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EXHIBIT 10.6
Recording requested by and when recorded return to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
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FACILITY 2 LEASE AGREEMENT
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
LEASE PLAN U.S.A., INC.
OCTOBER 15, 1997
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TABLE OF CONTENTS
PAGE
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SECTION 1. INTERPRETATION............................................................2
1.01. Definitions..................................................................2
1.02. Rules of Construction........................................................2
SECTION 2. BASIC PROVISIONS..........................................................2
2.01. Lease of the Facility 1 Property.............................................2
2.02. Term.........................................................................2
2.03. Rent.........................................................................3
2.04. Use..........................................................................5
2.05. As Is Lease..................................................................5
2.06. Nature of Transaction........................................................5
2.07. Security, Etc................................................................6
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS............................8
3.01. Maintenance, Repair, Etc.....................................................8
3.02. Risk of Loss.................................................................8
3.03. Insurance....................................................................8
3.04. Casualty and Condemnation...................................................11
3.05. Taxes.......................................................................14
3.06. Environmental Matters.......................................................14
3.07. Xxxxx, Xxxxxxxxx, Etc.......................................................16
3.08. Subletting..................................................................17
3.09. Utility Charges.............................................................17
3.10. Removal of Facility 1 Property..............................................17
3.11. Compliance with Governmental Rules and Insurance Requirements...............17
3.12. Permitted Contests..........................................................18
3.13. Lessor Obligations; Right to Perform Lessee Obligations.....................18
3.14. Inspection Rights...........................................................18
SECTION 4. EXPIRATION DATE..........................................................19
4.01. Termination by Lessee Prior to Scheduled Expiration Date....................19
4.02. Surrender of Facility 1 Property............................................19
4.03. Holding Over................................................................19
SECTION 5. DEFAULT..................................................................19
5.01. Events of Default...........................................................19
5.02. General Remedies............................................................22
5.03. Lease Remedies..............................................................22
5.04. Loan Remedies...............................................................23
5.05. Remedies Cumulative.........................................................26
5.06. No Cure or Waiver...........................................................26
5.07. Exercise of Rights and Remedies.............................................27
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SECTION 6. MISCELLANEOUS............................................................27
6.01. Notices.....................................................................27
6.02. Waivers; Amendments.........................................................27
6.03. Successors and Assigns......................................................27
6.04. No Third Party Rights.......................................................27
6.05. Partial Invalidity..........................................................27
6.06. Governing Law...............................................................27
6.07. Counterparts................................................................28
6.08. Nature of Lessee's Obligations..............................................28
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FACILITY 2 LEASE AGREEMENT
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF
RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement" herein), dated as
of October 15, 1997 is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
and
(2) LEASE PLAN U.S.A., INC., a Georgia corporation ("Lessor").
RECITALS
X. Xxxxxx has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
certain lease facility pursuant to which:
(1) Lessor would (a) purchase the improvements to certain land
and certain personal property designated by Xxxxxx, (b) lease such
property to Lessee as and when acquired by Lessor, (c) appoint Lessee as
Xxxxxx's agent to make certain improvements to such property, (d) make
advances to finance such improvements and to pay certain related
expenses and (e) grant to Lessee the right to purchase such parcels of
property; and
(2) The Participants would participate in such lease facility by
(a) funding the purchase prices and other advances to be made by Xxxxxx
and (b) acquiring participation interests in the rental and certain
other payments to be made by Xxxxxx.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lessor, the Participants and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity, "Agent"),
Lessor and the Participants have agreed to provide such lease facility upon the
terms and subject to the conditions set forth therein, including without
limitation the execution and delivery of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. BASIC PROVISIONS.
2.01. Lease of the Facility 2 Property. Subject to the acquisition
thereof by Lessor pursuant to the Participation Agreement and applicable
Acquisition Agreements, Xxxxxx agrees to lease to Xxxxxx and Xxxxxx agrees to
lease from Lessor the following property (the "Facility 2 Property") to the
extent of Lessor's estate, right, title and interest therein, thereto or
thereunder:
(a) All Improvements to the lots, pieces, tracts and parcels of
land described in Exhibit A (the "Facility 2 Improvements"), but
excluding such land;
(b) All Appurtenant Rights;
(c) All Related Goods (including those described in Exhibit B
and in each Exhibit B Supplement), Related Permits and Related
Agreements; and
(d) All accessions and accretions to and replacements and
substitutions for the foregoing.
2.02. Term.
(a) Original Term. The original term of this Agreement shall
commence on the Closing Date (the "Commencement Date") and shall end on
the first Business Day of October, 2002 (such date as it may be extended
pursuant to Subparagraph 2.02(b) to be referred to as the "Scheduled
Expiration Date").
(b) Extensions. Lessee may request Lessor to extend the
Scheduled Expiration Date in effect at any time for an additional period
of three (3) years, as provided in Subparagraph 2.09(b) of the
Participation Agreement. If Lessor and each Participant consents to such
a request in accordance with such provision, the definition of
"Scheduled Expiration Date" set forth in Subparagraph 2.02(a) shall be
deemed extended to the date which is the first business day of October,
2005. Xxxxxx acknowledges that neither Lessor nor any Participant has
any obligation or commitment (either express or implied) to extend, or
consent to the extension of, the Scheduled Expiration Date at any time.
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2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay as base rent hereunder ("Base
Rent") for each Rental Period (or portion thereof) an amount
equal to the sum of the Interest Component and Principal
Component for such Rental Period determined as follows:
(A) "Interest Component" shall mean, with
respect to any Rental Period, the sum of the following:
(1) The product of (x) the Rental Rate
for such Rental Period, times (y) the
Outstanding Lease Amount under Facility 2 on the
first day of such Rental Period (which shall
include any Advance under Facility 1 made on the
first day of such Rental Period), times (z) a
fraction, the numerator of which is the number
of days in such Rental Period and the
denominator of which is 360; and
(2) If Lessor makes an Advance under
Facility 2 (other than any Advance on the
Closing Date) during such Rental Period on any
day other than the first day of such Rental
Period, the product of (x) the LIBOR Rental Rate
for the Stub Period if the Stub Period is
greater than seven (7) days or the Alternate
Rental Period for the Stub Period if the Stub
Period is Seven (7) days or less, times (y) the
amount of such Advance, times (z) a fraction,
the numerator of which is the number of days in
such Stub Period and the denominator of which is
360.
If the Rental Rate shall change during any Rental
Period, the Rental Rate for such Rental Period shall be
the weighted average of the Rental Rates in effect from
time to time during such Rental Period.
(B) "Principal Component" shall mean:
(1) With respect to each Rental Period
ending on or prior to the Commitment Termination
Date, zero Dollars ($0.00); and
(2) With respect to each Rental Period
beginning on or after the Commitment Termination
Date, an amount equal to the product of (y)
$90,208.33 times (z) the number of months (or
fraction thereof) in such Rental Period
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(ii) The Term shall consist of the following
rental periods (individually, a "Rental Period"):
(A) The period which begins on the
Commencement Date and ends on the first Business
Day in the first calendar month immediately
following the month in which the Commencement
Date occurs;
(B) Each successive period thereafter
which begins on the last day of the immediately
preceding Rental Period and ends one (1) month
thereafter on the first Business Day of a
calendar month through and including the
Commitment Termination Date; and
(C) Each successive period thereafter
which begins on the last day of the immediately
preceding Rental Period and ends one (1), two
(2), three (3) or six (6) months thereafter, as
determined in accordance with this clause (ii),
on the first Business Day of a calendar month
through and including the Scheduled Expiration
Date.
Lessee may select a Rental Period of one (1), two (2),
three (3) or six (6) months for the Rental Period which
begins on the Commitment Termination Date or for any
Rental Period thereafter by delivering to Lessor, at
least three (3) Business Days prior to the first day of
such Rental Period, a written notice of such selection
(a "Notice of Rental Period Selection"); provided,
however, that (1) each Rental Period shall begin and end
on the first Business Day of a calendar month, (2) no
Rental Period shall end after the Scheduled Expiration
Date, (3) no Rental Period shall be longer than one (1)
month if a Default has occurred and is continuing on the
date three (3) Business Days prior to the first day of
such Rental Period and (4) each Rental Period for which
Lessee fails to make a selection in accordance with this
clause (ii) shall be one (1) month. Each Notice of
Rental Period Selection shall be delivered by
first-class mail or facsimile as required by
Subparagraph 2.02(a) and Paragraph 7.01 of the
Participation Agreement; provided, however, that Lessee
shall promptly deliver the original of any Notice of
Rental Period Selection initially delivered by
facsimile.
(iii) The rental rate for each Rental Period
("Rental Rate") shall be the LIBOR Rental Rate for such
Rental Period, except as follows:
(A) If the Commencement Date is not the
first Business Day of a month, the Rental Rate
for the first Rental Period (which begins on the
Commencement Date) shall be the LIBOR Rental
Rate for the Stub Period for the Acquisition
Advance made on the Commencement Date if such
Stub Period is greater than seven (7) days or
the Alternate Rental Rate for such Stub Period
if such Stub Period is seven (7) days or less;
(B) The Rental Rate applicable during
any Stub Period to that portion of the
Outstanding Lease Amount under Facility 2 equal
to the
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Acquisition Advance made on the first day of
such Stub Period shall be the LIBOR Rental Rate
for such Stub Period if such Stub Period is
greater than seven (7) days or the Alternate
Rental Rate for such Stub Period if such Stub
Period is seven (7) days or less: and
(C) The Rental Rate for any Rental
Period (or portion thereof) during which the
LIBOR Rental Rate is unavailable pursuant to
Subparagraph 2.12(a) or Subparagraph 2.12(b) of
the Participation Agreement shall be the
Alternate Rental Rate.
(iv) Lessee shall pay Base Rent in arrears on
(A) the last day of each Rental Period and, in the case
of any Rental Period which exceeds three (3) months,
each day occurring every three (3) months after the
first day of such Rental Period (individually, a
"Scheduled Rent Payment Date") and (B) the Expiration
Date.
(b) Supplemental Rent. Lessee shall pay as supplemental
rent hereunder ("Supplemental Rent") all amounts (other than
Base Rent, the purchase price payable by Lessee for any purchase
of the Facility 2 Property by Lessee pursuant to the Facility 2
Purchase Agreement and the Residual Value Guaranty Amount and
Indemnity Amount payable under the Facility 2 Purchase
Agreement) payable by Lessee under this Agreement and the other
Operative Documents. Lessee shall pay all Supplemental Rent
amounts on the dates specified in this Agreement and the other
Operative Documents for the payment of such amounts or, if no
date is specified for the payment of any such amount, upon the
demand of Lessor or any other Person to whom such amount is
payable.
2.04. Use. Lessee may use the Facility 2 Property for office, research
and development, warehouse and manufacturing purposes, and for any other purpose
which is in compliance with applicable zoning laws and ordinances for the
Facility 2 Property.
2.05. As Is Lease. Lessee has conducted, or will conduct from time to
time with regard to Facility 2 Property that may be added hereto after the date
hereof, all due diligence which it deems appropriate regarding the Facility 2
Property and agrees that no Lessor Party has any obligation to conduct any such
due diligence. Lessee is leasing the Facility 2 Property "as is, with all
faults" without any representation, warranty, indemnity or undertaking by any
Lessor Party regarding any aspect of the Facility 2 Property, including (a) the
condition of the Facility 2 Property (including any Improvements to the Facility
2 Property made prior to the Commencement Date or during the Term); (b) title to
the Facility 2 Property (including possession of the Facility 2 Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Facility 2 Property in favor of any Person); (c) the value,
habitability, usability, design, operation or fitness for use of the Facility 2
Property; (d) the availability or adequacy of utilities and other services to
the Facility 2 Property; (e) any latent, hidden or patent defect in the Facility
2 Property; (f) the zoning or status of the Facility 2 Property or any other
restrictions on the use of the Facility 2 Property; (g) the economics of the
Facility 2 Property; (h) any Casualty or Condemnation; or (i) the compliance of
the Facility 2 Property with any applicable Governmental Rule or Insurance
Requirement; provided, however,
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that Lessor shall be obligated to remove Lessor Liens to the extent required in
Subparagraph 5.04(b) of the Participation Agreement. Without limiting the
generality of the foregoing, Lessee specifically waives any covenant of quiet
enjoyment except as otherwise provided in Subparagraph 5.04(b) of the
Participation Agreement.
2.06. Nature of Transaction. As more fully provided in Paragraph 2.10 of
the Participation Agreement, Lessee and the Lessor Parties intend that the
transaction evidenced by this Agreement and the other Operative Documents
constitute an operating lease for accounting purposes and a loan secured by the
Facility 2 Property for all other purposes, including federal, state and local
income tax purposes and commercial, real estate and bankruptcy law purposes.
2.07. Security, Etc. In order to secure the Lessee Obligations and
otherwise to assure the Lessor Parties the benefits hereof in the event that the
transaction evidenced by this Agreement and the other Operative Documents is,
pursuant to the intent of Lessee and the Lessor Parties, treated as a loan for
certain purposes, Xxxxxx hereby makes the following grants and agrees as
follows:
(a) Real Property Security. As security for the Lessee
Obligations, Lessee hereby irrevocably and unconditionally grants,
conveys, transfers and assigns to Lessor, in trust for the benefit of
the Lessor Parties, with power of sale and right of entry and
possession, all estate, right, title and interest of Lessee in the
following Facility 2 Property, whether now owned or hereafter acquired,
(collectively, the "Real Property Collateral"):
(i) The Facility 2 Improvements;
(ii) All Subleases and Issues and Profits to the extent
that such Subleases and Issues and Profits constitute real
property;
(iii) All Related Goods, Related Agreements and Related
Permits to the extent that such Related Goods, Related
Agreements and Related Permits constitute real property;
(iv) All other Facility 2 Property to the extent such
property constitutes real Property; and
(v) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations, Lessee hereby irrevocably and unconditionally assigns and
grants to Lessor, for the benefit of the Lessor Parties, a security
interest in all estate, right, title and interest of Lessee in the
following Property, whether now owned or hereafter acquired,
(collectively, the "Personal Property Collateral"):
(i) All Subleases and Issues and Profits to the extent
such Subleases and Issues and Profits constitute personal
property;
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(ii) All Related Goods, Related Agreements and Related
Permits to the extent such Related Goods, Related Agreements and
Related Permits constitutes personal property;
(iii) All deposit accounts, instruments, investment
Facility 2 Property and monies held by any Lessor Party in
connection with this Agreement or any other Operative Document
(including any Repair and Restoration Account but excluding Cash
Collateral held by any Lessor Party pursuant to the Cash
Collateral Agreement);
(iv) All other Facility 2 Property to the extent such
Facility 2 Property constitutes personal property;
(v) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
(Cash Collateral held by Lessor Parties pursuant to the Cash Collateral
Agreement secures only the Lessee Obligations under the Purchase Agreement.)
This Agreement constitutes a fixture filing for purposes of the California
Commercial Code with respect to the Related Goods which are or are to become
fixtures on the Facility 1 Land or Facility 2 Improvements.
(c) Absolute Assignment of Subleases, Issues and Profits. Lessee hereby
irrevocably assigns to Lessor, for the benefit of the Lessor Parties, all of
Xxxxxx's estate, right, title and interest in, to and under the Subleases and
the Issues and Profits, whether now owned or hereafter acquired. This is a
present and absolute assignment, not an assignment for security purposes only,
and Xxxxxx's right to the Subleases and Issues and Profits is not contingent
upon, and may be exercised without possession of, the Facility 2 Property.
(i) Until the occurrence of an Event of Default, Lessee shall
have a revocable license to collect and retain the Issues and Profits as
they become due. Upon the occurrence of an Event of Default, such
license shall automatically terminate, and Lessor may collect and apply
the Issues and Profits pursuant to Subparagraph 5.02(d) without further
notice to Lessee or any other party and without taking possession of the
Facility 2 Property. All Issues and Profits thereafter collected by
Lessee shall be held by Xxxxxx as trustee in a constructive trust for
the benefit of Xxxxxx. Lessee hereby irrevocably authorizes and directs
the sublessees under the Subleases, without any need on their part to
inquire as to whether an Event of Default has actually occurred or is
then existing, to rely upon and comply with any notice or demand by
Lessor for the payment to Lessor of any rental or other sums which may
become due under the Subleases or for the performance of any of the
sublessees' undertakings under the Subleases. Collection of any Issues
and Profits by Lessor shall not cure or waive any default or notice of
default hereunder or invalidate any acts done pursuant to such notice.
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(ii) The foregoing irrevocable assignment shall not cause any
Lessor Party to be (A) a mortgagee in possession; (B) responsible or
liable for (1) the control, care, management or repair of the Facility 2
Property or for performing any of Lessee's obligations or duties under
the Subleases, (2) any waste committed on the Facility 2 Property by the
sublessees under any of the Subleases or by any other Persons, (3) any
dangerous or defective condition of the Facility 2 Property, or (4) any
negligence in the management, upkeep, repair or control of the Facility
2 Property resulting in loss or injury or death to any sublessee,
licensee, employee, invitee or other Person; or (C) responsible for or
impose upon any Lessor Party any duty to produce rents or profits. No
Lessor Party, in the absence of gross negligence or willful disregard on
its part, shall be liable to Lessee as a consequence of (y) the exercise
or failure to exercise any of the rights, remedies or powers granted to
Lessor hereunder or (z) the failure or refusal of Lessor to perform or
discharge any obligation, duty or liability of Lessee arising under the
Subleases.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Lessee shall not permit any waste of the Facility 2
Property, except for ordinary wear and tear, and shall, at its sole cost
and expense, maintain the Facility 2 Property in good working order,
mechanical condition and repair and make all necessary repairs thereto,
of every kind and nature whatsoever, whether interior or exterior,
ordinary or extraordinary, structural or nonstructural or foreseen or
unforeseen, in each case as required by all applicable Governmental
Rules and Insurance Requirements and on a basis consistent with the
operation and maintenance of commercial properties comparable in type
and location to the Facility 2 Property and in compliance with prudent
industry practice.
(b) New Improvements. Lessee shall make or cause to be made all
of the New Improvements authorized and required by the Construction
Agency Agreement in accordance with the Construction Agency Agreement.
(c) Other Modifications. Lessee, at its sole cost and expense,
may from time to time make alterations, renovations, improvements and
additions to the Facility 2 Property and substitutions and replacements
therefor (collectively, "Modifications") in addition to the New
Improvements; provided that:
(i) No Modification impairs the value, utility or useful
life of the Facility 2 Property or any part thereof from that
which existed immediately prior to such Modification;
(ii) All Modifications are made expeditiously and, in
all cases, completed not later than six (6) months prior to the
Scheduled Expiration Date;
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provided, however, in the event that Lessee shall have exercised
either the Term Purchase Option or the Expiration Purchase
Option the foregoing six (6) month limitation shall not be
applicable;
(iii) All Modifications are made in a good and
workmanlike manner and in compliance with all applicable
Governmental Rules and Insurance Requirements;
(iv) Subject to Paragraph 3.12 relating to permitted
contests, Lessee pays all costs and expenses and discharges (or
cause to be insured or bonded over) any Liens arising in
connection with any Modification not later than the earlier of
(A) sixty (60) days after the same shall be filed (or otherwise
becomes effective) and (B) six (6) months prior to the Scheduled
Expiration Date; provided, however, in the event that Lessee
shall have exercised either the Term Purchase Option or the
Expiration Purchase Option the foregoing six (6) month limitation
shall not be applicable;
(v) At least one (1) month prior to the commencement of
(y) any Modifications which are anticipated to cost $1,000,000
or more in the aggregate, or (z) any Modifications which cause
the total of all Modifications undertaken during the previous
twelve month period to exceed an aggregate cost of $2,500,000,
Lessee shall deliver to Lessor, with sufficient copies for Agent
and each Participant, a brief written description of such
Modifications; and
(vi) All Modifications otherwise comply with this
Agreement and the other Operative Documents.
(d) Abandonment. Lessee shall not abandon the Facility 2
Property or any material portion thereof for any period in excess of
thirty (30) consecutive days during the term hereof, except as a part of
any New Improvements or Modifications as permitted herein.
(e) Maintenance. Lessee shall maintain the Facility 2 Property
and each material portion thereof in a manner consistent with other
similar properties in the San Xxxx area, except as a part of any New
Improvements or Modifications as permitted herein
3.02. Risk of Loss. Lessee assumes all risks of loss arising from any
Casualty or Condemnation which arises or occurs prior to the Expiration Date or
while Lessee is in possession of the Facility 2 Property and all liability for
all personal injuries and deaths and damages to Facility 2 Property suffered by
any Person on or in connection with the Facility 2 Property which arises or
occurs prior to the Expiration Date or while Lessee is in possession of the
Facility 2 Property, except in each case to the extent any such loss or
liability is primarily caused by the gross negligence or willful misconduct of a
Lessor Party. Lessee hereby waives the provisions of California Civil Code
Sections 1932(1), 1932(2) and 1933(4), and any and all other applicable existing
or future Governmental Rules permitting the termination of this
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Agreement as a result of any Casualty or Condemnation, and Lessor shall in no
event be answerable or accountable for any risk of loss of or decrease in the
enjoyment and beneficial use of the Facility 2 Property as a result of any such
event.
3.03. Insurance.
(a) Coverage. Lessee, at its sole cost and expense, shall carry
and maintain the following insurance coverage:
(i) At all times during the Term, commercial liability
insurance covering claims for injuries or death sustained by
persons or damage to Facility 2 Property while on the Facility 2
Property, and workers' compensation insurance;
(ii) At all times during the Term, property insurance
covering loss or damage by fire, flood, earthquake and other
risks in an amount not less than the then current replacement
cost of the Improvements on the Facility 2 Property, provided
that any property insurance for fire, flood and other risks shall
not be required to cover the cost of foundations and underground
improvements but any earthquake policy or coverage shall cover
foundations and underground improvements. Earthquake insurance
shall be required only if it is commercially reasonably
available, as reasonably determined by Lessor and Required
Participants. The amount of earthquake insurance coverage shall
be 37.5% of the value of the Improvements. Lessee shall obtain
and provide to Lessor and the Agent evidence of such earthquake
insurance within thirty (30) days after the Closing Date.
(iii) During the construction of any Improvements,
builders' risk insurance covering fire, flood, earthquake and
other normal insured risks; and
(iv) At all times during the Term as appropriate, such
other insurance of the types customarily carried by a reasonably
prudent Person owning or operating properties similar to the
Facility 2 Property in the same geographic area as the Facility
2 Property.
Except as otherwise specifically required above, such insurance shall be
in amounts, in a form and with deductibles approved by Lessor, which approval
shall not be unreasonably withheld.
(b) Carriers. Any insurance carried and maintained by Lessee pursuant to
this Paragraph 3.03 shall be underwritten by an insurance company which (i) has,
at the time such insurance is placed and at the time of each renewal thereof, a
general policyholder rating of "A" and a financial rating of at least 8 from
A.M. Best and Company or any successor thereto (or if there is none, an
organization having a similar national reputation) or (ii) is otherwise approved
by Lessor and Required Participants.
(c) Terms. Each insurance policy maintained by Lessee pursuant to this
Paragraph 3.03 shall provide as follows, whether through endorsements or
otherwise:
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(i) Lessor and the Agent shall be named as additional insured,
in the case of each policy of liability insurance, or additional loss
payee, in the case of each policy of Facility 2 Property insurance.
(ii) In respect of the interests of Lessor in the policy, the
insurance shall not be invalidated by any action or by inaction of
Lessee or by any Person having temporary possession of the Facility 2
Property while under contract with Lessee to perform maintenance,
repair, alteration or similar work on the Facility 2 Property, and shall
insure the interests of Lessor regardless of any breach or violation of
any warranty, declaration or condition contained in the insurance policy
by Lessee, Lessor or any other additional insured (other than by such
additional insured, as to such additional insured); provided, however,
that the foregoing shall not be deemed to (A) cause such insurance
policies to cover matters otherwise excluded from coverage by the terms
of such policies or (B) require any insurance to remain in force
notwithstanding non-payment of premiums except as provided in clause
(iii) below.
(iii) If the insurance policy is canceled for any reason
whatsoever, or substantial change is made in the coverage that affects
the interests of Lessor, or if the insurance coverage is allowed to
lapse for non-payment of premium, such cancellation, change or lapse
shall not be effective as to Lessor for thirty (30) days after receipt
by Lessor of written notice from the insurers of such cancellation,
change or lapse.
(iv) No Lessor Party shall have any obligation or liability for
premiums, commissions, assessments, or calls in connection with the
insurance.
(v) The insurer shall waive any rights of set-off or
counterclaim or any other deduction, whether by attachment or otherwise,
that it may have against any Lessor Party.
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by any Lessor
Party with respect to its interest in the Facility 2 Property.
(vii) The insurer shall waive any right of subrogation against
any Lessor Party.
(viii) All provisions of the insurance, except the limits of
liability, shall operate in the same manner as if there were a separate
policy covering each insured party.
(ix) The insurance shall not be invalidated should Lessee or any
Lessor Party waive, in writing, prior to a loss, any or all rights of
recovery against any Person for losses covered by such policy, nor shall
the insurance in favor of any
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Lessor Party or Lessee, as the case may be, or their respective rights
under and interests in said policies be invalidated or reduced by any
act or omission or negligence of any Lessee Party or Lessor, as the case
may be, or any other Person having any interest in the Facility 2
Property.
(x) All insurance proceeds in respect of any loss or occurrence
with a value of less than two million five hundred thousand dollars
($2,500,000) shall be paid to and adjusted solely by Xxxxxx. All other
losses shall be adjusted jointly by Lessor and Lessee with all proceeds
for losses in excess of two million five hundred thousand dollars
($2,500,000) paid to Lessor, subject to the applicable provisions of the
Operative Documents, except from and after the date on which the insurer
receives written notice from Lessor that an Event of Default exists (and
unless and until such insurer receives written notice from Lessor that
all Events of Default have been cured), all losses shall be adjusted
solely by, and all insurance proceeds shall be paid solely to, Lessor.
(xi) Each policy shall contain a standard form mortgage
endorsement in favor of Xxxxxx.
(d) Evidence of Insurance. Lessee, at its sole cost and expense, shall
furnish to Lessor from time to time upon the request of Lessor such certificates
or other documents as Lessor may reasonably request to evidence Lessee's
compliance with the insurance requirements set forth in this Paragraph 3.03.
(e) Release of Lessor Parties. Lessee hereby waives, releases and
discharges each Lessor Party and its directors, officers, employees, agents and
advisors from all claims whatsoever arising out of any loss, claim, expense or
damage to or destruction covered or coverable by insurance required under this
Paragraph 3.03 notwithstanding that such loss, claim, expense or damage may have
been caused by any such Person, and, as among Lessee and such Persons, Lessee
agrees to look to the insurance coverage only in the event of such loss.
3.04. Casualty and Condemnation.
(a) Notice. Lessee shall give Lessor prompt written notice of the
occurrence of any Casualty affecting, or the institution of any proceedings for
the Condemnation of, the Facility 2 Property or any portion thereof.
(b) Repair or Purchase Option. After the occurrence of any Casualty or
Condemnation affecting the Facility 2 Property or any portion thereof, Lessee
shall either (i) repair and restore the Facility 2 Property as required by
Subparagraph 3.04(c) or (ii) exercise the Term Purchase Option and purchase the
Facility 2 Property pursuant to the Purchase Agreement; provided, however, that
Lessee may not elect to repair and restore the Facility 2 Property if an Event
of Default has occurred and is continuing unless Lessor and the Required
Participants shall consent in writing. Not later than one (1) month after the
occurrence of any Casualty or Condemnation, Lessee shall deliver to
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Lessor a written notice indicating whether it elects to repair and restore or
purchase the Facility 2 Property
(c) Repair and Restoration. If Lessee elects to repair and restore the
Facility 2 Property following any Casualty or Condemnation, Lessee shall
diligently proceed to repair and restore the Facility 2 Property to the
condition in which it existed immediately prior to such Casualty or Condemnation
and shall complete all such repairs and restoration not later than the earlier
of (y) one (1) year after the occurrence of the Casualty or Condemnation, and
(z) six (6) months prior to the Scheduled Expiration Date. Lessee shall use its
own funds to make such repairs and restoration, except to the extent any
Casualty and Condemnation Proceeds are available and are released to Lessee for
such purpose pursuant to Subparagraph 3.04(f). Lessee's exercise of the repair
and restoration option shall, if Lessor or Required Participants direct, be
subject to the following conditions:
(i) Deposit in a deposit account acceptable to and controlled by
Lessor (a "Repair and Restoration Account") of funds (including any
Casualty and Condemnation Proceeds which are available and are released
to Lessee pursuant to Subparagraph 3.04(f)) in the amount which Lessor
determines is needed to complete and fully pay all costs of the repair
or restoration (including taxes, financing charges, insurance and rent
during the repair period);
(ii) The establishment of an arrangement for lien releases and
disbursement of funds acceptable to Lessor and in a manner and upon such
terms and conditions as would be required by a prudent interim
construction lender; and
(iii) The delivery to Lessor of the following within ninety (90)
days after the occurrence of such Casualty or Condemnation, each in form
and substance acceptable to Lessor:
(A) Evidence that the Facility 2 Property can, in
Lessor's reasonable judgment, with diligent restoration or
repair, be returned to a condition at least equal to the
condition thereof that existed prior to the Casualty or partial
Condemnation causing the loss or damage within the earlier to
occur of (A) one (1) year after the Casualty and Condemnation,
and (B) six (6) months prior to the Scheduled Expiration Date;
(B) Evidence that all necessary governmental approvals
can be timely obtained to allow the rebuilding and reoccupancy
of the Facility 2 Property;
(C) Copies of all plans and specifications for the work;
(D) Copies of all contracts for the work, signed by a
contractor reasonably acceptable to Xxxxxx;
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(E) A cost breakdown for the work;
(F) A payment and performance bond for the work or other
security satisfactory to Lender;
(G) Evidence that, upon completion of the work, the
size, capacity and total value of the Facility 2 Property will
be at least as great as it was before the Casualty or
Condemnation occurred; and
(H) Evidence of satisfaction of any additional
conditions that Lessor or Required Participants may reasonably
establish to protect their rights under this Agreement and the
other Operative Documents.
All plans and specifications for the work must be reasonably
acceptable to Lessor, except that Xxxxxx's approval shall not be
required if the restoration work is based on the same plans and
specifications as were originally used to construct the Facility
2 Property. To the extent that the funds in a Repair and
Restoration Account include both Casualty and Condemnation
Proceeds and other funds deposited by Lessee, the other funds
deposited by Lessee shall be used first. Lessee acknowledges
that the specific conditions described above are reasonable.
(d) Prosecution of Claims for Casualty and Condemnation Proceeds.
Lessee shall proceed promptly and diligently to prosecute in good faith
the settlement or compromise of any and all claims for Casualty and
Condemnation Proceeds; provided, however, that any settlement or
compromise of any such claim shall, except as otherwise provided in
Section 3.03(c)(x), be subject to the written consent of Lessor and
Required Participants, which consents shall not be unreasonably
withheld. Lessor may participate in any proceedings relating to such
claims, and, after the occurrence and during the continuance of any
Event of Default, Lessor is hereby authorized, in its own name or in
Lessee's name, to adjust any loss covered by insurance or any Casualty
or Condemnation claim or cause of action, and to settle or compromise
any claim or cause of action in connection therewith, and Lessee shall
from time to time deliver to Lessor any and all further assignments and
other instruments required to permit such participation.
(e) Assignment of Casualty and Condemnation Proceeds. Lessee
hereby absolutely and irrevocably assigns to Lessor all Casualty and
Condemnation Proceeds and all claims relating thereto and agrees that
all Casualty and Condemnation Proceeds are to be paid to Lessor, except
as otherwise provided in Section 3.03(c)(x). Except as otherwise
provided in Section 3.03(c)(x), Lessee hereby authorizes and directs any
insurer, Governmental Authority or other Person responsible for paying
any Casualty and Condemnation Proceeds to make payment thereof directly
to Lessor alone, and not to Lessor and Xxxxxx jointly. If Xxxxxx
receives any Casualty and Condemnation Proceeds, Lessee shall promptly
pay over such Casualty and Condemnation Proceeds to Lessor. Lessee
hereby covenants that until such Casualty and Condemnation Proceeds are
so paid over to Lessor, Lessee shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Lessor and shall not commingle such
Casualty and Condemnation Proceeds
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with any other funds or assets of Lessee or any other Person. Lessor may
commence, appear in, defend or prosecute any assigned right, claim or
action, and may adjust, compromise, settle and collect all rights,
claims and actions assigned to Lessor, but shall not be responsible for
any failure to collect any such right, claim or action, regardless of
the cause of the failure.
(f) Use of Casualty and Condemnation Proceeds.
(i) If (A) no Event of Default has occurred and is
continuing, (B) Lessee exercises the repair and restoration
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C)
Lessee complies with any conditions imposed pursuant to
Subparagraph 3.04(c); then Lessor shall release any Casualty and
Condemnation Proceeds to Lessee for repair or restoration of the
Facility 2 Property, but may condition such release and use of
the Casualty and Condemnation Proceeds upon deposit of the
Casualty and Condemnation Proceeds in a Repair and Restoration
Account. Lessor shall have the option, upon the completion of
such restoration of the Facility 2 Property, to apply any surplus
Casualty and Condemnation Proceeds remaining after the completion
of such restoration to the payment of Rent and/or the reduction
of the Outstanding Lease Amount, notwithstanding that such
amounts are not then due and payable or that such amounts are
otherwise adequately secured.
(ii) If (A) an Event of Default has occurred and is
continuing, (B) Lessee fails to or is unable to comply with any
conditions imposed pursuant to Subparagraph 3.04(c) or (C) Lessee
elects to exercise the Term Purchase Option and purchase the
Facility 2 Property pursuant to the Purchase Agreement; then, at
the absolute discretion of Lessor and the Required Participants,
regardless of any impairment of security or lack of impairment of
security, but subject to applicable Governmental Rules governing
use of Casualty and Condemnation Proceeds, if any, Lessor may (1)
apply all or any of the Casualty and Condemnation Proceeds it
receives to the expenses of Lessor Parties in obtaining such
proceeds; (2) apply the balance to the payment of Rent and/or the
reduction of the Outstanding Lease Amount, notwithstanding that
such amounts are not then due and payable or that such amounts
are otherwise adequately secured and/or (3) release all or any
part of such proceeds to Lessee upon any conditions Lessor and
the Required Participants may elect.
(iii) Lessor shall apply any Casualty and Condemnation
Proceeds which are to be used to reduce the Outstanding Lease
Amount only on the last day of a Rental Period unless a Default
has occurred and is continuing.
(iv) Application of all or any portion of the Casualty
and Condemnation Proceeds, or the release thereof to Lessee,
shall not cure or waive any Default or notice of default or
invalidate any acts done pursuant to such notice.
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3.05. Taxes. Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly pay when due all Indemnified Taxes imposed on or payable
by Lessee or any Lessor Party in connection with the Facility 2 Property, this
Agreement or any of the other Operative Documents, or any of the transactions
contemplated hereby or thereby. Whenever any such taxes or other Governmental
Charges are payable by Lessee pursuant to the immediately preceding sentence, as
promptly as possible thereafter, Xxxxxx shall send to Lessor for the account of
the applicable Lessor Party a certified copy of an original official receipt
received by Lessee showing payment thereof. If Xxxxxx fails to pay any such
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to Lessor the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest or
penalties that may become payable by the Lessor Parties as a result of any such
failure. The obligations of Lessee under this Paragraph 3.05 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
3.06. Environmental Matters.
(a) Lessee's Covenants. Lessee shall not cause or permit the
Facility 2 Property to be used as a site for the use, generation,
manufacture, storage, treatment, release, discharge, disposal,
transportation or presence of any Hazardous Materials; provided that
Lessee has disclosed to Lessor that Lessee shall use on the Facility 2
Property from time to time the Hazardous Materials described in Schedule
1 attached hereto. Notwithstanding the disclosure provided in Schedule
1, Lessee shall comply and cause the Facility 2 Property to comply with
all Environmental Laws. Lessee shall immediately notify Lessor in
writing of (i) the discovery of any Hazardous Materials on, under or
about the Facility 2 Property (except for those described in Schedule 1,
which are used, stored, maintained and disposed of in accordance with
all Environmental Laws); (ii) any knowledge by Lessee that the Facility
2 Property does not comply with any Environmental Laws; (iii) any claims
against Lessee or the Facility 2 Property relating to Hazardous
Materials or pursuant to Environmental Laws; and (iv) the discovery of
any occurrence or condition on any real property adjoining or in the
vicinity of the Facility 2 Property that could cause the Facility 2
Property or any part thereof to be designated as "border zone Facility 2
Property" under the provisions of California Health and Safety Code
Sections 25220 et seq. or any regulation adopted in accordance
therewith. In response to the presence of any Hazardous Materials on,
under or about the Facility 2 Property, Lessee shall immediately take,
at Xxxxxx's sole expense, all remedial action required by any
Environmental Laws or any judgment, consent decree, settlement or
compromise in respect to any claim based thereon.
(b) Inspection By Lessor. Upon reasonable prior notice to
Lessee, Lessor, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial
foreclosure proceeding), enter and inspect the Facility 2 Property for
the purpose of determining the existence, location, nature and magnitude
of any past or present release or threatened release of any Hazardous
Materials into, onto, beneath or from the Facility 2 Property.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Xxxxxx
agrees to defend, indemnify
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and hold harmless the Lessor Parties and the other Indemnitees from and
against any claim, loss, damage, cost, expense or liability directly or
indirectly arising out of (i) the use, generation, manufacture, storage,
treatment, release, threatened release, discharge, disposal,
transportation or presence of any Hazardous Materials which are found
in, on, under or about the Facility 2 Property or (ii) the breach of any
covenant, representation or warranty of Lessee relating to Hazardous
Materials or Environmental Laws contained in this Agreement or any
Operative Document. This indemnity shall include (A) the costs, whether
foreseeable or unforeseeable, of any investigation, repair, cleanup or
detoxification of the Facility 2 Property which is required by any
Governmental Authority or is otherwise necessary to render the Facility
2 Property in compliance with all Environmental Laws; (B) all other
direct or indirect consequential damages (including any third party
claims, claims by any Governmental Authority, or any fines or penalties
against the Indemnitees; and (C) all court costs and attorneys' fees
(including expert witness fees and the cost of any consultants) paid or
incurred by the Indemnitees. Lessee shall pay immediately upon Xxxxxx's
demand any amounts owing under this indemnity. Lessee shall use legal
counsel reasonably acceptable to Lessor in any action or proceeding
arising under this indemnity. The obligations of Lessee under this
Subparagraph 3.06(c) shall survive the payment and performance of the
Lessee Obligations and the termination of this Agreement.
(d) Legal Effect of Section. Lessee and Lessor agree that (i)
this Paragraph 3.06 and clause (i) of Subparagraph 4.01(t) of the
Participation Agreement is intended as Lessor's written request for
information (and Xxxxxx's response) concerning the environmental
condition of the real Facility 2 Property security as required by
California Code of Civil Procedure Section 726.5 and (ii) each
representation and warranty and covenant herein and therein (together
with any indemnity applicable to a breach of any such representation and
warranty) with respect to the environmental condition of the Facility 2
Property is intended by Lessor and Lessee to be an "environmental
provision" for purposes of California Code of Civil Procedure Section
736.
3.07. Liens, Easements, Etc.
(a) Lessee's Covenants. Subject to Paragraph 3.12 relating to
permitted contests, Lessee shall not create, incur, assume or permit to
exist any Lien or easement on or with respect to any of the Facility 2
Property of any character, whether now owned or hereafter acquired,
except for the following ("Permitted Property Liens"):
(i) Liens in favor of a Lessor Party securing the Lessee
Obligations;
(ii) Liens and easements in existence on the
Commencement Date to the extent reflected in the title insurance
policy delivered to Agent pursuant to Paragraph 3.02 of and
Schedule 3.02 to the Participation Agreement and approved by
Lessor;
(iii) Liens and easements approved by Lessor and
reflected in the title insurance policy or policies or binders
to be delivered in connection with any Facility 2 Property added
hereto after the date hereof;
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(iv) Liens for taxes or other Governmental Charges not
at the time delinquent or thereafter payable without penalty;
(v) Liens of carriers, warehousemen, mechanics,
materialmen and vendors and other similar Liens imposed by law
incurred in the ordinary course of business for sums not
overdue; and
(vi) Lessor Liens or any other Liens approved by Lessor.
Subject to Paragraph 3.12 relating to permitted contests, Lessee shall
promptly (A) pay all Indebtedness and other obligations prior to the
time the non-payment thereof would give rise to a Lien on the Facility 2
Property and (B) discharge, at its sole cost and expense, any Lien on
the Facility 2 Property which is not a Permitted Property Lien.
(b) No Consents. Nothing contained in this Agreement shall be
construed as constituting the consent or request of any Lessor Party,
express or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Facility 2
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR
PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
FACILITY 2 PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND
THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY LESSOR PARTY IN
AND TO THE FACILITY 2 PROPERTY.
3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the Facility 2 Property or any portion thereof to any Person, provided,
that (a) Lessee remains directly and primarily liable for performing its
obligations under this Agreement and all other Lessee Obligations; (b) each
sublease is subject to and subordinated to this Agreement; (c) each sublease
expressly provides for the surrender of the Facility 2 Property (or portion
thereof) by the sublessee on the Expiration Date; (d) each sublease has a term
which expires on or prior to the Scheduled Expiration Date (or, if longer,
includes a provision that the sublease terminates on the Expiration Date if such
Expiration Date occurs prior to the Scheduled Expiration Date unless Lessee
purchases the Facility 2 Property on the Expiration Date pursuant to the
Purchase Agreement); (e) each sublease prohibits the sublessee from engaging in
any activities on the Facility 2 Property other than those permitted by
Paragraph 2.04; and (f) no sublease has a Material Adverse Effect. Any sublease
which does not satisfy each of the requirements of the immediately preceding
sentence shall be null and void as to the Lessor Parties and their successor and
assigns. Except for such permitted subleases, Lessee shall not assign any of its
rights or interests under this Agreement to any other Person.
3.09. Utility Charges. Lessee shall pay all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other
utilities and services to, on or in connection with the Facility 2 Property
during the Term.
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3.10. Removal of Facility 2 Property. Lessee shall not remove any
Improvements from the Facility 1 Land or any other Facility 2 Property from the
Facility 1 Land or Improvements, except that, during the Term, Lessee may remove
any Modification or any trade fixture, machinery, equipment, inventory or other
personal Facility 2 Property if such Modification or Facility 2 Property (a) was
not financed by an Advance, (b) is not required by any applicable Governmental
Rule or Insurance Requirement and (c) is readily removable without impairing the
value, utility or remaining useful life of the Facility 2 Property.
3.11. Compliance with Governmental Rules and Insurance Requirements.
Lessee, at its sole cost and expense, shall, unless its failure is not
reasonably likely to have a Material Adverse Effect, (a) comply, and cause its
agents, sublessees, assignees, employees, invitees, licensees, contractors and
tenants, and the Facility 2 Property to comply, with all Governmental Rules and
Insurance Requirements relating to the Facility 2 Property (including the
construction, use, operation, maintenance, repair and restoration thereof,
whether or not compliance therewith shall require structural or extraordinary
changes in the Improvements or interfere with the use and enjoyment of the
Facility 2 Property), and (b) procure, maintain and comply with all licenses,
permits, orders, approvals, consents and other authorizations required for the
construction, use, maintenance and operation of the Facility 2 Property and for
the use, operation, maintenance, repair and restoration of the Improvements
3.12. Permitted Contests. Lessee, at its sole cost and expense, may
contest any alleged Lien or easement on any of the Facility 2 Property or any
alleged Governmental Charge, Indebtedness or other obligation which is payable
by Lessee hereunder to Persons other than the Lessor Parties or which, if
unpaid, would give rise to a Lien on any of the Facility 2 Property, provided
that (a) each such contest is diligently pursued in good faith by appropriate
proceedings; (b) the commencement and continuation of such proceedings suspends
the enforcement of such Lien or easement or the collection of such Governmental
Charge, Indebtedness or obligation; (c) Lessee has established adequate reserves
for the discharge of such Lien or easement or the payment of such Governmental
Charge, Indebtedness or obligation in accordance with GAAP and, if the failure
to discharge such Lien or easement or the failure to pay such Governmental
Charge, Indebtedness or obligation might result in any civil liability for any
Lessor Party, Lessee has provided to such Lessor Party a bond or other security
satisfactory to such Lessor Party; (d) the failure to discharge such Lien or
easement or the failure to pay such Governmental Charge, Indebtedness or
obligation could not result in any criminal liability for any Lessor Party; (e)
the failure to discharge such Lien or easement or the failure to pay such
Governmental Charge, Indebtedness or obligation is not otherwise reasonably
likely to have a Material Adverse Effect; and (f) any such contest is completed
and such Lien or easement is discharged (either pursuant to such proceedings or
otherwise) or such Governmental Charge, Indebtedness or obligation is declared
invalid, paid or otherwise satisfied not later than six (6) months prior to the
Scheduled Expiration Date; provided, however, in the event that Lessee shall
have exercised either the Term Purchase Option or the Expiration Purchase Option
the foregoing six (6) month limitation shall not be applicable.
3.13. Lessor Obligations; Right to Perform Lessee Obligations. No Lessor
Party shall have any obligation to (a) maintain, repair or make any improvements
to the Facility 2 Property, (b) maintain any insurance on the Facility 2
Property, (c) perform any other obligation of Lessee under this Agreement or any
other Lessee Obligation, (d) make any expenditure on account of
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the Facility 2 Property (except to make Advances as required by the
Participation Agreement) or (e) take any other action in connection with the
Facility 2 Property, this Agreement or any other Operative Document, except as
expressly provided herein or in another Operative Document; provided however,
that Lessor may, in its sole discretion and without any obligation to do so,
after written notice to Lessee, perform any Lessee Obligation not performed by
Lessee when required. Lessor may enter the Facility 2 Property or exercise any
other right of Lessee under this Agreement or any other Operative Document to
the extent Lessor determines in good faith that such entry or exercise is
reasonably necessary for Lessor to perform any such Lessee Obligation not
performed by Lessee when required. Lessee shall reimburse Lessor and the other
Lessor Parties, within five (5) business days after demand, for all fees, costs
and expenses incurred by them in performing any such obligation or curing any
Default.
3.14. Inspection Rights. During the Term, Lessee shall permit any Person
designated by Lessor, upon reasonable notice and during normal business hours,
to visit and inspect any of the Facility 2 Property.
SECTION 4. EXPIRATION DATE.
4.01. Termination by Lessee Prior to Scheduled Expiration Date. Subject
to the terms and conditions of the Purchase Agreement, Lessee may, at any time
prior to the Scheduled Expiration Date, terminate this Agreement and purchase
the Facility 2 Property pursuant to Section II of the Purchase Agreement. Lessee
shall notify Lessor of Xxxxxx's election so to terminate this Agreement and
purchase the Facility 2 Property by delivering to Agent a Notice of Term
Purchase Option Exercise pursuant to and in accordance with the provisions of
Paragraph 2.02 of the Purchase Agreement.
4.02. Surrender of Facility 2 Property. Unless Lessee purchases the
Facility 2 Property on the Expiration Date pursuant to the Purchase Agreement,
Lessee shall vacate and surrender the Facility 2 Property to Lessor on the
Expiration Date in its then-current condition, subject to compliance by Lessee
on or prior to such date of its obligations under this Agreement and the other
Operative Documents (including the completion of the New Improvements and all
Modifications, the completion of all permitted contests and the removal of all
Liens which are not Permitted Facility 2 Property Liens).
4.03. Holding Over. If Lessee does not purchase the Facility 2 Property
on the Expiration Date pursuant to the Purchase Agreement but continues in
possession of any portion of the Facility 2 Property after the Expiration Date,
Lessee shall pay rent for each day it so continues in possession, payable upon
demand of Lessor, at a per annum rate equal to the Alternate Rental Rate plus
two percent (2%) and shall pay and perform all of its other Lessee Obligations
under this Agreement and the other Operative Documents in the same manner as
though the Term had not ended; provided, however, that this Paragraph 4.03 shall
not be interpreted to permit such holding over or to limit any right or remedy
of Lessor for such holding over.
SECTION 5. DEFAULT.
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5.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Lessee shall (i) fail to pay on the Expiration
Date any amount payable by Lessee under this Agreement or any other
Operative Document on such date, (ii) fail to pay within five (5)
business days after any Scheduled Rent Payment Date any Base Rent
payable on such Scheduled Rent Payment Date (other than the Base Rent
payable on the Expiration Date) or (iii) fail to pay within five (5)
business days after the same becomes due, any Supplemental Rent or other
amount required under the terms of this Agreement or any other Operative
Document (other than any such amount payable on the Expiration Date or
Base Rent); or
(b) Specific Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any covenant, obligation, condition or
agreement set forth in Subparagraph 3.01(d), Paragraph 3.03 or
Subparagraph 3.07(a) hereof or in Paragraph 5.02 or Paragraph 5.03 of
the Participation Agreement ; or
(c) Other Defaults. Lessee or any of its Subsidiaries shall fail
to observe or perform any other covenant, obligation, condition or
agreement contained in this Agreement or any other Operative Document
(except for those covenants described in Paragraph 5.01(d) below) and
such failure shall continue for a period of thirty (30) days after
written notice thereof from Lessor, provided, however, that in the event
that such failure cannot reasonably be cured within such thirty (30) day
period, such failure shall not constitute an Event of Default hereunder
so long as Lessee shall have commenced to cure such failure within such
thirty (30) day period and shall thereafter diligently pursue such cure
to completion, provided further that such failure shall in all events be
cured by the earlier of (i) the Expiration Date, if Lessee is exercising
the Marketing Option, (provided that if the Purchase Option is
consummated in accordance with the terms of the Purchase Agreement all
outstanding Defaults shall be deemed waived), or (ii) one hundred and
eighty days (180) days after Lessor's notice thereof; or
(d) Representations and Warranties. Any representation, warranty,
certificate, information or other statement (financial or otherwise)
made or furnished by or on behalf of Lessee or any of its Subsidiaries
to any Lessor Party in or in connection with this Agreement or any other
Operative Document, or as an inducement to any Lessor Party to enter
into this Agreement or any other Operative Document, shall be false,
incorrect, incomplete or misleading in any material respect when made or
furnished and Lessee shall not have cured the facts or circumstances
causing such representation, warranty, certificate or other statement to
be false, incorrect, incomplete or misleading within thirty (30) days of
notice thereof from Lessor; or
(e) Cross-Default. (i) Lessee or any of its Subsidiaries shall
fail to make any payment when due on account of any Indebtedness of such
Person (other than the Lessee Obligations) and such failure shall
continue beyond any period of grace provided with respect thereto, if
the amount of such Indebtedness exceeds $2,500,000 or the effect of such
failure is to cause, or permit the holder or holders thereof to cause,
Indebtedness of Lessee and its Subsidiaries (other than the Lessee
Obligations) in an aggregate amount
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exceeding $2,500,000 to become due or (ii) Lessee or any of its
Subsidiaries shall otherwise fail to observe or perform any agreement,
term or condition contained in any agreement or instrument relating to
any Indebtedness of such Person (other than the Lessee Obligations), or
any other event shall occur or condition shall exist, if the effect of
such failure, event or condition is to cause, or permit the holder or
holders thereof to cause, Indebtedness of Lessee and its Subsidiaries
(other than the Lessee Obligations) in an aggregate amount exceeding
$2,500,000 to become due (and/or to be secured by cash collateral); or
(f) Insolvency, Voluntary Proceedings. Lessee or any of its
Material Subsidiaries shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its Facility 2 Property, (ii) be unable, or admit in
writing its inability, to pay its debts generally as they mature, (iii)
make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated in full or in part, (v)
become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its Facility 2 Property by any
official in an involuntary case or other proceeding commenced against
it, or (vi) take any action for the purpose of effecting any of the
foregoing; or
(g) Involuntary Proceedings. Proceedings for the appointment of a
receiver, trustee, liquidator or custodian of Lessee or any of its
Material Subsidiaries or of all or a substantial part of the Facility 2
Property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Lessee or
any of its Material Subsidiaries or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect
shall be commenced and an order for relief entered or such proceeding
shall not be dismissed or discharged within thirty (30) days of
commencement; or
(h) Judgments. (i) One or more judgments, orders, decrees or
arbitration awards requiring Lessee and/or its Subsidiaries to pay an
aggregate amount of $2,500,000 or more (exclusive of amounts covered by
insurance issued by an insurer not an Affiliate of Lessee and otherwise
satisfying the requirements set forth in Subparagraph 3.03(b)) shall be
rendered against Lessee and/or any of its Subsidiaries in connection
with any single or related series of transactions, incidents or
circumstances and the same shall not be satisfied, vacated or stayed for
a period of thirty (30) consecutive days after the issue or levy; (ii)
any judgment, writ, assessment, warrant of attachment, tax lien or
execution or similar process shall be issued or levied against a
substantial part of the Facility 2 Property of Lessee or any of its
Subsidiaries and the same shall not be released, stayed, vacated or
otherwise dismissed within thirty (30) days after issue or levy; or
(iii) any other judgments, orders, decrees, arbitration awards, writs,
assessments, warrants of attachment, tax liens or executions or similar
processes which, alone or in the aggregate, are reasonably likely to
have a Material Adverse Effect are rendered, issued or levied; or
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(i) Operative Documents. Any Operative Document or any material
term thereof shall cease to be, or be asserted by Lessee or any of its
Subsidiaries not to be, a legal, valid and binding obligation of Lessee
or any of its Subsidiaries enforceable in accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for
the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan shall occur, or any Employee Benefit Plan shall be terminated
within the meaning of Title IV of ERISA or a trustee shall be appointed
by the PBGC to administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur; or
(l) Material Adverse Effect. Any event(s) or condition(s) which
is(are) reasonably likely to have a Material Adverse Effect shall occur
and be continuing or exist.
5.02. General Remedies. In all cases, upon the occurrence or existence
of any Event of Default and at any time thereafter unless such Event of Default
is waived, Lessor may, with the consent of the Required Participants, or shall,
upon instructions from the Required Participants, exercise any one or more of
the following rights and remedies (except that the remedy set forth in the first
sentence of Subparagraph 5.02(a) shall be automatic):
(a) Termination of Commitments. If such Event of Default is an
Event of Default of the type described in Subparagraph 5.01(f) or
Subparagraph 5.01(g) affecting Lessee, immediately and without notice
the obligation of Lessor to make Advances and the obligations of the
Participants to fund Advances shall automatically terminate. If such
Event of Default is any other Event of Default, Lessor may by written
notice to Xxxxxx, terminate the obligation of Lessor to make Advances
and the obligations of the Participants to fund Advances.
(b) Appointment of a Receiver. Lessor may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for
the Facility 2 Property.
(c) Specific Performance. Lessor may bring an action in any
court of competent jurisdiction to obtain specific enforcement of any of
the covenants or agreements of Lessee in this Agreement or any of the
other Operative Documents.
(d) Collection of Issues and Profits. Lessor may collect Issues
and Profits as provided in Subparagraph 2.07(c) and apply the proceeds
to pay Lessee Obligations.
(e) Protection of Facility 2 Property. Lessor may enter, take
possession of, manage and operate all or any part of the Facility 2
Property or take any other actions which it reasonably determines are
necessary to protect the Facility 2 Property and the rights and remedies
of the Lessor Parties under this Agreement and the other Operative
Documents, including (i) taking and possessing all of Lessee's books and
records relating to the Facility 2 Property; (ii) entering into,
enforcing, modifying, or canceling subleases
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on such terms and conditions as Lessor may consider proper; (iii)
obtaining and evicting tenants; (iv) fixing or modifying sublease rents;
(v) collecting and receiving any payment of money owing to Lessee; (vi)
completing any unfinished Improvements; and/or (vii) contracting for and
making repairs and alterations.
(f) Other Rights and Remedies. In addition to the specific
rights and remedies set forth above in this Paragraph 5.02 and in
Paragraph 5.03 and Paragraph 5.04, Lessor may exercise any other right,
power or remedy permitted to it by any applicable Governmental Rule,
either by suit in equity or by action at law, or both.
5.03. Lease Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a lease, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02, provided that prior to exercising any
remedies provided by this Section 5.03, Lessor shall give Lessee not less than
three (3) business days notice during which time Lessee may exercise the
Purchase Option and provided the Purchase Option is consummated in accordance
with the terms of the Purchase Agreement, Lessor shall not exercise any of the
remedies under this Section 5.03:
(a) Termination of Lease. Lessor may, by written notice to
Lessee, terminate this Agreement on a Termination Date which is prior to
the Scheduled Expiration Date, subject to Subparagraph 3.02(1) of the
Purchase Agreement. Such Termination Date shall be the last day of a
Rental Period unless Required Participants shall otherwise direct. On
such Termination Date (which shall then be the Expiration Date), Lessee
shall pay all unpaid Base Rent accrued through such date, all
Supplemental Rent due and payable on or prior to such date and all other
amounts payable by Lessee on the Expiration Date pursuant to this
Agreement and the other Operative Documents. Lessee also shall pay to
Lessor, in addition to all accrued Base Rent, the worth at the time of
such payment of the amount by which the unpaid Base Rent through the
Scheduled Expiration Date exceeds the amount of such rental loss for the
same period that Xxxxxx proves could reasonably be avoided.
(b) Continuation of Lease. Lessor may exercise the rights and
remedies provided by California Civil Code Section 1951.4, including the
right to continue this Agreement in effect after Xxxxxx's breach and
abandonment and recover Rent as it becomes due. Acts of maintenance or
preservation, efforts to relet the Facility 2 Property, the appointment
of a receiver upon Xxxxxx's initiative to protect its interest under
this Agreement or withholding consent to or terminating a sublease shall
not of themselves constitute a termination of Xxxxxx's right to
possession.
(c) Removal and Storage of Facility 2 Property. Lessor may enter
the Facility 2 Property and remove therefrom all Persons and Facility 2
Property, store such Facility 2 Property in a public warehouse or
elsewhere at the cost of and for the account of Lessee and sell such
Facility 2 Property and apply the proceeds therefrom pursuant to
applicable California law.
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5.04. Loan Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a loan, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02:
(a) Acceleration of Lessee Obligations. Lessor may, by written
notice to Lessee, terminate this Agreement on a Termination Date which
is prior to the Scheduled Expiration Date, subject to Subparagraph
3.02(1) of the Purchase Agreement, and declare all unpaid Lessee
Obligations due and payable on such Termination Date. Such Termination
Date shall be the last day of a Rental Period unless Required
Participants shall otherwise direct. On such Termination Date (which
shall then be the Expiration Date), Lessee shall pay all unpaid Base
Rent accrued through such date, all Supplemental Rent due and payable on
or prior to such date and all other amounts payable by Lessee on the
Expiration Date pursuant to this Agreement and the other Operative
Documents.
(b) Uniform Commercial Code Remedies. Lessor may exercise any or
all of the remedies granted to a secured party under the California
Uniform Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any
court of competent jurisdiction to foreclose the security interest in
the Facility 2 Property granted to Lessor by this Agreement or any of
the other Operative Documents.
(d) Power of Sale. Lessor may cause some or all of the Facility
2 Property, including any Personal Property Collateral, to be sold or
otherwise disposed of in any combination and in any manner permitted by
applicable Governmental Rules.
(i) Sales of Personal Property. Lessor may dispose of any
Personal Property Collateral separately from the sale of Real
Property Collateral, in any manner permitted by Division 9 of the
California Uniform Commercial Code, including any public or
private sale, or in any manner permitted by any other applicable
Governmental Rule. Any proceeds of any such disposition shall not
cure any Event of Default or reinstate any Lessee Obligation for
purposes of Section 2924c of the California Civil Code. In
connection with any such sale or other disposition, Xxxxxx agrees
that the following procedures constitute a commercially
reasonable sale:
(A) Lessor shall mail written notice of the sale
to Lessee not later than thirty (30) days prior to such
sale.
(B) Once per week during the three weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of general
circulation.
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(C) Upon receipt of any written request, Lessor
will make the Facility 2 Property available to any bona
fide prospective purchaser for inspection during
reasonable business hours.
(D) Notwithstanding, Lessor shall be under no
obligation to consummate a sale if, in its judgment,
none of the offers received by it equals the fair value
of the Facility 2 Property offered for sale.
(E) If Lessor so requests, Lessee shall assemble
all of the Personal Property Collateral and make it
available to Lessor at the site of the Facility 1 Land.
Regardless of any provision of this Agreement or any
other Operative Document, Lessor shall not be considered
to have accepted any Facility 2 Property other than cash
or immediately available funds in satisfaction of any
Lessee Obligation, unless Lessor has given express
written notice of its election of that remedy in
accordance with California Uniform Commercial Code
Section 9505.
The foregoing procedures do not constitute the only procedures
that may be commercially reasonable.
(ii) Lessor's Sales of Real Property or Mixed Collateral.
Lessor may choose to dispose of some or all of the Facility 2
Property which consists solely of Real Property Collateral in any
manner then permitted by applicable Governmental Rules, including
without limitation a nonjudicial trustee's sale pursuant to
California Civil Code xx.xx. 2924 et seq. In its discretion,
Lessor may also or alternatively choose to dispose of some or all
of the Facility 2 Property, in any combination consisting of both
Real Property Collateral and Personal Property Collateral,
together in one sale to be held in accordance with the law and
procedures applicable to real Facility 2 Property, as permitted
by Section 9501(4) of the California Uniform Commercial Code.
Lessee agrees that such a sale of Personal Property Collateral
together with Real Property Collateral constitutes a commercially
reasonable sale of the Personal Property Collateral. (For
purposes of this power of sale, either a sale of Real Property
Collateral alone, or a sale of both Real Property Collateral and
Personal Property Collateral together in accordance with
California Uniform Commercial Code Section 9501(4), will
sometimes be referred to as a "Lessor's Sale.")
(A) Before any Lessor's Sale, Lessor shall give
such notice of default and election to sell as may then
be required by applicable Governmental Rules.
(B) When all time periods then legally mandated
have expired, and after such notice of sale as may then
be legally required has been given, Lessor shall sell
the Facility 2 Property being sold at a public auction
to be held at the time and place specified in the notice
of sale.
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(C) Neither Lessor nor Agent shall have any
obligation to make demand on Lessee before any Lessor's
Sale.
(D) From time to time in accordance with then
applicable law, Lessor may postpone any Lessor's Sale by
public announcement at the time and place noticed for
that sale.
(E) At any Lessor's Sale, Lessor shall sell to
the highest bidder at public auction for cash in lawful
money of the United States.
(F) Lessor shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Facility 2
Property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts
bearing upon the regularity or validity of any Lessor's
Sale, shall be conclusive proof of their truthfulness.
Any such deed shall be conclusive against all Persons as
to the facts recited in it.
(e) Foreclosure Sales.
(i) Single or Multiple. If the Facility 2 Property
consists of more than one lot, parcel or item of Facility 2
Property, Lessor may:
(A) Designate the order in which the lots,
parcels and/or items shall be sold or disposed of or
offered for sale or disposition; and
(B) Elect to dispose of the lots, parcels and/or
items through a single consolidated sale or disposition
to be held or made under the power of sale granted in
Subparagraph 5.04(d), or in connection with judicial
proceedings, or by virtue of a judgment and decree of
foreclosure and sale; or through two or more such sales
or dispositions; or in any other manner Lessor may deem
to be in its best interests (any such sale or
disposition, a "Foreclosure Sale;" any two or more, "
Foreclosure Sales").
If Lessor chooses to have more than one Foreclosure Sale, Lessor
at its option may cause the Foreclosure Sales to be held
simultaneously or successively, on the same day, or on such
different days and at such different times and in such order as
it may deem to be in its best interests. No Foreclosure Sale
shall terminate or affect the security interests granted to
Lessor in the Facility 2 Property by this Agreement on any part
of the Facility 2 Property which has not been sold, until all of
the Lessee Obligations have been paid in full.
(ii) Credit Bids. At any Foreclosure Sale, any
Person or any Lessor Party, may bid for and acquire the
Facility 2 Property or any part of it to the extent
permitted by then applicable Governmental Rules. Instead
of paying cash for that Facility 2 Property, Lessor may
settle for the purchase price by crediting
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the sales price of the Facility 2 Property against the
Lessee Obligations in any order and proportions as
Lessor in its sole discretion may choose.
5.05. Remedies Cumulative. The rights and remedies of Lessor under this
Agreement and the other Operative Documents are cumulative and may be exercised
singularly, successively, or together.
5.06. No Cure or Waiver. Neither the performance by Lessor of any of
Lessee's obligations pursuant to Paragraph 3.13 nor the exercise by Lessor of
any of its other rights and remedies under this Agreement or any other Operative
Document (including the collection of Issues and Profits and the application
thereof to the Lessee Obligations) shall constitute a cure or waiver of any
Default or nullify the effect of any notice of default or sale, unless and until
all Lessee Obligations are paid in full.
5.07. Exercise of Rights and Remedies. The rights and remedies provided
to Lessor under this Agreement may be exercised by Lessor itself, by Agent
pursuant to Subparagraph 2.02(c) of the Participation Agreement, by a
court-appointed receiver or by any other Person appointed by any of the
foregoing to act on its behalf. All of the benefits afforded to Lessor under
this Agreement and the other Operative Documents shall accrue to the benefit of
Agent to the extent provided in Subparagraph 2.02(c) of the Participation
Agreement.
SECTION 6. MISCELLANEOUS.
6.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
6.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Xxxxxx and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Xxxxxx and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
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6.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
6.07. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
6.08. Nature of Xxxxxx's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 6.08(c).
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Xxxxxx's obligation to pay Rent and to pay and
perform all other Lessee Obligations shall continue in full force and
effect without abatement notwithstanding the occurrence or existence of
any event or circumstance, including any event or circumstance set forth
in Subparagraph 6.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 2 Property (including any
Improvements to the Facility 2 Property made prior to the Commencement
Date or during the Term); (ii) title to the Facility 2 Property
(including possession of the Facility 2 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 2 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 2 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 2 Property; (v) any latent, hidden or
patent defect in the Facility 2 Property; (vi) the zoning or status of
the Facility 2 Property or any other restrictions on the use of the
Facility 2 Property; (g) the economics of the Facility 2 Property; (vii)
any Casualty or Condemnation; (viii) the compliance of the Facility 2
Property with any applicable Governmental Rule or Insurance Requirement;
(ix) any failure by any Lessor Party to perform any of its obligations
under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement
or any other Operative Document; provided, however, that this
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Paragraph 7.08 shall not abrogate any right which Lessee may have to
recover damages from any Lessor Party for any material breach by such
Lessor Party of its obligations under this Agreement or any other
Operative Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
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IN WITNESS WHEREOF, Xxxxxx and Lessor have caused this Agreement to be
executed as of the day and year first above written.
LESSEE: NOVELLUS SYSTEMS, INC.
By: ___________________________________
Name: __________________________
Title: _________________________
LESSOR: LEASE PLAN U.S.A., INC.
By: ___________________________________
Name:___________________________
Title:__________________________
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