EXHIBIT 10.14
MASTER LEASE
(Cisco Technology, Inc. Trust 1998)
dated as of June 2, 1998
between
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity, except as expressly
stated herein, but solely as Certificate Trustee,
as Lessor
and
CISCO TECHNOLOGY, INC.,
as Lessee
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Lease Financing of Real Estate
Located in Milpitas and San Jose, California
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This Lease (which includes two Lease Supplements) is encumbered by a lien in
favor of State Street Bank and Trust Company, as Agent (the "Agent") under a
Loan Agreement dated as of June 2, 1998 among Lessor, the Lenders, and Agent, as
amended or supplemented from time to time. This Lease has been executed in
several counterparts. To the extent, if any, that this Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction), no lien on this Lease may be created through the
transfer or possession of any counterpart other than the original counterpart
containing the receipt therefor executed by Agent on the signature page hereof.
MASTER LEASE
This MASTER LEASE dated as of June 2, 1998 (including all Lease
Supplements from time to time executed and delivered, this "Lease"), between
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., not in its individual
capacity, except as expressly stated herein, but solely as Certificate Trustee,
as Lessor, and CISCO TECHNOLOGY, INC., a California corporation, as Lessee.
W I T N E S S E T H:
1. Lessor will, subject to the terms and conditions of the
Participation Agreement, purchase both of the Sites (legally
described in Exhibit A) on the Advance Date and advance funds to
Lessee to construct the Site Improvements on behalf of Lessor.
2. Lessor desires to lease to Lessee, and Lessee desires to lease
from Lessor, both of the Sites.
3. Following the Advance Date, Lessee shall construct the Site
Improvements on the Sites, which Site Improvements will be part
of the Leased Property.
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION; FULL RECOURSE
For all purposes hereof, the capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement dated as of even date herewith, among Lessee,
Cisco Systems, Inc., a California corporation, as Guarantor, Lessor, Agent and
the Participants identified therein (the "Participation Agreement"). The rules
of interpretation set forth in such Appendix 1 shall also apply to this Lease.
All obligations imposed on the "Lessee" in this Lease shall be the full recourse
liability of Lessee.
ARTICLE II
LEASE OF SITES; TERM
II.1 Acceptance and Lease of Sites. On the Advance Date, Lessor, subject
to the satisfaction or waiver of the conditions set forth in Article III of the
Participation Agreement, hereby agrees to accept delivery on such date of fee
title to the Sites pursuant to the terms of the Participation Agreement and the
applicable Lease Supplement and simultaneously to lease to Lessee for the Lease
Term, Lessor's interest in the Sites together with any Alterations (including
the Site Improvements) which thereafter may be constructed thereon pursuant to
this Lease, and Lessee hereby agrees to lease commencing on the Advance Date
from Lessor for the Lease Term, Lessor's interest in the Sites together with
Lessor's interest in any Alterations (including the Site Improvements) which
thereafter may be constructed thereon pursuant to this Lease and the Operative
Documents.
II.2 Acceptance Procedure for Site. Lessor hereby authorizes one or more
employees of Lessee, to be designated by Lessee, as the authorized
representative or representatives of Lessor to accept delivery on behalf of
Lessor of fee title to the Sites. Lessee hereby agrees that such acceptance of
delivery by such authorized representative or representatives and the execution
and delivery by Lessee on the Advance Date of a Lease Supplement (appropriately
completed) for each Site shall, without further act, constitute the irrevocable
acceptance by Lessee of each such Site for all purposes of this Lease and the
other Operative Documents on the terms set forth therein and herein, and that
the Sites, together with any Alterations (including the Site Improvements)
constructed thereon pursuant to this Lease and the other Operative Documents,
shall be deemed to be included in the Leased Property and shall be subject to
the terms and conditions of this Lease commencing on the Advance Date.
II.3 Term.
(a) Lease Term. The term of this Lease (the "Lease Term") shall
begin on the Advance Date and shall end on the date (such date, the "Lease
Expiration Date") which is the earlier of (i) the day preceding the fifth (5th)
anniversary of the Advance Date or, if the Lease Term is renewed in accordance
with Article XX hereof, the day preceding the tenth (10th) anniversary of the
Advance Date, (ii) the date on which this Lease is terminated in accordance with
the provisions hereof, or (iii) the Final Maturity Date.
II.4 Title. Each Site is leased to Lessee without any representation or
warranty, express or implied, by Lessor, Agent, Arranger or any Participant and
subject to the rights of parties in possession, the existing state of title
(including the Permitted Exceptions), and all Applicable Laws. Lessee shall in
no event have any recourse against Lessor for any defect in or exception to
title to any Leased Property other than resulting from Lessor Liens.
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ARTICLE III
OTHER PROPERTY
Lessee may from time to time own or hold under lease from Persons other
than Lessor, furniture, trade fixtures, equipment and other tangible personal
property (including software) located on or about either Site and which personal
property is not subject to this Lease. Lessor acknowledges Lessee's right to
finance and to secure under the UCC inventory, furnishings, furniture,
equipment, machinery, leasehold improvements and other personal property located
at any of the Sites so long as such UCC filings are not recorded against either
Site and by their terms specifically exclude any interest in the Leased
Property. Lessor shall from time to time, upon the reasonable request, and at
the sole cost and expense of Lessee, which request shall be accompanied by such
supporting information and documents as Lessor may reasonably require, promptly
acknowledge in writing to Lessee or other Persons that the particular items of
furniture, trade fixtures and equipment in question and which are located on a
Site are not part of the Leased Property and that, subject to the rights of
Lessor under any other Operative Documents, Lessor does not own or have any
other right or interest in or to such furniture, trade fixtures and equipment.
Lessor agrees to execute as reasonably requested by Lessee in writing and at the
sole cost of Lessee, such waiver forms and releases from Lessor Liens (which
shall contain customary indemnities for the benefit of Lessor and other
protections including the right to treat such property as abandoned if not
timely removed by Lessee) in favor of any purchase money seller, lessor or
lender which has financed or is in the process of consummating such financing of
such personal property items.
ARTICLE IV
RENT
IV.1 Basic Rent. Lessee shall pay to Lessor Basic Rent (i) on each
Payment Date, (ii) on any date required under Sections 14.1 or 20.1 or Article
XIX and (iii) on any date on which this Lease terminates or upon demand
following a Lease Event of Default pursuant to Section 17.1. At least 10 days
prior to each Payment Date, Lessor shall deliver to Lessee a notice setting
forth the exact amount of Basic Rent due on such date (the "Invoice"). For
purposes of this section, delivery of the Invoice by facsimile transmission,
receipt confirmed, shall be sufficient.
IV.2 Supplemental Rent. Lessee shall pay to Lessor (or if to a Person
other than Lessor, Agent or any of the Participants, to such Person as shall be
entitled thereto as expressly provided herein or in any other Operative
Document, and Lessor hereby directs Lessee, on behalf of Lessor, to so pay any
such other Person), any and all Supplemental Rent promptly as the same shall
become due and payable and, in the event of any failure on the part of Lessee to
pay any Supplemental Rent, Lessor shall have all rights, powers and remedies
provided for herein or by law or in equity or otherwise in the case of
nonpayment of Basic Rent. Lessee hereby reaffirms
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that its obligation to pay Supplemental Rent shall include (i) the payment of
any and all Additional Costs, (ii) all amounts determined to be due and payable
or otherwise subject to distribution pursuant to Article III of the Loan
Agreement in accordance with its terms. The expiration or other termination of
Lessee's obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of Lessee with respect to Supplemental Rent. Unless expressly
provided otherwise in this Lease, in the event of any failure on the part of
Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added under any agreement with a third party for nonpayment or late
payment of such Supplemental Rent, all of which shall also constitute
Supplemental Rent.
IV.3 Method and Amount of Payment. Basic Rent and Supplemental Rent
shall be paid by a wire transfer to Lessor (or, in the case of Supplemental Rent
due to any Person other than Lessor, Agent or any of the Participants, to such
Person as may be entitled thereto) at such place as Lessor (or such other
Person) shall specify in writing to Lessee pursuant to Schedule II to the
Participation Agreement or Section 9.3 of the Participation Agreement; provided,
however, that, so long as the Notes remain outstanding, Lessor directs Lessee to
pay Rent directly to the Agent. Each payment of Rent shall be made by Lessee
prior to 1:00 p.m. Boston, Massachusetts time (and payments made after such time
shall be deemed to have been made on the next day) at the place of payment in
funds consisting of lawful currency of the United States of America which (in
the case of any amount payable to Lessor, Agent or any Participant or any other
Indemnitee) shall be immediately available on the scheduled date when such
payment shall be due. The provisions of the foregoing sentence of this Section
4.3 shall be applicable only to Basic Rent and to Supplemental Rent payable to,
or on behalf of or for the account of, Lessor, Agent any Participant and any
other Indemnitee.
IV.4 Late Payment. If any Basic Rent shall not be paid when due, Lessee
shall pay to Lessor, or if any Supplemental Rent payable to or on behalf or for
the account of Lessor, Agent, any Participant, or other Indemnitee is not paid
when due, Lessee shall pay to such Person as shall be entitled thereto, in each
case as Supplemental Rent, interest at the Overdue Rate (to the maximum extent
permitted by Applicable Laws) on such overdue amount from and including the due
date thereof (without regard to any applicable grace period) to but excluding
the Business Day of payment thereof.
ARTICLE V
NET LEASE
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This Lease shall constitute a net lease and, notwithstanding any other
provision of this Lease, it is intended that Basic Rent, Supplemental Rent, the
Lease Balance and all other amounts due and payable under the Operative
Documents shall be paid without counterclaim, setoff, deduction or defense of
any kind and without abatement, suspension, deferment, diminution or reduction
of any kind, and Lessee's obligation to pay all such amounts throughout the
Lease Term is absolute and unconditional. The obligations and liabilities of
Lessee hereunder shall in no way be released, discharged or otherwise affected
for any reason, including, to the maximum extent permitted by Applicable Laws:
(a) any defect in the condition, merchantability, design, construction, quality
or fitness for use of any portion of the Leased Property, or any failure of the
Leased Property to comply with all Applicable Laws, including any inability to
occupy or use the Leased Property by reason of such non-compliance; (b) any
damage to, abandonment, loss, contamination of or Release from or destruction of
or any requisition or taking of the Leased Property or any part thereof,
including eviction; (c) any restriction, prevention or curtailment of or
interference with any use of the Leased Property or any part thereof, including
eviction; (d) any defect in title to or rights to the Leased Property or any
Lien on such title or rights or on the Leased Property; (e) any change, waiver,
extension, indulgence or other action or omission or breach in respect of any
obligation or liability of or by Lessor, Agent or any Participant; (f) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to Lessee, Lessor, Agent, any
Participant or any other Person, or any action taken with respect to this Lease
by any trustee or receiver of Lessee, Lessor, Agent, any Participant or any
other Person, or by any court, in any such proceeding; (g) any claim that Lessee
has or might have against any Person, including Lessor, Agent, or any
Participant; (h) any failure on the part of Lessor to perform or comply with any
of the terms of this Lease, any other Operative Document or of any other
agreement whether or not related to the Overall Transaction; (i) any invalidity
or unenforceability or disaffirmance against or by Lessee of this Lease or any
provision hereof or any of the other Operative Documents or any provision of any
thereof; (j) the impossibility of performance by Lessee, Lessor or both; (k) any
action by any court, administrative agency or other Authority; any restriction,
prevention or curtailment of or any interference with the construction on or any
use of the Leased Property or any part thereof; (l) the failure of Lessee to
achieve any accounting or tax benefits or the characterization of the
transaction intended by Section 22.19 of this Lease and Section 2.7 of the
Participation Agreement or (m) any other occurrence whatsoever, whether similar
or dissimilar to the foregoing, whether or not Lessee shall have notice or
knowledge of any of the foregoing. Except as specifically set forth in Article
XIV, Article XIX or Section 20.1, this Lease shall be non-terminable and
noncancellable by Lessee for any reason whatsoever, and Lessee, to the extent
permitted by Applicable Laws, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease, or to any
diminution, abatement or reduction of Rent payable by Lessee hereunder. If for
any reason whatsoever this Lease shall be terminated in whole or in part by
operation of law or otherwise, except as expressly provided in Article XIV or
Article XIX, Lessee shall, unless prohibited by Applicable Laws, nonetheless pay
to Lessor (or, in the case of Supplemental Rent due to any Person other than
Lessor, Agent or any of the Participants, to such Person as shall be entitled
thereto) an amount equal to each Rent payment (including the Lease Balance or
any other amount due and payable under any Operative
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Documents) at the time and in the manner that such payment would have become due
and payable under the terms of this Lease if it had not been terminated in whole
or in part. Each payment of Rent and any payment of the Lease Balance made by
Lessee hereunder shall be final and, absent manifest error in the computation of
the amount thereof, Lessee shall not seek or have any right to recover all or
any part of such payment from Lessor, Agent, any Participant or any party to any
agreements related thereto for any reason whatsoever. Lessee assumes the sole
responsibility for the condition, use, operation, maintenance, and management of
the Leased Property and Lessor shall have no responsibility in respect thereof
and shall have no liability for damage to the property of Lessee or any
subtenant of Lessee on any account or for any reason whatsoever other than by
reason of Lessor's willful misconduct or gross negligence or negligence in the
handling of funds; provided, however, any liability of Lessor with respect to
any such willful misconduct or gross negligence or negligence in the handling of
funds shall not limit or affect Lessee's absolute obligations as set forth in
this Article V. Without affecting Lessee's obligation to pay Basic Rent,
Supplemental Rent, the Lease Balance and all other amounts due and payable under
the Operative Documents, or to perform its obligations under the Operative
Documents, Lessee may seek damages or any other remedy at law or equity against
Lessor for a breach by Lessor of its obligations under this Lease or the
Participation Agreement.
ARTICLE VI
UTILITY CHARGES
Lessee shall pay or cause to be paid all charges for electricity, power,
gas, oil, water, telephone, sanitary sewer service and all other rents and
utilities used in or on the Leased Property during the Lease Term. Lessee shall
be entitled to receive any credit or refund with respect to any utility charge
paid by Lessee and the amount of any credit or refund received by Lessor on
account of any utility charges paid by Lessee, net of the costs and expenses
reasonably incurred by Lessor in obtaining such credit or refund, shall be
promptly paid over to Lessee. All charges for utilities imposed with respect to
the Leased Property for a billing period during which this Lease expires or
terminates (except pursuant to Article XIX or Section 20.1(b) hereof, in which
case Lessee shall be solely responsible for all such charges) shall be adjusted
and prorated on a daily basis between Lessee and any purchaser of the Leased
Property, and each party shall pay or reimburse the other for each party's pro
rata share thereof; provided, that in no event shall Lessor have any liability
therefor.
ARTICLE VII
CONDITION OF LEASED PROPERTY
VII.1 Waivers. LESSEE ACKNOWLEDGES AND AGREES THAT, ALTHOUGH LESSOR WILL
OWN AND HOLD RECORD TITLE TO THE LEASED PROPERTY, LESSEE
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IS SOLELY RESPONSIBLE FOR THE LEASED PROPERTY AND ANY ALTERATIONS. The Leased
Property is let by Lessor "AS IS" in its present condition, subject to (a) any
rights of any parties in possession thereof, (b) the state of the title thereto
existing at the time Lessor acquired its interest in the Leased Property, (c)
any state of facts which an accurate survey or physical inspection might show
(including any survey delivered on or prior to the Advance Date), (d) all
Applicable Laws, and (e) any violations of Applicable Laws which may exist at
the commencement of the Lease Term. Lessee has examined the Leased Property and
(insofar as Lessor is concerned) has found the same to be satisfactory. NONE OF
LESSOR, AGENT, ARRANGER NOR ANY PARTICIPANT HAS MADE OR SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE TO THE LEASED PROPERTY OR TO THE
VALUE, MERCHANTABILITY, HABITABILITY, CONDITION, OR FITNESS FOR USE OF THE
LEASED PROPERTY, OR ANY PART THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY, OR ANY PART
THEREOF, AND NONE OF LESSOR, AGENT, ARRANGER NOR ANY PARTICIPANT SHALL BE LIABLE
FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE LEASED
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS, except that
Lessor hereby represents and warrants that the Leased Property, is and shall be
free of Lessor Liens. Lessee has been afforded full opportunity to inspect the
Leased Property, is satisfied with the results of its inspections and is
entering into this Lease solely on the basis of the results of its own
inspections, and all risks incident to the matters discussed in the preceding
sentence, as between Lessor, Agent, Arranger and the Participants, on the one
hand, and Lessee, on the other, are to be borne by Lessee. The provisions of
this Article VII have been negotiated, and, except to the extent otherwise
expressly stated, the foregoing provisions are intended to be a complete
exclusion and negation of any representations or warranties by any of Lessor,
Agent, Arranger or the Participants, express or implied, with respect to the
Leased Property (or any interest therein), that may arise pursuant to any law
now or hereafter in effect or otherwise.
ARTICLE VIII
NON-INTERFERENCE
VIII.1 Non-Interference. Except as provided for at Article XVIII and so
long as no Lease Event of Default has occurred and is continuing, Lessor
covenants that it will not interfere in Lessee's or any of its permitted
subtenants' use of the Leased Property in accordance with this Lease during the
Lease Term; it being agreed that Lessee's remedies for breach of the foregoing
covenant shall be limited to a claim for damages or the commencement of
proceedings to enjoin such breach. Such right is independent of and shall not
affect Lessee's obligations hereunder and under the other Operative Documents or
Lessor's or any other Person's rights otherwise to initiate legal action to
enforce the obligations of Lessee under this Lease.
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VIII.2 Certain Duties and Responsibilities of Lessor. Lessor undertakes
to perform such duties and only such duties as are specifically set forth herein
and in the other Operative Documents, and no implied covenants or obligations
shall be read into this Lease against Lessor, and Lessor agrees that it shall
not, nor shall it have a duty to, manage, control, use, sell, maintain, insure,
register, lease, operate, modify, dispose of or otherwise deal with the Leased
Property or any other part of the Trust Estate in any manner whatsoever, except
as required by the terms of the Operative Documents and as otherwise provided
herein.
ARTICLE IX
MAINTENANCE AND REPAIR; ALTERATIONS AND ADDITIONS
IX.1 Maintenance and Repair; Compliance With Applicable Laws. Lessee, at
its own expense, shall at all times (a) maintain the Leased Property in at least
its current condition, subject to ordinary wear and tear, and in any event at
least as good as the condition of similar properties owned or leased by Lessee
and its affiliates and in good repair and condition and free from nuisance; (b)
except to the extent Section 9.5 hereof shall apply, maintain, manage and
monitor the Leased Property in accordance with all Applicable Laws, whether or
not such maintenance requires modifications or alterations; (c) comply with the
Insurance Requirements which are in effect at any time with respect to the
Leased Property or any part thereof; (d) maintain, manage and monitor the Leased
Property in accordance with all applicable Contractual Requirements; (e) use the
Leased Property only in accordance with Article X; (f) take all appropriate
steps that may be required to keep the Leased Property in the condition required
by the preceding clauses (a) through (e), ordinary or extraordinary, foreseen or
unforeseen, and including repairs, replacements and renewals that would
constitute capital expenditures under GAAP if incurred by an owner of property;
and (g) procure, maintain and comply in all material respects with all material
Governmental Actions required for the use, development, maintenance and
operation of the Leased Property. Lessee waives any right that it may now have
or hereafter acquire to (x) require Lessor to maintain, repair, replace, alter,
remove or rebuild all or any part of the Leased Property or (y) make repairs at
the expense of Lessor pursuant to any Applicable Laws or other agreements.
IX.2 Improvements and Alterations to Leased Property.
(a) (i) Lessee, at Lessee's own cost and expense, shall make
alterations, improvements and additions to the Leased Property and or any part
thereof and substitutions and replacements therefor (collectively,
"Alterations") which are (A) necessary to repair or maintain the Leased Property
in the condition required by Section 9.1; (B) necessary in order for the Leased
Property to be in compliance with Applicable Laws; or (C) necessary to restore
the Leased Property to its condition existing prior to a Casualty or
Condemnation to the extent required pursuant to Article XIII; and (ii) so long
as no Lease Event of Default or Lease Default
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has occurred and is continuing, Lessee, at Lessee's own cost and expense, may
undertake Alterations on either Site so long as such Alterations comply with
Applicable Laws and with Section 9.1 and subsection (b) of this Section 9.2.
(b) The making of any Alterations must be in compliance with the
following requirements:
(i) Lessee shall not make any Alterations in violation of the
terms of any restriction, easement, condition or covenant or other
matter affecting title to the Leased Property.
(ii) No Alterations shall be undertaken until Lessee shall have
procured and paid for, so far as the same may be required from time to
time, all permits and authorizations relating to such Alterations of all
municipal and other Authorities having jurisdiction over the applicable
Site. Lessor, at Lessee's expense, shall join in the application for any
such permit or authorization and execute and deliver any document in
connection therewith, whenever such joinder is necessary or advisable.
(iii) The Alterations shall be expeditiously completed in a good
and workmanlike manner and in compliance with all Applicable Laws then
in effect and the standards imposed by any insurance policies required
to be maintained hereunder.
(iv) All Alterations shall, when completed, be of such a
character as to not materially adversely affect the fair market value or
residual value of the affected Site from its fair market value or
residual value immediately prior to the making thereof or, in the case
of Alterations being made by virtue of a Casualty or Condemnation,
immediately prior to the occurrence of such Casualty or Condemnation.
(v) Lessee shall have made adequate arrangements for payment of
the cost of all Alterations when due so that the Leased Property shall
at all times be free of Liens, including for labor and materials
supplied or claimed to have been supplied to the Leased Property, other
than Permitted Liens; provided, that Lessee shall have the right to
engage in Permitted Contests in accordance with Section 9.5.
(vi) The Alterations must be located solely on the Leased
Property.
IX.3 Title to Alterations. Title to the following described Alterations
shall without further act vest in Lessor and shall be deemed to constitute a
part of the Leased Property and be subject to this Lease:
(a) Alterations that are Nonseverable and which are not
Development Improvements which have been approved pursuant to Section
6.2 of the Participation Agreement;
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(b) Alterations (including all Site Improvements) that are
financed with any amounts advanced by the Participants on the Advance
Date pursuant to the Participation Agreement; and
(c) Alterations that are required to be made pursuant to the
terms of Section 9.1 or 9.2(a)(i) hereof.
Lessee, at Lessor's request, shall execute and deliver any deeds, bills
of sale, assignments or other documents of conveyance reasonably necessary to
evidence the vesting of title in and to such Alterations to Lessor.
If such Alterations are not within any of the categories set forth in
clauses (a) through (c) of this Section 9.3, then title to such Alterations
shall vest in Lessee and such Alterations shall not be deemed to be Alterations
which are part of the Leased Property.
All Alterations to which Lessee shall have title may, so long as removal
thereof shall not result in the violation of any Applicable Laws and no Lease
Event of Default or Lease Default is continuing, be removed at any time by
Lessee. Lessee agrees to notify Lessor in writing at least 30 days before it
removes any Alterations and Lessee shall at its expense repair any damage to the
Leased Property caused by the removal of such Alterations. Subject to the
provisions of Section 6.2 of the Participation Agreement, title to any
Alterations shall vest in Lessor (or the purchaser of the applicable Leased
Property) if not removed from the Leased Property by Lessee prior to the return
of the Leased Property to Lessor or sale of the Leased Property.
IX.4 Maintenance and Repair Reports. Lessee shall keep reports in
sufficient detail, and as customary for owners of commercial real estate, to
indicate the nature and date of major work done. Such reports shall be made
available at Lessee's office to Lessor upon reasonable request. Lessee shall
give notice to Lessor of any Condemnation, the cost to repair which is
reasonably expected by Lessee to exceed $10,000,000, promptly after Lessee has
knowledge thereof.
IX.5 Permitted Contests. If, to the extent and for so long as (a) a
test, challenge, appeal or proceeding for review of any Applicable Laws or any
Governmental Action relating to the Leased Property or to the operation or
maintenance thereof shall be prosecuted diligently and in good faith in
appropriate proceedings by Lessee or (b) compliance with such Applicable Laws or
such Governmental Action shall have been excused or exempted by a valid
nonconforming use permit, waiver, extension or forbearance, Lessee shall not be
required to comply with such Applicable Laws or such Governmental Action but
only if and so long as any such test, challenge, appeal, proceeding or
noncompliance shall constitute a Permitted Contest.
Lessor will not be required to join in any Permitted Contest pursuant to
this Section 9.5 unless a provision of any Applicable Laws requires, or, in the
good faith opinion of Lessee, it is helpful to Lessee, that such proceedings be
brought by or in the name of Lessor; and in that event, Lessor will join in the
proceedings or permit them or any part thereof to be brought in its
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name if and so long as no Lease Event of Default is continuing and Lessee pays
all related out-of-pocket expenses and reasonable allocated internal costs of
Lessor and provides to Lessor adequate indemnification.
IX.6 Warrant of Title.
(a) Lessee agrees that, except as otherwise provided herein and
subject to the terms of Section 9.5 relating to Permitted Contests, Lessee shall
not directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment, levy,
title retention agreement or claim upon any Leased Property or any Alterations
to a Site, or any Lien, attachment, levy or claim with respect to the Rent or
with respect to any amounts held by Agent pursuant to the Loan Agreement or the
other Loan Documents, other than Permitted Liens and Lessor Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to or for
the performance by any contractor, mechanic, laborer, materialman, supplier or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to either Site or
any part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR, NOR ANY
PARTICIPANT NOR AGENT IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING A SITE OR ANY PART
OR PORTION THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER
LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE
INTEREST OF LESSOR, AGENT OR ANY PARTICIPANT IN AND TO ANY LEASED PROPERTY.
IX.7 Grants and Releases of Easements on the Sites. Provided that no
Lease Event of Default shall have occurred and be continuing and subject to the
provisions of Articles VIII, IX, X and XI, Lessor hereby consents in each
instance to the following actions by Lessee, in the name and stead of Lessor,
but at Lessee's sole cost and expense (a) the granting of easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the use, repair, or maintenance of a Site
as herein provided; (b) the release of existing easements or other rights in the
nature of easements which are for the benefit of a Site; (c) the dedication or
transfer of unimproved portions of a Site for road, highway or other public
purposes; (d) the execution of petitions to have a Site annexed to any municipal
corporation or utility district; (e) the execution of amendments to any
covenants and restrictions affecting a Site; and (f) the execution of such
plats, lot splits, lot line adjustments, parcel maps and dedications as may be
necessary or desirable in connection with the re-parcelization of the Sites;
provided, however, that in each case (i) such grant, release, dedication,
transfer, annexation, amendment or re-parcelization does not materially impair
the value, utility or remaining useful life of the applicable Site, (ii) such
grant, release, dedication, transfer, annexation, amendment or re-parcelization
is reasonably necessary or desirable in connection with the use, maintenance,
alteration or improvement of the applicable Site, (iii) such grant,
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release, dedication, transfer, annexation, amendment or re-parcelization will
not cause the applicable Site or any portion thereof to fail to comply in any
material respect with the provisions of this Lease or any other Operative
Documents or in any material respect with any Applicable Laws (including all
applicable zoning, planning, building and subdivision ordinances, all applicable
restrictive covenants and all applicable architectural approval requirements);
(iv) all governmental consents or approvals required prior to such grant,
release, dedication, transfer, annexation, amendment or re-parcelization have
been obtained, and all filings required prior to such action have been made; (v)
such grant, release, dedication, transfer, annexation, amendment or
re-parcelization will not result in any material down-zoning of the applicable
Site or any portion thereof or a material reduction in the maximum density or
development rights available to the applicable Site under all Applicable Laws;
(vi) Lessee shall remain obligated under this Lease and under any instrument
executed by Lessee consenting to the assignment of Lessor's interest in this
Lease as security for indebtedness, in each such case in accordance with their
terms, as though such grant, release, dedication, transfer, annexation,
amendment or re-parcelization had not been effected; and (vii) Lessee shall pay
and perform, and fully indemnify Lessor from and against any Claims arising
from, any obligations of Lessor under such grant, release, dedication, transfer,
annexation, amendment, or re-parcelization. Without limiting the effectiveness
of the foregoing, provided that no Lease Event of Default shall have occurred
and be continuing, Lessor shall, upon the request of Lessee, and at Lessee's
sole cost and expense, execute and deliver any instruments necessary or
appropriate to confirm any such grant, release, dedication, transfer,
annexation, amendment, or re-parcelization to any Person permitted under this
Section. Notwithstanding anything to the contrary contained in this Section, as
a condition to executing and delivering any plats, lot splits, lot line
adjustments, parcel maps and dedications as may be necessary or desirable in
connection with the re-parcelization of the Sites, Lessee shall deliver to
Lessor and Agent such documentation as Lessor or Agent reasonably deem necessary
or desirable to document or evidence the continued effectiveness, perfection and
priority of this Lease, the Lease Supplements, the Deed of Trust and the other
Operative Documents including new or revised surveys, new, updated or endorsed
Title Policies and opinions of counsel for Lessee, all in such form and
substance reasonably satisfactory to Lessor and Agent.
IX.8 Inspection. Upon five (5) Business Days prior notice to Lessee,
Lessor or its authorized representatives (the "Inspecting Parties") may inspect
(a) the Leased Property and (b) the books and records of Lessee relating to the
Leased Property and make copies and abstracts therefrom. All such inspections
shall be at the expense of the Inspecting Parties, except that if a Lease Event
of Default or Lease Default has occurred and is continuing, Lessee shall
reimburse the Inspecting Parties for the reasonable costs of such inspections.
Lessee shall furnish to the Inspecting Parties statements accurate in all
material respects regarding the condition and state of repair of the Leased
Property, at such times and as may be reasonably requested. No inspection shall
unreasonably interfere with Lessee's operations or the operations of any
permitted sublessee of the Leased Property. None of the Inspecting Parties shall
have any duty to make any such inspection or inquiry. None of the Inspecting
Parties shall incur any liability or obligation by reason of making any such
inspection or inquiry unless and to the extent, such Inspecting Party
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causes damage to the Leased Property or any property of Lessee or any other
Person during the course of such inspection.
IX.9 Reports. To the extent permissible under Applicable Laws, Lessee
shall prepare and file in timely fashion, or, where Lessor shall be required to
file, Lessee shall prepare and make available to Lessor within a reasonable time
prior to the date for filing and Lessor shall file, any reports with respect to
the condition or operation of the Leased Property that shall be required to be
filed with any Authority.
ARTICLE X
USE
Subject to the requirements of this Article X, each Site may be used for
any Permitted Use. Lessee shall not use the Leased Property or any part thereof
for any purpose or in any manner that would materially adversely affect the Fair
Market Value, utility, remaining useful life or residual value of either Site or
that would create a materially increased risk of environmental liability or that
would violate or conflict with, or constitute or result in a violation or
default under (a) any Applicable Laws whether now existing or hereafter in
effect, foreseen or unforeseen, except to the extent permitted by Section 9.5,
(b) the Insurance Requirements, or (c) any Operative Document. Lessee shall pay,
or cause to be paid, all charges and costs required in connection with the use
of the Leased Property as contemplated by this Lease and the Participation
Agreement. Lessee shall not, and shall not permit any other Person to, use or
develop the Leased Property or any portion thereof for residential uses. Lessee
shall not commit or permit any waste of the Leased Property or any part thereof
or take any act or fail to take any act which would cause or permit a nuisance
to exist or occur upon the Leased Property.
ARTICLE XI
INSURANCE
XI.1 Required Coverages. Subject in all respects to Lessee's rights
under Section 11.2, Lessee shall maintain:
(a) Comprehensive General Liability Insurance. Combined single
limit insurance against claims for third-party bodily injury, including death
and third-party property damage occurring on, in or about the Leased Property
(including adjoining streets and sidewalks) at least equal to $1,000,000 per
occurrence and a minimum of $5,000,000 excess of such coverage.
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(b) Property Insurance. Insurance against loss or damage covering
the Improvements or any portion thereof by reason of any Peril (as defined
below) in an amount (subject to such deductibles in such minimum amounts as is
carried by corporations owning and/or operating similar properties) otherwise
acceptable to the Required Participants; provided, however, that at no time
shall the amount of such coverage be less than the replacement cost of the
Improvements, including any costs that may be required to cause the Improvements
to be reconstructed to then current Applicable Laws. The term "Peril" shall mean
all perils covered by the standard policy with "all risk endorsement" then in
use in the State of California. Alternatively, at Lessee's election, such
insurance shall be on a coverage form reasonably available in the commercial
insurance market at the time of the most recent policy reviewed.
(c) Workers' Compensation Insurance. Lessee shall, in the
construction of any Alterations and the operation of the Leased Property, comply
with the Applicable Laws regarding workers' compensation and protect Lessor,
Agent and the Participants against any liability under such Applicable Laws
arising out of injury to employees of Lessee or its construction contractors.
Lessee is not hereby obligated to insure or indemnify against such liability as
described in this Section 11.1(c) for injury to employees of Lessor, Agent or
the Participants.
(d) General Requirements. Such insurance shall be written by
reputable insurance companies that are financially sound and solvent and
otherwise reasonably appropriate considering the amount and type of insurance
being provided by such companies. Any insurance company selected by Lessee shall
be rated in A.M. Best's Insurance Guide or any successor thereto (or if there be
none, an organization having a similar national reputation) and shall have a
general policyholder rating of "A" (or comparable rating for a rating by an
organization other than A.M. Best) and a financial rating of at least "X" (or
comparable rating for a rating by an organization other than A.M. Best) or be
otherwise acceptable to the Required Participants. In the case of liability
insurance maintained by Lessee, it shall name Lessor (both in its individual
capacity and as trustee), Agent, and each of the Participants, as additional
insureds and, in the case of property insurance maintained by Lessee, it shall
name Lessor, Agent, and the Participants, as mortgagee and loss payee as their
interests may appear. The insurance coverages required under this Section may be
obtained under one or more blanket policies covering Guarantor and its
Subsidiaries and/or covering properties of Guarantor and its Subsidiaries in
addition to the Sites and may be provided by a combination of primary insurance
policies and excess liability ("umbrella") insurance policies otherwise in
compliance with this Section 11.1. Each policy referred to in this Section 11.1
shall provide that: (i) it will not be canceled, materially modified or its
limits reduced, or allowed to lapse without renewal, except after not less than
30 days' prior written notice to Lessor; (ii) the interests of Lessor, Agent and
any Participant shall not be invalidated by any act or negligence of or breach
of warranty or representation by Lessee or any Person having an interest in the
Leased Property; (iii) such insurance is primary with respect to any other
insurance carried by or available to Lessor, Agent, or any Participant; (iv) the
insurer shall waive any right of subrogation, setoff, counterclaim, or other
deduction, whether by attachment or otherwise, against Lessor; and (v) such
policy shall contain a cross-liability clause providing for coverage of Lessor,
Agent and each Participant, as if
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separate policies had been issued to each of them. Lessee will notify Lessor
promptly of any policy cancellation, reduction in policy limits, modification or
amendment.
XI.2. Self-Insurance Rights. Lessee shall have the right to self-insure
through a self-insurance program maintained by Guarantor with respect to any of
the insurance required under this Lease so long as (i) Guarantor is a publicly
traded domestic corporation whose stock is traded on a nationally recognized
exchange; (ii) Lessee has not assigned this Lease; (iii) Guarantor maintains a
Consolidated Tangible Net Worth of at least $1,800,000,000 according to its most
recent audited financial statement; and (iv) Guarantor governs and manages its
self-insurance program in a manner consistent with programs managed by prudent
businesses whose stock is publicly traded on nationally recognized exchanges;
provided that if Lessee maintains or is required to maintain for the benefit of
any Person (other than pursuant to the Operative Documents) insurance written by
a third party insurance company with respect to any Leased Property or the
Improvements or activities conducted thereon, then Lessee shall maintain for the
benefit of Lessor, (in its individual capacity and as trustee), Agent and each
of the Participants, insurance written by a third party insurance company
satisfying the requirements of Section 11.21(d) against such casualties and
contingencies and of such types and in such amounts as Lessee maintains or is
required to maintain for such other Person. Upon request, Lessee shall supply or
cause Guarantor to supply Lessor from time to time with evidence reasonably
satisfactory to Lessor of Guarantor's net worth and the satisfaction of the
conditions set forth above. If Lessee elects to self-insure, Lessee shall be
responsible for losses or liabilities which would have been assumed by the
insurance companies which would have issued the insurance required of Lessee
under the Lease. Lessee will notify Lessor in advance of any period for which
Lessee intends to self-insure and shall provide Lessor with satisfactory
evidence that Lessee complies with these requirements in order to give Lessor an
opportunity to confirm the satisfaction of the conditions set forth above. For
so long as Lessee self-insures, Lessee, for applicable periods, shall and does
hereby indemnify and hold harmless Lessor, Agent and the Participants, and their
respective officers, directors, agents, employees, trustees, beneficiaries, and
representatives from and against all Claims (including reasonable attorneys'
fees) incurred or paid by Lessor, Agent or the Participants as a result of any
Claim customarily covered by a broad-form policy of commercial general liability
insurance, including a contractual liability endorsement.
XI.3 Delivery of Insurance Certificates. Promptly at any date Lessee is
not entitled to self-insure under Section 11.2 (and in no event later than ten
(10) business days after the occurrence of the event or condition which causes
such right to self-insure to cease or the date Lessee voluntarily decides to
cease participation in such self-insurance program) and thereafter in no event
less frequently than once each year on or before June 1 or upon written request
by Lessor following a Lease Event of Default, Lessee shall deliver to Lessor
certificates of insurance satisfactory to Lessor evidencing the existence of all
insurance required to be maintained hereunder and setting forth the respective
coverages, limits of liability, carrier, policy number and period of coverage
required at Section 11.1.
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ARTICLE XII
ASSIGNMENT AND SUBLEASING
XII.1 Assignment by Lessee. Lessee may not assign this Lease or any of
its rights or transfer or delegate any of its obligations hereunder in whole or
in part to any Person, except that Lessee may sublease either Site or any
portion thereof as permitted under Section 12.2. Notwithstanding the foregoing
sentence, Lessee may, so long as no Lease Event of Default has occurred and is
continuing, or would result therefrom, upon prior written notice to each of
Lessor and Agent, (i) delegate any of its obligations hereunder to any
Affiliate, provided that no delegation shall in any way discharge or diminish
any of Lessee's obligations to Lessor hereunder and Lessee shall remain directly
and primarily liable under this Lease and (ii) assign this Lease and all of
Lessee's rights and transfer or delegate any of its obligations hereunder to an
Affiliate of Lessee pursuant to an assignment and assumption agreement and such
other documentation, including opinions of counsel, all in form and substance
reasonably satisfactory to Lessor and the Required Participants; provided, that,
in any event of such assignment, Lessee shall (a) cause Guarantor to deliver a
reaffirmation of the Guarantees in form and substance and in all respects
satisfactory to Lessor and Agent that the Guarantees remain in full force and
effect with respect to such Affiliate as "Lessee" hereunder and under the other
Operative Documents, and (b) provide to Lessor reasonably satisfactory evidence
that such transferee Affiliate complies with the requirements of Section 11.2
(or alternatively, maintains the insurance coverages required under Section
11.1).
XII.2 Subletting. Lessee may from time to time, sublease either Site or
any portion thereof to any Person and to extend, modify or renew any sublease
without the approval of Lessor or Agent; provided, however, that (a) no sublease
or other relinquishment of possession of the Leased Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder, nor
affect or impair the Guarantees with respect to such obligation, nor release or
discharge, in whole or in part, Guarantor from any such obligations, and Lessee
shall remain directly and primarily liable under this Lease as to the Leased
Property, or portion thereof, so sublet; (b) each sublease shall expressly be
made subject to and subordinated to this Lease and to the rights of Lessor
hereunder; (c) each sublease shall expressly provide for the surrender of the
applicable Leased Property or portion thereof by the applicable sublessee at the
election of the Required Participants or Lessor (as applicable) after the
occurrence of a Lease Event of Default or upon the expiration or termination of
this Lease; and (d) if a sublessee is not a Subsidiary, such sublease shall
contain a provision whereby such sublessee agrees in writing not to assert a
claim or to challenge the intended character and treatment of the Overall
Transaction described in Section 2.7 of the Participation Agreement and such
sublessee irrevocably waives and relinquishes any such rights to assert such
claim or otherwise make such challenge.
ARTICLE XIII
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CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
XIII.1 Casualty and Condemnation.
(a) Subject to the provisions of this Article XIII, if all or a
portion of the Site Improvements on a Site are damaged or destroyed in whole or
in part by a Casualty or if the use, access, occupancy, easement rights or title
to either Site or any part thereof, is the subject of a Condemnation, then
(i) any insurance proceeds payable with respect to such Site
Improvements affected by such Casualty (or if Lessee is participating in
Guarantor's self-insurance program, any amounts payable in connection
with such program) shall be paid directly to Lessee (or if received by
Lessor, shall be paid over to Lessee), which amounts shall be used by
Lessee for the sole purpose of reconstruction, refurbishment and repair
of such Improvements; provided, that such reconstruction, refurbishment
or repair can be completed prior to the end of the Lease Term; provided,
further, that in the event that either (i) such reconstruction,
refurbishment or repair cannot be completed prior to the end of the
Lease Term or (ii) Lessee shall elect not to use all such proceeds for
the reconstruction, refurbishment or repair of such Site Improvements,
then all such proceeds payable with respect to such Casualty shall be
paid to Lessor to be applied towards the payment of the Lease Balance in
accordance with Article III of the Loan Agreement, and
(ii) (x) in the case of a Condemnation (that is not a Significant
Condemnation) of any part of either Site, any award or compensation
relating thereto shall be paid to Lessee for the sole purpose of
restoration of such Site (provided, that such restoration can be
completed prior to the end of the Lease Term) or else the portion of
such award or compensation attributable to the Site and the Site
Improvements shall be paid to Lessor to be applied in the Required
Participants' reasonable discretion to the partial restoration of such
Site or towards the payment of the applicable Lease Balance, and (y) in
the case of a Significant Condemnation, the portion of such award or
compensation attributable to the Site and the Site Improvements shall be
paid to Lessor to be applied in the reasonable discretion of the
Required Participants to the restoration of such Site or toward the
payment of the applicable Lease Balance in accordance with Article III
of the Loan Agreement.
provided, however, that, in each case, if a Lease Event of Default shall have
occurred and be continuing, such award, compensation or insurance proceeds shall
be subject to Section 22.17 and shall be paid directly to Lessor or, if received
by Lessee, Lessee shall promptly pay over such amount to Lessor, and pending
such payment such amounts shall be deemed to be held in trust for the
Participants.
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(b) If pursuant to this Section 13.1 and Section 14.1 this Lease
shall continue in full force and effect following a Casualty to Improvements or
a Condemnation with respect to a Site, Lessee shall, at its sole cost and
expense (and, without limitation, if any award, compensation or insurance
payment is not sufficient to restore such Site Improvements or Site in
accordance with this Section 13.1, Lessee shall pay the shortfall), promptly and
diligently repair any damage to such Site caused by such Casualty or
Condemnation in conformity with the requirements of Article IX, to restore such
Site and the Site Improvements thereon to at least the same condition, operative
value and useful life as existed immediately prior to such Casualty or
Condemnation. Lessee's obligation to restore the Improvements other than the
Site Improvements shall be limited to (i) eliminating any condition or hazard
which might pose a threat to human health or safety, or create a nuisance at any
Site or securing the Sites during the period of restoration so as to mitigate
against such risk and (ii) restoring or otherwise putting such Improvements in a
condition so that the Improvements will not materially adversely affect the Fair
Market Value of the affected Site or the Site Improvements thereon. In such
event, title to such Site shall remain with Lessor subject to the terms of this
Lease. Upon completion of such restoration, Lessee shall furnish to Lessor and
Agent an architect's certificate of substantial completion and a Responsible
Officer's Certificate confirming that such restoration has been completed
pursuant to this Lease.
(c) In no event shall a Casualty or Condemnation affect Lessee's
obligations to pay Rent pursuant to Article IV or to perform its obligations and
pay any amounts due on the Lease Expiration Date or pursuant to Articles XIX and
XX.
(d) Any Excess Casualty/Condemnation Proceeds received by Lessor
in respect of a Casualty or Condemnation shall be turned over to Lessee.
XIII.2 Negotiations. In the event any part of the Leased Property
becomes subject to condemnation or requisition proceedings, Lessee shall give
notice thereof to Lessor promptly after Lessee has knowledge thereof and, to the
extent permitted by any Applicable Laws, Lessee shall control the negotiations
with the relevant Authority unless a Lease Event of Default exists, in which
case Lessor may control such negotiations; provided, that in any event Lessor
may participate at Lessor's expense (or if a Lease Event of Default exists, at
Lessee's expense) in such negotiations; and provided in all cases, that no
settlement will be made without Lessor's prior written consent, not to be
unreasonably withheld. At no cost to Lessor, Lessee shall give to Lessor such
information, and copies of such documents, which relate to such proceedings, or
which relate to the settlement of amounts due under insurance policies required
by Section 11.1, and are in the possession of Lessee, as are reasonably
requested by Lessor. Nothing contained in this Section 13.2 shall diminish
Lessor's rights with respect to Net Condemnation Proceeds under Section 14.2.
XIII.3 Environmental Matters. Promptly upon Lessee's knowledge of the
existence of an Environmental Violation with respect to any Site, Lessee shall
notify Lessor in writing of such Environmental Violation. If Lessor elects not
to terminate this Lease with respect to such Site
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pursuant to Section 14.1, at Lessee's sole cost and expense, Lessee shall
promptly and diligently commence any response, clean up, remedial or other
action necessary to remove, clean up or remediate the Environmental Violation in
accordance with the terms of Article IX. Lessee shall, upon completion of
remedial action by the Lessee, cause to be prepared by an environmental
consultant reasonably acceptable to Lessor a report describing the Environmental
Violation and the actions taken by Lessee (or its agents) in response to such
Environmental Violation, and a statement by the consultant that the
Environmental Violation has been remedied in compliance in all material respects
with applicable Environmental Laws. Each such Environmental Violation shall be
remedied prior to the Lease Expiration Date unless each Site with respect to
which an Environmental Violation has occurred but has not been remedied has been
purchased by Lessee in accordance with Article XIX or Section 20.1(b). Nothing
in this Article XIII shall reduce or limit Lessee's obligations under Article
VII of the Participation Agreement.
XIII.4 Notice of Environmental Matters. Promptly, but in any event
within sixty (60) days from the date Lessee has Actual Knowledge thereof, Lessee
shall provide to Lessor written notice of any pending or threatened claim,
action or proceeding involving any Environmental Laws or any Release on or in
connection with any Site. All such notices shall describe in reasonable detail
the nature of the claim, action or proceeding and Lessee's proposed response
thereto. In addition, Lessee shall provide to Lessor, promptly following
receipt, copies of all written communications with any Authority relating to any
Environmental Violation in connection with any Site. Lessee shall also promptly
provide such detailed reports of any such material environmental claims as may
reasonably be requested by Lessor or Agent. In the event that Lessor receives
written notice of any pending or threatened claim, action or proceeding
involving any Environmental Laws or any Release on or in connection with either
Site, Lessor shall promptly give notice thereof to Lessee. For purposes of this
paragraph, "Actual Knowledge" of Lessee shall mean the actual knowledge of
Lessee's Director of Planning and Development, who is responsible for the day to
day operations of the Sites.
ARTICLE XIV
PARTIAL TERMINATIONS
XIV.1 Partial Termination upon Certain Events. If any of the following
occurs with respect to either Site:
(a) a Significant Condemnation occurs; or
(b) an Environmental Violation occurs or is discovered the cost
of remediation of which would exceed either (i) $15,000,000 with respect
to either Site or (ii) with respect to either Site, if such Site is
comprised of one or more legal parcels, $5,000,000 for any portion of
either Site constituting a legal parcel and (x) such violation has not
been remediated within 180 days after the occurrence or discovery
thereof, or (y) Lessee has
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notified Lessor prior to the expiration of such 180 day period that the
violation will not be remediated within such period;
and Lessor shall have given written notice (a "Termination Notice") to Lessee
that, as a consequence of such event (x) the Lease Supplement relating to such
Site is to be terminated and (y) this Lease is to be terminated with respect to
such Site, then Lessee shall be obligated to purchase Lessor's interest in such
affected Site on the next Payment Date after Lessee's receipt of the Termination
Notice, by paying to Lessor an amount equal to the Purchase Amount for such
affected Site.
XIV.2 Termination Procedures. On the date of the payment by Lessee of
the Purchase Amount for the affected Site in accordance with Section 14.1(a) or
(b) or for the affected parcel in accordance with Section 14.1(b) (such date,
the "Termination Date"), the Lease Supplement relating to each such affected
Site or such affected parcel, as the case may be, shall terminate and this Lease
shall terminate with respect to each such Site or each affected parcel, as the
case may be, and, concurrent with Lessor's receipt of such payment,
(a) Lessor shall convey such Site to Lessee (or to Lessee's
designee) "AS IS" and in its then present physical condition pursuant to
Section 22.15 or, in the case of an affected parcel, Lessee shall
purchase such parcel in accordance with Section 19.2; and
(b) in the case of a termination pursuant to Section 14.1(a),
Lessor shall convey to Lessee any Net Condemnation Proceeds with respect
to the Condemnation giving rise to the termination of this Lease with
respect to such Site theretofore received by Lessor or at the request of
Lessee, provided however, if Lessee has not previously paid the Purchase
Amount to Lessor, other such amounts shall be applied against sums due
hereunder.
ARTICLE XV
OWNERSHIP, GRANT OF LIEN AND FURTHER ASSURANCES
XV.1 Grant of Lien and Security Interest. Title to the Leased Property
is held by and shall remain in Lessor, as security for the obligations of Lessee
hereunder and under each of the other Operative Documents to which it is a party
until such time as Lessee shall have fulfilled all of its obligations hereunder
and under such other Operative Documents. Lessee hereby mortgages, grants,
conveys, assigns, warrants, transfers, sets over and pledges to Lessor for the
benefit of the Participants a mortgage and Lien against all of Lessee's right,
title and interest, whether now or hereafter existing or acquired, in the Leased
Property and the other Lease Collateral to secure the payment and performance of
all obligations of Lessee now or hereafter existing under this Lease or any
other Operative Document, TO HAVE AND TO HOLD the Lease Collateral and the
rights and privileges hereby mortgaged unto Lessor, its successors and assigns
for the uses and purposes set forth, until all the obligations hereunder and
under such other Operative Documents are paid, performed and satisfied in full.
Lessee shall, at its expense,
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do any further act and execute, acknowledge, deliver, file, register and record
any further documents (including the Deed of Trust) which Lessor or Agent may
reasonably request in order to protect its title to and perfected Lien in the
Leased Property and the other Lease Collateral, subject to no Liens other than
Permitted Liens, and Lessor's rights and benefits under this Lease. Lessee shall
promptly and duly execute and deliver to Lessor such documents and assurances
(including the Deed of Trust) and take such further actions as Lessor or Agent
may from time to time reasonably request in order to carry out more effectively
the intent and purpose of this Lease and the other Operative Documents, to
establish and protect the rights and remedies created or intended to be created
in favor of Lessor hereunder and thereunder, and to establish, perfect and
maintain the right, title and interest of Lessor in and to the Leased Property
and the other Lease Collateral, subject to no Lien other than Permitted Liens,
or of such Deed of Trust, financing statements or fixture filings or other
documents with respect hereto as Lessor or Agent may from time to time
reasonably request, and Lessee agrees to execute and deliver promptly such of
the foregoing Deed of Trust, financing statements and fixture filings or other
documents as may require execution by Lessee. To the extent permitted by
Applicable Laws, Lessee hereby authorizes any such Deed of Trust, financing
statements and fixture filings to be filed without the necessity of the
signature of Lessee, and Lessor agrees to provide Lessee with copies of any such
documents so filed. Lessor shall at such time as all of the obligations of
Lessee under this Lease or any other Operative Documents have been paid or
performed in full (other than Lessee's contingent obligations, if any, under
Article VII of the Participation Agreement) execute and deliver termination
statements, cancellations of lease or memoranda, quit claim deeds and other
appropriate documentation reasonably requested by Lessee, all at Lessee's
expense, to evidence Lessor's release of its Lien against the Lease Collateral.
ARTICLE XVI
LEASE EVENTS OF DEFAULT
The occurrence of any one or more of the following events, whether any
such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body, shall constitute a "Lease Event of Default":
(a) Lessee shall fail to make any payment of (i) Base Rent when
due and such failure shall continue for ten (10) days, (ii) any
Supplemental Rent when due and such failure shall continue for ten (10)
days after written demand therefor, or (iii) amounts payable pursuant to
the exercise of the Sale Option when due, or (iv) amounts payable
pursuant to Article XIV, Article XIX, Section 20.1(b) or Section 21.3
when due; or
(b) [intentionally omitted];
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(c) Lessee or Guarantor shall default in the performance or
observance of any term, covenant, condition or agreement on its part to
be performed or observed under Sections 11.1 or 12.1 hereof or Sections
5.11, 5.13, or 5.14 of the Participation Agreement; or
(d) Subject to Lessee's rights under Section 21.4, Lessee shall
fail to offer the Leased Property for sale in accordance with and
satisfy each of the terms, covenants, conditions and agreements set
forth at Articles XX and XXI in connection with and following its
exercise of the Sale Option, including each of Lessee's obligations at
Sections 21.1 and 21.2;
(e) any representation or warranty by Lessee or Guarantor in any
Operative Document or in any certificate or document delivered to
Lessor, or any Participant pursuant to any Operative Document shall have
been incorrect in any material respect when made, deemed made or
reaffirmed, as the case may be;
(f) (i) Guarantor shall fail to observe or perform any term,
covenant or condition of Guarantor (not included in any other clause of
this Article XVI) under (x) either Guarantee or (y) with respect to any
other Operative Document, within ten (10) days after written notice
thereof, or (ii) a Loan Event of Default shall have occurred;
(g) Lessee shall fail in any material respect to timely perform
or observe any covenant, condition or agreement (not included in any
other clause of this Article XVI) to be performed or observed by Lessee
hereunder or under any other Operative Document and such failure shall
continue for a period of 30 days (but in no event later than the Lease
Expiration Date) after the earlier to occur of (i) written notice
thereof from Lessor, Agent or any Participant or (ii) a Responsible
Officer of Lessee has knowledge thereof, provided, however, in the case
of a failure to comply with the requirements of Section 9.1(a), (b),
(d), (e), or (f) or Section 9.2 of this Lease, if such failure cannot in
Lessor's reasonably exercised judgment be cured in 30 days but can in
Lessor's reasonably exercised judgment be cured in 90 days, Lessee may
have an additional 60 days in which to cure such failure provided that
Lessee begins to cure such failure within 30 days following notice or
knowledge thereof as provided above and thereafter continues diligent
efforts to cure such failure;
(h) (i) Lessee, Guarantor or any Material Subsidiary shall
generally fail to pay, or admit in writing its general inability to pay,
its debts as they become due, or shall voluntarily commence any case or
proceeding or file any petition under any bankruptcy, insolvency or
similar law or seeking dissolution, liquidation or reorganization or the
appointment of a receiver, trustee, custodian or liquidator for itself
or a substantial portion of its property, assets or business or to
effect a plan or other arrangement with its creditors, or shall file any
answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition filed against it in any
bankruptcy, insolvency or
22
similar case or proceeding, or shall be adjudicated bankrupt, or shall
make a general assignment for the benefit or creditors, or shall consent
to, or acquiesce in the appointment of, a receiver, trustee, custodian
or liquidator for itself or a substantial portion of its property,
assets or business, or (ii) corporate action shall be taken by Lessee,
Guarantor or any Material Subsidiary for the purpose of effectuating any
of the foregoing;
(i) involuntary proceedings or an involuntary petition shall be
commenced or filed against Lessee, Guarantor or any Material Subsidiary
under any bankruptcy, insolvency or similar law or seeking the
dissolution, liquidation or reorganization of any such Person or the
appointment of a receiver, trustee, custodian or liquidator for Lessee,
Guarantor or any Material Subsidiary or of a substantial part of the
property, assets or business of any such Person, or any writ, judgment,
warrant of attachment, execution or similar process shall be issued or
levied against a substantial part of the property, assets or business of
Lessee, Guarantor or any Material Subsidiary and such proceedings or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated
or fully bonded, within 60 days after commencement, filing or levy, as
the case may be;
(j) any one or more judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount in excess
of $50,000,000 (after taking into account the actual amounts of third
party insurance recoveries, offsets and contributions received, and
amounts thereof not yet received but which the insurer thereon has
acknowledged in writing its obligation to pay, without material
conditions) shall be entered or filed against Lessee, Guarantor or any
Material Subsidiary, and all such judgments and processes shall not be
dismissed, vacated, stayed, discharged or bonded for a period of
forty-five (45) days;
(k) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $50,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $50,000,000;
(l) any Operative Document to which Lessee or Guarantor is a
party or the security interest and lien granted under this Lease (except
in accordance with its terms),
23
in whole or in part, terminates, ceases to be effective or ceases to be
the legal, valid and binding enforceable obligation of Lessee or
Guarantor, as applicable, or the security interest or lien securing
Lessee's obligations under the Operative Documents, in whole or in part,
ceases to be a perfected first priority security interest and lien, in
each case unless due to any act or failure to act on the part of Lessor
or Agent or (ii) Lessee or Guarantor shall directly or indirectly
contest the effectiveness, validity, binding nature or enforceability of
any Operative Document or any Lien granted under any Operative Document;
(m) Guarantor or any Subsidiary shall fail to make any payment in
respect of any Material Obligation when due or within any applicable
grace period;
(n) any event or condition shall occur which results in the
acceleration of the maturity of, or the early termination, payment or
satisfaction of, any Material Obligation;
(o) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
35% or more of the outstanding shares of common stock of Guarantor; or
during any period of 12 consecutive calendar months, individuals who
were directors of Guarantor on the first day of such period cease to
constitute a majority of the board of directors of Guarantor (other than
as a result of death or disability).
ARTICLE XVII
ENFORCEMENT
XVII.1 Remedies. Upon the occurrence of any Lease Event of Default and
the declaration thereof (but a Lease Event of Default shall be automatically
deemed to occur, and no declaration thereof shall be required, upon the
occurrence of a Lease Event of Default pursuant to clause (h) or (i) of Article
XVI), the Lease Balance due hereunder without further act shall be accelerated
and be deemed to be due and payable hereunder, and at any time thereafter, the
Lessor may, subject to Lessee's right to purchase the Leased Property pursuant
to Section 19.1 and so long as such Lease Event of Default is continuing, do one
or more of the following as Lessor in its sole discretion shall determine,
without limiting any other right or remedy Lessor may have on account of such
Lease Event of Default.
(a) By notice to Lessee, Lessor may terminate Lessee's right to
possession of the Leased Property subject to Lessee's right to purchase
the Site under Section 19.1 of this Lease; provided, however (i) no
reletting, reentry or taking of possession of any Leased Property (or
any portion thereof) by Lessor will be construed as an election on
Lessor's part to terminate this Lease unless a written notice of such
intention is given to Lessee,
24
(ii) notwithstanding any reletting, reentry or taking of possession,
Lessor may at any time thereafter elect to terminate this Lease for a
continuing Lease Event of Default and (iii) no act or thing done by
Lessor or any of its agents, representatives or employees and no
agreement accepting a surrender of the Leased Property shall be valid
unless the same be made in writing and executed by Lessor. A notice
given in connection with unlawful detainer proceedings specifying a time
within which to cure a default shall terminate Lessee's right to
possession if Lessee fails to cure the default within the time specified
in the notice. Upon termination of Lessee's right to possession and
without further demand or notice, Lessee shall surrender possession and
vacate the Leased Property and deliver possession thereof, and Lessor
may re-enter the Leased Property and remove any persons in possession
thereof. Upon such termination of Lessee's right to possession, the
Lease shall terminate and Lessor may recover from Lessee:
(i) The worth at the time of award of the unpaid Rent
under the Lease (including Basic Rent and Supplemental Rent)
which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by which
the unpaid Rent under the Lease (including Basic Rent and
Supplemental Rent) which would have been earned after termination
until the time of award exceeds the amount of such rental loss
that Lessee proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by
which the unpaid Rent for the balance of the Term after the time
of award exceeds the amount of such rental loss that Lessee
proves could be reasonably avoided;
(iv) Any other amount necessary to compensate Lessor for
all the detriment proximately caused by Lessee's failure to
perform Lessee's obligation under the Lease or which in the
ordinary course of things would be likely to result therefrom,
including the costs and expenses (including reasonable attorneys'
fees, advertising costs and brokers' commissions) of recovering
possession of the Leased Property, removing persons or property
therefrom, placing the Leased Property in good order, condition,
and repair, preparing and altering the Leased Property for
reletting, and all other costs and expenses of reletting; and
(v) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable
California law.
The "worth at the time of award" of the amounts referred to in clauses
(i) and (ii) above, is computed by allowing interest at the Overdue
Rate. The "worth at the time of award" of the amount referred to in
clause (iii) above is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time
of award plus one percent (1%);
25
(b) Subject to Lessee's rights under Section 19.1, as more fully
set forth in each Lease Supplement, Lessor may sell all or any portion
of the Leased Properties at public or private sale, as Lessor may
determine;
(c) Lessor may, at its option, elect not to terminate this Lease
with respect to any Site or all of the Leased Property and continue to
collect all Basic Rent, Supplemental Rent, and all other amounts due to
Lessor (together with all costs of collection) and enforce Lessee's
obligations under this Lease as and when the same become due, or are to
be performed, and at the option of Lessor, upon any abandonment of any
Leased Property by Lessee or re-entry of same by Lessor, Lessor may
enforce, by suit or otherwise, all other covenants and conditions hereof
to be performed or complied with by Lessee hereunder and to exercise all
other remedies permitted by Section 1951.4 of the California Civil Code
or any amendments thereof or any successor laws which replace such
Section 1951.4;
(d) Unless all of the Leased Property has been sold in its
entirety, Lessor may, whether or not Lessor shall have exercised or
shall thereafter at any time exercise any of its rights under clause
(b), (c) or (d) of this Section 17.1 with respect to the Leased Property
or any portion thereof, demand, by written notice to Lessee specifying a
date (a "Termination Date") not earlier than five (5) days after the
date of such notice, that Lessee purchase, on such Termination Date for
a price equal to the Purchase Amount, the Leased Property subject to
this Lease, in accordance with the provisions of Section 19.3;
(e) Lessor may exercise any other right or remedy that may be
available to it under Applicable Laws, including any and all rights or
remedies under any other Operative Document, or proceed by appropriate
court action (legal or equitable) to enforce the terms hereof or to
recover damages for the breach hereof. Separate suits may be brought to
collect any such damages for any period(s), and such suits shall not in
any manner prejudice Lessor's right to collect any such damages for any
subsequent period(s), or Lessor may defer any such suit until after the
expiration of the Lease Term, in which event such suit shall be deemed
not to have accrued until the expiration of the Lease Term;
(f) Lessor may retain and apply against the Lease Balance or any
other amounts payable under the Operative Documents all sums which
Lessor would, absent such Lease Event of Default, be required to pay to,
or turn over to, Lessee pursuant to the terms of this Lease; or
(g) If a Lease Event of Default shall have occurred and be
continuing, Lessor, to the extent permitted by Applicable Laws, as a
matter of right and with notice to Lessee, shall have the right to apply
to any court having jurisdiction to appoint a receiver or receivers of
the Leased Property or any portion thereof, and Lessee hereby
irrevocably consents to any such appointment. Any such receiver(s) shall
have all of the usual
26
powers and duties of receivers in like or similar cases and all of the
powers and duties of Lessor in case of entry, and shall continue as such
and exercise such powers until the date of confirmation of the sale of
such Property unless such receivership is sooner terminated.
(h) To the maximum extent permitted by Applicable Laws, Lessee
hereby waives the benefit of any appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force
and all rights of marshaling in the event of any sale of the Leased
Property, any portion thereof or any interest therein.
(i) Lessor shall be entitled to enforce payment of the
indebtedness and performance of the obligations secured hereby and to
exercise all rights and powers under this instrument or under any of the
other Operative Documents or other agreement or any Applicable Laws now
or hereafter in force, notwithstanding some or all of the obligations
secured hereby may now or hereafter be otherwise secured, whether by
mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this instrument nor its enforcement, shall
prejudice or in any manner affect Lessor's right to realize upon or
enforce any other security now or hereafter held by Lessor, it being
agreed that Lessor shall be entitled to enforce this instrument and any
other security now or hereafter held by Lessor in such order and manner
as Lessor may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Lessor is intended to be exclusive of any
other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by any of the Operative Documents
to Lessor or to which Lessor may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and as often
as may be deemed expedient by Lessor. In no event shall Lessor, in the
exercise of the remedies provided in this Lease (including in connection
with the assignment of rents to Lessor, or the appointment of a receiver
and the entry of such receiver onto the Sites or any portion thereof),
be deemed a "mortgagee in possession", and the Lessor shall not in any
way be made liable for any act, either of commission or omission, in
connection with the exercise of such remedies, except for the exercise
of the remedies set forth Sections 17.1(c) and (j), within thirty (30)
days after the declaration of the occurrence of a Lease Event of Default
in contravention of Lessee's purchase right set forth in Section 19.1.
(j) Foreclosure; Power of Sale. Lessee hereby grants to Chicago
Title Company, as trustee (together with all successor trustees, the
"Trustee"), IN TRUST for the benefit of Lessor as security for the
obligations hereunder A SECURITY INTEREST AND LIEN against the Leased
Property WITH POWER OF SALE, and that, upon the occurrence of any Lease
Event of Default, Lessor shall have the power and authority, to the
extent provided by Applicable Laws, after proper notice and lapse of
such time as may be required by Applicable Laws, to cause the Trustee to
sell the Leased Property, or any portion thereof, at the time and place
of sale fixed by Lessor in said notice of sale, either as a whole, or in
separate lots or parcels or items and in such order as Lessor may elect,
at
27
auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale; accordingly, it is acknowledged that
A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT; A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE APPLICABLE LEASED PROPERTY AND SELL IT WITHOUT
GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY LESSEE UNDER THIS
INSTRUMENT, and (ii) upon the occurrence of a Lease Event of Default,
Lessor, in lieu of or in addition to exercising any power of sale
hereinabove given, may proceed by a suit or suits in equity or at law,
whether for a foreclosure hereunder, or for the sale of the Leased
Property, or against Lessee on a recourse basis for the Lease Balance
and all accrued and unpaid interest on the Loans, all accrued and unpaid
Yield on the Certificate Amounts, and all other amounts owing by Lessee
under the Operative Documents with respect to such Leased Property, or
for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for
the appointment of a receiver pending any foreclosure hereunder or the
sale of the Leased Property, or for the enforcement of any other
appropriate legal or equitable remedy.
Lessor acknowledges and agrees that upon the declaration of a Lease
Event of Default the amount due and owing by it to Lessor hereunder shall be the
Lease Balance and that to the maximum extent permitted by Applicable Laws,
Lessee waives any right to contest the Lease Balance as the liquidated sum due
upon acceleration of this Lease.
XVII.2 Proceeds of Sale; Deficiency. All payments received and amounts
held or realized by Lessor at any time when a Lease Event of Default shall exist
and after the Lease Balance shall have been accelerated pursuant to this Article
XVII as well as all payments or amounts then held or thereafter received by
Lessor and the proceeds of sale pursuant to Section 17.1(j) or pursuant to
either Lease Supplement shall be distributed forthwith upon receipt by Lessor in
accordance with Article III of the Loan Agreement.
XVII.3 Deed of Trust Remedies. Without limiting any other remedies set
forth in this Lease, Lessor and Lessee agree that upon the occurrence of a Lease
Event of Default (irrespective of whether a Loan Event of Default has occurred
or is occurring), Lessor and Agent shall have all the rights and may pursue any
of the remedies provided to Agent in the Deed of Trust, the terms and provisions
of which Deed of Trust are incorporated herein by this reference.
XVII.4 Remedies Cumulative; No Waiver; Consents. To the extent permitted
by, and subject to the mandatory requirements of, Applicable Laws, each and
every right, power and remedy herein specifically given to Lessor or otherwise
in this Lease shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by Lessor, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the
28
right to exercise at the same time or thereafter any other right, power or
remedy. Without limiting the foregoing, Lessee acknowledges that Lessor may
proceed against all or any part of the Leased Property in exercising any
remedies in respect of real property or personal property, or both. No delay or
omission by Lessor in the exercise of any right, power or remedy or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of Lessee or be an
acquiescence therein. Lessor's consent to any request made by Lessee shall not
be deemed to constitute or preclude the necessity for obtaining Lessor's
consent, in the future, to all similar requests. No express or implied waiver by
Lessor of any Lease Event of Default shall in any way be, or be construed to be,
a waiver of any future or subsequent Lease Default or Lease Event of Default. To
the extent permitted by Applicable Laws and subject to the provisions of Section
17.1, Lessee hereby waives any rights now or hereafter conferred by statute or
otherwise that may require Lessor to sell, lease or otherwise use the Leased
Property, the other Lease Collateral or any part thereof in mitigation of
Lessor's damages upon the occurrence of a Lease Event of Default or that may
otherwise limit or modify any of Lessor's rights or remedies under this Article
XVII.
ARTICLE XVIII
RIGHT TO PERFORM FOR LESSEE
If Lessee shall fail to perform or comply with any of its agreements
contained herein and in Lessor's reasonably exercised judgment Lessee is not
acting diligently and appropriately to perform or comply with such agreements,
Lessor may, but shall not be obligated to, on five (5) Business Days' prior
notice to Lessee (except that in the case of an Emergency, Lessee shall permit
Lessor so to perform or comply on less than five (5) Business Days' notice
unless Lessee has a good faith reason not to permit Lessor to do so), perform or
comply with such agreement, and Lessor shall not thereby be deemed to have
waived any default caused by such failure, and the amount of such payment and
the amount of the out-of-pocket and reasonably allocated internal expenses of
Lessor (including reasonable attorneys' fees and expenses) incurred in
connection with such payment or the performance of or compliance with such
agreement, as the case may be, together with interest thereon at the Overdue
Rate, shall be deemed Supplemental Rent, payable by Lessee to Lessor upon
demand.
ARTICLE XIX
EARLY TERMINATION OPTION AND OBLIGATION TO PURCHASE
XIX.1 Early Termination Option. Without limitation of Lessee's purchase
obligation pursuant to Section 19.3, on any Business Day, Lessee may, at its
option, purchase one or both Sites or, in the case of Section 19.2 below, a
portion of a Site (the "Early Termination Option") at a price equal to the
Purchase Amount; Lessee's right to purchase all or a portion of the Leased
29
Property pursuant to this Section 19.1 or Section 19.2 below shall terminate
automatically upon (i) occurrence of a Lease Event of Default pursuant to
clauses (h) or (i) of Article XVI or (ii) the occurrence of any other Lease
Event of Default, unless in the case of a Lease Event of Default described in
this Section 19.1(ii) Lessee delivers a written notice of its election to
exercise this option to purchase all of the Leased Property not less than five
(5) days prior to the date of the purchase and consummates the purchase within
thirty (30) days following the occurrence and declaration of such Lease Event of
Default described in this Section 19.1(ii) (except that if a Lease Event of
Default pursuant to clause (h) or (i) of Article XVI has also occurred, then
such 30-day period shall be deemed to commence on the earlier of (x) the date of
the entry of order for relief or (y) the date of such declaration). In order to
exercise its option to purchase all or a portion of the Leased Property pursuant
to this Section 19.1 or Section 19.2 below and except as provided for in item
(ii) of the foregoing sentence, Lessee shall give to Lessor not less than sixty
(60) days' prior written notice of such election to exercise, which election
shall become irrevocable if not revoked or extended by written notice to Lessor
not later than ten (10) days prior to the end of such sixty (60) day period.
Upon receipt of the Purchase Amount, Lessor shall transfer the Leased Property
to Lessee, or its assigns, pursuant to Section 22.15, on the date set forth in
the written notice delivered by Lessee pursuant to this Section 19.1.
XIX.2 Partial Site Purchases. In addition to Lessee's option to purchase
one or both Sites as provided above, Lessee also shall have the option to
purchase a portion of a Site upon satisfaction of the following conditions: (i)
Lessee shall deliver to Lessor, Agent and the Participants an Appraisal setting
forth the Fair Market Value (as separate and independent pieces of property) of
the portion being purchased by Lessee as of the date of purchase and the
remaining portion of the applicable Site, (ii) the purchase price for the
portion of a Site being purchased shall be equal to the product of (A) a
fraction the numerator of which is the Fair Market Value of the portion being
purchased as determined in such Appraisal, and the denominator of which is the
sum of the Fair Market Values of the portion being purchased and remaining
portion of the Site as determined in such Appraisal and (B) the Site Balance for
such Site, (iii) the portion of the Site being purchased by Lessee and the
remaining portion shall each constitute a legal parcel under Applicable Laws
regarding subdivision, (iv) the remaining portion of the Site shall not be
dependent upon the portion being sold for services, utilities, parking or access
unless perpetual easements have been granted for the benefit of the remaining
portion of the Site in form satisfactory to the Required Participants and
otherwise in accordance with Applicable Laws regarding subdivision and zoning,
(v) any improvements situated on the remaining portion of the Site shall be
situated entirely on the remaining portion of the Site and no portion of the
improvements situated on the remaining portion of the Site shall be situated on
the portion of the Site being purchased by Lessee, (vi) Lessee shall deliver to
Lessor, Agent and the Participants a Title Policy complying with the
requirements of Section 3.1(l) of the Participation Agreement in an amount equal
to the Site Balance for such Site less the purchase price received for the
portion of the Site being sold, with such endorsements as reasonably requested
by Lessor or Agent, including endorsements with respect to the subdivision map
act and zoning, (vii) Lessee shall execute and deliver such modifications,
amendments or supplements to the Operative Documents to reflect the sale of such
real property and the payment of the purchase
30
price thereof as reasonably requested by Lessor or Agent. In the event either
Site is re-parcelized, and in connection with or after the re-parcelization
Lessee obtains an Appraisal of each parcel comprising the Site, then Lessee may
designate such post-re-parcelization Appraisal as the appraisal to be used in
connection with any subsequent purchase by Lessee of any of such parcels for the
purpose of determining the purchase price for such parcel being purchased, and
no new Appraisal need be obtained so long as the configuration of the parcels
does not change.
XIX.3 Required Purchase. Lessee shall be obligated to purchase for the
Purchase Amount all of Lessor's interest in the Leased Property (a)
automatically and without notice upon the occurrence of any Lease Event of
Default specified in clauses(h) or (i) of Article XVI, or (b) immediately upon
written demand of Lessor upon the occurrence of any other Lease Event of Default
pursuant to and for the amount described in Section 17.1(d).
ARTICLE XX
END OF TERM OPTIONS
XX.1 End of Term Options. At least 180 days but not more than 360 days
before the last day of the Base Term and the Renewal Term, if effective, Lessee
shall, by delivery of written notice to Lessor and Agent, exercise one of the
following options:
(a) Renew this Lease with respect to all of the Leased Property
then subject to the Lease for one additional five-year period (the "Renewal
Option") on the terms and conditions set forth herein; provided, however, such
Renewal Option shall be available only at the end of the Base Term; or
(b) Purchase for cash for the Purchase Amount all, but not less
than all, of the Leased Property then subject to the Lease on the Lease
Expiration Date (the "Purchase Option"); and if Lessee shall have elected to
purchase the Leased Property, Lessor shall, upon the payment to Lessor of the
Purchase Amount then due and payable by Lessee under the Operative Documents,
transfer all of Lessor's right, title and interest in and to the Leased Property
pursuant to Section 22.15; or
(c) Sell on behalf of Lessor for cash to a purchaser all, but not
less than all, of the Leased Property then subject to the Lease (the "Sale
Option"). Lessee's right to sell the Leased Property pursuant to the Sale Option
shall be conditioned upon and subject to the fulfillment by Lessee of each of
the terms and conditions set forth in Article XXI.
XX.2 Election of Options. If Lessee fails to make a timely election
pursuant to Section 20.1 at the end of the Base Term; or, if effective, the
Renewal Term, or if as of the end of the Base Term Lessee has elected the
Renewal Term pursuant to Section 20.1(a) but fails to satisfy the conditions to
renewal set forth at Section 20.3, Lessee shall be deemed to have elected the
31
Purchase Option. In addition, the Sale Option shall automatically be revoked
if there exists a Lease Event of Default or Significant Condemnation at any time
after the Sale Option is properly elected or Lessee fails to comply with any of
the terms and conditions set forth at Article XXI and Lessor shall be entitled
to exercise all rights and remedies provided in Article XVII. Lessee may not
elect the Sale Option if there exists on the date the election is made a Lease
Default, Lease Event of Default or a Significant Condemnation.
XX.3 Lease Renewal. Subject to the conditions set forth herein, Lessee
may, by written notice to Lessor, each Participant and Agent given not earlier
than 360 days and not later than 180 days prior to the fifth (5th) anniversary
of the Advance Date, request (a "Renewal Request") that the Lease Term be
extended to the day immediately preceding the tenth (10th) anniversary of the
Advance Date (the "Renewal Option"). Such renewal shall be subject to and
conditioned upon the following:
(a) on both the date of the Renewal Request and the date of the
commencement of the Renewal Term, no Lease Default or Lease Event of
Default shall have occurred and be continuing, and Lessee shall be
deemed to have represented the same to Lessor;
(b) Lessee shall not have exercised the Sale Option;
(c) the Final Maturity Date shall have been extended pursuant to
Section 2.13 of the Participation Agreement such that the Renewal Term
will expire on or before the extended Final Maturity Date; and
(d) on both the date of the Renewal Request and the date such
renewal becomes effective, either:
(i Guarantor shall have a senior unsecured debt rating (or
if no public debt is outstanding, a private letter rating) of at
least BBB by S&P (or Ba3 by Moody's) after giving effect to such
renewal and the extension of the Final Maturity Date, and
Guarantor's rating shall not be on credit watch with negative
implications; or
(ii) prior to the date such renewal becomes effective,
Lessee shall have provided to Agent for the sole benefit of the
Certificate Purchasers a valid and perfected first Lien in cash
or cash equivalents in an aggregate amount equal to the
Certificate Amounts to secure Certificate Trustee's obligations
to repay the Certificate Amounts, accrued Yield and all other
amounts owing to the Certificate Purchasers. The documentation
securing such security arrangement shall be in form and substance
reasonably satisfactory to the Certificate Purchasers and be
accompanied by opinions of counsel of Lessee regarding the
validity, perfection and priority of such interests.
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ARTICLE XXI
SALE OPTION
XXI.1 Sale Option Procedures. If Lessee elects the Sale Option, Lessee
shall use its best commercial efforts as nonexclusive agent for Lessor to obtain
the highest all cash purchase price for the purchase of all of the Leased
Property then subject to the Lease, and in the event Lessee receives any bid,
Lessee shall, within five (5) Business Days after receipt thereof, certify to
Lessor in writing the amount and terms of such bid and the name and address of
the party submitting such bid. Lessee shall bear all costs and expenses in
connection with any such bidding and sale process pursuant to this Section 21.1
as well as all costs and expenses incurred by any party (including a buyer or
potential buyer) to place the Leased Property in the condition required by
Section 9.1. None of the foregoing costs or expenses shall be deducted from the
Sale Proceeds or serve to reduce the purchase price to be paid for the Leased
Property. With respect to any sale made pursuant to this Article XXI and so long
as no Lease Event of Default shall have occurred and be continuing: (i) Lessee
shall transfer all of Lessee's right, title and interest in the Leased Property,
or cause the Leased Property to be transferred, to the bidder, if any, which
shall have submitted the highest all cash bid therefor in the same manner and in
the same condition and otherwise in accordance with all of the terms of this
Lease; (ii) subject to the prior or current payment by Lessee of all amounts due
under clause (iii) of this sentence, Lessor shall comply with any conditions to
transfer set forth in Section 21.2 and the transfer provisions of Section 22.15
in order to transfer Lessor's right, title and interest in and to the Leased
Property for cash to such bidder, such transfer to be made on the Lease
Expiration Date with respect to any bid accepted prior to such date or on the
date provided for at Section 21.4; and (iii) Lessee shall pay to Lessor on the
earlier of the Lease Expiration Date or immediately prior to such sale all of
the amounts required pursuant to Section 21.3. All costs related to a sale and
delivery pursuant to this Section 21.1, including the cost of sales agents
retained by Lessee, delivery of documents, filing and documentary transfer fees,
Taxes relating to or arising as a result of such transfer, title insurance,
certification and testing of the Leased Property, environmental audits, legal
costs, costs of notices, any advertisement or other similar costs shall be borne
entirely by Lessee, without regard to whether such costs were incurred by
Lessor, Lessee or any potentially qualified buyer. Neither Lessor nor any
Participant shall have any responsibility for procuring or financing any
purchaser.
XXI.2 Sale. Upon a sale of the Leased Property on the Lease Expiration
Date pursuant to Section 21.1 or following the Lease Expiration Date pursuant to
Section 21.4, Lessee shall, at Lessee's own expense, transfer the Leased
Property to the independent purchaser thereof free and clear of all Liens other
than Permitted Exceptions, in as good condition as it was on the Advance Date,
ordinary wear and tear excepted, and in compliance with all Applicable Laws (and
in any event without (x) any asbestos installed or maintained in any part of the
Leased Property, (y) any polychlorinated biphenyls (PCBs) in, on or used, stored
or located at the Leased Property, and (z) any other Hazardous Material). As a
condition to Lessee's rights hereunder, Lessee shall
33
obtain and make all necessary Governmental Actions required by Lessee or Lessor
in connection with any third party sale and satisfy the requirements of Section
5.16 of the Participation Agreement with respect to the Site Improvements.
Lessee shall cooperate with the independent purchaser of the Leased Property in
order to facilitate the ownership and operation of the Leased Property by such
purchaser after the date of the sale or transfer. Prior to the Lease Expiration
Date, Lessee shall furnish to Certificate Trustee, Agent, the Participants and
the independent purchaser hereunder a reasonably current Environmental Audit
dated no earlier than 45 days prior to the Lease Expiration Date and addressed
to each such party in form and substance satisfactory to such parties. The
Environmental Audit shall be prepared by environmental consultants selected by
the Lessor at the direction of and in the reasonable discretion of the Required
Participants. If the Leased Property is sold during the Extended Remarketing
Period, such Environmental Audit shall be updated by Lessee to a date not later
than forty-five (45) days prior to the date of such sale and shall be subject to
the reevaluation of the Certificate Trustee, the Agent, the Participants and, if
applicable, the independent purchaser, on the same basis as provided for in the
previous sentences. If any such Environmental Audit indicates any exceptions,
Lessee also shall deliver prior to the Lease Expiration Date a Phase II
environmental assessment by such environmental consultant and a written
statement by such environmental consultant indicating that all such exceptions
have been remedied in compliance with Applicable Laws. If Lessee exercises the
Sale Option, Lessor shall at Lessee's expense be entitled to perform such
investigation, including obtaining reports of engineers and other experts as to
the condition and state of repair and maintenance of the Leased Property and as
to the compliance of the Leased Property with Applicable Laws including
Environmental Laws. The obligations of Lessee under this Section 21.2 shall
survive the expiration or termination of this Lease.
XXI.3 Application of Sale Proceeds and Recourse Payments.
(a On the Lease Expiration Date in connection with an exercise of
the Sale Option, Lessee shall pay to Lessor all Rent then due together with all
other amounts due and payable by Lessee to Lessor, Agent, any Participant or any
Indemnitee. If a sale of the Leased Property is completed on the Lease
Expiration Date, Lessee also shall pay to Lessor, as Supplemental Rent, from the
Sale Proceeds the aggregate outstanding Lease Balance as of the Lease Expiration
Date (as determined after the payment of all Rent due on such date). If the Sale
Proceeds exceed the Lease Balance as of the Lease Expiration Date, Lessee shall
retain the portion of the Sale Proceeds in excess thereof. If the Sale Proceeds
are less than the aggregate outstanding Lease Balance, Lessee shall pay or shall
cause to be paid to Lessor, as Supplemental Rent, on the Lease Expiration Date,
in addition to the Sale Proceeds, an additional amount equal to the amount that
the Lease Balance exceeds the Sale Proceeds.
(b The obligation of Lessee to pay the amounts determined
pursuant to Section 21.3(a) shall be recourse obligation of Lessee, and such
payments by Lessee shall not limit any other obligation of Lessee under the
Operative Documents, including pursuant to Article VII of the Participation
Agreement.
34
XXI.4 Failure to Sell Premises. If Lessee shall exercise the Sale Option
and shall fail to sell all of the Leased Property on the Lease Expiration Date
in accordance with and subject to the provisions of Section 21.1, then Lessee
and Lessor hereby agree as follows:
(a In addition to the amounts required to be paid by Lessee
pursuant to the first sentence of Section 21.3(a), Lessee also shall pay to
Lessor on the Lease Expiration Date an amount equal to the Lease Balance and
Lessor shall apply such amount to a reduction of the amounts outstanding under
the Notes and Certificates.
(b Lessee shall continue to use its best commercial efforts as
non-exclusive agent for Lessor to sell the Leased Property on behalf of Lessor
in accordance with this Article XXI for the period (the "Extended Remarketing
Period") commencing on the Lease Expiration Date and ending on the earlier of
(i) the sale of all of the Leased Property in accordance with the provisions of
this Article XXI, (ii) the delivery of a written notice from Lessee to Lessor
pursuant to which Lessee notifies Lessor of its election to terminate its
remarketing rights hereunder, or (iii) the first anniversary of the Lease
Expiration Date. During the Extended Remarketing Period, Lessee shall have the
right to continue to occupy the Leased Property and this Lease shall remain in
full force and effect in accordance with all of its terms other than Lessee's
obligations to pay Basic Rent. Lessee shall remain bound by all of the
obligations and duties of Lessee under this Lease. On the last day of the
Extended Remarketing Period, Lessee shall pay to Lessor an amount equal to all
accrued and unpaid Supplemental Rent, and if Lessee has not sold all of the
Leased Property, Lessor shall transfer any remaining Leased Property to Lessee
pursuant to Section 22.15. During the Extended Remarketing Period, Lessee may
sell the Leased Property to one or more Persons pursuant to one or more sale
transactions, provided that each such sale must be for one or more legal
parcels. Each such sale must also comply with each of the requirements under
this Article XXI with respect to each such parcel sold. Notwithstanding the
foregoing, all such sales shall be consummated and Lessor shall transfer its
interest pursuant to Section 22.15 on one date during the Extended Remarketing
Period. Lessee shall give written notice to Lessor not less than thirty (30)
days prior to the date of such sale. Following Lessee's payment of all
Supplemental Rent as provided for in the preceding sentence, the Sales Proceeds
resulting from such sale or sales shall be retained by and be the property of
Lessee. All costs and expenses incurred by any Person, including Lessor, Agent
or any Participant in connection with any sale or transfer of the Leased
Property to Lessee or any third party, shall be borne by and be the sole
responsibility of Lessee.
(c Lessor reserves all rights under this Lease and the other
Operative Documents arising out of Lessee's breach of any provisions of this
Lease (including this Article XXI), whether occurring prior to, on or after the
Lease Expiration Date, including Lessee's breach of any of its obligations under
this Article XXI, including the right to sue Lessee for damages.
(d To the greatest extent permitted by Applicable Laws, Lessee
hereby unconditionally and irrevocably waives, and releases Lessor from, any
right to require Lessor during or following the Extended Remarketing Period to
assist in or cause a sale of the Leased
35
Property or from any Claims that Lessee was unable to sell the Leased Property
at all or for any minimum purchase price or on any particular terms and
conditions, Lessee hereby agreeing that if Lessee shall elect the Sale Option,
its ability to sell the Leased Property on or prior to the Lease Expiration Date
and to cause any Person to submit a bid to Lessor pursuant to Section 21.1 shall
constitute full and complete protection of Lessee's interest hereunder.
ARTICLE XXII
MISCELLANEOUS
XXII.1 Binding Effect; Successors and Assigns; Survival. The terms and
provisions of this Lease, and the respective rights and obligations hereunder of
Lessor, Lessee, Agent, Arranger and the Participants shall be binding upon them
and their respective successors, legal representatives and assigns (including,
in the case of Lessor, any Person to whom Lessor may transfer the Leased
Property or any interest therein in accordance with the provisions of the
Operative Documents), and inure to their benefit and the benefit of their
respective permitted successors, legal representatives and assigns.
XXII.2 Severability. Any provision of this Lease that shall be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and Lessee shall remain
liable to perform its obligations hereunder except to the extent of such
unenforceability. To the extent permitted by Applicable Laws, Lessee hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
XXII.3 Notices. Unless otherwise specified herein, all consents,
notices, requests, demands or other communications to or upon the respective
parties hereto shall be in writing and shall be delivered and shall be deemed to
have been given in accordance with Section 9.3 of the Participation Agreement.
XXII.4 Amendment; Complete Agreements. Neither this Lease nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification shall be sought. This Lease, together with the other Operative
Documents, is intended by the parties as a final expression of their agreement
and as a complete and exclusive statement of the terms thereof, all
negotiations, considerations and representations between the parties having been
incorporated herein and therein. No course of prior dealings between the parties
or their officers, employees, agents or Affiliates shall be relevant or
admissible to supplement, explain, or vary any of the terms of this Lease or any
other Operative Document. Acceptance of, or acquiescence in, a course of
performance rendered
36
under this or any prior agreement between the parties or their Affiliates shall
not be relevant or admissible to determine the meaning of any of the terms of
this Lease or any other Operative Document. No representations, undertakings, or
agreements have been made or relied upon in the making of this Lease other than
those specifically set forth in the Operative Documents.
XXII.5 Headings. The Table of Contents and headings of the various
Articles and Sections of this Lease are for convenience of reference only and
shall not modify, define or limit any of the terms or provisions hereof.
XXII.6 GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN, AND SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF,
THE STATE OF CALIFORNIA.
XXII.7 Discharge of Lessee's Obligations by its Affiliates. Lessor
agrees that performance of any of Lessee's obligations hereunder by one or more
of its Affiliates or one or more sublessees of the Leased Property or any part
thereof shall constitute performance by Lessee of such obligations to the same
extent and with the same effect hereunder as if such obligations were performed
by Lessee, but no such performance shall excuse Lessee from any obligation not
performed by it or on its behalf under the Operative Documents.
XXII.8 Liability of Lessor Limited. The parties hereto agree that Bank
shall have no personal liability whatsoever to Lessee or its respective
successors and assigns for any Claim based on or in respect of this Lease or any
of the other Operative Documents or arising in any way from the transactions
contemplated hereby or thereby; provided, however, that Bank shall be liable in
its individual capacity XXII.8.1 for its own willful misconduct or gross
negligence (or negligence in the handling of funds), XXII.8.2 for liabilities
that may result from the incorrectness of any representation or warranty
expressly made by Bank in its individual capacity in Section 4.3 of the
Participation Agreement or from the failure of Bank to perform Bank's covenants
and agreements set forth in Section 6.5 of the Participation Agreement, or
XXII.8.3 for any Tax based on or measured by any fees, commission or
compensation received by Bank for acting as Lessor as contemplated by the
Operative Documents. It is understood and agreed that, except as provided in the
preceding proviso: (a) Bank shall have no personal liability under any of the
Operative Documents as a result of acting pursuant to and consistent with any of
the Operative Documents; (b all obligations of Bank to Lessee are solely
nonrecourse obligations except to the extent that Bank has received payment from
others; (c) all such personal liability of Bank is expressly waived and released
as a condition of, and as consideration for, the execution and delivery of the
Operative Documents by Bank; and (d) this Lease is executed and delivered by
Bank solely in the exercise of the powers expressly conferred upon Bank as
Lessor under the Trust Agreement.
XXII.9 Estoppel Certificates. Each party hereto agrees that at any time
and from time to time during the Lease Term, it will promptly, but in no event
later than thirty (30) days after request by the other party hereto, execute,
acknowledge and deliver to such other party or to any
37
prospective purchaser (if such prospective purchaser has signed a commitment
letter or letter of intent to purchase the Leased Property or any part thereof
or to purchase any Note or Certificate), assignee or mortgagee or third party
designated by such other party, a certificate stating (a) that this Lease is
unmodified and in force and effect (or if there have been modifications, that
this Lease is in force and effect as modified, and identifying the modification
agreements); (b) the date to which Basic Rent has been paid; (c) in the case of
an estoppel certificate to be given by Lessee, whether or not there is any
existing default by Lessee in the payment of Basic Rent or any other sum of
money hereunder, and whether or not there is any other existing Lease Default or
Lease Event of Default with respect to which a notice of default has been
served, and, if there is any such default, specifying the nature and extent
thereof; (d) in the case of an estoppel certificate to be given by Lessee,
whether or not, to the knowledge of Lessee after due inquiry and investigation,
there are any purported setoffs, defenses or counterclaims against enforcement
of the obligations to be performed hereunder existing in favor of Lessee; and
(e) other items that may be reasonably requested; provided, that no such
certificate may be requested unless the requesting party has a good faith reason
for such request. In addition, Lessee, promptly, but in no event later than
thirty (30) days after request by any other party hereto, shall obtain and
deliver to such other party or to any prospective purchaser (if such prospective
purchaser has signed a commitment letter or letter of intent to purchase the
Leased Property or any part thereof or to purchase any Note or Certificate),
assignee, mortgagee or third party designated by such other party, an estoppel
certificate from each subtenant under each sublease containing such items as
reasonably requested by the party requesting the same; provided, that no such
certificate may be requested unless the requesting party has a good faith reason
for such request.
XXII.10 No Joint Venture. Any intention to create a joint venture or
partnership relation hereunder or pursuant to any other Operative Document
between Lessor and Lessee is hereby expressly disclaimed.
XXII.11 No Accord and Satisfaction. The acceptance by Lessor of any sums
from Lessee (whether as Basic Rent or otherwise) in amounts which are less than
the amounts due and payable by Lessee hereunder is not intended, nor shall be
construed, to constitute an accord and satisfaction of any dispute between
Lessor and Lessee regarding sums due and payable by Lessee hereunder, unless the
Required Participants specifically deem it as such in writing.
XXII.12 No Merger. In no event shall the leasehold estate of Lessee
hereunder or the rights and interests of the holder of any Notes or certificates
secured by a Lien in this Lease, merge with any interests, estates or rights of
Lessor in or to the Leased Property, it being understood that such leasehold
estate of Lessee hereunder and, the rights and interests of the holder of any
Notes or certificates secured by a Lien in this Lease, shall be deemed to be
separate and distinct from Lessor's interests, estates and rights in or to the
Leased Property, notwithstanding that any such interests, estates or rights
shall at any time or times be held by or vested in the same Person.
38
XXII.13 Successor Lessor. Lessee agrees that, in the case of the
appointment of any successor certificate trustee pursuant to the Trust
Agreement, such successor certificate trustee shall, upon written notice by such
successor certificate trustee to Lessee, succeed to all the rights, powers and
title of Lessor hereunder and shall be deemed to be Lessor for all purposes
hereof and without in any way altering the terms of this Lease or Lessee's
obligations hereunder.
XXII.14 Survival. The obligations of Lessee to be performed under this
Lease prior to the Lease Expiration Date and the obligations of Lessee pursuant
to Sections 4.1, 4.2, 4.4, Article V, Article VI (the last sentence thereof),
Article XVII, Article XVIII, Article XX, Article XXI and Article XXII hereof and
the obligations of Lessee under the other Operative Documents which by their
terms survive shall survive the expiration or termination of this Lease. The
extension of any applicable statute of limitations by Lessor, Lessee, any
Participant or any other Indemnitee shall not affect such survival.
XXII.15 Transfer of Leased Property.
(a Whenever pursuant to any provision of this Lease Lessor is
required to transfer the Leased Property to Lessee or to an independent third
party, such transfer shall be made at Lessee's expense by the transfer by a deed
without covenants or warranties of title, except for matters arising by, through
or under Lessor, of all of Lessor's interest in and to the Leased Property on an
"as is, where is, with all faults" basis free and clear of all Lessor Liens and
otherwise without recourse, representation or warranty of any kind, and together
with the due assumption by Lessee (or such third party) of, and due release of
Lessor from, all obligations relating to the Leased Property or any of the
Operative Documents. In connection with any transfer to an independent third
party, Lessee shall execute and deliver such customary and reasonable documents,
certificates and estoppels as may be required to facilitate the transfer of the
Leased Property. Any provision in this Lease or any other Operative Document to
the contrary notwithstanding, Lessor shall not be obligated to make any such
transfer until Lessor and the Participants have received all Rent and other
amounts due and owing hereunder and under the other Operative Documents
including any Break Funding Amount. At or subsequent to the transfer or return
of the Leased Property, Lessee will provide Lessor with such lien and title
searches as Lessor may reasonably request to demonstrate to Lessor's
satisfaction that the Leased Property is subject to no Liens for which Lessor
would be liable under any warranties of title.
(b Lessee may assign to another Person its right, upon a purchase
by Lessee, to take title to the Leased Property pursuant to Section 20.1(b);
provided, that (i) Lessee shall exercise any option, (ii) such assignee shall be
bound by the provisions of Section 20.1(b), (iii) Lessee shall have represented
by an instrument in writing and delivered to Lessor that all necessary
Governmental Actions with respect to such transfer, including the purchase of
the Leased Property by any other Person as contemplated herein, have been
obtained or made, as applicable, and (iv) no such assignment shall release
Lessee or Guarantor from its obligations under the Operative Documents, and
Lessee shall remain personally liable to Lessor for the payment of all amounts
due under any such Section and this Section 22.15.
39
XXII.16 Enforcement of Certain Warranties.
(a Unless a Lease Event of Default shall have occurred and be
continuing, Lessor authorizes Lessee (directly or through agents), at Lessee's
expense, to assert, during the Lease Term, all of Lessor's rights (if any) under
any applicable warranty and any other claim that Lessee or Lessor may have under
the warranties provided to Lessor in connection with the Leased Property and
Lessor agrees to cooperate, at Lessee's expense, with Lessee and its agents in
asserting such rights. Any amount recovered by Lessee under any such warranties
shall be paid to Lessee, subject to Section 22.17.
(b Notwithstanding the foregoing provisions of this Section
22.16, so long as a Lease Event of Default or Lease Default shall have occurred
and be continuing, any amount that would otherwise be retained by Lessee
pursuant to Section 22.16(a), shall be paid to Lessor as security for the
obligations of Lessee under this Lease, shall be invested by Lessor in
accordance with Section 23.17 in Permitted Investments and, if a Lease Event of
Default is continuing, may be applied to the obligations of Lessee hereunder,
and, at such time thereafter as no Lease Event of Default or Lease Default shall
be continuing, such amount and gain thereon shall be paid promptly to Lessee to
the extent not previously applied in accordance with the terms of this Lease.
XXII.17 Security Interest in Funds. As long as a Lease Event of Default
or Lease Default shall have occurred and be continuing, any amount that would
otherwise be payable to Lessee under the Operative Documents shall be paid to or
retained by Lessor (including amounts to be paid to Lessee pursuant to Article
XIII or Section 22.16) as security for the performance by Lessee in full of its
obligations under this Lease and the other Operative Documents and, if a Lease
Event of Default is continuing, it may be applied to the obligations of Lessee
hereunder and under the other Operative Documents. At such time as no Lease
Event of Default or Lease Default shall be continuing, such amounts, net of any
amounts previously applied to Lessee's obligations hereunder or under any other
Operative Documents, shall be paid to Lessee. Any such amounts which are held
pending payment to Lessee or application hereunder shall be invested by Lessor
as directed from time to time in writing by Lessee (provided, however, that if a
Lease Event of Default has occurred and is continuing, it will be directed by
Lessor), and at the expense and risk of Lessee, in Permitted Investments. Any
gain (including interest received) realized as the result of any such investment
(net of any fees, commissions and other expenses, if any, incurred in connection
with such investment) shall be applied from time to time in the same manner as
the principal invested. Lessee will promptly pay to Lessor on demand, the amount
of any loss realized as the result of any such investment (together with any
fees, commissions and other expenses, if any, incurred in connection with such
investment), such amount to be held, paid and applied in the same manner as
other amounts subject to this Section 22.17.
XXII.18 Recording of Deed of Trust and Memorandum of Lease. Concurrently
with the execution and delivery of this Lease, Lessor and Lessee shall execute,
acknowledge and cause to be recorded a Lease Supplement and Deed of Trust for
each Site in the official records of the
40
County where each such Site is located and in such other places as Lessor deems
necessary to perfect the Liens granted pursuant to this Lease and the other
Operative Documents.
XXII.19 Nature of Transaction. Lessor and Lessee acknowledge and agree
that the intent of the parties with respect to the nature of the transaction is
as set forth in Section 2.7 of the Participation Agreement.
[ Signatures on next page ]
41
IN WITNESS WHEREOF, the undersigned have each caused this Lease to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A., not in its
individual capacity except as
expressly stated herein, but solely
as Certificate Trustee
By: _____________________________
Name Printed: ____________________
Title: ___________________________
CISCO TECHNOLOGY, INC., a California
corporation, as Lessee
By: _____________________________
Name Printed: ____________________
Title: ___________________________
S-1
ACKNOWLEDGMENT- CERTIFICATE TRUSTEE
STATE OF CALIFORNIA )
)
COUNTY OF ___________ )
On _______________, 1998, before me, ______________________, a Notary
Public in and for said State, personally appeared _________________________ and
___________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
ACKNOWLEDGMENT-CISCO
STATE OF CALIFORNIA )
)
COUNTY OF ___________ )
On _______________, 1998, before me, ______________________, a Notary
Public in and for said State, personally appeared _________________________ and
___________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
RECEIPT FOR COUNTERPART NO. 1
STATE STREET BANK AND TRUST COMPANY, not in its individual capacity
except as expressly stated herein, but solely as Paying and Collateral Agent.
By: ______________________________________
Name Printed: ________
Title: ________
EXHIBIT A
Legal Description of the Sites
A-1
EXHIBIT B
Form of Lease Supplement
B-1
TABLE OF CONTENTS