Exhibit 4 (viii)
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LEASE AGREEMENT
Dated as of September 26, 2001
between
FIRST UNION DEVELOPMENT CORPORATION,
as Lessor
and
TOYS "R" US, INC.,
as Lessee
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This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Primary Financing Parties and respecting the
Security Documents, as the agent for the Secured Parties (the "Agent") under a
Security Agreement dated as of September 26, 2001, between First Union
Development Corporation, as the Borrower and the Agent, as amended, modified,
extended, supplemented and/or restated from time to time in accordance with the
applicable provisions thereof. This Lease Agreement has been executed in several
counterparts. To the extent, if any, that this Lease Agreement constitutes
chattel paper (as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction), no security interest in this Lease
Agreement may be created through the transfer or possession of any counterpart
other than the original counterpart containing the receipt therefor executed by
the Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I......................................................................1
1.1 Definitions............................................................1
1.2 Interpretation.........................................................2
ARTICLE II.....................................................................2
2.1 Property...............................................................2
2.2 Lease Term.............................................................2
2.3 Title..................................................................2
2.4 Lease Supplement.......................................................3
ARTICLE III....................................................................3
3.1 Rent...................................................................3
3.2 Payment of Basic Rent..................................................3
3.3 Supplemental Rent......................................................3
3.4 Performance on a Non-Business Day......................................4
3.5 Rent Payment Provisions................................................4
3.6 Payment to Agent.......................................................5
ARTICLE IV.....................................................................5
4.1 Taxes; Utility Charges.................................................5
ARTICLE V......................................................................5
5.1 Quiet Enjoyment........................................................5
ARTICLE VI.....................................................................6
6.1 Net Lease..............................................................6
6.2 No Termination or Abatement............................................6
ARTICLE VII....................................................................7
7.1 Ownership of the Property..............................................7
ARTICLE VIII...................................................................8
8.1 Condition of the Property..............................................8
8.2 Possession and Use of the Property.....................................9
8.3 Integrated Property...................................................10
ARTICLE IX....................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards.........................10
ARTICLE X.....................................................................11
10.1 Maintenance and Repair; Return........................................11
10.2 Environmental Inspection..............................................12
ARTICLE XI....................................................................12
11.1 Modifications.........................................................12
ARTICLE XII...................................................................14
12.1 Warranty of Title.....................................................14
ARTICLE XIII..................................................................15
13.1 Permitted Contests Other Than in Respect of Indemnities...............15
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13.2 Impositions, Utility Charges, Other Matters;
Compliance with Legal Requirements..................................15
ARTICLE XIV...................................................................15
14.1 Public Liability and Workers' Compensation Insurance..................15
14.2 Permanent Hazard and Other Insurance..................................16
14.3 Coverage..............................................................17
14.4 Policies..............................................................18
14.5 Insurance Coverage During Construction Period.........................18
ARTICLE XV....................................................................18
15.1 Casualty and Condemnation.............................................18
15.2 Environmental Matters.................................................21
15.3 Notice of Environmental Matters.......................................22
ARTICLE XVI...................................................................23
16.1 Termination Upon Certain Events.......................................23
16.2 Procedures............................................................23
ARTICLE XVII..................................................................23
17.1 Lease Events of Default...............................................23
17.2 Surrender of Possession...............................................26
17.3 Reletting.............................................................27
17.4 Damages...............................................................27
17.5 Power of Sale.........................................................28
17.6 Final Liquidated Damages..............................................28
17.7 Environmental Costs...................................................29
17.8 Waiver of Certain Rights..............................................29
17.9 Assignment of Rights Under Contracts..................................29
17.10 Remedies Cumulative..................................................29
17.11 Lessee's Right to Cure by Purchase of the Property...................30
ARTICLE XVIII.................................................................30
18.1 Lessor's Right to Cure Lessee's Lease Defaults........................30
ARTICLE XIX...................................................................30
19.1 Provisions Relating to Lessee's Exercise
of its Purchase Option..............................................30
19.2 No Purchase or Termination With Respect to
Less than All of a Property.........................................31
ARTICLE XX....................................................................31
20.1 Purchase Option or Sale Option-General Provisions.....................31
20.2 Lessee Purchase Option................................................32
20.3 Third Party Sale Option...............................................32
ARTICLE XXI...................................................................33
ARTICLE XXII..................................................................34
22.1 Sale Procedure........................................................34
22.2 Application of Proceeds of Sale.......................................36
22.3 Indemnity for Excessive Wear..........................................37
22.4 Appraisal Procedure...................................................37
22.5 Certain Obligations Continue..........................................38
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ARTICLE XXIII.................................................................38
23.1 Holding Over..........................................................38
ARTICLE XXIV..................................................................39
24.1 Risk of Loss..........................................................39
ARTICLE XXV...................................................................39
25.1 Assignment............................................................39
25.2 Subleases.............................................................39
ARTICLE XXVI..................................................................40
26.1 No Waiver.............................................................40
ARTICLE XXVII.................................................................40
27.1 Acceptance of Surrender...............................................40
27.2 No Merger of Title....................................................40
ARTICLE XXVIII................................................................41
28.1 [Reserved]............................................................41
ARTICLE XXIX..................................................................41
29.1 Notices...............................................................41
ARTICLE XXX...................................................................41
30.1 Miscellaneous.........................................................41
30.2 Amendments and Modifications..........................................41
30.3 Successors and Assigns................................................41
30.4 Headings and Table of Contents........................................41
30.5 Counterparts..........................................................41
30.6 GOVERNING LAW.........................................................42
30.7 Calculation of Rent...................................................42
30.8 Memoranda of Lease and Lease Supplement...............................42
30.9 Allocations between the Lenders and Lessor............................42
30.10 Limitations on Recourse..............................................42
30.11 WAIVERS OF JURY TRIAL................................................43
30.12 Exercise of Lessor Rights............................................43
30.13 SUBMISSION TO JURISDICTION; VENUE....................................43
30.14 USURY SAVINGS PROVISION..............................................43
30.15 Restriction On Collateralization.....................................44
EXHIBITS
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EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
iii
LEASE AGREEMENT
---------------
THIS LEASE AGREEMENT dated as of September 26, 2001 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Lease") is between FIRST UNION DEVELOPMENT CORPORATION, a North Carolina
corporation, as lessor (the "Lessor"), and TOYS "R" US, INC., a Delaware
corporation, as lessee (the "Lessee").
W I T N E S S E T H:
- - - - - - - - - -
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) acquire one or more parcels
of real property, which will (or may) have existing Improvements thereon, and
(ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Property by the Construction Agent; and
B. WHEREAS, the Interim Term shall commence with respect to the Property
on the Closing Date and the Basic Term shall commence with respect to the
Property upon the Rent Commencement Date; and
C. WHEREAS, this is a transaction between unrelated parties wherein Lessor
desires to lease to Lessee, and Lessee desires to lease from Lessor, the
Property.
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions.
For purposes of this Lease, capitalized terms used in this Lease and
not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Participation Agreement dated as of September 26,
2001 (as amended, modified, extended, supplemented, restated and/or replaced
from time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among Lessee, Lessor, the various financial
institutions and other institutional investors which are parties thereto from
time to time as Tranche A Note Purchasers, the various banks and other lending
institutions which are parties thereto from time to time as Tranche B Lenders,
the various banks and other lending institutions which are parties thereto from
time to time as Cash Collateral Lenders, First Union National Bank, as agent for
the Primary Financing Parties and respecting the Security Documents, as the
agent for the Secured Parties, and First Union National Bank, as the Escrow
Agent. Unless otherwise indicated, references in this Lease to articles,
sections, paragraphs, clauses, appendices, schedules and exhibits are to the
same contained in this Lease.
1.2 Interpretation.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.
ARTICLE II
2.1 Property.
Subject to the terms and conditions hereinafter set forth and
contained in the Lease Supplement relating to the Property, Lessor hereby leases
to Lessee and Lessee hereby leases from Lessor, the Property.
2.2 Lease Term.
The interim term of this Lease with respect to the Property (the
"Interim Term") shall begin upon the Closing Date (the "Commencement Date") and
shall end on the Rent Commencement Date, unless the Interim Term is earlier
terminated. The basic term of this Lease with respect to the Property (the
"Basic Term") shall begin upon the Rent Commencement Date and shall end on the
tenth anniversary of the Closing Date, unless the Basic Term is earlier
terminated.
Not less than one hundred eighty (180) days and no more than two
hundred forty (240) days prior to the end of the Basic Term, Lessee may give
Lessor and the Agent written notice of Lessee's desire to extend the Basic Term.
Lessor, each Primary Financing Party and the Agent shall each make a
determination, in the absolute and sole discretion of each such party, not later
than one hundred twenty-five (125) days prior to the then current Expiration
Date whether or not such party will agree to extend the Expiration Date as
requested; provided, however, that failure by any such party to respond (not
later than one hundred twenty-five (125) days prior to the then current
Expiration Date) to Lessee's request shall be deemed to constitute a refusal by
such party to the extension of the Expiration Date. In response to Lessee's
request for an extension of the Expiration Date, if (a) Lessor, each Primary
Financing Party and the Agent shall agree in writing to the requested extension,
then the Term shall be extended and shall expire on the agreed upon date or (b)
Lessor, any Primary Financing Party or the Agent shall refuse (or be deemed to
have refused) to agree to the requested extension, then the Basic Term shall not
be extended and shall expire on the then current Expiration Date.
2.3 Title.
The Property is leased to Lessee without any representation or
warranty, express or implied, by Lessor and subject to the rights of parties in
possession (if any), the state of title (including without limitation the
Permitted Liens) existing as of the Commencement Date, and all applicable Legal
Requirements. Lessee shall in no event have any recourse against Lessor for any
defect in Lessor's title to the Property or any interest of Lessee therein other
than for Lessor Liens.
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2.4 Lease Supplement.
On or prior to the Commencement Date, Lessee and Lessor shall each
execute and deliver a Lease Supplement for the Property effective as of such
Commencement Date in substantially the form of Exhibit A hereto; provided, on or
prior to the Rent Commencement Date, Lessee and Lessor shall, upon the
reasonable request of either party, execute and deliver an amended and restated
Lease Supplement for the Property effective as of such Rent Commencement Date.
ARTICLE III
3.1 Rent.
(a) (i) Lessee shall pay Basic Rent in arrears on each Scheduled
Interest Payment Date; provided, however, Lessee shall have no obligation
to pay Basic Rent with respect to the Property until the Rent Commencement
Date; provided, further, any amount of Basic Rent payable on the Scheduled
Interest Payment Date occurring on August 1, 2011 shall be paid on July
31, 2011, and (ii) Lessee shall pay Cash Collateral Rent on the Cash
Collateral Maturity Date.
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately available
funds on or before the due date therefor to such account at such bank as
Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or any
portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall not
delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent payable to Lessor by wire
transfer initiated prior to 10:00 a.m., Charlotte, North Carolina time, on
the applicable date for payment of such amount.
3.2 Payment of Basic Rent.
Basic Rent shall be paid absolutely net to Lessor or its designee,
so that this Lease shall yield to Lessor the full amount thereof, without
setoff, deduction or reduction.
3.3 Supplemental Rent.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable. All such
payments of Supplemental Rent payable to any Financing Party shall be in the
full amount thereof, without setoff, deduction or
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reduction. Lessee shall pay to the appropriate Person, as Supplemental Rent due
and owing to such Person, among other things, on demand, (a) any and all payment
obligations (except for amounts payable as Basic Rent, payments made in
connection with the satisfaction or removal of Lessor Liens, certain Transaction
Expenses funded by Advances pursuant to the Operative Agreements, principal and
interest due and owing under the Notes or the Note Purchase Agreement, the
Tranche B Credit Agreement or the Cash Collateral Credit Agreement, any
Make-Whole Amount, prepayment premiums and other amounts payable under the
Notes, the Note Purchase Agreement, the Tranche B Credit Agreement or the Cash
Collateral Credit Agreement that arise solely as a result of an Event of Default
attributable to the Lessor, amounts expressly excluded from indemnification
pursuant to Sections 11.1, 11.2 and 11.7 of the Participation Agreement, amounts
due and owing or otherwise payable or incurred as a result of or in connection
with any voluntary assignment, transfer or sale of a participation interest by
Lessor or any Tranche A Note Purchaser (other than as set forth in Section 5.14
of the Participation Agreement or Section 13.2 of the Note Purchase Agreement),
Tranche B Lender or Cash Collateral Lender, legal expenses of any individual
Tranche A Note Purchaser, Tranche B Lender or Cash Collateral Lender, costs
incurred by any individual Tranche A Note Purchaser, Tranche B Lender or Cash
Collateral Lender in determining to participate in the transaction contemplated
by the Operative Agreements (including costs and expenses of reviewing the
Operative Agreements and or private placement memorandum), and payment
obligations of one Financing Party to another Financing Party other than those
set forth in Section 13.2 of the Note Purchase Agreement) owing from time to
time under the Operative Agreements by any Person to the Agent, the Lessor, the
Escrow Agent, any Primary Financing Party, or any other Person, (b) interest at
the applicable Overdue Rate on any portion of any installment of Basic Rent not
paid when due for the period for which the same shall be overdue and on any
portion of any payment of Supplemental Rent payable to any Financing Party not
paid when due for the period from the due date until the same shall be paid and
(c) amounts referenced as Supplemental Rent obligations pursuant to Section 8.3
of the Participation Agreement. The expiration or other termination of Lessee's
obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of Lessee with respect to Supplemental Rent. Unless expressly
provided otherwise in this Lease, in the event of any failure on the part of
Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added for nonpayment or late payment of such Supplemental Rent, all
of which shall also constitute Supplemental Rent.
3.4 Performance on a Non-Business Day.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date. If any Supplemental Rent is required hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.
3.5 Rent Payment Provisions.
Lessee shall make payment of all Basic Rent and Supplemental Rent
when due regardless of whether any of the Operative Agreements pursuant to which
same is calculated and is owing shall have been rejected, avoided or disavowed
in any bankruptcy or insolvency
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proceeding involving any of the parties to any of the Operative Agreements. Such
Operative Agreements, including without limitation provisions relating to the
payment of Supplemental Rent with the proceeds of Advances pursuant to Section
8.3(d) of the Participation Agreement, and their related definitions are
incorporated herein by reference and shall survive any termination, amendment or
rejection of any such Operative Agreements.
3.6 Payment to Agent.
The Lessor hereby instructs the Lessee, and the Lessee hereby
acknowledges and agrees, that until such time as the Notes are paid in full and
the Liens evidenced by the Security Documents (including the Security Agreement
and the Mortgage Instruments) have been released (i) any and all Rent (excluding
Excepted Payments) and any and all other amounts of any kind or type under this
Lease due and owing or payable to any Person shall instead be paid directly to
the Agent (excluding Excepted Payments) or as the Agent may direct from time to
time for allocation and distribution in accordance with the procedures set forth
in Section 8.7 of the Participation Agreement.
ARTICLE IV
4.1 Taxes; Utility Charges.
Subject to the terms of Article XIII relating to permitted contests,
Lessee shall pay or cause to be paid all Impositions with respect to the
Property and/or the use, occupancy, operation, repair, access, maintenance or
operation thereof and all charges for electricity, power, gas, oil, water,
telephone, sanitary sewer service and all other rents, utilities and operating
expenses of any kind or type used in or on any Property during the Term. Upon
Lessor's reasonable written request, Lessee shall provide from time to time
Lessor with evidence of all such payments referenced in the foregoing sentence.
Lessee shall be entitled to receive any credit or refund with respect to any
Imposition or utility charge paid by Lessee. Unless an Event of Default shall
have occurred and be continuing, the amount of any credit or refund received by
Lessor on account of any Imposition or utility charge paid by Lessee, net of the
costs and expenses incurred by Lessor in obtaining such credit or refund, shall
be promptly paid over to Lessee. All charges for Impositions or utilities
imposed with respect to the Property for a period during which this Lease
expires or terminates shall be adjusted and prorated on a daily basis between
Lessor and Lessee, and each party shall pay or reimburse the other for such
party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment.
Subject to the rights of Lessor contained in Sections 17.2, 17.3 and
20.3 and the other terms of this Lease and the other Operative Agreements and so
long as no Lease Event of Default shall have occurred and be continuing, Lessee
shall peaceably and quietly have, hold and
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enjoy the Property for the Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the Commencement Date.
ARTICLE VI
6.1 Net Lease.
This Lease shall constitute a net lease, and the obligations of
Lessee hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of the Property. Any
present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement, suspension, deferment,
reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall
the obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) for any
reason whatsoever, including without limitation by reason of: (a) any damage to
or destruction of the Property or any part thereof; (b) any taking of the
Property or any part thereof or interest therein by Condemnation or otherwise;
(c) any prohibition, limitation, restriction or prevention of Lessee's use,
occupancy or enjoyment of the Property or any part thereof, or any interference
with such use, occupancy or enjoyment by any Person or for any other reason; (d)
any title defect, Lien or any matter affecting title to the Property; (e) any
eviction by paramount title or otherwise; (f) any default by Lessor hereunder;
(g) any action for bankruptcy, insolvency, reorganization, liquidation,
receivership, dissolution or other proceeding relating to or affecting the
Agent, any Primary Financing Party, Lessor, Lessee or any Governmental
Authority; (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental Authority or any other Person; (j)
Lessee's acquisition of ownership of all or part of the Property; (k) breach of
any warranty or representation with respect to the Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of the
Property or any part thereof; or (m) any other cause or circumstance whether
similar or dissimilar to the foregoing and whether or not Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of Lessee hereunder shall be covenants, agreements and obligations
that are separate and independent from any obligations of Lessor hereunder and
shall continue unaffected unless such covenants, agreements and obligations
shall have been modified or terminated in accordance with an express provision
of this Lease. Lessor and Lessee acknowledge and agree that the provisions of
this Section 6.1 have been specifically reviewed and subject to negotiation.
6.2 No Termination or Abatement.
Lessee shall remain obligated under this Lease in accordance with
its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental
6
Authority. Lessee hereby waives all right (a) to terminate or surrender this
Lease (except as permitted under the terms of the Operative Agreements) or (b)
to avail itself of any abatement, suspension, deferment, reduction, setoff,
counterclaim or defense with respect to any Rent. Lessee shall remain obligated
under this Lease in accordance with its terms and Lessee hereby waives any and
all rights now or hereafter conferred by statute or otherwise to modify or to
avoid strict compliance with its obligations under this Lease. Notwithstanding
any such statute or otherwise, Lessee shall be bound by all of the terms and
conditions contained in this Lease.
ARTICLE VII
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
No. 13, as amended, (B) Lessor will be the owner and lessor of the
Property and (C) Lessee will be the lessee of the Property, but (ii) for
federal and all state and local income tax purposes, and for all
bankruptcy purposes (including the substantive law upon which bankruptcy
proceedings are based), (A) this Lease will be treated as a financing
arrangement and (B) Lessee will be treated as the owner of the Property
and will be entitled to all tax benefits ordinarily available to owners of
property similar to the Property for such tax purposes. Notwithstanding
the foregoing, neither party hereto has made, or shall be deemed to have
made, any representation or warranty as to the availability of any of the
foregoing treatments under applicable accounting rules, tax, bankruptcy,
regulatory, commercial or real estate law or under any other set of rules.
Lessee shall claim the cost recovery deductions associated with the
Property, and Lessor shall not, to the extent not prohibited by Law, take
on its tax return a position inconsistent with Lessee's claim of such
deductions.
(b) In order to secure the obligations of Lessee now existing or
hereafter arising under any and all Operative Agreements, pursuant hereto
and to the Lease Supplement, Lessee hereby conveys, grants, assigns,
transfers, hypothecates, mortgages and sets over to Lessor, for the
benefit of the Secured Parties, a security interest (but subject only to
the security interest in the assets granted by Lessor in favor of the
Agent in accordance with the Security Agreement and the Mortgage
Instruments) in and lien on all right, title and interest of Lessee (now
owned or hereafter acquired) in and to the Property, to the extent such is
personal property and irrevocably grants and conveys a lien, deed of trust
or mortgage, as applicable, on all right, title and interest of Lessee
(now owned or hereafter acquired) in and to the Property to the extent
such is real property. Lessor and Lessee further intend and agree that,
for the purpose of securing the obligations of Lessee and/or the
Construction Agent now existing or hereafter arising under the Operative
Agreements, this Lease as supplemented by the Lease Supplement shall be a
security agreement and financing statement within the meaning of Article 9
of the Uniform Commercial Code respecting the Lessee's interest in the
Property and all proceeds (including without limitation insurance proceeds
thereof) to the extent such is personal property and an irrevocable grant
and conveyance of a lien, deed of trust or
7
mortgage, as applicable, on the Lessee's interest in the Property and all
proceeds (including without limitation insurance proceeds thereof) to the
extent such is real property and constitutes a grant by Lessee to Lessor
of a security interest, lien, deed of trust or mortgage, as applicable, in
all of Lessee's right, title and interest in and to the Property and all
proceeds (including without limitation insurance proceeds thereof) of the
conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property, and an assignment of all rents,
profits and income produced by the Property. Lessee and Lessor further
intend and agree that notifications to Persons holding such proceeds, and
acknowledgments, receipts or confirmations from financial intermediaries,
bankers or agents (as applicable) of Lessee, when given, shall be deemed
to have been given for the purpose of perfecting the foregoing lien,
security interest, mortgage lien or deed of trust, as applicable, under
applicable law. Lessee shall promptly take such actions as necessary
(including without limitation the filing of Uniform Commercial Code
Financing Statements, Uniform Commercial Code Fixture Filings and
memoranda (or short forms) of this Lease and the Lease Supplement) to
ensure that the lien, security interest, mortgage lien or deed of trust,
as applicable, in the Property and the other items referenced above will
be deemed to be a perfected lien, security interest, mortgage lien or deed
of trust, as applicable, of first priority (subject to all liens and
security interests granted to the Agent and/or the Primary Financing
Parties under the Security Documents (other than this Lease)) under
applicable law and will be maintained as such throughout the Term.
ARTICLE VIII
8.1 Condition of the Property.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE PROPERTY
"AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF
LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE STATE OF TITLE EXISTING AS OF
THE COMMENCEMENT DATE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF
ANY), (C) ANY STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN
ACCURATE SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E)
VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE
DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY
Primary Financing Party HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR
SHALL KEEP THE PROPERTY FREE AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY
(OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT
WHATSOEVER, EXPRESS OR
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IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR
NOR THE AGENT NOR ANY Primary Financing Party SHALL BE LIABLE FOR ANY LATENT,
HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR ANY PART
THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE
COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE
PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS
LESSOR, THE AGENT AND EACH Primary Financing Party ARE CONCERNED) SATISFIED WITH
THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE
BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE
MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT AND
THE Primary Financing Parties, ON THE ONE HAND, AND LESSEE, ON THE OTHER HAND,
ARE TO BE BORNE BY LESSEE.
8.2 Possession and Use of the Property.
(a) At all times during the Term with respect to the Property, such
Property shall be a Permitted Facility and shall be used by Lessee in the
ordinary course of its business. Lessee shall pay, or cause to be paid
during the Term, all charges and costs required in connection with the use
of the Property as contemplated by this Lease. Lessee shall not commit or
permit any waste of the Property or any part thereof.
(b) As of the Commencement Date, the address stated in Section
6.2(i) of the Participation Agreement is the principal place of business
and chief executive office of Lessee (as such terms are used in the
Uniform Commercial Code) and its location of jurisdiction (as such term is
used in the Uniform Commercial Code of any applicable jurisdiction) is
Delaware. As of the Completion Date, the principal place of business and
chief executive office of Lessee (as such terms are used in the Uniform
Commercial Code of any applicable jurisdiction) will be located at the
Property and its location of jurisdiction (as such term is used in the
Uniform Commercial Code of any applicable jurisdiction) will be Delaware.
Lessee will provide Lessor with prior written notice of any change of
location of its principal place of business, the location of its chief
executive office or the location of its jurisdiction of organization.
Regarding the Property, the Lease Supplement shall correctly identify the
initial location of the related Equipment (if any) and Improvements (if
any) and contain an accurate legal description for the related parcel of
Land. The Equipment and Improvements respecting the Property will be
located only at the location identified in the Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment to
or in any other item of equipment or personal property, or to or in any
real property, in a manner that could give rise to the assertion of any
Lien on such item of Equipment by reason of such attachment or the
assertion of a claim that such item of Equipment has become a fixture and
is subject to a Lien in favor of a third party that is prior to the Liens
thereon created by the Operative Agreements.
9
(d) On or prior to the Rent Commencement Date, Lessor and Lessee
shall execute a Lease Supplement (or, pursuant to Section 2.4, an amended
and restated Lease Supplement) which shall contain an Equipment Schedule
that has a general description of the Equipment which shall comprise a
part of the Property, a schedule that has a general description of the
Improvements which shall comprise a part of the Property and a legal
description of the Land upon which such Improvements will be constructed,
all of which shall be leased hereunder as of the Rent Commencement Date.
As of the Rent Commencement Date, such Equipment, Improvements, Land, all
additional Equipment and all additional Improvements which are financed
under the Operative Agreements after the Closing Date and the remainder of
such Property shall be deemed to have been accepted by Lessee for all
purposes of this Lease and to be subject to this Lease.
(e) At all times during the Term, Lessee will comply with all
obligations under and (to the extent no Lease Event of Default exists and
provided that any such exercise of rights and remedies hereinafter
referred to will not impair the value, utility or remaining useful life of
such Property) shall be permitted to exercise all rights and remedies
under, all operation and easement agreements and related or similar
agreements applicable to such Property.
8.3 Integrated Property.
On the Rent Commencement Date, Lessee shall, at its sole cost and
expense, cause the Property, together with any Appurtenant Rights, to constitute
(and for the duration of the Term shall continue to constitute) all of the
equipment, facilities, rights, personal property and real property necessary or
appropriate to operate, utilize, maintain and control the Property in a
commercially reasonable manner.
ARTICLE IX
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards.
Subject to the terms of Article XIII relating to permitted contests,
Lessee, at its sole cost and expense, shall (a) comply with all applicable Legal
Requirements (including without limitation all Environmental Laws) and all
Insurance Requirements relating to the Property, (b) procure, maintain and
comply with all licenses, permits, orders, approvals, consents and other
authorizations required for the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of the Property, and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Property, whether or not compliance
therewith shall require structural or extraordinary changes in the Property or
interfere with the use and enjoyment of the Property unless the failure to
procure, maintain and comply with such items identified in subparagraphs (b) and
(c), individually or in the aggregate, shall not and could not reasonably be
expected to have a Material Adverse Effect. Lessor agrees to take such actions
as may be
10
reasonably requested by Lessee in connection with the compliance by Lessee of
its obligations under this Section 9.1.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) Lessee, at its sole cost and expense, shall maintain the
Property in the repair and condition as existed as of the Completion Date
(ordinary wear and tear excepted) and make all necessary repairs thereto
and replacements thereof, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and maintenance
of Lessee's properties or equipment comparable in type and function to the
Property, such that the Property is capable of being immediately utilized
by a third party and in compliance with standard industry practice,
subject, however, to the provisions of Article XV with respect to Casualty
and Condemnation.
(b) Lessee shall not use or locate any component of the Property
outside of the Approved State therefor. Lessee shall not move or relocate
any component of the Property beyond the boundaries of the Land
(comprising part of such Property) described in the applicable Lease
Supplement, except for the temporary removal of Equipment and other
personal property for repair or replacement.
(c) If any component of the Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered unfit
for use, Lessee, at its own expense, will within a reasonable time replace
such component with a replacement component which is free and clear of all
Liens (other than Permitted Liens and Lessor Liens) and has a value,
utility and useful life at least equal to the component replaced (assuming
the component replaced had been maintained and repaired in accordance with
the requirements of this Lease). All components which are added to the
Property shall immediately become the property of (and title thereto shall
vest in) Lessor and shall be deemed incorporated in the Property and
subject to the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice and during regular business
hours, Lessor and its agents shall have the right to inspect the Property
and all maintenance records with respect thereto, but shall not, in the
absence of a Lease Event of Default, schedule any such inspection during
the months of October, November or December, nor materially disrupt the
business of Lessee. In connection with any such inspection initiated upon
the occurrence of, and thereafter during any continuance of, a Lease Event
of Default, costs and expenses in connection with any such inspection
shall be borne by the Lessee.
11
(e) Lessee shall cause to be delivered to Lessor (at Lessee's sole
expense) one (1) or more additional Appraisals (or reappraisals or updates
of prior Appraisals of the Property) as Lessor may request if and to the
extent any of Lessor, the Agent or any Primary Financing Party is required
pursuant to any applicable Legal Requirement to obtain such Appraisals (or
reappraisals or updates of prior Appraisals) and upon the occurrence of
any Lease Event of Default.
(f) Lessor shall under no circumstances be required to build any
improvements or install any equipment on the Property, make any repairs,
replacements, alterations or renewals of any nature or description to the
Property, make any expenditure whatsoever in connection with this Lease or
maintain the Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of the Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild all
or any part of the Property, or (ii) make repairs at the expense of Lessor
pursuant to any Legal Requirement, Insurance Requirement, contract,
agreement, covenant, condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination of this
Lease, if Lessee shall not have exercised its Purchase Option with respect
to the Property and purchased the Property, surrender the Property (i) to
Lessor pursuant to the exercise of the applicable remedies upon the
occurrence and continuance of a Lease Event of Default or (ii) pursuant to
the second paragraph of Section 22.1(a) hereof, to Lessor or the third
party purchaser, as the case may be, subject to Lessee's obligations under
this Lease (including without limitation the obligations of Lessee at the
time of such surrender under Sections 9.1, 10.1(a) through (f), 10.2,
11.1, 12.1, 22.1 and 23.1).
10.2 Environmental Inspection.
If Lessee has not given notice of exercise of its Purchase Option on
the Expiration Date pursuant to Section 20.1 or for whatever reason Lessee does
not elect (for itself or its designee) to purchase the Property in accordance
with the terms of this Lease, then not more than one hundred eighty (180) days
nor less than sixty (60) days prior to the Expiration Date, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental site
assessment recently prepared (no more than thirty (30) days prior to the date of
delivery) by an independent recognized professional reasonably acceptable to
Lessor, and in form, scope and content reasonably satisfactory to Lessor.
ARTICLE XI
11.1 Modifications.
(a) Lessee at its sole cost and expense, at any time and from time
to time without the consent of Lessor may make modifications, alterations,
renovations, improvements and additions to the Property or any part
thereof and substitutions and replacements therefor (collectively,
"Modifications"), and Lessee shall make any and all
12
Modifications required to be made pursuant to all Legal Requirements,
Insurance Requirements and manufacturer's specifications and standards;
provided, that: (i) no Modification shall materially impair the value,
utility or useful life of the Property from that which existed immediately
prior to such Modification (assuming the Property has been maintained and
repaired in accordance with the requirements of this Lease); (ii) each
Modification shall be done expeditiously and in a good and workmanlike
manner; (iii) no Modification shall adversely affect the structural
integrity of the Property; provided, however, an Improvement may be
demolished provided Lessee (x) constructs another Modification in
replacement thereof, (y) Lessee shall finance the proposed replacement
Modification outside of this lease facility, and (z) such Modification
shall not have a Material Adverse Effect; (iv) to the extent required by
Section 14.2(a), Lessee shall maintain builders' risk insurance at all
times when a Modification is in progress; (v) subject to the terms of
Article XIII relating to permitted contests, Lessee shall pay all costs
and expenses and discharge any Liens arising with respect to any
Modification; (vi) each Modification shall comply with the requirements of
this Lease (including without limitation Sections 8.2 and 10.1); and (vii)
no Improvement shall be demolished or otherwise rendered unfit for use
unless Lessee shall finance the proposed replacement Modification outside
of this lease facility; provided, further, Lessee shall not make any
Modification (unless required by any Legal Requirement) to the extent any
such Modification, individually or in the aggregate, shall or could
reasonably be expected to have a Material Adverse Effect. All
Modifications shall immediately and without further action upon their
incorporation into the Property (1) become property of Lessor, (2) be
subject to this Lease and (3) be titled in the name of Lessor. Lessee
shall not remove or attempt to remove any Modification titled to Lessor
from the Property, except as set forth in Section 10.1. Lessee, at its own
cost and expense, will pay for the repairs of any damage to the Property
caused by the removal or attempted removal of any Modification.
(b) The construction process provided for in the Agency Agreement,
the subdivision of the Property and sale of the Excess Land provided for
in Section 8.13 of the Participation Agreement and the provisions of
Section 21.1 are acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
(c) At the request of Lessee, Lessor shall execute and deliver to
Lessee such authorizations and other documents as may reasonably be
required in connection with any application for permits, licenses,
consents, approvals, entitlements and other authorizations required for
any such Modification, and, if reasonably requested by Lessee, shall join
as a party therein; provided, that all costs and expenses actually
incurred by Lessor shall be payable by Lessee.
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ARTICLE XII
12.1 Warranty of Title.
(a) Lessee hereby acknowledges and shall cause title in the Property
(including without limitation all Equipment, all Improvements, all
replacement components to the Property and all Modifications) immediately
and without further action to vest in and become the property of Lessor
and to be subject to the terms of this Lease from and after the date
hereof or such date of incorporation into the Property. Lessee agrees
that, subject to the terms of Article XIII relating to permitted contests,
Lessee shall not directly or indirectly create or allow to remain, and
shall promptly discharge at its sole cost and expense, any Lien, defect,
attachment, levy, title retention agreement or claim upon the Property,
any component thereof or any Modifications or any Lien, attachment, levy
or claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent or any Primary Financing Party pursuant to any Operative
Agreement, other than Permitted Liens and Lessor Liens. Lessee shall
promptly notify Lessor in the event it receives actual knowledge that a
Lien other than a Permitted Lien or Lessor Lien has occurred with respect
to the Property, the Rent or any other such amounts, and Lessee represents
and warrants to, and covenants with, Lessor that the Liens in favor of
Lessor and/or the Agent created by the Operative Agreements are (and until
the Financing Parties under the Operative Agreements have been paid in
full shall remain) first priority Liens subject only to Permitted Liens
and Lessor Liens. At all times subsequent to the Commencement Date, Lessee
shall (i) cause a valid, perfected, first priority Lien on the Property to
be in place in favor of the Agent (for the benefit of the Secured Parties)
and (ii) file, or cause to be filed, all necessary documents under the
applicable real property law and Article 9 of the Uniform Commercial Code
to perfect such title and Liens.
(b) Subject to Section 11.1(b), nothing contained in this Lease
shall be construed as constituting the consent or request of Lessor or
Agent, expressed or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Property or any
part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR NOR THE AGENT IS
AND NEITHER SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED
OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE 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 OR THE AGENT IN AND TO THE PROPERTY.
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ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities.
Except to the extent otherwise provided for in Section 11 of the
Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or 13.2 or any
Lien, attachment, levy, encumbrance or encroachment and Lessor agrees not to
pay, settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the Property, the Lessor, the Agent and each Primary Financing Party; (b) there
shall not be imposed a Lien (other than Permitted Liens and Lessor Liens) on the
Property that would subject any part of the Property or any Rent to a material
risk of being sold, forfeited, lost or deferred or a material reduction in
value; (c) at no time during the permitted contest shall there be a risk of the
imposition of criminal liability or material civil liability on Lessor, the
Agent or any Primary Financing Party for failure to comply therewith; and (d) in
the event that, at any time, there shall be a material risk of extending the
application of such item beyond the end of the Term, then Lessee shall deliver
to Lessor, the Agent and each other Financing Party an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor 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;
provided, that all reasonable costs and expenses actually incurred by Lessor
shall be payable by Lessee.
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal
Requirements.
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility
charges, Insurance Requirements and such other matters to be timely paid,
settled or compromised, as appropriate, with respect to the Property and (b) the
Property to comply with all applicable Legal Requirements and Insurance
Requirements.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance.
Subject to Section 14.5, during the Term for the Property, Lessee
shall procure and carry, at Lessee's sole cost and expense, commercial general
liability and umbrella liability insurance for claims for injuries or death
sustained by persons or damage to property while on the Property or respecting
the Equipment and such other public liability coverages as are then customarily
carried by similarly situated companies conducting business similar to that
15
conducted by Lessee. Such insurance shall be on terms and in amounts that are no
less favorable than insurance maintained by Lessee with respect to similar
properties and equipment that it owns and are then carried by similarly situated
companies conducting business similar to that conducted by Lessee, and in no
event shall have a minimum combined single limit per occurrence coverage (i) for
commercial general liability of less than $1,000,000.00 and (ii) for umbrella
liability of less than $25,000,000.00. The policies shall name Lessee as the
insured and shall be endorsed to name Lessor, the Agent and each Primary
Financing Party as additional insureds. The policies shall also specifically
provide that such policies shall be considered primary insurance which shall
apply to any loss or claim arising in connection with the Property before any
contribution by any insurance which Lessor, the Agent or any Primary Financing
Party may have in force. In the operation of the Property, Lessee shall comply
with applicable workers' compensation laws and protect Lessor, the Agent and
each Primary Financing Party against any liability under such laws.
14.2 Permanent Hazard and Other Insurance.
(a) During the Term, Lessee shall keep the Property insured against
all risk of physical loss or damage by fire and other risks covered under
an all risk, extended coverage or "special form" policy of insurance and
shall maintain builders' risk insurance during construction of any
Improvements or Modifications in each case in amounts no less than the
Property Cost of the Property from time to time and on terms that (i) are
no less favorable than insurance covering other similar properties owned
by Lessee and (ii) are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The policies
shall name Lessee as the insured and shall be endorsed to name Lessor and
the Agent (on behalf of the Secured Parties) as additional insureds,
mortgagees and loss payees, as their interests may appear; provided, so
long as no Lease Event of Default exists, any and all losses shall be
adjusted by Lessee, and any loss payable under the insurance policies
required by this Section for losses up to $1,650,000 will be paid to
Lessee.
(b) If, during the Term with respect to the Property the area in
which the Property is located is designated a "flood-prone" area pursuant
to the Flood Disaster Protection Act of 1973, or any amendments or
supplements thereto or is in a zone designated A or V, then Lessee shall
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973. In addition, Lessee will fully comply
with the requirements of the National Flood Insurance Act of 1968 and the
Flood Disaster Protection Act of 1973, as each may be amended from time to
time, and with any other Legal Requirement, concerning flood insurance to
the extent that it applies to the Property. During the Term, Lessee shall,
in the operation and use of the Property, maintain workers' compensation
insurance consistent with that carried by similarly situated companies
conducting business similar to that conducted by Lessee and containing
minimum liability limits of no less than $100,000.
16
14.3 Coverage.
(a) As of the date of this Lease and annually thereafter during the
Term, Lessee shall furnish the Agent (on behalf of Lessor, each Primary
Financing Party and the other beneficiaries of such insurance coverage)
with certificates, in form and substance reasonably satisfactory to Agent,
prepared by the insurers or insurance broker of Lessee showing the
insurance required under Sections 14.1 and 14.2 to be in effect, naming
(to the extent of their respective interests) Lessor, the Agent and each
Primary Financing Party as additional insureds (in the case of liability
insurance) and mortgagees and loss payees (in the case of property/hazard,
builders' risk and flood insurance) and evidencing the other requirements
of this Article XIV. All such insurance shall be at the cost and expense
of Lessee (except that such costs and expenses during the Construction
Period shall be paid in accordance with the provisions of Section 14.5)
and provided by nationally recognized, financially sound insurance
companies having an A/X or better rating by A.M. Best's Key Rating Guide,
or such other insurance companies acceptable to the Agent. Lessee shall
cause such certificates to include a provision for ten (10) days' advance
written notice by the insurer to the Agent (on behalf of Lessor, each
Primary Financing Party and the other beneficiaries of such insurance
coverage) in the event of cancellation or material alteration of such
insurance.
(b) Lessee agrees that the insurance policy or policies required by
Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate clause
pursuant to which any such policy shall provide that it will not be
invalidated with respect to the rights of the Lessor, the Agent or any
Primary Financing Party should Lessee or any Contractor, as the case may
be, have waived any or all rights of recovery against any party for losses
covered by such policy or due to any breach of warranty, fraud, action,
inaction or misrepresentation by Lessee or any Person acting on behalf of
Lessee. Lessee hereby waives any and all such rights against Lessor, the
Agent and each Primary Financing Party to the extent of payments made to
any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Article XIV, except that Lessor may carry
separate liability insurance at Lessor's sole cost so long as (i) Lessee's
insurance is designated as primary and in no event excess or contributory
to any insurance Lessor may have in force which would apply to a loss
covered under Lessee's policy and (ii) each such insurance policy will not
cause Lessee's insurance required under this Article XIV to be subject to
a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof or otherwise
maintain the coverage required by such Sections without any lapse in
coverage.
17
14.4 Policies.
Except as limited during the Construction Period pursuant to Section
2.6(g) of the Agency Agreement, all insurance required by this Article XIV
may be provided under (i) an individual policy covering the Property, (ii)
a blanket policy or policies which includes other liabilities, properties
and locations of Lessee, (iii) a plan of self-insurance, provided that
Lessee shall not be permitted to self-insure with respect to liability
insurance, property insurance and flood insurance respecting the Property
unless the Lessee shall maintain a Debt Rating of at least Baa2 from
▇▇▇▇▇'▇ and at least BBB from S&P, (iv) an increased coverage or "umbrella
policy" provided and utilized to increase the coverage provided by
individual or blanket policies in lower amounts (provided the aggregate
limits of liability shall comply with the provisions of this Article XIV)
or (v) a combination of any of the foregoing insurance programs.
14.5 Insurance Coverage During Construction Period.
During the Construction Period, Lessee shall, in its capacity as
Lessee hereunder and as Construction Agent pursuant to the Agency
Agreement, procure the insurance policies and coverages set forth in
Sections 14.1, 14.2 and 14.3 above. During the Construction Period,
premiums for such policies and coverage shall be paid with the proceeds of
one or more Advances made in accordance with the provisions of the
Operative Agreements and upon satisfaction or express waiver of the
conditions applicable to such Advance, and such amounts shall be added to
the Property Cost respecting the Property.
ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is obligated
to deliver or is deemed to have delivered, a Termination Notice), and
prior to the occurrence and continuation of a Lease Default or a Lease
Event of Default, Lessee shall be entitled to receive (and Lessor hereby
irrevocably assigns to Lessee all of Lessor's right, title and interest
in) any condemnation proceeds, award, compensation or insurance proceeds
under Sections 14.2(a) or 14.2(b) hereof to which Lessee or Lessor may
become entitled by reason of their respective interests in the Property
(i) if all or a portion of the 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 the Property or any part thereof is the subject of a
Condemnation; provided, however, if a Default or Event of Default shall
have occurred and be continuing or if such condemnation proceeds, award,
compensation or insurance proceeds shall exceed $1,650,000, then such
condemnation proceeds, award, compensation or insurance proceeds shall be
paid directly to Lessor or, if received by Lessee, shall be held in trust
for Lessor, and shall be paid over by Lessee to Lessor and held in
accordance with the terms of this paragraph (a). Except as expressly set
forth in this Section 15.1, all such amounts in excess of $1,650,000 held
by Lessor hereunder on
18
account of any condemnation proceeds, award, compensation or insurance
proceeds either paid directly to Lessor or turned over to Lessor shall be
held as security for the performance of Lessee's obligations hereunder and
under the other Operative Agreements. When all such obligations of Lessee
with respect to such matters (and all other obligations of Lessee which
should have been satisfied pursuant to the Operative Agreements as of such
date) have been satisfied or expressly waived, all amounts so held by
Lessor shall be paid over to Lessee, except to the extent such amounts
have been previously disbursed pursuant to Section 15.1(e).
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any condemnation proceeds,
award, compensation or insurance payment on account of any such Casualty
or Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, Lessor and the Agent shall participate in any such proceeding,
action, negotiation, prosecution or adjustment; provided, that all
reasonable costs and expenses actually incurred by Lessor or the Agent in
connection therewith shall be payable by the Lessee. Lessor and Lessee
agree that this Lease shall control the rights of Lessor and Lessee in and
to any such condemnation proceeds, award, compensation or insurance
payment. So long as no Lease Default or Lease Event of Default shall have
occurred and be continuing, Lessor shall not agree to or accept any
compromise relating to any such proceeding or action without Lessee's
prior written approval.
(c) If Lessee shall receive notice of a Casualty where damage to the
Improvements is estimated to equal or exceed ten percent (10%) of the
Property Cost of the Property, Lessee shall give notice thereof to Lessor
promptly after Lessee's receipt of such notice. In the event such a
Casualty occurs (regardless of whether Lessee gives notice thereof), then
Lessee shall be deemed to have delivered a Termination Notice to Lessor
and the provisions of Sections 16.1 and 16.2 shall apply; provided,
however, if no Lease Default or Lease Event of Default shall have occurred
and be continuing and if the cost to repair, restore or replace the
damaged portion of the Improvements is less than thirty percent (30%) of
the Property Cost of the Property and Lessee delivers within thirty (30)
days of such Casualty written notice to Lessor that it intends to repair,
restore or replace the portion of the Property affected by such Casualty,
then Lessee may repair, restore or replace the portion of the Property
affected by such Casualty pursuant to the terms and conditions of the
Operative Agreements, including without limitation Sections 10.1, 11.1 and
15.1 of this Lease and proceeds of any insurance policies held by Lessor
pursuant to this Section 15.1 shall be made available for Restoration in
accordance with Section 15.1(e) hereof. If Lessee shall receive notice of
a Condemnation of the Property or any portion thereof or interest therein
where the fair market value of the Property shall be diminished by more
than ten percent (10%), Lessee shall give notice thereof to Lessor
promptly after Lessee's receipt of such notice. In the event such a
Condemnation occurs (regardless of whether Lessee gives notice thereof),
then Lessee shall be deemed to have delivered a Termination Notice to
Lessor and the provisions of Sections 16.1 and 16.2 shall apply.
19
(d) In the event of a Casualty or a Condemnation (regardless of
whether notice thereof must be given pursuant to paragraph (c)), this
Lease shall terminate with respect to the Property in accordance with
Section 16.1 if Lessee, within thirty (30) days after such occurrence,
delivers to Lessor a notice to such effect.
(e) (i) If, pursuant to this Section 15.1, Lessee does not deliver a
notice to terminate this Lease pursuant to clause (d) above or is not
required to deliver a notice to terminate this Lease pursuant to clause
(c) above, then this Lease shall continue in full force and effect
following a Casualty or Condemnation with respect to the Property, Lessee
shall, at its sole cost and expense (subject to reimbursement in
accordance with this Section 15.1) promptly and diligently repair any
damage to the Property caused by such Casualty or Condemnation in
conformity with the requirements of Sections 10.1 and 11.1
("Restoration"), using the as-built Plans and Specifications or
manufacturer's specifications for the applicable Improvements, Equipment
or other components of the Property (as modified to give effect to any
subsequent Modifications or for such Modifications to be made as a part of
such Restoration as may be permitted under Section 11.1 hereof, any
previous Condemnation affecting the Property, and all applicable Legal
Requirements), so as to restore the Property to the same or a greater fair
market value, and such that the Property shall after such Restoration have
the same or greater useful life and utility as existed immediately prior
to such Casualty or Condemnation (assuming all maintenance and repair
standards have been satisfied). In such event, title to the Property shall
remain with Lessor.
(ii) If the award, compensation or proceeds received by or
turned over to Lessor, in accordance with Section 15.1(a), in respect of
any Casualty or Condemnation (collectively, as used in this Section
15.1(e), "proceeds"), and if a Lease Default or Lease Event of Default
shall not have occurred and be continuing, then Lessor shall make
available for expenses related to the Restoration of the Property all such
proceeds it receives pursuant to the terms of this Lease provided that
such Restoration shall be accomplished as provided in Section 15.1(g) so
long as such Restoration can, in the reasonable judgment of the Agent, be
completed by the earlier of (A) two (2) years after the date of the
Casualty or Condemnation or (B) the date one hundred eighty (180) days
prior to the Expiration Date, and in such a manner so that the Property
will have a value at least equal to its value prior to the Casualty or
Condemnation.
(iii) Any such proceeds held by Lessor for Restoration shall
be made available by Lessor (or at Lessor's election by a disbursing or
escrow agent who shall be selected by Lessor and whose fees shall be paid
by Lessee) from time to time as requested by Lessee, but no more
frequently than once a month as the Restoration progresses, upon delivery
to the Agent of the following: (i) evidence reasonably satisfactory to the
Agent of the estimated cost of Restoration; (ii) funds (or assurances
reasonably satisfactory to the Agent that such funds are available)
sufficient in addition to such proceeds to complete and fully pay for the
Restoration; and (iii) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, plats of
survey and such other evidence of cost, payment and performance as the
Agent may reasonably require and approve. No payment made prior to the
final completion of
20
Restoration shall exceed ninety percent (90%) of the value of the work
performed from time to time, as such value shall be determined by the
Agent in its reasonable judgment. Prior to commencement of the work, and
from time to time thereafter, if so requested by the Agent, Lessee shall
deposit with Lessor an amount of funds in excess of the proceeds which,
together with such proceeds, shall at all times be at least sufficient in
the reasonable judgment of the Agent to pay the entire unpaid cost of the
Restoration, free and clear of all Liens or claims of Lien. Any surplus
which may remain out of the proceeds held by Lessor after payment of all
costs of the Restoration shall be paid to Lessee. At Lessee's reasonable
request, Lessor will deposit any proceeds held by it for Restoration into
an interest-bearing account which is backed directly or indirectly by the
full faith and credit of the United States government over which Lessor
has sole possession, authority and control, and otherwise on terms and
conditions reasonably satisfactory to the Agent.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Basic Term a Casualty
occurs with respect to the Property or Lessee receives notice of a
Condemnation with respect to the Property, and following such Casualty or
Condemnation, the Property cannot reasonably be restored, repaired or
replaced on or before the day one hundred eighty (180) days prior to the
Expiration Date to the same or a greater fair market value, and such that
the Property shall after such repair or restoration have the same or
greater useful life and utility as existed immediately prior to such
Casualty or Condemnation (assuming all maintenance and repair standards
have been satisfied) or on or before such day the Property is not in fact
so restored, repaired or replaced, then Lessee shall be required to
exercise its Purchase Option for the Property on the next Payment Date
occurring not less than sixty (60) days after such Casualty or
Condemnation (notwithstanding the limits on such exercise contained in
Section 20.2) and pay Lessor the Termination Value for the Property. After
the payment by Lessee of the Termination Value for the Property, any
Excess Proceeds shall be paid to the Lessee.
15.2 Environmental Matters.
(a) Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of the Property in concentrations and
conditions that constitute an Environmental Violation and which, in the
reasonable opinion of Lessee, the cost to undertake any legally required
response, clean up, remedial or other action will or might result in a cost to
Lessee of more than $100,000, Lessee shall notify Lessor in writing of such
condition. In the event of any Environmental Violation (regardless of whether
notice thereof must be given), Lessee shall, not later than thirty (30) days
after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the Property pursuant to
Section 16.1, if applicable, or, at Lessee's sole cost and expense, promptly
during such thirty (30) day period deliver to Lessor notice of intention to
remediate, and thereafter promptly and diligently undertake and complete any
response, clean up, remedial or
21
other action (including without limitation the pursuit by Lessee of appropriate
action against any off-site or third party source for contamination) necessary
to remove, cleanup or remediate the Environmental Violation in compliance with
all Environmental Laws. Any such undertaking shall be timely completed in
accordance with prudent industry standards. If Lessee does not deliver a
Termination Notice with respect to the Property pursuant to Section 16.1, Lessee
shall, upon completion of remedial action by Lessee, cause to be prepared by a
reputable environmental consultant reasonably acceptable to Agent 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 compliance with
applicable Environmental Law. Not less than sixty (60) days and not more than
one hundred eighty (180) days prior to any time that Lessee elects to cease
operations with respect to the Property or to re-market the Property pursuant to
the Sale Option pursuant to Section 20.1 hereof or pursuant to any other
provision of any Operative Agreement, Lessee at its expense shall cause to be
delivered to Agent a Phase I environmental site assessment (or an update of a
prior Phase I environmental site assessment) respecting the Property recently
prepared (no more than thirty (30) days prior to the date of delivery) by an
independent recognized professional acceptable to Agent in its reasonable
discretion and in form, scope and content satisfactory to Agent in its
reasonable discretion. Subject to Section 5.4(b) of the Agency Agreement, but
notwithstanding any other provision of any Operative Agreement, if Lessee fails
to comply with the foregoing obligation regarding the Phase I environmental site
assessment, Lessee shall be obligated to purchase the Property for its
Termination Value and shall not be permitted to exercise (and Lessor shall have
no obligation to honor any such exercise) any rights under any Operative
Agreement regarding a sale of the Property to a Person other than Lessee or any
Affiliate or other designee of Lessee.
(b) Notwithstanding any provision herein to the contrary, the Lessor
acknowledges and agrees that the enforcement by the Lessee of the seller's
obligations under the Purchase Agreement with respect to the Existing
Environmental Matters shall be deemed to satisfy Lessee's obligations under this
Section 15.2(a) above with respect to such Existing Environmental Matters.
15.3 Notice of Environmental Matters.
Promptly, but in any event within fifteen (15) days from the date
Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
notice of any pending or threatened claim, action or proceeding involving any
Environmental Law or any Release on or in connection with the Property. All such
notices shall describe in reasonable detail the nature of the claim, action or
proceeding and Lessee's proposed response thereto. In addition, Lessee shall
provide to Lessor, within ten (10) days of receipt, copies of all material
written communications with any Governmental Authority relating to any
Environmental Law in connection with the Property. Lessee shall also promptly
provide such detailed reports of any such material environmental claims as may
reasonably be requested by Lessor.
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ARTICLE XVI
16.1 Termination Upon Certain Events.
If Lessee has delivered, or is deemed to have delivered, written
notice of a termination of this Lease to Lessor in the form described in Section
16.2(a) (a "Termination Notice") pursuant to the provisions of this Lease, then
following the applicable Casualty, Condemnation or Environmental Violation, this
Lease shall terminate upon the payment in full of the Termination Value for the
Property in accordance with the terms of the Operative Agreements on the
applicable Termination Date.
16.2 Procedures.
(a) A Termination Notice shall contain: (i) notice of termination of
this Lease on a Payment Date not more than sixty (60) days after Lessor's
receipt of such Termination Notice (the "Termination Date"); and (ii) a
binding and irrevocable agreement of Lessee to pay the Termination Value
for the Property and purchase the Property on such Termination Date.
(b) On the Termination Date, Lessee shall pay to Lessor the
Termination Value for the Property, and Lessor shall convey the Property
or the remaining portion thereof, if any, to Lessee (or Lessee's
designee), all in accordance with Section 20.2.
ARTICLE XVII
17.1 Lease Events of Default.
If any one (1) or more of the following events (each a "Lease Event
of Default") shall occur and be continuing:
(a) Lessee shall fail to make payment of (i) any Basic Rent (except
as set forth in clause (ii)) or any fees within five (5) Business Days
after the same has become due and payable or (ii) any Termination Value or
Cash Collateral Rent, on the date any such payment is due and payable, or
any payment of Basic Rent or Supplemental Rent due on the due date of any
payment of Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or the
Construction Agent shall fail to make any payment of any amount under any
Operative Agreement which has become due and payable, in either case,
within thirty (30) days after receipt of written notice that such payment
is due and payable;
23
(c) Lessee shall fail to maintain insurance as required by Article
XIV of this Lease or to deliver any requisite annual certificate with
respect thereto within thirty (30) days of the date such certificate is
due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any covenant or
agreement contained in Sections 8.3A.2(i), 8.2A.3 or 8.3B of the
Participation Agreement, or (ii) Lessee shall fail to observe or perform
any term, covenant, obligation or condition of Lessee under this Lease or
any other Operative Agreement to which Lessee is a party other than those
set forth in Sections 17.1(a), (b), (c), or (d)(i) hereof, and such
failure shall continue for thirty (30) days after the Lessee either has
received written notice thereof or a Responsible Officer of Lessee shall
have actual knowledge thereof; provided, that in the case of this clause
(ii), if such failure is not capable of remedy by the payment of money or
otherwise within such thirty (30) day period but may be remedied with
further diligence and if the Lessee has and continues to pursue diligently
such remedy, then the Lessee shall be granted additional time to pursue
such remedy; provided, further, in no event shall such additional period
exceed ninety (90) days or (iii) any representation or warranty or
statement of fact made by Lessee set forth in this Lease 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 when made;
(e) An Agency Agreement Event of Default shall have occurred and be
continuing and shall not have been expressly waived;
(f) Any obligation of the Lessee or any of its Subsidiaries
representing a Material Subsidiary Group (other than its obligations in
respect of the Operative Agreements), whether as principal, guarantor,
surety or other obligor, for the payment of any Indebtedness in an
aggregate Consolidated principal amount exceeding $25,000,000 (i) shall be
declared to be due and payable, or shall be required to be prepaid other
than pursuant to a regularly scheduled prepayment or required prepayment
(unless such required prepayment results from a default or event of
default thereunder), prior to the expressed maturity thereof, or (ii)
shall not be paid when due or within any grace period for the payment
thereof;
(g) The liquidation or dissolution of the Lessee, or the suspension
of the business of the Lessee, or the filing by the Lessee of a voluntary
petition or an answer seeking reorganization, arrangement, receivership,
readjustment of its debts, insolvency, liquidation, dissolution,
winding-up or for any other relief under the Bankruptcy Code, or under any
other insolvency act or law, state or federal, now or hereafter existing,
or any other action of the Lessee indicating its consent to, approval of
or acquiescence in, any such petition or proceeding; the application by
the Lessee for, or the appointment by, consent or acquiescence of the
Lessee of a receiver, a trustee or a custodian of the Lessee for all or a
substantial part of its property; the making by the Lessee of any general
assignment for the benefit of creditors; the inability of the Lessee or
the admission by the Lessee in writing of its inability to pay its debts
as they mature or the Lessee is generally
24
not paying its debts and other financial obligations as they become due
and payable; or the Lessee taking any corporate action to authorize any of
the foregoing;
(h) The filing of an involuntary petition against the Lessee in
bankruptcy or seeking reorganization, arrangement, readjustment of its
debts, insolvency, liquidation, dissolution, winding-up or for any other
relief under the Bankruptcy Code, or under any other insolvency act or
law, state or federal, now or hereafter existing; or the involuntary
appointment of a receiver, a trustee or a custodian of the Lessee for all
or a substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of
the property of the Lessee, and the continuance of any of such events for
sixty (60) days undismissed or undischarged;
(i) [Reserved];
(j) The entering of any order in any proceedings against the Lessee
or any Subsidiary of the Lessee decreeing the dissolution, divestiture or
split-up of the Lessee or any Subsidiary of the Lessee and such order
remains in effect for more than sixty (60) days;
(k) [Reserved];
(l) [Reserved];
(m) Judgments or decrees against one or more of the Lessee or any of
its Subsidiaries representing a Material Subsidiary Group in an aggregate
Consolidated amount exceeding $25,000,000 shall be rendered by a court of
competent jurisdiction and remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days; provided
that any such judgment or order shall not give rise to an Event of Default
under this paragraph (m) if and for so long as (i) the amount of such
judgment or order is covered by a valid and binding policy of insurance
between the defendant and the insurer covering full payment (less
deductibles and/or self-insured retention not to exceed $1,000,000)
thereof and (ii) such insurer has been notified, and has not disputed
coverage, of the amount of such judgment or order;
(n) (i) any Termination Event shall occur with respect to which the
Lessee or any of its Subsidiaries shall have been assessed any liability
in an aggregate Consolidated amount exceeding $25,000,000 which amount
shall remain unpaid for a period of 30 days, (ii) any Accumulated Funding
Deficiency in an aggregate Consolidated amount exceeding $25,000,000 shall
exist with respect to any Pension Plan and such Accumulated Funding
Deficiency shall not have been eliminated within a period of 30 days after
it shall have been determined, (iii) any Person shall engage in any
Prohibited Transaction involving any Employee Benefit Plan and, as a
result thereof, the Lessee or any of its Subsidiaries shall have been
assessed an excise tax penalty in an aggregate Consolidated amount
exceeding $25,000,000 which amount shall remain unpaid for a period of 30
days; unless and to the extent only that (a) such Termination Event,
Accumulated Funding Deficiency or Prohibited Transaction is being
contested by
25
appropriate proceedings in good faith by the Lessee or such Subsidiary or
Subsidiaries and (b) the amount of the Lien provided under Section 4068 of
ERISA, if such Lien shall arise as a result of any of the foregoing, would
not, if subtracted from Consolidated Tangible Net Worth, result in a
violation of Section 8.3B.7 of the Participation Agreement;
(o) Except as permitted pursuant to Section 8.3B.1 of the
Participation Agreement, any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Act of 1934), directly or
indirectly, of Voting Stock of the Lessee (or other securities convertible
into such Voting Stock) representing 20% or more of the combined voting
power of all Voting Stock of the Lessee; or (ii) during any period of up
to 24 consecutive months, commencing before or after the Closing Date,
individuals who at the beginning of such 24-month period were directors of
the Lessee shall cease to constitute a majority of the board of directors
of the Lessee and the replacements thereof shall not have been approved by
a vote of at least a majority of the members of the board of directors
then still in office who either were members of the board of directors at
the beginning of such period or whose election as members of the board of
directors was previously so approved;
(p) Any Operative Agreement to which the Lessee is a party shall
cease to be in full force and effect;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days written notice of such termination
(provided, notwithstanding the foregoing, this Lease shall be deemed to be
automatically terminated without the giving of notice upon the occurrence of a
Lease Event of Default under Sections 17.1(g), (h) or (j)), and this Lease shall
terminate, and all rights of Lessee under this Lease (other than Lessee's rights
to enforce Lessor's obligation to convey title to the Property to Lessee in
accordance with the provisions of Sections 17.6 and/or 17.11) shall cease.
Lessee shall, to the fullest extent permitted by law, pay as Supplemental Rent
all costs and expenses incurred by or on behalf of Lessor or any other Financing
Party, including without limitation reasonable fees and expenses of counsel, as
a result of any Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE AS SUPPLEMENTED BY THE
LEASE SUPPLEMENT. A POWER OF SALE MAY ALLOW LESSOR TO TAKE THE PROPERTY AND SELL
THE PROPERTY WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE
AND CONTINUANCE OF A LEASE EVENT OF DEFAULT.
17.2 Surrender of Possession.
If a Lease Event of Default shall have occurred after the
Commencement Date 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
26
the Property. 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. Upon the written demand of Lessor, Lessee shall return the
Property promptly to Lessor, in the manner and condition required by, and
otherwise in accordance with the provisions of, Section 22.1(c) hereof.
17.3 Reletting.
If a Lease Event of Default shall have occurred after the
Commencement Date and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 17.1, Lessor may, but shall be under no
obligation to, relet any or all of the Property, for the account of Lessee or
otherwise, for such term or terms (which may be greater or less than the period
which would otherwise have constituted the balance of the Term) and on such
conditions (which may include concessions or free rent) and for such purposes as
Lessor may determine, and Lessor may collect, receive and retain the rents
resulting from such reletting. Lessor shall not be liable to Lessee for any
failure to relet the Property or for any failure to collect any rent due upon
such reletting.
17.4 Damages.
Neither (a) the termination of this Lease as to the Property
pursuant to Section 17.1; (b) the repossession of the Property; nor (c) the
failure of Lessor to relet 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 liabilities and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. If any Lease Event of Default shall have occurred after the
Commencement Date and be continuing and this Lease is terminated pursuant to
Section 17.1, Lessee shall forthwith pay to Lessor all Rent and other sums due
and payable hereunder to and including without limitation the date of such
termination. In the event this Lease is not terminated pursuant hereto, 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 and until the end
of the Term hereof 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 17.6. In calculating the amount of such net
proceeds from reletting, there shall be deducted all of Lessor's, the Agent's
and any Primary Financing Party's reasonable expenses in connection therewith,
including without limitation repossession costs, brokerage or sales commissions,
fees and expenses for counsel and any necessary repair or alteration costs and
expenses incurred in preparation for such reletting. To the extent Lessor
27
receives any damages pursuant to this Section 17.4, such amounts shall be
regarded as amounts paid on account of Rent. Lessee specifically acknowledges
and agrees that its obligations under this Section 17.4 shall be absolute and
unconditional under any and all circumstances and shall be paid and/or
performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.5 Power of Sale.
(a) Without limiting any other remedies set forth in this Lease.
Lessor and Lessee agree that Lessee has granted, pursuant to Section 7.1(b)
hereof and the Lease Supplement, a Lien against the Property WITH POWER OF SALE,
and that, upon the occurrence and during the continuance of any Lease Event of
Default, Lessor shall have the power and authority, to the extent provided by
law, after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of the Property.
(b) Upon the occurrence and during the continuance of a Lease Event
of Default, the Lessor, in lieu of or in addition to exercising any power of
sale hereinabove given, may proceed by a suit or suits in equity or at law,
whether for a foreclosure hereunder, or for the sale of such interest in the
Property, against Lessee for the Termination Value or for the appointment of a
receiver pending any foreclosure hereunder or the sale of such interest in the
Property, or for the enforcement of any other appropriate legal or equitable
remedy.
17.6 Final Liquidated Damages.
If a Lease Event of Default shall have occurred and be continuing,
whether or not this Lease shall have been terminated pursuant to Section 17.1
and whether or not Lessor shall have collected any current liquidated damages
pursuant to Section 17.4, Lessor shall have the right to recover, by demand to
Lessee and at Lessor's election, and Lessee shall pay to Lessor, as and for
final liquidated damages, but exclusive of the indemnities payable under Section
11 of the Participation Agreement (which, if requested, shall be paid
concurrently), and in lieu of all current liquidated damages beyond the date of
such demand (it being agreed that it would be impossible accurately to determine
actual damages) the Termination Value (including, without limitation, the Make -
Whole Amount). Upon payment of the amount specified pursuant to the first
sentence of this Section 17.6, Lessee shall be entitled to receive from Lessor,
either at Lessee's request or upon Lessor's election, in either case at Lessee's
cost, Lessor's entire right, title and interest in and to the Property,
Improvements, Fixtures, Modifications, Equipment and all components thereof, in
each case in recordable form and otherwise in conformity with local custom and
free and clear of the Lien of this Lease (including without limitation the
release of any memoranda of Lease and/or the Lease Supplement recorded in
connection therewith) and any Lessor Liens. The Property shall be conveyed to
Lessee "AS-IS, WHERE-IS" and in its then present physical condition. If any
statute or rule of law shall limit the amount of such final liquidated damages
to less than the amount agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law; provided, however, Lessee
shall not be entitled to receive an assignment of Lessor's interest in the
Property, the Improvements, Fixtures, Modifications, Equipment or the components
thereof unless Lessee shall have paid in full the
28
Termination Value. Lessee specifically acknowledges and agrees that its
obligations under this Section 17.6 shall be absolute and unconditional under
any and all circumstances and shall be paid and/or performed, as the case may
be, without notice or demand and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever.
17.7 Environmental Costs.
If a Lease Event of Default shall have occurred and be continuing,
and whether or not this Lease shall have been terminated pursuant to Section
17.1, Lessee shall pay directly to any third party (or at Lessor's election,
reimburse Lessor) for the cost of any environmental testing and/or remediation
work undertaken respecting the Property, as such testing or work is deemed
appropriate in the reasonable judgment of Lessor, and shall indemnify and hold
harmless Lessor and each other Indemnified Person therefrom. Lessee shall pay
all amounts referenced in the immediately preceding sentence within five (5)
Business Days of any request by Lessor for such payment. The provisions of this
Section 17.7 shall not limit the obligations of Lessee under any Operative
Agreement regarding indemnification obligations, environmental testing,
remediation and/or work.
17.8 Waiver of Certain Rights.
If this Lease shall be terminated pursuant to Section 17.1, Lessee
waives, to the fullest extent permitted by Law, (a) any notice of re-entry or
the institution of legal proceedings to obtain re-entry or possession; (b) any
right of redemption, re-entry or possession; (c) the benefit of any laws now or
hereafter in force exempting property from liability for rent or for debt; and
(d) any other rights which might otherwise limit or modify any of Lessor's
rights or remedies under this Article XVII.
17.9 Assignment of Rights Under Contracts.
If a Lease Event of Default shall have occurred and be continuing,
and whether or not this Lease shall have been terminated pursuant to Section
17.1, Lessee shall upon Lessor's demand (and provided Lessee has not cured such
Lease Event of Default pursuant to Section 17.11 or otherwise paid to Lessor an
amount equal to the liquidated damages set forth in Section 17.6 within ten (10)
days after written demand therefor) immediately assign, transfer and set over to
Lessor all of Lessee's right, title and interest in and to each agreement
executed by Lessee in connection with the acquisition, installation, testing,
use, development, construction, operation, maintenance, repair, refurbishment
and restoration of the Property (including without limitation all right, title
and interest of Lessee with respect to all warranty, performance, service and
indemnity provisions), as and to the extent that the same relate to the
acquisition, installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of the Property or any of
them.
17.10 Remedies Cumulative.
The remedies herein provided shall be cumulative and in addition to
(and not in limitation of) any other remedies available at law, equity or
otherwise, including without
29
limitation any mortgage foreclosure remedies; provided, however, Lessor shall
not exercise any rights or remedies, other than the right to terminate this
Agreement, to collect current or full liquidated damages pursuant to Section
17.4 and 17.6 above and to transfer and convey the Property to Lessee in
accordance with Section 17.6 above, and to seek to enforce the indemnifications
under this Agreement and any other Operative Agreement, unless and until Lessee
shall have failed to pay to Lessor the liquidated damages set forth in Section
17.6 within ten (10) days after the Agent has delivered to the Lessee a written
demand therefor.
17.11 Lessee's Right to Cure by Purchase of the Property.
Notwithstanding anything in this Lease or in any of the other
Operative Agreements to the contrary, upon the occurrence and continuance of a
Lease Default or Lease Event of Default, Lessee may, but shall not be obligated
to, cure any such Lease Default or Lease Event of Default, as the case may be,
by purchasing the Property, such purchase to be consummated as provided in
Section 19.1 and Section 20.2.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessee's Lease Defaults.
Lessor, without waiving or releasing any obligation or Lease Event
of Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
without limitation the failure by Lessee to maintain the insurance required by
Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon the
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All
reasonable out-of-pocket costs and expenses so incurred (including without
limitation fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by Lessor,
shall be paid by Lessee to Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.
Subject to Section 19.2, in connection with any termination of this
Lease, or in connection with Lessee's exercise of its Purchase Option, upon the
date on which this Lease is to terminate, and upon tender by Lessee of the
amounts set forth in Sections 16.2(b) or 20.2, as applicable, Lessor shall
execute and deliver to Lessee (or to Lessee's designee) at Lessee's cost and
expense an assignment (by limited or special warranty deed or other appropriate
instrument) of Lessor's entire interest in the Property, in each case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this Lease, the Liens of the Security Documents and any other
Operative Agreements and any Lessor Liens, but without any other warranties (of
title or otherwise) from Lessor and such other documents or instruments as
30
may be reasonably requested by Lessee to effect the conveyance or assignment
contemplated by this Section 19.1. The Property shall be conveyed to Lessee
"AS-IS, "WHERE-IS" and in then present physical condition.
19.2 No Purchase or Termination With Respect to Less than All of a
Property.
Except as expressly permitted pursuant to Section 21.1, Lessee shall
not be entitled to exercise its Purchase Option or the Sale Option separately
with respect to a portion of the Property consisting of Land, Equipment,
Improvements but shall be required to exercise its Purchase Option or the Sale
Option with respect to the entire Property.
ARTICLE XX
20.1 Purchase Option or Sale Option-General Provisions.
Not less than one hundred eighty (180) days and no more than two
hundred forty (240) days prior to the Expiration Date or, respecting the
Purchase Option only, not less than sixty (60) days and no more than two hundred
forty (240) days prior to any Payment Date (such Expiration Date or, respecting
the Purchase Option only, any such Payment Date being hereinafter referred to as
the "Election Date"), Lessee may give Agent (on behalf of Lessor) irrevocable
written notice (the "Election Notice") that Lessee is electing (a) to purchase
the Property on the applicable Election Date (the "Purchase Option") or (b) with
respect to an Election Notice given in connection with the Expiration Date only,
the option to re-market the Property to a Person other than Lessee or any
Affiliate of Lessee and cause a sale of the Property to occur on the applicable
Election Date pursuant to the terms of Section 22.1 (the "Sale Option"). If
Lessee does not give an Election Notice indicating the Purchase Option or the
Sale Option at least one hundred eighty (180) days and not more than two hundred
forty (240) days prior to the Expiration Date, then Lessee shall be deemed to
have elected for the Purchase Option to apply on the Expiration Date. If Lessee
shall either (i) elect (or be deemed to have elected) to exercise the Purchase
Option or (ii) elect the Sale Option and fail to cause the Property to be sold
in accordance with the terms of Section 22.1 on the applicable Election Date,
then in either case Lessee shall pay to Lessor on the date on which such
purchase or sale is scheduled to occur an amount equal to the Termination Value
for the Property (which the parties do not intend to be a "bargain" purchase
price) and, upon receipt of such amounts and satisfaction of such obligations,
Lessor shall transfer to Lessee (or to Lessee's designee) all of Lessor's right,
title and interest in and to the Property in accordance with Section 20.2.
If the Property is the subject of remediation efforts respecting
Hazardous Substances at the applicable Election Date which could materially and
adversely impact the Fair Market Sales Value of the Property (with materiality
determined in Lessor's reasonable discretion), then Lessee shall be obligated to
purchase the Property pursuant to Section 20.2.
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20.2 Lessee Purchase Option.
Provided, no Lease Default or Lease Event of Default shall have
occurred and be continuing (other than those that will be cured by the payment
of the Termination Value for the Property) and provided, that the Election
Notice has been appropriately given specifying the Purchase Option, Lessee shall
purchase the Property on the applicable Election Date at a price equal to the
Termination Value for the Property (which the parties do not intend to be a
"bargain" purchase price).
Subject to Section 19.2, in connection with any termination of this
Lease, or in connection with Lessee's exercise of its Purchase Option, upon the
date on which this Lease is to terminate with respect to the Property and upon
tender by Lessee of the amounts set forth in Section 16.2(b) or this Section
20.2, as applicable, Lessor shall execute, acknowledge (where required) and
deliver to Lessee, at Lessee's cost and expense, each of the following: (a) a
special or limited warranty Deed conveying the Property (to the extent it is
real property) to Lessee (or Lessee's designee) free and clear of the Lien of
this Lease, the Liens of the Credit Documents and any other Operative Agreements
and any Lessor Liens; (b) a ▇▇▇▇ of Sale conveying the Property (to the extent
it is personal property) to Lessee (or Lessee's designee) free and clear of the
Lien of this Lease, the Liens of the Credit Documents and any other Operative
Agreements and any Lessor Liens; (c) any real estate tax affidavit or other
document required by law to be executed and filed in order to record the Deed;
and (d) FIRPTA affidavits and such documents or instruments as may be reasonably
requested by Lessee to effect the conveyance and release contemplated by this
Section 20.2. All of the foregoing documentation must be in form and substance
reasonably satisfactory to Agent and Lessee. The Property shall be conveyed to
Lessee (or Lessee's designee) "AS-IS, WHERE-IS" and in then present physical
condition.
On the applicable Election Date on which Lessee has elected to
exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor
or the Agent, as appropriate, the sum of all reasonable costs and expenses
incurred by any such party in connection with the election by Lessee to exercise
its Purchase Option and all Rent then due and payable or accrued under this
Lease and/or any other Operative Agreement.
20.3 Third Party Sale Option.
(a) Provided, that (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake to
cause a sale of the Property on the applicable Election Date (all as
specified in the Election Notice), in accordance with the provisions of
Section 22.1 hereof. Such Election Date on which a sale is required may be
hereafter referred to as the "Sale Date".
(b) In the event Lessee exercises the Sale Option then, as soon as
practicable and in all events not less than sixty (60) days and not more
than one hundred eighty (180) days prior to the Sale Date, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental site
assessment (or an update of a Phase I environmental site assessment
previously delivered) for the Property recently prepared (no more than
thirty
32
(30) days old prior to the date of delivery) by an independent recognized
professional reasonably acceptable to Lessor and in form, scope and
content reasonably satisfactory to Lessor. In the event that Lessor shall
not have received such environmental site assessment by the date sixty
(60) days prior to the Sale Date or in the event that such environmental
assessment shall reveal the existence of any material violation of
Environmental Laws, other material Environmental Violation or potential
material Environmental Violation (with materiality determined in each case
by Lessor in its reasonable discretion), then Lessee on the Sale Date
shall pay to Lessor an amount equal to the Termination Value for the
Property. Upon receipt of such payment, Lessor shall transfer to Lessee
all of Lessor's right, title and interest in and to the Property in
accordance with Section 19.1.
ARTICLE XXI
21.1 Subdivision and Sale of Excess Land.
(a) Lessee shall have the right to subdivide the Property into one
or more parcels of Land in accordance with Section 8.13(a) of the
Participation Agreement.
(b) The Construction Agent and the Lessee shall have the option,
exercisable by giving Lessor no less than sixty (60) days written notice
of the Construction Agent's or the Lessee's election to sell, transfer and
convey all or any portion of the Excess Land on the following terms and
conditions:
(i) prior to any such sale, transfer, conveyance or purchase
of such Excess Land, the Construction Agent or the Lessee shall
cause the Property to be subdivided in accordance with the
provisions of Section 8.13(a) of the Participation Agreement;
(ii) the Excess Land Payment Amount for the Excess Land shall
be paid to Lessor on the effective date of any such sale, transfer
or conveyance of the Excess Land for application in accordance with
Section 8.7(b)(vii) of the Participation Agreement and the Property
Cost for the Property immediately prior to such sale, transfer or
conveyance shall be reduced by the Excess Land Payment Amount;
(iii) the Remaining Property shall continue to constitute an
area with appropriate easement and operating agreements such that
the value of the Remaining Property is at least equal to the
Property Cost allocable to such Remaining Property after application
of the Excess Land Payment Amount and such that the utility and
useful life of the Remaining Property are not diminished;
(iv) the Remaining Property shall at all times satisfy all of
the terms and conditions of the Operative Agreements;
33
(v) all Rent and other amounts due and payable by Lessee under
any Operative Agreement shall be paid on or prior to the date of
such sale, transfer, conveyance or purchase of the Excess Land; and
(vi) no Default or Event of Default shall have occurred and be
continuing on the date of such sale, transfer and conveyance of the
Excess Land.
Lessee shall pay, or cause to be paid, all reasonable costs and expenses
incurred by any Financing Party in connection with a sale of any Excess
Land.
(c) To the extent not previously released pursuant to Section
8.13(a)(ii) of the Participation Agreement, upon the sale, transfer or
conveyance of any Excess Land in accordance with this Section 21.1 and
Section 8.13 of the Participation Agreement, the Excess Land shall be
released from the Lien of this Lease, the Liens of the Security Documents
and any other Operative Agreements and any Lessor Liens. In connection
with any sale of Excess Land, Lessor shall execute, acknowledge (where
required) and deliver to the purchaser thereof, at Lessee's cost and
expense, each of the following: (a) a special or limited warranty Deed
conveying the Excess Land; (b) any real estate tax affidavit or other
document required by law to be executed and filed in order to record the
Deed; and (c) FIRPTA affidavits and such documents or instruments as may
be reasonably requested by Lessee to effect the conveyance and release
contemplated by this Section 21.1. All of the foregoing documentation must
be in form and substance reasonably satisfactory to Agent and Lessee. The
Excess Land shall be conveyed "AS-IS, WHERE-IS" and in its then present
physical condition.
ARTICLE XXII
22.1 Sale Procedure.
(a) During the Marketing Period, Lessee, on behalf of Lessor, shall
obtain bids for the cash purchase of the Property in connection with a
sale to one (1) or more third party purchasers to be consummated on the
Sale Date, 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 the Property and shall provide Lessor with
such additional information about the bids and the bid solicitation
procedure as Lessor may reasonably request from time to time. All such
prospective purchasers must be Persons other than Lessee or any Affiliate
of Lessee. On the Sale Date, Lessee shall pay (or cause to be paid) to
Lessor or the Agent, as appropriate, the sum of all reasonable costs and
expenses incurred by Lessor and/or the Agent (as the case may be) in
connection with such sale of the Property, all Rent then due and payable
or accrued under this Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain bids
by giving Lessee written notice to that effect; provided, however, that
notwithstanding the foregoing, Lessor may not reject any bid submitted by
Lessee if such bid is greater than
34
or equal to the Limited Recourse Amount for the Property, and represents a
bona fide offer from one (1) or more third party purchasers. If the
highest price which a prospective purchaser or the prospective purchasers
shall have offered to pay for the Property on the Sale Date is less than
the Limited Recourse Amount for the Property or if such bid does not
represent a bona fide offer from one (1) or more third parties or if there
are no bids, Lessee may withdraw its exercise of the Sale Option and
exercise Lessee's Purchase Option by purchasing the Property on such Sale
Date in accordance with Section 20.2, failing which Lessor may elect to
retain the Property by giving Lessee prior written notice of Lessor's
election to retain the same, and promptly upon receipt of such notice,
Lessee shall surrender, or cause to be surrendered, the Property in
accordance with the terms and conditions of Section 10.1. Upon acceptance
of any bid, Lessor agrees, at Lessee's request and expense, to execute a
contract of sale with respect to such sale, so long as the same is
consistent with the terms of this Article 22 and provides by its terms
that it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain the Property pursuant to
the provisions of the preceding paragraph, Lessee shall arrange for Lessor
to sell the Property free and clear of the Lien of this Lease, the Liens
of the Security Documents and any other Operative Agreements and any
Lessor Liens, without recourse or warranty (of title or otherwise), for
cash on the Sale Date to the purchaser or purchasers offering the highest
cash sales price, as identified by Lessee or Lessor, as the case may be;
provided, however, solely as to Lessor, any Lessor Lien shall not
constitute a Lessor Lien so long as Lessor is diligently and in good faith
contesting, at the cost and expense of Lessor such Lessor Lien by
appropriate proceedings in which event (with the consent of the Lessee,
but without penalty or cost to Lessee) the applicable Sale Date shall be
delayed for the period of such contest. To effect such transfer and
assignment, Lessor shall execute, acknowledge (where required) and deliver
to the appropriate purchaser each of the following: (a) a special or
limited warranty Deed conveying the Property (to the extent it is real
property) to the appropriate purchaser free and clear of the Lien of this
Lease, the Liens of the Credit Documents and the other Operative
Agreements and any Lessor Liens; (b) a ▇▇▇▇ of Sale conveying the Property
(to the extent it is personal property) titled to Lessor to the
appropriate purchaser free and clear of the Lien of this Lease, the Liens
of the Credit Documents and the other Operative Agreements and any Lessor
Liens; (c) any real estate tax affidavit or other document required by law
to be executed and filed in order to record the Deed; and (d) FIRPTA
affidavits and such other documents or instruments required for the
issuance of an owner's policy of title insurance subject only to the Liens
encumbering the Property on the Commencement Date and those consented to
by Lessee, or otherwise to effect the conveyance and release contemplated
herein, as appropriate. All of the foregoing documentation must be in form
and substance reasonably satisfactory to Lessor and the Agent. Lessee
shall surrender the Property so sold or subject to such documents to each
purchaser in the condition specified in Section 10.1, or in such other
condition as may be agreed between Lessee and such purchaser. Neither
Lessor nor Lessee shall take or fail to take any action which would have
the effect of unreasonably discouraging bona fide third party bids for the
Property. If the Property is neither (i) sold on the Sale Date in
accordance with the terms of this Section 22.1, nor (ii) retained by
Lessor pursuant to an affirmative election made by
35
Lessor pursuant to the second sentence of the second paragraph of this
Section 22.1(a), then (x) Lessee shall be deemed to have elected the
Purchase Option and shall be obligated to pay Lessor on the Sale Date an
amount equal to the aggregate Termination Value for the Property less any
sales proceeds received, and (y) Lessor shall transfer the Property to
Lessee in accordance with Section 20.2.
(b) In the event Lessee shall have elected the Sale Option, Lessee
hereby unconditionally promises to pay to Lessor on the earlier of the
Sale Date or the Expiration Date, the Maximum Residual Guarantee Amount.
On the Sale Date if (x) Lessor receives the aggregate Termination Value
for the Property from one (1) or more third party purchasers and (y)
Lessor and such other parties receive all other amounts specified in the
last sentence of the first paragraph of Section 22.1(a) then Lessee may
retain any excess above Termination Value. If the Property is retained by
Lessor pursuant to an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then Lessee hereby unconditionally promises
to pay to Lessor on the Sale Date all Basic Rent and Supplemental Rent
(exclusive of a payment of the Termination Value) due and payable on or
prior to the Sale Date and, without duplication, all other amounts then
due and owing pursuant to the Operative Agreements and, without
duplication, an amount equal to the Maximum Residual Guarantee Amount. Any
payment of the foregoing amounts described in this Section 22.1(b) shall
be made, without duplication, together with a payment of all Rent and all
other amounts referenced in the last sentence of the first paragraph of
Section 22.1(a).
(c) In the event that the Property is either sold to one (1) or more
third party purchasers on the Sale Date or retained by Lessor in
connection with an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then in either case on the applicable Sale
Date Lessee shall provide Lessor or such third party purchaser (unless
otherwise agreed by such third party purchaser) with (i) all permits,
certificates of occupancy, governmental licenses and authorizations
necessary to use, operate, repair, access and maintain the Property for
the purpose it is being used by Lessee, and (ii) such manuals, permits,
easements, licenses, intellectual property, know-how, rights-of-way and
other rights and privileges in the nature of an easement as are reasonably
necessary or desirable in connection with the use, operation, repair,
access to or maintenance of the Property for its intended purpose or
otherwise as Lessor or such third party purchaser(s) shall reasonably
request (and a royalty-free license or similar agreement to effectuate the
foregoing on terms reasonably agreeable to Lessor or such third party
purchaser(s), as applicable). All assignments, licenses, easements,
agreements and other deliveries required by clauses (i) and (ii) of this
paragraph (c) shall be in form reasonably satisfactory to Lessor or such
third party purchaser(s), as applicable, and shall be fully assignable
(including without limitation both primary assignments and assignments
given in the nature of security) without payment of any fee, cost or other
charge.
22.2 Application of Proceeds of Sale.
Lessor shall apply the proceeds of sale of the Property to a third
party pursuant to the Sale Option in the following order of priority:
36
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as the
case may be) for the payment of all reasonable costs and expenses incurred
by Lessor (and/or the Agent, as the case may be) in connection with the
sale (to the extent Lessee has not satisfied its obligation to pay such
costs and expenses);
(b) SECOND, so long as the Tranche B Credit Agreement, the Cash
Collateral Credit Agreement or the Note Purchase Agreement is in effect
and any Financing or any other amounts are owing to the Financing Parties
under any Operative Agreement, to the Agent to be applied pursuant to
intercreditor provisions among Lessor, the Primary Financing Parties and
the Agent contained in the Operative Agreements, including without
limitation Section 8.7 of the Participation Agreement; and
(c) THIRD, to Lessee.
22.3 Indemnity for Excessive Wear.
If the proceeds of the sale described in Section 22.1 with respect
to the Property shall be less than the Limited Recourse Amount with respect to
the Property, and at the time of such sale it shall have been reasonably
determined (pursuant to the Appraisal Procedure) that the Fair Market Sales
Value of the Property shall have been impaired by greater than expected wear and
tear during the term of the Lease, Lessee shall pay to Lessor within ten (10)
days after receipt of Lessor's written statement (i) the amount of such excess
wear and tear determined by the Appraisal Procedure or (ii) the amount of the
Sale Proceeds Shortfall, whichever amount is less.
22.4 Appraisal Procedure.
For determining the Fair Market Sales Value of the 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 under the applicable Section of the
Lease, and if they cannot agree within ten (10) days, then two (2) qualified
appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor, shall
mutually agree thereupon, but if either party shall fail to choose an appraiser
within twenty (20) days after notice from the other party of the selection of
its appraiser, then the appraisal by such appointed appraiser shall be binding
on Lessee and Lessor. If the two (2) appraisers cannot agree within twenty (20)
days after both shall have been appointed, then a third appraiser shall be
selected by the two (2) appraisers or, failing agreement as to such third
appraiser within thirty (30) days after both shall have been appointed, by the
American Arbitration Association. The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser most different from the average of the other
two (2) shall be discarded and such average shall be binding on Lessor and
Lessee; provided, that if the highest appraisal and the lowest appraisal are
equidistant from the third appraisal, the third appraisal shall be binding on
Lessor and Lessee. The fees and expenses of the appraiser
37
appointed by Lessee shall be paid by Lessee; the fees and expenses of the
appraiser appointed by Lessor shall be paid by Lessor (such fees and expenses
not being indemnified pursuant to Section 11 of the Participation Agreement);
and the fees and expenses of the third appraiser shall be divided equally
between Lessee and Lessor.
22.5 Certain Obligations Continue.
During the Marketing Period, the obligation of Lessee to pay Rent
with respect to the Property (including without limitation the installment of
Basic Rent due on the Sale Date) shall continue undiminished until payment in
full to Lessor of the Maximum Residual Guarantee Amount, the sale proceeds, if
any, remaining after the payment of the Maximum Residual Guarantee Amount, the
amount due under Section 22.3, if any, and all other amounts due to Lessor or
any other Person with respect to the Property or any Operative Agreement. Lessor
shall have the right, but shall be under no duty, to solicit bids, to inquire
into the efforts of Lessee to obtain bids or otherwise to take action in
connection with any such sale, other than as expressly provided in this Article
XXII.
ARTICLE XXIII
23.1 Holding Over.
If Lessee shall for any reason remain in possession of the 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 the Property and Lessee shall continue to pay Basic Rent at the
lesser of the highest lawful rate and one hundred ten percent (110%) of the last
payment of Basic Rent due with respect to the Property prior to such expiration
or earlier termination of this Lease. Such Basic Rent shall be payable from time
to time upon demand by Lessor and such additional amount of Basic Rent shall be
applied by Lessor ratably to the Primary Financing Parties based on their
relative amounts of the then outstanding Property Cost for the Property. During
any period of tenancy at sufferance, Lessee shall, subject to the second
preceding sentence, be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to tenants at sufferance, to continue
their occupancy and use of the Property. Nothing contained in this Article XXIII
shall constitute the consent, express or implied, of Lessor to the holding over
of Lessee after the expiration or earlier termination of this Lease (unless the
Property is conveyed to Lessee) and nothing contained herein shall be read or
construed as preventing Lessor from maintaining a suit for possession of the
Property or exercising any other remedy available to Lessor at law or in equity.
38
ARTICLE XXIV
24.1 Risk of Loss.
During the Term, unless Lessee shall not be in actual possession of
the Property solely by reason of Lessor's exercise of its remedies of
dispossession under Article XVII, the risk of loss or decrease in the enjoyment
and beneficial use of 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 except as limited pursuant to Section 5.4 of the Agency
Agreement, and Lessor shall in no event be answerable or accountable therefor.
ARTICLE XXV
25.1 Assignment.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to the Property in whole or in part
to any Person without the prior written consent of each of the Agent, the
Tranche A Note Purchasers, the Tranche B Lenders and the Lessor; provided,
that Lessee may assign this Lease and Lessee's rights and obligations
hereunder to any successor to Lessee by merger or consolidation, or to the
purchaser of all or substantially all of the stock or assets of Lessee
(but only to the extent such merger, consolidation or sale is permitted
under Section 8.3B.1 of the Participation Agreement), without the consent
of any of the Agent, the Tranche A Note Purchasers, the Tranche B Lenders
or the Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1 or
otherwise) or other relinquishment of possession to the Property shall in
any way discharge or diminish any of the obligations of Lessee to Lessor
hereunder and Lessee shall remain directly and primarily liable under the
Operative Agreements as to any rights or obligations assigned by Lessee.
25.2 Subleases.
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor and the Agent of the execution of
such sublease and shall provide a copy of such sublease to Lessor and the
Agent. As of the date of the Lease Supplement, Lessee shall lease the
Property described in such Lease Supplement from Lessor, and any existing
tenant respecting the Property shall automatically be deemed to be a
subtenant of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any Primary
Financing Party or the Lessor and subject to the other provisions of this
Section 25.2, Lessee may sublet the Property or any portion thereof to any
wholly-owned Subsidiary of Lessee or any other Person; provided, all such
subleasing shall be done on market terms at fair
39
market rents, and shall in no way diminish the fair market value or useful
life of the Property. Except as otherwise provided in this Section
25.2(b), no other subleasing with respect to the Property or any portion
thereof shall be permitted without the written consent of the Lessor and
the Agent, which consent shall not be unreasonably delayed, denied or
conditional.
(c) No sublease (referenced in this Section 25.2 or otherwise) or
other relinquishment of possession to 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 portion thereof, so sublet. The term of any such sublease
shall not extend beyond the Term. Each sublease shall be expressly subject
and subordinate to this Lease.
ARTICLE XXVI
26.1 No Waiver.
No failure by Lessor or Lessee to insist upon the strict performance
of any term hereof or to exercise any right, power or remedy upon a default
hereunder, and no acceptance of full or partial payment of Rent during the
continuance of any such default, shall constitute a waiver of any such default
or of any such term. To the fullest extent permitted by law, no waiver of any
default shall affect or alter this Lease, and this Lease shall continue in full
force and effect with respect to any other then existing or subsequent default.
ARTICLE XXVII
27.1 Acceptance of Surrender.
No surrender to Lessor of this Lease or of all or any portion of the
Property or of any part of any thereof or of any interest therein shall be valid
or effective unless agreed to and accepted in writing by Lessor and no act by
Lessor or the Agent or any representative or agent of Lessor or the Agent, other
than a written acceptance, shall constitute an acceptance of any such surrender.
27.2 No Merger of Title.
There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in the Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
40
ARTICLE XXVIII
28.1 [Reserved].
ARTICLE XXIX
29.1 Notices.
All notices required or permitted to be given under this Lease shall
be in writing and delivered as provided in Section 12.2 of the Participation
Agreement.
ARTICLE XXX
30.1 Miscellaneous.
Anything contained in this Lease to the contrary notwithstanding,
all claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease and
such jurisdiction or of such provision or of any other provision hereof in any
other jurisdiction.
30.2 Amendments and Modifications.
Neither this Lease nor any Lease Supplement may be amended, waived,
discharged or terminated except in accordance with the provisions of Section
12.4 of the Participation Agreement.
30.3 Successors and Assigns.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 Headings and Table of Contents.
The headings and table of contents in this Lease are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
30.5 Counterparts.
This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which shall together constitute one (1)
and the same instrument.
41
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO
APPLY.
30.7 Calculation of Rent.
All calculation of Rent payable hereunder shall be computed based on
the actual number of days elapsed over a year of three hundred sixty (360) days
or, to the extent such Rent is based on the Prime Lending Rate, three hundred
sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
30.8 Memoranda of Lease and Lease Supplement.
This Lease shall not be recorded; provided, Lessor and Lessee shall
promptly record a memorandum of this Lease and the Lease Supplement (in
substantially the form of Exhibit A attached hereto) or a short form lease (in
form and substance reasonably satisfactory to Lessor) regarding the Property in
the local filing office with respect thereto, in all cases at Lessee's cost and
expense, and as required under applicable law to sufficiently evidence this
Lease and any such Lease Supplement in the applicable real estate filing
records.
30.9 Allocations between the Lenders and Lessor.
Notwithstanding any other term or provision of this Lease to the
contrary, the allocations of the proceeds of the Property and any and all other
Rent and other amounts received hereunder shall be subject to the inter-creditor
provisions among the Primary Financing Parties contained in the Intercreditor
Agreement and the other Operative Agreements (or as otherwise agreed among the
Primary Financing Parties from time to time).
30.10 Limitations on Recourse.
Notwithstanding anything contained in this Lease to the contrary,
except with respect to a breach of Lessor's covenant set forth in Section 30.15
and Lessor's obligations to discharge Lessor Liens, Lessee agrees to look solely
to Lessor's estate and interest in the Property (and in no circumstance to the
Agent, the Primary Financing Parties or otherwise to Lessor) for the collection
of any judgment requiring the payment of money by Lessor in the event of
liability by Lessor, and no other property or assets of Lessor or any
shareholder, owner or partner (direct or indirect) in or of Lessor, or any
director, officer, employee, beneficiary, Affiliate of any of the foregoing
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of the remedies of Lessee under or with respect to this Lease, the
relationship of Lessor and Lessee hereunder or Lessee's use of the Property or
any other liability of Lessor to Lessee. Nothing in this Section shall be
interpreted so as to limit the terms of Sections 6.1 or 6.2 or the provisions of
Section 12.9 of the Participation Agreement.
42
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE
FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.
30.12 Exercise of Lessor Rights.
Lessee hereby acknowledges and agrees that the rights and powers of
Lessor under this Lease have been assigned to the Agent pursuant to the terms of
the Security Agreement and the other Operative Agreements. Lessor and Lessee
hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct
and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(e) and
8.6 of the Participation Agreement, (b) all notices to be given to Lessor shall
be given to the Agent and (c) all notices to be given by Lessor may be given by
the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE.
THE PROVISIONS OF SECTION 12.7 OF THE PARTICIPATION AGREEMENT
RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN
STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO THE
EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY COURT
OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND INTEREST THEREON,
THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR PAYMENTS SO CHARACTERIZED AS
INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST." ALL AGREEMENTS AMONG THE
PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF THIS PARAGRAPH WHICH
SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY EVENT OR
CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF THE
MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED FOR,
CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN
43
EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT
TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR
AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT
PERMITTED UNDER APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY
AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF
VALUE WHICH IS CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED
HEREUNDER OR UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE
IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH
WOULD HAVE BEEN EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE
REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE
PAYMENT OF INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO
THE EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF
PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS
EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO
RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND,
AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE
EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND
SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL
OR EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.
30.15 Restriction On Collateralization.
Except to the extent required or permitted by the Operative
Agreements, Lessor shall not mortgage, pledge, hypothecate or encumber its
interest in this Lease or the Property.
[signature pages follow]
44
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
FIRST UNION DEVELOPMENT
CORPORATION, as Lessor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------
Title: VICE PRESIDENT
-------------------------
TOYS "R" US, INC., as Lessee
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------
Title: VICE PRESIDENT
-------------------------
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
FIRST UNION DEVELOPMENT
CORPORATION, as Lessor
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
TOYS "R" US, INC., as Lessee
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: SR. VICE PRESIDENT-TREASURER
----------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
EXHIBIT A TO THE LEASE
----------------------
LEASE SUPPLEMENT NO. 1
THIS LEASE SUPPLEMENT NO. 1 (this "Lease Supplement") dated as of
September 26, 2001 between FIRST UNION DEVELOPMENT CORPORATION, a North Carolina
corporation, as lessor (the "Lessor"), and TOYS "R" US, INC., a Delaware
corporation, as lessee (the "Lessee").
WHEREAS, Lessor is the owner or will be the owner of the Property
described on Schedule 1 hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Rules of Usage. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of September 26, 2001, among Lessee, Lessor, the various financial
institutions and other institutional investors which are parties hereto from
time to time as Tranche A Note Purchasers, the various banks and other lending
institutions which are parties hereto from time to time as Tranche B Lenders,
the various banks and other lending institutions which are parties thereto from
time to time as Cash Collateral Lenders, First Union National Bank, as the Agent
for the Primary Financing Parties and respecting the Security Documents, as the
Agent for the Secured Parties, and First Union National Bank, as Escrow Agent,
as such may be amended, modified, extended, supplemented, restated and/or
replaced from time to time.
SECTION 2. The Property. Attached hereto as Schedule 1 is the description
of the Leased Property, with an Equipment Schedule attached hereto as Schedule
1-A, a schedule of Improvements attached hereto as Schedule 1-B and a legal
description of the Land attached hereto as Schedule 1-C. Effective upon the
execution and delivery of this Lease Supplement by Lessor and Lessee, the Leased
Property shall be subject to the terms and provisions of the Lease. Without
further action, any and all additional Equipment funded under the Operative
Agreements and any and all additional Improvements made to the Land shall be
deemed to be titled to the Lessor and subject to the terms and conditions of the
Lease and this Lease Supplement.
This Lease Supplement shall constitute a mortgage, deed of trust, security
agreement and financing statement under the laws of the state in which the
Leased Property is situated. The maturity date of the obligations secured hereby
shall be September 26, 2011, unless extended.
For purposes of provisions of the Lease and this Lease Supplement related
to the creation and enforcement of the Lease and this Lease Supplement as a
security agreement and a fixture filing, Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor (Lessee herein) and of the
secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are set forth on the signature pages hereto.
A carbon, photographic or other reproduction of the Lease and this Lease
Supplement or of any financing statement related to the Lease and this Lease
Supplement shall be sufficient as a financing statement for any of the purposes
referenced herein.
SECTION 3. Use of Property. At all times during the Term with respect to
the Property, Lessee will comply with all obligations under and (to the extent
no Lease Event of Default exists and provided, that such exercise will not
impair the value of the Property) shall be permitted to exercise all rights and
remedies under, all operation and easement agreements and related or similar
agreements applicable to the Property.
SECTION 4. Ratification; Incorporation by Reference. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. Original Lease Supplement. The single executed original of this
Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART"
on the signature page thereof and containing the receipt of the Agent therefor
on or following the signature page thereof shall be the original executed
counterpart of this Lease Supplement (the "Original Executed Counterpart"). To
the extent that this Lease Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Lease Supplement may be created
through the transfer or possession of any counterpart other than the Original
Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY
IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. Mortgage; Power of Sale. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing as is the intent of the parties, then Lessor and Lessee agree that
Lessee hereby grants a Lien against the Leased Property WITH POWER OF SALE, and
that, upon the occurrence of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Leased Property.
2
SECTION 8. Lessee Acknowledgment. The Lessee hereby acknowledges that the
Lessor's rights hereunder have been assigned to the Agent.
SECTION 9. Counterpart Execution. This Lease Supplement may be executed in
any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one (1) and the
same instrument.
For purposes of the provisions of this Lease Supplement concerning this
Lease Supplement constituting a security agreement and fixture filing, the
addresses of the debtor (Lessee herein) and the secured party (Lessor herein),
from whom information may be obtained about this Lease Supplement, are as set
forth on the signature pages hereto.
[The remainder of this page has been intentionally left blank.]
3
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST UNION DEVELOPMENT
CORPORATION, as Lessor
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
First Union Development Corporation
c/o First Union Securities, Inc.
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Van ▇. ▇▇▇▇▇
TOYS "R" US, INC., as Lessee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Toys "R" Us, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
FIRST UNION NATIONAL BANK, as the
Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
First Union National Bank
c/o First Union Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Van ▇. ▇▇▇▇▇
SCHEDULE 1
TO LEASE SUPPLEMENT NO. 1
(Description of the Leased Property)
Office facility formerly known as the Pointview Office Complex located on
Cyanamid Drive and ▇▇▇▇▇▇ Avenue in the Township of ▇▇▇▇▇, Passaic County, New
Jersey, consisting of two (2) buildings of five (5) and six (6) stores
respectively, containing approximately 490,780 square feet of net usable area
and approximately 560,060 square feet of gross rentable area in the aggregate,
constructed on approximately 192 acres, identified as Block 3703, ▇▇▇ ▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ 4200, Lot 1 on the Tax Maps of ▇▇▇▇▇ Township,
together with certain easements, described on Schedule 1-C attached hereto and
incorporated herein by reference.
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. 1
(Equipment)
All equipment purchased from proceeds of the Advances and located on the real
property described on Schedule 1-C attached hereto and incorporated herein by
reference.
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. 1
(Improvements)
Two (2) buildings of five (5) and six (6) stores respectively, containing
approximately 490,780 square feet of net usable area and approximately 560,060
square feet of gross rentable area in the aggregate.
Site improvements include asphalt paved parking areas, curbing, signage,
landscaping, yard lighting and drainage.
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. 1
(Land)
EXHIBIT B TO THE LEASE
----------------------
This Instrument Prepared By and Mail To:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Space above this line
for Recorder's use
--------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT
AND
LEASE SUPPLEMENT NO. 1
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO. 1
("Memorandum"), dated as of September 26, 2001, is by and between FIRST UNION
DEVELOPMENT CORPORATION, a North Carolina corporation (hereinafter referred to
as "Lessor") and TOYS "R" US, INC., a Delaware corporation (hereinafter referred
to as "Lessee").
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise and
agree as follows:
1. Demised Premises and Date of Lease. Lessor has leased to Lessee, and
Lessee has leased from Lessor, for the Term (as hereinafter defined), certain
real property and other property located in the Township of ▇▇▇▇▇, County of
Passaic, State of New Jersey and identified on the Tax Maps of ▇▇▇▇▇ Township as
Block 3703, ▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇ 4200, Lot 1, which,
together with certain easements, is described in the attached Schedule 1 (the
"Property"), pursuant to the terms of a Lease Agreement between Lessor and
Lessee dated as of September 26, 2001 (as such may be amended, modified,
extended, supplemented, restated and/or replaced from time to time, "Lease") and
a Lease Supplement No.1 between Lessor and Lessee dated as of September 26, 2001
(the "Lease Supplement").
The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated. The maturity date of the obligations secured
thereby shall be September 26, 2011, unless extended.
For purposes of provisions of the Lease and the Lease Supplement related
to the creation and enforcement of the Lease and the Lease Supplement as a
security agreement and a fixture filing, Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor
(Lessee herein) and of the secured party (Lessor herein) from which information
concerning security interests hereunder may be obtained are as set forth on the
signature pages hereof. A carbon, photographic or other reproduction of this
Memorandum or of any financing statement related to the Lease and the Lease
Supplement shall be sufficient as a financing statement for any of the purposes
referenced herein.
2. Term, Renewal, Extension and Purchase Option. The term of the Lease for
the Property ("Term") commenced as of September 26, 2001 and shall end as of
September 26, 2011, unless the Term is extended or earlier terminated in
accordance with the provisions of the Lease. The Lease contains provisions for
renewal and extension. The tenant has a purchase option under the Lease.
3. Tax Payer Numbers.
Lessor's tax payer number: ▇▇-▇▇▇▇▇▇▇.
Lessee's tax payer number: ▇▇-▇▇▇▇▇▇▇.
4. Mortgage; Power of Sale. Lessor and Lessee intend that for bankruptcy,
receivership, UCC commercial law and real estate law this Lease will be treated
as a financing arrangement and Lessee will be treated as the owner of the
Property.
Without limiting any other remedies set forth in the Lease, in the event
that a court of competent jurisdiction rules that the Lease constitutes a
mortgage, deed of trust or other secured financing as is the intent of the
parties, then Lessor and Lessee agree that Lessee has granted, pursuant to the
terms of the Lease and the Lease Supplement, a Lien against the Property WITH
POWER OF SALE, and that, upon the occurrence and during the continuance of any
Lease Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be foreclosed) in all
or any part of the Property.
5. Restriction on Collateralization. Except to the extent required or
permitted by the Operative Agreements, Lessor shall not mortgage, pledge,
hypothecate or encumber its interest in the Lease or the Property.
6. Effect of Memorandum. The purpose of this instrument is to give notice
of the Lease and the Lease Supplement and their respective terms, covenants and
conditions to the same extent as if the Lease and the Lease Supplement were
fully set forth herein. This Memorandum shall not modify in any manner the
terms, conditions or intent of the Lease or the Lease Supplement and the parties
agree that this Memorandum is not intended nor shall it be used to interpret the
Lease or the Lease Supplement or determine the intent of the parties under the
Lease or the Lease Supplement.
7. Lessee Acknowledgment. The Lessee hereby acknowledges that the Lessor's
rights hereunder have been assigned to First Union National Bank, as Agent.
2
IN WITNESS WHEREOF, the parties hereto have duly executed this instrument
as of the day and year first written.
LESSOR:
FIRST UNION DEVELOPMENT CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
First Union Development Corporation
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
---------------------------------
LESSEE:
TOYS "R" US, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
STATE OF NORTH CAROLINA:
SS
COUNTY OF MECKLENBURG:
I certify that on ___________, 2001 personally came before me and this
person acknowledged under oath to my satisfaction that: (a) this person is the
___________ of First Union Development Corporation, a North Carolina
corporation, named in the foregoing Mortgage; and (b) the foregoing Mortgage was
signed and delivered by the corporation as its voluntary act duly authorized by
a proper resolution of its Board of Directors.
WITNESSETH my hand and seal.
____________________________________
Notary Public
My Commission Expires:_______________
STATE OF ___________________________________:
SS
COUNTY OF _________________________________:
I certify that on ___________, 2001 personally came before me and this
person acknowledged under oath to my satisfaction that: (a) this person is the
___________ of Toys "R" Us, a Delaware corporation, named in the foregoing
Mortgage; and (b) the foregoing Mortgage was signed and delivered by the
corporation as its voluntary act duly authorized by a proper resolution of its
Board of Directors.
WITNESSETH my hand and seal.
____________________________________
Notary Public
My Commission Expires:_______________
SCHEDULE 1
----------
(Description of Property)