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HomeMy WebLinkAbout124-81 RESOLUTION• • • Ti.maa. Imp RESOLUTION NO. kvi -2I WHEREAS, the City of Fayetteville, Arkansas (the "City") desires to proceed with the construction of improvements to Fayetteville City Hospital (the "improvements") involving a total construction cost of $509,836.00;,and WHEREAS, the City has received a proposal from Mcllroy Bank & Trust, Fayetteville, Arkansas ("Mcllroy Bank & Trust") to provide financing for the constructionof the improvements through a lease agreement with option to purchase (the "Lease"); and WHEREAS, pursuant to Article 12, Section 3 of the Con- stitution and Section 19-1042 of the Arkansas Statutes Annotated (Supp. 1979), the City is authorized to exercise full legislative power in any and all matters pertaining to municipal affairs, and pursuant to Arkansas Statutes Annotated Section 19-2310 (Supp. 1979) the City is further authorized to buy, sell, convey and lease real and personal property for public or governmental uses and purposes; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the construction of the improvements at the total construction cost of $509,836.00 is hereby authorized. 1 Section 2. That the financing for the construction of the improvements shall be provided by entering into the Lease with Mcllroy Bank & Trust. The Lease shall be in such form and shall contain such provisions, subject to the terms of this Resolution, as shall be acceptable to the Mayor, the City Clerk, and the City Attorney, who are hereby authorized to confer with Mcllroy Bank & Trust in order to complete the Lease. The Lease shall be payable solely from current revenues of the City available during each fiscal year The Lease shall not constitute an indebtedness or a pledge of the faith and credit or taxing power of the City within the meaning of any constitutional or statutory limitation. Section 3. That the Mayor and City Clerk, for and on behalf of the City, are hereby authorized and directed to do any and'all things necessary to carry out the authority granted by this Resolution, including, without limitation, the execution and delivery of the Lease, and anyand all papers, documents, certificates and other instruments of any nature whatsoever, required for the carrying out of such authority or to evidence the exercise thereof. Section 4. Any and all resolutions in conflict herewith are hereby repealed to the extent of such conflict. Section 5. This Resolution shall be in full force and effect immediately upon passage hereof. -2- • PASSED AND APPROVED this /5. day of , .. 198. • CITY OF FAYETTEVILLE, ARKANSAS • • LEASE AGREEMENT WITH OPTION TO PURCHASE This Agreement, made this 15th day of December , 1981, between McILROY BANK & TRUST, an Arkansas banking corporation ("Lessor") and CITY OF FAYETTEVILLE, ARKANSAS, ("Lessee"), a duly constituted political subdivision of the State of Arkansas;, WITNESSETH: • WHEREAS, Lessee has determined that a need exists for improvements to Fayetteville City Hospital, (the "property"); and WHEREAS, Lessee is authorized by the laws of the State of Arkansas to enter into this Agreement; and WHEREAS, Lessee desires to lease the property from Lessor for the period set forth herein, thereafter acquiring title to the property, pursuant to the terms and conditions and for the purposes described herein; and WHEREAS, Lessee has requested Lessor to provide funding for the lease and construction of the improvements; NOW, THEREFORE, for and in consideration of the premises contained herein, the parties agree as follows: ARTICLE I DEFINITIONS Section 101. Definitions. For purposes of this Agreement and all related documents, the terms defined herein shall have the following meanings (unless the context clearly requires otherwise): "Agreement" - This Lease Agreement with Option to Purchase and any amendments or Supplements hereto, specifically including Schedule(s) attached hereto. "Property" - The lands, buildings, improvements and facilities covered by the Lease Agreement and described in the Schedule(s). "Initial Term" - The initial period of the term of this Agreement, commencing on the date specified in the first Schedule hereto and expiring at the end of Lessee's then - current fiscal appropriations period. EXHIBIT A "Lessee" - City of Fayetteville, Arkansas, a political subdivision of the State of Arkansas, with its offices at 113 West Mountain Street (Post Office Drawer F), Fayetteville, Arkansas 72701, which address shall be the address for all notices to be given to Lessee hereunder. "Lessor" - Mcllroy Bank & Trust, an Arkansas banking corporation with its offices at One Mcllroy Plaza, Fayetteville, Arkansas. 72701, or any surviving, resulting or transferee corporation of Lessor, or any successor or assign of Lessor. "Rent" - The basic payments payable by Lessee pursuant to the provisions hereof during the Term of this Lease. Rent shall be paid by Lessee in consideration of the right to use the property during the Term and in consideration of the acquisition of the property upon termination hereof. Basic Rent shall be payable in the amounts and at the times set forth in the Schedule(s), subject to the provisions hereof relating to sources of funds. "Successive Terms" - The periods of this Agreement commencing upon the expiration of the Initial Term and upon the expiration of the next preceding Successive Term there- after. Each Successive Term shall be coterminous with the future fiscal appropriation periods applicable to Lessee so that at no time shall the term of this Agreement exceed the term of Lessee's applicable fiscal appropriations period. ARTICLE II DEMISING CLAUSE, DURATION OF LEASE TERMS, RENTAL PROVISIONS, CONSTRUCTION AND EQUIPPING OF PROJECT Section 201. Lease of Property. Lessor, for and in consideration of the covenants and agreements herein contained, on the part of Lessee to be kept and performed, agrees to and does hereby lease to Lessee, and Lessee agrees to and does hereby lease, take and accept from Lessor the property, subject to the terms, conditions and obligations set forth herein, for the term hereof. Section 202. Initial Term. The Initial Term of this Agreement shall commence upon the execution date hereof. The Initial Term shall expire at the end of Lessee's current -fiscal appropriations period. • Section 203. Successive Terms. The Successive Terms shall commence as follows: (a) the first Successive Term shall commence immediately upon the expiration of the Initial Term and shall expire at the end of Lessee's then -current fiscal appropriations period. (b) all following Successive Terms shall commence immediately upon the expiration of the next preceding Successive Term and shall expire at the end of Lessee's then -current fiscal appropriations period or at such earlier date as provided in the applicable Schedule(s). It is the express intent of Lessor and Lessee, and the express purpose of this Section 203, that each Successive Term shall begin and end simultaneously with the applicable fiscal appropriations period of Lessee so that at no time shall the term of this Agreement exceed the term of Lessee's applicable fiscal appropriations period. Section 204. Renewal of Terms. Upon the expiration of the Initial Term hereof, and each following Successive Term, this Agreement shall be renewed for the period of the next following Successive Term. Such renewal shall be automatic and shall occur without requirement of notice to or from Lessor or Lessee. Notwithstanding the foregoing, however, if the provisions of Section 205 shall become applicable, then this Agreement may be terminated by Lessee as provided therein, and the renewal shall be of no further force and effect. Section 205. Fiscal Funding. If the Lessee shall fail to have available sufficient funds such that Lessee can pay the Rent required by the terms of this Agreement, during any Successive Term hereof, then Lessee may terminate this Agreement and the sole remedy of Lessor shall be the immediate repossession of the property. Lessee covenants, represents and agrees that: (a) Sufficient monies are available to Lessee to pay Rent during the Initial Term; (b) Any monies authorized or appropriated to Lessee for the rental and acquisition of the property dur-ing.theCnitial Term or any Successive Term shall be applied to the payment of Rent until such monies are exhausted; -3- • • • (c) Lessee has not and willnot directly or indirectly give priority or parity to the application of monies authorized or appropriated for rental and acquisition of the property to the rental, lease or acquisition of other property of any type functionally similar to the property; (d) Lessee has taken and will take such action as is necessary under applicable law to include, obtain and maintain budgeted and lawful funds sufficient and available to pay Rent throughout all Successive Terms hereof; and (e) In the event of applicability of this provision, but prior to termination of the Agreement, Lessee will use its best efforts to use any procedures available to find other appropriate uses for the property with other agencies so that, if reasonably possible, a termination of the Agreement may be avoided. Section 206. Rent. Lessee agrees to pay to Lessor, as rent for the .use 'of the property during the Term, the sums -designated as Rent in the Schedule(s). Section 207. Payment and Source of Revenue. - Payment of Rent and any other obligations hereunder shall be made, without notice or demand, in lawful money of the United States of America to Lessor at the address set forth in the invoices delivered by Lessor, or at addresses required by Lessor. THIS CONTRACT IS NOT A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF LESSEE WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION. THIS CONTRACT IS PAYABLE SOLELY FROM CURRENT REVENUES OF LESSEE AS AVAILABLE ON AN ANNUAL BASIS. LESSOR SHALL HAVE NO RIGHT TO COMPEL THE EXERCISE OF ANY TAXING POWER OF LESSEE TO MAKE PAYMENTS HEREUNDER, AND NO TAX REVENUES OR OTHER FUNDS OF LESSEE ARE PLEDGED TO THE MAKING OF PAYMENTS HEREUNDER. Section 208. Other Payments. Lessee agrees to pay to Lessor all amounts, liabilities and obligations that Lessee assumes hereunder or agrees to pay to Lessor or any other party or to otherwise discharge. If Lessee shall fail to pay or discharge any obligation due, then Lessor shall have the right to pay or discharge any -4- • such obligation and shall have all rights, powers and remedies provided herein or by law, and such failure to pay shall be treated as a failure to pay Basic Rent. Lessee hereby agrees to pay and perform all of its obligations under this Agreement at its sole cost andexpense and to pay all such sums at such times as they may be due to any party, without notice or demand. Section 209. Net Payments and Nonterminability. Lessee agrees that its obligation to pay any amount as Rent or otherwise under this Agreement and to perform its other obligations hereunder shall be separate and independent covenants, agreements and obligations. Lessee's obligation to pay such amounts shall be absolute and unconditional and shall at all times continue unaffected unless the requirement therefor shall have been modified or terminated pursuant to an express provision of this Agreement. Section 210. Constructing and Equipping of Project. The Lessor has acquired the lands to be included in the Project. Lessee has undertaken and will complete the acquiring, constructing and equipping of the Project in accordance with the plans and specifications attached hereto as Exhibit B, and has executed, or will execute necessary contracts and purchase orders therefor. All expenditures made by it in connection with the acquiring, constructing and equipping of the Project will be paid by Lessor. Title to the lands, improvements, equipment and facilities paid for by Lessor shall be placed in the Lessor. Lessee shall obtain all necessary approvals from any and all governmental agencies requisite to the constructing and equipping of the Project, and the Project shall be constructed and equipped in compliance with all State and local laws, ordinances and regulations applicable thereto. ARTICLE III TITLE AND PURCHASE OF PROPERTY Section 301. Title. Lessor shall retain title to the property until Lessee shall have made all the payments required hereunder and shall have kept and performed all its agreements contained herein,notwithstanding the possession and use ofthe property by Lessee as herein provided. -5- Section 302. Option to Purchase. Lessee shall have the option to purchase the property at any time as shown on the attached Schedule(s) upon payment of the amount specified as the Termination Value therein. Section 303. Passage of Title. Except as otherwise specifically provided herein, when Lessor shall have received from Lessee all payments of Rent, and other amounts required to be paid by Lessee hereunder, and all of Lessee's obligations herein contained shall have been performed, absolute right, title and interest in and to the property shall pass to and vest in Lessee free of all liens and encumbrances without any further payment by Lessee, and this Agreement shall thereupon terminate. It is the express intent of Lessor and Lessee that the purpose of this Agreement shall be the lease and purchase of the property by Lessee, and when the foregoing conditions have been satisfied, the closing of such purchase shall occur at the offices of Lessee, at which time Lessor shall deliver to Lessee a warranty deed conveying title to the property to Lessee free from any lien or encumbrance created by or rising through Lessor. ARTICLE IV COVENANTS AND INDEMNITY OF LESSEE Section 401. Authority and Status. Lessee represents, covenants and warrants that it is a duly constituted political subdivision of the State of Arkansas and is authorized by the Constitution and laws of the State of Arkansas to enter into the transaction contem- plated by this Agreement and to carry out its obligations hereunder. Lessee has been duly authorized to execute and deliver this Agreement and agrees that it will do or cause to be done all things as may be required in the reasonable judgment of Lessor necessary to preserve and keep this Agreement in full force and effect. Lessee further represents, covenants and warrants that all required procedures for execution and delivery of this Agreement have been met, and that Lessee has complied with all applicable bidding, negotiation and approval requirements where necessary, and by due notifica- tion has presented this Agreement for approval and adoption as a valid, binding and enforceable obligation on its part. -6- r Section 402. Indemnities of Lessee. Lessee agrees to indemnify, protect and hold harmless Lessor from and against all losses, damages, injuries, liabilities, claims, causes of action and demands whatso- ever, regardless of the cost thereof, and expenses in connection therewith, including counsel fees, arising out of the reten- tion by Lessor of title to the property, or out of the use and operation thereof during the period when title thereto remains in Lessor, any violation of this Agreement, any violation of any legal requirements or any agreements affecting the property, or any contest under any provision of this Agreement. This covenant of indemnity shall continue in full force and effect, notwithstanding the payment of all obligations hereunder and the vesting of title to the property in Lessee, as provided herein, or the termination of this Agreement in any manner whatsoever. Section 403. Risk of Loss. Lessee agrees that Lessee will bear the risk of loss applicable to the property, and shall not be released from its obligations hereunder in the event of any damage to or the destruction of the property. ARTICLE V INSURANCE Section 501. Required Insurance. A. Lessee shall, at Lessee's sole cost, keep the property insured against the perils of fire and the hazards ordinarily included under broad form extended coverage endorsements in an amount approved by Lessor. B. At all times during the initial term, and all successive terms, of this lease, Lessee shall, at no cost or expense to.Lessor, maintain or cause to be maintained: (i) general public liability insurance against claims for bodily injury or death occurring upon, in or about the leased premises, with such insurance to afford protection to the limits of not less than $500,000.00 in respect of bodily injury or death to any one person and to the limits of not less than $1,000,000.00 in respect of any one accident; and" (ii) property damage insurance against claims for damage to property occurring upon, in, or about -7- II • the leased premises with protection to the limits in respect of damages to owner. • • such insurance to afford of not less than $100,000.00 the property of any one C. Copies or certificates of the insurance provided for by this Article or elsewhere in this lease shall be delivered by Lessee to Lessor; and, in the case of expiring policies throughout the term, or successive terms, copies or certificates of any new or renewal policies shall be delivered by Lessee to Lessor. D. The policy of insurance provided for in Section 501A of this Article V shall name the Lessor and the Lessee as insureds as their respective interests may appear. E. All insurance required by this Section 501 shall be effective with insurance companies qualified to do business in the State of Arkansas selected by the Lessee and acceptable to Lessor. Lessee shall cause appropriate provisions to be inserted in each insurance policy making such policy non - cancellable without at least ten (10) days prior written notice to Lessor and Lessee. Also, it is agreed that no claim shall be made and no suit or action at law or in equity shall be brought by the Lessor or by anyone claiming by, through or under Lessor, against Lessee for any damage to the leased premises covered by the insurance provided for by this Article V, however caused, but nothing in this subsection E shall diminish Lessee's obligation to repair or rebuild as provided in Article XIV. The Lessee shall have the sole right and responsibility to adjust any loss with the insured involved and to conduct any negotiations in connection therewith. 1 ARTICLE VI MAINTENANCE AND. REPAIRS Section 601. Repairs, Maintenance and Alterations. Lessee shall throughout the initial term, and all successive terms, at no cost and expense to Lessor, maintain, or cause to be maintained, and in the event of termination hereof, yield up or cause to be yielded up, in good and tenantable repair, order and condition, reasonable wear and tear excepted, the improvements now or at any time erected on the lands included in the property and sidewalks adjoining the property; and promptly at no cost and expense to Lessor -8- r make or cause to be made all necessary repairs, interior and exterior, structural and non-structural, foreseen as well as unforeseen to such improvements. Lessee shall have the right from time to time to make additions, alterations and changes in or to the improvements constituting part of the property and shall have the right to construct new improvements. It is understood and agreed that in the event the Lessee makes any additions, alterations and changes in or to the improvements constituting part of the property as authorized by this Section, the Lessee shall be under no obligation to restore the property to their original condition prior to such additions, alterations or changes. All structural improvements and alterations made on the property by or on behalf of Lessee shall immediately upon completion thereof be and become the property of the Lessor without payment therefor by Lessor but subject to this Lease Agreement. All machinery and equipment, trade fixtures, movable partitions, furniture and furnishings and other property installed at the expense of Lessee shall remain the property of the Lessee with the right of removal, whether or not affixed and/or attached to the real estate, and the Lessee shall, so long as it is not in default hereunder, be entitled but shall not be obligated to remove the same, or any part thereof, during the initial term, or any successive terms, or within a reasonable time thereater, but Lessee shall at its own cost and expense repair any and all damages to the property resulting from or caused by their removal therefrom. ARTICLE VII TAXES AND ASSESSMENTS Section 701. Payment by Lessee. Lessee will pay promptly all taxes and special assessments or other impositions which may be imposed upon the property or upon Lessor solely by reason of its ownership thereof and will keep at all times all the property free and clear of all Impositions which might in any way affect the title of Lessor thereto or result in a lien upon the property; provided, however, that Lessee shall be under no obligation to pay any Imposition so long as it is contesting in good faith and by appropriate legal proceedings such Imposition, and the non- payment thereof does not, in the opinion -of Lessor; adversely affect the property or rights of Lessor hereunder. If any -9- • such Imposition shall have been charged or levied against Lessor directly and paid by Lessor, Lessee shall reimburse Lessor on presentation of invoice therefor. Lessee will furnish to Lessor, within 30 days after demand therefor, proof of payment of each such Imposition payable by Lessee hereunder. ARTICLE VIII USE, OPERATION -AND POSSESSION Section 801. Possession by Lessee. Lessee, so long as it shall not be in default under this Agreement, shall be entitled from and after the commencement hereof, to the possession of the property and the use thereof, but only upon and subject to all the terms and conditions of this Agreement. ARTICLE IX PROHIBITIONS AGAINST LIENS Section 901. Discharge of Liens. Lessee will pay or satisfy and discharge any and all sums claimed by any party, by through and under Lessee or its successors or assigns, which, if unpaid, might become a lien or other charge upon the property, but shall not be required to pay or discharge any such claims so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings in any reasonable manner, and the nonpayment thereof does not, in the opinion of Lessor, adversely affect the title, property or rights of Lessor hereunder. Lessee will promptly remove and discharge any charge, lien, security interest or encumbrance upon the property, any other sum payable hereunder which arises for any reason, including but not limited to all liens which arise out of the use, ownership, possession or leasing thereof, but not including any mortgage, charge, lien, security interest or encumbrance created by or resulting from act of Lessor. Section 902. Covenant of Lessee. Lessee covenants that it shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect -10- • to the property, except with respect to the respective rights of Lessor and Lessee as herein provided. However, this covenant shall not be deemed breached by reason of liens for taxes, assessments or governmental charges or levies, in each case not due and delinquent, or undetermined or inchoate materialmen's, mechanic's, workmen's, repairmen's or other like liens arising in the ordinary course of business and, in each case, not delinquent. ARTICLE X ASSIGNMENT Section 1001. Assignment by Lessee. Lessee. covenants and agrees that it shall not transfer or assign its rights under this Agreement without the prior written consent of Lessor, and any such attempted assignment shall be void. Lessor hereby consents to an assignment of Lessee's rights under this Agreement to Fayetteville City Hospital. Section 1002. Assignment by Lessor. All or any of the rights, benefits and advantages of Lessor in and to the property and under this Agreement, including the right to receive payments herein provided to be made by Lessee, may be assigned in whole or in part by Lessor, and by each person taking from Lessor by assignment or otherwise, and may be reassigned by any such person at any time and from time to time. No such assignment of any nature whatsoever shall relieve Lessee of its obligations hereunder. ARTICLE XI LESSOR MAY PERFORM LESSEE'S OBLIGATIONS Section 1101. If Lessee shall fail to keep or perform any of its obligations as provided in this Lease Agreement in respect of (a) maintenance of insurance; (b) repairs and maintenance of the property; (c) compliance with legal or insurance requirements; (d) keeping the property lien free; or (e) making of any other payment of performance of any other obligations, then Lessor may (but shall not be obligated to -11- • • do so), upon the continuance of such failure on Lessee's part for thirty (30) days after written notice to Lessee, and without waiving or releasing Lessee from any obligation, and as an additional but not exclusive remedy, make any such payment or perform any such obligation (not under circumstances where such payment or performance would defeat any rights, herein specifically given to Lessee, to withhold such performance or to contest such obligation to the extent herein provided), and all sums so paid by Lessor and all necessary incidental costs and expenses incurred by Lessor in making such payment or performing such obligation shall be deemed Additional Rent and shall be paid to Lessor on demand, or at Lessor's option may be added to any installment of Basic Rent thereafter falling due, and if not so paid by Lessee, Lessor shall have the same rights and remedies as in the case of default by Lessee in the payment of the Basic Rent. ARTICLE XII PUBLIC UTILITIES AND CHARGES Section 1201. Lessee agrees to pay or cause to be paid all charges for water, gas, sewer, electricity, light, heat or power, telephone or other service used, rendered or supplied to or for the Lessee upon- or in connection with the property throughout the term of this Lease Agreement. ARTICLE XIII INSPECTION OF LEASED PREMISES Section 1301. Lessee shall permit Lessor or their respective authorized representatives, to enter the property at all reasonable times during usual business hours for the purpose of inspection and for the performance of any work therein made necessary by reason of Lessee's default under any of the provisions of this Lease Agreement. Lessor may, during the progress of any such work, keep and store on the property all necessary materials, supplies and equipment and shall not be liable for reasonable inconvenience, annoyance, disturbance, loss of business or other damage to Lessee suffered by reason of the performance of any such work or the storage of materials, supplies and equipment. -12- Pi • • ARTICLE XIV DAMAGE AND DESTRUCTION Section 1401. A. Lessee covenants and agrees that in the event of damage to or destruction of the property, or any part thereof, by fire or other casualty, the Lessee shall immediately notify the Lessor. In the event of such damage or destruc- tion, neither the term nor any of the obligations of either party under this lease shall be affected orreduced in any way, and, (i) Lessee shall proceed to repair, rebuild and replace the remaining part of the property as nearly as possible to the condition existing prior to such taking, to the extent that the same may be feasible, subject to the right on the part of the Lessee to make alterations which, in the reasonable judgment of Lessee, will improve the effeciency of the property for the purposes of the intended use, under this Lease Agreement; and (ii) Insurance money shall be paid to the Lessee, and the Lessor hereby assigns the same to the Lessee for the use of the Lessee in repairing, rebuilding and replacing as provided in (i) above. The net award shall be transferred to the Lessee upon receipt of a certificate signed by an officer of the Lessee: (a) requesting payment of a specified amount of such net award; (b) detailing the progress of the restoration and repair work; (c) stating that such specified amount does not exceed the estimated cost of the work and materials in connection with the restoration, including as part thereof the estimated fees of any architect or engineer, if any; and (d) stating that no part of such cost has pre- viously been made the basis of any request for the withdrawal under this Article. -13- f If the net award is in excess of the amount necessary to repair, rebuild and replace as specified in (i) above, such excess shall belong to and shall be paid to the Lessee. If the net award is less than the amount necessary for the Lessee to repair, rebuild and replace as set forth above, the Lessee shall nevertheless complete the repair, rebuilding and replacement work and pay the cost thereof. B. All insurance money paid on account of such damage or destruction shall be paid to the Lessor and applied as above set forth to the payment of the cost of the aforesaid restoration, repairs, replacements or rebuilding, including expenditures made for temporary repairs or for the protection of property pending the completion of permanent restoration, repairs, replacements, or rebuilding or to prevent interference with the business operated thereon (sometimes referred to as the "restoration"). ARTICLE XV CONDEMNATION Section 1501. A. If during the term of this Lease Agreement title to all or substantially all of the property shall be taken or condemned by a competent authority for any public use or purpose, the net amount awarded as damages or paid as a result of such taking (being the gross award less attorneys' fees and other expenses and costs incurred in the condemna- tion proceedings, hereinafter referred to as the "net award") shall be paid to Lessor for the account of Lessor and this Lease Agreement shall terminate andrents adjusted as of the date of taking. For purposes of this Article, "title to all or substantially all of the property shall be taken or condemned" shall be deemed to mean a taking of all of the property or a taking of such substantial portion of the property that the Lessee cannot reasonably operation in the remainder in substantially the same manner as before. B. If less than substantially all of the property shall be taken or condemned by a competent authority for any public use or purpose, neither the term nor any of the obligations of either party under this Lease Agreement shall be affected or reduced in any way, and -14- • (i) Lessee shall proceed to repair, rebuild and replace the remaining part of the property as nearly as possible to the condition existing prior to such taking, to the extent that the same may be feasible, subject to the right on the part of the Lessee to make alterations which, in the reasonable judgment of Lessee, will improve the effeciency of the property for the purposes of the intended use under this Lease Agreement; and (ii) The net award shall be paid to the Lessee, and the Lessor hereby assigns the same to the Lessee for the use of the Lessee in repairing, rebuilding and replacing as provided in (i) above. The net award shall be transferred to the Lessee upon receipt of a certificate signed by an officer of the Lessee: (a) requesting payment of a specified amount of such net award; (b) detailing the progress of the restoration and repair work; (c) stating that such specified amount does not exceed the estimated cost of the work and materials in connection with the restoration, including as part thereof the estimated fees of any architect or engineer, if any; and (d) stating that no part of such cost has pre- viously been made the basis of any request for the withdrawal under this Article. If the net award is in excess of the amount necessary to repair, rebuild and replace as specified in (i) above, such excess shall belong to and shall be paid to the Lessee. If the net award is less than the amount necessary for the Lessee to repair,rebuild and replace as set forth above, the Lessee shall nevertheless complete the repair, rebuilding and replacement work and pay the cost thereof. C. In the event of a taking under either A or B above, the Lessee shall have the right to participate in and to offer proof in the condemnation proceedings and to receive any award (by way of negotiation, settlement or judgment) which may be made for damages sustained by Lessee by reason of the condemnation. -15- • D. If the temporary use of the whole or any part of the property shall be taken by right to eminent domain, this Lease Agreement shall not be thereby terminated and the parties shall continue to be obligated under all of its terms and provisions and Lessee shall be entitled to receive the entire amount of the award made for such taking, whether by way of damages, rent or otherwise. ARTICLE XVI DEFAULT PROVISIONS Section 1601. The following shall be "events of default" under this Lease Agreement and the terms"event of default" or "default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events: (a) Failure by the Lessee to pay the Basic Rent or any part thereof when due and (i) continuation of said failure for a period of three (3) days after notice by mail given to it by the Lessor that the rent referred to in such notice has not been received or (ii) continuation of said failure for a period of seven (7) days. (b) Failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subsection (a) of this Section, (i) for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, given to the Lessee by the Lessor unless the Lessor shall agree in writing to an extension of such time prior to its expiration or (ii) for such longer period as may be reasonably necessary to remedy such default provided that the Lessee is proceeding with reasonable diligence to remedy the same. Section 1602. Whenever any event of default shall happen and then be continuing, the Lessor may take any of the following remedial steps: -16- (a) The Lessor may re-enter and take possession of the property without terminating this Lease Agreement, and sublease the property for the account of the Lessee, holding the Lessee liable for the difference in the rent and other amounts payable by the Lessee hereunder. (b) The Lessor may terminate the term, exclude the Lessee from possession of the property and use its best efforts to lease the property to another for the account of the Lessee, holding the Lessee liable for all rent and other payments due up to the effective date of any such leasing. (c) The Lessor shall have access to and inspect, examine and make copies of the books and records relating to the property. (d) The Lessor may take whatever action at law or in equity may appear necessary or desirable to collect the rent and any other amounts payable by Lessee hereunder, then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Lease Agreement. Any amounts collected pursuant to action taken under this Section shall be applied in accordance with the provisions of the lease. Section 1603. No remedy herein conferred upon or reserved to the Lessor is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall, impair any such right or power or shall be construed to be a waiver thereof but any such right or power may be exercised from time to time as often as may be deemed expedient. -17-