THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
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AGREEMENT FOR LEASE
between
Virtual Funding, Limited Partnership
and
Silicon Graphics Real Estate, Inc.
Dated as of November 18, 1993
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THIS AGREEMENT HAS BEEN ASSIGNED AS SECURITY
FOR INDEBTEDNESS OF THE OWNER. SEE SECTION 17.
This Agreement has been manually executed in 8 counterparts, numbered
consecutively from 1 through 8, of which this is No. ____. To the extent, if
any, that this Agreement constitutes chattel paper (as such term is defined in
the Uniform Commercial Code as in effect in any jurisdiction), no security
interest in this Agreement may be created or perfected through the transfer or
possession of any counterpart other than the original counterpart which shall
be the counterpart identified as counterpart No. 1.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
AGREEMENT FOR LEASE
Agreement for Lease dated as of November 18, 1993 (as the same may
be amended, restated, modified or supplemented from time to time, this
"Agreement"), between Virtual Funding, Limited Partnership, a Delaware limited
partnership ("Owner") and Silicon Graphics Real Estate, Inc., a Delaware
corporation ("Agent").
WHEREAS, Owner may from time to time acquire either (i) a fee
interest or (ii) a leasehold interest pursuant to a Ground Lease (hereinafter
defined) in certain Unit Premises (hereinafter defined); and
WHEREAS, Agent is an Affiliate (hereinafter defined) of the
Guarantor (hereinafter defined); and
WHEREAS, on or about the date of this Agreement Owner and Agent
propose to enter into a Lease (hereinafter defined), providing for the lease or
sublease by Agent of certain Unit Improvements (hereinafter defined) which will
be constructed and furnished on such Unit Premises pursuant to the terms of
this Agreement; and
WHEREAS, Owner desires to appoint Agent to act as agent for Owner in
connection with the selection of Owner's fee and/or leasehold interests in Unit
Premises from time to time, and with the construction of Unit Improvements and
the installation of Unit FF&E thereon, if any, and in connection with all
matters related to such construction, and Agent wishes to accept such
appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Owner and Agent hereby agree as follows:
1. DEFINITIONS
1 DEFINED TERMS. For the purposes of this Agreement each of the
following terms shall have the meaning specified with respect thereto:
ACCRUED DEFAULT OBLIGATIONS: Defined pursuant to subsection 11.2
hereof.
ACQUISITION CERTIFICATE: The written certification of Agent to be
delivered to Owner in connection with the making of the Initial Advance
hereunder, which contains the information and representations of Agent as
required by Section 4 of this Agreement, and which is substantially in the form
of Exhibit C hereto.
AFFILIATE: Defined pursuant to subsection 1.2 hereof.
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AFL UNIT LEASING RECORD: An instrument, substantially in the form
of Exhibit B hereto, evidencing the sublease of a Unit under the Lease, which
Unit is subject to a Ground Lease, or an instrument evidencing the lease of a
Unit under the Lease.
AGREEMENT: This Agreement for Lease, as the same may be amended,
restated, modified or supplemented from time to time.
ASSIGNEE: Defined pursuant to subsection 1.2 hereof.
ASSIGNMENT AND ASSUMPTION AGREEMENT: An agreement in the form
attached as Exhibit D to the Lease.
AVAILABLE COMMITMENT: At a particular time, an amount equal to the
excess of (a) the sum of (i) the aggregate commitment to lend under a Credit
Agreement or Credit Agreements and (ii) Owner's existing equity capital and
additional equity capital contributions which are in Owner's sole judgment then
available to Owner over (b) the sum of (i) the aggregate amount of all advances
theretofore made pursuant to Section 3 hereof with respect to Units subject to
this Agreement at such time, (ii) Financing Costs theretofore incurred by Owner
and not reimbursed by Agent with respect to Units subject to this Agreement at
such time, (iii) the aggregate Adjusted Acquisition Cost (as defined in the
Lease) of all Property and Equipment (as said terms are defined in the Lease)
leased under the Lease at such time and (iv) if Owner is financing any portion
of its debt capitalization with Commercial Paper, such amount as Owner and
Agent may agree to from time to time. For purposes of this definition of
Available Commitment, when a Unit is made subject to the Lease pursuant to the
terms of subsection 2.3 hereof, such Unit shall cease to be "subject to this
Agreement".
BUSINESS DAY: Defined pursuant to subsection 1.2 hereof.
CERTIFICATE OF INCREASED COST: The certificate delivered by Agent
to Owner pursuant to Section 7 hereof in connection with a request for a
Completion Advance, and which is substantially in the form of Exhibit F hereto.
CERTIFICATE OF SUBSTANTIAL COMPLETION: The certificate or
certificates delivered by Agent to Owner pursuant to Section 6 hereof in
connection with a request for a Final Advance, and which is substantially in
the form of Exhibit E hereto.
COMMERCIAL PAPER: Defined pursuant to subsection 1.2 hereof.
COMPLETION ADVANCE: Any advance made by Owner upon satisfaction of
the conditions set forth in Section 7 hereof.
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CONSTRUCTION AGREEMENT: Each agreement between Agent, acting on
behalf of Owner, and a General Contractor, providing for the construction of
Unit Improvements, as the same may be amended, restated, modified or
supplemented from time to time in accordance with this Agreement.
CONSTRUCTION DOCUMENTS: The collective reference to the
Construction Agreement(s), the Unit Plans, the Permits and all other agreements
entered into by Agent with respect to constructing, equipping, furnishing and
decorating the Unit.
CONSENT: Defined pursuant to subsection 1.2 hereof.
CONSOLIDATED TANGIBLE NET WORTH: The total shareholder equity of
Guarantor, less goodwill and any intangible assets (other than intangibles for
capitalized software, prepaid royalties, patents and other intellectual
property), all as determined on a consolidated basis in accordance with
generally accepted accounting principles.
CONTRACTUAL REQUIREMENTS: Defined pursuant to subsection 1.2 hereof.
CUSTOMARY GOVERNMENTAL ACTIONS: As defined in subsection 8.5 hereof.
CREDIT AGREEMENT: Defined pursuant to subsection 1.2 hereof.
DESIGN DEVELOPMENT DRAWINGS: Design development drawings with
respect to any Unit Improvements in such detail as is sufficient to (i)
establish the size, scope, character, use and nature of the proposed Unit
Improvements, (ii) reasonably enable Owner and any Assignee to formulate a
preliminary estimate of the fair market value of the proposed Unit Improvements
and (iii) obtain required planning and zoning approvals of the proposed Unit
Improvements for all applicable Governmental Authorities. Design Development
Drawings shall mean with respect to the North Shoreline Unit the design
development drawings approved in writing by Owner and any Assignee at the date
hereof.
DUFF & XXXXXX: Defined pursuant to subsection 1.2 hereof.
EFFECTIVE DATE: Defined pursuant to subsection 1.2 hereof.
EVENT OF DEFAULT: Any of the events specified in subsection 11.1
hereof; provided, that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
EVENT OF UNIT TERMINATION: Any of the events specified in
subsection 11.3 hereof.
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FF&E SPECIFICATIONS: The master list, if any, of furniture,
fixtures and equipment which may be acquired by Agent on behalf of Owner for
use in connection with the Unit Improvements (which list shall be specific with
respect to the kind, quality and quantities) appended hereto as Exhibit G, as
the same may be amended, modified, or supplemented from time to time with
Owner's prior written consent, which consent shall not be unreasonably withheld
or delayed.
FINAL ADVANCE: Any advance made by Owner upon satisfaction of the
conditions of Section 6 hereof.
FINANCING COSTS: All interest costs, other costs, fees and expenses
incurred by Owner under a Credit Agreement (including, without limitation,
interest at a default rate) and all costs incurred (i) in connection with
obtaining and maintaining equity financing, including, without limitation,
return on equity capital, (ii) in connection with the issuance of Commercial
Paper, including, without limitation, discount on Commercial Paper and (iii) in
connection with any other financing arrangement of Owner approved by Agent.
FORCE MAJEURE DELAY: Any delay caused by conditions beyond the
control of Agent, including, without limitation, acts of God or the elements,
fire, strikes, labor disputes, delays in delivery of material and disruption of
shipping, which does not have the effect of extending the Unit Completion Date
beyond one hundred and eighty (180) days in the aggregate.
GENERAL CONTRACTOR: Any contractor or contractors as may be engaged
by Agent from time to time as general contractor or construction manager in
connection with the construction of Unit Improvements.
GOVERNMENTAL ACTION: As defined in subsection 8.5 hereof.
GOVERNMENTAL AUTHORITY: Any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
GROUND LEASE: Each ground lease (which must be a Mortgageable
Ground Lease) pursuant to which a leasehold interest in a Unit Premises is
being leased to Owner.
GUARANTEE: The Guarantee, dated as of the date hereof, by and
between Guarantor and Owner, as it may be amended, restated, modified or
supplemented, from time to time.
GUARANTOR: Silicon Graphics, Inc., a Delaware corporation (an
Affiliate of Agent), and its successors.
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IMPLIED SENIOR DEBT RATING: Defined in subsection 1.2 hereof.
INDEMNIFIED PERSON: Any Person as defined in Section 12 hereof.
INITIAL ADVANCE: Any advance made by Owner upon satisfaction of the
conditions set forth in Section 4 hereof.
INSURANCE REQUIREMENTS: Defined pursuant to subsection 1.2 hereof.
INTERIM ADVANCE: Any advance made by Owner upon satisfaction of the
conditions set forth in Section 5 hereof.
INTERIM ADVANCE CERTIFICATE: The certificate delivered by Agent to
Owner pursuant to Section 5 hereof in connection with a request for an Interim
Advance, and which is substantially in the form of Exhibit D hereto.
LEASE: The Lease Agreement, dated as of the date hereof, by and
between Owner, as lessor or sublessor, and Agent, as lessee or sublessee, as
the case may be, as it may be amended, restated, modified or supplemented from
time to time, a copy of which is attached as Exhibit A hereto.
LEASE TERM: Defined pursuant to subsection 1.2 hereof.
LEGAL REQUIREMENTS: The term "Legal Requirements" shall have the
meaning set forth opposite such term in the Lease, except that the phrase "from
the date hereof through the term of this Agreement" shall substitute for the
phrase "from the date hereof through the Lease Term and any Renewal Term".
LIEN: Defined pursuant to subsection 1.2 hereof.
XXXXXXX: Xxxxxxx Xxxxx Money Markets Inc., a Delaware corporation.
XXXXXXX LEASING: ML Leasing Equipment Corp., a Delaware corporation.
XXXXXXX XXXXX: Xxxxxxx Xxxxx & Co., Inc., a Delaware corporation.
XXXXX'X: Defined pursuant to subsection 1.2 hereof.
MORTGAGEABLE GROUND LEASE: Defined pursuant to subsection 1.2
hereof.
THIS AGREEMENT FOR
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NAIC: Defined pursuant to subsection 1.2 hereof.
NORTH SHORELINE UNIT: The Unit located at 0000-0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx.
OWNER: Virtual Funding, Limited Partnership or any successor or
successors to all of its rights and obligations as Owner hereunder and, for
purposes of Section 12 hereof, shall include any Person or entity which
computes its liability for income or other taxes on a consolidated basis with
Virtual Funding, Limited Partnership or the income of which for purposes of
such taxes is, or may be, determined or affected directly or indirectly by the
income of Owner or its successor or successors.
PERMITS: All consents, licenses, building and operating permits
required for construction, completion, and operation of any Unit in accordance
with all Legal Requirements affecting such Unit.
PERMITTED CONTEST: Defined pursuant to paragraph (a) of Section 16
hereof.
PERMITTED LIENS: Defined pursuant to subsection 1.2 hereof.
PERSON: Defined pursuant to subsection 1.2 hereof.
POTENTIAL DEFAULT: Any event which, but for the lapse of time, or
giving of notice, or both, would constitute an Event of Default.
POTENTIAL EVENT OF UNIT TERMINATION: Any event which, but for the
lapse of time, or giving of notice, or both, would constitute an Event of Unit
Termination.
RESPONSIBLE OFFICER: The President, Vice President, Secretary or
Treasurer of the particular entity referenced, or any other officer or
similarly authorized person responsible for the administration of the
obligations of Agent, in the case of the Agent, or Guarantor, in the case of
Guarantor, with respect to this Agreement or the Guarantee, respectively.
S&P: Defined pursuant to subsection 1.2 hereof.
SUBSTANTIAL COMPLETION: With respect to any Unit, the satisfaction
of all requirements of Section 6 hereof.
TAKING: Any event which is described in paragraph (j) of subsection
11.3 hereof.
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TITLE COMPANY: Chicago Title Insurance Company, or such other title
insurance company as may be specifically approved by Owner in writing, together
with such reinsurers or coinsurers of such title company as may be approved by
Owner in writing.
UNIT: Any Unit Premises together with any Unit Improvements
constructed thereon and related Unit FF&E.
UNIT ACQUISITION COST: With respect to any Unit the sum of (a) the
aggregate amount of advances made pursuant to this Agreement with respect to
such Unit and (b) all other costs of Owner (including costs incurred by Agent
but reimbursed by Owner) with respect to the Unit (except costs which are not
properly capitalizable under generally accepted accounting practices, and
except costs which Owner is unable to finance under a Credit Agreement, all of
which will be reimbursed by Agent pursuant to the provisions of subsection 9.5
or Section 12 hereof) arising from the acquisition, construction, equipping,
and financing (including, without limitation, Financing Costs and Owner's
out-of-pocket expenses and fee obligations in connection therewith) prior to
the lease or sublease of the Unit under the Lease. All costs of Owner related
to this Agreement incurred during a calendar year which were not previously
allocated to a Unit and not reimbursed by Agent shall be allocated among Units
and Parcels of Property (as defined in the Lease) by Owner on or prior to
January 10th of the next succeeding year on a pro rata basis based upon the
Unit Acquisition Cost for all Units or Acquisition Cost (as defined in the
Lease) for all Parcels of Property with respect to which an Initial Advance was
made during such previous calendar year, and such allocation by Owner shall be
in Owner's sole judgment and shall be conclusive. Owner and Agent agree to
amend the AFL Unit Leasing Record for any Unit with respect to which a Final
Advance has been made to the extent required to reflect such allocation. Unit
Acquisition Cost shall not include Owner's rating agency fees, issuing and
paying agency fees and audit fees, which expenses shall be reimbursed by Agent
pursuant to subsection 9.5 hereof.
UNIT BUDGET: The budget to be prepared by Agent and delivered to
Owner prior to the Initial Advance with respect to any Unit, as the same may be
amended or modified from time to time (any such amendment which would result in
an increase in the aggregate Unit Budget being made only with the Owner and
Assignee's prior written consent), which budget may include costs relating to
such of the following as Agent deems to be appropriate: (a) the installation
of Unit FF&E, if any, thereon; (b) all costs, including, without limitation,
the purchase price, survey and survey inspection charges, appraisal,
architectural, engineering, environmental analysis, soil analysis and market
analysis fees, title insurance premiums, brokerage commissions, transfer fees
and taxes that are customarily the responsibility of the purchaser, closing
adjustments for taxes, utilities and the like, escrow and closing fees,
recording and filing fees, the legal fees of Owner and Agent, and all related
costs and expenses incurred in acquiring and maintaining marketable fee or
leasehold title to such Unit and in leasing or subleasing such Unit to Agent;
(c) the costs of completion of the Unit Improvements in
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conformity with the Unit Plans, the Construction Agreement or any contracts in
replacement thereof, including without limitation, costs of site preparation,
acquiring or granting easements necessary for completion of the Unit
Improvements, making utility connections, demolition, streets, parking areas,
landscaping, development, off-site improvements, design and related
construction of the Unit Improvements and related facilities and the costs of
necessary studies, surveys, plans and permits, insurance and examination and
incidental costs and expenses related thereto incurred in acquiring and
maintaining marketable fee or leasehold title to such Unit and in leasing or
subleasing such Unit and Unit FF&E to Agent; (d) the costs of architects',
attorneys', engineers' and other professionals' fees and disbursements, in
connection with the development, planning, renovation, construction, and
construction financing of the Unit Improvements, including, without limitation,
the fees and disbursements of Owner's counsel in connection with this Agreement
and the duties of Owner hereunder, the Construction Agreement, and in all other
matters involving or reasonably related to this transaction; (e) costs of all
charges and assessments for the construction, improvement, maintenance, repair
and restoration of streets, roads, walks, sewer, gas, electrical, telephone and
water lines and other improvements levied upon the Unit until the Effective
Date; (f) the costs of all insurance, real estate, property and excise tax
assessments, sales and use taxes on materials used in construction, and other
operating and carrying costs paid, accrued, or levied upon the Unit or Owner in
connection with the Unit during the period from acquisition of the Unit
Premises until the Effective Date for such Unit; (g) costs of Agent's project
representatives (inspectors, consultants, etc.) incurred in its capacity as
agent for Owner; and (h) any and all other costs arising from or in connection
with the construction period for such Unit Improvements and until the Effective
Date for such Unit.
UNIT COMPLETION DATE: With respect to the North Shoreline Unit,
thirty (30) months from the date on which the Initial Advance is made by Owner
to Agent pursuant to Section 4 hereof and with respect to any other Unit, such
period as is agreed to in writing between Agent and Owner.
UNIT FF&E: The specific items, if any, from the FF&E Specifications
which are installed or (if such FF&E Specifications have been acquired by Owner
for installation) to be installed in a particular Unit Improvement and for
which advances are made by Owner hereunder.
UNIT FF&E SPECIFICATIONS: The list of specific items chosen from
FF&E Specifications to be installed with the proceeds of advances hereunder in
a particular Unit Improvement.
UNIT IMPROVEMENTS: The improvements to be constructed on a
particular Unit Premises in accordance with the Unit Plans for the Unit
Improvements to be built on such Unit Premises.
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UNIT PLANS: With respect to a particular Unit Premises, the plans
and specifications for the construction of any Unit Improvements to be
constructed thereon, including, without limitation, installation of curbs,
sidewalks, gutters, landscaping, utility connections (whether on or off the
Unit Premises) and all fixtures necessary for construction, operation and
occupancy of the Unit and certain equipment to be used in connection therewith,
prepared or to be prepared by an architect and Agent and approved by Owner and
any Assignee, including such amendments, modifications and supplements thereto
as may from time to time be made by Agent; provided, that any subsequent
material deviation from the Unit Plans selected for the Unit shall be made only
with Owner's and any Assignee's prior written consent, which consent shall not
be unreasonably withheld. Owner's and any Assignee's failure to disapprove any
proposed material deviation from the then-approved Unit Plans within five (5)
Business Days after delivery by Agent to Owner and any Assignee of the proposed
revised Unit Plans shall be deemed consent by Owner and any Assignee to such
proposed material deviation. Anything to the contrary provided herein
notwithstanding, (i) for any Unit Improvements with respect to which the Owner
and any Assignee has approved Design Development Drawings, Unit Plans may be
submitted by the Agent on a phased basis (E.G., site improvement plans, core
and shell plans and tenant improvement or fit-out plans) and the Owner and any
Assignee shall grant or withhold their approval of the plans and specifications
for each such phase in accordance with the preceding sentence and (ii) Owner
shall not require any changes or modifications to the proposed Unit Plans for
any Unit as to which it has approved Design Development Drawings, other than
(A) changes required to correct technical deficiencies in such proposed Unit
Plans, and (B) changes designed to ensure that the Unit Plans are consistent in
all material respects with such approved Design Development Drawings. The Unit
Plans applicable to the North Shoreline Unit will provide for Unit Improvements
suitable for use and occupancy for general, executive and administrative
offices, operation of training facilities, light manufacturing and for research
and development and similar uses (and uses ancillary or accessory to the
foregoing), in all cases in compliance with all Legal Requirements and zoning
and land use restrictions applicable to the Unit Premises.
UNIT PREMISES: Each individual parcel of land, in which either a
fee interest or a leasehold interest has been acquired by Owner for the
construction of Unit Improvements thereon.
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2 OTHER DEFINITIONAL PROVISIONS.
(a) For purposes of this Agreement, the terms "Affiliate",
"Assignee", "Business Day", "Commercial Paper", "Consent", "Contractual
Requirements", "Credit Agreement", "Duff & Xxxxxx", "Effective Date", "Implied
Senior Debt Rating", "Insurance Requirements", "Lease Term", "Lien", "Xxxxx'x",
"Mortgageable Ground Lease", "NAIC", "Permitted Liens", "Person", and "S&P"
shall have the meanings set forth opposite those terms in the Lease, except
that, for purposes of this Agreement, the terms "the Lessor", "the Lessee" and
"this Lease" if used in those definitions in the Lease shall be deemed to be
the terms "Owner", "Agent" and "this Agreement", respectively, and if used in
those definitions in the Lease, each of the terms "Parcel", "Parcel of
Property" and "Property" shall be deemed to be the phrase "Unit Premises and
related Unit Improvements" and each of the terms "Unit of Equipment" and
"Unit", shall be deemed to be an item of "Unit FF&E".
(b) All terms defined in this Agreement shall have their defined
meanings when used in any certificate or other document made or delivered
pursuant hereto.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, paragraph, schedule and exhibit references are to this Agreement
unless otherwise specified.
2. APPOINTMENT OF AGENT
2 APPOINTMENT AND DUTIES OF AGENT. Subject to the terms hereof,
including, without limitation, the requirements of Section 4 hereof, Owner
hereby appoints Agent as its agent for selection of Unit Premises for
acquisition, as well as for the design, construction, equipping, and
installation on each Unit Premises of the Unit Improvements, and, if and to the
extent identified in Exhibit G hereto, Unit FF&E and Agent hereby accepts such
appointment. Unit Improvements must be of a type permitted to be leased under
the Lease, as set forth in Exhibit A to the Lease. Agent agrees all in
accordance with its best business judgment and this Agreement to select Unit
Premises for acquisition by Owner and to contract for and supervise the good
and workmanlike completion of the Unit Improvements and installation of the
Unit FF&E on each Unit Premises, suitable for its intended use.
3 COST AND COMPLETION OF A UNIT. Owner and Agent agree that (a)
the maximum cost to the Owner for the acquisition of any individual Unit
Premises and the construction of Unit Improvements thereon and the installation
of all Unit FF&E therein shall be no more than $20,000,000 with respect to the
North Shoreline Unit, and such amount as is agreed in writing between Agent,
Owner and any Assignee with regard to any other Unit, and (b) the
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cost to the Owner of the Unit FF&E constituting personal property and not
fixtures with respect thereto shall be no more than $1,000,000 with respect to
the North Shoreline Unit, and such amount as is agreed in writing between
Agent, Owner and any Assignee with regard to any other Unit. Agent agrees to
effect Substantial Completion of any Unit Improvements on or before the
applicable Unit Completion Date. After receiving the Initial Advance with
respect to a Unit, Agent may from time to time to the extent permitted hereby
amend, modify or supplement the Unit Plans, Unit Budget or Unit FF&E
Specifications relating thereto; provided, that no such amendment, modification
or supplement shall result in a material diminution of the value or usefulness
for its intended purpose of such Unit or result in a breach under subsection
9.17 of this Agreement. Agent shall promptly deliver to Owner and any Assignee
any such amended, modified or supplemented Unit Plans, Unit Budget or Unit FF&E
Specifications.
4 LEASE OF A UNIT.
(a) Upon Substantial Completion of any Unit Improvements, Agent
will deliver to Owner of the Certificate of Substantial Completion with respect
to such Unit Improvements and the AFL Unit Leasing Record in the form of
Exhibit E hereto, and Agent shall request the Final Advance with respect to
such Unit Improvements. If the conditions set forth in Section 6 hereof have
been satisfied, Owner, within five (5) Business Days of receipt of the
Certificate of Substantial Completion, a fully completed AFL Unit Leasing
Record executed by Agent and the other documents required in Section 6 hereof,
shall execute and deliver to Agent such AFL Unit Leasing Record. Such AFL Unit
Leasing Record shall have an Effective Date as of the date of execution by
Owner of the AFL Unit Leasing Record. The Final Advance shall be made by Owner
on the date of execution by Owner of the AFL Unit Leasing Record. Execution
and delivery by Agent of the AFL Unit Leasing Record shall constitute (i)
acknowledgment by Agent that the Unit is in good condition and has been
accepted for lease or sublease by Agent as of the Effective Date of the AFL
Unit Leasing Record, (ii) acknowledgment by Agent that the Unit is subject to
all of the covenants, terms and conditions of the Lease, and (iii)
certification by Agent that the representations and warranties contained in
Section 2 of the Lease are true and correct in all material respects on and as
of the Effective Date of the AFL Unit Leasing Record as though made on and as
of such date and that there exists on such date no (1) Event of Default or,
with respect to such Unit, Event of Unit Termination under this Agreement or
Event of Default (as defined in the Lease) or (2) to the best of Agent's
knowledge, after due investigation, Potential Default or, with respect to such
Unit, Potential Event of Unit Termination under this Agreement or Potential
Default (as defined in the Lease).
(b) Notwithstanding the foregoing, but subject to the terms of
subsection 3.1 hereof, Agent may, by delivering to Owner a Certificate of
Increased Cost, at any time up to six (6) months after the Effective Date with
respect to a Unit, request a Completion Advance in order to pay to Agent
construction costs that were not the subject of any previous advance. Owner,
within five (5) Business Days of receipt and upon Owner's approval of a request
for the
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Completion Advance and the Certificate of Increased Cost, shall execute
and deliver to Agent a revised AFL Unit Leasing Record for such Unit reflecting
such increased cost, and Agent, within five (5) Business Days of receipt of
such revised AFL Unit Leasing Record, shall sign the revised AFL Unit Leasing
Record and return it to Owner. The Completion Advance shall be made by Owner
upon receipt of the revised AFL Unit Leasing Record signed by Agent.
5 POWERS OF AGENT. Agent shall have the right to act for and on
behalf of Owner with full and complete authority to appear before each
applicable Governmental Authority to resolve issues related to the platting,
zoning and use of the Unit Premises, to obtain all Permits including zoning,
planning and land use approvals, to grant and obtain minor easements for the
benefit of any Unit Premises or which are deemed reasonably necessary by Agent
for the intended use of such Unit Premises, voluntarily to dedicate or convey
portions of any Unit Premises for road, highway and other public purposes as
required in the good faith judgment of Agent in order to obtain the use of all
or part of such Unit Premises for the purposes intended (provided that no such
action shall materially adversely affect either the market value of such Unit
Premises or the use of such Unit Premises for its intended purpose), appoint,
employ and deal with the architects, engineers, consultants and contractors,
purchase and arrange for delivery of all materials, supplies, furniture,
fixtures, and equipment, and to approve all related vouchers, invoices and
statements and, so long as no Event of Default shall exist hereunder, to
perform all obligations and exercise all rights of Owner and enforce all
obligations of the lessor under any Ground Lease. No payment shall be made for
any property or services of such architects, engineers, consultants, or
contractors relating to the acquisition, construction and equipping of any Unit
without the prior approval of Agent, and each amount so approved and paid shall
be in accordance with the Unit Budget, and shall be part of the Unit
Acquisition Cost of such Unit. Upon the occurrence of an Event of Default,
Owner may make payments to any architects, engineers, consultants, contractors,
vendors or suppliers which are properly due and payable in accordance with the
contracts with said parties, and any such payment so made shall be and become a
part of the Unit Acquisition Cost of the Unit.
Anything to the contrary provided herein notwithstanding, Agent
shall have the right on behalf of Owner, in connection with the development and
occupancy of the North Shoreline Unit, to convey a portion of the North
Shoreline Unit Premises to the appropriate Governmental Authority in connection
with the relocation of the direct off-ramp to northbound North Shoreline
Boulevard from Route 101. Owner shall cooperate, without unreasonable delay
and at Agent's expense, in connection with such conveyance and shall join in
the execution of any appropriate instruments or shall execute any separate
instruments as necessary.
3. ADVANCES
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2 AGREEMENT TO MAKE ADVANCES. Subject to the conditions and
upon the terms herein provided, including, without limitation, that the
Available Commitment not be exceeded, Owner agrees to make available to Agent
advances from time to time for each Unit up to an aggregate principal amount
for such Unit determined in accordance with the Unit Budget for such Unit and
not in excess of the maximum amount per Unit set forth in subsection 2.2
hereof. Subject to the terms of this Agreement, Owner agrees to make (a) an
Initial Advance with respect to a Unit in accordance with Section 4 of this
Agreement, (b) Interim Advances from time to time in accordance with Section 5
of this Agreement, (c) a Final Advance in accordance with Section 6 of this
Agreement and (d) a Completion Advance in accordance with Section 7 of this
Agreement.
3 PROCEDURE FOR ADVANCES. Agent shall give Owner notice in
accordance with Sections 4, 5, 6 and 7 hereof of its irrevocable request for an
advance pursuant to this Agreement, specifying a Business Day on which such
advance is to be made and the amount of the advance. Not later than 2:00 P.M.
New York time on the date for the advance specified in such notice, provided
all conditions to that advance have been satisfied, Owner shall provide to
Agent, in immediately available funds, the amount of the advance then
requested. Owner shall have no obligation to make advances with respect to a
Unit more often than once a week.
4 DETERMINATION OF AMOUNTS OF ADVANCES.
(a) INITIAL ADVANCE. The amount of an Initial Advance with
respect to a Unit shall be made within the limits of the Unit Budget and in
accordance with the Acquisition Certificate, and shall be utilized to pay all
acquisition and closing costs of the respective Unit Premises known at the time
of the Initial Advance, including, without limitation, the purchase price,
survey and survey inspection charges, recording and filing fees, brokerage
commissions, appraisal, architectural, engineering, environmental analysis,
soil analysis and market analysis fees, transfer fees and taxes that are
customarily the responsibility of the purchaser, title insurance premiums,
closing adjustments for taxes, utilities, and the like, escrow fees, if any,
construction materials and existing structures, and the legal fees of Owner and
Agent. All such costs for which the Initial Advance is requested shall be
specifically set forth in the Unit Budget attached to the Acquisition
Certificate, and in the request for the Initial Advance, and Owner shall have
no obligation to advance any funds in the Initial Advance which are not so
specifically set forth in such documents.
(b) INTERIM ADVANCES. Disbursements for costs of constructing and
equipping a Unit as well as additional acquisition and closing costs not
invoiced at the time of the Initial Advance shall be made as the same are
incurred within the limits of the Unit Budget, based upon the certifications of
the Agent contained in an Interim Advance Certificate.
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(c) FINAL ADVANCE. The amount of the Final Advance shall be made
within the limits of the Unit Budget and in accordance with the Certificate of
Substantial Completion, and shall be sufficient, subject to the provisions of
paragraph (d) of this subsection 3.3, for payment in full of all costs of
designing, furnishing, constructing and equipping the Unit in connection with
Substantial Completion of the Unit, free of all Liens other than Permitted
Liens. Owner shall have no obligation to make the Final Advance unless all
such costs set forth in the Unit Budget, the Certificate of Substantial
Completion, and the request for the Final Advance have been actually incurred,
or in the case of punch list items Owner is satisfied such costs will be
incurred, in construction and equipping of the Unit, free of all Liens, except
for Permitted Liens and shall not cause the Unit Acquisition Cost of the Unit
to exceed the Unit Budget.
(d) COMPLETION ADVANCE. The amount of the Completion Advance
shall be made in accordance with and shall not exceed the amount set forth in
the Certificate of Increased Cost, shall not cause the Unit Acquisition Cost of
the Unit to exceed the Unit Budget, and shall be sufficient for payment in full
of all costs that were not the subject of any previous advance with respect to
such Unit. Owner shall have no obligation to make the Completion Advance
unless all such costs were reasonably estimated in the Unit Budget and are
adequately set forth in the Certificate of Increased Cost and will be
sufficient for payment in full of all costs with respect to such Unit.
5 PARTIAL ADVANCES. If any or all conditions precedent to any
advance have not been satisfied on the applicable date for a requested advance,
Owner, in its sole discretion, and with the consent of Assignee may, but shall
have no obligation to, disburse a part of the requested advance.
4. CONDITIONS PRECEDENT TO
THE INITIAL ADVANCE WITH RESPECT TO A
UNIT
Owner's acquisition of any Unit Premises and Owner's obligation to
make the Initial Advance with respect to a Unit shall both be subject to the
satisfaction of the conditions set forth in this Section 4 and to the receipt
by Owner and any Assignee of the documents set forth in this Section 4, in each
case in form and substance reasonably satisfactory to Owner and any Assignee.
Owner shall determine whether the foregoing conditions are met within seven (7)
Business Days after receipt of the Acquisition Certificate and its attachments.
The following are the documents to be received by Owner and any
Assignee and the conditions to be satisfied:
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(a) LEASE AND GUARANTEE. With respect to the first advance only
under this Agreement, a fully executed copy of the Lease and a fully executed
copy of the Guarantee.
(b) ACQUISITION CERTIFICATE. A duly executed copy of the Acquisition
Certificate.
(c) WARRANTY DEED. Where fee title is being acquired by Owner, a
photocopy of the executed purchase and sale agreement and the warranty deed or
special warranty to be executed and delivered at the closing of the acquisition
of Owner's fee interest in such Unit Premises, conveying marketable title to
Owner, free of all Liens other than Permitted Liens, or such other form of Deed
(but not a quitclaim deed) as is customary in the area in which the Unit
Premises are located or as agreed to in writing by Owner and any Assignee. For
purposes of the Initial Advance, Permitted Liens shall NOT include any
mechanics' liens or materialmen's liens, or any taxes, assessments, governmental
charges or levies, except to the extent that such taxes, assessments,
governmental charges or levies are due and payable but not yet delinquent, and
have been properly apportioned with the seller at closing.
(d) MEMORANDUM OF LEASE AGREEMENT. Two original counterparts of a
memorandum of lease agreement in the appropriate form for recording in the
jurisdiction in which the Unit Premises are located, executed by Agent, as
lessee, and otherwise reasonably acceptable to Owner and Assignee.
(e) GROUND LEASE. Where a leasehold interest is being acquired by
Owner, an original of each Ground Lease, including a true and complete copy
of the metes and bounds legal description of the Unit Premises, intended to
be executed and delivered at the closing of the acquisition of Owner's
leasehold interest, in a form approved by Owner, and complying and
certified by Agent as complying in all respects with this Agreement and
with Section 29 of the Lease, and not subject to any Liens other than
Permitted Liens, along with a memorandum of ground lease in statutory
recordable form and any necessary estoppel certificates, recognition and
attornment agreements, confirmations, and subordinations required by
Owner's and any Assignee's counsel regarding the Ground Lease. For
purposes of the Initial Advance, Permitted Liens shall NOT include any
taxes, assessments, governmental charges or levies, except to the extent
that such taxes, assessments, governmental charges or levies are due and
payable but not yet delinquent.
(f) TITLE INSURANCE POLICY. As evidenced by written agreement of
Agent, Owner and any Assignee at the time of an Initial Advance with
respect to a Unit; satisfactory evidence that Owner shall receive at
closing either (i) an ALTA owner's policy (which, if available in the state
in which the Unit Premises are located, may be
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issued as a joint protection policy simultaneously insuring both Owner's
interest and Agent's interest in such Unit Premises, provided that Agent shall
deliver to Owner in connection with the Acquisition Certificate for such Unit
Premises a letter executed by Agent in which Agent explicitly agrees to the
conditions set forth on Exhibit K of this Agreement) with a pending improvements
clause, or (ii) a construction binder marked at closing for the benefit of Owner
and Assignee, constituting the irrevocable commitment of the Title Company to
issue a joint protection policy simultaneously, insuring both Owner's and
Agent's interests in such Unit Premises in accordance with the conditions of (i)
above and upon completion of the Unit Improvements, in each case issued by the
Title Company with respect to the Unit Premises in the amount of the total Unit
Acquisition Cost, as set forth in the applicable Unit Budget, acceptable to
Owner and Assignee in all respects (including such additional endorsements as
may be reasonably requested by Owner or Assignee), together with legible
photocopies of all underlying documents of record affecting the Unit Premises.
Owner shall have received evidence satisfactory to it that all premiums in
respect of such policies have been paid at the closing of title, which policy or
binder shall provide the substantive coverage contemplated to be provided above.
(g) SURVEY. A current survey of the Unit Premises certified to
Owner, any Assignee and the Title Company by an independent registered
civil engineer or licensed land surveyor, and dated a date within ninety
(90) days prior to the date of the Initial Advance. Such survey shall show
the following: (i) lot lines of the Unit Premises shown in metes and
bounds, and the lines of streets abutting the Unit Premises and the width
thereof; (ii) all access and other easements appurtenant to or used in
connection with the Unit Premises; (iii) all roadways, paths, driveways,
easements, set-backs, encroachments and overhanging projections and similar
encumbrances affecting the Unit Premises, whether recorded, apparent from a
physical inspection of the Unit Premises, or otherwise known to the
surveyor; (iv) any encroachments on any adjoining property by the building
structures and improvements on the Unit Premises; and (v) if the Unit
Premises are described by reference to a filed map, a legend relating the
survey to said map.
(h) SITE PLAN. A site plan prepared by Agent showing the proposed
location of the Unit Improvements to be constructed on the Unit Premises.
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(i) AVAILABILITY OF UTILITIES. Certification by Agent that all
utility services and facilities (including, without limitation, gas,
electrical, water and sewage services and facilities) (i) which are
necessary and required during the construction period have been completed
or will be available in such a manner as to assure Owner that the ability
of Agent to complete construction on or before the Unit Completion Date
will not be impeded by a lack thereof and (ii) which are necessary for
operation and occupancy of the Unit are or will be completed in such a
manner and at such a time as will assure the opening and operation of the
Unit on or before the Unit Completion Date.
(j) FLOOD ZONE. A certification by the surveyor or an official of an
appropriate Governmental Authority as to whether the Unit Premises are
located in a flood plain.
(k) PERMITS. A certificate of Agent certifying that all Permits and
governmental approvals required for the construction of the Unit
Improvements have been or will be issued or obtained in such a manner as to
assure Owner that the ability of Agent to complete construction of the Unit
Improvements on or before the Unit Completion Date will not be impeded by a
lack thereof and all Permits and governmental approvals required therefor
which have been issued or obtained are in full force and effect.
(l) OPINION OF COUNSEL FOR AGENT. With respect to the first advance
only under this Agreement, an opinion of Shearman & Sterling, counsel for
Agent, in form and substance reasonably satisfactory to Owner and Assignee
and, with respect to an Initial Advance with respect to a Unit Premises in
a state in which no Unit Premises has previously been acquired under this
Agreement, an opinion of local counsel for Agent, in form and substance
reasonably satisfactory to Owner and Assignee. With respect to an Initial
Advance for a Unit Premises in a state in which such opinion of local
counsel for Agent has previously been delivered, if Owner and Assignee have
reason to believe that the laws of such state have changed since the date
of the previous local counsel opinion for Agent in such state, then an
opinion of local counsel for Agent shall be delivered, in form and
substance reasonably satisfactory to Owner and Assignee.
(m) OPINION OF COUNSEL FOR GUARANTOR. With respect to the first
advance only under this Agreement, an opinion of Shearman & Sterling,
counsel for Guarantor, in form and substance satisfactory to Owner and
Assignee.
(n) CONSTRUCTION AGREEMENT. A fully executed and complete copy of
the Construction Agreement, if entered into at the time of the Initial
Advance.
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(o) DESIGN DEVELOPMENT DRAWINGS AND UNIT PLANS. A copy of the Design
Development Drawings and all then-completed portions of Unit Plans, each as
approved by Owner and Assignee.
(p) UNIT BUDGET. A copy of the Unit Budget and certification by
Agent that such Unit Budget is (i) true, complete (taking into account the
state of completion of the Unit Plans and the status of the bidding process
with respect to the Construction Documents) and correct, (ii) a reasonable
estimate of all expected costs of the Unit and (iii) within the dollar
limits set forth in the first sentence of subsection 2.2 hereof.
(q) CERTIFICATES OF INSURANCE. Certificates of insurance or other
evidence reasonably acceptable to Owner certifying that the insurance then
carried or maintained on the Unit complies with subsection 9.3 hereof.
(r) REQUEST FOR ADVANCE. A duly executed AIA Document G722 (or
substantially similar document), stating the total amount of the Initial
Advance requested, the date on which the advance is to be made, the name,
address and, if applicable, the escrow reference number of the escrow or
closing agent or party to whom the Initial Advance is to be tendered,
wiring instructions and an itemization of the various costs constituting
the amount of the Initial Advance in such detail as will be necessary to
provide disbursement instructions to the escrow or closing agent,
including, specifically, an accounting of all expenditures for costs shown
on the Unit Budget for which payment or reimbursement is being requested
with respect to the Unit.
(s) CERTIFICATE OF GUARANTOR. A duly executed Certificate of
Guarantor certifying that all representations and warranties made in the
Guarantee are and remain true and correct on and as of the date of the
Initial Advance as if made on and as of the date of the Initial Advance
(except to the extent such representations and warranties expressly relate
specifically to an earlier date) and no default under the Guarantee has
occurred and is continuing on the date such Initial Advance is to be made
or by reason of giving effect to such Initial Advance.
(t) UNIT FF&E SPECIFICATIONS. If applicable, a true and complete
copy of the Unit FF&E Specifications with respect to the Unit.
(u) ENVIRONMENTAL CERTIFICATE AND REPORT. An environmental
certificate in the form of Exhibit H hereto, duly executed by Agent, and an
environmental report certified to Owner and any Assignee and satisfactory
to Owner and any Assignee in all respects, prepared by a reputable
environmental consulting or environmental engineering firm acceptable to
Owner and any Assignee which addresses the matters set forth on Exhibit I
hereto; provided that with respect to the North Shoreline Unit the Owner
acknowledges
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receipt of an environmental report satisfying such requirement and agrees that
the foregoing requirement for an environmental certificate shall be met by a
certificate dated as of the date of the Acquisition Certificate to the effect
set forth in the certificate provided previously with respect to such location,
dated July 1, 1993, attached hereto as Exhibit J. If Owner or any Assignee
shall reasonably require additional assurance as to any matter or matters
contained or not adequately addressed in such environmental report in respect of
Unit Premises other than the North Shoreline Unit, or if the certificate
delivered pursuant to this Section 4(u) shall raise issues not raised in, or
shall identify changed circumstances in respect of matters contained in the
certificate attached hereto as Exhibit J, with respect to the North Shoreline
Unit, Owner or any Assignee may require that a supplemental or additional
environmental report with respect to such matter or matters, satisfactory to
Owner and any Assignee in all respects, be delivered.
(v) USE OF PROCEEDS, NO LIENS AND REPRESENTATIONS OF AGENT. (i) All
costs and expenses which are the subject of the Initial Advance requested
have been paid in full or will be paid in full out of the proceeds of the
Initial Advance, (ii) there are no Liens on the Unit Premises of which
Agent has knowledge that are not Permitted Liens, (iii) all representations
and warranties made in this Agreement, in the Lease, and in connection with
the Initial Advance, are and remain true and correct on and as of the date
of the Initial Advance and (iv) no Event of Default, Potential Default or,
with respect to the Unit for which the Initial Advance is requested, Event
of Unit Termination or Potential Event of Unit Termination, under this
Agreement has occurred and is continuing on the date such Initial Advance
is to be made or by reason of giving effect to such Initial Advance.
(w) ADDITIONAL MATTERS. Such other documents and legal matters in
connection with a request for an Initial Advance as are reasonably
requested by Owner and Assignee.
5. CONDITIONS PRECEDENT TO OWNER'S
OBLIGATION TO MAKE INTERIM ADVANCES AFTER
THE INITIAL ADVANCE WITH RESPECT TO A UNIT
Owner's obligation to make any Interim Advance with respect to a Unit
after the Initial Advance with respect to such Unit shall be subject to the
satisfaction of the conditions set forth in this Section 5 and to the receipt by
Owner and any Assignee of the documents set forth in this Section 5, in each
case in form and substance reasonably satisfactory to Owner and any Assignee.
Owner shall determine whether the foregoing conditions are met within seven (7)
Business Days after receipt of the Interim Advance Certificate and its
attachments.
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LEASE IS CONFIDENTIAL
AND PROPRIETARY
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The following are the documents to be received by Owner and any
Assignee and the conditions to be satisfied:
(a) INTERIM ADVANCE CERTIFICATE. A duly executed Interim Advance
Certificate.
(b) CONTINUING REPRESENTATIONS OF AGENT. All representations and
warranties made in this Agreement, in the Lease, and in connection with the
Interim Advance, are and remain true and correct on and as of the date of
the Interim Advance as if made on and as of the date of the Interim Advance
(except to the extent such representations and warranties expressly relate
specifically to an earlier date) and no Event of Default, Potential Default
or, with respect to the Unit for which such Interim Advance is requested,
Event of Unit Termination or Potential Event of Unit Termination, under
this Agreement has occurred and is continuing on the date such Interim
Advance is to be made or by reason of giving effect to such Interim
Advance; provided that, the foregoing condition that no Potential Default
shall have occurred and be continuing shall be deemed met for purposes of
obtaining an Interim Advance pursuant to this Section 5 notwithstanding the
occurrence of an event which would be a Potential Default under Section
11.1(e) of this Agreement if the following conditions shall have been and
continue to be met: (a) the Agent shall have advised the Owner of such
event promptly after a Responsible Officer obtains knowledge, or would have
obtained knowledge but for negligence of such Responsible Officer in
performing the customary duties of his office, thereof and, (b) at all
times during the first thirty (30) days following notice with respect to
such event to Agent pursuant to Section 11.1(e) hereof, Agent shall have
diligently and in good faith attempted to cure such Potential Default, and
at all times thereafter the conditions set forth in the portions of Section
11.1(e) hereof enumerated (i), (ii) and (iii) shall be continuously met in
Owner and any Assignee's reasonable judgment, (c) Guarantor's senior debt
rating or, if Guarantor has no senior debt rating, Implied Senior Debt
Rating shall continue to be BB+ or better by Duff & Xxxxxx, BB+ or better
by S&P, Ba1 or better by Xxxxx'x or, if the Guarantor has no senior debt
rating or Implied Senior Debt Rating from any of Duff & Xxxxxx, S&P or
Xxxxx'x, NAIC 2 or better by the NAIC; provided, however, that if the
Guarantor's private debt rating has not been reviewed by the NAIC within
the prior 15 months, then when Xxxxxxx Xxxxx Fixed Income Research Rating
is 5.5 or higher, and (d) Agent shall provide all information and reports
reasonably requested by Owner and Assignee in order to monitor the
satisfaction of such conditions.
(c) CERTIFICATE OF GUARANTOR. A duly executed certificate of
Guarantor certifying that all representations and warranties in the
Guarantee are and remain true and correct on and as of the date of the
Interim Advance as if made on and as of the date of such Interim Advance
(except to the extent such representations and warranties expressly
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relate specifically to an earlier date) and no default under the Guarantee
has occurred and is continuing on the date such Interim Advance is to be
made or by reason of giving effect to such Interim Advance.
(d) SATISFACTORY TITLE. A certificate of Agent certifying that since
the last disbursement, there have been no changes in the state of title and
no additional survey exceptions not theretofore specifically approved by
Owner and, if such Unit Premises are subject to a Ground Lease, confirming
that there are no defaults under the Ground Lease.
(e) REQUEST FOR ADVANCE. A duly executed AIA Document G722 (or a
substantially similar document), stating the total amount of the Interim
Advance requested, the date on which such Interim Advance is to be made,
and a specific breakdown of items and costs for which the Interim Advance
is being made.
(f) NO OTHER SECURITY INTERESTS. All materials and fixtures
incorporated in the construction of the Unit Improvements have been
purchased so that title thereto or a leasehold interest therein, as the
case may be, shall have vested in Owner immediately upon delivery thereof
to the Unit Premises, except for Permitted Liens.
(g) UNIT PLANS. Unit Plans with respect to each phase or portion of
the Unit Improvements any portion of the cost of which will be funded by
the requested Interim Advance.
(h) PROGRESS OF CONSTRUCTION. For any Interim Advance the proceeds
of which will be used to fund all or a portion of the costs of shell and
core completion, building systems or tenant improvements with respect to
applicable Unit Improvements, a copy of the applicable requisition of the
General Contractor pursuant to the Construction Contract (with attachments)
certified by the Unit architect with respect to completion of the work set
forth in such requisition.
(i) CONSTRUCTION AGREEMENT. A fully executed and complete copy of
any Construction Agreement, if entered into at the time of the particular
Interim Advance and not previously provided.
6. CONDITIONS PRECEDENT TO THE FINAL
ADVANCE WITH RESPECT TO A UNIT
Owner's obligation to make the Final Advance with respect to a Unit
shall be subject to the satisfaction of the conditions set forth in this Section
6 and to the receipt by Owner and any Assignee of the documents set forth in
this Section 6, in each case in form and substance
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reasonably satisfactory to Owner and any Assignee. When all of the conditions
set forth in this Section 6 shall have been satisfied, Substantial Completion of
a Unit shall be deemed to occur. Owner shall determine whether the foregoing
conditions are met within seven (7) Business Days after receipt of the
Certificate of Substantial Completion and its attachments.
The following are the documents to be received by Owner and any
Assignee and the conditions to be satisfied:
(a) CERTIFICATE OF SUBSTANTIAL COMPLETION. A duly executed
Certificate of Substantial Completion.
(b) SATISFACTORY TITLE. A certificate of Agent certifying that since
the Initial Advance for such Unit Premises, there have been no changes in
the state of title, except for Permitted Liens, and no additional survey
exceptions not theretofore specifically approved in writing by Owner and,
if such Unit Premises are subject to a Ground Lease, there are no defaults
under the Ground Lease.
(c) CONSTRUCTION AND EQUIPPING OF THE UNIT. A certificate of an
architect certifying that the Unit Improvements (including all interior
finish work, but exclusive of punch list items) have been completed within
the Unit Budget and in all material respects in accordance with the Unit
Plans and are accepted by Agent and all Unit FF&E for that Unit has been
installed and conforms in all material respects to the Unit FF&E
Specifications and are accepted by Agent. Agent shall deliver to Owner and
any Assignee a specific itemization of all items of Unit FF&E installed in
such Unit.
(d) PERMITS. All Permits and governmental approvals necessary for
the occupancy and primary use and operation of the Unit have been issued or
obtained.
(e) LIENS. The Unit, including interior finish work, has been
completed as contemplated in paragraph (c) above, free of all Liens, except
for Permitted Liens (all of which are to be itemized as to the nature,
amount, claimant and status), and there are no current Permitted Contests
with respect to the Unit (or, if any, the nature, amount, claimant and
status thereof).
(f) FINAL SURVEY. Except in the circumstance that Agent, Owner and
any Assignee have agreed in writing that an as-built survey may be
subsequently provided as of a time expressed in such agreement, a final as-
built survey, certified to Owner, any Assignee and the Title Company by an
independent registered civil engineer or licensed land surveyor, with a
metes and bounds description of the perimeter of the Unit Premises, and
showing the completed Unit Improvements, all easements on the Unit
Premises, and indicating the location of access to the Unit Premises and
all utility and water easements
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directly affecting the Unit Premises. No encroachments are to exist by the
Unit Improvements or on the Unit Premises other than those that are
Permitted Liens or that may have been consented to by Owner and all
set-back requirements have been complied with. If any discrepancies exist
between the legal description set forth on the survey delivered pursuant to
paragraph (h) of Section 4 hereof and the legal description set forth on
the final as-built survey, Owner and Agent shall cooperate in amending the
legal descriptions in all recorded documents creating or affecting the Unit
Premises, including, without limitation, any easements, to reflect the
correct as-built description.
(g) UTILITIES. Direct connection has been made to all appropriate
utility facilities and the Unit Improvements are ready for occupancy and
operation.
(h) FLOOD ZONE. If the Unit Premises are located in a flood plain, a
policy of flood insurance in an amount equal to the lesser of (A) the
maximum limit of coverage available under the National Flood Insurance Act
of 1968, as amended, or (B) the amount of the Unit Acquisition Cost for the
Unit, unless Agent is self-insured for such risks as permitted in the
Lease.
(i) CONTINUING REPRESENTATIONS OF AGENT. All representations and
warranties made in this Agreement, in the Lease, and in connection with the
Final Advance are to remain true and correct on and as of the date of the
Final Advance as if made on and as of the date of the Final Advance (except
to the extent such representations and warranties expressly relate
specifically to an earlier date) and no Event of Default, Potential Default
or, with respect to the Unit for which the Final Advance is requested,
Event of Unit Termination or Potential Event of Unit Termination, under
this Agreement has occurred and is continuing on the date such Final
Advance is to be made or by reason of giving effect to such Final Advance;
provided that, the foregoing condition that no Potential Default shall have
occurred and be continuing shall be deemed met for purposes of obtaining
the Final Advance pursuant to this Section 6 notwithstanding the occurrence
of an event which would be a Potential Default under Section 11.1(e) of
this Agreement if the following conditions shall have been and continue to
be met: (a) the Agent shall have advised the Owner of such event promptly
after a Responsible Officer obtains knowledge, or would have obtained
knowledge but for negligence of such Responsible Officer in performing the
customary duties of his office, thereof and, (b) at all times during the
first thirty (30) days following notice with respect to such event to Agent
pursuant to Section 11.1(e) hereof, Agent shall have diligently and in good
faith attempted to cure such Potential Default, and at all times thereafter
the conditions set forth in the portions of Section 11.1(e) hereof
enumerated (i), (ii) and (iii) shall be continuously met in Owner and any
Assignee's reasonable judgment, (c) Guarantor's senior debt rating or, if
the Guarantor has no senior debt rating, Implied Senior Debt Rating shall
continue to be BB+ or better by Duff & Xxxxxx, BB+ or better by S&P, Ba1 or
better by Xxxxx'x or, if the
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Guarantor has no senior debt rating or Implied Senior Debt Rating from any
of Duff & Xxxxxx, S&P or Xxxxx'x, NAIC 2 or better by the NAIC; provided,
however, that if the Guarantor's private debt rating has not been reviewed
by the NAIC within the prior 15 months, then when Xxxxxxx Xxxxx Fixed
Income Research Rating is 5.5 or higher, and (d) Agent shall provide all
information and reports reasonably requested by Owner and Assignee in order
to monitor the satisfaction of such conditions.
(j) CERTIFICATE OF GUARANTOR. A duly executed Certificate of
Guarantor certifying that all representations and warranties made in the
Guarantee are and remain true and correct on and as of the date of the
Final Advance as if made on and as of the date of the Final Advance (except
to the extent such representations and warranties expressly relate
specifically to an earlier date) and no default under the Guarantee has
occurred and is continuing on the date such Final Advance is to be made or
by reason of giving effect to such Final Advance.
(k) AFL UNIT LEASING RECORD. An AFL Unit Leasing Record prepared and
duly executed by Agent.
(l) REQUEST FOR ADVANCE. A duly executed AIA Document G722 (or a
substantially similar document), stating the total amount of the Final
Advance requested, the date on which such advance is to be made, wiring
instructions and a specific breakdown of items and costs for which the
Final Advance is to be made.
7. CONDITIONS PRECEDENT TO THE COMPLETION ADVANCE
WITH RESPECT TO A UNIT
Owner's obligation to make the Completion Advance with respect to a
Unit shall be subject to the satisfaction of the conditions set forth in this
Section 7 and to the receipt by Owner and any Assignee of the documents set
forth in this Section 7, in each case in form and substance reasonably
satisfactory to Owner and Assignee. The proceeds of the Completion Advance
shall be used to pay in full all costs relating to completion of such Unit for
which Agent has not been reimbursed prior to the Effective Date for the Unit.
Owner shall determine whether the foregoing conditions are met within seven (7)
Business Days after its receipt of the Certificate of Increased Cost and its
attachments.
The following are the documents to be received by Owner and any
Assignee and the conditions to be satisfied:
(a) CERTIFICATE OF INCREASED COST. A duly executed Certificate of
Increased Cost.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
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(b) CONTINUING REPRESENTATIONS OF AGENT. All representations and
warranties made in this Agreement, in the Lease, and in connection with the
Completion Advance are and remain true and correct on and as of the date of
the Completion Advance as if made on and as of the date of the Completion
Advance (except to the extent such representations and warranties expressly
relate specifically to an earlier date) and no Event of Default, Potential
Default or, with respect to the Unit for which the Completion Advance is
requested, Event of Unit Termination or Potential Event of Unit Termination
under this Agreement has occurred and is continuing on the date such
Completion Advance is to be made or by reason of giving effect to such
Completion Advance; provided that, the foregoing condition that no
Potential Default shall have occurred and be continuing shall be deemed met
for purposes of obtaining the Completion Advance pursuant to this Section 7
notwithstanding the occurrence of an event which would be a Potential
Default under Section 11.1(e) of this Agreement if the following conditions
shall have been and continue to be met: (a) the Agent shall have advised
the Owner of such event promptly after a Responsible Officer obtains
knowledge, or would have obtained knowledge but for negligence of such
Responsible Officer in performing the customary duties of his office,
thereof and, (b) at all times during the first thirty (30) days following
notice with respect to such event to Agent pursuant to Section 11.1(e)
hereof, Agent shall have diligently and in good faith attempted to cure
such Potential Default, and at all times thereafter the conditions set
forth in the portions of Section 11.1(e) hereof enumerated (i), (ii) and
(iii) shall be continuously met in Owner and any Assignee's reasonable
judgment, (c) Guarantor's senior debt rating or, if Guarantor has no senior
debt rating, Implied Senior Debt Rating shall continue to be BB+ or better
by Duff & Xxxxxx, BB+ or better by S&P, Ba1 or better by Xxxxx'x or, if the
Guarantor has no senior debt rating or Implied Senior Debt Rating from any
of Duff & Xxxxxx, S&P or Xxxxx'x, NAIC 2 or better by the NAIC; provided,
however, that if the Guarantor's private debt rating has not been reviewed
by the NAIC within the prior 15 months, then when Xxxxxxx Xxxxx Fixed
Income Research Rating is 5.5 or higher, and (d) Agent shall provide all
information and reports reasonably requested by Owner and Assignee in order
to monitor the satisfaction of such conditions.
(c) CERTIFICATE OF GUARANTOR. A duly executed certificate of
Guarantor certifying that all representations and warranties made in the
Guarantee are and remain true and correct on and as of the date of the
Completion Advance as if made on and as of the date of the Completion
Advance (except to the extent such representations and warranties expressly
relate specifically to an earlier date) and no default under the Guarantee
has occurred and is continuing on the date such Completion Advance is to be
made or by reason of giving effect to such Completion Advance.
(d) REQUEST FOR ADVANCE. A duly executed AIA Document G722 (or a
substantially similar document), stating the total amount of the Completion
Advance
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-26-
requested, the date on which such advance is to be made, wiring
instructions and a specific breakdown of items and costs for which the
Completion Advance is to be made.
(e) REVISED AFL UNIT LEASING RECORD. A revised AFL Unit Leasing
Record prepared by Agent pursuant to subsection 2.3(b) hereof.
(f) FINAL SURVEY. If not previously provided, a final as-built
survey, as described in Section 6(f) hereof.
8. REPRESENTATIONS AND
WARRANTIES OF AGENT
Agent represents and warrants to Owner now and on the date of each
advance that:
2 CORPORATE MATTERS. Agent (i) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, (ii) has full power, authority and legal right to own and operate
its properties and to conduct its business as presently conducted and to
execute, deliver and perform its obligations under the Lease, this Agreement,
any Consent (as defined in the Lease) and the Construction Documents and (iii)
is duly qualified to do business as a foreign corporation in good standing in
each jurisdiction in which its ownership or leasing of properties or the conduct
of its business requires such qualification. Silicon Graphics Real Estate,
Inc., a California corporation ("SGREI-CA") was organized on May 6, 1993, for
purposes unrelated to this transaction. Agent was organized on November 12,
1993 to effect a reincorporation of SGREI-CA as a Delaware corporation. SGREI-
CA will be merged into Agent no later than March 31, 1994, whereupon Agent will,
by operation of law succeed to all of SGREI-CA's rights and obligations.
3 POWER AND AUTHORITY. The consummation of the transactions herein
contemplated and the performance and observance of Agent's obligations under
this Agreement have been, and the Construction Documents have been or will be,
duly authorized by all necessary corporate action on the part of Agent. The
execution, delivery and performance by Agent of this Agreement, any Consent (as
defined in the Lease) and the Construction Documents will not result in any
violation of any term of the articles of incorporation or the by-laws of Agent,
do not require stockholder approval or the approval or consent of any trustee or
holders of indebtedness of Agent except such as have been obtained prior to the
date hereof and will not conflict with or result in a breach of any terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any Lien (other than a Permitted Lien) upon any property or assets
of Agent under, any indenture, mortgage or other agreement or instrument to
which Agent is a party or by which it or any of its property is bound, or any
existing applicable law,
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
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rule, regulation, license, judgment, order or decree of any Governmental
Authority or court having jurisdiction over Agent or any of its activities or
properties.
4 BINDING AGREEMENT. This Agreement and any Consent have been, and
each of the Construction Documents will be, duly authorized, executed and
delivered by Agent and, assuming the due authorization, execution and delivery
of this Agreement and any Consent by Owner and the Construction Documents by the
parties thereto other than Agent, this Agreement and any Consent are, and each
of the Construction Documents when executed and delivered will be, a legal,
valid and binding obligation of Agent, enforceable according to its terms.
5 NO LITIGATION. There is no action, suit, proceeding or
investigation at law or in equity by or before any court, governmental body,
agency, commission or other tribunal now pending or, to the best knowledge of
the Agent threatened against or affecting Agent or Guarantor or any property or
rights of Agent or Guarantor which questions the enforceability of this
Agreement or which, if adversely determined, would (i) affect Owner's title to
any Unit Premises, Unit Improvements, Unit FF&E or Unit, (ii) have a material
adverse impact on the value or use of any Unit, or (iii) have a material adverse
impact on the financial condition or business of Agent and Guarantor, taken as a
whole, or, which if adversely determined, would materially impair the ability of
Agent to perform its obligations hereunder or of Guarantor to perform its
obligations under the Guarantee.
6 CONSENTS, APPROVALS, AUTHORIZATIONS, ETC. There are no consents,
permits, licenses, orders, authorizations, approvals, waivers, extensions or
variances of, or notices to or registrations or filings with (each a
"Governmental Action"), any Governmental Authority or public body or authority
which are or will be required in connection with the valid execution, delivery
and performance of this Agreement and the Construction Documents, except for
customary Governmental Actions required for the construction of any improvements
to any Unit Premises, or the occupancy, use or placement in service of such
improvements or any Unit of Equipment, which in all cases have been or will be
obtained prior to the time required ("Customary Governmental Actions"), or any
Governmental Action (i) which is or will be required in connection with any
participation by Owner in the transaction contemplated by any xxxx of sale,
deed, assignment, assumption, ownership agreement, or operating agreement
relating to any Unit Premises, Unit Improvements, Unit FF&E or Unit, except for
any Customary Governmental Actions which will, if any, be obtained by Agent on
behalf of Owner, or (ii) which is or will be required to be obtained by Owner,
except for any Customary Governmental Actions which will, if any, be obtained by
Agent on behalf of Owner, Agent, Xxxxxxx, Xxxxxxx Leasing, any Assignee or an
Affiliate of the foregoing, during the term of this Agreement, with respect to
any Unit Premises, Unit Improvements, Unit FF&E or Unit, except in all cases for
such Governmental Actions, (A) as have been duly obtained, given or
accomplished, with true copies thereof delivered to Owner, and (B) as may be
required by applicable law not now in effect.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-28-
7 COMPLIANCE WITH CONTRACTUAL REQUIREMENTS, LEGAL REQUIREMENTS AND
INSURANCE REQUIREMENTS. The construction, operation, use, and physical
condition of each Unit Premises, the Unit Improvements, Unit, and item of Unit
FF&E comply with all Contractual Requirements, Legal Requirements and Insurance
Requirements, except any Contractual Requirements or Legal Requirements, the
non-compliance with which, individually or in the aggregate, (i) will not place
either Owner or any Assignee in any danger of civil liability for which Owner or
any Assignee is not adequately indemnified (Agent's obligations under Section 12
of this Agreement shall be deemed to be adequate indemnification if no Event of
Default exists and if such civil liability is reasonably likely to be less than
$5,000,000) or subject Owner or any Assignee to any criminal liability as a
result of failure to comply therewith, (ii) will not result in a material
diminution in the value of any Property or Equipment, and (iii) is consistent
with prudent business practices.
8 NO DEFAULT. Neither Agent nor Guarantor is in violation of or in
default under or with respect to any Contractual Requirement or Legal
Requirement in any respect which could be materially adverse to the business,
operations, properties or financial or other condition of Agent or Guarantor, or
which could materially adversely affect the ability of Agent to perform its
obligations under this Agreement or any of the Construction Documents or of the
Guarantor to perform its obligations under the Guarantee.
9 OWNERSHIP; LIENS. No Unit Premises, Unit Improvements, Unit
FF&E, or Unit is subject to any Lien, except for Permitted Liens.
10 FINANCIAL STATEMENTS. Agent has caused to be furnished to Owner
Guarantor's Annual Report on Form 10-K for the year ended June 30, 1993 and
Guarantor's Quarterly Report on Form 10-Q for the quarter ended September 30,
1993. The financial statements contained in such documents fairly present the
financial position, results of operations and statements of cash flow of
Guarantor as of the dates and for the periods indicated therein and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis.
11 CHANGES. Since September 30, 1993, there has been no material
adverse change in the financial condition or business of Guarantor, nor any
change which would materially impair the ability of Agent to perform its
obligations under this Agreement or any of the Construction Documents or which
would materially impair the ability of Guarantor to perform its obligations
under the Guarantee.
12 SUITABILITY OF EACH UNIT PREMISES. Each Unit Premises is or will
be made suitable in all material respects (including, without limitation, ground
conditions, utilities, and condition of title) for the construction of the
related Unit Improvements.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-29-
13 ERISA. Agent has not established and does not maintain or
contribute to any employee benefit plan that is covered by Title IV of the
Employee Retirement Income Security Act of 1974, as amended from time to time.
14 GROUND LEASE. Each Ground Lease is a Mortgageable Ground Lease
except to the extent agreed to in writing by Owner and Assignee, and is in full
force and effect and has not been modified, amended or changed in any manner
that has not been disclosed in writing to Owner, nor is there any material
default under any Ground Lease nor event which, with the giving of notice or the
passage of time or both, would constitute a default under such Ground Lease, nor
to the best knowledge of Agent has any party under any Ground Lease commenced
any action or given or received any notice for the purpose of terminating any
Ground Lease, and all rents, additional rents and other sums due and payable
under the Ground Lease have been paid in full.
15 STATUS OF AGENT. Not less than 90% of Agent's common stock is
owned directly or indirectly by Guarantor.
9. AFFIRMATIVE COVENANTS
Agent hereby agrees that, so long as this Agreement remains in effect,
Agent shall keep and perform fully each and all of the following covenants:
2 PERFORMANCE UNDER OTHER AGREEMENTS. Agent shall duly perform and
observe all of the covenants, agreements and conditions on its part to be
performed and observed hereunder and shall duly perform and observe, in all
material respects, all of the covenants, agreements and conditions on its part
which it is obligated to perform or observe under the Construction Documents.
3 NO ENCROACHMENTS. The Unit Improvements shall be constructed
entirely on the related Unit Premises and shall not encroach upon or overhang
(unless consented to by the affected property owner) any easement or right-of-
way on land of others in any manner that would materially impair the value or
utility of the Unit Premises. Upon request of Owner, Agent shall furnish from
time to time satisfactory evidence, other than, unless otherwise required by
this Agreement, an as-built survey, of compliance with the foregoing covenants.
If any discrepancies exist between the legal description set forth on the survey
described in Section 4(h) hereof and the final as-built survey provided pursuant
to Section 6 or 7 hereof, Owner and Agent shall cooperate, at Agent's expense,
in amending the legal descriptions in all recorded documents creating or
affecting the Unit Premises, including, without limitation, any easements, to
reflect the correct as-built description.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-30-
4 INSURANCE.
(a) INSURANCE WITH RESPECT TO EACH UNIT PREMISES, THE UNIT
IMPROVEMENTS, UNIT FF&E AND UNIT. Agent will maintain or cause to be maintained
on each Unit Premises, the Unit Improvements, Unit FF&E and Unit insurance of
the same types, in the same amounts and on the same terms and conditions as the
insurance required by paragraph (c) and paragraphs (f) through (1) of Section 10
of the Lease, except that the terms "Owner", "Agent" and "this Agreement" shall
substitute for the terms "the Lessor", "the Lessee" and "this Lease",
respectively, the phrase "Unit Premises, Unit Improvements, Unit FF&E and Unit"
shall substitute for the phrase "Parcel of Property", and references to
"Equipment" or "Unit of Equipment" shall be deemed deleted; provided, that in
lieu of the insurance required by paragraph (c)(i) of Section 10 of the Lease,
Agent shall maintain or cause to be maintained All Risk Builders' Risk Completed
Value Non-Reporting Form Insurance, including collapse coverage and fire
insurance with extended coverage, in an amount not less than one hundred percent
(100%) of the completed insurable value of the respective Unit Improvements and
Unit FF&E. The term "completed insurable value" as used herein means the actual
replacement cost, including the cost of debris removal, but excluding the cost
of constructing foundation and footings.
(b) Agent covenants that it will not use, carry on construction with
respect to, or occupy any Unit or permit the use, construction, or occupancy of
any Unit Premises, Unit Improvements, Unit FF&E or Unit at any time when the
insurance required by paragraph (a) of this subsection is not in force with
respect to such Unit Premises, Unit Improvements, Unit FF&E or Unit.
5 INSPECTION OF BOOKS AND RECORDS. Upon reasonable notice, Owner
or Assignee or designated representatives of either of them, shall have the
right of entry and free access to each Unit Premises, the Unit Improvements,
Unit FF&E and each Unit and the right to inspect all work done, labor performed
and materials furnished in and about each Unit Premises, the Unit Improvements,
Unit FF&E and each Unit and at reasonable times the right to inspect all books,
contracts and records of Agent relating to each Unit Premises, the Unit
Improvements, Unit FF&E and each Unit.
6 EXPENSES. Agent shall pay upon demand all obligations, costs and
expenses incurred by Owner with respect to any and all transactions contemplated
herein and the preparation of any document reasonably required hereunder and the
prosecution or defense of any action or proceeding or other litigation affecting
Agent or any Unit Premises, Unit Improvements, Unit FF&E or Unit, including
(without limiting the generality of the foregoing) all Financing Costs not
capitalizable by Owner in Unit Acquisition Cost and amounts required to
reimburse Owner for its obligations, costs and expenses arising in connection
with the termination of any Credit Agreement (whether as a result of a default
thereunder or otherwise), costs incurred in connection with terminating and
obtaining Owner's equity financing, title and
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-31-
conveyancing charges, recording and filing fees and taxes, title search fees,
rent under the Ground Leases, mortgage taxes, intangible personal property
taxes, escrow fees, revenue and tax stamp expenses, insurance premiums
(including title insurance premiums), brokerage commissions, finders' fees,
placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', rating agencies', accountants' and reasonable
attorneys' fees and disbursements, and will reimburse to Owner all expenses paid
by Owner of the nature described in this subsection 9.5 which have been or may
be incurred by Owner with respect to any and all of the transactions
contemplated herein. In the event Agent shall fail to reimburse Owner within
ten (10) Business Days after presentation of a xxxx and demand for payment
therefor, Owner may pay or deduct from the advances to be made any of such
expenses and any proceeds so applied shall be deemed advances under this
Agreement, and deducted from the total funds available to Agent under
this Agreement. Notwithstanding anything to the contrary contained in the
foregoing, Agent shall not be required to reimburse Owner for any of the
foregoing obligations, costs and expenses which constitute properly
capitalizable costs under generally accepted accounting practices and which
Owner is able to finance under a Credit Agreement, which obligations, costs and
expenses shall, subject to the terms and conditions hereof, be capitalized by
Owner and included in Unit Acquisition Cost. Expenses incurred by Owner
(including, without limitation, Financing Costs) in financing obligations, costs
and expenses pending such allocation as a capitalizable cost to a Unit shall be
payable by Agent hereunder, if not capitalizable by Owner as set forth in the
prior sentence.
7 CERTIFICATES; OTHER INFORMATION. Agent shall furnish to Owner:
(a) concurrently with the delivery of the financial statements
referred to in subsection 9.6(b) hereof, a certificate of a Responsible
Officer stating that, to the best of such Responsible Officer's knowledge,
Agent during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition contained in this Agreement
and in all material respects in the Construction Documents to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Event of Default or Potential Default except
as specified in such certificate;
(b) from time to time, (i) promptly, and in any event not more than
100 days after the end of the fiscal year of Guarantor, copies of
Guarantor's Annual Reports on Form 10-K, and promptly, and in any event not
more than 60 days after the end of each fiscal quarter of Guarantor, copies
of Guarantor's Quarterly Reports on Form 10-Q, in each case accompanied by
a certificate of a Responsible Officer of Guarantor setting forth a
calculation of the Guarantor's Consolidated Tangible Net Worth, and
promptly, any report Guarantor files on Form 8-K with the SEC, (ii)
promptly upon request, such other information with respect to the
operations, business, property, assets, financial condition or litigation
of Agent and Guarantor, taken as a whole, as Owner or any Assignee shall
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
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reasonably request, (iii) promptly after a Responsible Officer of Agent or
Guarantor obtains knowledge of any Event of Default or Potential Default or
Event of Unit Termination or Potential Event of Unit Termination, a
certificate of a Responsible Officer of Agent or Guarantor specifying the
nature and period of existence of such Event of Default or Potential
Default or Event of Unit Termination or Potential Event of Unit
Termination, and what action, if any, Agent or Guarantor has taken, is
taking, or proposes to take with respect thereto, (iv) promptly after a
Responsible Officer of Agent or Guarantor obtains knowledge of any material
adverse change in the financial condition or business of Agent and
Guarantor, taken as a whole, or of any litigation of the type described in
subsection 8.4 hereof, a certificate of a Responsible Officer of Agent or
Guarantor describing such change or litigation as the case may be, and (v)
promptly after Agent obtains knowledge of any and all Liens other than
Permitted Liens on any Unit Premises, Unit Improvements, Unit FF&E, or
Unit, a detailed statement describing each such Lien.
8 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Agent shall
preserve, renew and keep in full force and effect its corporate existence
(except as otherwise permitted herein), and take all reasonable action to
maintain all rights, privileges and franchises material to the conduct of its
business, and comply with all Legal Requirements with respect thereto; provided,
however, that nothing contained in this subsection 9.7 shall prevent Agent from
ceasing or omitting to exercise any rights, privileges or franchises which in
the reasonable judgment of Agent can no longer be profitably exercised or
prevent Agent from selling, abandoning or otherwise disposing of any property,
the retention of which in the reasonable judgment of Agent is inadvisable to the
business of Agent, or prevent any liquidation of any subsidiary of Agent, or any
merger, consolidation or sale, permitted by the provisions of subsection 10.2
hereof.
9 NOTICES. Agent shall give notice to Owner promptly upon the
occurrence of:
(a) any litigation or proceeding of the nature described in Section
8.4 hereof or otherwise affecting any Unit Premises, Unit Improvements,
Unit FF&E or Unit;
(b) any notice given pursuant to any of the Construction Documents
that a material default by Agent has occurred thereunder, if the
termination of such Construction Document could reasonably be expected to
result in an inability to complete the Unit Improvements by the applicable
Unit Completion Date;
(c) any notice given by Agent alleging that a material default has
occurred pursuant to any of the Construction Documents, if the termination
of such Construction Document could reasonably be expected to result in an
inability to complete the Unit Improvements by the applicable Unit
Completion Date;
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
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(d) any condition which results or is reasonably likely to result in
a Force Majeure Delay in completion of the Unit Improvements;
(e) notices received from the lessor under any Ground Lease affecting
or purporting to affect the rights, interest or obligations of the ground
lessee or of actual or alleged default thereunder; and
(f) the imposition of any Lien, other than Permitted Liens.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action, if any, Agent proposes to take with respect thereto.
10 CONTRACTUAL REQUIREMENTS, LEGAL REQUIREMENTS AND INSURANCE
REQUIREMENTS. Agent shall comply with:
(a) all Contractual Requirements;
(b) every Insurance Requirement the failure to comply with which
could affect the coverage of the insurance; and
(c) Legal Requirements affecting (i) the execution, delivery and
performance of this Agreement and the Construction Documents and (ii) any
Unit Premises, Unit Improvements, item of Unit FF&E or Unit;
except any Contractual Requirements or Legal Requirements, the non-compliance
with which, individually or in the aggregate, (x) will not place either the
Owner or any Assignee in any danger of civil liability for which the Owner or
any Assignee is not adequately indemnified (the Agent's obligations under
Section 12 of this Agreement shall be deemed to be adequate indemnification if
no Event of Default exists and if such civil liability is reasonably likely to
be less than $5,000,000) or subject the Owner or any Assignee to any criminal
liability as a result of failure to comply therewith, (y) will not result in a
material diminution in the value of any Unit Premises, Unit Improvements, item
of Unit FF&E or Unit, and (z) is consistent with prudent business practices.
11 PAYMENT OF TAXES. With respect to any Unit Premises, Unit
Improvements, Unit FF&E, or Unit, Agent shall make all required reports to the
appropriate taxing authorities and shall pay during the term of this Agreement
the taxes that Agent would be required to pay if such Unit Premises, Unit
Improvements or Unit was a Parcel of Property under paragraph (c) of Section 9
of the Lease, subject, however, to the rights of Agent with respect to
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-34-
Permitted Contests. Payment of such taxes shall be on the terms set forth in
paragraph (c) of Section 9 of the Lease.
12 FILINGS, ETC. Agent shall promptly and duly execute, deliver,
file, and record, at Agent's expense, all such documents, statements, filings,
and registrations, and take such further action as Owner shall from time to time
reasonably request in order to establish, perfect and maintain Owner's title to
and interest in any Unit Premises, Unit Improvements, Unit FF&E and any Unit and
any Assignee's interest in this Agreement, any Unit Premises, Unit Improvements,
Unit FF&E or any Unit as against Agent or any third party in any applicable
jurisdiction.
13 USE OF PROCEEDS. The proceeds of each advance shall be used by
Agent for payment of costs specified in the applicable request for the advance
and in accordance with the respective Unit Budget.
14 COMPLIANCE WITH OTHER REQUIREMENTS. Agent shall use commercially
reasonable precautions to prevent loss or damage to any Unit Premises, Unit
Improvements, Unit FF&E, or any Unit and to prevent injury to third Persons or
property of third Persons. Agent shall cooperate fully with Owner and all
insurance companies providing insurance pursuant to subsection 9.3 hereof in the
investigation and defense of any claims or suits arising from the ownership or
operation of equipment or ownership, use, or occupancy of any Unit Premises,
Unit Improvements, Unit FF&E, or any Unit; provided, that nothing contained in
this subsection shall be construed as imposing on Owner any duty to investigate
or defend any such claims or suits. Agent shall comply and shall use all
reasonable efforts to cause all Persons operating equipment on, using or
occupying any Unit Premises, Unit Improvements, Unit FF&E, or any Unit to comply
with every Insurance Requirement and Legal Requirement regarding acquiring,
titling, registering, leasing, subleasing, insuring, using, occupying, operating
and disposing of any Unit Premises, Unit Improvements, Unit FF&E, or any Unit,
and, if applicable, the licensing of operators thereof.
15 EVIDENCE OF COMPLIANCE. Agent shall furnish Owner and any
Assignee with such additional or updated documents, reports, certificates,
affidavits and other information, in form and substance satisfactory to Owner
and any Assignee in their reasonable judgment, as Owner and any Assignee may
reasonably require to evidence compliance by Agent with all of the provisions of
this Agreement.
16 STATEMENT OF EXPENDITURES. At Owner's request, Agent shall
supply Owner and any General Contractor with a statement setting forth the
names, addresses and amounts due or to become due as well as the amounts
previously paid to every contractor, subcontractor or Person furnishing
materials, performing labor or entering into the construction of any part of the
Unit Improvements.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-35-
17 CERTAIN DOCUMENTS. Agent shall furnish to Owner, if requested by
Owner, the contracts, bills of sale, statements, receipted vouchers, or other
documents under which title to the Unit Premises or Unit Improvements, or a
leasehold interest therein is claimed.
18 CHANGE UNIT BUDGET OR PLANS. Agent will obtain the prior written
consent of all Governmental Authorities the approval of which is required by
applicable Legal Requirements for modification or supplementation of any Unit
Plans or Unit Budget.
10 NEGATIVE COVENANTS
Agent hereby agrees that, so long as this Agreement remains in effect,
Agent shall not directly or indirectly:
2 RECEIVE CERTAIN ADVANCES. Receive advances with respect to a
Unit which exceed the Unit Budget for such Unit.
3 PROHIBITION OF FUNDAMENTAL CHANGES. Consolidate with or merge
into any other Person as such prohibition is set forth in Section 26 of the
Lease, except that the term "Owner" shall substitute for the term "the Lessor"
and the term "Agent" shall substitute for the term "the Lessee".
4 NOTIFICATION OF OPENING OF A UNIT. Open or operate a Unit prior
to the delivery to Owner of the Certificate of Substantial Completion and the
AFL Unit Leasing Record for the Unit.
5 ACQUIRE FEE OR LEASEHOLD INTEREST. Acquire a fee or leasehold
interest on behalf of Owner in any Unit Premises until Agent has delivered all
documents required by Section 4 hereof and in the reasonable judgment of Owner
satisfied the conditions set forth in such Section 4.
6 ASSIGNMENT OF OBLIGATIONS. Assign its obligations hereunder to
any other party except in accordance with Section 19 of this Agreement.
11. EVENTS OF DEFAULT AND EVENTS
OF UNIT TERMINATION
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-36-
2 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an Event of Default:
(a) FAILURE TO MAKE PAYMENTS. Failure to pay the purchase price of a
Unit when due in the event of a required purchase by Agent hereunder; or
failure by Agent to pay any other amount hereunder and the continuance of
such failure to pay such other amount for ten (10) days after written
notice of such failure by Owner to Agent.
(b) UNAUTHORIZED ASSIGNMENTS, ETC. Assignment by Agent of any
interest in this Agreement or any advance to be made hereunder or any
interest in either.
(c) MISREPRESENTATIONS. Any representation or warranty made herein
or which is contained in any certificate, document or financial or other
statement furnished under or in connection with this Agreement shall prove
to have been incorrect in any material respect on or as of the date made or
deemed made.
(d) BANKRUPTCY, ETC. The entry of a decree or order for relief in
respect of Agent or Guarantor by a court having jurisdiction in the
premises in an involuntary case under the Federal bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of Agent or Guarantor or of any substantial part of Agent's or
Guarantor's property, or ordering the winding up or liquidation of Agent's
or Guarantor's affairs, or the commencement against Agent or Guarantor of
any involuntary case under any such law and the continuance of any such
case unstayed and in effect for a period of sixty (60) consecutive days.
Also, the discontinuance of Agent's or Guarantor's business operations,
Agent's or Guarantor's general inability to pay their debts as they become
due or Agent or Guarantor's admission, each as to itself, of a general
inability to pay its debts as they come due or of bankruptcy, or the
commencement by Agent or Guarantor of a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or the
consent by Agent or Guarantor to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
other similar official) of Agent or Guarantor or of any substantial part of
Agent's or Guarantor's property, or the making by Agent or Guarantor of an
assignment for the benefit of creditors, or the failure of Agent or
Guarantor generally to pay their debts as such debts become due, or the
taking of corporate action by Agent or Guarantor in furtherance of any such
action.
(e) OTHER DEFAULTS. Agent shall default in the performance or
observance of any other term, covenant, condition or obligation contained
in this Agreement and, in the case of such default other than a default
arising under subsection 9.3 hereof, such default
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shall continue for thirty (30) days after written notice shall have been
given to Agent by Owner specifying such default and requiring such default
to be remedied; provided that such event shall not be an Event of Default
if (i) such default is of a nature that it cannot be completely remedied
with reasonable and diligent efforts within such thirty (30) day period,
but is capable of being remedied within an additional ninety (90) days and
(ii) Agent shall have instituted and thereafter diligently and continuously
prosecuted to completion all steps necessary to remedy such default and
such default is in fact remedied within an additional 90 days and (iii) the
continuance of such default will not place the Owner or any Assignee in any
danger of civil liability for which the Owner or any Assignee is not
adequately indemnified (the Agent's obligations under Section 12 of this
Agreement shall be deemed to be adequate indemnification if no other Event
of Default exists hereunder or if such civil liability is reasonably likely
to be less then $5,000,000) or subject the Owner or any Assignee to any
criminal liability as a result of such default; and further provided, that
an Event of Unit Termination shall not constitute an Event of Default
hereunder.
(f) GUARANTOR. Any representation or warranty made by Guarantor in
the Guarantee proves to be false or inaccurate in any material respect when
made or deemed made or the Guarantor defaults in the performance of any
obligation or covenant contained in the Guarantee.
(g) GUARANTEE. Guarantor defaults in any obligation under the
Guarantee which default continues after the period of any grace period
granted to the Agent hereunder in respect of such guaranteed obligation, or
Guarantor defaults in its obligations set forth in Section 11 of the
Guarantee and such default continues for twenty (20) Business Days after
notice thereof by Owner to Guarantor.
(h) DEFAULT UNDER LEASE. An Event of Default (as defined in the
Lease) shall occur under the Lease.
(i) PAYMENT OF OBLIGATIONS. A default or event of default, the
effect of which is to permit the holder or holders of any indebtedness
(including, without limitation, lease obligations which are shown on the
balance sheet of Agent or Guarantor or which relate to sale-leaseback
transactions), or a trustee or agent on behalf of such holder or holders,
to cause such indebtedness to become due prior to its stated maturity,
shall occur under the provisions of any agreement pursuant to which such
indebtedness was created or any instrument evidencing such indebtedness of
Agent or Guarantor in excess of $20,000,000 in the aggregate or any
obligation of Agent or Guarantor for the payment of such indebtedness shall
(A) become or be declared to be due and payable prior to its stated
maturity and shall not be paid when due, or (B) not be paid when due.
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(j) NEGATIVE COVENANTS. Agent shall default in the performance or
observance of any agreement, covenant or condition contained in Section 10
hereof.
(k) JUDGMENT DEFAULTS. Final judgment or judgments for the payment
of money in excess of $10,000,000 in the aggregate shall be rendered
against Agent or Guarantor by any U.S. Federal or state court and the same
shall remain undischarged for a period of thirty (30) days during which
execution of such judgments shall not be effectively stayed.
3 OWNER'S RIGHTS UPON AN EVENT OF DEFAULT. Upon the occurrence
and continuation of any Event of Default Owner may do any one or more of the
following:
(a) Terminate this Agreement and/or Owner's obligations to make any
further advances hereunder;
(b) To the extent permitted by applicable law, take immediate
possession of any Unit Premises, Unit Improvements, Unit FF&E, and Unit
with respect to which Owner has made an Initial Advance and remove any
equipment or property of Owner in the possession of Agent, wherever
situated, and for such purpose, enter upon any such Unit Premises, Unit
Improvements or Unit without liability to Agent for so doing;
(c) Whether or not any action has been taken under (a) above, sell
any Unit Premises, Unit Improvements, Unit FF&E, or Unit (with or without
the concurrence or request of Agent) at public or private sale (judicially
or non-judicially), pursuant to such notices and procedures as may be
required by law, to the extent such requirements are not effectively waived
by Agent hereunder; provided that the disposition of any Unit Premises,
Unit Improvements, Unit FF&E, or Unit shall take place in a commercially
reasonable manner;
(d) Hold, use, occupy, operate, remove, lease, sublease or keep idle
any Unit Premises, Unit Improvements, Unit FF&E, or Unit as Owner in its
sole discretion may determine, without any duty to account to Agent with
respect to any such action or inaction or for any proceeds thereof, except
as may be expressly set forth herein; and
(e) Exercise any other right or remedy which may be available under
applicable law and in general proceed by appropriate judicial proceedings,
either at law or in equity, to enforce the terms hereof or to recover
damages for the breach hereof.
Suit or suits for the recovery of any default in the payment of any
sum due hereunder or for damages may be brought by Owner from time to time at
Owner's election, and nothing herein contained shall be deemed to require Owner
to await the date whereon this
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Agreement or the term hereof would have expired by limitation had there been no
such default by Agent or no such termination or cancellation.
The receipt of any payments under this Agreement by Owner with
knowledge of any breach of this Agreement by Agent or of any default by Agent in
the performance of any of the terms, covenants or conditions of this Agreement,
shall not be deemed to be a waiver of any provision of this Agreement.
No receipt of moneys by Owner from Agent after the termination or
cancellation hereof in any lawful manner shall reinstate or continue this
Agreement, or operate as a waiver of the right of Owner to recover possession of
any Unit Premises, Unit Improvements, Unit FF&E, or Unit by proper suit, action,
proceedings or remedy or operate as a waiver of the right to receive any and all
amounts owing by Agent to or on behalf of Owner hereunder; it being agreed that,
after the service of notice to terminate or cancel this Agreement, and the
expiration of the time therein specified, if the default has not been cured in
the meantime, or after the commencement of suit, action or summary proceedings
or of any other remedy, or after a final order, warrant or judgment for the
possession of any Unit Premises, Unit Improvements, Unit FF&E, or Unit, Owner
may demand, receive and collect any moneys payable hereunder, without in any
manner affecting such notice, proceedings, suit, action, order, warrant or
judgment; and any and all such moneys so collected shall be deemed to be
payments on account for the use, operation and occupation of the Unit Premises,
Unit Improvements, Unit FF&E, or Unit, or at the election of Owner, on account
of Agent's liability hereunder.
After any Event of Default, Agent shall be liable for, and Owner may
recover from Agent, (i) all of Owner's obligations, costs and expenses incurred
in connection with its obligations under this Agreement and for which Owner may
demand reimbursement pursuant to subsection 9.5 hereof, (ii) all amounts payable
pursuant to subsection 11.4 and Section 12 hereof and (iii) all losses, damages,
costs and expenses (including, without limitation, attorneys' fees and expenses,
commissions, filing fees and sales or transfer taxes) sustained by Owner by
reason of such Event of Default and the exercise of Owner's remedies with
respect thereto, including, in the event of a sale by Owner of any Unit
Premises, Unit Improvements, Unit FF&E or Unit pursuant to this subsection 11.2,
all costs and expenses associated with such sale. The amounts payable in
clauses (i) through (iii) above are hereinafter sometimes referred to as the
"Accrued Default Obligations". Accrued Default Obligations, as used in this
paragraph, shall not include any damages for loss of opportunity or profits
arising from the prospective use, operation and occupancy by parties other than
Agent of any Unit or from alternate investments foregone by Owner in acquiring
the Unit or the anticipated receipt of income therefrom, in each case,
subsequent to Agent's possession of such Unit after the Lease Term.
After an Event of Default, Owner may sell its interest in any Unit
Premises, Unit Improvements, Unit FF&E, and Unit to any non-affiliate of Owner
upon any terms that Owner
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deems satisfactory, free of any rights of Agent or any Person claiming through
or under Agent. In the event of any such sale, in addition to the Accrued
Default Obligations, Owner shall be entitled to recover from Agent, as
liquidated damages, and not as a penalty, an amount equal to the Unit
Acquisition Cost of any Unit Premises, Unit Improvements, Unit FF&E or Unit so
sold, minus the proceeds of such sale received by Owner. Proceeds of sale
received by Owner in excess of the Unit Acquisition Cost of such Unit Premises,
Unit Improvements, Unit FF&E or Unit sold shall be credited against the Accrued
Default Obligations Agent is required to pay under this subsection 11.2. If such
proceeds exceed the Accrued Default Obligations, or, if Agent has paid all
amounts required to be paid under this subsection 11.2, such excess shall be
paid by Owner to Agent. As an alternative to any such sale, or if Agent converts
any Unit Premises, Unit Improvements, Unit FF&E or Unit after an Event of
Default, or if such Unit Premises, Unit Improvements, Unit FF&E or Unit is lost
or destroyed, in addition to the Accrued Default Obligations, Owner may cause
such Agent to pay to Owner, and Agent shall pay to Owner, as liquidated damages
and not as a penalty, and as consideration for the transfer of Owner's interest
in the applicable Unit Premises, Unit Improvements, Unit FF&E or Unit, an amount
equal to the Unit Acquisition Cost of such Unit Premises, Unit Improvements,
Unit FF&E or Unit. In the event Owner receives payment pursuant to the previous
sentence of this paragraph, Owner shall transfer all of Owner's right, title and
interest in and to the Unit Premises, Unit Improvements, Unit FF&E and Unit to
Agent.
In the event of a sale pursuant to this subsection 11.2, upon receipt
by Owner of the amounts payable hereunder, Owner shall transfer all of Owner's
right, title and interest in and to the Unit Premises, Unit Improvements, Unit
FF&E and Unit to Agent or a purchaser other than Agent, as the case may be.
No remedy referred to in this subsection 11.2 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Owner at law or in equity, and the
exercise in whole or in part by Owner of any one or more of such remedies shall
not preclude the simultaneous or later exercise by Owner of any or all such
other remedies. No waiver by Owner of any Event of Default hereunder shall in
any way be, or be construed to be, a waiver of any future or subsequent Event of
Default.
With respect to the termination of this Agreement as to any Unit
Premises, Unit Improvements, Unit FF&E, or Unit as a result of an Event of
Default, Agent hereby waives service of any notice of intention to re-enter.
Agent hereby waives any and all rights to recover or regain possession of any
Unit Premises, Unit Improvements, Unit FF&E, or Unit or to reinstate this
Agreement as permitted or provided by or under any statute, law or decision now
or hereafter in force and effect.
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4 EVENTS OF UNIT TERMINATION. The occurrence of any of the
following shall constitute an Event of Unit Termination with respect to a Unit:
(a) UNSATISFACTORY TITLE. If at any time title to any Unit Premises,
Unit Improvements or Unit is not reasonably satisfactory to Owner by reason
of any Lien, encumbrance, or other environmental defect (even though the
same may have existed at the time of any prior advance), except for
Permitted Liens, and such Lien, encumbrance or other defect is not
corrected by bonding, deposit or payment within thirty (30) days after
notice to Agent.
(b) DAMAGE OR DESTRUCTION. If any Unit Improvements are partially or
totally damaged or destroyed by fire or any other cause and the restoration
thereof cannot reasonably be expected to be completed so that the Unit
Improvements will be completed on or before the applicable Unit Completion
Date. Agent hereby expressly waives the benefits of Sections 1932 and 1933
of the California Civil Code.
(c) CESSATION OF CONSTRUCTION. If there is any cessation of
construction of the Unit Improvements for any period after the date
construction shall commence in excess of sixty (60) successive calendar
days, unless the conditions of each of subparagraphs (1) and (2) hereof
shall have been satisfied:
(1) the cessation of construction shall have been caused by
Force Majeure Delay; or
(2) from time to time upon Owner's reasonable request therefor
during any such cessation of construction, Agent shall furnish to
Owner reasonably satisfactory evidence that (notwithstanding such
cessation of construction) the completion of the Unit Improvements can
be accomplished on or before the respective Unit Completion Date
(subject to extension permitted in the case of Force Majeure Delay)
and within the Unit Budget.
(d) NONCONFORMING WORK. If the construction of the Unit
Improvements, or any part thereof, is made in a manner other than as herein
provided or any materials, fixtures or articles are not in accordance with
the Unit Plans and Agent fails to proceed diligently to correct such
nonconforming work in a reasonably prompt and satisfactory fashion after
notice and demand by Owner, or if Agent shall fail to proceed diligently to
correct any structural defect in the Unit Improvements in a reasonably
prompt and satisfactory fashion after notice and demand by Owner.
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(e) NON-COMPLIANCE WITH CERTAIN LEGAL REQUIREMENTS. If Agent fails
to comply with any Legal Requirement relating solely to such Unit Premises,
Unit Improvements, Unit FF&E or Unit, the non-compliance with which,
individually or in the aggregate would subject the Owner or any Assignee to
any criminal liability as a result of failure to comply therewith.
(f) FAILURE TO COMPLETE. If as of the close of business on a Unit
Completion Date, the related Unit Improvements have not been completed as
herein provided, or if the Certificate of Substantial Completion and AFL
Unit Leasing Record have not been executed and delivered by the respective
Unit Completion Date, or if Owner shall reasonably determine during the
course of construction that the Unit Improvements cannot be completed by
the Unit Completion Date, in either case subject to Force Majeure Delay.
(g) PERMITS. If Agent shall fail to obtain or be unable to obtain
any Permit, or if any Permit shall be revoked or otherwise cease to be in
full force and effect unless, Agent shall have obtained reinstatement or
reissuance of such Permit within thirty (30) days after the revocation or
expiration thereof, or if such reinstatement or reissuance is of a nature
that it cannot be completely effected within thirty (30) days, Agent shall
have diligently commenced application for such reinstatement or reissuance
and shall thereafter be diligently proceeding to complete said
reinstatement or reissuance.
(h) DEFAULT UNDER GROUND LEASE. Agent shall default in the
observance or performance of any material term, covenant or condition of
the Ground Lease relating to such Unit Premises on the part of Owner, as
tenant thereunder, to be observed or performed, unless any such observance
or performance shall have been waived or not required by the landlord under
such Ground Lease or is within a grace period provided for in such Ground
Lease, or if any one or more of the events referred to in such Ground Lease
shall occur which would cause such Ground Lease to terminate without notice
or action by the landlord thereunder or which would entitle the landlord
under such Ground Lease to terminate such Ground Lease and the term thereof
by the giving of notice to Owner without opportunity to cure, as tenant
thereunder, or if any Ground Lease shall be terminated or canceled for any
reason or under any circumstance whatsoever (other than action by Owner,
but not other than action by Agent on behalf of Owner).
(i) MATERIAL ADVERSE CHANGE. A material adverse change in the
financial condition or business of Agent and Guarantor, taken as a whole,
shall occur prior to the making of the Final Advance.
(j) TAKINGS. If the use, occupancy or title to any Unit is taken,
requisitioned or sold in, by or on account of actual or threatened eminent
domain proceedings or other
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action by any Person or authority having the power of eminent domain (such
events collectively referred to as a "Taking") and such Taking relates to
all or a substantial portion of a Unit. Upon receipt of proceeds from any
award or sale made in connection with such Taking, so long as no Event of
Default or Potential Default has occurred and is continuing, and so long as
Agent has made all payments to Owner required under subsection 11.4 hereof,
Owner shall remit to Agent the net amount of such proceeds remaining after
reimbursement for all costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred by Owner in connection with the
negotiation and settlement of any proceedings related to such Taking;
provided that, if such net proceeds shall exceed $2,000,000 the proceeds
shall be retained by Owner and utilized to reduce the amount of its
financing. If such proceeds are received prior to Agent making the
payments required under subsection 11.4 hereof, or if such net proceeds
shall exceed $2,000,000, the net proceeds shall be applied to the amount
payable thereunder. A Taking shall be deemed of "all or a substantial
portion" of a Unit if after such Taking a Unit is, or will be, unusable for
Agent's ordinary business purposes. Provided that no Event of Default
shall have occurred and be continuing, Agent may conclusively establish
that a Taking is of "all or a substantial portion" of a Unit by so
notifying the Owner and any Assignee in writing. Agent hereby expressly
waives the benefits of Section 1265.130 of the California Code of Civil
Procedure.
(k) INSUFFICIENT AVAILABLE COMMITMENT. If Owner shall reasonably
determine that the Available Commitment is not, or will not be, sufficient
to allow Owner to make advances for completion of the Unit Improvements and
acquisition and installation of Unit FF&E in accordance with the Unit
Budget; provided that if Owner shall make such determination it shall give
Agent written notice thereof and such event shall not be an Event of Unit
Termination if the amount of such insufficiency shall be equal to or less
than the amount of incomplete leasehold improvements and if Agent shall
within ten (10) days of such notice enter into a written agreement with
Owner in form reasonably acceptable to the Owner and any Assignee to pay
for the completion of such portion of the incomplete leasehold
improvements, in accordance with the Unit Plans and without seeking
advances hereunder to reimburse such payments and acknowledging that,
notwithstanding such payments, such leasehold improvements would be owned
by Owner.
5 OWNER'S RIGHTS UPON EVENT OF UNIT TERMINATION. If any Event of
Unit Termination with respect to a Unit shall occur, Owner shall have no further
obligation to make advances to Agent with respect to such Unit, and Owner may,
as liquidated damages and not as a penalty and as consideration for the transfer
of the applicable Unit, require Agent to purchase, such Unit within fifteen (15)
days after notice by Owner, and if Agent has notified Owner of a Taking in
respect of a Unit as permitted by the last sentence of paragraph (j) of Section
11.3, Agent shall have the right and obligation to purchase such Unit within
thirty (30) days of such
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notice by Agent, in any such case at a price equal to the Unit Acquisition Cost
for such Unit. At the time of such sale, Agent shall be required to pay to
Owner Owner's obligations, costs, losses, damages, and expenses (including,
without limitation, reasonable attorneys' fees and expenses) sustained by Owner
by reason of such Event of Unit Termination and exercise of Owner's rights under
this subsection 11.4.
12. INDEMNITIES
(a) Agent shall indemnify and hold harmless Owner, Xxxxxxx, Xxxxxxx
Xxxxx, Xxxxxxx Leasing, any Assignee, any successor or successors and any
Affiliate of each of them, and their respective officers, directors,
incorporators, shareholders, partners (general and limited, including, without
limitation, the general and limited partners of Owner), employees, agents and
servants (each of the foregoing an "Indemnified Person") from and against all
liabilities (including, without limitation, strict liability in tort and
environmental law), taxes (to the extent provided in subparagraph (ii) below),
losses, obligations, claims (including, without limitation, strict liability in
tort), damages, penalties, causes of action, suits, costs and expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses) or judgments of any nature relating to or in any way arising out of:
(i) The ordering, delivery, acquisition, construction, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, reregistration, custody by Agent of title and
registration documents, ownership, use, non-use, misuse, financing,
lease, sublease, operation, transportation, repair, control or
disposition of any Unit Premises, Unit Improvements, item of Unit
FF&E, or Unit, or the past, present or future presence or release of
hazardous substances on, under, to or from, or the generation on or
transportation of hazardous substances to or from, any Unit Premises
or the failure to report, disclose or remediate the same; and
(ii) Any of the claims, demands, fees, taxes, violations of
contract, or any other matter or situation described in or
contemplated by the indemnification provisions of subparagraphs (b),
(c) and (d) of Section 11 of the Lease and subject to the same
exclusions set forth therein or elsewhere in Section 11 of the Lease,
except that this Agreement shall substitute the terms "Owner" for "the
Lessor", "Agent" for "the Lessee", "this Agreement" for "this Lease",
and shall substitute the phrase "Unit Premises, Unit Improvements,
Unit FF&E or Unit" for the phrase "Property or Equipment" and for the
word "Property".
(b) The indemnification required under this Section 12 shall be upon
the terms provided in the paragraphs of Section 11 of the Lease following
paragraph (d) thereof, except
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that this Agreement shall substitute the terms in the same manner as described
in subparagraph (a)(ii) above.
13. LEASEHOLD INTERESTS
The provisions of Section 29 of the Lease shall govern each Ground
Lease hereunder, except this Agreement shall substitute the terms "Owner" for
"the Lessor", "Agent" for "the Lessee", "Unit Premises, Unit Improvements, Unit
FF&E and Unit" for "Parcel of Property" and "Section 13" for "Section 29".
14. PURCHASES
In connection with, and as a condition to, the purchase of any Unit
Premises, Unit Improvements, Unit FF&E, or Unit pursuant hereto, (i) Agent shall
pay at the time of purchase, in addition to the Unit Acquisition Cost and all
other amounts payable by Agent under this Agreement, all transfer taxes,
transfer gains taxes, mortgage recording tax, if any, recording and filing fees
and all other similar taxes, fees, expenses and closing costs (including
reasonable attorneys' fees) in connection with the conveyance of such Unit
Premises, Unit Improvements, Unit FF&E, or Unit to Agent and all other amounts
owing hereunder, and (ii) when Owner transfers title, such transfer shall be on
an as-is, non-installment sale basis, without warranty by, or recourse to,
Owner, but free of the Lien created pursuant to a Credit Agreement.
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15. OWNER'S RIGHT TO TERMINATE
(a) Owner shall have the right, upon written notice to Agent, to
terminate this Agreement with respect to each and every Unit Premises, Unit
Improvements, Unit FF&E, or Unit for which an AFL Unit Leasing Record has not
been executed by Owner and the Effective Date occurred as of the date stipulated
in such notice if, (i) at any time, for any reason (other than an Event of
Default by the Lessor under a Credit Agreement (as therein defined), which has
not been caused by or resulted from an Event of Default under this Agreement or
an Event of Default (as defined in the Lease) under the Lease or by a breach by
Agent of its obligations under any agreement or document executed and delivered
in connection with this Agreement or the Lease), Commercial Paper (as defined in
the Lease) cannot be issued by Owner upon terms reasonably acceptable to Owner,
Owner cannot arrange for bank borrowings to finance or refinance its obligations
hereunder with respect to such Unit Premises, Unit Improvements, Unit FF&E or
Unit upon terms reasonably acceptable to Owner, and Owner may no longer make or
continue borrowings under a Credit Agreement sufficient to finance or refinance
such obligations, (ii) at any time, for any reason (other than an Event of
Default by Owner under a Credit Agreement (as therein defined) which has not
been caused by or resulted from an Event of Default under this Agreement or from
a breach by Agent of its obligations under any agreement or document executed
and delivered in connection with this Agreement), a limited partner or partners
of Owner cannot arrange for borrowings from the bank or banks acting as lender
under a Credit Agreement in an amount equal to such limited partners' limited
partnership interest or interests in Owner or (iii) such bank or banks which
shall act as lender to a limited partner or partners of the Owner shall make a
material change in the terms of any such lending arrangement a condition
precedent to the extension of such lending arrangement without a corresponding
change being effected under the Credit Agreement to which such lender is a
party.
(b) In the event of a termination with respect to any Unit Premises,
Unit Improvements, Unit FF&E, or Unit pursuant to paragraph (a) of this Section
15, Agent shall be required to purchase, on the date stipulated in the written
notice contemplated by paragraph (a) of this Section 15, such Unit or any Unit
Premises, Unit Improvements or Unit FF&E constituting a part of such Unit as
identified by Owner in such notice, for cash at its or their Unit Acquisition
Cost.
16. PERMITTED CONTESTS
(a) Agent shall not be required, nor shall Owner have the right, to
pay, discharge or remove any tax, assessment, levy, fee, rent, charge, Lien or
encumbrance, or to comply or cause any Unit Premises, Unit Improvements, item of
Unit FF&E, or Unit to comply with any Legal Requirement applicable to any Unit
Premises, Unit Improvements, item of Unit FF&E, or Unit or the occupancy, use or
operation thereof, so long as no Event of Default exists
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under this Agreement, and, in the opinion of Agent's counsel, Agent shall have
reasonable grounds to contest the existence, amount, applicability or validity
thereof by appropriate proceedings, which proceedings in the reasonable judgment
of Owner, (i) shall not involve any material danger that any Unit Premises, Unit
Improvements, item of Unit FF&E, or Unit would be subject to sale, forfeiture or
loss, as a result of failure to comply therewith, (ii) shall not affect the
payment of any sums due and payable hereunder or result in any such sums being
payable to any Person other than Owner or any Assignee, (iii) will not place
Owner or any Assignee in any danger of civil liability which is not adequately
indemnified (Agent's obligations under Section 12 of this Agreement shall be
deemed to be adequate indemnification if no Event of Default exists) or to any
criminal liability, (iv) if involving taxes, shall suspend the collection of the
taxes, and (v) shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Agent or any Unit Premises, Unit
Improvements, item of Unit FF&E, or Unit is subject and shall not constitute a
default thereunder (the "Permitted Contest"). Agent shall conduct all Permitted
Contests in good faith and with due diligence and shall promptly after the final
determination (including appeals) of any Permitted Contest, pay and discharge
all amounts which shall be determined to be payable therein. Owner shall
cooperate in good faith with Agent with respect to all Permitted Contests
conducted by Agent pursuant to this Section 16.
(b) In the event Owner deems, in its sole discretion, that its
interests under this Agreement or in any Unit Premises, Unit Improvements, item
of Unit FF&E or Unit are not adequately protected in connection with a Permitted
Contest brought by Agent under this Section 16 as a result of concerns related
to the financial condition of the Guarantor, Agent shall give such reasonable
security, as may be demanded by Owner to insure payment of such tax, assessment,
levy, fee, rent, charge or Lien and compliance with any Legal Requirement and to
prevent any sale or forfeiture of any Unit Premises, Unit Improvements, item of
Unit FF&E, or Unit or any other amount due by reason of such nonpayment or
noncompliance. Agent hereby agrees that Owner may assign such security provided
by Agent to any Assignee.
(c) At least ten (10) days prior to the commencement of any Permitted
Contest, Agent shall notify Owner in writing thereof if the amount in contest
exceeds $100,000, and shall describe such proceeding in reasonable detail. In
the event that a taxing authority or subdivision thereof proposes an additional
assessment or levy of any tax for which Agent is obligated to reimburse Owner
under this Agreement, or in the event that Owner is notified of the commencement
of an audit or similar proceeding which could result in such an additional
assessment, then Owner shall in a timely manner notify Agent in writing of such
proposed levy or proceeding.
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
-48-
17. SALE OR ASSIGNMENT BY OWNER
(a) Except as otherwise expressly provided in this Section, Owner
shall not assign, convey or otherwise transfer any of its right, title and
interest in, to and under this Agreement. Owner shall have the right to obtain
equity and debt financing for the acquisition and ownership of any Unit
Premises, Unit Improvements, Unit FF&E, and Unit by mortgaging or assigning or
granting a lien on or security interest in its right, title and interest in any
or all amounts due from Agent or any third Person under this Agreement or in the
foregoing assets; provided, that any such mortgage, assignment or grant shall be
subject to the rights and interests of Agent under this Agreement.
(b) Any Assignee shall, except as otherwise agreed by Owner and
Assignee, have all the rights, powers, privileges and remedies of Owner
hereunder, and Agent's obligations as between itself and such Assignee hereunder
shall not be subject to any claims or defense that Agent may have against Owner.
Upon written notice to Agent of any such assignment, Agent shall thereafter make
payments of any and all sums due hereunder to Assignee, to the extent specified
in such notice, and such payments shall discharge the obligation of Agent to
Owner hereunder to the extent of such payments. Anything contained herein to
the contrary notwithstanding, no Assignee shall be obligated to perform any
duty, covenant or condition required to be performed by Owner hereunder, and any
such duty, covenant or condition shall be and remain the sole obligation of
Owner.
18. GENERAL CONDITIONS
The following conditions shall be applicable throughout the term of
this Agreement:
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
2 SURVIVAL. All indemnities, representations and warranties, and the
obligation to pay Additional Rent (as defined in the Lease) shall survive the
expiration or other termination hereof.
3 NO WAIVERS. No advance hereunder shall constitute a waiver of
any provision hereof, including, without limitation, of any of the conditions of
Owner's obligation to make further advances nor, in the event Agent is unable to
satisfy any such condition, shall any waiver of such condition have the effect
of precluding Owner from thereafter declaring such inability to be an Event of
Default as herein provided. Any advance made by Owner and any sums expended by
Owner pursuant to this Agreement shall be deemed to have been made pursuant to
this Agreement, notwithstanding the existence of an uncured Event of Default.
No advance at a time when an Event of Default exists shall constitute a waiver
of any right or remedy of Owner existing by reason of such Event of Default,
including, without limitation, the right to refuse to make further advances.
4 OWNER AND ASSIGNEE SOLE BENEFICIARIES. All conditions of the
obligation of Owner to make advances hereunder are imposed solely and
exclusively for the benefit of Owner and Assignee and their assigns and no other
Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Owner will refuse to
make advances in the absence of strict compliance with any or all thereof and no
other Person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Owner, with the consent of Assignee, at any time if in its sole discretion, it
deems it advisable to do so. Inspections and approvals of any Unit Plans, Unit
Premises, Unit Improvements, Unit FF&E, and Unit and the workmanship and
materials used therein impose no responsibility or liability of any nature
whatsoever on Owner, and no Person shall, under any circumstances, be entitled
to rely upon such inspections and approvals by Owner for any reason. Owner's
sole obligation hereunder is to make the advances if and to the extent required
by this Agreement.
5 NO OFFSETS, ETC. The obligations of Agent to pay all amounts
payable pursuant to this Agreement and to purchase a Unit hereunder shall be
absolute and unconditional under any and all circumstances of any character, and
such amounts shall be paid without notice, demand, defense, setoff, deduction or
counterclaim and without abatement, suspension, deferment, diminution or
reduction of any kind whatsoever, except as herein expressly otherwise provided.
The obligation of Agent to lease or sublease and pay Basic Rent (as defined in
the Lease) for a Unit upon Substantial Completion is without any warranty or
representation, express or implied, as to any matter whatsoever on the part of
Owner or any Assignee or any Affiliate of either, or anyone acting on behalf of
any of them.
AGENT HAS SELECTED AND SHALL SELECT ALL UNIT PREMISES, UNIT
IMPROVEMENTS, UNITS AND ITEMS OF UNIT FF&E CONSTRUCTED, ACQUIRED OR ORDERED ON
THE BASIS OF ITS OWN JUDGMENT. NEITHER OWNER NOR ANY ASSIGNEE NOR ANY AFFILIATE
OF EITHER, NOR ANYONE ACTING ON BEHALF OF ANY OF THEM, MAKES ANY REPRESENTATION
OR
(i)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, AS TO THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR
USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER CHARACTERISTIC,
OF ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR ITEM OF UNIT FF&E, OR AS TO
WHETHER ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR ITEM OF UNIT FF&E, OR THE
OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH ANY LAWS, RULES,
REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN OWNER AND AGENT, ANY ASSIGNEE OR ANY INDEMNIFIED PERSON,
AGENT ASSUMES ALL RISKS AND WAIVES ANY AND ALL DEFENSES, SET-OFFS, DEDUCTIONS,
COUNTERCLAIMS (OR OTHER RIGHTS), EXISTING OR FUTURE, TO ITS OBLIGATION TO PAY
ALL AMOUNTS PAYABLE HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR ITEM OF UNIT
FF&E, LATENT OR NOT;
(B) ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, ABATEMENT, DEFENSE OR
OTHER RIGHT WHICH AGENT MAY HAVE AGAINST OWNER, ANY ASSIGNEE, OR ANY INDEMNIFIED
PERSON FOR ANY REASON WHATSOEVER ARISING OUT OF THIS OR ANY OTHER TRANSACTION OR
MATTER;
(C) ANY DEFECT IN TITLE OR OWNERSHIP OF ANY UNIT PREMISES, UNIT
IMPROVEMENTS, OR UNIT OR ANY TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH
RESPECT TO THE UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR ITEMS OF UNIT FF&E;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR
DESTRUCTION OF, OR DAMAGE TO, ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR
ITEM OF UNIT FF&E IN WHOLE OR IN PART, OR CESSATION OF THE USE OR POSSESSION OF
ANY UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR ITEM OF UNIT FF&E BY AGENT FOR
ANY REASON WHATSOEVER AND OF WHATEVER DURATION, OR ANY CONDEMNATION,
CONFISCATION, REQUISITION, SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY UNIT
PREMISES, UNIT IMPROVEMENTS, ITEM OF UNIT FF&E OR UNIT, IN WHOLE OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE, OWNERSHIP,
OCCUPANCY OR POSSESSION OF THE UNIT PREMISES, UNIT IMPROVEMENTS, UNIT, OR ITEMS
OF UNIT FF&E BY AGENT;
(ii)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR PROCEEDING
BY OR AGAINST AGENT OR OWNER OR ANY ASSIGNEE;
(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER
TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS,
AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS; OR
(H) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER, WHETHER OR NOT
SIMILAR TO ANY OF THE FOREGOING.
AGENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE
CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE, CANCEL, QUIT, RESCIND
OR SURRENDER THIS AGREEMENT EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF.
The making of payments under this Agreement by Agent shall not be deemed a
waiver of any claim or claims that Agent may assert against Owner or any other
person. Owner agrees to repay Agent amounts paid to Owner to the extent such
payments were made in error and were not required by any of the terms or
provisions hereof.
6 NO RECOURSE. Owner's obligations hereunder are intended to be
the obligations of the limited partnership and of the corporation which is the
general partner thereof only and no recourse for the payment of any amount due
under this Agreement or the Construction Documents, or for any claim based
thereon or otherwise in respect thereof, shall be had against any limited
partner of Owner or any incorporator, shareholder, officer, director or
Affiliate, as such, past, present or future, of such corporate general partner
or of any corporate limited partner or of any successor corporation to such
corporate general partner or any corporate limited partner of Owner, or against
any direct or indirect parent corporation of such corporate general partner or
of any limited partner of Owner or any other subsidiary or Affiliate or any such
direct or indirect parent corporation or any incorporator, shareholder, officer
or director, as such, past, present or future, of any such parent or other
subsidiary or Affiliate, it being understood that Owner is a limited partnership
formed for the purpose of the transactions involved in and relating to this
Agreement, the Lease and the Construction Documents on the express understanding
aforesaid. Nothing contained in this subsection 18.5 shall be construed to
limit the exercise or enforcement, in accordance with the terms of this
Agreement, the Lease and the Construction Documents and any other documents
referred to herein, of rights and remedies against the limited partnership or
the corporate general partner of Owner or the assets of the limited partnership
or the corporate general partner of Owner.
7 NOTICES.
(iii)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
(a) All notices, offers, acceptances, approvals, waivers, requests,
demands and other communications hereunder or under any other instrument,
certificate or other document delivered in connection with the transactions
described herein shall be in writing, shall be addressed as provided below and
shall be considered as properly given (i) if delivered in person, (ii) if sent
by express courier service (including, without limitation, Federal Express,
Xxxxx, DHL, Airborne Express, and other similar express delivery services),
(iii) in the event overnight delivery services are not readily available, if
mailed by international airmail, postage prepaid, registered or certified with
return receipt requested, or (iv) if sent by telecopy and confirmed; provided,
that in the case of a notice by telecopy, the sender shall in addition confirm
such notice by writing sent in the manner specified in clauses (i), (ii) or
(iii) of paragraph (a) of this subsection 18.6. All notices shall be effective
upon receipt by the addressee; provided, however, that if any notice is tendered
to an addressee and the delivery thereof is refused by such addressee, such
notice shall be effective upon such tender. For the purposes of notice, the
addresses of the parties shall be as set forth below; provided, however, that
any party shall have the right to change its address for notice hereunder to any
other location by giving written notice to the other party in the manner set
forth herein. The initial addresses of the parties hereto are as follows:
If to Owner:
Virtual Funding, Limited Partnership
c/o ML Leasing Equipment Corp.
Project and Lease Finance Group
North Tower - 27th Floor
World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy of all notices under this subsection 18.6 to be simultaneously
given, delivered, or served to Xxxx Xxxxxx at the following address:
ML Leasing Equipment Corp.
Controller's Office
World Financial Center
South Tower - 8th Floor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
(iv)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
If to Agent:
Silicon Graphics Real Estate, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Treasury
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Silicon Graphics Real Estate, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx.
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Legal Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy of all notices under this subsection 18.6 to any Assignee at such
address as such Assignee may specify by written notice to Owner and Agent.
(b) Owner shall within five (5) Business Days give to Agent a copy of
all notices received by Owner pursuant to any Credit Agreement and any other
notices received with respect to any Unit Premises, Unit Improvements, item of
Unit FF&E, or Unit.
8 MODIFICATIONS. Neither this Agreement nor any provision hereof
may be changed, waived or terminated, orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver or
termination is sought.
9 RIGHTS CUMULATIVE. All rights, powers and remedies herein given
to Owner are cumulative and not alternative, and are in addition to all statutes
or rules of law; any forbearance or delay by Owner in exercising the same shall
not be deemed to be a waiver thereof, and the exercise of any right or partial
exercise thereof shall not preclude the further exercise thereof, and the same
shall continue in full force and effect until specifically waived by an
instrument in writing executed by Owner. All representations and covenants by
Agent shall survive the making of the advances, and the provisions hereof shall
be binding upon and inure to the benefit of the respective successors and
permitted assigns, if any, of the parties hereto. Agent may not, however,
assign its rights or obligations as agent hereunder except in accordance with
Section 19 of this Agreement.
10 GOVERNING LAW AND WAIVER OF JURY TRIAL. THIS AGREEMENT HAS BEEN
EXECUTED AND DELIVERED IN THE STATE OF NEW YORK. AGENT AND OWNER AGREE THAT, TO
THE MAXIMUM EXTENT PERMITTED BY THE LAWS
(v)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
OF THE STATE OF NEW YORK, THIS AGREEMENT, AND THE RIGHTS AND DUTIES OF AGENT AND
OWNER HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) IN ALL RESPECTS,
INCLUDING WITHOUT LIMITATION IN RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE. AGENT HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS
PROPERTIES, TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN
THE COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND
RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, AGENT HEREBY WAIVES AND
AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO
HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, AGENT AGREES NOT TO SEEK AND HEREBY
WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF
ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN
ENFORCEMENT OF SUCH JUDGMENT. AGENT AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. OWNER AND
AGENT EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
OWNER AND AGENT ACKNOWLEDGE THAT THE PROVISIONS OF THIS SUBSECTION 18.9 HAVE
BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION
THEREWITH.
11 CAPTIONS. The captions in this Agreement are for convenience of
reference only, and shall not be deemed to affect the meaning or construction of
any of the provisions hereof.
(vi)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
19. ASSIGNMENT BY AGENT.
(a) So long as no Event of Default has occurred and is continuing,
Agent may, upon thirty (30) days' prior written notice to Owner and any Assignee
and subject to the terms and conditions of this Agreement, assign all of its
rights and the performance of obligations hereunder to any Affiliate of
Guarantor (but not the Guarantor) (provided that Guarantor shall own directly or
indirectly not less than 90% of the outstanding shares of common stock of such
Affiliate) and upon such assignment be released from any liability or obligation
hereunder; provided that such assignment shall be subject to the satisfaction of
the following conditions:
(i) Owner and any Assignee shall have received a certificate of a
Responsible Officer of Guarantor certifying that Guarantor owns,
directly or indirectly, not less than 90% of the outstanding
shares of the common stock of such Affiliate.
(ii) Owner and any Assignee shall have received a Reaffirmation of
Guarantee in the form of Schedule A to the Assignment and
Assumption Agreement, together with an opinion of counsel in form
and substance reasonably satisfactory to Owner and any Assignee,
which opinion shall state, in addition to addressing matters in
respect of the Guaranty and the Guarantor, that such Affiliate's
obligations under the Lease and this Agreement are valid, binding
and enforceable according to their terms, subject to customary
exceptions.
(iii)Such Affiliate shall have executed and delivered a Consent
in form and substance reasonably satisfactory to Owner and any
Assignee.
(iv) Owner and any Assignee shall have received a certificate of a
Responsible Officer of such Affiliate to the effect set forth in
Section III of the Assignment and Assumption Agreement.
(v) Such Affiliate and Agent shall execute an Assignment and
Assumption Agreement.
(vii)
THIS AGREEMENT FOR
LEASE IS CONFIDENTIAL
AND PROPRIETARY
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
Virtual Funding, Limited Partnership by
Virtual Capital, Inc., its
General Partner
By _________________________
Name:
Title:
Silicon Graphics Real Estate, Inc.
By _________________________
Name:
Title:
(viii)
