EXHIBIT 10.52
LEASE
between
FBTC LEASING CORP.,
as Lessor,
and
LIVING CENTERS HOLDING COMPANY
as Lessee
___________________________
Dated as of October 10, 1996
___________________________
================================================================================
This Lease is subject to a security interest in favor of The Chase Manhattan
Bank, as agent (the "Agent"), under a Credit Agreement, dated as of October 10,
1996 among FBTC Leasing Corp., the Lenders, and the Agent, as amended or
supplemented. This Lease has been executed in several counterparts. To the
extent, if any, that this Lease constitutes chattel paper (as such term is
defined in the Uniform Commercial Code of the State where the Properties are
located, no security interest in this Lease may be created through the transfer
or possession of any counterpart other than the original counterpart containing
the receipt therefor executed by the Agent on the signature page hereof.
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS............................... 1
1.1 Defined Terms.................................................... 1
SECTION 2. PROPERTY AND TERM........................ 1
2.1 Property......................................................... 1
2.2 Lease Term....................................................... 1
2.3 Title............................................................ 1
2.4 Lease Supplements................................................ 1
SECTION 3. RENT.............................. 1
3.1 Rent............................................................. 1
3.2 Supplemental Rent................................................ 2
3.3 Performance on a Non-Business Day................................ 2
SECTION 4. UTILITY CHARGES......................... 2
4.1 Utility Charges.................................................. 2
SECTION 5. QUIET ENJOYMENT......................... 3
5.1 Quiet Enjoyment.................................................. 3
SECTION 6. NET LEASE............................ 3
6.1 Net Lease; No Setoff; Etc........................................ 3
6.2 No Termination or Abatement...................................... 4
SECTION 7. OWNERSHIP OF PROPERTY...................... 4
7.1 Ownership of the Property........................................ 4
SECTION 8. CONDITION OF PROPERTY...................... 5
8.1 Condition of the Property........................................ 5
8.2 Possession and Use of the Property............................... 6
SECTION 9. COMPLIANCE........................... 6
9.1 Compliance with Legal Requirements and Insurance Requirements.... 6
SECTION 10.................................. 6
10.1 Maintenance and Repair; Return................................... 6
10.2 Right of Inspection.............................................. 7
10.3 Environmental Inspection......................................... 7
SECTION 11. MODIFICATIONS......................... 8
11.1 Modifications, Substitutions and Replacements.................... ▇
-▇-
▇▇▇▇▇▇▇ ▇▇. TITLE............................. 9
12.1 Warranty of Title................................................ 9
12.2 Grants and Releases of Easements................................. 9
SECTION 13. PERMITTED CONTESTS....................... 10
13.1 Permitted Contests Other Than in Respect of Impositions.......... 10
SECTION 14. INSURANCE........................... 10
14.1 Public Liability and Workers' Compensation Insurance............. 10
14.2 Hazard and Other Insurance....................................... 11
14.3 Coverage......................................................... 11
SECTION 15. CONDEMNATION AND CASUALTY................... 12
15.1 Casualty and Condemnation........................................ 12
15.2 Environmental Matters............................................ 13
SECTION 16. LEASE TERMINATION....................... 14
16.1 Termination upon Certain Events.................................. 14
16.2 Procedures....................................................... 14
SECTION 17. DEFAULT............................ 14
17.1 Lease Events of Default.......................................... 14
17.2 Final Liquidated Damages......................................... 16
17.3 Lease Remedies................................................... 16
17.4 Waiver of Certain Rights......................................... 18
17.5 Assignment of Rights Under Contracts............................. 18
17.6 Remedies Cumulative.............................................. 18
17.7 Covenant Defaults................................................ 18
SECTION 18. LESSOR'S RIGHT TO CURE..................... 19
18.1 Lessor's Right to Cure Lessee's Lease Defaults................... 19
SECTION 19. LEASE TERMINATION....................... 19
19.1 Provisions Relating to Lessee's Termination of this
Lease or Exercise of Purchase Option............................. 19
19.2 Aggregate Tranche A Percentage................................... 20
SECTION 20. PURCHASE OPTION........................ 20
20.1 Purchase Option.................................................. 20
20.2 Maturity Date Purchase Option.................................... 20
20.3 Obligation to Purchase All Properties............................ 20
SECTION 21. SALE OF PROPERTY........................ 20
21.1 Sale Procedure................................................... 21
21.2 Application of Proceeds of Sale.................................. 21
21.3 Indemnity for Excessive Wear..................................... 21
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21.4 Appraisal Procedure.............................................. 22
21.5 Certain Obligations Continue..................................... 22
SECTION 22. HOLDING OVER.......................... 22
22.1 Holding Over..................................................... 22
SECTION 23. RISK OF LOSS.......................... 23
23.1 Risk of Loss..................................................... 23
SECTION 24. SUBLETTING AND ASSIGNMENT................... 23
24.1 Subletting and Assignment........................................ 23
24.2 Subleases........................................................ 23
SECTION 25. ESTOPPEL CERTIFICATES..................... 23
25.1 Estoppel Certificates............................................ 23
SECTION 26. NO WAIVER........................... 24
26.1 No Waiver........................................................ 24
SECTION 27. ACCEPTANCE OF SURRENDER.................... 24
27.1 Acceptance of Surrender.......................................... 24
SECTION 28. NO MERGER OF TITLE....................... 24
28.1 No Merger of Title............................................... 24
SECTION 29. NOTICES............................ 24
29.1 Notices.......................................................... 24
SECTION 30. MISCELLANEOUS......................... 25
30.1 Miscellaneous.................................................... 25
30.2 Amendments and Modifications..................................... 25
30.3 Successors and Assigns........................................... 26
30.4 Headings and Table of Contents................................... 26
30.5 Counterparts..................................................... 26
30.6 GOVERNING LAW.................................................... 26
30.7 Limitations on Recourse.......................................... 26
30.8 Memorandum of Lease.............................................. 26
30.9 Priority......................................................... 26
31.1 Ground Lease..................................................... 26
Exhibits
Exhibit A Lease Supplement
Exhibit B Memorandum of Lease
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LEASE (this "Lease"), dated as of October 10, 1996, between FBTC
LEASING CORP., a New York corporation, having its principal office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as lessor (the "Lessor"), and LIVING
CENTERS HOLDING COMPANY, a Delaware corporation, having its principal office at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as lessee (the "Lessee").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. Capitalized terms used herein but not otherwise
defined in this Lease shall have the respective meanings specified in Annex A to
the Participation Agreement dated as of the date hereof among Lessee, Lessor,
Agent and the Lenders named therein.
SECTION 2. PROPERTY AND TERM
2.1 Property. Subject to the terms and conditions hereinafter set
forth and contained in the respective Lease Supplement relating to each
Property, Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
each Property.
2.2 Lease Term. The Property is leased for the Term, unless extended
or earlier terminated in accordance with the provisions of this Lease.
2.3 Title. Each Property is leased to Lessee without any
representation or warranty, express or implied, by Lessor and subject to the
rights of parties in possession, the existing state of title (including the
Permitted Exceptions) and all applicable Legal Requirements. Lessee shall in no
event be excused in its obligation to pay Rent for any defect in title to the
Property.
2.4 Lease Supplements. On each Property Closing Date, Lessee and
Lessor shall each execute and deliver a Lease Supplement for the Property to be
leased on such date in substantially the form of Exhibit A hereto and thereafter
such Property shall be subject to the terms of this Lease.
SECTION 3. RENT
3.1 Rent. (a) On each applicable Payment Date occurring after the
termination of the Construction Period for a Property and on any date when this
Lease shall terminate, Lessee shall pay the Basic Rent attributable to such
Property.
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(b) Basic Rent shall be due and payable in lawful money of the United
States and shall be paid by wire transfer of immediately available funds on or
before the due date therefor to such account or accounts at such bank or banks
or to such other Person or in such other manner as Lessor shall from time to
time direct.
(c) Neither Lessee's inability or failure to take possession of all,
or any portion, of the Property when delivered by Lessor, nor Lessor's inability
or failure to deliver all or any portion of the Property to Lessee, whether or
not attributable to any act or omission of Lessee or any act or omission of
Lessor, or for any other reason whatsoever, shall delay or otherwise affect
Lessee's obligation to pay Rent in accordance with the terms of this Lease.
3.2 Supplemental Rent. (a) Lessee shall pay to Lessor or the Person
entitled thereto any and all Supplemental Rent promptly as the same shall become
due and payable, and if Lessee fails to pay any Supplemental Rent, Lessor shall
have all rights, powers and remedies provided for herein or by law or equity or
otherwise in the case of nonpayment of Basic Rent. Lessee shall pay to Lessor
as Supplemental Rent, among other things, on demand, to the extent permitted by
applicable Legal Requirements, interest at the applicable Overdue Rate on any
installment of Basic Rent not paid when due for the period for which the same
shall be overdue and on any payment of Supplemental Rent not paid when due or
demanded by Lessor for the period from the due date or the date of any such
demand, as the case may be, until the same shall be paid. The expiration or
other termination of Lessee's obligations to pay Basic Rent hereunder shall not
limit or modify the obligations of Lessee with respect to Supplemental Rent.
Unless expressly provided otherwise in this Lease or any other Operative
Agreement, in the event of any failure on the part of Lessee to pay and
discharge any Supplemental Rent as and when due, Lessee shall also promptly pay
and discharge any fine, penalty, interest or cost which may be assessed or added
for nonpayment or late payment of such Supplemental Rent, all of which shall
also constitute Supplemental Rent.
(b) Lessee shall make a payment of Supplemental Rent equal to the
Maximum Residual Guarantee Amount in accordance with Section 21.1(c).
3.3 Performance on a Non-Business Day. If any payment is required
hereunder on a day that is not a Business Day, then such payment shall be due on
the next succeeding Business Day.
SECTION 4. UTILITY CHARGES
4.1 Utility Charges. Lessee shall pay, or cause to be paid, all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on each Property during
the Term. Lessee shall be entitled to receive any credit or refund with respect
to any utility charge paid by Lessee and the amount of any credit or refund
received by Lessor on account of any utility charges paid by Lessee, net of the
costs and expenses incurred by Lessor in obtaining such credit or refund, shall
be promptly paid over to Lessee. All charges for utilities imposed with respect
to the Property for a billing period during which this Lease expires or
terminates shall be adjusted and prorated on a daily basis between
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Lessor and Lessee, and each party shall pay or reimburse the other for each
party's pro rata share thereof.
SECTION 5. QUIET ENJOYMENT
5.1 Quiet Enjoyment. So long as no Lease Event of Default shall have
occurred and be continuing, Lessee shall peaceably and quietly have, hold and
enjoy each Property for the Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor with respect to any
matters arising from and after the Lease Commencement Date.
SECTION 6. NET LEASE
6.1 Net Lease; No Setoff; Etc. This Lease shall constitute a net
lease and, notwithstanding any other provision of this Lease, it is intended
that Basic Rent and Supplemental Rent shall be paid without counterclaim,
setoff, deduction or defense of any kind and without abatement, suspension,
deferment, diminution or reduction of any kind, and Lessee's obligation to pay
all such amounts is absolute and unconditional. The obligations and liabilities
of Lessee hereunder shall in no way be released, discharged or otherwise
affected for any reason, including, without limitation, to the maximum extent
permitted by law: (a) any defect in the condition, merchantability, design,
construction, quality or fitness for use of any portion of any Property, or any
failure of any Property to comply with all Legal Requirements, including any
inability to occupy or use any Property by reason of such non-compliance; (b)
any damage to, abandonment, loss, contamination of or Release from or
destruction of or any requisition or taking of any Property or any part thereof,
including eviction; (c) any restriction, prevention or curtailment of or
interference with any use of any Property or any part thereof, including
eviction; (d) any defect in title to or rights to any Property or any Lien on
such title or rights or on any Property; (e) any change, waiver, extension,
indulgence or other action or omission or breach in respect of any obligation or
liability of or by Lessor, Agent or any Lender; (f) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings relating to Lessee, Lessor, Agent, any lender or any other Person,
or any action taken with respect to this Lease by any trustee or receiver of
Lessee, Lessor, Agent, any lender or any other Person, or by any court, in any
such proceeding; (g) any claim that Lessee has or might have against any Person,
including Lessor, Agent or any Lender; (h) any failure on the part of Lessor to
perform or comply with any of the terms of this Lease, any other Operative
Agreement or of any other agreement; (i) any invalidity or unenforceability or
disaffirmance against or by Lessee of this Lease or any provision hereof or any
of the other Operative Agreements or any provision of any thereof; (j) the
impossibility of performance by Lessee, Lessor or both; (k) any action by any
court, administrative agency or other Governmental Authority; any restriction,
prevention or curtailment of or any interference with the construction on or any
use of any Property or any part thereof; or (m) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Lessee shall have
notice or knowledge of any of the foregoing. This Lease shall be noncancellable
by Lessee for any reason whatsoever except as expressly provided herein, and
Lessee, to the extent permitted by Legal Requirements, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Lease, or to any diminution, abatement or reduction of Rent payable
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by Lessee hereunder. If for any reason whatsoever this Lease shall be terminated
in whole or in part by operation of law or otherwise, except as otherwise
expressly provided herein, Lessee shall, unless prohibited by Legal
Requirements, nonetheless pay to Lessor (or, in the case of Supplemental Rent,
to whomever shall be entitled thereto) an amount equal to each Rent payment at
the time and in the manner that such payment would have become due and payable
under the terms of this Lease if it had not been terminated in whole or in part,
and in such case, so long as such payments are made and no Lease Event of
Default shall have occurred and be continuing, Lessor will deem this Lease to
have remained in effect. Each payment of Rent made by Lessee hereunder shall be
final and, absent manifest error in the computation of the amount thereof,
Lessee shall not seek or have any right to recover all or any part of such
payment from Lessor, Agent or any party to any agreements related thereto for
any reason whatsoever. Lessee assumes the sole responsibility for the condition,
use, operation, maintenance, and management of the Property and Lessor shall
have no responsibility in respect thereof and shall have no liability for damage
to the property of Lessee or any subtenant of Lessee on any account or for any
reason whatsoever.
6.2 No Termination or Abatement. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, or any action with respect to this Lease which may
be taken by any trustee, receiver or liquidator of Lessor or by any court with
respect to Lessor, except as otherwise expressly provided herein. Lessee hereby
waives all right (i) to terminate or surrender this Lease, except as otherwise
expressly provided herein, or (ii) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be
bound by all of the terms and conditions contained in this Lease.
SECTION 7. OWNERSHIP OF PROPERTY
7.1 Ownership of the Property. (a) Lessor and Lessee intend that (i)
for financial accounting purposes with respect to Lessee (A) this Lease will be
treated as an "operating lease" pursuant to Statement of Financial Accounting
Standards (SFAS) No. 13, as amended, (B) Lessor will be treated as the owner and
lessor of the Property and (C) Lessee will be treated as the lessee of the
Property, but (ii) for federal, state and local income tax and all other
purposes (A) this Lease will be treated as a financing arrangement, (B) the
Lenders will be treated as senior lenders making loans to Lessee in an amount
equal to the Loans, which Loans will be secured by the Property, (C) Lessor will
be treated as a subordinated lender making a loan to Lessee in an amount equal
to the Lessor Contribution, which loan is secured by the Property, and (D)
Lessee will be treated as the owner of the Property and will be entitled to all
tax benefits ordinarily available to an owner of property like the Property for
such tax purposes.
(b) Lessor and Lessee further intend and agree that, for the purpose
of securing Lessee's obligations for the repayment of the above-described loans,
(i) this Lease shall also be
5
deemed to be a security agreement and financing statement within the meaning of
Article 9 of the Uniform Commercial Code and a real property mortgage or deed of
trust, as applicable; (ii) the Lease provided for in Section 2 shall be deemed a
grant of a security interest in and a mortgage lien on the Lessee's right, title
and interest in the Properties (including the right to exercise all remedies as
are contained in the applicable Mortgage and Memorandum of Lease upon the
occurrence of a Lease Event of Default) and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, investments, securities or
other property, whether in the form of cash, investments, securities or other
property, for the benefit of the Lessor to secure the Lessee's payment of all
amounts owed by the Lessee under this Lease and the other Operative Agreements
and Lessor holds title to the Properties so as to create and grant a first lien
and prior security interest in each Property (A) pursuant to this Lease for the
benefit of the Agent under the Assignment of Lease, to secure to the Agent the
obligations of the Lessee under the Lease and (B) pursuant to the Mortgages to
secure to the Agent the obligations of the Lessor under the Mortgages and the
Notes; (iii) the possession by Lessor or any of its agents of notes and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
Uniform Commercial Code; and (iv) notifications to Persons holding such
property, and acknowledgements, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to
have been given for the purpose of perfecting such security interest under
applicable law. Lessor and Lessee shall, to the extent consistent with this
Lease, take such actions as may be necessary to ensure that, if this Lease were
deemed to create a security interest in the Properties in accordance with this
Section, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the Basic Term. Nevertheless, Lessee acknowledges and agrees that
none of Lessor, Agent, or any Lender has provided or will provide tax,
accounting or legal advice to Lessee regarding this Lease, the Operative
Agreements or the transactions contemplated hereby and thereby, or made any
representations or warranties concerning the tax, accounting or legal
characteristics of the Operative Agreements, and that Lessee has obtained and
relied upon such tax, accounting and legal advice concerning the Operative
Agreements as it deems appropriate.
(c) Lessor and Lessee further intend and agree that in the event of
any insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State or Commonwealth thereof affecting Lessee or
Lessor, the transactions evidenced by this Lease shall be regarded as loans made
by an unrelated third party lender to Lessee.
SECTION 8. CONDITION OF PROPERTY
8.1 Condition of the Property. LESSEE ACKNOWLEDGES AND AGREES THAT IT
IS RENTING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR AND SUBJECT TO (A) THE EXISTING STATE OF TITLE,
(B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF, (C) ANY STATE OF FACTS
WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW AND (D) VIOLATIONS OF
LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF. NONE OF LESSOR,
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THE AGENT AND ANY LENDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED, INCLUDING THE
CONDITION OF ANY IMPROVEMENTS THEREON, THE SOIL CONDITION, OR ANY ENVIRONMENTAL
OR HAZARDOUS MATERIAL CONDITION) OR SHALL BE DEEMED TO HAVE ANY LIABILITY
WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN,
OPERATION, OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF) AND NONE OF LESSOR, THE AGENT AND
ANY LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR
THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL
REQUIREMENT.
8.2 Possession and Use of the Property. Each Property shall be used
in a manner consistent with the Agency Agreement and, after the Completion Date
for the Property, as a skilled nursing or assisted living Facility. Lessee
shall pay, or cause to be paid, all charges and costs required in connection
with the use of the Properties. Lessee shall not commit or permit any waste of
any Property or any part thereof.
SECTION 9. COMPLIANCE
9.1 Compliance with Legal Requirements and Insurance Requirements.
Subject to the terms of Section 13 relating to permitted contests, Lessee, at
its sole cost and expense, shall (a) comply in all material respects with all
Legal Requirements (including all Environmental Laws) and Insurance Requirements
relating to each Property, including the use, construction, operation,
maintenance, repair and restoration thereof, whether or not compliance therewith
shall require structural or extraordinary changes in the Improvements or
interfere with the use and enjoyment of each Property, and (b) procure, maintain
and comply in all material respects with all licenses, permits, orders,
approvals, consents and other authorizations required for the construction,
renovation, use, maintenance and operation of each Property and for the use,
operation, maintenance, repair and restoration of the Improvements.
SECTION 10. MAINTENANCE AND REPAIR
10.1 Maintenance and Repair; Return. (a) Lessee, at its sole cost
and expense, shall maintain each Property in good condition (ordinary wear and
tear excepted) and make all necessary repairs thereto, of every kind and nature
whatsoever, whether interior or exterior, ordinary or extraordinary, structural
or nonstructural or foreseen or unforeseen, in each case in substantial
compliance with all Legal Requirements and Insurance Requirements and on a basis
reasonably consistent with the operation and maintenance of commercial
properties comparable in type and location to the applicable Property subject,
however, to the provisions of Section 15 with respect to Condemnation and
Casualty.
(b) Lessor shall under no circumstances be required to build any
improvements on any Property, make any repairs, replacements, alterations or
renewals of any nature or
7
description to any Property, make any expenditure whatsoever in connection with
this Lease or maintain any Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of any Property, and Lessee waives
the right to (i) require Lessor to maintain, repair, or rebuild all or any part
of any Property, or (ii) make repairs at the expense of Lessor pursuant to any
Legal Requirement, Insurance Requirement, contract, agreement, covenants,
condition or restriction at any time in effect.
(c) Lessee shall, upon the expiration or earlier termination of the
Term with respect to a Property, vacate, surrender and transfer such Property to
Lessor, at Lessee's own expense, free and clear of all Liens other than (i)
Liens of the types described in clause (i) of the definition of Permitted Liens,
(ii) Liens of the type described in clause (ii) of the definition of Permitted
Exceptions and (iii) Lessor Liens, in as good condition as they were on the
applicable Property Closing Date or, if later, the Completion Date in respect of
such Property, ordinary wear and tear excepted, and in compliance with all Legal
Requirements and the other requirements of this Lease (and in any event without
(x) any asbestos installed or maintained in any part of such Property, (y) any
polychlorinated byphenyls (PCBs) in, on or used, stored or located at such
Property, and (z) any other Hazardous Substances in violation of Applicable
Environmental Laws). Lessee shall cooperate with any independent purchaser of
such Property in order to facilitate the ownership and operation by such
purchaser of such Property after such expiration or earlier termination of the
Term, including providing all books, reports and records regarding the
maintenance, repair and ownership of such Property and all data and technical
information relating thereto, granting or assigning all licenses necessary for
the operation and maintenance of such Property and cooperating in seeking and
obtaining all necessary licenses, permits and approvals of Governmental
Authorities. Lessee shall have also paid the total cost for the completion of
all Modifications commenced prior to such expiration or earlier termination of
the Term. The obligation of Lessee under this Section 10.1(c) shall survive the
expiration or termination of this Lease.
10.2 Right of Inspection. Lessor may, at reasonable times and with
reasonable prior notice, enter upon, inspect and examine at its own cost and
expense (unless a Lease Event of Default exists, in which case the out-of-pocket
costs and expenses of Lessor shall be paid by Lessee), any Property. Upon
request of the Agent, Lessee shall furnish to Lessor statements, no more than
once per year, accurate in all material respects, regarding the condition and
state of repair of each Property. Lessor shall have no duty to make any such
inspection or inquiry and shall not incur any liability or obligation by reason
of not making any such inspection or inquiry.
10.3 Environmental Inspection. Upon surrender of possession of each
Property, or not more than 120 days nor less than 30 days prior to the
Expiration Date (unless Lessee has previously irrevocably exercised the Purchase
Option), Lessee shall, at its sole cost and expense, provide to Lessor a report
by an environmental consultant selected by Lessee and reasonably satisfactory to
Lessor certifying that Hazardous Substances have not at any time during the Term
been generated, used, treated or stored on, transported to or from, Released at,
on or from or deposited at or on such Property, and no portion of such Property
has been used for such purposes other than (i) as necessary to use, operate,
maintain, repair and restore such Property and (ii) in full compliance with all
Environmental Laws. If such is not the case, the report shall set forth a
remedial response plan relating to such Property (which remedial response plan,
if required by any Environmental Law or Governmental Authority, shall be
approved by the
8
appropriate Governmental Authority). Such remedial response plan shall include,
but shall not be limited to, plans for full response, remediation, removal, or
other corrective action, and the protection, or mitigative action associated
with the protection, of natural resources including wildlife, aquatic species,
and vegetation associated with such Property, as required by all applicable
Environmental Laws. If such report includes a remedial response plan, Lessee
shall promptly deposit funds in escrow with the Agent sufficient to ensure the
full execution and implementation of such plan.
SECTION 11. MODIFICATIONS
11.1 Modifications, Substitutions and Replacements. (a) So long as
no Lease Event of Default has occurred and is continuing, Lessee, at its sole
cost and expense, may at any time and from time to time make alterations,
renovations, improvements and additions to a Property or any part thereof
(collectively, "Modifications"); provided, that: (i) except for any Modification
required to be made pursuant to a Legal Requirement or an Insurance Requirement,
no Modification, individually, or when aggregated with any (A) other
Modification or (B) grant, dedication, transfer or release pursuant to Section
12.2, shall impair the value of such Property or the utility or useful life of
such Property from that which existed immediately prior to such Modification;
(ii) the Modification shall be performed expeditiously and in a good and
workmanlike manner; (iii) Lessee shall comply with all Legal Requirements
(including all Environmental Laws) and Insurance Requirements applicable to the
Modification, including the obtaining of all permits and certificates of
occupancy, and the structural integrity of such Property shall not be adversely
affected; (iv) Lessee shall maintain or cause to be maintained builders' risk
insurance at all times when a Modification is in progress; (v) subject to the
terms of Section 13 relating to permitted contests, Lessee shall pay all costs
and expenses and discharge any Liens arising with respect to the Modification;
(vi) such Modifications shall comply with Sections 8.2 and 10.1 and shall not
change the primary character of such Property; and (vii) no Improvements shall
be demolished, except to the extent such demolition does not impair the value,
utility or useful life of such Property. All Modifications (other than those
that may be readily removed without impairing the value, utility or remaining
useful life of such Property) shall remain part of the realty and shall be
subject to this Lease, and title thereto shall immediately vest in Lessor. So
long as no Lease Event of Default has occurred and is continuing, Lessee may
place upon a Property any inventory, trade fixtures, machinery, equipment or
other property belonging to Lessee or third parties and may remove the same at
any time during the term of this Lease; provided that such inventory, trade
fixtures, machinery, equipment or other property, or their respective
operations, do not impair the value, utility or remaining useful life of such
Property.
(b) Following the Completion Date with respect to any Property, Lessee
shall notify Lessor of the undertaking of any construction, repairs or
alterations to the Property the cost of which is anticipated to exceed $500,000.
Prior to undertaking any such construction or alterations costing in excess of
such amount, Lessee shall deliver to Lessor (i) a brief narrative of the work to
be done and a copy of the plans and specifications relating to such work; and
(ii) an Officer's Certificate stating that such work when completed will not
impair the value, utility or remaining life of such Property. Lessor, by itself
or its agents, shall have the right, but not the
9
obligation, from time to time to inspect such construction to ensure that the
same is completed consistent with the plans and specifications.
(c) Following the Completion Date with respect to any Property, Lessee
shall not without the consent of Lessor undertake any construction or
alterations to such Property if such construction or alterations cannot, in the
reasonable judgement of Agent, be completed on or prior to the date that is
twelve months prior to the Expiration Date.
SECTION 12. TITLE
12.1 Warranty of Title. (a) Lessee agrees that, except as otherwise
provided herein and subject to the terms of Section 13 relating to permitted
contests, Lessee shall not directly or indirectly create or allow to remain, and
shall promptly discharge at its sole cost and expense, any Lien, defect,
attachment, levy, title retention agreement or claim upon any Property or any
Modifications or any Lien, attachment, levy or claim with respect to the Rent or
with respect to any amounts held by the Agent pursuant to the Credit Agreement,
other than Permitted Liens. Lessee shall promptly notify Lessor in the event it
receives knowledge that a Lien (other than a Permitted Lien or a Lessor Lien)
exists with respect to the Property unless Lessee promptly removes such Lien.
(b) Nothing contained in this Lease shall be construed as constituting
the consent or request of Lessor, expressed or implied, to or for the
performance by any contractor, mechanic, laborer, materialman, supplier or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to any Property
or any part thereof. NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
LESSEE, OR TO ANYONE HOLDING ANY PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR IN AND TO ANY
PROPERTY.
12.2 Grants and Releases of Easements. Provided that no Lease Event
of Default shall have occurred and be continuing and subject to the provisions
of Sections 8, 9, 10 and 11, Lessor hereby consents to the following actions by
Lessee, in the name and stead of Lessor, but at Lessee's sole cost and expense:
(a) the granting (prior to the Lien of the Mortgage) of easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the construction, use, repair, renovation
or maintenance of any Property as herein provided; (b) the release (free and
clear of the Lien of the Mortgage) of existing easements or other rights in the
nature of easements which are for the benefit of any Property; (c) the
dedication or transfer (prior to the Lien of the Mortgage) of unimproved
portions of any Property for road, highway or other public purposes; (d) the
execution of petitions to have any Property annexed to any municipal corporation
or utility district; and (e) the execution of amendments to any covenants and
restrictions affecting any Property; provided, that in each case Lessee shall
have delivered to Lessor an Officer's Certificate stating that: (i) such grant,
release, dedication or transfer does not impair the value of utility or
remaining useful life of the applicable Property, (ii) such grant, release,
dedication or transfer is necessary in connection with the construction, use,
maintenance, alteration, renovation or improvement of the
10
applicable Property, (iii) Lessee shall remain obligated under this Lease and
under any instrument executed by Lessee consenting to the assignment of Lessor's
interest in this Lease as security for indebtedness, in each such case in
accordance with their terms, as though such grant, release, dedication or
transfer, had not been effected and (iv) Lessee shall pay and perform any
obligations of Lessor under such grant, release, dedication or transfer. Without
limiting the effectiveness of the foregoing, provided that no Lease Event of
Default shall have occurred and be continuing, Lessor shall, upon the request of
Lessee, and at Lessee's sole cost and expense, execute and deliver any
instruments necessary or appropriate to confirm any such grant, release,
dedication or transfer to any Person permitted under this Section.
SECTION 13. PERMITTED CONTESTS
13.1 Permitted Contests Other Than in Respect of Impositions. Except
to the extent otherwise provided for in Section 12.2 of the Participation
Agreement, Lessee, on its own or on Lessor's behalf but at Lessee's sole cost
and expense, may contest, by appropriate administrative or judicial proceedings
conducted in good faith and with due diligence, the amount, validity or
application, in whole or in part, of any Legal Requirement, or utility charges
payable pursuant to Section 4.1 or any Lien, attachment, levy, encumbrance or
encroachment, and Lessor agrees not to pay, settle or otherwise compromise any
such item, provided that (a) the commencement and continuation of such
proceedings shall suspend the collection thereof from, and suspend the
enforcement thereof against the applicable Properties, Lessor, the Agent and the
Lenders; (b) there shall be no risk of the imposition of a Lien (other than a
Permitted Lien) on any Property and no part of any Property nor any Rent would
be in any danger of being sold, forfeited, lost or deferred; (c) at no time
during the permitted contest shall there be a risk of the imposition of criminal
liability or civil liability on Lessor, the Agent or any Lender for failure to
comply therewith; and (d) in the event that, at any time, there shall be a
material risk of extending the application of such item beyond the earlier of
the Maturity Date and the Expiration Date for the applicable Property, then
Lessee shall deliver to Lessor an Officer's Certificate certifying as to the
matters set forth in clauses (a), (b) and (c) of this Section 13.1. Lessor, at
Lessee's sole cost and expense, shall execute and deliver to Lessee such
authorizations and other documents as may reasonably be required in connection
with any such contest and, if reasonably requested by Lessee, shall join as a
party therein at Lessee's sole cost and expense.
SECTION 14. INSURANCE
14.1 Public Liability and Workers' Compensation Insurance. During
the Term, Lessee shall procure and carry, at Lessee's sole cost and expense,
commercial general liability insurance for claims for injuries or death
sustained by persons or damage to property while on each Property. Such
insurance shall be on terms and in amounts that are no less favorable than
insurance maintained by owners of similar properties and that are in accordance
with normal industry practice, provided that Lessee shall be permitted to self-
insure such liability up to $1,000,000. The policy shall be endorsed to name
Lessor, the Agent and the Lenders as additional insureds. The policy shall also
specifically provide that the policy shall be considered primary insurance which
shall apply to any loss or claim before any contribution by any insurance which
Lessor, the Agent or the Lenders may have in force. Lessee shall, in the
11
operation of the Property, comply with the applicable workers' compensation laws
and protect Lessor against any liability under such laws.
14.2 Hazard and Other Insurance. (a) During the Term, Lessee shall
keep each Property insured against loss or damage by fire and other risks on
terms and in amounts that are no less favorable than insurance maintained by
owners of similar properties, that are in accordance with normal industry
practice, are in amounts equal to the actual replacement cost of the
Improvements. So long as no Lease Event of Default exists, any loss payable
under the insurance policy required by this Section will be paid to and adjusted
solely by Lessee, subject to Section 15. So long as no Lease Event of Default
exists, any loss payable under any title insurance policy covering any Property
will be paid to and adjusted solely by Lessee, subject to Section 15.
(b) If at any time during the Term the area in which any Property is
located is designated a "flood-prone" area pursuant to the Flood Disaster
Protection Act of 1973 or any amendments or supplements thereto, then Lessee
shall comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973, as may be amended. In addition, Lessee will
fully comply with the requirements of the National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of 1973, as each may be amended from time
to time, and with any other Legal Requirement, concerning flood insurance to the
extent that it apply to any Property.
14.3 Coverage. (a) Lessee shall furnish Lessor and the Agent with
certificates showing the insurance required under Sections 14.1 and 14.2 to be
in effect and naming Agent, the Lenders and the Lessor as an additional insured
with respect to liability insurance and showing the mortgagee endorsement
required by Section 14.3(c). All such insurance shall be at the cost and
expense of Lessee. Such certificates shall include a provision in which the
insurer agrees to provide thirty (30) days' advance written notice by the
insurer to Lessor and the Agent in the event of cancellation or modification of
such insurance. If a Lease Event of Default has occurred and is continuing and
Lessor so requests, Lessee shall deliver to Lessor copies of all insurance
policies required by this Lease.
(b) Lessee agrees that the insurance policy or policies required by
this Lease shall include an appropriate clause pursuant to which such policy
shall provide that it will not be invalidated should Lessee waive, in writing,
prior to a loss, any or all rights of recovery against any party for losses
covered by such policy. Lessee hereby waives any and all such rights against
Lessor, the Agent and the Lenders to the extent of payments made under such
policies.
(c) All insurance policies required by Section 14.2 shall include a
"New York" or standard form mortgagee endorsement in favor of the Agent and, if
available, the Lessor.
(d) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Lease except that Lessor may carry separate
liability insurance so long as (i) Lessee's insurance is designated as primary
and in no event excess or contributory to any insurance Lessor may have in force
which would apply to a loss covered under Lessee's policy and (ii) each such
insurance policy
12
will not cause Lessee's insurance required under this Lease to be subject to a
coinsurance exception of any kind.
(e) Lessee shall pay as they become due all premiums for the insurance
required by this Lease, shall renew or replace each policy prior to the
expiration date thereof and shall promptly deliver to Lessor and the Agent
certificates for renewal and replacement policies.
SECTION 15. CONDEMNATION AND CASUALTY
15.1 Casualty and Condemnation. (a) Subject to the provisions of
this Section 15 and Section 16 (in the event Lessee delivers, or is obligated to
deliver, a Termination Notice), and prior to the occurrence and continuation of
a Lease Default, Lessee shall be entitled to receive (and Lessor hereby
irrevocably assigns to Lessee all of Lessor's right, title and interest in) any
award, compensation or insurance proceeds to which Lessee or Lessor may become
entitled by reason of their respective interests in a Property (i) if all or a
portion of such Property is damaged or destroyed in whole or in part by a
Casualty or (ii) if the use, access, occupancy, easement rights or title to such
Property or any part thereof is the subject of a Condemnation; provided,
however, if a Lease Default shall have occurred and be continuing such award,
compensation or insurance proceeds shall be paid directly to Lessor or, if
received by Lessee, shall be held in trust for Lessor, and shall be paid over by
Lessee to Lessor, and provided further that in the event of any Casualty or
Condemnation, the estimated cost of restoration of which is in excess of
$1,000,000, any such award, compensation or insurance proceeds shall be paid
directly to Lessor, or if received by Lessee, shall be held in trust for Lessor
and shall be paid over by Lessee to Lessor.
(b) So long as no Lease Event of Default has occurred and is
continuing, Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or insurance
payment on account of any such Casualty or Condemnation and shall pay all
expenses thereof; provided that if the estimated cost of restoration of the
Property or the payment on account of such title defect is in excess of
$1,000,000, then Lessor shall be entitled to participate in any such proceeding
or action. At Lessee's reasonable request, and at Lessee's sole cost and
expense, Lessor and the Agent shall participate in any such proceeding, action,
negotiation, prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessor or Lessee shall receive notice of a Casualty or a
possible Condemnation of a Property or any interest therein, Lessor or Lessee,
as the case may be, shall give notice thereof to the other and to the Agent
promptly after the receipt of such notice.
(d) In the event of a Casualty or receipt of notice by Lessee or
Lessor of a Condemnation, Lessee shall, not later than thirty (30) days after
such occurrence, deliver to Lessor and the Agent an Officer's Certificate
stating that either (i) (x) such Casualty is not a Significant Casualty or (y)
such Condemnation is neither a Total Condemnation nor a Significant Condemnation
and that this Lease shall remain in full force and effect with respect to the
applicable Property and, at Lessee's sole cost and expense, Lessee shall
promptly and diligently
13
restore the applicable Property in accordance with the terms of Section 15.1(e)
or (ii) this Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1.
(e) If pursuant to this Section 15.1, this Lease shall continue in
full force and effect following a Casualty or Condemnation with respect to the
affected Property, Lessee shall, at its sole cost and expense, promptly and
diligently repair any damage to the applicable Property caused by such Casualty
or Condemnation in conformity with the requirements of Sections 10.1 and 11.1
using the as-built plans and specifications for the applicable Property (as
modified to give effect to any subsequent Modifications, any Condemnation
affecting the Property and all applicable Legal Requirements) so as to restore
the applicable Property to the same condition, operation, function and value as
existed immediately prior to such Casualty or Condemnation. In such event,
title to the applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation with respect to which
this Lease remains in full force and effect under this Section 15.1 affect
Lessee's obligations to pay Rent pursuant to Section 3.1.
(g) Notwithstanding anything to the contrary set forth in Section
15.1(a) or Section 15.1(e), if during the Term a Casualty occurs with respect to
a Property or Lessee receives notice of a Condemnation with respect to a
Property, and following such Casualty or Condemnation, such Property cannot
reasonably be restored on or before the date which is twelve months prior to the
Maturity Date to substantially the same condition as existed immediately prior
to such Casualty or Condemnation or before such day such Property is not in fact
so restored, then Lessee shall exercise its Purchase Option with respect to such
Property on the next Payment Date or irrevocably agree in writing to exercise
the Maturity Date Purchase Option with respect to such Property, and in either
such event such remaining Casualty or Condemnation proceeds shall be paid to the
Agent, which shall pay such funds to Lessee upon the closing of the purchase of
such Property.
15.2 Environmental Matters. (a) Promptly upon Lessee's actual
knowledge of the presence of Hazardous Substances in any portion of a Property
in concentrations and conditions that constitute an Environmental Violation,
Lessee shall notify Lessor in writing of such condition. In the event of such
Environmental Violation, Lessee shall, not later than thirty (30) days after
Lessee has actual knowledge of such Environmental Violation, either deliver to
Lessor and the Agent an Officer's Certificate and a Termination Notice with
respect to such Property pursuant to Section 16.1, if applicable, or, at
Lessee's sole cost and expense, promptly and diligently undertake any response,
clean up, remedial or other action necessary to remove, cleanup or remediate the
Environmental Violation in accordance with the terms of Section 9.1. If Lessee
does not deliver a Termination Notice with respect to such Property pursuant to
Section 16.1, Lessee shall, upon completion of remedial action by Lessee, cause
to be prepared by an environmental consultant reasonably acceptable to Lessor a
report describing the Environmental Violation and the actions taken by Lessee
(or its agents) in response to such Environmental Violation, and a statement by
the consultant that the Environmental Violation has been remedied in full
compliance with applicable Environmental Laws.
(b) In addition, Lessee shall provide to Lessor, within five (5)
Business Days of receipt, copies of all written communications with any
Governmental Authority relating to any
14
Environmental Law in connection with any Property. Lessee shall also promptly
provide such detailed reports of any such environmental claims as reasonably may
be requested by Lessor and the Agent.
SECTION 16. LEASE TERMINATION
16.1 Termination upon Certain Events. (a) If Lessor or Lessee shall
have received notice of a Total Condemnation, then Lessee shall be obligated,
within thirty (30) days after Lessee receives notice thereof, to deliver a
written notice in the form described in Section 16.2(a) (a "Termination Notice")
of the termination of this Lease with respect to the applicable Property.
(b) If either: (i) Lessee or Lessor shall have received notice of a
Condemnation, and Lessee shall have delivered to Lessor an Officer's Certificate
that such Condemnation is a Significant Condemnation; or (ii) a Casualty occurs,
and Lessee shall have delivered to Lessor an Officer's Certificate that such
Casualty is a Significant Casualty; or (iii) an Environmental Violation occurs
or is discovered and Lessee shall have delivered to Lessor an Officer's
Certificate stating that, in the reasonable, good-faith judgment of Lessee, the
cost to remediate the same will exceed 10% of the Property Cost of such
Property; then, Lessee shall, simultaneously with the delivery of the Officer's
Certificate pursuant to the preceding clause (i), (ii) or (iii), deliver a
Termination Notice with respect to the affected Property.
16.2 Procedures. (a) A Termination Notice shall contain: (i)
notice of termination of this Lease with respect to the affected Property on a
date not more than thirty (30) days after Lessor's receipt of such Termination
Notice (the "Termination Date"); (ii) a binding and irrevocable agreement of
Lessee to pay the Termination Value and purchase such Property on such
Termination Date and (iii) the Officer's Certificate described in Section
16.1(b).
(b) On the Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, plus all amounts owing in respect
of Rent for such Property (including Supplemental Rent) theretofore accruing and
Lessor shall convey such Property to Lessee (or Lessee's designee) all in
accordance with Section 19.1.
SECTION 17. DEFAULT
17.1 Lease Events of Default. If any one or more of the following
events (each a "Lease Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent or any
Supplemental Rent representing amounts owed under the Credit Agreement or
the other Credit Documents within five (5) Business Days after the same has
become due and payable or (ii) any Maximum Residual Guarantee Amount,
Purchase Option Price or Termination Value after the same has become due
and payable; or
15
(b) Lessee shall fail to make payment of any other Supplemental Rent
due and payable within five (5) Business Days after receipt of notice
thereof; or
(c) Lessee shall fail to maintain insurance as required by Section 14;
or
(d) (i) subject to the limitations contained in Section 17.7 as to the
Lessee only, Lessee or any Guarantor shall fail to observe or perform any
term, covenant or condition of Lessee or such Guarantor, respectively,
under this Lease, the Participation Agreement, the Guarantee or any other
Operative Agreement to which it is a party (other than those set forth in
Section 17.1(a), (b) or (c) hereof) and such default shall remain
unremedied for a period of 30 days, provided that such 30 day period shall
be extended (up to a maximum period of 180 days) as to defaults which
cannot be cured with the payment of money but are curable though not
reasonably capable of cure within such 30 day period, provided that Lessee
has commenced to cure such default prior to the end of such 30 day period
and prosecutes such cure to completion or (ii) any representation or
warranty by Lessee or any Guarantor, respectively, set forth in this Lease,
the Guaranty or in any other Operative Agreement or in any document entered
into in connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or therewith
shall be false or inaccurate in any material way; or
(e) an Agency Agreement Event of Default shall have occurred and be
continuing; or
(f) Lessee or any Guarantor shall (i) admit in writing its inability
to pay its debts generally as they become due, (ii) file a petition under
the United States bankruptcy laws or any other applicable insolvency law or
statute of the United States of America or any State or Commonwealth
thereof, (iii) make a general assignment for the benefit of its creditors,
(iv) consent to the appointment of a receiver of itself or the whole or any
substantial part of its property, (v) fail to cause the discharge of any
custodian, trustee or receiver appointed for Lessee or any such Guarantor
or the whole or a substantial part of its property within ninety (90) days
after such appointment, or (vi) file a petition or answer seeking or
consenting to reorganization under the United States bankruptcy laws or any
other applicable insolvency law or statute of the United States of America
or any State or Commonwealth thereof; or
(g) insolvency proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof shall be
filed against Lessee or any Guarantor and not dismissed within ninety (90)
days from the date of its filing, or a court of competent jurisdiction
shall enter an order or decree appointing, without its consent of, a
receiver of Lessee or any Guarantor or the whole or a substantial part of
its property, and such order or decree shall not be vacated or set aside
within ninety (90) days from the date of the entry thereof; or
(h) a Credit Agreement Event of Default shall have occurred and be
continuing; or
16
(i) an event of default under the Corporate Credit Agreement shall
have occurred and be continuing;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Section 17 and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination, and this Lease
shall terminate. Lessee shall, to the fullest extent permitted by law, pay as
Supplemental Rent all costs and expenses incurred by or on behalf of Lessor,
including fees and expenses of counsel, as a result of any Lease Event of
Default hereunder.
17.2 Final Liquidated Damages. If a Lease Event of Default shall
have occurred and be continuing, Lessor shall have the right to recover, by
demand to Lessee and at Lessor's election, and Lessee shall pay to Lessor, as
and for final liquidated damages, but exclusive of the indemnities payable under
Section 13 of the Participation Agreement, and in lieu of all damages beyond the
date of such demand the sum of (a) the Termination Value, plus (b) all other
amounts owing in respect of Rent and Supplemental Rent theretofore accruing
under this Lease. Upon payment of the amount specified pursuant to the first
sentence of this Section 17.2, Lessee shall be entitled to receive from Lessor,
at Lessee's request and cost, an assignment of Lessor's right, title and
interest in the Properties, in each case in recordable form and otherwise in
conformity with local custom and free and clear of the Lien of all mortgages
(including the Mortgages) and any Lessor Liens. Lessee (or Lessee's designee)
shall execute and deliver to Lessor an assumption of all of Lessor's obligations
under the Ground Leases, if any. The Properties shall be conveyed to Lessee (or
Lessee's designee) "AS IS" and in their then present physical condition. If any
statute or rule of law shall limit the amount of such final liquidated damages
to less than the amount agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law; provided, that Lessee shall
not be entitled to receive an assignment of Lessor's interest under the Ground
Leases, if any, or in the Properties unless Lessee shall have paid in full the
Termination Value of each of the Properties.
17.3 Lease Remedies. Lessor and Lessee intend that for commercial
law and bankruptcy law purposes, this Lease will be treated as a financing
arrangement, as set forth in Section 7. If, as a result of applicable state
law, which cannot be waived, this Lease is deemed to be a lease of the
Properties, rather than a financing arrangement, and Lessor is unable to enforce
the remedies set forth in Section 17.2, the following remedies shall be
available to Lessor:
(a) Surrender of Possession. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to Section 17.1, Lessee shall, upon thirty (30) days written
notice, surrender to Lessor possession of the Property and Lessee shall quit the
same. Lessor may enter upon and repossess the Property by such means as are
available at law or in equity, and may remove Lessee and all other Persons and
any and all personal property and Lessee's equipment and personalty and
severable Modifications from the Property. Lessor shall have no liability by
reason of any such entry, repossession or removal performed in accordance with
applicable law.
(b) Reletting. If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet all, or any
portion, of the Property, for the account of Lessee or otherwise, for such term
or terms (which may be greater or less than the
17
period which would otherwise have constituted the balance of the Term) and on
such conditions (which may include concessions or free rent) and for such
purposes as Lessor may determine, and Lessor may collect, receive and retain the
rents resulting from such reletting. Lessor shall not be liable to Lessee for
any failure to relet the Property or for any failure to collect any rent due
upon such reletting.
(c) Damages. None of (i) the termination of this Lease pursuant to
Section 17.1; (ii) the repossession of the Property; or (iii) except to the
extent required by applicable law, the failure of Lessor to relet all, or any
portion, of the Property, the reletting of all or any portion thereof, nor the
failure of Lessor to collect or receive any rentals due upon any such reletting
shall relieve Lessee of its liability and obligations hereunder, all of which
shall survive any such termination, repossession or reletting. If any Lease
Event of Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay
to Lessor all Basic Rent and other sums due and payable hereunder to and
including the date of such termination. Thereafter, on the days on which the
Basic Rent or Supplemental Rent, as applicable, are payable under this Lease or
would have been payable under this Lease if the same had not been terminated
pursuant to Section 17.1 and until the end of the Term or what would have been
the Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section 17.1, less
the net proceeds, if any, which are actually received by Lessor with respect to
the period in question of any reletting of the Property or any portion thereof;
provided that Lessee's obligation to make payments of Basic Rent and
Supplemental Rent under this Section 17.4 shall continue only so long as Lessor
shall not have received the amounts specified in Section 17.5 or Section 17.6.
In calculating the amount of such net proceeds from reletting, there shall be
deducted all of Lessor's, the Agent's and any Lenders' expenses in connection
therewith, including repossession costs, brokerage commissions, fees and
expenses for counsel and any necessary repair or alteration costs and expenses
incurred in preparation for such reletting. To the extent Lessor receives any
damages pursuant to this Section 17.4, such amounts shall be regarded as amounts
paid on account of Rent.
(d) Acceleration of Rent. If a Lease Event of Default shall have
occurred and be continuing, and this Lease shall not have been terminated
pursuant to Section 17.1, and whether or not Lessor shall have collected any
current liquidated damages pursuant to Section 17.3(c), Lessor may upon written
notice to Lessee accelerate all payments of Basic Rent due hereunder and, upon
such acceleration, Lessee shall immediately pay Lessor, as and for final
liquidated damages and in lieu of all current liquidated damages on account of
such Lease Event of Default beyond the date of such acceleration (it being
agreed that it would be impossible accurately to determine actual damages) an
amount equal to the sum of (a) all Basic Rent (assuming interest at a rate per
annum equal to the Overdue Rate), as applicable, due from the date of such
acceleration until the end of the Term, plus (b) the Maximum Residual Guarantee
Amount that would be payable under Section 21.1(c) assuming the proceeds of the
sale pursuant to such Section 21.1(c) are equal to zero, which sum is then
discounted to present value at a rate equal to the rate then being paid on
United States treasury securities with maturities corresponding to the then
remaining Term. Following payment of such amount by Lessee, Lessee will be
permitted to stay in possession of the Property for the remainder of the Term,
18
subject to the terms and conditions of this Lease, including the obligation to
pay Supplemental Rent, provided that no further Lease Event of Default shall
occur and be continuing, following which Lessor shall have all the rights and
remedies set forth in this Section 17 (but not including those set forth in this
Section 17.3). If any statute or rule of law shall limit the amount of such
final liquidated damages to less than the amount agreed upon, Lessor shall be
entitled to the maximum amount allowable under such statute or rule of law.
17.4 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 17.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain re-
entry or possession; (b) any right of redemption, re-entry or repossession; (c)
the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might otherwise
limit or modify any of Lessor's rights or remedies under this Section 17.
17.5 Assignment of Rights Under Contracts. If a Lease Event of
Default shall have occurred and be continuing, and whether or not this Lease
shall have been terminated pursuant to Section 17.1, Lessee shall upon Lessor's
demand immediately assign, transfer and set over to Lessor all of Lessee's
right, title and interest in and to each agreement executed by Lessee in
connection with the construction, renovation, development, use or operation of
the Property (including all right, title and interest of Lessee with respect to
all warranty, performance, service and indemnity provisions), as and to the
extent that the same relate to the construction renovation, and operation of the
Property.
17.6 Remedies Cumulative. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise including any mortgage foreclosure
remedies contained in the Memorandum of Lease.
17.7 Covenant Defaults.
(a) The occurrence of any event which would give rise to a Lease
Default or Lease Event of Default pursuant to Section 17.1(d) for the
failure by the Lessee to observe or perform any term, covenant or condition
of Lessee under this Lease or the Participation Agreement relating to a
specific Property (a "Covenant Default") shall not be deemed to be a Lease
Default or a Lease Event of Default so long as the following conditions
shall be satisfied:
(i) such Covenant Default does not relate to the breach by the
Lessee of any of its obligations under this Lease or the other
Operative Agreements with respect to any environmental matters or
Environmental Claims;
(ii) such Covenant Default shall not have a Material Adverse
Effect;
(iii) there is no material risk that such Covenant Default will
cause any lien (other than a Permitted Exception) to attach to a
Property or subject the Lessor or any Lender to any criminal
liability;
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(iv) there shall not at any time exist Covenant Defaults
relating to Properties which have an aggregate Property Cost in excess
of the lesser of (a) 10% of the Property Costs of all of the
Properties and (b) $7,500,000 and
(v) the Lessee shall have delivered to Lessor an Officer's
Certificate stating that, in reasonable, good faith judgment of
Lessee, (a) the cost to remediate all such Covenant Defaults will not
exceed $3,000,000 and (b) the costs to remediate any Covenant Default
on a specific Property will not exceed 10% of the Property Cost of
such Property.
(b) If (i) each of the foregoing conditions set forth in Section
17.7(a) shall not be satisfied or (ii) such Covenant Default shall not be
cured prior to the date which is twelve months prior to the Maturity Date,
a Lease Event of Default shall be deemed to have occurred.
SECTION 18. LESSOR'S RIGHT TO CURE
18.1 Lessor's Right to Cure Lessee's Lease Defaults. Lessor, without
waiving or releasing any obligation or Lease Event of Default, may (but shall be
under no obligation to) remedy any Lease Event of Default for the account and at
the sole cost and expense of Lessee, including the failure by Lessee to maintain
any insurance required by Section 14, and may, to the fullest extent permitted
by law, and notwithstanding any right of quiet enjoyment in favor of Lessee,
enter upon any Property for such purpose and take all such action thereon as may
be necessary or appropriate therefor. No such entry shall be deemed an eviction
of Lessee. All out-of-pocket costs and expenses so incurred (including the fees
and expenses of counsel), together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid by Lessor, shall be paid
by Lessee to Lessor on demand as Supplemental Rent.
SECTION 19. LEASE TERMINATION
19.1 Provisions Relating to Lessee's Termination of this Lease or
Exercise of Purchase Option. In connection with any termination of this Lease
with respect to any Property pursuant to the terms of Section 16.2, or in
connection with Lessee's exercise of its Purchase Option or Maturity Date
Purchase Option, upon the date on which this Lease is to terminate with respect
to the applicable Property or upon the Expiration Date with respect to the
applicable Property, and upon tender by Lessee of the amounts set forth in
Section 16.2(b), 20.1 or 20.2, as applicable:
(a) Lessor shall execute and deliver to Lessee (or to Lessee's
designee) at Lessee's cost and expense an assignment of Lessor's entire
interest in the applicable Properties, in each case in recordable form and
otherwise in conformity with local custom and free and clear of the Lien of
the applicable Mortgage and any Lessor Liens; and
(b) The applicable Property shall be conveyed to Lessee "AS IS" and in
then present physical condition.
20
19.2 Aggregate Tranche A Percentage. Notwithstanding any other
provision of this Lease or the other Operative Agreements, (i) the Lessee shall
not be permitted to terminate this Lease with respect to a Property pursuant to
Section 16 or exercise its Purchase Option with respect to a Property pursuant
to Section 20.1 and (ii) Lessee shall not permit a Property to be sold pursuant
to Section 21.1(b) and Lessor shall not be obligated to accept a bid and sell a
Property pursuant to Section 21.1(b) if, in the case of either clause (i) or
(ii) above, the Aggregate Tranche A Percentage, after giving effect to the
termination of the Lease with respect to such Property, would be less than
82.50%.
SECTION 20. PURCHASE OPTION
20.1 Purchase Option. At any time prior to the commencement of the
Marketing Period and provided that neither the Agent nor any Lender has
commenced foreclosure proceedings or other proceedings initiating a sale of a
Property under any of the Mortgages, Lessee shall have the option (exercisable
by giving Lessor irrevocable written notice (the "Purchase Notice") of Lessee's
election to exercise such option not less than ten (10) days prior to the date
of purchase pursuant to such option) to purchase one or more of the Properties
on the date specified in such Purchase Notice at a price equal to the
Termination Value (the "Purchase Option Price") (which the parties do not intend
to be a "bargain" purchase price) of such Property. If Lessee exercises its
option to purchase one or more of the Properties pursuant to this Section 20.1
(the "Purchase Option"), Lessor shall transfer to Lessee or Lessee's designee
all of Lessor's right, title and interest in and to such Property as of the date
specified in the Purchase Notice upon receipt of the Purchase Option Price and
all Rent and other amounts then due and payable under this Lease and any other
Operative Agreement, in accordance with Section 19.1.
20.2 Maturity Date Purchase Option. Not less than twelve months
prior to the Maturity Date, Lessee may give Lessor and Agent irrevocable written
notice (the "Maturity Date Election Notice") that Lessee is electing to exercise
the Maturity Date Purchase Option. If Lessee does not give a Maturity Date
Election Notice on or before the date twelve months prior to the Maturity Date,
then Lessee shall be obligated to remarket the Properties pursuant to Section
21.1. If Lessee has elected to exercise the Maturity Date Purchase Option, then
on the Maturity Date Lessee shall pay to Lessor an amount equal to the
Termination Value for all the Properties (which the parties do not intend to be
a "bargain" purchase price) and, upon receipt of such amount plus all Rent and
other amounts then due and payable under this Lease and any other Operative
Agreement, Lessor shall transfer to Lessee or Lessee's designee all of Lessor's
right, title and interest in and to the Properties in accordance with Section
19.1.
20.3 Obligation to Purchase All Properties . If on the date which is
twelve months prior to the Maturity Date the then Termination Value of all the
Properties (including any Substitute Property) is less than the Maximum Purchase
Option Amount, then the Lessee shall be required to exercise its Purchase Option
on the Maturity Date with respect to all remaining Properties.
SECTION 21. SALE OF PROPERTY
21
21.1 Sale Procedure. (a) With respect to each Property, at the
expiration of the Term, unless Lessee shall have elected to purchase such
Property and has paid the Purchase Option Price with respect thereto, or
otherwise terminated this Lease with respect thereto and paid the Termination
Value with respect thereto, Lessee shall (i) pay to Lessor the Maximum Residual
Guarantee Amount for such Property, and (ii) sell such Property to one or more
third parties for cash in accordance with Section 21.1(b).
(b) During the Marketing Period, Lessee, as nonexclusive broker for
Lessor, shall use its best efforts to obtain bids for the cash purchase of each
Property being sold for the highest price available, shall notify Lessor
promptly of the name and address of each prospective purchaser and the cash
price which each prospective purchaser shall have offered to pay for such
Property and shall provide Lessor with such additional information about the
bids and the bid solicitation procedure as Lessor may request from time to time.
Lessor may reject any and all bids and may assume sole responsibility for
obtaining bids by giving Lessee written notice to that effect; provided,
however, that notwithstanding the foregoing, Lessor may not reject a bid if such
bid is greater than or equal to the sum of the Limited Recourse Amount and all
costs and expenses referred to in Section 21.1(i) and is a bona fide offer by a
third party purchaser who is not an Affiliate of Lessee. If the price which a
prospective purchaser shall have offered to pay for all or any of the Properties
is less than the sum of the Limited Recourse Amount and all costs and expenses
referred to in Section 21.1(i), Lessor may elect to retain the Property by
giving Lessee at least two Business Days' prior written notice of Lessor's
election to retain the Property, and upon receipt of such notice, Lessee shall
surrender the Property to Lessor pursuant to Section 10.1(c). Unless Lessor
shall have elected to retain the Property pursuant to the preceding sentence,
Lessor shall sell the Property free of any Lessor Liens attributable to it,
without recourse or warranty, for cash to the purchaser or purchasers identified
by Lessee or Lessor, as the case may be. Lessee shall surrender the Property so
sold to each purchaser in the condition specified in Section 10.1.
(c) On each date during the Marketing Period on which a Property is
sold pursuant to Section 21.1(b), and on the Maturity Date with respect to any
Properties remaining unsold, Lessee shall pay to Lessor the Maximum Residual
Guarantee Amount for such Property.
21.2 Application of Proceeds of Sale. Lessor shall apply the
proceeds of sale of each Property in the following order of priority:
(i) FIRST, to pay or to reimburse Lessor for the payment of all
reasonable costs and expenses incurred by Lessor in connection with the
sale; and
(ii) SECOND, the balance shall be paid to the Agent to be
applied pursuant to the provisions of the Credit Agreement.
21.3 Indemnity for Excessive Wear. If the proceeds of the sale
described in Section 21.1(b) with respect to any Property, less all expenses
incurred by Lessor in connection with such sale, shall be less than the Limited
Recourse Amount for such Property at the time of such sale and if it shall have
been determined (pursuant to the Appraisal Procedure) that the Fair Market Sales
Value of such Property shall have been impaired by greater than expected wear
and tear during the Term, Lessee shall pay to Lessor within ten (10) days after
receipt of Lessor's
22
written statement (i) the amount of such excess wear and tear determined by the
Appraisal Procedure or (ii) the amount of the Net Sale Proceeds Shortfall,
whichever amount is less.
21.4 Appraisal Procedure. For determining the Fair Market Sales
Value of a Property or any other amount which may, pursuant to any provision of
any Operative Agreement, be determined by an appraisal procedure, Lessor and
Lessee shall use the following procedure (the "Appraisal Procedure"). Lessor
and Lessee shall endeavor to reach a mutual agreement as to such amount for a
period of ten (10) days from commencement of the Appraisal Procedure, and if
they cannot agree within ten (10) days, then two qualified appraisers, one
chosen by Lessee and one chosen by Lessor, shall mutually agree thereupon, but
if either party shall fail to choose an appraiser within twenty (20) days after
notice from the other party of the selection of its appraiser, then the
appraisal by such appointed appraiser shall be binding on Lessee and Lessor. If
the two appraisers cannot agree within twenty (20) days after both shall have
been appointed, then a third appraiser shall be selected by the two appraisers
or, failing agreement as to such third appraiser within thirty (30) days after
both shall have been appointed, by the American Arbitration Association. The
decisions of the three appraisers shall be given within twenty (20) days of the
appointment of the third appraiser and the decision of the appraiser most
different from the average of the other two shall be discarded and such average
shall be binding on Lessor and Lessee; provided that if the highest appraisal
and the lowest appraisal are equidistant from the third appraisal, the third
appraisal shall be binding on Lessor and Lessee. The fees and expenses of all
of the appraisers shall be paid by the Lessee.
21.5 Certain Obligations Continue. During the Marketing Period, the
obligation of Lessee to pay Rent with respect to each Property (including the
installment of Basic Rent due on the Maturity Date) shall continue undiminished
until payment in full to Lessor of the sale proceeds, the Maximum Residual
Guarantee Amount, if any, the amount due under Section 21.3, if any, and all
other amounts due to Lessor with respect to the Property. Lessor shall have the
right, but shall be under no duty, to solicit bids, to inquire into the efforts
of Lessee to obtain bids or otherwise to take action in connection with any such
sale, other than as expressly provided in this Section 21.
SECTION 22. HOLDING OVER
22.1 Holding Over. If Lessee shall for any reason remain in
possession of a Property after the expiration or earlier termination of this
Lease (unless the Property is conveyed to Lessee), such possession shall be as a
tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at an annual rate equal to the rate payable hereunder
immediately preceding such expiration or earlier termination; provided, however,
that from and after the sixtieth (60th) day Lessee shall remain in possession of
such Property after such expiration or earlier termination, Lessee shall pay
Basic Rent at an annual rate equal to two hundred percent (200%) of the Basic
Rent payable hereunder immediately preceding such expiration or earlier
termination. Such Basic Rent shall be payable from time to time upon demand by
Lessor. During any period of tenancy at sufferance, Lessee shall, subject to
the second preceding sentence, be obligated to perform and observe all of the
terms, covenants and conditions of this Lease, but shall have no rights
23
hereunder other than the right, to the extent given by law to tenants at
sufferance, to continue its occupancy and use of the Property. Nothing
contained in this Section 22 shall constitute the consent, express or implied,
of Lessor to the holding over of Lessee after the expiration or earlier
termination of this Lease as to any Property and nothing contained herein shall
be read or construed as preventing Lessor from maintaining a suit for possession
of any Property or exercising any other remedy available to Lessor at law or in
equity.
SECTION 23. RISK OF LOSS
23.1 Risk of Loss. The risk of loss of or decrease in the enjoyment
and beneficial use of the Property as a result of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is
assumed by Lessee, and Lessor shall in no event be answerable or accountable
therefor.
SECTION 24. SUBLETTING AND ASSIGNMENT
24.1 Subletting and Assignment. Lessee may not assign this Lease or
any of its rights or obligations hereunder in whole or in part other than to any
Guarantor, provided that notwithstanding any such assignment, Lessee shall not
be released and shall remain obligated for all of its obligations under this
Lease and the other Operative Agreements. Lessee may, without the consent of
Lessor, sublease the Property or a portion thereof to any Person. No sublease
or other relinquishment of possession of the Property shall in any way discharge
or diminish any of Lessee's obligations to Lessor hereunder and Lessee shall
remain directly and primarily liable under this Lease as to the Property, or any
portion thereof, so sublet. Any sublease of the Property shall be made subject
to and subordinate to this Lease and to the rights of Lessor hereunder, and
shall expressly provide for the surrender of the Property after a Lease Event of
Default hereunder and such sublease shall expressly provide for termination at
or prior to the Expiration Date.
24.2 Subleases. Promptly following the execution and delivery of any
sublease permitted by this Section 24, Lessee shall deliver a copy of such
executed sublease to Lessor and the Agent.
SECTION 25. ESTOPPEL CERTIFICATES
25.1 Estoppel Certificates. At any time and from time to time upon
not less than twenty (20) days' prior request by Lessor, the Lessee shall
furnish to the Lessor a certificate signed by an individual having the office of
vice president or higher in the Certifying Party certifying that this Lease is
in full force and effect (or that this Lease is in full force and effect as
modified and setting forth the modifications); the dates to which the Basic Rent
and Supplemental Rent have been paid; to the best knowledge of the signer of
such certificate, whether or not the Lessor is in default under any of its
obligations hereunder (and, if so, the nature of such alleged default); and such
other matters under this Lease as the Lessor may reasonably request. Any such
certificate furnished pursuant to this Section 25 may be relied
24
upon by the Lessor, and any existing or prospective mortgagee, purchaser or
lender, and any accountant or auditor, of, from or to the Lessor (or any
Affiliate thereof).
SECTION 26. NO WAIVER
26.1 No Waiver. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
SECTION 27. ACCEPTANCE OF SURRENDER
27.1 Acceptance of Surrender. Except as otherwise expressly provided
in this Lease, no surrender to Lessor of this Lease or of all or any portion of
the Property or of any interest therein shall be valid or effective unless
agreed to and accepted in writing by Lessor and, prior to the payment or
performance of all obligations under the Credit Documents, the Agent, and no act
by Lessor or the Agent or any representative or agent of Lessor or the Agent,
other than a written acceptance, shall constitute an acceptance of any such
surrender.
SECTION 28. NO MERGER OF TITLE
28.1 No Merger of Title. There shall be no merger of this Lease or
of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, in whole or in part,
(a) this Lease or the leasehold estate created hereby or any interest in this
Lease or such leasehold estate, (b) the fee estate in the Property, except as
may expressly be stated in a written instrument duly executed and delivered by
the appropriate Person, or (c) a beneficial interest in Lessor.
SECTION 29. NOTICES
29.1 Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by nationally recognized courier service and
any such notice shall become effective one Business Day after delivery to such
nationally recognized courier service specifying overnight delivery and shall be
directed to the address of such Person as indicated:
If to Lessee:
Living Centers Holding Company
25
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lessor:
FBTC Leasing Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Agent:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attn: Global Lease Finance
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such additional parties and/or other address as such party may hereafter
designate.
SECTION 30. MISCELLANEOUS
30.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any term or
provision of this Lease or any application thereof shall be declared invalid or
unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby. If any right or option of
Lessee provided in this Lease, including any right or option described in
Sections 15, 16, 22 or 21, would, in the absence of the limitation imposed by
this sentence, be invalid or unenforceable as being in violation of the rule
against perpetuities or any other rule of law relating to the vesting of an
interest in or the suspension of the power of alienation of property, then such
right or option shall be exercisable only during the period which shall end
twenty-one (21) years after the date of death of the last survivor of the
descendants of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the former President of the United States,
▇▇▇▇▇ ▇▇▇▇, the deceased automobile manufacturer, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, the
founder of the Standard Oil Company, known to be alive on the date of the
execution and delivery of this Lease.
30.2 Amendments and Modifications. Neither this Lease nor any
provision hereof may be amended, waived, discharged or terminated except by an
instrument in writing signed by Lessor and Lessee.
26
30.3 Successors and Assigns. All the terms and provisions of this
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
30.4 Headings and Table of Contents. The headings and table of
contents in this Lease are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.
30.5 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
30.6 GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN, AND SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, EXCEPT AS TO MATTERS RELATING TO THE CREATION, PERFECTION AND
ENFORCEMENT OF LIENS AND SECURITY INTERESTS AND THE EXERCISE OF REMEDIES WITH
RESPECT THERETO, WHICH SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE IN WHICH THE APPLICABLE PROPERTY IS LOCATED.
30.7 Limitations on Recourse. The parties hereto agree that the
Lessor shall have no personal liability whatsoever to the Lessee or its
respective successors and assigns for any claim based on or in respect of this
Lease or any of the other Operative Agreements or arising in any way from the
transactions contemplated hereby or thereby; provided, however, that the Lessor
shall be personally liable (a) for its own willful misconduct or gross
negligence, (b) for liabilities that result from its breach of any of its
covenants, agreements or obligations set forth in or from any misrepresentation
of Lessor in any of the Operative Agreements, (c) for any Tax based on or
measured by any fees, commission or compensation received by it for acting as
the Lessor as contemplated by the Operative Agreements or (d) as the other
Operative Agreements expressly provide that the Lessor shall have personal
liability. It is understood and agreed that, except as provided in the
preceding proviso: (i) the Lessor shall have no personal liability under any of
the Operative Agreements as a result of acting pursuant to and consistent with
any of the Operative Agreements; (ii) all obligations of the Lessor to the
Lessee are solely nonrecourse obligations and shall be enforceable solely
against the interest of the Lessor in the Properties; and (iii) all such
personal liability of the Lessor is expressly waived and released as a condition
of, and as consideration for, the execution and delivery of the Operative
Agreements by the Lessor.
30.8 Memorandum of Lease. This Lease shall not be recorded, but
Lessor and Lessee shall, upon the execution and delivery of each Lease
Supplement, execute and deliver a memorandum of this Lease (a "Memorandum of
Lease") substantially in the form of Exhibit B and otherwise in form suitable
for recording under the laws of the jurisdiction in which the Property covered
by such Memorandum of Lease is located, which memorandum shall be recorded at
Lessee's sole cost and expense.
27
30.9 Priority. On and prior to the Maturity Date, the Mortgages
shall be subject and subordinate to this Lease and following the Maturity Date,
the Mortgages, at the sole election of the Agent, shall be senior to this Lease
without any further act by any Person.
SECTION 31.
31.1 Ground Lease. During the Basic Term, Lessee shall observe and
perform all of the obligations of Lessor under any Ground Lease (including the
payment of all rent and other amounts thereunder) and, in connection therewith,
shall, prior to the occurrence and continuation of a Lease Event of Default,
have the benefit of all of Lessor's rights as lessee under any Ground Lease.
28
IN WITNESS WHEREOF, the parties have caused this Lease be duly
executed and delivered as of the date first above written.
LIVING CENTERS HOLDING COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FBTC LEASING CORP.
By: ____________________________________
Name:
Title:
29
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on this ____ day of October, 1996.
THE CHASE MANHATTAN BANK, as the
Agent for the Lenders
By: ____________________________________
Name:
Title:
1
Exhibit A
---------
LEASE SUPPLEMENT NO. __
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of
_____________, between FBTC LEASING CORP., a New York corporation, as lessor
(the "Lessor"), and LIVING CENTERS HOLDING COMPANY, a Delaware corporation, as
lessee (the "Lessee").
WHEREAS, the Lessor is the owner of the Property described on Schedule
I hereto (the "Leased Property") and wishes to lease the same to the Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions; Rules of Usage. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise herein shall have
the meanings assigned to them in Annex A to the Participation Agreement, dated
as of October ___, 1996, among the Lessee, the Lessor, the Agent, and the
Lenders.
2. The Properties. Attached hereto as Schedule I is the description
of the Leased Property. Effective upon the execution and delivery of this Lease
Supplement by the Lessor and the Lessee, the Leased Property shall be subject to
the terms and provisions of the Lease.
3. Ratification. Except as specifically modified hereby, the terms
and provisions of the Lease are hereby ratified and confirmed and remain in full
force and effect.
4. Original Lease Supplement. The single executed original of this
Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART"
on the signature page thereof and containing the receipt of the Agent therefor
on or following the signature page thereof shall be the Original Executed
Counterpart of this Lease Supplement (the "Original Executed Counterpart"). To
the extent that this Lease Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Lease Supplement may be created
through the transfer or possession of any counterpart other than the Original
Executed Counterpart.
5. GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN, AND SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE, EXCEPT AS TO
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MATTERS RELATING TO THE CREATION, PERFECTION AND ENFORCEMENT OF LIENS AND
SECURITY INTERESTS AND THE EXERCISE OF REMEDIES WITH RESPECT THERETO, WHICH
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN
WHICH THE APPLICABLE PROPERTY IS LOCATED.
6. Counterpart Execution. This Lease Supplement may be executed in
any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
7. Recordation. The Lessor and the Lessee agree that a memorandum of
this Lease Supplement No. __ shall be recorded at the Lessee's sole cost and
expense as required by the Lease.
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IN WITNESS WHEREOF, the parties have caused this Lease Supplement
No.__ be duly executed and delivered as of the date first above written.
LIVING CENTERS HOLDING COMPANY
By: ____________________________________
Name:
Title:
FBTC LEASING CORP.
By: ______________________________
Name:
Title:
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Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on this ____ day of _________, ____.
THE CHASE MANHATTAN BANK, as the
Agent for the Lenders
By: ____________________________________
Name:
Title: