LEASE AGREEMENT
Dated as of June 9, 2000
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the PFG Real Estate Trust 2000-1,
as Lessor
and
Respecting each particular Property, the Credit Party referenced on the signature pages hereto which has executed a Lease Supplement with respect to such
Property
or the Eligible Lessee designated as a Lessee in any
Lease Supplement respecting such Property,
as Lessee
This Lease Agreement is subject to a security interest in favor of First Union National Bank, as the agent for the Lenders and respecting the Security Documents, as the agent for the Lenders and the Holders, to the extent of their interests (the "Agent") under a Security Agreement dated as of June 9, 2000, between First Security Bank, National Association, not individually, but solely as the Owner Trustee under the PFG Real Estate Trust 2000-1 and the Agent, as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof. This Lease Agreement has been executed in several counterparts. To the extent, if any, that this Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Agreement may be created through the transfer or possession of any counterpart other than the original counterpart containing the receipt therefor executed by the Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I 2
1.1 Definitions. 2
1.2 Interpretation. 2
1.3 No Joint or Several Liability. 2
ARTICLE II 3
2.1 Property. 3
2.2 Lease Term. 3
2.3 Title. 3
2.4 Lease Supplements. 3
ARTICLE III 3
3.1 Rent. 3
3.2 Payment of Basic Rent. 4
3.3 Supplemental Rent. 4
3.4 Performance on a Non-Business Day. 5
3.5 Rent Payment Provisions. 5
ARTICLE IV 5
4.1 Taxes; Utility Charges. 5
ARTICLE V 5
5.1 Quiet Enjoyment. 5
ARTICLE VI 6
6.1 Net Lease. 6
6.2 No Termination or Abatement. 7
ARTICLE VII 7
7.1 Ownership of the Properties. 7
ARTICLE VIII 9
8.1 Condition of the Properties. 9
8.2 Possession and Use of the Properties. 10
8.3 Integrated Properties. 11
ARTICLE IX 11
9.1 Compliance With Legal Requirements, Insurance
Requirements and Manufacturer's Specifications and
Standards. 11
ARTICLE X 12
10.1 Maintenance and Repair; Return. 12
10.2 Environmental Inspection. 13
ARTICLE XI 14
11.1 Modifications. 14
ARTICLE XII 15
12.1 Warranty of Title. 15
ARTICLE XIII 16
13.1 Permitted Contests Other Than in Respect of
Indemnities. 16
13.2 Impositions, Utility Charges, Other Matters;
Compliance with Legal Requirements. 16
ARTICLE XIV 17
14.1 Public Liability and Workers' Compensation
Insurance. 17
14.2 Permanent Hazard and Other Insurance. 17
14.3 Coverage. 18
ARTICLE XV 19
15.1 Casualty and Condemnation. 19
15.2 Environmental Matters. 21
15.3 Notice of Environmental Matters. 22
ARTICLE XVI 22
16.1 Termination Upon Certain Events. 22
16.2 Procedures. 23
ARTICLE XVII 23
17.1 Lease Events of Default. 23
17.2 Surrender of Possession. 27
17.3 Reletting. 27
17.4 Damages. 27
17.5 Power of Sale. 28
17.6 Final Liquidated Damages. 28
17.7 Environmental Costs. 29
17.8 Waiver of Certain Rights. 29
17.9 Assignment of Rights Under Contracts. 30
17.10 Remedies Cumulative. 30
ARTICLE XVIII 30
18.1 Lessor's Right to Cure Lessee's Lease Defaults. 30
ARTICLE XIX 31
19.1 Provisions Relating to Lessee's Exercise of its
Purchase Option. 31
19.2 No Purchase or Termination With Respect to Less
than All of a Property. 31
ARTICLE XX 31
20.1 Purchase Option or Sale Option-General Provisions. 31
20.2 Lessee Purchase Option. 32
20.3 Third Party Sale Option. 33
ARTICLE XXI 34
21.1 [Intentionally Omitted]. 34
ARTICLE XXII 34
22.1 Sale Procedure. 34
22.2 Application of Proceeds of Sale. 37
22.3 Indemnity for Excessive Wear. 37
22.4 Appraisal Procedure. 37
22.5 Certain Obligations Continue. 38
ARTICLE XXIII 38
23.1 Holding Over. 38
ARTICLE XXIV 39
24.1 Risk of Loss. 39
ARTICLE XXV 39
25.1 Assignment. 39
25.2 Subleases. 39
ARTICLE XXVI 40
26.1 No Waiver. 40
ARTICLE XXVII 40
27.1 Acceptance of Surrender. 40
27.2 No Merger of Title. 41
ARTICLE XXVIII 41
28.1 Incorporation of Covenants. 41
ARTICLE XXIX 42
29.1 Notices. 42
ARTICLE XXX 42
30.1 Miscellaneous. 42
30.2 Amendments and Modifications. 42
30.3 Successors and Assigns. 42
30.4 Headings and Table of Contents. 43
30.5 Counterparts. 43
30.6 GOVERNING LAW. 43
30.7 Calculation of Rent. 43
30.8 Memoranda of Lease and Lease Supplements. 43
30.9 Allocations between the Lenders and the Holders. 43
30.10 Limitations on Recourse. 44
30.11 WAIVERS OF JURY TRIAL. 44
30.12 Exercise of Lessor Rights. 44
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION. 44
30.14 USURY SAVINGS PROVISION. 45
EXHIBITS
EXHIBIT A - Lease Supplement No. ____ EXHIBIT B - Memorandum of Lease and Lease Supplement No.
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of June 9, 2000 (as amended, modified, extended, supplemented, restated and/or replaced from time to time, this "Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, having its principal office at 79 South Main Street, Salt Lake City, Utah 84111, not individually, but solely as the Owner Trustee under the PFG Real Estate Trust 2000-1, as lessor (the "Lessor"), and respecting each particular Property subject to this Lease as of the Initial Closing Date, the Credit Party referenced on the signature pages hereto which has executed a Lease Supplement with respect to such Property and respecting any other Property which becomes subject to this Lease after the Initial Closing Date, each other Eligible Lessee designated as a Lessee in any Lease Supplement respecting any such Property, as lessee (each such entity with respect to each such Property may be referred to herein as the "Lessee").
PRELIMINARY STATEMENT:
This Lease is a master lease pursuant to which the Lessor shall lease to each applicable Lessee one or more individual Properties from time to time which such Lessee has identified for acquisition or ground leasing by the Lessor under the terms of the Agency Agreement. The Lessor and all Lessees contemplate that each applicable Lessee will utilize this master lease to obtain an interest in one or more individual Properties from time to time and to finance the construction of Improvements thereon. This Lease permits the Lessee which has executed a Lease Supplement with respect to a particular Property (a) to pay the Termination Value to purchase such Property and to thereby terminate this Lease in accordance with the Operative Agreements as to such Property, and (b) from time to time to cause Lessor in accordance with the Operative Agreements to acquire, in fee simple or by ground lease, an interest in additional Properties to be leased to such Lessee which has executed a Lease Supplement with respect to such additional Property. Accordingly, the terms and conditions of this Lease shall apply to each Property for which the applicable Lessee has executed a Lease Supplement in accordance with the terms of the Operative Agreements.
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease various parcels of real property, some of which will (or may) have existing Improvements thereon, from one (1) or more third parties designated by the applicable Lessee and (ii) fund the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of each Property by the applicable Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each Property upon the Property Closing Date with respect thereto; provided, Basic Rent with respect thereto shall not be payable until the applicable Rent Commencement Date; and
C. WHEREAS, Lessor desires to lease to each applicable Lessee, and each applicable Lessee desires to lease from Lessor, each Property for which such Lessee has executed a Lease Supplement;
NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE XIII
13.1 Definitions.
For purposes of this Lease, capitalized terms used in this Lease and not otherwise defined herein shall have the meanings assigned to them in Appendix A to that certain Participation Agreement dated as of June 9, 2000 (as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof, the "Participation Agreement") among Lessees, Performance Food Group Company, as Guarantor, Lessor, the various banks and other lending institutions which are parties thereto from time to time, as the Holders, the various banks and other lending institutions which are parties thereto from time to time, as the Lenders, and First Union National Bank, as agent for the Lenders and respecting the Security Documents, as the agent for the Lenders and the Holders, to the extent of their interests. Unless otherwise indicated, references in this Lease to articles, sections, paragraphs, clauses, appendices, schedules and exhibits are to the same contained in this Lease.
13.2 Interpretation.
The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Lease.
13.3 No Joint or Several Liability.
Each Lessee shall be liable for its obligations as Lessee under this Lease and the other Operative Agreements solely with respect to such obligations arising in connection with the Properties for which such Lessee has executed Lease Supplements and no Lessee shall be jointly or severally liable for the obligations of the other Lessees; provided, notwithstanding the foregoing, the Security Documents shall cross-collateralize the obligations of the Lessees.
ARTICLE XIV
14.1 Property.
Subject to the terms and conditions hereinafter set forth and contained in the respective Lease Supplement relating to each Property, Lessor hereby leases to each applicable Lessee and such Lessee hereby leases from Lessor, each Property with respect to which such Lessee has executed a Lease Supplement.
14.2 Lease Term.
The term of this Lease with respect to each Property (the "Term") shall begin upon the Property Closing Date for such Property (in each case the "Commencement Date") and shall end on the fifth annual anniversary of the Initial Closing Date, unless the Term is earlier terminated in accordance with the provisions of this Lease. Notwithstanding the foregoing, no Lessee shall be obligated to pay Basic Rent until the Rent Commencement Date with respect to such Property.
14.3 Title.
Each Property is leased to the Lessee that has executed a Lease Supplement with respect to such Property without any representation or warranty, express or implied, by Lessor and subject to the rights of parties in possession (if any), the existing state of title (including without limitation the Permitted Liens) and all applicable Legal Requirements. No Lessee shall in any event have any recourse against Lessor for any defect in Lessor's title to any Property or any interest of such Lessee therein other than for Lessor Liens.
14.4 Lease Supplements.
On or prior to each Commencement Date, each applicable Lessee and Lessor shall each execute and deliver a Lease Supplement for the Property to be leased effective as of such Commencement Date in substantially the form of EXHIBIT A hereto.
ARTICLE XV
15.1 Rent.
(a) Each applicable Lessee shall pay Basic Rent in
arrears on each Payment Date, and on any date on which
this Lease shall terminate with respect to each Property
with respect to which such Lessee has executed a Lease
Supplement during the Term; provided, however, no Lessee
shall have any obligation to pay Basic Rent with respect
to such Property until the Rent Commencement Date with
respect to such Property (notwithstanding that Basic
Rent for such Property shall accrue from and including
the Scheduled Interest Payment Date immediately
preceding such Rent Commencement Date).
(b) Basic Rent shall be due and payable in lawful
money of the United States and shall be paid by wire
transfer of immediately available funds on the due date
therefor (or within the applicable grace period) to such
account or accounts at such bank or banks as Lessor
shall from time to time direct.
(c) The inability or failure of any Lessee to take
possession of all or any portion of any Property with
respect to which such Lessee has executed a Lease
Supplement when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the
Construction Agent, such Lessee or any other Person or
for any other reason whatsoever, shall not delay or
otherwise affect such Lessee's obligation to pay Rent
for such Property in accordance with the terms of this
Lease.
(d) Each applicable Lessee shall make all payments
of Rent allocable to such Lessee prior to 12:00 Noon,
Charlotte,
North Carolina time, on the applicable date
for payment of such amount.
15.2 Payment of Basic Rent.
Basic Rent shall be paid absolutely net to Lessor or its designee, so that this Lease shall yield to Lessor the full amount thereof, without setoff, deduction or reduction.
15.3 Supplemental Rent.
Each applicable Lessee shall pay to the Person entitled thereto any and all Supplemental Rent when and as the same shall become due and payable, and if such Lessee fails to pay any Supplemental Rent within three (3) days after the same is due, Lessor shall have all rights, powers and remedies provided for herein or by law or equity or otherwise in the case of nonpayment of Basic Rent. All such payments of Supplemental Rent shall be in the full amount thereof, without setoff, deduction or reduction. Each applicable Lessee shall pay to the appropriate Person, as Supplemental Rent due and owing to such Person, among other things, on demand, (a) any and all payment obligations (except for amounts payable as Basic Rent) owing from time to time under the Operative Agreements by any Person to the Agent, any Lender, any Holder or any other Person, (b) interest at the applicable Overdue Rate on any installment of Basic Rent not paid when due (subject to the applicable grace period) for the period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due or demanded by the appropriate Person (subject to any applicable grace period) for the period from the due date or the date of any such demand, as the case may be, until the same shall be paid and (c) amounts referenced as Supplemental Rent obligations pursuant to Section 8.3 of the Participation Agreement. It shall be an additional Supplemental Rent obligation of each applicable Lessee to pay to the appropriate Person all rent and other amounts when such become due and owing from time to time under each Ground Lease with respect to each Property subject to a Ground Lease and for which such Lessee has executed a Lease Supplement and without the necessity of any notice from Lessor with regard thereto. The expiration or other termination of any Lessee's obligations to pay Basic Rent hereunder shall not limit or modify the obligations of such Lessee with respect to Supplemental Rent. Unless expressly provided otherwise in this Lease, in the event of any failure on the part of any Lessee to pay and discharge any Supplemental Rent as and when due, such Lessee shall also promptly pay and discharge any fine, penalty, interest or cost which may be assessed or added for nonpayment or late payment of such Supplemental Rent, all of which shall also constitute Supplemental Rent.
15.4 Performance on a Non-Business Day.
If any Basic Rent is required hereunder on a day that is not a Business Day, then such Basic Rent shall be due on the corresponding Scheduled Interest Payment Date. If any Supplemental Rent is required hereunder on a day that is not a Business Day, then such Supplemental Rent shall be due on the next succeeding Business Day.
15.5 Rent Payment Provisions.
Each applicable Lessee shall make payment of all Basic Rent and Supplemental Rent when due (subject to the applicable grace periods) regardless of whether any of the Operative Agreements pursuant to which same is calculated and is owing shall have been rejected, avoided or disavowed in any bankruptcy or insolvency proceeding involving any of the parties to any of the Operative Agreements. Such provisions of such Operative Agreements and their related definitions are incorporated herein by reference and shall survive any termination, amendment or rejection of any such Operative Agreements.
ARTICLE XVI
16.1 Taxes; Utility Charges.
Each applicable Lessee shall pay, or cause to be paid, all Impositions with respect to each Property with respect to which such Lessee has executed a Lease Supplement and/or the use, occupancy, operation, repair, access, maintenance or operation thereof and all charges for electricity, power, gas, oil, water, telephone, sanitary sewer service and all other rents, utilities and operating expenses of any kind or type used in or on any Property with respect to each Property with respect to which such Lessee has executed a Lease Supplement and related real property during the Term. Upon Lessor's request, each applicable Lessee shall provide from time to time Lessor with evidence of all such payments referenced in the foregoing sentence. Each applicable Lessee shall be entitled to receive any credit or refund with respect to any Imposition or utility charge paid by such Lessee. Unless an Event of Default shall have occurred and be continuing, the amount of any credit or refund received by Lessor on account of any Imposition or utility charge paid by any Lessee, net of the costs and expenses incurred by Lessor in obtaining such credit or refund, shall be promptly paid over to such Lessee. All charges for Impositions or utilities imposed with respect to any Property with respect to each Property with respect to which a particular Lessee has executed a Lease Supplement for a period during which this Lease expires or terminates shall be adjusted and prorated on a daily basis between Lessor and such Lessee, and each party shall pay or reimburse the other for such party's pro rata share thereof.
ARTICLE XVII
17.1 Quiet Enjoyment.
Subject to the rights of Lessor contained in Sections 17.2, 17.3 and 20.3 and the other terms of this Lease and the other Operative Agreements and so long as no Event of Default shall have occurred and be continuing, each applicable Lessee shall peaceably and quietly have, hold and enjoy each Property with respect to each Property with respect to which such Lessee has executed a Lease Supplement for the applicable Term, free of any claim or other action by Lessor or anyone rightfully claiming by, through or under Lessor (other than such Lessee) with respect to any matters arising from and after the applicable Commencement Date.
ARTICLE XVIII
18.1 Net Lease.
This Lease shall constitute a net lease, and the obligations of each applicable Lessee hereunder are absolute and unconditional. Each applicable Lessee shall pay all operating expenses arising out of the use, operation and/or occupancy of each Property with respect to which such Lessee has executed a Lease Supplement. Any present or future law to the contrary notwithstanding, this Lease shall not terminate, nor shall any Lessee be entitled to any abatement, suspension, deferment, reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall the obligations of any Lessee hereunder be affected (except as expressly herein permitted and by performance of the obligations in connection therewith) for any reason whatsoever, including without limitation by reason of: (a) any damage to or destruction of any Property or any part thereof; (b) any taking of any Property or any part thereof or interest therein by Condemnation or otherwise; (c) any prohibition, limitation, restriction or prevention of any Lessee's use, occupancy or enjoyment of any Property or any part thereof, or any interference with such use, occupancy or enjoyment by any Person or for any other reason; (d) any title defect, Lien or any matter affecting title to any Property; (e) any eviction by paramount title or otherwise; (f) any default by Lessor hereunder; (g) any action for bankruptcy, insolvency, reorganization, liquidation, dissolution or other proceeding relating to or affecting the Agent, any Lender, Lessor, Lessee, any Holder or any Governmental Authority; (h) the impossibility or illegality of performance by Lessor, any Lessee or all of them; (i) any action of any Governmental Authority or any other Person; (j) any Lessee's acquisition of ownership of all or part of any Property; (k) breach of any warranty or representation with respect to any Property or any Operative Agreement; (l) any defect in the condition, quality or fitness for use of any Property or any part thereof; or (m) any other cause or circumstance whether similar or dissimilar to the foregoing and whether or not any Lessee shall have notice or knowledge of any of the foregoing. The parties intend that the obligations of each applicable Lessee hereunder shall be covenants, agreements and obligations that are separate and independent from any obligations of Lessor hereunder and shall continue unaffected unless such covenants, agreements and obligations shall have been modifie ...