Resolution No 16-2024 - Related to Property Conveyance to McCormick Company Lathrop St.

Home Browse Search

�0 • Secti1 on 6.8. Removal of Leased Equipment. The Lessor shall not>be under any obligation to renew, repair or replace any inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary Leased Equipment. In any instance where the Lessee in its sound discretion determines that any items of Leased Equipment have become inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary, the Lessee may remove such items of Leased Equipment from the Building and the Leased Land and (as a whole or in part) without any responsibility or accountability to the Lessor or the Trustee therefor, provided that the Lessee: (a) Substitutes (either by direct payment of the costs thereof or by advancing to the Lessor the funds necessary therefor) and installs anywhere in the Building or on the Leased Land other machinery or equipment having equal or greater value (but not necessarily having the same function) in the operation of the Building as a manufacturing and distribution plant, all of which substituted machinery or equipment shall be free of all liens and encumbrances (other than Permitted Encumbrances) but shall become a part of the Leased Equipment; or (b) (i) in the case of the sale of any such equipment to anyone other than itself or in the case of the scrapping thereof, the Lessee shall pay into the Bond Fund the proceeds from such sale or the scrao value thereof, as the case may be, (i i) in the case of the trade-in of such equipment for other equipment not to be installed in the Building or on the Leased Land, the Lessee shall pay into the Bond Fund the amount of the credit received by it in such trade-in, and (iii) in the case of the sale of any such equipment to the Lessee or a related company, the Lessee shall pay into the Bond Fund an amount equal to the original cost thereof to the Lessee less depreciation at rates cal- culated in accordance with generally accepted accounting practice. In the event that Lessee prior to such removal of items of Leased Equipment from the Building and the Leased Land has acquired and installed machinery or equipment with its own funds which has become an integral part of the Leased Equipment, Lessee may take credit to the extent of the amount so spent by it against the requirement that it either substitute and install other machinery and equipment having equal or greater value or that it make payment into the Bond Fund, providing that the provisions of this Section shall not relieve the Lessee of its obligations under the first sentence of Section 6.1 hereof. 2is9 ..231