EXHIBIT 10.19
The transactions contemplated in this Lease Agreement have been
made possible by the following banks, acting in the capacities
indicated:
Banque Nationale de Paris, ABN Amro Bank N.V.,
as Administrative/Documentation as Syndication Agent and
Agent and Arranger Co-Arranger
$86,000,000
LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
3COM CORPORATION,
AS TENANT
EFFECTIVE AS OF JULY 29, 1997
(Marlborough Site)
This Lease Agreement amends, restates and replaces the Lease Agreement
between the Landlord and Tenant dated January 21, 1997, covering the Land
(as described in Exhibit A attached hereto).
TABLE OF CONTENTS
1. Definitions
(a) Active Negligence
(b) Additional Rent
(c) Administrative Fee
(d) Advance Date
(e) Affiliate
(f) Applicable Laws
(g) Applicable Purchaser
(h) Approved Participants
(i) Attorneys' Fees
(j) Base Rent
(k) Base Rent Date
(l) Breakage Costs
(m) Business Day
(n) Capital Adequacy Charges
(o) Carrying Costs
(p) Carrying Costs Accrual Termination Date
(q) Cash Collateral
(r) Certificate of Deposit Collateral Percentage
(s) Closing Costs
(t) Change of Control Event
(u) Code
(v) Collateral
(w) Commitment Fee
(x) Completion Deadline
(y) Completion Notice
(z) Construction Advances
(aa) Construction Allowance
(ab) Construction Documents
(ac) Construction Periods
(ac) Custodial Agreement
(ad) Debt
(ae) Default
(af) Default Rate
(ag) Defaulting Participant
(ah) Designated Improvements
(ai) Designated Sale Date
(aj) Effective Rate
(ak) Environmental Indemnity
(al) Environmental Laws
(am) Environmental Losses
(an) Environmental Report
(ao) ERISA
(ap) ERISA Affiliate
(aq) ERISA Termination Event
(ar) Escrowed Proceeds
(as) Eurocurrency Liabilities
(at) Eurodollar Rate Reserve Percentage
(au) Event of Default
(av) Excluded Taxes
(aw) Fair Market Value
(ax) Fed Funds Rate
(ay) Funding Advances
(az) GAAP
(ba) Hazardous Substance
(bb) Hazardous Substance Activity
(bc) Impositions
(bd) Improvements
(be) Indemnified Party
(bf) Initial Investment
(bg) Landlord's Parent
(bh) Last Advance Date
(bi) LIBOR
(bj) LIBOR Period Election
(bk) Lien
(bl) Losses
(bm) Maximum Construction Allowance
(bn) Notice of Last Advance
(bo) Ordinary Negligence
(bp) Outstanding Construction Allowance
(bq) Participant
(br) Participation Agreement
(bs) Period
(bt) Permitted Encumbrances
(bu) Permitted Hazardous Substance Use
(bv) Permitted Hazardous Substances
(bw) Permitted Transfer
(bx) Person
(by) Plan
(bz) Pledge Agreement
(ca) Prime Rate
(cb) Purchase Agreement
(cc) Purchase Documents
(cd) Purchase Price
(ce) Qualified Payments
(cf) Qualifying Security Interest
(cg) Remaining Proceeds
(ch) Rent
(ci) Responsible Financial Officer
(cj) Scope Change
(ck) Securities Collateral
(cl) Securities Collateral Percentage
(cm) Spread
(cn) Stipulated Loss Value
(co) Subsidiary
(cp) Tenant's Knowledge
(cq) Term
(cr) Unfunded Benefit Liabilities
(cs) Upfront Fee
(ct) Voluntary Minimum Pledge Commitment
(cu) Other Terms and References
2. Term
3. Rental
(a) Base Rent
(b) Upfront Fee
(c) Commitment Fees
(d) Administrative Agency Fees
(e) Additional Rent
(f) Interest and Order of Application
(g) Net Lease
(h) No Demand or Setoff
(i) Overdrawn Allowance
4. Insurance and Condemnation Proceeds
5. No Lease Termination
(a) Status of Lease
(b) Waiver By Tenant
6. Construction Allowance
(a) Advances; Outstanding Construction Allowance
(b) Designated Improvements
(i) Responsibility for Construction.
(ii) Scope Changes.
(iii) Value Added.
(iv) Estoppel Letters Required.
(v) Advances Not a Waiver.
(c) Conditions to Construction Advances
(i) Prior Notice
(ii) Amount of the Advances
(iii) Insurance
a) Title Insurance
b) Builder's Risk Insurance
(iv) Progress of Construction
(v) Evidence of Costs to be Reimbursed
(vi) No Event of Default or Change of Control Event
(vii) No Sale of Landlord's Interest
(viii) Certificate of No Default
(ix) Payments by Approved Participants
(d) Completion Notice
7. Purchase Documents and Environmental Indemnity
8. Use and Condition of Leased Property
(a) Use
(b) Condition
(c) Consideration of and Scope of Waiver
9. Other Representations, Warranties and Covenants of Tenant
(a) Financial Matters
(b) Existing Contract
(c) No Default or Violation
(d) Compliance with Covenants and Laws
(e) Environmental Representations
(f) No Suits
(g) Condition of Property
(h) Organization
(i) Enforceability
(j) Not a Foreign Person
(k) Omissions
(l) Existence
(m) Tenant Taxes
(n) Operation of Property
(o) Debts for Construction
(p) Impositions
(q) Repair, Maintenance, Alterations and Additions
(r) Insurance and Casualty
(s) Condemnation
(t) Protection and Defense of Title
(u) No Liens on the Leased Property
(v) Books and Records
(w) Financial Statements; Required Notices;
Certificates as to Default
(x) Further Assurances
(y) Fees and Expenses; General Indemnification;
Increased Costs; and Capital Adequacy Charges
(z) Liability Insurance
(aa) Permitted Encumbrances
(ab) Environmental
(ac) Affirmative Financial Covenants
(ad) Negative Covenants
(i) Liens
(ii) Transactions with Affiliates
(iii) Mergers; Sales of Assets
(v) Change of Business
(ae) ERISA
10. Representations, Warranties and Covenants of Landlord
(a) Title Claims By, Through or Under Landlord
(b) Actions Required of the Title Holder
(c) No Default or Violation
(d) No Suits
(e) Organization
(f) Enforceability
(g) Existence
(h) Not a Foreign Person
11. Assignment and Subletting
(a) Consent Required
(b) Standard for Landlord's Consent to Assignments
and Certain Other Matters
(c) Consent Not a Waiver
(d) Landlord's Assignment
12. Environmental Indemnification
(a) Indemnity
(b) Assumption of Defense
(c) Notice of Environmental Losses
(d) Rights Cumulative
(e) Survival of the Indemnity
13. Landlord's Right of Access
14. Events of Default
(a) Definition of Event of Default
(b) Remedies
(c) Enforceability
(d) Remedies Cumulative
(e) Waiver by Tenant
(f) No Implied Waiver
15. Default by Landlord
16. Quiet Enjoyment
17. Surrender Upon Termination
18. Holding Over by Tenant
19. Miscellaneous
(a) Notices
(b) Severability
(c) No Merger
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD
(e) Entire Agreement
(f) Binding Effect
(g) Time is of the Essence
(h) Termination of Prior Rights
(i) Governing Law
(j) Waiver of a Jury Trial
(k) Not a Partnership, Etc
(l) Tax Reporting
Exhibits and Schedules
Exhibit A Legal Description
Exhibit B Encumbrance List
Exhibit C Permitted Hazardous Substances
Exhibit D Resolution of Disputed Insurance Claims
Exhibit E Covenant Compliance Certificate
Exhibit F Certificate Setting Forth the Calculation of the Spread
Exhibit G List of Environmental Reports
Exhibit H Information Concerning Designated Improvements
Exhibit I Contractor's Estoppel Letter
Exhibit J Architect's Estoppel Letter
Exhibit K Draw Request Forms
Exhibit L Notice to Accelerate the Carrying Costs Accrual
Termination Date
Exhibit M Notice of Libor Period Election
Schedule 1 List of Approved Participants
LEASE AGREEMENT
This LEASE AGREEMENT (hereinafter called this "Lease"),
made to be effective as of July 29, 1997 (all references herein
to the "date hereof" or words of like effect shall mean such
effective date), by and between BNP LEASING CORPORATION, a
Delaware corporation (hereinafter called "Landlord"), and 3COM
CORPORATION, a Delaware corporation (hereinafter called
"Tenant");
W I T N E S E T H T H A T:
WHEREAS, pursuant to a Sale Agreement dated December 13,
1996 (as amended, hereinafter called the "Existing Contract")
between 3Com Corporation, a California Corporation, the
predecessor in interest to Tenant and Metropolitan Life
Insurance Company, a New York corporation (hereinafter called
"Seller"), concerning the land described in Exhibit A attached
hereto (hereinafter called the "Land") and the improvements on
such Land, if any, Landlord acquired the Land and improvements
(if any) from Seller contemporaneously with the execution of
the Original Lease (hereinafter defined);
WHEREAS, Tenant assigned its rights under the Existing
Contract to Landlord on or about January 21, 1997; Landlord
acquired the Land on or about January 21, 1997; and Landlord
leased the Land and any improvements thereon to Tenant pursuant
to a Lease Agreement between Landlord and Tenant dated as of
January 21, 1997 (as supplemented or amended to the date
hereof, the "Original Lease");
WHEREAS, by this Lease Landlord and Tenant desire to
amend, restate and replace the Original Lease;
NOW, THEREFORE, in consideration of the rent to be paid
and the covenants and agreements to be performed by Tenant, as
hereinafter set forth, Landlord and Tenant hereby amend and
restate the Original Lease in its entirety, and Landlord does
hereby LEASE, DEMISE and LET unto Tenant for the term
hereinafter set forth the Land, together with:
(i) Landlord's interest in any and all buildings and
improvements now existing or hereafter erected on the
Land, including, but not limited to, the fixtures,
attachments, appliances, equipment, machinery and other
articles attached to such buildings and improvements
(hereinafter called the "Improvements");
(ii) all easements and rights-of-way now owned or
hereafter acquired by Landlord for use in connection with
the Land or Improvements or as a means of access thereto;
(iii) all right, title and interest of Landlord, now owned
or hereafter acquired, in and to (A) any land lying within
the right-of-way of any street, open or proposed,
adjoining the Land, (B) any and all sidewalks and alleys
adjacent to the Land and (C) any strips and gores between
the Land and abutting land (except strips and gores, if
any, between the Land and abutting land owned by Landlord,
with respect to which this Lease shall cover only the
portion thereof to the center line between the Land and
the abutting land owned by Landlord).
The Land and all of the property described in items (i) through
(iii) above are hereinafter referred to collectively as the
"Real Property".
In addition to conveying the leasehold in the Real
Property as described above, Landlord hereby grants and assigns
to Tenant for the term of this Lease the right to use and enjoy
(and, to the extent the following consist of contract rights,
to enforce) any assignable interests or rights in, to or under
the following that have been transferred to Landlord by Seller
under the Existing Contract: (a) any goods, equipment,
furnishings, furniture, chattels and personal property of
whatever nature that are located on the Real Property and all
renewals or replacements of or substitutions for any of the
foregoing; and (b) any general intangibles, permits, licenses,
franchises, certificates, and other rights and privileges. All
of the property, rights and privileges described above in this
paragraph are hereinafter collectively called the "Personal
Property". The Real Property and the Personal Property are
hereinafter sometimes collectively called the "Leased
Property."
Provided, however, the leasehold estate conveyed hereby
and Tenant's rights hereunder are expressly made subject and
subordinate to the Permitted Encumbrances (as hereinafter
defined) and to any other claims or encumbrances not asserted
by Landlord itself or by third parties lawfully claiming
through or under Landlord.
The Leased Property is leased by Landlord to Tenant and is
accepted and is to be used and possessed by Tenant upon and
subject to the following terms, provisions, covenants,
agreements and conditions:
1. Definitions. As used herein, the terms "Lease,"
"Landlord," "Tenant," "Existing Contract," "Seller," "Land,"
"Improvements," "Real Property," "Personal Property" and
"Leased Property" shall have the meanings indicated above and
the terms listed immediately below shall have the following
meanings:
(a) Active Negligence. "Active Negligence" of an Indemnified
Party means, and is limited to, the negligent conduct of
activities on the Leased Property by the Indemnified Party in a
manner that proximately causes actual bodily injury or property
damage to occur. "Active Negligence" shall not include (1) any
negligent failure of Landlord to act when the duty to act would
not have been imposed but for Landlord's status as owner of the
Leased Property or as a party to the transactions described in
this Lease, (2) any negligent failure of any other Indemnified
Party to act when the duty to act would not have been imposed
but for such party's contractual or other relationship to
Landlord or participation or facilitation in any manner,
directly or indirectly, of the transactions described in this
Lease, or (3) the exercise in a lawful manner by Landlord (or
any party lawfully claiming through or under Landlord) of any
remedy provided herein or in the Purchase Documents.
(b) Additional Rent. "Additional Rent" shall have the meaning
assigned to it in subparagraph 3.(e) below.
(c) Administrative Fee. "Administrative Fee" shall have the
meaning assigned to it in subparagraph 3.(d) below.
(d) Advance Date. "Advance Date" means, regardless of whether
any Construction Advance shall actually be made thereon, the
first Business Day of every calendar month, beginning with
August 1, 1997 and continuing regularly thereafter to and
including the Carrying Costs Accrual Termination Date;
provided, that if the Carrying Costs Accrual Termination Date
occurs before the Last Advance Date (as defined below), then
after the Carrying Costs Accrual Termination Date each Base
Rent Date upon which commences a new Base Rent Period (and only
such Base Rent Dates) through and including the Last Advance
Date shall also constitute an "Advance Date" hereunder. In any
event, no Advance Date shall occur after the Last Advance Date.
(e) Affiliate. "Affiliate" of any Person means any other
Person controlling, controlled by or under common control with
such Person. For purposes of this definition, the term
"control" when used with respect to any Person means the power
to direct the management of policies of such Person, directly
or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
(f) Applicable Laws. "Applicable Laws" shall have the meaning
assigned to it in subparagraph 9.(d) below.
(g) Applicable Purchaser. "Applicable Purchaser" means any
third party designated by Tenant to purchase the Landlord's
interest in the Leased Property and in any Escrowed Proceeds as
provided in the Purchase Agreement.
(h) Approved Participants. "Approved Participants" means (1)
the existing Participants and prospective participants listed
on Schedule 1 attached hereto; and (2) any other party which
Tenant shall have approved as a Participant, which approval
shall not be unreasonably withheld for any party that Landlord
proposes as a new Participant to replace, in whole or in part,
an Approved Participant under the Participation Agreement and
the Pledge Agreement; provided, the party proposed by Landlord
as a new Participant is a commercial bank operating in the
United States of America having capital and surplus in excess
of $500,000,000 or an Affiliate of such a bank; and, provided
further, the replacement will not reduce the aggregate
Percentages of Landlord and Landlord's Parent under and as
defined in the Participation Agreement below the minimum
percentage specified in paragraph 14.2 of the Participation
Agreement.
(i) Attorneys' Fees. "Attorneys' Fees" means the reasonable
fees and expenses of counsel to the parties incurring the same,
which may include fairly allocated costs of in-house counsel,
printing, photostating, duplicating and other expenses, air
freight charges, and fees billed for law clerks, paralegals,
librarians and others not admitted to the bar but performing
services under the supervision of an attorney. Such terms
shall also include, without limitation, all such fees and
expenses incurred with respect to appeals, arbitrations and
bankruptcy proceedings, and whether or not any manner or
proceeding is brought with respect to the matter for which such
fees and expenses were incurred.
(j) Base Rent. "Base Rent" means the rent payable by Tenant
pursuant to subparagraph 3.(a) below.
(k) Base Rent Date. "Base Rent Date" means a date upon which
Base Rent must be paid under the Lease, all of which dates
shall be the first Business Day of a calendar month. The first
Base Rent Date shall be determined as follows:
a) If a LIBOR Period Election of one
month is in effect on the Carrying Costs Accrual
Termination Date, then the first Business Day of the
first calendar month following the Carrying Costs
Accrual Termination Date shall be the first Base Rent
Date.
b) If a LIBOR Period Election of two
months is in effect on the Carrying Costs Accrual
Termination Date, then the first Business Day of the
second calendar month following the Carrying Costs
Accrual Termination Date shall be the first Base Rent
Date.
c) If the LIBOR Period Election in
effect on the Carrying Costs Accrual Termination Date
is three months or six months, then the first
Business Day of the third calendar month following
the Carrying Costs Accrual Termination Date shall be
the first Base Rent Date.
Each successive Base Rent Date after the first Base Rent Date
shall be the first Business Day of the first, second or third
calendar month following the calendar month which includes the
preceding Base Rent Date, determined as follows:
(1) If a LIBOR Period Election of one
month is in effect on a Base Rent Date, then the
first Business Day of the first calendar month
following such Base Rent Date shall be the next
following Base Rent Date.
(2) If a LIBOR Period Election of two
months is in effect on a Base Rent Date, then the
first Business Day of the second calendar month
following such Base Rent Date shall be the next
following Base Rent Date.
(3) If a LIBOR Period Election of
three months or six months is in effect on a Base
Rent Date, then the first Business Day of the third
calendar month following such Base Rent Date shall be
the next following Base Rent Date.
Thus, for example, if the Carrying Costs Accrual Termination
Date falls on the first Business Day of June, 1999 and a LIBOR
Period Election of six months commences on the Carrying Costs
Accrual Termination Date, then the first Base Rent Date shall
be the first Business Day of September, 1999, and the second
Base Rent Date shall be the first Business Day of December,
1999.
"Base Rent Period" means a period for which Base Rent must
be paid under the Lease, each of which periods shall correspond
to the LIBOR Period Election for such period. The first Base
Rent Period shall begin on and include the Carrying Costs
Accrual Termination Date, and each successive Base Rent Period
shall begin on and include the Base Rent Date upon which the
preceding Base Rent Period ends. Each Base Rent Period,
including the first Base Rent Period, shall end on but not
include the first or second Base Rent Date after the Base Rent
Date upon which such period began, determined as follows:
(1) If the LIBOR Period Election for
a Base Rent Period is one month, two months or three
months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon
which such period began.
(2) If the LIBOR Period Election for
a Base Rent Period is six months, then such Base Rent
Period shall end on the second Base Rent Date after
the Base Rent Date upon which such period began.
The determination of Base Rent Periods can be illustrated by
two examples:
1) If Tenant makes a LIBOR Period
Election of three months for a hypothetical Base Rent
Period beginning on the first Business Day in
January, 2000, then such Base Rent Period will end on
but not include the first Base Rent Date after it
begins; that is, such Base Rent Period will end on
the first Business Day in April, 2000, the third
calendar month after January, 2000.
2) If, however, Tenant makes a LIBOR
Period Election of six months for the hypothetical
Base Rent Period beginning the first Business Day in
January, 2000, then such Base Rent Period will end on
but not include the second Base Rent Date after it
begins; that is, the first Business Day in July,
2000.
(l) Breakage Costs. "Breakage Costs" means any and all costs,
losses or expenses incurred or sustained by Landlord's Parent
or any other Participant, for which Landlord's Parent or the
other Participant shall expect reimbursement from Landlord,
because of the resulting liquidation or redeployment of
deposits or other funds used to make Funding Advances upon any
termination of this Lease by Tenant pursuant to Paragraph 2 or
any sale of the Leased Property pursuant to the Purchase
Agreement, if such termination or sale is effective as of any
day other than a Base Rent Date. Breakage Costs will include
losses attributable to any decline in LIBOR as of the effective
date of termination or sale as compared to LIBOR used to
determine the Effective Rate then in effect. (However, if
Landlord's Parent or another Participant actually receives a
profit upon the liquidation or redeployment of deposits or
other funds used to make Funding Advances, because of any
increase in LIBOR, then such profit will be offset against
costs or expenses that would otherwise be charged as Breakage
Costs for the account of Landlord's Parent or the applicable
Participant under this Lease.) Each determination by
Landlord's Parent of Breakage Costs shall, in the absence of
clear and demonstrable error, be conclusive and binding upon
Landlord and Tenant.
(m) Business Day. "Business Day" means any day that is (1)
not a Saturday, Sunday or day on which commercial banks are
generally closed or required to be closed in New York City, New
York or San Francisco, California, and (2) a day on which
dealings in deposits of dollars are transacted in the London
interbank market; provided that if such dealings are suspended
indefinitely for any reason, "Business Day" shall mean any day
described in clause (1).
(n) Capital Adequacy Charges. "Capital Adequacy Charges"
means any additional amounts Landlord's Parent or any other
Participant requires Landlord to pay as compensation for an
increase in required capital as provided in subparagraph
9.(y)(iv).
(o) Carrying Costs. "Carrying Costs" means the charges added
to and made a part of the Outstanding Construction Allowance
from time to time on and before the Carrying Costs Accrual
Termination Date pursuant to and as more particularly described
in subparagraph 6.(a)(ii) below.
(p) Carrying Costs Accrual Termination Date. "Carrying Costs
Accrual Termination Date" means the earlier of (1) the Last
Advance Date or (2) the first Advance Date that occurs at least
ten (10) days after Landlord has received a notice from Tenant,
in the form of Exhibit L attached hereto, stating that Tenant
irrevocably elects to accelerate the Carrying Costs Accrual
Termination Date and thereby accelerate the commencement of
Base Rent accruals and the termination of accruals of Carrying
Costs. It is understood that Tenant may, but shall not be
required, to give such a notice at any time.
(q) Cash Collateral. "Cash Collateral" shall have the meaning
assigned to it in the Pledge Agreement.
(r) Certificate of Deposit Collateral Percentage.
"Certificate of Deposit Collateral Percentage" for each Period
means the Certificate of Deposit Collateral Percentage for such
Period (as defined in and determined in accordance with the
Pledge Agreement); provided, however, for purposes of this
Lease, the Certificate of Deposit Collateral Percentage for any
Period shall not exceed a fraction, the numerator of which
fraction shall equal the Value (as defined in and determined in
accordance with the Pledge Agreement) of all Cash Collateral
that is, on the first day of such Period, held by the Deposit
Takers under (and as defined in) the Pledge Agreement, subject
to a Qualifying Security Interest and free from claims or
security interests held or asserted by any third party, and the
denominator of which fraction shall equal the Stipulated Loss
Value on the first day of such Period (computed after the
addition of any Construction Advance made on such first day,
after the addition of all Carrying Costs for prior Construction
Periods, and after the subtraction of any Qualified Payments
applied on such first day).
(s) Closing Costs. "Closing Costs" means an amount requested
by Tenant, not to exceed $200,000, advanced by or on behalf of
Landlord on the effective date of this Lease to pay on behalf
of Tenant (i) the Upfront Fee, (ii) "Base Rent" and "Breakage
Costs" which have accrued and are due under (and as are defined
in) the Original Lease, and (iii) expenses incurred in
connection with the preparation and negotiation of this Lease,
the Purchase Documents, the Environmental Indemnity, the
Participation Agreement and related documents. To the extent
that Landlord does not itself apply funds advanced as provided
in this definition, the remainder thereof will be advanced to
Tenant, with the expectation that Tenant shall use any such
amount advanced for one or more of the following purposes: (1)
the payment of the Upfront Fee and expenses incurred in
connection with the preparation and negotiation of this Lease,
the Purchase Documents, the Environmental Indemnity, the
Participation Agreement and related documents; (2) the payment
or reimbursement of other expenses incurred by Tenant in
connection with any improvements Tenant may elect to make to
the Leased Property in accordance with the requirements and
limitations imposed by this Lease, including the planning,
design, engineering and permitting of thereof; (3) the
maintenance of the Leased Property; or (4) the payment of Rents
next due. The advance described in this definition shall
constitute part of the Initial Investment, and the amount
thereof may be confirmed by Landlord and Tenant in a separate
closing certificate.
(t) Change of Control Event. "Change of Control Event" means
the occurrence of any merger or consolidation or sale of assets
involving Tenant that is prohibited by subparagraph
9.(ad)(iii).
(u) Code. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(v) Collateral. "Collateral" shall have the meaning assigned
to it in the Pledge Agreement.
(w) Commitment Fee. "Commitment Fee" shall have the meaning
assigned to it in subparagraph 3.(c) below.
(x) Completion Deadline. "Completion Deadline" means the
first Business Day in August, 1999.
(y) Completion Notice. "Completion Notice" shall have the
meaning assigned to it in subparagraph 6.(d) below.
(z) Construction Advances. "Construction Advances" means
actual advances of funds made by or on behalf of Landlord
pursuant to Paragraph 6.(a)(i) below for costs incurred to
construct the Designated Improvements or for property taxes and
assessments assessed against the Leased Property paid prior to
the Last Advance Date.
(aa) Construction Allowance. "Construction Allowance" means
the allowance, consisting of all Construction Advances and
Carrying Costs, which is to be provided by Landlord for the
construction of the Designated Improvements as more
particularly described in Paragraph 6 below.
(ab) Construction Documents. "Construction Documents" means
all construction contracts, architectural contracts,
engineering contracts, drawings, plans, specifications, change
orders, budgets, surveys, soils reports, environmental impact
studies and other documents executed by or prepared for Tenant
with respect to the construction of the Designated
Improvements.
(ac) Construction Periods. The first "Construction
Period" shall be the period beginning on and including the
effective date hereof and ending on but not including the first
Advance Date. Each successive "Construction Period" after the
first Construction Period shall be a period of approximately
one (1) month (except Construction Periods, if any, commencing
on or after the Carrying Costs Accrual Termination Date, which
shall be coterminous with Base Rent Periods) and shall begin on
and include the day on which the preceding Construction Period
ends and shall end on but not include the next following
Advance Date. The last "Construction Period" shall end on but
not include the Last Advance Date.
(ac) Custodial Agreement. "Custodial Agreement" means the
Custodial Agreement dated as of the date hereof between Banque
Nationale de Paris, New York Branch, and Tenant pursuant to
which such bank will hold securities pledged by Tenant as
collateral for Tenant's obligations under the Purchase
Agreement, as such Custodial Agreement may be extended,
supplemented, amended, restated or otherwise modified from time
to time.
(ad) Debt. "Debt" of any Person means (i) indebtedness of such
Person for borrowed money, (ii) obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such Person to pay the
deferred purchase price of property or services,
(iv) obligations of such Person as lessee under leases which
shall have been or should be, in accordance with GAAP, recorded
as capital leases, (v) obligations of such Person, contingent
or otherwise, under any lease of real property or related
documents (including a separate purchase agreement) which
provide that such Person must purchase or cause another to
purchase any interest in the leased property and thereby
guarantee a minimum residual value of the leased property to
the lessor; (vi) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i)
through (v) above, (vii) liabilities of another Person secured
by a Lien on, or payable out of the proceeds of production
from, property of such Person even though such obligation shall
not be assumed by such Person (but in the case of such
liabilities not assumed by such Person, the liabilities shall
constitute Debt of such Person only to the extent of the value
of such Person's property encumbered by the Lien securing such
liabilities) and (viii) Unfunded Benefit Liabilities.
(ae) Default. "Default" means any event which, with the
passage of time or the giving of notice or both, would (if not
cured within any applicable cure period) constitute an Event of
Default.
(af) Default Rate. "Default Rate" means a floating per annum
rate equal to three percent (3%) above the Prime Rate.
However, in no event will the Default Rate exceed the maximum
interest rate permitted by law.
(ag) Defaulting Participant. "Defaulting Participant" means
any Approved Participant that shall have breached the
Participation Agreement by failing to provide a Funding Advance
to Landlord for (or equal to) such Participant's percentage of
any Construction Advance requested by Tenant. (For purposes of
this Lease a "Participant's percentage" shall mean the
percentage that, under the Participation Agreement, is to be
multiplied against Construction Advances to compute the amount
the Participant must advance to Landlord for (or equal to) a
percentage of Construction Advances requested hereunder.)
(ah) Designated Improvements. "Designated Improvements" shall
mean the improvements on the Land and any furnishings for such
improvements which are to be constructed and installed by
Tenant using the Construction Allowance as described in
Paragraph 6 below.
(ai) Designated Sale Date. "Designated Sale Date" shall have
the meaning assigned to it in the Purchase Agreement.
(aj) Effective Rate. "Effective Rate" means, for each Period,
the per annum rate determined by dividing (A) LIBOR for such
Period, by (B) 100% minus the Eurodollar Rate Reserve
Percentage for such Period; provided, however, for each day
during the short first Construction Period ending on August 1,
1997, the Effective Rate will equal the per annum rate which is
fifty basis points (50/100 of 1%) above the Fed Funds Rate on
that day.
If LIBOR or the Eurodollar Rate Reserve Percentage changes from
Period to Period, then the Effective Rate shall be
automatically increased or decreased, as the case may be, as of
the date of the change from Period to Period. If for any
reason Landlord's Parent determines that it is impossible or
unreasonably difficult to determine the Effective Rate with
respect to a given Period in accordance with the preceding
sentences, then the "Effective Rate" for that Period shall
equal any published index or per annum interest rate determined
reasonably and in good faith by Landlord's Parent to be a
comparable rate at the beginning of the first day of that
period. A comparable interest rate might be, for example, the
then existing yield on short term United States Treasury
obligations (as compiled by and published in the then most
recently published United States Federal Reserve Statistical
Release H.15(519) or its successor publication), plus or minus
a fixed adjustment based on Landlord's Parent's comparison of
past eurodollar market rates to past yields on such Treasury
obligations. Any determination by Landlord's Parent of the
Effective Rate hereunder shall, in the absence of clear and
demonstrable error, be conclusive and binding.
(ak) Environmental Indemnity. "Environmental Indemnity" means
the separate Environmental Indemnity Agreement dated as of the
date hereof executed by Tenant in favor of Landlord covering
the Land and certain other property described therein, as such
agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time.
(al) Environmental Laws. "Environmental Laws" means any and
all existing and future Applicable Laws pertaining to safety,
health or the environment, or to Hazardous Substances or
Hazardous Substance Activities, including without limitation
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (as amended, hereinafter called
"CERCLA"), and the Resource Conservation and Recovery Act of
1976, as amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980, and the Hazardous
and Solid Waste Amendments of 1984 (as amended, hereinafter
called "RCRA").
(am) Environmental Losses. "Environmental Losses" means Losses
suffered or incurred by any Indemnified Party, directly or
indirectly, relating to or arising out of, based on or as a
result of: (i) any Hazardous Substance Activity; (ii) any
violation of Environmental Laws relating to the Leased Property
or to the ownership, use, occupancy or operation thereof; (iii)
any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental
agency or authority in connection with any Hazardous Substance
Activity; or (iv) any claim, demand, cause of action or
investigation, or any action or other proceeding, whether
meritorious or not, brought or asserted against any Indemnified
Party which directly or indirectly relates to, arises from, is
based on, or results from any of the matters described in
clauses (i), (ii), or (iii) of this subparagraph 1.(am), or any
allegation of any such matters. ENVIRONMENTAL LOSSES INCURRED
BY OR ASSERTED AGAINST A PARTICULAR INDEMNIFIED PARTY SHALL
INCLUDE LOSSES RELATING TO OR ARISING OUT OF OR AS A RESULT OF
ANY MATTERS LISTED IN THE PRECEDING SENTENCE EVEN WHEN SUCH
MATTERS ARE CAUSED BY THE ORDINARY NEGLIGENCE (AS DEFINED
BELOW) OF THAT PARTICULAR OR ANY OTHER INDEMNIFIED PARTY.
However, Losses incurred by or asserted against a particular
Indemnified Party and proximately caused by (and attributed by
any applicable principles of comparative fault to) the wilful
misconduct, Active Negligence or gross negligence of any
Indemnified Party will not constitute Environmental Losses of
such Indemnified Party for purposes of this Lease.
(an) Environmental Report. "Environmental Report" means,
collectively, the reports listed on Exhibit G attached hereto.
(ao) ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, together
with all rules and regulations promulgated with respect
thereto.
(ap) ERISA Affiliate. "ERISA Affiliate" means any Person who
for purposes of Title IV of ERISA is a member of Tenant's
controlled group, or under common control with Tenant, within
the meaning of Section 414 of the Code, and the regulations
promulgated and rulings issued thereunder.
(aq) ERISA Termination Event. "ERISA Termination Event" means
(i) the occurrence with respect to any Plan of a) a reportable
event described in Sections 4043(b)(5) or (6) of ERISA or b)
any other reportable event described in Section 4043(b) of
ERISA other than a reportable event not subject to the
provision for 30-day notice to the Pension Benefit Guaranty
Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (ii) the withdrawal of Tenant or
any Affiliate of Tenant from a Plan during a plan year in which
it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (iii) the filing of a notice of intent
to terminate any Plan or the treatment of any Plan amendment as
a termination under Section 4041 of ERISA, or (iv) the
institution of proceedings to terminate any Plan by the Pension
Benefit Guaranty Corporation under Section 4042 of ERISA, or
(v) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
(ar) Escrowed Proceeds. "Escrowed Proceeds" shall mean any
proceeds that are received by Landlord from time to time during
the Term (and any interest earned thereon), which Landlord is
holding for the purposes specified in the next sentence, from
any party (1) under any casualty insurance policy as a result
of damage to the Leased Property, (2) as compensation for any
restriction placed upon the use or development of the Leased
Property or for the condemnation of the Leased Property or any
portion thereof, (3) because of any judgment, decree or award
for injury or damage to the Leased Property or (4) under any
title insurance policy or otherwise as a result of any title
defect or claimed title defect with respect to the Leased
Property; provided, however, in determining "Escrowed Proceeds"
there shall be deducted all expenses and costs of every type,
kind and nature (including Attorneys' Fees) incurred by
Landlord to collect such proceeds; and provided, further,
"Escrowed Proceeds" shall not include any payment to Landlord
by a Participant or an Affiliate of Landlord that is made to
compensate Landlord for the Participant's or Affiliate's share
of any Losses Landlord may incur as a result of any of the
events described in the preceding clauses (1) through (4).
"Escrowed Proceeds" shall include only such proceeds as are
held by Landlord (A) pursuant to Paragraph 4 for the payment to
Tenant for the restoration or repair of the Leased Property or
(B) for application (generally, on the next following Advance
Date or Base Rent Date which is at least three (3) Business
Days following Landlord's receipt of such proceeds) as a
Qualified Payment or as reimbursement of costs incurred in
connection with a Qualified Payment. "Escrowed Proceeds" shall
not include any proceeds that have been applied as a Qualified
Payment or to pay any costs incurred in connection with a
Qualified Payment. Until Escrowed Proceeds are paid to Tenant
pursuant to Paragraph 4 below or applied as a Qualified Payment
or as reimbursement for costs incurred in connection with a
Qualified Payment, Landlord shall keep the same deposited in an
interest bearing account, and all interest earned on such
account shall be added to and made a part of Escrowed Proceeds.
(as) Eurocurrency Liabilities. "Eurocurrency Liabilities" has
the meaning assigned to that term in Regulation D of the Board
of Governors of the Federal Reserve System, as in effect from
time to time.
(at) Eurodollar Rate Reserve Percentage. "Eurodollar Rate
Reserve Percentage" means, for purposes of determining the
Effective Rate for any Period, the reserve percentage
applicable two Business Days before the first day of such
period under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, but
not limited to, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve
System in New York City with deposits exceeding One Billion
Dollars with respect to liabilities or deposits consisting of
or including Eurocurrency Liabilities (or with respect to any
other category or liabilities by reference to which LIBOR is
determined) having a term comparable to such period.
(au) Event of Default. "Event of Default" shall have the
meaning assigned to it in subparagraph 14.(a) below.
(av) Excluded Taxes. "Excluded Taxes" shall mean (1) all
federal, state and local income taxes upon the Base Rent, the
Upfront Fee, the Commitment Fee, Administrative Fees and any
interest paid to Landlord pursuant to subparagraph 3.(f), (2)
any taxes imposed by any governmental authority outside the
United States, and (3) any transfer or change of ownership
taxes assessed because of Landlord's transfer or conveyance to
any third party of any rights or interest in this Lease, the
Purchase Documents, or the Leased Property, but excluding any
such taxes assessed because of any Permitted Transfer.
(aw) Fair Market Value. "Fair Market Value" shall have the
meaning assigned to it in the Purchase Agreement.
(ax) Fed Funds Rate. "Fed Funds Rate" means, for any period, a
fluctuating interest rate (expressed as a per annum rate and
rounded upwards, if necessary, to the next 1/16 of 1%) equal
for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rates are not so
published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by
the Landlord's Parent from three Federal funds brokers of
recognized standing selected by Landlord's Parent. All
determinations of the Fed Funds Rate by Landlord's Parent
shall, in the absence of clear and demonstrable error, be
binding and conclusive upon Landlord and Tenant.
(ay) Funding Advances. "Funding Advances" means (1) advances
(equal in the aggregate to the Initial Investment) made on or
prior to the date hereof by Landlord's Parent and other
Participants to or on behalf of Landlord to permit Landlord to
acquire or maintain its investment in the Leased Property and
to allow Landlord to provide the advance described in the
definition of Closing Costs in subparagraph 1.(s), (2) future
advances (which, together with the Funding Advances described
in the preceding clauses (1), are expected to total
$86,000,000) made by Landlord's Parent or any Participant to or
on behalf of Landlord to allow Landlord to provide Construction
Advances hereunder and to cover Carrying Costs, and (3) future
advances made by Landlord's Parent or any Participant to or on
behalf of Landlord in replacement of or renewal and extension
of other Funding Advances. For example, if after the date
hereof a new Participant advances funds on behalf of Landlord
to Landlord's Parent or another then existing Participant in
repayment of all or part of Funding Advances previously made by
Landlord's Parent or the other Participant, such advance of
funds by the new Participant shall constitute a Funding Advance
hereunder, and the prior Funding Advances so repaid to
Landlord's Parent or the other Participant shall thereupon
cease to constitute Funding Advances for purposes of this
Lease.
(az) GAAP. "GAAP" means generally accepted accounting
principles in the United States of America as in effect from
time to time, applied on a basis consistent with those used in
the preparation of the financial statements referred to in
subparagraph 9.(w) (except for changes concurred in by Tenant's
independent public accountants).
(ba) Hazardous Substance. "Hazardous Substance" means (i) any
chemical, compound, material, mixture or substance that is now
or hereafter defined or listed in, regulated under, or
otherwise classified pursuant to, any Environmental Laws as a
"hazardous substance," "hazardous material," "hazardous waste,"
"extremely hazardous waste," "infectious waste," "toxic
substance," "toxic pollutant," or any other formulation
intended to define, list or classify substances by reason of
deleterious properties, including, without limitation,
ignitability, corrosiveness, reactivity, carcinogenicity,
toxicity or reproductive toxicity; (ii) petroleum, any fraction
of petroleum, natural gas, natural gas liquids, liquified
natural gas, synthetic gas usable for fuel (or mixtures of
natural gas and such synthetic gas), and ash produced by a
resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes
associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iii) asbestos
and any asbestos containing material; and (iv) any other
material that, because of its quantity, concentration or
physical or chemical characteristics, poses a significant
present or potential hazard to human health or safety or to the
environment if released into the workplace or the environment.
(bb) Hazardous Substance Activity. "Hazardous Substance
Activity" means any actual, proposed or threatened use,
storage, holding, existence, location, release (including,
without limitation, any spilling, leaking, leaching, pumping,
pouring, emitting, emptying, dumping, disposing into the
environment, and the continuing migration into or through soil,
surface water, groundwater or any body of water), discharge,
deposit, placement, generation, processing, construction,
treatment, abatement, removal, disposal, disposition, handling
or transportation of any Hazardous Substance from, under, in,
into or on the Leased Property, including, without limitation,
the movement or migration of any Hazardous Substance from
surrounding property, surface water, groundwater or any body of
water under, in, into or onto the Leased Property and any
residual Hazardous Substance contamination in, on or under the
Leased Property.
(bc) Impositions. "Impositions" shall have the meaning
assigned to it in subparagraph 9.(p) below.
(bd) Improvements. "Improvements," as defined in the recitals
at the beginning of this Lease, shall include not only existing
improvements to the Land as of the date hereof, if any, but
also any new improvements or changes to existing improvements
made by Tenant. Accordingly, any and all new improvements made
to the Leased Property by Tenant using the Construction
Allowance as contemplated in this Lease shall constitute
Improvements as that term is used herein.
(be) Indemnified Party. "Indemnified Party" means each of (1)
Landlord and any of Landlord's successors and assigns as to all
or any portion of the Leased Property or any interest therein
(but excluding Tenant or any Applicable Purchaser under the
Purchase Agreement or any Person that claims its interest in
the Leased Property through or under Tenant or through or under
an assignment from Landlord that does not constitute a
Permitted Transfer), (2) the Participants, and (3) any
Affiliate, officer, agent, director, employee or servant of any
of the parties described in clause (1) or (2) preceding.
(bf) Initial Investment. "Initial Investment" means
$10,400,000, being equal to the $10,200,000 "Stipulated Loss
Value" under and as defined in the Original Lease, plus the
advance described in the definition of Closing Costs in
subparagraph 1.(s) above.
(bg) Landlord's Parent. "Landlord's Parent" means Landlord's
Affiliate, Banque Nationale de Paris, a bank organized and
existing under the laws of France, together with any Affiliates
of such bank that directly or indirectly provided or hereafter
during the Term provide or maintain any Funding Advances, and
any successors of such bank and such Affiliates.
(bh) Last Advance Date. "Last Advance Date" means the earlier
of (1) the Completion Deadline (or - if the Completion Deadline
is not an Advance Date, which could occur if Tenant exercises
its rights hereunder to accelerate the Carrying Costs Accrual
Termination Date and to thereafter designate a LIBOR Period
Election of more than one month - then the latest Advance Date
prior to the Completion Deadline), (2) the first Advance Date
that occurs at least ten (10) days after Landlord has received
a Completion Notice or a Notice of Last Advance, or (3) the
Designated Sale Date.
(bi) LIBOR. "LIBOR" means, for purposes of determining the
Effective Rate for each Period, the rate determined by
Landlord's Parent to be the average rate of interest per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) of the
rates at which deposits of dollars are offered or available to
Landlord's Parent in the London interbank market at
approximately 11:00 a.m. (London time) on the second Business
Day preceding the first day of such period. Landlord shall
instruct Landlord's Parent to consider deposits, for purposes
of making the determination described in the preceding
sentence, that are offered: (i) for delivery on the first day
of such Period, (ii) in an amount equal or comparable to the
total (projected on the applicable date of determination by
Landlord's Parent) Stipulated Loss Value on the first day of
such Period, and (iii) for a period of time equal or comparable
to the appropriate Period. If Landlord's Parent so chooses, it
may determine LIBOR for any period by reference to the rate
reported by the British Banker's Association on Page 3750 of
the Telerate Service at approximately 11:00 a.m. (London time)
on the second Business Day preceding the first day of such
period; provided, however, Tenant may notify Landlord that
Tenant objects to any future determination of LIBOR in the
manner provided by this sentence, in which case any
determination of LIBOR required more than three Business Days
after Landlord's receipt of such notice shall be made as if
this sentence had been struck from this Lease. If for any
reason Landlord's Parent determines that it is impossible or
unreasonably difficult to determine LIBOR with respect to a
given Period in accordance with the preceding sentences, or if
Landlord's Parent shall determine that it is unlawful (or any
central bank or governmental authority shall assert that it is
unlawful) for Landlord, Landlord's Parent or any other
Participant to provide or maintain any Funding Advances
hereunder during any Period for which Base Rent is computed by
reference to LIBOR, then "LIBOR" for that Period shall equal
the rate which is fifty basis points (50/100 of 1%) above the
Fed Funds Rate for that period. All determinations of LIBOR by
Landlord's Parent shall, in the absence of clear and
demonstrable error, be binding and conclusive upon Landlord and
Tenant.
(bj) LIBOR Period Election. "LIBOR Period Election" for any
Base Rent Period means a period of one month, two months, three
months or six months as designated by Tenant at least ten
Business Days prior to the commencement of such Base Rent
Period by a notice given to Landlord in the form of Exhibit M
attached to this Lease. (For purposes of this Lease a LIBOR
Period Election for any Base Rent Period shall also be
considered the LIBOR Period Election in effect on (1) the date
[whether the Carrying Costs Accrual Termination Date or a Base
Rent Date] upon which such Base Rent Period begins and (2)
subsequent Base Rent Dates, if any, which occur before the date
upon which such Base Rent Period ends.) Any LIBOR Period
Election shall remain in effect not only for the entire first
Base Rent Period for which it is designated or becomes
effective, but also for subsequent Base Rent Periods until a
new designation by Tenant becomes effective in accordance with
the provisions set forth in this definition. Notwithstanding
the foregoing, however: (1) any LIBOR Period Election that
would cause a Base Rent Period to extend beyond the end of the
scheduled Term will be shortened as necessary to cause such
Base Rent Period to end when the scheduled Term ends; (2)
changes in the LIBOR Period Election shall become effective
only upon the commencement of a new Base Rent Period; (3) until
such time as Tenant designates another LIBOR Period Election
consistent with the foregoing requirements, Tenant will be
considered to have designated a LIBOR Period Election of one
month; and (4) if an Event of Default shall have occurred and
be continuing on the third Business Day preceding the
commencement of any Base Rent Period, the LIBOR Period Election
for such Base Rent Period shall be one month.
(bk) Lien. "Lien" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including
any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any agreement to sell
receivables with recourse, any lease in the nature thereof, and
the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction).
Customary bankers' rights of set-off arising by operation of
law or by contract (however styled, if the contract grants
rights no greater than those arising by operation of law) in
connection with working capital facilities, lines of credit,
term loans and letter of credit facilities and other
contractual arrangements entered into with banks in the
ordinary course of business are not "Liens" for the purposes of
this Lease.
(bl) Losses. "Losses" means any and all losses, liabilities,
damages (whether actual, consequential, punitive or otherwise
denominated), demands, claims, actions, judgments, causes of
action, assessments, fines, penalties, costs, and out-of-pocket
expenses (including, without limitation, Attorneys' Fees and
the fees of outside accountants and environmental consultants),
of any and every kind or character, foreseeable and
unforeseeable, liquidated and contingent, proximate and remote,
known and unknown.
(bm) Maximum Construction Allowance. "Maximum Construction
Allowance" means $86,000,000, minus the Initial Investment.
(bn) Notice of Last Advance. "Notice of Last Advance" means
any notice given by Tenant to Landlord stating that Tenant
irrevocably elects not to request or accept any further
Construction Advances which Tenant might be entitled to but for
such election. It is understood that Tenant may, but shall not
be required, to give a Notice of Last Advance in order to
accelerate the Last Advance Date and to thereby accelerate the
date upon which Commitment Fees shall cease to accrue.
(bo) Ordinary Negligence. "Ordinary Negligence" of an
Indemnified Party means any negligent acts or omissions of such
party that does not for any reason constitute Active Negligence
as defined in this Lease.
(bp) Outstanding Construction Allowance. "Outstanding
Construction Allowance" means at any time the amount equal to
(1) the total Construction Advances made by Landlord, PLUS (2)
all Carrying Costs added to the Outstanding Construction
Allowance under subparagraph 6.(a)(ii) on or prior to the date
in question, LESS (3) the amount (if any) of Qualified Payments
paid to Landlord and applied to the Outstanding Construction
Allowance on or prior to such date, and LESS (4) any payments
previously made by Tenant to Landlord pursuant to
subparagraph 3.(i).
(bq) Participant. "Participant" means any Person, including
Landlord's Parent, that agrees with Landlord or another
Participant to participate in all or some of the risks and
rewards to Landlord of this Lease and the Purchase Documents.
As of the effective date hereof, the only Participants are
those which have executed the Participation Agreement, but such
Participants and Landlord may agree to share in risks and
rewards of this Lease and the Purchase Documents with other
Participants in the future. However, no Person other than
Landlord's Parent and the Approved Participants shall qualify
as a Participant for purposes of this Lease, the Purchase
Documents or any other agreement to which Tenant is a party
unless, with Tenant's prior written approval or when an Event
of Default had occurred and was continuing, such Person became
a party to the Pledge Agreement and to the Participation
Agreement by executing supplements to those agreements as
contemplated therein.
(br) Participation Agreement. "Participation Agreement" means
the Participation Agreement dated the date hereof among
Landlord, Landlord's Parent, and the Participants named
therein, pursuant to which Landlord's Parent and such
Participants have agreed to participate in certain risks and
rewards to Landlord of this Lease and the Purchase Agreement,
as such Participation Agreement may be extended, supplemented,
amended, restated or otherwise modified from time to time in
accordance with its terms.
(bs) Period. "Period" means a Construction Period or a Base
Rent Period, as the context requires.
(bt) Permitted Encumbrances. "Permitted Encumbrances" means
(i) the encumbrances and other matters affecting the Leased
Property that are set forth in Exhibit B attached hereto and
made a part hereof, and (ii) any provisions of the Existing
Contract or any other agreement described therein that survived
closing thereunder (but not any deed of trust, mortgage or
other agreement given to secure the repayment of borrowed
funds), and (iii) any easement agreement or other document
affecting title to the Leased Property executed by Landlord at
the request of or with the consent of Tenant.
(bu) Permitted Hazardous Substance Use. "Permitted Hazardous
Substance Use" means the use, storage and offsite disposal of
Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the
nature of the Hazardous Substances involved; provided, the
scope and nature of such use, storage and disposal shall not
include the use of underground storage tanks for any purpose
other than the storage of water for fire control, nor shall
such scope and nature:
(1) exceed that reasonably required for the
construction of Improvements permitted by this Lease and
for the operation of the Leased Property for the purposes
expressly permitted under subparagraph 8.(a); or
(2) include any disposal, discharge or other release
of Hazardous Substances from operations on the Leased
Property in any manner that might allow such substances to
reach surface water or groundwater, except (i) through a
lawful and properly authorized discharge (A) to a publicly
owned treatment works or (B) with rainwater or storm water
runoff in accordance with Applicable Laws and any permits
obtained by Tenant that govern such runoff; or (ii) any
such disposal, discharge or other release of Hazardous
Substances for which no permits are required and which are
not otherwise regulated under applicable Environmental
Laws.
Further, notwithstanding anything to the contrary herein
contained, Permitted Hazardous Substance Use shall not include
any use of the Leased Property as a treatment, storage or
disposal facility (as defined by federal Environmental Laws)
for Hazardous Substances, including but not limited to a
landfill, incinerator or other waste disposal facility.
(bv) Permitted Hazardous Substances. "Permitted Hazardous
Substances" means Hazardous Substances used and reasonably
required for Tenant's operation of the Leased Property for the
purposes expressly permitted by subparagraph 8.(a) in strict
compliance with all Environmental Laws and with due care given
the nature of the Hazardous Substances involved. Without
limiting the generality of the foregoing, Permitted Hazardous
Substances shall include, without limitation, usual and
customary office and janitorial products, and the materials
listed on Exhibit C attached hereto.
(bw) Permitted Transfer. "Permitted Transfer" means any one or
more of the following: (1) the creation or conveyance of
rights and interests under the Participation Agreement in favor
of Landlord's Parent or Participants; (2) subject to the last
sentence of subparagraph 11.(d), any assignment or conveyance
by Landlord of any lien or security interest against the Leased
Property (in contrast to a conveyance of Landlord's fee estate
in the Leased Property) or of any interest in Rent, payments
required by the Purchase Agreement or payments to be generated
from the Leased Property after the Term, to any present or
future Participant or to any Affiliate of Landlord; (3) any
agreement to exercise or refrain from exercising rights or
remedies hereunder or under the Purchase Documents or the
Environmental Indemnity made by Landlord with any present or
future Participant or Affiliate of Landlord; (4) any assignment
or conveyance by Landlord requested by Tenant or required by
any Permitted Encumbrance, by the Purchase Agreement or by
Applicable Laws; (5) any assignment or conveyance by Landlord
when an Event of Default shall have occurred and be continuing;
or (6) any assignment or conveyance by Landlord after the
Designated Sale Date.
(bx) Person. "Person" means an individual, a corporation, a
partnership, an unincorporated organization, an association, a
joint stock company, a joint venture, a trust, an estate, a
government or agency or political subdivision thereof or other
entity, whether acting in an individual, fiduciary or other
capacity.
(by) Plan. "Plan" means at any time an employee pension
benefit plan which is covered under Title IV of ERISA or
subject to the minimum funding standards under Section 412 of
the Code and is either (i) maintained by Tenant or any
Subsidiary for employees of Tenant or any Subsidiary or
(ii) maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer
makes contributions and to which Tenant or any Subsidiary is
then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions.
(bz) Pledge Agreement. "Pledge Agreement" means the Pledge
Agreement dated as of the date hereof between Landlord and
Tenant, pursuant to which Tenant may pledge certificates of
deposit and/or securities as security for Tenant's obligations
under the Purchase Agreement (and for the corresponding
obligations of Landlord to the Participants under the
Participation Agreement), as such Pledge Agreement may be
extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
(ca) Prime Rate. "Prime Rate" means the prime interest
rate or equivalent charged by Landlord's Parent in the United
States as announced or published by Landlord's Parent from time
to time, which need not be the lowest interest rate charged by
Landlord's Parent. If for any reason Landlord's Parent does
not announce or publish a prime rate or equivalent, the prime
rate or equivalent announced or published by ABN AMRO Bank N.V.
or Credit Commercial de France as selected by Landlord shall be
used as the Prime Rate. The prime rate or equivalent announced
or published by such bank need not be the lowest rate charged
by it. The Prime Rate may change from time to time after the
date hereof without notice to Tenant as of the effective time
of each change in rates described in this definition.
(cb) Purchase Agreement. "Purchase Agreement" means the
Purchase Agreement dated as of the date hereof between Landlord
and Tenant pursuant to which Tenant has agreed to purchase or
to arrange for the purchase by a third party of the Leased
Property, as such Purchase Agreement may be extended,
supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.
(cc) Purchase Documents. "Purchase Documents" means
collectively the Purchase Agreement, the Pledge Agreement, and
the Custodial Agreement.
(cd) Purchase Price. "Purchase Price" shall have the
meaning assigned to it in the Purchase Agreement.
(ce) Qualified Payments. "Qualified Payments" means all
payments received by Landlord from time to time during the Term
from any party (1) under any casualty insurance policy as a
result of damage to the Leased Property, (2) as compensation
for any restriction placed upon the use or development of the
Leased Property or for the condemnation of the Leased Property
or any portion thereof, (3) because of any judgment, decree or
award for injury or damage to the Leased Property or (4) under
any title insurance policy or otherwise as a result of any
title defect or claimed title defect with respect to the Leased
Property; provided, however, that (x) in determining Qualified
Payments, there shall be deducted all expenses and costs of
every kind, type and nature (including taxes and Attorneys'
Fees) incurred by Landlord with respect to the collection of
such payments, (y) Qualified Payments shall not include any
payment to Landlord by a Participant or an Affiliate of
Landlord that is made to compensate Landlord for the
Participant's or Affiliate's share of any Losses Landlord may
incur as a result of any of the events described in the
preceding clauses (1) through (4) and (z) Qualified Payments
shall not include any payments received by Landlord that
Landlord has paid to Tenant for the restoration or repair of
the Leased Property or that Landlord is holding as Escrowed
Proceeds. For purposes of computing the total Qualified
Payments (and other amounts dependent upon Qualified Payments,
such as Stipulated Loss Value and the Outstanding Construction
Allowance) paid to or received by Landlord as of any date,
payments described in the preceding clauses (1) through (4)
will be considered as Escrowed Proceeds, not Qualified
Payments, until they are actually applied as Qualified Payments
by Landlord, which Landlord will do upon the first Advance Date
or Base Rent Date which is at least three (3) Business Days
after Landlord's receipt of the same unless postponement of
such application is required by other provisions of this Lease
or consented to by Tenant in writing. Thus, for example,
condemnation proceeds actually received by Landlord in the
middle of a Base Rent Period will not be considered as having
been received by Landlord for purposes of computing the total
Qualified Payments unless and until actually applied by
Landlord as a Qualified Payment on a subsequent Base Rent Date
in accordance with Paragraph 4 below. (Landlord shall have no
obligation to readvance any portion of the Outstanding
Construction Allowance reduced by Qualified Payments.)
(cf) Qualifying Security Interest. "Qualifying Security
Interest" means a first priority perfected security interest
under the Pledge Agreement which is sufficient, for purposes of
the laws and regulations which govern minimum amounts of
capital that Landlord and Participants or their affiliates must
maintain, to permit them to assign a risk weighting of no more
than twenty percent to a portion of their collective investment
in the Leased Property equal to the Value (as defined in and
determined in accordance with the Pledge Agreement) of the
Collateral encumbered by such an interest.
(cg) Remaining Proceeds. "Remaining Proceeds" shall have
the meaning assigned to it in subparagraph 4.(a)(ii).
(ch) Rent. "Rent" means the Base Rent and all Additional Rent.
(ci) Responsible Financial Officer. "Responsible
Financial Officer" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of Tenant.
(cj) Scope Change. A "Scope Change" means a material
addition to, deletion from or other modification to the
quality, function or capacity of the Designated Improvements as
delineated in Exhibit H or in any plans and specifications
therefor previously approved by Landlord, but shall not include
refinement, correction and detailing by Tenant or Tenant's
architects or contractors from time to time. As used in this
definition, a "material" change shall mean any change that (a)
is reasonably likely to substantially reduce the fair market
value of the Leased Property (after completion of the
Designated Improvements), or (b) will change the general
character of the Designated Improvements from that described in
Exhibit H.
(ck) Securities Collateral. "Securities Collateral" shall
have the meaning assigned to it in the Pledge Agreement.
(cl) Securities Collateral Percentage. "Securities
Collateral Percentage" for each Period means the Securities
Collateral Percentage for such Period (as defined in and
determined in accordance with the Pledge Agreement); provided,
however, for purposes of this Lease, the Securities Collateral
Percentage:
(i) for any Period ending on or prior to the Last Advance
Date shall be zero; and
(ii) for any Period ending after the Last Advance Date
shall not exceed the lesser of
(A) one minus the Certificate of
Deposit Collateral Percentage for such Period, or
(B) a fraction, the numerator of which
fraction shall equal the Value (as defined below) of
all Securities Collateral that is, on the first day
of such Period, held by the Custodian under the
Custodial Agreement, subject to a Qualifying Security
Interest and free from claims or security interests
held or asserted by any third party, and the
denominator of which fraction shall equal the
Stipulated Loss Value on the first day of such Period
(computed after the subtraction of any Qualified
Payments applied on such first day). "Value" means,
for purposes of determining the Securities Collateral
Percentage under this definition for each Period, the
Value (as defined in and determined in accordance
with the Pledge Agreement) on the Valuation Date (as
defined in the Custodial Agreement) upon which such
Period commences or, if such Period does not commence
upon a Valuation Date, on the most recent Valuation
Date prior to the commencement of such Period.
(cm) Spread. The "Spread" on any date will depend upon a
computation involving (a) the rating by Standard and Poor's
Corporation (the "S&P Rating") or the rating by Xxxxx'x
Investor Service, Inc. (the "Moody's Ratings"), whichever
rating is higher, of Tenant's senior, unsecured debt on that
date (whether such ratings are express or published, implied
ratings), and (b) the Debt to Capital Ratio (as defined below)
on that date, such computation to be as follows:
(i) If (1) there is no S&P Rating for the senior,
unsecured debt of Tenant (express or published, implied)
or the S&P Rating is below BBB-, AND (2) there is no
Xxxxx'x Rating for senior, unsecured debt of Tenant
(express or published, implied) or the Xxxxx'x Rating is
below Baa3, AND (3) the Debt to Capital Ratio is greater
than 0.30, then the Spread will be sixty basis points
(.600%).
(ii) If (1) the S&P Rating is BBB-, OR (2) the Xxxxx'x
Rating is Baa3, OR (3) the Debt to Capital Ratio is equal
to or less than 0.30 and more than 0.15, and if Tenant
does not qualify for a lower Spread pursuant to clause
(iii), (iv) or (v) below, then the Spread will be forty-
five basis points (.450%).
(iii) If (1) the S&P Rating is BBB, OR (2) the Xxxxx'x
Rating is Baa2, OR (3) the Debt to Capital Ratio is equal
to or less than 0.15, and if Tenant does not qualify for a
lower Spread pursuant to clause (iv) or (v) below, then
the Spread will be thirty-seven and one-half basis points
(.375%).
(iv) If (1) the S&P Rating is BBB+, OR (2) the Xxxxx'x
Rating is Baa1, and if Tenant does not qualify for a lower
Spread pursuant to clause (v) below, then the Spread will
be thirty basis points (.300%).
(v) If (1) the S&P Rating is above BBB+, OR (2) the
Xxxxx'x Rating is above Baa1, then the Spread will be
twenty-seven and one-half basis points (.275%).
For purposes of calculating the Spread, "Debt to Capital Ratio"
means the quotient determined by dividing (A) funded Senior
Debt (as defined in subparagraph 9.(ac)(ii)), by (B) the total
Capitalization (as defined in subparagraph 9.(ac)(ii)),
including Subordinated Debt (as defined in
subparagraph 9.(ac)(ii)). The parties believe it improbable
that the ratings systems used by Standard and Poor's
Corporation and by Xxxxx'x Investor Service, Inc. will be
discontinued or changed, but if such ratings systems are
discontinued or changed, Landlord shall be entitled to select
and use a comparable ratings systems as a substitute for the
S&P Rating or the Xxxxx Rating, as the case may be, for
purposes of determining the Spread. All determinations of the
Spread by Landlord shall, in the absence of clear and
demonstrable error, be binding and conclusive for purposes of
this Lease. Further Landlord may, but shall not be required,
to rely on the determination of the Spread set forth in any
certificate delivered by Tenant pursuant to
subparagraph 9.(w)(iv) below, and no reduction in the Spread
will be effective because of an improvement in the S&P Rating,
the Xxxxx'x Rating or the Debt to Capital Ratio before Tenant
has notified Landlord thereof by delivery of such a
certificate.
(cn) Stipulated Loss Value. "Stipulated Loss Value" means
at any time the amount equal to (1) the Initial Investment PLUS
(2) the Outstanding Construction Allowance at such time, LESS
(3) the aggregate amount (if any) of Qualified Payments paid to
Landlord in excess of any Qualified Payments deducted in the
computation of such Outstanding Construction Allowance. Under
no circumstances will any payment of Base Rent, the Upfront
Fee, Commitment Fees or Administrative Fees reduce Stipulated
Loss Value.
(co) Subsidiary. "Subsidiary" means any corporation of
which Tenant and/or its other Subsidiaries own, directly or
indirectly, such number of outstanding shares as have more than
50% of the ordinary voting power for the election of directors.
(cp) Tenant's Knowledge. "Tenant's knowledge," "to the
knowledge of Tenant" and words of like effect means the actual
knowledge (with due investigation) of any of the following
employees of Tenant: Xxxx Xxxxxx, Vice President and Corporate
Controller; Xxxxxxxxxxx X. Xxxxxxx, Chief Financial Officer;
Xxx Xxxxxxx, Vice President of Worldwide Real Estate and Site
Services; and Xxxx Xxxxxx, Director of Worldwide Safety and
Environmental Health. However, to the extent Tenant's
knowledge after the date hereof may become relevant hereunder
or under any certificate or other notice provided by Tenant to
Landlord in connection with this Lease, "Tenant's knowledge"
and words of like effect shall include the then actual
knowledge of other employees of Tenant (if any) that have
assumed responsibilities of the current employees listed in the
preceding sentence or that have replaced such current
employees. But none of the employees of Tenant whose knowledge
is now or may hereafter be relevant shall be personally liable
for the representations of Tenant made herein.
(cq) Term. "Term" shall have the meaning assigned to it
in Xxxxxxxxx 0 xxxxx.
(xx) Unfunded Benefit Liabilities. "Unfunded Benefit
Liabilities" means, with respect to any Plan, the amount (if
any) by which the present value of all benefit liabilities
(within the meaning of Section 4001(a)(16) of ERISA) under the
Plan exceeds the fair market value of all Plan assets allocable
to such benefit liabilities, as determined on the most recent
valuation date of the Plan and in accordance with the
provisions of ERISA for calculating the potential liability of
Tenant or any ERISA Affiliate of Tenant under Title IV of
ERISA.
(cs) Upfront Fee. "Upfront Fee" shall have the meaning
assigned to it in subparagraph 3.(b).
(ct) Voluntary Minimum Pledge Commitment. "Voluntary
Minimum Pledge Commitment" means an agreement in form and
substance reasonably satisfactory to Landlord and the other
parties to the Pledge Agreement which Tenant may elect to
execute in connection with a casualty, condemnation or sale in
lieu of condemnation affecting the Leased Property and which
modifies the Pledge Agreement by establishing a Minimum
Collateral Percentage (as defined therein) sufficient to
require Tenant to maintain Collateral under the Pledge
Agreement with a value of no less than the insurance,
condemnation or sale proceeds paid or to be paid because of the
casualty, condemnation or sale in lieu of condemnation until
Tenant has completed any related repairs or restoration
required by this Lease.
(cu) Other Terms and References. Words of any gender used
in this Lease shall be held and construed to include any other
gender, and words in the singular number shall be held to
include the plural and vice versa, unless the context otherwise
requires. References herein to Paragraphs, subparagraphs or
other subdivisions shall refer to the corresponding Paragraphs,
subparagraphs or subdivisions of this Lease, unless specific
reference is made to another document or instrument.
References herein to any Schedule or Exhibit shall refer to the
corresponding Schedule or Exhibit attached hereto, which shall
be made a part hereof by such reference. All capitalized terms
used in this Lease which refer to other documents shall be
deemed to refer to such other documents as they may be renewed,
extended, supplemented, amended or otherwise modified from time
to time, provided such documents are not renewed, extended or
modified in breach of any provision contained herein or therein
or, in the case of any other document to which Landlord is a
party or of which Landlord is an intended beneficiary, without
the consent of Landlord. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. The
words "this Lease", "herein", "hereof", "hereby", "hereunder"
and words of similar import refer to this Lease as a whole and
not to any particular subdivision unless expressly so limited.
The phrases "this Paragraph" and "this subparagraph" and
similar phrases refer only to the Paragraphs or subparagraphs
hereof in which the phrase occurs. Unless required by the
context in which it is used, the word "or" is not exclusive.
Other capitalized terms are defined in the provisions that
follow.
2. Term. The term of this Lease (herein called the "Term")
shall commence on and include the effective date hereof, and
end at 8:00 A.M. on the first Business Day of August, 2002,
unless extended or sooner terminated as herein provided.
Notwithstanding any other provision of this Lease which may
expressly restrict the early termination hereof, and provided
that Tenant is still in possession of the Leased Property and
has not breached its obligation to make or have made any
payment required by Paragraph 2 of the Purchase Agreement on
any prior Designated Sale Date, Tenant may notify Landlord of
Tenant's election to terminate this Lease before the first
Business Day of August, 2002, by giving Landlord an irrevocable
notice of such election and of the effective date of the
termination, which notice must be given (if at all) at least
sixty (60) days prior to the effective date of the termination.
If Tenant elects to so terminate this Lease, then on the date
on which this Lease is to be terminated, not only must Tenant
pay all unpaid Rent, Tenant must also pay any Breakage Costs
resulting from the termination and must satisfy its obligations
under the Purchase Agreement. The payment of any unpaid Rent
and Breakage Costs and the satisfaction of Tenant's obligations
under the Purchase Agreement shall be conditions precedent to
the effectiveness of any early termination of this Lease by
Tenant.
The Term may be extended at the option of Tenant for two
successive periods of five (5) years each; provided, however,
that prior to any such extension the following conditions must
have been satisfied: (A) at least one hundred eighty (180) days
prior to the commencement of any such extension, Landlord and
Tenant must have agreed in writing upon, and received the
written consent and approval of Landlord's Parent and all other
Participants to (1) a corresponding extension of the date
specified in clause (iii) of the definition of Designated Sale
Date in the Purchase Agreement, and (2) an adjustment to the
Rent that Tenant will be required to pay for the extension, it
being expected that the Rent for the extension may be different
than the Rent required for the original Term, and it being
understood that the Rent for any extension must in all events
be satisfactory to both Landlord and Tenant, each in its sole
and absolute discretion; (B) there must be no Event of Default
continuing hereunder at the time of Tenant's exercise of its
option to extend; and (C) immediately prior to any such
extension, this Lease must remain in effect. With respect to
the condition that Landlord and Tenant must have agreed upon
the Rent required for any extension of the Term, neither Tenant
nor Landlord is willing to submit itself to a risk of liability
or loss of rights hereunder for being judged unreasonable.
Accordingly, both Tenant and Landlord hereby disclaim any
obligation express or implied to be reasonable in negotiating
the Rent for any such extension. Subject to the changes to the
Rent payable during any extension of the Term as provided in
this Paragraph, if Tenant exercises its option to extend the
Term as provided in this Paragraph, this Lease shall continue
in full force and effect, and the leasehold estate hereby
granted to Tenant shall continue without interruption and
without any loss of priority over other interests in or claims
against the Leased Property that may be created or arise after
the date hereof and before the extension.
3. Rental.
(a) Base Rent. Tenant shall pay Landlord rent (herein called
"Base Rent") in arrears, in currency that at the time of
payment is legal tender for public and private debts in the
United States of America, in installments on each Base Rent
Date through the end of the Term. Each payment of Base Rent
must be received by Landlord no later than 12:00 noon (San
Francisco time) on the date it becomes due; if received after
12:00 noon it will be considered for purposes of this Lease as
received on the next following Business Day. Each installment
of Base Rent shall represent rent allocable to the Base Rent
Period (or portion thereof) ending on the date on which the
installment is due. Landlord shall notify Tenant in writing of
the Base Rent due for each Base Rent Period at least fifteen
(15) days prior to the Base Rent Date on which such period
ends. Any failure by Landlord to so notify Tenant shall not
constitute a waiver of Landlord's right to payment, but absent
such notice Tenant shall not be in default for any underpayment
resulting therefrom if Tenant, in good faith, reasonably
estimates the payment required, makes a timely payment of the
amount so estimated and corrects any underpayment within three
(3) Business Days after being notified by Landlord of the
underpayment.
For all Base Rent Periods subject to a LIBOR Period
Election of one month, two months or three months, Base Rent
shall be due in one installment on the Base Rent Date upon
which the Base Rent Period ends. For Base Rent Periods subject
to a LIBOR Period Election of six months, Base Rent shall be
payable in two installments, with the first installment
becoming due on the Base Rent Date that occurs on the first
Business Day of the third calendar month following the
commencement of such Base Rent Period, and with the second
installment becoming due on the Base Rent Date upon which the
Base Rent Period ends. Notwithstanding the foregoing, if
Tenant or any Applicable Purchaser purchases Landlord's
interest in the Property pursuant to the Purchase Agreement,
any accrued unpaid Base Rent and all outstanding Additional
Rent shall be due on the date of purchase in addition to the
purchase price and other sums due Landlord under the Purchase
Agreement.
The Base Rent for each Base Rent Period shall equal the
sum of:
(1) (A) Stipulated Loss Value on the first day of
such Base Rent Period, times (B) one minus the sum of the
Certificate of Deposit Collateral Percentage for such Base
Rent Period and the Securities Collateral Percentage for
such Base Rent Period, times (C) the sum of (i) the
Effective Rate for such Base Rent Period and (ii) the
Spread calculated on the tenth (10th) Business Day prior
to the day upon which such Base Rent Period commences,
times (D) the number of days in such Base Rent Period,
divided by (E) three hundred sixty (360); PLUS
(2) (A) Stipulated Loss Value on the first day of
such Base Rent Period, times (B) the Certificate of
Deposit Collateral Percentage for such Base Rent Period,
times (C) twenty-two and one-half basis points (22.5/100
of 1%), times (D) the number of days in such Base Rent
Period, divided by (E) three hundred sixty (360); PLUS
(3) (A) Stipulated Loss Value on the first day of
such Base Rent Period, times (B) the Securities Collateral
Percentage for such Base Rent Period, times (C) the sum of
(i) the Effective Rate for such Base Rent Period and (ii)
twenty-two and one-half basis points (22.5/100 of 1%),
times (D) the number of days in such Base Rent Period,
divided by (E) three hundred sixty (360).
To ease the administrative burden of this Lease and the
Pledge Agreement, clause (2) in the formula above for
calculating Base Rent reflects a reduction in the Base Rent
equal to the interest that would accrue on any Cash Collateral
required by the Pledge Agreement from time to time if the
Accounts (as defined in the Pledge Agreement) bore interest at
the Effective Rate. Landlord has agreed to such reduction in
the Base Rent to provide Tenant with the economic equivalent of
interest on such Cash Collateral, and in return Tenant has
agreed to the provisions of the Pledge Agreement that excuse
the actual payment of interest on the Accounts. By
incorporating such reduction of Base Rent into the formula
above, and by providing for noninterest bearing Accounts in the
Pledge Agreement, the parties will avoid an unnecessary and
cumbersome periodic exchange of equal payments. It is not,
however, the intent of Landlord or Tenant to understate Base
Rent or interest for financial reporting purposes.
Accordingly, for purposes of determining Tenant's compliance
with the affirmative financial covenants set forth in
subparagraph 9.(ac), and for purposes of any financial reports
that this Lease requires of Tenant from time to time, Tenant
may report Base Rent as if there had been no such reduction and
as if the Cash Collateral from time to time required by the
Pledge Agreement had been maintained in Accounts bearing
interest at the Effective Rate.
Assume, only for the purpose of illustration of the
calculation of Base Rent: that after the Carrying Costs Accrual
Termination Date, a hypothetical Base Rent Period contains
exactly ninety (90) days; that, after taking into account all
Qualified Payments, the Stipulated Loss Value on the first day
of such Base Rent Period is $50,000,000; that the Certificate
of Deposit Collateral Percentage for such Base Rent Period is
twenty percent (20%); that the Securities Collateral Percentage
for such Base Rent Period is thirty percent (30%); that the
Effective Rate for the applicable Base Rent Period is 5.5%; and
that the Spread for the applicable Base Rent Period is 0.5%.
Under such assumptions, the Base Rent for the hypothetical Base
Rent Period will equal:
$50,000,000 x 50% x (5.5% + 0.5%) x 90/360,
or $375,000, PLUS
$50,000,000 x 20% x .225% x 90/360, or
$5,625, PLUS
$50,000,000 x 30% x (5.5% + .225%) x
90/360, or $214,687.5, = $595,312.5
(b) Upfront Fee. Upon execution and delivery of this Lease by
Landlord, Tenant shall pay Landlord an upfront fee (the
"Upfront Fee") as provided in the letter dated July 10, 1997
from Landlord to Tenant, which Tenant executed and returned to
Landlord to indicate (among other things) Tenant's willingness
to proceed with negotiations for this Lease (the "Nonbinding
Term Sheet"). (Tenant shall, however, be entitled to an
appropriate credit against the Upfront Fee for the deposit
already paid by Tenant as provided in the Nonbinding Term
Sheet.) The Upfront Fee shall represent Additional Rent for
the first Base Rent Period.
(c) Commitment Fees. For each Construction Period, Tenant
shall pay Landlord a fee (herein called a "Commitment Fee")
equal to (1) twelve and one-half basis points (12.5/100 of 1%),
times (2) the difference at the end of the first day of such
Construction Period between (A) the Maximum Construction
Allowance and (B) the sum (computed without deduction for any
Qualified Payments) of all Construction Advances made by or on
behalf of Landlord under this Lease and all Carrying Costs that
have been added to and made a part of the Outstanding
Construction Allowance, times (3) the number of days in such
Construction Period, divided by (4) three hundred sixty (360).
Tenant shall pay Commitment Fees in arrears on the first
Business Day of February, May, August and November of each
calendar year, beginning with the first Business Day in
November, 1997 and continuing regularly thereafter to and
including the first of such Business Days to fall on or after
the Last Advance Date; provided that if any of such dates does
not fall on a Business Day, the payment of Commitment Fees
otherwise then due shall become due on the next following
Business Day; and provided, further, if any Commitment Fees
shall have accrued and remain unpaid on the Designated Sale
Date, such accrued unpaid Commitment Fees shall be due on the
Designated Sale Date.
(d) Administrative Agency Fees. Upon execution and delivery
of this Lease by Landlord, and again on each anniversary of the
date hereof, Tenant shall pay to Landlord an administrative
agency fee (an "Administrative Fee") in the amount equal to one
third of the total per annum administrative agency fees
specified in the Nonbinding Term Sheet. Each Administrative
Fee shall represent Additional Rent for the Construction Period
or Base Rent Period during which it is paid.
(e) Additional Rent. All amounts which Tenant is required to
pay to or on behalf of Landlord pursuant to this Lease,
together with every charge, premium, interest and cost set
forth herein which may be added for nonpayment or late payment
thereof, shall constitute rent (all such amounts, other than
Base Rent, are herein called "Additional Rent").
(f) Interest and Order of Application. All Rent shall bear
interest, if not paid when first due, at the Default Rate in
effect from time to time from the date due until paid;
provided, that nothing herein contained will be construed as
permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws.
Landlord shall be entitled to apply any amounts paid by or on
behalf of Tenant hereunder against any Rent then past due in
the order the same became due or in such other order as
Landlord may elect.
(g) Net Lease. It is the intention of Landlord and Tenant
that the Base Rent and all other payments herein specified
shall be absolutely net to Landlord. Tenant shall pay all
costs, expenses and obligations of every kind relating to the
Leased Property or this Lease which may arise or become due,
including, without limitation: (i) Impositions, including any
taxes payable by virtue of Landlord's receipt of amounts paid
to or on behalf of Landlord in accordance with this
subparagraph 3.(g), but not including any Excluded Taxes; (ii)
any Capital Adequacy Charges; (iii) any amount for which
Landlord is or becomes liable with respect to the Permitted
Encumbrances; and (iv) any costs incurred by Landlord
(including Attorneys' Fees) because of Landlord's acquisition
or ownership of the Leased Property or because of this Lease or
the transactions contemplated herein.
(h) No Demand or Setoff. The Base Rent and all Additional
Rent shall be paid without notice or demand and without
abatement, counterclaim, deduction, setoff or defense, except
as expressly provided herein.
(i) Overdrawn Allowance. On any Advance Date on which (1) the
Outstanding Construction Allowance (including any Carrying
Costs added thereto on such Advance Date), plus any Qualified
Payments that have been applied to reduce the Outstanding
Construction Allowance on or prior to such Advance Date, exceed
(2) the Maximum Construction Allowance, Tenant shall pay to
Landlord the amount of such excess. Each payment required by
this subparagraph must be received by Landlord no later than
12:00 noon (San Francisco time) on the Advance Date it becomes
due; if received after 12:00 noon it will be considered for
purposes of this Lease as received on the next following
Business Day. Landlord shall notify Tenant in writing of any
payment due pursuant to this subparagraph at least fifteen (15)
days prior to the Advance Date upon which it becomes due. Any
failure by Landlord to so notify Tenant shall not constitute a
waiver of Landlord's right to payment, but absent such notice
Tenant shall not be in default for any underpayment resulting
therefrom if Tenant, in good faith, reasonably estimates the
payment required, makes a timely payment of the amount so
estimated and corrects any underpayment within three (3)
Business Days after being notified by Landlord of the
underpayment. Nothing in this subparagraph shall be construed
to require Landlord to make Construction Advances which could
result in payments required by this subparagraph.
4. Insurance and Condemnation Proceeds.
(a) Subject to Landlord's rights under this Paragraph 4, and
so long as no Event of Default shall have occurred and be
continuing, Tenant shall be entitled to use all casualty
insurance and condemnation proceeds payable with respect to the
Leased Property during the Term for the restoration and repair
of the Leased Property or any remaining portion thereof.
Except as provided in the last sentence of subparagraph 9.(r)
and the last sentence of subparagraph 9.(s), all insurance and
condemnation proceeds received with respect to the Leased
Property (including proceeds payable under any insurance policy
covering the Leased Property which is maintained by Tenant)
shall be paid to Landlord and applied as follows:
(i) First, such proceeds shall be used to reimburse
Landlord for any costs and expenses, including Attorneys'
Fees, incurred in connection with the collection of such
proceeds.
(ii) Second, the remainder of such proceeds (the
"Remaining Proceeds"), shall be held by Landlord as
Escrowed Proceeds and applied to reimburse Tenant for the
actual cost of the repair, restoration or replacement of
the Leased Property. However, any Remaining Proceeds not
needed for such purpose shall be applied by Landlord as
Qualified Payments after Tenant notifies Landlord that
they are not needed for repairs, restoration or
replacement.
Notwithstanding the foregoing, if an Event of Default shall
have occurred and be continuing, then Landlord shall be
entitled to receive and collect insurance or condemnation
proceeds payable with respect to the Leased Property, and
either, at the discretion of Landlord, (A) hold such proceeds
as Escrowed Proceeds until paid to Tenant as reimbursement for
the actual and reasonable cost of repairing, restoring or
replacing the Leased Property when Tenant has completed such
repair, restoration or replacement, or (B) apply such proceeds
(net of the deductions described in clause (i) above) as
Qualified Payments.
(b) Any Remaining Proceeds held by Landlord as Escrowed
Proceeds shall be deposited by Landlord in an interest bearing
account as provided in the definition of Escrowed Proceeds and
shall be paid to Tenant upon completion of the applicable
repair, restoration or replacement and upon compliance by
Tenant with such terms, conditions and requirements as may be
reasonably imposed by Landlord, but in no event shall Landlord
be required to pay any Escrowed Proceeds to Tenant in excess of
the actual cost to Tenant of the applicable repair, restoration
or replacement, it being understood that Landlord may retain
any such excess as a Qualified Payment. In any event, Tenant
will not be entitled to any abatement or reduction of the Base
Rent or any other amount due hereunder except to the extent
that such excess Remaining Proceeds result in Qualified
Payments which reduce Stipulated Loss Value (and thus payments
computed on the basis of Stipulated Loss Value) as provided in
the definitions set out above. Further, notwithstanding the
inadequacy of the Remaining Proceeds held by Landlord as
Escrowed Proceeds, if any, or anything herein to the contrary,
Tenant must, after any taking of less than all or substantially
all of the Leased Property by condemnation and after any damage
to the Leased Property by fire or other casualty, restore or
improve the Leased Property or the remainder thereof to a value
no less than Stipulated Loss Value (computed after the
application of any Remaining Proceeds as a Qualified Payment)
and to a safe and sightly condition. Any taking of so much of
the Leased Property as, in Landlord's reasonable judgment,
makes it impracticable to restore or improve the remainder
thereof as required by the preceding sentence shall be
considered a taking of substantially all the Leased Property
for purposes of this Paragraph 4.
(c) In the event of any taking of all or substantially all of
the Leased Property, Landlord shall be entitled to apply all
Remaining Proceeds as a Qualified Payment, notwithstanding the
foregoing. In addition, if Stipulated Loss Value immediately
prior to any taking of all or substantially all of the Leased
Property by condemnation exceeds the sum of the Remaining
Proceeds resulting from such condemnation, then Landlord shall
be entitled to recover the excess from Tenant upon demand as an
additional Qualified Payment, whereupon this Lease shall
terminate.
(d) Nothing herein contained shall be construed to prevent
Tenant from obtaining and applying as it deems appropriate any
separate award from any condemning authority or from any
insurer for a taking of or damage to Tenant's personal property
not included in the Leased Property or for moving expenses or
business interruption, provided, such award is not combined
with and does not reduce the award for any taking of the Leased
Property, including Tenant's interest therein. Further,
notwithstanding anything to the contrary herein contained, if
Remaining Proceeds held by Landlord during the term of this
Lease shall exceed Stipulated Loss Value and any Rent payable
by Tenant, then Tenant may get the excess by terminating this
Lease in accordance with Paragraph 2 and purchasing such excess
(which will then be held by Landlord as Escrowed Proceeds),
together with any remaining interest of Landlord in the Leased
Property, pursuant to the Purchase Agreement.
(e) Landlord and Tenant each waive any right of recovery
against the other, and the other's agents, officers or
employees, for any damage to the Leased Property or to the
personal property situated from time to time in or on the
Leased Property resulting from fire or other casualty covered
by a valid and collectible insurance policy; provided, however,
that the waiver set forth in this subparagraph 4.(e) shall be
effective insofar, but only insofar, as compensation for such
damage or loss is actually recovered by the waiving party (net
of costs of collection) under the policy notwithstanding the
waivers set out in this paragraph. Tenant shall cause the
insurance policies required of Tenant by this Lease to be
properly endorsed, if necessary, to prevent any loss of
coverage because of the waivers set forth in this paragraph.
If such endorsements are not available, the waivers set forth
in this paragraph shall be ineffective to the extent that such
waivers would cause required insurance with respect to the
Leased Property to be impaired.
5. No Lease Termination.
(a) Status of Lease. Except as expressly provided herein,
this Lease shall not terminate, nor shall Tenant have any right
to terminate this Lease, nor shall Tenant be entitled to any
abatement of the Rent, nor shall the obligations of Tenant
under this Lease be excused, for any reason whatsoever,
including without limitation any of the following: (i) any
damage to or the destruction of all or any part of the Leased
Property from whatever cause, (ii) the taking of the Leased
Property or any portion thereof by eminent domain or otherwise
for any reason, (iii) the prohibition, limitation or
restriction of Tenant's use of all or any portion of the Leased
Property or any interference with such use by governmental
action or otherwise, (iv) any eviction of Tenant or of anyone
claiming through or under Tenant by paramount title or
otherwise (provided, if Tenant is wrongfully evicted by
Landlord or by any third party lawfully claiming through or
under Landlord, other than Tenant or a third party claiming
through or under Tenant, then Tenant will have the remedies
described in Xxxxxxxxx 00 xxxxx), (x) any default on the part
of Landlord under this Lease or under any other agreement to
which Landlord and Tenant are parties, (vi) the inadequacy in
any way whatsoever of the design or construction of any
improvements included in the Leased Property, it being
understood that Landlord has not made and will not make any
representation express or implied as to the adequacy thereof,
or (vii) any other cause whether similar or dissimilar to the
foregoing, any existing or future law to the contrary
notwithstanding. It is the intention of the parties hereto
that the obligations of Tenant hereunder shall be separate and
independent of the covenants and agreements of Landlord, that
the Base Rent and all other sums payable by Tenant hereunder
shall continue to be payable in all events and that the
obligations of Tenant hereunder shall continue unaffected,
unless the requirement to pay or perform the same shall have
been terminated or limited pursuant to an express provision of
this Lease. However, nothing in this Paragraph shall be
construed as a waiver by Tenant of any right Tenant may have at
law or in equity to (i) recover monetary damages for any
default under this Lease by Landlord that Landlord fails to
cure within the period provided in Xxxxxxxxx 00, (xx)
injunctive relief in case of the violation, or attempted or
threatened violation, by Landlord of any of the express
covenants, agreements, conditions or provisions of this Lease,
or (iii) a decree compelling performance of any of the express
covenants, agreements, conditions or provisions of this Lease.
(b) Waiver By Tenant. Without limiting the foregoing, Tenant
waives to the extent permitted by Applicable Laws, except as
otherwise expressly provided herein, all rights to which Tenant
may now or hereafter be entitled by law (including any such
rights arising because of any implied "warranty of suitability"
or other warranty under Applicable Laws) (i) to quit, terminate
or surrender this Lease or the Leased Property or any part
thereof or (ii) to any abatement, suspension, deferment or
reduction of the Base Rent or any other sums payable under this
Lease.
6. Construction Allowance.
(a) Advances; Outstanding Construction Allowance.
(i) Subject to the conditions set forth below, Landlord
shall make advances (herein called "Construction Advances")
on Advance Dates from time to time as requested by Tenant to
reimburse Tenant for the actual cost of making the Designated
Improvements to the Leased Property and for any property
taxes or assessments payable prior to the Last Advance Date
with respect to the Leased Property. In no event will
Construction Advances which may be required of Landlord, when
added to Carrying Costs accrued or projected by Landlord to
accrue prior to the Carrying Costs Accrual Termination Date
as described below, exceed the Maximum Construction
Allowance. Notwithstanding the foregoing, if for any reason
Stipulated Loss Value (and thus the Outstanding Construction
Allowance included as a component thereof) must be determined
under this Lease as of any date between Advance Dates, the
Outstanding Construction Allowance determined on such date
shall equal the Outstanding Construction Allowance on the
immediately preceding Advance Date computed in accordance
with the preceding sentence, plus Carrying Costs accruing on
and after such preceding Advance Date to but not including
the date in question.
(ii) Charges (herein collectively called "Carrying Costs")
shall accrue as described below for each Construction Period
ending on or prior to the Carrying Costs Accrual Termination
Date, and will be added to (and thereafter be included in)
the Outstanding Construction Allowance on the last day of
such Construction Period (i.e., generally on the Advance Date
upon which such Construction Period ends).
(iii) For the first short Construction Period ending
August 1, 1997, Carrying Costs shall equal the sum of
Carrying Costs for all days during such period, and the
Carrying Costs accruing for each day during such period shall
equal (A) the Initial Investment, times (B) the sum of (i)
the Effective Rate for such day and (ii) the Spread
calculated on the date of this Lease, divided by (C) three
hundred sixty (360).
For each Construction Period after the first short
Construction Period and prior to or ending on the Carrying
Costs Accrual Termination Date, Carrying Costs shall equal:
(1)(A) Stipulated Loss Value as of the first day
of such Construction Period, times (B) one minus the
Certificate of Deposit Collateral Percentage in effect
during such Construction Period, times (C) the sum of
(i) the Effective Rate in effect during such
Construction Period and (ii) the Spread calculated on
the tenth (10th) Business Day prior to the day upon
which such Construction Period commences, times (D) the
number of days in such Construction Period, divided by
(E) three hundred sixty (360); PLUS
(2)(A) Stipulated Loss Value as of the first day
of such Construction Period, times (B) the Certificate
of Deposit Collateral Percentage in effect during such
Construction Period, times (C) twenty-two and one-half
basis points (22.5/100 of 1%), times (D) the number of
days in such Construction Period, divided by (E) three
hundred sixty (360).
(iv) To ease the administrative burden of this Lease and
the Pledge Agreement, clause (2)(A) in the formula set forth
in the preceding clause 6.(a)(iii) for calculating Carrying
Costs reflects a reduction in the Carrying Costs equal to the
interest that would accrue on any Cash Collateral required by
the Pledge Agreement from time to time if the Accounts (as
defined in the Pledge Agreement) bore interest at the
Effective Rate. Landlord has agreed to such reduction in the
Carrying Costs to provide Tenant with the economic equivalent
of interest on such Cash Collateral, and in return Tenant has
agreed to the provisions of the Pledge Agreement that excuse
the actual payment of interest on the Accounts. By
incorporating such reduction of Carrying Costs into the
formula above, and by providing for noninterest bearing
Accounts in the Pledge Agreement, the parties will avoid an
unnecessary and cumbersome periodic exchange of equal
payments. It is not, however, the intent of Landlord or
Tenant to understate Carrying Costs or interest for financial
reporting purposes. Accordingly, for purposes of determining
Tenant's compliance with the affirmative financial covenants
set forth in subparagraph 9.(ac), and for purposes of any
financial reports that this Lease requires of Tenant from
time to time, Tenant may report its financial statements as
if there had been no such reduction and as if the Cash
Collateral from time to time required by the Pledge Agreement
had been maintained in Accounts bearing interest at the
Effective Rate.
(b) Designated Improvements.
(i) Responsibility for Construction. Tenant shall construct
all Designated Improvements in a good and workmanlike manner,
in accordance with (1) the descriptions and renderings
attached as Exhibit H, (2) any Construction Documents for
which Tenant has requested and obtained the written approval
of Landlord or which Landlord has executed at the request of
Tenant pursuant to Paragraph 10.(b) (though this clause (2)
shall not be construed to require Tenant to get such approval
or execution of Construction Documents by Landlord), (3)
Applicable Laws, and (4) the other provisions of this Lease.
Further, except for building foundations, driveways, parking
lots, sidewalks and other improvements which would not suffer
damage by being submerged under flood waters, all Designated
Improvements shall be constructed by Tenant above the
elevation that the U.S. Army Corp of Engineers or any other
governmental authority estimates as the highest elevation
that 100 year flood waters could be expected to reach.
Tenant shall have sole responsibility for contracting for and
administering the construction of Designated Improvements, it
being understood that Landlord's obligation with respect to
the Designated Improvements shall be limited to the making of
advances under and subject to the conditions set forth in
this Paragraph 6. No contractor or other third party shall
be entitled to enforce Landlord's obligations to make
advances as a third party beneficiary. Notwithstanding
delays beyond Tenant's control, and even if the Construction
Allowance is not sufficient to pay for completion of
Designated Improvements, Tenant warrants that it shall cause
all Designated Improvements with respect to which it receives
any Construction Advances to be completed on or prior to the
Completion Deadline.
(ii) Scope Changes. Before making any Scope Change to the
Designated Improvements contemplated in Exhibit H, Tenant
shall provide to Landlord a reasonably detailed written
description of the Scope Change and a revised construction
budget, all of which must be approved in writing by Landlord
(or by any construction representative appointed by Landlord
from time to time) before the Scope Change is implemented.
(iii) Value Added. The Designated Improvements, upon
completion and taken as a whole, must enhance the value of
the Leased Property by an amount commensurate with the total
Construction Allowance used by Tenant; however, this
requirement will not preclude Tenant from obtaining
Construction Advances for soft costs (such as architectural
fees), demolition costs or other costs that do not,
individually, add value to the Leased Property but that are
incurred in connection with the construction of Designated
Improvements which will in the aggregate satisfy this
requirement. For purposes hereof, the Designated
Improvements will be deemed to have added value
"commensurate" with the Construction Allowance used by Tenant
if, when the Designated Improvements are substantially
complete, the Leased Property has a fair market value with
the Designated Improvements that exceeds the fair market
value which the Leased Property would have without the
Designated Improvements by an amount equal to no less than
fifty percent (50%) of the Carrying Costs and Construction
Advances added to the Outstanding Construction Allowance.
(iv) Estoppel Letters Required. If requested by Landlord
prior to the substantial completion of the Designated
Improvements, Tenant shall cause the contractor under each
significant general construction contract for the Designated
Improvements to execute and deliver to Landlord an estoppel
letter in the form of Exhibit I attached hereto. Similarly,
if requested by Landlord prior to the substantial completion
of the Designated Improvements, Tenant shall also cause the
architect and engineer under any material architectural or
engineering contract for the Designated Improvements to
execute and deliver to Landlord an estoppel letter in the
form of Exhibit J attached hereto; provided, that no such
estoppel letter shall be required from any architect or
engineer who has assigned his plans and specifications for
the Designated Improvements to Tenant without restricting
Tenant's right to further assign or allow other to use the
same. Tenant hereby grants to Landlord (and Landlord's
successors and assigns through any Permitted Transfer) a
license to copy and use any such plans and specifications as
Landlord shall deem appropriate.
(v) Advances Not a Waiver. No funding of Construction
Advances and no failure of Landlord to object to Designated
Improvements proposed or constructed by Tenant shall
constitute a waiver by Landlord of the requirements contained
in this subparagraph 6.(b).
(c) Conditions to Construction Advances. Landlord's
obligation to make Construction Advances from time to time
under this Paragraph 6 shall be subject to the following terms
and conditions, all of which are intended for the sole benefit
of Landlord:
(i) Prior Notice. Tenant must make a request in
substantially the form attached to this Lease as Exhibit K
for any Construction Advance at least ten (10) Business Days
prior to the Advance Date upon which the advance is to be
paid. Landlord shall consider in good faith any changes to
the Construction Advance request forms attached hereto that
Tenant may reasonably request, provided the requested changes
do not impair Landlord's rights or create or increase any
liability Landlord may have in connection with the Designated
Improvements.
(ii) Amount of the Advances. No Construction Advance
shall exceed the lesser of:
a) the Maximum Construction Allowance, less the sum of
(1) all prior Construction Advances and all Carrying
Costs accruing through the date of such advance, and
(2) the Carrying Costs then projected by Landlord to be
added to the Construction Allowance on and after the
date of the advance; or
b) (1) the actual costs and expenses previously
incurred and paid by Tenant for the Designated
Improvements, including "soft costs," and for property
taxes or assessments assessed against the Leased
Property after the date hereof and prior to the Last
Advance Date, less (2) the sum of all previous
Construction Advances made under this Paragraph 6 to
Tenant as reimbursement for such costs and expenses.
Further, no Construction Advance shall be required that
would cause the cost of completing all Designated
Improvements then contemplated as estimated by Landlord to
exceed the difference computed by subtracting (1) the
Carrying Costs then projected by Landlord to be added to the
Outstanding Construction Allowance, from (2) the Construction
Allowance remaining to be advanced. Tenant shall not request
any Construction Advance (other than the final Construction
Advance) for an amount less than $500,000.
(iii) Insurance. Tenant shall have obtained and provided
certificates (or, in the case of clause a) below, title
policies or binders) reasonably satisfactory to Landlord
evidencing insurance covering the Leased Property as follows
(in addition to the liability insurance required under
subparagraph 9.(z) below):
a) Title Insurance. An owner's title insurance policy
(or binder committing the applicable title insurer to
issue an owner's title insurance policy, without the
payment of further premiums) in an amount, form and
substance and written by one or more title insurance
companies reasonably satisfactory to Landlord and
insuring Landlord's ownership of fee title to the
Leased Property, including any new Improvements
constructed by Tenant, in the amount no less than
Stipulated Loss Value plus any remaining portion of the
Construction Allowance to be advanced under this Lease;
and
b) Builder's Risk Insurance. Builder's risk and such
other hazard insurance as Landlord may reasonably
require against all risks of physical loss (including
collapse and transit coverage, but not including
earthquake or flood coverage) with deductibles not to
exceed $1,000,000 (or such other amount as Landlord and
Tenant may agree upon in writing from time to time),
such insurance to be in amounts sufficient to cover the
total value of any Improvements under construction and
to be maintained in full force and effect at all times
until completion of the Designated Improvements.
(iv) Progress of Construction. Construction of the
Designated Improvements shall be progressing in a good and
workmanlike manner and in accordance with the requirements of
this Lease without any continuing significant interruption,
other than interruptions beyond the reasonable control of
Tenant that are not likely to cause the cost of such
construction (and Carrying Costs and construction period and
property taxes and assessments) to exceed the Maximum
Construction Allowance. Also, Tenant shall have corrected or
caused the correction promptly of any significant defect in
such construction.
(v) Evidence of Costs to be Reimbursed. To the extent
contemplated by the Construction Advance request forms
attached as Exhibit K and described in subparagraph 6.(c)(i),
or otherwise required by Landlord at the time a Construction
Advance is to be made, Tenant shall have submitted invoices,
requests for payment from contractors, certifications from
Tenant's architect or construction manager, lien releases and
other evidence satisfactory to Landlord that (A) all costs
for which Tenant requests reimbursement constitute actual
costs incurred by Tenant for the construction of the
Designated Improvements or constitute property taxes or
assessments assessed against the Leased Property and paid by
Tenant prior to the Last Advance Date with respect to the
Leased Property and (B) general contractors and all parties
that have the right to assert a mechanic's or materialman's
lien against the Leased Property for labor performed in
connection with the Leased Property or materials delivered to
the Leased Property (collectively, "Potential Lien
Claimants") have been paid all sums for which prior
Construction Advances have been advanced under this Lease or
the Original Lease. Without limiting the foregoing, Landlord
may decline to advance any amount that would result in an
excess of $5,000,000 or more of (1) the total cost of work
with respect to which Potential Lien Claimants could have
asserted a lien against the Leased Property and for which
Construction Advances have been advanced by Landlord, over
(2) the cost of such work for which Tenant has provided to
Landlord unconditional statutory lien releases from all
Potential Lien Claimants in form and substance reasonably
satisfactory to Landlord.
(vi) No Event of Default or Change of Control Event. No
Event of Default shall have occurred and be continuing under
this Lease and no Change of Control Event shall have
occurred.
(vii) No Sale of Landlord's Interest. No sale of
Landlord's interest in the Leased Property shall have
occurred pursuant to the Purchase Agreement.
(viii) Certificate of No Default. Landlord shall have
received, together with the notice requesting the
Construction Advance described in clause (i) above, a current
certificate of a Responsible Financial Officer of Tenant in
the form attached as Exhibit F.
(ix) Payments by Approved Participants. None of the
Approved Participants (other than Landlord's Parent) shall
have failed to advance to Landlord their respective
percentage shares of the Construction Advance being requested
as required by Section 3.2 of the Participation Agreement.
However, any such failure shall excuse Landlord's obligation
to provide the Construction Advance requested only to the
extent of the funds that the applicable Defaulting
Participant or Participants should have advanced (but did not
advance) to Landlord. Moreover, in the event of any such
failure:
a) Landlord will, to the extent possible, postpone
reductions of Construction Advances because of the
failure by any one or more Defaulting Participants to
make required advances under Section 3.2 of the
Participation Agreement by adjusting (and readjusting
from time to time, as required) the funding
"Percentages" of other Participants, and by requesting
the other Participants to make advances to Landlord on
the basis of such adjusted Percentages, in each case as
provided in Section 4 of the Participation Agreement;
however, so long as a Defaulting Participant's failure
to make required advances continues, no Construction
Advance shall be required that would cause the
Outstanding Construction Allowance (plus Carrying Costs
to accrue thereafter as projected by BNPLC) to exceed
(a) the Maximum Construction Allowance available under
this Lease, less (b) all amounts that should have been,
but have not been, advanced by a Defaulting Participant
as required by Section 3.2 of the Participation
Agreement.
b) Tenant may exercise its rights under Section 3.1.3
of the Pledge Agreement to require Landlord to attempt
in good faith, on and subject to the terms and
conditions set forth in that Section, to assist Tenant
in identifying one or more new Participants to replace
the Defaulting Participants.
(d) Completion Notice. Tenant shall provide a notice to
Landlord (the "Completion Notice") promptly after construction
of the Designated Improvements is substantially complete and
more than fifty percent (50%) of the Designated Improvements
are being occupied by Tenant or any subtenant permitted by
Paragraph 11.(a).
7. Purchase Documents and Environmental Indemnity. Tenant
acknowledges and agrees that nothing contained in this Lease
shall limit, modify or otherwise affect any of Tenant's
obligations under the Purchase Documents or Environmental
Indemnity, which obligations are intended to be separate,
independent and in addition to, and not in lieu of, the
obligations established by this Lease. In the event of any
inconsistency between the terms and provisions of the Purchase
Documents or Environmental Indemnity and the terms and
provisions of this Lease, the terms and provisions of the
Purchase Documents or Environmental Indemnity (as the case may
be) shall control.
8. Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances and the terms
hereof, Tenant may use and occupy the Leased Property so long
as no Event of Default occurs hereunder, but only for the
following purposes and other lawful purposes (including
parking) incidental thereto:
(i) research and development of computer-related and other
electronic products; and
(ii) administrative and office space; and
(iii) distribution and warehouse storage of computer-related
and other electronic products; and
(iv) assembly of computer-related and other electronic
products using components manufactured elsewhere, and light
manufacturing of computer-related and other electronic
products, but not including the manufacture of computer chips
on-site; and
(v) cafeteria, library, fitness center and other support
function uses that Tenant may provide to its employees.
Although the term "electronic products" in this subparagraph
may include products designed to detect, monitor, neutralize,
handle or process Hazardous Substances, the use of the Leased
Property by Tenant shall not include bringing Hazardous
Substances onto the Leased Property for the purpose of
researching, testing or demonstrating any such products.
(b) Condition. Tenant accepts the Leased Property (and will
accept the same upon any purchase of the Landlord's interest
therein) in its present state, AS IS, and without any
representation or warranty, express or implied, as to the
condition of such property or as to the use which may be made
thereof. Tenant also accepts the Leased Property without any
representation or warranty, express or implied, by Landlord
regarding the title thereto or the rights of any parties in
possession of any part thereof, except as set forth in
subparagraph 10.(a). Landlord shall not be responsible for any
latent or other defect or change of condition in the Land,
Improvements, fixtures and personal property forming a part of
the Leased Property, and the Rent hereunder shall in no case be
withheld or diminished because of any latent or other defect in
such property, any change in the condition thereof or the
existence with respect thereto of any violations of Applicable
Laws. Nor shall Landlord be required to furnish to Tenant any
facilities or service of any kind, such as, but not limited to,
water, steam, heat, gas, hot water, electricity, light or
power.
(c) Consideration of and Scope of Waiver. The provisions of
subparagraph 8.(b) above have been negotiated by the Landlord
and Tenant after due consideration for the Rent payable
hereunder and are intended to be a complete exclusion and
negation of any representations or warranties of the Landlord,
express or implied, with respect to the Leased Property that
may arise pursuant to any law now or hereafter in effect, or
otherwise. However, such exclusion of representations and
warranties by Landlord is not intended to impair any
representations or warranties made by other parties, including
Seller, the benefit of which is to pass to Tenant during the
Term because of the definition of Personal Property and Leased
Property above.
9. Other Representations, Warranties and Covenants of Tenant.
Tenant represents, warrants and covenants as follows:
(a) Financial Matters. Tenant is solvent and has no
outstanding liens, suits, garnishments or court actions which
could render Tenant insolvent. There has not been filed by or,
to Tenant's knowledge, against Tenant a petition in bankruptcy
or a petition or answer seeking an assignment for the benefit
of creditors, the appointment of a receiver, trustee, custodian
or liquidator with respect to Tenant or any significant portion
of Tenant's property, reorganization, arrangement,
rearrangement, composition, extension, liquidation or
dissolution or similar relief under the federal Bankruptcy Code
or any state law. The financial statements and all financial
data heretofore delivered to Landlord relating to Tenant have
been prepared in accordance with GAAP in all material respects.
No material adverse change has occurred in the financial
position of Tenant as reflected in Tenant's financial
statements covering the fiscal period ended May 31, 1997.
(b) Existing Contract. Except to the extent required of
Landlord under subparagraph 10.(b), Tenant shall satisfy all
surviving obligations of Tenant under the Existing Contract and
under other agreements described therein. Tenant agrees to
indemnify, defend and hold Landlord harmless from and against
any and all Losses imposed on or asserted against or incurred
by Landlord at any time and from time to time by reason of, in
connection with or arising out of any obligations imposed by
the Existing Contract or the other agreements described
therein. THE INDEMNITY SET OUT IN THIS SUBPARAGRAPH SHALL
APPLY EVEN IF THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY
OR ARISES OUT OF THE ORDINARY NEGLIGENCE (AS DEFINED ABOVE) OF
LANDLORD; provided, such indemnity shall not apply to Losses
proximately caused by (and attributed by any applicable
principles of comparative fault to) the Active Negligence,
gross negligence or willful misconduct of Landlord. Because
Tenant hereby assumes and agrees to satisfy all surviving
obligations of Tenant under the Existing Contract and the other
agreements described therein, no failure by Landlord to take
any action required by the Existing Contract or such other
agreements (save and except any actions required of Landlord
under subparagraph 10.(b)) shall, for the purposes of this
indemnity, be deemed to be caused by the Active Negligence,
gross negligence or willful misconduct of Landlord. The
foregoing indemnity is in addition to the other indemnities set
out herein and shall not terminate upon the closing of any sale
of Landlord's interest in the Leased Property pursuant to the
provisions of the Purchase Agreement or the termination of this
Lease.
(c) No Default or Violation. The execution, delivery and
performance by Tenant of this Lease, the Purchase Documents and
the Environmental Indemnity do not and will not constitute a
breach or default under any other material agreement or
contract to which Tenant is a party or by which Tenant is bound
or which affects the Leased Property or Tenant's use, occupancy
or operation of the Leased Property or any part thereof and do
not, to the knowledge of Tenant, violate or contravene any law,
order, decree, rule or regulation to which Tenant is subject,
and such execution, delivery and performance by Tenant will not
result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or
security interest in, Tenant's property pursuant to the
provisions of any of the foregoing.
(d) Compliance with Covenants and Laws. The intended use of
the Leased Property by Tenant complies, or will comply after
Tenant obtains readily available permits, in all material
respects with all applicable restrictive covenants, zoning
ordinances and building codes, flood disaster laws, applicable
health, safety and environmental laws and regulations, the
Americans with Disabilities Act and other laws pertaining to
disabled persons, and all other applicable laws, statutes,
ordinances, rules, permits, regulations, orders, determinations
and court decisions (all of the foregoing are herein sometimes
collectively called "Applicable Laws"). Tenant has obtained or
will promptly obtain all utility, building, health and
operating permits as may be required for Tenant's use of the
Leased Property by any governmental authority or municipality
having jurisdiction over the Leased Property.
(e) Environmental Representations. To Tenant's knowledge and
except as otherwise disclosed in the Environmental Report, as
of the date hereof: (i) no Hazardous Substances Activity has
occurred prior to the date of this Lease; (iii) neither Tenant
nor any prior owner or operator of the Leased Property or any
surrounding property has reported or been required to report
any release of any Hazardous Substances on or from the Leased
Property or the surrounding property pursuant to any
Environmental Law; (iv) neither Tenant nor any prior owner or
operator of the Leased Property or any surrounding property has
received any warning, citation, notice of violation or other
communication regarding a suspected or known release or
discharge of Hazardous Substances on or from the Leased
Property or regarding a suspected or known violation of
Environmental Laws concerning the Leased Property from any
federal, state or local agency; and (v) none of the following
are located on the Leased Property: asbestos; urea formaldehyde
foam insulation; transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls
in excess of fifty (50) parts per million; any other Hazardous
Substances other than Permitted Hazardous Substances; or any
underground storage tank or tanks. Further, Tenant represents
that to its knowledge the Environmental Report is not
misleading or inaccurate in any material respect.
(f) No Suits. There are no judicial or administrative
actions, suits, proceedings or investigations pending or, to
Tenant's knowledge, threatened that will affect Tenant's
intended use of the Leased Property or the validity,
enforceability or priority of this Lease, or Tenant's use,
occupancy and operation of the Leased Property or any part
thereof, and Tenant is not in default with respect to any
order, writ, injunction, decree or demand of any court or other
governmental or regulatory authority that could materially and
adversely affect the business or assets of Tenant and its
Subsidiaries taken as a whole or Tenant's use, occupancy or
operation of the Leased Property. No condemnation or other
like proceedings are pending or, to Tenant's knowledge,
threatened against the Leased Property.
(g) Condition of Property. The Land as described in Exhibit A
is shown on the plat included as part of the A.L.T.A. Survey
prepared by Guerriere & Xxxxxx, Inc., last revised January 7,
1997, certification dated January 8, 1997, which was delivered
to Landlord at the request of Tenant. All material
improvements on the Land as of the date hereof are as shown on
that survey, and except as shown on that survey there are no
easements or encroachments visible or apparent from an
inspection of the Real Property. Adequate provision has been
made (or can be made at a cost that is reasonable in connection
with development of the Land) for the Leased Property to be
served by electric, gas, storm and sanitary sewers, sanitary
water supply, telephone and other utilities required for the
use thereof. All streets, alleys and easements necessary to
serve the Leased Property have been completed and are
serviceable (or can be completed at a cost that is reasonable
in connection with development of the Land). The Leased
Property is in a condition satisfactory for its use and
occupancy. Tenant is not aware of any latent or patent
material defects or deficiencies in the Real Property that,
either individually or in the aggregate, could materially and
adversely affect Tenant's use or occupancy or could reasonably
be anticipated to endanger life or limb.
(h) Organization. Tenant is duly incorporated and legally
existing under the laws of the State of Delaware. Tenant has
all requisite power and has procured or will procure on a
timely basis all governmental certificates of authority,
licenses, permits, qualifications and other documentation
required to lease and operate the Leased Property. Tenant has
the corporate power and adequate authority, rights and
franchises to own Tenant's property and to carry on Tenant's
business as now conducted and is (or has properly applied with
all appropriate authorities to become) duly qualified and in
good standing in each state in which the character of Tenant's
business makes such qualification necessary (including, without
limitation, the States of California and Massachusetts) or, if
it is not so qualified in a state other than California and
Massachusetts, such failure does not have a material adverse
effect on the properties, assets, operations or businesses of
Tenant and its Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and performance
of this Lease, the Purchase Documents, and the Environmental
Indemnity are duly authorized and do not require the consent or
approval of any governmental body or other regulatory authority
that has not heretofore been obtained and are not in
contravention of or conflict with any Applicable Laws or any
term or provision of Tenant's articles of incorporation or
bylaws. This Lease, the Purchase Documents, and the
Environmental Indemnity are valid, binding and legally
enforceable obligations of Tenant in accordance with their
terms, except as such enforcement is affected by bankruptcy,
insolvency and similar laws affecting the rights of creditors,
generally, and equitable principles of general application.
(j) Not a Foreign Person. Tenant is not a "foreign person"
within the meaning Sections 1445 and 7701 of the Code (i.e.,
Tenant is not a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate as those
terms are defined in the Code and regulations promulgated
thereunder).
(k) Omissions. To Tenant's knowledge, none of Tenant's
representations or warranties contained in this Lease or any
document, certificate or written statement furnished to
Landlord by or on behalf of Tenant contains any untrue
statement of a material fact or omits a material fact necessary
in order to make the statements contained herein or therein
(when taken in their entireties) not misleading.
(l) Existence. Tenant shall continuously maintain its
corporate existence, and Tenant shall continuously maintain its
qualification to do business in the States of California and
Massachusetts.
(m) Tenant Taxes. Tenant shall comply with all applicable tax
laws and pay before the same become delinquent all taxes
imposed upon it or upon its property where the failure to so
comply or so pay would have a material adverse effect on the
financial condition or operations of Tenant; except that Tenant
may in good faith by appropriate proceedings contest the
validity, applicability or amount of any such taxes and pending
such contest Tenant shall not be deemed in default under this
subparagraph if (1) Tenant diligently prosecutes such contest
to completion in an appropriate manner, and (2) Tenant promptly
causes to be paid any tax adjudged by a court of competent
jurisdiction to be due, with all costs, penalties, and interest
thereon, promptly after such judgment becomes final; provided,
however, in any event such contest shall be concluded and the
tax, penalties, interest and costs shall be paid prior to the
date any writ or order is issued under which any of Tenant's
property that is material to the business of Tenant and its
Subsidiaries taken as a whole may be seized or sold because of
the nonpayment thereof.
(n) Operation of Property. Tenant shall operate the Leased
Property in a good and workmanlike manner and in compliance
with all Applicable Laws and will pay all fees or charges of
any kind in connection therewith. Tenant shall not use or
occupy, or allow the use or occupancy of, the Leased Property
in any manner which violates any Applicable Law or which
constitutes a public or private nuisance or which makes void,
voidable or cancelable any insurance then in force with respect
thereto. To the extent that any of the following would,
individually or in the aggregate, materially and adversely
affect the value of the Leased Property or Tenant's use,
occupancy or operations on the Leased Property, Tenant shall
not: (i) initiate or permit any zoning reclassification of the
Leased Property; (ii) seek any variance under existing zoning
ordinances applicable to the Leased Property; (iii) use or
permit the use of the Leased Property in a manner that would
result in such use becoming a nonconforming use under
applicable zoning ordinances or similar laws, rules or
regulations; (iv) execute or file any subdivision plat
affecting the Leased Property; or (v) consent to the annexation
of the Leased Property to any municipality. If a change in the
zoning or other Applicable Laws affecting the permitted use or
development of the Leased Property shall occur that Landlord
determines will materially reduce the then-current market value
of the Leased Property, and if after such reduction the
Stipulated Loss Value shall substantially exceed the then-
current market value of the Leased Property in the reasonable
judgment of Landlord, then Tenant shall pay Landlord an amount
equal to such excess for application as a Qualified Payment.
Tenant shall make any payment required by the preceding
sentence within one hundred eighty (180) days after it is
requested by Landlord, and in any event shall make any such
payment before the end of the Term. Tenant shall not impose
any restrictive covenants or encumbrances upon the Leased
Property without the prior written consent of the Landlord;
provided, that such consent shall not be unreasonably withheld
for any encumbrance or restriction that is made expressly
subject to this Lease, as modified from time to time, and
subordinate to Landlord's interest in the Leased Property by an
agreement in form satisfactory to Landlord. Tenant shall not
cause or permit any drilling or exploration for, or extraction,
removal or production of, minerals from the surface or
subsurface of the Leased Property. Tenant shall not do any act
whereby the market value of the Leased Property may be
materially lessened. Tenant shall allow Landlord or its
authorized representative to enter the Leased Property at any
reasonable time to inspect the Leased Property and, after
reasonable notice, to inspect Tenant's books and records
pertaining thereto, and Tenant shall assist Landlord or
Landlord's representative in whatever way reasonably necessary
to make such inspections. If Tenant receives a written notice
or claim from any federal, state or other governmental entity
that the Leased Property is not in compliance in any material
respect with any Applicable Law, or that any action may be
taken against the owner of the Leased Property because the
Leased Property does not comply with Applicable Law, Tenant
shall promptly furnish a copy of such notice or claim to
Landlord. Notwithstanding the foregoing, Tenant may in good
faith, by appropriate proceedings, contest the validity and
applicability of any Applicable Law with respect to the Leased
Property, and pending such contest Tenant shall not be deemed
in default hereunder because of a violation of such Applicable
Law, if Tenant diligently prosecutes such contest to completion
in a manner reasonably satisfactory to Landlord, and if Tenant
promptly causes the Leased Property to comply with any such
Applicable Law upon a final determination by a court of
competent jurisdiction that the same is valid and applicable to
the Leased Property; provided, that in any event such contest
shall be concluded and the violation of such Applicable Law
must be corrected and any claims asserted against Landlord or
the Leased Property because of such violation must be paid by
Tenant, all prior to the date that (i) any criminal charges may
be brought against Landlord or any of its directors, officers
or employees because of such violation or (ii) any action may
be taken by any governmental authority against Landlord or any
property owned by Landlord (including the Leased Property)
because of such violation.
(o) Debts for Construction. Tenant shall cause all debts and
liabilities incurred in the construction, maintenance,
operation and development of the Leased Property, including
without limitation all debts and liabilities for labor,
material and equipment and all debts and charges for utilities
servicing the Leased Property, to be promptly paid.
Notwithstanding the foregoing, Tenant may in good faith by
appropriate proceedings contest the validity, applicability or
amount of any asserted mechanic's or materialmen's lien and
pending such contest Tenant shall not be deemed in default
under this subparagraph (or subparagraphs 9.(t) or 9.(u))
because of the contested lien if (1) within sixty (60) days
after being asked to do so by Landlord, Tenant bonds over to
Landlord's satisfaction any contested liens alleged to secure
an amount in excess of $3,000,000 (individually or in the
aggregate), (2) Tenant diligently prosecutes such contest to
completion in a manner reasonably satisfactory to Landlord, and
(3) Tenant promptly causes to be paid any amount adjudged by a
court of competent jurisdiction to be due, with all costs and
interest thereon, promptly after such judgment becomes final;
provided, however, that in any event each such contest shall be
concluded and the lien, interest and costs shall be paid prior
to the date (i) any criminal action may be instituted against
Landlord or its directors, officers or employees because of the
nonpayment thereof or (ii) any writ or order is issued under
which any property owned by Landlord (including the Leased
Property) may be seized or sold or any other action may be
taken against Landlord or any property owned by Landlord
because of the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord for (or, if
requested by Landlord, will pay or cause to be paid prior to
delinquency) all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes,
levies, fees, charges, surcharges, assessments or penalties
which arise out of or are attributable to this Lease or which
are imposed upon Landlord or the Leased Property because of the
ownership, leasing, occupancy, sale or operation of the Leased
Property, or any part thereof, or relating to or required to be
paid by the terms of any of the Permitted Encumbrances
(collectively, herein called the "Impositions"), excluding only
Excluded Taxes. If Landlord requires Tenant to pay any
Impositions directly to the applicable taxing authority or
other party entitled to collect the same, Tenant shall furnish
Landlord with receipts showing payment of such Impositions and
other amounts prior to delinquency; except that Tenant may in
good faith by appropriate proceedings contest the validity,
applicability or amount of any asserted Imposition, and pending
such contest Tenant shall not be deemed in default of this
subparagraph (or subparagraphs 9.(t) or 9.(u)) because of the
contested Imposition if (1) within sixty (60) days after being
asked to do so by Landlord, Tenant bonds over to the
satisfaction of Landlord any lien asserted against the Leased
Property and alleged to secure an amount in excess of
$1,000,000 because of the contested Imposition, (2) Tenant
diligently prosecutes such contest to completion in a manner
reasonably satisfactory to Landlord, and (3) Tenant promptly
causes to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all costs, penalties and interest
thereon, promptly after such judgment becomes final; provided,
however, that in any event each such contest shall be concluded
and the Impositions, penalties, interest and costs shall be
paid prior to the date (i) any criminal action may be
instituted against Landlord or its directors, officers or
employees because of the nonpayment thereof or (ii) any writ or
order is issued under which any property owned by Landlord
(including the Leased Property) may be seized or sold or any
other action may be taken against Landlord or any property
owned by Landlord because of the nonpayment thereof.
(q) Repair, Maintenance, Alterations and Additions. Tenant
shall keep the Leased Property in good order, repair, operating
condition and appearance (ordinary wear and tear excepted),
causing all necessary repairs, renewals, replacements,
additions and improvements to be promptly made, and will not
allow any of the Leased Property to be materially misused,
abused or wasted or to deteriorate. Tenant shall promptly
replace any worn-out fixtures included within the Leased
Property with fixtures comparable to the replaced fixtures when
new and repair any damage caused by the removal of such
fixtures. Further, Tenant shall not, without the prior written
consent of Landlord, (i) remove from the Leased Property any
fixtures of significant value, except such as are replaced by
Tenant by articles of equal value, free and clear of any Lien
(and for purposes of this clause "significant value" will mean
any fixture that has a value of more than $500,000 or that,
when considered together with all other fixtures removed and
not replaced by Tenant by articles of equal suitability and
value, has an aggregate value of $1,000,000 or more) or (ii)
make any alteration to any Improvements which significantly
reduce the fair market value or change the general character of
the Leased Property, taken as a whole, or which impair in any
significant manner the useful life or utility of the
Improvements, taken as whole. Upon request of Landlord made at
any time when an Event of Default shall have occurred and be
continuing, Tenant shall deliver to Landlord an inventory
describing and showing the make, model, serial number and
location of all fixtures and personalty, if any, included in
the Leased Property with a certification by Tenant that such
inventory is a true and complete schedule of all such fixtures
and personalty and that all items specified in the inventory
are covered hereby free and clear of any Lien other than the
Permitted Encumbrances described in Exhibit B.
(r) Insurance and Casualty. Throughout the Term, Tenant will
keep all Improvements (including all alterations, additions and
changes made to the Improvements) which are located within the
Leased Property insured under an all-risk property insurance
policy (excluding from coverage damage by flood or earthquake,
but not excluding other perils normally included within the
definitions of extended coverage, vandalism and malicious
mischief) in the amount of one hundred percent (100%) of the
replacement value with endorsements for contingent liability
from operation of building laws, increased cost of construction
and demolition costs which may be necessary to comply with
building laws. Tenant will be responsible for determining the
amount of property insurance to be maintained, but such
coverage will be on an agreed value basis to eliminate the
effects of coinsurance. Such insurance shall be issued by an
insurance company or companies rated by the A.M. Best Company
of Oldwick, New Jersey as having a policyholder's rating of A
or better and a reported financial information rating of X or
better. Any deductible applicable to such insurance shall not
exceed $1,000,000 (or such other amount as Landlord and Tenant
may agree upon in writing from time to time). Such insurance
shall cover not only the value of Tenant's interest in the
Improvements, but also the interest of Landlord, and such
insurance shall include provisions that Landlord must be
notified at least ten (10) days prior to any cancellation or
reduction of insurance coverage. With this Lease Tenant shall
deliver to Landlord a certificate from the applicable insurer
or its authorized agent evidencing the insurance required by
this subparagraph and any additional insurance which shall be
taken out upon any part of the Leased Property. Thereafter,
Tenant shall deliver to Landlord certificates from the
applicable insurer or its authorized agent of renewals or
replacements of all such policies of insurance at least five
(5) days before any such insurance shall expire. Tenant
further agrees that all such policies shall provide that
proceeds thereunder will be payable to Landlord as Landlord's
interest may appear. If Tenant fails to obtain any insurance
required by this Lease or to provide confirmation of any such
insurance as required by this Lease, Landlord shall be entitled
(but not required) to obtain the insurance that Tenant has
failed to obtain or for which Tenant has not provided the
required confirmation and, without limiting Landlord's other
remedies under the circumstances, Landlord may require Tenant
to reimburse Landlord for the cost of such insurance and to pay
interest thereon computed at the Default Rate from the date
such cost was paid by Landlord until the date of reimbursement
by Tenant. In the event any of the Leased Property is
destroyed or damaged by fire, explosion, windstorm, hail or by
any other casualty against which insurance shall have been
required hereunder, (i) Landlord may, but shall not be
obligated to, make proof of loss if not made promptly by
Tenant, (ii) each insurance company concerned is hereby
authorized and directed to make payment for such loss directly
to Landlord for application as required by Paragraph 4, and
(iii) Landlord's consent must be obtained for any settlement,
adjustment or compromise of any claims for loss, damage or
destruction under any policy or policies of insurance
(provided, that if any such claim is for less than $2,000,000
and no Event of Default shall have occurred and be continuing,
Tenant alone shall have the right to settle, adjust or
compromise the claim as Tenant deems appropriate; and, provided
further, that any disagreement between Landlord and Tenant
about the amount for which any such claim should be settled
shall, at the request of either party, be resolved as provided
in Exhibit D, unless an Event of Default shall have occurred
and be continuing, in which case Landlord alone shall have the
right to settle, adjust or compromise the claim as Landlord
deems appropriate). If any casualty shall result in damage to
or loss or destruction of the Leased Property in excess of
$3,000,000, Tenant shall give immediate notice thereof to
Landlord and Paragraph 4 shall apply.
Notwithstanding the foregoing provisions of this
subparagraph 9.(r), following any fire or other casualty
involving the Leased Property, if insurance proceeds totaling
not more than $2,000,000 are to be recovered as a result
thereof, or if in connection therewith Tenant shall have
executed a Voluntary Minimum Pledge Commitment and delivered
any additional Collateral required to satisfy such Voluntary
Minimum Pledge Commitment, Tenant shall be entitled to receive
directly and hold such insurance proceeds, so long as no Event
of Default shall have occurred and be continuing and so long as
Tenant applies such proceeds towards the restoration,
replacement and repair of the Leased Property as required by
subparagraph 4.(b).
(s) Condemnation. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the
Leased Property or any portion thereof, or any other similar
governmental or quasi-governmental proceedings arising out of
injury or damage to the Leased Property or any portion thereof,
Tenant shall notify Landlord of the pendency of such
proceedings. Tenant shall, at its expense, diligently
prosecute any such proceedings and shall consult with Landlord,
its attorneys and experts and cooperate with them as reasonably
requested in the carrying on or defense of any such
proceedings. All proceeds of condemnation awards or proceeds
of sale in lieu of condemnation with respect to the Leased
Property and all judgments, decrees and awards for injury or
damage to the Leased Property shall be paid to Landlord and
applied as provided in Paragraph 4 above. Landlord is hereby
authorized, in the name of Tenant, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree
or award concerning condemnation of any of the Leased Property.
Landlord shall not be, in any event or circumstances, liable
or responsible for failure to collect, or to exercise diligence
in the collection of, any such proceeds, judgments, decrees or
awards.
Notwithstanding the foregoing provisions of this
subparagraph 9.(s), following any condemnation or sale in lieu
of condemnation involving the Leased Property, if condemnation
or sale proceeds totaling not more than $2,000,000 are to be
recovered as a result thereof, or if in connection therewith
Tenant shall have executed a Voluntary Minimum Pledge
Commitment and delivered any additional Collateral required to
satisfy such Voluntary Minimum Pledge Commitment, Tenant shall
be entitled to receive directly and hold such condemnation or
sale proceeds, so long as no Event of Default shall have
occurred and be continuing and so long as Tenant applies such
proceeds towards the restoration, replacement and repair of the
remainder of the Leased Property as required by
subparagraph 4.(b).
(t) Protection and Defense of Title. If any encumbrance or
title defect whatsoever affecting Landlord's fee interest in
the Leased Property is claimed or discovered (excluding
Permitted Encumbrances, this Lease and any other encumbrance
which is claimed by Landlord or lawfully claimed through or
under Landlord and which is not claimed by, through or under
Tenant) or if any legal proceedings are instituted with respect
to title to the Leased Property, Tenant shall give prompt
written notice thereof to Landlord and at Tenant's own cost and
expense will promptly cause the removal of any such encumbrance
and cure any such defect and will take all necessary and proper
steps for the defense of any such legal proceedings, including
but not limited to the employment of counsel, the prosecution
or defense of litigation and the release or discharge of all
adverse claims. If Tenant fails to promptly remove any such
encumbrance or title defect (other than a Lien Tenant is
contesting as expressly permitted by and in accordance with
subparagraph 9.(o) or subparagraph 9.(p)), Landlord (whether or
not named as a party to legal proceedings with respect thereto)
shall be entitled to take such additional steps as in its
judgment may be necessary or proper to remove such encumbrance
or cure such defect or for the defense of any such attack or
legal proceedings or the protection of Landlord's fee interest
in the Leased Property, including but not limited to the
employment of counsel, the prosecution or defense of
litigation, the compromise or discharge of any adverse claims
made with respect to the Leased Property, the removal of prior
liens or security interests, and all expenses (including
Attorneys' Fees) so incurred of every kind and character shall
be a demand obligation owing by Tenant.
For purposes of this subparagraph 9.(t), Tenant shall be
deemed to be acting promptly to remove any encumbrance or to
cure any title defect, other than a Lien which Tenant has
itself granted or authorized, so long as Tenant (or a title
insurance company obligated to do so) is in good faith by
appropriate proceedings contesting the validity and
applicability of the encumbrance or defect, and pending such
contest Tenant shall not be deemed in default under this
subparagraph because of the encumbrance or defect; provided,
with respect to a contest of any encumbrance or title defect
which is the subject of subparagraphs 9.(o) or 9.(p), Tenant
(or the applicable title insurance company) must satisfy the
conditions and requirements for a permitted contest set forth
in those subparagraphs, and with respect to a contest of any
other encumbrance or title defect, Tenant (or the applicable
title insurance company) must:
(1) diligently prosecute the contest to completion in
a manner reasonably satisfactory to Landlord;
(2) immediately remove the encumbrance or cure the
defect, as and to the extent reasonably required to preserve
Landlord's indefeasible fee estate in the Leased Property and
to prevent any significant adverse impact the encumbrance or
defect may have on the value of the Leased Property, upon a
final determination by a court of competent jurisdiction that
the encumbrance or defect is valid and applicable to the
Leased Property; and
(3) in any event conclude the contest and remove the
encumbrance or cure the defect and pay any claims asserted
against Landlord or the Leased Property because of such
encumbrance or defect, all prior to (i) any Designated Sale
Date on which neither Tenant nor any Applicable Purchaser
purchases the Leased Property pursuant to the Purchase
Agreement for a price to Landlord (when taken together with
any additional payments made by Tenant pursuant to
Paragraph 2(a)(ii) of the Purchase Agreement, in the case of
a purchase by an Applicable Purchaser) of not less than the
Purchase Price, (ii) the date any criminal charges may be
brought against Landlord or any of its directors, officers or
employees because of such encumbrance or defect or (iii) the
date any action may be taken against Landlord or any property
owned by Landlord (including the Leased Property) by any
governmental authority or any other Person who has or claims
rights superior to Landlord because of the encumbrance or
defect.
(u) No Liens on the Leased Property. Tenant shall not,
without the prior written consent of Landlord, create, place or
permit to be created or placed, or through any act or failure
to act, acquiesce in the placing of, or allow to remain, any
Lien (except Permitted Encumbrances, the lien for property
taxes or assessments assessed against the Leased Property which
are not delinquent and any Lien Tenant is contesting as
expressly permitted by and in accordance with subparagraph
9.(o) or subparagraph 9.(p)), against or covering the Leased
Property or any part thereof (other than any Lien which is
lawfully claimed through or under Landlord and which is not
claimed by, through or under Tenant) regardless of whether the
same are expressly or otherwise subordinate to this Lease or
Landlord's interest in the Leased Property, and should any
prohibited Lien exist or become attached hereafter in any
manner to any part of the Leased Property without the prior
written consent of Landlord, Tenant shall cause the same to be
promptly discharged and released to the satisfaction of
Landlord.
(v) Books and Records. Tenant shall keep books and records
that are accurate and complete in all material respects for the
construction and maintenance of the Leased Property and will
permit all such books and records (including without limitation
all contracts, statements, invoices, bills and claims for
labor, materials and services supplied for the construction and
operation of any Improvements) to be inspected and copied by
Landlord and its duly accredited representatives at all times
during reasonable business hours; provided that so long as
Tenant remains in possession of the Leased Property, Landlord
or Landlord's representative will, before making any such
inspection or copying any such documents, if then requested to
do so by Tenant to maintain Tenant's security: (i) sign in at
Tenant's security or information desk if Tenant has such a desk
on the premises, (ii) wear a visitor's badge or other
reasonable identification provided by Tenant when Landlord or
Landlord's representative first arrives at the Leased Property,
(iii) permit an employee of Tenant to observe such inspection
or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Tenant that do not,
individually or in the aggregate, interfere with or delay
inspections or copying by Landlord authorized by this
subparagraph.. This subparagraph shall not be construed as
requiring Tenant to regularly maintain separate books and
records relating exclusively to the Leased Property; provided,
however, that if requested by Landlord at any time when an
Event of Default shall have occurred and be continuing, Tenant
shall construct or abstract from its regularly maintained books
and records information required by this subparagraph relating
to the Leased Property.
(w) Financial Statements; Required Notices; Certificates as to
Default. Tenant shall deliver to Landlord and to each
Participant of which Tenant has been notified:
(i) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of
Tenant, a consolidated balance sheet of Tenant and its
consolidated Subsidiaries as of the end of such fiscal year
and a consolidated income statement and statement of cash
flows of Tenant and its consolidated Subsidiaries for such
fiscal year, all in reasonable detail and all prepared in
accordance with GAAP and accompanied by a report and opinion
of accountants of national standing selected by Tenant, which
report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be
subject to any qualifications or exceptions as to the scope
of the audit nor to any qualification or exception which
Landlord determines, in Landlord's reasonable discretion, is
unacceptable; provided that notwithstanding the foregoing,
for so long as Tenant is a company subject to the periodic
reporting requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, Tenant shall be deemed to
have satisfied its obligations under this clause (i) so long
as Tenant delivers to Landlord the same annual report and
report and opinion of accountants that Tenant delivers to its
shareholders;
(ii) as soon as available and in any event within sixty (60)
days after the end of each of the first three quarters of
each fiscal year of Tenant, the consolidated balance sheet of
Tenant and its consolidated Subsidiaries as of the end of
such quarter and the consolidated income statement and the
consolidated statement of cash flows of Tenant and its
consolidated Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail and all prepared in
accordance with GAAP and certified by a Responsible Financial
Officer of Tenant (subject to year-end adjustments); provided
that notwithstanding the foregoing, for so long as Tenant is
a company subject to the periodic reporting requirements of
Section 12 of the Securities Exchange Act of 1934, as
amended, Tenant shall be deemed to have satisfied its
obligations under this clause (ii) so long as Tenant delivers
to Landlord the same quarterly reports, certified by a
Responsible Financial Officer of Tenant (subject to year-end
adjustments), that Tenant delivers to its shareholders;
(iii) together with the financial statements furnished in
accordance with subparagraph 9.(w)(ii) and 9.(w)(i), a
certificate of a Responsible Financial Officer of Tenant in
substantially the form attached hereto as Exhibit E: (i)
certifying that to the knowledge of Tenant no Default or
Event of Default under this Lease has occurred and is
continuing or, if a Default or Event of Default has occurred
and is continuing, a brief statement as to the nature thereof
and the action which is proposed to be taken with respect
thereto, (ii) certifying that the representations of Tenant
set forth in Paragraph 9 of this Lease are true and correct
in all material respects as of the date thereof as though
made on and as of the date thereof or, if not then true and
correct, a brief statement as to why such representations are
no longer true and correct, and (iii) with computations
demonstrating compliance with the financial covenants
contained in subparagraph 9.(ac);
(iv) promptly after any change in the rating of Tenant's
senior, unsecured debt by Standard and Poor's Corporation or
Xxxxx'x Investor Service, Inc. or in Tenant's Debt to Capital
Ratio (as defined in subparagraph 1.(cm)), which will result
in a change in the Spread (as defined in
subparagraph 1.(cm)), a certificate of a Responsible
Financial Officer of Tenant in substantially the form
attached hereto as Exhibit F with computations evidencing
Tenant's calculation of the Spread after giving effect to
such changes;
(v) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which
Tenant sends to Tenant's stockholders, and copies of all
regular, periodic and special reports, and all registration
statements (other than registration statements on Form S-8 or
any form substituted therefor) which Tenant files with the
Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any
national securities exchange;
(vi) as soon as possible and in any event within five (5)
Business Days after a Responsible Financial Officer of Tenant
becomes aware of the occurrence of each Default or Event of
Default with respect to the Affirmative Financial Covenants
described in subparagraph 9.(ae) or the Negative Covenants
described in subparagraph 9.(af), a statement of a
Responsible Financial Officer of Tenant setting forth details
of such Default or Event of Default and the action which
Tenant has taken and proposes to take with respect thereto;
(vii) upon request by Landlord, a statement in writing
certifying that this Lease is unmodified and in full effect
(or, if there have been modifications, that this Lease is in
full effect as modified, and setting forth such
modifications) and the dates to which the Base Rent has been
paid and either stating that to the knowledge of Tenant no
Default or Event of Default under this Lease has occurred and
is continuing or, if a Default or Event of Default under this
Lease has occurred and is continuing, a brief statement as to
the nature thereof; it being intended that any such statement
by Tenant may be relied upon by any prospective purchaser or
mortgagee of the Leased Property and by any Participant; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of Tenant, of any of its
Subsidiaries or of the Leased Property as Landlord or any
Participant through Landlord may from time to time reasonably
request.
Landlord is hereby authorized to deliver a copy of any
information or certificate delivered to it pursuant to this
subparagraph 9.(w) to any Participant and to any regulatory
body having jurisdiction over Landlord that requires or
requests it.
(x) Further Assurances. Tenant shall, on request of Landlord,
(i) promptly correct any defect, error or omission which may be
discovered in the contents of this Lease or in any other
instrument executed in connection herewith or in the execution
or acknowledgment thereof; (ii) execute, acknowledge, deliver
and record or file such further instruments and do such further
acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Lease and to subject to this
Lease any property intended by the terms hereof to be covered
hereby including specifically, but without limitation, any
renewals, additions, substitutions, replacements or
appurtenances to the Leased Property; (iii) execute,
acknowledge, deliver, procure and record or file any document
or instrument deemed advisable by Landlord to protect its
rights in and to the Leased Property against the rights or
interests of third persons; and (iv) provide such certificates,
documents, reports, information, affidavits and other
instruments and do such further acts as may be necessary,
desirable or proper in the reasonable determination of Landlord
to enable Landlord, Landlord's Parent and other Participants to
comply with the requirements or requests of any agency or
authority having jurisdiction over them.
(y) Fees and Expenses; General Indemnification; Increased
Costs; and Capital Adequacy Charges.
(i) Except for any costs paid by Landlord with the proceeds
of the advance described in subparagraph 1.(s) as part of the
Closing Costs, Tenant shall pay (and shall indemnify and hold
harmless Landlord, Landlord's Parent and any Person claiming
through Landlord by reason of a Permitted Transfer from and
against) all Losses incurred by Landlord or Landlord's Parent
or any Person claiming through Landlord through a Permitted
Transfer in connection with or because of (A) the ownership
of any interest in or operation of the Leased Property, (B)
the negotiation or administration of this Lease, the Purchase
Documents, the Environmental Indemnity or the Participation
Agreement, (C) the making of Funding Advances, including
Attorneys' Fees or other costs incurred to evaluate lien
releases and other information submitted by Tenant with
requests for Construction Advances, (D) the construction of
the Designated Improvements, whether such Losses are incurred
at the time of execution of this Lease or at any time during
the Term, or (E) Tenant's request for assistance in
identifying any new Participant pursuant to Paragraph 18 of
the Purchase Agreement, whether such Losses are incurred at
the time of execution of this Lease or at any time during the
Term. Costs and expenses included in such Losses may
include, without limitation, all appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes (other
than Excluded Taxes), brokerage fees and commissions,
abstract fees, title policy fees, Uniform Commercial Code
search fees, escrow fees, Attorneys' Fees and environmental
consulting fees incurred by Landlord with respect to the
Leased Property. If Landlord pays or reimburses Landlord's
Parent for any such Losses, Tenant shall reimburse Landlord
for the same notwithstanding that Landlord may have already
received any payment from any other Participant on account of
such Losses, it being understood that the other Participant
may expect repayment from Landlord when Landlord does collect
the required reimbursement from Tenant.
(ii) Tenant shall also pay (and indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through
Landlord by reason of a Permitted Transfer from and against)
all Losses, including Attorneys' Fees, incurred or expended
by Landlord or Landlord's Parent or any Person claiming
through Landlord through a Permitted Transfer or in
connection with (A) the breach by Tenant of any covenant of
Tenant herein or in any other instrument executed in
connection herewith or (B) Landlord's exercise in a lawful
manner of any of Landlord's remedies hereunder or under
Applicable Law or Landlord's protection of the Leased
Property and Landlord's interest therein as permitted
hereunder or under Applicable Law. (However, the indemnity
in the preceding sentence shall not be construed to make
Tenant liable to both Landlord and any Participant or other
party claiming through Landlord for the same damages. For
example, so long as Landlord remains entitled to recover any
past due Base Rent from Tenant, no Participant shall be
entitled to collect a percentage of the same Base Rent from
Tenant.) Tenant shall further indemnify and hold harmless
Landlord and all other Indemnified Parties against, and
reimburse them for, all Losses which may be imposed upon,
asserted against or incurred or paid by them by reason of, on
account of or in connection with any bodily injury or death
or damage to the property of third parties occurring in or
upon or in the vicinity of the Leased Property through any
cause whatsoever. THE FOREGOING INDEMNITY FOR INJURY, DEATH
OR PROPERTY DAMAGE SHALL APPLY EVEN WHEN INJURY, DEATH OR
PROPERTY DAMAGE IN, ON OR IN THE VICINITY OF THE LEASED
PROPERTY RESULTS IN WHOLE OR IN PART FROM THE ORDINARY
NEGLIGENCE (AS DEFINED ABOVE) OF AN INDEMNIFIED PARTY;
provided, such indemnity shall not apply to Losses suffered
by an Indemnified Party that were proximately caused by (and
attributed by any applicable principles of comparative fault
to) the Active Negligence, gross negligence or wilful
misconduct of such Indemnified Party.
(iii) If, after the date hereof, due to either (A) the
introduction of or any change (other than any change by way
of imposition or increase of reserve requirements included in
the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (B) the compliance
with any guideline or request from any central bank or other
governmental authority (whether or not having the force of
law), there shall be any increase in the cost to Landlord's
Parent or any other Participant of agreeing to make or
making, funding or maintaining advances to Landlord in
connection with the Leased Property, then Tenant shall from
time to time, upon demand by Landlord pay to Landlord for the
account of Landlord's Parent or such other Participant, as
the case may be, additional amounts sufficient to compensate
Landlord's Parent or the Participant for such increased cost.
An increase in costs resulting from any imposition or
increase of reserve requirements applicable to Collateral
held from time to time by Landlord's Parent or other
Participants pursuant to the Pledge Agreement would be an
increase covered by the preceding sentence. A certificate as
to the amount of any increased cost covered by this
subparagraph, submitted to Landlord and Tenant by Landlord's
Parent or the other Participant, shall be conclusive and
binding for purposes of determining Tenant's obligations
hereunder, absent clear and demonstrable error.
(iv) Landlord's Parent or any other Participant may demand
additional payments (herein called "Capital Adequacy
Charges") if Landlord's Parent or the other Participant
determines that any law or regulation or any guideline or
request from any central bank or other governmental authority
(whether or not having the force of law) affects the amount
of capital to be maintained by it and that the amount of such
capital is increased by or based upon the existence of
Funding Advances made or to be made to Landlord to permit
Landlord to maintain Landlord's investment in the Leased
Property or to make Construction Advances. To the extent
that Landlord's Parent or the other Participant demands
Capital Adequacy Charges as compensation for the additional
capital requirements reasonably allocable to such advances,
Tenant shall pay to Landlord for the account of Landlord's
Parent or the other Participant, as the case may be, the
amount so demanded.
(v) Any amount to be paid to Landlord, Landlord's Parent or
any other Indemnified Party under this subparagraph 9.(y)
shall be a demand obligation owing by Tenant. Tenant's
indemnities and obligations under this subparagraph 9.(y)
shall survive the termination or expiration of this Lease
with respect to any circumstance or event existing or
occurring prior to such termination or expiration.
(z) Liability Insurance. Tenant shall maintain one or more
policies of commercial general liability insurance against
claims for bodily injury or death and property damage occurring
or resulting from any occurrence in or upon the Leased
Property, in standard form and with an insurance company or
companies rated by the A.M. Best Company of Oldwick, New Jersey
as having a policyholder's rating of A or better and a reported
financial information rating of X or better, such insurance to
afford immediate protection, to the aggregate limit of not less
than $10,000,000 combined single limit for bodily injury and
property damage in respect of any one accident or occurrence,
with not more than $1,000,000 (or such other amount as Landlord
and Tenant may agree upon in writing from time to time)
self-insured retention. Such commercial general liability
insurance shall include blanket contractual liability coverage
which insures contractual liability under the indemnifications
set forth in this Lease (other than the indemnifications set
forth in Paragraph 12 concerning environmental matters), but
such coverage or the amount thereof shall in no way limit such
indemnifications. The policy evidencing such insurance shall
name as additional insureds Landlord and all Participants of
which Tenant has been notified (including Landlord's Parent and
the Participants). Tenant shall maintain with respect to each
policy or agreement evidencing such commercial general
liability insurance such endorsements as may be reasonably
required by Landlord and shall at all times deliver and
maintain with Landlord written confirmation (in form
satisfactory to Landlord) with respect to such insurance from
the applicable insurer or its authorized agent, which
confirmation must provide that insurance coverage will not be
canceled or reduced without at least ten (10) days notice to
Landlord. Not less than five (5) days prior to the expiration
date of each policy of insurance required of Tenant pursuant to
this subparagraph, Tenant shall deliver to Landlord a
certificate evidencing a paid renewal policy or policies.
(aa) Permitted Encumbrances. Except to the extent expressly
required of Landlord by subparagraph 10.(b), Tenant shall
comply with and will cause to be performed all of the
covenants, agreements and obligations imposed upon the owner of
the Leased Property in the Permitted Encumbrances in accordance
with their respective terms and provisions. Tenant shall not,
without the prior written consent of Landlord, modify or permit
any modification of any Permitted Encumbrance in any manner
that could impose significant monetary obligations upon
Landlord or any subsequent owner of the Leased Property, could
significantly and adversely affect the value of the Leased
Property, could impose any lien to secure payment or
performance obligations against any part of the Leased Property
or would otherwise be material and adverse to Landlord.
(ab) Environmental.
(i) Environmental Covenants. Tenant covenants:
a) not to cause or permit the Leased Property to be in
violation of, or do anything or permit anything to be
done which will subject the Leased Property to any
remedial obligations under, any Environmental Laws,
including without limitation CERCLA and RCRA, assuming
disclosure to the applicable governmental authorities
of all relevant facts, conditions and circumstances
pertaining to the Leased Property;
b) not to conduct or authorize others to conduct
Hazardous Substance Activities on the Leased Property,
except Permitted Hazardous Substance Use;
c) to the extent required by Environmental Laws, to
remove Hazardous Substances from the Leased Property
(or if removal is prohibited by law, to take whatever
action is required by law) promptly upon discovery; and
d) not to discharge or authorize the discharge of
anything (including Permitted Hazardous Substances)
from the Leased Property into groundwater or surface
water that would require any permit under applicable
Environmental Laws, other than storm water runoff.
If Tenant's failure to cure any breach of the covenants
listed above in this subparagraph (i) continues beyond the
Environmental Cure Period (as defined below), Landlord may,
in addition to any other remedies available to it, after
notifying Tenant of the remediation efforts Landlord believes
are needed, cause the Leased Property to be freed from all
Hazardous Substances (or if removal is prohibited by law, to
take whatever action is required by law), and the cost of the
removal shall be a demand obligation owing by Tenant to
Landlord. Further, subject to the provisions of subparagraph
12.(c) below, Tenant agrees to indemnify Landlord against all
Losses incurred by or asserted or proven against Landlord in
connection therewith. As used in this subparagraph,
"Environmental Cure Period" means the period ending on the
earlier of: (1) one hundred and eighty days (180) after
Tenant is notified of the breach which must be cured within
such period, or such longer period as is reasonably required
for any cure that Tenant pursues with diligence pursuant to
and in accordance with an Approved Plan (as defined below),
(2) the date any writ or order is issued for the levy or sale
of any property owned by Landlord (including the Leased
Property) or any criminal action is instituted against
Landlord or any of its directors, officers or employees
because of the breach which must be cured within such period,
(3) the end of the Term. As used in this subparagraph, an
"Approved Plan" means a plan of remediation of a violation of
Environmental Laws for which Tenant has obtained, within one
hundred and eighty days (180) after Tenant is notified of the
applicable breach of the covenants listed above in this
subparagraph (i), the written approval of the governmental
authority with primary jurisdiction over the violation and
with respect to which no other governmental authority
asserting jurisdiction has claimed such plan is inadequate.
(ii) Environmental Inspections and Reviews. Landlord
reserves the right to retain an independent professional
consultant to review any report prepared by Tenant or to
conduct Landlord's own investigation to confirm whether
Hazardous Substances Activities or the discharge of anything
into groundwater or surface water has occurred in violation
of the preceding subparagraph (i), but Landlord's right to
reimbursement for the fees of such consultant shall be
limited to the following circumstances: (1) an Event of
Default shall have occurred; (2) Landlord shall have retained
the consultant to establish the condition of the Leased
Property just prior to any conveyance thereof pursuant to the
Purchase Agreement or just prior to the expiration of this
Lease; (3) Landlord shall have retained the consultant to
satisfy any regulatory requirements applicable to Landlord or
its Affiliates; or (4) Landlord shall have retained the
consultant because Landlord has been notified of a violation
of Environmental Laws concerning the Leased Property or
Landlord otherwise reasonably believes that Tenant has not
complied with the preceding subparagraph (i). Tenant grants
to Landlord and to Landlord's agents, employees, consultants
and contractors the right during reasonable business hours
and after reasonable notice to enter upon the Leased Property
to inspect the Leased Property and to perform such tests as
are reasonably necessary or appropriate to conduct a review
or investigation of Hazardous Substances on, or any discharge
into groundwater or surface water from, the Leased Property.
Tenant shall promptly reimburse Landlord for the cost of any
such inspections and tests, but only when the inspections and
tests are (1) ordered by Landlord after an Event of Default;
(2) ordered by Landlord to establish the condition of the
Leased Property just prior to any conveyance thereof pursuant
to the Purchase Agreement or just prior to the expiration of
this Lease; (3) ordered by Landlord to satisfy any regulatory
requirements applicable to Landlord or its Affiliates; or (4)
ordered because Landlord has been notified of a violation of
Environmental Laws concerning the Leased Property or Landlord
otherwise reasonably believes that Tenant has not complied
with the preceding subparagraph (i).
(iii) Notice of Environmental Problems. Tenant shall
immediately advise Landlord of (i) any discovery of any event
or circumstance which would render any of the representations
contained in subparagraph 9.(e) inaccurate in any material
respect if made at the time of such discovery, (ii) any
remedial action taken by Tenant in response to any (A)
discovery of any Hazardous Substances other than Permitted
Hazardous Substances on, under or about the Leased Property
or (B) any claim for damages resulting from Hazardous
Substance Activities, (iii) Tenant's discovery of any
occurrence or condition on any real property adjoining or in
the vicinity of the Leased Property which could cause the
Leased Property or any part thereof to be subject to any
ownership, occupancy, transferability or use restrictions
under Environmental Laws, or (iv) any investigation or
inquiry affecting the Leased Property by any governmental
authority in connection with any Environmental Laws. In such
event, Tenant shall deliver to Landlord within thirty (30)
days after Landlord's request, a preliminary written
environmental plan setting forth a general description of the
action that Tenant proposes to take with respect thereto, if
any, to bring the Leased Property into compliance with
Environmental Laws or to correct any breach by Tenant of the
covenants listed above in subparagraph (i), including,
without limitation, any proposed corrective work, the
estimated cost and time of completion, the name of the
contractor and a copy of the construction contract, if any,
and such additional data, instruments, documents, agreements
or other materials or information as Landlord may reasonably
request.
(ac) Affirmative Financial Covenants.
(i) Quick Ratio. Tenant shall maintain a ratio of (A) Quick
Assets of Tenant and its Subsidiaries (determined on a
consolidated basis) to (B) the sum of Current Liabilities of
Tenant and its Subsidiaries (determined on a consolidated
basis), of not less than 1.00 to 1.00. As used in this
subparagraph 9.(ac), "Quick Assets" means the sum (without
duplication of any item) of the Collateral held and pledged
under the Pledge Agreement, plus unencumbered cash, plus
unencumbered short term cash investments, plus other
unencumbered marketable securities which are classified as
short term investments according to GAAP, plus the fair
market value of unencumbered Long-Term Investments, plus
unencumbered current net accounts receivable. For purposes
of determining Quick Assets, assets will be deemed to be
"unencumbered" if they are actually unencumbered or if they
are encumbered only by Liens, from which, at the time of the
applicable determination of Quick Assets, Tenant is entitled
to a release of such assets upon no more than ninety days'
notice, without any payment (other than the payment of
ministerial fees and costs), without subjecting other assets
to any Lien and without otherwise satisfying any condition
that is beyond Tenant's control. As used herein "Long-Term
Investments" means those investments described below (to the
extent that they are not classified as short term investments
in accordance with GAAP), provided that such investments
shall have maturities of not longer than two years, and shall
be rated not less than A- by Standard & Poor's Corporation or
less than A by Xxxxx'x Investors Service, Inc.:
(1) Securities issued or fully guaranteed
or fully insured by the United States government or any
agency thereof and backed by the full faith and credit
of the United States;
(2) Certificates of deposit, time
deposits, eurodollar time deposits, repurchase
agreements, or banker's acceptances that are issued by
either one of the 50 largest (in assets) banks in the
United States or by one of the 100 largest (in assets)
banks in the world; and
(3) Notes and municipal bonds.
As used in this subparagraph 9.(ac), "Current Liabilities"
means, with respect to any Person, all liabilities of such
Person treated as current liabilities in accordance with
GAAP, including without limitation (a) all obligations
payable on demand or within one year after the date in which
the determination is made and (b) installment and sinking
fund payments required to be made within one year after the
date on which determination is made, but excluding all such
liabilities or obligations which are renewable or extendable
at the option of such Person to a date more than one year
from the date of determination.
(ii) Maximum Senior Debt to Capitalization. Throughout the
Term Tenant shall maintain a ratio of Senior Debt to
Capitalization of not more than 0.35 to 1.00. As used in
this subparagraph 9.(ac):
"Senior Debt" means the outstanding Debt of
Tenant and its Subsidiaries (determined on a
consolidated basis), minus the aggregate principal
amount of the Subordinated Debt.
"Capitalization" means the sum of the Debt of
Tenant and its Subsidiaries (determined on a
consolidated basis), including the aggregate principal
amount of the Subordinated Debt, plus Consolidated
Tangible Net Worth of Tenant and its Subsidiaries
(determined on a consolidated basis).
"Subordinated Debt" means the following
unsecured Debt of Tenant: (i) unsecured Debt in respect
of the $110,000,000 aggregate principal amount at
maturity of 10 1/14% Convertible Subordinated Notes due
2001 issued pursuant to the Indenture (in this
definition called the "Existing Subordinated Notes")
but only so long as such unsecured Debt remains
expressly and unconditionally subordinated to the
payment and performance obligations of Tenant in
transactions of the type and structure contemplated by
this Lease and the Purchase Agreement; (ii) other
unsecured Debt of Tenant which is expressly and
unconditionally subordinated to the obligations of
Tenant under this Lease and the Purchase Agreement on
the same terms as the Existing Subordinated Notes or on
other terms approved by the Majority, as defined in the
Participation Agreement (such approval not to be
unreasonably withheld), which together with the
Existing Subordinated Notes, does not exceed at any
time an aggregate amount equal to fifteen percent (15%)
of Tenant's Consolidated Tangible Net Worth at such
time; and (iii) other unsecured Debt of Tenant in an
amount approved in writing by the Majority and which is
expressly and unconditionally subordinated to the
obligations of Tenant under this Lease and the Purchase
Agreement on terms approved in writing by the Majority,
in each case in its sole discretion.
"Consolidated Tangible Net Worth" means, at any
date of determination thereof, the excess determined in
accordance with GAAP of consolidated total assets on
such date over consolidated total liabilities on such
date; provided, however, that Intangible Assets on such
date shall be excluded from any determination of
consolidated total assets on such date.
"Intangible Assets" means, as of the date of any
determination thereof, the total amount of all assets
of Tenant and its consolidated Subsidiaries that are
properly classified as "intangible assets" in
accordance with GAAP and, in any event, shall include,
without limitation, goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental
expense, organization expense, unamortized debt
discount and expense, and deferred charges other than
prepaid insurance and prepaid taxes and current
deferred taxes which are classified on the balance
sheet of Tenant and its consolidated Subsidiaries as a
current asset in accordance with GAAP and in which
classification Tenant's independent public accountants
concur.
"Indenture" means the Indenture dated as of
November 1, 1994 by and between Tenant and the First
National Bank of Boston, as trustee.
(iii) Minimum Tangible Net Worth. Tenant shall not permit
its Consolidated Tangible Net Worth, on a consolidated basis,
at the end of any fiscal quarter to be less than the sum of:
(A) eighty percent (80%) of Consolidated Tangible Net Worth
of Tenant as of May 31, 1997 (restated to give effect to
Tenant's subsequent merger with U.S. Robotics, such that
"Consolidated Tangible Net Worth" as used in this clause (A)
reflects not only Tenant's May 31, 1997 Consolidated Tangible
Net Worth as reported prior to the merger, but also the
March 30, 1997 Consolidated Tangible Net Worth of U.S.
Robotics reported prior to the merger); plus (B) fifty
percent (50%) of Tenant's net income (but without deducting
any net losses for any period) earned in each fiscal quarter,
starting with the quarter ended August 31, 1997, and ending
with the quarter which, at such time, is the most recently
ended fiscal quarter; less (C) the amount of write-offs
resulting from acquisitions after May 31, 1997, such amount
not to exceed an aggregate, cumulative amount of
$550,000,000.
(iv) Fixed Charge Ratio. Throughout the Term Tenant shall
maintain as of the last day of each fiscal quarter of Tenant
a ratio of (A) Adjusted EBIT of Tenant and its Subsidiaries
(determined on a consolidated basis) for the twelve (12)
month period ending on such date, to (B) Fixed Charges of
Tenant and its Subsidiaries (determined on a consolidated
basis) for the twelve (12) month period ending on such date,
of not less than 2.00 to 1.00. As used in this clause (iv),
"Adjusted EBIT" means, for any accounting period, net income
(or net loss), plus the amounts (if any) which, in the
determination of net income (or net loss) for such period,
have been deducted for (a) gross interest expense, (b) income
tax expense (c) rent expense under leases of property
(excluding rent expense payable under any "Minor Lease",
which shall mean a lease under which rent is less than
$1,000,000 per annum), (d) depreciation, and (e) non-
recurring charges taken in connection with acquisitions, in
each case determined in accordance with GAAP. As used in
this clause (iv), "Fixed Charges" means, for any accounting
period, the sum of (a) gross interest expense, plus
(b) amortization of principal or debt discount in respect of
all Debt during such period, plus (c) rent payable under all
leases of property during such period (excluding rent payable
under any Minor Lease), plus (d) taxes payable during such
period.
