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EXHIBIT 10.19
EXECUTION COPY
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AMENDED AND RESTATED
MASTER LEASE AND DEED OF TRUST
THIS DOCUMENT SECURES FUTURE ADVANCES
Dated as of February 9, 1999
between
SYMANTEC CORPORATION,
as the Lessee
and
SUMITOMO BANK LEASING AND FINANCE, INC.,
as the Lessor.
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This Master Lease and Deed of Trust is subject to a lien in favor of the Lenders
under the Loan Agreement. This Master Lease and Deed of Trust has been executed
in several counterparts. To the extent, if any, that this Master Lease and Deed
of Trust 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 and Deed of Trust may be created through the transfer or possession
of any counterpart other than the original counterpart containing the receipt
therefor executed by THE SUMITOMO BANK, LIMITED, LOS ANGELES BRANCH as the Agent
for the Lenders, on or following the signature page hereof.
This counterpart is the original executed chattel paper counterpart.
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Master Lease
MASTER LEASE AND DEED OF TRUST
THIS DOCUMENT SECURES FUTURE ADVANCES
THIS MASTER LEASE AND DEED OF TRUST (this "Master Lease"), dated as of
February 9, 1999, between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware
corporation, as the Lessor (in such capacity, the "Lessor"), and SYMANTEC
CORPORATION, a Delaware 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, the Lessor, the various financial
institutions (the "Lenders") as are or may from time to time become Lenders
under the Loan Agreement, The Bank of Nova Scotia, as Documentation Agent, and
The Sumitomo Bank, Limited, Los Angeles Branch, as Administrative Agent (in such
capacity, the "Agent") for the Lenders, the Lenders and the Lessor have agreed
to finance the Lessor's acquisition of each Property;
WHEREAS, on each Acquisition Date, the Lessor will purchase from one or
more third parties designated by the Lessee certain parcels of Land, together
with the Improvements thereon, if any;
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; and the rules of interpretation set forth in
Appendix A to this Master Lease shall apply to this Master Lease.
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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 II thereof, the
Lessor hereby agrees to accept pursuant to the terms of the Participation
Agreement delivery on the Closing the Land together with Improvements thereon,
if any, to be delivered by the seller thereof 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 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 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 Exhibit A hereto covering the Land and
all Improvements thereon, if any, to be acquired by the Lessor on such
Acquisition Date and all other Improvements which thereafter may be constructed
thereon this Master Lease, shall, without further act, constitute the
irrevocable acceptance by the Lessee of all of the Property 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
Property, together with any Improvements constructed on such Property pursuant
to the 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 the Acquisition Date.
2.3. Lease Term. The Base Lease Term (the "Base Lease Term") of this
Master Lease with respect to (i) City Center I commenced on the Acquisition Date
thereof and shall end on February 1, 2006, (ii) City Center II shall begin on
the Restructuring Date and shall end on February 1, 2006, and (iii) with respect
to any other Property shall begin on the Acquisition Date thereof, and shall end
on the date specified in the applicable Lease Supplement therefor, unless
earlier terminated in accordance with the provisions of this Master Lease and
the other Operative Documents.
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The Lease Term of this Master Lease with respect to City Center II shall
consist of an Interim Term and a Base Lease Term. The Interim Term for such
Improvements shall begin on (and include) the Restructuring Date and end on (but
exclude) the first day of the Base Lease Term for such Improvements. The Base
Lease Term for City Center II shall (i) begin on (and include) the earliest of
(x)Substantial Completion, (y) the first Business Day following the day on which
the Construction Commitment Amount has been fully funded and (z) the first
Business Day of the twelfth (12th) month following the Restructuring Date
(provided, that no Construction Agency Agreement Event of Default shall have
occurred and be continuing on such date) and (ii) end on the February 1, 2006,
unless earlier terminated in accordance with the provisions of this Master Lease
and the other Operative Documents.
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 and Property Legal Requirements. 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.
ARTICLE III
PAYMENT OF RENT
3.1. Rent.
(a) During the Base Lease Term for each Property, the Lessee
shall pay Basic Rent 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.
(b) The Lessee's inability or failure to take possession of all
or any portion of any Property when delivered by the Lessor, nor the
Lessor's inability or failure to deliver all or any portions of this
Property to the Lessee where attributable to any act or omission of the
Lessee or any act or omission of the Lessor, or for any other reason
whatsoever, shall delay or otherwise affect the Lessee's obligation to
pay Rent for such Property in accordance with the terms of this Master
Lease.
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3.2. Payment of Rent. Rent shall be paid absolutely net to the Lessor,
so that this Master Lease shall yield to the Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3. Supplemental Rent. The Lessee shall pay to the Lessor or the 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 shall have all rights, powers and remedies provided for herein or by law
or equity or otherwise in the case of nonpayment of Basic Rent. 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 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 shall be made by the Lessee
to the Agent prior to 11:00 a.m., San Francisco, California time to the Agent's
account specified on Schedule II to the Participation Agreement in funds
consisting of lawful currency of the United States of America which shall be
immediately available on the scheduled date when such payment shall be due,
unless such scheduled date shall not be a Business Day, in which case such
payment shall be made on the next succeeding Business Day. Payments received
after 12:00 p.m., San Francisco 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 Agent 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 (except that no notice shall be required if a
Lease Event of Default has occurred and is continuing), permit the Lessor and
its 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
and Property Legal Requirements, 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 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,
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Master Lease
waiver, extension, indulgence or other action or omission or breach in respect
of any obligation or liability of or by the Lessor or any Participant; (vi) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to the Lessee, the Lessor, any
Participant or any other Person, or any action taken with respect to this Master
Lease by any trustee or receiver of the Lessee, the Lessor, any Participant 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, any Participant, or any vendor, manufacturer, contractor of or for
any Property; (viii) any failure on the part of the Lessor to perform or comply
with any of the terms of this Master Lease (other than performance by 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; (xii) any restriction, prevention or curtailment of or
interference with the construction on or any use of any Property or any part
thereof; or (xiii) 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 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) to avail itself of any abatement,
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suspension, deferment, reduction, setoff, counterclaim or defense with respect
to any Rent. 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. Subject to Section 2.1(r) of the Participation
Agreement, the Lessee may sublease any Property or any portion thereof to any
Person; provided, however, that 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. 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.
ARTICLE VII
LESSEE ACKNOWLEDGMENTS
7.1. Condition of the Properties. THE LESSEE ACKNOWLEDGES AND AGREES
THAT IT IS LEASING EACH PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR
COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR OR THE LENDERS 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 AND PROPERTY LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE
HEREOF OR ON THE ACQUISITION DATE FOR SUCH PROPERTY. NONE OF THE LESSOR OR THE
LENDERS 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), VALUE, HABITABILITY,
USE, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF ANY PROPERTY (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART THEREOF) AND NONE
OF THE LESSOR OR THE LENDERS SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE FAILURE OF ANY
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PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY REQUIREMENT OF LAW OR PROPERTY
LEGAL REQUIREMENT.
7.2. Risk of Loss. 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 the Lessor shall in no event be
answerable or accountable 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. Each Property may be used in
all lawful manners consistent with the business of the Lessee and otherwise as
set forth in the applicable Appraisal. The Lessee shall pay, or cause to be
paid, all charges and costs required in connection with the use of the
Properties as contemplated by this Master Lease. The Lessee shall not commit or
permit any waste of the Properties or any part thereof.
8.3. Compliance with Requirements of Law, Property Legal Requirements
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), Property Legal Requirements 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.
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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 assign its rights under this
Master Lease in whole or in part to any Person but no such assignment shall
relieve the Lessee from any of its obligations hereunder.
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, Property Legal Requirements 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.
(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) 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,
Property Legal Requirement, Insurance Requirement, contract, agreement,
or covenant, condition or restriction in effect at any time during the
Lease Term.
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(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, subject to the Lessee's obligations
under Sections 8.3, 9.1(a), 10.1, 11.1, 14.1(e), 14.2 and 20.1.
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 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 or Property Legal Requirement (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) the Modification shall be done in a good and workmanlike
manner;
(iii) the Lessee shall comply in all material respects with all
Requirements of Law (including all Hazardous Materials Laws), Property
Legal Requirements and Insurance Requirements applicable to the
Modification, including the obtaining of all permits and certificates of
occupancy;
(iv) subject to the terms of Article XII relating to permitted
contests, the Lessee shall pay all costs and expenses and shall
discharge (or cause to be insured or bonded over) within sixty (60) days
after the same shall be filed (or otherwise become effective) any Liens
arising with respect to the Modification;
(v) such Modifications shall comply with Sections 8.3 and
9.1(a); and
(vi) the Lessee shall be required to obtain the prior written
approval of the Lessor, which approval shall not be unreasonably
withheld, and which shall be deemed to have
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been given if no response from the Lessor to the request for consent is
received by the Lessee within ten (10) days of the date of such request,
with respect to any alterations that shall Materially affect any
structural element of any Improvements.
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 Lessor and (z) are readily removable without impairing the
value, utility or remaining useful life of the applicable Property, shall be the
property of the Lessee and shall not be subject to this Master Lease. So long as
no Lease Event of Default has occurred and is continuing, 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
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 (directly or indirectly) by the Lessor or any Participant
pursuant to the Participation Agreement.
10.2. Notice to the Lessor. If the Lessee reasonably expects the cost of
any Modification to any Property to exceed $250,000.00, the Lessee shall deliver
to the Lessor a brief written narrative of the work to be performed in
connection with such Modification prior to making such Modification.
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), 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 Participants pursuant to the Loan Agreement or the
other
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Operative Documents, other than Permitted Liens and Liens on machinery,
equipment, general intangibles and other personal property not financed
by the proceeds of the Loans or Lessor Amounts.
(b) Nothing contained in this Master Lease shall be construed as
constituting the consent or request of the Lessor, expressed or implied,
to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT NONE OF THE LESSOR OR THE LENDERS 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 ANY 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 and subject to
the provisions of Articles VII, IX and X and Section 8.3 the Lessor hereby
consents in each instance to the following actions by the Lessee, in the name
and stead of the Lessor, 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; and (c) the execution of amendments to any covenants
and restrictions affecting any Property; 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 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 Property Legal Requirements (including, without
limitation, all applicable zoning, planning, building and subdivision
ordinances, all applicable restrictive covenants and all applicable
architectural approval requirements); (iv) all governmental consents or
approvals required prior to such grant, release, dedication,
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transfer, annexation or amendment have been obtained, 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 interest in this Master Lease as security for
indebtedness, in each such case in accordance with their terms, as though such
grant, release, dedication, transfer or amendment had not been effected and (vi)
the Lessee shall pay and perform any 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 Lessor
agrees to execute Lessor waiver forms and release of Lessor's 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. So long as no Event of Default shall have
occurred and be continuing, Lessee is hereby granted an irrevocable power of
attorney (coupled with an interest) to execute the types of documents,
instruments and agreement referred to in this Section 11.2. In addition, Lessor
covenants to cooperate and to execute promptly any documents requested by Lessee
under this Section 11.2.
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 Agent,
involve (A) any risk of criminal liability being imposed on the Lessor or any
Lender or (B) any risk of
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(1) foreclosure, forfeiture or loss of such Property, or sale of any Property or
any material part thereof, or nonpayment of Rent (2) civil liability being
imposed on the Lessor, any 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 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 Participants 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 combined single limit for bodily
injury or property damage, $5,000,000 per occurrence and aggregate. 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 name the
Lessor as additional insured. 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 may have in force.
(b) The Lessee shall in the construction of any Modifications
and the operation of the Properties, comply with the applicable workers'
compensation laws.
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13.2. Hazard and Other Insurance. During the Lease Term, the Lessee
shall keep, or cause to be kept, such Property insured against loss or damage by
fire, and other risks on terms and in amounts that are no less favorable than
insurance covering other similar properties owned by the Lessee or its
Affiliates and that are in accordance with normal industry practices, but at
least an amount sufficient to cover the replacement cost of the Improvements.
During the construction of any Improvements the Lessee shall also maintain or
cause to be maintained builders' risk insurance. All insurance proceeds in
respect of any loss or occurrence for which the proceeds related thereto are (i)
less than or equal to $500,000.00, in the absence of the occurrence and
continuance of an Event of Default, shall be adjusted by and paid to the Lessee
for application toward the reconstruction, repair or refurbishment of the
applicable Property and (ii) greater than $500,000.00, shall be adjusted by and
held by the Lessor for application in accordance with Article XIV.
13.3. Insurance Coverage.
(a) The Lessee shall furnish the Lessor and the Agent with
certificates showing the insurance required under Sections 13.1 and 13.2
to be in effect and naming the Lessor as additional insured with respect
to liability coverage (excluding worker's compensation insurance),
naming the Lessor and the Lessee as their interests may appear with
respect to property coverage and naming the Lessor as loss payee with
respect to property coverage and showing the mortgagee endorsement
required by Section 13.3(c) with respect to such coverage. All such
insurance shall be at the cost and expense of the Lessee. Such
certificates shall include a provision for no less than thirty (30)
days' advance written notice by the insurer to the Lessor in the event
of cancellation or reduction of such insurance.
(b) The Lessee agrees that the insurance policy or policies
required by Sections 13.2 shall include an appropriate clause pursuant
to which such policy shall provide that it will not be invalidated
should the Lessee waive, in writing, prior to a loss, any or all rights
of recovery against any party for losses covered by such policy, and
that the insurance in favor of the Lessor and its rights under and
interests in said policies shall not be invalidated or reduced by any
act or omission (including breach of warranty) or negligence of the
Lessee or any other Person having any interest in any Property other
than the Lessor. The Lessee hereby waives any and all such rights
against the Lessor to the extent of payments made under such policies.
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(c) All such insurance shall be written by reputable insurance
companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of insurance
being provided by such companies. Any insurance company selected by the
Lessee which is rated in Best's Insurance Guide or any successor thereto
(or if there be none, an organization having a similar national
reputation) shall have a general policyholder rating of "A" and a
financial rating of at least "VIII" or be otherwise acceptable to the
Lessor. All insurance policies required by Section 13.2 shall include a
standard form mortgagee endorsement in favor of the Lessor.
(d) The Lessor shall not carry separate insurance concurrent in
kind or form or contributing in the event of loss with any insurance
required under this Article XIII except that the Lessor may, at the
Lessor's expense, carry separate liability insurance so long as (i) the
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance the Lessor may have in force which would
apply to a loss covered under the Lessee's policy and (ii) each such
insurance policy will not cause the Lessee's insurance required under
this Article XIII to be subject to a coinsurance exception of any kind.
(e) The Lessee shall pay as they become due all premiums for the
insurance required by Section 13.1 and Section 13.2, and shall renew or
replace each policy prior to the expiration date thereof. Throughout the
Lease Term, at the time each of the Lessee's insurance policies is
renewed (but in no event less frequently than once each year), the
Lessee shall deliver to the Lessor and the Agent certificates of
insurance evidencing that all insurance required by this Article XIII is
being maintained by the Lessee and is in effect.
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
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(i) in the case of a Casualty, (x) any insurance
proceeds less than $500,000 payable with respect to such
Casualty shall be paid directly to the Lessee, or if received by
the Lessor, shall be paid over to such Lessee for the
reconstruction, refurbishment and repair of such Property, and
(y) any insurance proceeds in excess of $500,000 payable with
respect to such Casualty shall be paid to the Lessor to be
applied by disbursement to the Lessee to the restoration of such
Property, and
(ii) 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 and in the case of a
Significant Condemnation such award or compensation shall be
paid to the Lessor to be applied in the Lessee's reasonable
discretion to the restoration of such Property or toward the
payment of the applicable Lease Balance;
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 Lenders, and shall
be paid over by the Lessee to the Lessor to be distributed in accordance
with the Article VII of the Participation Agreement. All amounts held by
the Lessor, or the Lenders 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 Lenders or turned over to the
Lessor or the Lenders 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 purchase price 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 Lessee's sole cost and expense, the
Lessor and the Lenders 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
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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 Lenders
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), or is not covered by
insurance as in the case of Casualty caused by earthquake, 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 9.1 and 10.1 (as modified to give effect to
any subsequent Modifications, any Condemnation affecting such Property
and all applicable Property Legal Requirements) so as to restore such
Property to at least the same condition, operation, function and value
as existed immediately prior to such Casualty or Condemnation with such
Modification as the Lessee may elect in accordance with Section 10.1. 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 the Lessor an architect's certificate of
substantial completion and a Responsible Employee'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 Lenders 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
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writing of such Environmental Violation. If the Lessor elects 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 or
18.2. 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 Lenders. 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.
ARTICLE XV
TERMINATION OF LEASE
15.1. Partial Termination upon Certain Events. If any of the following
occurs with respect to any Property:
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(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 relating
to such Property is to be terminated 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 on or prior to the next
occurring Basic Rent Payment Date by paying 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, or the Lease Balance, as the case may be, with respect
to any Property or all Properties, as the case may be, 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 special
warranty deed with respect to each such Property, a bill of sale with
respect to the Equipment located on each such Property 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) or (ii)
of Section 15.1(a), the Lessor shall convey to the Lessee any Net
Proceeds with respect to the Casualty or Condemnation giving rise to the
termination of this Master Lease with respect to such Property
theretofore received by
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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
within five (5) days after the same has become due and payable, or (ii)
any Property Balance, Purchase Option Price, Loan Balance or Lease
Balance, including, without limitation, amounts due pursuant to Sections
15.1, 15.2, 18.1, 18.2, or 20.1;
(b) the Lessee shall fail to make payment of any Supplemental
Rent due and payable within five (5) days after receipt of notice
thereof;
(c) the Lessee shall fail to maintain insurance as required by
Article XIII of this Master Lease;
(d) the Lessee shall fail to deposit with the Collateral Agent,
within the time set forth in Section 6.1 of the Participation Agreement,
the Deficiency Collateral;
(e) the Lessee shall not be in compliance with Section
10.1(f)(i), (ii) or (iii) of the Participation Agreement;
(f) the Lessee shall fail to observe or perform any term,
covenant or condition of the Lessee under this Lease or the Operative
Documents to which it is party other than those described in Section
20.1(a), (b), (c), (d) or (e) hereof, and such failure shall have
continued for thirty (30) days after the earlier of (i) delivery to the
Lessee of written notice thereof from the Lessor or (ii) a Responsible
Employee of the Lessee shall have knowledge of such failure; provided
further, that failure by the Lessee to fully comply with the
requirements of Section 20.1 hereof shall not be subject to any cure
period; provided, however, that no Event of Default shall be deemed to
have occurred under this subsection until one hundred twenty (120) days
has elapsed so long as throughout such time, the Lessee is diligently
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pursuing a cure for such breach (to the extent such breach may be
cured);
(g) any representation or warranty made by the Lessee in any of
the Operative Documents to which it is a party shall prove to have been
Materially inaccurate at the time made, and if such inaccuracy can be
cured, it shall not have been cured within thirty (30) days after the
earlier of (i) delivery to the Lessee of written notice thereof from the
Lessor or (ii) a Responsible Employee of the Lessee shall have knowledge
of such inaccuracy; provided, however, that no Event of Default shall be
deemed to have occurred under this subsection until one hundred twenty
(120) days has elapsed so long as throughout such time, the Lessee is
diligently pursuing a cure for such breach (to the extent such breach
may be cured);
(h) the Lessee shall (i) admit in writing its inability to pay
its debts generally as they become due, (ii) file a petition under the
United States bankruptcy laws or any other applicable insolvency law or
statute of the United States of America or any State or Commonwealth
thereof, (iii) make a general assignment for the benefit of its
creditors, (iv) consent to the appointment of a receiver of itself or
the whole or any substantial part of its property, (v) fail to cause the
discharge of any custodian, trustee or receiver appointed for the Lessee
or the whole or a substantial part of its property within sixty (60)
days after such appointment, or (vi) file a petition or answer seeking
or consenting to reorganization under the United States bankruptcy laws
or any other applicable insolvency law or statute of the United States
of America or any State or Commonwealth thereof;
(i) insolvency proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof shall be
filed against the Lessee and not dismissed within ninety (90) days from
the date of its filing, or a court of competent jurisdiction shall enter
an order or decree appointing, without the consent of the Lessee a
receiver of the Lessee or the whole or a substantial part of any of its
property and such order or decree shall not be vacated or set aside
within ninety (90) days from the date of the entry thereof;
(j) 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
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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;
(k) any judgments or orders for the payment of money, in any
case not covered by insurance, individually or in the aggregate in
excess of $5,000,000 shall be rendered against the Lessee, and such
judgment or order shall continue unsatisfied and unstayed (pursuant to
laws, rules or court orders) for a period of thirty (30) days;
(l) an event of default, as defined in any agreement, mortgage,
indenture or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Lessee with
respect to any Property, whether such indebtedness now exists or shall
hereafter be created, shall happen and such indebtedness individually or
in the aggregate shall exceed $5,000,000 and shall be due and payable
prior to its stated maturity;
(m) any Lien granted under any Operative Document shall, in
whole or in part, terminate, cease to be effective against, or cease to
be the legal, valid, binding and enforceable obligation of, the Lessee;
(n) the Lessee shall directly or indirectly contest the validity
of any Operative Document in any manner in any court of competent
jurisdiction or any lien granted by any Operative Document; or
(o) a Loan Agreement Event of Default, a Guaranty Event of
Default or a Construction Agency Agreement Event of Default shall have
occurred and be continuing.
16.2. Remedies. Upon the occurrence of any Lease Event of Default and at
any time thereafter, the Lessor may, so long as
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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
(including, without limitation, the obligation of the Lessee to purchase the
Properties as set forth in Section 18.2:
(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; 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 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
Lenders in connection with any reletting, including, without limitation,
reasonable brokers' fees and all costs of any alterations or repairs
made by the Lessor;
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(c) The Lessor may (i) sell all or any part of any Property at
public sale free and clear of any rights of the Lessee and without any
duty to account to the Lessee with respect to such action or inaction or
any proceeds (except that Excess Proceeds are payable to and shall be
paid to the Lessee) with respect thereto (except to the extent required
by clause (ii) below if the Lessor shall elect to exercise its rights
thereunder) in which event the Lessee's obligation to pay Basic Rent
hereunder for periods commencing after the date of such sale shall be
terminated or proportionately reduced, as the case may be; and (ii) if
the Lessor shall so elect, demand that the Lessee pay to the Lessor, and
the Lessee shall pay to the Lessor, on the date of such sale, as
liquidated damages for loss of a bargain and not as a penalty (the
parties agreeing that the Lessor's actual damages would be difficult to
predict, but the aforementioned liquidated damages represent a
reasonable approximation of such amount) or (in lieu of Basic Rent due
for periods commencing on or after the Payment Date coinciding with such
date of sale (or, if the sale date is not a Basic Rent Payment Date, the
Basic Rent Payment Date next preceding the date of such sale)), an
amount equal to (A) the excess, if any, of (1) the Lease Balance
calculated as of such Basic Rent Payment Date (including all Rent due
and unpaid to and including such Basic Rent Payment Date and), over (2)
the net proceeds of such sale (that is, after deducting all costs and
expenses incurred by the Lessor incident to such conveyance, including,
without limitation, repossession costs, brokerage commissions,
prorations, transfer taxes, fees and expenses for counsel, title
insurance fees, survey costs, recording fees, and any repair costs);
plus (B) interest at the Overdue Rate on the foregoing amount from such
Basic Rent Payment Date until the date of payment;
(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 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, in its sole and absolute
discretion, elect not to terminate this Master Lease and may make the
necessary repairs in order to relet such Property, and relet such
Property or any part thereof for such term or terms (which may be for a
long term extending beyond the Lease Term of
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this Master Lease) and at such rental or rentals and upon such other
terms and conditions as the Lessor in its reasonable discretion may deem
advisable; and upon each such reletting all rentals actually received by
the Lessor from such reletting shall be applied to the Lessee's
obligations hereunder and the other Operative Documents in such order,
proportion and priority as the Lessor may elect in the Lessor's sole and
absolute discretion. If such rentals received from such reletting during
any period are less than the Rent with respect to such Property to be
paid during that period by the Lessee hereunder, the Lessee shall pay
any deficiency, as calculated by the Lessor, to the Lessor on the next
Basic Rent Payment Date;
(e) Unless all of the Properties have been sold in their
entirety, the Lessor may, whether or not the Lessor shall have exercised
or shall thereafter at any time exercise any of its rights under clause
(b), (c) or (d) of this Section 16.2 with respect to any Properties or
any portions thereof, demand, by written notice to the Lessee specifying
a date (a "Termination Date") not earlier than twenty (20) days after
the date of such notice, that the Lessee purchase, on such Termination
Date, all unsold Properties and all unsold portions of Properties in
accordance with the provisions of Article XXI and Section 18.2;
(f) The Lessor may exercise any other right or remedy that may
be available to it under Applicable Law, 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;
(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
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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 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.
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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.
(k) Foreclosure; Power of Sale. Lessee hereby grants to First
American Title Guaranty Company, as trustee (together with all successor
trustees, the "Trustee"), IN TRUST, WITH POWER OF SALE, all of Lessee's
right, title and interest in and to the Properties and, upon the
occurrence of a Lease Event of Default, Lessor shall have the power and
authority, after proper notice and lapse of such time as may be required
by law, to cause Trustee to sell any Property or the Properties by
notifying Trustee of that election and depositing with Trustee this
instrument and receipts and evidence of expenditures made and secured
hereby as Trustee may reasonably require. Upon receipt of any such
notice from Lessor, 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 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, 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 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. 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 Lessee, Trustee or
Lessor, may purchase at any sale. After deducting all costs, fees and
expenses of Lessor and Trustee, including costs of evidence of title in
connection with any sale, Lessor shall apply the proceeds of sale, in
the following order of priority, to payment of the following
(collectively, the "Obligations"): (i) first, all amounts expended by or
for the account of Lessor under the
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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
Lessee under this Lease and the other Operative Documents, with 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
Lessor may elect in its sole and absolute discretion. To the extent
permitted by applicable statutes, 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 Obligations have been satisfied or all the Properties
have been sold, without defect or irregularity. No action of Lessor or
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 Lessor from
pursuing judicial foreclosure before a completed sale pursuant to the
power of sale contained herein. Lessor shall have the right, with the
irrevocable consent of 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 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 ("Property Rents"), and apply the Property Rents after payment of
all necessary charges and expenses to reduction of the Obligations in
such order, proportion and priority as Lessor may elect. At the option
of Lessor, the receiver shall accomplish entry and taking possession of
any Property or the Properties by
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actual entry and possession or by notice to Lessee. The receiver so
appointed by a court of competent jurisdiction shall be empowered to
issue receiver's certificates for funds advanced by Lessor for the
purpose of protecting the value of any Property or the Properties as
security for the Obligations. The amounts evidenced by receiver's
certificates shall bear interest at the Overdue Rate and may be added to
the Obligations if the Lessee or a junior lienholder purchases any
Property or the Properties at the trustee's sale. Trustee or any
successor acting hereunder may resign and thereupon be discharged of the
trusts hereunder upon thirty (30) days' prior written notice to Lessor.
Regardless of whether Trustee resigns, 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, 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
Lessor and containing the name of the original Lessee and Lessor
hereunder, the book and page where this instrument (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 LESSEE UNDER THIS INSTRUMENT.
Notwithstanding any of the foregoing, the Lessor acknowledges that upon
the occurrence and continuance of a Lease Event of Default solely under clause
(e) of Section 16.1, the Lessor's remedies for such default shall be limited to
recovery of the Loan Balance by liquidation of the Additional Collateral or
through other appropriate means.
16.3. Waiver of Certain Rights. 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
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(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 All or Some of the Properties. Subject to the
conditions contained herein, and without limitation of the Lessee's purchase
obligation pursuant to Section 18.2, the Lessee shall have the irrevocable
option on any Business Day to purchase all or some of the Properties subject to
this Master Lease at a price equal to the Lease Balance for such Properties on
the date of such purchase relating to such Property. 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) 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, including Break
Costs, if any, the Lessor shall transfer to the Lessee or its designee all of
the Lessor's right,
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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 the Lessor the Lease Balance on such Expiration Date.
18.2. Expiration Date Purchase Obligation; Change of Control Purchase
Obligation. (a) Unless (i) the Lessee shall have properly exercised its option
pursuant to Section 18.1 and purchased the Properties pursuant thereto, or (ii)
the Lessee shall have properly exercised the Remarketing Option and shall have
fulfilled all of the conditions of clauses (a) through (l) of Section 20.1
hereof and the Lessor shall have sold its interest in all of the Properties
pursuant thereto, then, subject to the terms, conditions and provisions set
forth in this Article, and in accordance with the terms of Section 21.1(a), 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.
(b) In the event that a Change of Control shall have occurred the Lessor
may, within two Business Days of receipt of written notice from the Lessee of
such occurrence, demand that the Lessee purchase from the Lessor all of the
Properties for an amount equal to the Lease Balance and the Lessee shall
purchase the Properties as provided herein. Such purchase shall occur no later
than the earlier of (x) the Expiration Date or (y) the next scheduled Basic Rent
Payment Date, provided such date is no earlier than 30 days after the Lessor
issues its purchase demand, and be effected as provided in Section 21.1(a).
(c) 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
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released, fully or partially, from any of its obligations under this Master
Lease, including, without limitation, the obligation to pay the Lessor the Lease
Balance on such Expiration Date or designated purchase date, as the case may be.
18.3. Exchange of Properties. So long as no Lease Default or Lease Event
of Default shall have occurred and be continuing, the Lessor shall, subject to
receipt of an Exchange Request and satisfaction of all the conditions set forth
in Article II of the Participation Agreement, release the Property subject to
Lease Supplement No. 3 from the Lease and convey such Property to the party
designated by the Lessee in accordance with Section 21.1(a) hereof, accept
conveyance of City Center II from such party and enter into Lease Supplement No.
4 with the Lessee pursuant to the Participation Agreement and from and after
such conveyances City Center II shall be subject to this Lease.
ARTICLE XIX
RENEWAL TERMS
19.1. Renewal. Prior to the final Expiration Date, the parties hereto
may agree to renew this Master Lease for one or more additional terms upon terms
and conditions to be mutually agreed upon; provided, however, that nothing
herein shall be construed as a commitment by either party to renew this Master
Lease beyond the Expiration Date.
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 and complete the sale of all of the Properties
for 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 one hundred and eighty (180) days 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.
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(b) Not later than one hundred and twenty (120) 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.
(c) The Lessee shall have completed all Modifications,
restoration and rebuilding of the affected Properties pursuant to
Sections 10.1 and 14.1 (as the case may be) and shall have fulfilled all
of the conditions and requirements in connection therewith pursuant to
said Sections, in each case prior to the date on which the Lessor
receives the Lessee's notice of the Lessee's intention to exercise the
Remarketing Option (time being of the essence), regardless of whether
the same shall be within the Lessee's control. The Lessee shall have
also paid the cost of all Modifications commenced prior to the
Expiration Date. The Lessee shall not have been excused pursuant to
Section 12.1 from complying with any Applicable Law that involved the
extension of the ultimate imposition of such Applicable Law beyond the
Expiration of the Term. Any Permitted Property Liens (other than Lessor
Liens) on any Property that were contested by the Lessee shall have been
removed.
(d) During the Marketing Period, the Lessee shall, as
nonexclusive agent for the Lessor, use its best 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. The Lessee will be responsible for hiring brokers and
making the Properties available for inspection by prospective
purchasers. The Lessee shall promptly upon request permit inspection of
any Property and any maintenance records relating to any Property by the
Lessor, any Participant and any potential purchasers, and shall
otherwise do all things necessary to sell and deliver possession of the
Properties to any purchaser. All such marketing of the Properties shall
be at the Lessee's sole expense. The Lessee shall allow the Lessor and
any potential qualified purchaser
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reasonable access to the Properties for the purpose of inspecting the
same.
(e) The Lessee shall procure bids from one or more bona fide
prospective purchasers and shall deliver to the Lessor and the
Participants not less than ninety (90) days prior to the Expiration Date
a binding written unconditional (except as set forth below), irrevocable
offer by such purchaser or purchasers offering the highest bid to
purchase the Properties. No such purchaser shall be the Lessee or any
Subsidiary or Affiliate of the Lessee. The written offer must specify
the Expiration Date as the closing date unless the Lessor and the
Participants shall otherwise agree in their sole discretion.
(f) The Lessee shall submit all bids to the Lessor and the
Participants, and the Lessor will have the right to submit any one or
more bids. Any sale by the Lessee shall be for the highest cash bid
submitted to the Lessor. The determination of the highest bid shall be
made by the Lessor prior to the end of the Marketing Period, but in any
event, the Lessor shall have no obligation to approve any bid for any
Property unless each highest bid plus an amount that may be paid by the
Lessee in its sole and absolute discretion (in addition to its
obligations under Section 20.1(i)), together with such bid, equals or
exceeds the Property Balance. All bids shall be on an all-cash basis
unless the Lessor and the Participants shall otherwise agree in their
sole discretion.
(g) 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. Any agreement as to such sale shall be made subject to
the Lessor's rights hereunder.
(h) As between the Lessor and the Lessee the Lessee shall pay
directly, and not from the sale proceeds, all prorations, credits, costs
and expenses of the sale of the Properties, whether incurred by the
Lessor or the Lessee, including without limitation, the cost of all
title insurance, surveys, environmental reports, appraisals, transfer
taxes, the Lessor's reasonable attorneys' fees,
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the Lessee's attorneys' fees, commissions, escrow fees, recording fees,
and all applicable documentary and other transfer taxes.
(i) 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 Loan Balance plus all accrued
and unpaid Rent (including Supplemental Rent, if any) 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 3.4
hereof.
(j) The Lessee shall pay to the Lessor on or prior to the
Expiration Date the amounts, if any, required to be paid pursuant to
Section 13.2 of the Participation Agreement.
(k) The purchase of all of the Properties shall be consummated
on the Expiration Date and the gross proceeds (the "Gross Remarketing
Proceeds") of the sale of the Properties (less any marketing, closing or
other costs, prorations or commissions) 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 Loan Balance received by the Lessor
exceeds the Lease Balance as of such date, then the excess shall be paid
to the Lessee on the Expiration Date.
If the Lessee effectively elects the Remarketing Option and no sale of
any Property is consummated prior to the end of the Marketing Period, Lessee may
exercise its purchase option pursuant to Section 18.2 or Lessee shall, in
addition to making the payment required pursuant to Section 20.1(i) above, at
its own cost and expense, do each of the following:
(i) execute and deliver to Lessor and the Lessor's title
insurance company an affidavit as to the absence of any Liens (other
than Permitted Liens of the type described in clause (i), (viii) or
(x)), 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
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(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 Governmental Action.
The obligations of the Lessee under this paragraph shall survive the
expiration or termination of this Master Lease.
Except as expressly set forth herein, the Lessee shall have no right,
power or authority to bind the Lessor in connection with any proposed sale of
any Property.
If one or more of the foregoing provisions shall not be fulfilled as of
the date set forth above 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 be obligated to purchase
all of the Properties pursuant to Section 18.2 on the Expiration Date.
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 Loan Balance and all other amounts 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, other than as
expressly provided in this Article XX.
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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 with the Lessee's purchase
of any Property in accordance with Section 18.1 or in connection with
the Lessee's Expiration Date Purchase Obligation or obligations under
Section 16.2(e), 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(e), 18.1 or 18.2, 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
grant deed with respect to such Property or Properties
containing representations and warranties of grantor to the
Lessee regarding Lessor Liens, a bill of sale with respect to
the Equipment located on 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 Deed of Trust 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.
(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
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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. The Lessee
shall, on and within a reasonable time before and up to one year after
the Expiration Date, cooperate reasonably with the Lessor and the
independent purchaser(s) of the Properties in order to facilitate the
purchase by such purchaser(s) of the Properties, which cooperation shall
include the following, all of which the Lessee shall do on or before the
Expiration Date or as soon thereafter as is reasonably practicable:
providing copies of all books and records regarding the maintenance and
ownership of the Properties and all know-how, data and technical
information relating thereto, providing a current copy of the Plans and
Specifications for each Property, granting or assigning all licenses
necessary for the operation and maintenance of each Property and
cooperating reasonably in seeking and obtaining all necessary
Governmental Action. The obligations of the Lessee under this paragraph
shall survive the expiration or termination of this Master Lease.
ARTICLE XXII
ESTOPPEL CERTIFICATES
22.1. Estoppel Certificates. At any time and from time to time upon not
less than ten (10) 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).
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Master Lease
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
Lenders, and no act by the Lessor or the Lenders or any representative or agent
of the Lessor or the Lenders, 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
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. Ownership of the Properties. (a) The parties hereto intend that
(i) for financial accounting purposes with respect to the Lessee, the Lessor
will be treated as the owner and the lessor of the Properties and the Lessee
will be treated as the lessee of the Properties and (ii) for all other purposes,
including federal and all state and local income tax purposes, state real estate
and commercial law and bankruptcy purposes, (A) this Lease will be treated as a
financing arrangement, (B) the Lessor and the Lenders will be deemed lenders
making loans to the Lessee in an amount equal to the sum of the Lessor Amount
and the outstanding principal amount of the Loans and (C) the Lessee will be
treated as the owner of the Properties and will be entitled to all tax benefits
ordinarily available to an owner of properties like the Properties for such tax
purposes.
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Nevertheless, the Lessee acknowledges and agrees that neither the Lessor nor any
of the Lenders has made any representations or warranties to the Lessee
concerning the tax, accounting or legal characteristics of the Operative
Documents and that the Lessee has obtained and relied upon such tax, accounting
and legal advice concerning the Operative Documents as it deems appropriate.
(b) It is the intent of the parties hereto that this Lease grants a
security interest and mortgage, as the case may be, on the Properties to the
Lessor to secure Lessee's performance under and payment of all amounts under
this Lease and the other Operative Documents.
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; provided that any such right shall be exercised
within 54 years from the date hereof. 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, acknowledgment 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
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Master Lease
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 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.
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
14.3 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
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
26.9. Limitations on Recourse. The parties hereto agree that except as
specifically set forth in this Lease or in any other Operative Document, Lessor
shall have no personal liability whatsoever to the Lessee or its 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 Property; provided, however, that Lessor
shall be liable in its
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Master Lease
individual capacity (a) for its own willful misconduct or gross negligence (or
negligence in the handling of funds), (b) breach of any of its representations,
warranties or covenants under the Operative Documents, or (c) for any Tax based
on or measured by any fees, commission or compensation received by it for acting
as the Lessor as contemplated by the Operative Documents. It is understood and
agreed that, except as provided in the preceding sentence: (i) Lessor shall have
no personal liability under any of the Operative Documents as a result of acting
pursuant to and consistent with any of the Operative Documents; (ii) all
obligations of Lessor to the Lessee are solely nonrecourse obligations except to
the extent that it has received payment from others; and (iii) all such personal
liability of Lessor is expressly waived and released as a condition of, and as
consideration for, the execution and delivery of the Operative Documents by
Lessor.
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 The Sumitomo Bank, Limited,
San Francisco Branch, as Agent for the Lenders 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.
SYMANTEC CORPORATION,
as Lessee
By /s/ GREG MYERS
-------------------------------------
Name: Greg Myers
Title: VP, Finance
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Master Lease
SUMITOMO BANK LEASING AND FINANCE, INC.,
as Lessor
By /s/ WILLIAM M. GINN
-------------------------------------
Name: William M. Ginn
Title: President
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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.
THE SUMITOMO BANK,
LIMITED, LOS ANGELES BRANCH
as Agent for the Lenders
By /s/ AZUR SHAKERI
---------------------------------
Name: Azur Shakeri
Title: Vice President
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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...................................................................4
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
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 Law, Property Legal
Requirements and Insurance Requirements.......................................8
8.4. Assignment by Lessee..............................................................9
ARTICLE IX
MAINTENANCE AND REPAIR; RETURN
9.1. Maintenance and Repair; Return....................................................9
ARTICLE X
MODIFICATIONS, ETC.
10.1. Modifications, Substitutions and Replacements....................................10
10.2. Notice to the Lessor.............................................................11
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Master Lease
ARTICLE XI
WARRANT OF TITLE; EASEMENTS
11.1. Warrant of Title.................................................................11
11.2. Grants and Releases of Easements; Lessor's Waivers...............................12
ARTICLE XII
PERMITTED CONTESTS
12.1. Permitted Contests in Respect of Applicable Law..................................13
ARTICLE XIII
INSURANCE
13.1. Public Liability and Workers' Compensation Insurance.............................14
13.2. Hazard and Other Insurance.......................................................14
13.3. Insurance Coverage...............................................................15
ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
14.1. Casualty and Condemnation........................................................16
14.2. Environmental Matters............................................................18
14.3. Notice of Environmental Matters..................................................19
ARTICLE XV
TERMINATION OF LEASE
15.1. Partial Termination upon Certain Events..........................................19
15.2. Termination Procedures...........................................................20
ARTICLE XVI
EVENTS OF DEFAULT
16.1. Lease Events of Default..........................................................21
16.2. Remedies.........................................................................23
16.3. Waiver of Certain Rights.........................................................30
ARTICLE XVII LESSOR'S RIGHT TO CURE
17.1. The Lessor's Right to Cure the Lessee's
Lease Defaults...............................................................31
ARTICLE XVIII
PURCHASE PROVISIONS
18.1. Purchase of All or Some of the Properties........................................31
18.2. Expiration Date Purchase Obligation; Change of Control
Purchase Obligation..........................................................32
18.3. Exchange of Properties...........................................................33
ARTICLE XIX
RENEWAL TERMS
19.1. Renewal..........................................................................33
ARTICLE XX
REMARKETING OPTION
20.1. Option to Remarket...............................................................33
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
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Master Lease
ARTICLE XXII
ESTOPPEL CERTIFICATES
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...............................................................40
ARTICLE XXV
INTENT OF THE PARTIES
25.1. Ownership of the Properties......................................................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. Limitations on Recourse..........................................................42
26.10. Original Lease...................................................................43
EXHIBIT A Form of Lease Supplement
iii