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EXHIBIT 10.52
[EXECUTION COPY]
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MASTER LEASE
THIS DOCUMENT SECURES FUTURE ADVANCES
Dated as of December 27, 1996
between
CISCO SYSTEMS, INC.,
as the Lessee,
and
UBS MORTGAGE FINANCE INC.
as the Lessor.
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This Master Lease is subject to a lien in favor of the Lender under the Loan
Agreement. This Master Lease has been executed in several counterparts. To the
extent, if any, that this Master 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 Master Lease may be created through the transfer
or possession of any counterpart other than the original counterpart containing
the receipt therefor executed by UNION BANK OF SWITZERLAND, acting through its
New York Branch, as the Lender, on or following the signature page hereof.
This counterpart is [not] the original counterpart.
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MASTER LEASE
THIS DOCUMENT SECURES FUTURE ADVANCES
THIS MASTER LEASE (this "Master Lease"), dated as of December 27, 1996,
between UBS MORTGAGE FINANCE INC., a New York corporation, as Lessor (in such
capacity, the "Lessor") and CISCO SYSTEMS, INC., a California corporation, as
Lessee (in such capacity, the "Lessee").
W I T N E S S E T H:
WHEREAS, pursuant to a Participation Agreement dated as of the date
hereof (as amended, modified, restated or supplemented from time to time, the
"Participation Agreement"), among the Lessee, as Lessee and Construction Agent,
the Lessor and Union Bank of Switzerland, acting through its New York Branch, as
Lender (the "Lender") under the Loan Agreement, the Lender and the Lessor have
agreed to finance the acquisition and construction of each Property;
WHEREAS, on each Acquisition Date, the Lessor will purchase from the
Seller certain parcels of Land, together with any Improvements thereon;
WHEREAS, the Lessee, as Construction Agent for the Lessor, will cause
the construction of certain Improvements on each Property which as constructed
will be the property of the Lessor and will become part of such Property;
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee
desires to lease from the Lessor, each Property; and
WHEREAS, each Property will be subject to the terms of this
Master Lease;
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
1.1. Definitions; Interpretation. Capitalized terms used but not
otherwise defined in this Master Lease have the respective meanings specified in
Appendix A to this Master Lease (as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time, "Appendix A to
this
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Master Lease
Master Lease"); and the rules of interpretation set forth in Appendix A to
this Master Lease shall apply to this Master Lease.
ARTICLE II
MASTER LEASE
2.1. Acceptance and Lease of Property. Subject to the conditions set
forth in the Participation Agreement, including without limitation the
satisfaction or waiver of the conditions set forth in Article VI thereof, the
Lessor hereby covenants and agrees to acquire and to accept pursuant to the
terms of the Participation Agreement delivery on each Acquisition Date of the
Land together with Improvements thereon to be delivered by the Seller on such
Acquisition Date and simultaneously to demise and lease to the Lessee hereunder
and under the Lease Supplement for the Lease Term, the Lessor's interest in such
Land and in such Improvements together with any Improvements which thereafter
may be constructed on such Land pursuant to the Construction Agency Agreement or
this Master Lease, and the Lessee hereby agrees, expressly for the direct
benefit of the Lessor, to lease from the Lessor for the Lease Term, the Lessor's
interest in such Land and in such Improvements together with any Improvements
which thereafter may be constructed on such Land pursuant to the Construction
Agency Agreement and this Master Lease.
2.2. Acceptance Procedure. The Lessee hereby agrees that the execution
and delivery by the Lessee on each Acquisition Date of an appropriately
completed Lease Supplement in the form of either Exhibit A-1 hereto, or Exhibit
A-2 hereto, covering the Land or all Improvements or any Land to be acquired by
the Lessor on such Acquisition Date and all other Improvements which thereafter
may be constructed thereon pursuant to the Construction Agency Agreement,
respectively, and this Master Lease, shall, without further act, constitute the
acceptance by the Lessee of all of the Land which is the subject of such Lease
Supplement for all purposes of this Master Lease and the other Operative
Documents on the terms set forth therein and herein, and that such Land,
together with any Improvements constructed on such Land pursuant to the
Construction Agency Agreement and this Master Lease, shall be deemed to be
included in the leasehold estate of this Master Lease and shall be subject to
the terms and conditions of this Master Lease as of such Acquisition Date.
2.3. Lease Term. The Basic Lease Term (Land) (the "Basic Lease Term
(Land)") of this Master Lease with respect to any Property (a) shall begin on
the earlier of (i) the Completion Date for the first Property on which
Improvements are constructed and (ii) the date the Lessee delivers written
notice to the
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Lessor requesting commencement of the Basic Lease Term, and (b) end on the
Expiration Date. The Basic Lease Term (Improvements) (the "Basic Lease Term
(Improvements)" shall begin on the Completion Date for such Property and shall
end on the Expiration Date. In the event the Basic Lease Term (Land) or Basic
Lease Term (Improvements) commences on any day other than the day following the
last day of the then effective Interest Period, the Lessee shall pay any Break
Costs associated with the early termination of the Interest Period.
2.4. Title. Each Property is leased to the Lessee without any
representation or warranty, express or implied, by the Lessor and subject to the
rights of parties in possession, the existing state of title (including, without
limitation, all Liens other than Lessor Liens) and all applicable Requirements
of Law. The Lessee shall in no event have any recourse against the Lessor for
any defect in or exception to title to any Property other than resulting from
Lessor Liens attributable to the Lessor.
ARTICLE III
PAYMENT OF RENT
3.1. Rent.
(a) During the Lease Term, the Lessee shall pay Basic Rent to the
Lessor on each Basic Rent Payment Date, on the date required under
Section 20.1(k) in connection with the Lessee's exercise of the
Remarketing Option and on any date on which this Master Lease shall
terminate with respect to any or all Properties. At least 10 days prior
to each Basic Rent Payment Date, the Lessor shall deliver to the Lessee
a notice of the exact amount of the Basic Rent due on such date (the
"Invoice"). For the purposes of this Section 3.1, delivery of the
Invoice by facsimile transmission, receipt confirmed, will be
sufficient.
(b) The Lessee's inability or failure to take possession of all
or any portion of any Property when delivered by the Lessor attributable
to any act or omission of the Lessee shall not delay or otherwise affect
the Lessee's obligation to pay Rent for such Property in accordance with
the terms of this Master Lease.
3.2. Payment of Rent. Rent shall be paid absolutely net to each Person
entitled thereto, so that this Master Lease shall yield to such Person the full
amount thereof, without setoff, deduction or reduction.
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Master Lease
3.3. Supplemental Rent. The Lessee shall pay to the Lessor or any other
Person entitled thereto any and all Supplemental Rent promptly as the same shall
become due and payable, and if the Lessee fails to pay any Supplemental Rent,
the Lessor and such other Persons shall have all rights, powers and remedies
provided for herein or by law or equity or otherwise. The Lessee shall pay to
the Lessor, as Supplemental Rent, among other things, on demand, to the extent
permitted by applicable Requirements of Law, interest at the applicable Overdue
Rate on any installment of Basic Rent not paid when due for the period for which
the same shall be overdue and on any payment of Supplemental Rent not paid when
due or demanded by the Lessor for the period from the due date or the date of
any such demand, as the case may be, until the same shall be paid. The
expiration or other termination of the Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of the Lessee with respect
to Supplemental Rent. Unless expressly provided otherwise in this Master Lease,
in the event of any failure on the part of the Lessee to pay and discharge any
Supplemental Rent as and when due, the Lessee shall also promptly pay and
discharge any fine, penalty, interest or cost which may be assessed or added
under any agreement to which Lessee is a party or which is authorized in writing
by the Lessee with a third party for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.4. Method of Payment. Each payment of Rent payable by the Lessee to
the Lessor under this Lease or any other Operative Document shall be made by the
Lessee to the Lender as assignee of the Lessor under the Assignment of Lease
(or, if all Loans and all other amounts owing to the Lender under the Loan
Agreement and the other Operative Documents have been paid in full and all
Commitments of the Lender have been permanently terminated, to the Lessor) prior
to 2:00 p.m., New York City time, to the Account in immediately available funds
consisting of lawful currency of the United States of America on the date when
such payment shall be due. Payments received after 2:00 p.m., New York City
time, on the date due shall for the purpose of Section 16.1 hereof be deemed
received on such day; provided, however, that for the purposes of the second
sentence of Section 3.3 hereof, such payments shall be deemed received on the
next succeeding Business Day and, unless the Lender (or the Lessor, as
applicable) is otherwise able to invest or employ such funds on the date
received, subject to interest at the Overdue Rate as provided in such Section
3.3.
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ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT
4.1. Quiet Enjoyment. Subject to Sections 2.4 and 4.2, and subject to
the rights of the Lessor contained in Article XV and the other terms of the
Operative Documents to which the Lessee is a party, the Lessee shall peaceably
and quietly have, hold and enjoy each Property for the Lease Term, free of any
claim or other action by the Lessor or anyone claiming by, through or under the
Lessor (other than the Lessee) with respect to any matters arising from and
after the applicable Acquisition Date. Such right of quiet enjoyment is
independent of, and shall not affect the Lessor's rights otherwise to initiate
legal action to enforce the obligations of the Lessee under this Master Lease.
4.2. Right to Inspect. During the Lease Term, the Lessee shall upon
reasonable notice from the Lessor, permit the Lessor, the Lender, and their
respective authorized representatives to inspect any Property subject to this
Master Lease during normal business hours, provided that such inspections shall
not unreasonably interfere with the Lessee's business operations at such
Property.
ARTICLE V
NET LEASE, ETC.
5.1. Net Lease. This Master Lease shall constitute a net lease. Any
present or future law to the contrary notwithstanding, this Master Lease shall
not terminate, nor shall the Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Rent,
nor shall the obligations of the Lessee hereunder be affected (except as
expressly herein permitted and by performance of the obligations in connection
therewith) by reason of: (i) any defect in the condition, merchantability,
design, construction, quality or fitness for use of any Property or any part
thereof, or the failure of any Property to comply with all Requirements of Law,
including any inability to occupy or use any such Property by reason of such
non-compliance; (ii) any damage to, removal, abandonment, salvage, loss,
contamination of or Release from, scrapping or destruction of or any requisition
or taking of any Property or any part thereof; (iii) any restriction, prevention
or curtailment of or interference with the construction on or any use of any
Property or any part thereof including eviction; (iv) any defect in title to or
rights to any Property or any Lien on such title or rights or on any Property
(other than Lessor Liens); (v) any change, waiver, extension, indulgence or
other action or omission or breach in
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respect of any obligation or liability of or by the Lessor or the Lender; (vi)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceedings relating to the Lessee, the
Lessor, the Lender or any other Person, or any action taken with respect to this
Master Lease by any trustee or receiver of the Lessee, the Lessor, the Lender or
any other Person, or by any court, in any such proceeding; (vii) any claim that
the Lessee has or might have against any Person, including without limitation
the Lessor, the Lender, or any vendor, manufacturer, contractor of or for any
Property; (viii) any failure on the part of the Lessor or any other Lessor to
perform or comply with any of the terms of this Master Lease (other than
performance by the Lessor of its obligations set forth in Section 2.1 hereof),
of any other Operative Document or of any other agreement; (ix) any invalidity
or unenforceability or illegality or disaffirmance of this Master Lease against
or by the Lessee or any provision hereof or any of the other Operative Documents
or any provision of any thereof; (x) the impossibility or illegality of
performance by the Lessee, the Lessor or both; (xi) any action by any court,
administrative agency or other Governmental Authority; or (xii) any other cause
or circumstances whether similar or dissimilar to the foregoing and whether or
not the Lessee shall have notice or knowledge of any of the foregoing. The
Lessee's agreement in the preceding sentence shall not affect any claim, action
or right the Lessee may have against the Lessor or any other Participant. The
parties intend that the obligations of the Lessee hereunder shall be covenants
and agreements that are separate and independent from any obligations of the
Lessor hereunder or under any other Operative Documents and the obligations of
the Lessee shall continue unaffected unless such obligations shall have been
modified or terminated in accordance with an express provision of this Master
Lease.
5.2. No Termination or Abatement. The Lessee shall remain obligated
under this Master Lease in accordance with its terms and shall not take any
action to terminate, rescind or avoid this Master Lease (except as provided
herein), notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting the Lessor or any
Participant, or any action with respect to this Master Lease which may be taken
by any trustee, receiver or liquidator of the Lessor or any Participant or by
any court with respect to the Lessor or any Participant. The Lessee hereby
waives all right (i) to terminate or surrender this Master Lease (except as
provided herein) or (ii) except as a consequence of a reduction in the Lease
Balance as a result of Casualty or Condemnation proceeds pursuant to the terms
of Section 14.1 of this Master Lease, or as a result of a purchase of any or all
of the
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Properties pursuant to Section 18.1 of this Master Lease, to avail itself of any
abatement, suspension, deferment, reduction, setoff, counterclaim or defense
with respect to the Lease Balance. The Lessee shall remain obligated under this
Master Lease in accordance with its terms and the Lessee hereby waives any and
all rights now or hereafter conferred by statute or otherwise to modify or to
avoid strict compliance with its obligations under this Master Lease.
Notwithstanding any such statute or otherwise, the Lessee shall be bound by all
of the terms and conditions contained in this Master Lease.
ARTICLE VI
SUBLEASES
6.1. Subletting. The Lessee may from time to time, sublease any Property
or any portion thereof to any Person and to extend, modify or renew any sublease
without the approval of Lessor or Lender; provided, however, that: (a) no
sublease or other relinquishment of possession of any Property shall in any way
discharge or diminish any of the Lessee's obligations to the Lessor hereunder
and the Lessee shall remain directly and primarily liable under this Master
Lease as to the Properties, or portion thereof, so sublet; (b) each sublease of
any Property shall expressly be made subject to and subordinated to this Master
Lease and to the rights of the Lessor hereunder; and (c) each sublease shall
expressly provide for the surrender of the applicable Property or portion
thereof by the applicable sublessee at the election of the Lender or the Lessor
(as applicable) after the occurrence of a Lease Event of Default.
ARTICLE VII
LESSEE ACKNOWLEDGMENTS
7.1. Condition of the Properties. THE LESSEE ACKNOWLEDGES AND AGREES
THAT ALTHOUGH THE LESSOR WILL OWN AND HOLD TITLE TO THE IMPROVEMENTS, THE
LESSEE, ACTING AS CONSTRUCTION AGENT, IS SOLELY RESPONSIBLE UNDER THE TERMS OF
THE CONSTRUCTION AGENCY AGREEMENT FOR THE DESIGN, DEVELOPMENT, BUDGETING AND
CONSTRUCTION OF THE IMPROVEMENTS AND ANY ALTERATIONS OR MODIFICATIONS. THE
LESSEE FURTHER ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY "AS IS"
WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR
OR THE LENDER AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF TITLE
(EXCLUDING LESSOR LIENS), (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF,
(C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT
SHOW, AND (D) VIOLATIONS OF REQUIREMENTS OF LAW WHICH MAY EXIST ON THE DATE
HEREOF OR ON THE ACQUISITION DATE FOR
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Master Lease
SUCH PROPERTY. NEITHER THE LESSOR NOR THE LENDER HAS MADE OR SHALL BE DEEMED TO
HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) OR SHALL
BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE (OTHER THAN FOR
LESSOR LIENS ATTRIBUTABLE TO THE LESSOR OR THE LENDER), VALUE, HABITABILITY,
USE, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF ANY PROPERTY (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT (EXCEPT SECTION
4.1 HEREOF) WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY
PART THEREOF) AND NEITHER THE LESSOR NOR THE LENDER SHALL BE LIABLE FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS
ATTRIBUTABLE TO THE LESSOR OR THE LENDER) OR THE FAILURE OF ANY PROPERTY, OR ANY
PART THEREOF, TO COMPLY WITH ANY REQUIREMENT OF LAW.
7.2. Risk of Loss. Subject to the terms of Section 14.1 of this Master
Lease, during the Lease Term the risk of loss of or decrease in the enjoyment
and beneficial use of the Properties as a result of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is
assumed by the Lessee, and except for loss or damages arising from the gross
negligence or willful misconduct of Lessor or Lender or their respective agents,
employees or contractors, neither the Lessor nor the Lender shall in any event
be answerable or accountable to Lessee therefor.
ARTICLE VIII
POSSESSION AND USE OF THE PROPERTIES, ETC.
8.1. Utility Charges. The 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 Properties during
the Lease Term. The Lessee shall be entitled to receive any credit or refund
with respect to any utility charge paid by the Lessee and the amount of any
credit or refund received by the Lessor on account of any utility charges paid
by the Lessee, net of the costs and expenses reasonably incurred by the Lessor
in obtaining such credit or refund, shall be promptly paid over to the Lessee.
8.2. Possession and Use of the Property. Prior to the Completion Date,
each Property shall be used in a manner consistent with the Construction Agency
Agreement and, after the Completion Date for such Property, as set forth in the
applicable lease supplement, and not less than the standards applied by the
Lessee for other comparable properties owned or leased by the Lessee. The Lessee
shall pay, or cause to be paid, all charges and costs required in connection
with the use of the Properties
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as contemplated by this Master Lease and the Construction Agency Agreement. The
Lessee shall not commit or permit any waste of the Properties or any part
thereof.
8.3. Compliance with Requirements of Laws and Insurance Requirements.
Subject to the terms of Article XII relating to permitted contests, the Lessee,
at its sole cost and expense, shall (a) comply in all material respects with all
Requirements of Law (including all Hazardous Materials Laws) and Insurance
Requirements relating to the Properties, including the use, construction,
operation, maintenance, repair and restoration thereof and the remarketing
thereof pursuant to Article XX, whether or not compliance therewith shall
require structural or extraordinary changes in the Improvements or interfere
with the use and enjoyment of the Properties, and (b) procure, maintain and
comply with all licenses, permits, orders, approvals, consents and other
authorizations required for the construction, use, maintenance and operation of
the Properties and for the use, operation, maintenance, repair and restoration
of the Improvements. Notwithstanding the preceding sentence, the Lessee shall be
deemed to be in compliance with all Hazardous Materials Laws for purposes of
this Master Lease notwithstanding any Environmental Violation if the severity of
such Environmental Violation is less than Federal, state or local standards
requiring remediation or removal or, if such standards are exceeded, remediation
or removal is proceeding in accordance with all applicable Hazardous Materials
Laws.
8.4. Assignment by Lessee. The Lessee may not assign this Master Lease
or any of its rights or obligations hereunder in whole or in part to any Person,
except that the Lessee may Sublease any Property or portion thereof as permitted
under Section 6.1. Notwithstanding the foregoing sentence, the Lessee may, so
long as no Event of Default has occurred and is continuing, or would result
therefrom, upon prior written notice to each of the Lessor and the Lender,
assign this Master Lease and all of the Lessee's rights and obligations
hereunder to an Affiliate of the Lessee pursuant to an assignment and assumption
agreement and such other documentation, including opinions of counsel, all in
form and substance reasonably satisfactory to the Lessor and the Lender;
provided, that, in any event of such assignment, the Lessee shall execute and
deliver a guaranty in form and substance and in all respects satisfactory to the
Lessor and the Lender pursuant to which the Lessee shall guaranty the full and
punctual payment and performance of all obligations of such Affiliate as the
"Lessee" hereunder and under the other Operative Documents.
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8.5. Phase Two Improvements. The Lessor agrees that it will negotiate in
good faith with the Lessee with regard to any proposals that the Lessee may make
with respect to the construction of improvements on any portions of the Land
which are not intended to be developed as a part of the Improvements nor
constructed or otherwise purchased with amounts advanced by the Participants
pursuant to the Operative Documents, including specifically any financing
involving a third party unrelated to the Lender or the Lessor or any
improvements paid for by the Lessee (any such improvements being referred to
herein, collectively, as the "Phase Two Improvements"). The Lessee shall have
the right to construct Phase Two Improvements on any unimproved portion of the
Land, subject to the Lessor's consent which shall not be unreasonably withheld.
In furtherance of the foregoing, the Lessor shall give reasonable consideration
to (including with respect to the taking of any action reasonably requested in
connection with) the Lessee's development of any Phase Two Improvements,
including (i) the execution of one or more subleases of those portions of the
Land on which the Phase Two Improvements will be constructed between the Lessee,
as the sublessor, and the owner of the Phase Two Improvements, as the sublessee;
(ii) subordination of the Lessor's and the Lender's interests in such portions
of the Land to the interests of the owners (other than the Lessee) or the
lenders of the Phase Two Improvements; and/or (iii) the subordination of the
Lessor's and the Lender's interests in such portions of the Land to any mortgage
or deed of trust securing financing of the Phase Two Improvements; provided,
however, that the Lessee's obligations to the Lessor with respect to the Land
Lease shall remain secured by the Pledge Agreement.
ARTICLE IX
MAINTENANCE AND REPAIR; RETURN
9.1. Maintenance and Repair; Return.
(a) The Lessee, at its sole cost and expense, shall maintain each
Property in good condition (ordinary wear and tear excepted) and make
all necessary repairs thereto, of every kind and nature whatsoever,
whether interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by all
Requirements of Law and Insurance Requirements and in no event less than
the standards applied by the Lessee in the operation and maintenance of
other comparable properties owned or leased by the Lessee or its
Affiliates.
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(b) The Lessor shall under no circumstances be required to build
any improvements on any Property, make any repairs, replacements,
alterations or renewals of any nature or description to any Property,
make any expenditure whatsoever in connection with this Master Lease
(other than for Advances made in accordance with and pursuant to the
terms of the Participation Agreement and the Construction Agency
Agreement) or maintain any Property in any way. The Lessee waives any
right to (i) require the Lessor to maintain, repair, or rebuild all or
any part of any Property or (ii) make repairs at the expense of the
Lessor pursuant to any Requirement of Law, Insurance Requirement,
contract, agreement, or covenant, condition or restriction in effect at
any time during the Lease Term.
(c) The Lessee shall, upon the expiration or earlier termination
of this Master Lease with respect to any Property (other than as a
result of the Lessee's purchase of such Property from the Lessor as
provided herein), vacate and surrender such Property to the Lessor in
its then-current, "AS IS" condition, without any express or implied
warranty subject to the Lessee's obligations under Sections 8.3, 9.1(a),
10.1, 11.1, 14.1, 14.2 and 20.1. Title to all improvements, furnishings,
furniture, fixtures and any personal property of the Lessee which were
not funded by the Lessor and the Lender pursuant to the Participation
Agreement, located on or about a Property whether or not affixed to the
realty, shall, subject to the following sentence, be and remain the
property of the Lessee throughout the Lease Term, and at any time during
the Lease Term may be removed by the Lessee or, at the Lessee's election
surrendered with the Property, in which event title to such surrendered
property shall, if the Lessor so elects, be deemed transferred to the
Lessor. Notwithstanding the foregoing, any fixture constituting part of
the Property which are required by Applicable Law or which cannot be
removed without causing Material damage to or the diminution in value of
the applicable Property shall at all times remain part of the Property.
ARTICLE X
MODIFICATIONS, ETC.
10.1. Modifications, Substitutions and Replacements. During the Lease
Term, the Lessee, at its sole cost and expense, may at any time and from time to
time make alterations, renovations, improvements and additions to any Property
or any
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part thereof and substitutions and replacements therefor (collectively,
"Modifications"); provided, however, that:
(i) except for any Modification required to be made pursuant to a
Requirement of Law (a "Required Modification"), no Modification shall
adversely affect the value or useful life of such Property or any part
thereof from that which existed immediately prior to such Modification;
(ii) such Modifications shall be (and shall be done in a manner)
consistent with the Plans and Specifications for such Property;
(iii) such Modifications shall comply with Sections 8.3 and
9.1(a); and
(iv) the Lessee shall have provided notice to the Lessor of any
structural Modification the cost of which exceeds 10% of the
Improvements Budget for such Property.
All Modifications shall remain part of the realty and shall be subject to this
Master Lease and title thereto shall immediately vest in the Lessor; provided,
however, that Modifications that (x) are not Required Modifications, (y) were
not financed by the Participants and (z) either (i) are readily removable
without impairing the value, utility or remaining useful life of the applicable
Property, or (ii) subject to the Lessor's consent rights under Section 8.5
hereof, Phase Two Improvements shall be the property of the Lessee or other
third party and shall not be subject to this Master Lease. The Lessee may place
upon the Properties any trade fixtures, machinery, equipment, inventory or other
property belonging to the Lessee or third parties and may remove the same at any
time during the Lease Term, subject, however, to the terms of Section 9.1(a);
provided, however, that such trade fixtures, machinery, equipment, inventory or
other property do not impair the value or useful life of the applicable
remaining Property; provided, further, however, that the Lessee shall keep and
maintain at the Properties and shall not remove from the Properties any
Equipment financed or otherwise paid for by the Lender pursuant to the
Participation Agreement.
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ARTICLE XI
WARRANT OF TITLE; EASEMENTS
11.1. Warrant of Title.
(a) The Lessee agrees that except as otherwise provided herein
and subject to the terms of Article XII relating to permitted contests,
the Lessee shall not directly or indirectly create or allow to remain,
and shall promptly discharge at its sole cost and expense, any Lien
(other than any Lessor Lien or any Permitted Property Lien), defect,
attachment, levy, title retention agreement or claim upon any Property
or any Lien, attachment, levy or claim with respect to the Rent or with
respect to any amounts held by the Lessor or the Lender pursuant to the
Loan Agreement or the other Operative Documents, other than Permitted
Property Liens and Liens on machinery, equipment, general intangibles
and other personal property not financed by the proceeds of the Loans or
the Lessor Amounts.
(b) Nothing contained in this Master Lease shall be construed as
constituting the consent or request of the Lessor or any other
Participant, expressed or implied, to or for the performance by any
contractor, mechanic, laborer, materialman, supplier or vendor of any
labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to any
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER THE
LESSOR NOR THE LENDER IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE
HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER THE LESSEE, AND
THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR OR THE
LENDER IN AND TO ANY PROPERTY.
11.2. Grants and Releases of Easements; Lessor's Waivers. Provided that
no Lease Event of Default shall have occurred and be continuing, from time to
time upon request of the Lessee and subject to the Lessee's prompt reimbursement
of the Lessor's costs and expenses, the Lessor (as holder of record title to the
Property) shall execute such documents reasonably satisfactory in form (which
have been prepared at Lessee's expense) to effect any of the actions set forth
in clauses (a), (b), (c), (d), (e) and (f) of the following sentence, if in the
Lessee's reasonable and good faith opinion such action by the Lessor is
necessary or appropriate to effect such intended actions. Provided that no Lease
Event of Default shall have occurred and be continuing and subject to the
provisions of Articles VII, IX and X and Section
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8.3, the Lessor hereby consents in each instance to the following actions by the
Lessee as the Lessor's Construction Agent, and the Lessor hereby appoints the
Lessee the Lessor's attorney-in-fact, with full authority in the place and stead
of the Lessor to take such action or actions from time to time during the Lease
Term, but at the 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 any Property as herein provided; (b) the release of existing easements or
other rights in the nature of easements which are for the benefit of any
Property; (c) if required by applicable Governmental Authority in connection
with the Construction, the dedication or transfer of unimproved portions of any
Property for road, highway or other public purposes; (d) the execution of
amendments to any covenants and restrictions; (e) the filing and processing of
Site Development Permit Amendments, Parcel Maps, Tentative Maps, Development
Agreements and any and all other permit applications, authorizations,
entitlements, agreements with any government or regulatory agency or amendments
thereof, or other documents reasonably required or beneficial for construction
or Modification of the Improvements, or amendments to Permitted Property Liens
or governmental permits or approvals affecting any Property; and (f) the
execution and filing of tract or parcel maps subdividing the Land into lots or
parcels or reconfiguring existing lots of parcels; provided, however, that in
each case (i) such grant, release, dedication, transfer or amendment does not
materially impair the value or remaining useful life of the applicable Property,
(ii) such grant, release, dedication, transfer or amendment that in the Lessee's
judgment is reasonably necessary or beneficial in connection with the use,
maintenance, alteration or improvement of the applicable Property, (iii) such
grant, release, dedication, transfer or amendment will not cause the applicable
Property or any portion thereof to fail to comply with the provisions of this
Master Lease or any other Operative Documents and all Requirements of Law
(including, without limitation, all applicable zoning, planning, building and
subdivision ordinances, all applicable restrictive covenants and all applicable
architectural approval requirements); (iv) any and all governmental consents or
approvals required prior to such grant, release, dedication, transfer,
annexation or amendment have been obtained, and any and all filings required
prior to such action have been made; (v) the Lessee shall remain obligated under
this Master Lease and under any instrument executed by the Lessee consenting to
the assignment of the Lessor's interests in this Master Lease as security for
indebtedness, in each such case in accordance with their terms, substantially as
though such grant, release, dedication, transfer or amendment had not been
effected and (vi) the Lessee shall pay and perform any
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obligations of the Lessor under such grant, release, dedication, transfer or
amendment. The Lessor acknowledges the Lessee's right to finance and to secure
under the Uniform Commercial Code, inventory, furnishings, furniture, equipment,
machinery, leasehold improvements and other personal property located at the
Properties other than Equipment, and the Lessor agrees to execute Lessor waiver
forms and release of Lessor Liens in favor of any purchase money seller, lessor
or lender which has financed or may finance in the future such items. Without
limiting the effectiveness of the foregoing, provided that no Lease Event of
Default shall have occurred and be continuing, the Lessor shall, upon the
request of the Lessee, and at the Lessee's sole cost and expense, execute and
deliver any instruments necessary or appropriate to confirm any such grant,
release, dedication, transfer, annexation or amendment to any Person permitted
under this Section 11.2 including landlord waivers with respect to any of the
foregoing.
ARTICLE XII
PERMITTED CONTESTS
12.1. Permitted Contests in Respect of Applicable Law. If, to the extent
and for so long as (a) a test, challenge, appeal or proceeding for review of any
Applicable Law relating to any Property shall be prosecuted diligently and in
good faith in appropriate proceedings by the Lessee or (b) compliance with such
Applicable Law shall have been excused or exempted by a valid nonconforming use,
variance permit, waiver, extension or forbearance, the Lessee shall not be
required to comply with such Applicable Law but only if and so long as any such
test, challenge, appeal, proceeding, waiver, extension, forbearance or
noncompliance shall not, in the reasonable opinion of the Lessor and the Lender,
involve (A) any risk of criminal liability being imposed on the Lessor or the
Lender or (B) any risk of (1) foreclosure, forfeiture or loss of such Property,
or any material part thereof, or (2) the nonpayment of Rent or (C) any
substantial risk of (1) the sale of, or the creation of any Lien (other than a
Permitted Property Lien) on, any part of such Property, (2) civil liability
being imposed on the Lessor, the Lender, or such Property, or (3) enjoinment of,
or interference with, the use, possession or disposition of such Property in any
material respect.
The Lessor will not be required to join in any proceedings pursuant to
this Section 12.1 unless a provision of any Applicable Law requires that such
proceedings be brought by or in the name of the Lessor; and in that event the
Lessor will join in the proceedings or permit them or any part thereof to be
brought
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in its name if and so long as (i) the Lessee has not elected the Remarketing
Option and (ii) the Lessee pays all related expenses and indemnifies the Lessor
and the Lender with respect to such proceedings.
ARTICLE XIII
INSURANCE
13.1. Public Liability and Workers' Compensation Insurance.
(a) During the Lease Term, the Lessee shall procure and carry, at
the Lessee's sole cost and expense, commercial general liability
insurance for claims for injuries or death sustained by persons or
damage to property while on the Properties and such other public
liability coverages as are ordinarily procured by the Lessee or its
Affiliates who own or operate similar properties, but in any case shall
provide liability coverage of at least $2,000,000 per person and
$1,000,000 for property damage per occurrence. Such insurance shall be
on terms and in amounts that are no less favorable than insurance
maintained by the Lessee or such Affiliates with respect to similar
properties that they own and that are in accordance with normal industry
practice. The policy shall be endorsed to include the Lessor and the
Lender as additional insureds. The policy shall also specifically
provide that the policy shall be considered primary insurance which
shall apply to any loss or claim before any contribution by any
insurance which the Lessor or the Lender may have in force.
(b) The Lessee shall, in the construction of the Improvements
(including in connection with any Modifications thereof) and the
operation of the Properties, comply with the applicable workers'
compensation laws.
(c) The Lessee shall have the right to self-insure with respect
to any of the insurance required under this Master Lease so long as (i)
the Lessee is a publicly traded domestic corporation whose stock is
traded on a nationally recognized exchange; (ii) the Lessee has not
assigned this Master Lease; (iii) the Lessee maintains a Consolidated
Tangible Net Worth of at least $1,000,000,000 according to its most
recent audited financial statement; and (iv) the Lessee 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. Upon request, the Lessee shall supply
the Lessor from time to time with evidence reasonably
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satisfactory to the Lessor of the Lessee's net worth and the
satisfaction of the condition set forth above. If the Lessee elects to
self-insure, the 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 the Lessee under the Master Lease.
The Lessee will notify the Lessor in advance of any period for which it
intends to self-insure and shall provide Lessor with satisfactory
evidence that it complies with these requirements in order to give the
Lessor an opportunity to confirm the satisfaction of the conditions set
forth above. For so long as the Lessee self-insures, the Lessee, for
applicable periods, shall and does hereby indemnify and hold harmless
the Lessor, its officers, directors, agents, employees and
representatives from and against all costs, damages, or expenses
(including reasonable attorneys' fees) incurred or paid by the Lessor as
a result of any claim customarily covered by a broad-form policy of
commercial general liability insurance, including a contractual
liability indorsement.
13.2. [Intentionally Omitted].
13.3. [Intentionally Omitted].
ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
14.1. Casualty and Condemnation.
(a) Subject to the provisions of this Article XIV, if all or a
portion of any Property is damaged or destroyed in whole or in part by a
Casualty or if the use, access, occupancy, easement rights or title to
any Property or any part thereof, is the subject of a Condemnation, then
(i) any insurance proceeds payable with respect to such
Casualty shall be paid directly to the Lessee (or if received by
the Lessor, shall be paid over to the Lessee) for the sole
purpose of reconstruction, refurbishment and repair of such
Property; 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) the Lessee shall elect not
to use such proceeds for the reconstruction, refurbishment or
repair of such
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Property, then all such insurance proceeds payable with respect
to such Casualty shall be paid to the Lessor to be applied
towards the payment of the Lease Balance in accordance with
Section 7.2 of the Participation Agreement, and
(ii) (x) in the case of a Condemnation (that is not a
Significant Condemnation) of any part of any Land (not including
the applicable Improvements), any award or compensation relating
thereto shall be paid to the Lessee for the sole purpose of
restoration of such Property (provided, that such restoration can
be completed prior to the end of the Lease Term) or else shall be
paid to the Lessor to be applied in the Lessor's and the Lender's
reasonable discretion to the partial restoration of such Property
or towards the payment of the applicable Lease Balance, and (y)
in the case of a Significant Condemnation, such award or
compensation shall be paid to the Lessor to be applied in the
Lessor's and the Lender's reasonable discretion to the
restoration of such Property or toward the payment of the
applicable Lease Balance in accordance with Article VII of the
Participation 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 paid directly to the Lessor or, if received by the
Lessee, shall be held in trust for the Lessor and the Lender, and shall
be paid by the Lessee to the Account to be distributed in accordance
with Article VII of the Participation Agreement. All amounts held by the
Lessor or the Lender when a Lease Event of Default exists hereunder on
account of any award, compensation or insurance proceeds either paid
directly to the Lessor or the Lender or turned over to the Lessor or the
Lender shall at the option of the Lessor either be (i) paid to the
Lessee for the repair of damage caused by such Casualty or Condemnation
in accordance with clause (d) of this Section 14.1, or (ii) applied to
the repayment of the Property Balance of the related Property on the
Termination Date with respect to such Property in accordance with
Article XV, with any Excess Casualty/Condemnation Proceeds being payable
to the Lessee.
(b) The Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At the Lessee's
reasonable request, and at the
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Lessee's sole cost and expense, the Lessor and the Lender shall
participate in any such proceeding, action, negotiation, prosecution or
adjustment. The Lessor and the Lessee agree that this Master Lease shall
control the rights of the Lessor and the Lessee in and to any such
award, compensation or insurance payment.
(c) If the Lessor or the Lessee shall receive notice of a
Casualty or of an actual, pending or threatened Condemnation of any
Property or any interest therein, the Lessor or the Lessee, as the case
may be, shall give notice thereof to the other and to the Lender
promptly after the receipt of such notice.
(d) If pursuant to this Section 14.1 and Section 15.1 this Master
Lease shall continue in full force and effect following a Casualty or
Condemnation with respect to any Property, the Lessee shall, at its sole
cost and expense (and, without limitation, if any award, compensation or
insurance payment is not sufficient to restore such Property in
accordance with this clause (d), the Lessee shall pay the shortfall),
promptly and diligently repair any damage to such Property caused by
such Casualty or Condemnation in conformity with the requirements of
Sections 8.3 and 9.1, to restore such Property to at least the same
condition, operative value and useful life as existed immediately prior
to such Casualty or Condemnation. In such event, title to such Property
shall remain with the Lessor subject to the terms of this Master Lease.
Upon completion of such restoration, the Lessee shall furnish to the
Lessor (which, in turn, shall furnish to the Lender) an architect's
certificate of substantial completion and a Responsible Officer's
Certificate confirming that such restoration has been completed pursuant
to this Master Lease.
(e) In no event shall a Casualty or Condemnation affect the
Lessee's obligations to pay Rent pursuant to Section 3.1 or to perform
its obligations and pay any amounts due on the Expiration Date or
pursuant to Articles XVIII and XXI.
(f) Any Excess Casualty/Condemnation Proceeds received by the
Lessor or the Lender in respect of a Casualty or Condemnation shall be
turned over to the Lessee.
14.2. Environmental Matters. Promptly upon the Lessee's knowledge of the
existence of an Environmental Violation with respect to any Property, the Lessee
shall notify the Lessor in writing of such Environmental Violation. If the
Lessor elects
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not to terminate this Master Lease with respect to such Property pursuant to
Section 15.1, at the Lessee's sole cost and expense, the 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 Section 8.3 (including the last sentence thereof).
The Lessee shall, upon completion of remedial action by the Lessee, cause to be
prepared by an environmental consultant reasonably acceptable to the Lessor a
report describing the Environmental Violation and the actions taken by the
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 Hazardous Materials Laws.
Each such Environmental Violation shall be remedied prior to the Expiration Date
unless each Property with respect to which an Environmental Violation has
occurred but has not been remedied has been purchased by the Lessee in
accordance with Section 18.1. Nothing in this Article XIV shall reduce or limit
the Lessee's obligations under Sections 13.1, 13.2 or 13.3 of the Participation
Agreement.
14.3. Notice of Environmental Matters. Promptly, but in any event within
sixty (60) Business Days from the date the Lessee has actual knowledge thereof,
the Lessee shall provide to the Lessor written notice of any pending or
threatened claim, action or proceeding involving any Hazardous Materials Laws or
any Release on or in connection with any Property. All such notices shall
describe in reasonable detail the nature of the claim, action or proceeding and
the Lessee's proposed response thereto. In addition, the Lessee shall provide to
the Lessor, within sixty (60) Business Days of receipt, copies of all written
communications with any Governmental Authority relating to any Environmental
Violation in connection with any Property. The Lessee shall also promptly
provide such detailed reports of any such material environmental claims as may
reasonably be requested by the Lessor or the Lender. In the event that the
Lessor receives written notice of any pending or threatened claim, action or
proceeding involving any Hazardous Materials Laws or any Release on or in
connection with any Property, the Lessor shall promptly give notice thereof to
the Lessee. For purposes of this paragraph, "actual knowledge" of the Lessee
shall mean the actual knowledge of the Lessee's Director of Planning and
Development, who is responsible for the day to day operations of the Properties.
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ARTICLE XV
TERMINATION OF LEASE
15.1. Partial Termination upon Certain Events. If any of the following
occurs with respect to any Property:
(i) a Significant Condemnation occurs; or
(ii) an Environmental Violation occurs or is discovered
the cost of remediation of which would exceed $5,000,000;
and the Lessor shall have given written notice (a "Termination Notice") to the
Lessee that, as a consequence of such event (x) the Lease Supplement(s) relating
to such Property are to be terminated or, with respect to the Lease Supplement
(Land), modified and (y) this Master Lease is to be terminated with respect to
such Property, then the Lessee shall be obligated to purchase the Lessor's
interest in such affected Property within 30 days after Lessee's receipt of the
Termination Notice, by paying to the Lessor an amount equal to the Property
Balance for such affected Property.
15.2. Termination Procedures. On the date of the payment by the Lessee
of the Property Balance for the affected Property or Properties in accordance
with Section 15.1 (such date, the "Termination Date"), the Lease Supplement
relating to each such affected Property shall terminate and this Master Lease
shall terminate with respect to each such Property and, concurrent with the
Lessor's receipt of such payment,
(a) the Lessor shall execute and deliver to the Lessee (or to the
Lessee's designee) at the Lessee's cost and expense a quitclaim deed
with respect to each such Property with a covenant against grantor acts
and an assignment of the Lessor's entire interest in each such Property
(which shall include an assignment of all of the Lessor's right, title
and interest in and to any Net Proceeds with respect to each such
Property not previously received by the Lessor), in each case in
recordable form and otherwise in conformity with local custom and free
and clear of the Lien of the Lessor Mortgage and any Lessor Liens,
attributable to the Lessor;
(b) each such Property shall be conveyed to the Lessee (or to the
Lessee's designee) "AS IS" and in its then present physical condition;
and
(c) in the case of a termination pursuant to clause (i) of
Section 15.1, the Lessor shall convey to the Lessee
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any Net Proceeds with respect to the Condemnation giving rise to the
termination of this Master Lease with respect to such Property
theretofore received by the Lessor or at the request of the Lessee, such
amounts shall be applied against sums due hereunder.
ARTICLE XVI
EVENTS OF DEFAULT
16.1. Lease Events of Default. The occurrence of any one or more of the
following events (whether 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) the Lessee shall fail to make payment of (i) any Basic Rent
due and payable ten (10) days after the date of Lessee's receipt of
written notice thereof, (ii) any Supplemental Rent due and payable
within ten (10) days after receipt of written notice thereof, or (iii)
any Property Balance, Loan Balance or Lease Balance, on the date due
therefor; or
(b) the Lessee shall fail to deposit with the Lender, within ten
(10) days of receipt of written notice, the Deficiency Collateral;
(c) the Lessee shall not be in compliance with Section 10.8 of
the Participation Agreement;
(d) [Intentionally Omitted];
(e) the Lessee shall fail to observe or perform any term,
covenant or condition of the Lessee under this Master Lease or the other
Operative Documents to which it is party other than those described in
the foregoing clauses (a), (b), (c) or (d) of this Section 16.1, and, in
each such case, such failure shall have continued unremedied for thirty
(30) days after written notice; provided, that such cure period shall be
extended from thirty (30) days to one-hundred and eighty (180) days if
such term, covenant or condition is, without prejudice to the Lessor
and/or the Lender, curable or remediable and the Lessee is at all times
during such extended period diligently taking action reasonably
satisfactory to the Lessor and the Lender to so cure or remedy default;
provided, further, that failure by
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the Lessee to fully comply with the requirements of Section 20.1 hereof
shall not be subject to any cure period; provided, further, that, for
purposes of clarification, the failure by the Lessee to comply with the
foregoing clauses (a), (b), (c) and (d) of this Section 16.1 shall not
be subject to any cure period except as expressly set forth in such
clauses (a), (b), (c) and (d);
(f) any representation or warranty made or deemed made by the
Lessee herein or in any Operative Document or which is contained in any
certificate, document or financial or other statement furnished at any
time under or in connection with any Operative Document shall prove to
have been incorrect, false or misleading in any material respect on or
as of the date made or deemed made, unless the fact or condition which
made such representation of warranty incorrect, false or misleading is,
without prejudice to the Lessor and/or the Lender, curable or remediable
and the Lessee is at all times diligently taking action reasonably
satisfactory to the Lessor and the Lender to so cure or remedy such fact
or condition in order to make such representation and/or warranty true
and correct in all material respects, in which event the Lessee shall
have one-hundred and eighty (180) days from the date such representation
or warranty was made or deemed made to cure or remedy such default;
(g) a Construction Agency Agreement Event of Default by virtue of
a breach by the Construction Agent of its obligation to complete the
construction of the Improvements;
(h) (i) The Lessee shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Lessee shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Lessee any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of
an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of sixty (60)
days; or
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(iii) there shall be commenced against the Lessee any case, proceeding
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within sixty (60) days from the entry thereof; or (iv) the Lessee
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Lessee shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(i) any Operative Document or any Lien granted under any
Operative Document shall, taken as a whole, terminate, cease to be
effective against, or cease to be the legal, valid, binding and
enforceable obligation of the Lessee;
(j) the Lessee shall directly or indirectly contest the
effectiveness, validity, binding nature of enforceability of any
Operative Document or any Lien granted under any Operative Document;
(k) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $5,000,000 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 $5,000,000;
(l) any judgements or orders for the payment of money, in any
case not covered by insurance, individually or in the aggregate in
excess of $50,000,000 shall be rendered against the Lessee, and such
judgment or order shall continue
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unsatisfied and unstayed (pursuant to laws, rules or court
orders) for a period of thirty (30) days;
(m) a default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness of the Lessee or any of its Consolidated Subsidiaries
having a principal amount, individually or in the aggregate, in excess
of $50,000,000, or a default shall occur in the performance or
observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity
of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders
of such Indebtedness, or any trustee or agent for such holders, to cause
such Indebtedness to become due and payable prior to its expressed
maturity; and
(n) 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 the Lessee.
16.2. Remedies. Upon the occurrence of any Lease Event of Default and
the declaration thereof, 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 the last three paragraphs of this
Section 16.2 and so long as such Lease Event of Default is continuing, do one or
more of the following as the Lessor in its sole discretion shall determine,
without limiting any other right or remedy the Lessor may have on account of
such Lease Event of Default.
(a) The Lessor may, by notice to the Lessee, rescind or terminate
this Master Lease as to any Property or all of the Properties as of the
date specified in such notice; provided, however (i) no reletting,
reentry or taking of possession of any Property (or any portion thereof)
by the Lessor will be construed as an election on the Lessor's part to
terminate this Master Lease unless a written notice of such intention is
given to the Lessee, (ii) notwithstanding any reletting, reentry or
taking of possession, the Lessor may at any time thereafter elect to
terminate this Master Lease for a continuing Lease Event of Default and
(iii) no act or thing done by the Lessor or any of its agents,
representatives or employees and no agreement accepting a
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surrender of the Properties shall be valid unless the same
be made in writing and executed by the Lessor;
(b) The Lessor may (i) demand that the Lessee, and the Lessee
shall upon the written demand of the Lessor, return any Property
promptly to the Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Articles VII and
IX and Section 8.3 hereof as if such Property were being returned at the
end of the Lease Term, and the Lessor shall not be liable for the
reimbursement of the Lessee for any costs and expenses incurred by the
Lessee in connection therewith and (ii) without prejudice to any other
remedy which the Lessor may have for possession of any Property, and to
the extent and in the manner permitted by Applicable Law, enter upon
such Property and take immediate possession of (to the exclusion of the
Lessee) such Property or any part thereof and expel or remove the Lessee
and any other Person who may be occupying such Property, by summary
proceedings or otherwise, all without liability to the Lessee for or by
reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or otherwise
and, in addition to the Lessor's other damages, the Lessee shall be
responsible for all costs and expenses incurred by the Lessor and/or the
Lender in connection with any reletting, including, without limitation,
reasonable brokers' fees and all costs of any alterations or repairs
made by the Lessor or the Lender;
(c) As more fully set forth in each Lease Supplement, the Lessor
may sell all or any part of any one or more Properties at public or
private sale, as the Lessor may determine;
(d) The Lessor may, at its option, elect not to terminate this
Master Lease with respect to any Property or all of the Properties and
continue to collect all Basic Rent, Supplemental Rent, and all other
amounts due to the Lessor (together with all costs of collection) and
enforce the Lessee's obligations under this Master Lease as and when the
same become due, or are to be performed, and at the option of the
Lessor, upon any abandonment of any Property by the Lessee or re-entry
of same by the Lessor, the Lessor may enforce, by suit or otherwise, all
other covenants and conditions hereof to be performed or complied with
by the 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;
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(e) [Intentionally Omitted]
(f) The Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, including any and all rights or
remedies under the Pledge Agreement, 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 the Lessor's right to collect any such damages for any
subsequent period(s), or the 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;
(g) The Lessor may retain and apply against the Lease Balance all
sums which the Lessor would, absent such Lease Event of Default, be
required to pay to, or turn over to, the Lessee pursuant to the terms of
this Master Lease; or
(h) If a Lease Event of Default shall have occurred and be
continuing, the Lessor, to the extent permitted by Applicable Law, as a
matter of right and with notice to the Lessee, shall have the right to
apply to any court having jurisdiction to appoint a receiver or
receivers of any Property, and the Lessee hereby irrevocably consents to
any such appointment. Any such receiver(s) shall have all of the usual
powers and duties of receivers in like or similar cases and all of the
powers and duties of the 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.
(i) To the maximum extent permitted by law, the Lessee hereby
waives the benefit of any appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale of any Property or any
interest therein.
(j) The 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 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 the
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Lessor's right to realize upon or enforce any other security now or
hereafter held by the Lessor, it being agreed that the Lessor shall be
entitled to enforce this instrument and any other security now or
hereafter held by the Lessor in such order and manner as the Lessor may
determine in its absolute discretion. No remedy herein conferred upon or
reserved to the 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 the Lessor or to which
it may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient
by the Lessor. In no event shall the Lessor, in the exercise of the
remedies provided in this instrument (including, without limitation, in
connection with the assignment of rents to Lessor, or the appointment of
a receiver and the entry of such receiver onto all or any part of the
Properties), 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 in clauses (c), (j) or (k) of
this Section 16.2 within thirty (30) days after the declaration of the
occurrence of an Event of Default in contravention of Lessee's purchase
right set forth in the last paragraph of this Section 16.2.
(k) Foreclosure; Power of Sale. The Lessee hereby grants to First
American Title Insurance Company, as trustee (together with all
successor trustees, the "Trustee"), IN TRUST, WITH POWER OF SALE, all of
the Lessee's right, title and interest in and to the Properties and,
upon the occurrence of a Lease Event of Default and following
termination of this Master Lease by the Lessor, the Lessor shall have
the power and authority, after proper notice and lapse of such time as
may be required by law and by the Master Lease, to cause the Trustee to
sell any Property or the Properties by notifying the Trustee of that
election and depositing with the Trustee this instrument and receipts
and evidence of expenditures made and secured hereby as the Trustee may
reasonably require. Upon receipt of any such notice from the Lessor, the
Trustee shall cause to be recorded, published and delivered to Lessee
such Notice of Default and Election to Sell as is then required by
applicable statutory authority and by this instrument, which notice
shall set forth, among other things, the nature of the breach(es) or
default(s), the action(s) required to
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effect a cure thereof and the time period within which that cure may be
effected. If no cure is effected within the statutory time limits
following recordation of the Notice of Default and Election to Sell and
after Notice of Sale has been given as required by the above-referenced
statutes, the Trustee may without further notice or demand sell and
convey any Property or the Properties in accordance with the
above-referenced statutes. Each Property may be sold as a whole or in
separate lots, parcels or items and in such order as the Lessor may
direct, at public auction to the highest bidder for cash in lawful money
of the United States payable at the time of sale. The Trustee shall
deliver to such purchaser(s) a good and sufficient deed or deeds
conveying the property so sold, but without any covenant or warranty
express or implied. The recitals in such deed of any matter or fact
shall be conclusive proof of the truthfulness thereof. Any Person,
including the Lessee, the Trustee or the Lessor, may purchase at any
sale. After deducting all costs, fees and expenses of the Lessor and the
Trustee, including costs of evidence of title in connection with any
sale, the Lessor shall apply the proceeds of sale, in the following
order of priority, to payment of the following (collectively referred to
herein as the "Obligated Amounts"): (i) first, all amounts expended by
or for the account of the Lessor under the terms hereof and not then
repaid, with accrued interest at the Overdue Rate; and (ii) second, all
other amounts then due and owing hereunder including, without
limitation, all Basic Rent, Supplemental Rent, the full amount of the
Lease Balance as of the date of sale as if this Lease had been
terminated with respect to all of the Properties then subject to this
Lease under Section 18.1, and all other amounts then payable by the
Lessee under this Lease and the other Operative Documents, with the
Lessor having the right to apply the proceeds of sale to the amounts
described above in this clause (ii) in such order, proportion and
priority as the Lessor may elect in its sole and absolute discretion. To
the extent permitted by applicable statutes, the Trustee may postpone
the sale of all or any portion of any Property or the Properties by
public announcement at the time and place of sale, and from time to time
thereafter may again postpone that sale by public announcement or
subsequently noticed sale, and without further notice may make such sale
at the time fixed at the last postponement or may, in its discretion,
give a new notice of sale. A sale of less than all of any Property or
the Properties or any defective or irregular sale made hereunder shall
not exhaust the power of sale provided for herein, and subsequent sales
may be made hereunder until all of the Obligated Amounts have been
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satisfied or all the Properties have been sold, without defect or
irregularity. No action of the Lessor or the Trustee based upon the
provisions contained herein or contained in the applicable statutes,
including, without limitation, the giving of the Notice of Default and
Election to Sell or the Notice of Sale, shall constitute an election of
remedies which would preclude the Lessor from pursuing judicial
foreclosure before a completed sale pursuant to the power of sale
contained herein. The Lessor shall have the right, with the irrevocable
consent of the Lessee hereby given and evidenced by the execution of
this instrument, to obtain appointment of a receiver by any court of
competent jurisdiction without further notice to the Lessee, which
receiver shall be authorized and empowered to enter upon and take
possession of any Property or the Properties, including all personal
property used upon or in connection with the real property herein
conveyed, to let any Property or the Properties, to receive all the
rents, issues and profits, if any, which may be due or become due in
respect to the leasing of any Property or the Properties to another
party (herein, "Property Rents"), and apply the Property Rents after
payment of all necessary charges and expenses to reduction of the
Obligated Amounts in such order, proportion and priority as the Lessor
may elect. At the option of the Lessor, the receiver shall accomplish
entry and taking possession of any Property or the Properties by actual
entry and possession or by notice to the Lessee. The receiver so
appointed by a court of competent jurisdiction shall be empowered to
issue receiver's certificates for funds advanced by the Lessor for the
purpose of protecting the value of any Property or the Properties as
security for the Obligated Amounts. The amounts evidenced by receiver's
certificates shall bear interest at the Overdue Rate and may be added to
the Obligated Amounts if the Lessee or a junior lienholder purchases any
Property or the Properties at the trustee's sale. The Trustee or any
successor acting hereunder may resign and thereupon be discharged of the
trusts hereunder upon thirty (30) days' prior written notice to the
Lessor. Regardless of whether the Trustee resigns, the Lessor may, from
time to time, substitute a successor or successors to any Trustee named
herein or acting hereunder in accordance with any statutory procedure
for such substitution; or if Lessor, in its sole and absolute
discretion, so elects, and if permitted by law, the Lessor may
substitute such successors or successors by recording, in the office of
the recorder of the county or counties where such Property is located, a
document executed by the Lessor and containing the name of the original
Lessee and Lessor hereunder, the book and page where this instrument
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(or a memorandum hereof) is recorded (and/or instrument number, as
applicable) and the name of the new Trustee, which instrument shall be
conclusive proof of proper substitution of such successor Trustee or
Trustees, who shall, without conveyance from the predecessor Trustee,
succeed to the rights, powers and duties hereunder. It is acknowledged
that A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT; A POWER OF
SALE MAY ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THEM WITHOUT GOING
TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE LESSEE UNDER THIS
INSTRUMENT.
The Lessor acknowledges and agrees that upon the declaration of an Event
of Default the amount due and owing by it to the Lessor hereunder shall be the
Lease Balance and that to the maximum extent permitted by law, the Lessee waives
any right to contest the Lease Balance as the liquidated sum due upon
acceleration of this instrument.
In order to satisfy the Lease Balance due and owing the Lessee may avail
itself of any and all of the foregoing remedies provided, however, that the
Lessor acknowledges and agrees that in the case of a Lease Event of Default set
forth in clause (a), (b), (c), (e) (unless such Event of Default is caused by a
breach of Section 6.1, Section 8.4, failure to complete a structural
Modification the cost of which exceeds 10% of the Property Balance for such
Property, Section 11.2 hereof if the effect of such has the result described in
clause (i) of the proviso therein and Section 14.2 hereof), (f), (i), (j), (k),
(l), (m) or (n) of Section 16.1 hereof, in the absence of a Lease Event of
Default under any other clause, that the Lessor's personal recourse against the
Lessee shall be limited to the sum of all past due and accrued and unpaid Rent
hereunder and the Tranche A Loan Balance plus Lessor Balance in respect of the
Land. Any Lease Balance remaining after realization from the Lessee of the
foregoing amount shall be satisfied solely from proceeds derived from the sale
or use of the Property.
If, pursuant to the exercise by the Lessor of its remedies pursuant to
this Section 16.2, the Lease Balance and all other amounts due and owing from
the Lessee under this Master Lease and the other Operative Documents have been
paid in full, then the Lessor shall remit to the Lessee any excess amounts
received by the Lessor. The obligation to deliver such excess to the Lessee
shall survive this Master Lease.
The Lessor agrees that for thirty (30) days after the declaration of the
occurrence of an Event of Default, Lessor shall forebear from exercising the
remedies set forth in clauses
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(c), (j) or (k) of this Section 16.2 during which time Lessee may tender to the
Lessor in immediately available funds the Lease Balance and all past due and
accrued and unpaid Rent upon the receipt of which Lessor shall transfer the
Properties to the Lessee or its designee in accordance with Article XXI hereof.
16.3. Waiver of Certain Rights. Subject to the foregoing, if this Master
Lease shall be terminated pursuant to Section 16.2, the Lessee waives, to the
fullest extent permitted by law, (a) any notice of re-entry or the institution
of legal proceedings to obtain re-entry or possession; (b) any right of
redemption, re-entry or repossession; (c) the benefit of any laws now or
hereafter in force exempting property from liability for rent or for debt or
limiting the Lessor with respect to the election of remedies; and (d) any other
rights which might otherwise limit or modify any of the Lessor's rights or
remedies under this Article XVI.
ARTICLE XVII
LESSOR'S RIGHT TO CURE
17.1. The Lessor's Right to Cure the Lessee's Lease Defaults. The
Lessor, without waiving or releasing any obligation or Lease Event of Default,
may (but shall be under no obligation to) remedy any Lease Event of Default for
the account and at the sole cost and expense of the Lessee, including the
failure by the Lessee to maintain the insurance required by Article XIII, and
may, to the fullest extent permitted by law, and notwithstanding any right of
quiet enjoyment in favor of the Lessee, enter upon any Property for such purpose
and take all such action thereon as may be necessary or appropriate therefor. No
such entry shall be deemed an eviction of the Lessee. All reasonable
out-of-pocket costs and expenses so incurred (including fees and expenses of
counsel), together with interest thereon at the Overdue Rate from the date on
which such sums or expenses are paid by the Lessor, shall be paid by the Lessee
to the Lessor as Supplemental Rent.
ARTICLE XVIII
PURCHASE PROVISIONS
18.1. Purchase of the Properties. Subject to the conditions contained
herein, the Lessee shall have the irrevocable option on any Business Day to
purchase any or all (subject, however, to the penultimate sentence of this
Section 18.1) of the Properties subject to this Master Lease at a price (the
"Purchase Price") equal to the aggregate Property Balances
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of the applicable Properties on the date of such purchase, plus Break Costs (if
any). The Lessee's exercise of its option pursuant to this Section 18.1 shall be
subject to the following conditions:
(i) the Lessee shall have delivered a Purchase Notice to the
Lessor not less than thirty (30) days prior to such purchase, specifying
the date of such purchase;
(ii) [Intentionally Omitted].
(iii) the Lessee shall not have given notice of its intention to
exercise the Remarketing Option.
If the Lessee exercises its option pursuant to this Section 18.1 then, upon the
Lessor's receipt of all amounts due in connection therewith, the Lessor shall
transfer to the Lessee or its designee all of the Lessor's right, title and
interest in and to the applicable Properties in accordance with the procedures
set forth in Section 21.1(a), such transfer to be effective as of the date
specified in the Purchase Notice. The Lessee may designate, in a notice given to
the Lessor not less than ten (10) Business Days prior to the closing of such
purchase (time being of the essence), the transferee or transferees to whom the
conveyance shall be made (if other than to the Lessee), in which case such
conveyance shall (subject to the terms and conditions set forth herein) be made
to such designee; provided, however, that such designation of a transferee or
transferees shall not cause the Lessee to be released, fully or partially, from
any of its obligations under this Master Lease, including, without limitation,
the obligation to pay to the Lessor the Property Balances of the applicable
Properties on the date specified in the applicable Purchase Notice.
Notwithstanding anything herein to the contrary, the Lessee may only exercise
its Purchase Option for less than all of the Properties so long as after giving
effect to such purchase, the aggregate of the Property Balance (Improvements) of
the Properties remaining subject to this Master Lease would be equal to 50.0% or
more of an amount equal to the highest Lease Balance (Improvements) in respect
of all Properties outstanding at any time prior to the time of such purchase.
The Lessee shall have the right to elect by written notice to the Lessor and the
Lender to have all or part of the Purchase Price paid by liquidation of the
Additional Collateral so long as, in the case of a purchase of less than all the
Properties, sufficient Additional Collateral remains subject to the Pledge
Agreement.
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ARTICLE XIX
EXTENSION OF EXPIRATION DATE
19.1. Extension of Expiration Date. The Lessee may extend the Expiration
Date subject to, and in accordance with, the terms and conditions of Section
11.2 of the Participation Agreement.
ARTICLE XX
REMARKETING OPTION
20.1. Option to Remarket. Subject to the fulfillment of each of the
conditions set forth in this Section 20.1, the Lessee shall have the option (the
"Remarketing Option") to market all of the Properties on behalf of the Lessor.
The Lessee's effective exercise and consummation of the Remarketing
Option shall be subject to the due and timely fulfillment of each of the
following provisions as to each of the Properties as of the dates set forth
below:
(a) Not later than six months prior to the Expiration Date, the
Lessee shall give to the Lessor written notice of the Lessee's exercise
of the Remarketing Option, which exercise shall be irrevocable. Failure
by the Lessee to give timely notice shall be deemed to be an election by
the Lessee, without further act thereby, of its Purchase Option for all
of the Properties.
(b) Not later than ninety (90) days prior to the Expiration Date,
the Lessee shall deliver to the Lessor an Environmental Audit for each
of the Properties. Such Environmental Audit shall be prepared by an
environmental consultant selected by the Lessor in the Lessor's
reasonable discretion and shall contain conclusions reasonably
satisfactory to the Lessor as to the environmental status of the
Properties. If any such Environmental Audit indicates any exceptions,
the Lessee shall have also delivered prior to the Expiration Date a
Phase Two 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 Law. As
of the Expiration Date, any Permitted Property Liens (other than (x)
Liens of the type described in clause (iii) of the definition of
"Permitted Property Liens" to the extent, but only to the extent, the
Lessor is in its opinion fully indemnified therefrom, and (y) Liens of
the type described in clause (vii) of the definition of "Permitted
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Property Liens") on any Property that were contested by the Lessee shall
have been removed.
(c) [Intentionally Omitted].
(d) [Intentionally Omitted].
(e) [Intentionally Omitted].
(f) During the Marketing Period, the Lessee shall, as
nonexclusive agent for the Lessor, use reasonable commercial efforts to
sell the Lessor's interest in the Properties and will attempt to obtain
the highest purchase price therefor and for not less than the Fair
Market Sales Value.
(g) [Intentionally Omitted].
(h) [Intentionally Omitted].
(i) The Lessee shall have obtained, at its cost and expense, all
required governmental and regulatory consents and approvals and shall
have made all filings as required by Applicable Law in order to carry
out and complete the transfer of each of the Properties. As to the
Lessor, any such sale shall be made on an "as is, with all faults" basis
without representation or warranty by the Lessor other than the absence
of Lessor Liens.
(j) The Lessee shall pay directly, and not from the sale
proceeds, all prorations and credits, whether incurred by the Lessor or
the Lessee, including without limitation, the cost of all environmental
reports, appraisals required under Section 13.2 of the Participation
Agreement and the Lessee's attorneys' fees.
(k) The Lessee shall pay to the Lessor on or prior to the
Expiration Date (or in the case of Supplemental Rent, to the Person
entitled thereto) an amount equal to the Tranche A Loan Balance plus the
aggregate amount of Lessor Amounts that are allocable to Land
Acquisition Costs (without duplication of the Tranche A Loan Balance)
plus all accrued and unpaid Rent and all other amounts hereunder which
have accrued or will accrue prior to or as of the Expiration Date, in
the type of funds specified in Section 3.1(b) hereof; provided that in
no event shall the Lessee be obligated to pay the Tranche B Loan Balance
or the Lessor Amount attributable to construction of the Improvements.
(l) [Intentionally Omitted].
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(m) The gross proceeds (the "Gross Remarketing Proceeds") of the
sale of the Properties (less any marketing, closing or other costs,
prorations or commissions related to the marketing of the Properties),
shall be paid directly to the Lessor; provided, however, that if the sum
of (x) the Gross Remarketing Proceeds from such sale plus (y) the
Tranche A Loan Balance and Lessor Amounts allocable to Land Acquisition
Costs received by the Lessor pursuant to Section 20.1(k) exceeds the
Lease Balance as of such date, then the excess shall be paid to the
Lessee promptly after receipt thereof by the Lessor. The obligations of
the Lessor under this paragraph shall survive the expiration or
termination of this Master Lease.
If the Lessee effectively elects the Remarketing Option and the sale of
any Property is not consummated prior to the end of the Marketing Period, the
Lessee shall, in addition to making the payment required pursuant to Section
20.1(k) above, at its own cost and expense, do each of the following:
(i) execute and deliver to the Lessor and the Lessor's title
insurance company an affidavit as to the absence of any Liens (other
than Permitted Property Liens of the type described in clause (i),
(vii), (viii), (ix) or (x) Liens for taxes not yet due and Lessor
Liens), and shall execute and deliver to the Lessor a statement of
termination of this Master Lease to the extent relating to such
Property;
(ii) on the Expiration Date, transfer possession of such Property
to the Lessor or any Person designated by the Lessor, by surrendering
the same into the possession of the Lessor or such Person, as the case
may be, in the condition required by this Section 20.1 and in compliance
with Applicable Law; and
(iii) for a period of up to one year after the Expiration Date,
cooperate reasonably with the Lessor and/or any Person designated by the
Lessor to receive such Property, which cooperation shall include
reasonable efforts with respect to the following, all of which the
Lessee shall do on or before the Expiration Date for such Property or as
soon thereafter as is reasonably practicable: providing copies of all
books and records regarding the maintenance and ownership of such
Property and all know-how, data and technical information relating
thereto, providing a current copy of the applicable Plans and
Specifications, granting or assigning all assignable licenses necessary
for the operation and maintenance of such Property and cooperating
reasonably in seeking and obtaining all necessary
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Master Lease
Governmental Action. The obligations of the Lessee under
this paragraph shall survive the expiration or termination
of this Master Lease.
Lessor shall have no obligation to approve any bid for the Properties
except for bona fide all-cash bids which, together with amounts payable by the
Lessee under clause (k) hereof, in the aggregate is at least equal to the Lease
Balance and the acceptance of which will not subject the Lessor to any
additional liability. Except as expressly set forth herein, the Lessee shall
have no right, power or authority to bind the Lessor or any Participant in
connection with any proposed sale of any Property.
If one or more of the foregoing provisions (a) through (k) shall not be
fulfilled as of the Expiration Date with respect to any Property, then the
Lessor shall declare by written notice to the Lessee the Remarketing Option to
be null and void (whether or not it has been theretofore exercised by the
Lessee) as to all of the Properties, in which event all of the Lessee's rights
under this Section 20.1 shall immediately terminate and the Lessee shall
purchase from the Lessor, and the Lessor shall convey to the Lessee, on the
Expiration Date all of the Lessor's interest in all of the Properties for an
amount equal to the Lease Balance..
20.2. Certain Obligations Continue. During the Marketing Period, the
obligation of the Lessee to pay Rent with respect to each Property (including
the installment of Rent due on the Expiration Date) shall continue undiminished
until payment in full of the Tranche A Loan Balance plus the aggregate amount of
the Lessor Balance allocable to Land Acquisition Costs and all accrued and
unpaid Supplemental Rent due to the Lessor with respect to the Properties under
the Operative Documents to which the Lessee is a party. The Lessor shall have
the right, but shall be under no duty, to solicit bids, to inquire into the
efforts of the Lessee to obtain bids or otherwise to take action in connection
with any such sale.
ARTICLE XXI
PROCEDURES RELATING TO PURCHASE OR REMARKETING
21.1. Provisions Relating to the Exercise of Purchase
Option or Obligation and Conveyance Upon Remarketing and
Conveyance Upon Certain Other Events.
(a) In connection with any termination of this Master Lease with
respect to any Property pursuant to the terms of Article XV, in
connection with any purchase or in connection
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with the Lessee's purchase of any Property in accordance with Section
18.1 or in connection with the Lessee's exercise of the purchase right
under Section 16.2, then, upon the date on which this Master Lease is to
terminate with respect to the applicable Property and upon the payment
of all amounts due under Section 5.1 of the Construction Agency
Agreement, as applicable, and upon tender by the Lessee of the amounts
set forth in Article XV, Sections 16.2 or 18.1, as applicable:
(i) the Lessor shall execute and deliver to the Lessee (or
to the Lessee's designee) at the Lessee's cost and expense a
quitclaim deed with covenants against grantor's acts with respect
to such Property or Properties and an assignment of the Lessor's
entire interest in such Property or Properties (which shall
include an assignment of all of the Lessor's right, title and
interest in and to any Net Proceeds with respect to such Property
or Properties not previously received by the Lessor and an
assignment of leases of the Properties), in each case in
recordable form and otherwise in conformity with local custom and
free and clear of the Lien of the Lessor Mortgage and any Lessor
Liens;
(ii) such Property or Properties shall be conveyed to the
Lessee "AS IS" and in its then present physical condition; and
(iii) the Lessor shall execute and deliver to Lessee and
the Lessee's title insurance company an affidavit as to the
Lessor's title and Lessor Liens and shall execute and deliver to
Lessee a statement of termination of this Master Lease to the
extent this Master Lease relates to such Property or Properties.
(b) If the Lessee properly exercises the Remarketing Option, then
the Lessee shall, on the Expiration Date, and at its own cost, transfer
possession of all of the Properties to the independent purchaser(s)
thereof, in each case by surrendering the same into the possession of
the Lessor or such purchaser(s), as the case may be, free and clear of
all Liens other than Lessor Liens and the lien of the Lessor Mortgage,
in good condition (as modified by Modifications permitted by this Master
Lease), ordinary wear and tear excepted, and in compliance with
Applicable Law.
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Master Lease
ARTICLE XXII
ESTOPPEL CERTIFICATES
22.1. Estoppel Certificates. At any time and from time to time upon not
less than thirty (30) Business Days' prior request by the Lessor or the Lessee
(the "Requesting Party"), the other party (whichever party shall have received
such request, the "Certifying Party") shall furnish to the Requesting Party a
certificate signed by an individual having the office of vice president or
higher in the Certifying Party certifying that this Master Lease is in full
force and effect (or that this Master Lease is in full force and effect as
modified and setting forth the modifications); the dates to which the Basic Rent
and Supplemental Rent have been paid; to the best knowledge of the signer of
such certificate, whether or not the Requesting Party is in default under any of
its obligations hereunder (and, if so, the nature of such alleged default); and
such other matters under this Master Lease as the Requesting Party may
reasonably request. Any such certificate furnished pursuant to this Article XXII
may be relied upon by the Requesting Party, and any existing or prospective
mortgagee, purchaser or lender, and any accountant or auditor, of, from or to
the Requesting Party (or any Affiliate thereof).
ARTICLE XXIII
ACCEPTANCE OF SURRENDER
23.1. Acceptance of Surrender. No surrender to the Lessor of this Master
Lease or of all or any of the Properties or of any part of any thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by the Lessor and, prior to the payment or performance of all
obligations under the Loan Agreement and termination of the Commitments, the
Lender, and no act by the Lessor or the Lender or any representative or agent of
the Lessor or the Lender, other than a written acceptance, shall constitute an
acceptance of any such surrender.
ARTICLE XXIV
NO MERGER OF TITLE
24.1. No Merger of Title. There shall be no merger of this Master Lease
or of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly, in whole or in part,
(a) this Master Lease or the leasehold estate created hereby or any interest in
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Master Lease
this Master Lease or such leasehold estate, (b) the fee or groundleasehold
estate in any Property, except as may expressly be stated in a written
instrument duly executed and delivered by the appropriate Person or (c) a
beneficial interest in the Lessor.
ARTICLE XXV
INTENT OF THE PARTIES
25.1. Nature of Transaction.
(a) It is the intent of the parties that: (a) the Lease constitutes an
operating lease from Lessor to the Lessee for purposes of the Lessee's financial
reporting, (b) the Lease and other transactions contemplated will result in the
Lessee being recognized as the owner of the Properties for Federal and state
income tax and bankruptcy purposes, (c) each Lease Supplement grants to Lessor a
Lien on the Lessee's interest in the Property covered thereby, and (d) the
obligations of the Lessee to pay Basic Rent and any part of the Property Balance
shall be treated as payments of interest and principal, respectively, for
Federal and state income tax and bankruptcy purposes. The Lessor shall be deemed
to have a valid and binding security interest in and Lien on the Lessee's
interest in the Properties, free and clear of all Liens other than Permitted
Property Liens, as security for the obligations of the Lessee under the
Operative Documents (it being understood and agreed that the Lessee does hereby
grant a Lien, and convey, transfer, assign, mortgage and warrant to Lessor and
its successors, transferees and assigns, for the benefit of the Lessor and its
successors, transferees and assigns, the Properties and any proceeds or products
thereof, to have and hold the same as collateral security for the payment and
performance of the obligations of the Lessee under the Operative Documents),
each of the parties hereto agrees that it will not, nor will it permit any
Affiliate to at any time, take any action or fail to take any action with
respect to the preparation or filing of any income tax return, including an
amended income tax return, to the extent that such action or such failure to
take action would be inconsistent with the intention of the parties expressed in
this Section 25.1.
(b) Specifically, without limiting the generality of clause (a) of this
Section 25.1, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any State or Commonwealth thereof affecting Lessee, Lessor,
any Participant or any collection actions, the
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Master Lease
transactions evidenced by the Operative Documents shall be regarded as loans
made by the Participants to the Lessee.
ARTICLE XXVI
MISCELLANEOUS
26.1. Survival; Severability; Etc. Anything contained in this Master
Lease to the contrary notwithstanding, all claims against and liabilities of the
Lessee or the Lessor arising from events commencing prior to the expiration or
earlier termination of this Master Lease shall survive such expiration or
earlier termination for a period of one year except as to indemnification which
shall continue to survive. If any term or provision of this Master Lease or any
application thereof shall be declared invalid or unenforceable, the remainder of
this Master Lease and any other application of such term or provision shall not
be affected thereby. If any right or option of the Lessee provided in this
Master Lease, including any right or option described in Article XIV, XV, XVIII
or XX, would, in the absence of the limitation imposed by this sentence, be
invalid or unenforceable as being in violation of the rule against perpetuities
or any other rule of law relating to the vesting of an interest in or the
suspension of the power of alienation of property, then such right or option
shall be exercisable only during the period which shall end twenty-one (21)
years after the date of death of the last survivor of the descendants of
Franklin D. Roosevelt, the former President of the United States, Henry Ford,
the deceased automobile manufacturer, and John D. Rockefeller, the founder of
the Standard Oil Company, known to be alive on the date of the execution,
acknowledgement and delivery of this Master Lease.
26.2. Amendments and Modifications. Subject to the requirements,
restrictions and conditions set forth in the Participation Agreement, neither
this Master Lease nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing in recordable form signed by the
Lessor and the Lessee.
26.3. No Waiver. No failure by the Lessor, any Participant or the Lessee
to insist upon the strict performance of any term hereof or to exercise any
right, power or remedy upon a default hereunder, and no acceptance of full or
partial payment of Rent during the continuance of any such default, shall
constitute a waiver of any such default or of any such term. To the fullest
extent permitted by law, no waiver of any default shall affect or alter this
Master Lease, and this Master Lease shall continue in full force and effect with
respect to any other then existing or subsequent default.
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Master Lease
26.4. Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and directed to the address
described in, and deemed received in accordance with the provisions of, Section
15.3 of the Participation Agreement.
26.5. Successors and Assigns. All the terms and provisions of this
Master Lease shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
26.6. Headings and Table of Contents. The headings and table of contents
in this Master Lease are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.
26.7. Counterparts. This Master Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
26.8. GOVERNING LAW. THIS MASTER LEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, EXCEPT AS TO MATTERS RELATING TO
THE CREATION OF THE LEASEHOLD ESTATES HEREUNDER AND THE EXERCISE OF RIGHTS AND
REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. WITHOUT LIMITING THE
FOREGOING, IN THE EVENT THAT THIS MASTER LEASE IS DEEMED TO CONSTITUTE A
FINANCING WHICH IS THE INTENTION OF THE PARTIES, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, SHALL GOVERN THE CREATION,
TERMS AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED HEREBY, BUT THE LIEN CREATED
HEREBY AND THE CREATION AND THE ENFORCEMENT OF SAID LIEN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE
LOCATED.
26.9. Liability Limited. The parties hereto agree that except as
specifically set forth in this Master Lease or in any other Operative Document,
the Lessor shall have no personal liability whatsoever to the Lessee or the
Lender or their respective successors and assigns for any claim based on or in
respect of this Master Lease or any of the other Operative Documents or arising
in any way from the transactions contemplated hereby or thereby and the recourse
shall be solely had against the Lessor's interest in the Properties; provided,
however, that Lessor shall be liable in its individual capacity (a) for its own
willful misconduct or gross negligence, (b) breach of any of its
representations, warranties or covenants under the Operative Documents, or (c)
for any Tax based on or
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Master Lease
measured by any fees, commission or compensation received by it for acting as
the Lessor as contemplated by the Operative Documents.
26.10. Original Lease. The single executed original of this Master Lease
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt thereof of Union Bank of Switzerland,
New York Branch, as the Lender therefor on or following the signature page
thereof shall be the Original Executed Counterpart of this Master Lease (the
"Original Executed Counterpart"). To the extent that this Master Lease
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction, no security interest in this
Master Lease may be created through the transfer or possession of any
counterpart other than the Original Executed Counterpart.
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Master Lease
IN WITNESS WHEREOF, the parties have caused this Master Lease be duly
executed and delivered as of the date first above written.
CISCO SYSTEMS, INC.,
as Lessee
By
--------------------------------------
Name:
Title:
S-1
46
Master Lease
UBS MORTGAGE FINANCE INC.,
as Lessor
By
--------------------------------------
Name:
Title:
By
--------------------------------------
Name:
Title:
S-2
47
Master Lease
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date hereof.
UNION BANK OF SWITZERLAND,
acting through its New York
Branch,
as Lender
By
--------------------------------------
Name:
Title:
By
--------------------------------------
Name:
Title:
S-3
48
Master Lease
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
DEFINITIONS
1.1. Definitions; Interpretation........................................................ 1
ARTICLE II
MASTER LEASE
2.1. Acceptance and Lease of Property................................................... 2
2.2. Acceptance Procedure............................................................... 2
2.3. Lease Term......................................................................... 2
2.4. Title ............................................................................ 3
ARTICLE III
PAYMENT OF RENT
3.1. Rent ............................................................................ 3
3.2. Payment of Rent.................................................................... 3
3.3. Supplemental Rent.................................................................. 4
3.4. Method of Payment.................................................................. 4
ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT
4.1. Quiet Enjoyment.................................................................... 5
4.2. Right to Inspect................................................................... 5
ARTICLE V
NET LEASE, ETC.
5.1. Net Lease.......................................................................... 5
5.2. No Termination or Abatement........................................................ 6
ARTICLE VI
SUBLEASES
6.1. Subletting......................................................................... 7
ARTICLE VII
LESSEE ACKNOWLEDGMENTS
7.1. Condition of the Properties........................................................ 7
7.2. Risk of Loss....................................................................... 8
i
49
TABLE OF CONTENTS
(continued)
Section Page
- ------- ----
ARTICLE VIII
POSSESSION AND USE OF THE PROPERTIES, ETC.
8.1. Utility Charges.................................................................... 8
8.2. Possession and Use of the Property................................................. 8
8.3. Compliance with Requirements of Laws and
Insurance Requirements...................................................... 9
8.4. Assignment by Lessee............................................................... 9
8.5. Phase Two Improvements............................................................. 10
ARTICLE IX
MAINTENANCE AND REPAIR; RETURN
9.1. Maintenance and Repair; Return..................................................... 10
ARTICLE X
MODIFICATIONS, ETC.
10.1. Modifications, Substitutions and Replacements..................................... 11
ARTICLE XI
WARRANT OF TITLE; EASEMENTS
11.1. Warrant of Title.................................................................. 13
11.2. Grants and Releases of Easements; Lessor's
Waivers..................................................................... 13
ARTICLE XII
PERMITTED CONTESTS
12.1. Permitted Contests in Respect of Applicable Law................................... 15
ARTICLE XIII
INSURANCE
13.1. Public Liability and Workers' Compensation
Insurance................................................................... 16
13.2. [Intentionally Omitted]........................................................... 17
13.3. [Intentionally Omitted]........................................................... 17
ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
14.1. Casualty and Condemnation......................................................... 17
14.2. Environmental Matters............................................................. 19
14.3. Notice of Environmental Matters................................................... 20
ii
50
TABLE OF CONTENTS
(continued)
Section Page
- ------- ----
ARTICLE XV
TERMINATION OF LEASE
15.1. Partial Termination upon Certain Events........................................... 21
15.2. Termination Procedures............................................................ 21
ARTICLE XVI
EVENTS OF DEFAULT
16.1. Lease Events of Default........................................................... 22
16.2. Remedies.......................................................................... 25
16.3. Waiver of Certain Rights.......................................................... 32
ARTICLE XVII
LESSOR'S RIGHT TO CURE
17.1. The Lessor's Right to Cure the
Lessee's Lease Defaults..................................................... 32
ARTICLE XVIII
PURCHASE PROVISIONS
18.1. Purchase of the Properties........................................................ 32
ARTICLE XIX
EXTENSION OF EXPIRATION DATE
19.1. Extension of Expiration Date...................................................... 34
ARTICLE XX
REMARKETING OPTION
20.1. Option to Remarket................................................................ 34
20.2. Certain Obligations Continue...................................................... 37
ARTICLE XXI
PROCEDURES RELATING TO PURCHASE OR REMARKETING
21.1. Provisions Relating to the Exercise of Purchase
Option or Obligation and Conveyance Upon
Remarketing and Conveyance Upon Certain Other
Events...................................................................... 37
ARTICLE XXII
ESTOPPEL CERTIFICATES
iii
51
TABLE OF CONTENTS
(continued)
Section Page
- ------- ----
22.1. Estoppel Certificates............................................................. 39
ARTICLE XXIII
ACCEPTANCE OF SURRENDER
23.1. Acceptance of Surrender........................................................... 39
ARTICLE XXIV
NO MERGER OF TITLE
24.1. No Merger of Title................................................................ 39
ARTICLE XXV
INTENT OF THE PARTIES
25.1. Nature of Transaction............................................................. 40
ARTICLE XXVI
MISCELLANEOUS
26.1. Survival; Severability; Etc....................................................... 41
26.2. Amendments and Modifications...................................................... 41
26.3. No Waiver......................................................................... 41
26.4. Notices........................................................................... 42
26.5. Successors and Assigns............................................................ 42
26.6. Headings and Table of Contents.................................................... 42
26.7. Counterparts...................................................................... 42
26.8. GOVERNING LAW..................................................................... 42
26.9. Liability Limited................................................................. 42
26.10. Original Lease.................................................................... 43
EXHIBITS
EXHIBIT A-1 Form of Lease Supplement (Land)
EXHIBIT A-2 Form of Lease Supplement (Improvements)
iv
52
[EXECUTION COPY]
APPENDIX A
to
Participation Agreement,
Master Lease,
Lease Supplements
Loan Agreement,
Construction Agency Agreement,
Mortgages,
Pledge Agreement
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a
clear contrary intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative
Document), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the
other Operative Documents and reference to any promissory note includes
any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision
of any Applicable Law means that provision of such Applicable Law from
time to time in effect and constituting the substantive
53
Appendix A
amendment, modification, codification, replacement or
reenactment of such section or other provision;
(vi) reference in any Operative Document to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section thereof or
Appendix, Schedule or Exhibit thereto;
(vii) "hereunder", "hereof", "hereto" and words of similar import
shall be deemed references to an Operative Document as a whole and not
to any particular Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding
such term;
(ix) relative to the determination of any period of time, "from"
means "from and including" and "to" means "to but excluding"; and
(x) with respect to any rights and obligations of the parties
under the Operative Documents, all such rights and obligations shall be
construed to the extent permitted by Applicable Law.
B. Computation of Time Periods. For purposes of computation of periods
of time under the Operative Documents, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".
C. Accounting Terms and Determinations. Unless otherwise specified in
any Operative Document, all terms of an accounting character used therein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Lessee's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Lessee and its consolidated Subsidiaries delivered
to the Lessor and the Lender unless with respect to any such change concurred in
by the Lessee's independent public accountants or required by GAAP, in
determining compliance with any of the provisions of any Operative Document, the
Lessee shall have objected to determining such compliance on such basis at the
time of delivery of such financial statements, in which event such calculations
shall be made on a basis consistent with those used in the preparation of
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54
Appendix A
the latest financial statements as to which such objection shall not have been
made.
D. Conflict in Operative Documents. If there is any conflict between any
Operative Documents, such Operative Document shall be interpreted and construed,
if possible, so as to avoid or minimize such conflict but, to the extent (and
only to the extent) of such conflict, the Participation Agreement shall prevail
and control.
E. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring the Operative Document to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
F. Defined Terms. Unless a clear contrary intention appears, terms
defined herein have the respective indicated meanings when used in each
Operative Document.
"Account" means the account established by the Lessee with the Lender
pursuant to which all payments by the Lessee under the Operative Documents shall
be made. The Account shall be specified on Schedule II to the Participation
Agreement, as such Schedule may from time to time be amended, supplemented,
amended and restated or otherwise modified from time to time.
"Acquisition Date" is defined in Section 6.1 of the
Participation Agreement.
"Additional Collateral" means any of the following obligations which
have been issued by the United States of America, registered under the name of
Union Bank of Switzerland and delivered under the Pledge Agreement:
(a) all allotments, accretions, offers, rights, benefits and
advantages whatsoever at any time accruing, offered or arising in
respect of or incidental to the same or in respect of or incidental to
any securities, rights, moneys or other property previously accruing,
offered or arising as mentioned in this clause (a); and
(b) all proceeds of sale, dividends, interest and other
distributions or income hereafter paid or payable or made in respect of
the same or the securities, rights, moneys or other property falling
within clause (a) above or deriving from any investment of any such
dividends, interest
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55
Appendix A
and other distributions or income; also includes (without
limitation):
(i) obligations of the United States of America having a
maturity of not more than one (1) year from the date of issue and
commonly known as "treasury bills"; and
(ii) obligations of the United States of America having a
maturity greater than one year, but no more than ten (10) years,
from the date of issue and commonly known as "treasury notes".
"Adjusted Eurodollar Rate" means the applicable London Interbank Offered
Rate, as applicable to any Interest Period and, in the event Lender is required
to maintain reserves against "Eurocurrency Liabilities" under Regulation D,
during such period the Adjusted Eurodollar Rate shall mean a rate per annum
equal to the quotient obtained (rounded upwards, if necessary, to the next
higher 1/100th of 1%) by dividing (i) the applicable London Interbank Offered
Rate for such Interest Period by (ii) 1.00 minus the Eurodollar Reserve
Percentage.
"Advance" means an advance of funds to the Lessee pursuant to Article
III of the Participation Agreement.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"After Tax Basis" means, with respect to any payment to be received, the
amount of such payment increased so that, after deduction of the amount of all
taxes required to be paid by the recipient (less any tax savings realized and
the present value of any tax savings projected to be realized by the recipient
as a result of the payment of the indemnified amount) with respect to the
receipt by the recipient of such amounts, such increased payment (as so reduced)
is equal to the payment otherwise required to be made.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including Hazardous Materials Laws) statutes, treaties, codes,
ordinances, permits, certificates,
-4-
56
Appendix A
orders and licenses of and interpretations by, any Governmental Authority, and
applicable judgments, decrees, injunctions, writs, orders or like action of any
court, arbitrator or other administrative, judicial or quasi-judicial tribunal
or agency of competent jurisdiction (including those pertaining to health,
safety or the environment (including, without limitation, wetlands) and those
pertaining to the construction, use or occupancy of any Property) or in each
case affecting the Lessee, any Property or any material interests in any other
kind of property or asset, whether real, personal or mixed, or tangible or
intangible, of the Lessee.
"Appraisal" means, with respect to each Property, an appraisal of such
Property as if improved in accordance with the Plans and Specifications, which
Appraisal complies in all material respects with all of the provisions of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
the rules and regulations adopted pursuant thereto, and all other applicable
Requirements of Law addressed to the Lender, the Lessor and the Lessee, and will
appraise the Fair Market Sales Value of such Property as built in accordance
with the applicable Plans and Specifications therefor as of the Completion Date
for such Property and as of the Expiration Date. Each Appraisal shall be
prepared by a reputable appraiser selected by the Lender and the Lessor, and
such appraiser shall be reasonably acceptable to the Lessee. Each such Appraisal
may "bring-down" by a letter a previously delivered appraisal meeting the above
requirements.
"Appraiser" means, with respect to any Property, the appraiser which
prepared the Appraisal or such other Person selected by the Lender and the
Lessor.
"Appurtenant Rights" means, with respect to any Land, (i) all
agreements, easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, hereditaments and other rights and
benefits at any time belonging or pertaining to such Land or the Improvements
thereon, including, without limitation, the use of any streets, ways, alleys,
vaults or strips of land adjoining, abutting, adjacent or contiguous to such
Land and (ii) all permits, licenses and rights, whether or not of record,
appurtenant to such Land.
"Assignment of Lease and Rent" means the Assignment of Lease and Rent
dated as of December 27, 1996, from the Lessor, as assignor, to the Lender, as
assignee, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
-5-
57
Appendix A
"Available Commitments" means the Available Loan Commitments
and the Available Lessor Commitments.
"Available Lessor Commitment" means at any time, an amount equal to the
excess, if any, of (x) the aggregate amount of the Lessor Commitments minus (y)
the aggregate outstanding amounts of the Lessor Amounts.
"Available Loan Commitment" means at any time, an amount equal to the
excess, if any, of (x) the aggregate amount of the Loan Commitments minus (y)
the aggregate outstanding principal amounts of all Loans.
"Bankruptcy Code" is defined in Section 5.1(e) of the Loan
Agreement.
"Base Rate" means, for any day, the rate per annum equal to one-half of
one percent above the Federal Funds Rate.
"Base Rate Loan(s)/Lessor Amount(s)" means a Loan or Lessor Amount, as
the case may be, bearing interest at the Base Rate.
"Base Lease Term (Improvements)" is defined in Section 2.3
of the Master Lease.
"Basic Lease Term (Land)" is defined in Section 2.3 of the
Master Lease.
"Basic Rent" means, for each Property, the sum of (i) the Lender Basic
Rent and (ii) the Lessor Basic Rent, calculated as of the applicable date on
which Basic Rent is due.
"Basic Rent Payment Date" means the last day of each Interest Period
then in effect.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Bill of Sale" is defined in Section 6.1(j) of the
Participation Agreement.
"Break Costs" means an amount equal to the amount, if any, required to
compensate any Participant for any additional losses (including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by such Participant to fund its
obligations under the Operative Documents) it may reasonably incur as a
-6-
58
Appendix A
result of (v) the Lessee's payment of Rent other than on a Basic Rent Payment
Date, (x) any Advance not being made on the date specified therefor in the
applicable Funding Request (other than as a result of a breach by such
Participant, as the case may be, of its obligation under Section 3.1, 3.2 or
3.3, as the case may be, of the Participation Agreement to make Advances to the
Lessee or make Lessor Amounts or Loans available to the Lessor), (y) the
Lessee's payment of the Lease Balance on any date other than a Basic Rent
Payment Date, or (z) as a result of any conversion of the Eurodollar Rate in
accordance with Section 13.7 of the Participation Agreement. A statement as to
the amount of such loss, cost or expense, prepared in good faith and in
reasonable detail and submitted by such Participant, as the case may be, to the
Lessee, shall be presumed correct and binding on the Lessee absent demonstrable
error.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York or San Francisco, California are
authorized or required by law to close, except that, when used in connection
with a Eurodollar Loan or Eurodollar Lessor Amount, such day shall also be a day
on which dealings between banks are carried on in U.S. dollar deposits in
London, England, San Francisco, California and New York, New York.
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" means the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Casualty" means any damage or destruction of all or any portion of a
Property as a result of a fire or other casualty.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. SectionSection 9601 et.
seq., as amended by the Superfund Amendments and Reauthorization
Act of 1986, as otherwise amended or modified from time to time,
or any successor statute thereto.
"Certifying Party" is defined in Section 22.1 of the Master
Lease.
"Claims" means any and all obligations, liabilities, losses,
actions, suits, judgments, penalties, fines, claims, demands,
-7-
59
Appendix A
settlements, costs and expenses (including, without limitation, reasonable legal
fees and expenses) of any nature whatsoever.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.
"Commitment" means (i) as to the Lender, the Loan Commitment, and (ii)
as to the Lessor, the Lessor Commitment.
"Commitment Letter" means that certain Commitment Letter, dated as of
November 25, 1996, among the Lessee, the Lessor and the Lender.
"Commitment Percentage" means, with respect to any Participant, the
percentage set forth such Participant's name under the heading "Commitment
Percentage" on Schedule I to the Participation Agreement, as such Schedule may
be amended, supplemented, amended and restated or otherwise modified from time
to time.
"Commitment Period" means, with respect to each Property, the period
from and including the Acquisition Date to but not including the date occurring
on the earlier of (i) the Commitment Termination Date, (ii) the date on which
the sum of the Loan Balance and the Lessor Balance equals the Maximum Commitment
Amount, subject to Section 4.3 of the Participation Agreement, (iii) the date of
Completion of the applicable Construction and (iv) the date on which the
Commitments shall terminate as provided in the Operative Documents; provided,
however, that in the event that any Commitment Period would end after the Final
Commitment Termination Date, such Commitment Period shall end on such Final
Commitment Termination Date.
"Commitment Termination Date" means the date specified in a written
notice from the Lessee to the Lessor and Lender as the Commitment Termination
Date.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Lessee within the meaning
of Section 4001 of ERISA or is part of a group which includes the Lessee and
which is treated as a single employer under Section 414 of the Code.
"Completion" means, with respect to any Property, such time as the
conditions set forth in Section 6.3 of the Participation Agreement are satisfied
with respect thereto.
"Completion Certificate" is defined in Section 6.3(a) of the
Participation Agreement.
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"Completion Date" means, with respect to any Property, the date
determined under Section 6.3 of the Participation Agreement.
"Condemnation" means, with respect to any Property, any condemnation,
requisition, confiscation, seizure or other taking or sale of the use, access,
occupancy, easement rights or title to such Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including an action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, such
Property or alter the pedestrian or vehicular traffic flow to such Property so
as to result in change in access to such Property, or by or on account of an
eviction by paramount title or any transfer made in lieu of any such proceeding
or action. A "Condemnation" shall be deemed to have occurred on the earliest of
the dates that use, occupancy or title vests in the condemning authority.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Lessee in
its consolidated financial statements if such statements were prepared as of
such date.
"Consolidated Tangible Net Worth" means at any date the consolidated
stockholders' equity of the Lessee and its Consolidated Subsidiaries less their
consolidated Intangible Assets, all determined as of such date. For purposes of
this definition, "Intangible Assets" means the amount (to the extent reflected
in determining such consolidated stockholders' equity) of (i) all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to January 29, 1995 in the book value
of any asset owned by the Lessee or a Consolidated Subsidiary, and (ii) all
unamortized debt discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, anticipated future benefit of
tax loss carry-forwards, copyrights, organization or developmental expenses and
other intangible assets.
"Construction" means, with respect to any Property, the construction and
installation of all Improvements thereon contemplated by the Plans and
Specifications applicable to such Property.
"Construction Agency Agreement" means the Construction
Agency Agreement, dated as of December 27, 1996, between the
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Lessor and the Lender, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Construction Agency Agreement Assignment" means the Construction Agency
Agreement Assignment, dated as of December 27, 1996, made by the Lessor, as
assignor, in favor of the Lender, as assignee, as the same may be amended,
supplemented, amended and restated or otherwise modified from
time to time.
"Construction Agency Agreement Default" means any event or condition
which, with the lapse of time or the giving of notice, or both, would constitute
a Construction Agency Agreement Event of Default.
"Construction Agency Agreement Event of Default" means a "Construction
Agency Agreement Event of Default" as defined in Section 5.1 of the Construction
Agency Agreement.
"Construction Agency Agreement Supplement" means any duly executed and
delivered Supplement to the Construction Agency Agreement substantially in the
form attached to the Construction Agency Agreement as Exhibit A thereto.
"Construction Agent" means the Lessee, as construction agent under the
Construction Agency Agreement.
"Construction Costs" means the fees, expenses, costs and other items
related to the development and construction of the Properties and specified
below:
(a) the costs of development, architectural and engineering
services related to the Properties, including the costs of preparation
of studies, surveys, reports, tests, plans and specifications;
(b) the costs of legal, accounting and other services
related to the Properties and other improvements;
(c) the fees and charges incurred in connection with securing all
Governmental Actions required to be taken, given or obtained in
connection with the development, construction, ownership, financing,
maintenance or operation of the Properties;
(d) any title fees, premiums and escrow costs and other expenses
relating to title insurance and the closings contemplated by the
Operative Documents;
(e) all expenses relating to all Environmental Audits;
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(f) fees and other expenses relating to Appraisals;
(g) the costs incurred in connection with the acquisition,
construction, improvement, rehabilitation or extension of the
Improvements comprising a part of the Properties and the provision of
the necessary services and utilities thereto;
(h) interest on the Loans and Yield on the Lessor
Amounts during the Construction Period in respect to each
Property;
(i) the Fees of the Lessor and the Lender;
(j) any sales, use, property, real or personal,
tangible or intangible taxes incurred in connection with the
Properties;
(k) any other items included in the construction
budget;
(l) any other costs and expenses incurred in
connection with the acquisition, construction, development
and equipping of the Properties; and
(m) such other items as the Participants may
reasonably approve in writing.
"Construction Documents" is defined in Section 2.7 of the Construction
Agency Agreement.
"Construction Documents Assignment" means the Construction Documents
Assignment, dated as of December 27, 1996, made by the Construction Agent in
favor of the Lessor and delivered pursuant to the Construction Agency Agreement,
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Construction Period" means, with respect to any Property, the period
commencing on the commencement of construction on such Property and ending on
the Completion Date for such Property.
"Construction Period Property" means, at any date of determination, any
Property as to which the Construction Period has commenced but not ended on or
prior to such date.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any
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agreement, instrument or undertaking to which such Person is a party or by which
it or any of its property is bound.
"CPS" is defined in the first recital to the Participation
Agreement.
"Deed" means a quitclaim, grant or special warranty deed, as applicable,
with respect to the real property comprising the applicable Property, in
conformity with Applicable Law and appropriate for recording with the applicable
Governmental Authorities, conveying fee simple title to such real property to
the Lessor, subject only to Permitted Exceptions.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Deficiency Collateral" is defined in Section 14.1 of the
Participation Agreement.
"Deficiency Date" is defined in Section 14.1 of the
Participation Agreement.
"Documentation Date" is defined in Section 2.1 of the
Participation Agreement.
"Dollars" and "$" mean dollars in lawful currency of the
United States of America.
"End of the Term Report" is defined in Section 13.2(a) of
the Participation Agreement.
"Environmental Audit" means, with respect to each Property, a Phase One
environmental site assessment (the scope and performance of which meets or
exceeds the then most current ASTM Standard Practice E1527 for Environmental
Site Assessments: Phase One Environmental Site Assessment Process) of such
Property.
"Environmental Laws" means any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes or decrees of any Governmental Authority or other Requirement
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment or
the use, storage, handling, disposal, transport, treatment or generation of
Hazardous Materials, as now or may at any time be in effect during the Lease
Term, including CERCLA, RCRA, the Clean Air Act, 42 USC Section 7401 et seq.,
the Toxic
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Substances Control Act 15 USC Section 2601 et seq. and any rules, regulations
and guidance documents promulgated thereunder.
"Environmental Violation" means, with respect to any Property, any
activity, occurrence or condition that violates or results in non-compliance
with any Hazardous Materials Law.
"Equipment" means equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired by the Lessor using the proceeds of the Loans and/or the
Lessor Amounts and now or subsequently attached to, contained in or used or
usable in any way in connection with any operation or letting of a Property,
including but without limiting the generality of the foregoing, all screens,
awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm
doors and windows, shelving, display cases, counters, furniture and furnishings,
heating, electrical, switch gear, uninterrupted power supply, and mechanical
equipment, lighting, switchboards, plumbing, ventilation, air conditioning and
air-cooling apparatus, refrigerating, and incinerating equipment, escalators,
generators, elevators, loading and unloading equipment and systems, stoves,
ranges, laundry equipment, cleaning systems (including window cleaning
apparatus), telephones, communications systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire prevention
and extinguishing apparatus and materials, security systems, motors, engines,
machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of
every kind and description.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means, with respect to the Lessee, the Lessee and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Lessee, are treated as a single employer under Section 414 of the Code.
"Estimated Improvement Costs" means, with respect to any Property as of
the related Acquisition Date, an amount equal to the aggregate amount which the
Construction Agent in good faith expects to be expended in order to achieve
Completion with respect to Improvements for such Property, including (i)
Construction Costs, and (ii) Transaction Expenses, in each case allocated with
respect to such Property during its Construction Period.
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"Eurodollar Loan(s)/Lessor Amount(s)" means a Loan or Lessor Amount, as
the case may be, bearing interest at the Adjusted Eurodollar Rate.
"Eurodollar Reserve Percentage" means that percentage (expressed as a
decimal) which is in effect on any day that a reserve percentage is prescribed
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office of any
Bank to United States residents). The London Interbank Offered Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means a Lease Event of Default.
"Excess Casualty/Condemnation Proceeds" means the excess, if any, of (x)
the aggregate of all awards, compensation or insurance proceeds payable in
connection with a Casualty or Condemnation minus (y) the Property Balance paid
by the Lessee pursuant to Article XV of the Master Lease with respect to such
Casualty or Condemnation.
"Excess Sales Proceeds" means the excess, if any, of (x) the aggregate
of all proceeds received by the Lessor in connection with the Lessee's exercise
of the Remarketing Option under Article XX of the Master Lease, less all fees,
costs and expenses of the Lessor in connection with the exercise of its rights
and remedies thereunder, minus (y) the Lease Balance.
"Expiration Date" means, with respect to the Master Lease, unless the
Master Lease shall have been earlier terminated in accordance with the
provisions of the Master Lease or any of the other Operative Documents, the
Maturity Date.
"Expiration Date Purchase Obligation" means the Lessee's obligation,
pursuant to Section 20.1 of the Master Lease, to purchase all (but not less than
all) of the Properties on the Expiration Date.
"Extension Conditions" is defined in Section 11.2 of the
Participation Agreement.
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"Fair Market Sales Value" means, with respect to any Property, the
amount, which in any event shall not be less than zero, that would be paid in
cash in an arm's-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, for the ownership of such Property. The Fair
Market Sales Value of any Property shall be determined based on the assumption
that, except for purposes of Article XVI of the Master Lease and Section 13.2 of
the Participation Agreement, such Property is in the condition and state of
repair required under Section 9.1 of the Master Lease and the Lessee is in
compliance with the other requirements of the Operative Documents relating to
the condition of the Property.
"Federal Funds Rate" means, for any day or period, as applicable, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) at
which Federal funds in the amount equal to the principal amount of the related
Loans or Lessor Amounts are offered in the interbank market to Union Bank of
Switzerland, New York Branch, as of 11:00 a.m., New York time, on such day for
such day or for such period, as applicable.
"Fees" means, collectively, the fees set forth in the Commitment Letter
paid or payable to the Lessor and/or the Lender.
"Final Commitment Termination Date" means December 27, 2003, the seventh
year anniversary of the Documentation Date, unless the Maturity Date shall have
been extended pursuant to Section 2.8 of the Loan Agreement and Section 11.1 of
the Participation Agreement, in which case, the "Final Commitment Termination
Date" shall mean December 27, 2006, the tenth year anniversary of the
Documentation Date.
"Fixed Charge Coverage Ratio" means the following (as calculated on a
rolling four quarter basis):
(Consolidated Net Income + Interest Expense + Taxes
+ Depreciation + Amortization + Write Off of Goodwill
related to an Acquisition - Cash - Short Term Investments)
(Interest Expense + Total Rent Expense)
"Force Majeure Event" means, with respect to the Construction of any
Property, any event (the existence of which was not known and could not have
been discovered through the exercise of reasonable due diligence by the Lessee
or the Construction Agent prior to the Acquisition Date with respect to such
Property) beyond the control of the Lessee and the Construction Agent,
including, but not limited to, strikes,
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lockouts, adverse soil conditions, acts of God, adverse weather conditions,
inability to obtain labor or materials, government activities, civil commotion
and enemy action; but excluding any event, cause or condition that results from
the Construction Agent's financial condition or failure to pay or any event,
cause or condition which could have been avoided or which could be remedied
through the exercise of commercially reasonable efforts or the commercially
reasonable expenditure of funds.
"F.R.S. Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Funding Date" means the date in each month on which an Advance is made.
In the event that any Funding Date shall not fall on a Business Day, then the
Funding Date for such calendar month in which such event occurs shall be the
immediately succeeding Business Day.
"Funding Office" means the office of each Participant identified on
Schedule II to the Participation Agreement as its Funding Office.
"Funding Request" is defined in Section 3.4(a) of the
Participation Agreement.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those which, in accordance with paragraph C hereof, are to be
used in making the calculations for purposes of determining compliance with the
terms of the Operative Documents.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the use,
occupancy, zoning and operation of any Property as provided in the Master Lease.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and having jurisdiction over any Property or the Operative
Documents, as applicable.
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"Gross Remarketing Proceeds" is defined in Section 20.1(m)
of the Master Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking that (a) directly or indirectly (i) produces, generates or creates
any Hazardous Material; (ii) causes or results in (or threatens to cause or
result in) the Release of any Hazardous Material into the environment (including
air, water vapor, surface water, groundwater, drinking water, land (including
surface or subsurface), plant, aquatic and animal life); or (iii) involves the
containment or storage of any Hazardous Material; and (b) is regulated as
hazardous waste treatment, storage or disposal within the meaning of any
Hazardous Materials Law.
"Hazardous Materials" means any hazardous, toxic or dangerous materials,
substances, chemicals, wastes or pollutants that from time to time are defined
by or pursuant to or are regulated under any Hazardous Materials Laws, including
asbestos, polychlorinated biphenyls, petroleum, petroleum derivatives or
by-products, other hydrocarbons, urea formaldehyde and any material, substance,
pollutant or waste that is defined as a hazardous waste under RCRA or defined as
a hazardous substance under CERCLA.
"Hazardous Materials Laws" means all laws, statutes, rules, regulations
or ordinances of Governmental Authority, now or hereafter in effect, relating to
the generation, recycling, use, reuse, sale, storage, handling, transport,
treatment or disposal of Hazardous Materials, including CERCLA, RCRA, the Clean
Air Act, 42 U.S.C. Section 7401, et seq. ("CAA"), the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq. ("TSCA") and any rules, regulations and
guidance documents promulgated or published thereunder, and any statute, law,
rule, regulation or ordinance of Governmental Authority now or hereafter in
effect that relates to public health, safety or the discharge, emission or
disposal of Hazardous Materials in or to air, water, land or groundwater, to the
withdrawal or use of groundwater, to the use, handling or disposal of asbestos,
polychlorinated biphenyls, petroleum, petroleum derivatives or by-products,
other hydrocarbons or urea formaldehyde, to the treatment, storage, disposal or
management of Hazardous Materials, to exposure to Hazardous Materials or to the
transportation, storage, disposal, management or release of gaseous or liquid
substances, and any regulation, order, injunction, judgment, declaration, notice
or demand issued thereunder.
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"Impositions" means any and all liabilities, losses, expenses and costs
of any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever imposed by Governmental
Authority ("Taxes") (including, without limitation, (i) real and personal
property taxes, including personal property taxes on any property covered by any
Lease that is classified by Governmental Authorities as personal property, and
real estate or ad valorem taxes in the nature of property taxes; (ii) sales
taxes, use taxes and other similar taxes (including rent taxes and intangibles
taxes); (iii) any excise taxes; (iv) real estate transfer taxes, conveyance
taxes, mortgage taxes, intangible taxes, stamp taxes and documentary recording
taxes and fees; (v) taxes that are or are in the nature of franchise, income,
value added, gross receipts, privilege and doing business taxes, license and
registration fees; and (vi) assessments on any Property, including all
assessments for public improvements or benefits, whether or not such
improvements are commenced or completed within the Lease Term), and in each case
all interest, additions to tax and penalties thereon, which at any time may be
levied, assessed or imposed by any Federal, state or local authority upon or
with respect to (a) any Tax Indemnitee, any Property or any part thereof or
interest therein, or the Lessee or any sublessee or user of any Property; (b)
the financing, refinancing, demolition, construction, substitution, subleasing,
assignment, control, condition, occupancy, servicing, maintenance, repair,
ownership, possession, purchase, rental, lease, activity conducted on, delivery,
insuring, use, operation, improvement, transfer, return or other disposition of
such Property or any part thereof or interest therein; (c) the Notes or interest
therein or transfer thereof; (d) the rentals, receipts or earnings arising from
any Property or any part thereof or interest therein; (e) the Operative
Documents or any payment made or accrued pursuant thereto; (f) the income or
other proceeds received with respect to any Property or any part thereof or
interest therein upon the sale or disposition thereof; (g) any contract
(including the Construction Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Notes; or (i) otherwise in connection with the
transactions contemplated by the Operative Documents. Impositions for any given
tax year shall exclude assessment installments that are not due and payable
during such tax year.
Notwithstanding anything in the first paragraph of this definition
(except as provided in the final paragraph of this definition) the term
"Imposition" shall not mean or include:
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(i) Taxes and impositions (other than Taxes that are, or are in
the nature of, sales, use, rental, transfer or property taxes) that are
imposed by any Governmental Authority and that are based upon or
measured by or with respect to the gross or net income or gross or net
receipts (including, without limitation, any minimum taxes, income or
capital gains taxes, withholding taxes or taxes on, measured by or with
respect to or in the nature of capital, net worth, excess profits, items
of tax preference, capital stock, franchise, gift, succession, estate,
business privilege or doing business taxes or any similar taxes or taxes
in lieu thereof) and any interest, additions to tax, penalties or other
charges in respect thereof and any withholding tax imposed as a
collection device for, in lieu of, or otherwise related to the foregoing
without regard to whether such tax is required to be collected by Lessee
and without regard to whether Lessee would be liable for such
withholding tax in the event it failed to so withhold; provided that
this clause (i) shall not be interpreted to prevent a payment from being
made on an After Tax Basis if such payment is otherwise required to be
so made;
(ii) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs, or relates
to a period, after the termination of the Master Lease (but not any Tax
or imposition that relates to any period prior to the termination of the
Master Lease with respect to the Property to which such Imposition
relates);
(iii) any Tax or imposition for so long as, but only for so long
as, it is being contested in accordance with the provisions of Section
13.5(b) of the Participation Agreement, provided that the foregoing
shall not limit any Lessee's obligation under Section 13.5(b) of the
Participation Agreement to advance to such Tax Indemnitee amounts with
respect to Taxes that are being contested in accordance with Section
13.5(b) of the Participation Agreement or any expenses incurred by such
Tax Indemnitee in connection with such contest;
(iv) any interest, additions to tax or penalties imposed on a Tax
Indemnitee as a result of a breach by such Tax Indemnitee of its
obligations under Section 13.5(e) of the Participation Agreement as a
result of a Tax Indemnitee's failure to file any return or other
documents timely and as prescribed by applicable law; provided that this
clause (iv) shall not apply (x) if such interest or penalties arise as a
result of a position taken (or requested to be taken) by the Lessee in a
contest controlled
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by the Lessee under Section 13.5(b) of the Participation Agreement or
(y) if such failure is attributable to a failure by the Lessee to
fulfill its obligations under the Master Lease with respect to any such
return;
(v) any Taxes or impositions imposed upon a Tax Indemnitee with
respect to any voluntary transfer, sale, financing or other voluntary
disposition of any interest in any Property or any part thereof, or any
interest therein or any interest or obligation under the Operative
Documents or from any sale, assignment, transfer or other disposition of
any interest in a Tax Indemnitee or any Affiliate thereof, (other than
any transfer pursuant to the terms of the Master Lease in connection
with (1) the exercise by the Lessee of its Purchase Option or any
termination option or other purchase of any Property by any Lessee, (2)
the occurrence of an Event of Default, (3) a Casualty or Condemnation
affecting any Property, or (4) any sublease, modification or addition to
any Property by the Lessee);
(vi) any Taxes or impositions imposed on a Tax Indemnitee, to the
extent such Tax Indemnitee actually receives a credit (or otherwise has
a reduction in a liability for Taxes) in respect thereof against Taxes
that are not indemnified under the Participation Agreement (but only to
the extent such credit is not taken into account in calculating the
indemnity payment on an After Tax Basis);
(vii) Taxes imposed on or with respect to or payable by any Tax
Indemnitee based on, measured by or imposed with respect to any fees or
rents received by such Tax Indemnitee;
(viii) any Taxes imposed against or payable by a Tax Indemnitee
resulting from, or that would not have been imposed but for, the gross
negligence or willful misconduct of such Tax Indemnitee;
(ix) Taxes imposed on or payable by a Tax Indemnitee to the
extent such Taxes result from or would not have been imposed but for, a
breach by the Tax Indemnitee or any Affiliate thereof of any
representations, warranties or covenants set forth in the Operative
Documents (unless such breach is directly caused by any Lessee's breach
of its representations, warranties or covenants set forth in the
Operative Documents);
(x) Taxes to the extent resulting from such Tax Indemnitee's
failure to comply with the provisions of
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Section 13.5(b) of the Participation Agreement, which failure precludes
or materially adversely affects the ability to conduct a contest
pursuant to Section 13.5(b) of the Participation Agreement (unless such
failure is caused by the Lessee's breach of its obligations);
(xi) with respect to each Property, Taxes which are included in
applicable Property Improvements Cost or applicable Land Acquisition
Cost if and to the extent actually paid;
(xii) Taxes that would have been imposed in the absence of the
transactions contemplated by the Operative Documents and Taxes imposed
on or with respect to or payable as a result of activities of a Tax
Indemnitee or Affiliate thereof unrelated to the transactions
contemplated by the Operative Documents or not specifically authorized
by Lessee or the Operative Documents;
(xiii) Taxes imposed on or with respect to or payable by a Tax
Indemnitee resulting from, or that would not have been imposed but for
the existence of, any Lessor Lien created by or through such Tax
Indemnitee or an Affiliate thereof and not caused by acts or omissions
of any Lessee, unless required to be removed by any Lessee;
(xiv) Any Tax imposed against or payable by a Tax Indemnitee to
the extent that the amount of such Tax exceeds the amount of such Tax
that would have been imposed against or payable by such Tax Indemnitee
(or, if less, that would have been subject to indemnification under
Section 13.5 of the Participation Agreement) if such Tax Indemnitee were
not a direct or indirect successor, transferee or assign of one of the
original Tax Indemnitees; provided, however, that this exclusion (xiv)
shall not apply if such direct or indirect successor, transferee or
assign acquired its interest as a result of a transfer permitted under
the Operative Documents pursuant to and while an Event of Default shall
have occurred and is continuing;
(xv) Taxes imposed on or with respect to or payable by a Tax
Indemnitee that would not have been imposed but for an amendment,
supplement, modification, consent or waiver to any Operative Document
not initiated, requested or consented to by any Lessee unless such
amendment, supplement, modification, consent or waiver (A) arises due
to, or in connection with there having occurred, an Event of Default or
(B) is required by the terms of the Operative Documents
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or is executed in connection with any amendment to the Operative
Documents required by law;
(xvi) Taxes in the nature of intangibles, stamp, documentary or
similar Taxes;
(xvii) Taxes imposed on or with respect to or payable by a Tax
Indemnitee or any Affiliate because such Tax Indemnitee or any Affiliate
thereof is not a United States person within the meaning of Section
7701(a)(30) of the Code; and
(xviii) Any tax imposed by its express terms in lieu of or in
substitution for a Tax not subject to indemnity pursuant to the
provisions of Section 13.5 of the Participation Agreement.
Notwithstanding the foregoing, the exclusions from the definition of Impositions
set forth in clauses (i), (ii), (v), (vii), (xii), (xvi) and (xviii) (to the
extent that any such tax is imposed by its express terms in lieu of or in
substitution for a Tax set forth in clauses (i), (ii), (v), (vii), (xii) and
(xvi)) above shall not apply (but the other exclusions shall apply) to any Taxes
or any increase in Taxes imposed on a Tax Indemnitee net of any decrease in
taxes realized by such Tax Indemnitee, to the extent that such tax increase or
decrease would not have occurred if on each Funding Date the Lessor had advanced
funds to the Lessee in the form of a loan secured by the applicable Property in
an amount equal to the applicable Property Improvement Cost funded on such
Funding Date, with debt service for such loan equal to the Basic Rent payable on
each Rent Payment Date and a principal balance at the maturity of such loan in
an amount equal to the then outstanding amount of the Advances at the end of the
term of the Master Lease.
For purposes of determining the exclusion from the definition of
Impositions set forth in clause (i), an income tax shall include, without
limitation, any tax imposed under the United States Internal Revenue Code, as
well as any tax that could qualify as an "income tax" under United States
Treasury Regulation Section 1.901-2.
"Improvements" means all buildings, structures, Fixtures, Equipment, and
other improvements of every kind existing at any time and from time to time and
constructed pursuant to the Construction Agency Agreement, or otherwise
purchased, with amounts advanced by the Participants pursuant to the
Participation Agreement, on or under any Land, or any parcel of Land to be
acquired pursuant to the terms of the Operative
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Documents, together with any and all appurtenances to such buildings, structures
or improvements, including sidewalks, utility pipes, conduits and lines, parking
areas and roadways, and including all Modifications and other additions to or
changes in the Improvements at any time.
"Improvements Budget" means, with respect to each Property, the budget
for the Construction of Improvements on such Property as agreed to by the Lessor
and the Lessee on a per square foot basis.
"Indebtedness" means, of any Person at any date, (i) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), (ii) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (iii) all obligations of such Person as lessee under Capital
Leases, (iv) all obligations of such Person in respect of acceptances issued or
created for the account of such Person, (v) all liabilities secured by any Lien
on any property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof, (vi) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (vii) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (viii) all obligations of
such Person in respect of any guaranty, reimbursement or similar obligation,
(ix) all obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
agreements, and (x) all contingent or non-contingent obligations of such Person
in respect of letters of credit issued or bankers' acceptances created for the
account of such Person.
"Indemnitee" means each of the Lessor, the Lender, their respective
Affiliates and their respective successors, assigns, directors, shareholders,
partners, officers, employees and agents.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
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"Insurance Requirements" means all terms and conditions of any insurance
policy either required by the Master Lease to be maintained by the Lessee or
required by the Construction Agency Agreement to be maintained by the
Construction Agent, and all requirements of the issuer of any such policy.
"Interest Period" means,
(a) with respect to any Loan or Lessor Amount advanced
during the Commitment Period;
(i) initially, the period commencing on the Funding Date
with respect to such Loan or Lessor Amount and ending on the day
preceding the Payment Set Date (determined in accordance with
clause (i) of the definition thereof); and
(ii) thereafter, each period commencing on the day after
the last day of the preceding Interest Period and ending on the
day preceding the next succeeding Payment Set Date (determined in
accordance with clause (ii) of the definition thereof); provided,
however, that the Interest Period applicable to Advances made (x)
on the twentieth day of the month following the commencement of
such period shall end on the day preceding the twentieth day of
the month following two months thereafter and (y) on the
twentieth day of the month following two months after the
commencement of such period shall end on the day preceding the
twentieth day of the month following one month thereafter and
(b) with respect to any Loan or Lessor Amount advanced
outstanding during the Basic Lease Term:
(i) initially, the period commencing on the day the Lease
Term begins and ending on the day preceding the first twentieth
day of the month of the Lease Term; and
(ii) thereafter, each period commencing on the day after
the last day of the preceding Interest Period applicable to such
Loan or Lessor Amount and ending on the day preceding the date
which is three months thereafter.
The foregoing provisions relating to Interest Periods are subject to the
following:
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(x) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business
Day;
(y) any Interest Period that would otherwise extend beyond the
Commitment Period with respect to any Property shall end on the last day
of the Commitment Period with respect to such Property; and
(z) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
"Land" means each parcel of real property described on Schedule I to any
Lease Supplement, and includes all Appurtenant Rights attached thereto.
"Land Acquisition Cost" means the amount of the Advance made available
to the Construction Agent for the purpose of acquiring any portion of the Land,
developing the infrastructure related to the Land, including without limitation,
the filing and processing of applications for government or regulatory permits,
authorizations, entitlements or approvals and payment of fees by any
Governmental Authority and paying the Transaction Expenses relating to such
funding and acquisition, as such amount is set forth in the Funding Request
relating to the acquisition of such Property.
"Lease" means, collectively, the Master Lease and each Lease
Supplement.
"Lease Balance" means, as of any date of determination, an amount equal
to the sum of the Loan Balance and the Lessor Balance and all other amounts
owing by the Lessee under the Operative Documents (including without limitation,
accrued and unpaid Rent and Supplemental Rent, if any).
"Lease Balance (Improvements)" means the aggregate Lease
Balance for the Improvements only.
"Lease Balance (Land)" means the aggregate Lease Balance for
the Land only.
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
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"Lease Event of Default" means a "Lease Event of Default" as defined in
Section 16.1 of the Master Lease.
"Lease Supplement" means each Lease Supplement, executed by the Lessee,
dated as of an Acquisition Date or a Funding Date and covering either (i) the
Land identified on Schedule I thereto or (ii) the Improvements on the Land (but
not such Land itself) identified on Schedule I thereto, substantially in the
form of Exhibit A-1 to the Master Lease (in the case of Land) or substantially
in the form of Exhibit A-2 to the Master Lease (in the case of Improvements), in
each case as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Lease Term" means the period commencing on the first day of the Basic
Lease Term and ending on the Expiration Date.
"Lender" means Union Bank of Switzerland, acting through its New York
Branch, together with its successors and assigns permitted pursuant to Section
12.1 of the Participation Agreement.
"Lender Basic Rent" means, as determined as of any Basic Rent Payment
Date, the interest due on the Loans, determined in accordance with Section 2.4
of the Loan Agreement and excluding any interest at the applicable Overdue Rate
on any installment of Basic Rent not paid when due and any fine, penalty,
interest or cost assessed or added under any agreement with a third party for
nonpayment or late payment of Basic Rent.
"Lessee" means Cisco Systems, Inc., a California corporation, as lessee
under the Lease, and its successors and assigns expressly permitted under the
Master Lease.
"Lessee Mortgage" is defined in the ninth recital to the Participation
Agreement, the provisions for which shall be contained in each Lease Supplement.
"Lessor" means UBS Mortgage Finance Inc., a New York corporation,
together with its successors and assigns permitted pursuant to Section 12.1 of
the Participation Agreement.
"Lessor Amount" is defined at Section 3.2 of the
Participation Agreement.
"Lessor Balance" means, as of any date of determination, an amount equal
to the sum of the outstanding Lessor Amounts together with all accrued and
unpaid Yield thereon.
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"Lessor Basic Rent" means the amount of accrued Yield due on the Lessor
Amounts, determined in accordance with Section 4.1 of the Participation
Agreement as of any Basic Rent Payment Date and excluding any interest at the
applicable Overdue Rate on any installment of Lessor Basic Rent not paid when
due and any fine, penalty, interest or cost assessed or added under any
agreement with a third party for nonpayment or late payment of Lessor Basic
Rent.
"Lessor Commitment" means the Commitment of the Lessor in the amount set
forth on Schedule I of the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Lessor Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Lessor's interest under the Master Lease and the Lease
Supplements to the extent the Master Lease and Lease Supplements are security
agreements.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against any Participant, whether or
not resulting from the transactions contemplated by the Operative Documents, (b)
any act or omission of any Participant which is not required or permitted by the
Operative Documents or is in violation of any of the terms of the Operative
Documents, (c) any claim against any Participant, with respect to Taxes or
Transaction Expenses against which the Lessee is not required to indemnify any
Participant, in its individual capacity, pursuant to Article IX of the
Participation Agreement or (d) any claim against the Lessor arising out of any
transfer by the Lessor of all or any portion of the interest of the Lessor in
the Properties or the Operative Documents other than the transfer of title to or
possession of the Properties by the Lessor pursuant to and in accordance with
the Master Lease, the Loan Agreement or the Participation Agreement or pursuant
to the exercise of the remedies set forth in Section 16.2 of the Master Lease.
"Lessor Margin" means, with respect to the Lessor Amounts, 0.20% per
annum and in the event the Lessee has suspended the Lender's right to enter into
repurchase agreements for the Additional Collateral pursuant to Section 2.8 of
the Pledge Agreement, the applicable margin during the period of suspension is
0.25% per annum.
"Lessor Mortgage" means, with respect to any Property, the Lease
Supplement for such Property and any and all other security instruments in
appropriate recordable form in each relevant
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jurisdiction sufficient to grant to the Lessor a first priority Lien on the
Lessee's interest in such Property.
"Leverage Ratio" means the following (as determined as of the most
recent fiscal year end):
Total Debt + [8 x minimum
annual rent expense for next year] - Cash - Short Term Investments
(Consolidated Net Income + Interest Expense + Taxes + Depreciation +
Amortization
+ Write Off of Goodwill related to acquisitions)
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any irrevocable license, conditional sale or other title retention
agreement, any lease in the nature thereof, or any other right of or arrangement
with any creditor to have its claim satisfied out of any specified property or
asset with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded, or the
filing of, or agreement to execute as "debtor", any financing or continuation
statement under the Uniform Commercial Code of any jurisdiction or any federal,
state or local lien imposed pursuant to any Environmental Law.
"Loan Agreement" means the Loan Agreement, dated as of December 27,
1996, between the Lessor, as borrower thereunder and the Lender, as the same may
be amended, supplemented, amended and restated or otherwise modified from time
to time.
"Loan Agreement Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute a Loan Agreement Event of
Default.
"Loan Agreement Event of Default" is defined in Section 5 of
the Loan Agreement.
"Loan Balance" means, as of any date of determination, an amount equal
to the sum of the outstanding Loans together with all accrued and unpaid
interest thereon pursuant to the Loan Agreement.
"Loan Commitment" means the Commitment of the Lender in the amount(s)
set forth on Schedule I to the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Loan Documents" means the Loan Agreement and the Notes.
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"Loan Margin" means, with respect to the Tranche A and Tranche B Loans
respectively, 0.10% per annum and 0.20% per annum, and in the event the Lessee
has suspended the Lender's right to enter into repurchase agreements for the
Additional Collateral pursuant to Section 2.8 of the Pledge Agreement, the
applicable margin during the period of suspension is 0.15% per annum for Tranche
A Loans and 0.25% per annum for Tranche B Loans.
"Loans" is defined in Section 2.1 of the Loan Agreement.
"London Interbank Offered Rate" means, as applicable to any Eurodollar
Loan, for an Interest Period of three (3) months, the rate per annum determined
by the Lender on the basis of the offered rate for deposits in Dollars of
amounts equal or comparable to the principal amount of such Eurodollar Loan
offered for a period comparable to such Interest Period, which rates appear on
the Reuters Screen LIBO Page as of 11:00 a.m., London time, two (2) Business
Days prior to the first day of each such Interest Period, provided that (i) if
more than one such offered rate appears on the Reuters Screen LIBO Page, the
"London Interbank Offered Rate" will be the arithmetic average (rounded upwards,
if necessary, to the next higher 1/100th of 1%) of such offered rates; and (ii)
if no such offered rates appear on such page, the "London Interbank Offered
Rate" for such Interest Period will be the rate per annum quoted by the Lender's
London Branch, two (2) Business Days prior to the first day of each such
Interest Period, for deposits in Dollars offered to leading banks for a period
comparable to such Interest Period in an amount comparable to the principal
amount of such Eurodollar Loan; provided, that in the event this rate is
unavailable for an Interest Period of three months, an Interest Period based on
a combination of one or two months interest periods shall be used.
"Marketing Period" means the period commencing on the date six months
prior to the Expiration Date and ending on the Expiration Date.
"Master Lease" means the Master Lease, dated as of December 27, 1996,
between the Lessor and the Lessee, as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
"Material" and "Materially" mean material to (i) the ability of a Person
to perform its obligations under the Operative Documents to which it is a party,
or (ii) the value or condition of any Property.
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"Material Adverse Effect" means a material adverse effect on (i) the
business, financial position or results of operations of the Lessee and its
Subsidiaries taken as a whole, (ii) the ability of the Lessee to perform any
material obligation under the Operative Documents or (iii) any of the rights and
remedies of the Lessor and/or the Lender under any of the Operative Documents.
"Maturity Date" means with respect to the Loans and the Lessor Amounts,
the seventh anniversary of the Documentation Date, unless such Maturity Date is
extended pursuant to Section 2.7 of the Loan Agreement and Section 11.2 of the
Participation Agreement, in which case, the "Maturity Date" shall mean the tenth
year anniversary of the Documentation Date.
"Maximum Commitment Amount" means an amount equal to
$250,000,000.00.
"Modifications" is defined in Section 10.1 of the Master
Lease.
"Moody's" means Moody's Investors Service, Inc. or any
successor or assignee of the business of such company in the
business of rating securities.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Proceeds" means all amounts received by the Lessor in connection
with any Casualty or Condemnation or any sale of the Property pursuant to the
Lessor's exercise of remedies under Section 16.2 of the Master Lease or the
Lessee's exercise of the Remarketing Option under Article XX of the Master
Lease, and all interest earned thereon, less any Impositions arising in
connection with such amounts, if any, and less the expense of claiming and
collecting such amounts, including all costs and expenses in connection
therewith for which the Lessor or any Participant is entitled to be reimbursed
pursuant to the Lease.
"Notes" is defined in Section 2.2 of the Loan Agreement.
"Obligations" means all obligations (monetary or otherwise) of the
Lessee arising under or in connection with any of the Operative Documents.
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"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Master Lease;
(c) each Lease Supplement;
(d) the Loan Agreement;
(e) each Note;
(f) the Assignment of Lease and Rent;
(g) each Deed;
(h) the Pledge Agreement;
(i) the Lessor Financing Statements;
(j) the Construction Agency Agreement;
(k) the Construction Agency Agreement Assignment;
(l) the Construction Documents Assignment;
(m) each Construction Agency Agreement Supplement; and
(n) the Purchase and Sale Agreement Assignment.
Operative Documents amended, modified or supplemented without Lessee's prior
written consent shall, to the extent of such amendment, modification or
supplement, not constitute Operative Documents for purposes of Lessee's
liability or obligations under any of the Operative Documents.
"Overdue Rate" means, with respect to any Loan or Lessor Amount, the
Base Rate or the Adjusted Eurodollar Rate then in effect for such Loan or Lessor
Amount, as the case may be, plus two percent (2%), or the highest rate permitted
by Applicable Law (if any), whichever is less. In the event that the Overdue
Rate collected by any Participant is in violation of any usury or similar law,
then the Overdue Rate shall be reduced to the extent necessary to cause the
Overdue Rate to comply with any usury or similar law.
"Participants" means, collectively, the Lender and the
Lessor, and their respective successors and assigns.
"Participation Agreement" means the Participation Agreement, dated as of
December 27, 1996, among the Lessee, as Lessee and as Construction Agent, the
Lessor and the Lender, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Participant Balance" means, with respect to any Participant as of any
date of determination: (i) with respect to the Lender, an amount equal to the
aggregate outstanding Loan of the Lender, together with all accrued and unpaid
interest thereon or (ii) with respect to the Lessor, an amount equal to the
aggregate outstanding Lessor Amounts of the Lessor, together with all amounts of
accrued and unpaid Yield thereon.
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"Payment Set Date" means (i) the first twentieth day of the month
immediately following the initial Advance and (ii) thereafter, the twentieth day
of the month following three months after the date determined under clause (i)
and each succeeding twentieth day of the third month thereafter.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, and any successor thereto.
"Permitted Property Liens" means, with respect to any
Property, any of the following:
(i) the respective rights and interests of the parties
to the Operative Documents as provided in the Operative
Documents;
(ii) the rights of any sublessee under a sublease permitted by
the terms of the Master Lease;
(iii) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 12.1 of the
Master Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers', warehousemen's
and other like Liens relating to the construction of the Improvements or
in connection with any Modifications or arising in the ordinary course
of business for amounts that either are not more than 60 days past due
or are being diligently contested in good faith by appropriate
proceedings, so long as such proceedings satisfy the conditions for the
continuation of proceedings to contest Taxes set forth in Section 12.1
of the Master Lease;
(v) Liens of any of the types referred to in clause (iv) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor have
been made), which bonding (or arrangements) shall comply with applicable
Requirements of Law, and has effectively stayed any execution or
enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such
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judgments or awards and satisfy the conditions for the
continuation of proceedings to contest set forth in Section
12.1 of the Master Lease;
(vii) easements, rights of way and other encumbrances on title to
real property pursuant to Section 11.2 of the Master Lease;
(viii) Lessor Liens; provided that the existence of such liens
shall not be deemed Lessee's authorization or recognition of such liens;
(ix) Liens created by the Lessee with the consent of the Lessor;
and
(x) Liens described on the title insurance policy delivered with
respect to such Property pursuant to Section 6.1(p) of the Participation
Agreement other than Liens described in clause (iv) or (vi) above that
are not removed within forty (40) days of their origination.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Authority or any other entity.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Plans and Specifications" means, with respect to each Property, the
plans and specifications for the Construction thereof, as more particularly
described in Schedule II to the Construction Agency Agreement Supplement
applicable to such
Property.
"Pledge Agreement" means the Pledge Agreement, dated as of December 27,
1996, made by the Lessee in favor of the Lender, as "Collateral Agent"
thereunder, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
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"Property" means each individual building to be constructed including
the Lessor's interest in all Land, as owner in fee simple, related thereto or,
in the case of Land on which no Improvements are to be constructed, each portion
of the Land, constituting a separate legal parcel.
"Property Balance" means, with respect to any Property, the sum of (i)
the Property Balance (Land) and (ii) the Property Balance (Improvements).
"Property Balance (Improvements)" means, with respect to any Property,
an amount equal to the outstanding principal amount of the Loans and Lessor
Amounts relating only to the Improvements in respect of such Property, and all
accrued and unpaid interest and Yield thereon, and any Supplemental Rent related
thereto.
"Property Balance (Land)" means, with respect to any Property, an amount
equal to the outstanding principal amount of the Loans and Lessor Amounts
relating only to the Land in respect of such Property, and all accrued and
unpaid interest and Yield thereon, and any Supplemental Rent related thereto.
"Property Cost" means, with respect to any Property, the sum of the Land
Acquisition Cost and the Property Improvement Costs for such Property and
pro-rata portion of the Commitment Fees.
"Property Improvement Costs" means, with respect to any Property, the
aggregate amount of Advances made to the Construction Agent for the purpose of
paying Construction Costs and the Transaction Expenses relating to such funding
and construction, as such amount is set forth in the Funding Request relating
thereto.
"Purchase and Sale Agreement" is defined in the first recital to the
Participation Agreement.
"Purchase and Sale Agreement Assignment" is defined in the second
recital to the Participation Agreement.
"Purchase Notice" means an irrevocable written notice by the Lessee
delivered to the Lessor pursuant to Section 18.1 of the Master Lease, notifying
the Lessor of the Lessee's intention to exercise its option pursuant to such
Section, and identifying the Property or Properties to be purchased in
accordance therewith and the proposed purchase date therefor.
"Purchase Option" means the Lessee's option to purchase a Property in
accordance with the provisions of Section 18.1 of the Master Lease.
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"Rating" means the respective rating or indication of each of the Rating
Agency applicable to the long-term senior unsecured non-credit enhanced debt of
the Lessee, as announced by the Rating Agency from time to time.
"Rating Agency" means S&P.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
Section6901 et seq., or as otherwise amended or modified or any successor
statute thereto.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Material.
"Remarketing Option" is defined in Section 20.1 of the
Master Lease.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent, in
each case payable under the Master Lease.
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the PBGC has by regulation waived
the applicable notice requirement, or as to which the PBGC has announced a
policy of not enforcing penalties for failure to satisfy applicable notice
requirements.
"Repurchase Agreement" is defined in Section 2.8 of the
Pledge Agreement.
"Required Modification" is defined in clause (i) of Section
10.1 of the Master Lease.
"Requirement of Law" means, as to any Person, (a) the partnership
agreement, certificate of incorporation, bylaws or other organizational or
governing documents of such Person, and (b) all statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of any Governmental
Authority affecting any Property, the Improvements or the demolition,
Construction, use or alteration thereof, whether now or hereafter enacted and in
force, including any that require repairs, modifications or alterations in or to
any Property or in any way limit the use and enjoyment thereof (including all
building, zoning and fire codes and the Americans with Disabilities Act of
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1990, 42 U.S.C. Section 1201 et. seq. and any other similar Federal, state or
local laws or ordinances and the regulations promulgated thereunder) and any
that may relate to environmental requirements (including all Hazardous Materials
Laws), and all permits, certificates of occupancy, licenses, authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments which are either of record or known to
the Lessee affecting any Property, the Appurtenant Rights and any easements,
licenses or other agreements entered into pursuant to Section 11.2 of the Master
Lease.
"Responsible Officer" means as to the Lessee, any duly
authorized officer thereof.
"Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"Scheduled Payment Date" means the Payment Set Date.
"Seller" is defined in the first recital to the
Participation Agreement.
"Shortfall Amount" means, as of the Expiration Date, an amount equal to
(i) the Lease Balance, minus (ii) the Loan Balance received by the Lessor from
the Lessee pursuant to Section 20.1(k) of the Master Lease, minus (iii) the
aggregate amount of the highest, binding, written, unconditional, irrevocable
offer to purchase each Property obtained by the Lessee pursuant to Section
20.1(f) of the Master Lease; provided, however, that if the sale of the
Properties to the Person submitting such offer is not consummated on or prior to
the Expiration Date, then the term "Shortfall Amount" shall mean an amount equal
to (i) the Lease Balance, minus (ii) the Loan Balance received by the Lessor
pursuant to Section 20.1(k) of the Master Lease.
"Significant Condemnation" means (a) a Condemnation that involves a
taking of the Lessor's entire title to the related Land, or (b) a Condemnation
that in the reasonable, good faith judgment of the Lender and the Lessor (i)
renders the related Property unsuitable for continued use as property of the
type of such Property immediately prior to such Condemnation, or (b) is
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so substantial in nature that restoration of the related property to
substantially its condition as it existed immediately prior to such Condemnation
would be impracticable or impossible.
"Significant Subsidiary" means any Subsidiary of the Lessee the assets
of which represent 5% or more of the total assets of the Lessee and the
Subsidiaries on a consolidated basis.
"Single Employer Plan" means any Plan which is not a Multiemployer Plan.
"Solvent" means with respect to any Person on a particular date, that on
such date (i) the fair value of the property of such Person (including, without
limitation, its Consolidated Subsidiaries) is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person (including, without limitation, its Consolidated Subsidiaries), (ii) the
present fair saleable value of the assets of such Person (including, without
limitation, its Consolidated Subsidiaries) is not less than the amount that will
be required to pay the probable liability of such Person (including, without
limitation, its Consolidated Subsidiaries) on its debts as they become absolute
and matured, (iii) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (iv) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property (including,
without limitation, the property of its Consolidated Subsidiaries and other
Subsidiaries) would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability taking
into account any subrogation and contribution rights.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the
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management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in the Operative Documents
shall refer to a Subsidiary or Subsidiaries of the Lessee.
"Supplemental Rent" means all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor
or any other Person under the Master Lease, or under any of the other Operative
Documents, including, without limitation, Fees, Break Costs, the Loan Balance,
the Shortfall Amount, amounts due pursuant to Section 13.2 of the Participation
Agreement and payments pursuant to Sections 15.2 of the Master Lease and
Articles XVIII and XX of the Master Lease.
"Tax Indemnitee" means the Lender, the Lessor, their respective
Affiliates and their respective successors, assigns, directors, shareholders,
partners, officers, employees and agents.
"Taxes" is defined in the definition of Impositions.
"Termination Date" is defined in Section 15.2 of the Master Lease.
"Termination Notice" is defined in Section 15.1 of the Master Lease.
"Tranche A Loan" is defined in Section 2.1 of the Loan Agreement.
"Tranche A Loan Balance" is the Loan Balance with respect to the Tranche
A Loans.
"Tranche A Loan Commitment" is the Tranche A Commitment specified in
Schedule I to the Participation Agreement.
"Tranche B Loan" is defined in Section 2.1 of the Loan Agreement.
"Tranche B Loan Balance" is the Loan Balance with respect to the Tranche
B Loans.
"Tranche B Loan Commitment" is the Tranche B Commitment specified in
Schedule I to the Participation Agreement.
"Transaction Expenses" means all costs, expenses and Impositions
incurred in connection with the preparation, execution and delivery of the
Operative Documents and the
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transactions contemplated by the Operative Documents including without
limitation:
(a) the reasonable fees, out-of-pocket expenses and disbursements
of Mayer, Brown & Platt, special counsel for the Lessor and the Lender,
and such other reasonable fees, expenses and disbursements of counsel
for the Lessee, in negotiating the terms of the Operative Documents and
the other transaction documents, preparing for the closing under, and
rendering opinions in connection with, such transactions and in
rendering other services customary for counsel representing parties to
transactions of the types involved in the transactions contemplated by
the Operative Documents;
(b) the reasonable fees, out-of-pocket expenses and disbursements
of any law firm or other external counsel of the Lessor, the Lessee and
the Lender in connection with (1) any amendment, supplement, waiver or
consent with respect to any Operative Documents requested or approved by
the Lessee and (2) any enforcement of any rights or remedies against the
Lessee in respect of the Operative Documents;
(c) any and all Taxes and fees incurred in recording, registering
or filing any Operative Document or any other transaction document, any
deed, declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Documents; and
(d) any brokerage commissions paid or payable by the Lessee.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code as
in effect in any applicable jurisdiction.
"Yield" is defined in Section 4.1(a) of the Participation Agreement.
"Yield Rate" means, at the option of the Lessee, (i) the Base Rate, or
(ii) the sum of the Adjusted Eurodollar Rate plus the Lessor Margin, as the case
may be. The Adjusted Eurodollar Rate may not be selected by the Lessee for any
period of less than one month without the prior written consent of the Lender.
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