Effective Date and subject to
the fulfillment of all of the conditions set forth in the following subsection
B, Lessee shall also have the right to deliver a Rejectable Substitution Offer
to substitute any Property with a Substitute Property (each a "Discretionary
Substitution").
Each Rejectable Substitution Offer shall identify the proposed Substitute
Property in reasonable detail and contain a certificate executed by a duly
authorized officer of Lessee pursuant to which Lessee shall certify that in
Lessee's good faith judgment such proposed Substitute Property satisfies as of
the date of such notice, or will satisfy as of the date of the closing of such
substitution, all of the applicable conditions to substitution set forth in this
Section 57. Lessee agrees to deliver to Lessor all of the diligence information
and materials contemplated by the provisions of Section 57.B of this Lease
within 30 days after the delivery to Lessor of a Rejectable Substitution Offer.
Lessor shall have 90 days after the delivery of a Rejectable Substitution
Offer notice satisfying the requirements of the preceding paragraph to deliver
to Lessee written notice of its election to either accept or reject the
Rejectable Substitution Offer. Lessor's failure to deliver such notice within
such time period shall be deemed to constitute Lessor's acceptance of the
Rejectable Substitution Offer. If Lessor accepts the Rejectable Substitution
Offer or is deemed to have accepted the Rejectable Substitution Offer, then
Lessee shall complete such substitution, subject, however, to the satisfaction
of each of the applicable terms and conditions set forth in this Section 57.
If Lessor rejects the Rejectable Substitution Offer pursuant to the
previous paragraph for reasons other than that, in Lessor's reasonable judgment,
the proposed Substitute Property would not have satisfied the applicable
substitution conditions set forth in this Section 57, then:
(X) if such rejected Rejectable Substitution Offer was made with
respect to a Casualty/Condemnation Substitution, the provisions of the
last paragraph of Section 21.B and the last sentence of the second
paragraph of Section 21.B shall be applicable; and
(Y) if such rejected Rejectable Substitution Offer was made with
respect to a Discretionary Substitution, this Lease shall terminate with
respect to the Property which Lessee proposed to replace on the next
scheduled Base Monthly Rental payment date (the "Early Substitution
Termination Date") provided Lessee has paid to Lessor all Base Annual
Rental, Additional Rental and all other sums and obligations then due and
payable under this Lease as of such Early Substitution Termination Date.
On the Early Substitution Termination Date, and provided Lessee shall have
paid to Lessor all Base Annual Rental, Additional Rental and other sums
and obligations then due and payable under this Lease as of the Early
Substitution Date:
41
(i) the Base Annual Rental then in effect shall be reduced by
an amount equal to the product of (x) the Applicable Rent Reduction
Percentage for the Property which Lessee proposed to replace, and
(y) the Base Annual Rental then in effect; and
(ii) all obligations of Lessor and Lessee shall cease as of
the Early Substitution Termination Date with respect to such
Property; provided, however, Lessee's obligations to Lessor with
respect to such Property under any indemnification provisions of
this Lease with respect to such Property (including, without
limitation, Sections 16 and 19 of this Lease) and Lessee's
obligations to pay any sums (whether payable to Lessor or a third
party) accruing under this Lease with respect to such Property prior
to the Early Substitution Termination Date shall survive the
termination of this Lease with respect to such Property or
otherwise. This Lease shall, however, continue in full force and
effect with respect to all other Properties.
B. The substitution of a Substitute Property for a Property pursuant to
the preceding subsection A shall be subject to the fulfillment of all of the
following terms and conditions:
(i) The Substitute Property must:
(1) be a Permitted Facility, in good condition and repair,
ordinary wear and tear excepted;
(2) have a fair market value no less than the greater of the
then fair market value of the Property being replaced or the fair
market value of such Property as of the Effective Date (in each
case, determined without regard to this Lease, but assuming that
while this Lease has been in effect, Lessee has complied with all of
the terms and conditions of this Lease), as determined by Lessor,
utilizing the same valuation method as used in connection with the
closing of the transaction described in the Sale-Leaseback
Agreement, which was based upon the sum of (x) the fair market value
of the land comprising such Property and (y) the replacement cost of
the improvements located thereon;
(3) have improvements which have a remaining useful life
substantially equivalent to, or better than, that of the
improvements located at the Property to be replaced;
(4) include a Land Parcel to be conveyed to Lessor by special
or limited warranty deed, free and clear of all liens and
encumbrances, except such matters as are reasonably acceptable to
Lessor (the "Substitute Property Permitted Exceptions"); and
(5) be located in either (a) the same state as the Property to
be replaced is then located, or (b) in another state acceptable to
Lessor in Lessor's reasonable discretion;
42
(ii) Lessor shall have inspected and approved the Substitute
Property utilizing Lessor's customary site inspection and underwriting
approval criteria. Lessee shall have reimbursed Lessor for all of its
reasonable costs and expenses incurred with respect to such proposed
substitution, including, without limitation, Lessor's third-party and/or
in-house site inspectors' costs and expenses with respect to the proposed
Substitute Property. Lessee shall be solely responsible for the payment of
all costs and expenses resulting from such proposed substitution,
regardless of whether such substitution is consummated, including, without
limitation, the cost of title insurance and endorsements for Lessor,
survey charges, stamp taxes, mortgage taxes, transfer fees, transfer
taxes, charges, escrow and recording fees, water certification charges and
costs, City of Chicago Transaction tax (if applicable), income and
transfer taxes imposed on Lessor as a result of such substitution and the
reasonable attorneys' fees and expenses of counsel to Lessee and Lessor;
(iii) Lessor shall have received a preliminary title report and
irrevocable commitment to insure title by means of an ALTA extended
coverage owner's policy of title insurance (or its equivalent, in the
event such form is not issued in the jurisdiction where the proposed
Substitute Property is located) for the proposed Substitute Property
issued by Title Company and committing to insure Lessor's good and
marketable title in the respective Land Parcel and Reversionary Interest
for the proposed Substitute Property, subject only to the Substitute
Property Permitted Exceptions (as defined in the Sale-Leaseback Agreement)
and containing endorsements substantially comparable to those required by
Lessor at the Closing (as defined in the Sale-Leaseback Agreement);
(iv) Lessor shall have received a current ALTA survey of the
proposed Substitute Property, the form of which shall be comparable to
those received by Lessor at the Closing and sufficient to cause the
standard survey exceptions set forth in the title policy referred to in
the preceding subsection to be deleted;
(v) no Event of Default shall have occurred and be continuing under
any of the Sale-Leaseback Documents;
(vi) Lessee shall have executed such documents as may be reasonably
required by Lessor as a result of such substitution, including amendments
to this Lease and the Memorandum (the "Substitute Documents"), all of
which documents shall be in form and substance reasonably satisfactory to
Lessor;
(vii) the representations and warranties set forth in the Substitute
Documents, this Lease and the Sale-Leaseback Agreement applicable to the
proposed Substitute Property shall be true and correct in all material
respects as of the date of substitution, and Lessee shall have delivered
to Lessor an officer's certificate certifying to that effect;
(viii) Lessee shall have delivered to Lessor certificates of
insurance showing that insurance required by the Substitute Documents is
in full force and effect;
(ix) Lessor shall have obtained an endorsement to the policy of
residual value insurance issued to Lessor in connection with the
transaction described in the Sale-
43
Leaseback Agreement with respect to the proposed Substitute Property,
which endorsement shall be in form and substance reasonably satisfactory
to Lessor; and
(x) the date of the closing of the substitution shall occur no later
than 20 days after the date of acceptance (or deemed acceptance) by Lessor
of the Rejectable Substitution Offer.
C. Upon satisfaction of the foregoing conditions set forth in Section 57.B
and provided Lessor has accepted the Rejectable Substitution Offer or is deemed
to have accepted the Rejectable Substitution Offer:
(i) the proposed Substitute Property shall be deemed substituted for
the Property to be replaced;
(ii) the Substitute Property shall be referred to herein as a
"Property" and included within the definition of "Properties";
(iii) the Substitute Documents shall be dated as of the date of the
substitution; and
(iv) Lessor shall convey the Lessor's interest in the Property to be
replaced to Lessee or a designee of Lessee "as-is" by quit-claim deed,
subject to all matters of record (except for any consensual liens granted
by Lessor other than those granted by Lessor at the request of Lessee),
and without representation or warranty.
D. Notwithstanding the foregoing, nothing in this Section 57 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and characterizations set forth in Lease, including,
without limitation, those provisions set forth in Section 3 of this Lease.
58. REJECTABLE PURCHASE OFFER. Subject to the fulfillment of all of the
conditions set forth in this Section 58.
A. Lessor shall have 90 days from the delivery by Lessee of a Rejectable
Purchase Offer notice to purchase a certain property as described in the
Rejectable Purchase Offer ("Rejectable Purchase Offer") by delivering to Lessee
written notice of its election to either accept or reject the Rejectable
Purchase Offer. Lessor's failure to respond to such Rejectable Purchase Offer
notice within such time period shall be deemed to constitute Lessor's acceptance
of the Rejectable Purchase Offer. If Lessor accepts the Rejectable Purchase
Offer or is deemed to have accepted the Rejectable Purchase Offer, then Lessee
shall complete such purchase, subject, however, to the satisfaction of each of
the terms and conditions set forth in the following subsection B.
B. The purchase of a Property pursuant to the preceding subsection A shall
be subject to the fulfillment of all of the following terms and conditions:
(i) no Event of Default shall have occurred and be continuing under
any of the Sale-Leaseback Documents;
44
(ii) Lessee shall have delivered to Lessor a certificate executed by
a duly authorized officer of Lessee certifying to Lessor that Lessee does
not own any properties which are available for substitution and which meet
the applicable requirements for substitution set forth in Section 57;
(iii) Lessee shall have paid to Lessor the Subject Purchase Price
(as defined below), together with all Base Annual Rental, Additional
Rental and other sums and obligations then due and payable under this
Lease as of the date of the closing of such purchase;
(iv) Lessee shall be solely responsible for the payment of all costs
and expenses resulting from such proposed purchase, regardless of whether
the purchase is consummated, including, without limitation, to the extent
applicable, the cost of title insurance and endorsements, including,
survey charges, stamp taxes, mortgage taxes, transfer taxes and fees,
escrow and recording fees, taxes imposed on Lessor as a result of such
purchase, the attorneys' fees of Lessee and the reasonable attorneys' fees
and expenses of counsel to Lessor; and
(v) the date of the closing of such purchase shall occur on the next
scheduled Base Monthly Rental payment date following Lessor's acceptance
(or deemed acceptance) of the Rejectable Purchase Offer, but in no event
later than 20 days after the date of acceptance (or deemed acceptance) by
Lessor of such Rejectable Purchase Offer.
On the date of the closing of the purchase of a Property pursuant to this
Section (the "Rejectable Purchase Closing Date"), subject to satisfaction of the
foregoing conditions:
(1) this Lease shall be deemed terminated with respect to such
Property only, but this Lease shall continue in full force and effect with
respect to all of the other Properties; provided, however, such
termination shall not limit Lessee's obligations to Lessor with respect to
such Property under any indemnification provisions of this Lease
(including, without limitation, Sections 16 and 19 of this Lease) and
Lessee's obligations to pay any sums (whether payable to Lessor or a third
party) accruing under this Lease with respect to such Property prior to
the Rejectable Purchase Closing Date shall survive the termination of this
Lease;
(2) the Base Annual Rental shall be reduced for each such Property
by an amount equal to the product of (x) the Applicable Rent Reduction
Percentage for such Property and (y) the Base Annual Rental then in
effect; and
(3) Lessor shall convey Lessor's interest in such Property to Lessee
"as-is" by quit-claim deed, subject to all matters of record (except for
any consensual liens granted by Lessor other than those granted by Lessor
at the request of Lessee), and without representation or warranty.
For purposes of this Section 58, the term "Subject Purchase Price"
shall mean the product of the amount specified on SCHEDULE I attached
hereto which corresponds to the time period during which such purchase
occurs multiplied by the Purchase Price for the Property being purchased.
45
59. STATE SPECIFIC PROVISIONS. The provisions and/or remedies which are
set forth on SCHEDULE II shall be deemed a part of and included within the terms
and conditions of this Lease.
60. CERTIFICATE. At any time, and from time to time, at or following the
assignment by any Permitted Sublessee of its right, title and interest in any
Permitted Sublease, Lessor, provided all of the conditions in Section 12 of the
Permitted Sublease have been satisfied, agrees, promptly and in no event later
than twenty (20) Business Days after a request from Lessee to execute,
acknowledge and deliver to Lessee and any such Permitted Sublessee a certificate
from Lessor, certifying that such Permitted Sublessee has been released from all
liabilities, obligations and duties to Lessor under the Permitted Sublease.
46
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of
the date first above written. Witness the following signatures and seals.
LESSOR:
▇▇▇▇▇▇▇ FAMILY, LLC,
a Massachusetts limited liability company
By: its member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Its: Member
--------------------------------
LESSEE:
SLA MAIL II, INC., a Massachusetts
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its: President & CEO
------------------------------------
Lessee's Tax Identification Number:
-----------------------------
47
POWER OF ATTORNEY
Lessor may act as attorney-in-fact or otherwise on behalf of Lessee
pursuant to Sections 24, 25.B and 31 of this Lease. This power of attorney is
coupled with an interest, is durable and is not affected by subsequent
disability or incapacity of the principal or lapse of time.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- ---------------------------------------
Witness ▇▇▇▇ ▇. ▇▇▇▇▇▇ Lessee ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
48