Recording requested by and
when recorded return to:
Xxxxxxxxx Xxxxxxxxxxx, Esq.
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
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LEASE AGREEMENT,
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
Between
FAIR, XXXXX AND COMPANY, INC.
And
LEASE PLAN NORTH AMERICA, INC.
May 15, 1998
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--------------------------------------------------------------------------------
THIS LEASE IS NOT INTENDED TO CONSTITUTE
A TRUE LEASE FOR INCOME TAX PURPOSES
(SEE PARAGRAPH 2.06)
--------------------------------------------------------------------------------
Maturity Date: May 15, 2003
Maximum Principal Amount to be Advanced: $55,000,000
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TABLE OF CONTENTS
Page
SECTION 1. INTERPRETATION...........................................2
1.01. Definitions..................................................2
1.02. Rules of Construction........................................2
SECTION 2. BASIC PROVISIONS.........................................2
2.01. Lease of the Property........................................2
2.02. Term.........................................................2
2.03. Rent.........................................................3
2.04. Use..........................................................7
2.05. "As Is" Lease................................................7
2.06. Nature of Transaction........................................8
2.07. Security, Etc. ..............................................8
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS..........10
3.01. Maintenance, Repair, Etc. ..................................10
3.02. Risk of Loss................................................11
3.03. Insurance...................................................12
3.04. Casualty and Condemnation...................................14
3.05. Taxes.......................................................18
3.06. Environmental Matters.......................................18
3.07. Xxxxx, Xxxxxxxxx, Etc. .....................................19
3.08. Subletting..................................................20
3.09. Utility Charges.............................................21
3.10. Removal of Property.........................................21
3.11. Compliance with Governmental Rules and
Insurance Requirements...................................21
3.12. Permitted Contests..........................................21
3.13. Lessor Obligations; Right to Perform Lessee Obligations.....22
3.14. Inspection Rights...........................................22
SECTION 4. EXPIRATION DATE.........................................22
4.01. Termination by Lessee Prior to Scheduled Expiration Date....22
4.02. Surrender of Property.......................................22
4.03. Holding Over................................................23
SECTION 5. DEFAULT.................................................23
-i-
TABLE OF CONTENTS
(continued)
Page
5.01. Events of Default...........................................23
5.02. General Remedies............................................25
5.03. Lease Remedies..............................................26
5.04. Loan Remedies...............................................27
5.05. Remedies Cumulative.........................................30
5.06. No Cure or Waiver...........................................30
5.07. Exercise of Rights and Remedies.............................30
SECTION 6. MISCELLANEOUS...........................................30
6.01. Notices.....................................................30
6.02. Waivers; Amendments.........................................30
6.03. Successors and Assigns......................................30
6.04. No Third Party Rights.......................................30
6.05. Partial Invalidity..........................................31
6.06. Governing Law...............................................31
6.07. Counterparts................................................31
6.08. Nature of Lessee's Obligations..............................31
EXHIBITS
A Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection
-ii-
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 May 15, 1998 is entered into by and among:
(1) FAIR, XXXXX AND COMPANY, INC., a Delaware corporation
("Lessee");
(2) LEASE PLAN NORTH AMERICA, INC., an Illinois corporation
("Lessor").
RECITALS
X. Xxxxxx has requested Lessor and the financial institutions which are
"Participants" under the Participation Agreement referred to in Recital B below
(such financial institutions to be referred to collectively as the
"Participants") to provide to Lessee a lease facility pursuant to which:
(1) Lessor would (a) purchase certain property designated by
Lessee, (b) lease such property to Lessee, (c) appoint Lessee as
Lessor's agent to make such improvements (which improvements will be
owned by Lessor), (d) make advances to finance such improvements and to
pay certain related expenses and (e) grant to Lessee the right to
purchase such property; and
(2) The Participants would participate in such lease facility
by (a) funding the purchase price 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 as of May 15, 1998 (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 setting forth the terms of the lease by
Lessor to Lessee of the property.
EXHIBIT 10.39
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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 Property. Subject to the acquisition thereof by
Lessor pursuant to the Participation Agreement and applicable Acquisition
Agreement either on the Closing Date or during the term hereof , Xxxxxx agrees
to lease to Lessee and Xxxxxx agrees to lease from Lessor the following property
(the "Property") to the extent of Lessor's estate, right, title and interest
therein, thereto or thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Land");
(b) All Improvements located on the Land;
(c) All Appurtenant Rights belonging, relating or pertaining
to any of the Land or Improvements;
(d) All Related Goods (including those described in Exhibit B
and in each Exhibit B Supplement), Related Permits and Related
Agreements related to any of the foregoing Land, Improvements or
Appurtenant Rights; and
(e) 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
May 15, 2003 (such date
2
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 for either (i) three (3) additional
periods of one (1) year each, or (ii) one (1) additional period of
three (3) years, as each is provided in Subparagraph 2.09(b) of the
Participation Agreement, provided that after giving effect to any such
extension, the remaining scheduled term shall not exceed five (5)
years. If Lessor and each Participant consents to any such request in
accordance with such provision, the current Scheduled Expiration Date
shall be deemed extended by one (1) year or three (3) years, as
applicable. 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.
2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay as base rent hereunder ("Base
Rent") for each Rental Period for each Portion of the
Outstanding Lease Amount an amount equal to the product of (A)
the Rental Rate for such Rental Period and Portion, times (B)
the amount of such Portion on the first day of such Rental
Period (which shall include any Advance under made on the
first day of such Rental Period), times (C) a fraction, the
numerator of which is the number of days in such Rental 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.
(ii) Prior to the first Business Day in the first
calendar month immediately following the month in which the
Commencement Date occurs, the Outstanding Lease Amount shall
consist of a single Portion in the full amount of the
Outstanding Lease Amount. Thereafter, Lessee may elect to
divide the Outstanding Lease Amount into two or more Portions
by delivering a Notice of Rental Period Selection as provided
in clause (iii) below; provided, however, that (A) each
Portion shall be in the amount of $10,000,000 or an integral
multiple of $100,000 in excess thereof; (B) the total number
of Portions outstanding at any time shall not exceed four (4);
and (C) the Outstanding Lease Amount shall consist of a single
Portion in the amount of the Outstanding Lease Amount if the
Outstanding Lease Amount is less than $10,000,000.
(iii) The Term shall consist of the following rental
periods (individually, a "Rental Period") for each Portion:
(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; and
3
(B) Each successive period thereafter which
begins on the last day of the immediately preceding
Rental Period for the applicable Portion and ends at
the end of the time period selected by Xxxxxx as
provided below in this clause (B) through and
including the Scheduled Expiration Date.
(1) Unless Lessee has selected a
longer Rental Period for a Portion to have a
Fixed Rate pursuant to clause (iv)(D) of
this Subparagraph 2.03(a), Lessee shall,
subject to clause (3) below, select a Rental
Period for each Portion of one (1), two (2),
three (3) or six (6) months; provided,
however, that (y) no such 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 (z)
each such Rental Period for which Lessee
fails to make a selection in accordance with
this clause (iii)(B)(1) shall be one (1)
month. Lessee shall select each such Rental
Period by delivering to Lessor, at least
three (3) Business Days prior to the first
day of such Rental Period, an irrevocable
written notice in the form of Exhibit C,
appropriately completed (a "Notice of Rental
Period Selection"). 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.
(2) If Xxxxxx has elected to
exercise the Fixed Rate option for any
Rental Period for a Portion pursuant to
clause (iv)(D) of this Subparagraph 2.03(a),
Lessee shall, subject to clause (3) below,
select a Rental Period of twelve (12) months
or longer for such Rental Period, which
Rental Period shall begin on the last day of
the then current Rental Period for such
Portion. Lessee shall select each such
Rental Period by delivering to Agent a Fixed
Rate Request pursuant to clause (iv)(D)
below.
(3) Xxxxxx's selection of the time
period for each Rental Period which begins
on or after the Commencement Date is subject
to the following:
(y) Each Rental Period
shall begin and end on the first
Business Day of a calendar month,
except that the last Rental Period
may begin on the first Business Day
in which the Scheduled Expiration
Date is to occur and end on the
Scheduled Expiration Date; and
(z) No Rental Period shall
end after the Scheduled Expiration
Date.
4
(iv) The rental rate for each Rental Period for a
Portion ("Rental Rate") shall be the LIBOR Rental Rate for
such Rental Period and Portion, 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 or after the
Commencement Date, but prior to the first Business
Day of the succeeding month) shall be (y) the LIBOR
Rental Rate for the period beginning on or after the
Commencement Date but prior to the first Business Day
of the succeeding month and ending on the first
Business Day of such succeeding month provided that
such period is greater than seven (7) days or (z) the
Alternate Rental Rate if such period is seven (7)
days or less. The Rental Rate for the last Rental
Period (which begins on the first Business Day of
month in which the Scheduled Expiration Date is to
occur) shall be (y) the LIBOR Rental Rate for the
period beginning on the first Business Day of such
month and ending on the Scheduled Expiration Date,
provided that such period is greater than seven (7)
days, or (z) the Alternate Rental Rate if such period
is seven (7) days or less.
(B) 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.
(C) If Lessee so selects by notifying Lessor
in writing prior to the time Lessee is required to
select a new Rental Period pursuant to clause
(iii)(B)(1) above, the rental rate for any Rental
Period shall be the Alternate Rental Rate.
(D) If Lessee so selects, the rental rate
for a Rental Period for any Portion (of one year or
more) shall be a Fixed Rental Rate, with the Fixed
Rate for such Rental Period determined as follows:
(1) Lessee shall request Lessor to
provide a Fixed Rate by delivering to Agent
a written request (a "Fixed Rate Request")
in the form of Exhibit C, which specifies
the Portion and Rental Period for which such
Fixed Rate is requested, which Rental Period
shall comply with clause (iii)(B) of this
Subparagraph 2.03(a). Lessee shall deliver
each Fixed Rate Request to Agent, no later
than 12:00 noon (Eastern Standard Time or
Eastern Daylight Time, as applicable) at
least four (4) Business Days prior to the
first day of such Rental Period. Agent shall
promptly furnish to Lessor and each
Participant copies of each Fixed Rate
Request.
5
(2) Not later than 11:00 a.m.
(Eastern Standard Time or Eastern Daylight
Time, as applicable) three (3) Business Days
prior to the first day of the Rental Period
specified in each Fixed Rate Request, each
Participant shall advise Agent
telephonically and shall immediately
thereafter confirm such telephonic notice by
delivering to Agent by facsimile a written
irrevocable quote (a "Fixed Rate Quote")
specifying the per annum fixed rate at which
such Participant is willing to fund its
Proportionate Share of the applicable
Portion during such Rental Period.
(3) After receipt of the various
Fixed Rate Quotes, Agent shall promptly
calculate the weighted average (rounded
upward if necessary to the nearest 1/100 of
one percent) of the Fixed Rate Quotes
provided by each Participant and shall
deliver to Lessee no later than 11:20 a.m.
(Eastern Standard Time or Eastern Daylight
Time, as applicable) three (3) Business
Days prior to the first day of the Rental
Period specified in each Fixed Rate
Request, with copies to Lessor and each
Participant, a written irrevocable offer (a
"Fixed Rate Offer") specifying such
average. If any Participant fails to
provide a Fixed Rate Quote, Agent shall
calculate the weighted average of the Fixed
Rate Quotes actually received and the Fixed
Rate Quote submitted by such Participant
shall be deemed to be the weighted average
of the Fixed Rate Quotes actually received
from all Participants.
(4) Not later than 11:30 a.m.
(Eastern Standard Time or Eastern Daylight
Time, as applicable) three (3) Business Days
prior to the first day of the Rental Period
specified in each Fixed Rate Request, Lessee
shall deliver to Agent a written irrevocable
notice either accepting the Fixed Rate Offer
(a "Fixed Rate Acceptance") or rejecting the
Fixed Rate Offer (a "Fixed Rate Rejection").
If Xxxxxx fails to deliver either a Fixed
Rate Acceptance or Fixed Rate Rejection as
required hereunder, the Fixed Rate Offer
shall be deemed rejected.
(y) If Lessee accepts a
Fixed Rate Offer, the rental rate
for the Rental Period and Portion
specified in the applicable Fixed
Rate Request shall be a Fixed Rental
Rate and the Fixed Rate for such
Rental Period and Portion shall be
the average rate set forth in such
Fixed Rate Offer; provided that each
Participant shall be entitled to
receive a Fixed Rate equal to the
Fixed Rate Quote submitted or deemed
submitted by such Participant.
(z) If Lessee rejects a
Fixed Rate Offer or if the Fixed
Rate Request is not delivered by the
Agent within the applicable time
periods, the rental rate for the
applicable
6
Portion shall continue at the LIBOR
Rental Rate (except as otherwise
provided in clause (iv)(A), (iv)(B)
or (iv)(C) of this Subparagraph
2.03(a)), with the next succeeding
Rental Period for such Portion to
be determined as provided in clause
(iii)(B)(1) of this Subparagraph
2.03(a). Each Fixed Rate Request,
Fixed Rate Quote, Fixed Rate
Acceptance and Fixed Rate Rejection
shall be delivered by facsimile as
required by Paragraph 7.01 of the
Participation Agreement[; provided,
however, that
(v) Lessee shall pay Base Rent in arrears (A) for
each Portion, on the last day of each Rental Period therefor
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) for all Portions, on 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 Property by
Lessee pursuant to the Purchase Agreement and the Residual Value
Guaranty Amount and Indemnity Amount payable under the 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, 10 days after demand of Lessor or any other
Person to whom such amount is payable.
2.04. Use. Lessee may use the Property for (i) general office uses,
(ii) uses reasonably ancillary to ordinary general office uses, such as
cafeterias for employees, and (iii) the sale of goods and services by Lessee or
any corporate successor to Lessee that do not involve customer purchases in
person.
2.05. "As Is" Lease. Lessee has conducted, or will conduct from time to
time with regard to property that may be added hereto after the date hereof, all
due diligence which it deems appropriate regarding the Property and agrees that
no Lessor Party has any obligation to conduct any such due diligence. Lessee is
leasing the Property "as is, with all faults" without any representation,
warranty, indemnity or undertaking by any Lessor Party regarding any aspect of
the Property, including (a) the condition of the Property (including any
Improvements to the Property made prior to the Commencement Date or during the
Term); (b) title to the Property (including possession of the Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Property in favor of any Person); (c) the value, habitability,
usability, design, operation or fitness for use of the Property; (d) the
availability or adequacy of utilities and other services to the Property; (e)
any latent, hidden or patent defect in the Property; (f) the zoning or status of
the Property or any other restrictions on the use of the Property; (g) the
economics of the Property; (h) any Casualty or Condemnation; or (i) the
compliance of the Property with any applicable Governmental Rule or Insurance
Requirement; provided, however, 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
7
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 Lessor, the Participants and Agent
(collectively, the "Lessor Parties") intend that the transaction evidenced by
this Agreement and the other Operative Documents constitute an operating lease
in accordance with FASB 13 for accounting purposes and a loan secured by the
Property for federal, state and local income tax purposes 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, as beneficiary (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 property, whether now owned or hereafter acquired,
(collectively, the "Real Property Collateral"):
(i) The Land;
(ii) All Improvements located on the Land;
(iii) All Appurtenant Rights belonging, relating or
pertaining to any of the foregoing Land or Improvements;
(iv) All Subleases of and all Issues and Profits
accruing from any of the foregoing Land, Improvements or
Appurtenant Rights to the extent that such Subleases and
Issues and Profits constitute real property;
(v) All Related Goods, Related Permits and Related
Agreements related to any of the foregoing Land, Improvements
or Appurtenant Rights to the extent that such Related Goods,
Related Agreements and Related Permits constitute real
property;
(vi) All other Property to the extent that such
property constitutes real property; and
(vii) All proceeds of the foregoing, including
Casualty and Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations, Xxxxxx 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 Xxxxxx in the
8
following property, whether now owned or hereafter acquired,
(collectively, the "Personal Property Collateral"):
(i) All Subleases of and all Issues and Profits
accruing from any of the Land, Improvements or Appurtenant
Rights to the extent that such Subleases and Issues and
Profits constitute personal property;
(ii) All Related Goods, Related Permits and Related
Agreements related to any of the Land, Improvements or
Appurtenant Rights to the extent that such Related Goods,
Related Agreements and Related Permits constitute personal
property;
(iii) All Cash Collateral and all other deposit
accounts, instruments, investment property and monies held by
any Lessor Party in connection with this Agreement or any
other Operative Document (including any Repair and Restoration
Account);
(iv) All other Property to the extent such Property
constitutes personal property; and
(v) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
For purpose of the provisions of this Agreement related to the creation
and enforcement of this Agreement as a security agreement and a fixture
filing with respect to the Related Goods, Lessee is the "debtor" and
Lessor is the "secured party," acting for the benefit of the Lessor
Parties. 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 Land or Improvements. The mailing
addresses of Xxxxxx and of Lessor from which information concerning
security interests hereunder may be obtained are as set forth on the
signature page of this Agreement. A carbon, photographic or other
reproduction of this Agreement or of any financing statement related to
this Agreement shall be sufficient as a financing statement for any of
the purposes referenced herein.
(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
for security purposes, and Xxxxxx's right to the Subleases and Issues
and Profits is not contingent upon, and may be exercised without
possession of, the Property.
(i) If no Event of Default has occurred and is
continuing, Lessee shall have a revocable license to collect
and retain the Issues and Profits as they become due. Upon the
occurrence and during the continuance 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 Property.
9
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.
(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 Property or for performing any of
Lessee's obligations or duties under the Subleases, (2) any
waste committed on the Property by the sublessees under any of
the Subleases or by any other Persons, (3) any dangerous or
defective condition of the Property, or (4) any negligence in
the management, upkeep, repair or control of the 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
Property, except for ordinary wear and tear, and shall, at its sole
cost and expense, maintain the 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 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 Property and
10
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 Property or any part thereof from that
which existed immediately prior to such Modification;
(ii) All Modifications are made expeditiously and, in
no case unless Xxxxxx currently is exercising either the Term
Purchase Option or the Expiration Date Purchase Option, shall
Modifications in an aggregate amount of $100,000 remain
uncompleted later than six (6) months prior to the Scheduled
Expiration Date;
(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)unless Lessee currently is
exercising either the Term Purchase Option or the Expiration
Date Purchase Option, six (6) months prior to the Scheduled
Expiration Date;
(v) At least one (1) month prior to the commencement
of (A) any Modifications which are anticipated to cost
$500,000 or more in the aggregate, or (B) any Modifications
which cause the total of all Modifications undertaken during
the previous twelve-month period to exceed an aggregate cost
of $1,000,000, 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 Property or any
material portion thereof for any period in excess of sixty (60)
consecutive days during the term hereof, except as a part of any New
Improvements or Modifications as permitted herein or in the other
Operative Documents.
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 Property and all liability for all personal
injuries and deaths and damages to property suffered by any Person or property
on or in connection with the Property which arises or occurs prior to the
Expiration Date or while Lessee is in possession of the 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
11
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
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 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 property while on the
Property, and workers' compensation insurance;
(ii) At all times after commencement of construction
of any structure, (A) unless covered by builders' risk
insurance pursuant to clause (iii) of Subparagraph 3.03(a),
property insurance covering loss or damage by earthquake in an
amount not less than the then current probable maximum loss
(as determined by a seismic expert reasonably approved by
Lessor and Agent and subject to a reasonable deductible of not
more than 15% of the total value at risk and (B) property
insurance covering loss or damage by fire, flood and other
risks (other than earthquake) in an amount not less than the
Asset Termination Value;
(iii) At all times after commencement of construction
of any structure, builders' risk insurance in the full amount
of the Asset Termination Value, as such may change from time
to time, 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 Property in the same geographic area as the
Property.
Except as otherwise specifically required above, such insurance shall
be in amounts, in a form and with deductibles reasonably approved by
Lessor.
(b) Carriers. Any primary insurance carried and maintained by
Lessee pursuant to this Paragraph 3.03 shall be underwritten by an
insurance company which (A) 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 10 from A.M. Best and Company
or any successor thereto (or if there is none, an organization having a
similar national reputation) or (B) 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 Agent shall be named as additional
insureds, in the case of each policy of liability insurance
and property insurance, and additional loss payees, in the
case of each policy of 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 Property while under contract with Lessee to
perform maintenance, repair, alteration or similar work on the
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 cancelled 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 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 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
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negligence of any Lessee Party or Lessor, as the case may be,
or any other Person having any interest in the Property.
(x) All insurance proceeds with a value of less than
Five Million Dollars ($5,000,000) in respect of any loss or
occurrence with respect to the Property shall be paid to and
adjusted solely by Lessee and all other insurance proceeds
shall be paid to Lessor and adjusted jointly by Lessor and
Lessee, except that, from and after the date on which the
insurer receives written notice from Lessor that an Event of
Default has occurred and is continuing (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
mortgagee endorsement in favor of Xxxxxx.
(d) Evidence of Insurance. Lessee, at its sole cost and
expense, shall furnish to Lessor from time to time (i) upon each
renewal of insurance and upon any material change in terms thereof,
certificates evidencing such renewal or change and Lessee's compliance
with the insurance requirements set forth in the Paragraph 3.03, and
(ii) upon the request of Lessor, such other 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 Material Casualty affecting, or the institution
of any proceedings for the Condemnation of, the Property or any portion
thereof.
(b) Repair or Purchase Option. After the occurrence of any
Material Casualty or Condemnation affecting the Property or any portion
thereof, Lessee shall either (i) repair and restore the Property as
required by Subparagraph 3.04(c) or (ii) exercise the Term Purchase
Option and purchase the Property pursuant to the Purchase Agreement;
provided, however, that Lessee may not elect to repair and restore the
Property if such casualty or condemnation is a Major Casualty or Major
Condemnation or if an Event of Default has occurred and is continuing,
unless Lessor and the Required Participants shall consent in writing.
Not later than forty-five (45) days after the occurrence of any
14
Material Casualty or Condemnation, Lessee shall deliver to Lessor a
written notice indicating whether it elects to repair and restore or
purchase the Property.
(c) Repair and Restoration. If Lessee elects to repair and
restore the Property following any Material Casualty or Condemnation,
Lessee shall diligently proceed to obtain all necessary permits and to
repair and restore the Property to the condition in which it existed
immediately prior to such Material Casualty or Condemnation and shall
use reasonable efforts to complete all such repairs and restoration as
soon as reasonably practicable, but not later than the earlier of (y)
twelve (12) months following the occurrence of the Material Casualty or
Condemnation and (z) six (6) months prior to the Scheduled Expiration
Date unless Xxxxxx currently is exercising either the Term Purchase
Option or the Expiration Date Purchase Option. 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). Xxxxxx's
exercise of the repair and restoration option shall, if Lessor or
Required Participants direct, be subject to satisfaction of the
following conditions:
(i) Within two (2) months after the occurrence of the
Material Casualty or Condemnation, Lessee shall 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) As soon as reasonably possible after the
occurrence of the Material Casualty or Condemnation, Lessee
shall establish 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.
(iii) As soon as reasonably possible after the
occurrence of the Material Casualty or Condemnation, Lessee
shall deliver to Lessor the following, each in form and
substance acceptable to Lessor;
(A) Evidence that the 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)
twelve (12) months after the occurrence of the
Casualty or Condemnation and (B) unless Lessee
currently is exercising either the Term Purchase
Option or the Expiration Date Purchase Option, six
(6) months prior to the Scheduled Expiration Date;
15
(B) Evidence that all necessary governmental
approvals can be timely obtained to allow the
rebuilding and reoccupancy of the 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;
(E) A cost breakdown for the work;
(F) A payment and performance bond for the
work or other security satisfactory to Lessor;
(G) Evidence that, upon completion of the
work, the size, capacity and total value of the
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
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 clause (x) of Subparagraph 3.03(c), 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. Except as
otherwise provided in clause (x) of Subparagraph 3.03(c), Xxxxxx agrees
that all Casualty and Condemnation Proceeds are to be paid to Xxxxxx
and Xxxxxx hereby authorizes and directs any insurer, Governmental
16
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 payable to Lessor hereunder, 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 with any other
funds or assets of Lessee or any other Person. Except as otherwise
provided in clause (x) of Subparagraph 3.03(c), 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 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. Lessee shall have the option, upon the completion of
such restoration of the 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 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.
17
(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.
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 Property, this Agreement or
any of the other Operative Documents, or any of the transactions contemplated
hereby or thereby. As promptly as possible after any Indemnified Taxes are
payable by Xxxxxx, Lessee shall send to Lessor for the account of the applicable
Lessor Party a copy of an original official receipt received by Xxxxxx 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
Hazardous Materials to be used, generated, manufactured, stored,
treated, disposed of, transported or present on or released or
discharged from the Property in violation of Environmental Laws that is
reasonably likely to have a Material Adverse Effect. Lessee may use
Hazardous Materials in connection with the operation of its business
(or the business of permitted subtenants) so long as such use is
consistent with the preceding sentence. Other than as previously
disclosed to Lessor under the Participation Agreement, Lessee shall
immediately notify Lessor in writing of (i) any knowledge by Lessee
that the Property does not comply with any Environmental Laws; (ii) any
claims against Lessee or the Property relating to Hazardous Materials
or pursuant to Environmental Laws; and (iii) the discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of the Property that could cause the Property or any part
thereof to be designated as a "hazardous waste property" or as a
"border zone 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 release or discharge of any
Hazardous Materials on, under or about the 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 Property for the purpose
of determining the existence, location, nature and magnitude of
18
any past or present release or threatened release of any Hazardous
Materials into, onto, beneath or from the Property, provided that any
such Person so entering and inspecting the Property shall do so in
compliance with the PG&E Agreements and without materially disrupting
the operations of Lessee.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Lessee
agrees to defend, indemnify 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 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, excluding any breach of
the PG&E Agreements by Lessor while Lessor is in physical possession of
the Property after an Event of Default. This indemnity shall include
(A) the costs, whether foreseeable or unforeseeable, of any
investigation, repair, cleanup or detoxification of the Property which
is required by any Governmental Authority or is otherwise necessary to
render the 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) PG&E Agreements. Lessee shall take all necessary action to
comply to the fullest extent possible with all of the terms and
conditions of the PG&E Agreements. Xxxxxx agrees that it will not take
any affirmative action which would constitute a breach the PG&E
Agreements, provided that for purposes of this covenant, any action by
Lessee under the PG&E Agreements shall not be deemed to be the action
of Lessor.
(e) Legal Effect of Section. Lessee and Lessor agree that (i)
this Paragraph 3.06 and clause (i) of Subparagraph 4.01(u) of the
Participation Agreement are intended as Lessor's written request for
information (and Xxxxxx's response) concerning the environmental
condition of the real 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 Property is intended by
Xxxxxx and Lessee to be an "environmental provision" for purposes of
California Code of Civil Procedure Section 736.
3.07. Liens, Easements, Etc.
19
(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 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 and other Lessor Liens;
(ii) Liens and easements in existence on the
Commencement Date to the extent reflected in the title
insurance policies delivered to Agent pursuant to Paragraph
3.01 of and Schedule 3.01 to the Participation Agreement and
approved by Lessor;
(iii) Liens for taxes or other Governmental Charges
not at the time delinquent or thereafter payable without
penalty; and
(iv) 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.
Subject to Paragraph 3.12 relating to permitted contests, Lessee shall
promptly (A) pay all Indebtedness of Lessee and other obligations prior
to the time the non-payment thereof would give rise to a Lien on the
Property and (B) discharge, at its sole cost and expense, any Lien on
the 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 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 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 PROPERTY.
3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the 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 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 Property on the Expiration Date pursuant to the Purchase
Agreement); (d) each sublease prohibits the sublessee from engaging in any
activities on the Property other than those permitted by Paragraph 2.04,
provided that Lessee
20
may sublease the Tract 2 Property to a Person which occupies the Tract 2
Property as of the date hereof and such Person may engage in activities on such
Property in which it is engaged on the date hereof; and (e) 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 Property during the
Term.
3.10. Removal of Property. Lessee shall not remove any Improvements
from the Land or any other Property from the Land or Improvements, except that,
during the Term, Lessee may remove any Modification or any trade fixture,
machinery, equipment, inventory or other personal property if such Modification
or 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
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 Property to comply, with all Governmental Rules (including,
without limitation, Waste Discharge Requirements order No. 85-80 (Ca. Regional
Water Quality Control Board, San Francisco Region) and Consent Order Docket No.
HAS 89/90-002 (Ca. Department of Toxic Substances Control), including all the
attached and ancillary documents thereto) and Insurance Requirements relating to
the 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 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 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 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 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, Xxxxxx 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
21
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) unless Lessee currently is
exercising either the Term Purchase Option or the Expiration Date Purchase
Option, 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.
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 Property, (b) maintain any insurance on the Property, (c)
perform any other obligation of Lessee under this Agreement or any other Lessee
Obligation, (d) make any expenditure on account of the Property (except to make
Advances as required by the Participation Agreement) or (e) take any other
action in connection with the 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, perform any Lessee Obligation not performed by Lessee when
required. Lessor may enter the 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 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 Property pursuant to Section 2 of the Purchase Agreement. Lessee shall
notify Lessor of Xxxxxx's election so to terminate this Agreement and purchase
the 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 Property. Unless Lessee purchases the Property on
the Expiration Date pursuant to the Purchase Agreement, Lessee shall vacate and
surrender the 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
Property Liens of the types described in clauses (i), (ii) (iii) or (vi) of
Subparagraph 3.07(a)).
22
4.03. Holding Over. If Lessee does not purchase the Property on the
Expiration Date pursuant to the Purchase Agreement but continues in possession
of any portion of the 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 (2.0%) 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.
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 ten (10)
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, in Subparagraph 2.01(c), Paragraph 5.02 or
Paragraph 5.03 of the Participation Agreement or in Paragraph 3.01 of
the Construction Agency 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
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
and (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
23
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. Lessee or any of its Subsidiaries (i)
shall fail to make any payment when due on account of any Indebtedness
or Contingent Obligation of such Person (excluding the Lessee
Obligations but including all other Indebtedness and Contingent
Obligations of Lessee or any of its Subsidiaries to any Lessor Party)
and such failure shall continue beyond any period of grace provided
with respect thereto, if the amount of such payment exceeds $5,000,000
or the effect of such failure is to cause, or permit the holder or
holders thereof to cause, Indebtedness and/or Contingent Obligations in
an aggregate amount exceeding $5,000,000 to become due or (ii) shall
default in the observance or performance of any other agreement, term
or condition contained in any agreement or instrument evidencing such
Indebtedness or Contingent Obligation, if the effect of such default is
to cause, or permit the holder or holders thereof to cause,
Indebtedness and/or Contingent Obligations in an aggregate amount
exceeding $5,000,000 to become due; or
(f) Insolvency, Voluntary Proceedings. Lessee or any of its
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 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 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
Subsidiaries or of all or a substantial part of the property thereof,
or an involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to Lessee or any of its
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 sixty (60) days of commencement; or
(h) Judgments. (i) A final judgment or order for the payment
of money in excess of $5,000,000 (exclusive of amounts covered by
insurance issued by an insurer not an Affiliate of Lessee and otherwise
satisfying the requirements set forth in Subparagraph 5.01(d)) shall be
rendered against Lessee or any of its Subsidiaries and the same shall
remain undischarged for a period of sixty (60) days during which
execution shall not be effectively stayed or (ii) any judgment, writ,
assessment, warrant of attachment, tax lien or execution or similar
process shall be issued or levied against a
24
substantial part of the property of Lessee or any of its Subsidiaries
and such judgment, writ, or similar process shall not be released,
stayed, vacated or otherwise dismissed within sixty (60) days after
issue or levy; or
(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) Major Casualty or Condemnation. Any Major Casualty or
Major Condemnation affecting the Property shall occur; or
(m) Material Adverse Effect. Any event(s) or condition(s)
which has a Material Adverse Effect shall occur 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 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.
25
(e) Protection of Property. Lessor may enter, take possession
of, manage and operate all or any part of the Property or take any
other actions which it reasonably determines are necessary to protect
the 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
Property; (ii) entering into, enforcing, modifying, or canceling
subleases 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) Termination of Agency. Lessor may terminate all or any
portion of the authority of Xxxxxx, as agent, under the Construction
Agency Agreement.
(g) 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:
(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 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.
26
(c) Removal and Storage of Property. Lessor may enter the
Property and remove therefrom all Persons and property, store such
property in a public warehouse or elsewhere at the cost of and for the
account of Lessee and sell such property and apply the proceeds
therefrom pursuant to applicable California law.
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 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
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 2912c 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.
27
(B) Once per week during the three (3) weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of
general circulation.
(C) Upon receipt of any written request,
Lessor will make the 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 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 Land.
Regardless of any provision of this Agreement or any
other Operative Document, Lessor shall not be
considered to have accepted any 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
Property which consists solely of Real Property Collateral in
any manner then permitted by applicable Governmental Rules. In
its discretion, Lessor may also or alternatively choose to
dispose of some or all of the 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
property, as permitted by Section 9501(4) of the California
Uniform Commercial Code (ORS Section 79.5010(4)). 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
28
given, Lessor shall sell the property being sold at a
public auction to be held at the time and place
specified in the notice of sale.
(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 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 Property consists of
more than one lot, parcel or item of 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 Property by this Agreement
on any part of the 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, including any Lessor Party, may bid for and acquire
the Property or any part of it to the extent permitted by then
applicable Governmental Rules. Instead of paying cash for that
29
property, Lessor may settle for the purchase price by
crediting the sales price of the 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
30
right, remedy or claim under or by virtue of this Agreement or under or by
virtue of any provision herein. 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 Property (including any
Improvements to the Property made prior to the Commencement Date or
during the Term); (ii) title to the Property (including possession of
the Property by any Person or the existence of any Lien or any other
right, title or interest in or to any of the Property in favor of any
Person); (iii) the value, habitability, usability, design, operation or
fitness for use of the Property; (iv) the availability or adequacy of
utilities and other services to the Property; (v) any latent, hidden or
patent defect in the Property; (vi) the zoning or status of the
Property or any other restrictions on the use of the Property; (g) the
economics of the Property; (vii) any Casualty or Condemnation; (viii)
the compliance of the 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
31
(x) the exercise by any Lessor Party of any of its remedies under this
Agreement or any other Operative Document; provided, however, that this
Paragraph 6.08 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.
32
IN WITNESS WHEREOF, Xxxxxx and Lessor have caused this Agreement to be
executed as of the day and year first above written.
LESSEE: FAIR, XXXXX AND COMPANY, INC.,
a Delaware corporation
By: __________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President - Facilities
Administration
Fair, Xxxxx and Company, Inc.
000 Xxxxx Xxxxxxx Xxxxx
Xxx Xxxxxx, XX 00000-1996
Attn: Xxxxx X. XxXxxxxxx,
General Counsel
Tel. No: 000-000-0000
Fax. No: 000-000-0000
LESSOR: LEASE PLAN NORTH AMERICA, INC.,
an Illinois corporation
By: __________________________________
Name: Xxxxx Xxxxxx
Title: Attorney-in-fact
Lease Plan North America, Inc.
c/o ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Tel. No: (000) 000-0000
Fax. No: (000) 000-0000
33
STATE OF CALIFORNIA )
) ss
COUNTY OF _________________________)
On _____________, 1998, before me, ___________________ a Notary Public
in and for the State of California, personally appeared , personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s) or the
entity on behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
______________________________________________
STATE OF CALIFORNIA )
) ss
COUNTY OF _________________________)
On _____________, 1998, before me, ___________________ a Notary Public
in and for the State of California, personally appeared , personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s) or the
entity on behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
[SEAL]
______________________________________________
EXHIBIT A
LAND
PART 1 - PROPERTY PURCHASED FROM PG&E
A-1
PART 2 - PROPERTY PURCHSED FROM CITY OF SAN XXXXXX
A-1
EXHIBIT B
RELATED GOODS
B-1
EXHIBIT B(1)
SUPPLEMENT TO EXHIBIT B TO LEASE AGREEMENT
[Date]
Lease Plan North America, Inc.
c/o ABN AMRO Bank N.V.
as Agent
Capital Markets-Syndication Group
0000 Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
1. Reference is made to that certain Lease Agreement, Construction Deed
of Trust with Assignment of Rents, Security Agreement and Fixture Filing, dated
as of ____________, 1998 (the "Lease Agreement"), between Fair, Xxxxx and
Company, Inc. ("Lessee") and Lease Plan North America, Inc. ("Lessor").
2. Xxxxxx hereby agrees that the description of "Related Goods" set
forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Xxxxxx hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Xxxxxx has executed this Supplement to Exhibit B on
the date set forth above.
LESSEE: FAIR, XXXXX AND COMPANY, INC.,
a Delaware corporation
By: _______________________________
Name: _________________________
Title: ________________________
B(1)-1
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
C-1
EXHIBIT C
NOTICE OF RENTAL PERIOD SELECTION
[Date]
Lease Plan North America, Inc.
c/o ABN AMRO Bank N.V.
as Agent
Capital Markets-Syndications Group
0000 Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
1. Reference is made to that certain Participation Agreement, dated as
of May 15, 1998 (the "Participation Agreement"), among Fair, Xxxxx and Company,
Inc. ("Lessee"), Lease Plan North America, Inc. ("Lessor"), the financial
institutions listed in Schedule I to the Participation Agreement (the
"Participants") and ABN AMRO Bank N.V., as agent for the Participants (in such
capacity, "Agent"). Unless otherwise indicated, all terms defined in the
Participation Agreement have the same respective meanings when used herein.
2. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the Lease Agreement,
Lessee hereby irrevocably selects a new Rental Period for a Portion of the
Outstanding Lease Amount as follows:
(a) The Portion for which a new Rental Period is to be
selected is the Portion in the amount of $__________ with a current
Rental Period which began on ________, ____ and ends on __________,
____; and
(b) The next Rental Period for such Portion shall be
__________ month[s].]
[Pursuant to Subparagraph 2.03(a) of the Lease Agreement,
Lessee hereby irrevocably elects to divide a Portion of the Outstanding Lease
Amount into further Portions as follows:
(a) The Portion which is to be divided is the Portion in the
amount of $__________ with a current Rental Period which began on
________, ____ and ends on __________, ____; and
(b) On the last day of the current Rental Period for such
Portion, such Portion is to be divided into the following Portions with
the following initial Rental Periods:
C-1
Portion Rental Period
------- -------------
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]]
[Pursuant to Subparagraph 2.03(a) of the Lease Agreement,
Lessee hereby irrevocably elects to combine into a single Portion certain
Portions of the Outstanding Lease Amount as follows:
(a) The Portions which are to be combined are the Portions in
the amounts of $__________, $_________ and $_______, each with a
current Rental Period which ends on __________, ____; and
(b) The initial Rental Period for such newly created Portion
shall be __________ month[s].]
[Pursuant to Subparagraph 2.03(a) of the Lease Agreement,
Lessee hereby elects the Fixed Rate option for a Rental Period of ___________
months with respect to a Portion equal to $________. Lessee hereby requests that
Lessor to provide a Fixed Rate.]
3. Lessee hereby certifies to the Lessor Parties that, on the date of
this Notice of Rental Period Selection and after giving effect to the selections
described above:
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 of the Participation Agreement and in the other
Operative Documents are true and correct in all material respects as if
made on such date (except for representations and warranties expressly
made as of a specified date, which shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) All of the Operative Documents are in full force and
effect.
IN WITNESS WHEREOF, Xxxxxx has executed this Notice of Rental Period
Selection on the date set forth above.
FAIR, XXXXX AND COMPANY, INC.
By: _______________________________
Name: _________________________
Title: ________________________
C-2
