<PAGE>
EXHIBIT 10.3
LEASE AGREEMENT
by and between
UH STORAGE (DE) LIMITED PARTNERSHIP,
a Delaware limited partnership
as LANDLORD
and
MERCURY PARTNERS, LP,
a Nevada limited partnership,
as TENANT
Premises: See Schedule A attached hereto
Dated as of: March 31, 2004
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TABLE OF CONTENTS
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Page
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1. Demise of
Premises....................................................
1
2. Certain
Definitions...................................................
1
3. Title and
Condition; Single Lease Transaction.........................
12
4. Use of Leased
Premises; Quiet Enjoyment...............................
14
5.
Term..................................................................
16
6. Basic
Rent............................................................
17
7. Additional
Rent.......................................................
17
8. Net Lease:
Non-Terminability..........................................
18
9. Payment of
Impositions................................................
19
10. Compliance with
Laws and Easement Agreements; Environmental Matters... 20
11. Liens; Recording
..................................................... 23
12. Maintenance and
Repair................................................ 24
13. Alterations and
Improvements.......................................... 24
14. Permitted
Contests....................................................
26
15. Indemnification
...................................................... 26
16.
Insurance.............................................................
28
17. Casualty and
Condemnation.............................................
31
18. Termination
Events....................................................
33
19.
Restoration...........................................................
34
20. Procedures Upon
Purchase.............................................. 35
21. Assignment and
Subletting: Prohibition against Leasehold Financing....
37
22. Events of
Default.....................................................
40
23. Remedies and
Damages Upon Default.....................................
43
24.
Notices...............................................................
46
25. Estoppel
Certificate..................................................
46
26.
Surrender.............................................................
47
27. No Merger of
Title....................................................
47
28. Books and
Records.....................................................
47
29. Determination of
Value................................................ 48
30. Non-Recourse as to
Landlord........................................... 50
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31.
Financing.............................................................
50
32. Subordination,
Non-Disturbance and Attornment.........................
51
33. Tax Treatment;
Reporting..............................................
52
34. Option to Purchase
................................................... 52
35. Security
Deposit......................................................
53
36. Economic
Abandonment..................................................
55
37. Substitution and
Exchange of Premises................................. 56
38. UHS Lease;
Automatic Assumption of the UHS Lease .....................
57
39. Local Law
Provisions .................................................
58
40. Miscellaneous
........................................................
58
</TABLE>
Exhibit "A-l" - Legal Descriptions of each Related Premises
Exhibit "A-2" - Street Addresses of each Related Premises
Exhibit "B" -
Machinery and Equipment
Exhibit "C-l" - Schedule of Permitted Encumbrances
Exhibit "C-2" - Schedule B from each Title Pro Forma
Exhibit "D" -
Rent Schedule
Exhibit "E" -
Acquisition Costs
Exhibit "F" -
Premises Percentage Allocation of Basic Rent
Exhibit "G" -
Local Law Provisions
Exhibit "H" -
Tenant's Post Closing Environmental Obligations
ii
<PAGE>
LEASE
AGREEMENT, made as of March 31, 2004, between UH STORAGE (DE)
LIMITED PARTNERSHIP, a Delaware limited partnership (together with
any of its
successors and/or assigns, "Landlord"), with an address c/o W. P.
Carey & Co.
LLC, 50 Rockefeller Plaza, 2nd Floor, New York, New York 10020, and
MERCURY
PARTNERS, LP, a Nevada limited partnership ("Tenant") with an
address at c/o
Jones Vargas, 100 W. Liberty Street, Suite 1200, Reno, Nevada
89501.
In
consideration of the rents and provisions herein stipulated to be
paid
and performed, Landlord and Tenant hereby covenant and agree as
follows:
1. Demise of Premises. Landlord hereby demises and lets to
Tenant,
and Tenant hereby takes and leases from Landlord, for the term and
upon the
provisions hereinafter specified, the following described
properties
(hereinafter referred to collectively as the "Leased Premises" and
each
individually as a "Related Premises": (a) that portion of the land
described in
Exhibit "A-l" attached hereto upon which the Improvements
containing the
self-storage units and related facilities are located and
designated "RV", boat
and customer trailer parking areas are located, together with the
Appurtenances
related thereto, and together with a personal easement for the
benefit of Tenant
(and any permitted assignees or sublessees of Tenant's interests
hereunder)
granting the right of ingress and egress for vehicular and
pedestrian access
over and through the Common Areas (collectively, the "Land"); (b)
the buildings,
structures and other improvements now or hereafter constructed on
the Land
(collectively, the "Improvements"); and (c) the fixtures,
machinery, equipment
and other property described in Exhibit "B" on the Land or within
any
Improvements thereon (collectively, the "Equipment").
2. Certain Definitions.
"Abandonment Date" shall mean the Abandonment Date as defined
in Paragraph 36.
"Abandonment Notice" shall mean Abandonment Notice as defined
in Paragraph 36.
"Abandonment Offer
Amount" shall mean the Abandonment Offer
Amount as defined in Paragraph 36.
"Abandonment Premises" shall mean the Leased Premises or any
of the Related Premises, as applicable, abandoned pursuant to
Paragraph 36.
"Acquisition Cost" of each of the Related Premises shall mean
the amount set forth opposite such premises on Exhibit "E"
hereto.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Affected Premises" shall mean the Affected Premises as
defined in Paragraph 18.
1
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"Affiliate" of any Person shall mean any Person which shall
(1) control, (2) be under the control of, or (3) be under common
control with
such Person (the term "control" as used herein shall be deemed to
mean ownership
of more than 50% of the outstanding Voting Stock of a corporation,
or other
majority equity and control interest if such Person is not a
corporation).
"Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations, reconstructions, renewals,
replacements or
removals of and all substitutions or replacements for any of the
Improvements or
Equipment, both interior and exterior, structural and
non-structural, and
ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land,
including (a)
easements over other lands granted by any Easement Agreement and
(b) any
streets, ways, alleys, sidewalks, driveways, curbs vaults, gores or
strips of
land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases
from Landlord to a Lender which (a) encumbers any of the Leased
Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be
amended,
supplemented or modified from time to time, in any case, whether
pursuant to a
separate agreement or as part of a Mortgage.
"Assignment and Assumption of UHS Lease Agreement" shall mean
that certain Assignment and Assumption Agreement dated as of the
date hereof by
and between Tenant and UHS Tenant.
"Assignment and Subordination of Management Agreement" shall
mean that certain Assignment and Subordination of Management
Agreement dated as
of the date hereof by and among Tenant, Landlord and Manager and
any future
assignment and subordination of management agreement by and among
Tenant,
Manager and Landlord, which future assignment and subordination of
management
agreement shall be in form and substance reasonably acceptable to
each party
thereto.
"Automatic Renewal Notice" shall mean Automatic Renewal Notice
as defined in Paragraph 5.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Adjustment Date" shall mean Basic Rent Adjustment
Date as defined in Exhibit "D".
"Basic Rent Payment Dates" shall mean the Basic Rent Payment
Dates as defined in Paragraph 6.
"Casualty" shall mean any loss of or damage to or destruction
of or which affects the Leased Premises or Appurtenances or which
arises from
the Appurtenances.
2
<PAGE>
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Common Areas" shall mean the applicable area or areas located
upon or comprising a portion of each Related Premises necessary for
Tenant
and/or its employees, customers, contractors and invitees to enjoy
vehicular and
pedestrian ingress and/or egress to and from the Improvements from
(i) any
public street adjoining the Land or (ii) any office or general
parking areas
located upon or constituting a portion of the land and improvements
demised to
UHS under the UHS Lease for the Corresponding UHS Premises.
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean written notice of the
relevant condemning authority, of the institution of or intention
to institute
any proceeding for Condemnation.
"Corresponding UHS Premises" shall mean the real property and
improvements demised pursuant to the UHS Lease and located
contiguously to, and
at the same street address as, the applicable Related Premises,
Affected
Premises, Exchange Premises or Abandonment Premises as the context
shall
require, demised hereunder to Tenant.
"Costs" of a Person or associated with a specified transaction
shall mean all reasonable out-of-pocket costs and expenses incurred
by such
Person or associated with such transaction, including without
limitation,
attorneys' fees and expenses, court costs, brokerage fees, escrow
fees, title
insurance premiums, recording fees and transfer taxes, as the
circumstances
require.
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"CPI Adjusted Acquisition Cost" shall mean the product of (x)
the Acquisition Cost, as increased by CPI from the Commencement
Date through the
Option Purchase Date in the same manner that Basic Rent is adjusted
by CPI
pursuant to Exhibit "D" and (y) 0.90.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, and other similar agreements
burdening or
benefiting any Related Premises and listed as Permitted
Encumbrances or as may
hereafter affect the Land comprising any Related Premises or the
use or
occupancy of any Related Premises and bind Landlord and/or any
future fee owner
of any Related Premises.
"Environmental Law" shall mean (i) whenever enacted or
promulgated, any applicable federal, state, foreign and local law,
statute,
ordinance, rule, regulation, license, permit, authorization,
approval, consent,
court order, judgment, decree, injunction, code, requirement or
agreement with
any governmental entity, (x) relating to pollution (or the cleanup
thereof), or
the protection of air, water vapor, surface water, groundwater,
drinking water
supply,
3
<PAGE>
land (including land surface or subsurface), plant, aquatic and
animal life from
injury caused by a Hazardous Substance or (y) concerning exposure
to, or the
use, containment, storage, recycling, reclamation, reuse,
treatment, generation,
discharge, transportation, processing, handling, labeling,
production, disposal
or remediation of any Hazardous Substance, Hazardous Condition or
Hazardous
Activity, in each case as amended and as now or hereafter in
effect, and (ii)
any common law or equitable doctrine (including, without
limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass
and strict
liability) that may impose liability or obligations or injuries or
damages due
to or threatened as a result of the presence of, exposure to, or
ingestion of,
any Hazardous Substance. The term Environmental Law includes,
without
limitation, the federal Comprehensive Environmental Response
Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization
Act, the
federal Water Pollution Control Act, the federal Clean Air Act, the
federal
Clean Water Act, the federal Resources Conservation and Recovery
Act of 1976
(including the Hazardous and Solid Waste Amendments to RCRA), the
federal Solid
Waste Disposal Act, the federal Toxic Substance Control Act, the
federal
Insecticide, Fungicide and Rodenticide Act, the federal
Occupational Safety and
Health Act of 1970, the federal National Environmental Policy Act
and the
federal Hazardous Materials Transportation Act, each as amended and
as now or
hereafter in effect and any similar state or local Law.
"Environmental Violation" shall mean (a) any direct or
indirect discharge, disposal, spillage, emission, escape, pumping,
pouring,
injection, leaching, release, seepage, filtration or transporting
of any
Hazardous Substance at, upon, under, onto or within the Leased
Premises, or from
the Leased Premises to the environment, in violation of any
Environmental Law or
in excess of any reportable quantity established under any
Environmental Law or
which could result in any liability to Landlord, Tenant or Lender,
any Federal,
state or local government or any other Person for the costs of any
removal or
remedial action or natural resources damage or for bodily injury or
property
damage, (b) any deposit, storage, dumping, placement or use of any
Hazardous
Substance at, upon, under or within the Leased Premises or which
extends to any
Appurtenances in violation of any Environmental Law or in excess of
any
reportable quantity established under any Environmental Law or
which could
result in any liability to any Federal, state or local government
or to any
other Person for the costs of any removal or remedial action or
natural
resources damage or for bodily injury or property damage, (c) the
abandonment or
discarding of any barrels, containers or other receptacles
containing any
Hazardous Substances in violation of any Environmental Laws, (d)
any activity,
occurrence or condition which could result in any liability, cost
or expense to
Landlord or Lender or any other owner or occupier of the Leased
Premises, or
which could result in a creation of a lien on any Related Premises
under any
Environmental Law or (e) any violation of or noncompliance with
any
Environmental Law.
"Equipment" shall mean the Equipment as defined in
Paragraph 1.
"Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).
"Exchange" shall mean Exchange as defined in Paragraph 37.
"Exchange Premises" shall mean Exchange Premises as defined in
Paragraph 37.
4
<PAGE>
"Expansion" shall mean an Expansion as defined in
Paragraph 13(a).
"Expansion Credit" shall mean the difference between (x) the
Fair Market Value of the applicable Related Premises including the
Expansion and
(y) the Fair Market Value of such Related Premises as if such
Expansion had not
been constructed, as determined in each case by the appraisers
pursuant to
Paragraph 29.
"Fair Market Value" of either the Leased Premises or any
Related Premises, as the case may be, and the context may require,
shall mean
the higher of (a) the fair market value of the Leased Premises or
any Related
Premises, as the case may be, as of the Relevant Date as if
unaffected and
unencumbered by this Lease or (b) the fair market value of the
Leased Premises
or Related Premises, as the case may be, as of the Relevant Date as
affected and
encumbered by this Lease and assuming that the Term has been
extended for all
extension periods provided for herein. For all purposes of this
Lease, Fair
Market Value shall be determined in accordance with the procedure
specified in
Paragraph 29. Notwithstanding the foregoing, for purposes of
determining the
Fair Market Value of any Related Premises upon Tenant's exercise of
its option
to purchase the Leased Premises pursuant to Paragraph 34 of this
Lease, there
shall be deducted from the Fair Market Value of any applicable
Related Premises
an amount equal to the value of any Expansion Credit that
corresponds to such
Related Premises.
"Fair Market Value Date" shall mean the date when the Fair
Market Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately
available funds which at the time of payment are legal tender for
the payment of
public and private debts in the United States of America.
"Guarantor" shall mean Mercury 99, LLC., a Nevada limited
liability company.
"Guaranty" shall mean the Guaranty and Suretyship Agreement
dated as of the date hereof from Guarantor to Landlord guaranteeing
the payment
and performance by Tenant of all of Tenant's obligations under the
Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or
creates any
Hazardous Substance; (ii) causes or results in (or threatens to
cause or result
in) the release, seepage, spill, leak, flow, discharge or emission
of any
Hazardous Substance into the environment (including the air, ground
water,
watercourses or water systems), (iii) involves the containment or
storage of any
Hazardous Substance; or (iv) would cause any of the Leased Premises
or any
portion thereof to become a hazardous waste treatment, recycling,
reclamation,
processing, storage or disposal facility within the meaning of any
Environmental
Law.
"Hazardous Condition" means any condition which would support
any claim or liability under any Environmental Law, including the
presence of
underground storage tanks.
5
<PAGE>
"Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or
mixture, mineral
(including asbestos), chemical, gas, medical waste, or other
pollutant, in each
case whether naturally occurring, man-made or the by-product of any
process,
that is toxic, harmful or hazardous or acutely hazardous to the
environment or
public health or safety or (ii) any substance supporting a claim
under any
Environmental Law, whether or not defined as hazardous as such
under any
Environmental Law. Hazardous Substances include, without
limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste,
petroleum or
petroleum-derived substances or waste, radon, radioactive
materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation,
lead,
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in
Paragraph 15.
"Initial Lender" shall mean Bank of America, N.A. and its
successors and/or assigns.
"Initial Loan" shall mean that certain Loan made by Initial
Lender to Landlord on the date hereof secured by the Leased
Premises.
"Initial Loan Agreement" shall mean that certain Loan
Agreement by and between Landlord and Initial Lender, dated as of
the
Commencement Date.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation,
requirement or
administrative or judicial determination, even if unforeseen or
extraordinary,
of every duly constituted governmental authority, court or agency,
now or
hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Assumption Event" shall mean Lease Assumption Event as
defined in Paragraph 38.
"Lease Year" shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at
midnight on the
last day of the twelfth (12th) consecutive calendar month following
the month in
which the Commencement Date occurred, and each succeeding twelve
(12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
6
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"Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental
Laws and
Laws relating to accessibility to, usability by, and discrimination
against,
disabled individuals) and all covenants, restrictions and
conditions now or
hereafter of record which may be applicable to Tenant or to any of
the Leased
Premises or any Related Premises, or to the use, manner of use,
occupancy,
possession, operation, maintenance, alteration, repair or
restoration of any of
the Leased Premises or any Related Premises, even if compliance
therewith
necessitates structural changes or improvements or results in
interference with
the use or enjoyment of any of the Leased Premises or any Related
Premises or
requires Tenant to carry insurance other than as required by this
Lease.
"Lender" shall mean (a) initially, Initial Lender, and (b)
thereafter, any person or entity (and its respective successors and
assigns)
which may, on or after the date hereof, make a Loan to Landlord or
be the holder
of a Note.
"Letter of Credit" shall mean Letter of Credit as defined in
Paragraph 35.
"Loan" shall mean any loan made by one or more Lenders to
Landlord, which loan is secured by a Mortgage and evidenced by a
Note.
"Loan Documents" shall mean those documents or instruments
evidencing or securing a Loan, including, without limitation, a
loan agreement,
Mortgage, Note, Assignment or Subordination non-disturbance and
attornment
agreement.
"Monetary Obligations" shall mean Rent and all other sums
payable by Tenant under this Lease to Landlord, to any third party
on behalf of
Landlord or to any Indemnitee.
"Manager" shall mean U-Haul Self-Storage Management (WPC),
Inc., a Nevada corporation or any future manager retained to manage
the Leased
Premises.
"Management Agreement" shall collectively mean (i) that
certain Property Management Agreement by and among Tenant and
Manager, as
manager, dated as of the date hereof, with respect to the Leased
Premises or any
future written management agreement with respect to the management
of the Leased
Premises approved by Landlord and Lender, and (ii) that certain
Assignment and
Subordination of Management Agreement by and among Landlord, Tenant
and Manager
dated as of the date hereof and any future assignment and
subordination of
management agreement as may be required by and in form and
substance acceptable
to, Landlord and Lender.
"Mortgage" shall mean any mortgage or deed of trust from
Landlord to a Lender which (a) encumbers any of the Leased
Premises, and (b)
secures Landlord's obligation to repay a Loan, as the same may be
amended,
supplemented or modified.
"Negative Pledge Agreement" shall mean that certain Negative
Pledge Agreement by and between Landlord, the sole principal of
Guarantor (the
"Principal") and Guarantor with respect to the ownership interests
of Guarantor
in Tenant and with respect to the ownership interests of Principal
in Guarantor.
7
<PAGE>
"Net Award" shall mean (a) the entire award payable to
Landlord or Lender by reason of a Condemnation whether pursuant to
a judgment or
by agreement or otherwise, or (b) the entire proceeds of any
insurance required
under clauses (i), (ii) (to the extent payable to Landlord or
Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any expenses
incurred by
Landlord and Lender in collecting such award or proceeds.
"Non-Compete Agreement" shall mean that certain Non-Compete
Agreement dated as of the date hereof by and between Mark Shoen and
Landlord.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended,
supplemented or
modified.
"O & M Plan" shall mean the Operations and Maintenance
Program, if any, established with respect to the monitoring,
removal,
remediation, encapsulation or other treatment or handling of
asbestos containing
materials present at any Related Premises, prepared by ATC
Associates, Inc. and
dated on or about March 2, 2004, as same may be amended, renewed,
supplemented
or otherwise modified from time to time.
"Option Exercise Price" shall mean (1) in the case of a
Purchase Option exercised on or about the tenth (10th) anniversary
of the
Commencement Date, greater of (A) 115% of the Acquisition Cost of
the Leased
Premises as of the Relevant Date or (B) the Fair Market Value of
the Leased
Premises as of the Relevant Date, plus, in each case, any
applicable Prepayment
Premium which Landlord is required to pay in prepaying any Loan
with proceeds of
the Option Exercise Price, and (2) in the case of a Purchase Option
exercised on
or about the twentieth (20th) anniversary of the Commencement Date,
greater of
(A) Acquisition Cost of the Leased Premises as of the Relevant Date
or (B) the
lesser of (x) the Fair Market Value of the Leased Premises as of
the Relevant
Date and (y) the CPI Adjusted Acquisition Cost of the Leased
Premises as of the
Relevant Date, plus, in each case, any applicable Prepayment
Premium which
Landlord is required to pay in prepaying any Loan with proceeds of
the Option
Exercise Price.
"Option Exercise Notice" shall mean Option Exercise Notice as
defined in Paragraph 34.
"Partial Casualty" shall mean any Casualty which does not
constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does
not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and
other
encumbrances, other than any Mortgage or Assignment, listed or
referred to on
Exhibit "C" hereto (but such listing shall not be deemed to revive
any such
encumbrances that have expired or terminated or are otherwise
invalid or
unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
8
<PAGE>
"Preapproved Sublet" shall mean Preapproved Sublet as defined
in Paragraph 21.
"Premises Percentage Allocation" shall mean the percentage
allocated to each Related Premises in Exhibit "F" to this Lease as
the same may
be adjusted in accordance with the formula specified in Exhibit
"F".
"Prepayment Premium" shall mean any payment required to be
made by Landlord to a Lender under a Note or other document
evidencing or
securing a Loan (other than payments of principal and/or interest
which Landlord
is required to make under a Note or a Mortgage) solely by reason of
any
prepayment or defeasance by Landlord of any principal due under a
Note or
Mortgage, and which may, without limitation, take the form of (i) a
"make whole"
or yield maintenance clause requiring a prepayment premium or (ii)
a defeasance
payment (such defeasance payment to be an amount equal to the
positive
difference between (a) the total amount required to defease a Loan
and (b) the
outstanding principal balance of the Loan as of the date of such
defeasance plus
reasonable Costs of Landlord and Lender); provided that such
Prepayment Premium
shall be as set forth in the Initial Loan Agreement while same is
in effect,
and, thereafter, consistent with market terms at the time the Note
was executed
for loans from Lender (or similar institutional lenders) for
similar sized loans
for single user properties of the size and type of the Lease
Premises and owned
or operated by a tenant of similar creditworthiness as Tenant
hereunder.
"Present Value" of any amount shall mean such amount
discounted by a rate per annum which is the lower of (a) the Prime
Rate at the
time such present value is determined or (b) six percent (6%) per
annum.
"Prime Rate" shall mean the interest rate per annum as
published, from time to time, in The Wall Street Journal as the
"Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the
lowest rate of
interest charged by any "large U.S. money center commercial banks"
and Landlord
makes no representations or warranties to that effect. In the event
The Wall
Street Journal ceases publication or ceases to publish the "Prime
Rate" as
described above, the Prime Rate shall be the average per annum
discount rate
(the "Discount Rate") on ninety-one (91) day bills ("Treasury
Bills") issued
from time to time by the United States Treasury at its most recent
auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills
are then
being issued, the Discount Rate shall be the discount rate on
Treasury Bills
then being issued for the period of time closest to ninety-one (91)
days.
"Qualified Manager" shall mean (a) U-Haul International, Inc.
or one or more of its Affiliates, (b) such other nationally or
regionally
recognized, reputable and professional management organization (i)
that has (or
whose principals or key management personnel have), together with
its
Affiliates, not less than five (5) years experience managing
properties of a
type, quality and size similar to the Leased Premises, totaling in
the aggregate
not less than 3,000,000 square feet and/or 30,000 self-storage
units, and (ii)
prior to whose employment as manager of the Leased Premises (A)
prior to the
occurrence of a Securitization, such employment shall have been
approved by
Lender in its reasonable discretion, and (B) after the occurrence
of a
Securitization, Lender shall have received written confirmation
from the Rating
Agencies that the employment of such manager will not result in a
downgrade,
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<PAGE>
withdrawal or qualification of the initial, or if higher, then
current ratings
of the Securities, or (c) if no Loan is outstanding, a manager that
is
acceptable to Landlord in Landlord's sole and absolute discretion
and if any
Loan is outstanding, a manager that is acceptable to Landlord and
Lender in
Landlord and Lender's sole and absolute discretion.
"Rating Agencies" shall mean each of Moody's Investors
Services, Inc.("Moody's") and Standard & Poor's Rating
Services, a division of
The McGraw-Hill Companies, Inc. ("S & P"), or any other
nationally recognized
statistical rating agency which has been approved by Landlord
and/or Lender, as
applicable, provided, however, that notwithstanding the foregoing,
so long as
the Initial Loan remains outstanding, the term "Rating Agencies"
shall have the
meaning assigned in the Initial Loan Agreement.
"Related Premises" shall mean Related Premises as defined in
Paragraph 1 and as more particularly identified by site location on
Exhibit A-2.
"Relevant Amount" shall mean the Termination Amount or Option
Exercise Price, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to
the date on which the applicable Condemnation Notice is received,
in the event
of a Termination Notice under Paragraph 18 which is occasioned by a
Taking, (b)
the date immediately prior to the date on which the applicable
Casualty occurs,
in the event of a Termination Notice under Paragraph 18 which is
occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in
the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c),
or (d) the
date on which Landlord receives an Option Exercise Notice.
"Remaining Premises" shall mean the Related Premises which are
not Affected Premises under Paragraph 18 or an Abandonment Premises
under
Paragraph 36.
"Renewal Term" shall mean Renewal Term as defined in
Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and Additional
Rent.
"Securitization" shall mean the issuance of pass-through
mortgage certificates or other commercial mortgage-backed
securities
("Securities") evidencing a beneficial interest in a rated public
offering or
private placement, or such broader definition of such capitalized
terms as may
be established by Lender in connection with a Loan and/or
Mortgage.
"Security Deposit" shall mean Security Deposit as defined in
Paragraph 35.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"Surviving Obligations" shall mean any obligations of Tenant
under this Lease, actual or contingent, which are either Monetary
Obligations
that arise or accrue during the Term of this Lease and remain
unsatisfied upon
the Expiration Date or earlier or termination of
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<PAGE>
this Lease or non-monetary obligations which survive such
expiration or
termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a
portion of any of the Leased Premises (i) in or by condemnation or
other eminent
domain proceedings pursuant to any Law, general or special, or (ii)
by reason of
any agreement with any condemnor in settlement of or under threat
of any such
condemnation or other eminent domain proceeding, or (iii) by any
other means, or
(b) any de facto condemnation. The Taking shall be considered to
have taken
place as of the later of the date actual physical possession is
taken by the
condemnor, or the date on which the right to compensation and
damages accrues
under the law applicable to the Related Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of (a) the sum of
the Fair Market Value of the applicable Related Premises and the
applicable
Prepayment Premium which Landlord will be required to pay in
prepaying or
defeasing, as applicable, any Loan with proceeds of the Termination
Amount or
(b) the sum of the Acquisition Cost for the applicable Related
Premises and the
applicable Prepayment Premium which Landlord will be required to
pay in
prepaying or defeasing in whole or in part, as applicable, any Loan
with
proceeds of the Termination Amount.
"Termination Date" shall mean the Termination Date as defined
in Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party Purchaser
as defined in Paragraph 21(g).
"Threshold Amount" shall mean, (A) with respect to any
individual Related Premises, the lesser of (x) twenty-five (25%)
percent of the
allocated Acquisition Cost of the applicable Related Premises as
set forth on
Exhibit 'E' hereto, or (y) Five Hundred Thousand ($500,000)
Dollars; and (B)
with respect to the Leased Premises collectively, for purposes of
determining
whether or not the Threshold Amount has been exceeded with respect
to (i) the
costs of remediation of, or other response action for,
Environmental Violations
under Paragraph 10(d), (ii) the costs of Alterations under
Paragraph 13 (other
than with respect to any Alterations associated with a Casualty or
Condemnation
for which a Net Award is available), and (iii) the amounts in
controversy with
respect to a Permitted Violations subject to contests under
Paragraph 14, the
Threshold Amount shall not in the aggregate exceed, at any given
point in time,
the sum of Ten Million Dollars ($10,000,000) under all three
categories
collectively.
"UHS" shall mean U-Haul Moving Partners, Inc., a Nevada
corporation.
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<PAGE>
"UHS Lease" shall mean that certain Lease Agreement, dated as
of the date hereof, by and between Landlord and UHS with respect
the
Corresponding UHS Premises.
"Voting Stock" means shares of stock of a corporation having
ordinary voting power to elect the board of directors or other
managers of such
corporation.
"Warranties" shall mean Warranties as defined in
Paragraph 3(e).
3. Title and Condition; Single Lease Transaction.
(a) The Leased Premises are demised and let subject to (i) the
rights of any Persons in possession of the Leased Premises, (ii)
the existing
state of title of any of the Leased Premises, including any
Permitted
Encumbrances, (iii) any state of facts which an accurate survey or
physical
inspection of the Leased Premises might show, (iv) all Legal
Requirements,
including any existing violation of any thereof, (v) the rights of
UHS to any
Common Areas under the UHS Lease and (vi) the condition of the
Leased Premises
as of the commencement of the Term, without representation or
warranty by
Landlord.
(b) Tenant acknowledges that the Leased Premises are in good
condition and repair at the inception of this Lease. LANDLORD
LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS
WHERE IS AND WITH
ALL FAULTS. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS
LANDLORD
HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE,
NOR SHALL
LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY
WARRANTY OR
REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY
PARTICULAR USE
OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP
THEREIN, (iii) THE
EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD'S TITLE
THERETO, (v)
VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii)
USE, (ix)
CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION,
(xiii)
DURABILITY (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS
SUBSTANCE, OR
(xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL
REQUIREMENT; AND
ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT
ACKNOWLEDGES THAT
THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS SPECIFICATIONS
AND THAT THE
LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND ARE SATISFACTORY
TO IT. IN THE
EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF
ANY NATURE,
WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY
RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS
PARAGRAPH 3(b) HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND
NEGATION OF ANY
WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED
PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL
12
<PAGE>
CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING
OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the
title to the Leased Premises prior to the execution and delivery of
this Lease
and has found the same to be satisfactory for the purposes
contemplated hereby.
Tenant acknowledges that (i) fee simple title (both legal and
equitable) to the
Leased Premises is in Landlord and except as provided in Paragraph
34 hereof
with respect to an option to purchase the Leased Premises that
Tenant has only
the leasehold right of possession and use of the Leased Premises,
as provided
herein, (ii) the Improvements conform to all material Legal
Requirements and all
Insurance Requirements, (iii) all easements necessary or
appropriate for the use
or operation of the Leased Premises have been obtained, (iv) all
contractors and
subcontractors who have performed work on or supplied materials to
the Leased
Premises have been fully paid, and all materials and supplies have
been fully
paid for, (v) the Improvements have been fully completed in all
material
respects in a workmanlike manner of first class quality, and (vi)
all Equipment
necessary or appropriate for the use or operation of the Leased
Premises has
been installed and is presently fully operative in all material
respects. For
the purposes of this Lease, the inaccuracy of any of the
representations or
acknowledgments set forth in this Paragraph 3(c) shall not by
itself constitute
the basis of a default by Tenant under this Lease, but Tenant
hereby expressly
waives any claim or defense against Landlord with respect to any of
the
foregoing matters.
(d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, in conjunction with Landlord, the right to
enforce all
assignable warranties, guaranties, indemnities, causes of action
and similar
rights (collectively "Warranties") which Landlord may have against
any
manufacturer, seller, engineer, contractor or builder in respect of
any Related
Premises. Such assignment shall remain in effect until the
expiration or earlier
termination of this Lease (unless Tenant or its affiliate or
designee acquires
any Related Premises, in which instance such assignment shall
become permanent
and irrevocable with respect to such Related Premises), whereupon
such
assignment shall cease and all of the Warranties, guaranties,
indemnities and
other rights shall automatically revert to Landlord. In
confirmation of such
reversion Tenant shall execute and deliver promptly any certificate
of other
document reasonably required by Landlord. Landlord shall also
retain the right
to enforce any guaranties upon the occurrence of an Event of
Default. Tenant
shall use commercially reasonable efforts to enforce any Warranties
for any
structural components at any Related Premises, including but not
limited to
general construction, concrete, roofs, lifts, and elevators in
accordance with
their respective terms.
(e) LANDLORD AND TENANT AGREE THAT IT IS THEIR MUTUAL INTENT
TO CREATE, AND THAT THIS LEASE CONSTITUTES, A MASTER LEASE WITH
RESPECT TO EACH
AND EVERY PARCEL OF LAND, IMPROVEMENTS INCLUDED IN ANY AND ALL OF
THE LEASED
PREMISES (WHEREVER LOCATED), THAT THIS LEASE IS NOT INTENDED AND
SHALL NOT BE
CONSTRUED TO BE SEPARATE LEASES AND THAT ALL THE TERMS AND
CONDITIONS HEREOF
SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF LANDLORD AND TENANT WITH
RESPECT
THERETO.
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<PAGE>
(f) TENANT, ON BEHALF OF ITSELF AND ANY TRUSTEE OR LEGAL
REPRESENTATIVE (UNDER THE FEDERAL BANKRUPTCY CODE OR ANY SIMILAR
STATE
INSOLVENCY PROCEEDING) EXPRESSLY ACKNOWLEDGES AND AGREES THAT,
NOTWITHSTANDING
THE PROVISIONS OF PARAGRAPH 18 HEREOF OR ANY OTHER PROVISION IN
THIS LEASE TO
THE CONTRARY, IT IS THE EXPRESS INTENT OF LANDLORD AND TENANT TO
CREATE, AND
THAT THIS LEASE CONSTITUTES, A SINGLE LEASE WITH RESPECT TO EACH
AND EVERY
PARCEL OF LAND, IMPROVEMENTS AND EQUIPMENT INCLUDED IN EACH AND ALL
OF THE
RELATED PREMISES (WHEREVER LOCATED) AND SHALL NOT BE (OR BE DEEMED
TO BE)
DIVISIBLE OR SEVERABLE INTO SEPARATE LEASES FOR ANY PURPOSE
WHATSOEVER, AND
TENANT, ON BEHALF OF ITSELF AND ANY SUCH TRUSTEE OR LEGAL
REPRESENTATIVE, HEREBY
WAIVES ANY RIGHT TO CLAIM OR ASSERT A CONTRARY POSITION IN ANY
ACTION OR
PROCEEDING; IT BEING FURTHER UNDERSTOOD AND AGREED BY TENANT THAT
THE
ALLOCATIONS OF ACQUISITION COST AND PERCENTAGE ALLOCATION OF BASIC
RENT AS SET
FORTH ON EXHIBIT "E" AND EXHIBIT "F" HEREOF ARE INCLUDED TO PROVIDE
A FORMULA
FOR RENT ADJUSTMENT AND LEASE TERMINATION UNDER CERTAIN
CIRCUMSTANCES AND AS AN
ACCOMMODATION TO TENANT. ANY EVENT OF DEFAULT HEREUNDER IN
CONNECTION WITH ANY
RELATED PREMISES SHALL BE DEEMED TO BE AN EVENT OF DEFAULT WITH
RESPECT TO THE
ENTIRE LEASED PREMISES (WHEREVER LOCATED). THE FOREGOING AGREEMENTS
AND WAIVERS
BY TENANT IN THIS PARAGRAPH 3(E) ARE MADE AS A MATERIAL INDUCEMENT
TO LANDLORD
TO ENTER INTO THE TRANSACTION CONTEMPLATED BY THIS LEASE AND THAT,
BUT FOR THE
FOREGOING AGREEMENTS AND WAIVERS BY TENANT, LANDLORD WOULD NOT
CONSUMMATE THIS
LEASE TRANSACTION.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for the use,
operation and maintenance of the self-storage units now or
hereafter located
upon the Land and incidental office use in connection with Tenant's
self-storage
business and ancillary uses related to either of the foregoing;
provided,
however, subject to the terms of Paragraph 21, any subtenant may
use the Leased
Premises for any lawful purpose (so long as no such subtenant's use
requires a
change of use or zoning classification or a zoning variance, or
precludes the
return to the primary uses first identified above at any time in
the future).
Tenant shall not use or occupy or permit any of the Leased Premises
to be used
or occupied, nor do or permit anything to be done in or on any of
the Leased
Premises, in a manner which would or might (i) violate any Law,
Legal
Requirement or Permitted Encumbrance, (ii) make void or voidable or
cause any
insurer to cancel any insurance required by this Lease, or make it
difficult or
impossible to obtain any such insurance at commercially reasonable
rates, (iii)
make void or voidable, cancel or cause to be cancelled or release
any of the
Warranties, (iv) cause structural injury to any of the Improvements
or (v)
constitute a public or private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of
Default has occurred and is continuing, Tenant shall quietly hold,
occupy and
enjoy the Leased Premises throughout the Term, without any
hindrance, ejection
or molestation by Landlord with respect to
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<PAGE>
matters that arise after the date hereof, provided that Landlord or
its agents
may enter upon and examine any of the Leased Premises at such
reasonable times
as Landlord may select and upon reasonable prior written notice to
Tenant
(except in the case of an emergency involving the imminent threat
of loss of
life or serious bodily harm or injury to persons or any material
loss of or
damage to property, in which event no notice shall be required) for
the purpose
of inspecting the Leased Premises, verifying compliance or
non-compliance by
Tenant with its obligations hereunder and the existence or
non-existence of an
Event of Default or event which with the passage of time and/or
notice would
constitute an Event of Default, showing the Leased Premises to
prospective
Lenders and purchasers and taking such other action with respect to
the Leased
Premises as is permitted by any provision hereof.
(c) In no event shall any portion of the Leased Premises be
used or occupied or permitted to be used or occupied by Tenant (or
any subtenant
or other occupant) without the express prior written consent of
Landlord, which
may be granted or withheld in its sole discretion, for any of the
following
purposes: (i) any nightclub, bar or discotheque; (ii) any adult
bookstore or
video shop, nude or semi-nude or "adult" entertainment
establishment or any
lewd, obscene or pornographic purpose; (iii) any store in which a
material
portion of the inventory is not available for sale or rental to
children under
18 years of age because such inventory explicitly deals with,
relates to, or
depicts human sexuality, or in which any of the inventory
constitutes drug
paraphernalia of the kind associated with or sold by so-called
"head shops";
(iv) any dumping, disposing, incineration or reduction of garbage
(exclusive of
appropriately screened dumpsters and/or recycling bins and garbage
disposal in
the ordinary course of business); (v) any mortuary; (vi) any fire
sale,
bankruptcy sale (unless pursuant to a court order) or auction house
operation;
(vii) any gas station (provided, however, the sale of propane or
the sale or
rental of propane tanks shall be permitted subject to applicable
Laws); (viii)
any central laundry or dry cleaning plant or laundromat; (ix) any
automobile,
truck, trailer or RV sales (except as expressly permitted in
Paragraph 4(a)
above); (x) any "flea market", secondhand, surplus or other
"off-price" or deep
discount store (provided that the sale of secondhand goods at the
Related
Premises in Key Largo, Florida consistent with practices in effect
as of the
date of this Lease shall be permitted to continue); (xi) any
gambling or
off-track betting operation, or (xii) any massage parlor or
carnival.
Notwithstanding the foregoing, the sale by Tenant (or its
affiliates or Manager)
of items abandoned by self-storage customers or in connection with
any lien sale
conducted in accordance with applicable Laws shall not be
prohibited hereby.
(d) Tenant covenants and agrees, as a material inducement to
Landlord's agreement to enter into this Lease, that at all times
during the
Term, each Related Premises shall be operated by a Qualified
Manager pursuant to
a Management Agreement approved by Landlord and Lender. Tenant
shall not be
permitted to amend, modify or waive any provision of any approved
Management
Agreement without having received the prior written consent of
Landlord and
Lender (if applicable), provided Landlord agrees that its consent
shall not be
unreasonably withheld, conditioned or delayed with respect to any
immaterial
amendment, modification or waiver if Lender's consent is not
required for such
modification, amendment or waiver pursuant to any Loan Documents.
Any Management
Agreement shall be assigned to Landlord and, while any Loan remains
outstanding,
Lender and Tenant covenant and agree to execute (and cause any such
Qualified
Manager to execute) such agreements, consents and acknowledgments
as may be
requested by Landlord from time to time to evidence the
15
<PAGE>
foregoing. Any Management Agreement and any Qualified Manager's
interest
thereunder shall be subordinate to Landlord's fee interest in the
Leased
Premises, this Lease and any Mortgage or other security instrument
hereafter
placed upon the Leased Premises and to any and all advances made or
to be made
thereunder, to the interest thereon, and all renewals, replacements
and
extensions thereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have and
hold the Leased Premises for an initial term (such term, as
extended or renewed
in accordance with the provisions hereof, being called the "Term")
commencing on
the date hereof (the "Commencement Date") and ending on the last
day of the two
hundred fortieth (240th) calendar month next following the date
hereof (the
"Expiration Date").
(b) Provided that if, on or prior to the Expiration Date or
any other Renewal Date (as hereinafter defined) this Lease shall
not have been
terminated pursuant to any provision hereof, then on the Expiration
Date and on
the tenth (10th) anniversary of the Expiration Date (each of the
Expiration Date
and such anniversary being referred to herein as a "Renewal Date"),
the Term
shall be deemed to have been automatically extended for an
additional period
of ten years (each such extension, a "Renewal Term"), unless Tenant
shall notify
Landlord in writing at least twelve (12) months prior to the next
Renewal Date
(the "Non-Renewal Notice Deadline") that Tenant is terminating this
Lease as of
the next Renewal Date, provided, however, Landlord shall deliver
written notice
(the "Automatic Renewal Notice") to Tenant of the upcoming
automatic renewal of
the Term by hand or registered or certified mail at least fifteen
(15) and not
more than thirty (30) days prior to the Non-Renewal Notice
Deadline, and, if
such Automatic Renewal Notice is not timely delivered, then, the
Non-Renewal
Notice Deadline shall be automatically extended to that date that
is fifteen
(15) days after the date Landlord gives the Automatic Renewal
Notice. Any such
extension of the Term shall be subject to all of the provisions of
this Lease,
as the same may be amended, supplemented or modified (except that
Tenant shall
not have the right to any additional Renewal Terms). In addition,
the initial
Term of this Lease shall be extended for the first ten (10) year
Renewal Term
irrespective of whether Tenant has timely notified Landlord in
writing that
Tenant is terminating this Lease as of the Expiration Date if
Tenant has timely
delivered to Landlord (i) the Option Exercise Notice pursuant to
and in
accordance with the provisions of Paragraph 34 and (ii) at least
six (6) months
prior to the expiration date of the initial Term, written notice
that Tenant has
rescinded the Option Exercise Notice pursuant to Paragraph 34(c),
which
rescission notice shall not be effective unless such notice
contains Tenant's
irrevocable agreement to renew the Term of this Lease for the first
ten (10)
year Renewal Term.
(c) If Tenant exercises its option pursuant to Paragraph 5(b)
not to have the Term automatically extended at any time that an
Event of Default
occurs, and is continuing, Landlord shall have the right during the
remainder of
the Term then in effect and, in any event, Landlord shall have the
right during
the last year of the Term, to (i) advertise the availability of any
of the
Leased Premises for sale or reletting and to erect upon any of the
Leased
Premises signs indicating such availability and (ii) show any of
the Leased
Premises to prospective purchasers or tenants or their agents at
such reasonable
times as Landlord may select.
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<PAGE>
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for
the
Leased Premises during the Term, the amounts determined in
accordance with
Exhibit "D" hereto ("Basic Rent") payable in advance for the next
following
three (3) calendar months (i.e. the Basic Rent payment due on June
25, 2004
shall cover the period commencing on July 1, 2004 through and
including the last
day of September 2004), commencing on the twenty-fifth day of June,
2004, and
continuing on the same day of each September, December, March and
June
thereafter during the Term (each such day being a "Basic Rent
Payment Date").
Each such rental payment shall be made in immediately available
Federal Funds,
at Landlord's sole discretion, (a) to Landlord at its address set
forth above
and/or to such one or more other Persons, at such addresses and in
such
proportions as Landlord may direct by not less than fifteen (15)
days' prior
written notice to Tenant, and (b) by certified or bank check, or by
wire
transfer. Basic Rent for the period commencing on the date of this
Lease and
ending on June 30, 2004 shall be paid by Tenant upon the execution
and delivery
of this Lease.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided herein,
all costs and expenses of Tenant, Landlord and any other Persons
specifically
referenced herein which are incurred in connection or associated
with (A) the
ownership, use, non-use, occupancy, monitoring, possession,
operation,
condition, design, construction, maintenance, alteration, repair or
restoration
of any of the Leased Premises, (B) the performance of any of
Tenant's
obligations under this Lease, (C) any sale or other transfer of any
of the
Leased Premises to Tenant under this Lease, including costs and
expenses
incurred in connection with the payment of a Prepayment Premium,
(D) any
Condemnation proceedings, (E) the adjustment, settlement or
compromise of any
insurance claims involving or arising from any of the Leased
Premises, (F) the
exercise or enforcement by Landlord, its successors and assigns, of
any of its
rights under this Lease, (G) any amendment to or modification or
termination of
this Lease made at the request of Tenant, (H) Costs of Landlord
incurred in
connection with the preparation, negotiation and execution of this
Lease, or
incurred in connection with any act undertaken by Landlord (or its
counsel) at
the request of Tenant, or incurred in connection with any act of
Landlord
performed on behalf of Tenant, (I) the reasonable Costs of Landlord
incurred in
connection with any act undertaken by Landlord at the request of
Tenant or
Tenant's failure to act promptly in an emergency situation, (J)
an
administrative fee of $5,000 (the "Administrative Fee") to defer
the internal
costs of Landlord with respect to each applicable Related Premises
in connection
with Tenant's exercise of its rights under Paragraphs 36 or 37
hereof; provided
that (x) the total amount of Administrative Fees payable in any
Lease Year shall
not exceed $150,000 in the aggregate for the Leased Premises, and
(y) no
Administrative Fee shall be payable in connection with any exercise
by Tenant of
its right under Paragraphs 36 or 37 hereof if the Administrative
Fee is paid by
UHS under the UHS Lease in connection with such transaction and (L)
any other
items specifically required to be paid by Tenant under this
Lease;
(ii) after the date all or any portion of any
installment of Basic Rent is due and not paid by the applicable
Basic Rent
Payment Date, an amount (the "Late Charge") equal to the lesser of
(x) $15,000
and (y) five percent (5%) of the amount of such
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<PAGE>
unpaid installment or portion thereof to reimburse Landlord for its
cost and
inconvenience incurred as a result of Tenant's delinquency;
provided, however,
that with respect to the first late payment of all or any portion
of any
installment of Basic Rent in any Lease Year, the Late Charge shall
not be due
and payable unless the Basic Rent has not been paid within five (5)
days'
following the due date thereof. To the extent the Tenant has timely
deposited
funds sufficient to pay Basic Rent then due hereunder into a
lockbox established
for the benefit of Landlord and/or Lender, the failure or delay of
the transfer
of such funds to Landlord shall not entitle Landlord to a Late
Charge or to
declare a default hereunder;
(iii) to the extent in excess of amounts collected by
Landlord under item (iv) below, a sum equal to any additional sums
(excluding
the repayment of principal under a Loan but including any late
charge in excess
of the amount payable under clause (ii) above for that portion of
the Basic Rent
paid to the Lender as scheduled installments of principal and
interest, default
penalties, interest in excess of amounts payable under clause (iv)
below for
that portion of the Basic Rent paid to the Lender as scheduled
installments of
principal and interest, and fees of Lender's counsel) which are
payable by
Landlord to any Lender under any Note by reason of Tenant's late
payment or
non-payment of Basic Rent or by reason of an Event of Default;
and
(iv) interest at the rate (the "Default Rate") of four
percent (4%) over the Prime Rate per annum on the following sums
until paid in
full: (A) any and all installments of Basic Rent and/or any amounts
of
Additional Rent (other than as described in clause (B) herein
below) not paid
prior to the expiration of any applicable notice and cure period,
(B) all
overdue amounts of Additional Rent relating to obligations which
Landlord shall
have paid on behalf of Tenant, from the date of payment thereof by
Landlord.
(b) Tenant shall pay and discharge (i) any Additional Rent
referred to in Paragraph 7(a)(i) when the same shall become due,
provided that
amounts which are billed to Landlord or any third party, but not to
Tenant,
shall be paid within thirty (30) days after Landlord's demand for
payment
thereof, and (ii) any other Additional Rent, within thirty (30)
days after
Landlord's demand for payment thereof.
(c) In no event shall amounts payable under Paragraph
7(a)(ii), (iii) and (iv) or elsewhere in this Lease exceed the
maximum amount
permitted by applicable Law.
8. Net Lease: Non-Terminability.
(a) This is a net lease and all Monetary Obligations shall be
paid without notice or demand (except as otherwise expressly
provided herein
with respect to any specific Monetary Obligation) and without
set-off,
counterclaim, recoupment, abatement, suspension, deferment,
diminution,
deduction, reduction or defense (collectively, a "Set-Off").
(b) This Lease and the rights of Landlord and the obligations
of Tenant hereunder shall not be affected by any event or for any
reason or
cause whatsoever foreseen or unforeseen.
(c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations
shall continue to
be payable in
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all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and
the obligations of Tenant hereunder shall continue unaffected
unless the
requirement to pay or perform the same shall have been terminated
pursuant to an
express provision of this Lease. The obligation to pay Rent or
amounts equal
thereto shall not be affected by any collection of rents by any
governmental
body pursuant to a tax lien or otherwise, even though such
obligation results in
a double payment of Rent. All Rent payable by Tenant hereunder
shall constitute
"rent" for all purposes (including Section 502(b)(6) of the Federal
Bankruptcy
Code).
(d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have
under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased
Premises, or
(ii) to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal
property,
franchise, sales, use, gross receipts and rent taxes), all charges
for any
easement or agreement maintained for the benefit of any of the
Leased Premises,
all assessments and levies, all permit, inspection and license
fees, all rents
and charges for water, sewer, utility and communication services
relating to any
of the Leased Premises, all ground rents and all other public
charges whether of
a like or different nature, even if unforeseen or extraordinary,
imposed upon or
assessed against (i) Tenant, (ii) Tenant's possessory interest in
the Leased
Premises, (iii) any of the Leased Premises, or (iv) Landlord as a
result of or
arising in respect of the acquisition, ownership, occupancy,
leasing, use or,
possession of any of the Leased Premises, any activity conducted on
any of the
Leased Premises, or the Rent (collectively, the "Impositions");
provided, that
nothing herein shall obligate Tenant to pay (A) income, excess
profits or other
taxes of Landlord (or Lender) which are determined on the basis of
Landlord's
(or Lender's) net income or net worth (unless such taxes are in
lieu of or a
substitute for any other tax, assessment or other charge upon or
with respect to
the Leased Premises which, if it were in effect, would be payable
by Tenant
under the provisions hereof or by the terms of such tax, assessment
or other
charge), (B) any estate, inheritance, succession, gift or similar
tax imposed on
Landlord, (C) any capital gains tax imposed on Landlord in
connection with the
sale of the Leased Premises to any Person or (D) any Costs incurred
by Landlord
or any Indemnitee as a result of and to the extent of any
Indemnitee's
negligence acts (but not omissions, unless such omissions
constitute gross
negligence) or willful misconduct. Landlord shall have the right to
require
Tenant to pay, together with scheduled installments of Basic Rent,
the amount of
the gross receipts or rent tax, if any, payable with respect to the
amount of
such installment of Basic Rent. If any Imposition may be paid in
installments
without interest or penalty, Tenant shall have the option to pay
such Imposition
in installments; in such event, Tenant shall be liable only for
those
installments which accrue or become due and payable during the
Term. Tenant
shall prepare and file all tax reports required by governmental
authorities
which relate to the Impositions. If at any time during the Term
Tenant shall be
paying Taxes directly to the applicable taxing authority (and not
by way of a
servicer arranged by a party other than Tenant), then within ten
(10) days after
Landlord's request therefor, Tenant shall deliver to Landlord, (x)
receipts for
payment of all taxes required to be paid by Tenant hereunder within
thirty (30)
days after the due date thereof and (y) receipts for payment of all
other
Impositions. Tenant shall, in any event, deliver to Landlord copies
of all
settlements and
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all notices pertaining to the non-payment, late payment or change
in Impositions
which may be issued by any governmental authority within ten (10)
days after
Tenant's receipt thereof unless such settlement or notice indicates
that a copy
of such settlement or notice has been sent directly to Landlord
and/or Lender.
Tenant and Landlord agree that they shall each cooperate with the
other with
respect to the delivery of such notices and/or requests as may be
required by
each applicable local taxing authority in order to cause each such
local taxing
authority to send all real estate tax bills and assessments
applicable to the
corresponding Related Premises to the Tenant's tax servicer (which
tax servicer
shall be the same tax servicer as designated by UHS under the UHS
Lease) and to
send copies of all such tax bills be sent to Landlord's tax
servicer; provided,
however, that the failure of any such taxing authority to send to
any such bills
to the Tenant's tax servicer shall not mitigate any obligation of
Tenant to pay
such taxes and/or assessments before delinquency and/or interest or
penalties
are due thereon.
(b) Following the occurrence of an Event of Default, or if
Landlord
is required by a Lender, Tenant shall pay to Landlord such amounts
(each an
"Escrow Payment") monthly or as required by such Lender (but not
more often than
monthly) so that there shall be in an escrow account an amount
sufficient to pay
the Escrow Charges (as hereinafter defined) as they become due. As
used herein,
"Escrow Charges" shall mean real estate taxes and assessments on or
with respect
to the Leased Premises or payments in lieu thereof and premiums on
any insurance
required by this Lease and any reserves for capital improvements,
replacements,
deferred maintenance or repairs required by any Lender. Landlord
shall determine
the amount of the Escrow Charges (it being agreed that if required
by a Lender,
such amount shall equal any corresponding escrow installments
required to be
paid by Landlord) and the amount of each Escrow Payment. To the
extent held by
Landlord, the Escrow Payments shall not be commingled with other
funds of
Landlord or other Persons. Neither Landlord nor Lender shall be
required to
deposit any Escrow Payments into an interest bearing account,
however, in the
event any Escrow Payments are deposited into an interest bearing
account, the
interest earned thereon shall accrue to the benefit of Tenant, and,
to the
extent actually paid to Landlord, shall be paid over to Tenant.
Landlord shall
apply the Escrow Payments to the payment of the Escrow Charges in
such order or
priority as Landlord shall determine or as required by law. If at
any time the
Escrow Payments theretofore paid to Landlord shall be insufficient
for the
payment of the Escrow Charges, Tenant, within ten (10) days after
Landlord's
demand therefor, shall pay the amount of the deficiency to
Landlord. Provided
that no Event of Default then exists, any remaining balance of the
Escrow
Payments shall be promptly returned to Tenant upon the expiration
or earlier
termination of the Term or earlier termination of the requirement
to maintain
the Escrow Payments. Tenant's obligation to pay Escrow Payments
pursuant to this
Paragraph 9(b) shall be without duplication of any Escrow Payments
previously
paid by UHS under the UHS Lease with respect to the Leased Premises
hereunder
for the same period.
10.
Compliance with Laws and Easement Agreements; Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform to,
and
cause the Leased Premises and any other Person occupying any part
of the Leased
Premises to comply with and conform to all Insurance Requirements,
in all
material respects, and Legal Requirements (including all
applicable
Environmental Laws). Tenant shall not at any time (i) cause, permit
or suffer to
occur any Environmental Violation or (ii) permit any sublessee,
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assignee or other Person occupying the Leased Premises under or
through Tenant
to cause, permit or suffer to occur any Environmental Violation
and, at the
request of Landlord or Lender, Tenant shall promptly remediate or
undertake any
other appropriate response action to correct any existing
Environmental
Violation, however immaterial, and (iii) without the prior written
consent of
Landlord and Lender, permit any drilling or exploration for or
extraction,
removal, or production of any minerals from the surface or the
subsurface of the
Land, regardless of the depth thereof or the method of mining or
extraction
thereof. Any and all reports prepared for or by Landlord with
respect to the
Leased Premises shall be for the sole benefit of Landlord and
Lender and no
other Person shall have the right to rely on any such reports;
provided that
nothing herein shall be deemed to prevent Tenant from obtaining a
copy thereof,
or from requesting the preparer of such reports to separately
address an
additional copy of such report or a reliance letter to Tenant.
Landlord agrees
that any remediation that Tenant may be required to undertake
during the Term
for any Environmental Violation shall be based upon remediation
standards
appropriate for commercial facilities or commercial uses under
applicable
Environmental Laws; provided, however, that after the expiration of
the Term or
the earlier termination of this Lease until the applicable Related
Premises has
been either sold or entirely re-let, Landlord shall have the right,
if required
by any prospective purchaser or tenant, to require Tenant to
undertake
additional remediation to the clean-up level standards applicable
to any uses
then permitted under applicable Legal Requirements (including,
without
limitation, any zoning ordinances) where the Related Premises is
located if such
standards are more stringent than the applicable remediation
standards for
commercial facilities.
(b) Tenant, at its sole cost and expense, will at all times
promptly
and faithfully abide by, discharge and perform all of the
covenants, conditions
and agreements contained in any Easement Agreement on the part of
Landlord or
the occupier to be kept and performed thereunder. Tenant will not
alter, modify,
amend or terminate any Easement Agreement, give any consent or
approval
thereunder, or enter into any new Easement Agreement without, in
each case,
prior written consent of Landlord. Notwithstanding the foregoing,
provided that
no Event of Default shall have occurred and be continuing, Landlord
hereby
agrees to consent in each instance to the following actions by the
Tenant at the
Tenant's sole cost and expense: (a) the granting of easements,
licenses, rights
and privileges in the nature of easements reasonably necessary or
desirable for
the use, repair, or maintenance of any Related Premises as herein
provided; (b)
the release of existing easements or other rights in the nature of
easements
which are for the benefit of any Related Premises (c) the execution
of
amendments to any covenants and restrictions affecting any Related
Premises;
provided, however, that, in each case, (i) such grant, release,
dedication,
transfer or amendment does not materially lessen or impair the
value, utility or
remaining useful life of the applicable Related Premises, (ii) such
grant,
release, dedication, transfer or amendment that in the Tenant's
judgment is
reasonably necessary in connection with the use, maintenance,
alteration or
improvement of the applicable Related Premises (iii) such grant,
release,
dedication, transfer or amendment will not cause the Related
Premises or any
portion thereof to fail to comply with the provision of this Lease
and all
applicable Laws (including, without limitation, all applicable
zoning, planning,
building and subdivision ordinances, all applicable restrictive
covenants and
all applicable architectural approval requirements); (iv) all
governmental
consents or approvals required prior to such grant, release,
dedication,
transfer, annexation or amendment have been obtained, and all
filings required
prior to such action have been made; (v) the Tenant shall remain
obligated under
this Lease in accordance with its terms, as though such grant,
release,
dedication, transfer or
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amendment had not been affected and (vi) the Tenant shall pay and
perform any
obligations of the Landlord under such grant, release, dedication,
transfer or
amendment. Landlord shall within fifteen (15) days of written
request by Tenant,
execute any consent or instrument reasonably required by Tenant
with respect to
any of the documents described in the proceeding sentence. Tenant
shall conform
to and comply with each O & M Plan, if any, applicable to the
Leased Premises or
any Related Premises
(c) Upon prior written notice from Landlord, Tenant shall
permit
such persons as Landlord may designate ("Site Reviewers") to visit
the Leased
Premises during normal business hours and in a manner which does
not
unreasonably interfere with Tenant's operations and perform,
environmental site
investigations and assessments ("Site Assessments") on the Leased
Premises in
any of the following circumstances: (i) in connection with any
sale, financing
or refinancing of the Leased Premises, (ii) within the six month
period prior to
the expiration of the Term, (iii) if required by Lender pursuant to
terms of the
Initial Loan Agreement or any other credit facility to which
Landlord is bound,
(iv) if an Event of Default exists, or (v) at any other time that,
in the
reasonable opinion of Landlord or Lender, a reasonable basis exists
to believe
that an Environmental Violation or any condition that could
reasonably be
expected to result in any Environmental Violation exists. Such Site
Assessments
may include both above and below the ground testing for
Environmental Violations
and such other tests as may be necessary, in the opinion of the
Site Reviewers,
to conduct the Site Assessments. Tenant shall supply to the Site
Reviewers such
historical and operational information within Tenant's possession
or control
regarding the Leased Premises as may be reasonably requested by the
Site
Reviewers to facilitate the Site Assessments, and shall make
available for
meetings with the Site Reviewers appropriate personnel having
knowledge of such
matters. The Costs of performing and reporting Site Assessments
under clause (i)
(if the sale is to Tenant or any affiliate or designee of Tenant),
under clause
(ii) (but only one time), and under clauses (iv) and (v) (if any
Environmental
Violation is discovered as a result of such Site Assessment) shall
be paid by
Tenant, and in all other instances the cost of performing and
reporting Site
Assessments shall be paid by Landlord.
(d) If an Environmental Violation occurs or is found to exist
and,
in Landlord's reasonable determination (based, in good faith, upon
a report or
opinion of an environmental consultant), the cost of remediation
of, or other
response action with respect to, the same is likely to exceed the
Threshold
Amount, Tenant shall provide to Landlord, within ten (10) days
after Landlord's
request therefor, adequate financial assurances that Tenant will
effect such
remediation in accordance with applicable Environmental Laws. Such
financial
assurances shall be a bond or letter of credit or cash reserve held
by Landlord
satisfactory to Landlord and in form and substance and in an amount
equal to or
greater than Landlord's reasonable estimate (but such amount shall
not exceed
150% of the estimated cost of remediation), based upon a Site
Assessment
performed pursuant to Paragraph 10(c), of the anticipated cost of
such remedial
action.
(e) Notwithstanding anything to the contrary contained herein,
the
mere presence of propane and/or propane tanks at any Related
Premises shall not
constitute an Event of Default hereunder, provided and so long as
such propane
and/or tanks are in quantities consistent with Tenant's business at
such Related
Premises and are sold, dispensed, maintained, stored, handled and
disposed of in
accordance with all applicable Laws.
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<PAGE>
(f) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation
which occurs or
is found to exist, Landlord shall have the right (but no
obligation) to take any
and all actions as Landlord shall deem necessary or advisable in
order to cure
such Environmental Violation.
(g) Tenant shall notify Landlord immediately after becoming aware
of
any Environmental Violation (or alleged Environmental Violation)
or
noncompliance with any of the covenants contained in this Paragraph
10 and shall
forward to Landlord immediately upon receipt thereof copies of all
orders,
reports, notices, permits, applications or other communications
relating to any
such violation or noncompliance.
(h) All future leases, subleases or concession agreements
relating
to the Leased Premises entered into by Tenant shall contain
covenants of the
other party thereto which are identical to the covenants contained
in Paragraph
10(a) or shall incorporate such provisions by reference.
(i) So long as no Event of Default has occurred and is then
continuing, Tenant shall have the right together with Landlord and
Lender, to
negotiate with governmental authorities regarding the extent and
methodology of
remediation or cure of any Environmental Violation. Landlord shall,
upon the
receipt of a written request from Tenant, execute such documents or
instruments
reasonably and customarily required by any applicable governmental
authority
with respect to remediation of an Environmental Violation provided
the execution
of such documents or instruments could not and will not cause
Landlord and/or
Lender to incur any additional liability, cost or expense.
(j) Tenant shall comply with the terms and conditions of Exhibit
"H"
attached hereto.
11. Liens;
Recording.
(a) Tenant shall not, directly or indirectly, create or permit to
be
created or to remain and shall promptly discharge or remove any
lien, levy or
encumbrance on any of the Leased Premises or on any Rent or any
other sums
payable by Tenant under this Lease, other than any Mortgage or
Assignment, the
Permitted Encumbrances and any mortgage, lien, encumbrance or other
charge
created by or to the extent resulting from any act or omission of
any
Indemnitee. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE
LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT
OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER
TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF
THE LEASED
PREMISES. LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED
PREMISES
REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Landlord and Tenant shall execute, deliver and record, file
or
register (collectively, "record") at Tenant's expense a memorandum
or short form
instrument of
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this Lease in such manner and in such places as may be required or
permitted by
any present or future Law in order to give record notice of this
Lease and
purchase options contained herein.
12.
Maintenance and Repair.
(a) Tenant shall at all times maintain each Related Premises and
the
Appurtenances in as good repair and appearance as each is in on the
date hereof
and fit to be used for their intended use and consistent with the
practices
generally recognized as then acceptable by other companies in its
industry and,
in any event, as least as good as those observed by the prior owner
or operator
of the Leased Premises immediately preceding the date of this
Lease, and, in the
case of the Equipment, in as good mechanical condition as it was on
the later of
the date hereof or the date of its installation, except for
ordinary wear and
tear. Tenant shall take every other action reasonably necessary or
appropriate
for the preservation and safety of each Related Premises. Tenant
shall promptly
make all Alterations of every kind and nature, whether foreseen or
unforeseen,
which may be required to comply with the foregoing requirements of
this
Paragraph 12(a). Landlord shall not be required to make any
Alteration, whether
foreseen or unforeseen, or to maintain any of the Related Premises
or
Appurtenances in any way, and Tenant hereby expressly waives any
right which may
be provided for in any Law now or hereafter in effect to make
Alterations at the
expense of Landlord or to require Landlord to make Alterations. Any
Alteration
made by Tenant pursuant to this Paragraph 12 shall be made in
conformity with
the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall (i)
encroach upon any setback or any property, street or right-of-way
adjoining any
of the Leased Premises, (ii) violate the provisions of any
restrictive covenant
affecting any of the Leased Premises, (iii) hinder or obstruct any
easement or
right-of-way to which any of the Leased Premises is subject or (iv)
impair the
rights of others in, to or under any of the foregoing, Tenant
shall, promptly
after receiving notice or otherwise acquiring knowledge thereof,
either (A)
obtain from all necessary parties waivers or settlements of all
claims,
liabilities and damages resulting from each such encroachment,
violation,
hindrance, obstruction or impairment, whether the same shall affect
Landlord,
Tenant or both, or (B) take such action as shall be necessary to
remove all such
encroachments, hindrances or obstructions and to end all such
violations or
impairments, including, if necessary, making Alterations.
13.
Alterations and Improvements.
(a) Tenant shall have the right, without having obtained the
prior
written consent of Landlord or Lender and provided that no Event of
Default then
exists, (i) to make Alterations or a series of related Alterations
that, as to
any such Alterations or series of related Alterations, do not cost
in excess of
the Threshold Amount with respect to any Related Premises and (ii)
to install
Equipment in the Improvements or accessions to the Equipment that,
as to such
Equipment or accessions, do not cost in excess of the Threshold
Amount, so long
as at the time of construction or installation of any such
Equipment or
Alterations no Event of Default exists and the value and utility of
the Leased
Premises is not diminished thereby. If the cost of any Alterations,
series of
related Alterations, Equipment or accessions thereto is in excess
of the
Threshold Amount, or if Tenant desires to construct any new
buildings upon any
Related Premises or raise or demolish any then existing buildings
(other than in
connection with the
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restoration of the applicable Improvements following a casualty or
condemnation
in accordance with Paragraphs 17 and 19), then the prior written
approval of
Landlord shall be required in each instance, such approval not to
be
unreasonably withheld or delayed. Landlord shall have the right to
require
Tenant to remove any Alterations at the expiration of the Term or
earlier
termination of this Lease (A) constructed in violation of the terms
of this
Lease or (B) in excess of the Threshold Amount and for which
Landlord has not
agreed in writing may remain at the applicable Related Premises
prior to or as a
part of granting its approval thereto. If Tenant shall, at its own
cost and
expense, intend to construct upon the Land additional buildings or
additions to
the existing Improvements (x) the hard costs of construction
thereof are
reasonably expected to exceed $500,000 and (y) the primary intent
thereof is the
addition of new permanent storage units at a Related Premises,
(i.e., a new,
free-standing storage facility, the expansion of the footprint of
an existing
storage facility, or the addition of one or more new floors or
portions thereof
to any existing storage facility), then prior to the commencement
of such
construction (any such construction meeting the foregoing criteria,
hereinafter,
an "Expansion") and as a part of the approval process therefor as
required
above, Tenant may seek a written determination from Landlord, to be
exercised in
its reasonable judgment, that such Expansion qualifies for an
Expansion Credit
in the event that Tenant exercises its purchase option under
Paragraph 34
hereof. Landlord shall provide such determination within thirty
(30) days after
the date that Tenant delivers to Landlord a description describing
the nature
and scope of the proposed Expansion in reasonable detail (including
preliminary
drawings or plans, if applicable), and Landlord's determination
shall be final
and binding. Tenant's construction of any Expansion without an
affirmative
determination that such Expansion qualifies for an Expansion
Credit, shall be
deemed Tenant's acknowledgment that such Expansion does not and
will not qualify
for an Expansion Credit. Tenant acknowledges that the construction
of any
Expansion without obtaining the prior written consent of Landlord
shall be an
Event of Default under this Lease. The determination by Landlord
that an
Expansion does not qualify for a Expansion Credit shall not alter
the
requirement that Landlord's approval of any Alterations that cost
in excess of
the Threshold Amount shall not be unreasonably withheld or delayed
in accordance
with the terms and conditions of this Paragraph 13(a).
(b) If Tenant makes any Alterations pursuant to this Paragraph 13
or
as required by Paragraph 12 or 17 (such Alterations and actions
being
hereinafter collectively referred to as "Work"), then (i) the
market value of
the Leased Premises shall not be lessened by any such Work or its
usefulness
impaired, (ii) all such Work shall be performed by Tenant in a good
and
workmanlike manner, (iii) all such Work shall be completed
diligently and in
compliance with all Legal Requirements, (iv) all such Work shall
comply with the
requirements of all insurance policies required to be maintained by
Tenant
hereunder, (v) if any such Work involves the replacement of
Equipment or parts
thereto, all replacement Equipment or parts shall have a value and
useful life
equal to the greater of (A) the value and useful life on the date
hereof of the
Equipment being replaced or (B) the value and useful life of the
Equipment being
replaced immediately prior to the occurrence of the event which
required its
replacement (assuming such replaced Equipment was then in the
condition required
by this Lease), (vi) Tenant shall promptly discharge or remove all
liens filed
against any of the Leased Premises arising out of such Work, (vii)
Tenant shall
procure and pay for all permits and licenses required in connection
with any
such Work, (viii) all such Work shall be the property of Landlord
and shall be
subject to this Lease, and Tenant shall execute and deliver to
Landlord any
document requested by Landlord evidencing the assignment to
Landlord of all
estate, right, title and interest (other than the
25
<PAGE>
leasehold estate created hereby) of Tenant or any other Person
thereto or
therein, and (ix) Tenant shall comply, to the extent requested by
Landlord or
required by this Lease, with the provisions of Paragraphs 12(a) and
19(a),
whether or not such Work involves restoration of the Leased
Premises.
14.
Permitted Contests. Notwithstanding any other provision of this
Lease,
Tenant shall not be required to (a) pay any Imposition, (b) comply
with any
Legal Requirement, (c) discharge or remove any lien referred to in
Paragraph 11
or 13 or (d) take any action with respect to any encroachment,
violation,
hindrance, obstruction or impairment referred to in Paragraph 12(b)
(such
non-compliance with the terms hereof being hereinafter referred to
collectively
as "Permitted Violations") and may dispute or contest the same, so
long as at
the time of such non-compliance no Event of Default exists and so
long as Tenant
shall contest, in good faith, the existence, amount or validity
thereof, the
amount of the damages caused thereby, or the extent of its or
Landlord's
liability therefor by appropriate proceedings which shall operate
during the
pendency thereof to prevent or stay (i) the collection of, or other
realization
upon, the Permitted Violation so contested, (ii) the sale,
forfeiture or loss of
any of the Leased Premises or any Rent to satisfy or to pay any
damages caused
by any Permitted Violation, (iii) any interference with the use or
occupancy of
any of the Leased Premises, (iv) any interference with the payment
of any Rent,
(v) the cancellation or increase in the rate of any insurance
policy or a
statement by the carrier that coverage will be denied or (vi) the
enforcement or
execution of any injunction, order or Legal Requirement with
respect to the
Permitted Violation. If requested by Landlord with respect to any
Permitted
Violation where the amount in controversy is in excess of the
Threshold Amount,
Tenant shall provide Landlord security which is satisfactory, in
Landlord's
reasonable judgment, to assure that such Permitted Violation is
corrected,
including all Costs, interest and penalties that may be incurred or
become due
in connection therewith. While any proceedings which comply with
the
requirements of this Paragraph 14 are pending and the required
security is held
by Landlord, Landlord shall not have the right to correct any
Permitted
Violation thereby being contested unless Landlord is required by
Law to correct
such Permitted Violation and Tenant's contest does not prevent or
stay such
requirement as to Landlord. Each such contest shall be promptly and
diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so
long as the
conditions of this Paragraph 14 are at all times complied with, has
the right to
attempt to settle or compromise such contest through negotiations.
Tenant shall
pay any and all losses, judgments, decrees and Costs in connection
with any such
contest and shall, promptly after the final determination of such
contest, fully
pay and discharge the amounts which shall be levied, assessed,
charged or
imposed or be determined to be payable therein or in connection
therewith,
together with all penalties, fines, interest and Costs thereof or
in connection
therewith, and perform all acts the performance of which shall be
ordered or
decreed as a result thereof. No such contest shall subject Landlord
to the risk
of any civil or criminal liability.
15.
Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save and hold
harmless Landlord, Lender and all other Persons described in
Paragraph 30 (each
an "Indemnitee") from and against any and all liabilities, losses,
damages
(including punitive damages), penalties, Costs (including
attorneys' fees and
costs), causes of action, suits, claims, demands or judgments of
any nature
whatsoever, howsoever caused, without regard to the form
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of action and whether based on strict liability, gross negligence,
negligence or
any other theory of recovery at law or in equity, arising from (i)
any matter
pertaining to the acquisition (or the negotiations leading
thereto), ownership,
leasing, use, non-use, occupancy, operation, management, condition,
design,
construction, maintenance, repair or restoration of any of the
Leased Premises
or Appurtenances, (ii) any casualty in any manner arising from any
of the Leased
Premises or Appurtenances, whether or not Indemnitee has or should
have
knowledge or notice of any defect or condition causing or
contributing to said
casualty, (iii) any violation by Tenant of any provision of this
Lease, any
contract or agreement to which Tenant is a party (including any
Loan Document
executed by Tenant), any Legal Requirement or any Permitted
Encumbrance or any
encumbrance consented to by Tenant or (iv) any alleged, threatened
or actual
Environmental Violation, including (A) liability for response costs
and for
costs of removal and remedial action incurred by the United States
Government,
any state or local governmental unit or any other Person, or
damages from injury
to or destruction or loss of natural resources, including the
reasonable costs
of assessing such injury, destruction or loss, incurred pursuant to
Section 107
of CERCLA, or any successor section or act or provision of any
similar state or
local Law, (B) liability for costs and expenses of abatement,
correction or
cleanup, fines, damages, response costs or penalties which arise
from the
provisions of any of the other Environmental Laws and (C) liability
for personal
injury or property damage arising under any statutory or common-law
tort theory,
including damages assessed for the maintenance of a public or
private nuisance
or for carrying on of a dangerous activity provided that none of
the foregoing
indemnification provisions shall apply to the extent arising from
the negligent
acts (but not omissions, unless such omissions constitute gross
negligence) or
willful misconduct of any Indemnitee (it being further acknowledged
by the
parties hereto that any failure or omission on the part of Landlord
to take any
action required to be taken by Tenant pursuant to the terms of this
Lease shall
not be deemed to constitute negligence on the part of
Landlord).
(b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in
the event of a
conflict of interest or a dispute between Tenant and any such
Indemnitee or
during the continuance of an Event of Default, retain its own
counsel and defend
such action (it being understood that Landlord may employ counsel
of its choice
to monitor the defense of any such action, the cost of which shall
be paid by
Tenant) and (ii) such Indemnitee shall notify Tenant to resist or
defend such
action or proceeding by retaining counsel reasonably satisfactory
to such
Indemnitee, and such Indemnitee will cooperate and assist in the
defense of such
action or proceeding if reasonably requested to do so by Tenant. In
the event of
a conflict of interest or dispute or during the continuance of an
Event of
Default, Landlord shall have the right to select counsel, and the
reasonable
cost of such counsel shall be paid by Tenant.
(c) The
obligations of Tenant under this Paragraph 15 shall survive
any termination, expiration or rejection in bankruptcy of this
Lease.
THE INDEMNITY SET FORTH IN THIS SECTION 15 SHALL NOT BE IMPAIRED OR
AFFECTED BY
ANY NEGLIGENT OMISSION ON THE PART OF LANDLORD OR ANYONE ACTING
BEHALF OF
LANDLORD. IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT THIS LEASE
INCLUDES
INDEMNIFICATION PROVISIONS WHICH IN CERTAIN CIRCUMSTANCES COULD
INCLUDE AN
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INDEMNIFICATION BY TENANT OF LANDLORD FROM CLAIMS OR LOSSES ARISING
AS A RESULT
OF LANDLORD'S OWN NEGLIGENT OMISSIONS.
16.
Insurance.
(a) Tenant shall maintain or cause to be maintained the
following
insurance on or in connection with the Leased Premises:
(i) Insurance against risk of physical loss or damage to the
Improvements and Equipment as provided under "Special Form"
coverage, and
including customarily excluded perils of hail, windstorm, flood
coverage (with
respect to any Related Premises any portion of which is within a
100-year flood
plain), earthquake and, to the extent required by Lender, terrorism
(subject to
market availability at the time in question), in amounts no less
than the actual
replacement cost of the Improvements and Equipment; provided that,
if Tenant's
insurance company is unable or unwilling to include any of all of
such excluded
perils, Tenant shall have the option of purchasing coverage against
such perils
from another insurer on a "Difference in Conditions" form or
through a
stand-alone policy. Such policies shall contain Replacement Cost
Endorsements
and no co-insurance endorsements and shall contain deductibles not
more than
$25,000 per occurrence, except with respect to (A) earthquake,
which shall have
a deductible of not more than higher of $250,000 or 5% of the
replacement cost
of the applicable Related Premises and (B) windstorm, which shall
have a
deductible of not more than the higher of $250,000 or 2% of the
replacement cost
of the applicable Related Premises. If any of the Improvements
constitute a
legal non-conforming structure under applicable building, zoning or
land use
laws, such policies shall also include an ordinance or law coverage
endorsement
which will contain Coverage A: "Loss Due to Operation of Law" (with
a minimum
liability limit equal to Replacement Cost with a waiver of any
co-insurance
provisions or an Agreed Value Endorsement), Coverage B: "Demolition
Cost" and
Coverage C: "Increased Cost of Construction" coverages.
(ii)
Commercial General Liability Insurance (including but not
limited to Incidental Medical Malpractice and Host Liquor
Liability), Umbrella
Liability and Non-Owned and Hired Business Automobile Liability
Insurance
against claims for personal and bodily injury, death or property
damage
occurring on, in or as a result of the use of the Leased Premises,
in an amount
not less than $1,000,000 per occurrence and $2,000,000 per
location/annual
aggregate with excess liability coverage of $25,000,000 per
occurrence and
$50,000,000 general aggregate, on an occurrence based policies, and
all other
coverage extensions that are usual and customary for properties of
this size and
type provided, however, that the Landlord shall have the right to
require such
higher limits as may be reasonable and customary for properties of
this size and
type and Customer Goods Liability Insurance in an amount not less
than $500,000
general aggregate.
(iii) Worker's compensation insurance covering all persons
employed by Tenant or Manager in connection with any work done on
or about any
of the Leased Premises for which claims for death, disease or
bodily injury may
be asserted against Landlord, Tenant or any of the Leased Premises
or, in lieu
of such Workers' Compensation Insurance, a program of
self-insurance complying
with the rules, regulations and requirements of the appropriate
agency of the
State or States in which the Leased Premises are located.
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<PAGE>
(iv) Comprehensive Boiler and Machinery Insurance on any of
the Equipment or any other equipment on or in the Leased Premises
in an amount
not less than $5,000,000 per accident for damage to property.
Either such Boiler
and Machinery policy or the All-Risk policy required in (i) above
shall include
at least $3,000,000 per incidence for Off-Premises Service
Interruption,
Expediting Expenses, Ammonia Contamination, and Hazardous Materials
Clean-up
Expense and may contain a deductible not to exceed $25,000.
(v) Business Interruption and Extra Expense Insurance at
limits to cover 100% of losses and/or expenses incurred over the
period of
indemnity not less than eighteen (18) months from time of loss
including an
extended period of indemnity which provides that after the physical
loss to the
Improvements and Equipment has been repaired, the continued loss of
income will
be insured until such income either returns to the same level it
was at prior to
the loss, or the expiration of six (6) months from the date that
such Related
Premises is repaired or replaced and operations are resumed,
whichever first
occurs. Such insurance shall name Landlord as loss payee solely
with respect to
Rent payable to or for the benefit of the Landlord under this
Lease.
(vi) During any period in which substantial Alterations at any
Related Premises are being undertaken, builder's risk insurance
covering the
total completed value including any "soft costs" with respect to
the
Improvements being altered or repaired (on a completed value,
non-reporting
basis), replacement cost of work performed and equipment, supplies
and materials
furnished in connection with such construction or repair of
Improvements or
Equipment, together with such "soft cost" endorsements and such
other
endorsements as Landlord may reasonably require and general
liability, workers'
compensation and automobile liability insurance with respect to the
Improvements
being constructed, altered or repaired.
(vii) Such other insurance (or other terms with respect to any
insurance required pursuant to this Paragraph 16, including without
limitation
amounts of coverage, deductibles, form of mortgagee clause) on or
in connection
with any of the Leased Premises as Landlord or Lender may
reasonably require.
(b) The insurance required by Paragraph 16(a) shall be written
by
companies which have a Best's rating of A:X or above and a claims
paying ability
rating of A+ (or its equivalent) or better by at least two (2)
Rating Agencies
(one of which shall be S&P ) or such other Rating Agencies
approved by Landlord
and Lender in their sole discretion and are authorized to write
insurance
policies by, the State Insurance Department for the states in which
the Leased
Premises are located. Notwithstanding foregoing, an "Umbrella"
Policy issued by
Mt. Hawley Insurance Company shall be acceptable to Landlord and
Lender,
provided that (i) the ratings assigned to Mt. Hawley Insurance
Company by A.M.
Best Company, Inc. do not fall below "A/IX" and (ii) the ratings
assigned to Mt.
Hawley Insurance Company by S&P do not fall below "A+". The
insurance policies
(i) shall be for such terms as Landlord may reasonably approve and
(ii) shall be
in amounts sufficient at all times to satisfy any coinsurance
requirements
thereof. The insurance referred to in Paragraphs 16(a)(i),
16(a)(iv) and
16(a)(vi) shall name Landlord as owner and Lender as loss payee and
Tenant as
its interest may appear. The insurance referred to in Paragraph
16(a)(ii) shall
name Landlord and Lender as additional insureds, and the insurance
referred to
in Paragraph 16(a)(v) shall name Landlord as insured and Lender and
Landlord as
loss payee. If said insurance or any part thereof shall expire,
be
29
<PAGE>
withdrawn, become void, voidable, unreliable or unsafe for any
reason, including
a breach of any condition thereof by Tenant or the failure or
impairment of the
capital of any insurer, or if for any other reason whatsoever said
insurance
shall become reasonably unsatisfactory to Landlord, Tenant shall
immediately
obtain new or additional insurance reasonably satisfactory to
Landlord. Landlord
acknowledges that the insurance required to be maintained pursuant
to Paragraph
16(a) shall be carried under a policy or policies insuring both the
Leased
Premises demised hereunder and the "Leased Premises" demised under
the UHS Lease
(collectively, the "Combined Property") and the insurance amounts
and
deductibles set forth in Paragraph 16(a) reflect the insurance
amounts and
deductibles required for the entire Combined Property in the
aggregate,
provided, however, that the Business Interruption and Extra Expense
insurance
required to be maintained pursuant to Paragraph 16(a)(v), shall
insure the
payment of both Rent payable under this Lease and Rent (as that
term is defined
in the UHS Lease) payable under the UHS Lease.
(c) Each insurance policy referred to in clauses (i), (iv), (v)
and
(vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee
clauses in favor of and reasonably acceptable to Lender. Each
policy required by
any provision of Paragraph 16(a), except clause (iii) thereof,
shall provide
that it may not be cancelled substantially modified or allowed to
lapse on any
renewal date except after sixty (60) days' prior notice to Landlord
and Lender.
Each such policy shall also provide that any loss otherwise payable
thereunder
shall be payable notwithstanding (i) any act or omission of
Landlord or Tenant
which might, absent such provision, result in a forfeiture of all
or a part of
such insurance payment, (ii) the occupation or use of any of the
Leased Premises
for purposes more hazardous than those permitted by the provisions
of such
policy, (iii) any foreclosure or other action or proceeding taken
by Lender
pursuant to any provision of the any Loan Documents upon the
happening of an
event of default therein or (iv) any change in title to or
ownership of any of
the Leased Premises.
(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each
policy and
deliver to Landlord evidence of the payment of the full premium
therefor or
installment then due at least thirty (30) days prior to the
expiration date of
such policy, and shall promptly deliver to Landlord all original
certificates of
insurance or, if required by Lender, original or certified
policies.
(e) Anything in this Paragraph 16 to the contrary
notwithstanding,
any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may
be carried under a "blanket" or umbrella policy or policies
covering other
properties or liabilities of Tenant, provided that such "blanket"
or umbrella
policy or policies otherwise comply with the provisions of this
Paragraph 16 and
provided further that Tenant shall provide to Landlord a Statement
of Values
which shall be reviewed annually and amended as necessary based on
Replacement
Cost Valuations. The original or a certified copy of each such
"blanket" or
umbrella policy shall promptly be delivered to Landlord.
(f) Tenant shall have the replacement cost and insurable value
of
the Improvements and Equipment determined from time to time as
required by the
replacement cost endorsement and shall deliver to Landlord the new
replacement
cost endorsement or certificate evidencing such endorsement
promptly upon
Tenant's receipt thereof.
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<PAGE>
(g) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16
and (ii) all
requirements of the insurers thereunder applicable to Landlord,
Tenant or any of
the Leased Premises as to the use, manner of use, occupancy,
possession,
operation, maintenance, alteration or repair of any of the Leased
Premises, even
if such compliance necessitates Alterations or results in
interference with the
use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent in form
or
contributing in the event of a Casualty with that required in this
Paragraph 16
unless (i) Landlord and Lender are included therein as named
insureds, with loss
payable as provided herein, and (ii) such separate insurance
complies with the
other provisions of this Paragraph 16. Tenant shall immediately
notify Landlord
of such separate insurance and shall deliver to Landlord the
original policies
or certified copies thereof.
(i) All policies shall contain effective waivers by the carrier
against all claims for insurance premiums against Landlord and
shall contain
full waivers of subrogation against the Landlord.
(j) All proceeds of any insurance required under Paragraph
16(a)
shall be payable as follows:
(i) Proceeds payable under clauses (ii), (iii) and (iv) of
Paragraph 16(a) and proceeds attributable to the general liability
coverage of
Builder's Risk insurance under clause (vi) of Paragraph 16(a) shall
be payable
to the Person entitled to receive such proceeds.
(ii) Proceeds of insurance required under clause (i) of
Paragraph 16(a) and proceeds attributable to Builder's Risk
insurance (other
than its general liability coverage provisions) under clause (vi)
of Paragraph
16(a) shall be payable to Landlord or Lender and applied as set
forth in
Paragraph 17 or, if applicable, Paragraph 18. Promptly following
receipt thereof
Tenant shall apply the Net Award to restoration of the Leased
Premises in
accordance with the applicable provisions of this Lease unless a
Termination
Event shall have occurred and Tenant has given a Termination
Notice.
(k) With respect to the Related Premises located in the State of
New
York, the parties intend that the terms of this Paragraph 16 and
those of
Paragraphs 17 and 19, constitute an "express agreement to the
contrary" under
Section 227 of the New York State Real Property Law.
17.
Casualty and Condemnation.
(a) If any Casualty to any of the Related Premises occurs the
insurance proceeds for which are reasonably estimated by Tenant to
be equal to
or in excess of the Threshold Amount, Tenant shall give Landlord
and Lender
immediate notice thereof. So long as no Event of Default exists
Tenant is hereby
authorized to adjust, collect and compromise all claims under any
of the
insurance policies required by Paragraph 16(a) (except public
liability
insurance claims payable to a Person other than Tenant, Landlord or
Lender) and
to execute and deliver on behalf of Landlord all necessary proofs
of loss,
receipts, vouchers and releases
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<PAGE>
required by the insurers and Landlord shall have the right to join
with Tenant
therein. Any final adjustment, settlement or compromise of any such
claim shall
be subject to the prior written approval of Landlord, and Landlord
shall have
the right to prosecute or contest, or to require Tenant to
prosecute or contest,
any such claim, adjustment, settlement or compromise. If an Event
of Default
exists, Tenant shall not be entitled to adjust, collect or
compromise any such
claim or to participate with Landlord in any adjustment, collection
and
compromise of the Net Award payable in connection with a Casualty.
Tenant agrees
to sign, upon the request of Landlord, all such proofs of loss,
receipts,
vouchers and releases. Each insurer is hereby authorized and
directed to make
payment under said policies, including return of unearned premiums,
directly to
Landlord or, if required by any Loan Documents, to Lender instead
of to Landlord
and Tenant jointly, and Tenant hereby appoints each of Landlord and
Lender as
Tenant's attorneys-in-fact to endorse any draft therefor. The
rights of Landlord
under this Paragraph 17(a) shall be extended to Lender if required
pursuant to
the terms of the Initial Loan Agreement and pursuant to any other
Loan
Documents.
(b) Tenant, immediately upon receiving a Condemnation Notice,
shall
notify Landlord and Lender thereof. So long as no Event of Default
exists,
Tenant is authorized to collect, settle and compromise the amount
of any Net
Award and Landlord shall have the right to join with Tenant
therein. If an Event
of Default exists, Landlord shall be authorized to collect, settle
and
compromise the amount of any Net Award and Tenant shall not be
entitled to
participate with Landlord in any Condemnation proceeding or
negotiations under
threat thereof or to contest the Condemnation or the amount of the
Net Award
therefor. No agreement with any condemnor in settlement or under
threat of any
Condemnation shall be made by Tenant without the written consent of
Landlord.
Subject to the provisions of this Paragraph 17(b), Tenant hereby
irrevocably
assigns to Landlord any award or payment to which Tenant is or may
be entitled
by reason of any Condemnation, whether the same shall be paid or
payable for
Tenant's leasehold interest hereunder or otherwise; but nothing in
this Lease
shall impair Tenant's right to any award or payment on account of
Tenant's trade
fixtures, equipment or other tangible property which is not part of
the
Equipment, moving expenses or loss of business, if available, to
the extent that
and so long as (i) Tenant shall have the right to make, and does
make, a
separate claim therefor against the condemnor and (ii) such claim
does not in
any way reduce either the amount of the award otherwise payable to
Landlord for
the Condemnation of Landlord's fee interest in the applicable
Related Leased
Premises or the amount of the award (if any) otherwise payable for
the
Condemnation of Tenant's leasehold interest hereunder. The rights
of Landlord
under this Paragraph 17(b) shall also be extended to Lender if
required pursuant
to the terms of the Initial Loan Agreement and pursuant to any
other Loan
Documents.
(c) If any Partial Casualty (whether or not insured against) or
Partial Condemnation shall occur to any Related Premises, this
Lease shall
continue, notwithstanding such event, and there shall be no
abatement or
reduction of any Monetary Obligations. Promptly after such Partial
Casualty or
Partial Condemnation, Tenant, as required in Paragraph 12(a), shall
commence and
diligently continue to restore the applicable Related Premises as
nearly as
possible to their value, condition and character immediately prior
to such event
(assuming such Related Premises to have been in the condition
required by this
Lease). So long as no Event of Default exists, any Net Award up to
and including
the Threshold Amount shall be paid by Landlord to Tenant and Tenant
shall
restore the applicable Related Premises in accordance with the
requirements of
Paragraph 13(b) of this Lease. Any Net Award in excess of the
Threshold
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<PAGE>
Amount shall (unless such Casualty or Condemnation resulting in the
Net Award is
a Termination Event) be made available by Landlord (or Lender if
the terms of
any Loan Documents so require) to Tenant for the restoration of any
of the
applicable Related Premises pursuant to and in accordance with and
subject to
the provisions of Paragraph 19 hereof. If any Casualty or
Condemnation which is
not a Partial Casualty or Partial Condemnation shall occur, Tenant
shall comply
with the terms and conditions of Paragraph 18.
18.
Termination Events.
(a) If either (i) all of any Related Premises shall be taken by
a
Taking or (ii) any substantial portion of any Related Premises
shall be taken by
a Taking or all or any substantial portion of any Related Premises
shall be
totally damaged or destroyed by a Casualty and, in any such case,
Tenant
certifies and covenants to Landlord that it will forever abandon
operations at
the Related Premises, (any one or all of the Related Premises
described in the
above clauses (i) and (ii) above being hereinafter referred to as
the "Affected
Premises" and each of the events described in the above clauses (i)
and (ii)
shall hereinafter be referred to as a "Termination Event"), then
(x) in the case
of (i) above, Tenant shall be obligated, within thirty (30) days
after Tenant
receives a Condemnation Notice and (y) in the case of (ii) above,
Tenant shall
have the option, within thirty (30) days after Tenant receives a
Condemnation
Notice or thirty (30) days after the Casualty, as the case may be,
to give to
Landlord written notice (a "Termination Notice") in the form
described in
Paragraph 18(b) of the Tenant's election to terminate this Lease as
to the
Affected Premises. If Tenant elects under clause (y) above not to
give Landlord
a Termination Notice, then Tenant shall cause the Leased Premises
to be repaired
or rebuilt in accordance with Paragraphs 17 and 19.
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease as to the Affected Premises on
the first Basic
Rent Payment Date which occurs at least ninety (90) days after the
Fair Market
Value Date (the "Termination Date"), (ii) a binding and irrevocable
offer of
Tenant to pay the Termination Amount, (iii) if the Termination
Event is an event
described in Paragraph 18(a)(ii), the certification and covenant
described
therein, and (iv) an original termination notice from UHS of UHS'
intention to
terminate the UHS Lease as to the Affected Premises effective as of
the same
date as Tenant's notice and containing a binding and irrevocable
offer of UHS to
pay the applicable "Termination Amount" under the UHS Lease for
the
Corresponding UHS Premises and, if the Termination Event is an
event described
in Paragraph 18(a)(ii) of the UHS Lease, the certification and
covenant
described therein; it being agreed by Tenant that no Termination
Notice given by
Tenant hereunder shall be of any force or effect unless accompanied
by a
simultaneous "Termination Notice" from UHS with respect to the
Corresponding UHS
Premises. Promptly upon the delivery to Landlord of a Termination
Notice,
Landlord and Tenant shall commence to determine Fair Market Value
of the
Affected Premises.
(c) If Landlord shall reject such offer by Tenant to pay to
Landlord
the Termination Amount as to the Affected Premises pursuant to
Paragraph 18(b)
above by written notice to Tenant (a "Rejection") which Rejection
shall contain
the written consent of Lender to Landlord's rejection of Tenant's
offer to pay
the Termination Amount, not later than thirty (30) days following
the Fair
Market Value Date, then this Lease shall terminate as to the
Affected Premises
on the Termination Date. Upon such termination (i) all obligations
of Tenant
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hereunder as to the Affected Premises shall terminate except for
any Surviving
Obligations, (ii) Tenant shall immediately vacate and shall have no
further
right, title or interest in or to any of the Affected Premises and
(iii) the Net
Award shall be retained by Landlord. Notwithstanding anything to
the contrary
hereinabove contained, if Tenant shall have received a Rejection
and, on the
date when this Lease would otherwise terminate with respect to the
Affected
Premises as provided above, Landlord shall not have received the
full amount of
the Net Award payable by reason of the applicable Termination
Event, then the
date on which this Lease is to terminate with respect to the
Affected Premises
shall be automatically extended to the first Basic Rent Payment
Date after the
receipt by Landlord of the full amount of the Net Award. It is
acknowledged and
agreed by Landlord that any acceptance or Rejection of a
Termination Notice from
Tenant under this Paragraph 18(c) or 18(d) below shall also
concurrently contain
the same response (i.e. an acceptance or Rejection, as the case my
be) of the
termination Notice delivered by UHS with respect to the
Corresponding UHS
Premises.
(d) Unless Tenant shall have received a Rejection not later than
the
thirtieth (30th) day following the Fair Market Value Date, Landlord
shall be
conclusively presumed to have accepted such offer from Tenant to
pay the
Termination Amount. If such offer from Tenant to pay the
Termination Amount is
accepted by Landlord then, on the Termination Date, Tenant shall
pay to Landlord
the Termination Amount and all Remaining Obligations and, if
requested by
Tenant, Landlord shall convey to Tenant or its designee the
Affected Premises or
the remaining portion thereof, if any, all in accordance with
Paragraph 20.
(e) In the event of the termination of this Lease as to the
Affected
Premises as hereinabove provided, this Lease shall remain in full
force and
effect as to the Remaining Premises; provided, that the Basic Rent
for the
Remaining Premises to be paid after such termination shall be the
Basic Rent
otherwise payable hereunder with respect to the Leased Premises
multiplied by a
percentage equal to the sum of the percentages set forth on Exhibit
"F" for the
Remaining Premises.
19.
Restoration.
(a) If any Net Award is in excess of the Threshold Amount,
Landlord
(or Lender if required by any Loan Documents) shall hold the Net
Award in a fund
(the "Restoration Fund") and disburse amounts from the Restoration
Fund only in
accordance with the following conditions:
(i) prior to commencement of restoration, (A) the plans and
specifications and a budget for the restoration shall have been
approved by
Landlord, (B) if the Net Award is less than the amount set forth on
the full
cost budget for the restoration of the applicable Related Premises
(which budget
has been approved by Landlord), Landlord and Lender shall be
provided with
mechanics' lien insurance (if available) and acceptable performance
and payment
bonds which insure satisfactory completion of and payment for the
restoration,
are in an amount and form and have a surety acceptable to Landlord,
and name
Landlord and Lender as additional dual obligees, and (C) to the
extent permitted
by applicable Law, appropriate waivers of mechanics' and
materialmen's liens
shall have been filed or obtained;
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(ii) at the time of any disbursement, no Event of Default
shall exist and no mechanics' or materialmen's liens shall have
been filed
against the applicable Related Premises being restored that remain
undischarged;
(iii) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement,
upon receipt of (A) satisfactory evidence, including architects'
certificates,
of the stage of completion, the estimated total cost of completion
and
performance of the work to date in a good and workmanlike manner in
accordance
with the contracts, plans and specifications, (B) waivers of liens
with respect
to work paid to date, (C) contractors' and subcontractors' sworn
statements as
to completed work and the cost thereof for which payment is
requested, (D) a
satisfactory bringdown of title insurance and (E) other evidence of
cost and
payment so that Landlord and Lender can verify that the amounts
disbursed from
time to time are represented by work that is completed, in place
and free and
clear of mechanics' and materialmen's lien claims;
(iv) each request for disbursement shall be accompanied by a
certificate of Tenant, signed by a duly authorized officer of
Tenant, describing
the work for which payment is requested, stating the cost incurred
in connection
therewith, stating that Tenant has not previously received payment
for such work
and, upon completion of the work, also stating that the work has
been fully
completed and complies with the applicable requirements of this
Lease;
(v) Landlord may retain ten percent (10%) of the Restoration
Fund until the restoration is fully completed.
(vi) If the Restoration Fund is held by Landlord, the
Restoration Fund shall not be commingled with Landlord's other
funds and shall
bear interest (in a money-market or similar type account having
appropriate
liquidity) at the then available rate; and
(vii) such other reasonable and customary conditions as
Landlord or Lender may impose, so long as such conditions are
consistent with
those being required by prudent lenders or investors for similar
properties
under similar circumstances.
(b) Prior to commencement of restoration and at any time during
restoration, if the estimated cost of completing the restoration
work free and
clear of all liens, as determined by Landlord, exceeds the amount
of the Net
Award available for such restoration, the amount of such excess
shall, upon
demand by Landlord, be paid by Tenant to Landlord to be added to
the Restoration
Fund. Any sum so added by Tenant which remains in the Restoration
Fund upon
completion of restoration shall be refunded to Tenant. For purposes
of
determining the source of funds with respect to the disposition of
funds
remaining after the completion of restoration, the Net Award shall
be deemed to
be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after completion
of
the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum
shall be paid by Landlord to Tenant.
20.
Procedures Upon
Purchase.
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(a) If the Leased Premises or any of the Related Premises are
purchased by Tenant (or Tenant's designee) pursuant to any
provision of this
Lease, Landlord need not convey any better title thereto than that
which was
conveyed to Landlord, and Tenant or its designee shall accept such
title,
subject, however, to the Permitted Encumbrances (including the UHS
Lease, if
still in effect), and to all other liens, exceptions and
restrictions on,
against or relating to any of the Leased Premises or the applicable
Related
Premises and to all applicable Laws, but free of the lien of and
security
interest created by any Mortgage or Assignment and liens,
exceptions and
restrictions on, against or relating to the Leased Premises or the
applicable
Related Premises which have been created by, or permitted or
resulted solely
from, the acts of Landlord after the date of this Lease, unless the
same are
Permitted Encumbrances or were created with the concurrence of
Tenant or as a
result of a default by Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the Leased
Premises
or any of the Related Premises pursuant to any provision of this
Lease (any such
date the "Purchase Date"), Tenant shall pay to Landlord, or to any
Person to
whom Landlord directs payment, the Relevant Amount therefor
specified herein, in
Federal Funds, less any credit of the Net Award received and
retained by
Landlord or a Lender allowed against the Relevant Amount, and
Landlord shall
deliver to Tenant (i) a special warranty deed which describes the
premises being
conveyed and conveys the title thereto as provided in Paragraph
20(a), (ii) such
other instruments as shall be necessary or customary transfer to
Tenant or its
designee any other property (or rights to any Net Award not yet
received by
Landlord or a Lender) then required to be sold by Landlord to
Tenant pursuant to
this Lease and (iii) any Net Award received by Landlord, not
credited to Tenant
against the Relevant Amount and required to be delivered by
Landlord to Tenant
pursuant to this Lease; provided, that if any Monetary Obligations
remain
outstanding on such date, then Landlord may deduct from the Net
Award the amount
of such Monetary Obligations; and further provided, that if any
event has
occurred which, in Landlord's reasonable judgment, is likely to
subject any
Indemnitee to any liability which Tenant is required to indemnify
against
pursuant to Paragraph 15, then an amount shall be deducted from the
Net Award
which, in Landlord's reasonable judgment, is sufficient to satisfy
such
liability, which amount shall be deposited in an escrow account
with a financial
institution reasonably satisfactory to Landlord and Tenant pending
resolution of
such matter. Landlord shall reasonably cooperate (at no additional
cost to
Landlord, unless such cost is in connection with the cure of any
condition
existing on title caused or permitted by Landlord and which is not
permitted
under Paragraph 20(a)), with Tenant and Tenant's title insurance
company with
respect to customary closing affidavits and related matters to
enable the
purchaser to obtain title in accordance with the terms of Paragraph
20(a). If on
the Purchase Date any Monetary Obligations remain outstanding and
no Net Award
is payable to Tenant by Landlord or the amount of such Net Award is
less than
the amount of the Monetary Obligations, then Tenant shall pay to
Landlord on the
Purchase Date the amount of such Monetary Obligations. Upon the
completion of
such purchase, this Lease and all obligations and liabilities of
Tenant
hereunder with respect to the applicable Related Premises (but not
with respect
to the Remaining Premises) shall terminate, except any Surviving
Obligations.
(c) If the completion of such purchase shall be delayed after
(i)
the Termination Date, in the event of a purchase pursuant to
Paragraph 18 or,
(ii) the date scheduled for such purchase, in the event of a
purchase under any
other provision of this Lease then (x) Rent shall continue to be
due and payable
until completion of such purchase and (y) at
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Landlord's sole option, Fair Market Value shall be redetermined and
the Relevant
Amount payable by Tenant pursuant to the applicable provision of
this Lease
shall be adjusted to reflect such redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord shall be
prorated as of the Purchase Date, and the prorated unapplied
balance shall be
deducted from the Relevant Amount due to Landlord; provided, that
no
apportionment of any Impositions shall be made upon any such
purchase.
21.
Assignment and
Subletting: Prohibition against Leasehold Financing.
(a) Except as otherwise expressly provided to the contrary in
this
Paragraph 21, Tenant may not (i) assign this Lease, voluntarily
or
involuntarily, whether by operation of law or otherwise (including
through any
merger or consolidation) to any Person, or (ii) sublet any of the
Leased
Premises at any time to any other Person, without the prior written
consent of
Landlord, which consent may be granted or withheld by Landlord for
any or no
reason. Any purported sublease or assignment in violation of this
Paragraph 21
(including any Affiliate transaction in violation of the provisions
of
Paragraphs 21(h) and (i) below) shall be null and void. In
addition,
notwithstanding anything to the contrary contained in this
Paragraph 21, Tenant
shall not have the right to assign this Lease (voluntarily or
involuntarily,
whether by operation of law or otherwise), or sublet any of the
Leased Premises
to any Person (including any Affiliate) at any time that an Event
of Default
beyond any applicable notice and cure period shall have occurred
and then be
continuing under this Lease.
(b) (i) Tenant shall have the right, upon thirty (30) days
prior
written notice to Landlord and Lender, to enter into one or more
subleases that
demise, in the aggregate, up to 100% of the gross space in each
Related Premises
to any Affiliate of Tenant or of an approved manager of the Leased
Premises and
up to but not in excess of forty-nine percent (49%) of the gross
space in each
Related Premises to any other Person with no consent or approval of
Landlord
being required or necessary (each, a "Preapproved Sublet"). Other
than pursuant
to Preapproved Sublets, at no time during the Term shall subleases
exist for
more than forty-nine percent (49%) of the gross space in any
Related Premises
without the prior written consent of Landlord which consent shall
be granted or
withheld based upon the following criteria (the "Review Criteria"):
(A) credit,
(B) capital structure, (C) management, (D) operating history, (E)
proposed use
of the Leased Premises and (F) risk factors associated with the
proposed use of
the Leased Premises by the proposed subtenant, taking into account
factors such
as environmental concerns, product liability and the like. Landlord
and Lender
shall review such information and shall approve or disapprove the
proposed
subtenant in writing no later than the thirtieth (30th ) day
following receipt
of all such information, and Landlord and Lender shall be deemed to
have acted
reasonably in granting or withholding consent if such grant or
disapproval is
based on their review of the Review Criteria applying prudent
business judgment.
Notwithstanding anything to the contrary in this Paragraph
21(b)(i), any license
or rental agreement with a customer of Tenant for one or more
self-storage
garages, rooms or bays entered into in the ordinary course of
Tenant's business
as an operator of a self-storage facilities shall not be deemed a
sublease for
the purposes of this Paragraph 21 provided that such license or
rental agreement
is for a term of not more than twelve (12) months.
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(ii) If Tenant assigns all its rights and interest under this
Lease, the assignee under such assignment shall expressly assume
all the
obligations of Tenant hereunder, actual or contingent, including
obligations of
Tenant which may have arisen on or prior to the date of such
assignment, by a
written instrument delivered to Landlord at the time of such
assignment and
shall also provide any certification reasonably required by
Landlord related to
the USA Patriot Act. Each sublease of any of the Related Premises
shall (A) be
expressly subject and subordinate to this Lease and any Mortgage
encumbering the
Leased Premises; (B) not extend beyond the then current Term minus
one day; (C)
terminate upon any termination of this Lease, unless Landlord
elects in writing
to cause the sublessee to attorn to and recognize Landlord as the
lessor under
such sublease, whereupon such sublease shall continue as a direct
lease between
the sublessee and Landlord upon all the terms and conditions of
such sublease;
and (D) bind the sublessee to all covenants contained in Paragraphs
4(a), 10 and
12 with respect to subleased premises to the same extent as if the
sublessee
were the Tenant and (E) required the sublessee to provide any
certification
reasonably required by Landlord related to the USA Patriot Act. No
assignment or
sublease shall affect or reduce any of the obligations of Tenant
hereunder, and
all such obligations of Tenant shall continue in full force and
effect as
obligations of a principal and not as obligations of a guarantor,
as if no
assignment or sublease had been made. No assignment or sublease
shall impose any
additional obligations on Landlord under this Lease.
(c) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease (including a Preapproved
Sublet), deliver
a duplicate original copy thereof to Landlord which, in the event
of an
assignment, shall be in recordable form. Each sublease of any
portion of any
Related Premises shall (A) be expressly subject and subordinate to
this Lease
and any Mortgage encumbering the Leased Premises; (B) not extend
beyond the then
current Term (including any exercised or deemed exercised Renewal
Term) minus
one day; (C) terminate upon any termination of this Lease, unless
Landlord
elects (at its option) in writing to cause the sublessee to attorn
to and
recognize Landlord as the lessor under such sublease, whereupon
such sublease
shall continue as a direct lease between the sublessee and Landlord
upon all the
terms and conditions of such sublease; and (d) bind the sublessee
to all
covenants contained in Paragraphs 4(a), 10 and 12 with respect to
subleased
premises to the same extent as if the sublessee were the
Tenant.
(d) As security for performance of its obligations under this
Lease,
Tenant hereby grants, conveys and assigns to Landlord all right,
title and
interest of Tenant in and to all subleases now in existence or
hereafter entered
into for any or all of the Leased Premises, any and all
extensions,
modifications and renewals thereof and all rents, issues and
profits therefrom.
Landlord hereby grants to Tenant a license to collect and enjoy all
rents and
other sums of money payable under any sublease of any of the Leased
Premises,
provided, however, that Landlord shall have the absolute right at
any time while
an Event of Default is continuing upon notice to Tenant and any
subtenants to
revoke said license and to collect such rents and sums of money and
to retain
the same. Any amounts collected shall be applied to Rent payments
next due and
owing. With respect to any sublease requiring Landlord's consent
pursuant to
this Paragraph 21 or for which Landlord or Lender has granted
non-disturbance
rights, Tenant shall not consent to, cause or allow any
modification or
alteration of any of the terms, conditions or covenants of any of
the subleases
or the termination thereof, without the prior written approval of
Landlord which
consent shall not be unreasonably withheld nor shall
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Tenant accept any rents more than thirty (30) days in advance of
the accrual
thereof nor do nor permit anything to be done, the doing of which,
nor omit or
refrain from doing anything, the omission of which, will or could
be a breach of
or default in the terms of any of the subleases.
(e) Tenant shall not have the power to mortgage, pledge or
otherwise
encumber its interest under this Lease or any sublease of any of
the Related
Premises, and any such mortgage, pledge or encumbrance made in
violation of this
Paragraph 21 shall be void and of no force and effect.
(f) Intentionally Omitted.
(g) Subject to the provisions of Paragraph 34 hereof, Landlord
may
sell or transfer the Leased Premises at any time without Tenant's
consent to any
institutional investor or other Person whose principal business is
investing in
commercial real estate that is not a Direct Competitor of Tenant or
the initial
Manager of the Leased Premises (each a "Third Party Purchaser"). In
the event of
any such transfer, Tenant shall attorn to any Third Party Purchaser
as Landlord
so long as such Third Party Purchaser and Landlord notify Tenant in
writing of
such transfer. At the request of Landlord, Tenant will execute such
documents
confirming the agreement referred to above and such other
agreements as Landlord
may reasonably request, provided that such agreements do not
increase the
liabilities and obligations of Tenant hereunder. As used in this
Paragraph
21(g), the term "Direct Competitor" shall mean the ten (10) largest
operators of
self-storage facilities in the United States as published from time
to time by
Self-Storage Almanac. In the event Self-Storage Almanac ceases
publication or
ceases to publish the list of the ten (10) largest operators of
self-storage
facilities in the United States, Landlord and Tenant shall attempt
to agree on a
substitute trade publication or other reputable listing source to
determine the
ten (10) largest operators of self-storage facilities in the United
States,
provided that if Landlord and Tenant are unable to agree on a
substitute trade
publication or other reputable listing source, a substitute trade
publication
shall be selected by Landlord in its reasonable discretion.
Notwithstanding
anything to the contrary contained herein, the terms of this
Paragraph 21(g)
shall not apply in the case of any foreclosure by Lender (or
delivery of a deed
in lieu of foreclosure), a transfer to any affiliate of Lender, or
the initial
sale of the Leased Premises by any Lender following a foreclosure
(or the
delivery of a deed in lieu of foreclosure).
(h) Tenant shall not, in a single transaction or series of
related
transactions, sell or convey, transfer or lease all or
substantially all of its
assets (an "Asset Transfer") to any Person, and any such Asset
Transfer shall be
deemed an assignment in violation of this Lease; except that,
Tenant shall have
the right conduct an Asset Transfer to a Person if the following
conditions are
met: (a) the Asset Transfer is to a Person that is approved in
writing by
Landlord in Landlord's sole and absolute discretion in accordance
with the
provisions of Paragraph 21 (a) of this Lease and (b) this Lease is
assigned to
such Person as a part of such Asset Transfer.
(i) At no time during the Term shall any Person or "group"
(within
the meaning of Section 13(d) or Section 14(d) of the Securities
Exchange Act of
1934, as amended); pursuant to a single transaction or series of
related
transaction (i) acquire more than 50% of the Voting Stock,
partnership
interests, membership interests or other equitable and/or
beneficial
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interests of Tenant ("Control") or (ii) obtain the power (whether
or not
exercised) to elect a majority of the directors of Tenant or voting
control of
any partnership or limited liability company or other entity acting
as its
general partner or managing member, unless the purchaser who
acquires such
voting power shall be approved in writing by Landlord in Landlord's
sole and
absolute discretion in accordance with Paragraph 21 (a) and any
such change of
Control without such approval shall be deemed an assignment in
violation of this
Lease. Notwithstanding the foregoing provisions, this Paragraph
21(i) shall (x)
not apply to a transfer of any direct or indirect interests in
Tenant held by a
Person owning such interests as of the date of this Lease, either
(A) by devise,
descent or by operation of law upon the death of such Person to his
immediate
family member or members or (B) for estate planning purposes to an
immediate
family member or members of such Person, or to a trust for the
benefit of such
Person and/or his immediate family member or members, so long as
either (1) such
trustee or other family member has sufficient experience and
expertise in the
operation and/or ownership of self storage facilities or (2) Mark
Shoen retains
day to day operational control of Tenant or (y) not prohibit any
sale of the
outstanding capital stock of Guarantor, as parent of Tenant, by any
Person
through the "over-the-counter market" or through any recognized
stock exchange,
other than by those deemed to be a "control person" within the
meaning of the
Securities Exchange Act of 1934 (and any such permitted sale shall
not be deemed
an assignment in violation of this Lease.).
22.
Events of
Default.
(a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph
22(b)) shall,
at the sole option of Landlord, constitute an "Event of Default"
under this
Lease:
(i) a failure by Tenant to make any payment of any Monetary
Obligation on or prior to its due date, regardless of the reason
for such
failure;
(ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise
specifically
mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant herein or
in any certificate, demand or request made pursuant hereto now or
hereafter
proves to be incorrect, as of the time made, in any material
respect;
(iv)
a final, non-appealable judgment or judgments for the
payment of money in excess of $5,000,000 in the aggregate shall be
rendered
against Tenant and the same shall remain undischarged for a period
of ninety
(90) consecutive days;
(v) Tenant shall
(A) voluntarily be adjudicated a bankrupt or
insolvent, (B) seek or consent to the appointment of a receiver or
trustee for
itself or for any of the Related Premises, (C) file a petition
seeking relief
under the bankruptcy or other similar laws of the United States,
any state or
any jurisdiction, (D) make a general assignment for the benefit of
creditors, or
(E) be unable to pay its debts as they mature;
(vi) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee
for it or for
any of the Related Premises or
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approving a petition filed against Tenant which seeks relief under
the
bankruptcy or other similar laws of the United States, any state or
any
jurisdiction, and such order, judgment or decree shall remain
undischarged or
unstayed ninety(90) days after it is entered;
(vii) any of the Related Premises shall have been (A)
abandoned or (B) vacated for a period in excess of sixty(60)
consecutive days
or more than ninety(90) days during any Lease Year, except (1)
during any
reasonable period of repair or restoration of the such Related
Premises
following a Casualty or Taking, (2) during the course of performing
Alterations
to prepare the Leased Premises for occupancy by a permitted
subtenant or
assignee pursuant to an executed sublease or assignment agreement,
(3) with the
prior written consent of Landlord, which consent shall not be
unreasonably
withheld or delayed so long as Tenant has established a plan for
the
preservation, maintenance and security of the Related Premises
(including
confirmation that the insurance required to be carried hereunder by
Tenant will
remain in full force and effect notwithstanding Tenant's vacating
of the Related
Premises) acceptable to Landlord, or (4) after the delivery of an
Abandonment
Notice as to such Related Premises given pursuant to the terms of
Paragraph 36
hereof, or the delivery of a certificate relating to an Obsolete
Premises given
pursuant to the terms of Paragraph 29 hereof, as to such Obsolete
Premises;
(viii) Tenant shall be liquidated or dissolved or shall begin
proceedings towards its liquidation or dissolution;
(ix) the estate or interest of Tenant in any of the Related
Premises shall be levied upon or attached in any proceeding and
such estate or
interest is about to be sold or transferred or such process shall
not be vacated
or discharged within ninety(90) days after it is made;
(x) a failure by Tenant to perform or observe, or a violation
or breach of, or a misrepresentation by Tenant under, any provision
of any
Assignment to which Tenant is a party or any other document between
Tenant and
Lender or from Tenant to Lender, if such failure, violation, breach
or
misrepresentation gives rise to a default beyond any applicable
cure period with
respect to any Loan;
(xi) a failure by Tenant to maintain in effect any license or
permit necessary for the use, occupancy or operation of any of the
Related
Premises;
(xii) Tenant shall in a single transaction or series of
related transactions sell, convey, transfer or lease all or
substantially all of
its assets in violation of the provisions of Paragraph 21; or
(xiii) Tenant shall fail to deliver the estoppel described in
Paragraph 25 within the time period specified therein;
(xiv) Tenant shall fail to timely (i) provide, maintain and
replenish, if necessary, the Security Deposit or (ii) repay to
Landlord either
of the installments (or any portion thereof) of the Security
Deposit advanced by
Landlord on behalf of Tenant, in any case, in accordance with the
requirements
of Paragraph 35;
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(xv) An event of default beyond any applicable notice and/or
cure period shall exist under the Management Agreement, the
Negative Pledge
Agreement, the Guaranty or the Non-Compete Agreement;
(xvi) An event of default beyond any applicable notice and/or
cure period shall exist under the UHS Lease; or
(xvii) Any modification, termination or expiration of the
Assignment and Assumption of UHS Lease Agreement shall occur.
(b) No notice or cure period shall be required in any one or more
of
the following events: (A) the occurrence of an Event of Default
under clause (i)
(except as otherwise set forth below), (iii), (iv), (v), (vi),
(vii), (viii),
(ix), (x), (xi), (xii), (xiv), or (xvii) of Paragraph 22(a); (B)
the default
consists of a failure to pay Basic Rent, a failure to maintain any
insurance
required by Paragraph 16 or an assignment or sublease entered into
in violation
of Paragraph 21; or (C) the default is such that any delay in the
exercise of a
remedy by Landlord could reasonably be expected to cause
irreparable harm to
Landlord. Notwithstanding the foregoing clause (B) above, if the
default
consists of the failure to pay any Basic Rent, there shall be a
cure period of
three (3) days from the date on which notice is given, but Landlord
shall not be
obligated to give notice of, or allow any cure period for, any such
default more
than one (1) time within any Lease Year, and if the default
consists of the
failure to pay any other Monetary Obligation under clause (i) of
Paragraph
22(a), the applicable cure period shall be ten (10) days from the
date on which
notice is given. If the default consists of a default under clause
(ii) of
Paragraph 22(a), other than the events specified in clauses (B) and
(C) of the
first sentence of this Paragraph 22(b), the applicable cure period
shall be
thirty(30) days from the date on which notice is given or, if the
default
cannot be cured within such thirty (30) day period and delay in the
exercise of
a remedy would not (in Landlord's reasonable judgment) cause any
material
adverse harm to Landlord or any of the Leased Premises, the cure
period shall be
extended for the period required to cure the default (but such cure
period,
including any extension, shall not in the aggregate exceed ninety
(90) days
except in the case of any on-going remediation or monitoring of an
Environmental
Violation which is being cured in compliance with Paragraph 10, in
which case
the applicable cure period shall be extended to the extent such
extension is
permitted by Lender), provided that Tenant shall commence to cure
the default
within the said thirty (30) day period and shall actively,
diligently and in
good faith proceed with and continue the curing of the default
until it shall be
fully cured. If the default consists of a default under clause
(xiii) of
Paragraph 22(a), the applicable cure period shall be ten(10) days
from the date
notice is given. Notwithstanding anything to the contrary herein,
to the extent
the Tenant has timely deposited funds sufficient to pay Basic Rent
then due
hereunder into a lockbox established for the benefit of Landlord
and/or Lender,
the failure or delay of the transfer of such funds to Landlord
shall not entitle
Landlord to declare a default hereunder. If the default consists of
a default
under clause (xiii) of Paragraph 22(a), the applicable cure period
shall be ten
(10) days from the date notice is given. If the default consists of
a default
under clause (xv) of Paragraph 22(a), the applicable cure period
shall be three
(3) days from the date notice is given, provided, however, that
with respect to
a default under the Management Agreement where the underlying facts
and/or
circumstances giving rise to the default under the Management
Agreement also
gives rise to another default under Paragraph 22(a) of this Lease,
the cure
period shall be the greater of (x) three(3) days from the date
notice is given,
or (y) the cure period
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otherwise given under this Paragraph 22 with respect to such
underlying facts
and/or circumstances. If the default consists of a default under
clause (xvi) of
Paragraph 22(a), the applicable cure period shall be three(3) days
after the
date on which any applicable notice an cure period has expired
under the terms
of the UHS Lease for any monetary default and ten(10) days after
the date on
which any applicable notice an cure period has expired under the
terms of the
UHS Lease for any non-monetary default, provided that if such
non-monetary
default cannot be cured within such ten(10) day period and delay in
the
exercise of a remedy would not (in Landlord's reasonable judgment)
cause any
material adverse harm to Landlord or any of the Leased Premises,
the cure period
shall be extended for the period required to cure the default (but
such cure
period, including any extension, shall not in the aggregate exceed
ninety(90)
days except in the case of any on-going remediation or monitoring
of an
Environmental Violation which is being cured in compliance with
Paragraph 10, in
which case the applicable cure period shall be extended to the
extent such
extension is permitted by Lender), provided that Tenant shall
commence to cure
the default within the said ten(10) day period and shall actively,
diligently
and in good faith proceed with and continue the curing of the
default until it
shall be fully cured.
23.
Remedies and
Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing,
Landlord shall have the right, at its sole option, then or at any
time
thereafter, to exercise its remedies and to collect damages from
Tenant in
accordance with this Paragraph 23, subject in all events to
applicable Law,
without demand upon or notice to Tenant except as otherwise
provided in
Paragraph 22(b), this Paragraph 23 and except as required by
applicable Law.
(i) Landlord may give Tenant notice of Landlord's intention to
terminate this Lease on a date specified in such notice. Upon such
date, this
Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire
and terminate. Upon such termination, Tenant shall immediately
surrender and
deliver possession of the Leased Premises to Landlord in accordance
with
Paragraph 26. If Tenant does not so surrender and deliver
possession of all of
the Leased Premises, Landlord may re-enter and repossess any of the
Leased
Premises not surrendered, with legal process, by peaceably entering
any of the
Leased Premises and changing locks or by summary proceedings,
ejectment or any
other lawful means or procedure. Upon or at any time after taking
possession of
any of the Leased Premises, Landlord may, by legal process, remove
any Persons
or property therefrom. Landlord shall be under no liability for or
by reason of
any such entry, repossession or removal. Notwithstanding such entry
or
repossession, Landlord may collect the damages set forth in
Paragraph 23(b)(i)
or 23(b)(ii).
(ii) After repossession of any of the Leased Premises pursuant
to clause (i) above, Landlord shall have the right to relet any of
the Leased
Premises to such tenant or tenants, for such term or terms, for
such rent, on
such conditions and for such uses as Landlord in its sole
discretion may
determine, and collect and receive any rents payable by reason of
such
reletting. Landlord may make such Alterations in connection with
such reletting
as it may deem advisable in its sole discretion. Notwithstanding
any such
reletting, Landlord may collect the damages set forth in Paragraph
23(b)(ii).
(iii) Intentionally omitted.
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(iv) Landlord may declare by notice to Tenant the entire Basic
Rent (in the amount of Basic Rent then in effect) for the remainder
of the then
current Term to be immediately due and payable. Tenant shall
immediately pay to
Landlord all such Basic Rent discounted to its Present Value, all
accrued Rent
then due and unpaid, all other Monetary Obligations which are then
due and
unpaid and all Monetary Obligations which arise or become due by
reason of such
Event of Default (including any Costs of Landlord). Upon receipt by
Landlord of
all such accelerated Basic Rent and Monetary Obligations, this
Lease shall
remain in full force and effect and Tenant shall have the right to
possession of
the Leased Premises from the date of such receipt by Landlord to
the end of the
Term, and subject to all the provisions of this Lease, including
the obligation
to pay all increases in Basic Rent and all Monetary Obligations
that
subsequently become due, except that (A) no Basic Rent which has
been prepaid
hereunder shall be due thereafter during the said Term, (B) Tenant
shall have no
option to extend or renew the Term and (C) Tenant shall have no
further rights
under Paragraph 34.
(b) The following constitute damages to which Landlord shall be
entitled if Landlord exercises its remedies under Paragraph
23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph 23(a)(i)
but not its remedy under Paragraph 23(a)(ii) (or attempts to
exercise such
remedy and is unsuccessful in reletting the Leased Premises) then,
upon written
demand from Landlord, Tenant shall pay to Landlord, as liquidated
and agreed
final damages for Tenant's default and in lieu of all current
damages beyond the
date of such demand (it being agreed that it would be impracticable
or extremely
difficult to fix the actual damages), an amount equal to the
Present Value of
the excess, if any, of (A) all Basic Rent from the date of such
demand to the
date on which the Term is scheduled to expire hereunder in the
absence of any
earlier termination, reentry or repossession over (B) the then fair
market
rental value of the Leased Premises for the same period. Tenant
shall also pay
to Landlord all of Landlord's Costs in connection with the
repossession of the
Leased Premises and any attempted reletting thereof, including all
brokerage
commissions, legal expenses, reasonable attorneys' fees, employees'
expenses,
costs of Alterations and expenses and preparation for
reletting.
(ii) If Landlord exercises its remedy under Paragraph 23(a)(i)
or its remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant
shall, until
the end of what would have been the Term in the absence of the
termination of
the Lease, and whether or not any of the Leased Premises shall have
been relet,
be liable to Landlord for, and shall pay to Landlord, as liquidated
and agreed
current damages all Monetary Obligations which would be payable
under this Lease
by Tenant in the absence of such termination less the net proceeds,
if any, of
any reletting pursuant to Paragraph 23(a)(ii), after deducting from
such
proceeds all of Landlord's Costs (including the items listed in the
last
sentence of Paragraph 23(b)(i) hereof) incurred in connection with
such
repossessing and reletting; provided, that if Landlord has not
relet the Leased
Premises, such Costs of Landlord shall be considered to be Monetary
Obligations
payable by Tenant. Tenant shall be and remain liable for all sums
aforesaid, and
Landlord may recover such damages from Tenant and institute and
maintain
successive actions or legal proceedings against Tenant for the
recovery of such
damages. Nothing herein contained shall be deemed to require
Landlord to wait to
begin such action or other legal proceedings until the date when
the Term would
have expired by its own terms had there been no such Event of
Default.
44
<PAGE>
(c) Notwithstanding anything to the contrary herein contained,
in
lieu of or in addition to any of the foregoing remedies and
damages, Landlord
may exercise any remedies and collect any damages available to it
at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant
to the
exercise of any remedy, it may pursue any other remedy which it has
hereunder or
at law or in equity.
(d) Landlord shall not be required to mitigate any of its
damages
hereunder unless required to by applicable Law. If any Law shall
validly limit
the amount of any damages provided for herein to an amount which is
less than
the amount agreed to herein, Landlord shall be entitled to the
maximum amount
available under such Law.
(e) No termination of this Lease, repossession or reletting of
any
of the Leased Premises, exercise of any remedy or collection of any
damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD OR
TENANT
HEREUNDER, TENANT AND LANDLORD HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY,
PROVIDED, HOWEVER, THAT NEITHER LANDLORD NOR TENANT WAIVES ITS
RIGHT TO A TRIAL
BY JURY WITH RESPECT TO ANY ACTION, PROCEEDING OR COUNTER-CLAIM
BROUGHT BY
EITHER TENANT OR LANDLORD AGAINST THE OTHER IN ANY ACTION FOR
PERSONAL INJURY OR
PROPERTY DAMAGE.
(g) Upon the occurrence of any Event of Default, Landlord shall
have
the right (but no obligation) to perform any act required of Tenant
hereunder
and, if performance of such act requires that Landlord enter the
Leased
Premises, Landlord may enter the Leased Premises for such
purpose
(h) No failure of Landlord (i) to insist at any time upon the
strict
performance of any provision of this Lease or (ii) to exercise any
option,
right, power or remedy contained in this Lease shall be construed
as a waiver,
modification or relinquishment thereof. A receipt by Landlord of
any sum in
satisfaction of any Monetary Obligation with knowledge of the
breach of any
provision hereof shall not be deemed a waiver of such breach, and
no waiver by
Landlord of any provision hereof shall be deemed to have been made
unless
expressed in a writing signed by Landlord.
(i) Tenant hereby waives and surrenders, for itself and all
those
claiming under it, including creditors of all kinds, (i) any right
and privilege
which it or any of them may have under any present or future Law to
redeem any
of the Leased Premises or to have a continuance of this Lease after
termination
of this Lease or of Tenant's right of occupancy or possession
pursuant to any
court order or any provision hereof, and (ii) the benefits of any
present or
future Law which exempts property from liability for debt or for
distress for
rent.
(j) Except as otherwise provided herein, all remedies are
cumulative
and concurrent and no remedy is exclusive of any other remedy. Each
remedy may
be exercised at any time an Event of Default has occurred and is
continuing and
may be exercised from time to time. No remedy shall be exhausted by
any exercise
thereof.
45
<PAGE>
24.
Notices. All
notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required
or permitted
to be given pursuant to the provisions of this Lease shall be in
writing and
shall be deemed to have been given and received for all purposes
when delivered
in person or by Federal Express or other reliable 24-hour delivery
service or
five(5) business days after being deposited in the United States
mail, by
registered or certified mail, return receipt requested, postage
prepaid,
addressed to the other party at its address stated on page one of
this Lease or
when delivery is refused. Any Automatic Renewal Notice given by
Landlord
pursuant to Paragraph 5 hereof shall be delivered in person or by
registered or
certified mail. Notices sent to Landlord shall be to the attention
of Director,
Asset Management, and notices sent to Tenant shall be to the
attention of
Finance Director. A copy of any notice given by Tenant to Landlord
shall be
addressed to the attention of Director, Asset Management and
shall
simultaneously be given by Tenant to Reed Smith LLP, One Liberty
Place,
Philadelphia, PA 19103, Attention: Chairman, Real Estate Department
and, for so
long as the Initial Loan is outstanding, to Bank of America, N.A.,
Capital
Markets Servicing Group, 555 South Flower Street, 6th Floor,
CA9-706-06-42, Los
Angeles, CA 90071, Attention: Servicing Manager with a copy to
Thacher Proffitt
& Wood LLP, Two World Financial Center, New York, NY 10281,
Attention David S.
Hall, Esq. and a copy of any notice given by Landlord to Tenant
shall
simultaneously be given by Landlord to Torys LLP, 237 Park Avenue,
New York, NY
10017, Attention: Gary Litke, Esq., with a courtesy copy to Manager
at c/o U-
Haul International, Inc., 2727 North Central Avenue, Phoenix, AZ
85004,
Attention: President and Assistant General Counsel, provided,
however, the
failure of Landlord to give Manager a copy of any notice given by
Landlord to
Tenant shall not in any manner impair the effectiveness of any
notice given to
Tenant. For the purposes of this Paragraph, any party referenced
herein
(including Initial Lender or any subsequent Lender) may substitute
another
address stated above (or substituted by a previous notice),
including
substituting Initial Lender for the then current Lender, for its
address by
giving fifteen(15) days' notice of the new address to the other
party, in the
manner provided above.
25.
Estoppel
Certificate. At any time upon not less than ten(10)
days'prior written request by either Landlord or Tenant (the
"Requesting Party")
to the other party (the "Responding Party"), the Responding Party
shall deliver
to the Requesting Party a statement in writing, executed by an
authorized
officer of the Responding Party, certifying (a) that, except as
otherwise
specified, this Lease is unmodified and in full force and effect,
(b) the dates
to which Basic Rent, Additional Rent and all other Monetary
Obligations have
been paid, (c) that, to the knowledge of the signer of such
certificate and
except as otherwise specified, no default by either Landlord or
Tenant exists
hereunder, (d) such other matters as the Requesting Party may
reasonably
request, and (e) if Tenant is the Responding Party that, except as
otherwise
specified, there are no proceedings pending or, to the knowledge of
the signer,
threatened, against Tenant before or by a court or administrative
agency which,
if adversely decided, would materially and adversely affect the
financial
condition and operations of Tenant. Any such statements by the
Responding Party
may be relied upon by the Requesting Party, any Person whom the
Requesting Party
notifies the Responding Party in its request for the Certificate is
an intended
recipient or beneficiary of the Certificate, any Lender or their
assignees and
by any prospective purchaser or mortgagee of any of the Leased
Premises. Any
certificate required under this Paragraph 25 and delivered by
Tenant shall state
that, the individual signing the same, has sufficient familiarity
with the facts
contained therein and is duly authorized to execute and deliver
same.
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<PAGE>
26.
Surrender. Upon
the expiration or earlier termination of this Lease,
Tenant shall peaceably leave and surrender the Leased Premises or
Affected
Premises, if applicable, to Landlord in the same condition in which
the Leased
Premises or Affected Premises, if applicable, was at the
commencement of this
Lease, except as repaired, rebuilt, restored, altered, replaced or
added to as
permitted or required by any provision of this Lease, and except
for ordinary
wear and tear. Upon such surrender, Tenant shall (a) remove from
the Leased
Premises or Affected Premises, if applicable, all property which is
owned by
Tenant or third parties other than Landlord and Alterations
required to be
removed pursuant to Paragraph 13 hereof and (b) repair any damage
caused by such
removal. Property not so removed shall become the property of
Landlord, and
Landlord may thereafter cause such property to be removed from the
Leased
Premises or Affected Premises, if applicable. The cost of removing
and disposing
of such property and repairing any damage to any of the Leased
Premises or
Affected Premises, if applicable, caused by such removal shall be
paid by Tenant
to Landlord upon demand. Landlord shall not in any manner or to any
extent be
obligated to reimburse Tenant for any such property which becomes
the property
of Landlord pursuant to this Paragraph 26.
27.
No Merger of
Title. There shall be no merger of the leasehold estate
created by this Lease with the fee estate in any of the Leased
Premises by
reason of the fact that the same Person may acquire or hold or own,
directly or
indirectly, (a) the leasehold estate created hereby or any part
thereof or
interest therein and (b) the fee estate in any of the Leased
Premises or any
part thereof or interest therein, unless and until all Persons
having any
interest in the interests described in (a) and (b) above which are
sought to be
merged shall join in a written instrument effecting such merger and
shall duly
record the same.
28.
Books and
Records.
(a) Tenant shall keep adequate records and books of account
with
respect to the finances and business of Tenant generally and with
respect to the
Leased Premises, in accordance with generally accepted accounting
principles
("GAAP") consistently applied, and shall permit Landlord and Lender
by their
respective agents, accountants and attorneys, upon reasonable prior
notice to
Tenant, and subject to the provisions of Paragraph 4(b), to visit
the Leased
Premises and inspect same and to examine (and make copies of) the
records and
books of account of Tenant at Tenant's primary place of business
first set forth
herein and to discuss the finances and business with the officers
of Tenant, at
such reasonable times as may be requested by Landlord. Upon the
request of
Lender or Landlord (either telephonically or in writing), Tenant
shall provide
the requesting party with copies of any information to which such
party would be
entitled in the course of a personal visit. Without limiting the
foregoing and
in addition thereto, Tenant agrees that, in the event that
Landlord, its parent,
or any of its Affiliates, are required, in order to comply with the
terms of any
applicable Law, including complying with Landlord's (or its parent
company's)
filing requirements under the Securities Act of 1934 or other
similar Laws, to
obtain audited financial statements on a per Related Premises
basis, Tenant
shall cooperate and cause the Manager to cooperate with any such
audit
(including on-site); provided, that any such audit shall be made at
Landlord's
sole cost and expense.
(b) Tenant shall deliver or cause to be delivered to Landlord and
to
Lender within one hundred twenty(120) days of the close of each
fiscal year,
annual audited
47
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financial statements of Tenant and the Leased Premises prepared by
either Sarvas
King & Coleman P.C. or such other nationally recognized
independent certified
public accountants selected by Tenant. Tenant shall also furnish to
Landlord
within seventy-five(75) days after the end of each of the three
remaining
quarters unaudited financial statements and all other quarterly
reports of
Tenant and the Leased Premises (including vacancy rate data or data
from which
vacancy rates can be readily calculated), certified by Tenant's
chief financial
officer, and all filings, if any, of Form 10-K, Form 10-Q and other
required
filings with the Securities and Exchange Commission pursuant to the
provisions
of the Securities Exchange Act of 1934, as amended, or any other
Law. All
financial statements of Tenant shall be prepared in accordance with
GAAP. In
addition to the foregoing, Tenant shall deliver to Landlord and
Lender such
monthly and/or quarterly reports and unaudited financial statements
with respect
to Tenant and the Leased Premises as shall be required by the
Initial Lender
pursuant to the Initial Loan Agreement (and as shall be reasonably
required by
any subsequent Lender). Notwithstanding the foregoing, Landlord
acknowledges
that, with respect to the annual audited financial statements
required
hereunder, the Tenant first named herein shall provide consolidated
audited
financial statements of Guarantor (including Tenant), which annual
consolidated
audited financials of Guarantor shall in all other respects comply
with the
terms of this Paragraph 28(b).
29.
Determination of
Value.
(a) Whenever a determination of Fair Market Value is required
pursuant to any provision of this Lease, such Fair Market Value
shall be
determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon such Fair
Market Value within thirty(30) days after the date (the "Applicable
Initial
Date") on which (A) Tenant provides Landlord with notice of its
intention to
terminate this Lease and purchase the Affected Premises pursuant to
Paragraph
18, (B) Landlord provides Tenant with notice of its intention to
redetermine
Fair Market Value pursuant to Paragraph 20(c), (C) Landlord
provides Tenant with
notice of Landlord's intention to require Tenant to make an offer
to purchase
the Leased Premises pursuant to Paragraph 23(a)(iii) or (D)
Landlord receives an
Option Exercise Notice. Upon reaching such agreement, the parties
shall execute
an agreement setting forth the amount of such Fair Market Value.
Each and every
Fair Market Value determination hereunder shall, unless otherwise
expressly
agreed to in w
