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EXHIBIT 10.4
LEASE AGREEMENT
by and between
CAN (WI) QRS 12-34, INC.,
a Wisconsin corporation
as LANDLORD
and
SILGAN CONTAINERS CORPORATION,
a Delaware corporation,
as TENANT
Premises: Menomonie, Wisconsin
Oconomowoc, Wisconsin
Dated as of: June 13, 1997
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TABLE OF CONTENTS
Page
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Parties.................................................. 1
1. Demise of Premises....................................... 1
2. Certain Definitions...................................... 1
3. Title and Condition...................................... 11
4. Use of Leased Premises; Quiet Enjoyment.................. 12
5. Term .................................................... 13
6. Basic Rent............................................... 14
7. Additional Rent.......................................... 14
8. Net Lease; Non-Terminability............................. 16
9. Payment of Impositions .................................. 17
10. Compliance with Law; Environmental Matters............... 18
11. Liens; Recording and Title............................... 20
12. Maintenance and Repair................................... 21
13. Alterations and Improvements............................. 22
14. Permitted Contests....................................... 23
15. Indemnification.......................................... 24
16. Insurance................................................ 25
17. Casualty and Condemnation................................ 29
18. Termination Events....................................... 31
19. Restoration.............................................. 32
20. Procedures Upon Purchase................................. 33
21. Assignment and Subletting; Prohibition
against Leasehold Financing.............................. 35
22. Events of Default........................................ 40
23. Remedies and Damages Upon Default........................ 42
24. Notices.................................................. 46
25. Estoppel Certificate..................................... 47
26. Surrender................................................ 47
27. No Merger of Title....................................... 48
28. Books and Records........................................ 48
29. Determination of Value................................... 51
30. Non-Recourse as to Landlord.............................. 52
31. Financing................................................ 53
32. Subordination............................................ 54
33. Tax Treatment; Reporting................................. 54
34. Right of First Refusal................................... 54
35. Economic Abandonment..................................... 56
36. Miscellaneous............................................ 57
EXHIBITS
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Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Percentage Allocation of Basic Rent
Exhibit "F" - Schedule of Termination Values
Exhibit "G" - Post Closing Obligations
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LEASE AGREEMENT, made as of this 13th day of June, 1997, between CAN
(WI) QRS 12-34, INC., a Wisconsin corporation ("Landlord"), with an address c/o
W.P. ▇▇▇▇▇ & Co., Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, and SILGAN CONTAINERS CORPORATION, ("Tenant"), a Delaware corporation
with an address at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets to Tenant, and
Tenant hereby takes and leases from Landlord, for the term and upon the
provisions hereinafter specified, the following described property (hereinafter
referred to collectively as the "Leased Premises" and individually as the
"Menomonie Premises" (comprised of (x) an office and manufacturing building
containing approximately 66,596 square feet and (y) a warehouse building
containing approximately 120,950 square feet) and "Oconomowoc Premises"
(comprised of one building used for office and laboratory space and containing
approximately 40,835 square feet) each of which premises is more particularly
described in the applicable description in Exhibit "A" attached hereto and made
a part hereof and shall include the portions of items (a), (b) and (c) of this
Paragraph 1 located thereon or therein and appertaining thereto): (a) the
premises described in Exhibit "A" hereto, together with the Appurtenances
(collectively, the "Land"); (b) the buildings, structures and other improvements
now or hereafter constructed on the Land (collectively, the "Improvements"); and
(c) the fixtures, machinery, equipment and other property described in Exhibit
"B" hereto (collectively, the "Equipment").
2. Certain Definitions.
"Abandonment Date" shall mean the Abandonment Date as defined
in Paragraph 35.
"Abandonment Notice" shall mean Abandonment Notice as defined
in Paragraph 35.
"Abandonment Premises" shall mean either of the Related
Premises, as applicable.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways,
curbs, gores and vault spaces adjoining any of the Leased Premises and for which
Landlord has any legal obligations.
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"Affected Premises" shall mean the Affected Premises as
defined in Paragraph 18.
"Affiliate" shall mean any Person which directly or indirectly
controls or is controlled by such Person. "Controls" and "controlled by" each
refers to the effective power to direct or cause the direction of the management
and policies of the Person in question, which, if not the Tenant or Landlord, as
the case may be, shall be through the ownership of shares in Tenant or shares or
units in Landlord.
"Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations, reconstructions, renewals, replacements or
removals of and all substitutions or replacements for any of the Improvements or
Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land, including (a)
easements over other lands granted by any Easement Agreement and (b) any
streets, ways, alleys, vaults, gores or strips of land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases
from Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Payment Dates" shall mean the Basic Rent Payment
Dates as defined in Paragraph 6.
"Business Days" shall mean any day except Saturday, Sunday and
any other holiday that national banks in the State are authorized to close.
"Casualty" shall mean any injury to or death of any person or
any loss of or damage to any property (including the Leased Premises) included
within or related to the Leased Premises or arising from the Adjoining Property.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking.
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"Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Corporate Fiduciary" shall mean Corporate Fiduciary as
defined in Paragraph 9(b).
"Costs" of a Person or associated with a specified transaction
shall mean all reasonable costs and expenses incurred by such Person or
associated with such transaction, including without limitation, attorneys' fees
and expenses, court costs, brokerage fees, escrow fees, title insurance
premiums, mortgage commitment fees, mortgage points, recording fees and transfer
taxes, as the circumstances require.
"CPA:12" shall mean Corporate Property Associates 12
Incorporated.
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Default Termination Amount" shall mean the Default
Termination Amount as defined in Paragraph 23(a)(iii).
"Deposit Amount" shall mean Deposit Amount as defined in
Paragraph 21(a)(iii).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect any Leased Premises.
"Environmental Law" shall mean (i) whenever enacted or
promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity, (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous Condition
or Hazardous Activity, in each case as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as
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negligence, nuisance, trespass and strict liability) that may impose liability
or obligations or injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Hazardous Substance. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act, the
federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic
Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act and the federal Hazardous Materials Transportation Act,
each as amended and as now or hereafter in effect and any similar state or local
Law.
"Environmental Violation" shall mean (a) any direct or
indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or within the Leased Premises, or from
the Leased Premises to the environment, in violation of any Environmental Law or
in excess of any reportable quantity established under any Environmental Law or
which results in any liability to Landlord, Tenant or Lender, any Federal, state
or local government or any other Person for the costs of any removal or remedial
action or natural resources damage or for bodily injury or property damage, (b)
any deposit, storage, dumping, placement or use of any Hazardous Substance at,
upon, under or within the Leased Premises or which extends to any Adjoining
Property in violation of any Environmental Law or in excess of any reportable
quantity established under any Environmental Law or which results in any
liability to any Federal, state or local government or to any other Person for
the costs of any removal or remedial action or natural resources damage or for
bodily injury or property damage, (c) the abandonment or discarding of any
barrels, containers or other receptacles containing any Hazardous Substances in
violation of any Environmental Laws, (d) any activity, occurrence or condition
which results in any liability, cost or expense to Landlord or Lender or any
other owner or occupier of the Leased Premises, or which could result in a
creation of a lien on any Related Premises under any Environmental Law or (e)
any violation of or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph
1.
"Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).
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"Fair Market Value" of either the Leased Premises or any
Related Premises, as the case may be, and the context may require, shall mean
the higher of (a) the fair market value of the Leased Premises or any Related
Premises, as the case may be, as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased Premises
or Related Premises, as the case may be, as of the Relevant Date as affected and
encumbered by this Lease without assuming that the Term has been extended for
any extension periods provided for herein except for any extensions for which
Landlord has received the notice required under Paragraph 5(b). For all purposes
of this Lease, Fair Market Value shall be determined in accordance with the
procedure specified in Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair
Market Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately
available funds which at the time of payment are legal tender for the payment of
public and private debts in the United States of America.
"GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States of America, applied on a
consistent basis.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release, seepage, spill, leak, flow, discharge or emission of any
Hazardous Substance into the environment (including the air, ground water,
watercourses or water systems), (iii) involves the containment or storage of any
Hazardous Substance; or (iv) would cause any of the Leased Premises or any
portion thereof to become a hazardous waste treatment, recycling, reclamation,
processing, storage or disposal facility within the meaning of any Environmental
Law.
"Hazardous Condition" means any condition which would support
any claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance supporting a claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law.
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Hazardous Substances include, without limitation, any toxic or hazardous waste,
pollutant, contaminant, industrial waste, petroleum or petroleum-derived
substances or waste, radon, radioactive materials, asbestos, asbestos containing
materials, urea formaldehyde foam insulation, lead, polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph
15.
"Initial Term" shall mean Initial Term as defined in Paragraph
5(a).
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Intended Assignment Offer" shall mean Intended Assignment
Offer as defined in Paragraph 21.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at midnight on the
last day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental Laws) and
all covenants, restrictions and conditions now or hereafter of record which may
be applicable to
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Tenant or to any of the Leased Premises or Related Premises, or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration, repair
or restoration of any of the Leased Premises or Related Premises, even if
compliance therewith necessitates structural changes or improvements or results
in interference with the use or enjoyment of any of the Leased Premises or
Related Premises.
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note; provided that any Person who owns or
operates a business whose primary operation is the manufacturing of cans and/or
lids and/or plastic containers for third party users shall not be a Lender for
the purposes of this Lease as long as the foregoing is the primary business of
Tenant.
"Loan" shall mean any loan made by one or more Lenders to
Landlord, which loan is secured by a Mortgage and an Assignment and evidenced by
a Note.
"Monetary Obligations" shall mean Rent and all other sums
payable by Tenant under this Lease to Landlord, to any third party on behalf of
Landlord or to any Indemnitee.
"Mortgage" shall mean any mortgage or deed of trust from
Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable to
Landlord or Lender by reason of a Condemnation whether pursuant to a judgment or
by agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i), (ii) (to the extent payable to Landlord or Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any reasonable expenses
incurred by Landlord and Lender in collecting such award or proceeds.
"Non-Preapproved Assignee" shall mean Non-Preapproved Assignee
as defined in Paragraph 21(a).
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Offer Amount" shall mean with respect to the Leased Premises
or either Related Premises, as the case may be, the greater of (i) Fair Market
Value or (ii) the sum of the applicable Termination Value and any Prepayment
Premium which Landlord will be required to pay in prepaying or partially
prepaying any Loan with the proceeds of the Offer Amount.
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"Partial Casualty" shall mean any Casualty which does not
constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does
not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on Exhibit "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).
"Permitted Leasehold Mortgage" shall mean any first lien
leasehold mortgage, deed of trust, pledge or similar security device covering
all of Tenant's leasehold estate in the Leased Premises.
"Permitted Leasehold Mortgagee" shall mean any national
banking association, state chartered bank, savings and loan association,
insurance company, savings bank, foreign bank authorized to do business in the
United States, trust company, real estate investment trust, pension fund or
major investment bank, which shall have gross assets in excess of $250,000,000
and which shall be Tenant's senior secured lender.
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Preapproved Assignee" shall mean Preapproved Assignee as
defined in Paragraph 21(a).
"Preapproved Assignment" shall mean Preapproved Assignment as
defined in Paragraph 21(a).
"Prepayment Premium" shall mean any payment (other than a
payment of principal and/or interest which Landlord is required to make under a
Note or a Mortgage) by reason of any prepayment by Landlord of any principal due
under a Note or Mortgage that is made pursuant to Paragraphs 18, 21, 23 or 35 of
this Lease or that is a result of an Event of Default by Tenant hereunder, and
which may be (in lieu of such prepayment premium or prepayment penalty) a "make
whole" clause requiring a prepayment premium in an amount sufficient to
compensate the Lender for the loss of the benefit of the Loan due to prepayment,
provided that such payment shall be calculated on a principal amount equal to
the lesser of (i) $6,075,000 or (ii) the balance of the Note as of the date of
prepayment assuming the principal amount thereof amortizes on the basis of a
twenty (20) year amortization schedule where the first payment of principal is
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made on the first day of the second calendar month following the closing of the
initial Loan.
"Present Value" of any amount shall mean such amount
discounted by a rate per annum which is the lower of (a) the Prime Rate at the
time such present value is determined or (b) eight percent (8%) per annum.
"Prime Rate" shall mean the interest rate per annum as
published, from time to time, in The Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the lowest rate of
interest charged by any "large U.S. money center commercial banks" and Landlord
makes no representations or warranties to that effect. In the event The Wall
Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate
(the "Discount Rate") on ninety-one (91) day bills ("Treasury Bills") issued
from time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Rejection" shall mean Rejection as defined in Paragraph
18(c).
"Related Premises" shall mean either of the Menomonie Premises
and Oconomowoc Premises.
"Relevant Amount" shall mean the Termination Amount, the
Default Termination Amount or the Offer Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to
the date on which the applicable Condemnation Notice is received, in the event
of a Termination Notice under Paragraph 18 which is occasioned by a Taking, (b)
the date immediately prior to the date on which the applicable Casualty occurs,
in the event of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c), (d) the date
immediately prior to the date on which Tenant give to Landlord the Intended
Assignment Offer, (e) the date immediately prior to the Event of Default giving
rise to the need to determine Fair Market Value in the event Landlord provides
Tenant with notice of its intention to require Tenant to make a Termination
Offer under Paragraph 23(a)(iii), or (f) the date immediately prior to the date
on which the applicable Abandonment Notice is sent under Paragraph 35.
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"Remaining Premises" shall mean the Related Premises which are
not Affected Premises under Paragraph 18 or Abandonment Premises under Paragraph
35.
"Rent" shall mean, collectively, Basic Rent and Additional
Rent.
"Retention Date" shall mean the later of the date on which the
amount of the Remaining Sum is finally determined or the date on which
Landlord's right to the Remaining Sum is finally determined.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the State of Wisconsin.
"Surviving Obligations" shall mean any obligations of Person
under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a
portion of any of the Leased Premises (i) in or by condemnation or other eminent
domain proceedings pursuant to any Law, general or special, or (ii) by reason of
any agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (b) any de facto
condemnation. The Taking shall be considered to have taken place as of the later
of the date actual physical possession is taken by the condemnor, or the date on
which the right to compensation and damages accrues under the law applicable to
the Related Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of (a) Fair Market
Value or (b) the sum of the applicable Termination Value and any Prepayment
Premium which Landlord will be required to pay in prepaying any Loan with
proceeds of the Termination Amount.
"Termination Date" shall mean the Termination Date as defined
in Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
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"Termination Value" shall mean the Termination Value described
in Exhibit "F" for the applicable Lease Year.
"Third Party Purchaser" shall mean the Third Party Purchaser
as defined in Paragraph 21(g).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to
(i) the Mortgage and Assignment presently in effect, (ii) the rights of any
Persons in possession of the Leased Premises, (iii) the existing state of title
of any of the Leased Premises, including any Permitted Encumbrances, (iv) any
state of facts which an accurate survey or physical inspection of the Leased
Premises might show, (v) all Legal Requirements, including any existing
violation of any thereof, and (vi) the condition of the Leased Premises as of
the commencement of the Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises are in
good condition and repair at the inception of this Lease. LANDLORD LEASES AND
WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS
FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION OR (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE; AND ALL RISKS INCIDENT THERETO ARE TO BE
BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS
SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN
INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR
PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO OR FOR ANY DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has
examined the title to the Leased Premises prior to the execution and delivery of
this Lease and has found the same to be
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satisfactory for the purposes contemplated hereby. Tenant acknowledges that (i)
fee simple title (both legal and equitable) to the Leased Premises is in
Landlord and that Tenant has only the leasehold right of possession and use of
the Leased Premises as provided herein, (ii) this Lease is a single Lease for
multiple properties and shall not be terminable with respect to less than all of
the Leased Premises or severable with respect to any one or more Related
Premises except as specifically provided herein, (iii) the Improvements conform
to all material Legal Requirements and all Insurance Requirements, (iv) all
easements necessary or appropriate for the use or operation of the Leased
Premises have been obtained, (v) all contractors and subcontractors who have
performed work on or supplied materials to the Leased Premises have been fully
paid, and all materials and supplies have been fully paid for, (vi) the
Improvements have been fully completed in all material respects in a workmanlike
manner of first class quality, and (vii) all Equipment necessary or appropriate
for the use or operation of the Leased Premises has been installed and is
presently fully operative in all material respects.
(d) Landlord hereby assigns to Tenant, without recourse
or warranty whatsoever, all warranties, guaranties, indemnities and similar
rights which Landlord may have against any manufacturer, seller, engineer,
contractor or builder in respect of any of the Leased Premises. Such assignment
shall remain in effect until an Event of Default (and provided that the same
shall be continuing) occurs or until the expiration or earlier termination of
this Lease, whereupon such assignment shall cease and all of said warranties,
guaranties, indemnities and other rights shall automatically revert to Landlord.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Menomonie Premises for
manufacturing and warehouse purposes and the Oconomowoc Premises for office
headquarters, research and development purposes, including laboratory and light
manufacturing use, and for no other purpose without Landlord's prior written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned. Tenant shall not use or occupy or permit any of the Leased Premises
to be used or occupied, nor do or permit anything to be done in or on any of the
Leased Premises, in a manner which would or might (i) violate any Law or Legal
Requirement, (ii) make void or voidable or cause any insurer to cancel any
insurance required by this Lease, or make it difficult or impossible to obtain
any such insurance at commercially reasonable rates, (iii) cause structural
injury to any of the Improvements or (iv) constitute a public or private
nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event
of Default has occurred and is continuing, Tenant shall
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quietly hold, occupy and enjoy the Leased Premises throughout the Term, without
any hindrance, ejection or molestation by Landlord with respect to matters that
arise after the date hereof, provided that Landlord or its agents may enter upon
and examine any of the Leased Premises at such reasonable times as Landlord may
select and upon reasonable notice to Tenant (except in the case of any
emergency, in which event no notice shall be required) for the purpose of
inspecting the Leased Premises, verifying compliance or non-compliance by Tenant
with its obligations hereunder and the existence or non-existence of an Event of
Default or event which with the passage of time and/or notice would constitute
an Event of Default, showing the Leased Premises to prospective Lenders and
purchasers and taking such other action with respect to the Leased Premises as
is permitted by any provision hereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have
and hold the Leased Premises for an initial term (the "Initial Term", as
extended or renewed in accordance with the provisions hereof, being called the
"Term") commencing on the date hereof (the "Commencement Date") and ending on
the last day of the one hundred eightieth (180th) calendar month next following
the date hereof (the "Expiration Date").
(b) Provided that if, on or prior to the Expiration Date
or any other Renewal Date (as hereinafter defined) this Lease shall not have
been terminated pursuant to any provision hereof, then on the Expiration Date
and on the fifth (5th) and tenth (10th) anniversaries of the Expiration Date
(the Expiration Date and each such anniversary being a "Renewal Date"), Tenant
shall have the right to extend the Term for an additional period of five (5)
years, provided that Tenant shall notify Landlord in writing at least eighteen
(18) months prior to the next Renewal Date that Tenant is extending this Lease
as of the next Renewal Date for an additional five (5) years. Any such extension
of the Term shall be subject to all of the provisions of this Lease, as the same
may be amended, supplemented or modified. If requested by Landlord, Tenant shall
execute an amendment to the Memorandum of Lease evidencing any extension of the
Term.
(c) If Tenant does not exercise its option pursuant to
Paragraph 5(b) to extend the Term, then Landlord shall have the right during the
remainder of the Term then in effect and, in any event, Landlord shall have the
right during the last year of the Term, to (i) advertise the availability of any
of the Leased Premises for sale or reletting and to erect upon any of the Leased
Premises signs indicating such availability and (ii) show any of the Leased
Premises to prospective purchasers or tenants or their agents at such reasonable
times upon reasonable advance notice. In all events
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Landlord shall make all reasonable efforts to avoid interference with Tenant's
business operations.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent
for the Leased Premises during the Term, the amounts determined in accordance
with Exhibit "D" hereto ("Basic Rent"), commencing on the first day of July,
1997, and continuing on the first day of each October, January, April and July
thereafter during the Term (each such day being a "Basic Rent Payment Date").
Each such rental payment shall be made, at Landlord's sole discretion, (a) to
Landlord at its address set forth above and/or to such one or more other
Persons, at such addresses and in such proportions as Landlord may direct by
fifteen (15) days' prior written notice to Tenant (in which event Tenant shall
give Landlord notice of each such payment concurrent with the making thereof),
and (b) by a check hand delivered at least five (5) business days before or
mailed at least ten (10) days before the applicable Basic Rent Payment Date.
Tenant shall also have the right to make payments of Basic Rent in Federal
Funds. Pro rata Basic Rent for the period from the date hereof through the last
day of the month hereof shall be paid on the date hereof.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided
herein, all costs and expenses of Tenant, Landlord and any other Persons
specifically referenced herein which are incurred in connection or associated
with (A) the ownership, use, non-use, occupancy, possession, operation,
condition, design, construction, maintenance, alteration, repair or restoration
of any of the Leased Premises, (B) the performance of any of Tenant's
obligations under this Lease, (C) any sale or other transfer of any of the
Leased Premises to Tenant under this Lease, (D) any Condemnation proceedings,
(E) the adjustment, settlement or compromise of any insurance claims involving
or arising from any of the Leased Premises, (F) the prosecution, defense or
settlement of any litigation involving or arising from any of the Leased
Premises, this Lease, or the sale of the Leased Premises to Landlord, (G) the
exercise or enforcement by Landlord, its successors and assigns, of any of its
rights under this Lease, (H) any amendment to or modification or termination of
this Lease made at the request of Tenant, (I) Costs of Landlord's counsel
incurred in connection with the preparation, negotiation and execution of this
Lease, or incurred in connection with any act undertaken by Landlord (or its
counsel) at the request of Tenant, or incurred in connection with any act of
Landlord performed on behalf of Tenant following a default by Tenant, (J) the
reasonable internal Costs of Landlord incurred in connection with any act
undertaken by Landlord at the request of Tenant or Tenant's failure to act
promptly in an emergency
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situation, and (K) any other items specifically required to be paid by Tenant
under this Lease;
(ii) after the date all or any portion of any
installment of Basic Rent is due and not paid, an amount equal to four percent
(4%) of the amount of such unpaid installment or portion thereof ("Late
Charge"), provided, however, that (A) with respect to the first late payment of
all or any portion of any installment of Basic Rent in any consecutive twelve
(12) month period, the Late Charge shall not be due and payable unless the Basic
Rent has not been paid within five (5) days' following written notice from
Landlord and (B) if Tenant exercises its remedy under Paragraph 23(a)(iv)
hereof, the Late Charge shall not be payable on the accelerated Basic Rent;
(iii) in addition to the amounts payable under
clauses 7(a)(ii) and (iv) a sum equal to any additional sums (including any late
charge payable on the portion of Basic Rent equal to installments of principal
and interest on the then outstanding Loan, default penalties, interest and fees
of Lender's counsel) which are payable by Landlord to any Lender under any Note
by reason of Tenant's late payment or non-payment of Basic Rent or by reason of
an Event of Default, provided, however, that Tenant shall not be required to pay
an amount equal to any late fee payable by Landlord to a Lender if, under clause
(ii) above, Tenant pays any past due installment of Basic Rent within any grace
period permitted in (and as limited by) clause (ii) above, and, provided
further, that Tenant shall receive as a credit against any late charge or
default interest payable on the then outstanding Loan equal to the product of
(i) the sum of the Late Charge and the amount paid pursuant to clause 7(a)(iv)
and (ii) the ratio of the amount of the Loan and the Acquisition Cost; and
(iv) interest at the rate (the "Default Rate")
of four percent (4%) over the Prime Rate per annum on the following sums until
paid in full: (A) all overdue installments of Basic Rent from the respective due
dates thereof, (B) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant, from the date of
payment thereof by Landlord, and (C) all other overdue amounts of Additional
Rent, from the date when any such amount becomes overdue.
(b) In no event shall Additional Rent include costs
incurred by Landlord or Lender for insurance in excess of the insurance required
under Paragraph 16 hereof, costs and expenses incurred by Landlord for property
management or administration of this Lease or other costs and expenses of
Landlord or Lender related to the conduct of their business generally or matters
relating to investor relations, nor shall Tenant be liable for amounts incurred
by Landlord if Landlord has exceeded its authority under this Lease in incurring
such costs.
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(c) Tenant shall pay and discharge (i) any Additional
Rent referred to in Paragraph 7(a)(i) when the same shall become due, provided
that amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within ten (10) days after Landlord's demand for payment thereof,
and (ii) any other Additional Rent, within ten (10) days after Landlord's demand
for payment thereof.
(d) In no event shall amounts payable under Paragraph
7(a)(ii), (iii) and (iv) exceed the maximum amount permitted by applicable Law.
8. Net Lease; Non-Terminability.
(a) This is a net lease and all Monetary Obligations
shall be paid without notice or demand and without set-off, counterclaim,
recoupment, abatement, suspension, deferment, diminution, deduction, reduction
or defense (collectively, a "Set-Off").
(b) Except as otherwise expressly provided herein, this
Lease and the rights of Landlord and the obligations of Tenant hereunder shall
not be affected by any event or for any reason, including the following: (i) any
damage to or theft, loss or destruction of any of the Leased Premises, (ii) any
Condemnation, (iii) Tenant's acquisition of ownership of any of the Leased
Premises other than pursuant to an express provision of this Lease, (iv) any
default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement, (v) any latent or other defect in any of the
Leased Premises, (vi) the breach of any warranty of any seller or manufacturer
of any of the Equipment, (vii) any violation of Paragraph 4(b) or any other
provision of this Lease by Landlord, (viii) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up of, or other proceeding affecting Landlord, (ix) the exercise of any
remedy, including foreclosure, under any Mortgage or Assignment, (x) any action
with respect to this Lease (including the disaffirmance hereof) which may be
taken by Landlord, any trustee, receiver or liquidator of Landlord or any court
under the Federal Bankruptcy Code or otherwise, (xi) any interference with
Tenant's use of the Leased Premises, (xii) market or economic changes or (xiii)
any other cause, whether similar or dissimilar to the foregoing, any present or
future Law to the contrary notwithstanding.
(c) The obligations of Tenant hereunder shall be
separate and independent covenants and agreements, all Monetary Obligations
shall continue to be payable in all events (or, in lieu thereof, Tenant shall
pay amounts equal thereto), and the obligations of Tenant hereunder shall
continue unaffected unless the requirement to pay or perform the same shall have
been terminated pursuant to an express provision of this Lease,
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provided that Tenant shall not be obligated to pay double installments of Rent.
All Rent payable by Tenant hereunder shall constitute "rent" for all purposes
(including Section 502(b)(6) of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal property,
franchise, sales and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all assessments and
levies, all permit, inspection and license fees, all rents and charges for
water, sewer, utility and communication services relating to any of the Leased
Premises, all ground rents, if any, and all other public charges whether of a
like or different nature, even if unforeseen or extraordinary, imposed upon or
assessed against (i) Tenant, (ii) Tenant's possessory interest in the Leased
Premises, (iii) any of the Leased Premises, (iv) Landlord as a result of or
arising in respect of the acquisition, ownership, occupancy, leasing, use,
possession or sale of any of the Leased Premises, any activity conducted on any
of the Leased Premises, or the Rent, or (v) any Lender by reason of any Note,
Mortgage, Assignment or other document evidencing or securing a Loan and which
(as to this clause (v)) Landlord has agreed to pay (collectively, the
"Impositions"); provided, that nothing herein shall obligate Tenant to pay (A)
income, franchise, excess profits or other taxes of Landlord (or Lender) which
are determined on the basis of Landlord's (or Lender's) net income or net worth
(unless such taxes are in lieu of or a substitute for any other tax, assessment
or other charge upon or with respect to the Leased Premises which, if it were in
effect, would be payable by Tenant under the provisions hereof or by the terms
of such tax, assessment or other charge and such taxes are determinable without
regard to any other properties owned by Landlord or Lender), (B) any estate,
inheritance, succession, gift or similar tax imposed on Landlord or (C) any
capital gains tax imposed on Landlord in connection with the sale of the Leased
Premises to any Person. If any Imposition may be paid in installments without
penalty, Tenant shall have the option to pay such Imposition in installments; in
such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall prepare and file all tax
reports required by governmental authorities which relate to the Impositions.
Tenant shall deliver to Landlord (1) copies of all settlements and notices
pertaining to the Impositions which may be issued by any governmental authority
within thirty (30)
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Business Days after Tenant's receipt thereof, (2) receipts for payment of all
taxes required to be paid by Tenant hereunder within thirty (30) days after the
due date thereof and (3) receipts for payment of all other Impositions within
thirty (30) Business Days after Landlord's request therefor.
(b) Landlord shall have the right if required by a Lender
and, in any event, during the occurrence of an Event of Default to require
Tenant to pay to Lender on behalf of Landlord or if not required by the Lender
to a fiduciary ("Corporate Fiduciary") selected by Landlord and reasonably
acceptable to Tenant an additional monthly sum (each an "Escrow Payment")
sufficient to pay the Escrow Charges (as hereinafter defined) as they become
due. As used herein, "Escrow Charges" shall mean real estate taxes on the Leased
Premises or payments in lieu thereof and premiums on any insurance required by
this Lease. Landlord shall reasonably determine the amount of the Escrow Charges
and of each Escrow Payment. The Escrow Payments may be commingled with other
funds of Landlord or other Persons and no interest thereon shall be due or
payable to Tenant. Landlord shall apply the Escrow Payments to the payment of
the Escrow Charges in such order or priority as Landlord shall determine or as
required by law. If at any time the Escrow Payments theretofore paid to Landlord
shall be insufficient for the payment of the Escrow Charges, Tenant, within ten
(10) days after Landlord's demand therefor, shall pay the amount of the
deficiency to Landlord upon providing to Tenant reasonable proof of such
insufficiency.
10. Compliance with Laws and Easement Agreements; Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform
to, and cause any other Person occupying any part of the Leased Premises to
comply with and conform to, all Insurance Requirements and Legal Requirements
(including all applicable Environmental Laws). Tenant shall not at any time (i)
cause, permit or suffer to occur any Environmental Violation or (ii) permit any
sublessee, assignee or other Person occupying the Leased Premises under or
through Tenant to cause, permit or suffer to occur any Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all
times promptly and faithfully abide in all material respects by, discharge and
perform all of the covenants, conditions and agreements contained in any
Easement Agreement on the part of Landlord or the occupier to be kept and
performed thereunder. Tenant will not alter, modify, amend or terminate any
Easement Agreement, give any consent or approval thereunder, or enter into any
new Easement Agreement without, in each case, prior written consent of Landlord
which shall not be unreasonably withheld or delayed.
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(c) In connection with any sale or financing of the
Leased Premises, or if required by a Lender, or if Landlord or Lender have
reasonable cause to believe that an Environmental Violation exists and, in any
event, during the final eighteen (18) months of the Term, Tenant shall permit
such persons as Landlord may designate (with the approval of Tenant so long as
no Event of Default exists, such approval not be unreasonably withheld or
delayed) ("Site Reviewers") to visit the Leased Premises and perform, as agents
of Tenant, environmental site investigations and assessments ("Site
Assessments") on the Leased Premises for the purpose of determining whether
there exists on the Leased Premises any Environmental Violation or any condition
which could result in any Environmental Violation. Landlord shall give Tenant
prior notice of any Site Assessment, and any such Site Assessments may include
both above and below the ground testing for Environmental Violations and such
other tests as may be necessary, in the opinion of the Site Reviewers, to
conduct the Site Assessments. Tenant shall supply to the Site Reviewers such
historical and operational information regarding the Leased Premises as may be
reasonably requested by the Site Reviewers to facilitate the Site Assessments,
and shall make available for meetings with the Site Reviewers appropriate
personnel having knowledge of such matters. The cost of performing and reporting
Site Assessments shall be allocated as follows: Tenant shall pay the cost if an
Environmental Violation is found to exist or if a Site Assessment or update to
the most current Environmental Assessment is required by the Lender that makes
the initial Loan as a condition to making such Loan; Landlord and Tenant shall
split equally the cost of the Site Assessments conducted during the final
eighteen (18) months of the Term except that if any an Environmental Violations
exist and the Site Reviewers estimate that the cost to remediate any such
Environmental Violations will be in excess of $25,000, Tenant shall pay all of
the costs of any Site Assessments in addition to the Phase I Site Assessment
that are recommended by the Site Reviewers. The cost of performing all other
Site Assessments shall be paid by Landlord.
(d) If an Environmental Violation occurs or is found to
exist and, in the opinion of the Site Reviewer, the cost of remediation of the
same is likely to exceed $150,000, Tenant shall provide to Landlord, within ten
(10) Business Days after Landlord's request therefor, adequate financial
assurances as reasonably determined by Landlord that Tenant will effect such
remediation in accordance with applicable Environmental Laws.
(e) During the last eighteen (18) months of the Term
Landlord and Tenant agree that they shall cause to be conducted Site Assessments
at the Leased Premises. If an Environmental Violation occurs or is found to
exist and the Term would otherwise terminate or expire, then, Landlord and
Tenant shall enter into a License Agreement pursuant to which Landlord shall
grant to Tenant and its consultants a license to enter the applicable Related
Premises for the purpose of implementing a
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remediation plan prepared by the Site Reviewers. Such license agreement shall be
on such terms and conditions as Landlord shall reasonably require.
(f) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation which occurs or
is found to exist, Landlord shall have the right (but no obligation) to take any
and all actions as Landlord shall deem necessary or advisable in order to cure
such Environmental Violation if, within thirty (30) days following written
notice from Landlord, Tenant fails to take any and all actions as Landlord shall
reasonably deem necessary or advisable in order to cure such Environmental
Violation. In no event shall Landlord have any obligation to take any action to
cure any Environmental Violation.
(g) Tenant shall notify Landlord promptly after becoming
aware of any Environmental Violation (or alleged Environmental Violation) or
noncompliance with any of the covenants contained in this Paragraph 10 and shall
forward to Landlord promptly upon receipt thereof copies of all orders, reports,
notices, permits, applications or other communications relating to any such
violation or noncompliance.
(h) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall contain covenants
of the other party thereto which are substantially identical to the covenants
contained in this Paragraph 10.
(i) Tenant shall comply with the requirements set forth
in Exhibit "G" within the time periods set forth therein.
(j) Notwithstanding anything in this Lease to the
contrary, Tenant shall not be liable for any Environmental Violation relating to
a Hazardous Condition first arising from an event or condition concerning the
presence of Hazardous Substances affecting the Leased Premises to the extent
such Hazardous Substances were first introduced to the Leased Premises (i)
subsequent to the expiration or termination of the Lease or (ii) following the
date upon which Tenant is dispossessed or removed from occupancy by Landlord
pursuant to Paragraph 23.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or
permit to be created or to remain and shall promptly discharge or remove any
lien, levy or encumbrance on any of the Leased Premises or on any Rent or any
other sums payable by Tenant under this Lease, other than any Mortgage or
Assignment, the Permitted Encumbrances, the Permitted Leasehold Mortgage, and
any mortgage, lien, encumbrance or other charge created by or resulting solely
from any act or omission of Landlord. NOTICE IS
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HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR
OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND THAT NO
MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED PREMISES.
LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH
NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or
register (collectively, "record") all such instruments as may be required or
permitted by any present or future Law in order to evidence the respective
interests of Landlord and Tenant in any of the Leased Premises, and shall cause
a memorandum of this Lease (or, if such a memorandum cannot be recorded, this
Lease), and any supplement hereto or thereto, to be recorded in such manner and
in such places as may be required or permitted by any present or future Law in
order to protect the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain each Related
Premises and the Adjoining Property in as good repair and appearance as each is
in on the date hereof, ordinary wear and tear excepted, and fit to be used for
their intended use in accordance with the better of the practices generally
recognized as then acceptable by other companies in its industry or observed by
Tenant with respect to the other real properties owned or operated by it, and,
in the case of the Equipment, in as good mechanical condition as it was on the
later of the date hereof or the date of its installation, except for ordinary
wear and tear. Tenant shall take every other action reasonably necessary or
appropriate for the preservation and safety of each Related Premises. Tenant
shall promptly make all Alterations of every kind and nature, whether foreseen
or unforeseen, which may be required to comply with the foregoing requirements
of this Paragraph 12(a). Landlord shall not be required to make any Alteration,
whether foreseen or unforeseen, or to maintain any of the Related Premises or
Adjoining Property in any way, and, to the extent permitted by Law, Tenant
hereby expressly waives any right which may be provided for in any Law now or
hereafter in effect to make Alterations at the expense of Landlord or to require
Landlord to make Alterations. Any Alteration made by Tenant pursuant to this
Paragraph 12 shall be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed,
shall (i) encroach upon any setback or any property, street or right-of-way
adjoining any of the Leased Premises, (ii) violate the provisions of any
restrictive covenant affecting any of the Leased Premises, (iii) hinder or
obstruct any easement or right-of-way to which any of the Leased Premises is
subject or
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(iv) impair the rights of others in, to or under any of the foregoing, Tenant
shall, promptly after receiving notice or otherwise acquiring knowledge thereof,
either (A) obtain from all necessary parties waivers or settlements of all
claims, liabilities and damages resulting from each such encroachment,
violation, hindrance, obstruction or impairment, whether the same shall affect
Landlord, Tenant or both, or (B) take such action as shall be reasonably
necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained
the prior written consent of Landlord and Lender, to make (i) Alterations or a
series of related Alterations that, as to any such Alterations or series of
related Alterations, do not cost in excess of $375,000 with respect to any
Related Premises and (ii) to install Equipment in the Improvements or accessions
to the Equipment that, as to such Equipment or accessions, do not cost in excess
of $375,000, so long as at the time of construction or installation of any such
Equipment or Alterations no Event of Default exists and the value and utility of
the Leased Premises is not diminished thereby. If the cost of any Alterations,
series of related Alterations, Equipment or accessions thereto is in excess of
$375,000, the prior written approval of Landlord and Lender shall be required,
such approval not to be unreasonably withheld, delayed or conditioned. Tenant
shall not construct upon the Land any additional buildings without having first
obtained the prior written consent of Landlord and Lender, such consent not to
be unreasonably withheld or delayed.
(b) If Tenant makes any Alterations pursuant to this
Paragraph 13 or as required by Paragraph 12 or 17 (such Alterations and actions
being hereinafter collectively referred to as "Work"), then (i) the market value
of the Leased Premises shall not be lessened by any such Work or its usefulness
impaired, (ii) all such Work shall be performed by Tenant in a good and
workmanlike manner, (iii) all such Work shall be expeditiously completed in
compliance with all Legal Requirements, (iv) all such Work shall comply with the
requirements of all insurance policies required to be maintained by Tenant
hereunder, (v) if any such Work involves the replacement of Equipment or parts
thereto, all replacement Equipment or parts shall have a value and useful life
equal to the greater of (A) the value and useful life on the date hereof of the
Equipment being replaced or (B) the value and useful life of the Equipment being
replaced immediately prior to the occurrence of the event which required its
replacement (assuming such Replaced Equipment was then in the condition required
by this Lease), (vi) Tenant shall promptly discharge or remove all liens filed
against any of the Leased Premises arising out of
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such Work, (vii) Tenant shall procure and pay for all permits and licenses
required in connection with any such Work, (viii) all such Work shall be the
property of Landlord and shall be subject to this Lease, and Tenant shall
execute and deliver to Landlord any document reasonably requested by Landlord
evidencing the assignment to Landlord of all estate, right, title and interest
(other than the leasehold estate created hereby) of Tenant or any other Person
thereto or therein, and (ix) Tenant shall comply, to the extent requested by
Landlord or required by this Lease, with the provisions of Paragraphs 12(a) and
19(a), whether or not such Work involves restoration of the Leased Premises.
14. Permitted Contests. Notwithstanding any other provision of
this Lease, Tenant shall not be required to (a) pay any Imposition, (b)
discharge or remove any lien referred to in Paragraph 11 or 13 or (c) take any
action with respect to any encroachment, violation, hindrance, obstruction or
impairment referred to in Paragraph 12(b) (such non-compliance with the terms
hereof being hereinafter referred to collectively as "Permitted Violations"), so
long as at the time of such non-compliance no Event of Default exists and so
long as Tenant shall contest, in good faith, the existence, amount or validity
thereof, the amount of the damages caused thereby, or the extent of its or
Landlord's liability therefor by appropriate proceedings which shall operate
during the pendency thereof to prevent or stay (i) the collection of, or other
realization upon, the Permitted Violation so contested, (ii) the sale,
forfeiture or loss of any of the Leased Premises or any Rent to satisfy or to
pay any damages caused by any Permitted Violation, (iii) any interference with
the use or occupancy of any of the Leased Premises, (iv) any interference with
the payment of any Rent, or (v) the cancellation or increase in the rate of any
insurance policy or a statement by the carrier that coverage will be denied.
Tenant shall provide Landlord security which is satisfactory, in Landlord's
reasonable judgment, to assure that such Permitted Violation is corrected,
including all Costs, interest and penalties that may be incurred or become due
in connection therewith. While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by law to correct
such Permitted Violation and Tenant's contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in
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connection therewith, together with all penalties, fines, interest and Costs
thereof or in connection therewith, and perform all acts the performance of
which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any criminal liability. Landlord shall join in
and cooperate with Tenant in any such contests.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save
and hold harmless Landlord, Lender and all other Persons described in Paragraph
30 (each an "Indemnitee") from and against any and all liabilities, losses,
damages (including punitive damages), penalties, Costs (including reasonable
attorneys' fees and costs), causes of action, suits, claims, demands or
judgments of any nature whatsoever, howsoever caused, unless caused by the gross
negligence or willful misconduct of the Indemnitee requesting indemnification,
without regard to the form of action and whether based on strict liability,
negligence or any other theory of recovery at law or in equity, arising from (i)
any matter (except for a matter between Landlord and Lender that is not a result
of an act or failure to act by Tenant as required by the terms of this Lease or
in any document between Tenant and Lender or executed by Tenant in favor of
Lender or between Landlord and its shareholders) pertaining to the acquisition
(or the negotiations leading thereto), ownership, leasing, use, non-use,
occupancy, operation, management, condition, design, construction, maintenance,
repair or restoration of any of the Leased Premises or Adjoining Property, (ii)
any casualty in any manner arising from any of the Leased Premises or Adjoining
Property, whether or not Indemnitee has or should have knowledge or notice of
any defect or condition causing or contributing to said casualty, (iii) any
violation by Tenant of any provision of this Lease, any contract or agreement to
which Tenant is a party, any Legal Requirement or any Permitted Encumbrance or
any encumbrance Tenant consented to or the Mortgage or Assignment, (iv) any loss
or reduction of rental income or proceeds from sale attributable to the
existence of an Environmental Violation at the expiration or sooner termination
of the Term, or (v) any alleged, threatened in writing or actual Environmental
Violation, including (A) liability for response costs and for costs of removal
and remedial action incurred by the United States Government, any state or local
governmental unit or any other Person, or damages from injury to or destruction
or loss of natural resources, including the reasonable costs of assessing such
injury, destruction or loss, incurred pursuant to Section 107 of CERCLA, or any
successor section or act or provision of any similar state or local Law, (B)
liability for costs and expenses of abatement, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any of
the other Environmental Laws and (C) liability for personal injury or property
damage arising under any statutory or common-law tort theory, including damages
assessed for the
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maintenance of a public or private nuisance or for carrying on of a dangerous
activity.
(b) In case any action or proceeding is brought against
any Indemnitee by reason of any such claim, (i) Tenant may, except in the event
of a conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its choice
to monitor the defense of any such action) or (ii) such Indemnitee shall notify
Tenant to resist or defend such action or proceeding by retaining counsel
reasonably satisfactory to such Indemnitee, and such Indemnitee will cooperate
and assist in the defense of such action or proceeding if reasonably requested
to do so by Tenant. In the event of a conflict of interest or dispute or during
the continuance of an Event of Default, Landlord shall have the right to select
counsel, and the reasonable cost of such counsel shall be paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15
shall survive any termination, expiration or rejection in bankruptcy of this
Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or
in connection with the Leased Premises:
(i) Insurance against physical loss or damage
to the Improvements and Equipment as provided under a standard "All Risk"
property policy including but not limited to flood (to the extent that a Related
Premises is in a flood zone) and earthquake coverage in amounts not less than
the actual replacement cost of the Improvements and Equipment. Such policies
shall contain Replacement Cost and Agreed Amount Endorsements and shall contain
deductibles of not more than $50,000, except if the Silgan Containers
Corporation is the Tenant, the deductible may be up to and including $250,000
per occurrence; provided that Landlord and Lender shall not unreasonably
withhold or delay consent to any request for an increase in the amount of such
deductible and shall base their response on a review of, among other things, the
creditworthiness of Tenant.
(ii) Commercial General Liability Insurance and
Business Automobile Liability Insurance (including Non-Owned and Hired
Automobile Liability) against claims for personal and bodily injury, death or
property damage occurring on, in or as a result of the use of the Leased
Premises, in an amount not less than $15,000,000 per occurrence/annual aggregate
and all other coverage extensions that are usual and customary for properties of
this size and type provided, however, that the Landlord shall
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have the right to require such higher limits as may be reasonable and customary
for properties of this size and type.
(iii) Worker's compensation insurance covering
all persons employed by Tenant in connection with any work done on or about any
of the Leased Premises for which claims for death, disease or bodily injury may
be asserted against Landlord, Tenant or any of the Leased Premises or, in lieu
of such Worker's Compensation Insurance, a program of self-insurance complying
with the rules, regulations and requirements of the appropriate agency of the
State or States in which the Leased Premises are located.
(iv) Comprehensive Boiler and Machinery
Insurance on any of the Equipment or any other equipment on or in the Leased
Premises in an amount not less than $10,000,000 per accident for damage to
property. Such policies shall include at least $10,000,000 per accidence for
Off-Premises Service Interruption, Expediting Expenses, Ammonia Contamination,
and Hazardous Materials Clean-up Expense and may contain a deductible not to
exceed $50,000, except if the Silgan Containers Corporation is the Tenant, the
deductible may be up to and including $250,000.
(v) Business Income/Extra Expense Insurance to
include loss of rents at limits sufficient to cover 100% of the annual rent
payable to Landlord with a period of indemnity not less than one year from time
of loss. Such insurance shall name Landlord as additional insured solely with
respect to Rent payable to or for the benefit of Landlord under this Lease
Agreement.
(vi) During any period in which substantial
Alterations at any Related Premises are being undertaken, builder's risk
insurance covering the total completed value including any "soft costs" with
respect to the Improvements being altered or repaired (on a completed value,
non-reporting basis), replacement cost of work performed and equipment, supplies
and materials furnished in connection with such construction or repair of
Improvements or Equipment, together with such "soft cost" endorsements and such
other endorsements as Landlord may reasonably require and general liability,
worker's compensation and automobile liability insurance with respect to the
Improvements being constructed, altered or repaired.
(vii) Such other insurance on or in connection
with any of the Leased Premises (or such other terms with respect to any
insurance required pursuant to this Paragraph 16, including without limitation
amounts of coverage, deductibles (which shall be considered on, among other
things, the creditworthiness of the Tenant), form of mortgagee clause) as
Landlord or Lender may reasonably require, which at the time is usual and
commonly obtained in connection with properties similar
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in type of building size, use and location to the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be
written by companies which have a Best's rating of A:X or above and are licensed
to issue insurance in, and approved to write insurance policies by, the State
Insurance Department for the states in which the Leased Premises are located.
The insurance policies (i) shall be on customary terms and (ii) shall be in
amounts reasonably sufficient at all times to satisfy any coinsurance
requirements thereof. The insurance referred to in Paragraphs 16(a)(i),
16(a)(iv) and 16(a)(vi) shall name Landlord as Owner and Lender as loss payee
and Tenant as its interest may appear. The insurance referred to in Paragraph
16(a)(ii) shall name Landlord and Lender as additional insureds, and the
insurance referred to in Paragraph 16(a)(v) shall name Landlord as insured and
Lender and Landlord as loss payee. If said insurance or any part thereof shall
expire, be withdrawn, become void, voidable, unreliable or unsafe for any
reason, including a breach of any condition thereof by Tenant or the failure or
impairment of the capital of any insurer, or if for any other reason whatsoever
said insurance shall become reasonably unsatisfactory to Landlord, Tenant shall
immediately obtain new or additional insurance reasonably satisfactory to
Landlord.
(c) Each insurance policy referred to in clauses (i),
(iv), (v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and reasonably acceptable to Lender. Each policy
required by any provision of Paragraph 16(a), except clause (iii) thereof, shall
provide that it may not be cancelled except after thirty (30) days' prior notice
to Landlord and Lender. Each such policy shall also provide that any loss
otherwise payable thereunder shall be payable notwithstanding (i) any act or
omission of Landlord or Tenant which might, absent such provision, result in a
forfeiture of all or a part of such insurance payment, (ii) the occupation or
use of any of the Leased Premises for purposes more hazardous than those
permitted by the provisions of such policy, (iii) any foreclosure or other
action or proceeding taken by Lender pursuant to any provision of the Mortgage,
Note, Assignment or other document evidencing or securing the Loan upon the
happening of an event of default therein or (iv) any change in title to or
ownership of any of the Leased Premises.
(d) Tenant shall pay as they become due all premiums for
the insurance required by Paragraph 16(a), shall renew or replace each policy
and deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least thirty (30) days prior to the expiration date of
such policy, and shall promptly deliver to Landlord all original certificates of
insurance.
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(e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant, provided that such "blanket"
or umbrella policy or policies otherwise substantially comply with the
provisions of this Paragraph 16 and provided further that Tenant shall provide
to Landlord a Statement of Values which shall be reviewed annually and amended
as necessary based on Replacement Cost Valuations. The original certificate of
insurance for each such "blanket" or umbrella policy shall promptly be delivered
to Landlord.
(f) Tenant shall have the replacement cost and insurable
value of the Improvements and Equipment determined from time to time as required
by the replacement cost and agreed amount endorsements and shall deliver to
Landlord the new replacement cost and agreed amount endorsement or certificate
evidencing such endorsement promptly upon Tenant's receipt thereof.
(g) Tenant shall promptly comply with and conform to (i)
all provisions of each insurance policy required by this Paragraph 16 and (ii)
all requirements of the insurers thereunder applicable to Landlord, Tenant or
any of the Leased Premises or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Leased Premises, even
if such compliance necessitates Alterations or results in interference with the
use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent
in form or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as named
insureds, with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies therefor.
(i) All policies shall contain effective waivers by the
carrier against all claims for insurance premiums against Landlord and shall
contain full waivers of subrogation against the Landlord.
(j) All proceeds of any insurance required under
Paragraph 16(a) shall be payable as follows:
(i) Except for proceeds payable to a Person
other than Landlord, Tenant or Lender, all proceeds of insurance required under
clauses (ii), (iii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds
attributable to the general
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liability coverage provisions of Builder's Risk insurance under clause (vi) of
Paragraph 16(a) shall be payable to Landlord or, if required by the Mortgage, to
Lender.
(ii) Proceeds of insurance required under
clause (i) of Paragraph 16(a) and proceeds attributable to Builder's Risk
insurance (other than its general liability coverage provisions) under clause
(vi) of Paragraph 16(a) shall be payable by Landlord (or Lender) and applied as
set forth in Paragraph 17. Tenant shall apply the Net Award to restoration of
the Leased Premises in accordance with the applicable provisions of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty to either of the Related Premises
occurs and the cost of restoration is reasonably estimated by Tenant to be in
excess of Fifty Thousand Dollars ($50,000), Tenant shall give Landlord and
Lender prompt notice thereof. So long as no Event of Default exists Tenant is
hereby authorized to adjust, collect and compromise all claims under any of the
insurance policies required by Paragraph 16(a) (except public liability
insurance claims payable to a Person other than Tenant, Landlord or Lender) and
to execute and deliver on behalf of Landlord all necessary proofs of loss,
receipts, vouchers and releases required by the insurers and Landlord shall have
the right to join with Tenant therein. Any final adjustment, settlement or
compromise of any such claim shall be subject to the prior written approval of
Landlord, which shall not be unreasonably withheld or delayed, and Landlord
shall have the right to prosecute or contest, or to require Tenant to prosecute
or contest, any such claim, adjustment, settlement or compromise. If an Event of
Default exists, Tenant shall not be entitled to adjust, collect or compromise
any such claim or to participate with Landlord in any adjustment, collection and
compromise of the Net Award payable in connection with a Casualty. Tenant agrees
to sign, upon the request of Landlord, all such proofs of loss, receipts,
vouchers and releases. Each insurer is hereby authorized and directed to make
payment under said policies, including return of unearned premiums, directly to
Landlord or, if required by the Mortgage, to Lender instead of to Landlord and
Tenant jointly, and Tenant hereby appoints each of Landlord and Lender as
Tenant's attorneys-in-fact to endorse any draft therefor. The rights of Landlord
under this Paragraph 17(a) shall be extended to Lender if and to the extent that
any Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation
Notice, shall notify Landlord and Lender thereof. So long as no Event of Default
exists, Tenant is authorized to collect, settle and compromise the amount of any
Net Award and Landlord shall have the right to join with Tenant herein. If an
Event of Default exists, Landlord shall be authorized to collect,
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settle and compromise the amount of any Net Award and Tenant shall not be
entitled to participate with Landlord in any Condemnation proceeding or
negotiations under threat thereof or to contest the Condemnation or the amount
of the Net Award therefor. No agreement with any condemnor in settlement or
under threat of any Condemnation shall be made by Tenant without the written
consent of Landlord which shall not be unreasonably withheld, conditioned or
delayed. Subject to the provisions of this Paragraph 17(b), Tenant hereby
irrevocably assigns to Landlord any award or payment to which Tenant is or may
be entitled by reason of any Condemnation, whether the same shall be paid or
payable for Tenant's leasehold interest hereunder or otherwise; but nothing in
this Lease shall impair Tenant's right to any award or payment on account of
Tenant's trade fixtures, equipment or other tangible property which is not part
of the Equipment, moving expenses or loss of business, if available, to the
extent that and so long as (i) Tenant shall have the right to make, and does
make, a separate claim therefor against the condemnor and (ii) such claim does
not in any way reduce either the amount of the award otherwise payable to
Landlord for the Condemnation of Landlord's fee interest in the Leased Premises
or the amount of the award (if any) otherwise payable for the Condemnation of
Tenant's leasehold interest hereunder. The rights of Landlord under this
Paragraph 17(b) shall also be extended to Lender if and to the extent that any
Mortgage so provides.
(c) If any Partial Casualty (whether or not insured
against) or Partial Condemnation shall occur to either Related Premises, this
Lease shall continue, notwithstanding such event, and there shall be no
abatement or reduction of any Monetary Obligations. Promptly after such Partial
Casualty or Partial Condemnation, Tenant, as required in Paragraph 12(a), shall
commence and diligently continue to restore the Leased Premises as nearly as
possible to their value, condition and character immediately prior to such event
(assuming the Leased Premises to have been in the condition required by this
Lease). So long as no Event of Default exists, any Net Award up to and including
$375,000 shall be paid by Landlord to Tenant and Tenant shall restore the Leased
Premises in accordance with the requirements of Paragraph 13(b) of this Lease.
Any Net Award in excess of $375,000 shall (unless such Casualty resulting in the
Net Award is a Termination Event) be made available by Landlord (or Lender if
the terms of the Mortgage so require) to Tenant for the restoration of any of
the Leased Premises pursuant to and in accordance with and subject to the
provisions of Paragraph 19 hereof. If any Casualty or Condemnation which is not
a Partial Casualty or Partial Condemnation shall occur, Tenant shall comply with
the terms and conditions of Paragraph 18.
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18. Termination Events.
(a) If (i) all of either Related Premises shall be taken
by a Taking or (ii) any substantial portion of either Related Premises shall be
taken by a Taking or all or any substantial portion of either Related Premises
shall be totally damaged or destroyed by a Casualty and, in any such case,
Tenant certifies and covenants to Landlord that it will forever abandon
operations at the Related Premises, (any one or all of the Related Premises
described in the above clauses (i) and (ii) above being hereinafter referred to
as the "Affected Premises" and each of the events described in the above clauses
(i) and (ii) shall hereinafter be referred to as a "Termination Event"), then
(x) in the case of (i) above, Tenant shall be obligated, within forty-five (45)
days after Tenant receives a Condemnation Notice and (y) in the case of (ii)
above, Tenant shall have the option, within forty-five (45) days after Tenant
receives a Condemnation Notice or forty-five (45) days after the Casualty, as
the case may be, to give to Landlord written notice (a "Termination Notice") of
the Tenant's option to terminate this Lease as to the Affected Premises in the
form described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of
Tenant's intention to terminate this Lease as to the Affected Premises on the
first Basic Rent Payment Date which occurs at least ninety (90) days after the
Fair Market Value Date (the "Termination Date"), (ii) a binding and irrevocable
offer of Tenant to pay the Termination Amount and (iii) if the Termination Event
is an event described in Paragraph 18(a)(ii), the certification and covenant
described therein and a certified resolution of the Board of Directors of Tenant
authorizing the same. Promptly upon the delivery to Landlord of a Termination
Notice, Landlord and Tenant shall commence to determine Fair Market Value.
(c) If Landlord shall reject such offer to terminate this
Lease as to the Affected Premises by written notice to Tenant (a "Rejection"),
which Rejection shall contain the written consent of Lender, not later than
thirty (30) days following the Fair Market Value Date, then this Lease shall
terminate as to the Affected Premises on the Termination Date; provided that, if
any Basic Rent or Impositions remain unpaid as of the Termination Date, Landlord
may, at its option, extend the date on which this Lease may terminate as to the
Affected Premises to a date which is no later than the first Basic Rent Payment
Date after the Termination Date on which Tenant all past due Basic Rent and
Impositions are paid. Upon such termination (i) all obligations of Tenant
hereunder as to the Affected Premises shall terminate except for any Surviving
Obligations, (ii) Tenant shall immediately vacate and shall have no further
right, title or interest in or to any of the Affected Premises and (iii) the Net
Award shall be retained by Landlord.
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(d) Unless Tenant shall have received a Rejection not
later than the thirtieth (30th) day following the Fair Market Value Date,
Landlord shall be conclusively presumed to have accepted such offer. If such
offer is accepted by Landlord then, on the Termination Date, Tenant shall pay to
Landlord the Termination Amount and, if requested by Tenant, Landlord shall
convey to Tenant or its designee the Affected Premises or the remaining portion
thereof, if any, all in accordance with Paragraph 20 and in such event Landlord
shall have no further rights in and to the Net Award and shall cooperate with
Tenant to cause the Net Award to be delivered to Tenant. This obligation of
Landlord shall survive termination of this Lease.
(e) In the event of the termination of this Lease as to
the Affected Premises as hereinabove provided, this Lease shall remain in full
force and effect as to the Remaining Premises; provided, that the Basic Rent for
the Remaining Premises to be paid after such termination shall be the percentage
of the Basic Rent set forth on Exhibit "F" for the Remaining Premises.
19. Restoration.
(a) A Corporate Fiduciary (or Lender if required by any
Mortgage) shall hold any Net Award in excess of $375,000 in a fund (the
"Restoration Fund") and disburse amounts from the Restoration Fund only in
accordance with the following conditions:
(i) prior to commencement of restoration, the
architects, contracts, contractors, plans and specifications for the restoration
shall have been reasonably and promptly approved by Landlord;
(ii) at the time of any disbursement, no Event
of Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged or for which a
bond has been established;
(iii) disbursements shall be made from time to
time in an amount not exceeding the cost of the work completed since the last
disbursement, but not later than thirty (30) days following receipt of, (A)
reasonably satisfactory evidence, including architects' certificates, of the
stage of completion, the estimated total cost of completion and performance of
the work to date in a good and workmanlike manner in accordance with the
contracts, plans and specifications, (B) waivers of liens, (C) contractors' and
subcontractors' sworn statements as to completed work and the cost thereof for
which payment is requested, (D) a satisfactory bringdown of title insurance and
(E) other evidence of cost and payment so that Landlord and Lender can
reasonably verify that the amounts disbursed from time
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to time are represented by work that is completed, in place and free and clear
of mechanics' and materialmen's lien claims;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and to the best of such person's
knowledge, complies with the applicable requirements of this Lease;
(v) Landlord may retain ten percent (10%) of
the Restoration Fund until the restoration is fifty percent (50%) completed;
(vi) if the Restoration Fund is held by
Landlord, the Restoration Fund shall not be commingled with Landlord's other
funds and shall bear interest at a rate agreed to by Landlord and Tenant; and
(vii) such other reasonable and customary
conditions as Landlord or Lender may impose.
(b) Prior to commencement of restoration and at any time
during restoration, if the estimated cost of completing the restoration work
free and clear of all liens, as determined by Landlord, exceeds the amount of
the Net Award available for such restoration, unless prior to drawing or
continuing to draw funds from the Restoration Fund Tenant agrees to pay directly
to the contractor such shortfall (and provides to Landlord and Lender evidence
of such payment), the amount of such excess shall, upon demand by Landlord, be
paid by Tenant to Landlord to be added to the Restoration Fund. Any sum so added
by Tenant which remains in the Restoration Fund upon completion of restoration
shall be refunded to Tenant. For purposes of determining the source of funds
with respect to the disposition of funds remaining after the completion of
restoration, the Net Award shall be deemed to be disbursed prior to any amount
added by Tenant.
(c) If any sum remains in the Restoration Fund after
completion of the restoration and payment of all costs therefor and any refund
to Tenant pursuant to Paragraph 19(b), such sum shall be retained by Landlord
or, if required by a Note or Mortgage, paid by Landlord to a Lender.
20. Procedures Upon Purchase.
(a) If the Leased Premises or any of the Related Premises
are purchased by Tenant pursuant to any provision of this Lease, Landlord need
not convey any better title thereto
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than that which was conveyed to Landlord, and Tenant or its designee shall
accept such title, subject, however, to the Permitted Encumbrances and to all
applicable Laws, but free of the lien of and security interest created by any
Mortgage or Assignment and liens, exceptions and restrictions on, against or
relating to the Leased Premises or the applicable Related Premises to the extent
the same have been created by or resulted from acts or omissions of Landlord
after the date of this Lease, unless the same are Permitted Encumbrances or
customary utility easements benefiting the Leased Premises or were created with
the concurrence of Tenant or as a result of a default by Tenant under this
Lease.
(b) Upon the date fixed for any such purchase of the
Leased Premises or any of the Related Premises pursuant to any provision of this
Lease (any such date the "Purchase Date"), Tenant shall pay to Landlord, or to
any Person to whom Landlord directs payment, the Relevant Amount therefor
specified herein, in Federal Funds, less any credit of the Net Award received
and retained by Landlord or a Lender allowed against the Relevant Amount, and
Landlord shall deliver to Tenant (i) a special warranty deed which describes the
premises being conveyed and conveys the title thereto as provided in Paragraph
20(a), (ii) such other documents and instruments as shall be necessary to
transfer to Tenant or its designee any other property (or rights to any Net
Award not yet received by Landlord or a Lender) then required to be sold by
Landlord to Tenant pursuant to this Lease and (iii) any Net Award received by
Landlord or Lender , not credited to Tenant against the Relevant Amount and
required to be delivered by Landlord to Tenant pursuant to this Lease; provided,
that if any Monetary Obligations remain outstanding on such date, then Landlord
may deduct from the Net Award the amount of such Monetary Obligations. If on the
Purchase Date any Monetary Obligations remain outstanding and no Net Award is
payable to Tenant by Landlord or the amount of such Net Award is less than the
amount of the Monetary Obligations, then Tenant shall pay to Landlord on the
Purchase Date the amount of such Monetary Obligations. Upon the completion of
such purchase, this Lease and all obligations and liabilities of Tenant
hereunder with respect to the applicable Related Premises (but not with respect
to the Remaining Premises) shall terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be delayed
after (i) the Termination Date, in the event of a purchase pursuant to Paragraph
18 or, (ii) the date scheduled for such purchase, in the event of a purchase
under any other provision of this Lease then (x) Rent shall continue to be due
and payable until completion of such purchase and (y) if the delay continues for
more than six (6) months and such delay is not caused by Landlord and in
Landlord's reasonable judgment the Fair Market Value has increased by more than
3%, at Landlord's sole option, Fair Market Value shall be redetermined and the
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Relevant Amount payable by Tenant pursuant to the applicable provision of this
Lease shall be adjusted to reflect such redetermination. Landlord shall not be
deemed to have caused completion of such purchase to be delayed if it in good
faith disputes the process or methodology for determining Fair Market Value.
Landlord and Tenant each agree that following the determination of Fair Market
Value it will not delay for more than thirty (30) days the date fixed for any
such purchase.
(d) Any prepaid Monetary Obligations paid to Landlord
shall be prorated as of the Purchase Date, and the prorated unapplied balance
shall be deducted from the Relevant Amount due to Landlord; provided, that no
apportionment of any Impositions shall be made upon any such purchase.
21. Assignment and Subletting; Prohibition against Leasehold
Financing.
(a) (i) Tenant shall have the right, upon thirty (30)
days prior written notice to Landlord and Lender (which notice shall include, if
applicable, the financial information required under the following clause (C) in
form and substance satisfactory to Landlord and Lender) and provided an Event of
Default does not then exist, with no consent of Landlord or Lender being
required or necessary ("Preapproved Assignment") to assign this Lease by
operation of law or otherwise to any Person ("Preapproved Assignee") (A) that is
a wholly-owned subsidiary or an Affiliate of Tenant, or (B) that immediately
following such assignment will have a publicly traded unsecured senior debt
rating of "A" or better from ▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's") or a
rating of "A" or better from Standard & Poor's Corporation ("S&P"), and in the
event all of such rating agencies cease to furnish such ratings, then a
comparable rating ("Comparable Rating") by any rating agency reasonably
acceptable to Landlord and Lender or (C) if the transaction that gives rise to
the assignment of this Lease is a sale of all or substantially all of the assets
of Tenant, that immediately following such assignment and after giving effect
thereto (1) will have a publicly traded unsecured senior debt rating of "Baa" or
better from Moody's or a rating of "BBB-" from S&P or a Comparable Rating or (2)
will have on a proforma basis a Net Worth of not less than the Net Worth of
Tenant immediately prior to the assignment and will have a Fixed Charge Coverage
Ratio of not less than 1.75 to 1 measured by the proforma trailing four quarters
of the Preapproved Assignee after giving effect to the assignment. For the
purpose of this Paragraph 21(a)(i) the following terms shall have the following
meanings unless otherwise defined herein.
"EBIDTAR" for any period shall mean earnings from continuing
operations, exclusive or extraordinary items, if any, before interest expense,
depreciation, taxes, amortization
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expense (including amortization of debt issuance costs), rent and less capital
expenditures.
"Fixed Charge Coverage Ratio" shall mean the ratio of (a)
EBIDTAR to (b) Fixed Charges.
"Fixed Charges" for any period shall mean the sum of the total
interest expense for such period and rent or lease payments for such period,
determined in accordance with GAAP.
"Net Worth" shall mean, at any date, the net worth of Tenant
and the Net Worth of the proposed Preapproved Assignee under Paragraph
21(a)(i)(C)(2) above, in both instances determined in accordance with GAAP.
(ii) If, during the Initial Term, Tenant desires to
assign this Lease to a Person ("Non-Preapproved Assignee") who would not be a
Preapproved Assignee ("Non-Preapproved Assignment"), whether by operation of law
or otherwise, then Tenant shall, not less than ninety (90) days prior to the
date on which it desires to make a Non-Preapproved Assignment submit to Landlord
and Lender information regarding the following with respect to the
Non-Preapproved Assignee (collectively, the "Review Criteria"): (A) credit, (B)
capital structure, (C) management, (D) operating history, (E) proposed use of
the Leased Premises and (F) risk factors associated with the proposed use of the
Leased Premises by the Non-Preapproved Assignee, taking into account factors
such as environmental concerns, product liability and the like. Landlord and
Lender shall review such information and shall approve or disapprove the
Non-Preapproved Assignee no later than the thirtieth (30th) day following
receipt of all such information, and Landlord and Lender shall be deemed to have
acted reasonably in granting or withholding consent if such grant or disapproval
is based on their review of the Review Criteria applying prudent business
judgment.
(iii) If Landlord shall reject a Non-Preapproved
Assignment and Tenant desires to complete the Non-Preapproved Assignment, Tenant
shall have the right to make a rejectable offer (the "Intended Assignment
Offer") to purchase the Leased Premises for a purchase price equal to the Offer
Amount and to consummate the purchase price on the first Basic Rent Payment Date
occurring after the determination of Fair Market Value (the "Intended Assignment
Purchase Date"). Notwithstanding the foregoing, if the Intended Assignment Offer
is accepted by Landlord and the Non-Preapproved Assignment occurs on a date (the
"Assignment Date") that is prior to the Intended Assignment Purchase Date, then
no later than the Assignment Date, then on the Assignment Date Tenant shall
deposit in escrow with a Corporate Fiduciary an amount (the "Deposit Amount")
equal to one hundred five percent (105%) of the sum of the Termination Value and
any Prepayment Premium. The Deposit Amount shall be held by
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and invested by the Corporate Fiduciary at the direction of Landlord and the
Deposit Amount, together with any interest earned thereon, shall be applied on
the Intended Assignment Purchase Date to payment of the Offer Amount with any
balance returned to Tenant.
(iv) If Landlord shall reject the Intended
Assignment Offer by notice to Tenant, such notice to contain the written consent
of Lender to such rejection, no later than the thirtieth (30th) day following
receipt of the Intended Assignment Offer by Landlord, then this Lease shall
remain in full force and effect and Landlord and Lender shall be deemed to have
consented to the Non-Preapproved Assignment notwithstanding their initial
disapproval under Paragraph 21(a)(ii). Nothing provided herein shall constitute
a waiver by Landlord of the obligations of Tenant re comply with the
requirements of this Paragraph 21(a)(iv) if a subsequent Non-Preapproved
Assignment arises. No rejection of the Intended Assignment Offer shall be
effective for any purpose unless consented to in writing by Lender.
(v) Unless Landlord shall have rejected the Intended
Assignment Offer (a rejection by Landlord without the concurrence of Lender
shall be deemed acceptance) by the foregoing notice to Tenant not later than the
thirtieth (30th) day following receipt of the Intended Assignment Offer,
Landlord shall be conclusively presumed to have accepted the Intended Assignment
Offer. If the Intended Assignment Offer is accepted by Landlord, Tenant shall
pay to Landlord the Offer Amount (less the Deposit Amount and interest thereon
paid to Landlord) on the Intended Assignment Purchase Date and, provided that no
rent or any other charge is due and unpaid under this Lease as of the Intended
Assignment Purchase Date and Tenant is otherwise in compliance with the terms of
this Lease, Landlord shall convey to Tenant the Leased Premises in accordance
with the provisions of Paragraph 20 of this Lease.
(vi) During any Renewal Term, Landlord and Lender
shall not unreasonably withhold their consent to any request for a
Non-Preapproved Assignment.
(b) Tenant shall have the right, upon thirty (30) days
prior written notice to Landlord and Lender, to enter into one or more subleases
that demise, in the aggregate, up to but not in excess of twenty-five percent
(25%) of the gross space in the Improvements in each Related Premises with no
consent or approval of Landlord being required or necessary ("Preapproved
Sublet"); provided, however, that as long as the Agreement - New Lease undated
with Land O'Lakes, Inc. ("LOL") which is hereby approved by Landlord is in full
force and effect Tenant shall not have the right to sublease space in the
Menomonie Premises to any other Person and shall not increase the space leased
to LOL without the prior written approval of Landlord, such approval not to be
unreasonably withheld or delayed. Other than pursuant to a
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Preapproved Sublet, subleases for more than twenty-five percent (25%) of the
gross space in the Leased Premises shall not be permitted without the prior
written consent of Landlord, which consent shall be granted or withheld based on
a review of the Review Criteria. Landlord and Lender shall be deemed to have
acted reasonably in granting or withholding consent if such grant or disapproval
is based on their reasonable review of the Review Criteria applying prudent
business judgment.
(c) If Tenant assigns all its rights and interest under
this Lease, the assignee under such assignment shall expressly assume all the
obligations of Tenant hereunder, actual or contingent, including obligations of
Tenant which may have arisen on or prior to the date of such assignment, by a
written instrument delivered to Landlord at the time of such assignment. Each
sublease of any of the Leased Premises shall be subject and subordinate to the
provisions of this Lease. No assignment or sublease shall affect or reduce any
of the obligations of Tenant hereunder, and all such obligations shall continue
in full force and effect as obligations of a principal and not as obligations of
a guarantor, as if no assignment or sublease had been made. No assignment or
sublease shall impose any additional obligations on Landlord under this Lease.
(d) Tenant shall, within ten (10) days after the
execution and delivery of any assignment or sublease, deliver a duplicate
original copy thereof to Landlord which, in the event of an assignment, shall be
in recordable form.
(e) As security for performance of its obligations under
this Lease, Tenant hereby grants, conveys and assigns to Landlord all right,
title and interest of Tenant in and to all subleases now in existence or
hereafter entered into for any or all of the Leased Premises, any and all
extensions, modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all
rents and other sums of money payable under any sublease of any of the Leased
Premises, provided, however, during the continuation of an Event of Default that
Landlord shall have the absolute right at any time upon notice to Tenant and any
subtenants to revoke said license and to collect such rents and sums of money
and to retain the same. Tenant shall not accept any rents more than thirty (30)
days in advance of the accrual thereof nor do nor permit anything to be done,
the doing of which, nor omit or refrain from doing anything, the omission of
which, will or could be a breach of or default in the terms of any of the
subleases.
(f) (i) Tenant shall have the right to grant a first
lien Permitted Leasehold Mortgage on, or to pledge its leasehold interest in,
the Leased Premises to a Permitted Leasehold Mortgagee, but shall not have the
power to otherwise mortgage, pledge or otherwise encumber its interest under
this
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Lease or any sublease of the Leased Premises, and any other such mortgage,
pledge or encumbrance made in violation of this Paragraph 21 shall be void and
of no force and effect. Any entity that becomes a successor tenant under this
Paragraph 21(f) shall be required to comply with all of the terms of this Lease.
(ii) At no cost to Landlord, Landlord shall
reasonably cooperate with Tenant and such Permitted Leasehold Mortgagee in
connection with the granting and perfecting of any such Permitted Leasehold
Mortgage.
(iii) Landlord hereby agrees that upon the request
of Tenant, Landlord will enter into an agreement with a Permitted Leasehold
Mortgagee which agreement shall be in form and substance reasonably satisfactory
to Landlord and which shall provide, among other things, (A) that upon a default
on the part of Tenant pursuant to the terms and conditions of this Lease,
Landlord shall give notice of such default by Tenant in the manner provided in
Paragraph 24 to any Permitted Leasehold Mortgagee whose name and address has
been provided to Landlord, (B) that Permitted Leasehold Mortgagee shall have an
opportunity to cure any such default, which, in the case of a Monetary
Obligation, shall be a period of five (5) days longer than the time period
provided to Tenant, and (ii) in the case of all other defaults which are
reasonably capable of cure, ten (10) days longer than the cure period afforded
to Tenant pursuant to this Lease, and (C) that Landlord shall not enter into any
modification or amendment to this Lease without the written consent of the
Permitted Leasehold Mortgagee, which shall not be unreasonably withheld or
delayed.
(iv) Subject to the terms and conditions of this
▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ shall recognize any designee of Permitted Leasehold
Mortgagee or purchaser at a foreclosure sale, whether such sale is public or
private, so long as such designee or purchaser qualifies as a Preapproved
Assignee or a Non-Preapproved Assignee that has been approved by Landlord and
Lender in accordance with the terms of Paragraph 21(a)(i) and (a)(ii) prior to
any foreclosure sale. In all other instances an Event of Default shall exist
upon consummation of such foreclosure unless the Permitted Leasehold Mortgagee
or said designee or purchaser makes the Intended Assignment Offer and otherwise
complies with the provisions of Paragraph 21(a)(iii), (iv) and (v).
(v) Notwithstanding anything herein to the contrary,
in no event shall any Permitted Leasehold Mortgagee have any liability to
Landlord pursuant to this Lease by reason of any Permitted Leasehold Mortgage
unless and until said Permitted Leasehold Mortgagee becomes the Tenant
hereunder.
(g) Subject to Tenant's rights under ▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ may sell or transfer the Leased Premises at any time without Tenant's
consent to any third party (each a "Third Party
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Purchaser"), provided, that so long as no Event of Default exists either at the
time Landlord enters into an Agreement of Sale for the purchase of the Leased
Premises or on the date of conveyance to a Third Party Purchaser, Landlord shall
not sell the Leased Premises to any Person whose primary business is the
manufacturing of cans and/or lids and/or metal or plastic containers and/or lids
for third party users as long as the foregoing is the primary business of
Tenant. In the event of any such transfer, Tenant shall attorn to any Third
Party Purchaser as Landlord so long as such Third Party Purchaser and Landlord
notify Tenant in writing of such transfer and such Third Party Purchaser assumes
in writing the obligations of Landlord under this Lease whenever said
obligations occurred. At the request of Landlord, Tenant will execute such
documents confirming the agreement referred to above and such other agreements
as Landlord may reasonably request, provided that such agreements do not
increase the liabilities and obligations of Tenant hereunder.
22. Events of Default.
(a) The occurrence of any one or more of the following
(after expiration of any applicable cure period as provided in Paragraph 22(b))
shall, at the sole option of Landlord, constitute an "Event of Default" under
this Lease:
(i) a failure by Tenant to make any payment of
any Monetary Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and
observe, or a violation or breach of, any other provision hereof not otherwise
specifically mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by
Tenant herein or in any certificate, demand or request made pursuant hereto
proves to be incorrect, now or hereafter, in any material respect, including the
breach of a representation that contains a "knowledge" limitation;
(iv) a default beyond any applicable cure
period or at maturity by Tenant in any payment of principal or interest on any
obligations for borrowed money having a principal balance of $20,000,000 or more
in the aggregate, or in the performance of any other provision contained in any
instrument under which any such obligation is created or secured (including the
breach of any covenant thereunder), (x) if such payment is a payment at maturity
or a final payment, or (y) if an effect of such default is to cause such
obligation to become due prior to its stated maturity and the acceleration of
such obligation would have a material adverse effect on the ability of Tenant to
perform its obligations under this Lease;
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(v) a final, non-appealable judgment or
judgments for the payment of money in excess of $20,000,000 in the aggregate
shall be rendered against Tenant and the same shall remain undischarged for a
period of sixty (60) consecutive days and the payment of such judgment or
judgments would have a material adverse effect on the ability of Tenant to
perform its obligations under this Lease;
(vi) Tenant shall (A) voluntarily be
adjudicated a bankrupt or insolvent, (B) seek or consent to the appointment of a
receiver or trustee for itself or for any of the Related Premises, (C) file a
petition seeking relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, or (D) make a general assignment for the
benefit of creditors;
(vii) a court shall enter an order, judgment or
decree appointing, without the consent of Tenant, a receiver or trustee for it
or for any of the Related Premises or approving a petition filed against Tenant
which seeks relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, and such order, judgment or decree shall
remain undischarged or unstayed sixty (60) days after it is entered;
(viii) either of the Related Premises shall have
been vacated during the Initial Term except as permitted under, and subject to
the terms and conditions of Paragraph 35, or either of the Related Premises
shall have been abandoned;
(ix) Tenant shall be liquidated or dissolved or
shall begin proceedings towards its liquidation or dissolution;
(x) the estate or interest of Tenant in any of
the Related Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within ninety (90) days after it is made;
(xi) a failure by Tenant to perform or observe
beyond any applicable notice and grace period, or a violation or breach of, or a
misrepresentation by Tenant under, any provision of any Assignment or any other
document between Tenant and Lender, if such failure, violation, breach or
misrepresentation gives rise to a default beyond any applicable cure period with
respect to any Loan;
(xii) a failure by Tenant to maintain in effect
any license or permit necessary for the use, occupancy or operation of any of
the Related Premises; or
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(xiii) Tenant shall sell or transfer all or
substantially all of its assets unless this Lease shall be sold or assigned in
connection with such sale and such purchaser shall be either a Preapproved
Assignee or a Non-Preapproved Assignee that has been approved by Landlord and
Lender unless, in the latter case, Tenant has paid the Deposit Amount in
accordance with Paragraph 21(a)(iii).
(b) No notice or cure period shall be required in any one
or more of the following events: (A) the occurrence of an Event of Default under
clause (iv), (v), (vi), (vii), (viii), (ix), (x), (xi) or (xiii) of Paragraph
22(a); (B) an assignment or sublease entered into in violation of Paragraph 21;
or (C) the default is such that any delay in the exercise of a remedy by
Landlord could reasonably be expected to cause irreparable harm to Landlord. If
the default consists of the failure to pay any Monetary Obligation, including
Basic Rent, under clause (i) of Paragraph 22(a), the applicable cure period
shall be three (3) days from the date on which notice is given, but Landlord
shall not be obligated to give notice of, or allow any cure period for, any such
default more than one (1) time within any consecutive twelve (12) month period
for any category of Monetary Obligation. If the default consists of a default
under clauses (ii), (iii) or (xii) of Paragraph 22(a), other than the events
specified in clauses (B) and (C) of the first sentence of this Paragraph 22(b),
the applicable cure period shall be thirty (30) days from the date on which
notice is given or, if the default cannot be cured within such thirty (30) day
period and delay in the exercise of a remedy would not (in Landlord's reasonable
judgment) cause any material adverse harm to Landlord or any of the Leased
Premises, the cure period shall be extended for the period required to cure the
default (but such cure period, including any extension, shall not in the
aggregate exceed one hundred ten (110) days (provided, however, that no
extension shall be permitted of the default is the failure to provide any
insurance required by Paragraph 16(a)), provided that Tenant shall commence to
cure the default within the said thirty-day period and shall actively,
diligently and in good faith proceed with and continue the curing of the default
until it shall be fully cured.
23. Remedies and Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of
Landlord's intention to terminate this Lease on a date specified
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in such notice. Upon such date, this Lease, the estate hereby granted and all
rights of Tenant hereunder shall expire and terminate. Upon such termination,
Tenant shall immediately surrender and deliver possession of the Leased Premises
to Landlord in accordance with Paragraph 26. If Tenant does not so surrender and
deliver possession of all of the Leased Premises, Landlord may re-enter and
repossess any of the Leased Premises not surrendered, with legal process, by
peaceably entering any of the Leased Premises and changing locks or by summary
proceedings, ejectment or any other lawful means or procedure. Upon or at any
time after taking possession of any of the Leased Premises, Landlord may, by
peaceable means or legal process, remove any Persons or property therefrom.
Landlord shall be under no liability for or by reason of any such entry,
repossession or removal. Notwithstanding such entry or repossession, Landlord
may (A) exercise the remedy set forth in and collect the damages permitted by
Paragraph 23(a)(iii) or (B) collect the damages set forth in Paragraph 23(b)(i)
or 23(b)(ii).
(ii) Landlord may give Tenant notice of
Landlord's intention to terminate Tenant's occupancy of the Leased Premises and
to reenter and take possession of the Leased Premises or any part thereof (which
termination of occupancy and reentry shall not operate to terminate this Lease
unless Landlord expressly so elects in writing) and of any and all fixtures
which are located on the Leased Premises and owned by Landlord. Landlord shall
be under no liability for or by reason of any such entry, repossession or
removal. Notwithstanding such entry or repossession, Landlord may (A) exercise
the remedy set forth in and collect the damages permitted by Paragraph 23(a)(iv)
or (B) collect the damages set forth in Paragraph 23(b)(i) or 23(b)(ii).
(iii) After repossession of any of the Leased
Premises pursuant to clause (i) above, Landlord shall have the right to relet
any of the Leased Premises to such tenant or tenants, for such term or terms,
for such rent, on such conditions and for such uses as Landlord in its
reasonable discretion may determine, and collect and receive any rents payable
by reason of such reletting. Landlord may make such Alterations in connection
with such reletting as it may deem advisable in its reasonable discretion.
Notwithstanding any such reletting, Landlord may collect the damages set forth
in Paragraph 23(b)(ii).
(iv) Landlord may, upon notice to Tenant,
require Tenant to make an irrevocable offer to terminate this Lease in its
entirety for an amount (the "Default Termination Amount") specified in the next
sentence. The "Default Termination Amount" shall be the greatest of (A) the Fair
Market Value of the Leased Premises or (B) the sum of the Termination Value for
the Leased Premises and any Prepayment Premium which Landlord will be required
to pay in prepaying the Loan with proceeds of the Default Termination Amount or
(C) an amount equal
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to the Present Value of the entire Basic Rent from the date of such purchase to
the date on which the then Term would expire. Upon such notice to Tenant, Tenant
shall be deemed to have made such offer and shall, if requested by Landlord,
within ten (10) days following such request, deposit with Landlord as payment
against the Default Termination Amount the amount described in (B) above,
Landlord and Tenant shall promptly commence to determine Fair Market Value.
Within ten (10) days after the Fair Market Value Date, Landlord shall accept or
reject such offer. If Landlord accepts such offer then, on the tenth (10th)
business day after such acceptance, Tenant shall pay to Landlord the Default
Termination Amount and, at the request of Tenant, Landlord will convey the
Leased Premises to Tenant or its designee in accordance with Paragraph 20. Any
rejection by Landlord of such offer shall have no effect on any other remedy
Landlord may have under this Lease.
(v) Landlord may declare by notice to Tenant
the entire Basic Rent (in the amount of Basic Rent then in effect) for the
remainder of the then current Term to be immediately due and payable. Tenant
shall immediately pay to Landlord all such Basic Rent discounted to its Present
Value, all accrued Rent then due and unpaid, all other Monetary Obligations
which are then due and unpaid and all Monetary Obligations which arise or become
due by reason of such Event of Default (including any Costs of Landlord). Upon
receipt by Landlord of all such accelerated Basic Rent and Monetary Obligations,
this Lease shall remain in full force and effect and Tenant shall have the right
to possession of the Leased Premises from the date of such receipt by Landlord
to the end of the Term, and subject to all the provisions of this Lease,
including the obligation to pay all increases in Basic Rent and all Monetary
Obligations that subsequently become due, except that (A) no Basic Rent which
has been prepaid hereunder shall be due thereafter during the said Term and (B)
Tenant shall have no option to extend or renew the Term.
(b) The following constitute damages to which Landlord
shall be entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(iii):
(i) If Landlord exercises its remedy under
Paragraph 23(a)(i) but not its remedy under Paragraph 23(a)(iii) (or attempts to
exercise such remedy and is unsuccessful in reletting the Leased Premises) then,
upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated
and agreed final damages for Tenant's default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of (A) all Basic Rent from the date of such
demand to the date on which the Term is scheduled to expire hereunder in the
absence of any earlier termination, re-entry or repossession over
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(B) the then fair market rental value of the Leased Premises for the same
period. Tenant shall also pay to Landlord all of Landlord's reasonable Costs in
connection with the repossession of the Leased Premises and any attempted
reletting thereof, including all brokerage commissions, legal expenses,
reasonable attorneys' fees, employees' expenses, costs of Alterations and
expenses and preparation for reletting, provided, however, that such Costs shall
be allocated if a reletting extends beyond the stated expiration of the Term.
(ii) If Landlord exercises its remedy under
Paragraph 23(a)(i) or its remedies under Paragraph 23(a)(i) and 23(a)(iii), then
Tenant shall, until the end of what would have been the Term in the absence of
the termination of the Lease, and whether or not any of the Leased Premises
shall have been relet, be liable to Landlord for, and shall pay to Landlord, as
liquidated and agreed current damages on the date on which the same are due and
payable under the terms of this Lease all Monetary Obligations which would be
payable under this Lease by Tenant in the absence of such termination less the
net proceeds, if any, of any reletting pursuant to Paragraph 23(a)(iii), after
deducting from such proceeds all of Landlord's Costs (including the items listed
in the last sentence of Paragraph 23(b)(i) hereof) incurred in connection with
such repossessing and reletting; provided, that if Landlord has not relet the
Leased Premises, such Costs of Landlord shall be considered to be Monetary
Obligations payable by Tenant. Tenant shall be and remain liable for all sums
aforesaid, and Landlord may recover such damages from Tenant and institute and
maintain successive actions or legal proceedings against Tenant for the recovery
of such damages. Nothing herein contained shall be deemed to require Landlord to
wait to begin such action or other legal proceedings until the date when the
Term would have expired by its own terms had there been no such Event of
Default.
(c) Notwithstanding anything to the contrary herein
contained, in lieu of or in addition to any of the foregoing remedies and
damages, Landlord may exercise any remedies and collect any damages available to
it at law or in equity. If Landlord is unable to obtain full satisfaction
pursuant to the exercise of any remedy, it may pursue any other remedy which it
has hereunder or at law or in equity.
(d) Landlord shall not be required to mitigate any of its
damages hereunder unless required to by applicable Law. If any Law shall validly
limit the amount of any damages provided for herein to an amount which is less
than the amount agreed to herein, Landlord shall be entitled to the maximum
amount available under such Law.
(e) No termination of this Lease, repossession or
reletting of any of the Leased Premises, exercise of any remedy
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or collection of any damages pursuant to this Paragraph 23 shall relieve Tenant
of any Surviving Obligations.
(f) TO THE EXTENT PERMITTED BY LAW, LANDLORD AND TENANT
WAIVE ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY REMEDY OR PROCEEDING
HEREUNDER.
(g) Upon the occurrence of any Event of Default, Landlord
shall have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose.
(h) No failure of Landlord (i) to insist at any time upon
the strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(i) to the extent permitted by Law, Tenant hereby waives
and surrenders, for itself and all those claiming under it, including creditors
of all kinds, (i) any right and privilege which it or any of them may have under
any present or future Law to redeem any of the Leased Premises or to have a
continuance of this Lease after termination of this Lease or of Tenant's right
of occupancy or possession pursuant to any court order or any provision hereof,
and (ii) the benefits of any present or future Law which exempts property from
liability for debt or for distress for rent.
(j) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.
24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
three (3) Business Days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated above or when delivery is
refused. A copy of any notice given by Tenant to Landlord shall
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simultaneously be given by Tenant to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chairman, Real Estate Department. For
the purposes of this Paragraph, any party may substitute another address stated
above (or substituted by a previous notice) for its address by giving fifteen
(15) days' notice of the new address to the other party, in the manner provided
above, and any notice received by counsel for any party shall be adequate notice
for purposes of this Lease.
25. Estoppel Certificate. At any time upon not less than ten (10)
Business Days' prior written request by either Landlord or Tenant (the
"Requesting Party") to the other party (the "Responding Party"), the Responding
Party shall deliver to the Requesting Party a statement in writing, executed by
an authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by an court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation.
26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
except for ordinary wear and tear and, if a Rejection is received by Tenant
under Paragraph 18, Casualty and Condemnation. Upon such surrender, Tenant shall
(a) remove from the Leased Premises all property which is owned by Tenant or
third parties other than Landlord and (b) repair any damage caused by such
removal. Property not so removed within ten (10) days following
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such expiration shall become the property of Landlord, and Landlord may
thereafter cause such property to be removed from the Leased Premises. The cost
of removing and disposing of such property and repairing any damage to any of
the Leased Premises caused by such removal shall be paid by Tenant to Landlord
upon demand. Landlord shall not in any manner or to any extent be obligated to
reimburse Tenant for any such property which becomes the property of Landlord
pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased Premises
by reason of the fact that the same Person may acquire or hold or own, directly
or indirectly, (a) the leasehold estate created hereby or any part thereof or
interest therein and (b) the fee estate in any of the Leased Premises or any
part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.
28. Books and Records.
(a) Tenant shall keep adequate records and books of
account with respect to the finances and business of Tenant generally and with
respect to the Leased Premises, in accordance with GAAP and shall permit
Landlord and Lender by their respective agents, accountants and attorneys, upon
reasonable notice to Tenant, to visit the headquarters of Silgan Holdings, Inc.
("Holdings") to discuss the finances and business with the officers of Tenant or
Holdings, at such reasonable times as may be requested by Landlord.
(b) Prior to any assignment of Tenant's interest in this
Lease to any Person who is not an Affiliate of Silgan Containers Corporation or
an Affiliate of Holdings (unless such Affiliate prepares the financial
statements described in the following Paragraph 28(c)), Tenant shall deliver to
Landlord and to Lender within one hundred twenty (120) days of the close of each
fiscal year, annual unaudited financial statements of Tenant and all other
quarterly financial reports that Tenant prepares or causes to be prepared for
Persons unaffiliated with Tenant or Holdings. All financial statements of Tenant
shall be prepared in accordance with GAAP consistently applied, except that all
such unaudited statements shall be subject to normal year end adjustments and
footnotes shall not be required. All annual financial statements shall be
accompanied (i) by the certification of the Chief Financial Officer or other
responsible financial officer of Tenant, dated within five (5) days of the
delivery of such statement, stating that (A) such statements are true, correct
and complete, (B) the affiant knows of no Event of Default, or event which, upon
notice or the passage of time or both, would become an Event of Default which
has occurred and is
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continuing hereunder or, if any such event has occurred and is continuing,
specifying the nature and period of existence thereof and what action Tenant has
taken or proposes to take with respect thereto and (C) except as otherwise
specified in such affidavit, to the best of the affiant's knowledge that Tenant
has fulfilled all of its obligations under this Lease which are required to be
fulfilled on or prior to the date of such affidavit. Tenant shall also deliver
to Landlord annual audited and quarterly unaudited financial statements of
Holdings as soon as reasonably available following the close of each fiscal year
and fiscal quarter of Holdings.
(c) Following any assignment of Tenant's interest in this
Lease to any Person who is not an Affiliate of Silgan Containers Corporation or
an Affiliate of Holdings unless in either case such Affiliate prepares the
statements described in this Paragraph 28(c), such assignee, as Tenant, shall
deliver to Landlord and to Lender within one hundred twenty (120) days of the
end of each fiscal year, annual audited financial statements of such Tenant
prepared by nationally recognized independent certified public accountants.
Tenant shall also furnish to Landlord within sixty (60) days after the end of
each of the three remaining quarters unaudited financial statements and all
other quarterly reports of such Tenant, certified by such Tenant's chief
financial officer, and all filings, if any, of Form 10-K, Form 10-Q and other
required filings with the Securities and Exchange Commission pursuant to the
provisions of the Securities and Exchange Act of 1934, as amended, or any other
Law. All financial statements of such Tenant shall be prepared in accordance
with GAAP accompanied (i) by an opinion of said accountants stating that there
are no qualifications as to the scope of the audit and the audit was performed
in accordance with GAAP and (ii) by the affidavit of the chief financial officer
of such Tenant, dated within five (5) days of the delivery of such statement,
stating that the affiant knows of no Event of Default, or event which, upon
notice or the passage of time or both, would become an Event of Default which
has occurred and is continuing, specifying the nature and period of existence
thereof and what action such Tenant has taken or proposes to take with respect
thereto and except as otherwise specified in such affidavit, to the best of
affiant's knowledge that such Tenant has fulfilled all of its obligations under
this Lease which are required to be fulfilled on or prior to the date of such
affidavit.
(d) Landlord, Lender and their respective agents,
accountants and attorneys, shall consider and treat on a strictly confidential
basis any financial statements of Tenant pursuant to Paragraph 28(b) which are
delivered to or received by them and which are conspicuously stamped
"CONFIDENTIAL". Neither Landlord, Lender, nor their respective agents,
accountants and attorneys, shall disclose any information contained in such
financial statements to any other Persons without the prior written consent of
the President. Notwithstanding anything to the contrary, each of Landlord and
Lender agree to reveal such financial statements
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or any part thereof only to its agents, accountants, attorneys and employees who
need to know and have access to such financial statements for purposes of this
Lease and the related documents only.
The restrictions contained in this Paragraph 28(d) shall not prevent disclosure
by Landlord or Lender of any information in any of the following circumstances:
(i) Upon the order of any court or
administrative agency to the extent required by such order and not effectively
stayed or by appeal or otherwise, provided that the Landlord or Lender, as the
case may be, shall have provided Tenant with notice of any such order so that
Tenant may seek a protective order or other appropriate remedy (for which
Landlord and/or Lender agree to cooperate in all reasonable respects with the
Tenant in seeking a protective order or other appropriate remedy);
(ii) Upon the request, demand or requirement of
any regulatory agency or authority having jurisdiction over such party,
including the Securities and Exchange Commission (whether or not such request or
demand has the force of law), provided that the Landlord or Lender, as the case
may be, shall have provided Tenant with notice of any such request, demand or
requirement so that Tenant may seek a protective order, confidential treatment
of such information or other appropriate remedy (for which Landlord and/or
Lender agree to cooperate in all reasonable respects with the Tenant in seeking
a protective order, confidential treatment of such information or other
appropriate remedy);
(iii) That has been publicly disclosed other
than by breach of this Paragraph 28(d) by Lender or Landlord or by any other
Person who has been provided such information by Landlord or Lender; and
(iv) While an Event of Default exists, in
connection with the exercise of and only to the extent necessary to exercise any
right or remedy under this Lease or any other related document.
Landlord, Lender and Tenant agree that money damages may not be sufficient
remedy for any breach of this Paragraph (d) by it or any other Person (including
agents, attorneys, accountants and employees of Landlord and/or Lender) to whom
it discloses any of such information and that, in addition to all other remedies
(including monetary damages) which may be available, Tenant shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach.
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29. Determination of Value.
(a) Whenever a determination of Fair Market Value is
required pursuant to any provision of this Lease, such Fair Market Value shall
be determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to
agree upon such Fair Market Value within thirty (30) days after the date (the
"Applicable Initial Date") on which (A) Tenant provides Landlord with notice of
its intention to terminate this Lease and purchase the Affected Premises
pursuant to Paragraph 18, (B) Landlord provides Tenant with notice of its
intention to redetermine Fair Market Value pursuant to Paragraph 20(c), (C)
Landlord provides Tenant with notice of Landlord's intention to require Tenant
to make an offer to purchase the Leased Premises pursuant to Paragraph
23(a)(iii), (D) Tenant provides to Landlord an Intended Assignment Offer or (E)
Tenant provides to Landlord an Abandonment Notice. Upon reaching such agreement,
the parties shall execute an agreement setting forth the amount of such Fair
Market Value.
(ii) If the parties shall not have signed such
agreement within thirty (30) days after the Applicable Initial Date, Tenant
shall within forty (40) days after the Applicable Initial Date select an
appraiser and notify Landlord in writing of the name, address and qualifications
of such appraiser. Within ten (10) days following Landlord's receipt of Tenant's
notice of the appraiser selected by Tenant, Landlord shall select an appraiser
and notify Tenant of the name, address and qualifications of such appraiser.
Such two appraisers shall endeavor to agree upon Fair Market Value based on a
written appraisal made by each of them as of the Relevant Date (and given to
Landlord by Tenant). If such two appraisers shall agree upon a Fair Market
Value, the amount of such Fair Market Value as so agreed shall be binding and
conclusive.
(iii) If such two appraisers shall be unable to
agree upon a Fair Market Value within twenty (20) days after the selection of an
appraiser by Landlord, then such appraisers shall advise Landlord and Tenant of
their respective determination of Fair Market Value and shall select a third
appraiser to make the determination of Fair Market Value. The selection of the
third appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to
agree upon the designation of a third appraiser within ten (10) days after the
expiration of the twenty (20) day period referred to in clause (iii) above, or
if such third appraiser does not make a determination of Fair Market Value
within twenty (20) days after his selection, then such third appraiser or a
substituted third appraiser, as applicable, shall, at the request
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of either party hereto (with respect to the other party), be appointed by the
President or Chairman of the American Arbitration Association in New York, New
York. The determination of Fair Market Value made by the third appraiser
appointed pursuant hereto shall be made within twenty (20) days after such
appointment.
(v) If a third appraiser is selected, Fair
Market Value shall be the average of the determination of Fair Market Value made
by the third appraiser and the determination of Fair Market Value made by the
appraiser (selected pursuant to Paragraph 29(a)(ii) hereof) whose determination
of Fair Market Value is nearest to that of the third appraiser. Such average
shall be binding and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed
pursuant to this Paragraph 29(a) shall (A) be independent qualified MAI
appraisers (B) have no right, power or authority to alter or modify the
provisions of this Lease, (C) utilize the definition of Fair Market Value set
forth in Paragraph 2 of this Lease, and (D) be registered in the State if the
State provides for or requires such registration.
(vii) If the determination of Fair Market Value
is required under Paragraph 23(a)(iii), the Cost of the procedure described in
this Paragraph 29(a) above shall be borne entirely by Tenant; in all other
instances the Cost shall be split equally between Landlord and Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended
with respect to the Leased Premises or either Related Premises, as applicable,
to the date specified for termination in the particular provision of this Lease
pursuant to which the determination of Fair Market Value is being made.
(c) In determining Fair Market Value as defined in clause
(b) of the definition of Fair Market Value, the appraisers shall add (a) the
present value of the Rent for the remaining Term (with assumed increases in the
CPI to be determined by the appraisers) using a discount rate (which may be
determined by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and (b) the present value of the Leased Premises as
of the end of such Term. The appraisers shall further assume that no default
then exists under the Lease and that Tenant has complied (and will comply) with
all provisions of the Lease.
30. Non-Recourse as to Landlord. Anything contained herein to
the contrary notwithstanding, any claim based on or in respect of any liability
of Landlord under this Lease shall be
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enforced only against the Leased Premises and the income therefrom and not
against any other assets, properties or funds of (a) Landlord, (b) any director,
officer, general partner, limited partner, employee or agent of Landlord, or any
general partner of Landlord, any of its general partners or shareholders (or any
legal representative, heir, estate, successor or assign of any thereof), (c) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, or any of its general partners, either directly or through Landlord or
its general partners or any predecessor or successor partnership or corporation
or their shareholders, officers, directors, employees or agents (or other
entity), or (d) any other Person (including ▇▇▇▇▇ Property Advisors, ▇▇▇▇▇
Fiduciary Advisors, Inc., W.P. ▇▇▇▇▇ & Co., Inc., W.P. ▇▇▇▇▇ Incorporated and
any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof).
31. Financing.
(a) Tenant agrees to pay concurrent with the funding of
the initial Loan, the sum of (i) the Cost of any environmental reports required
by the initial Lender and (ii) all other out-of-pocket Costs up to a maximum of
$175,000 incurred by Landlord in connection with the initial financing of the
Leased Premises, including, without limitation, the cost of appraisals, title
insurance, surveys, Landlord's and Lender's legal fees and expenses and Lender's
commitment fees.
(b) If Landlord desires to obtain or refinance any Loan,
Tenant shall negotiate in good faith with Landlord concerning any request made
by any Lender or proposed Lender for changes or modifications in this Lease,
provided, however, that Tenant shall have no obligation to modify this Lease.
However, Tenant shall agree, upon request of Landlord, to supply any such Lender
with such notices and information as Tenant is required to give to Landlord
hereunder and to extend the rights of Landlord hereunder to any such Lender and
to consent to such financing if such consent is requested by such Lender. Tenant
shall provide any other consent or statement and shall execute any and all other
documents that such Lender reasonably requires in connection with such
financing, including an environmental indemnity agreement and a subordination,
non-disturbance and attornment agreement, so long as the same do not materially
adversely affect in Tenant's reasonable judgment any right, benefit or privilege
of Tenant under this Lease or materially increase Tenant's obligations in
Tenant's reasonable judgment under this Lease. Except as provided in Paragraph
31(a) above, Landlord shall pay the reasonable costs and expenses of Tenant in
connection with any document, instrument or agreement that any Lender shall
require, and Tenant shall have no liability for costs incurred in connection
with any refinancing of the initial Loan or any future Loan.
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32. Subordination. This Lease and Tenant's interest hereunder
shall be subordinate to any Mortgage or other security instrument to a Lender
hereafter placed upon the Leased Premises by Landlord, and to any and all
advances made or to be made thereunder, to the interest thereon, and all
renewals, replacements and extensions thereof, provided that any such Mortgage
or other security instrument (or a separate instrument in recordable form duly
executed by the holder of any such Mortgage or other security instrument and
delivered to Tenant) shall provide for the recognition of this Lease and all
Tenant's rights hereunder unless and until an Event of Default exists and is
continuing. Any such subordination, nondisturbance and attornment agreement
shall be in form reasonably satisfactory to Tenant and, in any event, may
require Tenant to confirm that (a) Lender and its assigns will not be liable for
any misrepresentation, act or omission of Landlord and (b) Lender and its
assigns will not be subject to any counterclaim, demand or offsets which Tenant
may have against Landlord.
33. Tax Treatment; Reporting. Landlord and Tenant each
acknowledge that each shall treat this transaction as a true lease for state law
purposes and shall report this transaction as a Lease for Federal income tax
purposes. For Federal income tax purposes each shall report this Lease as a true
lease with Landlord as the owner of the Leased Premises and Equipment and Tenant
as the lessee of such Leased Premises and Equipment including: (1) treating
Landlord as the owner of the property eligible to claim depreciation deductions
under Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
34. Right of First Refusal.
(a) Except as otherwise provided in clause (f) of this
Paragraph 34, and provided an Event of Default does not then exist, if Landlord
shall enter into a contract for the sale (the "Sale Contract") of the Leased
Premises with a Third Party Purchaser, which Sale Contract shall be conditioned
upon Tenant's failure to exercise its right under this ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇
shall give written notice to Tenant of the Sale Contract, together with a copy
of the executed Sale Contract and the name and business address of the Third
Party Purchaser.
(b) For a period of fifteen (15) Business Days following
receipt of such notice, Tenant shall have the right and option, exercisable by
written notice to Landlord given within said fifteen (15) Business Day period,
to elect to purchase the Leased Premises at the purchase price and upon all the
terms and conditions set forth in such Sale Contract except that no
contingencies contained in such Sale Contract as to environmental
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assessments, engineering studies, inspection of the Leased Premises,
availability of financing, sale of other property, state of the title to or
encumbrances on the Leased Premises, or any other condition or contingency to
the Third Party Purchaser's obligation to purchase the Leased Premises which
pertains to the condition of the Leased Premises, the Third Party Purchaser's
ability to take certain action or any other factor beyond the control of
Landlord, shall apply to Tenant's obligation to purchase the Leased Premises
under this Paragraph 34, and Tenant shall be obligated to purchase the Leased
Premises without any such condition or contingency.
(c) If at the expiration of the aforesaid fifteen (15)
Business Day period Tenant shall have failed to exercise the aforesaid option,
Landlord may sell the Leased Premises to such Third Party Purchaser upon the
terms set forth in such contract.
(d) Except as otherwise specifically provided herein, the
closing date for any purchase of the Leased Premises by Tenant pursuant to this
Paragraph 34 shall be the earlier to occur of (i) ninety (90) days after the
date of Tenant's notice to Landlord of its intention to purchase the Leased
Premises upon the terms of a Sale Contract or (ii) the closing date provided in
such Sale Contract. At such closing Landlord shall convey the Leased Premises to
Tenant in accordance with, and Tenant shall pay to Landlord the purchase price
and other consideration set forth in, the applicable contract.
(e) Tenant shall have the right during the Term to
exercise the foregoing right of first refusal upon (i) each proposed sale of the
Leased Premises prior to the seventh (7th) anniversary of the date of this Lease
and (ii) commencing with the seventh (7th) anniversary of the date of this Lease
one (1) time during the balance of the Term; provided, that if, following
compliance with the procedure described in Paragraph 34(a), a Third Party
Purchaser does not purchase the Leased Premises, such event shall not count as
an exercise of Tenant's right of first refusal. Notwithstanding anything to the
contrary, if Tenant fails to exercise the right of first refusal granted
pursuant to this Paragraph 34, after the seventh (7th) anniversary of the date
of this Lease and the sale to the Third Party Purchaser is consummated or if
this Lease terminates or the Term expires, such right shall terminate and be
null and void and of no further force and effect. In such event Tenant shall
execute a quitclaim deed and such other documents as Landlord shall reasonably
request evidencing the termination of its right of first refusal.
(f) The provisions of this Paragraph 34 shall not apply
to or prohibit (i) any mortgaging, subjection to deed of trust or other
hypothecation of Landlord's interest in the Leased Premises, (ii) any sale of
the Leased Premises pursuant to a private power of sale under or judicial
foreclosure of any Mortgage or other security instrument or device to which
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Landlord's interest in the Leased Premises is now or hereafter subject, (iii)
any transfer of Landlord's interest in the Leased Premises to a Lender,
beneficiary under deed of trust or other holder of a security interest therein
or their designees by deed in lieu of foreclosure, (iv) any transfer of the
Leased Premises to any governmental or quasi-governmental agency with power of
condemnation, (v) any transfer of the Leased Premises to any Affiliate or
subsidiary of Landlord or CPA:10, or to any fund sponsored by W.P. ▇▇▇▇▇ & Co.,
Inc., W.P. ▇▇▇▇▇ Incorporated or any of their Affiliates, (vi) any Person to
whom Landlord sells all or substantially all of its assets, or (vii) any
transfer of the Leased Premises to any of the successors or assigns of any of
the Persons referred to in the foregoing clauses (i) through (iv).
35. Economic Abandonment.
(a) Provided that an Event of Default does not exist,
Tenant shall have the right at any time after the expiration of the fifth (5th)
Lease Year to terminate this Lease with respect to any Related Premises (any
such Related Premises, an "Abandonment Premises") that shall have become
uneconomic for Tenant's continued use and occupancy in its business operations
as determined by Tenant. In the event Tenant elects to exercise such right,
Tenant shall give notice (the "Abandonment Notice") to Landlord (with a copy to
Lender) of its intention so to terminate this Lease as to the Abandonment
Premises, no later than twelve (12) months prior to the date (the "Abandonment
Date") of such intended termination, which notice shall specify the Abandonment
Date and shall contain (a) an irrevocable offer of Tenant to terminate this
Lease as to the Abandonment Premises on the Abandonment Date for the Offer
Amount and (b) a certificate of Tenant (i) stating that the Abandonment Premises
are no longer economic for Tenant's continued use and occupancy in its business
operations, (ii) specifying in reasonable detail the reasons therefor and (iii)
certifying that Tenant then intends to abandon its operations at the Abandonment
Premises, which certificate shall be conclusively binding upon Landlord and
Tenant, and (c) a resolution of the Board of Directors of Tenant authorizing
such notice.
(b) Promptly upon the delivery of such notice from Tenant
to Landlord, Landlord and Tenant shall commence to determine such Fair Market
Value in accordance with the procedure specified in Paragraph 29.
(c) Landlord shall accept or reject such offer by notice
to Tenant given not later than thirty (30) days following the determination of
Fair Market Value. If Landlord shall reject such offer, which rejection shall
not be valid unless accompanied by the written consent of Lender thereto, then
upon (i) payment of all Rent and any other sums due and unpaid hereunder as of
the Abandonment Date and (ii) compliance by Tenant with all other
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obligations and liabilities under this Lease which have arisen on or prior to
the Abandonment Date, this Lease shall terminate as to the Abandonment Premises
on the Abandonment Date and Tenant shall immediately vacate and have no further
right, title, interest or liability (except for Surviving Obligations) in or to
any of the Abandonment Premises.
(d) After the Abandonment Date, whether or not Landlord
shall have accepted or rejected Tenant's offer, the terms of this Lease will
remain in full force and effect with respect to the remaining Related Premises
except that the Basic Rent will be the percentage of the then Basic Rent which
is allocated to the remaining Related Premises as set forth on Exhibit "F"
attached hereto and made a part hereof.
(e) Unless Landlord shall have rejected such offer by the
foregoing notice to Tenant not later than the thirtieth (30th) day following the
determination of Fair Market Value, Landlord shall be conclusively presumed to
have accepted such or if the rejection is not executed by Lender. If such offer
is accepted by Landlord, Tenant shall pay to Landlord the Offer Amount on the
Abandonment Date and, provided an Event of Default does not then exist
hereunder, at the request of Tenant, Landlord shall convey to Tenant the
Abandonment Premises in accordance with the provisions of Paragraph 20.
(f) Landlord shall have the right, at Landlord's sole
option, to treat any vacating or abandonment of the Abandonment Premises which
is prohibited pursuant to Paragraph 22(a)(viii) hereof as constituting an
election by Tenant of its rights under this Paragraph 35 and as an irrevocable
offer of Tenant to purchase the Abandonment Premises at the price and upon the
terms hereinabove more specifically provided.
36. Miscellaneous.
(a) The paragraph headings in this Lease are used only
for convenience in finding the subject matters and are not part of this Lease or
to be used in determining the intent of the parties or otherwise interpreting
this Lease.
(b) As used in this Lease, the singular shall include the
plural and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien" shall
mean "lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part
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thereof or interest therein"; (vi) "any of the Land" shall mean "the Land or any
part thereof or interest therein"; (vii) "any of the Improvements" shall mean
"the Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform under
this Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except as otherwise specifically provided herein (including Paragraph
21 hereof), neither Landlord nor Tenant shall unreasonably withhold, delay or
condition its consent whenever such consent is required under this Lease. Time
is of the essence with respect to the performance by Tenant of its obligations
under this Lease.
(d) Landlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or licensee of Tenant with respect to any of
the Leased Premises or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by
Tenant on or about the effective date hereof at Landlord's request constitute
the entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating to
the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject
matter of this Lease and have each fully participated in the negotiation and
drafting of this Lease. Accordingly, this Lease shall be construed without
regard to the rule that ambiguities in a document are to be construed against
the drafter.
(f) This Lease may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land
and bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of Landlord, its successors and assigns. If there is more than one
Tenant, the obligations of each shall be joint and several.
(h) Notwithstanding any provision in this Lease to the
contrary, all Surviving Obligations of Tenant shall
-58-
61
survive the expiration or termination of this Lease with respect to any Related
Premises.
(i) If any one or more of the provisions contained in
this Lease shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(j) All exhibits attached hereto are incorporated herein
as if fully set forth.
(k) This Lease shall be governed by and construed and
enforced in accordance with the Laws of the State.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
CAN (WI) QRS 12-34, INC.,
a Wisconsin corporation
By: _________________________________
First Vice President
ATTEST: TENANT:
SILGAN CONTAINERS CORPORATION,
a Delaware corporation
By: ______________________________ By: _________________________________
Title: ___________________________ Title: ______________________________
[Corporate Seal]
-59-
62
EXHIBIT A
Oconomowoc Premises:
Parcel Three (3) of Certified Survey Map No. 8005, being a redivision of Parcel
Three (3) of Certified Survey Map No. 8004, being a redivision of Parcel Two (2)
of Certified Survey Map No. 7410, being a redivision of Parcel Two (2) of
Certified Survey Map No. 6786, being a part of the Northeast one-quarter (1/4),
Northwest one-quarter (1/4), Southeast one-quarter (1/4) and Southwest
one-quarter (1/4) of the Northwest one-quarter (1/4) of Section Fifteen (15),
and Parcel Three (3) of Certified Survey Map No. 6554, being a part of the
Northwest one-quarter (1/4) and the Southwest one-quarter (1/4) of the Northwest
one-quarter (1/4) of Section Fifteen (15), Township Seven (7) North, Range
Seventeen (17) East, in the City of Oconomowoc, Waukesha County, State of
Wisconsin recorded in the Office of the Register of Deeds for Waukesha County,
recorded on May 3, 1996 in Volume 69 of Certified Survey Maps, Pages 196 to 199
inclusive, as Document No. 2121036.
SAID LANDS ARE ALSO DESCRIBED AS:
Parcel Three (3) of CERTIFIED SURVEY MAP NO. 8055, being a redivision of Parcel
Three of Certified Survey Map No. 8044, being a redivision of Parcel Two (2) of
Certified Survey Map No. 7410, being a redivision of Parcel Two (2) of Certified
Survey Map No. 6786, being a part of the Northeast one-quarter (1/4), Northwest
one-quarter (1/4), Southeast one-quarter (1/4) and Southwest one-quarter (1/4)
of the Northwest one-quarter (1/4) of Section Fifteen (15), and Parcel Three (3)
of Certified Survey Map No. 6554, being a part of the Northwest one-quarter
(1/4) and the Southwest one-quarter (1/4) of the Northwest one-quarter (1/4) of
Section Fifteen (15), in Township Seven (7) North, Range Seventeen (17) East, in
the City of Oconomowoc, County of Waukesha, State of Wisconsin, bounded and
described as follows: Commencing at the Northwest corner of said Northwest 1/4
Section; thence South 01(degree) 16' 53" West along the West line of said 1/4
Section 1625.06 feet to a point; thence South 89(degree) 06' 49" East 1480.80
feet to a point; thence North 01(degree) 28' 09" East 160.46 feet to a point;
thence South 87(degree) 52' 44" East 326.06 feet to the point of beginning of
the lands to be described; thence continuing South 87(degree) 52' 44" East
411.00 feet to the Westerly line of Corporate Center Drive; thence South
02(degree) 07' 15" West along said Westerly line 211.95 feet to a point; thence
Southerly 308.78 feet along said Westerly line and the arc of a curve whose
center lies to the Northwest, whose radius is 338.00 feet and whose chord bears
South 28(degree) 17' 30.5" West 298.15 feet to a point; thence South 54(degree)
27' 46" West along said Westerly line 103.48 feet to a point; thence Westerly
207.28 feet along said Westerly line and the arc of a curve whose center lies to
the Northwest, whose radius is 393.42 feet and whose chord bears South
69(degree) 33' 22" West 204.89 feet to a point; thence North 01(degree) 20' 55"
East 621.43 feet to the point of beginning.
63
EXHIBIT A
Known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
Tax Key No. Part of ococ ▇▇▇-▇▇▇-▇▇▇
64
Menomonie Premises:
PARCEL A
Lot Twenty-four (24) of Certified Survey Map No. 670, as recorded in Volume 3 of
Survey Maps, Page 64; Being a part of Lot Twenty-one (21) of Certified Survey
Map No. 511; Being a part of the Southwest Quarter (SW-1/4) of the Northwest
Quarter (NW-1/4) and the Northwest Quarter (NW-1/4) of the Northwest Quarter
(NW-1/4) of Section Twenty (20), Township Twenty-eight (28) North, Range Twelve
(12) West, CITY OF MENOMONIE, ▇▇▇▇ County, Wisconsin.
ADDRESS OF PROPERTY: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TAX PARCEL NO. ▇▇▇-▇▇▇▇-▇▇ aka M1220-0221-A
PARCEL B
Lot Thirteen (13) of Certified Survey Map No. 510, as recorded in Volume 2 of
Survey Maps, Page 240; Being a part of the West One-half (W-1/2) of the
Northwest Quarter (NW-1/4) of Section Twenty (20), Township Twenty-eight (28)
North, Range Twelve (12) West, CITY OF MENOMONIE, ▇▇▇▇ County, Wisconsin;
EXCEPT the South 40 feet thereof which was formerly the North One-half (N-1/2)
of the vacated Public Street previously abutting this Lot.
ALSO
Lot Twenty-five (25) of Certified Survey Map No. 670, as recorded in Volume 3 of
Survey Maps, Page 64; Being a part of Lot Twenty-one (21) of Certified Survey
Map No. 511; Being a part of the West One-half (W-1/2)of the Northwest Quarter
(NW-1/4) of Section Twenty (20), Township Twenty-eight (28) North, Range Twelve
(12) West, CITY OF MENOMONIE, ▇▇▇▇ County, Wisconsin.
ADDRESS OF PROPERTY: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
65
TAX PARCEL NOS. ▇▇▇-▇▇▇▇-▇▇ aka M1220-0213
251-1005-10-005 aka ▇▇▇▇▇-▇▇▇▇-▇
▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇ (7) and Eight (8) of Certified Survey Map No. 512, as recorded in
Volume 2 of Survey Maps, Page 242; Being a part of the Southwest Quarter
(SW-1/4) of the Northwest Quarter (NW-1/4) of Section Twenty (20), Township
Twenty-eight (28) North, Range Twelve (12) West, CITY OF MENOMONIE, ▇▇▇▇ County,
Wisconsin.
ADDRESS OF PROPERTY: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TAX PARCEL NO. ▇▇▇-▇▇▇▇-▇▇ aka M1220-0207
66
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and
appliances of every kind and nature whatsoever now or hereafter affixed or
attached to the Leased Premises (except as hereafter provided), including all
electrical, anti-pollution, heating, lighting (including hanging fluorescent
lighting), incinerating, power, air cooling, air conditioning, humidification,
sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and
ventilating systems, devices and machinery and all engines, pipes, pumps, tanks
(including exchange tanks and fuel storage tanks), motors, conduits, ducts,
steam circulation coils, blowers, steam lines, compressors, oil burners,
boilers, doors, windows, loading platforms, lavatory facilities, stairwells,
fencing (including cyclone fencing), passenger and freight elevators, overhead
cranes and garage units, together with all additions thereto, substitutions
therefor and replacements thereof required or permitted by this Lease.
Excluding all personal property and all trade fixtures,
machinery, office, manufacturing and warehouse equipment of Tenant which are not
necessary to the operation, as buildings, of the buildings which constitute part
of the Leased Premises, including specifically without limitation the following:
Oconomowoc Premises:
1. Boiler for Process Area
2. 61 tracked shelving units located in Temperature
Storage Rooms
3. One 40 degree temperature storage unit
4. One 120 degree temperature storage unit
5. All laboratory cabinetry and fixtures including exhaust
hoods
6. One air compressor with dryer
Menomonie Premises:
1. Propane storage tanks (fuel for lift trucks)
2. Compressors, Dryers, Storage tanks and Controls for
compressed air system.
3. Phone system.
4. Racks and shelves for spare parts and tools storage.
67
EXHIBIT C
PERMITTED ENCUMBRANCES
Oconomowoc Premises:
1. General and real estate taxes for the year 1997, not yet
due and payable.
2. Reservation for utility easement as shown on the recorded
plat of Certified Survey Map No. 8005. Said easement was also shown on the
recorded Certified Survey Map Nos. 7410, 6786, 6657 and 6555 which said premises
were formerly a part, and as shown on the ALTA/ACSM Land Title Survey prepared
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated April 11, 1997 and being Survey No. 157102.
3. Reservation for drainage easement as shown on the recorded
plat of Certified Survey Map No. 8005. Said easement was also shown on the
recorded Certified Survey Map Nos. 7410, 6786, 6657 and 6555 which said premises
were formerly a part, and as shown on the ALTA/ACSM Land Title Survey prepared
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated April 11, 1997 and being Survey No. 157102.
4. Utility easement recorded on July 29, 1950 in Volume 524 of
Deeds, Page 313, as Document No. 340756.
5. Restrictions, conditions, covenants, provisions, easement,
obligations, repurchase rights and assessments contained in a Declaration of
Protective Covenants for Oconomowoc Corporate Center recorded on November 29,
1990 in Reel 1257, Image 977, as Document No. 1624247.
6. Tax Incremental District Development Agreement recorded on
November 29, 1990 in Reel 1257, Image 879, as Document No. 1624246.
7. Rights of parties in possession.
Menomonie Premises:
1. All assessments and taxes due in 1998 and thereafter, not
yet due and payable.
2. Taxes due in 1997 for the year 1996 are postponed; balance
due July 31, 1997.
68
EXHIBIT C
3. The lien of special taxes or assessments, if any, due in
1998 and thereafter, not yet due and payable.
4. Easement to construct, operate and maintain lines for the
transmission of electrical energy as granted to Northern States Power Company,
dated May 16, 1974 and recorded March 8, 1979, in Vol. 284 Records, Page 230, as
Document #327564.
5. Avigation Easement as shown on Map of Survey recorded
August 16, 1993, in Vol. 514 Records, Page 216, as Document #404895, and as
shown on Map of Survey by Cedar Corp. dated April 17, 1997, last revised May 5,
1997.
6. Avigation Easement as shown on Map of Survey recorded
August 16, 1993, in Vol. 514 Records, Page 218, as Document #404896, and as
shown on Map of Survey by Cedar Corp. dated April 17, 1997, last revised May 5,
1997.
7. Building setback lines as shown on Map of Survey by Cedar
Corp. dated April 17, 1997, last revised May 5, 1997.
8. Rights of parties in possession.
69
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent. Subject to the adjustments provided for in
Paragraphs 2, 3 and 4 below, Basic Rent payable in respect of the Term shall be
$893,200 per annum, payable quarterly in advance on each Basic Rent Payment
Date, in equal installments of $223,300 each.
2. CPI Adjustments to Basic Rent. The Basic Rent shall be
subject to adjustment, in the manner hereinafter set forth, for increases in the
index known as United States Department of Labor, Bureau of Labor Statistics,
Consumer Price Index, All Urban Consumers, United States City Average, All
Items, (1982-84=100) ("CPI") or the successor index that most closely
approximates the CPI. If the CPI shall be discontinued with no successor or
comparable successor index, Landlord and Tenant shall attempt to agree upon a
substitute index or formula, but if they are unable to so agree, then the matter
shall be determined by arbitration in accordance with the rules of the American
Arbitration Association then prevailing in New York City. Any decision or award
resulting from such arbitration shall be final and binding upon Landlord and
Tenant and judgment thereon may be entered in any court of competent
jurisdiction. In no event will the Basic Rent as adjusted by the CPI adjustment
be less than the Basic Rent in effect for the five (5) year period immediately
preceding such adjustment.
3. Effective Dates of CPI Adjustments. Basic Rent shall not be
adjusted to reflect changes in the CPI until the fifth (5th) anniversary of the
Basic Rent Payment Date on which the first full monthly installment of Basic
Rent shall be due and payable (the "First Full Basic Rent Payment Date"). As of
the fifth (5th) anniversary of the First Full Basic Rent Payment Date and
thereafter on the tenth (10th) and, if the initial Term is extended, on the
fifteenth (15th), twentieth (20th), twenty-fifth (25th) and thirtieth (30th)
anniversaries of the First Full Basic Rent Payment Date, Basic Rent shall be
adjusted to reflect increases in the CPI during the most recent five (5) year
period immediately preceding each of the foregoing dates (each such date being
hereinafter referred to as the "Basic Rent Adjustment Date").
4. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date when the
average CPI determined in clause (i) below exceeds the Beginning CPI (as defined
in this Paragraph 4(a)), the Basic Rent in effect immediately prior to the
applicable Basic Rent Adjustment Date shall be multiplied by a fraction, the
numerator of which shall be the difference between (i) the average CPI for the
three (3) most recent calendar months (the "Prior Months")
70
ending prior to such Basic Rent Adjustment Date for which the CPI has been
published on or before the forty-fifth (45th) day preceding such Basic Rent
Adjustment Date and (ii) the Beginning CPI, and the denominator of which shall
be the Beginning CPI. An amount equal to the lesser of (A) the product of such
multiplication or (B) the product of the Basic Rent in effect immediately prior
to such Basic Rent Adjustment Date multiplied by 21.66% shall be added to the
Basic Rent in effect immediately prior to such Basic Rent Adjustment Date. As
used herein, "Beginning CPI" shall mean the average CPI for the three (3)
calendar months corresponding to the Prior Months, but occurring five (5) years
earlier. If the average CPI determined in clause (i) is the same or less than
the Beginning CPI, the Basic Rent will remain the same for the ensuing five (5)
year period.
(b) Notice of the new annual Basic Rent shall be
delivered to Tenant on or before the tenth (10th) Business Day preceding each
Basic Rent Adjustment Date.
(c) Effective as of a given Basic Rent Adjustment Date,
Basic Rent payable under this Lease until the next succeeding Basic Rent
Adjustment Date shall be the Basic Rent in effect after the adjustment provided
for as of such Basic Rent Adjustment Date.
71
EXHIBIT E
PERCENTAGE ALLOCATION OF BASIC RENT
Menomonie Premises 48%
Oconomowoc Premises 52%
100%
----
If either of the Related Premises ceases to be subject to this Lease, the
percentage shown on this Exhibit "F" for the remaining Related Premises which
remains subject to this Lease shall be 100%.
72
EXHIBIT F
TERMINATION VALUES
Lease Year Termination Value
1 $8,523,000
2 $8,523,000
3 $8,523,000
4 $8,523,000
5 $8,523,000
6 $8,405,000
7 $8,365,500
8 $8,340,250
9 $8,310,500
10 $8,288,000
11 $8,255,500
12 $8,233,000
13 $8,228,000
14 $8,173,000
15 and thereafter $8,140,000
The Termination Value allocable to the Menomonie Premises shall be 48% of the
applicable Termination Value specified above, and the Termination Value
allocable to the Oconomowoc Premises shall be 52% of the applicable Termination
Value specified above.
73
EXHIBIT G
POST-CLOSING OBLIGATIONS
Oconomowoc Premises.
No later than September 1, 1997 Tenant shall cause a sealant material
to be placed in the gap between the floor and the walls in the hazardous
materials storage room to reduce the likelihood of any release to soil or
groundwater as recommended by Park Corporation in the Phase I Reports dated
April 17, 1997 ("Park Recommendation").
Menomonie Premises.
No later than September 1, 1997 Tenant shall implement the Park
Recommendation for secondary containment around hazardous materials storage
areas.