Master Lease - CRC-I LP and Foodmaker Inc.
MASTER LEASE
BETWEEN
CRC-I LIMITED PARTNERSHIP,
A MASSACHUSETTS LIMITED PARTNERSHIP
AND
FOODMAKER, INC.,
A DELAWARE CORPORATION
as of December 15, 1993
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TABLE OF CONTENTS
Page
1. Demise; Title; Condition. . . . . . . . . . . 1
(a) Acquisition and Lease of the
Units. . . . . . . . . . . . . . . . . . 1
(b) Condition of the Leased Property . . . . 1
(c) Disclaimer of Representations by
Lessor . . . . . . . . . . . . . . . . . 1
2. Term . . . . . . . . . . . . . . . . . . . . 2
(a) Basic Term . . . . . . . . . . . . . . . 2
(b) Renewal Terms. . . . . . . . . . . . . . 2
3. Rent . . . . . . . . . . . . . . . . . . . . 3
(a) Basic Rent and Special Rent. . . . . . . 3
(b) Additional Rent. . . . . . . . . . . . . 4
(c) Overdue Payments . . . . . . . . . . . . 4
(d) Place for Payment of Rent. . . . . . . . 4
4. Use . . . . . . . . . . . . . . . . . . . . 5
5. Net Lease; Non-terminability. . . . . . . . . 5
(a) No Deduction or Offset . . . . . . . . . 5
(b) Non-Terminability. . . . . . . . . . . . 5
(c) Bankruptcy by Lessor . . . . . . . . . . 7
6. Taxes, Utilities and Other Charges; Law
and Agreements. . . . . . . . . . . . . . . . 7
(a) Taxes; Closing Costs . . . . . . . . . . 7
(b) Excluded Taxes . . . . . . . . . . . . . 8
(c) Utility Services . . . . . . . . . . . . 9
(d) Indenture Expenses . . . . . . . . . . . 9
(e) Compliance With Legal Requirements . . . 9
(f) Lessee's Right to Contest. . . . . . . .10
(g) Encumbrances by Lessor and Lessee. . . .11
7. Liens . . . . . . . . . . . . . . . . . . . .12
8. Indemnification . . . . . . . . . . . . . . .13
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9. Environmental Matters . . . . . . . . . . . .15
(a) Environmental Representations. . . . . .15
(b) Environmental Covenants. . . . . . . . .16
(c) Notice of Environmental Matters. . . . .16
(d) Environmental Investigation. . . . . . .17
(e) Environmental Indemnity. . . . . . . . .17
(f) Other Indemnification Provisions
Apply. . . . . . . . . . . . . . . . . .18
(g) Survival . . . . . . . . . . . . . . . .18
10. Maintenance and Repair; Additions . . . . . .19
(a) Maintenance. . . . . . . . . . . . . . .19
(b) Violation of Restrictions. . . . . . . .19
(c) Alterations. . . . . . . . . . . . . . .20
(d) Compliance with Legal
Requirements . . . . . . . . . . . . . .20
11. Trade Fixtures. . . . . . . . . . . . . . . .20
(a) Not Part of Leased Property. . . . . . .20
(b) Equipment Leases . . . . . . . . . . . .21
(c) Other Fixtures . . . . . . . . . . . . .21
12. Condemnation and Casualty . . . . . . . . . .22
(a) Destruction While Credit Rating
Maintained . . . . . . . . . . . . . . .22
(i) Destruction . . . . . . . . . . . . .22
(ii) Notice of Destruction . . . . . . . .22
(iii) Application of the Award. . . . . . .23
(iv) Proceeds Account. . . . . . . . . . .24
(b) Destruction When Credit Rating
Deteriorates . . . . . . . . . . . . . .26
(i) Destruction . . . . . . . . . . . . .26
(ii) Notice of Destruction . . . . . . . .26
(iii) Application of Award. . . . . . . . .26
(iv) Proceeds Account. . . . . . . . . . .27
(c) Temporary Condemnation . . . . . . . . .28
13. Insurance . . . . . . . . . . . . . . . . . .28
(a) Required Insurance . . . . . . . . . . .28
(b) Required Policy Provisions . . . . . . .30
(c) No Concurrent Insurance. . . . . . . . .31
(d) Delivery of Policies . . . . . . . . . .31
(e) Compliance by Lessee . . . . . . . . . .32
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14. Financial Statements; Certificates;
Notices. . . . . . . . . . . . . . . . .32
(a) Financial Statements . . . . . . . . . .32
(b) Compliance and Fair Market Value
Certificates . . . . . . . . . . . . . .32
(c) Notices Regarding Lessor's
Bankruptcy . . . . . . . . . . . . . . .33
(d) Notices of Default . . . . . . . . . . .34
15. Economic Infeasibility. . . . . . . . . . . .34
(a) Substitution . . . . . . . . . . . . . .34
(b) Election Notice. . . . . . . . . . . . .34
(c) Conditions to Substitution . . . . . . .35
(d) Effect of Substitution . . . . . . . . .37
(e) Costs. . . . . . . . . . . . . . . . . .37
16. Quiet Enjoyment . . . . . . . . . . . . . . .37
(a) Covenant by Lessor . . . . . . . . . . .37
(b) Breach by Lessor . . . . . . . . . . . .38
17. Survival. . . . . . . . . . . . . . . . . . .39
18. Subletting; Assignment. . . . . . . . . . . .39
(a) Conditions . . . . . . . . . . . . . . .39
(b) No Effect on Obligations . . . . . . . .39
(c) No Encumbrance by Lessee . . . . . . . .39
(d) No Prepayment of Rent Under
Subleases. . . . . . . . . . . . . . . .39
19. Advances by Lessor. . . . . . . . . . . . . .39
20. Conditional Limitations -- Events of
Default and Remedies. . . . . . . . . . . . .40
(a) Events of Default. . . . . . . . . . . .40
(b) Remedies Upon Breach . . . . . . . . . .43
(i) Termination . . . . . . . . . . . . .43
(ii) Continue Lease in Effect. . . . . . .46
(iii) Repairs by Lessor . . . . . . . . . .47
(iv) Attorneys' Fees and Other
Damages . . . . . . . . . . . . . . .47
(v) Damages in Bankruptcy . . . . . . . .47
(c) Cumulative Remedies. . . . . . . . . . .48
(d) No Waiver. . . . . . . . . . . . . . . .48
(e) Right of Re-Entry. . . . . . . . . . . .49
(f) Enforcement Costs. . . . . . . . . . . .49
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21. Notices . . . . . . . . . . . . . . . . . . .49
22. Estoppel Certificates . . . . . . . . . . . .50
23. No Merger . . . . . . . . . . . . . . . . . .51
24. Surrender; Holding Over . . . . . . . . . . .51
(a) Surrender. . . . . . . . . . . . . . . .51
(b) Agreement by Lessor's Mortgagee. . . . .52
(c) Holding Over . . . . . . . . . . . . . .52
25. Separability. . . . . . . . . . . . . . . . .52
26. Signs; Showing. . . . . . . . . . . . . . . .52
27. Intentionally Omitted . . . . . . . . . . . .53
28. Substitution, Purchase and Early
Termination Procedures. . . . . . . . . . . .53
(a) Substitution . . . . . . . . . . . . . .53
(i) Conveyance of Substitute
Units . . . . . . . . . . . . . . . .53
(b) Purchase; Early Termination. . . . . . .55
29. Waivers of Trial by Jury and Statute
of Limitations. . . . . . . . . . . . . . . .57
(a) Trial by Jury. . . . . . . . . . . . . .57
(b) Statute of Limitations . . . . . . . . .57
30. Rejectable Offer Requirements . . . . . . . .58
(a) Year Nine. . . . . . . . . . . . . . . .58
(b) Termination Date Rejectable Offer. . . .63
(c) Examples . . . . . . . . . . . . . . . .67
31. Option to Purchase. . . . . . . . . . . . . .67
32. Right of First Refusal. . . . . . . . . . . .68
(a) Notice Requirement . . . . . . . . . . .68
(b) Lessee's Election. . . . . . . . . . . .68
(c) Closing. . . . . . . . . . . . . . . . .69
(d) Changes in Terms . . . . . . . . . . . .69
(e) Exempted Transactions. . . . . . . . . .70
33. Granting and Release of Easements . . . . . .70
34. Recording . . . . . . . . . . . . . . . . . .71
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35. Miscellaneous . . . . . . . . . . . . . . . .71
(a) Successors and Assigns . . . . . . . . .71
(b) Amendments . . . . . . . . . . . . . . .71
(c) Waivers. . . . . . . . . . . . . . . . .72
(d) Choice of Law. . . . . . . . . . . . . .72
(e) Headings . . . . . . . . . . . . . . . .72
(f) Single Original. . . . . . . . . . . . .72
(g) Substitute Performance . . . . . . . . .72
(h) Days . . . . . . . . . . . . . . . . . .72
(i) State-Specific Provisions. . . . . . . .72
(j) Schedules. . . . . . . . . . . . . . . .73
36. Determination of Value. . . . . . . . . . . .74
(a) Valuation Procedures . . . . . . . . . .74
(b) Delays Resulting from
Valuation Procedures . . . . . . . . . .75
(c) Definitions. . . . . . . . . . . . . . .75
37. Early Termination Election. . . . . . . . . .76
38. Composite Lease . . . . . . . . . . . . . . .76
39. No Apportionments . . . . . . . . . . . . . .77
40. Approvals . . . . . . . . . . . . . . . . . .77
41. Representations and Warranties of
Lessee . . . . . . . . . . . . . . . . . . .77
(a) Due Organization . . . . . . . . . . . .77
(b) Power and Authority. . . . . . . . . . .77
(c) Enforceability . . . . . . . . . . . . .77
(d) No Registration, Consent Etc . . . . . .77
(e) No Violation . . . . . . . . . . . . . .78
(f) Non-Contravention. . . . . . . . . . . .78
(g) Operation of the Leased
Property . . . . . . . . . . . . . . . .78
(h) Litigation . . . . . . . . . . . . . . .78
(i) Condition of the Improvements. . . . . .78
42. Limitation on Interest. . . . . . . . . . . .79
43. Acquisition and Lease of the Additional
Units. . . . . . . . . . . . . . . . . .79
(a) Potential Additional Units . . . . . . .79
(b) Purchase and Lease . . . . . . . . . . .79
(c) Closing Conditions . . . . . . . . . . .81
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44. Obligations Hereunder Related to or
Measured by Sums Allocated to the
Potential Additional Units. . . . . . . . . .81
45. Certain Definitions . . . . . . . . . . . . .81
46. Covenants and Restrictions Upon Expiration
of Master Lease . . . . . . . . . . . . . . .91
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MASTER LEASE
BETWEEN
CRC-I and FOODMAKER, INC.
THIS MASTER LEASE, dated as of December 15, 1993 (hereinafter,
"Lease"), is made by and between CRC-I Limited Partnership, a Massachusetts
limited partnership, as lessor ("Lessor"), and Foodmaker, Inc., a Delaware
corporation, as lessee ("Lessee").
Capitalized terms not otherwise defined when they first appear in this Lease are
defined in Article 45.
1. Demise; Title; Condition.
(a) Acquisition and Lease of the Units. As of the First
Closing Date, Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, subject to the Permitted Encumbrances and all of the provisions and
conditions hereof, the premises consisting of (i) the 29 separate parcels of
land described in Schedules A-1 through A-29 attached hereto, which parcels also
are described by their street addresses and Lessee's internal "location numbers"
on Schedule A attached hereto (which location numbers are utilized in various
schedules to this Lease), (ii) all right, title and interest of Lessor in and to
all buildings, structures, equipment and improvements now or hereafter located
on such land and fixtures appurtenant thereto, and (iii) all right, title and
interest of Lessor in and to all easements, rights and appurtenances or
agreements relating to or running with such land and improvements (but
specifically excluding those items identified on Schedule B attached hereto).
Each of such 29 separate and individual parcels of land, together with such
improvements located thereon and all such entitlements relating thereto,
hereinafter shall be referred to individually as a "Unit" and collectively as
the "Units."
(b) Condition of the Leased Property. The Leased Property is
and shall be leased by Lessor to Lessee "as-is, where-is, with all faults" in
its condition on the effective date of the Lease thereof to Lessee hereunder,
without representation or warranty by Lessor. Lessee has examined the Leased
Property and the condition of title to Lessor's Estate and the Leased Property
and has found the same to be satisfactory for Lessee's purposes.
(c) Disclaimer of Representations by Lessor. LESSOR HAS NOT
MADE AND SHALL NOT MAKE AN INSPECTION OF THE LEASED PROPERTY AND MAKES NO
REPRESENTATION OR WARRANTY,
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EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY OR TITLE THERETO OR THE
LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR A
PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, OR AS TO THE COMPLIANCE THEREOF WITH ANY LEGAL
REQUIREMENTS (INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES
ACT), AND ALL RISKS INCIDENTAL TO THE LEASED PROPERTY SHALL BE BORNE BY LESSEE.
LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT TO ANY DEFECT
OR DEFICIENCY OF ANY NATURE IN THE LEASED PROPERTY OR ANY PORTION THEREOF,
WHETHER PATENT OR LATENT. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN NEGOTIATED
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION BY LESSOR OF, AND
LESSOR HEREBY DISCLAIMS ANY AND ALL WARRANTIES BY LESSOR, EXPRESS OR IMPLIED,
WITH RESPECT TO THE LEASED PROPERTY OR ANY PORTION THEREOF, WHETHER ARISING
PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN
EFFECT OR OTHERWISE.
2. Term.
(a) Basic Term. Subject to the provisions hereof, the initial
term of this Lease and Lessee's right to have and hold possession of the Leased
Property ("Basic Term") shall begin on the Closing Date (as to the Units), and
on the Additional Unit Closing Date (as to any Potential Additional Unit which
is added as a Unit hereunder) and end at midnight on November 1, 2003 unless
sooner terminated as hereinafter expressly provided.
(b) Renewal Terms. If (i) Lessor properly delivers to Lessee
a valid Year Nine Rejection Notice pursuant to Article 30, paragraph (a)(iii) or
a valid Rejection Notice pursuant to Article 30, paragraph (b)(iii) below, (ii)
Lessee elects, respectively, pursuant to the provisions of Article 30, paragraph
(a)(iii) below, clauses (B) or (D)(II) in response to such Year Nine Rejection
Notice or the provisions of Article 30, paragraph (b)(iii), clauses (B) or (D)
(II) in response to such Rejection Notice, and (iii) no Event of Default shall
have occurred and be continuing on the date of Lessee's Extension Notice
applicable thereto, then Lessee shall have the option, exercisable separately
and independently with respect to each Unit, to extend the term of this Lease at
such time for an additional term of five (5) years (except that, in the case of
the renewal of this Lease as to any Year Nine Unit, such renewal term shall be
for six (6) years) and thereafter for up to three (3) additional successive
terms of five (5) years each and a final additional term beginning on the day
after the expiration of the fourth additional term and
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continuing until the final day of Lessor's Estate (individually a "Renewal
Term," and collectively "Renewal Terms"), subject to all of the provisions and
conditions of this Lease, except that Basic Rent with respect to each such Unit
shall be (x) as set forth on Schedule C attached hereto in case of any Renewal
Term after Lessee elects the provisions of Article 30, paragraph (a)(iii),
clause (B) or Article 30, paragraph (b)(iii), clause (B) and (y) as set forth in
Article 30, paragraph (a)(iii), clause (D)(II) and in Article 30, paragraph
(b)(iii), clause (D)(II) as to any Renewal Term following Lessee's election of
the provisions thereof. Lessee may exercise any such option by delivering to
Lessor an Extension Notice at any time on or before the date which is thirty
(30) days after the date Lessor delivers to Lessee a valid Year Nine Rejection
Notice pursuant to Article 30, paragraph (a)(iii), or a valid Rejection Notice
pursuant to Article 30, paragraph (b)(iii) as applicable, in the case of an
extension of the Basic Term, and at least one hundred eighty (180) days before
expiration of the immediately preceding Renewal Term, in the case of any other
extension. The Extension Notice shall identify the Unit(s) with respect to
which Lessee desires to exercise this option to extend the term of this Lease.
Failure to extend the Term of this Lease with respect to any Unit(s) shall
nullify the option for such Renewal Term and all subsequent Renewal Terms, but
only with respect to such Unit(s). Either party, upon request of the other,
will execute and acknowledge, in form suitable for recording, an instrument
confirming any such extension. Time shall be of the essence with respect to the
giving of notice by Lessee of its election to extend the Basic Term or any
subsequent Renewal Term.
3. Rent.
(a) Basic Rent and Special Rent.
(i) During the Basic Term of this Lease, Lessee shall
pay, as rent for the Leased Property, the Basic Rent specified in Schedule C
attached hereto to Lessor (or to such other Person as Lessor from time to time
may specify in writing, it being acknowledged and understood that Lessor hereby
irrevocably instructs Lessee to make all payments due to Lessor hereunder to the
Indenture Trustee until further notice from said Indenture Trustee). Basic Rent
shall be payable by Lessee in arrears in the amounts and on the Installment
Payment Dates set forth in Schedule C. If any Installment Payment Date falls on
a day which is not a Business Day, Basic Rent shall be due and payable on the
next Business Day.
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(ii) During the Basic Term of this Lease, Lessee shall
pay, in addition to Basic Rent, the Special Rent specified in Schedule D
attached hereto to Lessor (or to such other Person as Lessor from time to time
may specify in writing, it being acknowledged and understood that Lessor hereby
irrevocably instructs Lessee to make all such payments to the Indenture Trustee
until further notice from said Indenture Trustee). Special Rent shall be
payable by Lessee in arrears in the amounts and on the Installment Payment Dates
set forth in Schedule D. If any Installment Payment Date falls on a day which
is not a Business Day, Special Rent shall be due and payable on the next
Business Day.
(b) Additional Rent. All amounts which Lessee is required to
pay or discharge pursuant to this Lease in addition to Basic Rent and Special
Rent (including, without limitation, any amounts payable pursuant to Article 19
hereof), together with every fee, charge, overdue interest and cost which may be
added for nonpayment or late payment thereof, shall constitute additional rent
hereunder (hereinafter, "Additional Rent").
(c) Overdue Payments. Lessee also shall pay to Lessor on
demand interest at an annual rate, calculated on the basis of a 360-day year of
twelve equal months, equal to twelve and seventy-five one hundredths percent
(12.75%) (hereinafter, "Overdue Rate"), but in no event greater than the maximum
rate not prohibited by applicable law, with respect to (A) all overdue
installments of Basic Rent and Special Rent from the due date thereof until paid
in full, (B) all overdue amounts of Additional Rent arising out of obligations
which Lessor shall have paid on behalf of Lessee pursuant hereto from the date
of such payment by Lessor until paid in full, and (C) each other sum required to
be paid by Lessee to Lessor hereunder which is overdue, including without
limitation, any amounts payable pursuant to Article 20, from the date such sum
was due until the date received by Lessor.
(d) Place for Payment of Rent. The Basic Rent, Special Rent,
Additional Rent and all other amounts or charges payable hereunder shall be
payable to Lessor, or to such other Person as Lessor from time to time may
specify in writing (it being acknowledged and understood that Lessor hereby
irrevocably instructs Lessee to make all payments due to Lessor hereunder to the
Indenture Trustee until further notice from said Indenture Trustee), at such
place within the continental United States as Lessor from time to time may
designate to Lessee in writing; provided, however, that
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Lessee may pay Additional Rent directly to the Person entitled thereto.
4. Use. For a period of three (3) years commencing on the date hereof
(hereinafter, "Use Restriction Period"), Lessee may use the Leased Property only
for (a) the operation of a restaurant under the name of "Jack in the Box," (b)
any other business (including restaurant business) which, during the Use
Restriction Period, is within Lessee's primary lines of business so long as the
same does not involve the use of Hazardous Substances other than the normal and
customary use thereof in compliance with Environmental Laws. After expiration
of the Use Restriction Period, Lessee may use the Leased Property for any lawful
purpose so long as the same does not involve the use of Hazardous Substances
other than the normal and customary use thereof in compliance with Environmental
Laws.
5. Net Lease; Non-terminability.
(a) No Deduction or Offset. This Lease is a "triple net
lease," and Lessee shall pay all Basic Rent, Special Rent and Additional Rent
without notice, demand, counterclaim, set-off, deduction, defense, abatement,
suspension, deferment, diminution or reduction, free from any charges,
assessments, impositions, expenses or deductions of any and every kind or nature
whatsoever. All costs, expenses and obligations of every kind and nature
whatsoever relating to the Leased Property and the appurtenances thereto and the
use and occupancy thereof by Lessee or anyone claiming by, through or under
Lessee as lessee hereunder which may arise or become due during or with respect
to the Term shall be paid by Lessee. Lessee assumes the sole responsibility for
the condition, use, operation, maintenance and management of the Leased
Property, and Lessor shall have no responsibility in respect thereof and shall
have no liability for damage to the property of Lessee or any sublessee of
Lessee for any reason whatsoever.
(b) Non-Terminability. Except as expressly provided herein or
under applicable Legal Requirements (to the extent that such Legal Requirements
may not validly be waived, it being the intention of Lessee to waive, to the
fullest extent possible, any Legal Requirement which might require or grant any
right to Lessee to require the termination of this Lease, the abatement,
deduction, deferment or reduction of rent hereunder, or which might otherwise
excuse, release or discharge Lessee from any obligations or liabilities
hereunder), this Lease shall not terminate, nor shall Lessee have any right to
terminate this
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Lease, nor shall Lessee be entitled to any abatement, deduction, deferment or
reduction of Basic Rent, Special Rent or Additional Rent hereunder, nor shall
Lessee have the right to be excused, released or discharged from any obligations
or liabilities hereunder for any reason, including, without limitation, (i) any
damage to or destruction of all or part of the Leased Property; (ii) any latent
or other defect in the Leased Property; (iii) any restriction, deprivation
(including eviction) or prevention, or any interference with, any use or
occupancy of the Leased Property (whether due to any defect in or failure of
Lessor's title to Lessor's Estate, including the lien of Lessor's Mortgage or
otherwise); (iv) any condemnation, confiscation, requisition or other taking or
sale of the use, occupancy or title to the Lessor's Estate or the Leased
Property; (v) any default, action, omission or breach on the part of Lessor
under this Lease or of CRC-II under that certain Master Lease between Lessee and
CRC-II executed contemporaneously herewith (the "CRC-II Master Lease"), or on
the part of Lessor or CRC-II under any other agreement between Lessor and Lessee
or CRC-II and Lessee, or any default, action, omission or breach on the part of
Lessor's Mortgagee; (vi) any claim arising from any other business or
relationship between Lessor and Lessee or CRC-II and Lessee; (vii) the
inadequacy, incorrectness or failure of this Lease to lease to Lessee the
property intended to be leased hereby; (viii) the inadequacy in any way
whatsoever of the design or construction of any improvements included in the
Leased Property, it being understood that Lessor has not made and will not make
any representations express or implied as to the adequacy thereof; (ix) Lessee's
acquisition of ownership of the Lessor's Estate or the Leased Property or any
sale or other disposition of the Lessor's Estate or the Leased Property (except
as provided in Articles 30, 31 or 37 below); (x) the impossibility of
performance by Lessor or Lessee or both; (xi) any actual or threatened action of
any court, administrative agency or other governmental authority; (xii) force
majeure; or (xiii) any other cause, whether similar or dissimilar to the
foregoing, and whether or not foreseeable, any present or future law
notwithstanding. It is the intention of the parties hereto that the obligations
of Lessee hereunder shall be separate, exclusive and independent of the
covenants and agreements of Lessor, that the Basic Rent, Special Rent,
Additional Rent and all other sums payable by Lessee hereunder shall continue to
be payable in all events and that the obligations of Lessee hereunder shall
continue unaffected, unless the requirement to pay or perform the same shall
have been terminated or limited pursuant to an express provision of this Lease
or under applicable Legal Requirements which may not validly be waived.
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(c) Bankruptcy by Lessor. Lessee will remain obligated under
this Lease in accordance with its provisions and conditions, and will not take
any action to terminate, rescind or avoid this Lease for any reason,
notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting Lessor, or any assignee of Lessor, or
any action with respect to this Lease which may be taken by any receiver,
trustee or liquidator, or any assignee of Lessor or by any court in any such
proceeding. To the fullest extent permitted under applicable Legal
Requirements, Lessee waives all rights at any time conferred by statute or
otherwise to quit, terminate or surrender this Lease or the Leased Property
(except as otherwise expressly provided herein) or to any abatement, suspension,
deferment or reduction of any Basic Rent, Special Rent, Additional Rent or other
sum payable hereunder, or for damage, loss or expense suffered by Lessee on
account of any cause referred to in this Article 5 or otherwise.
6. Taxes, Utilities and Other Charges; Law and Agreements.
(a) Taxes; Closing Costs.
(i) Lessee shall pay and discharge, on or before the last
day upon which the same may be paid without interest or penalty, all taxes,
including any tax based upon or measured by gross rentals or receipts from
Lessor's Estate or the Leased Property, assessments (including assessments for
benefits from public works or improvements, whether or not begun or completed
prior to the commencement of the Term hereof and whether or not to be completed
within said Term), levies, fees, water and sewer rents and other governmental
and similar charges or assessments, general and special, ordinary or
extraordinary, and whether or not the same shall have been within the express
contemplation of the parties hereto, and any interest and penalties thereon,
which are levied or assessed or are otherwise due during the Term against (i)
Lessor and which relate to the Lessor's Estate or the Leased Property, the use,
occupancy, operation or possession of Lessor's Estate or the Leased Property or
any part thereof or the transactions contemplated by this Lease, (ii) Lessor's
Estate or the Leased Property or this Lease or the interest of Lessee or Lessor
therein, (iii) Basic Rent, Special Rent or Additional Rent or other sums payable
by Lessee hereunder, (iv) the use, occupancy, construction, repair or rebuilding
of the improvements or any portion thereof, (v) gross receipts from Lessor's
Estate or the Leased Property, (vi) Lessee's personal property and Trade
Fixtures, or (vii) real estate franchise or license
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charges. If any tax and assessment levied or assessed against Lessor's Estate
or the Leased Property legally may be paid in installments, Lessee shall have
the option to pay such tax or assessment in installments; provided, however,
that any taxes or assessments which may be levied or assessed for a period
ending after the termination of the Term shall be prorated between Lessor and
Lessee as of such date. Lessee shall furnish to Lessor within twenty (20) days
after any written demand therefor by Lessor, proof of the payment of any tax,
assessment, fee, water and sewer rent or charge which is payable by Lessee.
Taxes, assessments, fees, water and sewer rents and other governmental charges
which are payable by Lessee shall be apportioned between Lessor and Lessee as of
the date on which this Lease terminates.
(ii) Lessee shall pay or cause to be paid all fees,
expenses and costs of Lessor, Lessor's Mortgagee, the Indenture Trustee and
Jefferies & Company, Inc. and the Noteholders (including, without limitation,
attorneys' fees and expenses of outside counsel, including, without limitation,
special local counsel to Jefferies & Co., Inc. and of one special counsel to the
Noteholders and the fees of Standard & Poor's Corporation and Moody's Investors
Service, Inc. for issuing the rating agency letters contemplated by the
Indenture), and any brokerage and placement fees resulting from any contract or
agreement with Lessor or Lessee (including, without limitation, those payable to
Jefferies & Company, Inc.) incident to the preparation and negotiation of this
Lease, Lessor's Mortgage, the Loan Documents and Other Loan Documents (as
defined in Lessor's Mortgage) and the Indenture and each of the notes described
in the Indenture, and all fees, expenses, taxes and costs incurred in connection
with the execution, delivery, filing, recording or rerecording of any notice or
memorandum of this Lease, Lessor's Mortgage, and any other document or
instrument (including financing statements) required to be filed, recorded or
rerecorded in connection with the leasing and mortgaging of the Leased Property,
including, without limitation, title insurance premiums and escrow fees, and
whether arising in connection with the leasing and mortgaging of the Units or
the Potential Additional Units.
(b) Excluded Taxes. Nothing in this Lease shall require
payment by Lessee of any non-real estate franchise, estate, inheritance,
succession, transfer (other than transfer taxes, recording fees or similar
charges payable in connection with any conveyance hereunder to Lessee or Lessor
or in connection with Lessor's or Lessor's Mortgagee's exercise of remedies
after an Event of Default), net income
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or profits taxes of Lessor, Lessor's Mortgagee or the Indenture Trustee (other
than sales, use, value added or transfer taxes or charges or any gross receipts
or similar taxes imposed or levied upon, assessed against or measured by the
Basic Rent, Special Rent, Additional Rent or any other sums payable by Lessee
hereunder or levied upon or assessed against Lessor's Estate or the Leased
Property or other tax or charge that would not be imposed but for the existence
of the documents and transactions contemplated by this Lease, the CRC-II Master
Lease and the Indenture), any taxes imposed by any state or local government on,
or measured by, the net income of Lessor, Lessor's Mortgagee or the Indenture
Trustee unless any such tax is in lieu of or a substitute for any other tax or
assessment upon or with respect to Lessor's Estate or the Leased Property which
would be payable by Lessee hereunder.
(c) Utility Services. Lessee shall pay all charges for
utility, communication and other services to the extent rendered or used during
the Term on or about the Leased Property, whether or not payment therefor shall
become due after expiration of the Term.
(d) Indenture Expenses. Lessee shall pay (i) all expenses,
disbursements and advances incurred or made by the Indenture Trustee in
accordance with the provisions of the Indenture (including the reasonable
compensation, fees and expenses and disbursements of its agents and counsel)
which are not funded by the balances from time to time on deposit in the
Administrative Expenses Account established under the Indenture, including,
without limitation, those costs and expenses described in Sections 2.9(c), 3.2,
3.4, 5.3, 5.14, 5.16, 6.7, 6.12, 7.6, 7.17, 8.1, 9.3, 9.5, 9.7, 11.14, 11.15,
11.18, 11.19, 11.20 and 12.15 of the Indenture and all additional fees charged
by Standard & Poor's Corporation or Moody's Investors Service, Inc. pursuant to
the requirements of the Indenture, but, excluding all expenses, disbursements or
advances as may be attributable to the negligence, willful misconduct or bad
faith of the Indenture Trustee and (ii) all expenses required to be paid by the
Issuer (as such term is defined in the Indenture) under the Indenture. Lessee
also shall pay upon demand all costs incurred by Lessor pursuant to Section 1.05
of Lessor's Mortgage.
(e) Compliance With Legal Requirements. At Lessee's cost and
expense, Lessee shall perform and comply with and shall cause the Leased
Property to comply with all laws, rules, orders, ordinances, regulations and
requirements now or hereafter enacted or promulgated, of every government and
municipality having jurisdiction over
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Lessee or the Leased Property and of any agency thereof, relating to Lessee or
the Leased Property, or the improvements, or the facilities or equipment thereon
or therein, or the streets, sidewalks, curbs and gutters adjoining the Leased
Property, or the appurtenances to the Leased Property, or the franchises and
privileges connected therewith, including without limitation the Americans with
Disabilities Act and Environmental Laws, all rules, orders and regulations of
the National Board of Fire Underwriters or other body exercising similar
functions in connection with the prevention of fire or the correction of
hazardous conditions which apply to the Leased Property, and all private
covenants, conditions and restrictions affecting the Leased Property
(collectively, "Legal Requirements"), whether or not such Legal Requirements
shall necessitate ordinary or extraordinary structural changes, improvements,
interference with use and enjoyment of the Leased Property, replacements or
repairs, extraordinary as well as ordinary, and Lessee shall so perform and
comply, whether or not such Legal Requirements shall now exist or hereafter
shall be enacted or promulgated, and whether or not such Legal Requirements are
within the present contemplation of Lessor or Lessee. Lessee, at Lessee's cost
and expense, shall perform and comply with the terms of any easement granted or
released pursuant to Article 33. Lessee, at its expense, shall comply with all
provisions of insurance policies required pursuant to Article 13, and with the
provisions of all contracts, agreements, instruments and restrictions affecting
the Leased Property or any part thereof or its ownership, occupancy, use,
operation or possession.
(f) Lessee's Right to Contest. Notwithstanding the provisions
of this Article 6 and Article 7 or any other provision of this Lease, at all
times during the Term hereof, if no Event of Default described in Article 20,
paragraph (a) shall have occurred and be continuing, Lessee shall have the
right, in the ordinary course of its business, (i) to determine the manner in
which Lessee will cause Lessee, the Leased Property or the business conducted at
the Leased Property to comply with Legal Requirements, (ii) to contest or
challenge, at its sole cost and expense, any tax, charge, levy, assessment, lien
or other encumbrance, or the application, interpretation or enforcement of any
Legal Requirement affecting Lessee, the Leased Property or the business
conducted at the Leased Property, and to postpone payment of or compliance with
the same during the pendency of such contest or challenge, and (iii) to
determine the method, manner and scope of Lessee's contest or challenge to such
tax, charge, levy, assessment, lien or other encumbrance, or the other
application, interpretation or enforcement of any Legal Requirements
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affecting Lessee, the Leased Property or the business conducted at the Leased
Property; provided that, however, (A) if Lessee contests or challenges any tax,
charge, levy, assessment, lien or other encumbrance, the commencement and
continuation of such contest or challenge shall suspend the collection thereof
from, and suspend the enforcement thereof against, Lessor, Lessor's Estate, the
Leased Property, Basic Rent, Special Rent and Additional Rent, (B) no part of
the Leased Property nor any Basic Rent, Special Rent or Additional Rent shall be
interfered with or shall be in danger of being sold, forfeited, attached or lost
as a result of such contest, challenge, action or inaction of Lessee, (C) there
shall be no risk of the imposition of civil or criminal liability on Lessor for
failure to comply with any such Legal Requirements or to pay any such tax,
charge, levy, assessment, lien or other encumbrance, (D) Lessee shall preclude
the collection of, or other realization upon, any contested amount from the
Leased Property or any interest in the Leased Property, (E) such contest by
Lessee shall not affect the ownership, use or occupancy of the Leased Property.
Lessee agrees promptly to notify Lessor of the existence of any such contest or
challenge, and, upon request by Lessor or Lessor's Mortgagee from time to time,
notice of the status of such contest by Lessee and/or confirmation of the
continuing satisfaction of the conditions set forth in this paragraph (f).
Lessee will pay, indemnify, protect, defend, save and hold the Indemnified
Parties harmless against all losses, judgments, decrees and costs (including
attorneys' fees and expenses) in connection with any such contest, challenge,
action or inaction of Lessee, and promptly after the final determination of such
contest, Lessee will pay and discharge the amounts which shall be levied,
assessed or imposed or determined to be payable therein, together with all
penalties, fines, interests, costs, damages and expenses thereon or in
connection therewith. In the event that all such contested amounts exceed
$300,000 in the aggregate at any one time, Lessee shall deliver to Lessor or
Lessor's Mortgagee cash, a bond or other security acceptable to Lessor and
Lessor's Mortgagee equal to 125% of the contested amount pursuant to collateral
arrangements reasonably satisfactory to Lessor and Lessor's Mortgagee.
(g) Encumbrances by Lessor and Lessee. Lessor and Lessee
acknowledge and agree that Lessor will execute Lessor's Mortgage, and Lessee
will execute Lessee's Mortgage. Without Lessee's prior written consent, Lessor
shall not have the right to pledge, encumber or subject to a security interest
or any financing (other than Lessor's Mortgage and except as required by
Lessor's Mortgagee) Lessor's Estate or the Leased Property, and any attempt by
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Lessor to do so shall be null and void ab initio and of no force or effect.
Lessee shall comply with the provisions of and perform its obligations under the
consent of Lessee to the assignment of this Lease to Lessor's Mortgagee.
7. Liens. Lessee accepts the Leased Property subject to all of the
Permitted Encumbrances. Subject to the provisions of Article 6, paragraph (f),
Lessee will promptly, but in any event no later than thirty (30) days after its
Actual Knowledge of the filing thereof, but in any event prior to the
enforcement of the same, at its own expense, remove and discharge of record, by
bond or otherwise, any charge, lien, security interest or encumbrance upon
Lessor's Estate or the Leased Property, upon any Basic Rent or Special Rent, or
upon any Additional Rent which arises for any reason (except for (i) arising out
of the act or omission of Lessor without the consent of Lessee, and (ii)
Lessor's Mortgage), including all liens which arise out of Lessee's possession,
use, operation and occupancy of the Leased Property, but not including any
Permitted Encumbrances. Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, express or implied, to or for the
performance by any contractor, laborer, materialman 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 Leased Property or any
part thereof. Lessor and Lessee, at Lessor's request, shall execute a
memorandum or notice of this Lease, as to each Unit, and each Potential
Additional Unit (upon its becoming a Unit hereunder), in recordable form,
containing notice to the effect that Lessor will not be liable for any labor,
services or materials furnished or to be furnished to Lessee, or to anyone
holding an interest in the Lessor's Estate or the Leased Property or any part
thereof through or under Lessee, and that no mechanic's or other liens for any
such labor, services or materials shall attach to or affect the interest of
Lessor in and to the Lessor's Estate or the Leased Property. Lessor is hereby
given authority to enter upon the Leased Property upon twenty-four (24) hours
prior written notice to Lessee for the purpose of posting any notices which in
Lessor's opinion shall be necessary to hold Lessor harmless from any claim or
liability arising out of any work done on the Leased Property. If Lessee shall
fail to discharge any charge, lien, security interest or encumbrance within the
time period permitted by this Lease, Lessor may discharge the same by payment or
bond or both, and Lessee will repay to Lessor, upon demand, any and all amounts
paid therefor, or by reason of any liability on such bond, and also any and all
reasonable incidental expenses, including reasonable attorneys' fees incurred by
Lessor in connection therewith.
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8. Indemnification. Lessee shall pay and shall protect, defend and
indemnify the Indemnified Parties against and hold the Indemnified Parties
harmless from all liabilities, losses, damages, penalties, charges, costs,
expenses (including reasonable attorneys' fees and expenses) or judgments
(collectively, "Losses") resulting from any claims, demands, actions, causes of
action, suits, investigations or administrative or legal proceedings of any
nature (collectively, "Claims"), (a) arising or alleged to arise from or in
connection with the ownership, condition, use, operation, maintenance, repair,
rebuilding, alteration, modification, subletting and management of Lessor's
Estate or the Leased Property at any time during or prior to the Term of this
Lease, (b) relating to Lessor's Estate or the Leased Property and the
appurtenances thereto and the use and occupancy thereof by Lessee or anyone
claiming by, through or under Lessee at any time during or prior to the Term of
this Lease, (c) arising out of any misrepresentation or breach of warranty by
Lessee under Article 9, paragraph (a) or Article 41, or (d) arising or alleged
to arise from or in connection with any of the following: (i) any injury to or
death of any Person, or any damage to or loss of property on or adjacent to the
Leased Property (excluding adjacent property in which the Indemnified Party has
an interest other than pursuant to this Lease or any other lease between the
Indemnified Party and Lessee), or growing out of or directly or indirectly
connected with the ownership, use, nonuse, occupancy, operation, possession,
condition, construction, repair or rebuilding of the Leased Property or adjacent
property, sidewalks, streets or ways or resulting from the condition of any
thereof (excluding adjacent property, sidewalks, streets or ways in which
Indemnified Party has an interest other than pursuant to this Lease or any other
lease between the Indemnified Party and Lessee) or any encroachment thereof onto
any adjacent property at any time during or prior to the Term of this Lease;
(ii) any Claims by third parties resulting from any violation or alleged
violation by Lessee (but not from any gross negligence or willful misconduct of
the Indemnified Party) of (A) any provision of this Lease, or (B) any Legal
Requirement, or (C) any other lease or agreement relating to Lessor's Estate or
the Leased Property, or (D) any Permitted Encumbrances or (E) any contract or
agreement to which Lessee is a party or affecting the Leased Property, or (F)
any restriction, law, ordinance or regulation affecting Lessor's Estate or the
Leased Property or the ownership, use, nonuse, occupancy, condition, operation,
possession, construction, repair or rebuilding thereof or of adjacent property,
sidewalks, streets or ways; (iii) any contest permitted by Article 6; (iv)
Lessee's failure to pay in accordance with the provisions hereof any item of
Additional
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Rent or other sums payable by Lessee hereunder; or (v) any of the matters listed
on Schedule Q attached hereto. Lessee shall not be liable in any case to any
Indemnified Party for any Losses to the extent that they result from the
negligence or willful misconduct of such Indemnified Party. If any Indemnified
Party shall be made a party to any such litigation commenced against Lessee, and
if Lessee, at its expense, shall fail to provide such Indemnified Party with
legal counsel reasonably approved by such Indemnified Party, Lessee shall pay
all costs and reasonable attorneys' fees and expenses incurred or paid by such
Indemnified Party or its agent in connection with such litigation. The
following provisions shall apply in connection with any indemnification
obligation hereunder.
(a) If an Indemnified Party notifies Lessee of any Claim as to
which this Article 8 applies, Lessee shall assume on behalf of the Indemnified
Party and conduct with due diligence and in good faith the investigation and
defense thereof and the response thereto with counsel selected by Lessee but
reasonably satisfactory to the Indemnified Party; provided, however, that the
Indemnified Party shall have the right to be represented by advisory counsel of
its own selection and at its own expense, which advisory counsel may participate
in the investigation and defense of and response to such Claim only with the
approval and at the direction and under the supervision of Lessee's counsel; and
provided further, that if such Claim involves both Lessee and the Indemnified
Party and the Indemnified Party shall have reasonably concluded that legal
defenses are available to it which may result in its asserting a Claim (or
cross-claim or counter-claim) against Lessee, then the Indemnified Party at its
sole cost and expense shall have the right to select separate counsel to
participate in the investigation and defense of and response to such Claim on
its own behalf (except as provided in Article 20, paragraph (f)).
(b) If any Claims are asserted against an Indemnified Party as
to which this Article 8 applies, and Lessee fails to assume promptly (and in any
event within fifteen (15) days after having Actual Knowledge of the same) the
defense of the Indemnified Party, then the Indemnified Party may (but shall not
be obligated to) contest (without prior notice or consent of Lessee) the Claim
at Lessee's expense using counsel selected by the Indemnified Party or the
Indemnified Party may settle or pay in full the amount of such Claim (without
prior notice to or consent from Lessee), without releasing Lessee from any
obligations to each Indemnified Party under this Article 8, if in the
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written opinion of counsel to the Indemnified Party, the settlement or payment
in full is advisable.
(c) The rights of each Indemnified Party under this Article 8
shall be in addition to any other rights and remedies of such Indemnified Party
against Lessee under the other provisions of this Lease or under any other
document or instrument now or hereafter executed by Lessee, or under any Legal
Requirement or in equity (including, without limitation, any right of
reimbursement or contribution pursuant to Environmental Laws).
9. Environmental Matters.
(a) Environmental Representations. Except as disclosed in
those environmental reports and statements described on Schedule E attached
hereto, Lessee represents and warrants to and in favor of the Indemnified
Parties that:
(i) Lessee has obtained all permits, licenses and any
other authorizations required to conduct operations at the Leased Property that
are required under all applicable Environmental Laws, and, to the best of
Lessee's Actual Knowledge, Lessee is in compliance with all terms and conditions
of all permits, licenses and any other authorizations required under all
applicable Environmental Laws;
(ii) As of the date hereof, no notices, complaints or
orders of violation or non-compliance of any nature whatsoever have been issued
to Lessee or, to the best of Lessee's Actual Knowledge, to any Person regarding
the Leased Property, and no federal, state or local environmental investigation
or legal action by a private party is pending or, to the best of Lessee's Actual
Knowledge, threatened, in each case with regard to the Leased Property or any
use thereof or any alleged violation of, or strict liability arising under,
Environmental Laws;
(iii) Except as set forth on Schedule E and Schedule H
attached hereto, no liens have been placed upon the Leased Property in
connection with any actual or alleged liability under any Environmental Laws;
and
(iv) The Leased Property has not been used by Lessee or,
to the best of Lessee's Actual Knowledge by any other Person, to generate,
manufacture, refine, produce or process any Hazardous Substance or to store,
handle, transfer or transport any Hazardous Substance other than
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normal and lawful use thereof in lawful quantities and in compliance with
Environmental Laws.
(b) Environmental Covenants. Lessee covenants and agrees with
respect to the Leased Property as follows:
(i) At all times during the Term of the Lease, the Leased
Property, Lessee, and all sublessees and assignees of Lessee shall comply in all
respects with all applicable Environmental Laws;
(ii) Lessee and all sublessees and assignees of the Leased
Property shall comply with all terms and conditions of all permits, licenses and
any other authorizations required under all applicable Environmental Laws during
the Term of this Lease;
(iii) The Leased Property will not be used by Lessee or any
other Person at any time during the Term of this Lease to generate, manufacture,
refine, produce or process any Hazardous Substance or to store, handle, transfer
or transport any Hazardous Substance, other than normal and lawful uses thereof
in lawful quantities and in compliance with Environmental Laws where such uses
will have no material adverse effect upon any Unit and will not reduce the Fair
Market Value of any Unit;
(iv) At all times during the Term of this Lease, the
Leased Property will be maintained free of any activities, uses or conditions
which result in a release, threatened release, emission, disposal, escape,
seepage, leakage, spillage, pumping, pouring, emptying, injection, dumping, or
discharge of any Hazardous Materials from, under, into, or on, the Leased
Property in violation of applicable Environmental Laws; and
(v) Lessee during the Term of this Lease (A) shall comply
and cause all sublessees and assignees of space in the Leased Property to comply
with all Environmental Laws, (B) shall cause any alterations of or construction
on the Leased Property to be done in accordance with applicable Environmental
Laws, and (C) shall remove and dispose of in compliance with applicable
Environmental Laws, any Hazardous Substances present upon or emanating from the
Leased Property not in compliance with Environmental Laws or requiring removal
and disposal pursuant to applicable Environmental Laws.
(c) Notice of Environmental Matters. Promptly upon obtaining
Actual Knowledge thereof, Lessee shall give to Lessor notice of the occurrence
of any of the following
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events: (i) the failure of the Leased Property, Lessee, or any sublessee or
assignee of Lessee to comply with any Environmental Law which has resulted, or
has the potential to result, in an adverse impact on the Leased Property; (ii)
the issuance to Lessee, or any sublessee of the Leased Property or any assignee
of Lessee, of any notice, complaint or order of a violation or non-compliance
with regard to the Leased Property or the use thereof with respect to
Environmental Laws; (iii) any notice of a pending or threatened investigation to
determine whether any operations on the Leased Property are in violation of any
Environmental Law; or (iv) any environmental condition which has resulted in, or
has the potential to result in, an adverse impact on the Leased Property.
(d) Environmental Investigation. If Lessee has Actual
Knowledge (or receives a written notice from Lessor) that an adverse change in
the environmental condition of any Unit has occurred or that an adverse
environmental condition with respect to any Unit has been discovered, Lessee
diligently (in any event within thirty (30) days after obtaining such Actual
Knowledge or receiving such notice, or such shorter period as may be required by
law or necessitated by an emergency) shall engage a qualified environmental
consultant to investigate such environmental condition, and thereafter
diligently shall undertake such acts and actions as are necessary to prosecute
to completion a cure of such environmental condition to the extent necessary to
meet Legal Requirements and comply with applicable Environmental Laws and to
prevent a diminution in the Fair Market Value of such Unit. All costs and
expenses incurred in connection with any investigation or remediation required
shall be paid by Lessee.
(e) Environmental Indemnity. In addition to any indemnity
contained in Article 8, Lessee agrees to indemnify, defend and hold harmless
each Indemnified Party from and against any and all Losses which may be suffered
or incurred by or asserted against such Indemnified Party, to the extent such
Losses arise directly or indirectly as a result of any Claim relating to (i) the
Leased Property, (ii) the presence, use, storage, transportation, disposal,
release, threatened release, discharge, emission or generation of any Hazardous
Substances at the Leased Property as a result of acts, omissions, occurrences or
events at any time during or prior to the Term of this Lease (including, without
limitation, any such presence, disposal, release, discharge, emission or
generation continuing or arising after expiration of the Term as a result of
acts, omissions, events or occurrences at any time during or prior to expiration
of the Term), (iii) Lessee's violation of or
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failure to comply with this Article 9, or (iv) any breach by Lessee of any
representation or warranty set forth in Article 9, paragraph (a); provided,
however, that no Indemnified Party will be indemnified by Lessee hereunder for
any such Losses solely caused by the gross negligence or willful misconduct of
such Indemnified Party. Such Losses shall include, without limitation, the
following out-of-pocket costs incurred by an Indemnified Party if such costs are
incurred at a time when Lessee is in default in the performance of its
obligations under this Article 9: out-of-pocket costs incurred in connection
with determining whether any portion of the Leased Property is in compliance
with all applicable Environmental Laws; taking any necessary precautions to
protect against any actual or threatened disposal, generation, emission or
release of Hazardous Substances; and any removal, remediation of any kind and
disposal of any Hazardous Substances. The rights of the Indemnified Parties
hereunder shall not be limited by any investigation or the scope of any
investigation undertaken by them or on their behalf in connection with the
Leased Property prior to the date hereof, nor shall Lessee's obligations
hereunder be diminished or affected in any respect as a result of any notice or
disclosure, if any, to, or other knowledge, if any, by, any Indemnified Party of
any actual or threatened disposal, generation, emission or release of Hazardous
Substances onto any Leased Property, nor shall any Indemnified Party be deemed
to have permitted or acquiesced in any disposal, generation, emission or release
of Hazardous Substances or any breach of Lessee's other obligations hereunder,
solely because any Indemnified Party had notice, disclosure or knowledge
thereof, whether on or to the date hereof or hereafter.
(f) Other Indemnification Provisions Apply. The provisions of
paragraphs (a), (b) and (c) of Article 12 also shall apply with respect to the
indemnification obligations of Lessee set forth in this Article 9.
(g) Survival. The obligations and liabilities of Lessee,
whether actual or contingent, with respect to each Indemnified Party under this
Article 9, including obligations (if any) arising after expiration of the Term,
shall survive (i) expiration or other termination of this Lease or any
foreclosure of Lessor's and/or Lessee's Mortgage, (ii) the abandonment of the
Leased Property by Lessee, (iii) any purchase of the Leased Property or any
portion thereof by Lessee, (iv) the Substitution of other property for any Unit
pursuant to any provisions hereof, (v) any Early Termination Election by Lessee
with respect to any Unit or any other release or transfer of any Unit; or (vi)
any payments of any type by Lessee to Lessor pursuant
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to the terms of this Lease (including, without limitation, payments made under
Articles 28, 30, 31 and 32 herein).
10. Maintenance and Repair; Additions.
(a) Maintenance. Lessee, at its sole cost and expense, will
keep and maintain the Leased Property, including any altered, rebuilt,
additional or substituted buildings and other improvements, in a condition at
least equal to that as on the date of this Lease, ordinary wear and tear
excepted, and (except as otherwise provided in Article 12, paragraphs (a)(iii)
and (b)(iii)) Lessee will make all structural and non-structural and ordinary
and extraordinary changes, repairs and replacements, foreseen or unforeseen,
which may be required, whether or not caused by its act or omission, to be made
upon or in connection with the Units in order to keep the same in such condition
and in compliance with Legal Requirements and Environmental Laws, including
taking action necessary to maintain Lessor's Estate and the Leased Property in
such condition. Lessee shall keep the Leased Property orderly and free and
clear of rubbish. Lessor shall not be required to maintain, alter, repair,
rebuild or replace any Units or to maintain the Leased Property, and Lessee
expressly waives the right to make repairs at the expense of Lessor pursuant to
any law at any time in effect.
(b) Violation of Restrictions. If any improvements shall
encroach upon any property, street or right-of-way adjoining or adjacent to the
Leased Property, or shall violate any restrictive covenant affecting the Leased
Property or any part thereof, or shall impair the rights of others under or
obstruct any easement or right-of-way to which the Leased Property is subject,
then, promptly after the written request of Lessor or any Person affected by any
such encroachment, violation, impairment or obstruction, Lessee, at its expense,
either (i) shall obtain effective waivers or settlements of all claims,
liabilities and damages resulting from each such encroachment, violation,
impairment or obstruction, or (ii) shall make such changes in the Units and take
such other action as shall be necessary to remove such encroachments or
obstructions and to end such violations or impairments, including, to the extent
necessary, the alteration or removal of any improvement thereon. Any such
alteration or removal shall be made to the same extent as if such alteration or
removal were an alteration under the provisions of this Article 10, paragraphs
(c) or (d), and there shall be no abatement of rent by reason of such alteration
or removal. So long as any such encroachment, violation or improvement is not
material, Lessor, at
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Lessee's request, shall waive the foregoing requirements contained in this
Article 10, paragraph (b), provided Lessee indemnifies, defends, protects and
holds Lessor and all Indemnified Parties harmless against any Losses that Lessor
and such Indemnified Party may incur as a result of such encroachment,
violation, impairment or destruction, which indemnity shall survive termination
of this Lease and the other events described in Article 9, paragraph (g) above.
(c) Alterations. Lessee shall have the right, at its sole
cost and expense, to make alterations, modifications or improvements to the
Units and to make any alterations, additions, modifications or improvements
("Alterations") to any Unit whether or not structurally integrated with the
existing Units, provided that such Alterations (i) will not adversely effect the
structural integrity of the Units or materially impair the utility, Fair Market
Value (as defined in Article 36, paragraph (c)(ii) below), useful life or
operation of such Unit, and (ii) will conform with the character and quality of
the existing Units and all Legal Requirements. All Alterations will be
constructed in a good and workmanlike manner using a quality of material and
workmanship at least as good as the original work or installation of the Units
and will be completed in a commercially reasonable time period, and upon
completion of such Alterations, the Unit(s) shall be free and clear of all liens
arising from or as a result of the Alterations. Each Alteration shall be made
at the sole cost and expense of Lessee, may not be encumbered and (except for
Lessee's Trade Fixtures) immediately shall become the property of Lessor and
subject to this Lease.
(d) Compliance with Legal Requirements. All work required or
permitted by this Article 10 shall be performed in compliance with all
applicable Legal Requirements and shall comply with the requirements of all
insurance policies required to be maintained by Lessee hereunder. Lessee shall
procure and pay for all permits and licenses required in connection with any
such work or Alterations.
11. Trade Fixtures.
(a) Not Part of Leased Property. Lessor acknowledges and
agrees that all items specified on Schedule B and all other items of machinery,
equipment or personal property which Lessee utilizes to conduct its business on
the Leased Property (hereinafter, "Trade Fixtures"), and all replacements
thereof, are and shall remain the property of Lessee and shall be treated as
trade fixtures for the purposes of this Lease. Accordingly, Lessor acknowledges
and agrees that (i) the Trade Fixtures
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constitute Lessee's personal property, and shall not be considered to be part of
the Leased Property, regardless of whether or by what means they become attached
thereto, (ii) it does not possess any ownership or security interest in such
Trade Fixtures, and (iii) Lessee may remove such Trade Fixtures at any time
during the Term hereof, provided that Lessee agrees to repair any damage
resulting from such removal. Lessee may remove its Trade Fixtures from the
Leased Property at any time prior to the termination of this Lease, provided
that Lessee shall repair any damage to the Leased Property resulting from such
removal. Lessee, at its own cost and expense, may install, place, reinstall or
replace upon the Leased Property, or remove from the Leased Property, any such
Trade Fixtures. Any replacement Trade Fixtures shall not become the property of
Lessor but shall remain Lessee's property.
(b) Equipment Leases. Lessor acknowledges and agrees that
Lessee's Trade Fixtures may be leased from an equipment lessor (hereinafter,
"Equipment Lessor") and that Lessee may execute and enter into an equipment
lease with respect to such Trade Fixtures ("Equipment Lease"). If and to the
extent required by any Equipment Lease, Lessor shall execute and deliver to the
Equipment Lessor a consent or acknowledgement, in recordable form reasonably
acceptable to such Equipment Lessor in which Lessor (i) acknowledges and agrees
that the Trade Fixtures which are the subject of the Equipment Lease constitute
the personal property of Lessee, and shall not be considered to be part of the
Leased Property, regardless of whether or by what means they become attached
thereto, (ii) agrees that it will not claim any interest in such Trade Fixtures,
and (iii) agrees that Equipment Lessor may enter the Leased Property for the
purpose of exercising any right it may have under the provisions of the
Equipment Lease, including the right to remove such Trade Fixtures, provided
that such Equipment Lessor agrees to repair any damage resulting from such
removal.
(c) Other Fixtures. All fixtures, machinery and equipment
other than Trade Fixtures, and replacements thereof, shall be the property of
Lessor and subject to this Lease. Lessee shall be responsible, during the Term,
to repair, maintain, insure, pay utility charges and ad valorem taxes upon such
fixtures, machinery, equipment and replacements in accordance with the
provisions hereunder requiring the same with respect to the Leased Property.
Replacements made by Lessee of fixtures, machinery and equipment (excluding
Trade Fixtures) which are the property of Lessor shall be at Lessee's expense
and shall be at least
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equal to the quality of the replaced fixtures, machinery and equipment when the
replaced items were new.
12. Condemnation and Casualty.
(a) Destruction While Credit Rating Maintained. Provided
Lessee's long term rating, as determined by Standard & Poor's Corporation and
Moody's Investors Service, Inc., is not below both "B+" and "Ba3," respectively,
at the time of any Destruction (as defined below), the following provisions
shall apply:
(i) Destruction. If Lessor's Estate, the Leased
Property, any Unit or any portion thereof is damaged, destroyed, lost or taken
(A) by fire or other casualty, or (B) by condemnation, requisition or other
taking or occupancies of the Lessor's Estate or the Leased Property on account
of any actual or threatened eminent domain proceeding or other action by any
authority, civil or military, having the power of eminent domain (hereinafter
referred to individually or collectively as "Destruction"), any Award arising as
a result of or which is attributable to such Destruction (including, without
limitation, Lessee's reversionary interest in the Leased Property, any Unit or
any portion thereof) shall be collected and paid, retained, distributed or
utilized as set forth in paragraph (a)(iii) below, except that, so long as no
Event of Default shall have occurred and be continuing, Lessee shall be entitled
to collect and retain any award, insurance proceeds or other payment
specifically made for interruption of Lessee's business, moving expenses, Trade
Fixtures or other loss of Lessee's property other than Lessee's interest under
this Lease (hereinafter, "Lessee's Loss"). Lessee, at its cost and expense, in
the name of and on behalf of Lessor or Lessee, shall appear in any such
proceeding or other action, negotiate and prosecute any Claim for any Award on
account of any such Destruction. Lessor or Lessor's Mortgagee, at their sole
cost and expense, shall have the right to be represented by advisory counsel in
any such proceeding or other action, which advisory counsel may participate in
such proceeding or other action only with the approval and at the direction and
under the supervision of Lessee or its counsel.
(ii) Notice of Destruction. If there shall be a
Destruction of any Unit or any portion thereof, Lessee promptly shall deliver to
Lessor and the Indenture Trustee written notice of such Destruction. Within
sixty (60) days after such Destruction, Lessee shall elect by a further written
notice to Lessor either (A) to make a Substitution of such Unit pursuant to
Article 15 below, or (B) to make an
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Early Termination Election with respect to such Unit in accordance with the
provisions of Article 37 below (including, without limitation, the initial date
requirement thereunder), or (C) at Lessee's own cost and expense, to carry out
any necessary demolition and to repair, replace and/or rebuild such Unit so
that, as nearly as practicable, the Unit is restored to a physical and operating
condition not less than the condition required to be maintained hereunder
immediately prior to such Destruction (hereinafter, "Restoration"), in which
case, Lessee's written notice shall specify Lessee's reasonable estimate of the
cost of completing the Restoration. If Lessee fails to deliver to Lessor such
written notice within said sixty (60) day period, Lessee shall be deemed to have
elected to make a Restoration.
If (and only if) Lessee elects or is deemed to elect to make a
Restoration, then, within ninety (90) days after the occurrence of the
Destruction, Lessee shall commence and proceed with diligence and promptness to
complete such Restoration as expeditiously as possible under the circumstances
of such Destruction. All repair work shall be undertaken and completed in the
same manner as if the same were an Alteration. If, however, Lessee elects to
make a Substitution or Early Termination as provided hereunder, Lessee shall
have no obligation to undertake any Restoration of the Unit subject to such
Destruction.
Basic Rent, Special Rent and Additional Rent shall not abate
hereunder by reason of any such Destruction of Lessor's Estate or any Unit, and
this Lease shall continue in full force and effect, and Lessee shall continue to
perform and fulfill all of Lessee's obligations, covenants and agreements
hereunder notwithstanding such Destruction, except as provided to the contrary
upon completion of a Substitution or Early Termination with respect to any Unit
pursuant to the provisions of Article 15 or Article 37 below, respectively.
Lessee covenants and agrees that the amount of any Award collected or received
by or paid to Lessee as a result of any Destruction shall be utilized by Lessee
to comply with its obligations under this Article 12, paragraph (a)(ii). In no
event shall Lessee's obligations be limited to the amount of the Award paid or
available to it.
(iii) Application of the Award. Lessee may accept and
retain on its own behalf (and to the extent received by Lessor, Lessor's
Mortgagee or Indenture Trustee, Lessor, Lessor's Mortgagee and Indenture Trustee
immediately shall pay or deliver to Lessee) any Award in the amount of $500,000
or less in the event of the Destruction of any
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individual Unit ("Single Destruction Threshold"); provided, however, that the
aggregate amounts so received or retained by Lessee (together with any amounts
so paid or delivered to Lessee) with respect to any two or more Units which are
the subject of any Destruction, and as to which Lessee has neither consummated a
Substitution or Early Termination in compliance herewith nor delivered a
certificate of completion pursuant to paragraph (a)(iv)(A) below shall not
exceed $3,000,000 at any time ("Multiple Destruction Threshold"). If any single
Award exceeds the Single Destruction Threshold or any Awards which Lessee has
neither utilized to consummate a Substitution or Early Termination in compliance
herewith nor to complete a Restoration pursuant to paragraph (a)(iv)(A) below
together in the aggregate exceed the Multiple Destruction Threshold, then (to
the extent not paid directly to the Indenture Trustee) Lessee shall deposit or
cause to be deposited with the Indenture Trustee the amount of such Award(s).
In addition, if Lessee elects to make a Restoration pursuant to the provisions
of paragraph (a)(ii) above, Lessee also shall deposit or cause to be deposited
with the Indenture Trustee, in cash or other immediately available funds, the
amount by which Lessee's reasonable estimate of the cost of Restoration exceeds
the total Award(s) deposited with the Indenture Trustee, or, alternatively,
Lessee shall post an equivalent bond whereupon such deposit or bonded amount
shall constitute part of the Award for purposes of this Article 12, paragraph
(a)(iii). If Lessee makes an Early Termination Election pursuant to the
provisions of Article 37 below, then concurrently with delivery of Lessee's
written notice to Lessor of such Early Termination Election pursuant to
paragraph (a)(ii) above, Lessee shall deposit or cause to be deposited with the
Indenture Trustee (to the extent not directly paid to the Indenture Trustee) the
entire Award attributable to the Destruction, together with any other amounts
then due with respect to such Early Termination.
(iv) Proceeds Account. Moneys held by the Indenture
Trustee shall be segregated and held in the "Proceeds Account" provided in the
Indenture and shall be held subject to the Indenture for the uses and purposes
provided in this Article 12, paragraph (a). Provided no Event of Default shall
have occurred and be continuing, such amounts shall be held or disbursed by the
Indenture Trustee as follows:
(A) If Lessee elects to make a Restoration pursuant
to paragraph (a)(ii) above, then as the work of Restoration progresses, any
amounts held by the Indenture Trustee shall be paid by the Indenture Trustee to
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reimburse Lessee for the actual costs and expenses incurred by Lessee in
connection with such Restoration in excess of the Award retained by Lessee, if
any. Such amounts shall be paid to Lessee upon written notice to Indenture
Trustee, with a copy to Lessor, setting forth in reasonable detail all of such
costs and expenses actually incurred by Lessee in connection therewith, the
amount of the Award retained by Lessee which Lessee previously has expended in
connection with such Restoration and the amount of the proceeds then held by the
Indenture Trustee to which Lessee is then entitled thereunder. Lessee shall
comply with the reasonable requirements of Lessor's Mortgage and Lessor's
Mortgagee or the Indenture Trustee with respect to distribution of any such
amounts. Upon completion of the Restoration of a Unit pursuant to this Lease,
and Lessee's receipt of all necessary licenses, permits and approvals for the
occupancy and conduct of business on the restored Unit, Lessee shall deliver to
the Indenture Trustee a certificate executed by an executive officer of Lessee
certifying to the same. Upon receipt of such certificate by the Indenture
Trustee, any further amounts (including any amount in excess of the cost of
Restoration) held by the Indenture Trustee with respect to such Unit shall be
paid or released to Lessee provided no Event of Default hereunder shall have
occurred and be continuing.
(B) If Lessee elects to make a Substitution pursuant
to paragraph (a)(ii) above, provided no Event of Default hereunder shall have
occurred and be continuing, any amounts held by the Indenture Trustee with
respect to such Unit shall be paid or released to Lessee upon receipt of a
certificate signed by an executive officer of Lessee certifying that the
Substitution has been completed pursuant to Article 15 hereof, and that Lessee
has received all necessary licenses, permits and approvals for the occupancy and
conduct of business at the Substitute Unit.
(C) If Lessee makes an Early Termination Election
pursuant to paragraph (a)(ii) above, provided no Event of Default hereunder
shall have occurred and be continuing, any amounts held by the Indenture Trustee
with respect to such Unit shall apply to and reduce the Unit Redemption Price
payable by Lessee to Lessor for the Unit with respect to which Lessee elects
Early Termination. Upon completion of the Early Termination and payment of the
Unit Redemption Price, provided no Event of Default hereunder shall have
occurred and be continuing, any further amounts (including any amount in excess
of the Unit Redemption Price) held by the Indenture Trustee with respect to such
Unit shall be paid or released to Lessee. Notwithstanding
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the foregoing, if an Event of Default hereunder has occurred and is continuing,
the proceeds received by the Indenture Trustee shall be applied according to the
provisions of Lessee's Mortgage.
(b) Destruction When Credit Rating Deteriorates. If, at the
time of any Destruction, Lessee's long term rating, as determined by Standard &
Poor's Corporation and Moody's Investors Service, Inc., is below both "B+" and
"Ba3," respectively, the following provisions shall apply:
(i) Destruction. If Lessor's Estate, the Leased
Property, any Unit or any portion thereof is the subject of a Destruction, any
Award arising as a result of or which is attributable to such Destruction
(including, without limitation, Lessee's reversionary interest in the Leased
Property, any Unit or any portion thereof) shall be collected by and paid to the
Indenture Trustee in accordance with Lessor's Mortgage and applied in accordance
with Lessor's Mortgage and to the extent not inconsistent therewith, this Lease,
except that, so long as no Event of Default shall have occurred and be
continuing, Lessee shall be entitled to collect and retain any award, insurance
proceeds or other payments specifically made for Lessee's Loss. Lessee, at its
cost and expense, in the name of and on behalf of Lessor or Lessee, shall appear
in any such proceeding or other action, negotiate and prosecute any Claim for
any Award on account of any such Destruction. Lessor or Lessor's Mortgagee, at
their sole cost and expense, shall have the right to be represented by advisory
counsel in any such proceeding or other action, which advisory counsel may
participate in such proceeding or other action only with the approval and at the
direction and under the supervision of Lessee or its counsel.
(ii) Notice of Destruction. If there shall be a
Destruction of any Unit or any portion thereof, Lessee promptly shall deliver to
Lessor and the Indenture Trustee written notice of such Destruction, and all of
the other provisions set forth in paragraph (a)(ii) above shall apply. In no
event shall Lessee's obligations be limited to the amount of the Award paid or
available to it.
(iii) Application of Award. Lessee shall direct that all
such Award(s) be paid directly to the Indenture Trustee. If and to the extent
Lessee receives any Award, Lessee immediately shall pay, deliver or cause to be
assigned to the Indenture Trustee all such amounts. The Indenture Trustee shall
disburse to Lessee, provided Lessee has elected to make a Restoration and has
delivered to the Indenture Trustee a certificate that it has commenced or is
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about to commence such Restoration, and provided no Event of Default shall have
occurred and be continuing, any Award in the amount of the Single Destruction
Threshold or less, provided that the aggregate Awards so paid or delivered to
Lessee on account of Units for which Lessee has neither consummated a
Substitution or Early Termination pursuant hereto nor delivered to the Indenture
Trustee a certificate of completion as described in clause (C) below or in
Article 12, paragraph (a)(iv)(A) above shall not exceed the Multiple Destruction
Threshold. The Indenture Trustee shall retain and disburse as provided below
any portion of the Award which exceeds either the Single Destruction Threshold
or Multiple Destruction Threshold. If the cost to complete the Restoration of
any Unit, as estimated by Lessee in a certificate, exceeds the Award paid on
account of the Destruction of such Unit, Lessee shall deposit with Lessor's
Mortgagee such excess amount, or, alternatively, Lessee shall post an equivalent
bond whereupon such deposit or bonded amount shall constitute part of the Award
for purposes of this Article 12, paragraph (b).
(iv) Proceeds Account.
(A) The portion of the Award held by the Indenture
Trustee shall be segregated in the "Proceeds Account" provided for in the
Indenture.
(B) Provided no Event of Default shall have occurred
and be continuing, moneys held in the "Proceeds Account" with respect to any
Unit subject to a Destruction shall be disbursed to Lessee by the Indenture
Trustee for actual costs and expenses incurred by Lessee in connection with
Restoration of such Unit as follows: As the work of Restoration progresses, any
amounts held by the Indenture Trustee shall be paid by the Indenture Trustee to
reimburse Lessee for the actual costs and expenses incurred by Lessee in
connection with such Restoration in excess of the Award previously disbursed to
Lessee, upon written notice by Lessee to Indenture Trustee, with a copy to
Lessor, setting forth in reasonable detail all of such costs and expenses
actually incurred by Lessee in connection therewith, the amount of the Award
previously disbursed to Lessee which Lessee has previously expended, and the
amount of the proceeds then held by the Indenture Trustee with respect to such
Unit to which Lessee is then entitled thereunder. Lessee shall comply with the
reasonable requirements of Lessor's Mortgage and Lessor's Mortgagee or the
Indenture Trustee with respect to distribution of any such amounts.
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(C) Upon completion of the Restoration, Lessee shall
deliver to the Indenture Trustee a certificate signed by an executive officer of
Lessee certifying that the Restoration of the Unit has been completed in
accordance with this Lease and that Lessee has received all necessary licenses,
permits and approvals for the occupancy of such Unit and conduct of its business
therein.
(D) Upon receipt of such certificate, provided no
Event of Default hereunder shall have occurred and be continuing, the Indenture
Trustee shall release to Lessee any remaining Award attributable to the restored
Unit.
If Lessee elects to make a Substitution for any Unit, provided no Event of
Default hereunder shall have occurred and be continuing, the amount of any Award
held by Lessor or Lessor's Mortgagee with respect to such Unit shall be paid or
released to Lessee on the Substitution Date (as defined herein) provided all
terms and conditions applicable to the Substitution have been satisfied. If
Lessee elects Early Termination of a Unit which has been affected by a
Destruction, provided no Event of Default hereunder shall have occurred and be
continuing, Lessor or Lessor's Mortgagee or the Indenture Trustee shall apply
the Award held by it for such Unit to the Special Sinker Rent and Unit
Redemption Price payable by Lessee to Lessor for such Unit upon satisfaction of
all conditions thereto and payment of all other sums due in connection
therewith.
Notwithstanding the foregoing, if an Event of Default is then
continuing, the proceeds received by the Indenture Trustee shall be applied in
accordance with Lessee's Mortgage.
(c) Temporary Condemnation. Notwithstanding any other
provision to the contrary contained in this Article 12, in the event of a
temporary condemnation, this Lease shall remain in full force and effect, and,
provided no Event of Default shall have occurred and be continuing, Lessee shall
be entitled to the Award allocable to such temporary condemnation. If Lessee
purchases any Unit pursuant to Article 30, 31 or 32 below, any amounts held by
Lessor's Mortgagee and any portion of any Award allocable to such Unit shall be
paid or released to Lessee concurrently with such purchase.
13. Insurance.
(a) Required Insurance. Lessee, at its cost and expense,
shall maintain or cause to be maintained valid and
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enforceable insurance of the following character and shall cause to be delivered
to Lessor, Lessor's Mortgagee and to the Indenture Trustee annual certificates
of the insurers as to such coverage:
(i) Standard fire and extended coverage insurance,
including endorsements for vandalism, malicious mischief, business interruption
and sprinkler leakage (hereinafter "All Risks Property Insurance") (excluding
flood coverage, unless Lessee consistently obtains such coverage for its
properties not subject to this Lease, and earthquake coverage) covering the
Leased Property, all replacements and additions thereto and all building
materials and other property which constitute part of the Leased Property in a
manner consistent with insurance maintained by Lessee on properties similar to
the Leased Property and in any event in amounts not less than the actual
replacement cost of the Leased Property, excluding land cost and other
uninsurable items;
(ii) Public liability insurance covering legal liability
against claims for bodily injury, death or property damage occurring on, in or
about the Leased Property and the adjoining land, streets, sidewalks or ways or
occurring as a result of construction and use and occupancy of facilities
located on the Leased Property or as a result of the construction thereof or the
use of products or materials manufactured, processed, constructed or sold, or
services rendered on, the Leased Property, in the minimum amount of $5,000,000
with respect to any one occurrence, accident or disaster or incidence of
negligence;
(iii) Worker's compensation insurance (or other similar
insurance or self insurance program permitted and in compliance with the laws of
the State in which the Leased Property is located) covering all Persons employed
in connection with any work performed on or about the Leased Property with
respect to which claims for death or bodily injury could be asserted against
Lessor, Lessee or the Leased Property, complying with the laws of the State in
which the Leased Property is located; and
(iv) Such other insurance, in such amounts, against such
risks, and with such other provisions as is customarily and generally maintained
by operators of similar properties.
Such insurance shall be written by insurance companies with a
General Policy rating of "A:VIII" or better in Best's Key Rating Guide and rated
"B+" or better by Standard & Poor's Corporation or Ba3 or better by Moody's
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Investors Service, Inc., and which are legally qualified to issue such insurance
and shall name Lessee as insured and Lessor, Lessor's Mortgagee and the
Indenture Trustee as an additional insured with respect to the insurance
described in clauses (i) and (ii) and, to the extent applicable, clause (iv)
above. Provided Lessee's long term rating, as determined by Standard & Poor's
Corporation and Moody's Investors Service, Inc., is not below both "B+" and
"Ba3," respectively, at the time of any Destruction giving rise to a claim
against such insurance, such insurance shall name Lessee and Indenture Trustee
as joint loss payees, for distribution pursuant to Article 12, paragraph (a)
hereof as their interests appear therein, with respect to the insurance
described in clause (i) (except for business interruption insurance and the
proceeds of any insurance payable for Lessee's Loss, with respect to which
Lessee shall be the sole loss payee). If, however, at the time of any
Destruction giving rise to a claim against such insurance, Lessee's long term
rating, as determined by Standard & Poor's Corporation and Moody's Investors
Service, Inc., is below both "B+" and "Ba3," respectively, Lessee shall cause
such insurance to be paid to the Indenture Trustee as the sole loss payee for
distribution pursuant to Article 12, paragraph (b) hereof, with respect to the
insurance described in clause (i) (except for business interruption insurance
and the proceeds of any insurance payable for Lessee's Loss with respect to
which Lessee shall be the sole loss payee).
Such insurance may provide for such deductible amounts as are
customarily provided in insurance maintained by Lessee on similar properties and
may be obtained by Lessee by endorsement on its blanket insurance policies,
provided such blanket policies satisfy the requirements specified above in this
Article 13, paragraph (a) and provide for a reserved amount thereunder with
respect to the Leased Property so as to assure that the amount of insurance
required by Article 13, paragraph (a) will be available notwithstanding any
losses with respect to other properties covered by such blanket policy.
(b) Required Policy Provisions. Any recovery by the Indenture
Trustee under the policy of insurance maintained in accordance with clause (i)
of this Article 13, paragraph (a) promptly shall be paid or applied by the
Indenture Trustee strictly in accordance with Article 12 hereof. Every
insurance policy maintained pursuant to this Lease shall: (i) provide that the
issuer waives all rights of subrogation against Lessor, any successor to
Lessor's interests in the Leased Property, Lessor's Mortgagee and the Indenture
Trustee; and (ii) provide that thirty (30) days
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advance written notice of cancellation, modification, termination or lapse of
coverage shall be given to Lessor and Lessor's Mortgagee and the Indenture
Trustee and that such insurance, as to the interest of Lessor, Lessor's
Mortgagee and the Indenture Trustee, shall not be invalidated by any act or
neglect of Lessor, Lessor's Mortgagee, the Indenture Trustee, Lessee or any
Person, nor by any foreclosure or any other proceedings relating to the Lessor's
Estate or to the Leased Property, nor by any change in the title ownership of
Lessor's Estate or the Leased Property, nor by use or occupation of the Leased
Property for purposes more hazardous than are permitted by such policy; and
(iii) be primary and without right or provision of contribution as to any other
insurance carried by Lessor or any other interested party; and (iv) in the event
any insuring company is not domiciled within the United States of America,
include a United States Service of Suit clause (providing any actions against
the insurer by the names insured or Lessor are conducted within the jurisdiction
of the United States of America).
(c) No Concurrent Insurance. Lessee shall not obtain or carry
separate insurance concurrent in form or contributing in the event of loss with
that required in this Article 13 to be furnished by Lessee, unless Lessor,
Lessor's Mortgagee and the Indenture Trustee are included as a named insured,
with loss payable as provided in this Lease and otherwise complying with the
requirements of this Lease. Lessee immediately shall notify Lessor whenever any
such separate insurance is obtained and shall deliver to Lessor, Lessor's
Mortgagee and the Indenture Trustee the policy or policies, duplicates thereof
or a certificate of insurance evidencing the same satisfactory to Lessor's
Mortgagee and the Indenture Trustee.
(d) Delivery of Policies. Lessee shall deliver to Lessor
prior to the execution of this Lease the original or duplicate policies or
certificates of insurance, satisfactory to Lessor's Mortgagee and the Indenture
Trustee, evidencing all of the insurance required hereunder. Lessee, prior to
the time of the expiration of any such policy, shall deliver to Lessor, Lessor's
Mortgagee and the Indenture Trustee other original or duplicate policies or such
certificates or other evidence reasonably satisfactory to Lessor, Lessor's
Mortgagee and the Indenture Trustee evidencing the renewal of any such policy.
If Lessee fails to maintain or renew any insurance required by this Lease, or to
pay the premium therefor, then Lessor, at its option, but without obligation to
do so, may procure such insurance. Any sums so expended by Lessor shall be
Additional Rent hereunder and shall be repaid by Lessee within five (5)
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Business Days after notice to Lessee of such expenditure and the amount thereof.
(e) Compliance by Lessee. Lessee shall comply with all of the
terms, provisions and conditions of each insurance policy maintained pursuant to
the terms of this Lease.
14. Financial Statements; Certificates; Notices.
(a) Financial Statements. Lessee shall cause to be delivered
to Lessor, Lessor's Mortgagee and the Indenture Trustee the following financial
statements of Lessee:
(i) As soon as practicable, copies of all such financial
statements, proxy statements, notices and other communications and reports as
Lessee shall send to its shareholders and all regular, current or periodic
reports (including reports on Form 10-K, Form 8-K and Form 10-Q) which Lessee is
or may be required to file with the Securities and Exchange Commission or any
governmental body or agency succeeding to the functions of the Securities and
Exchange Commission; and
(ii) If Lessee shall no longer be a public company
required to file such reports with the Securities and Exchange Commission within
one hundred twenty (120) days after the end of each fiscal year, and within
sixty (60) days after the end of any other fiscal quarter, a consolidated
statement of earnings, and a consolidated statement of changes in financial
position, a consolidated statement of stockholders' equity, and a consolidated
balance sheet of Lessee as of the end of each such year or fiscal quarter,
setting forth in each case in comparative form the corresponding consolidated
figures from the preceding annual audit or corresponding fiscal quarter in the
prior fiscal year, as appropriate, all in reasonable detail satisfactory in
scope to Lessor, Lessor's Mortgagee and the Indenture Trustee and certified to
Lessee as to the annual consolidated statements by independent public
accountants of recognized national standing selected by Lessee, whose
certificate shall be based upon an examination conducted in accordance with
generally accepted auditing standards and the application of such tests as said
accountants deem necessary under the circumstances.
(b) Compliance and Fair Market Value Certificates.
Concurrently with the delivery of annual financial statements pursuant hereto,
Lessee will cause to be delivered to Lessor, Lessor's Mortgagee and the
Indenture Trustee a certificate in the form attached hereto as
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Schedule F certifying, to Lessee's Actual Knowledge, there exists no default or
Event of Default under this Lease, or if any such default or Event of Default
exists, specifying the nature thereof, the period of existence thereof and what
action Lessee proposes to take with respect thereto. On or before October 1 of
each of 1995, 1997, 1999, 2001, 2002 and 2003, Lessee shall cause to be
delivered to Lessor, Lessor's Mortgagee and the Indenture Trustee a certificate
of the Fair Market Value of Lessor's Estate in each Unit then subject to this
Lease (which certification as to Fair Market Value shall be binding upon Lessee
and may be relied upon by Lessor for purposes of determining the Fair Market
Value of Lessor's Estate in any Unit pursuant to any provision hereof);
provided, however, that Lessee's failure to deliver the certification described
in this sentence shall not constitute an Event of Default under this Lease, and
in the event of such failure, the most recent certification by Lessee as to the
Fair Market Value of Lessor's Estate in each Unit shall constitute Lessee's
certification hereunder, and if no prior certification of Fair Market Value has
been delivered hereunder, then Lessee will be deemed to have certified that the
Fair Market Value of Lessor's Estate in each Unit is equal to the Termination
Value of such Unit. In addition, Lessee agrees upon prior written request to
meet with Lessor, Lessor's Mortgagee and the Indenture Trustee at Lessee's
national headquarters during normal business hours at mutually convenient times,
from time to time, to discuss this Lease and such information about Lessee's
business and financial condition as is generally made available to banks and
other lenders or to shareholders (exclusive of proprietary information).
(c) Notices Regarding Lessor's Bankruptcy. Promptly after
Lessee's receipt of any notice of any action, application or effort to reject
this Lease by the Lessor or any trustee arising from or in connection with any
case, proceeding or other action commenced or pending by or against the Lessor
under the Bankruptcy Code, Lessee shall give notice to the Lessor's Mortgagee
and the Indenture Trustee. In connection with any such case, proceeding or
other action, Lessee hereby (i) assigns to Lessor's Mortgagee any and all of
Lessee's rights as lessee under Section 365(h) of the Bankruptcy Code or any
successor statute, (ii) covenants that it shall not elect to treat this Lease as
terminated pursuant to Section 365(h) of the Bankruptcy Code or any such
successor statue without the prior written consent of Lessor's Mortgagee, (iii)
agrees that any such election by Lessee without such consent shall be null and
void, and (iv) agrees that any right of offset that may be available under said
Section 365 shall not be utilized.
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(d) Notices of Default. Promptly (and in any event, within
ten (10) Business Days) after Lessee has Actual Knowledge of any condition or
event which constitutes an Event of Default or which would, upon the giving of
notice, passage of time, or both, constitute an Event of Default, Lessee shall
give written notice to Lessor, Lessor's Mortgagee and the Indenture Trustee
specifying the nature and the period of existence of any such condition or event
and the actions Lessee has taken, is taking or proposes to take with respect
thereto.
15. Economic Infeasibility.
(a) Substitution. If either (i) Lessee, in its reasonable
business discretion exercised in good faith, determines that any Unit is
inadequate or unprofitable for the purposes for which it is then being used
pursuant to this Lease, or (ii) after any Destruction, Lessee in good faith
determines that any such Destruction has rendered the Unit subject to such
Destruction permanently unsuitable for continued use in the business conducted
at such Unit immediately prior to the Destruction, then the Lessee, at its
option, during the term of this Lease or any extensions thereof, may give
written notice (hereinafter, "Notice") to the Lessor of its intention to
substitute (hereinafter, "Substitution") a substitute property or, if necessary
to meet the conditions set forth below, substitute properties (hereinafter,
collectively, "Substitute Unit") for such Unit (hereinafter, "Released Unit").
(b) Election Notice. The Notice shall (i) contain a
description of the Substitute Unit; (ii) contain a statement that to the best of
Lessee's Actual Knowledge, the Substitute Unit and Lessor's Estate in the
Substitute Unit have a Fair Market Value not less than the then current Fair
Market Value of the Released Unit and Lessor's Estate in the Released Unit,
respectively; (iii) be accompanied by an MAI appraisal confirming such values;
(iv) contain a certification by Lessee to the effect that the marketability of
title to the Substitute Unit, the status of entitlements to the Substitute Unit,
and the environmental status of the Substitute Unit are at least as favorable to
Lessor as those of the Released Unit, together with such relevant supporting
data as Lessor and/or Lessor's Mortgagee or the Indenture Trustee reasonably may
request (including, without limitation, a preliminary title report, a
certificate of occupancy (or equivalent) and, to the extent in Lessee's
possession, an environmental report, an engineer's report, soils report and as-
built survey), and such other certifications and information as may be necessary
to demonstrate that the Substitute Unit (including Lessor's
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Estate in the Substitute Unit) complies with all applicable Legal Requirements
and Insurance Requirements and the warranties and representations set forth in
Article 9, paragraph (a) and Article 41 below; (v) include notice to Lessor of
Lessee's intention to effect the Substitution on the first day of the first
month (hereinafter, "Substitution Date") occurring at least sixty (60) days
following receipt of the items described in the foregoing clauses (i) through
(v).
(c) Conditions to Substitution. If, on the Substitution Date,
no Event of Default shall have occurred and be continuing and all conditions and
requirements imposed by Lessor pursuant to this Article 15 and Article 28 in
connection with the Substitution have been satisfied, including, but not limited
to: (i) the approval of Lessor, Lessor's Mortgagee and their respective legal
counsel of all documents required to effectuate the Substitution; (ii) Lessee's
payment in full of all installments of Basic Rent, Special Rent, Additional Rent
and all other charges due and unpaid hereunder, including all costs incurred in
connection with the Substitution; (iii) Lessee's compliance with all other
obligations and liabilities, actual or contingent, under this Lease which have
arisen on or prior to the Substitution Date, and Lessee not then being in
default hereunder; (iv) delivery to Lessor and Lessor's Mortgagee, respectively,
of commitments from a title insurance company acceptable to each for ALTA (or,
in the event such Substitute Unit is located in the State of Texas, Texas
standard) "owner" and "mortgagee" title insurance policies insuring Lessor's
Estate and Lessee's reversionary interest in the Substitute Unit, and Lessor's
Mortgagee's first lien on all such interests in the Substitute Unit subject only
to (A) any rights reserved to or vested in any municipality or public authority
to condemn, appropriate, recapture or designate a purchaser of such Substitute
Unit, (B) any liens thereon for taxes, assessments and other governmental
charges, provided that such taxes, assessments or other governmental charges are
not delinquent at the time of Substitution, (C) easements, rights of way,
servitudes, zoning laws, use regulations, reservations, rights, restrictions,
defects and irregularities in title to the Substitute Unit (collectively,
"Defects"), provided that such Defects shall be no less favorable to Lessor than
the Defects associated with title to the Released Unit, (D) the liens of
Lessor's Mortgage and Lessee's Mortgage (provided that said liens shall be
subordinate to this Lease, subject to the provisions set forth in the notice or
memorandum of lease executed contemporaneously herewith) and any other
assignment of this Lease as further security for the note or notes secured by
Lessor's Mortgage and any collateral
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assignment thereof to the Indenture Trustee, (E) discrepancies, conflicts in
boundary lines, encroachments, and any state of facts which an inspection of the
Leased Property would disclose (provided that such matters are no less favorable
to Lessor than similar matters affecting the Released Unit), together with a
certificate from Lessee that all exceptions shown on such title insurance
policies are permitted pursuant to clauses (A) through (E) above and that such
exceptions shall have no adverse effect on the value of such Substitute Unit,
construction of improvements thereon, or its intended use or operations; (v)
Lessee's conveyance to Lessor (pursuant to documents and instruments consistent
with those utilized for Lessor's acquisition of the other Units) of an estate
for years with respect to the Substitute Unit (which estate for years shall
terminate at the same time as Lessor's Estate in the Released Unit is scheduled
to terminate) and the lease back of such estate to Lessee in accordance with and
subject to the provisions and conditions, and for the remaining Term, of this
Lease (as amended to reflect the Substitution); (vi) an amendment to this Lease,
which shall be in the form of Schedule G attached hereto, which effects the
Substitution of the Substitute Unit for the Released Unit (including the
Lessor's Estate in each such Property) and which ratifies and confirms all other
terms and provisions of this Lease, including, without limitation, Article 1,
paragraphs (b) and (c) and the obligation to continue to pay the Basic Rent,
Special Rent the Additional Rent and all other amounts payable hereunder in the
amounts, at the times and upon the other terms and conditions set forth in this
Lease without adjustment; (vii) the execution, delivery and recordation of
mortgages, deeds of trust, assignments of rents and leases, security agreements
and fixture filings for such Substitute Unit, as approved by Lessor's Mortgagee
(including the mortgaging of Lessor's Estate therein and Lessee's reversionary
interest in favor of Lessor's Mortgagee without adverse effect on any
substantive or procedural remedy available under existing mortgages on the
Leased Property), together with an assignment of rents relating thereto approved
by Lessor's Mortgagee; (viii) the delivery of an opinion of counsel for Lessee
(addressed to Lessor and Lessor's Mortgagee) and an opinion of counsel for
Lessor which opinions shall be reasonably satisfactory to Lessor's Mortgagee
stating that such amendment, mortgage and other documents have been duly
authorized, executed and delivered and constitute legal, valid and binding
obligations of Lessee and Lessor, enforceable in accordance with their terms;
(ix) to the extent required by Lessor's Mortgagee or the Indenture Trustee, a
modification of Lessor's Mortgage and other financing documents relating to the
other Units to reflect such Substitution; (x) certificates of insurance for
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such Substitute Unit as required by this Lease or Lessee's Mortgage; and (xi)
satisfaction of any other applicable condition to such Substitution set forth in
Section 11.18 of the Indenture or reasonably requested by Lessor's Mortgagee;
then Lessor's Estate in such Released Unit shall be conveyed to Lessee in
accordance with the provisions of Article 28.
(d) Effect of Substitution. If completion of any Substitution
shall be delayed beyond the Substitution Date, then Basic Rent, Special Rent and
Additional Rent and all other amounts payable hereunder shall continue to be due
and payable until completion of the Substitution. Upon the completion of the
Substitution, but not prior thereto, this Lease and all obligations hereunder
(including the obligations to pay Basic Rent, Special Rent and Additional Rent)
shall terminate with respect to such Released Unit and the Lessor's Estate
therein (except with respect to obligations and liabilities of Lessee, actual or
contingent, arising under this Lease or other documents which expressly survive
expiration of the Term), at which time the provisions and conditions of this
Lease, including the obligation to pay to Lessor the Basic Rent, Special Rent,
Additional Rent and all other amounts payable under this Lease, shall apply with
respect to the Substitute Unit, as if each and every reference herein applicable
to the Released Unit (including, without limitation, the Individual Unit Basic
Rent, Individual Unit Special Rent, Individual Year Nine Special Rent,
Termination Value and Unit Percentage applicable thereto) shall be applicable
instead to the Substitute Unit.
(e) Costs. Lessee shall pay all costs relating to a
Substitution, including all out-of-pocket costs and expenses (including
reasonable attorneys' fees and disbursements) of Lessor, Lessor's Mortgagee and
the Indenture Trustee relating to any such Substitution.
16. Quiet Enjoyment.
(a) Covenant by Lessor. So long as no Event of Default under
this Lease shall have occurred and be continuing, Lessor covenants that Lessee
shall and may at all times peaceably and quietly have, hold and enjoy the Leased
Property during the Term of this Lease subject only to the provisions of this
Lease, the Permitted Encumbrances and any Claims not lawfully asserted through
Lessor. Notwithstanding the preceding sentence, (i) Lessor may exercise its
rights and remedies under Article 20 upon any Event of Default, and (ii) Lessor,
Lessor's Mortgagee or their agents may enter upon and inspect the Leased
Property, during normal business hours after reasonable written
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notice. Any such inspection may include, upon fifteen (15) days prior written
notice and at Lessor's sole cost and expense (except if such inspection reveals
a material non-compliance with Lessee's obligations hereunder, in which event,
Lessee shall pay such costs and expenses), the performance of an environmental
study of the Leased Property being inspected and in a manner which shall not
interfere with the conduct of Lessee's business. Subject to applicable Legal
Requirements (to the extent such Legal Requirements may not validly be waived,
it being the intention of Lessee to waive, to the fullest extent possible, any
Legal Requirements which might require or grant any right to Lessee to require
the termination of this Lease, the abatement, deduction, deferment or reduction
of rent hereunder, or which otherwise might release or discharge Lessee from any
obligations or liabilities hereunder), any failure by Lessor to comply with the
foregoing covenant shall not give Lessee any right to cancel or terminate the
Lease or to abate, reduce or make deduction from or offset against any Basic
Rent, Special Rent, or Additional Rent or other sum payable under this Lease, or
to fail to perform or observe any other covenant, agreement or obligation
hereunder. Lessee shall have the right to obtain injunctive or other relief
against Lessor for breach of the aforesaid covenant of peaceful and quiet
possession and enjoyment of the Leased Property, including recovery of
attorneys' fees, provided that such right (including attorneys' fees) shall not
in any way modify Article 5 or diminish the obligations of Lessee under Article
5.
(b) Breach by Lessor. If Lessor should default in the
performance of any of its obligations, covenants, agreements, conditions,
representations or warranties under this Lease, Lessor shall have the time
reasonably required, but in no event less then thirty (30) days, to cure such
default after receipt of written notice from Lessee specifying such default and
specifying what action Lessee believes is necessary to cure the default. If
Lessee prevails in any litigation brought against Lessor because of Lessor's
failure to cure a default within the time required by the preceding sentence,
then Lessee shall be entitled to an award against Lessor for the damages
proximately caused to Lessee by such default, but no such default (even if
uncured after any applicable cure period) shall give Lessee any right to cancel
or terminate the Lease or to abate, reduce or make reduction from or offset
against any Basic Rent, Special Rent, Additional Rent or any other sum payable
under the Lease, or any right to fail to perform or observe any other covenant,
agreement or obligation hereunder.
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17. Survival. Upon termination of this Lease as herein provided (whether
as to any Unit or the entire Leased Property), the obligations and liabilities
of Lessor and Lessee, actual or contingent, under this Lease which arose at or
prior to such termination, or which are expressly stated herein as surviving
termination, shall survive such termination.
18. Subletting; Assignment.
(a) Conditions. Lessee may assign this Lease or sublet the
Leased Property, any Unit or any portion thereof, provided that (i) no Event of
Default under this Lease shall have occurred and be continuing on the date of
such sublease or assignment, and (ii) each such sublease or assignment shall
expressly be made subject to the provisions hereof.
(b) No Effect on Obligations. No such sublease or assignment
shall affect or reduce any obligations of Lessee or rights of Lessor hereunder,
and all obligations of Lessee hereunder shall continue in full effect as the
obligations of a principal and not of a guarantor or surety, as though no
subletting or assignment had been made.
(c) No Encumbrance by Lessee. Lessee shall not mortgage,
pledge, encumber or subject to a security interest or any financing (other than
Lessee's Mortgage) this Lease or the interest of Lessee in and to any sublease
of the Leased Property or any portion thereof or the rental payable thereunder.
Any such mortgage or pledge, and any sublease or assignment not permitted by
this Article 18, shall be null and void ab initio and of no force or effect.
(d) No Prepayment of Rent Under Subleases. Each sublease or
assignment shall prohibit the payment or collection of fixed rent from the
sublessee more than one month in advance. No term of any sublease shall extend
beyond the Basic Term plus any Renewal Terms already duly exercised by Lessee.
19. Advances by Lessor. If Lessee shall fail to make or perform any
payment or act required by this Lease, then, upon ten (10) Business Days' notice
to Lessee (or upon shorter notice or no notice, to the extent necessary to meet
an emergency or a governmental limitation or to prevent an event of default
under any mortgage affecting the Lessor's Estate or the Leased Property),
Lessor, at its option, may make such payment or perform such act for the account
of Lessee, and Lessor shall not thereby be deemed to have released Lessee from
any obligation hereunder. Amounts so paid by Lessor and all incidental costs
and expenses
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(including reasonable attorneys' fees and expenses) incurred in connection with
such payment or performance shall constitute Additional Rent and shall be paid
by Lessee to Lessor on demand and shall bear interest at the Overdue Rate from
the date of demand until paid.
20. Conditional Limitations -- Events of Default and Remedies.
(a) Events of Default. Any of the following occurrences or
acts shall constitute an "Event of Default" under this Lease:
(i) If Lessee shall: (A) default in making payment of any
installment of Basic Rent or Special Rent when due; or (B) default in making
payment of the Purchase Price or Unit Redemption Price for any Unit on the date
due; or (C) fail to keep in full force and effect the casualty or general
liability insurance coverage required to be maintained by Lessee hereunder; or
(D) fail to pay any monetary obligation (including, without limitation, any
indemnification obligation) of Lessee under the Lease (other than Basic Rent or
Special Rent) within ten (10) Business Days after written notice to Lessee
thereof; or
(ii) If Lessee shall default in any material respect in
the performance of any other covenant, agreement or obligation on the part of
Lessee to be performed under this Lease and such default shall continue for a
period of thirty (30) days after written notice thereof; provided, however, that
in the case of a default which with reasonable diligence can be remedied by
Lessee, but not within a period of thirty (30) days, if Lessee shall commence
within such period of thirty (30) days to remedy the default and thereafter
shall prosecute the remedying of such default with all reasonable diligence, the
period of time after obtaining such written notice of default within which to
remedy the default shall be extended for such period as may be reasonable to
remedy the same with all reasonable diligence (and provided further that for
purposes of this clause (ii), Lessee's failure to perform any covenant,
agreement or obligation shall be considered, without limitation, to be
"material" if such failure could have an adverse effect on Lessee's ability to
operate, maintain, restore, repair, alter, insure or sublease any Unit as
required or permitted hereunder, or could adversely affect the Fair Rental Value
or Fair Market Value of such Unit, or could adversely affect Lessee's ability to
perform any of its monetary or indemnification obligations hereunder); or
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(iii) If Lessee (A) shall institute (by petition,
application, written admission, written consent or otherwise in writing) any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debts,
dissolution, liquidation, or similar proceedings, file a petition of bankruptcy
or for reorganization or for an arrangement pursuant to the Bankruptcy Code, or
(B) shall be adjudicated a bankrupt or become insolvent, or (C) shall make an
assignment for the benefit of its creditors, or (D) shall admit in writing its
inability to pay its debts generally as they become due, or (E) shall be
dissolved, or (F) shall suspend payment of its obligations, or (G) shall take
any corporate action in furtherance of any of the foregoing; or
(iv) If any bankruptcy, insolvency, reorganization,
arrangements, readjustment or debt, dissolution, liquidation or similar
proceedings shall be instituted (by petition, application or otherwise) against
Lessee, and (A) Lessee shall consent to the filing thereof, or (B) such
proceedings shall not be discharged or denied within sixty (60) days after the
institution thereof; or
(v) If a receiver, trustee or liquidator (or other
similar official) shall be appointed for or take possession or charge of Lessee
or of Lessee's estate or interest in the Leased Property or of all or a
substantial part of Lessee's other property, and shall not be discharged within
sixty (60) days thereafter, or if Lessee shall apply for, consent to or
acquiesce in such appointment; or
(vi) If a final judgment for the payment of money in
excess of $1,000,000 shall be rendered against Lessee and Lessee shall not
comply with such judgment or discharge the same or cause it to be discharged
within thirty (30) days from the entry thereof (or until the expiration of the
period in which an appeal may be filed if such period should be longer), or if
Lessee shall not appeal therefrom and secure a stay of execution pending such
appeal; or
(vii) If Lessee has defaulted or received notice of any
default (A) on any indebtedness for borrowed money or under any single "capital
lease" (as defined under generally accepted accounting principles) which failure
or default has resulted in $25,000,000 or more under any such indebtedness or
"capital lease" being past due or becoming due before its stated maturity, (B)
on any indebtedness for borrowed money or under any "capital leases" (as defined
under generally accepted accounting principals) which default has resulted in
$50,000,000 or more in the aggregate
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under all such indebtedness or "capital leases" being past due or becoming due
before their stated maturity, or (C) under the CRC-II Master Lease.
(viii) If Lessee's interest in the Leased Property or estate
or interest of Lessor in the Leased Property or any part thereof shall be levied
upon or attached in any proceeding and such process shall not be vacated or
discharged within sixty (60) days after such levy or attachment.
(ix) If any representation, warranty or certification made
by Lessee in this Lease, any deed by which Lessee conveyed Lessor's Estate to
Lessor, Lessee's Mortgage or any other document relating to the transactions
contemplated hereby and thereby or in any statement, certificate, report,
schedule, notice or other writing furnished by Lessee in connection herewith or
therewith to Lessor, Lessor's Mortgagee or the Indenture Trustee or their
successors or assigns shall be inaccurate or incomplete as of the date made and,
if such representation, warranty or certification is capable of being made so
accurate and complete, Lessee fails to make such representation, warranty or
certification accurate and complete within thirty (30) days after the earlier of
Actual Knowledge of such inaccuracy or incompleteness by Lessee or written
notice from Lessor, Lessor's Mortgagee or the Indenture Trustee; provided,
however, that in case any representation or warranty made by Lessee in Article
41, paragraph (g) or (i) shall not be accurate and complete, the same shall
constitute an Event of Default hereunder only if such inaccuracy or
incompleteness is "material" and only if Lessee fails to make such
representation or warranty accurate and complete within such thirty (30) day
period, or if such representation or warranty can be made accurate or complete
by Lessee, but not within a period of thirty (30) days, then no Event of Default
shall be deemed to have occurred hereunder if Lessee shall have commenced within
such period of thirty (30) days to make such representation or warranty accurate
and complete and thereafter shall prosecute making such representation or
warranty accurate and complete with all reasonable diligence. Any inaccurate or
incomplete representation or warranty under Article 41, paragraph (g) or (i)
shall be "material" if such inaccuracy or incompleteness relates to a matter
which could have an adverse effect on Lessee's ability to operate, maintain,
restore, repair, alter, insure or sublease any Unit as required or permitted
hereunder, or relates to a matter which
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could adversely affect the Fair Rental Value or Fair Market Value of such Unit,
or relates to a matter which could adversely affect Lessee's ability to perform
any of its monetary or indemnification obligations hereunder); or
(x) If an Event of Default shall occur under Lessee's
Mortgage.
(b) Remedies Upon Breach. This Lease and the Term and estate
hereby granted are subject to the limitation that whenever an Event of Default
shall have occurred, Lessor, at Lessor's option, may exercise the following
remedies:
(i) Termination. Lessor may terminate this Lease at any
time thereafter by giving notice to Lessee of Lessor's election to terminate
this Lease specifying the date of such termination, in which event the Term of
this Lease shall expire by limitation at midnight on the date specified in such
notice as fully and completely as if said date were the date originally fixed
for the expiration of the Term, and Lessee shall thereupon quit and peacefully
surrender the Leased Property to Lessor, without any payment therefor by Lessor,
but Lessee shall remain liable under this Lease. To the fullest extent
permitted by applicable Legal Requirements, upon any such termination of this
Lease, Lessor, without formal demand or notice of any kind, may re-enter the
Leased Property by summary dispossess proceedings or any other action or
proceeding authorized by law and remove Lessee therefrom without being liable
for any damages therefor. In case of any such termination as provided in this
paragraph (b)(i), the Basic Rent, Special Rent and Additional Rent shall become
due thereupon and shall be paid up to the time of such termination, together
with such expenses, including attorneys' fees, as Lessor shall incur in
connection with such termination and/or dispossession, and, in addition, Lessor,
to the extent not prohibited by applicable Legal Requirements, may elect then or
at any time thereafter, at Lessor's option, either of the following, as well as
any additional rights or remedies in connection with the termination of this
Lease as to any Unit available under the laws of the state where such Unit is
located (including, without limitation, those set forth in Schedule J attached
hereto):
(A) Lessor may elect to relet the Leased Property or
any Unit or any part or parts thereof, and receive and collect the rents
therefor, applying the same first to the payment of such expenses as Lessor may
have incurred in recovering possession of the Leased Property and for putting
the same in good order or condition and preparing or altering the same for re-
rental, and expenses, commissions and charges paid by Lessor in and about the
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reletting thereof, and then to the fulfillment of the covenants and agreements
of Lessee under this Lease. Any such reletting may be for the remainder of the
term of this Lease with respect to any one or more Units or for a longer or
shorter period. In any such case and whether or not the Leased Property in
question, or any part thereof, is relet, Lessee shall pay to Lessor, for all
periods after the time of such termination, if required by Lessor, until the end
of the originally scheduled term of this Lease as in effect at the time of such
termination (and notwithstanding such termination), the amount of all Basic
Rent, Special Rent and Additional Rent required to be paid by Lessee hereunder,
less the net amount received by Lessor from reletting, if any, and the same
shall be due and payable by Lessee to Lessor on each Installment Payment Date,
that is to say, upon each Installment Payment Date, Lessee shall pay to Lessor
the net amount of the deficiency then existing after crediting the amount
received by Lessor from reletting, if any, to the amount of Basic Rent, Special
Rent and Additional Rent required to be paid by Lessee; or
(B) As an alternative to clause (A) above, Lessor
may elect to recover against Lessee as damages for loss of the bargain and not
as a penalty an aggregate sum which, at the time of such termination of this
Lease, represents the excess, if any, of (i) the then Discounted Present Value
of all Basic Rent, Special Rent and Additional Rent payable by Lessee that would
have accrued for the balance of the originally scheduled Term of this Lease
after such termination, over (ii) the then Discounted Present Value of the
amount of the aggregate Fair Rental Value of the Leased Property which Lessee
proves Lessor reasonably could have obtained for the balance of such Term. The
"Discounted Present Value" of the amounts due under paragraph (B) above upon
termination of this Lease shall mean the present value of such amounts as
calculated by Lessor using a discount rate equal to ten percent (10%).
In addition, Lessor may elect at any time after such
termination and regardless of any recovery by Lessor under clause (A) or (B)
above, to designate, by at least thirty (30) days prior written notice ("Early
Offer Notice") to Lessee, a date (hereinafter, "Early Offer Date") for the
delivery by Lessee of the Offer pursuant to Article 30 with respect to all of
the Leased Property which was subject to this Lease prior to such termination,
in which case Lessee must deliver an Offer pursuant to Article 30 by the Early
Offer Date for a price not less than the Early Offer Minimum Purchase Price (as
defined below) and shall be deemed to have delivered on such Early Offer Date an
Offer to purchase Lessor's Estate in the Leased Property for the Early Offer
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Minimum Purchase Price if Lessee has not actually done so. Such Offer shall be
subject to rejection by Lessor in accordance with Rejection Notice validly
given by Lessor under Article 30 and shall be deemed accepted unless validly so
rejected. If Lessor accepts or is deemed to have accepted such Offer, the
closing of such purchase shall proceed in accordance with Article 28, except as
otherwise provided in this paragraph to the contrary. Notwithstanding anything
to the contrary contained in Articles 28 and 30, the date for the consummation
of such purchase and the payment of the price by Lessee to Lessor shall be 120
days after the Early Offer Date, and the minimum Purchase Price payable by
Lessee to Lessor pursuant to such Offer shall be no less than the sum of accrued
but unpaid Basic Rent and Additional Rent due under this Lease up through the
closing of such purchase, plus the Unit Redemption Prices for all Units and
Potential Additional Units (other than those as to which Lessee has previously
made and consummated an Early Termination Election or has made or exercised and
consummated the Year Nine Offer or the Year Nine Option) (collectively, "Early
Offer Minimum Purchase Price"). If the Offer is accepted or deemed accepted and
Lessee duly purchases the Leased Property in compliance with such Offer and the
provisions hereof, Lessor agrees to refund to Lessee the amounts, if any,
previously collected by Lessor pursuant to clause (A) or clause (B) above and
attributable to any Basic Rent or Special Rent payable for any period of time
after the date of the consummation of such sale shall be credited against and
shall be deemed to have been paid by Lessee as part of the Early Offer Minimum
Purchase Price. If the Offer is accepted or deemed accepted and if Lessee fails
to purchase the Leased Property by the date set for the consummation of the
purchase, Lessor shall have all of the remedies of a seller against a defaulting
buyer of real property, including, without limitation, the right to specific
performance and the right to recover, in addition to all other damages
proximately caused by such default, the amount by which the price payable by
Lessee pursuant to such Offer exceeds the sum of (x) the then balances of the
Sinking Fund Account and the Additional Unit Acquisition Account plus (y) the
Fair Market Value of Lessor's Estate in the Leased Property, plus (z) interest
on the foregoing at the Overdue Rate from the due date until paid in full (which
amount hereunder shall be referred to as "Seller's Damages"). If Lessee pays
the Seller's Damages to Lessor as provided herein, Lessor agrees to refund to
Lessee the amounts, if any, previously collected by Lessor pursuant to clause
(A) or clause (B) above and attributable to any Basic Rent or Special Rent
payable for any period of time after the date of payment to Lessor of such
Seller's Damages, and upon such payment, Lessor shall have no further right to
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recover pursuant to clause (A) or clause (B) above any sums attributable to any
Basic Rent payable for any period of time after the date of payment to Lessor of
the Seller's Damages. If the Offer given or deemed given under this paragraph
(b)(i) is validly rejected by Lessor, all references in Article 30, paragraph
(b)(iii) to the "Termination Value" of such Unit[s] or Potential Additional
Unit[s]" shall mean and refer to the Unit Redemption Prices thereof instead.
Notwithstanding anything to the contrary contained in this
paragraph (b)(i) or in Schedule J attached hereto, in no event shall Lessor be
entitled to recover from Lessee damages on account of any Event of Default in an
aggregate amount in excess of the amount at the time of recovery of all such
amounts by Lessor (the date on which all such amounts are recovered by Lessor
being referred to herein as the "Final Payment Date") by which: (x) the sum of
(aa) all accrued but unpaid Basic Rent as of the Final Payment Date, (bb) the
Unit Redemption Price for all Units and Potential Additional Units (other than
those as to which Lessee has previously made and consummated an Early
Termination Election or has made or exercised and consummated the Year Nine
Offer or the Year Nine Option), and (cc) interest on the foregoing at the
Overdue Rate from the date due until paid in full, exceeds (y) the sum of the
then balance of the Sinking Fund Account and the Additional Unit Acquisition
Account plus the Fair Market Value of Lessor's Estate in the Leased Property on
the Final Payment Date. Such limitation shall not affect any of Lessor's rights
to recover Additional Rent or the costs, expenses and damages described in
clauses (iii) and (iv) and paragraph (f) below.
(ii) Continue Lease in Effect. Lessor shall have the
right to continue this Lease in effect and to enforce, by suit or otherwise, all
covenants and conditions hereof to be performed or complied with by Lessee and
exercise all of Lessor's rights and remedies under this Lease, including the
right to recover Basic Rent, Special Rent and Additional Rent from Lessee as
they become due under this Lease, and to enforce Lessee's obligation to make an
Offer for, and if such Offer is not duly rejected, to purchase, the Leased
Property pursuant to Article 30 below, even though Lessee has breached this
Lease and abandoned the Leased Property. If such an Offer is accepted or deemed
accepted and Lessee fails to purchase the Leased Property by the date set for
the consummation of the purchase, Lessor shall have all of the remedies of a
seller against a defaulting buyer of real property, including, without
limitation, the right to specific performance and the right to recover, in
addition to all damages proximately caused by
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such default, the amount by which the price payable by Lessee pursuant to such
Offer exceeds the sum of the then balance of the Sinking Fund Account and the
Additional Unit Acquisition Account plus the Fair Market Value of Lessor's
Estate in the Leased Property plus interest thereon at the Overdue Rate from the
due date until paid in full. Acts of maintenance or preservation, or efforts by
Lessor or on Lessor's behalf to relet the Leased Property, or the appointment of
a receiver upon the initiative of Lessor to protect Lessor's interest under this
Lease or reasonable withholding of consent to an assignment or subletting by
Lessee shall not constitute a termination of Lessor's right to possession of the
Leased Property; provided that the foregoing enumeration shall not be construed
as in any way limiting the actions Lessor may take without termination Lessee's
right to possession.
(iii) Repairs by Lessor. If Lessor shall re-enter and
obtain possession of the Leased Property following an Event of Default in
accordance with paragraph (i), Lessor shall have the right, without notice, to
repair or alter the Leased Property in such manner as Lessor may deem necessary
or advisable so as to put the Leased Property in good order and to make the same
rentable, and Lessee agrees to pay to Lessor on demand all expenses incurred by
Lessor in obtaining possession, and in altering, repairing and putting the
Leased Property in good order and condition, and in re-letting the same,
including fees of attorneys and architects, and all other reasonable expenses or
commissions.
(iv) Attorneys' Fees and Other Damages. Regardless of
whether Lessor has exercised its rights under paragraph (i) or (ii) above,
Lessor shall have the right to recover from Lessee all costs incurred by Lessor
in enforcing this Lease (including, without limitation, attorneys' fees and
expenses) and all other amounts necessary to compensate Lessor for all the costs
and expenses proximately incurred and all damages proximately caused by
Lessee's failure to perform its obligations under this Lease or which in the
ordinary course of events would be likely to result therefrom (other than those
in the nature of rent, Purchase Price or other sums due hereunder), as well as
all costs and expenses for which Lessor may be responsible under Lessor's
Mortgage or the Indenture as a result of such default.
(v) Damages in Bankruptcy. Nothing herein contained
shall limit or prejudice the right of Lessor, in any bankruptcy or
reorganization or insolvency proceeding, to seek as damages by reason of such
Event of Default an
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amount equal to the maximum allowed by any bankruptcy or reorganization or
insolvency proceedings, or to seek as damages by reason of such termination, an
amount equal to the maximum allowed by any statute or rule whether such amount
shall be greater or less than the amounts referred to above.
(c) Cumulative Remedies. The specified remedies to which
Lessor may resort under this Lease are, except as expressly provided in this
Article 20, cumulative and are not intended to be exclusive of any other
remedies provided herein or to which Lessor may be lawfully entitled in case of
any breach or threatened breach by Lessee of any provision of this Lease. Each
remedy, right or power may be exercised as often and in such order as Lessor may
deem expedient. The failure of Lessor to insist in any one or more cases upon
the strict performance of any of the covenants of this Lease or to exercise any
right or option herein contained shall not be construed as a waiver or a
relinquishment for the past or future breach of such covenant or option.
Receipt by Lessor of any Basic Rent, Special Rent or Additional Rent or any
other sum payable hereunder with knowledge of the breach of any provision
contained in this Lease shall not constitute a waiver of such breach, and no
waiver by Lessor of any provision of this Lease shall be deemed to have been
made unless made under signature of an authorized representative of Lessor.
Lessor shall be entitled, to the extent permitted by applicable law, to
injunctive relief in case of any violation, or attempted or threatened
violation, of any covenant, agreement, condition or provision of this Lease, or
to a decree compelling substantial performance of any covenant, agreement,
condition, or provision of this Lease, or to any other remedy allowed to Lessor
at law or in equity.
(d) No Waiver. No receipt of moneys by Lessor from Lessee
after a termination of this Lease by Lessor shall reinstate, continue or extend
the Term of this Lease or affect any notice theretofore given to Lessee, or
operate as a waiver of the right of Lessor to enforce the payment of Basic Rent,
Special Rent, Additional Rent and any amounts to be paid by Lessee to Lessor for
the purchase of the Leased Property then due or thereafter falling due, it being
agreed that after the commencement of suit for possession of the Leased
Property, or after final order or judgment for the possession of the Leased
Property, Lessor may demand, receive and collect any moneys due or thereafter
falling due without in any manner affecting such suit, order or judgment, all
such moneys collected being deemed payments on account of the use and occupation
of the Leased Property or,
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at the election of Lessor, on account of Lessee's liability hereunder. To the
fullest extent permitted by applicable Legal Requirements, Lessee hereby waives
(i) any and all rights of redemption provided by any law, statute or ordinance
now in effect or which may hereafter be enacted and (ii) the benefits of any
present or future constitution, statute or rule of law which exempts property
from liability for debt or for distress for rent.
(e) Right of Re-Entry. The word "re-enter", as used in this
Lease, shall not be restricted to its technical legal meaning, but is used in
the broadest sense. No such taking of possession of the Leased Property by
Lessor shall constitute an election to terminate the Term of this Lease unless
notice of such intention be given to Lessee or unless such termination be
decreed by a court.
(f) Enforcement Costs. If any action shall be brought for the
enforcement of any provision of this Lease, the non-prevailing party in such
action or suit shall pay, in addition to any other sums such party may be
required to pay, attorneys' fees and all reasonable costs incurred by the
prevailing party to such action or suit. Any such attorneys' fees and
disbursements incurred by either party in enforcing a judgment in its favor
under this Lease shall be recoverable separately from such judgment, and the
obligation for such attorneys' fees and disbursements is intended to be
severable from other provisions of this Lease and not to be merged into any such
judgment.
21. Notices. All communications herein provided for or made pursuant
hereto shall be in writing and shall sent by (i) legible fax with the original
following in due course (failure to send such original shall not affect the
validity of such fax notice), and the giving of such communication shall be
complete when such fax is received, and (ii) either (A) registered or certified
mail, return receipt requested, in which event the giving of such communication
shall be deemed complete on the fifth Business Day after the same is deposited
in a United States Post Office with postage charges prepaid, or (B) reputable
overnight delivery service, in which event the giving of such communication
shall be deemed complete on the immediately succeeding Business Day after the
same is deposited with such delivery service:
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(a) if to Lessor: CRC-I Limited Partnership
c/o Charles Duddles
9330 Balboa Avenue
San Diego, CA 92123-1516
Telecopier: (619) 694-1526
with a copy to: CRC-I Limited Partnership
c/o Christopher Wilson
1-1 Concord Green
Concord, MA 01742
and to: State Street Bank & Trust
Company, as Trustee
Joseph Palmer Building
Corporate Trust Department -
Fifth Floor
One Heritage Drive
North Quincy, Massachusetts 02171
Attention: Andrew Sinsaky
Telecopier: (617) 985-3034
(b) if to Lessee: Foodmaker, Inc.
9330 Balboa Avenue
San Diego, CA 92123-1516
Attention: Real Estate Legal
Department
Telecopier: (619) 694-1526
with a copy to: Seltzer Caplan Wilkins &
McMahon
750 B Street, Suite 2100
San Diego, California 92101
Attn: Kevin A. Werner, Esq.
Telecopier: (619) 685-3100
Either party may change its address for notice by written notice given to the
other in the manner hereinabove provided. Any such communication shall be
deemed to have been duly given or served on the date personally delivered or
delivered by courier service or, if forwarded by mail as provided above, on the
fifth (5th) business day after mailing.
22. Estoppel Certificates. Each party hereto agrees that at any time and
from time to time during the Term of this Lease, it will promptly, but in no
event later than ten (10) Business Days after request by the other party hereto,
execute, acknowledge and deliver to such other party a certificate stating, to
the best of such party's Actual Knowledge, (a) that this Lease is unmodified and
in force and effect (or if there have been modifications, that this Lease is in
force and effect as modified, and setting forth any modifications); (b) the date
to which Basic Rent,
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Special Rent, Additional Rent and other sums payable hereunder have been paid;
(c) whether or not there is an existing default by Lessee in the payment of
Basic Rent, Special Rent, Additional Rent, or any other sum required to be paid
hereunder, and whether or not there is any other existing Event of Default by
Lessee with respect to which a notice of default has been served or of which the
signer has Actual Knowledge, and, if there is any such Event of Default,
specifying the nature and extent thereof; (d) whether or not there are any
defenses or counterclaims against enforcement of the obligations to be performed
hereunder existing in favor of the party executing such certificate; and (e)
stating that Lessee is in possession of the Leased Property or setting forth the
parties in possession and identifying the instruments pursuant to which they
took possession. It is understood and agreed that any such certificate
delivered pursuant to this Article 22 may be relied upon by any mortgagee or by
any
prospective purchaser of the Leased Property or any assignee of such mortgagee.
23. No Merger. Lessee agrees that there shall be no merger of this Lease
or of any sublease under this Lease or of any leasehold or subleasehold estate
hereby or thereby created with Lessor's Estate or the fee or any other estate or
ownership interest in the Leased Property or any part thereof by reason of the
fact that the same Person may acquire or own or hold, directly or indirectly,
(a) this Lease or any sublease or any leasehold or subleasehold estate created
hereby or thereby or any interest in this Lease or any such sublease or in any
such
leasehold or subleasehold estate, and (b) Lessor's Estate or the fee estate or
other estate or ownership interest in the Leased Property or any part thereof.
24. Surrender; Holding Over.
(a) Surrender. Upon the expiration or earlier
termination of the Term of this Lease, Lessee shall peaceably leave and
surrender the Leased Property to Lessor in the same condition in which the
Leased Property originally was received from Lessor on the first day of the
Basic Term as to any Unit, except as repaired, rebuilt, restored, altered or
added to as required by or permitted by any provision of this Lease (ordinary
wear and tear and, subject to Lessee's restoration obligations hereunder, if
applicable, the consequences of casualty described in Article 12, paragraphs
(a)(iii) and (b)(iii), hereof,
condemnation or taking excepted) and with respect to Hazardous Substances, in
the condition required under Article 9 of this Lease. Lessee shall remove from
the Leased Property within sixty (60) days after expiration or earlier
termination all property (including Lessee's Trade Fixtures) situated thereon
which is not the property of Lessor and shall repair any damage caused by such
removal. Property not so removed shall become the property of
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Lessor, and Lessor may cause such property to be removed from the Leased
Property and disposed of, and Lessee shall pay the cost of any such removal and
disposal and of repairing any damage caused by such removal.
(b) Agreement by Lessor's Mortgagee. Except for surrender upon the
expiration of the Term hereof or earlier termination of this Lease as to any
Released Unit or Terminated Unit, no surrender to Lessor of this Lease or of the
Leased Property shall be valid or effective unless agreed to and accepted in
writing by Lessor, Lessor's Mortgagee and the Indenture Trustee.
(c) Holding Over. If Lessee continues to hold the Leased Property or
any Unit after the termination of this Lease without Lessor's written consent,
whether such termination occurs by lapse of time or otherwise, such holding over
shall constitute and be construed as a tenancy from day to day only, at a daily
Basic Rent equal to $1.00; subject, however, to all of the provisions, covenants
and agreements on the part of Lessee hereunder; provided, however, that if
Lessee holds over after expiration of the Basic Term and the amount owed under
the CRC Note executed contemporaneously herewith has not been paid, the daily
Basic Rent shall equal 1/360th of the Overdue Rate multiplied by the full amount
of all sums which are due and unpaid under the CRC Note. No payments of money
by Lessee to Lessor after the termination of this Lease shall reinstate,
continue or extend the term of this Lease, and no extension of this Lease after
the termination hereof shall be valid unless and until the same shall be reduced
to writing and signed by both Lessor and Lessee and, if such post-termination
extension occurs after an Event of Default and termination of this Lease prior
to the Termination Date (as defined herein), approved by Lessor's Mortgagee and
the Indenture Trustee.
25. Separability. Each provision contained in this Lease shall be separate
and independent, and the breach of any such provision by Lessor shall not
discharge or relieve Lessee from its obligation to perform each obligation of
this Lease to be performed by Lessee. If any provision of this Lease or the
application thereof to any Person or circumstance shall to any extent be invalid
and unenforceable, the remainder of this Lease, or the application of such
provision to Persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby.
26. Signs; Showing. Provided Lessee has not elected to extend and renew
the Basic Term or any of the Renewal Terms with respect to any Unit(s), then at
any time after the date upon which Lessee delivers to Lessor written notice
pursuant to Article 30, paragraph (c) of its election to terminate this Lease
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or allow the Basic Term of this Lease to expire with respect to such Unit(s),
Lessor may (a) place signs in reasonable locations on the grounds in front of
such Unit(s) advertising that the same will be available for rent or purchase,
and (b) upon not less than twenty-four (24) hours written notice to Lessee, show
such Unit(s) to prospective lessees or purchasers during normal business hours
as Lessee may elect.
27. Intentionally Omitted.
28. Substitution, Purchase and Early Termination Procedures.
(a) Substitution. In the event of a Substitution pursuant to Article
15, the provisions and conditions of this Article 28, paragraph (a) shall apply.
(i) Conveyance of Substitute Units. On the closing date
determined or scheduled for the Substitution, Lessee, pursuant to Article 15,
shall (i) convey to Lessor an estate for years with respect to the Substitute
Unit (which estate for years shall terminate at the same time as Lessor's Estate
in the Released Unit is scheduled to terminate) subject to (A) any rights
reserved to or vested in any municipality or public authority to condemn,
appropriate, recapture or designate a purchaser of such Substitute Unit, (B) any
liens thereon for taxes, assessments and other governmental charges, provided
that such taxes, assessments or other governmental charges are not delinquent at
the time of Substitution, (C) easements, rights of way, servitudes, zoning laws,
use regulations, reservations, rights, restrictions, defects and irregularities
in title to the Substitute Unit (collectively "Defects"), provided that such
Defects shall be no less favorable to Lessor than the Defects associated with
title to the Released Unit, (D) the liens of Lessor's Mortgage and Lessee's
Mortgage (provided that said liens shall be subordinate to this Lease, subject
to the provisions set forth in the notice or memorandum of lease executed
contemporaneously herewith) and any other assignment of this Lease as further
security for the note or notes secured by Lessor's Mortgage and any collateral
assignment thereof to the Indenture Trustee, (E) discrepancies, conflicts in
boundary lines, encroachments, and any state of facts which in inspection of the
Leased Property would disclose (provided that such matters are no less favorable
to Lessor than similar matters affecting the Released Unit), together with a
certificate from Lessee to the effect that all exceptions shown on such title
insurance policies are permitted pursuant to clauses (A) through (E) above and
that such exceptions shall have no adverse effect on the value of
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such Substitute Unit, construction of improvements thereon, or its intended use
or operations, and (ii) lease from Lessor Lessor's Estate in the Substitute Unit
for a term equal to the remainder of the Basic Term or the Renewal Term, as the
case may be, and in all other respects in compliance with such Article 15.
(ii) Lessor shall execute and deliver to Lessee all such
instruments and documents as may be appropriate to transfer to Lessee all of
Lessor's Estate in the Released Units, subject to (A) all liens, encumbrances,
charges, exceptions and restrictions attaching to the Released Units (other than
those created or caused by or through Lessor without the consent of Lessee), and
(B) all Legal Requirements. Lessor shall cause to be released or reconveyed, as
appropriate, concurrently with the closing date of the conveyance of Lessor's
Estate in any such Released Unit to Lessee, Lessor's Mortgage and any other
interests, encumbrances or liens placed or permitted to be placed by Lessor
without Lessee's consent in, on or against such Released Unit transferred to
Lessee on such date. Notwithstanding any provisions contained herein to the
contrary, Lessee acknowledges that Lessor makes no representations or warranties
of any nature or kind, whether statutory, express or implied, with respect to
environmental matters or the physical condition of any such Released Units and
Lessee, by acceptance of such instruments and documents, shall accept each such
Released Unit "AS IS," "WHERE IS," "WITH ALL FAULTS" and without any such
representation or warranty by Lessor as to environmental matters, the physical
condition of such Unit, compliance with subdivision or platting requirements or
construction of any improvements. Without limiting the generality of the
foregoing, Lessee hereby further acknowledges and agrees that warranties of
merchantability and fitness for a particular purpose are excluded from the
transaction contemplated by such instruments and documents, as are any
warranties arising from a course of dealing or usage of trade. Lessee hereby
assumes all risk and liability (and agrees that Lessor shall not be liable for
any special, direct, indirect, consequential, or other damages) resulting or
arising from or relating to the ownership, use, condition, location,
maintenance, repair or operation of such Released Units.
(iii) Lessee shall pay all charges incident to such transfer of
Lessor's Estate in the Released Units, including but not limited to all transfer
taxes, recording fees, escrow fees, mortgage costs, title insurance premiums and
federal, state and local taxes, except for any net income or profit taxes
(including any capital gains taxes) of Lessor and Lessor's Mortgagee and
reasonable attorneys'
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fees and expenses of Lessor's counsel and counsel to the Lessor's Mortgagee;
(iv) Lessee shall pay in accordance with Article 3, paragraph (a)
all Basic Rent, Special Rent, Additional Rent and other sums payable by Lessee
under this Lease, due and payable through the date Lessee makes any Substitution
of Units pursuant to Article 15.
(v) Upon the completion of such Substitution, but not prior
thereto (whether or not any delay in the completion of such Substitution shall
be the fault of Lessor), this Lease and all obligations hereunder shall
terminate but solely as to the Released Units, except with respect to
obligations and liabilities of Lessee (including, without limitation, under
Articles 8 and 9 of this Lease) which expressly survive termination and except,
in the case of a Substitution, for the obligations and liabilities of Lessee
under this Lease, as amended to cover the Substitute Unit.
(b) Purchase; Early Termination. In the event of a Purchase
(including, without limitation, a Purchase pursuant to an Early Termination),
the provisions of this Article 28, paragraph (b) shall apply. As used in this
Article 28, paragraph (b), the term "Purchaser" shall mean the party obligated
to Purchase, the term "Seller" shall mean the party obligated to sell, and the
term "Purchased Property" shall mean the interest of Lessor or Lessee, as the
case may be, in the Unit or Units required to be sold, in each case as
determined in accordance with the applicable provisions of Articles 30, 31, 32
and 37. The "Closing Date" shall mean the date on which such Purchase is
required to be closed in accordance with such provisions. On the Closing Date
with respect to any Purchased Property:
(i) The Purchaser of the Purchased Property shall pay to the
Seller, in lawful money of the United States in immediately available funds at
the Seller's address as stated herein or at any other place in the United States
which such Seller may designate, the Purchase Price for such Purchased Property
determined pursuant to Article 30, 31, 32 or 37 as applicable. If Lessor is the
Seller, Lessee shall pay the Purchase Price directly to the Indenture Trustee.
(ii) The Seller shall execute and deliver to the Purchaser all
such instruments and documents as may be appropriate to transfer its interest in
the Purchased Property subject to (A) all Permitted Encumbrances affecting the
Purchased Property (in case Lessee is the Purchaser) and
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all liens, encumbrances, charges, exceptions and restrictions affecting the
Purchased Property as of the date any interest in such Purchased Property was
originally leased by Lessor to Lessee hereunder or arising thereafter through
acts of or otherwise approved by Lessor (in case Lessor is the Purchaser), and
(B) all Legal Requirements. The Seller shall cause to be released or
reconveyed, as appropriate, upon the Closing Date, Lessor's Mortgage and
Lessee's Mortgage and any other interests, encumbrances or liens placed or
permitted to be placed by the Seller without the Purchaser's consent, in, on or
against such Purchased Property on such Closing Date except that, in the case of
a purchase pursuant to Lessee's Right of First Refusal pursuant to Article 32
below, such sale shall be subject to Lessor's Mortgage and there shall be no
merger of Lessee's Remainder Estate with Lessor's Estate except as otherwise
provided to the contrary in Article 32. Notwithstanding any provisions
contained herein to the contrary, if Lessee is the Purchaser, Lessee
acknowledges that, except as expressly provided herein, Lessor, as the Seller,
shall make no representations or warranties or indemnifications of any nature or
kind, whether statutory, express or implied, with respect to environmental
matters or the physical condition of any such Purchased Property, and Lessee, by
acceptance of such instruments and documents, shall accept each such Purchased
Property "AS IS," "WHERE IS," "WITH ALL FAULTS" and without any such
representation or warranty by the Lessor as to environmental matters, the
physical condition of such Purchased Property, compliance with subdivision or
platting requirements or the construction of any improvements. Without limiting
the generality of the foregoing, if Lessee is the Purchaser, Lessee hereby
further acknowledges and agrees that warranties of merchantability and fitness
for a particular purpose are excluded from the transaction contemplated by such
instruments and documents, as are any warranties arising from a course of
dealing or usage of trade. Lessee hereby assumes all risk and liability (and
agrees that the Seller shall not be liable for any special, direct, indirect,
consequential or other damages) resulting or arising from or relating to the
ownership, use, condition, location, maintenance, repair or operation of such
Purchased Property. If Lessor is the Purchaser, Lessee shall be required to
comply with its obligations under Article 24(a) and shall be deemed to have
warranted to Lessor that Lessee is in full compliance with this Lease as to such
Purchased Property and such warranty shall survive the Closing Date and the
delivery and recordation of the deed therefor.
(iii) Lessee shall pay all charges incident to such transfer of the
Seller's interest in the Purchased
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Property, including but not limited to all transfer taxes, recording fees,
escrow fees, mortgage costs, title insurance premiums and federal, state and
local taxes, except for any net income or profit taxes (including any capital
gains taxes), of the Seller and Lessor's Mortgagee and reasonable attorneys'
fees and expenses of Lessor's counsel and counsel to the Lessor's Mortgagee.
(iv) Lessee shall pay to Lessor all Basic Rent, Special Rent,
Additional Rent and other sums payable by Lessee under this Lease due and
payable through the Closing Date with respect to any Purchased Property.
(v) Upon the completion of the Purchase, but not prior thereto
(whether or not any delay in the completion of such Purchase shall be the fault
of Lessor), this Lease and all obligations hereunder shall terminate but solely
as to the Purchased Property, except with respect to obligations and liabilities
of Lessee (including, without limitation, under Articles 8 and 9 of this Lease)
which expressly survive termination hereof.
29. Waivers of Trial by Jury and Statute of Limitations.
(a) Trial by Jury. Lessor and Lessee each hereby waive its respective
rights to a jury trial of any claim or cause of action based upon or arising out
of this Lease or any other document or any dealings between them relating to the
subject matter of this transaction and the relationship that is being
established. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that are related to the
subject matter of this transaction, including without limitation, contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Lessee and Lessor each acknowledge that this waiver is a
material inducement to enter into a business relationship, that each has already
relied on the waiver in entering into this Lease and the other documents
referred to herein, and that each will continue to rely on the waiver in their
related future dealings. Lessee and Lessor each further warrant and represent
that it has reviewed this waiver with its legal counsel, and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. This waiver is irrevocable, meaning that it may not be modified either
orally or in writing, and the waiver shall apply to any subsequent amendments,
renewals, supplements or modifications to this agreement or to any other
documents or agreements relating to the Lease, this agreement or the
environmental indemnity agreement. In the
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event of litigation, this Lease may be filed as a written consent to a trial by
the court.
(b) Statute of Limitations. Lessee hereby waives, to the fullest
extent permitted by law, all statutes of limitations as a defense to any action
or proceeding brought by Lessor or any of its successors or assigns.
30. Rejectable Offer Requirements.
(a) Year Nine.
(i) Not less than 120 nor more than 270 days prior to the first
Business Day of January, 2003 (the "Year Nine Termination Date"), Lessee shall
make an irrevocable offer (the "Year Nine Offer") to purchase Lessor's Estate in
Units then subject to this Lease and/or to terminate Lessee's obligations
hereunder which relate to or are measured by sums allocated to Potential
Additional Units, which Units and Potential Additional Units shall be designated
by Lessee in the Year Nine Offer and shall have Termination Values equal to at
least the amount by which (A) fifty percent (50%) of the Termination Values of
all Units and Potential Additional Units exceeds (B) the sum of (i) the
Termination Values of all Units and Potential Additional Units as to which
Lessee has previously made and consummated an Early Termination Election) and
(ii) the Termination Values of all Units as to which Lessee has exercised its
Year Nine Option pursuant to Article 31 below. Those Units and Potential
Additional Units so designated by Lessee are referred to herein as "Year Nine
Units". In the Year Nine Offer, Lessee shall designate a value (herein, the
"Year Nine Offer Value") for the entire interest of Lessor and Lessee in the
Year Nine Units and shall make an offer to purchase Lessor's Estate in all of
the Units included within the Year Nine Units and to terminate Lessee's
obligations hereunder which relate to or are measured by sums allocated to the
Potential Additional Units included in the Year Nine Units for an aggregate
Purchase Price (herein referred to as "Lessee's Initial Year Nine Price") which
shall be designated in such Year Nine Offer but which shall be not less than the
sum of (i) an amount equal to (A) the sum of (I) 12/35ths times (II) the
Termination Values of the Year Nine Units (but in no event shall the Termination
Values of the Year Nine Units taken into account for purposes of this clause
(A)(II) when combined with the Termination Values of all Units as to which
Lessee has exercised the Year Nine Option and as to which Lessee has previously
made and consummated an Early Termination Election exceed fifty percent (50%) of
the Termination Values of all Units and Potential Additional Units (inclusive of
those as to which
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Lessee has exercised the Year Nine Option and as to which Lessee has previously
made and consummated an Early Termination Election)), plus (B) 100% of the
portion of the Termination Values of all Year Nine Units which exceeds the
amount described in the parenthetical in clause (A)(II) above (the sum of the
amounts described in clauses (A) and (B) above being referred to herein or (the
"Year Nine Minimum Purchase Price") plus (C) an amount equal to 50% of the
amount by which (I) the Year Nine Offer Value exceeds (II) the Year Nine Minimum
Purchase Price (the amount described in the clause (C) being referred to herein
as the "Year Nine Increment"). If Lessee fails to make such Year Nine Offer
during such time, Lessee shall be deemed to have made such Year Nine Offer on
the date occurring 120 days prior to the Year Nine Termination Date in an amount
equal to the Year Nine Minimum Purchase Price (as calculated as of the Year Nine
Termination Date) with respect to Units and Potential Additional Units
designated in a written notice to Lessee by any of Lessor, Lessor's Mortgagee or
the Indenture Trustee at any time prior to the Year Nine Termination Date, so
long as such Units and Potential Additional Units satisfy the requirements for
"Year Nine Units" set forth in the definition of that term above (except for the
requirement therein that Lessee designate such Units and Potential Additional
Units and except that the Termination Values of the Units or Potential
Additional Units designated by Lessor in such notice shall not be greater than
one hundred and ten percent (110%) of the minimum Termination Values of the Year
Nine Units which were required to have been designated in Lessee's Year Nine
Offer). Lessee acknowledges that Lessee's obligation to make the Year Nine
Offer as provided herein forms a material part of the consideration to Lessor
for entering into this Lease and that the rent payable by Lessee hereunder has
been agreed upon in reliance upon Lessee's obligation to make the Year Nine
Offer as so provided.
(ii) If Lessor accepts or is deemed to accept the Year Nine Offer,
this Lease and Lessee's obligations hereunder (but solely with respect to and to
the extent measured by sums allocated to such Year Nine Units) will terminate on
the Year Nine Termination Date upon payment of a Purchase Price equal to
Lessee's Initial Year Nine Price and satisfaction of the other conditions set
forth herein (except as expressly provided hereunder), and Lessee shall pay on
the Year Nine Termination Date a Purchase Price equal to Lessee's Initial Year
Nine Price for the Units purchased and for the Potential Additional Units as to
which Lessee's obligations are to be terminated as a result of such Year Nine
Offer pursuant to this Article 30, paragraph (a) and Lessor's Estate in such
Units shall be conveyed to Lessee,
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all pursuant to the provisions of Article 28. Unless Lessor specifically
rejects the Year Nine Offer pursuant to paragraph (a)(iii) below (or if Lessor's
Year Nine Rejection Notice is ineffective as provided in paragraph (a)(iii)
below), Lessor shall be deemed to have accepted the Year Nine Offer. If Lessor
accepts or is deemed to accept the Year Nine Offer, the provisions hereof shall
constitute a binding purchase and sale agreement between Lessor and Lessee as to
the Units included within the Year Nine Units and as a binding obligation on the
part of Lessee to pay to Lessor the sums payable with respect to the termination
of Lessee's obligations hereunder which relate to or are measured by sums
allocated to Potential Additional Units. Notwithstanding anything to the
contrary herein, Lessee shall not be entitled to any reduction of the Purchase
Price for such Year Nine Units, nor shall the obligations of Lessee to Lessor to
purchase the applicable Year Nine Units or to pay to Lessor sums to terminate
Lessee's obligations which relate to or are measured by sums allocated to
Potential Additional Units be affected by reason of (A) any Destruction of all
or any part of such Year Nine Units from whatever cause, (B) any prohibition,
limitation or restriction of or on Lessee's use of all or any portion of such
Year Nine Units or any interference with such use by governmental action or
otherwise, (C) any eviction of Lessee or any party claiming under Lessee by
paramount title or otherwise, (D) any default on the part of Lessor under this
Lease or any other agreement to which Lessor is a party, or (E) any other cause,
whether similar or dissimilar to the foregoing, any existing or future law to
the contrary notwithstanding. It is the intention of the parties hereto that
the obligation of Lessee to pay the Purchase Price for the Year Nine Units shall
be a covenant and agreement separate and independent from Lessor's obligation to
convey the applicable Year Nine Units pursuant to this Lease; provided, however,
that nothing in this subparagraph shall excuse Lessor from its obligation to
tender a deed or other applicable conveyancing instrument upon the tender by
Lessee of such Purchase Price for the Year Nine Units at the closing of the
sale. Accordingly, the Purchase Price for the Year Nine Units shall continue to
be payable in all events, and the obligations of Lessee hereunder shall continue
unaffected.
(iii) Lessor may reject the Year Nine Offer only by sending written
notice of such rejection (hereinafter, "Year Nine Rejection Notice") to Lessee
not later than sixty (60) days after receipt (or deemed receipt) of the Year
Nine Offer and only if Lessor has complied with the provisions of Lessor's
Mortgage which limit Lessor's authority to deliver a Rejection Notice and only
if such
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Year Nine Rejection Notice includes Lessor's Year Nine Offer as described below.
Under no circumstances shall Lessee be entitled to any refund of Basic Rent,
Special Rent, Special Sinker Rent or Additional Rent previously paid in the
event of such a rejection. Any Year Nine Rejection Notice delivered by Lessor
in violation of Lessor's Mortgage or without including Lessor's Year Nine Offer
shall be null and void and of no force or effect. In the event Lessor duly
gives a valid Year Nine Rejection Notice, Lessee may elect, separately and
independently with respect to each Year Nine Unit, any one of the rights set
forth in paragraphs (A) through (D) below by giving Lessor written notice of
such election with respect to each such Year Nine Unit within thirty (30) days
after Lessee's receipt of the Year Nine Rejection Notice; provided, however,
that Lessee must elect paragraph (A) as to any Potential Additional Unit
included within the Year Nine Units. Lessee's failure to make any election
within the time period permitted under this Article 30, paragraph (a)(iii) shall
constitute Lessee's election to exercise the right set forth in clause (A)
below. If Lessee elects to exercise the rights set forth in clause (B), (C) or
(D) below, Lessor and Lessee prior to the Year Nine Termination Date shall enter
into a separate lease or other agreement which shall supersede this Lease but
solely as to the Units included within the Year Nine Units and as to which
Lessee has exercised its rights under clauses (B), (C) or (D) (and without
limiting Lessee's liability hereunder for all obligations with respect to such
Units which expressly survive the termination of this Lease). If Lessor and
Lessee have not so agreed, this Lease shall, automatically upon the Year Nine
Termination Date and without any further act on the part of Lessor or Lessee, be
deemed a separate and severed lease and/or contract as to such Units, separate
from the other Units which remain subject hereto, between Lessor and Lessee for
(i) a Renewal Term on all of the other terms set forth herein but solely as to
such Units as to which Lessee has elected to exercise its rights under clause
(B), and (ii) the purchase or sale of Lessee's Remainder Estate under clauses
(C) or (D) (and, if applicable under clause (D), the extension and renewal of
the Term as to such Units as provided therein), with Lessor's Estate in such
Units included within the Year Nine Units, but solely as to such Year Nine Units
as to which Lessee has elected to exercise such rights. Lessee further agrees
for the benefit of Lessor's Mortgagee, the Indenture Trustee and the holders of
the notes described in the Indenture that, unless and until said notes have been
indefeasibly paid in full for a period of time in excess of all applicable
preference or other similar periods under the Bankruptcy Code, Lessee shall not
ask, demand, sue for or otherwise exercise any right or remedy with respect to
any
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amount or obligation owed by Lessor to Lessee with respect to any such separate
lease or agreement. As used herein, the "Lessor's Year Nine Offer" shall mean
as to any such Unit a written notice to Lessee specifying the following:
(aa) The annual amount of Basic Rent at which Lessor is
prepared to lease such Unit to Lessee during the first three Renewal Terms
(which Basic Rent would be payable in equal semi-annual installments); and
(bb) The purchase price (the "Lessor's Year Nine Price") Lessor
is prepared to pay to Lessee for its Remainder Estate in such Year Nine Unit.
Such purchase price must not be less than 50% of the total of (x) the annual
Basic Rent specified in clause (aa) above divided by 10%, minus (y) the
Termination Value of such Year Nine Unit times a percentage, the numerator of
which shall equal the Year Nine Minimum Purchase Price and the denominator of
which shall equal the Termination Values of all Year Nine Units.
Within thirty (30) days after Lessee's receipt of the Year Nine Rejection
Notice, Lessee shall elect one of the following as to each of the Year Nine
Units on a unit-by-unit basis:
(A) Lessee may elect to terminate this Lease, but solely as to
any Year Nine Unit, as of the last day of the Basic Term.
(B) Lessee may extend the Term, but solely as to any Year Nine
Unit, for the initial Renewal Term at a rent equal to the Fair Rental Value
thereof. Lessee will be entitled to a credit against such rent as it becomes
payable in an amount equal to the Individual Unit Year Nine Special Rent paid
for such Year Nine Unit. If Lessee exercises this option, Lessee will be
entitled to exercise additional renewal options at a rent equal to the Fair
Rental Value in compliance with Article 2, paragraph (b).
(C) Lessee may elect as to any Year Nine Unit to purchase
Lessor's Estate in each such Year Nine Unit for an amount equal to the total of
(I) the Lessor's Year Nine Price set forth in the Lessor's Year Nine Offer for
the Remainder Estate in such Year Nine Unit, plus (II) the Termination Value of
such Year Nine Unit times a percentage, the numerator of which shall equal the
Year Nine Minimum Purchase Price and the denominator of which shall equal the
Termination Values of all Year Nine Units, in which case
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Lessor shall convey to Lessee pursuant to Article 28 the Lessor's Estate in such
Year Nine Unit on the Year Nine Termination Date.
(D) Lessee may elect as to any Year Nine Unit to sell to Lessor
the Remainder Estate in such Year Nine Unit for Lessor's Year Nine Price, and,
in such event, Lessee will convey such Remainder Estate to Lessor pursuant to
Article 28 on the Year Nine Termination Date. If Lessee does elect to sell the
Remainder Estate in any such Year Nine Unit to Lessor, Lessee shall concurrently
elect either (I) to terminate this Lease as to such Year Nine Unit as of the
Year Nine Termination Date, or (II) to extend and renew this Lease as to such
Year Nine Unit for the initial Renewal Term at the Basic Rent set forth in the
Lessor's Year Nine Offer. Lessee will be entitled to a credit against such rent
as it becomes payable in an amount equal to the Individual Unit Year Nine
Special Rent paid for such Year Nine Unit. If Lessee elects to extend this
Lease for such initial Renewal Term as to such Year Nine Unit, it can thereafter
extend this Lease for each of two additional Renewal Terms at the same Basic
Rent as set forth in Lessor's Year Nine Offer and otherwise in compliance with
Article 2, paragraph (b), and if Lessee has elected to extend this Lease for
such first three Renewal Terms as to such Year Nine Unit, it can thereafter
extend this Lease for each of two additional Renewal Terms as to such Year Nine
Unit in compliance with Article 2, paragraph (b). Each Basic Rent payment for
each such Year Nine Unit during each of such two additional Renewal Terms will
be in an amount equal to the level semi-annual payment of Basic Rent that would
be payable over such Renewal Terms, if the total of (x) all installments of
Basic Rent payable during such Renewal Terms for such Year Nine Unit, (y) the
Lessor's Year Nine Price for such Year Nine Unit and (z) all installments of
Individual Unit Basic Rent theretofore paid by Lessee over the Basic Term and
the first three Renewal Terms with respect to such Unit were discounted (semi-
annually in arrears) to the commencement of the Basic Term as to such Unit by
10.25% to a present value of 93% of the Termination Value of such Year Nine
Unit.
(b) Termination Date Rejectable Offer
(i) Except as otherwise required in Article 20, paragraph (b)(i),
for all Units and Potential Additional Units (collectively, "Year Ten Units")
with respect to which Lessee has not (A) exercised the Early Termination
Election described in Article 37, (B) elected to include as one of the Year Nine
Units pursuant to Article 30, paragraph (a) above or (C) exercised the Option or
Year Nine Option
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described in Article 31, not less than 120 nor more than 270 days prior to the
last day of the Basic Term ("Termination Date"), Lessee shall make an
irrevocable offer ("Offer") to purchase Lessor's Estate in the Units included in
the Year Ten Units and to terminate Lessee's obligations hereunder which relate
to or are measured by sums allocated to the Potential Additional Units included
in the Year Ten Units for an aggregate Purchase Price (herein referred to as
"Lessee's Initial Year Ten Price") which shall be designated in such Offer but
which shall be not less than the sum of the Termination Values of all Year Ten
Units. If Lessee fails to make such Offer during such time, Lessee shall be
deemed to have made such Offer on the date occurring 120 days prior to the
Termination Date in an amount equal to the Termination Values of all Year Ten
Units. Lessee acknowledges that Lessee's obligation to make the Offer as
provided herein and in Article 20, paragraph (b) forms a material part of the
consideration to Lessor for entering into this Lease and that the rent payable
by Lessee hereunder has been agreed upon in reliance upon Lessee's obligation to
make the Offer as so provided.
(ii) If Lessor accepts or is deemed to accept Lessee's Offer, this
Lease and Lessee's obligations with respect to such Year Ten Units hereunder
will terminate on the Termination Date upon payment of a Purchase Price equal to
Lessee's Initial Year Ten Price, and satisfaction of the other conditions set
forth herein (except as expressly provided hereunder), Lessee shall pay to
Lessor on the Termination Date a Purchase Price equal to Lessee's Initial Year
Ten Price for the Year Ten Units pursuant to this Article 30, paragraph (b) and
Lessor's Estate in the Units included in the Year Ten Units shall be conveyed to
Lessee pursuant to the provisions of Article 28. Unless Lessor specifically
rejects the Offer pursuant to paragraph (b)(iii) below (or if Lessor's Rejection
Notice is ineffective as provided in paragraph (b)(iii) below), Lessor shall be
deemed to have accepted the Offer. If Lessor accepts or is deemed to accept the
Offer, the provisions hereof shall constitute a binding purchase and sale
agreement between Lessor and Lessee as to the Unit(s) subject to such Offer and
a binding obligation on the part of Lessee to pay to Lessor the sums payable
with respect to the termination of Lessee's obligations hereunder which relate
to or are
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measured by sums allocated to the Potential Additional Units included in the
Year Ten Units. Notwithstanding anything to the contrary herein, Lessee shall
not be entitled to any reduction of the Purchase Price hereunder, nor shall the
obligations of Lessee to Lessor to purchase the applicable Units or to pay to
Lessor sums to terminate Lessee's obligations which relate to or are measured by
sums allocated to Potential Additional Units be affected by reason of (A) any
Destruction of all or any part of such Units from whatever cause, (B) any
prohibition, limitation or restriction of or on Lessee's use of all or any
portion of such Units or any interference with such use by governmental action
or otherwise, (C) any eviction of Lessee or any party claiming under Lessee by
paramount title or otherwise, (D) any default on the part of Lessor under this
Lease or any other agreement to which Lessor is a party, or (E) any other cause,
whether similar or dissimilar to the foregoing, any existing or future law to
the contrary notwithstanding. It is the intention of the parties hereto that
the obligation of Lessee to pay the Purchase Price shall be a covenant and
agreement separate and independent from Lessor's obligation to convey the
applicable Units pursuant to this Lease; provided, however, that nothing in this
subparagraph shall excuse Lessor from its obligation to tender a deed or other
applicable conveyancing instrument upon the tender by Lessee of such Purchase
Price at the closing of the sale. Accordingly, the Purchase Price shall
continue to be payable in all events, and the obligations of Lessee hereunder
shall continue unaffected.
(iii) Lessor may reject the Offer only by sending written notice of
such rejection (hereinafter, "Rejection Notice") to Lessee not later than sixty
(60) days after receipt (or deemed receipt) of the Offer and only if Lessor has
complied with the provisions of Lessor's Mortgage which limit Lessor's authority
to deliver a Rejection Notice and only if such Rejection Notice includes
Lessor's Offer as described below. Under no circumstances shall Lessee be
entitled to any refund of Basic Rent, Special Rent, Special Sinker Rent or
Additional Rent previously paid in the event of such a rejection. Any Rejection
Notice delivered by Lessor in violation of Lessor's Mortgage or without
including Lessor's Offer shall be null and void and of no force or effect. In
the event Lessor duly gives a valid Rejection Notice, Lessee may elect,
separately and independently with respect to each Unit, any one of the rights
set forth in paragraphs (A) through (D) below by giving Lessor written notice of
such election with respect to such Unit within thirty (30) days after Lessee's
receipt of the Rejection Notice; provided, however, that Lessee must elect
paragraph (A) as to any [Potential Construction Unit or] Potential Additional
Unit included within the Year Ten Units. Lessee's failure to make any election
within the time period permitted under this Article 30, paragraph (b)(iii) shall
constitute Lessee's election to exercise the right set forth in clause (A)
below. As used herein, "Lessor's Offer" shall mean as to any such Unit a
written offer to Lessee specifying the following:
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(aa) The annual amount of Basic Rent at which Lessor is prepared
to lease such Unit to Lessee during the first three Renewal Terms (which Basic
Rent would be payable in equal semi-annual installments); and
(bb) The purchase price (the "Lessor's Price") Lessor is prepared
to pay to Lessee for its Remainder Estate in such Unit. Such purchase price
must not be less than 50% of the total of (x) the annual Basic Rent specified in
clause (aa) above divided by 10% minus (y) the Termination Value for such Unit.
Within thirty (30) days after Lessee's receipt of the Rejection Notice, Lessee
shall elect one of the following as to each of the Year Ten Units:
(A) Lessee may elect to terminate this Lease as to any Year Ten
Unit as of the last day of the Basic Term.
(B) Lessee may elect to extend the Term as to any Year Ten Unit
for the initial Renewal Term at a rent equal to the Fair Rental Value of such
Unit. Lessee will be entitled to a credit against such rent as it becomes
payable in an amount equal to the Individual Unit Year Nine Special Rent paid
for each such Unit. If Lessee exercises this option, it will be entitled to
exercise additional renewal options at a rent equal to the Fair Rental Value in
compliance with Article 2, paragraph (b).
(C) Lessee may elect as to any Year Ten Unit to purchase Lessor's
Estate in such Unit for an amount equal to the total of (I) the Lessor's Price
set forth in the Lessor's Offer for the Remainder Estate plus (II) the
Termination Value for such Unit, in which case Lessor will convey to Lessee
pursuant to Article 28 the Lessor's Estate in such Unit on the Termination Date.
(D) Lessee may elect as to any Year Ten Unit to sell the
Remainder Estate in such Year Ten Unit to Lessor pursuant to Article 28 on the
Termination Date. If Lessee does elect to sell the Remainder Estate in any such
Year Ten Unit to Lessor, Lessee shall concurrently elect either (I) to terminate
this Lease as to such Year Ten Unit as of the last day of the Basic Term or (II)
to extend and renew this Lease as to such Year Ten Unit for the initial Renewal
Term at the Basic Rent set forth in the Lessor's Offer. Lessee will be entitled
to a credit against such rent as it becomes payable in an amount equal to the
Individual Unit
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Year Nine Special Rent paid for such Year Ten Unit. If Lessee elects to extend
this Lease for such initial Renewal Term, as to such Year Ten Unit, it can
thereafter extend this Lease for each of two additional Renewal Terms as to such
Year Ten Unit at the same Basic Rent as set forth in Lessor's Offer and
otherwise in compliance with Article 2, paragraph (b), and if Lessee has elected
to extend this Lease for such first three Renewal Terms as to such Year Ten
Unit, it can thereafter extend this Lease for each of two additional Renewal
Terms as to such Year Ten Unit in compliance with Article 2, paragraph (b).
Each Basic Rent payment for each such Year Ten Unit during each of such two
additional Renewal Terms will be in an amount equal to the level semi-annual
payment of Basic Rent that would be payable over such Renewal Terms, if the
total of (x) all installments of Basic Rent payable during such Renewal Terms
for such Year Ten Unit, (y) the Lessor's Price for such Year Ten Unit and (z)
all installments of Individual Unit Basic Rent theretofore paid by Lessee over
the Basic Term and the first three Renewal Terms with respect to such Unit were
discounted to the commencement of the Basic Term as to such Unit (semi-annually
in arrears) by 10.25% to a present value of 93% of the Termination Value of such
Unit.
(c) Examples
Examples of the method of calculating the Lessor's Year Nine Price
in the Lessor's Year Nine Offer and the Lessor's Price in the Lessor's Offer are
set forth in Schedule I attached hereto.
31. Option to Purchase. So long as no Event of Default shall have occurred
and be continuing, Lessee shall have the option ("Option") to purchase one or
more Unit(s) (which Option shall be exercisable separately and independently
with respect to each Unit) effective on any one of the following dates
(hereinafter, "Option Purchase Date"): (a) the Termination Date, (b) the last
day of any Renewal Term or (c) the Year Nine Termination Date (the Option
exercisable on such date being referred to herein as the "Year Nine Option") but
only, in the case of clause (c), if Lessee shall have paid in full, or its
exercise of such Year Nine Option is conditioned upon Lessee's payment in full
of, the Special Rent due on the Year Nine Termination Date in accordance with
Schedule D and only with respect to Units having Termination Values not greater
than fifty percent (50%) of the aggregate Termination Values of all Units and
Potential Additional Units (inclusive of those as to which Lessee has previously
made an Early Termination Election). If Lessee elects the Option, the Purchase
Price for such Unit(s) shall be the Fair Market Value of the Unit(s)
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selected by Lessee (determined as provided in Article 36), provided that if the
Option Purchase Date is the Termination Date, the Purchase Price will be not
less than the Termination Values for such Unit(s) and Lessee's right to
consummate such purchase shall be subject to the consummation of all
transactions required under Article 30, paragraph (b) concurrently therewith,
and if the Option Purchase Date is the Year Nine Termination Date, the Purchase
Price will be not less than 12/35ths of the Termination Values of all Units as
to which Lessee has exercised the Year Nine Option and Lessee's right to
consummate such purchase shall be subject to the consummation of all
transactions required under Article 30 paragraph (a) concurrently therewith.
Lessee shall deliver written notice of its exercise of any such Option at least
180 days prior to the applicable Purchase Date but in no event later than the
delivery of the Offer (or, in the case of the Year Nine Option, the Year Nine
Offer) to Lessor, and all of Lessor's interest in the selected Unit(s) will be
conveyed to Lessee on the Purchase Date pursuant to the provisions of Article
28. The Option shall expire, unless sooner exercised, upon expiration of the
Term or earlier termination of this Lease pursuant to the provisions hereof.
32. Right of First Refusal.
(a) Notice Requirement. Except as otherwise provided in paragraph (d)
of this Article 32, and provided an Event of Default does not then exist, prior
to selling all or any portion of Lessor's Estate in any Unit(s) to any third
party (hereinafter, "Third Party Purchaser"), if Lessor shall either (i) obtain
a bona fide written offer from a Third Party Purchaser to purchase all or any
portion of Lessor's Estate in any Unit(s) which Lessor intends to accept; or
(ii) enter into a contract for the sale of all or any portion of a Lessor's
Estate in any Unit(s) with a Third Party Purchaser, which contract shall be
conditioned upon Lessee's failure to exercise its right under this Article 32,
paragraph (a), Lessor shall give written notice to Lessee of the offer (and
Lessor's willingness to accept the same) or contract for sale, together with a
copy of the executed offer or contract for sale and the name and business
address of the Third Party Purchaser.
(b) Lessee's Election. For a period of fifteen (15) days following
receipt of such notice, Lessee shall have the right and option (sometimes
referred to herein as Lessee's "Right of First Refusal"), exercisable by written
notice to Lessor given within said fifteen (15) day period, to elect to purchase
Lessor's Estate in the Unit(s) identified in the Third Party Purchaser's offer
or contract
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for sale at the purchase price and upon all the provisions and conditions set
forth in such written offer or contract for sale, except that such sale shall be
subject to Lessor's Mortgage and Lessee's Mortgage and there shall be no merger
of Lessee's Remainder Estate with Lessor's Estate as a result of such sale
(unless all obligations secured thereby are to be paid in full in accordance
with such offer or contract) and no contingencies contained in such offer or
contract for sale as to environmental assessments, engineering studies,
inspection of such Unit(s), state of the title to or encumbrances against
Lessor's Estate in such Unit(s), or any other condition or contingency to the
Third Party Purchaser's obligation to purchase Lessor's Estate in such Unit(s)
which pertains to the condition of the Lessor's Estate in such Unit(s), the
Third Party Purchaser's ability to take certain action or any other factor
beyond the control of Lessor, shall apply to Lessee's obligation to purchase
Lessor's Estate in such Unit(s) under this Article 32, and Lessee shall be
obligated to purchase Lessor's Estate in such Unit(s) without any such condition
or contingency.
(c) Closing. Except as otherwise specifically provided herein, the
closing date for any purchase of Lessor's Estate in any Unit(s) by Lessee
pursuant to this Article 32 shall be the earlier to occur of: (i) ninety (90)
days after the date of Lessee's notice to Lessor of its intention to purchase
Lessor's Estate in such Unit(s) upon the terms of an offer from or contract for
sale with a Third Party Purchaser, or (ii) the closing date provided in such
offer or contract for sale. At such closing, Lessor shall convey Lessor's
Estate in such Unit(s) to Lessee in accordance with, and Lessee shall pay to
Lessor the purchase price and other consideration set forth in, the applicable
offer or contract of sale.
(d) Changes in Terms. If Lessee does not timely exercise its option
to purchase as herein provided, then Lessor may proceed to accept the offer from
the Third Party Purchaser or sell the Lessor's Estate in the Unit(s) pursuant to
the provisions and conditions of the proposed contract for sale; provided,
however, that any such transaction must be consummated within 120 days after
Lessor's notice to Lessee; and provided further that the final terms of the
proposed sale of Lessor's Estate in the Unit(s) to the Third Party Purchaser are
no more favorable than the terms described in Lessor's notice to Lessee. If the
purchase and sale of Lessor's Estate in the Unit(s) is not consummated as
required by the immediately preceding sentence, any such proposed or
contemplated sale or transfer of Lessor's Estate in the Unit(s) again shall
become subject
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to Lessee's rights set forth herein. The foregoing right of first refusal with
respect to Lessor's Estate in the Unit(s) shall be terminated and shall be null
and void and of no further effect with respect to Lessor's Estate upon the
consummation of the sale to the Third Party Purchaser of Lessor's Estate in the
Unit(s) in question.
(e) Exempted Transactions. The provisions of Article 32, paragraph
(a) shall not apply to or prohibit (i) any mortgaging, subjection to deed of
trust or other hypothecation of Lessor's Estate or the Leased Property, (ii) any
sale of Lessor's Estate or the Leased Property pursuant to a private power of
sale under or judicial foreclosure of any deed of trust or other security
instrument or device to which Lessor's interest in Lessor's Estate or the Leased
Property is now or hereafter subject, or as a result of any other exercise of
remedies thereunder, (iii) any transfer of Lessor's interest in Lessor's Estate
or the Leased Property to a mortgagee or other holder of a security interest
therein by deed in lieu of foreclosure, (iv) any transfer of Lessor's Estate or
the Leased Property to any governmental or quasi-governmental agency with power
of condemnation, (v) any transfer of Lessor's Estate or the Leased Property to
any of the successors or assigns of any of the Persons referred to in the
foregoing clauses (i) through (iv) or clause (vii) below, except as provided in
the short form memorandum of this Lease, (vi) any transfer, sale or conveyance
of any part or all of the interest of Lessor or the stock of any partner in
Lessor, or (vii) any transfer, sale or conveyance of Lessor's Estate or the
Leased Property to a person which has an option to purchase or right of first
refusal under any Permitted Encumbrance.
33. Granting and Release of Easements. If no Event of Default has occurred
and is continuing, Lessee from time to time in writing may request Lessor to
join with Lessee (at Lessee's cost and expense), and Lessor agrees to join
Lessee, (i) to grant easements, licenses, rights of way and other rights and
privileges in the nature of easements for the purposes of providing utilities
and the like to the Leased Property, (ii) to release existing easements and
appurtenances relating to the provision of utilities and the like to the Leased
Property, and (iii) to execute and deliver any instrument, in form and substance
reasonably acceptable to Lessor, necessary or appropriate to make or confirm
such grants or releases to any Person, with or without consideration; provided
that Lessee shall have certified to Lessor and Lessor's Mortgagee that in
Lessee's opinion such grant or release does not materially interfere with and is
not materially detrimental to the conduct of
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business on the Leased Property and does not impair the usefulness or Fair
Market Value of the Leased Property.
34. Recording. This Lease shall not be recorded, but Lessor and Lessee
will execute, acknowledge, deliver and cause to be recorded or filed in the
manner and place required by any present or future law, a notice or memorandum
of this Lease, and all other instruments, including, without limitation,
financing statements, continuation statements, releases and instruments of
similar character, which reasonably shall be requested by Lessor or Lessee as
being necessary or appropriate in order to protect their respective interests in
the Leased Property.
35. Miscellaneous.
(a) Successors and Assigns. This Lease, as amended from time to time,
with the consent of Lessee's Mortgagee and the Indenture Trustee, shall be
binding upon and shall inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns permitted hereunder,
including without limitation any entity resulting from the consolidation, merger
or acquisition of its assets substantially as an entity. All Indemnified
Parties are hereby expressly made third party beneficiaries of Article 6,
paragraph (e), Article 8, Article 9 and Article 10, paragraph (b) and of all
representations and warranties of Lessee herein. In addition, the Indenture
Trustee is hereby expressly made a third party beneficiary of those provisions
requiring payment by Lessee of rent, Purchase Price or other sums due hereunder
or costs and expenses to the Indenture Trustee or otherwise requiring
performance to or any consent or approval from the Indenture Trustee.
(b) Amendments. This Lease may not be amended, changed, waived,
discharged or terminated orally, but only by an instrument specifically
evidencing an intent to amend signed by the party against whom enforcement
thereof is sought. Lessee shall be responsible for all reasonable out-of-pocket
costs (including reasonable attorneys' fees and disbursements) incurred by
Lessor, Lessor's Mortgagee or the Indenture Trustee in connection with any such
amendment, change, waiver, discharge or termination, as well as any amendment,
change, waiver, discharge or termination of the CRC Note, Lessor's Mortgage, the
Indenture or any documents related thereto, other than any amendment, change or
waiver requested solely by a Person other than Lessee, as well as any such costs
incurred in connection with any proceedings of the type described in Article 20,
paragraph (a)(iii), (iv) or (v). Any such amendment, change, waiver, discharge
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or termination made otherwise than as expressly permitted by this Lease shall be
null and void and of no force or effect.
(c) Waivers. No failure, delay, forbearance or indulgence on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, or as an acquiescence in any breach, nor shall any single
or partial exercise of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
(d) Choice of Law. Except to the extent the provisions of this Lease
relating to any Unit are required to be governed by and construed in accordance
with the substantive laws of the state where such Unit is located, and subject
to Article 35, paragraph (i) below, this Lease and the rights and obligations in
respect hereof shall be governed by, and construed and interpreted in accordance
with, the laws of the State of California, except that if the rights and
remedies of Lessor, Lessor's Mortgagee or the Indenture Trustee hereunder with
respect to any Unit are enforceable under the laws of the State where such Unit
is located but are not enforceable under California law, then such rights and
remedies with respect to such Unit shall be governed by the substantive laws of
the state where such Unit is located.
(e) Headings. All headings are for reference purposes only and shall
not be considered in the interpretation or construction of the provisions of
this Lease.
(f) Single Original. Only one single original of this Lease shall be
executed, which shall be delivered to the Indenture Trustee or, upon written
notice from the Indenture Trustee, to Lessor.
(g) Substitute Performance. Lessee may cause to be performed any
obligations of Lessee under this Lease in lieu of performing such obligation
itself.
(h) Days. Whenever notice or approval is required or permitted to be
given or withheld under any provision of this Lease, within a specified time
period, all references in such provision to "day" or "days" shall be deemed to
refer to a calendar day or calendar days unless such provision specifically
refers to Business Days (as herein defined).
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(i) State-Specific Provisions. The additional provisions of Schedule
J attached hereto shall apply to Units located in the states described thereon.
(j) Schedules. The following Schedules are attached hereto and
incorporated herein by this reference:
SCHEDULE A - Property Address and Lessee
Identification Number
SCHEDULE A - 1 - Units
through A - 29
SCHEDULE B - Excluded Items
SCHEDULE C - Basic Rent and Rent Adjustments
SCHEDULE D - Special Rent
SCHEDULE E - Schedule of Environmental Reports
SCHEDULE F - Periodic Certification
SCHEDULE G - Form of Amendment - Substitution
SCHEDULE H - Permitted Encumbrances
SCHEDULE I - Examples of Purchase Price
Calculations
SCHEDULE J - Additional State Specific
Provisions
SCHEDULE K - Early Termination
SCHEDULE L - Termination Values
SCHEDULE M - Unit Percentages
SCHEDULE N - Unit Redemption Prices
SCHEDULE O - Potential Additional Units
SCHEDULE P - Amendment to Lease -- Potential
Additional Units
SCHEDULE Q - Indemnification Matters
SCHEDULE R - Covenants and Restrictions Upon
Expiration of the Lease
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36. Determination of Value.
(a) Valuation Procedures. Whenever a determination of Fair Market
Value or Fair Rental value is required pursuant to any provision of this Lease,
such Value shall be determined in accordance with the following procedure:
(i) Lessor may elect, by written notice to Lessee delivered
within fifteen (15) days after the Initial Date (as defined below), to accept
and utilize the certification of the Fair Market Value of any Unit most recently
provided by Lessee pursuant to Article 14, paragraph (b) as the Fair Market
Value of such Unit hereunder. Such election shall be in Lessor's sole
discretion, and no previous acceptance of such certification without protest by
Lessor shall obligate Lessor at any subsequent time to be bound by the amount so
certified by Lessee for any purpose hereunder. No such election by Lessor as to
any Unit shall require Lessor to make such election as to any other Unit. As to
any Unit for which Lessor has not made the election provided for herein, Lessor
and Lessee shall endeavor to agree upon such Value within fifteen (15) days
after the date ("Initial Date") on which (A) Lessee exercises the Option set
forth in Article 31, or (B) Lessee elects to renew and extend this Lease
pursuant to Article 2, paragraph (b). Upon reaching such agreement, the parties
shall execute an agreement setting forth the amount of such Value.
(ii) If the parties shall not have agreed upon the Value in
writing within fifteen (15) days after the Initial Date, within twenty (20) days
after the Initial Date, Lessee shall select an appraiser and notify Lessor in
writing of the name, address and qualifications of such appraiser. Within five
(5) days thereafter, Lessor shall select an appraiser and notify Lessee of the
name, address and qualifications of such appraiser. Such two appraisers shall
endeavor to agree upon Fair Market Value or Fair Rental Value, as applicable,
based upon an appraisal made by each of them. If such two appraisers shall
agree upon a Fair Market Value or Fair Rental Value, as applicable, the amount
of such Value as so agreed shall be conclusive and binding upon the parties.
(iii) If the two appraisers are unable to agree upon a Fair Market
Value or Fair Rental Value (as applicable) within fifteen (15) days after
Lessor's selection of an appraiser, then such appraisers shall advise Lessor and
Lessee of their respective determination of such Value and together shall select
a third appraiser to make
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the determination of such Value. If the two appraisers are unable to agree upon
the designation of a third appraiser within five (5) days after the expiration
of the fifteen (15) day period referred to above, or if such third appraiser
does not make a determination of Fair Market Value or Fair Rental Value (as
applicable) within fifteen (15) days after his or her selection, then such third
appraiser or a substituted third appraiser, as applicable, at the request of
either party hereto, shall be appointed by the Regional Vice President of the
American Arbitration Association in Los Angeles, California.
(iv) The determination of such Value made by the third appraiser
appointed pursuant to clause (iii) above shall be made within fifteen (15) days
after such appointment. The third appraiser shall select the Value determined
by one of the two appraisers pursuant to Article 36, paragraph (a) (iii) hereof
as its Value. Such Value determined pursuant to the preceding sentence shall be
binding and conclusive upon Lessor and Lessee as the Value.
(v) All appraisers selected or appointed pursuant to this Article
36 shall (A) be independent qualified MAI appraisers, (B) have no right, power
or authority to alter or modify the provisions of this Lease, and (C) be
registered in the state where the appraiser is qualified to do business if such
state provides for and requires such registration. The cost of the procedure
described in this Article 36 above shall be shared by Lessee and Lessor equally.
(b) Delays Resulting from Valuation Procedures. If, by virtue of any
delay, Fair Rental Value is not determined before the expiration or termination
of the Basic Term or the current Renewal Term, then provided all sums secured by
Lessor's Mortgage have been paid, the date on which the Term otherwise would
expire or terminate shall be extended to the date specified for termination in
the particular provision of this Lease pursuant to which the determination of
Value is being made.
(c) Definitions. In determining Fair Rental Value and Fair Market
Value under this Lease, the parties and appraisers shall use the following
definitions and standards:
(i) The term "Fair Rental Value" as used in this Lease shall mean
the rental amount, projected during the relevant period, that a willing,
comparable, non-equity lessee would pay, and a willing, comparable lessor of a
comparable quality location within a five mile radius of the
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Unit at issue would accept, at arm's length, for space of comparable size and
quality as the Unit at issue taking into account the age, quality, layout,
parking area and then current use of the Unit at issue and also taking into
account items that the professional real estate brokers customarily consider,
including, but not limited to, rental rates, location availability, lessee size,
tenant improvement allowances, operating expenses and allowance and any other
lease concessions, if any, then being charged or granted by lessors of such
similar properties.
(ii) The term "Fair Market Value" as used in this Lease shall mean
the purchase price that a willing comparable buyer would pay, and a willing
comparable seller of a comparable quality location within a five mile radius of
the Unit at issue would accept, at arm's length, for real property of comparable
size with improvements of comparable size and quality as the Unit at issue,
subject only to liens and encumbrances similar to the Permitted Encumbrances
affecting such Unit on the date such Unit was made subject to this Lease. In
determining Fair Market Value, the appraisers shall take into account the age,
quality, layout, parking area, deed restrictions (if any) and the then current
use of the Unit at issue and also taking into account the items that
professional real estate brokers customarily consider, including, but not
limited to, recent sales and fast food restaurant location availability for
properties within the same general metropolitan area as the Unit at issue.
"Fair Market Value" shall be calculated under the assumptions, whether or not
then accurate, that Lessee has maintained the applicable Units in compliance
with this Lease and all Legal Requirements (including Environmental Laws); that
Lessee has completed all improvements, repairs or alterations, the construction
of which was commenced prior to the date as of which the determination of Fair
Market Value is being made; that Lessee has completed any Restoration of the
applicable Units after any Destruction as required hereunder; that Lessee has
completed any contests of and paid any taxes as required hereunder; and that
Lessee has cured any title defects affecting the applicable Units, all in
accordance with the standards and requirements of the Lease as though the Lease
were continuing in force.
37. Early Termination Election. The provisions of Schedule K regarding
Lessee's Early Termination Election are hereby incorporated in their entirety by
reference. All references elsewhere in this Lease or in any other document to
provisions in this Article 37 shall include the provisions of Schedule K
incorporated herein by reference.
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38. Composite Lease. This Lease constitutes a single, indivisible lease
and agreement between Lessor and Lessee with respect to all Units and Potential
Additional Units, and, except as may be expressly provided otherwise herein, all
provisions hereof shall be applicable equally to each of the Units with the same
effect as if a lease with respect thereto had been executed and delivered by
Lessor and Lessee.
39. No Apportionments. Except as otherwise expressly set forth in this
Lease, upon termination of this Lease with respect to any Unit resulting in
delivery of title to Lessor's Estate in such Unit to Lessee, there shall be no
apportionment of rents (including water and sewer rents), taxes, insurance or
other charges payable with respect to such Unit, all of such rents, taxes,
insurance or other charges due and payable with respect to such Unit prior to
termination being payable by Lessee hereunder and all due after such time being
payable by Lessee as the then owner of such Unit.
40. Approvals. Whenever in this Lease Lessor's or Lessee's approval or
consent is required, such approval or consent shall be in writing, and Lessor
and Lessee each covenant and agree that such approval or consent shall not be
unreasonably withheld or delayed, unless otherwise expressly provided herein.
41. Representations and Warranties of Lessee. Lessee represents and
warrants as follows:
(a) Due Organization. Lessee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business in each State in which a Unit is located.
(b) Power and Authority. Lessee has the corporate power and authority
to execute, deliver and perform this Lease. This Lease has been duly
authorized, executed and delivered by Lessee.
(c) Enforceability. The Lease constitutes the legal, valid and
binding obligations of the Lessee enforceable against Lessee as a lease in
accordance with its terms. Lessee has been represented by experienced legal
counsel who has advised Lessee of the rights and duties of Lessee hereunder.
Lessee has no defense to the enforcement of this Lease as a lease.
(d) No Registration, Consent Etc. No registration with, consent or
approval of, notice to, or other action by,
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any governmental entity is required on the part of Lessee for the execution,
delivery or performance by Lessee of this Lease, or if required, such
registration has been made, such consent or approval has been obtained, such
notice has been given or such other appropriate action has been taken.
(e) No Violation. The execution, delivery and performance by Lessee
of this Lease are not in violation of Lessee's charter, certificate of
incorporation or bylaws or any Legal Requirement, or any other contractual
agreement of Lessee.
(f) Non-Contravention. The execution, delivery and performance by
Lessee of this Lease will not violate or result in a breach of any of the terms
of or constitute a default under or result in a creation of any lien, charge or
encumbrance on any property or assets of Lessee, pursuant to the terms of any
indenture, mortgage, deed of trust or other agreement or order to which Lessee
is a party or by which it or any Unit is bound.
(g) Operation of the Leased Property. Lessee's use, occupancy or
operation of the Leased Property or any part thereof do not violate or
contravene any Legal Requirement.
(h) Litigation. Other than as previously disclosed in Lessee's most
recent 10-K filings with the Securities and Exchange Commission (copies of which
have been delivered to Lessor and Lessor's Mortgagee), there are no judicial or
administrative actions, suits, proceedings or investigations pending or, to
Lessee's Actual Knowledge, threatened that are reasonably likely to affect
Lessee's intended use, or the value, of the Leased Property or the validity,
enforceability or priority of this Lease, or Lessee's occupancy and operation of
the Leased Property or any part thereof, and Lessee is not in default with
respect to any order, writ, injunction, decree or demand of any court or other
governmental or regulatory authority. No condemnation or other like proceedings
are pending or, to Lessee's Actual Knowledge, threatened against any of the
Units.
(i) Condition of the Improvements. Each of the buildings, structures
and other improvements located on the Leased Property (i) are structurally
sound, (ii) have been constructed in a good and workmanlike manner, and (iii)
are free from defects which would render them unfit for their continued use in
the manner in which they presently are used. The equipment and systems that
serve the Leased
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Property, and which were conveyed to Lessor prior to execution of this Lease,
including, without limitation, the plumbing, heating, air conditioning,
electrical and life safety systems and appliances, are in good working order.
42. Limitation on Interest. This Lease shall not require the payment or
permit the collection of interest in excess of the maximum allowed by law. If
herein any excess of interest in such respect is provided for or shall be
adjudicated to be so provided for, neither Lessor, nor its successors or assigns
shall be obligated to pay such interest in excess of the maximum amount allowed
by law, and the right to demand the payment of any such excess shall be and
hereby is waived.
43. Acquisition and Lease of the Additional Units.
(a) Potential Additional Units. Lessor and Lessee acknowledge that
Lessee is the owner of certain "Jack In The Box" restaurants (collectively,
"Potential Additional Units" more particularly described in Schedule O attached
hereto. Lessee intends to grant to Lessor Lessor's Estate in each such
Potential Additional Unit and to lease back from Lessor such Potential
Additional Unit pursuant to this Lease. This Article 43 sets forth certain
obligations of Lessee with respect to the Additional Units and the terms and
conditions upon which Lessor will agree to acquire Lessor's Estate from Lessee
and lease back to Lessee the Potential Additional Units. The terms "Unit,"
"Units" and "Leased Property" as used in this Lease include, without limitation,
all Potential Additional Units hereafter subjected to this Lease.
(b) Purchase and Lease. Upon compliance with all Additional Unit
Closing Conditions (as defined below) as to any Potential Additional Unit,
Lessor shall purchase from Lessee Lessor's Estate in such Potential Additional
Unit, and then shall lease such Potential Additional Unit to Lessee, on the
terms set forth below:
(i) The purchase price for Lessor's Estate in any Potential
Additional Unit (and for any parcel of land substituted therefor in compliance
therewith) shall be the Termination Value thereof and shall be payable upon the
date of the recordation (such date as to such Potential Additional Unit is
referred to herein as the "Additional Unit Closing Date") of the Additional Unit
Deed (as defined below) conveying to Lessor Lessor's Estate in such Potential
Additional Unit as described below and the satisfaction of all Additional Unit
Closing Conditions.
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(ii) Each deed granting to Lessor the estate for years in such
Potential Additional Unit (the "Additional Unit Deed"), shall be a grant or
special warranty deed in substantially the form of the deed utilized in
connection with Lessor's acquisition of Lessor's Estate in the other Units
subject hereto, with such modifications therein as may be reasonably recommended
by counsel to Lessor, Lessor's Mortgagee or the Indenture Trustee or by the
title company insuring the interest of Lessor, Lessor's Mortgagee or the
Indenture Trustee therein.
(iii) Simultaneously with the execution and delivery of such
Additional Unit Deed as to any Potential Additional Unit, Lessor and Lessee
shall enter into an amendment to the Lease, in the form of Schedule P attached
hereto whereby Lessor shall lease such Potential Additional Unit to Lessee on
all of the terms and conditions set forth herein other than those which are
clearly inapplicable to any Unit (subject to such additional terms and
conditions as may be consistent with a "triple-net lease" and the terms set
forth herein, as may be reasonably recommended by local counsel to Lessor,
Lessor's Mortgagee or the Indenture Trustee in the state where such Unit is
located), without any adjustment in the aggregate Basic Rent, Special Rent or
other amounts payable by Lessee hereunder. Each party acknowledges that the
Additional Rent and other obligations for which Lessee is responsible may be
affected by the addition of any Potential Additional Unit as part of the Leased
Property hereunder.
(iv) Immediately upon the execution and delivery of such
Additional Unit Deed and amendment to this Lease and satisfaction of all
Additional Unit Closing Conditions, such Potential Additional Unit shall be
considered a "Additional Unit," a "Unit" and part of the "Leased Property"
hereunder and Lessor's Estate therein shall be part of "Lessor's Estate"
hereunder.
(v) Lessee shall pay all costs and expenses incurred by Lessor,
Lessor's Mortgagee and the Indenture Trustee in connection with the acquisition,
lease and encumbrance (pursuant to the Indenture) of such Potential Additional
Unit, whether or not any such acquisition actually closes.
(vi) Lessee may substitute for any Potential Additional Unit
another parcel provided such Substitution shall be in compliance with the
provisions which otherwise govern the substitution of Units set forth in Article
15 of this Lease, but no such substitution shall affect the Termination Value,
Basic Rent, Special Rent, Purchase Price
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or other economic attributes under this Lease of the Potential Additional Unit
being substituted, all of which shall be fully applicable to the substituted
unit.
(c) Closing Conditions. The conditions precedent to Lessor's
obligations under paragraph (b) above (the "Additional Unit Closing Conditions")
to acquire any Potential Additional Unit are as follows:
(i) All conditions to the release of funds from the Additional
Unit Acquisition Account in the amount of the Termination Value for such
Potential Additional Unit to Lessee pursuant to the terms of Section 9.5 of the
Indenture, shall have been satisfied at Lessee's sole cost and expense.
(ii) No Event of Default or event which, with the giving of
notice, the passage of time, or both, would constitute an Event of Default shall
be continuing hereunder.
44. Obligations Hereunder Related to or Measured by Sums Allocated to the
Potential Additional Units. Lessee acknowledges and agrees that, until such
time as a Potential Additional Unit becomes a Unit hereunder, all Basic Rent and
Special Rent which is payable hereunder and which is related to or measured by
sums allocated to the Potential Additional Units shall be considered additional
Basic Rent and Special Rent for the Units hereunder and that the portion of any
Purchase Price payable hereunder which is attributable to the termination of
Lessee's obligations hereunder which relate to or are measured by sums allocated
to Unit Redemption Prices or Termination Values of Potential Additional Units
shall be considered to be additional consideration for the purchase by Lessee of
the Units hereunder.
45. Certain Definitions. As used in this Lease the following terms have
the meanings set forth below:
(a) Actual Knowledge by either party with respect to any matter means
the actual knowledge of such matter by an executive officer of such party or any
employee charged with responsibility therefor or possessing expertise in the
field, after due inquiry. Lessor acknowledges that the sole inquiry which
Lessee has made concerning the environmental condition of the Leased Property is
the review of the materials described in Schedule E attached hereto.
(b) Additional Rent is defined in Article 3, paragraph (b).
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(c) Additional Unit Acquisition Account shall have the meaning set
forth in the Indenture.
(d) Additional Unit Closing Conditions is defined in Article 43,
paragraph (c).
(e) Additional Unit Closing Date is defined in Article 43, paragraph
(b).
(f) Additional Unit Deed is defined in Article 43, paragraph (b).
(g) Affiliate, with respect to any Person, means any other Person
controlling, controlled by or under common control with such Person. For
purpose of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
(h) Alteration is defined in Article 10, paragraph (c).
(i) Award means the entire award, compensation, insurance proceeds or
other payment (if any) received by Lessee, Lessor, Lessor's Mortgagee or the
Indenture Trustee on account of any Destruction (including any payment in
settlement thereof or made under threat thereof), less any expenses reasonably
incurred by Lessee in negotiating or collecting such award, compensation,
insurance proceeds or other payment, and (so long as no Event of Default shall
have occurred and be continuing) excluding any award, compensation, insurance
proceeds or other payment attributable to or made for Lessee's Loss.
(j) Bankruptcy Code means Title 11 of the United States Code or any
other Federal or state bankruptcy, insolvency or similar law, now or hereafter
in effect in the United States.
(k) Basic Rent is defined and set forth on Schedule C attached hereto.
(l) Basic Term is defined in Article 2, paragraph (a).
(m) Business Day means any day except Saturdays, Sundays and the days
in which banks located in New York, New York or Los Angeles, California shall be
closed.
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(n) Claims is defined in Article 8.
(o) Closing Date is defined in Article 28, paragraph (b).
(p) Construction Account shall have the meaning set forth in the
Indenture.
(q) CRC Note means that certain Promissory Note, dated as of December
15, 1993, executed by Lessor to the order of FM 1993A Corp., a Delaware
corporation, in accordance with the Indenture and the Note Purchase Agreement,
dated as of December 15, 1993. The CRC Note is one of the obligations secured
by Lessor's Mortgage. Lessor shall not modify the CRC Note or the payment
obligations provided thereunder without Lessee's prior written consent, which
Lessee may grant or withhold in its sole and absolute discretion.
(r) CRC-II means CRC-II Limited Partnership, a Massachusetts limited
partnership.
(s) CRC-II Master Lease is defined in Article 5, paragraph (b).
(t) Defects is defined in Article 15, paragraph (c), and Article 28,
paragraph (b)(ii).
(u) Destruction is defined in Article 12, paragraph (a).
(v) Discounted Present Value is defined in Article 20, paragraph
(b)(i)(B).
(w) Early Offer Minimum Purchase Price is defined in Article 20,
paragraph (b)(i).
(x) Early Offer Date is defined in Article 20, paragraph (b)(i).
(y) Early Offer Notice is defined in Article 20, paragraph (b)(i).
(z) Early Termination is defined in Article 37.
(aa) Early Termination Closing Date is defined in Article 37.
(ab) Early Termination Election is defined in Article 37.
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(ac) Early Termination Offer Value is defined in Article 37.
(ad) Environmental Laws means the Resource Conservation and Recovery
Art (42 U.S.C. Sect. 6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Sect. 9601 et seq.), as amended by the Superfund
Amendments and Reauthorization Act of 1986, the Hazardous Materials
Transportation Act (49 U.S.C. Sect. 1801 et seq.), the Toxic Substances Control
Act (15 U.S.C. Sect. 2601 et seq.), the Clean Air Act (42 U.S.C. Sect. 9402 et
seq.), the Clean Water Act (33 U.S.C. Sect. 1251 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Sect. 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. Sect. 651 et seq.) and all
applicable federal, state and local environmental laws, including obligations
under the common law, ordinances, rules, regulations, private agreements (such
as covenants, conditions and restrictions), orders, consent decrees, judgments,
permits, licenses, authorizations, codes and publications, as any of the
foregoing may have been or may be from time to time amended, supplemented or
supplanted, and any other federal, state or local laws, including obligations
under the common law, ordinances, rules, regulations, private agreements (such
as covenants, conditions and restrictions) and publications, now or hereafter
existing relating to regulation or control of Hazardous Substances or
environmental health and safety.
(ae) Equipment Lease is defined in Article 11.
(af) Equipment Lessor is defined in Article 11.
(ag) Event of Default is defined in Article 20.
(ah) Extension Notice means Lessee's written notice to Lessor of
Lessee's election to exercise its option to extend this Lease for any Renewal
Term and shall include any such notice delivered pursuant to Article 2,
paragraph (b), Article 30, paragraph (a)(iii), clause (B) or Article 30,
paragraph (b)(iii), clause (B).
(ai) Fair Market Value shall have the meaning set forth in Article 36.
(aj) Fair Rental Value shall have the meaning set forth in Article 36.
(ak) Final Payment Date is defined in Article 20, paragraph (b)(i).
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(al) First Closing Date shall mean January 4, 1994.
(am) Hazardous Substances means (i) those substances included within
the definitions of or identified as "hazardous substances", "hazardous
materials" or "toxic substances" in or pursuant to, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of 1980 (43
U.S.C. 9601 et seq.), as amended by Superfund Amendments and Reauthorization Act
of 1986 (Publ. L. 99-499, 100 State. 1613), the Resource Conversation and
Recovery Act of 1976 (42 U.S.C., 6901 et seq.), the Occupational Safety and
Health Act of 1970 (29 U.S.C. 651 et seq.), and the Hazardous Materials
Transportation Act, (49 U.S.C. 1801 et seq.), and in the regulations promulgated
pursuant to said laws, all as amended; (ii) those substances listed in the
United States Department of Transportation Table (40 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto); (iii) any
material, waste or substance which is or contains (A) petroleum, including crude
oil or any fraction thereof, natural gas or synthetic gas usable for fuel or any
mixture thereof, (B) asbestos, (C) polychlorinated biphenyls, (D) designated as
a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33
U.S.C. 1251 et seq., (33 U.S.C. 1321) or listed pursuant to Section 307 of the
Clean Water Act (33 U.S.C. Sect. 1317); (E) flammable explosives; (F)
radioactive materials, and (iv) such other substances, materials and wastes
which are or become regulated as hazardous, toxic or "special wastes" under
applicable local, state or federal law, or the United States government, or
which are classified as hazardous, toxic or as "special wastes" under federal,
state or local laws or regulations.
(an) Ideal Sinking Fund Balance is defined in Article 37.
(ao) Indemnified Party shall mean each of Lessor, Lessor's Mortgagee,
the Indenture Trustee, each holder of the "Notes" (as defined in the Indenture)
and their respective Affiliates, directors, officers, employees, successors and
assigns.
(ap) Indenture shall mean that certain Indenture executed
contemporaneously herewith, by Lessor's Mortgagee, as the "Issuer" and State
Street Bank and Trust Company, as the "Trustee".
(aq) Indenture Trustee shall mean the trustee of the Indenture.
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(ar) Individual Unit Basic Rent, with respect to each Unit and
Potential Additional Unit shall be that portion of the Basic Rent attributable
thereto as set forth on Schedule C attached hereto.
(as) Individual Unit Special Rent, with respect to each Unit and
Potential Additional Unit shall be that portion of the Special Rent attributable
thereto as set forth on Schedule D attached hereto.
(at) Individual Unit Year Nine Special Rent is defined in Schedule D.
(au) Initial Date is defined in Article 36, paragraph (a)(i).
(av) Installment Payment Dates means the dates on which Basic Rent or
Special Rent are payable hereunder.
(aw) Insurance Requirements means any insurance which Lessee is
required to maintain pursuant to Article 13.
(ax) Leased Property collectively means the Units from time to time
subject to this Lease.
(ay) Legal Requirements is defined in Article 6(e).
(az) Lessee's Early Termination Increment is defined in Article 37.
(aa) Lessee's Early Termination Minimum Purchase Price is defined in
Article 37.
(bb) Lessee's Early Termination Offer is defined in Article 37.
(bc) Lessee's Initial Year Nine Price is defined in Article 30,
paragraph (a).
(bd) Lessee's Initial Year Ten Price is defined in Article 30,
paragraph (b).
(be) Lessee's Loss is defined in Article 12, paragraph (a).
(bf) Lessee's Mortgage means, collectively, the mortgage(s) or deed(s)
of trust encumbering Lessee's reversionary interest in the Leased Property in
favor of Lessor's Mortgagee.
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(bg) Lessee's Present Value Increment is defined in Article 37.
(bh) Lessee's Rejection Notice is defined in Article 37.
(bi) Lessor's Early Termination Counter-Offer is defined in Article
37.
(bj) Lessor's Estate, as to any Unit, means an estate for years in and
to such Unit commencing on the date such estate for years is conveyed to Lessor
and terminating on November 30, 2028.
(bk) Lessor's Mortgage means, collectively, the mortgages and deeds of
trust encumbering Lessor's Estate in the Leased Property, in favor of Lessor's
Mortgagee, together with any assignment of Lessor's interest in this Lease to
Lessor's Mortgagee.
(bl) Lessor's Mortgagee means the holder of Lessor's Mortgage
encumbering any Unit, and any assignee thereof, including, without limitation,
the Indenture Trustee.
(bm) Lessor's Offer is defined in Article 30, paragraph (b)(iii),
clause (C)(I).
(bn) Lessor's Price is defined in Article 30, paragraph (b)(iii),
clause (C)(I).
(bo) Lessor's Rejection Notice is defined in Article 37.
(bp) Lessor's Year Nine Offer is defined in Article 30, paragraph (a).
(bq) Lessor's Year Nine Price is defined in Article 30, paragraph (a).
(br) Losses is defined in Article 8.
(bs) Multiple Destruction Threshold is defined in Article 12,
paragraph (a).
(bt) Noteholders means the holders from time to time of the notes
issues pursuant to the Indenture.
(bu) Notice means the written notice of Lessor's intention to make a
Substitution pursuant to Article 15.
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(bv) Offer is defined in Article 30, paragraph (b).
(bw) Option is defined in Article 31.
(bx) Option Purchase Date is defined in Article 31.
(by) Overdue Rate is defined in Article 3.
(bz) Permitted Encumbrances means, with respect to the Lessor's Estate
or the Leased Property: (a) in the case of any Unit, all matters affecting title
to such Unit as specified on Schedule H and (b) in the case of any Potential
Additional Unit or Substitute Unit: (i) any liens thereon for taxes, assessments
and other governmental charges and any liens of mechanics, materialmen and
laborers for work or services performed or material furnished in connection with
Lessor's Estate or the Leased Property; (ii) easements, rights-of-way,
servitudes, zoning laws, use regulations and other similar reservations, rights
and restrictions and other defects and irregularities in title to Lessor's
Estate or the Leased Property whether or not of record existing on the first day
that such Unit becomes subject to this Lease); (iii) the lien of Lessor's
Mortgagee (provided that said lien shall be subordinate to this Lease, subject
to the provisions of any notice or memorandum of this Lease recorded pursuant to
Article 34 hereof) and any assignment of this Lease as further security for the
note or notes secured by Lessor's Mortgage and any collateral assignment thereof
to the Indenture Trustee; and (iv) all other matters affecting title existing on
the date such Unit becomes subject to this Lease.
(ca) Person means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, trustee of a trust,
unincorporated organization or government or governmental authority, agency or
political subdivision thereof.
(cb) Potential Additional Unit is defined in Article 43, paragraph
(a).
(cc) Purchase means the acquisition by Lessee of Lessor's Estate in
any Unit(s) pursuant to the provisions of Articles 30, 31, 32 and 37 and the
acquisition by Lessor of Lessee's interest in any Units pursuant to the
provisions of Article 30 or 37.
(cd) Purchase Price means the amount payable by Lessee or Lessor
pursuant to a Purchase.
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(ce) Purchased Property is defined in Article 28, paragraph (b).
(cf) Purchaser is defined in Article 28.
(cg) Rejection Notice is defined in Article 30, paragraph (b)(iii).
(ch) Released Unit is defined in Article 15.
(ci) Remainder Estate means, as to any Unit, Lessee's reversionary
interest in such Unit.
(cj) Renewal Term means any additional term referred to in Article 2,
paragraph (b) or Article 30, paragraph (b)(iii), clause (C).
(ck) Rent means all Basic Rent, Special Rent, Additional Rent, and all
other amounts or charges payable hereunder.
(cl) Restoration is defined in Article 12, paragraph (a).
(cm) Right of First Refusal is defined in Article 32.
(cn) Seller is defined in Article 28.
(co) Seller's Damages is defined in Article 20, paragraph (b)(i).
(cp) Single Destruction Threshold is defined in Article 12, paragraph
(a).
(cq) Sinking Fund Account means the Sinking Fund Account maintained
under the Indenture.
(cr) Special Rent is defined and set forth in Schedule D.
(cs) Special Sinker Rent is defined in Article 37.
(ct) Substitute Unit is defined in Article 15.
(cu) Substitution is defined in Article 15.
(cv) Supplemental Year Nine Special Rent is defined in Schedule D.
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(cw) Term means the Basic Term, plus any Renewal Terms.
(cx) Terminated Unit is defined in Article 37.
(cy) Termination Date means the last day of the Basic Term.
(cz) Termination Premium is defined in Schedule N.
(da) Termination Value, with respect to each Unit and Potential
Additional Unit is the amount shown on Schedule L as the termination value for
such Unit. Upon any Substitution, the Termination Value with respect to the
Substitute Unit shall be the Termination Value of the Released Unit replaced by
such Substitute Unit.
(db) Trade Fixtures is defined in Article 11.
(dc) Unit is defined in Article 1, paragraph (a) and includes, but
only upon the acquisition thereof by Lessor and the leasing thereof to Lessee in
accordance herewith, any Potential Additional Unit. No Released Unit or
Terminated Unit shall be considered a Unit hereunder, except for any obligations
hereunder arising prior to the Substitution or Early Termination of such Unit or
which expressly survives the termination of this Lease as to such Unit.
(dd) Unit Percentage with respect to any Unit and Potential Additional
Unit shall mean the percentage set forth in Schedule M.
(de) Unit Redemption Price, with respect to any Unit and Potential
Additional Unit shall mean the amount payable by Lessee to Lessor upon Early
Termination pursuant to Article 37 and shall be set forth on Schedule N attached
hereto.
(df) Use Restriction Period is defined in Article 4.
(dg) Value means the Fair Market Value or the Fair Rental Value, as
applicable.
(dh) Year Nine Increment is defined in Article 30, paragraph (a).
(di) Year Nine Minimum Purchase Price is defined in Article 30,
paragraph (a).
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(dj) Year Nine Offer is defined in Article 30, paragraph (a).
(dk) Year Nine Offer Value is defined in Article 30, paragraph (a).
(dl) Year Nine Option is defined in Article 31.
(dm) Year Nine Rejection Notice is defined in Article 30, paragraph
(a).
(dn) Year Nine Special Rent is defined in Schedule D.
(do) Year Nine Termination Date is defined in Article 30, paragraph
(a).
(dp) Year Nine Units is defined in Article 30, paragraph (a).
(dq) Year Ten Units is defined in Article 30, paragraph (b).
46. Covenants and Restrictions Upon Expiration of Master Lease. The
provisions of Schedule R attached hereto are incorporated herein by this
reference and shall, except as otherwise provided in Schedule R, survive
expiration of the Term and termination of this Lease. All references elsewhere
in this Lease or in any other document to provisions in this Article 46 shall
include the provisions of Schedule R incorporated herein by reference.
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IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be duly
executed and delivered as of the date set forth above.
LESSOR: CRC-I LIMITED PARTNERSHIP, a
Massachusetts limited
partnership
By: CRC-I Corp., a
Massachusetts corporation,
General Partner
By:______________________
Name: Charles Duddles
Title: President
[SEAL]
LESSEE: FOODMAKER, INC., a Delaware
corporation
By:_________________________
Name: William F. Motts
Title: Vice President
By:_________________________
Name: Leo Momsen
Title: Assistant Secretary
[SEAL]
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SCHEDULES
(Schedules to the Master Lease are not included. Foodmaker agrees to furnish
supplementally a copy of any Schedule to the Master Lease to the Commission upon
request.)
SCHEDULES
Schedule A Street Address and Location
Schedule A-1
through A-29 Legal Descriptions of Units
Schedule B Lessee's Trade Fixtures
Schedule C Basic Rent Schedule
Schedule C-1 Individual Unit Basic Rent
Schedule D Special Rent Schedule
Schedule D-1 Individual Unit Special Rent and Individual
Unit Year Nine Special Rent
Schedule E Schedule of Environmental Reports
Schedule F Certificate of Foodmaker, Inc.
Pursuant to Article 14, paragraph (c) of the
Master Lease
Schedule G Form of Amendment - Substitution
Schedule H Permitted Encumbrances
Schedule I Examples of Calculations of Purchase Price
(pursuant to Article 30)
Schedule J Specific Provisions Relating to Units located
in Particular Jurisdictions
Schedule K Early Termination
Schedule L Termination Values
Schedule L-1 Individual Unit Termination Value
Schedule M Unit Percentages
Schedule M-1 Unit Percentages
Schedule N Unit Redemption Prices
Schedule O Schedule of Potential Additional Units
Schedule P Form of Amendment -- Potential [Construction]
[Additional] Units
Schedule Q Indemnified Matters
Schedule R Covenants and Restrictions After Expiration
of Lease
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MASTER LEASE
BETWEEN
CRC-II LIMITED PARTNERSHIP,
A MASSACHUSETTS LIMITEDPARTNERSHIP
AND
FOODMAKER, INC.
A DELAWARE CORPORATION
As of December 15, 1993
The Company also entered into a Master Lease with CRC-II substantially identical
to the CRC-I Master Lease differing only as to the properties involved. A
summary of material differences follows:
1. References to CRC-I are changed to CRC-II.
2. References to CRC-II are changed to CRC-I.
3. References to "Additional" Units are changed to "Construction" Units.
4. References to "Additional Unit Acquisition Account" are changed to
"Construction Account".
5. Section 43 (a) is revised and included hereafter.
(a) Potential Construction Units. Lessor and Lessee acknowledge
that Lessee is in the process of constructing "Jack In The
Box" restaurants on certain of the Units (collectively, and
together with any Potential Construction Units, as hereinafter
defined, Lessor's Estates in which are acquired by Lessor and
leased back to Lessee pursuant hereto, the "Construction
Units"). Lessee is also in the process of negotiating, or has
obtained a contract of sale, for the acquisition of, or
otherwise acquiring those parcels of land described in
Schedule O attached hereto, upon which Lessee intends to
construct "Jack In The Box" restaurants (collectively, and
including any parcels of land substituted therefor in
compliance herewith, the "Potential Construction Units");
Lessee intends to grant to Lessor Lessor's Estate in each such
Potential Construction Unit and to lease back from Lessor such
Potential Construction Unit pursuant to this Lease. This
Article 43 sets forth certain obligations of Lessee with
respect to the Construction Units and the terms and conditions
upon which Lessor will agree to acquire Lessor's Estate from
Lessee and lease back to Lessee the Potential Construction
Units. The terms "Unit," "Units" and "Leased Property" as
used in this Lease include, without limitation, all Potential
Construction Units hereafter subjected to this Lease. <PAGE>
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6. Section 43 (b) (i) is revised and included hereafter.
(i) The purchase price for Lessor's Estate in any Potential
Construction Unit (and for any parcel of land substituted
therefore in compliance therewith) shall be the
Termination Value thereof and shall be payable upon the
date of the recordation (such date as to such Potential
Construction Unit is referred to herein as the
"Construction Unit Closing Date") of the Construction
Unit Deed (as defined below) conveying to Lessor Lessor's
Estate in such Potential Construction Unit as described
below and the satisfaction of all Construction Unit
Closing Conditions. If Lessee is acquiring such
Potential Construction Unit concurrently with Lessee's
grant to Lessor of Lessor's Estate, the purchase price
shall be deposited into an escrow and released from the
escrow to Lessee or Lessee's seller pursuant to escrow
instructions satisfactory to Lessor, Lessor's Mortgagee
and the Indenture Trustee.
7. Schedules are specific to the properties involved.