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EXHIBIT 10.97
EXECUTION COPY
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MASTER LEASE
between
THE SYMANTEC 2001 TRUST
as Lessor
and
SYMANTEC CORPORATION
as Lessee
DATED AS OF MARCH 30, 2001
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This Master Lease is subject to a security interest in favor of THE BANK OF NOVA
SCOTIA as agent (the "AGENT"), under a Credit Agreement, dated as of March 30,
2001, among the Lenders, and the Agent, as amended or supplemented. This lease
has been executed in several counterparts. To the extent, if any, that this
Lease constitutes chattel paper (as such term is defined in the Uniform
Commercial Code of any jurisdiction), no security interest in this Lease may be
created through the transfer or possession of any counterpart other than the
original counterpart containing the receipt therefor executed by the Agent on
the signature page hereof.
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TABLE OF CONTENTS
PAGE
ARTICLE I....................................................................................1
1.1 Definitions...................................................................1
ARTICLE II...................................................................................1
2.1 Property......................................................................1
2.2 Lease Term....................................................................1
2.3 Title.........................................................................1
2.4 Lease Supplement..............................................................1
2.5 Lease Supplements.............................................................1
ARTICLE III..................................................................................2
3.1 Rent; Capitalized Interest; Capitalized Holder Yiled; Capitalized
Commitment Fees...............................................................2
3.2 Payment of Basic Rent.........................................................2
3.3 Supplemental Rent.............................................................2
3.4 Performance on a Non-Business Day.............................................3
3.5 Method of Payment.............................................................3
ARTICLE IV...................................................................................3
4.1 Impositions; Utility Charges..................................................3
ARTICLE V....................................................................................3
5.1 Quiet Enjoyment...............................................................3
ARTICLE VI...................................................................................4
6.1 Net Lease; No Setoff; Etc.....................................................4
6.2 No Termination or Abatement...................................................5
ARTICLE VII..................................................................................5
7.1 Ownership of the Property.....................................................5
7.2 Liens and Security Interests..................................................5
ARTICLE VIII.................................................................................8
8.1 Condition of the Properties...................................................8
8.2 Possession and Use of the Properties..........................................8
ARTICLE IX...................................................................................9
9.1 Compliance with Legal Requirements and Insurance Requirements.................9
i.
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE X....................................................................................9
10.1 Maintenance and Repair; Return................................................9
10.2 Right of Inspection..........................................................10
10.3 Environmental Inspection.....................................................10
ARTICLE XI..................................................................................11
11.1 Modifications, Substitutions and Replacements................................11
ARTICLE XII.................................................................................12
12.1 Warranty of Title............................................................12
12.2 Grants and Releases of Easements.............................................12
ARTICLE XIII................................................................................13
13.1 Permitted Contests Other Than in Respect of Impositions......................13
ARTICLE XIV.................................................................................13
14.1 Public Liability and Workers' Compensation Insurance.........................13
14.2 Hazard and Other Insurance...................................................14
14.3 Coverage.....................................................................14
ARTICLE XV..................................................................................15
15.1 Casualty and Condemnation....................................................15
15.2 Environmental Matters........................................................16
15.3 Notice of Environmental Matters..............................................17
ARTICLE XVI.................................................................................17
16.1 Termination upon Certain Events..............................................17
16.2 Termination Procedures.......................................................19
ARTICLE XVII................................................................................19
17.1 Lease Events of Default......................................................19
17.2 Final Liquidated Damages.....................................................21
17.3 Lease Remedies...............................................................23
17.4 Waiver of Certain Rights.....................................................25
17.5 Assignment of Rights Under Contracts.........................................25
17.6 Foreclosure..................................................................25
17.7 Remedies Cumulative..........................................................28
ii.
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TABLE OF CONTENTS
(CONTINUED)
PAGE
17.8 Lessee's Right to Cure.......................................................28
ARTICLE XVIII...............................................................................28
18.1 Lessor's Right to Cure Lessee's Lease Defaults...............................28
ARTICLE XIX.................................................................................28
19.1 Provisions Relating to Lessee's Termination of this Lease or Exercise
of Purchase Options..........................................................28
ARTICLE XX..................................................................................28
20.1 Maturity Date Purchase Option................................................28
20.2 Extension of Expiration Date.................................................29
ARTICLE XXI.................................................................................29
21.1 Sale Procedure...............................................................29
21.2 Application of Proceeds of Sale..............................................30
21.3 Indemnity for Excessive Wear.................................................30
21.4 Appraisal Procedure..........................................................30
21.5 Certain Obligations Continue.................................................31
ARTICLE XXII................................................................................31
22.1 Holding Over.................................................................31
ARTICLE XXIII...............................................................................31
23.1 Risk of Loss.................................................................31
ARTICLE XXIV................................................................................32
24.1 Subletting and Assignment....................................................32
24.2 Subleases....................................................................32
ARTICLE XXV.................................................................................32
25.1 Estoppel Certificates........................................................32
ARTICLE XXVI................................................................................32
26.1 No Waiver....................................................................32
ARTICLE XXVII...............................................................................32
27.1 Acceptance of Surrender......................................................32
ARTICLE XXVIII..............................................................................33
28.1 No Merger of Title...........................................................33
iii.
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE XXIX................................................................................33
29.1 Notices......................................................................33
ARTICLE XXX.................................................................................33
30.1 Miscellaneous................................................................33
30.2 Amendments and Modifications.................................................34
30.3 Successors and Assigns.......................................................34
30.4 Headings and Table of Contents...............................................34
30.5 Counterparts.................................................................34
30.6 GOVERNING LAW................................................................34
30.7 Limitations on Recourse......................................................34
30.8 Memoranda of Lease and Lease Supplements.....................................35
iv.
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THIS MASTER LEASE (this "LEASE"), dated as of March 30, 2001, between
THE SYMANTEC 2001 TRUST, a Delaware business trust, as lessor ("LESSOR"), having
its principal office c/o Wilmington Trust FSB, 0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx
000 X, Xxx Xxxxx, XX 00000 and SYMANTEC CORPORATION, a Delaware corporation,
having its principal office at 00000 Xxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, as lessee (the "LESSEE").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined in
this Lease have the respective meanings specified in Annex A to the
Participation Agreement dated as of the date hereof among Lessee, Lessor, the
Lenders and the Holders named therein, Fuji Bank, as documentation agent, Key
Bank, N.A. as syndication agent and the Agent. The rules of usage set forth in
Appendix A to the Participation Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY. Subject to the terms and conditions hereinafter set forth
and contained in the respective Lease Supplement relating to each Property,
Lessor hereby demises and leases to Lessee and Lessee hereby agrees, expressly
for the direct benefit of Lessor, to lease from Lessor for the Term, Lessor's
interest in each Property.
2.2 LEASE TERM. The term of this Lease with respect to each Property
(the "TERM") shall begin upon the Property Closing Date for such Property (in
each case, a "TERM COMMENCEMENT DATE") and shall end on the Maturity Date,
unless the Term is earlier terminated or the term of this Lease is renewed (as
described below) in accordance with the provisions of this Lease.
2.3 TITLE. Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession, the existing state of title (including the Permitted Exceptions)
and all applicable Legal Requirements. Lessee shall in no event have any
recourse against Lessor for any defect in title to any Property, except for the
failure of Lessor to remove Lessor Liens at the expiration or earlier
termination of this Lease.
2.4 LEASE SUPPLEMENT. On the initial Funding Date, Lessee and Lessor
shall each execute and deliver a Lease Supplement for the Property to be leased
on such date in substantially the form of EXHIBIT A and thereafter each Property
shall be subject to the terms of this Lease.
2.5 LEASE SUPPLEMENTS. On or prior to each Term Commencement Date,
Lessee and Lessor each shall execute and deliver a Lease Supplement or, if the
fair value of the Land portion of a Property is twenty-five percent (25%) or
more of the total fair value of such Property at the inception of the Lease, a
Lease Supplement for each of the Land and Improvements, for the Property to be
leased effective as of such Term Commencement Date, in substantially the form of
EXHIBIT A.
1.
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ARTICLE III
3.1 RENT; CAPITALIZED INTEREST; CAPITALIZED HOLDER YIELD; CAPITALIZED
COMMITMENT FEES.
(a) (i) Capitalized Interest, Capitalized Holder Yield and
Commitment Fees which are capitalized during the Construction Period for each
Property shall be due and payable during the Construction Period, on each
applicable Payment Date and on any date which this Lease shall terminate, in the
manner set forth in Sections 2.3, 2.4 and 2.11 of Credit Agreement and Sections
1.6 and 1.10 of the Participation Agreement and (ii) thereafter, Basic Rent
shall be due and payable from Lessee for each Property on each applicable
Payment Date during the Term after the Construction Period and on any date after
the Construction Period when this Lease shall terminate. Such amounts shall be
in lawful money of the United States and shall be paid by wire transfer of
immediately available funds on the due date therefor to such account or accounts
at such bank or banks or to such other Person or in such other manner as Lessor
shall from time to time direct.
(b) Neither Lessee's inability or failure to take possession of all,
or any portion, of a Property when delivered by Lessor, nor Lessor's inability
or failure to deliver all or any portion of any Property to Lessee, whether or
not attributable to any act or omission of Lessee or any act or omission of
Lessor, or for any other reason whatsoever, shall delay or otherwise affect (i)
the accrual of Capitalized Interest, Capitalized Holder Yield or Commitment Fees
which are capitalized during the Construction Period of (ii) Lessee's obligation
to pay Basic Rent after the Construction Period, in accordance with the terms of
this Lease.
3.2 PAYMENT OF BASIC RENT. Basic Rent shall be paid absolutely net to
Lessor, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT.
(a) Lessee shall pay to Lessor or the Person or the Persons entitled
thereto any and all Supplemental Rent promptly as the same shall become due and
payable, and if Lessee fails to pay any Supplemental Rent, Lessor shall have all
rights, powers and remedies provided for herein or by law or equity or otherwise
in the case of nonpayment of Basic Rent. Lessee shall pay to Lessor as
Supplemental Rent, among other things, on demand, to the extent permitted by
applicable Requirements of Law, interest at the applicable Overdue Rate on any
installment of Basic Rent not paid when due for the period for which the same
shall be overdue and on any payment of Supplemental Rent not paid when due or
demanded by Lessor for the period from the due date or the date of any such
demand, as the case may be, until the same shall be paid. The expiration or
other termination of Lessee's obligations to pay Basic Rent hereunder shall not
limit or modify the obligations of Lessee with respect to Supplemental Rent.
Unless expressly provided otherwise in this Lease or any other Operative
Agreement, in the event of any failure on the part of Lessee to pay and
discharge any Supplemental Rent as and when due, Lessee shall also promptly pay
and discharge any fine, penalty, interest or cost which may be assessed or added
for nonpayment or late payment of such Supplemental Rent, all of which shall
also constitute Supplemental Rent.
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(b) Lessee shall make a payment of Supplemental Rent equal to the
Maximum Residual Guarantee Amount or the Construction Period Maximum Recourse
Amount in accordance with SECTION 21.1(C) or Article IV or V of the Construction
Agency Agreement, if applicable.
3.4 PERFORMANCE ON A NON-BUSINESS DAY. If any payment is required
hereunder on a day that is not a Business Day, then such payment shall be due on
the next succeeding Business Day (subject to the definition of the term
"INTEREST PERIOD").
3.5 METHOD OF PAYMENT. Each payment of Rent payable by Lessee to Lessor
under this Lease or any other Operative Agreement shall be made by Lessee to
Lessor prior to 10:00 a.m. Pacific Time to the Account in immediately available
funds consisting of lawful currency of the United States of America on the date
when such payment shall be due. Payments received after 1:00 p.m. New York time
on the date due shall for the purpose of SECTION 17.1 be deemed received on such
day; provided, however, that for the purposes of the second sentence of SECTION
3.3, such payments shall be deemed received on the next succeeding Business Day
and shall accrue interest at the Overdue Rate as provided in such SECTION 3.3.
ARTICLE IV
4.1 IMPOSITIONS; UTILITY CHARGES. Lessee shall pay, or cause to be paid,
all Impositions relating to the Property and all charges for electricity, power,
gas, oil, water, telephone, sanitary sewer service and all other rents and
utilities used in or on any Property during the Construction Period and the
Term, provided, that such charges paid during the Construction Period shall be
reimbursable as Project Costs through Advances subject to the terms and
conditions of the Operative Agreements. Upon Lessor's request made from time to
time, Lessee shall provide Lessor with evidence of all such payments referenced
in the foregoing sentence. Lessee shall be entitled to receive any net credit or
refund with respect to any Imposition or utility charge paid by Lessee and the
amount of any credit or refund received by Lessor on account of any Imposition
or utility charges paid by Lessee, net of the costs and expenses incurred by
Lessor in obtaining such credit or refund, shall be promptly paid over to
Lessee. All charges for utilities imposed with respect to a Property for a
billing period during which this Lease expires or terminates shall be adjusted
and prorated on a daily basis between Lessor and Lessee, and each party shall
pay or reimburse the other for each party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT. Subject to the rights of Lessor contained in this
Lease and the other Operative Agreements, and so long as no Lease Event of
Default shall have occurred and be continuing, Lessee shall peaceably and
quietly have, hold and enjoy each Property for the Term, free of any claim or
other action by Lessor or anyone rightfully claiming by, through or under
Lessor, except to the extent to that any such claim or other action relates
solely to the Property and arises prior to the Property Closing Date. Such right
of quiet enjoyment is independent of, and shall not affect the rights of Lessor
(or anyone claiming by, through or under Lessor) otherwise to initiate legal
action to enforce the obligations of Lessee under this Lease.
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ARTICLE VI
6.1 NET LEASE; NO SETOFF; ETC. This Lease shall constitute a net lease
and, notwithstanding any other provision of this Lease, it is intended that
Basic Rent and Supplemental Rent shall be paid without counterclaim, setoff,
deduction or defense of any kind and without abatement, suspension, deferment,
diminution or reduction of any kind, and Lessee's obligation to pay all such
amounts, throughout the Term, is absolute and unconditional. The obligations and
liabilities of Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including, to the maximum extent permitted by
law: (a) any defect in the condition, merchantability, design, construction,
quality or fitness for use of any portion of a Property, or any failure of a
Property to comply with all Legal Requirements, including any inability to
occupy or use such Property by reason of such noncompliance; (b) any damage to,
abandonment, loss, contamination of or Release from or destruction of or any
requisition or taking of a Property or any part thereof, including eviction; (c)
any restriction, prevention or curtailment of or interference with any use of a
Property or any part thereof, including eviction; (d) any defect in title to or
rights to a Property or any Lien on such title or rights or on such Property;
(e) any change, waiver, extension, indulgence or other action or omission or
breach in respect of any obligation or liability of or by Lessor, Agent or any
other Participant; (f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceedings relating to
Lessee, Lessor, Agent, any other Participant or any other Person, or any action
taken with respect to this Lease by any trustee or receiver of Lessee, Lessor,
Agent, any other Participant or any other Period, or by any court, in any such
proceeding; (g) any claim that Lessee has or might have against any Person,
including Lessor or any other Participant; (h) any failure on the part of Lessor
to perform or comply with any of the terms of this Lease, any other Operative
Agreement or of any other agreement; (i) any invalidity or unenforceability or
disaffirmance against or by Lessee of this Lease or any provision hereof or any
of the other Operative Agreements or any provision of any thereof; (j) the
impossibility or illegality of performance by Lessee, Lessor, any other
Participant or any of them; (k) any action by any court, administrative agency
or other Governmental Authority; (l) any restriction, prevention or curtailment
of or any interference with the construction on or any use of a Property or any
part thereof; or (m) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not Lessee shall have notice or
knowledge of any of the foregoing. This Lease shall be noncancellable by Lessee
for any reason whatsoever except as expressly provided herein, and Lessee, to
the fullest extent permitted by Legal Requirements, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Lease, or to any diminution, abatement or reduction of Rent payable by Lessee
hereunder. If for any reason whatsoever this Lease shall be terminated in whole
or in part by operation of law or otherwise, except as otherwise expressly
provided herein, Lessee shall, unless prohibited by any Requirements of Law,
nonetheless pay to Lessor (or, in the case of Supplemental Rent, to whomever
shall be entitled thereto) an amount equal to each Rent payment at the time and
in the manner that such payment would have become due and payable under the
terms of this Lease if it had not been terminated in whole or in part, and in
such case, so long as such payments are made and no Lease Event of Default shall
have occurred and be continuing, Lessor will deem this Lease to have remained in
effect. Each payment of Rent made by Lessee hereunder shall be final and, absent
manifest error in the computation of the amount thereof, Lessee shall not seek
or have any right to recover all or any part of such payment from Lessor or any
Financing Party or any party to any agreements related thereto for any reason
whatsoever. Lessee assumes the
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sole responsibility for the condition, use, operation, maintenance, and
management of each Property and Lessor nor any other Participant shall have any
responsibility in respect thereof or any liability for damage to the property of
Lessee or any subtenant of Lessee on any account or for any reason whatsoever.
Nothing in this Article VI shall prevent the Lessee from bringing a separate
action against Lessor for any breach of contract, gross negligence, willful
misconduct or other causes of action permitted by the Operative Agreements.
6.2 NO TERMINATION OR ABATEMENT. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting any Participant, or any action with respect to this Lease
which may be taken by any trustee, receiver or liquidator of any Participant or
by any court with respect to any Participant, except as otherwise expressly
provided herein. Lessee hereby waives all right (i) to terminate or surrender
this Lease, except as otherwise expressly provided herein, or (ii) to avail
itself of any abatement, suspension, deferment, reduction, setoff, counterclaim
or defense with respect to any Rent. Lessee shall remain obligated under this
Lease in accordance with its terms and Lessee hereby waives any and all rights
now or hereafter conferred by statute or otherwise to modify or to avoid strict
compliance with its obligations under this Lease. Notwithstanding any such
statute or otherwise, Lessee shall be bound by all of the terms and conditions
contained in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTY. The parties hereto intend that (i) for
financial accounting purposes with respect to Lessee, Lessor, and the other
Participants (A) this Lease will be treated as an "OPERATING LEASE" pursuant to
Statement of Financial Accounting Standards (SFAS) No. 13, as amended, (B)
Lessor will be treated as the owner and lessor of each Property and (C) Lessee
will be treated as the lessee of such Property, but (ii) for federal, state and
local income transfer and other tax purposes and for purposes of bankruptcy,
insolvency, conservatorship and receivership law (including the substantive law
upon which bankruptcy, conservatorship, insolvency and receivership proceedings
are based), creditor's rights and other commercial law purposes (A) this Lease
will be treated as a financing arrangement, (B) Lessor and the other
Participants will be treated as lenders making loans to Lessee in an amount
equal to the sum of the Holder Advances and the outstanding principal amount of
the Loans, which loans are secured by the Property, and (C) Lessee will be
treated as the owner of the Property and will be entitled to all tax benefits
ordinarily available to an owner of land and property like the Property for such
tax purposes.
7.2 LIENS AND SECURITY INTERESTS.
(a) The parties hereto further intend and agree that, for the
purpose of securing Lessee's obligations for the repayment of the
above-described loans, and all other amounts owing to the Participants under the
Operative Agreements, (i) this Lease shall also be deemed to be a security
agreement, financing statement and fixture filing within the meaning of Article
9 of the Uniform Commercial Code and a real property mortgage or deed of trust,
as applicable; (ii) this Lease grants a security interest in and a mortgage lien
on Lessee's beneficial ownership interest in each Property (including the right
to exercise all remedies as are contained
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in the Deed of Trust upon the occurrence of an Event of Default attributable to
the Lessee) and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, investments, securities or other property, whether in the
form of cash, investments, securities or other property, for the benefit of
Lessor to secure Lessee's payment of all amounts owed by Lessee under this Lease
and the other Operative Agreements and all amounts owing to the Participants
under the Operative Agreements, including amounts payable from the sale or
disposition of a Property and Lessor holds title to each Property so as to
create and grant a first lien and prior security interest in each Property
(except for Permitted Exceptions) (A) pursuant to this Lease for the benefit of
Lessor, to secure to Lessor the obligations of Lessee under the Lease and all
amounts owing to the Participants under the Operative Agreements, including
amounts payable from the sale or disposition of a Property and (B) pursuant to
the Deed of Trust to secure to Agent the obligations of the Lessor under the
Deed of Trust and the Notes and all amounts owing to the Participants under the
Operative Agreements, including amounts payable from the sale or disposition of
a Property; (iii) the possession by Lessor or any of its agents of notes and
such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 of the Uniform Commercial Code; and (iv) notifications to Persons holding
such property, and acknowledgements, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of Lessee shall be deemed to
have been given for the purpose of perfecting such security interest under
applicable law. The parties hereto shall, to the extent consistent with this
Lease, take such actions as may be necessary to ensure that, if this Lease were
deemed to create a security interest in each Property in accordance with this
Section, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the Term. If this transaction is treated as a financing, the
obligations arising hereunder shall be with full recourse to Lessee and shall
not be treated as recourse only to the Properties. To the fullest extent
permitted by applicable law, Lessor and Lessee intend that the Properties (other
than the Land relating to the Properties) be and remain at all times personal
property regardless of the manner or extent to which any part of the Properties
(other than the Land relating to the Properties) may be attached or affixed to
any real property. Except as required by applicable law, Lessee shall not under
any circumstances take any action or make any filing or recording which could
cause any Property (other than the Land relating to such Property) to be deemed
to be real property or permit any Person to obtain any interest in any Property
(other than the Land relating to such Property) as a result of any Property
(other than the Land relating to such Property) being deemed to be in whole or
in part real property. Nothing contained herein shall be deemed an obligation on
the part of Lessor to make any further advances. Nevertheless, Lessee
acknowledges and agrees that neither Lessor, Agent nor any other Participant has
provided or will provide tax, accounting or legal advice to Lessee regarding
this Lease, the Operative Agreements or the transactions contemplated hereby and
thereby, or made any representations or warranties concerning the tax,
accounting or legal characteristics of the Operative Agreements, and that Lessee
has obtained and relied upon such tax, accounting and legal advice concerning
the Operative Agreements as it deems appropriate.
(b) The parties hereto further intend and agree that in the event of
any insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State or
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Commonwealth thereof affecting any party hereto, the transactions evidenced by
this Lease shall be regarded as loans made by an unrelated third party lender to
Lessee.
(c) Specifically, but without limiting the foregoing or the
generality of SECTION 7.1 for purposes of securing Lessee's obligations for the
above-described loans, Lessee hereby grants, bargains, sells, mortgages,
conveys, aliens, remises, releases, assigns, sets over and confirms to Lessor,
with power of sale, all of Lessee's right, title, and interest in and to the
following (collectively, the "MORTGAGED PROPERTY"): (i) all Land and all
Properties and Appurtenant Rights relating thereto and all proceeds, both cash
and noncash thereof; (ii) all easements, rights-of-way, strips and gores of
land, vaults, streets, ways, alleys, passages, sewer rights, waters, water
courses, water rights, minerals, flowers, shrubs, crops, trees, timber and other
emblements now or hereafter located on the Land or under or above the same or
any part or parcel thereof, and all estates, rights, titles, interests,
tenements, hereditaments and appurtenances, reversions and remainders
whatsoever, in any way belonging, relating or appertaining to such Land and such
Properties or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter acquired by
Lessee; (iii) all right, title and interest of Lessee in all furnishings,
furniture, fixtures, machinery, apparatus, Equipment, fittings, appliances,
building supplies and materials, chattels, goods, consumer goods, farm products,
inventory, warranties, chattel paper, documents, accounts, general intangibles,
trade names, trademarks, servicemarks, logos (including any names or symbols by
which a Property is known) and goodwill related thereto, and all other articles
of personal property of every kind and nature whatsoever, tangible or tangible,
now, heretofore or hereafter acquired with any proceeds of the Advances and now,
heretofore or hereafter (A) arising out of or related to the ownership of a
Property, or (B) located in, on or about a Property, or (C) used or intended to
be used in connection with the construction, use, operation or enjoyment of a
Property; (iv) all right, title and interest of Lessee in any and all leases,
subleases, rental agreements and arrangements of any sort now or hereafter
affecting a Property or any portion thereof and providing for or resulting in
the payment of money to Lessee for the use of a Property or any portion thereof,
whether the user enjoys a Property or any portion thereof as tenant for years,
licensee, tenant at sufferance or otherwise, and irrespective of whether such
leases, rental agreements and arrangements be oral or written, and including any
and all extensions, renewals and modifications thereof (the "SUBJECT LEASES")
and guaranties of the performance or obligations of any tenants or lessees
thereunder, together with all income, rents, issues, profits and revenues from
the Subject Leases (including all tenant security deposits and all other tenant
deposits, whether held by Lessee or in a trust account, and all other deposits
and escrow funds relating to any Subject Leases), and all the estate, right,
title, interest, property, possession, claim and demand whatsoever at law, as
well as in equity, of Lessee of, in and to the same; provided, however, that
although this Lease contains (and it is hereby agreed that this Lease contains)
a present, current, unconditional and absolute assignment of all of said income,
rents, issues, profits and revenues, Lessee shall collect and apply such rental
payments and revenues as provided in the Lease and the other Operative
Agreements; (v) all right, title and interest of Lessee to and under all
agreements, management contracts, consents, authorizations, certificates and
other rights of every kind and character of any Governmental Authority affecting
any Property, to the extent the same are transferable, service contracts,
utility contracts, leases of equipment, documents and agreements relating to the
construction of any Improvements (including any and all construction contracts,
architectural contracts, engineering contracts, designs, plans, specifications,
drawings, surveys, tests, reports, bonds and governmental
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approvals) and all other contracts, licenses and permits now or hereafter
affecting such Property or any part thereof and all guaranties and warranties
with respect to any of the foregoing (the "SUBJECT CONTRACTS"); (vi) all right,
title and interest of Lessee in any insurance policies or binders now or
hereafter relating to any Property, including any unearned premiums thereon, as
further provided in this Lease; (vii) all right, title and interest of Lessee in
any and all awards, payments, proceeds and the right to receive the same, either
before or after any foreclosure hereunder, as a result of any temporary or
permanent injury or damage to, taking of or decrease in the value of a Property
by reason of casualty, condemnation or otherwise as further provided in this
Lease; (viii) all right, title and interest of Lessee in all utility, escrow and
all other deposits (and all letters of credit, certificates of deposit,
negotiable instruments and other rights and evidence of rights to cash) now or
hereafter relating to any Property or the purchase, construction or operation
thereof; (ix) all claims and causes of action arising from or otherwise related
to any of the foregoing, and all rights and judgments related to any legal
actions in connection with such claims or causes of action; and (x) all
Modifications, extensions, additions, improvements, betterments, renewals and
replacements, substitutions, or proceeds of any of the foregoing, and all
inventory, chattel paper, documents, instruments, Equipment, fixtures, farm
products, consumer goods, general intangibles and other property of any nature
constituting proceeds acquired with proceeds of any of the property described
hereinabove; all of which foregoing items are hereby declared and shall be
deemed to be a portion of the security for the indebtedness and Advances herein
described, a portion of the above described collateral being located upon the
Land.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES. LESSEE ACKNOWLEDGES AND AGREES THAT IT
IS LEASING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR AND SUBJECT TO (A) THE EXISTING STATE OF TITLE,
(B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF, (C) ANY STATE OF FACTS
WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW AND (D) VIOLATIONS OF
LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF. NEITHER LESSOR, AGENT NOR
ANY OTHER PARTICIPANT HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED, INCLUDING ANY
REPRESENTATION, WARRANTY OR COVENANT CONCERNING THE CONDITION OF ANY
IMPROVEMENTS THEREON, THE SOIL CONDITION, OR ANY ENVIRONMENTAL OR HAZARDOUS
MATERIAL CONDITION) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO
THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS
FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION,
WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
PROPERTY (OR ANY PART THEREOF) AND NEITHER ANY LESSOR, NOR ANY PARTICIPANT SHALL
BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF ANY
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT.
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8.2 POSSESSION AND USE OF THE PROPERTIES. Each Property shall be used in
a manner consistent with the Construction Agency Agreement and, after the
Completion Date, for office purposes and uses reasonably incidental thereto and
in compliance with this Lease. Lessee shall pay, or cause to be paid, all
charges and costs required in connection with the use of each Property. Lessee
shall not commit or permit any waste of any Property or any part thereof.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS.
Subject to the terms of Article XIII relating to permitted contests, Lessee, at
its sole cost and expense, shall (a) comply with all Legal Requirements
(including all Environmental Laws), Insurance Requirements and tax reporting
requirements relating to each Property, including the use, construction,
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 such Property, and (b)
procure, maintain and comply in all material respects with all licenses,
permits, orders, approvals, consents and other authorizations required for the
construction, renovation, use, maintenance and operation of each Property and
for the use, operation, maintenance, repair and restoration of the Improvements;
provided that costs incurred by the Lessee during the Construction Period under
this SECTION 9.1 shall be reimbursable as Project Costs through Advances,
subject to the terms and conditions of the Operative Agreements.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition (ordinary wear and tear excepted) 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 Legal Requirements and Insurance
Requirements and on a basis reasonably consistent with the operation and
maintenance of commercial properties comparable in type and location to each
Property, subject, however, to the provisions of Article XV with respect to
Condemnation and Casualty.
(b) Following Completion of any Property, Lessor shall under no
circumstances be required to build any Improvements on such Property, make any
repairs, replacements, alterations or renewals of any nature or description to
any Property, make any expenditure whatsoever in connection with this Lease or
maintain any Property in any way. Lessor shall not be required to maintain,
repair or rebuild all or any part of any Property, and Lessee waives the right
to (i) require Lessor to maintain, repair, or rebuild all or any part of a
Property, or (ii) make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenants, condition or
restriction at any time in effect.
(c) Lessee shall, upon the expiration or earlier termination of the
Term with respect to a Property not including a purchase thereof by Lessee,
vacate, surrender and transfer such Property to Lessor or, at Lessor's request,
the independent purchaser thereof, at Lessee's
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own expense, free and clear of all Liens other than Lessor Liens and Permitted
Exceptions, in as good condition as it was on the Completion of the Improvements
thereon or on such termination date, if during the Construction Period, ordinary
wear and tear during the Term excepted, and in compliance with all Legal
Requirements and the other requirements of this Lease and the Construction
Agency Agreement (and in any event without (x) any asbestos installed or
maintained in any part of such Property, (y) any polychlorinated byphenyls
(PCBs) in, on or used, stored or located at such Property, and (z) any other
Hazardous Substances). Lessee shall cooperate with any independent purchaser of
a Property in order to facilitate the ownership or leasing and operation by such
purchaser of such Property after such expiration or earlier termination of the
Term, including providing all books, reports and records regarding the
maintenance, repair and ownership of such Property and all data and technical
information relating thereto, granting or assigning all licenses necessary for
the operation and maintenance of such Property and cooperating in seeking and
obtaining all necessary licenses, permits and approvals of Governmental
Authorities. Lessee shall have also paid the total cost for the completion of
all Modifications commenced prior to such expiration or earlier termination of
the Term. The obligation of Lessee under this SECTION 10.1(C) shall survive the
expiration or termination of this Lease.
(d) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered unfit for
use, unless failure to replace such component will have no adverse effect upon
the Fair Market Sales Value of the Property, Lessee, at its own expense, within
a reasonable time will replace such component with a replacement component which
is free and clear of all Liens (other than Permitted Exceptions and Lessor
Liens) and has a value, utility and useful life at least equal to the component
replaced (assuming the component replaced has been maintained and repaired in
accordance with the requirements of this Lease). All components which are added
to any Property shall immediately become the property of (and title thereto
shall vest in) Lessor and shall be deemed incorporated in such Property and
subject to the terms of this Lease as if originally leased hereunder.
10.2 RIGHT OF INSPECTION. During the Construction Period and the Term,
Lessor, Agent and any Participant may, each not more than twice each year unless
a Lease Event of Default exists, at reasonable times and with reasonable prior
notice, enter upon, inspect and examine at its own cost and expense (unless a
Lease Event of Default exists, in which case the out-of-pocket costs and
expenses of such parties shall be paid by Lessee), any Property. Lessee shall
furnish to Lessor statements, no more than once per year, accurate in all
material respects, regarding the condition and state of repair of each Property.
Notwithstanding the foregoing, Lessor shall have no duty to make any such
inspection or inquiry and shall not incur any liability or obligation by reason
of not making any such inspection or inquiry.
10.3 ENVIRONMENTAL INSPECTION. Upon surrender of possession of any
Property, on not more than 120 days nor less than 30 days prior to the
Expiration Date or earlier termination of the Term (unless Lessee has previously
irrevocably exercised the Purchase Option or Maturity Date Purchase Option or
the Construction Period is being followed by the Term), Lessee shall, at its
sole cost and expense provide to Lessor a report by an environmental consultant
selected by Lessee and reasonably satisfactory to Lessor, certifying that
Hazardous Substances have not at any time during the Term been generated, used,
treated or stored on, transported to or from, Released at, on or from or
deposited at or on the Property other than (i) as necessary to use,
16
operate, maintain, repair and restore the Property and (ii) in full compliance
with all Environmental Laws; and no portion of the Property has been used for
such purposes other than in full compliance with all Environmental Laws. If such
is not the case, the report shall set forth a remedial response plan relating to
the Property (which remedial response plan, if required by any Environmental Law
or Governmental Authority, shall be approved by the appropriate Governmental
Authority). Such remedial response plan shall include, but shall not be limited
to, plans for full response, remediation, removal, or other corrective action,
and the protection, or mitigative action associated with the protection, of
natural resources including wildlife, aquatic species, and vegetation associated
with the Property, as required by all applicable Environmental Laws. If such
report includes a remedial response plan, Lessee shall promptly deposit funds in
escrow with Lessor, or provide other financial accommodations satisfactory to
Lessor, sufficient to ensure the full execution and implementation of such plan.
ARTICLE XI
11.1 MODIFICATIONS, SUBSTITUTIONS AND REPLACEMENTS.
(a) So long as no Lease Event of Default has occurred and is
continuing, Lessee, at its sole cost and expense, may at any time and from time
to time make alterations, renovations, improvements and additions to a Property
or any part thereof (collectively, "MODIFICATIONS"); provided, that: (i) except
for any Modification required to be made pursuant to a Legal Requirement or an
Insurance Requirement, no Modification, individually, or when aggregated with
any (A) other Modification or (B) grant, dedication, transfer or release
pursuant to SECTION 12.2, shall materially impair the value of the Property or
the utility or useful life of the Property from that which existed immediately
prior to such Modification; (ii) the Modification shall be performed
expeditiously and in a good and workmanlike manner; (iii) Lessee shall comply
with all Legal Requirements (including all Environmental Laws) and Insurance
Requirements applicable to the Modification, including the obtaining of all
permits and certificates of occupancy; (iv) the structural integrity of the
Property shall not be adversely affected; (v) Lessee shall maintain or cause to
be maintained builders' risk insurance at all times when a Modification is in
progress; (vi) subject to the terms of Article XIII relating to permitted
contests, Lessee shall pay all costs and expenses and discharge any Liens
arising with respect to the Modification; (vii) such Modifications shall comply
with SECTIONS 8.2 and 10.1 and shall not change the primary character of the
Property; and (viii) no Improvements shall be demolished in total in making the
Modification. All Modifications (other than those that may be readily removed
without impairing the value, utility or remaining useful life of a Property,
unless required by Legal Requirements or Insurance Requirements) shall remain
part of the Improvements and shall be subject to this Lease, and title thereto
shall immediately vest in Lessor. So long as no Lease Event of Default has
occurred and is continuing, Lessee may place upon any Property any inventory,
trade fixtures, machinery, equipment or other property belonging to Lessee or
third parties and may remove the same at any time during the term of this Lease;
provided that such inventory, trade fixtures, machinery, equipment or other
property, or their respective operations, do not materially impair the value,
utility or remaining useful life of such Property.
(b) Following substantial completion of the initial improvements
with respect to a Property, Lessee shall notify Lessor of the undertaking of any
construction, repairs or
17
alterations to such Property the cost of which is anticipated to exceed
$500,000. Prior to undertaking any such construction or alterations, Lessee
shall deliver to Lessor (i) a brief narrative of the work to be done and a copy
of the plans and specifications relating to such work; and (ii) an Officer's
Certificate stating that such work when completed will not impair the value,
utility or remaining useful life of such Property. Lessor, by itself or its
agents, shall have the right, but not the obligation, from time to time to
inspect such construction to ensure that the same is completed consistent with
such plans and specifications.
(c) Following substantial completion of the initial improvements
with respect to a Property, Lessee shall not without the consent of Lessor
undertake any construction or alterations to such Property if such construction
or alterations cannot, in the reasonable judgment of Lessor, be completed on or
prior to the date that is twelve months prior to the Maturity Date.
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee agrees that, except as otherwise provided herein and
subject to the terms of Article XIII relating to permitted contests, Lessee
shall not directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment, levy,
title retention agreement or claim upon any Property or any Modifications or any
Lien, attachment, levy or claim with respect to the Rent or with respect to any
amounts held by Agent or the Collateral Agent pursuant to the Credit Agreement,
the Pledge Agreement or the Control Agreement, other than, with respect to the
Properties only, Permitted Exceptions and Lessor Liens. Lessee shall promptly
notify Lessor in the event it receives actual knowledge that a Lien (other than
a Permitted Exception or Lessor Lien) exists with respect to any Property or
that a Lien exists with respect to the Rent or the Collateral.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed 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 any Property
or any part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR, AGENT, NOR ANY
OTHER PARTICIPANT IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING ANY PROPERTY OR ANY
PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR
ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LESSOR IN AND TO ANY PROPERTY.
12.2 GRANTS AND RELEASES OF EASEMENTS. Provided that no Default
attributable to Lessee shall have occurred and be continuing and subject to the
provisions of Articles VIII, IX, X and XI, Lessor hereby consents to the
following actions by Lessee, in the name and stead of Lessor, but at Lessee's
sole cost and expense: (a) the granting of easements, licenses, rights-of-way
and other rights and privileges in the nature of easements reasonably necessary
or desirable for the construction, use, repair, renovation or maintenance of any
Property as herein provided, and the processing of lot line adjustments,
provided that such lot line adjustments shall not have
18
an adverse effect upon the Fair Market Sales Value of such Property; (b) the
release of existing easements or other rights in the nature of easements which
are for the benefit of a Property or adjacent properties (owned by the Lessee);
(c) the dedication or transfer of unimproved portions of any Property for road,
highway or other public purposes; and (d) the execution of petitions to have the
Property annexed to any municipal corporation or utility district; provided,
that in each case Lessee shall have delivered to Lessor an Officer's Certificate
stating that: (i) such recording, grant, release, dedication, transfer or lot
line adjustment does not materially impair the value, utility or remaining
useful life of any Property, (ii) such, recording, grant, release, dedication or
transfer is necessary in connection with the construction, use, maintenance,
alteration, renovation or improvement of a Property or adjacent properties
(owned by the Lessee), (iii) Lessee shall remain obligated under this Lease and
under any instrument executed by Lessee consenting to the assignment of Lessor's
interest in this Lease as security for indebtedness, in each such case in
accordance with their terms, as though such recording, grant, release,
dedication or transfer, had not been effected and (iv) Lessee shall pay and
perform any obligations of Lessor under such recording, grant, release,
dedication, transfer or adjustment. Without limiting the effectiveness of the
foregoing, provided that no Default attributable to Lessee shall have occurred
and be continuing, Lessor shall, upon the request of Lessee, and at Lessee's
sole cost and expense, execute and deliver any instruments necessary or
appropriate to confirm any such recording, grant, release, dedication or
transfer to any Person permitted under this Section.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF IMPOSITIONS. Except to
the extent otherwise provided for in Section 11.3(f) of the Participation
Agreement, Lessee, on its own or on Lessors' behalf (but at Lessee's sole cost
and expense), may contest, by appropriate administrative or judicial proceedings
conducted in good faith and with due diligence, the amount, validity or
application, in whole or in part, of any Legal Requirement, or utility charges
payable pursuant to SECTION 4.1 or any Lien, attachment, levy, encumbrance or
encroachment, and Lessor agrees not to pay, settle or otherwise compromise any
such item, provided that (a) the commencement and continuation of such
proceedings shall suspend the collection thereof from, and suspend the
enforcement thereof against, any Property, the Rent, the Collateral, Lessor and
the other Participants; (b) there shall be no risk of the imposition of a Lien
(other than a Permitted Exception) on any Property, or any Lien on any Rent or
the Collateral, and no part of any Property nor any Rent or any of the
Collateral would be in any danger of being sold, forfeited, lost or deferred;
(c) at no time during the permitted contest shall there be a risk of the
imposition of criminal liability or civil liability on Lessor or any Participant
for failure to comply therewith; and (d) in the event that, at any time, there
shall be a material risk of extending the application of such item beyond the
Expiration Date, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
SECTION 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee such authorizations and other documents as may reasonably be
required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
ARTICLE XIV
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14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE. During the
Term following the Construction Period with respect to each Property, Lessee
shall procure and carry, at Lessee's sole cost and expense, commercial general
liability insurance for claims for injuries or death sustained by persons or
damage to property while on each Property. During the Construction Period,
Lessee's obligations with respect to insurance are governed by Article VI of the
Construction Agency Agreement. Such insurance shall be on terms and in amounts
that are no less favorable than (i) insurance maintained by owners of similar
properties, that are in accordance with normal industry practice and (ii)
insurance maintained by Lessee and its Affiliates on properties owned or leased
by them comparable in type to the Properties. Each policy shall be endorsed to
name Lessor, Agent and each other Participant as additional insureds. Each
policy shall also specifically provide that the policy shall be considered
primary insurance which shall apply to any loss or claim before any contribution
by any insurance which Lessor, Agent or any other Participant may have in force.
Lessee shall, in the operation of each Property, comply with the applicable
workers' compensation laws and protect Lessor and each other Participant against
any liability under such laws.
14.2 HAZARD AND OTHER INSURANCE.
(a) During the Term following the Construction Period, Lessee shall
keep each Property insured against loss or damage by fire and other risks (which
may include earthquake, flood or wind) in amounts that are equal to the actual
replacement cost of the Improvements and on terms that are no less favorable
than (i) insurance maintained by owners of similar properties, that are in
accordance with normal industry practice and (ii) insurance maintained by Lessee
and its Affiliates on properties owned or leased by them comparable in type to
the Properties. So long as no Lease Event of Default exists, any loss payable
under the insurance policy required by this Section will be paid to and adjusted
solely by Lessee, subject to ARTICLE XV. So long as no Lease Event of Default
exists, any loss payable under any title insurance policy covering any Property
will be paid to and adjusted solely by Lessee, subject to ARTICLE XV.
(b) If at any time during any Term any area in which Improvements
are located is designated a "flood-prone" area pursuant to the Flood Disaster
Protection Act of 1973 or any amendments or supplements thereto, then Lessee
shall comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973, as may be amended. In addition, Lessee will
fully comply with the requirements of the National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of 1973, as each may be amended from time
to time, and with any other Legal Requirement concerning flood insurance to the
extent that it applies to any Property.
14.3 COVERAGE.
(a) Lessee shall furnish Lessor with certificates showing the
insurance required under SECTIONS 14.1 and 14.2 to be in effect and naming
Lessor as loss payee with respect to property insurance and Agent, Lessor and
the other Participants as additional insureds with respect to liability
insurance and showing the mortgagee endorsement required by SECTION 14.3(C). All
such insurance shall be at the cost and expense of Lessee. Such certificates
shall include a provision in which the insurer agrees to provide thirty (30)
days' advance written
20
notice by the insurer to Lessor and Agent (on behalf of the beneficiaries of
such coverage) in the event of cancellation or modification of such insurance.
If Lessor so requests, Lessee shall promptly deliver to Lessor copies of all
insurance policies required by this Lease.
(b) Lessee agrees that the insurance policy or policies required by
this Lease shall include an appropriate clause pursuant to which such policy
shall provide that it will not be invalidated should Lessee waive, in writing,
prior to a loss, any or all rights of recovery against any party for losses
covered by such policy. Lessee hereby waives any and all such rights against
each Lessor, Agent and each other Participant to the extent of payments made
under such policies.
(c) All insurance policies required by SECTION 14.2 shall include a
"New York" or standard form mortgagee endorsement in favor of the Agent.
(d) All insurance coverages required pursuant to this Article XIV
shall be obtained from insurance companies which carry a current rating by the
A.M. Best Company of at least "A" and a financial rating of at least "8."
(e) Neither Lessor nor any other Participant shall carry separate
insurance concurrent in kind or form or contributing in the event of loss with
any insurance required under this Lease except that Lessor and any other
Participant may carry separate liability insurance so long as (i) Lessee's
insurance is designated as primary and in no event excess or contributory to any
insurance such party may have in force which would apply to a loss covered under
Lessee's policy and (ii) each such insurance policy will not cause Lessee's
insurance required under this Lease to be subject to a coinsurance exception of
any kind.
(f) Lessee shall pay as they become due all premiums for the
insurance required by this Lease, shall renew or replace each policy prior to
the expiration date thereof and shall promptly deliver to Lessor and Agent
certificates for renewal and replacement policies, and otherwise maintain the
coverage required by this Lease without any lapse of coverage
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of this Article XV and Article XVI
(in the event Lessee delivers, or is obligated to deliver, a Termination
Notice), and prior to the occurrence and continuation of a Lease Event of
Default during the Term following the Construction Period, Lessee shall be
entitled to receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest during such time in) any award, compensation
or insurance proceeds to which Lessee or Lessor may become entitled by reason of
their respective interests in the Property (i) if during the Term all or a
portion of any Property is damaged or destroyed in whole or in part by a
Casualty or (ii) if during the Term the use, access, occupancy, easement rights
or title to any Property or any part thereof is the subject of a Condemnation;
provided, however, if a Default attributable to Lessee shall have occurred and
be continuing or if a Casualty or Condemnation occurs during the Construction
Period, such award, compensation or insurance proceeds shall be promptly paid
directly to Lessor or, if received by Lessee, shall be held in trust for Lessor,
and shall be promptly paid over by Lessee to Lessor, and provided
21
further that in the event of any Casualty or Condemnation during the Term
following the Construction Period, the estimated cost of restoration of which is
in excess of $1,000,000, any such award, compensation or insurance proceeds
shall be paid directly to Lessor, or if received by Lessee, shall be held in
trust for Lessor and shall be paid over by Lessee to Lessor. Unless the Lease
has been terminated pursuant to Article XVI, following a Casualty or
Condemnation during the Construction Period, Lessee shall comply with the
provisions of Section 3.3 of the Construction Agency Agreement and, unless a
Default attributable to Lessee shall have occurred and be continuing, Lessor
shall pay over to Lessee any such award, compensation or insurance proceeds to
be applied to the cost of construction or restoration of a Property.
(b) So long as no Lease Event of Default has occurred and is
continuing, during the Term following the Construction Period, Lessee may appear
in any proceeding or action to negotiate, prosecute, adjust or appeal any claim
for any award, compensation or insurance payment on account of any such Casualty
or Condemnation and shall pay all expenses thereof; provided that if the
estimated cost of restoration of a Property or the payment on account of such
title defect is in excess of $500,000, then Lessor shall be entitled to
participate in any such proceeding or action. At Lessee's reasonable request,
and at Lessee's sole cost and expense, Lessor and Agent shall participate in any
such proceeding, action, negotiation, prosecution or adjustment which the Lessee
is entitled to control. Lessor, each other Participant and Lessee agree that
this Lease shall control the rights of Lessor, the other Participants and Lessee
in and to any such award, compensation or insurance payment.
(c) If any party shall receive notice of a Casualty or a possible
Condemnation of any Property or any interest therein, such party, as the case
may be, shall give notice thereof to Lessor, Lessee and to Agent promptly after
the receipt of such notice.
(d) In the event of a Casualty or receipt of notice by Lessee or
Lessor of a Condemnation, Lessee shall, not later than thirty (30) days after
such occurrence, deliver to Lessor and the Agent an Officer's Certificate
stating that either (i) (x) such Casualty is not a Significant Casualty or (y)
such Condemnation is neither a Total Condemnation nor a Significant Condemnation
and that this Lease shall remain in full force and effect with respect to such
Property and, at Lessee's sole cost and expense, except to the extent reimbursed
by insurance or condemnation proceeds, Lessee shall promptly and diligently
restore such Property in accordance with the terms of SECTION 15.1(E) and
Section 3.3 of the Construction Agency Agreement or (ii) this Lease shall
terminate with respect to such Property in accordance with SECTION 16.1.
(e) If pursuant to this SECTION 15.1, this Lease shall continue in
full force and effect following (i) a Casualty which occurs during the
Construction Period and which arises from a Full Recourse Construction Period
Event of Default or (ii) a Casualty or Condemnation which occurs at any time
thereafter during the Term, Lessee shall, at its sole cost and expense, except
to the extent reimbursed by insurance or condemnation proceeds, promptly and
diligently repair any damage to such Property caused by such Casualty or
Condemnation in conformity with the requirements of SECTIONS 10.1 and 11.1 using
the as-built plans and specifications for such Property (as modified to give
effect to any subsequent Modifications, any Condemnation affecting such Property
and all applicable Legal Requirements) so as to restore such Property to the
same condition, operation, function and value as existed immediately prior to
such Casualty
22
or Condemnation. In such event, title to such Property shall remain with Lessor
and Lessor shall pay over to Lessee any award, compensation or insurance
proceeds to be applied to the cost of such restoration, subject to SECTION
15.1(A).
(f) In no event shall a Casualty or Condemnation with respect to
which this Lease remains in full force and effect under this SECTION 15.1 affect
Lessee's obligations to pay Rent pursuant to SECTION 3.1.
15.2 ENVIRONMENTAL MATTERS. Promptly upon Lessee's knowledge of the
presence of Hazardous Substances in any portion of any Property in
concentrations and/or conditions that constitute an Environmental Violation,
Lessee shall notify Lessor and Agent in writing of such presence or condition.
In the event of such Environmental Violation, Lessee shall, not later than
thirty (30) days after Lessee has actual knowledge of such Environmental
Violation, either deliver to Lessor and Agent an Officer's Certificate and a
Termination Notice with respect to such Property pursuant to SECTION 16.1, if
applicable, or, at Lessee's sole cost and expense, promptly and diligently
undertake any response, clean up, remedial or other action necessary to remove,
cleanup or remediate the Environmental Violation in accordance with the terms of
SECTION 9.1. If Lessee does not deliver a Termination Notice with respect to the
Property pursuant to SECTION 16.1, Lessee shall, upon completion of remedial
action by Lessee, cause to be prepared by an environmental consultant reasonably
acceptable to Lessor and Agent a report describing the Environmental Violation
and the actions taken by Lessee (or its agents) in response to such
Environmental Violation, and a statement by the consultant that the
Environmental Violation has been remedied in full compliance with applicable
Environmental Laws.
15.3 NOTICE OF ENVIRONMENTAL MATTERS. Promptly, but in any event within
five (5) Business Days from the date Lessee has actual knowledge thereof, Lessee
shall provide to Lessor and Agent written notice of any material pending or
threatened claim, action or proceeding involving any Environmental Law or any
Release on or in connection with any Property. All such notices shall describe
in reasonable detail the nature of the claim, action or proceeding and Lessee's
proposed response thereto. In addition, Lessee shall provide to Lessor and
Agent, within five (5) Business Days of receipt, copies of all written
communications with any Governmental Authority relating to any Environmental
Violation in connection with such Property. Lessee shall also promptly provide
such detailed reports of any such environmental claims as reasonably may be
requested by Lessor and Agent.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
(a) If: (i) Lessor, Agent or Lessee shall have received notice of a
Total Condemnation; or (ii) Lessee or Lessor or any other Participant shall have
received notice of a Condemnation, and Lessee shall have delivered to Lessor and
Agent or, if during the Construction Period, Lessor shall have delivered to
Lessee and Agent an Officer's Certificate that such Condemnation is a
Significant Condemnation; or (iii) a Casualty occurs, and Lessee shall have
delivered to Lessor and Agent or, if during the Construction Period, Lessor
shall have delivered to Lessee and Agent, an Officer's Certificate that such
Casualty is a Significant
23
Casualty; or (iv) an Environmental Violation occurs or is discovered and Lessee
shall have delivered to Lessor an Officer's Certificate stating that, in the
reasonable, good-faith judgment of Lessee, the cost to remediate the same will
exceed $1,000,000; or (v) if during the Term a Casualty occurs with respect to
any Property or Lessee or Lessor receives notice of a Condemnation with respect
to any Property, and following such Casualty or Condemnation, such Property
cannot reasonably be restored on or before the date which is twelve months prior
to the Maturity Date to substantially the same condition as existed immediately
prior to such Casualty or Condemnation or before such day such Property is not
in fact so restored, and Lessee shall have delivered an Officer's Certificate to
Lessor and Agent to such effect; then, (A) Lessee shall, within thirty (30) days
after Lessee receives notice of a Total Condemnation pursuant to the preceding
clause (i) or simultaneously with the delivery of the Officer's Certificate by
Lessee pursuant to the preceding clause (ii), (iii), (iv) or (v) deliver a
notice of termination of this Lease to Lessor (a "TERMINATION NOTICE") or (B) if
during the Construction Period, Lessor may deliver to Lessee and Agent a
Termination Notice.
(b) In the case of an event described in (i) clause (i), (ii),
(iii) or (v) of SECTION 16.1(A) which occurs during the Term following the
Construction Period due to any cause or, if during the Construction Period, due
to a Full Recourse Construction Period Event of Default or (ii) clause (iv) of
SECTION 16.1(A), which occurs at any time during the Construction Period or the
Term, Lessee shall be obligated to pay Lessor, for the account of the
Participants, on or prior to the earlier of the Maturity Date and the date
occurring thirty (30) days after the date of the Termination Notice, an amount
(offsetting, at the option of Lessor, against such amount the aggregate amount
of the Pledged Collateral) equal to (x) all accrued and unpaid Capitalized
Interest, Capitalized Holder Yield and Basic Rent due and owing on such date,
plus (y) all Supplemental Rent due and owing on such date, plus (z) at the
option of Lessee (1) the Lease Balance on such date (in which case Lessor shall,
as set forth in SECTIONS 16.2 AND 19.1, transfer to Lessee all of Lessor's
interest in a Property), or (2) the Permitted Lease Investment Balance on such
date, provided that (A) if such amount is less than the Lease Balance on such
date, subsection (e) shall apply and (B) if such amount equals the Lease
Balance, Lessor shall, as set forth in SECTIONS 16.2 and 19.1, transfer to
Lessee on such date of payment all of Lessor's interest in such Property.
(c) In the case of an event described in clause (i), (ii) or (iii)
of SECTION 16.1(A) which occurs during the Construction Period and which arises
from the acts or omissions of Lessee or any Lessee Person (other than for any
reasons set forth in clause (b) above), while located on, in the possession of,
controlling, or acting or failing to act with respect to any Property, Lessee
shall be obligated to pay to Lessor, for the account of the Participants, on or
prior to the date occurring thirty (30) days after the date of the Termination
Notice, an amount (offsetting, at the option of Lessor, against such amount the
aggregate amount of the Pledged Collateral) equal to (x) all accrued and unpaid
Capitalized Interest, Capitalized Holder Yield and Basic Rent due and owing on
such date plus (y) all Supplemental Rent due and owing on such date, plus (z) at
the option of Lessee (1) the Lease Balance on such date (in which case Lessor
shall, as set forth in SECTION 16.2 and 19.1, transfer to Lessee on such date
all of Lessor's interest in such Property) or (2) an amount equal to the
Construction Period Maximum Recourse Amount on such date, in which event
subsection (e) shall apply.
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(d) In the case of an event described in clause (i), (ii) or (iii)
of SECTION 16.1(A) which occurs during the Construction Period and which is not
covered by SECTION 16.1(B) or (C) above, Lessee shall make payments to Lessor,
for the account of the Participants, on or prior to the date occurring thirty
(30) days after the date of the Termination Notice, of an amount (offsetting, at
the option of Lessor, against such amount the aggregate amount of the Pledged
Collateral) equal to the sum of (x) all Supplemental Rent otherwise due and
owing on such date plus (y) at Lessee's option, if it wishes to purchase
Lessor's interest in a Property, the Lease Balance on such date (in which case
Lessor shall, as set forth in SECTIONS 16.2 and 19.1, transfer to Lessee on such
date all of Lessor's interest in such Property); and if Lessee does not elect to
purchase Lessor's interest in the Property under clause (y), subsection (e)
shall apply.
(e) If Lessee elects not to purchase Lessor's interest in a
Property pursuant to any of SECTIONS 16.1(B), (C) or (D), Lessee shall return
such Property to Lessor (or to any other Person specified by Lessor in
compliance with SECTION 10.1(C)); Lessor shall be entitled to retain all
insurance and condemnation proceeds with respect to such Significant Casualty,
Significant Condemnation or Environmental Violation; and Lessor shall either
require Lessee to remarket such Property for the Participants or undertake to
remarket such Property itself in accordance with SECTION 21.1(B). Any proceeds,
including insurance and condemnation proceeds, received shall be applied in the
manner set forth in Section 12.4 of the Participation Agreement.
16.2 TERMINATION PROCEDURES. On the date of the payment by Lessee of the
Lease Balance and all other amounts due in accordance with a Termination Notice
or in accordance with SECTION 16.1 (such date, the "TERMINATION DATE"), this
Lease shall terminate and Lessor shall convey such Property to Lessee (or
Lessee's designee) all in accordance with SECTION 19.1.
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT. If any one or more of the following events
(each a "LEASE EVENT OF DEFAULT") shall occur:
(a) Lessee shall fail to make payment of (i) any Capitalized
Interest, Capitalized Holder Yield, Basic Rent or any Supplemental Rent (other
than as referred to in clauses (a)(ii) or (b) of this SECTION 17.1) representing
amounts owed under the Credit Agreement or the other Credit Documents within
three (3) days after the same has become due and payable or (ii) any
Construction Period Maximum Recourse Amount, Maximum Residual Guarantee Amount,
Permitted Lease Investment Balance or Purchase Option Price after the same has
become due and payable; or
(b) Lessee shall fail to make payment of any other Supplemental
Rent due and payable within ten (10) days after receipt of notice thereof; or
(c) Lessee shall fail to maintain (i) insurance as required by
ARTICLE XIV or (ii) the financial covenants set forth in Section 8.4(i) of the
Participation Agreement; or
(d) Lessee shall fail to observe or perform any obligation or
covenant of Lessee (other than those specifically referred to in this SECTION
17.1), which failure, if capable of cure, continues for thirty (30) days (or
three (3) days in the case of Lessee's failure to observe or perform the
obligations or covenants contained in Sections 3.1(a) and 4.2 of the Pledge
25
Agreement) after the earlier of (i) Lessee's having knowledge thereof or (ii)
written notice thereof to Lessee by Lessor; or any representation or warranty by
Lessee set forth in this Lease or in any other Operative Agreement or in any
document entered into in connection herewith or therewith or in any document,
certificate or financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material way unless capable of
cure and cured within thirty (30) days after the earlier of (i) Lessee's having
knowledge thereof or (ii) written notice thereof to Lessee by Lessor; or
(e) a Construction Agency Agreement Event of Default shall have
occurred and be continuing; or
(f) Lessee shall (i) admit in writing its inability to pay its
debts generally as they become due, (ii) file a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof, (iii) make a general
assignment for the benefit of its creditors, (iv) consent to the appointment of
a receiver of itself or the whole or any substantial part of its property, (v)
fail to cause the discharge of any custodian, trustee or receiver appointed for
Lessee or the whole or a substantial part of its property within ninety (90)
days after such appointment, or (vi) file a petition or answer seeking or
consenting to reorganization under the United States bankruptcy laws or any
other applicable insolvency law or statute of the United States of America or
any State or Commonwealth thereof; or
(g) insolvency proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof shall be filed against
Lessee and not dismissed within ninety (90) days from the date of its filing, or
a court of competent jurisdiction shall enter an order or decree appointing,
without the consent of Lessee, a receiver of Lessee or the whole or a
substantial part of its property, and such order or decree shall not be vacated
or set aside within ninety (90) days from the date of the entry thereof; or
(h) Lessee shall fail to provide the Pledged Collateral in
accordance with the terms of the Operative Agreements; or
(i) there shall be entered against Lessee or any Subsidiary one or
more judgments or decrees in an aggregate amount at any one time outstanding in
excess of $1,000,000, and such judgments or decrees shall not have been
satisfied, vacated, discharged, or stayed or bonded pending appeal within thirty
(30) days from entry thereof; or
(j) with respect to any Plan (other than a Multiemployer Plan) as
to which Lessee or any ERISA Affiliate of Lessee may have any liability, there
shall exist, for a period of thirty (30) days, a deficiency which is $500,000 or
more in the Plan assets available to satisfy the benefits guaranteeable under
ERISA with respect to such Plan, and (i) steps are undertaken to terminate such
Plan or (ii) such Plan is terminated or (iii) any Reportable Event which
presents a material risk of termination with respect to such Plan shall occur;
or
(k) the Lessee or any of its Subsidiaries (i) shall default in the
payment when due, whether at stated maturity or otherwise, of principal,
interest or rent in respect of
26
Indebtedness or Off Balance Sheet Debt of $2,000,000 or more; or (ii) shall fail
to perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any such
Indebtedness or Off Balance Sheet Debt of $2,000,000 or more, if the effect of
any such failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness or Off Balance Sheet Debt or beneficiary or
beneficiaries of such Indebtedness or Off Balance Sheet Debt (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness or Off Balance Sheet Debt to be declared to be due and
payable prior to its stated maturity, or cash collateral in respect thereof to
be demanded;
(l) Any Operative Agreement, other than the Credit Agreement, shall
cease to be in full force and effect, or the Credit Agreement shall cease to be
in full force and effect and such cessation is attributable to Lessee, or Lessee
or any Person acting by or on behalf of Lessee shall deny or disaffirm its
obligations thereunder or contest the validity of any Operative Agreement or any
Lien granted thereunder in any respect, either directly or indirectly; or
(m) (i) any Person or two (2) or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of voting stock of Lessee (or other securities
convertible into such voting stock) representing greater than fifty percent
(50%) of the combined voting power of all voting stock of Lessee; or (ii) the
first day on which a majority of the members of the board of directors of Lessee
are not Continuing Directors (as defined below); or (iii) any Person or two (2)
or more Persons acting in concert shall have acquired by contract or otherwise,
or shall have entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of, the power to exercise, directly or
indirectly, a controlling influence over the management or policies of Lessee,
or control over voting stock of Lessee (or other securities convertible into
such securities) representing more than forty-nine percent (49%) of the combined
voting power of all voting stock of Lessee;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this ARTICLE XVII and in SECTION 18.1 (x) terminate the
Commitments and rescind or terminate this Lease by giving Lessee three (3)
Business Days' notice of such termination, and this Lease and the Commitments
shall terminate; and (y) exercise any and all remedies available under
applicable law, including those remedies contained or referred to in any
applicable Lease Supplement. Lessee shall, to the fullest extent permitted by
law, pay as Supplemental Rent all costs and expenses incurred by or on behalf of
Lessor, including fees and expenses of counsel, as a result of any Lease Event
of Default. (A "CONTINUING DIRECTOR" shall mean any director who is either (A) a
member of such board of directors on the Closing Date or (B) nominated or
elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board at the time of such
nomination or election.)
17.2 FINAL LIQUIDATED DAMAGES.
(a) If a Lease Event of Default shall have occurred and be
continuing, Lessor shall have the right (subject to applicable law and the
provisions of Section 5.4 of the Construction Agency Agreement if the Lease
Event of Default is a Construction Agency Agreement Event of Default) to
recover, by demand to Lessee and at Lessor's election, and
27
Lessee shall pay to Lessor, as and for final liquidated damages, but exclusive
of the indemnities payable under Section 11 of the Participation Agreement, and
in lieu of all damages beyond the date of such demand, the sum of (a) the
Permitted Lease Investment Balance, plus (b) the Nonrecourse Portion (subject to
the proviso at the end of this sentence), plus (c) all other amounts owing in
respect of Rent theretofore accruing under this Lease (offsetting, at the option
of Lessor, or at the option of Lessee, with the consent of Lessor, against such
amount the aggregate amount of the Pledged Collateral); provided, that
notwithstanding anything contained in this Lease or elsewhere in the Operative
Agreements, the Nonrecourse Portion shall not be a recourse obligation of the
Lessee but shall be recourse only to the Property and the other Collateral and
shall be payable in the manner set forth in Section 12 of the Participation
Agreement.
Notwithstanding the foregoing, and subject, in the case of a Lease Event
of Default that occurs during the Construction Period to Sections 5.3 and 5.4 of
the Construction Agency Agreement, (i) if this Lease is being terminated on the
basis of a Lease Event of Default under SECTION 17.1(D) arising out of the
failure to perform an obligation or covenant or the breach of a representation
or warranty, the performance of which covenant or obligation or the truth of
which representation or warranty requires the determination by Lessor or Agent
that a "Material Adverse Effect" has occurred, Lessee shall only be required to
pay the Maximum Residual Guarantee Amount (or, if such Lease Event of Default
occurs during the Construction Period, the Construction Period Maximum Recourse
Amount); (ii) if this Lease is being terminated on the basis of a Lease Event of
Default under SECTION 17.1(K)(II) and the other Indebtedness or Off-Balance
Sheet Debt referred to in such clause (ii) of SECTION 17.1(K) could be or has
been accelerated or been declared to be due and payable prior to its stated
maturity (or cash collateral in respect thereof could be or has been demanded)
on the basis of the occurrence of a "Material Adverse Effect," Lessee shall only
be required to pay the Maximum Residual Guarantee Amount (or, if such Lease
Event of Default occurs during the Construction Period, the Construction Period
Maximum Recourse Amount); and (iii) if such Lease Event of Default occurs under
SECTION 17.1(F) or (G), the amount referred to in clauses (a) and (b) (subject,
in the case of clause (b), to the proviso at the end of the first sentence of
SECTION 17.1(A)) of the first sentence of SECTION 17.2(A), together with the
amount referred to in clause (c) of such first sentence, shall automatically
become due and payable without notice or demand.
(b) Upon payment of the amount specified in SECTION 17.2(A), if the
amount paid under clauses (a) and (b) equals the Lease Balance, Lessee shall be
entitled to receive from Lessor, at Lessee's request and cost, an assignment of
Lessor's right, title and interest in the Properties, the Improvements, Fixtures
and Modifications, in each case in recordable form and otherwise in conformity
with local custom and free and clear of the Lien of the Deed of Trust and any
Lessor Liens. The Properties shall be conveyed to Lessee (or Lessee's designee)
"AS IS" and in its then present physical condition. If any statute or rule of
law shall limit the amount of such final liquidated damages to less than the
amount agreed upon, Lessor shall be entitled to the maximum amount allowable
under such statute or rule of law; provided, that Lessee shall not be entitled
to receive an assignment of Lessor's interest in the Properties, the
Improvements, the Fixtures and the Modifications unless Lessee shall have paid
in full the Lease Balance of the Properties and all such Rent and Supplemental
Rent.
28
(c) If Lessee does not pay the Lease Balance and Rent theretofore
accruing under this Lease, Lessor shall (i) market the Properties to third party
purchasers in accordance with SECTION 21.1(B) or (ii) direct the Lessee to, and
the Lessee will, use its commercial best efforts, as non-exclusive agent of
Lessor, to market on behalf of the Participants, the Properties to third party
purchasers in accordance with SECTION 21.1(B). Any proceeds received from a sale
or remarketing of the Properties shall be applied in the manner set forth in
Section 12.4 of the Participation Agreement.
17.3 LEASE REMEDIES. Lessor and Lessee intend that for commercial law
and bankruptcy law purposes, this Lease will be treated as a financing
arrangement, as set forth in ARTICLE VII. If, as a result of applicable state
law which cannot be waived, this Lease is deemed to be a lease of any Property,
rather than a financing arrangement, and Lessor is unable to enforce the
remedies set forth in SECTION 17.2, the following remedies shall be available to
Lessor (subject to applicable law and the provisions of Section 5.3 and 5.4 of
the Construction Agency Agreement if the Lease Event of Default occurs during
the Construction Period):
(a) SURRENDER OF POSSESSION. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have been
terminated pursuant to SECTION 17.1, Lessee shall, upon thirty (30) days written
notice, surrender to Lessor possession of the Properties and Lessee shall quit
the same. Lessor may enter upon and repossess the Properties by such means as
are available at law or in equity, and may remove Lessee and all other Persons
and any and all personal property and Lessee's equipment and personalty and
severable Modifications from the Properties. Lessor shall have no liability by
reason of any such entry, repossession or removal performed in accordance with
applicable law.
(b) RELETTING. If a Lease Event of Default shall have occurred and
be continuing, and whether or not this Lease shall have been terminated pursuant
to SECTION 17.1, Lessor may, but shall be under no obligation to, relet all, or
any portion, of the Properties, for the account of Lessee or otherwise, for such
term or terms (which may be greater or less than the period which would
otherwise have constituted the balance of the Term) and on such conditions
(which may include concessions or free rent) and for such purposes as Lessor may
reasonably determine, and Lessor may collect, receive and retain the rents
resulting from such reletting which rents shall be applied against amounts owing
by Lessee. Lessor shall not be liable to Lessee for any failure to relet the
Properties or for any failure to collect any rent due upon such reletting.
(c) DAMAGES. None of (a) the termination of this Lease pursuant to
SECTION 17.1; (b) the repossession of the Properties; or (c) except to the
extent required by applicable law, the failure of Lessor to relet all or any
portion of the Properties, the reletting of all or any portion of the Properties
or the failure of Lessor to collect or receive any rentals due upon any such
reletting shall relieve Lessee of its liability and obligations hereunder, all
of which shall survive any such termination, repossession or reletting. If any
Lease Event of Default shall have occurred and be continuing and notwithstanding
any termination of this Lease pursuant to SECTION 17.1, Lessee shall forthwith
pay to Lessor all Capitalized Interest, Capitalized Holder Yield and Basic Rent
and other sums due and payable to the Participants hereunder or under the
Operative Agreements to and including the date of such termination. Thereafter,
on the days on which the Basic Rent, Capitalized Interest, Capitalized Holder
Yield or Supplemental Rent, as
29
applicable, are payable under this Lease or would have been payable under this
Lease if the same had not been terminated pursuant to SECTION 17.1 and until the
end of the Term or what would have been the Term in the absence of such
termination, Lessee shall pay Lessor, an amount equal to the Capitalized
Interest, Capitalized Holder Yield, Basic Rent and Supplemental Rent that are
payable under this Lease or under the Operative Agreements or would have been
payable by Lessee hereunder or under the Operative Agreements if this Lease had
not been terminated pursuant to SECTION 17.1, less the net proceeds, if any,
which are actually received by Lessor with respect to the period in question of
any reletting of the Properties or any portion thereof (offsetting, at the
option of Lessor, against such amount the aggregate amount of the Pledged
Collateral), and subject to the limits set forth in SECTION 17.2(A); provided
that Lessee's obligation to make payments of Basic Rent, Capitalized Interest,
Capitalized Holder Yield and Supplemental Rent under this SECTION 17.3(C) shall
continue only so long as Lessor shall not have received the amounts specified in
SECTION 17.2 or SECTION 17.3(D). In calculating the amount of such net proceeds
from reletting, there shall be deducted all of Lessor's, Agent's and any other
Participant's expenses in connection therewith, including repossession costs,
brokerage commissions, fees and expenses for counsel and any necessary repair or
alteration costs and expenses reasonably incurred in preparation for such
reletting. To the extent Lessor receives any damages pursuant to this SECTION
17.3(C), such amounts shall be regarded as amounts paid on account of Rent.
(d) ACCELERATION OF RENT. If a Lease Event of Default shall have
occurred and be continuing, and this Lease shall not have been terminated
pursuant to SECTION 17.1, and whether or not Lessor shall have collected any
current liquidated damages pursuant to SECTION 17.3(C), Lessor may upon written
notice to Lessee accelerate all payments of Capitalized Interest, Capitalized
Holder Yield and Basic Rent due hereunder and, upon such acceleration, Lessee
shall immediately pay Lessor, as and for final liquidated damages and in lieu of
all current liquidated damages on account of such Lease Event of Default beyond
the date of such acceleration an amount equal to the sum of (and subject to the
limits set forth in SECTION 17.2(A)) (a) all Capitalized Interest, Capitalized
Holder Yield and Basic Rent (assuming interest at a rate per annum equal to the
Overdue Rate), as applicable, due from the date of such acceleration until the
end of the Term, plus (b) the Maximum Residual Guarantee Amount or Construction
Period Maximum Recourse Amount that would be payable under SECTION 21.1(C) or
under Section 5.3(d) of the Construction Agency Agreement assuming the proceeds
of the sale pursuant to such SECTION 21.1(C) are equal to zero, which sum is
then discounted to present value at a rate equal to the blended Lessor Yield and
the interest on the Loans applicable to the Properties on such date (offsetting,
at the option of Lessor, against such amount the aggregate amount of the Pledged
Collateral). Following payment of such amount by Lessee, (i) if during the Term,
Lessee will be permitted to stay in possession of the Properties for the
remainder of the Term, subject to the terms and conditions of this Lease,
including the obligation to pay Supplemental Rent, provided that no further
Lease Event of Default shall occur and be continuing, following which Lessor
shall have all the rights and remedies set forth in this Article XVII (but not
including those set forth in this SECTION 17.3), and (ii) if during the
Construction Period, the provisions of Sections 5.3, 5.4 and 5.5 of the
Construction Agency Agreement shall control.
(e) REPOSSESSION AND RECOVERABLE AMOUNTS. In the event of any
termination of the Term or the Construction Agency Agreement pursuant to SECTION
17.1 or
30
Article V of the Construction Agency Agreement or as permitted by law, Lessee
shall quit and surrender the Properties to Lessor, and Lessor may without
further notice enter upon, reenter, possess and repossess the same by summary
proceedings, ejectment or otherwise, and again have, repossess and enjoy the
same as if this Lease had not been made, subject to Lessee's right of redemption
set forth in SECTION 17.1, and in any such event neither Lessee nor any Person
claiming through or under Lessee by virtue of any law or an order of any court
shall be entitled to possession or to remain in possession of the Properties but
shall forthwith quit and surrender the Properties, and Lessor shall,
notwithstanding any other provision of this Lease, be entitled to recover from
Lessee the aggregate of all amounts Lessor is permitted to recover from Lessee.
17.4 WAIVER OF CERTAIN RIGHTS. If this Lease shall be terminated
pursuant to SECTION 17.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, re-entry or repossession,
except for the rights of redemption specifically provided for herein; (c) the
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt; and (d) any other rights which might otherwise limit or
modify any of Lessor's rights or remedies under this Article XVII.
17.5 ASSIGNMENT OF RIGHTS UNDER CONTRACTS. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to SECTION 17.1, unless the Lease Balance and Rent
theretofore accruing under this Lease shall have been paid in full, Lessee shall
upon Lessor's demand immediately assign, transfer and set over to Lessor all of
Lessee's right, title and interest in and to each Construction Contract and each
other agreement executed by Lessee in connection with the construction,
renovation, development, use or operation of the Properties (including all
right, title and interest of Lessee with respect to all warranty, performance,
service and indemnity provisions), as and to the extent that the same relate to
the construction, renovation, and operation of the Properties.
17.6 FORECLOSURE. Subject to Article XXI below, in the event that a
court of competent jurisdiction rules that this Lease constitutes a mortgage,
deed of trust or other secured financing, and subject to the availability of
such remedy under applicable law, then Lessor and Lessee agree that Lessee
hereby mortgages and grants to Lessor, for the benefit of the Participants, a
Lien against the Lands and the Properties, for the purpose of securing all of
the obligations hereunder and under the other Operative Agreements (including
the payment of Capitalized Interest, Capitalized Holder Yield, Basic Rent,
Supplemental Rent and the Lease Balance, Permitted Lease Investment Balance, the
Nonrecourse Portion or Purchase Option Price) (collectively, the "LEASE PAYMENT
OBLIGATIONS"). In each case, upon the occurrence of any Lease Event of Default
which is continuing, the Lessor shall have the power and authority, to the
extent provided by law, to exercise the following rights and remedies:
(a) To declare the Lease Payment Obligations immediately due and
payable;
(b) With or without notice, and without releasing Lessee from any
obligation hereunder, to cure any default of Lessee and, in connection
therewith, to enter upon the Properties and to perform such acts and things as
Lessor deems necessary or desirable to inspect, investigate, assess and protect
the Properties, including any of its other rights; to appear in and defend any
action or proceeding purporting to affect the Properties or the rights or powers
of
31
Lessor hereunder; to pay, purchase, contest or compromise any encumbrance,
charge, lien or claim of lien which, in the judgment of Lessor, is prior or
superior hereto, the judgment of Lessor being conclusive as between the parties
hereto; to pay any premiums or charges with respect to insurance required to be
carried hereunder; and to employ counsel, accountants, contractors and other
appropriate persons to assist Lessor;
(c) To commence and maintain an action or actions in any court of
competent jurisdiction to foreclose this instrument as a mortgage or to obtain
specific enforcement of the covenants of Lessee hereunder, and Lessee agrees
that such covenants shall be specifically enforceable by injunction or any other
appropriate equitable remedy and that for the purposes of any suit brought
hereunder, Lessee waives the defense of laches and any applicable statute of
limitations;
(d) Lessor may foreclose the Lien in accordance with applicable
laws and rules of court. Any sale conducted upon foreclosure of this Lien shall
be held at the front door of the county courthouse for the County or City and
County in which the Lands and Properties are located, or on the Lands, or at
such other place as similar sales are then customarily held in such County or
City and County, provided that the actual place of sale shall be specified in
the notice of sale. Except to the extent not allowed under applicable law, the
proceeds of any sale shall be applied first to the fees and expenses of the
officer conducting the sale, and then to the reduction or discharge of the Lease
Payment Obligations in such order as is set forth in Section 12.6 of the
Participation Agreement; any surplus remaining shall be paid over to Lessee or
to such other person or persons as may be lawfully entitled to such surplus. At
the conclusion of any foreclosure sale, the officer conducting the sale shall
execute and deliver to the purchaser at the sale a certificate of purchase which
shall describe the property sold to such purchaser and shall state that upon the
expiration of the applicable periods for redemption, the holder of such
certificate will be entitled to a deed to the property described in the
certificate. After the expiration of all applicable periods of redemption,
unless the property sold has been redeemed by Lessee, the officer who conducted
such sale shall, upon request, execute and deliver an appropriate deed to the
holder of the certificate of purchase or the last certificate of redemption, as
the case may be, and such deed shall operate to divest Lessee and all persons
claiming under Lessee of all right, title and interest, whether legal or
equitable, in the property described in the deed. Nothing in this provision
dealing with foreclosure procedures or specifying particular actions to be taken
by Lessor or by any judicial officer shall be deemed to contradict or add to the
requirements and procedures now or hereafter specified by applicable law in
violation of such applicable laws, and any such inconsistency shall be resolved
so as to retain maximum flexibility in choice of remedy by Lessor.
(e) Lessor or its employees, acting by themselves or through a
court-appointed receiver, may enter upon, possess, manage, operate, dispose of
and contract to dispose of the Lands and the Properties or any part thereof;
negotiate with governmental authorities with respect to the Properties'
environmental compliance and remedial measures; contract for goods and services,
hire agents, employees and counsel, make repairs, alterations and improvements
to the Properties necessary, in Lessor's judgment, to protect or enhance the
security hereof; to incur the risks and obligations ordinarily incurred by
owners of property (without any personal obligation on the part of the
receiver); and/or to take any and all other actions which may be necessary or
desirable to comply with Lessee's obligations hereunder and under the Operative
32
Agreements. All sums realized by Lessor under this SECTION 17.6(D), less all
costs and expenses incurred by it under this SECTION 17.6(D), including
attorneys' fees, and less such sums as Lessor deems appropriate as a reserve to
meet future expenses under this SECTION 17.6(D), shall be applied on any Lease
Payment Obligations secured hereby in such order as Lessor shall determine.
Neither application of said sums to said indebtedness nor any other action taken
by Lessor under this SECTION 17.6(D) shall cure or waive any Event of Default or
notice of default hereunder or nullify the effect of any such notice of default.
Lessor, or any employee or agent of Lessor, or a receiver appointed by a court,
may take any action or proceeding hereunder without regard to (i) the adequacy
of the security for the indebtedness secured hereunder, (ii) the existence of a
declaration that the indebtedness secured hereby has been declared immediately
due and payable, or (iii) the filing of a notice of default;
(f) In connection with any sale or sales hereunder, Lessor may
elect to treat any of the Property which consists of a right in action or which
is property that can be severed from the real property covered hereby or any
improvements thereon without causing structural damage thereto as if the same
were personal property or a fixture, as the case may be, and dispose of the same
in accordance with applicable law, separate and apart from the sale of real
property. Any sale of any personal property or fixtures hereunder shall be
conducted in any manner permitted by the UCC.
(g) To resort to and realize upon the Properties or any of them and
any other security now or hereafter held by Lessor in such order and manner as
Lessor may, in its sole discretion, determine; and resort to any or all such
security may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken non-judicial
proceedings, or both.
(h) All costs and expenses incurred by Lessor pursuant to this
SECTION 17.6 (including court costs, consultants' fees and attorneys' fees,
whether incurred in litigation or not and whether before or after judgment)
shall bear interest at the Overdue Rate, from the date of expenditure until said
sums have been paid. Lessor shall be entitled to bid, at the sale of any
Property held pursuant to SECTION 17.6(D) above, the amount of said costs,
expenses and interest in addition to the amount of the other Lease Payment
Obligations hereby secured as a credit bid, which shall be deemed the equivalent
of cash.
(i) Lessee hereby waives any right to require that any security
given hereunder or under any other agreement securing the Lease Payment
Obligations be marshalled and further waives any right otherwise available in
respect to marshalling of assets which secure any Lease Payment Obligation or to
require Lessor to pursue its remedies against any such assets.
After deducting all costs, fees and expenses of Lessor and any trustee,
including all costs of evidence of title and attorneys' fees in connection with
sale, Lessor shall apply the proceeds of sale in accordance with Section 12.6 of
the Participation Agreement.
17.7 REMEDIES CUMULATIVE. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise.
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17.8 LESSEE'S RIGHT TO CURE. Notwithstanding any provision contained in
this Lease or any other Operative Agreement, if an Event of Default has occurred
and is continuing, Lessee shall have the right to cure such Event of Default by
exercising its Purchase Option at any time prior to such time as a foreclosure
upon or sale of any Property has been completed.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS. Lessor, without
waiving or releasing any obligation or Event of Default, may (but shall be under
no obligation to) remedy any Event of Default for the account and at the sole
cost and expense of Lessee, including the failure by Lessee to maintain any
insurance required by Article XIV, and may, to the fullest extent permitted by
law, and notwithstanding any right of quiet enjoyment in favor of Lessee, enter
upon any Property for such purpose and take all such action thereon as may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of
Lessee. All out-of-pocket costs and expenses so incurred (including the fees and
expenses of counsel), together with interest thereon at the Overdue Rate from
the date on which such sums or expenses are paid by Lessor, shall be paid by
Lessee to Lessor on demand as Supplemental Rent.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S TERMINATION OF THIS LEASE OR
EXERCISE OF PURCHASE OPTIONS. In connection with any termination of this Lease
with respect to the Properties pursuant to the terms of SECTION 16.1 or 16.2 or
ARTICLE XVII if the Properties are being purchased by Lessee (or its designee),
or in connection with Lessee's exercise of its Purchase Option or Maturity Date
Purchase Option, upon the date on which this Lease is to terminate with respect
to the Properties or upon the Expiration Date with respect to the Properties,
and upon tender by Lessee of the Lease Balance and the other amounts set forth
in SECTION 16.1, 17.2, 20.1 or 20.2, as applicable:
(a) Lessor shall execute and deliver to Lessee (or to Lessee's
designee) at Lessee's cost and expense an assignment or transfer of Lessor's
entire right, title and interest in the Properties, in each case in recordable
form and otherwise in conformity with local law and custom and free and clear of
the Lien of this Lease, the Deed of Trust and any Lessor Liens; and
(b) Properties shall be conveyed to Lessee or its designee "AS IS"
and in their then present physical condition.
ARTICLE XX
20.1 PURCHASE OPTION. Subject to SECTION 17.7, Lessee shall have the
option on any Payment Date (exercisable by giving Lessor irrevocable written
notice (the "PURCHASE NOTICE") of Lessee's election to exercise such option not
less than thirty (30) days prior to the date of purchase pursuant to such
option) to purchase the Properties on the date specified in such Purchase Notice
at a price equal to the Lease Balance plus all Basic Rent and Supplemental Rent
due and owing on such date of purchase (the "PURCHASE OPTION PRICE") (which the
parties do not intend to be a "bargain" purchase price) of the Properties. If
Lessee exercises its option to purchase the Properties pursuant to this SECTION
20.1 (the "PURCHASE OPTION"), Lessor shall transfer to Lessee or Lessee's
designee all of Lessor's right, title and interest in and to the
34
Properties as of the date specified in the Purchase Notice upon receipt of the
Purchase Option Price and all Rent and other amounts then due and payable under
this Lease and any other Operative Agreement, in accordance with SECTION 19.1.
20.2 MATURITY DATE PURCHASE OPTION. Not less than 180 days prior to the
Maturity Date, Lessee may give Lessor and Agent irrevocable written notice (the
"MATURITY DATE ELECTION NOTICE") that Lessee is electing to exercise the
Maturity Date Purchase Option or its option to have the Properties remarketed
pursuant to SECTION 21.1. If Lessee does not give a Maturity Date Election
Notice on or before the date 180 days prior to the Maturity Date, then Lessee
shall be deemed to have exercised its Maturity Date Purchase Option. If Lessee
has elected, or is deemed to have elected, to exercise the Maturity Date
Purchase Option, then on the Maturity Date Lessee shall pay to Lessor an amount
equal to the Purchase Option Price plus any Supplemental Rent due and owing on
such date of purchase (offsetting, at the option of Lessor, against such amount
the aggregate amount of the Pledged Collateral) (which the parties do not intend
to be a "bargain" purchase price) and, upon receipt of such amount plus all Rent
and other amounts then due and payable under this Lease and any other Operative
Agreement, Lessor shall transfer to Lessee or Lessee's designee all of Lessor's
and the Lessors' right, title and interest in and to the Properties in
accordance with SECTION 19.1.
20.3 EXTENSION OF EXPIRATION DATE. Lessee may request an extension of
the Expiration Date and the Maturity Date subject to, and in accordance with,
the terms and conditions of Section 14 of the Participation Agreement.
ARTICLE XXI
21.1 SALE PROCEDURE.
(a) (i) Provided that no Default attributable to Lessee or Lease
Event of Default shall have occurred and be continuing, at the expiration of the
Term, unless Lessee shall have (A) elected to extend the Expiration Date and the
Expiration Date shall have been so extended, (B) elected (or be deemed to have
elected) to purchase the Properties or (C) otherwise terminated this Lease with
respect thereto and paid the Lease Balance, Lessee may, upon no less than 180
days and no more than 270 days written notice to the Participants, elect to have
the Properties remarketed, and (ii) if Lessee elects to have the Properties
remarketed Lessee shall (x) pay to Lessor the Maximum Residual Guarantee Amount
or Permitted Lease Investment Balance, as the case may be, for the Properties
(offsetting, at the option of Lessor, against such amount the aggregate amount
of the Pledged Collateral), and (y) sell the Properties to one or more third
parties for cash in accordance with SECTION 21.1(B).
(b) During the Marketing Period, if Lessee elects to have the
Properties remarketed pursuant to this Section or is required to remarket the
Properties pursuant to Sections 4.2 or 5.5 of the Construction Agency Agreement
or SECTION 16.1 or 17.2, Lessor shall either remarket the Properties itself or
direct Lessee to conduct the remarketing. If Lessor so directs, Lessee, as
nonexclusive agent for Lessor, shall use its best efforts to obtain bids for the
cash purchase of the Properties for the highest price available in the relevant
market, shall notify Lessor promptly of the name and address of each prospective
purchaser and the cash price which each prospective purchaser shall have offered
to pay for any Property and shall provide Lessor
35
with such additional information about the bids and the bid solicitation
procedure as Lessor may request from time to time. Lessor may reject any and all
bids and may assume sole responsibility for obtaining bids and conducting the
remarketing by giving Lessee written notice to that effect; provided, however,
that notwithstanding the foregoing, Lessor may not reject a bid if such bid is
greater than or equal to the difference between (i) the Lease Balance and (ii)
the Maximum Residual Guarantee Amount or Permitted Lease Investment Balance, if
any, as the case may be, paid by the Lessee and all costs and expenses of sale
(including, if applicable, the Lessor Remarketing Fee) (such amount, the
"MINIMUM BID AMOUNT"), and is a bona fide offer by a third party purchaser who
is not an Affiliate of Lessee. If the price which a prospective purchaser shall
have offered to pay for all or any of the Properties is less than the Minimum
Bid Amount, or if no bid is received, Lessor may elect to retain the Properties
or any of them after the end of the Marketing Period by giving Lessee at least
two Business Days' prior written notice of Lessor's election to retain the
Properties or any of them, and upon receipt of such notice, Lessee shall
surrender such Properties to Lessor pursuant to Section 10.1(c). Unless Lessor
shall have elected to retain the Properties or any of them pursuant to the
preceding sentence, Lessor shall sell the Properties free of any Lessor Liens
attributable to it, without recourse or warranty, for cash to the purchaser or
purchasers identified by Lessee or Lessor, as the case may be, and Lessee shall
surrender the Properties to such purchaser in the condition specified in SECTION
10.1.
(c) On the date during the Marketing Period on which the Properties
are sold pursuant to SECTION 21.1(B), or on the Maturity Date if the Properties
remain unsold, Lessee shall pay to Lessor the Maximum Residual Guarantee Amount
or Permitted Lease Investment Balance, as the case may be, for the Properties
(offsetting, at the option of Lessor, against such amount the aggregate amount
of the Pledged Collateral) plus all accrued and unpaid Capitalized Interest,
Capitalized Holder Yield and Basic Rent plus any Supplemental Rent due and owing
on such date of purchase or payment.
21.2 APPLICATION OF PROCEEDS OF SALE. Lessor shall apply the proceeds of
sale of the Properties pursuant to the provisions of the Participation
Agreement.
21.3 INDEMNITY FOR EXCESSIVE WEAR. If the proceeds of the sale described
in SECTION 21.1(B) with respect to the Properties, less all expenses incurred by
Lessor in connection with such sale, shall be less than the Limited Recourse
Amount for the Properties at the time of such sale and if it shall have been
determined (pursuant to the Appraisal Procedure) that the Fair Market Sales
Value of the Properties or any of them shall have been impaired by greater than
expected wear and tear during the Term, Lessee shall pay to Lessor within ten
(10) days after receipt of Lessor's written statement (i) the amount of such
excess wear and tear determined by the Appraisal Procedure or (ii) the amount of
the Net Sale Proceeds Shortfall, whichever amount is less.
21.4 APPRAISAL PROCEDURE. For determining the Fair Market Sales Value of
the Properties or any other amount which may, pursuant to any provision of any
Operative Agreement, be determined by an appraisal procedure, Lessor and Lessee
shall use the following procedure (the "APPRAISAL PROCEDURE"). Lessor and Lessee
shall endeavor to reach a mutual agreement as to such amount for a period of ten
(10) days from commencement of the Appraisal Procedure, and if they cannot agree
within ten (10) days, then two qualified appraisers, one chosen by Lessee and
one chosen by Lessor, shall mutually agree thereupon, but if either party
36
shall fail to choose an appraiser within twenty (20) days after notice from the
other party of the selection of its appraiser, then the appraisal by such
appointed appraiser shall be binding on Lessee and Lessor. If the two appraisers
cannot agree within twenty (20) days after both shall have been appointed, then
a third appraiser shall be selected by the two appraisers or, failing agreement
as to such third appraiser within thirty (30) days after both shall have been
appointed, by the American Arbitration Association. The decisions of the three
appraisers shall be given within twenty (20) days of the appointment of the
third appraiser and the decision of the appraiser most different from the
average of the other two shall be discarded and such average shall be binding on
Lessor and Lessee; provided that if the highest appraisal and the lowest
appraisal are equidistant from the third appraisal, the third appraisal shall be
binding on Lessor and Lessee. The fees and expenses of all of the appraisers
shall be paid by Lessee.
21.5 CERTAIN OBLIGATIONS CONTINUE. During the Marketing Period, the
obligation of Lessee to pay Rent with respect to the Properties (including the
installment of Basic Rent due on the Maturity Date) shall continue undiminished
until payment in full to Lessor of the sale proceeds, the Maximum Residual
Guarantee Amount, if any, the amount due under SECTION 21.3, if any, and all
other amounts due to Lessor with respect to the Properties. Lessor shall have
the right, but shall be under no duty, to solicit bids, to inquire into the
efforts of Lessee to obtain bids or otherwise to take action in connection with
any such sale, other than as expressly provided in this Article XXI.
ARTICLE XXII
22.1 HOLDING OVER. If Lessee shall for any reason remain in possession
of the Properties or any of them after the expiration or earlier termination of
this Lease (unless such Property is conveyed to Lessee), such possession shall
be as a tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at an annual rate equal to two hundred percent (200%) of the
Basic Rent payable hereunder immediately preceding such expiration or earlier
termination. Such Basic Rent shall be payable from time to time upon demand by
Lessor. During any period of tenancy at sufferance, Lessee shall, subject to the
second preceding sentence, be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights to possession
hereunder other than the right, to the extent given by law to tenants at
sufferance, to continue its occupancy and use of the Properties. Nothing
contained in this ARTICLE XXII shall constitute the consent, express or implied,
of Lessor to the holding over of Lessee after the expiration or earlier
termination of this Lease as to the Properties and nothing contained herein
shall be read or construed as preventing Lessor from maintaining a suit for
possession of the Properties or exercising any other remedy available to Lessor
at law or in equity.
ARTICLE XXIII
23.1 RISK OF LOSS. During the Term, the risk of loss of or decrease in
the enjoyment and beneficial use of the Properties as a result of the damage or
destruction thereof by Casualty, Condemnation, Environmental Violations or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor. During the Construction Period, the risk of loss
37
of or decrease in the enjoyment and beneficial use of the Properties as a result
of the damage or destruction thereof by Casualty, Condemnation, Environmental
Violations or otherwise shall be assumed by the Lessee to the extent provided in
Articles XV and XVI.
ARTICLE XXIV
24.1 SUBLETTING AND ASSIGNMENT. Lessee may not assign this Lease or any
of its rights or obligations hereunder in whole or in part without Lessor's
prior written consent, which consent may be withheld in its sole discretion.
Lessee may, without the consent of Lessor, sublease the Properties or a portion
thereof to any Person. No sublease or other relinquishment of possession of the
Properties or any portion thereof shall in any way discharge or diminish any of
Lessee's obligations to Lessor hereunder and Lessee shall remain directly and
primarily liable under this Lease as to the Properties, or any portion thereof,
so sublet. Any sublease of the Properties or any portion thereof shall be made
expressly subject to and subordinate to this Lease and to the rights of Lessor
hereunder, shall be terminable upon any termination of this Lease unless the
Lessee shall have purchased such Property pursuant to ARTICLE XX and shall
expressly provide for the surrender of such Property after a Lease Event of
Default.
24.2 SUBLEASES. Promptly following the execution and delivery of any
sublease permitted by this Article XXIV, Lessee shall deliver a copy of such
executed sublease to Lessor and Agent.
ARTICLE XXV
25.1 ESTOPPEL CERTIFICATES. At any time and from time to time upon not
less than twenty (20) days' prior request by Lessor, Lessee shall furnish to
Lessor a certificate signed by an individual having the office of vice president
or higher in Lessee certifying that this Lease is in full force and effect (or
that this Lease is in full force and effect as modified and setting forth the
modifications); the dates to which the Basic Rent and Supplemental Rent have
been paid; to the best knowledge of the signer of such certificate, whether or
not Lessor is in default under any of its obligations hereunder (and, if so, the
nature of such alleged default); and such other matters under this Lease as
Lessor may reasonably request. Any such certificate furnished pursuant to this
ARTICLE XXV may be relied upon by Lessor, and any existing or prospective
mortgagee, purchaser or lender, and any accountant or auditor, of, from or to
Lessor (or any Affiliate thereof).
ARTICLE XXVI
26.1 NO WAIVER. No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
38
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER. Except as otherwise expressly provided in
this Lease, no surrender to Lessor of this Lease or of all or any portion of the
Properties or of any interest therein shall be valid or effective unless agreed
to and accepted in writing by Lessor and, prior to the payment or performance of
all obligations under the Credit Documents, Agent, and no act by Lessor or Agent
or any representative or agent of Lessor or Agent, other than a written
acceptance, shall constitute an acceptance of any such surrender.
ARTICLE XXVIII
28.1 NO MERGER OF TITLE. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, or (b) the fee estate in any Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
appropriate Person.
ARTICLE XXIX
29.1 NOTICES. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by nationally recognized courier service and
any such notice shall become effective one Business Day after delivery to such
nationally recognized courier service specifying overnight delivery and shall be
directed to the address of such Person as indicated:
IF TO THE LESSEE, TO IT AT:
Symantec Corporation
00000 Xxxxxxx Xxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attention: Treasury
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
Pillsbury Winthrop LLP
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
39
IF TO THE LESSOR, TO IT AT:
The Symantec 2001 Trust
c/o Wilmington Trust FSB
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxxxx 000 X
Xxx Xxxxx, XX 00000
Attention: Corporate Trust Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH COPIES TO:
The Bank of Nova Scotia
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Scotiabanc Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such additional parties and/or other addresses as any such Person
may hereafter designate.
ARTICLE XXX
30.1 MISCELLANEOUS. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any term or
provision of this Lease or any application thereof shall be declared invalid or
unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby. If any right or option of
Lessee provided in this Lease, including any right or option described in
ARTICLES XV, XVI, XX or XXI, would, in the absence of the
40
limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule of law relating to
the vesting of an interest in or the suspension of the power of alienation of
property, then such right or option shall be exercisable only during the period
which shall end twenty-one (21) years after the date of death of the last
survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx, the former President of
the United States, Xxxxx Xxxx, the deceased automobile manufacturer, and Xxxx X.
Xxxxxxxxxxx, the founder of the Standard Oil Company, alive on the date of the
execution and delivery of this Lease.
30.2 AMENDMENTS AND MODIFICATIONS. Neither this Lease nor any provision
hereof may be amended, waived, discharged or terminated except by an instrument
in writing signed by Lessor and Lessee.
30.3 SUCCESSORS AND ASSIGNS. All the terms and provisions of this Lease
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
30.4 HEADINGS AND TABLE OF CONTENTS. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
30.5 COUNTERPARTS. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
30.6 GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN, AND SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE, WITHOUT REGARD TO RULES RELATING TO CONFLICTS OF LAW (OTHER THAN
GENERAL OBLIGATIONS LAW SECTION 5-1401), EXCEPT AS TO MATTERS RELATING TO THE
CREATION, PERFECTION AND ENFORCEMENT OF LIENS AND SECURITY INTERESTS AND THE
EXERCISE OF REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH A GIVEN PROPERTY IS
LOCATED.
30.7 LIMITATIONS ON RECOURSE.
(a) Except as expressly set forth in the Operative Agreements,
Lessee agrees to look solely to Lessor's estate and interest in the Properties,
the proceeds of sale thereof, any insurance proceeds or any other award or any
third party proceeds received by Lessor in connection with the Properties for
the collection of any judgment requiring the payment of money by Lessor in the
event of liability by Lessor, and no other property or assets of Lessor, the
Lenders or any shareholder, owner or partner (direct or indirect) thereof, or
any director, officer, employee, beneficiary, Affiliate of any of the foregoing
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Lessee's remedies under or with respect to this Lease, the
relationship of Lessor and Lessee hereunder or Lessee's use of the Properties or
any other liability of Lessor to Lessee; provided that nothing in this Section
shall be construed to
41
impair or limit the rights of Lessee against Lessor under the Operative
Agreements. Nothing in this Section shall be interpreted so as to limit the
terms of SECTION 6.1 or 6.2.
(b) It is expressly understood and agreed by the parties hereto
that (i) this Lease is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as trustee of the Lessor in the exercise
of the powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements herein made on the part of the
Lessor is made and intended not as personal representations, undertakings and
agreements by the Trust Company but is made and intended for the purpose of
binding only the Lessor, (iii) nothing herein contained shall be construed as
creating any liability on the Trust Company, individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (iv) under no
circumstances shall the Trust Company be personally liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Lessor under this Lease or any other related documents.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS. This Lease shall not be
recorded; provided, however, Lessor and Lessee shall promptly record a
Memorandum of Lease (in substantially the form of EXHIBIT B) or a short form
lease (in form and substance reasonably satisfactory to Lessor) regarding each
Property, promptly after the acquisition thereof, in the local filing office
with respect thereto, in all cases at Lessee's cost and expense, and as required
under applicable law to sufficiently evidence this Lease and any such Lease
Supplement in the applicable real estate filing records. Lessor (at the
direction of the Agent) shall elect whether the costs and expenses incurred by
Lessor and/or the Agent respecting the recordation of the above-referenced items
shall be paid by either (i) Lessor (but only the extent amounts are available
therefor with respect to the Available Commitments and the Available Lessor
Commitments or each Lender and each Lessor approves the necessary increases in
the Available Commitments and the Available Lessor Commitments to fund such
costs and expenses) or (ii) Lessee; provided, however, that amounts funded by
the Lenders and the Lessors with respect to such costs and expenses shall be
added to the Project Costs of each applicable Property; and provided, further,
that amounts funded by Lessee with respect to such costs and expenses shall be a
part of (and limited by) the Maximum Residual Guarantee Amount.
[The signature page follows.]
42
IN WITNESS WHEREOF, the parties have caused this Lease be duly executed
and delivered as of the date first above written.
LESSEE: SYMANTEC CORPORATION
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LESSOR: THE SYMANTEC 2001 TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as trustee
By:___________________________________________
Name:_________________________________________
Title:________________________________________
43
EXHIBIT A
LEASE SUPPLEMENT
[LAND] [IMPROVEMENTS]
LEASE SUPPLEMENT NO. __
THIS LEASE SUPPLEMENT [LAND] [IMPROVEMENTS] NO. __ (this "LEASE SUPPLEMENT")
dated as of ___________, 200__, between THE SYMANTEC 2001 TRUST, as lessor (the
"LESSOR"), and SYMANTEC CORPORATION, a Delaware corporation, as lessee (the
"LESSEE").
WHEREAS, Lessor is the owner or will be the owner of the [PROPERTY] [LAND]
[IMPROVEMENTS] described on SCHEDULE 1 (the "LEASED PROPERTY") and wishes to
lease the same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease Supplement,
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in Annex A to the Participation Agreement dated as of
March 30, 2001.
SECTION 2. THE PROPERTIES. Attached as SCHEDULE 1 is the description of the
Property, with an Equipment Schedule attached as SCHEDULE 1-A, an Improvement
Schedule attached as SCHEDULE 1-B and a legal description of the Land attached
as SCHEDULE 1-C. Effective upon the execution and delivery of this Lease
Supplement by Lessor and Lessee, the Property shall be subject to the terms and
provisions of the Lease. Without further action, any and all additional
Equipment funded under the Operative Agreements and any and all additional
Improvements made to the Land shall be deemed to be titled to the Lessor and
subject to the terms and conditions of the Lease and this Lease Supplement.
This Lease Supplement shall constitute a mortgage, deed of trust, security
agreement and financing statement under the laws of the state in which the
Property is situated. The maturity date of the obligations secured hereby shall
be ______________ unless extended to not later than ________________.
For purposes of provisions of the Lease and this Lease Supplement related to the
creation and enforcement of the Lease and this Lease Supplement as a security
agreement and a fixture filing, Lessee is the debtor and Lessor is the secured
party. The mailing addresses of the debtor (Lessee herein) and of the secured
party (Lessor herein) from which information concerning security interests
hereunder may be obtained are set forth on the signature pages hereto. A carbon,
photographic or other reproduction of the Lease and this Lease Supplement or of
any financing statement related to the Lease and this Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.
SECTION 3. ALLOCATIONS. The Maximum Residual Percentage for [THIS PROPERTY IS
_________ PERCENT (__%)] [THE LAND IS ONE HUNDRED PERCENT (100%)] [THE
IMPROVEMENTS IS
A-1.
44
______________ PERCENT (___%)]. The [LAND INVESTMENT BALANCE] [IMPROVEMENTS
INVESTMENTS BALANCE] is $_____________.
SECTION 4. USE OF PROPERTY. At all times during the Term with respect to the
Property, Lessee will comply with all obligations under and (to the extent no
Lease Event of Default exists and provided that such exercise will not impair
the value of such Property) shall be permitted to exercise all rights and
remedies under, all operation and easement agreements and related or similar
agreements applicable to the Property.
SECTION 5. RATIFICATION; INCORPORATION BY REFERENCE. Except as specifically
modified hereby, the terms and provisions of the Lease and the Operative
Agreements are hereby ratified and confirmed and remain in full force and
effect. The Lease is hereby incorporated herein by reference as though restated
herein in its entirety.
SECTION 6. ORIGINAL LEASE SUPPLEMENT. The single executed original of this Lease
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Agent therefor on or
following the signature page thereof shall be the original executed counterpart
of this Lease Supplement (the "ORIGINAL EXECUTED COUNTERPART"). To the extent
that this Lease Supplement constitutes chattel paper, as such term is defined in
the Uniform Commercial Code as in effect in any applicable jurisdiction, no
security interest in this Lease Supplement may be created through the transfer
or possession of any counterpart other than the Original Executed Counterpart.
SECTION 7. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY
IS LOCATED ARE REQUIRED TO APPLY (INCLUDING MATTERS RELATING TO THE CREATION,
PERFECTION AND ENFORCEMENT OF LIENS AND SECURITY INTERESTS AND TO THE EXERCISE
OF REMEDIES), IN WHICH EVENT THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE APPLICABLE
PROPERTY IS LOCATED.
SECTION 8. GRANT OF MORTGAGE LIEN AND SECURITY INTEREST; ASSIGNMENT OF RENTS. To
secure to the Lessor the payment of all amounts owed to Lessor by Lessee under
the Lease and the other Operative Agreements, and without limiting any other
remedies set forth in the Lease, Lessee and Lessor agree as follows:
(a) In the event that a court of competent jurisdiction rules that
the Lease constitutes a mortgage, deed of trust or other secured financing as is
the intent of the parties, then Lessor and Lessee agree that Lessee has caused
Lessor to hold title to the Property and Lessee does hereby mortgage, grant,
bargain, sell, convey, assign, transfer and set over to the Lessor, WITH POWER
OF SALE, to the extent permitted by applicable law: (i) all of the Lessee's
right, title and interest in the Property, if any; (ii) all rights and benefits
of whatever nature derived or to be derived by the Lessee under or by virtue of
the Lease; and (iii) all of the Lessee's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary, of any of the
above-described property into cash or other liquid claims, including all awards,
payments or
A-2.
45
proceeds, including interest thereon, and the right to receive the same, which
may be made as a result of casualty, any exercise of the right of eminent domain
or deed in lieu thereof, the alteration of the grade of any street and any
injury to or decrease in the value thereof, the foregoing being referred to
hereinafter as the "SECURITY PROPERTY."
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Exceptions, unto the Lessor, its successors and assigns IN TRUST,
forever, for the uses and purposes herein expressed, but not otherwise.
(b) Subject to the terms and conditions of the Lease as supplemented
by this Lease Supplement (including the Lessee's rights hereunder and thereunder
so long as no Lease Event of Default has occurred and is continuing), the Lessee
hereby grants to the Lessor a security interest in that portion of the Security
Property (the "UCC PROPERTY") subject to the Uniform Commercial Code of the
State in which the Security Property is located (the "UCC"). The Lease, as
supplemented by this Lease Supplement, shall also be deemed to be a security
agreement and shall support any financing statement showing the Lessor's
interest as a secured party with respect to any portion of the UCC Property
described in such financing statement. The Lessee agrees, at its sole cost and
expense, to execute, deliver and file from time to time such further instruments
as may be requested by the Lessor to confirm and perfect the lien of the
security interest in the collateral described in this Lease Supplement.
(c) The Lessee hereby irrevocably assigns, conveys, transfers and
sets over unto the Lessor (subject, however, to the Lease and the rights of the
Lessee thereunder and hereunder) all and every part of the rents, issues and
profits (collectively, the "PROFITS") that may from time to time become due and
payable on account of any and all subleases or other occupancy agreements now
existing, or that may hereafter come into existence with respect to the Property
or any part thereof, including any guaranties of such subleases or other
occupancy agreements (collectively, the "SUBLEASES"). Upon request of the
Lessor, the Lessee shall execute and cause to be recorded, at its expense,
supplemental or additional assignments of any Subleases of the Property. Upon
the occurrence and during the continuance of a Lease Event of Default and
subject to the provisions of subsection 5(d), the Lessor is hereby fully
authorized and empowered in its discretion (in addition to all other powers and
rights herein granted), and subject to the Lease and the rights of the Lessee
thereunder and hereunder, to apply for and collect and receive all such Profits
and enforce such guaranty or guaranties, and all money so received under and by
virtue of this assignment shall be held and applied as further security for the
payment of the loan(s) secured hereby.
(d) Notwithstanding that this Lease Supplement is an absolute
assignment of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in the Profits and
the Subleases, Lessor grants to Lessee a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits. Such license
shall be automatically revoked upon the occurrence and during the continuance of
any Lease Event of Default.
[Revise as needed in accordance with the law of each applicable jurisdiction.]
SECTION 9. COUNTERPART EXECUTION. This Lease Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts
A-3.
46
together constituting but one (1) and the same instrument. For purposes of the
provisions of this Lease Supplement concerning this Lease Supplement
constituting a security agreement and fixture filing, the addresses of the
debtor (Lessee herein) and the secured party (Lessor herein), from whom
information may be obtained about this Lease Supplement, are as set forth on the
signature pages hereto.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
A-4.
47
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
LESSOR:
THE SYMANTEC 2001 TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as trustee
By:______________________________________
Name:____________________________________
Title:___________________________________
Attn:____________________________________
LESSEE:
SYMANTEC CORPORATION, a Delaware
corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
Attn:____________________________________
[LEASE SUPPLEMENT NO. ___]
A-5.
48
SCHEDULE 1
TO LEASE SUPPLEMENT NO. __
(Description of the Property)
A-6.
49
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. __
(Equipment)
A-7.
50
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. __
(Improvements)
A-8.
51
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. __
(Legal Description)
A-9.
52
EXHIBIT B
[MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
NECESSARY FOR LOCAL LAW REQUIREMENTS]
Recordation requested by:
After recordation return to:
Space above this line
for Recorder's use
--------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT
AND
LEASE SUPPLEMENT [LAND] [IMPROVEMENTS] NO. ____
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT [LAND]
[IMPROVEMENTS] NO. ____ ("MEMORANDUM"), dated as of _____________, 2001 is by
and between THE SYMANTEC 2001 TRUST, as Lessor (the "LESSOR") and SYMANTEC
CORPORATION, a Delaware corporation, as lessee (the "LESSEE").
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise and agree
as follows:
1. DEMISED PREMISES AND DATE OF LEASE. Lessor has leased to Lessee, and
Lessee has leased from Lessor, for the Term (as hereinafter defined), [certain
real property and other property located in _____________, which real property
is described on SCHEDULE 1 (the "PROPERTY"), pursuant to the terms of a Lease
between Lessor and Lessee dated as of _______________ (as such may be amended,
modified, extended, supplemented, restated and/or replaced from time to time,
"LEASE") and a Lease Supplement No. ____ between Lessor and Lessee dated as of
______________ (the "LEASE SUPPLEMENT") (said Lease to cover only the Land not
the Improvements)] [certain Improvements and other property located on that
certain real property located in ___________, which real property is described
on SCHEDULE 1 (the "PROPERTY"), pursuant to the terms of a Lease between Lessor
and Lessee dated as of ___________ (as such may be amended, modified, extended,
supplemented, restated and/or replaced from time to time, "LEASE") and a Lease
Supplement No. __ between Lessor and Lessee dated as of ____________________
(the "LEASE SUPPLEMENT") (said Lease to cover only the Improvements and not the
Land)].
The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is
B-1.
53
situated. The maturity date of the obligations secured thereby shall be
___________, unless extended to not later than ___________.
For purposes of provisions of the Lease and the Lease Supplement related
to the creation and enforcement of the Lease and the Lease Supplement as a
security agreement and a fixture filing, Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor (Lessee herein) and of the
secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are as set forth on the signature pages
hereof. A carbon, photographic or other reproduction of this Memorandum or of
any financing statement related to the Lease and the Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.
2. TERM, RENEWAL, EXTENSION AND PURCHASE OPTION. The term of the Lease
for the Property ("TERM") commenced as of __________, 200_and shall end as of
_________, 200_, unless the Term is extended or earlier terminated in accordance
with the provisions of the Lease. The Lease contains provisions for renewal and
extension. The tenant has a purchase option under the Lease.
3. TAX PAYER NUMBERS.
Lessor's tax payer number is ____________________.
Lessee's tax payer number is ____________________.
4. GRANT OF MORTGAGE LIEN AND SECURITY INTEREST; ASSIGNMENT OF RENTS. To
secure to the Lessor the payment of all amounts owed to Lessor by Lessee under
the Lease and the other Operative Agreements, and without limiting any other
remedies set forth in the Lease, Lessee and Lessor agree as follows:
(a) In the event that a court of competent jurisdiction rules that
the Lease constitutes a mortgage, deed of trust or other secured financing as is
the intent of the parties, then Lessor and Lessee agree that Lessee has caused
Lessor to hold title to the Property and Lessee does hereby mortgage, grant,
bargain, sell, convey, assign, transfer and set over to the Lessor, WITH POWER
OF SALE, to the extent permitted by applicable law: (i) all of the Lessee's
right, title and interest in the Property, if any; (ii) all rights and benefits
of whatever nature derived or to be derived by the Lessee under or by virtue of
the Lease; and (iii) all of the Lessee's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary, of any of the
above-described property into cash or other liquid claims, including all awards,
payments or proceeds, including interest thereon, and the right to receive the
same, which may be made as a result of casualty, any exercise of the right of
eminent domain or deed in lieu thereof, the alteration of the grade of any
street and any injury to or decrease in the value thereof, the foregoing being
referred to hereinafter as the "SECURITY PROPERTY."
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Exceptions, unto the Lessor, its successors and assigns IN TRUST,
forever, for the uses and purposes herein expressed, but not otherwise.
B-2.
54
(b) Subject to the terms and conditions of the Lease as supplemented
by this Memorandum of Lease (including the Lessee's rights hereunder and
thereunder so long as no Lease Event of Default has occurred and is continuing),
the Lessee hereby grants to the Lessor a security interest in that portion of
the Security Property (the "UCC PROPERTY") subject to the Uniform Commercial
Code of the State in which the Security Property is located (the "UCC"). The
Lease, as supplemented by this Memorandum of Lease, shall also be deemed to be a
security agreement and shall support any financing statement showing the
Lessor's interest as a secured party with respect to any portion of the UCC
Property described in such financing statement. The Lessee agrees, at its sole
cost and expense, to execute, deliver and file from time to time such further
instruments as may be requested by the Lessor to confirm and perfect the lien of
the security interest in the collateral described in this Memorandum of Lease.
(c) The Lessee hereby irrevocably assigns, conveys, transfers and
sets over unto the Lessor (subject, however, to the Lease and the rights of the
Lessee thereunder and hereunder) all and every part of the rents, issues and
profits (collectively, the "PROFITS") that may from time to time become due and
payable on account of any and all subleases or other occupancy agreements now
existing, or that may hereafter come into existence with respect to the Property
or any part thereof, including any guaranties of such subleases or other
occupancy agreements (collectively, the "SUBLEASES"). Upon request of the
Lessor, the Lessee shall execute and cause to be recorded, at its expense,
supplemental or additional assignments of any Subleases of the Property. Upon
the occurrence and during the continuance of a Lease Event of Default and
subject to the provisions of subsection 5(d), the Lessor is hereby fully
authorized and empowered in its discretion (in addition to all other powers and
rights herein granted), and subject to the Lease and the rights of the Lessee
thereunder and hereunder, to apply for and collect and receive all such Profits
and enforce such guaranty or guaranties, and all money so received under and by
virtue of this assignment shall be held and applied as further security for the
payment of the loan(s) secured hereby.
(d) Notwithstanding that this Memorandum of Lease is an absolute
assignment of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in the Profits and
the Subleases, Lessor grants to Lessee a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits. Such license
shall be automatically revoked upon the occurrence and during the continuance of
any Lease Event of Default.
5. LESSOR GRANT.
(a) The Lessor hereby grants a Lien, against all of the Lessor's
right, title and interest in and to the Property and all rents, additional
rents, issues, income, revenues, distributions, royalties and profits now or in
the future payable in respect of the Property to the Lessee to secure (i) the
Lessor's obligations hereunder in respect of the due and punctual transfer by
the Lessor to the Lessee of all of the Lessor's right, title and interest in and
to the Property when required by and in accordance with the Lease, and (ii) if
the Lessor shall then be the subject of any bankruptcy, insolvency or similar
proceeding, the satisfaction of the Lessee's right to damages and other claims
arising out of the rejection of the Lease or unilateral termination of such
obligation to transfer to the Lessee all of the Lessor's right, title and
interest in and to the Property.
B-3.
55
(b) During the existence of a Lessor Default (as defined below), the
Lessee shall have the power and authority, to the extent provided by law, to
exercise any or all of the rights and powers and pursue any and all of the
remedies provided under the Operative Agreements or by Law in respect of the
obligations secured in accordance with SECTION 5(A) (including specific
performance of any covenant or agreement contained in the Lease or any other
Related Document, in aid of the execution of any power granted in the Lease or
any other Related Document, or for the enforcement of any other appropriate
legal or equitable remedy). The Lessor shall have all the rights available to a
mortgagor under the laws of the jurisdiction in which the Property is located.
The following shall constitute a Lessor default ("LESSOR DEFAULT"): the Lessee
shall have exercised any of its purchase options in the Lease for all or any
portion of the Property in accordance with the terms thereof and shall have
tendered in full all amounts to be paid by the Lessee in connection therewith
and complied with all other requirements under the Lease in connection with such
purchase and all of the Lessor's right, title and interest in and to the
Property shall not have been transferred to the Lessee in accordance with the
Lease.
(c) The Lien created in SECTION 5(A) shall automatically terminate
and be deemed released without further act or consideration upon (i)
commencement by the Lessor of the exercise of any remedy in respect of any
Property pursuant to Article 17 of the Lease, (ii) the occurrence of a Lease
Event of Default, or (iii) a breach by the Lessee of the covenant in SECTION
5(D).
(d) Lessee covenants and agrees that it will not assign, transfer,
mortgage, pledge, hypothecate, or encumber the Lien created in SECTION 5(A),
except pursuant to a Permitted Acquisition. Any such attempted assignment,
transfer, mortgage, pledge, hypothecation, or encumbrance in violation of this
SECTION 5(D) shall be null and void.
6. EFFECT OF MEMORANDUM. The purpose of this instrument is to give
notice of the Lease and the Lease Supplement and their respective terms,
covenants and conditions to the same extent as if the Lease and the Lease
Supplement were fully set forth herein. This Memorandum shall not modify in any
manner the terms, conditions or intent of the Lease or the Lease Supplement and
the parties agree that this Memorandum is not intended nor shall it be used to
interpret the Lease or the Lease Supplement or determine the intent of the
parties under the Lease or the Lease Supplement. For purposes of this
Memorandum, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Annex A to the Participation Agreement
dated as of March 30, 2001.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
B-4.
56
IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument as of the day and year first written.
LESSOR:
THE SYMANTEC 2001 TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as trustee
By:_______________________________________
Name:_____________________________________
Title:____________________________________
LESSEE:
SYMANTEC CORPORATION
By:_______________________________________
Name:_____________________________________
Title:____________________________________
[MEMORANDUM OF LEASE AND LEASE SUPPLEMENT NO.____]
B-5.
57
SCHEDULE 1
(Description of Property)
B-6.
58
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF ____________________)
) SS:
COUNTY OF ___________________)
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by
______________________, as __________________ of _______________, a Delaware
banking corporation, not individually, but solely as the Trustee under The
Symantec 2001 Trust.
[Notarial Seal] ______________________________
Notary Public
My commission expires:____________
STATE OF ____________________)
) SS:
COUNTY OF ___________________)
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this ____ day of _____________, by_______________________,
as __________________ of _______________, a Delaware corporation, on behalf of
the corporation.
[Notarial Seal] ______________________________
Notary Public
My commission expires:____________
B-7.
