EXHIBIT 10.17
LEASE AGREEMENT
by and between
▇▇▇▇▇ (PA) QRS 11-36
and
▇▇▇▇▇ (PA) QRS 12-10
each a Pennsylvania business trust
collectively, as LANDLORD
and
DEL MONTE CORPORATION,
a New York corporation,
as TENANT
Premises: Yakima, Washington
Dated as of: October 24, 2001
Table of Contents
Page
1. Demise of Premises ................................................ 1
2. Certain Definitions................................................ 1
3. Title and Condition ............................................... 8
4. Use of Leased Premises; Quiet Enjoyment ........................... 9
5. Term .............................................................. 9
6. Basic Rent ........................................................ 10
7. Additional Rent ................................................... 10
8. Net Lease; Non-Terminability....................................... 11
9. Payment of Impositions ............................................ 12
10. Compliance with Laws, Easement Agreements and Railroad Ground
Lease; Environmental Matters ...................................... 13
11. Liens; Recording .................................................. 15
12. Maintenance and Repair ............................................ 15
13. Alterations and Improvements ...................................... 15
14. Permitted Contests ................................................ 16
15. Indemnification ................................................... 17
16. Insurance ......................................................... 18
17. Casualty and Condemnation ......................................... 20
18. Termination Events ................................................ 22
19. Restoration; Reduction of Rent .................................... 23
20. Procedures Upon Purchase .......................................... 24
21. Assignment and Subletting ......................................... 25
22. Events of Default ................................................. 28
23. Remedies and Damages Upon Default ................................. 30
24. Notices ........................................................... 33
25. Estoppel Certificate .............................................. 33
26. Surrender.......................................................... 33
27. No Merger of Title ................................................ 34
28. Books and Records ................................................. 34
29. Determination of Value ............................................ 35
30. Non-Recourse as to Landlord ....................................... 37
31. Financing.......................................................... 37
32. Subordination ..................................................... 38
33. Tax Treatment; Reporting .......................................... 38
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Table of Contents
(continued)
Page
34. Financing Major Alterations ...................................... 38
35. INTENTIONALLY DELETED ............................................ 39
36. Economic Abandonment ............................................. 39
37. Option to Purchase ............................................... 39
38. Right of First Refusal ........................................... 40
39. Miscellaneous .................................................... 41
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EXHIBITS
Exhibit "A" ......................................................- Premises
Exhibit "B" .......................................- Machinery and Equipment
Exhibit "C" ............................- Schedule of Permitted Encumbrances
Exhibit "D" ................................................ - Rent Schedule
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LEASE AGREEMENT, made as of this ______day of October, 2001, between
▇▇▇▇▇ (PA) QRS 11-36 and ▇▇▇▇▇ (PA) QRS 12-10, each a Pennsylvania business
trust (collectively, "Landlord"), with its principal place of business c/o W.P.
▇▇▇▇▇ & Co LLC, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
DEL MONTE CORPORATION, a New York corporation ("Tenant"), with an address at
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Landlord and Tenant entered into that certain Lease Agreement
dated as of October 31,1995 for property situate in Mendota, Illinois,
Toppenish, Washington, Plover, Wisconsin, and Yakima, Washington, as amended by
that certain First Amendment to Lease Agreement made as of June 28, 1996, that
certain Second Amendment to Lease made as of October 31, 1996, that certain
Third Amendment to Lease Agreement made as of June 24, 1997 and that certain
Fourth Amendment to Lease Agreement dated as of the date hereof (the "Original
Lease"); and
WHEREAS, Landlord and Tenant now desire to amend the Original Lease in
order to remove the demised premises in Yakima, Washington, and to enter into
this Lease for the demised premises in Yakima, Washington, such that the
Original Lease would now apply to the property situate in Mendota, Illinois,
Toppenish, Washington, and Plover, Wisconsin and this Lease would apply to the
property situate in Yakima, Washington.
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. The Leased Premises shall be comprised of one
(1) parcel of Land, Improvements constructed thereon by Landlord and Equipment
installed therein by Landlord, all as set forth in this Lease. 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 as the "Leased Premises" which
premises is more particularly described 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
constructed or to be constructed on the Land by Landlord (collectively, the
"Improvements"); and (c) the fixtures, machinery, equipment, including conveyor
equipment, and other property to be installed in the Improvements by Landlord
described in Exhibit "B" hereto (collectively, the "Equipment").
2. Certain Definitions.
"Abandonment Date" shall mean the Abandonment Date as defined in
Paragraph 36.
"Abandonment Notice" shall mean Abandonment Notice as defined in
Paragraph 36.
"Abandonment Offer Amount" shall mean the Abandonment Offer
Amount as defined in Paragraph 36.
"Abandonment Premises" shall mean the Abandonment Premises as
defined in Paragraph 36.
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"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways, curbs,
gores and vault spaces adjoining the Leased Premises and which Tenant has the
legal obligation to maintain.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition and otherwise in this
Lease, a Person shall be deemed to control another Person if the controlling
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the other Person only through the
ownership of voting securities (but not by contract or otherwise).
"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 and shall include any Major Alterations.
"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.
"Assumable Loan" shall mean Assumable Loan as defined in
Paragraph 38.
"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.
"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.
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean written notice or knowledge of
the institution of or intention to institute any proceeding for Condemnation.
"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.
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
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"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).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect the Leased Premises.
"Environmental Law" shall mean (i) whenever enacted or
promulgated, any applicable federal, state, foreign or 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 or damage 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 negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations for 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, or could reasonably be expected to result, in any material
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, or could reasonably be
expected to result, in any material 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 on or from the Leased Premises of any barrels,
drums, containers or other receptacles containing any Hazardous Substances in
violation of any Environmental Laws, (d) any activity, occurrence or condition
under any Environmental Law which results, or could reasonably be expected to
result, in any material liability, cost or expense to Landlord or Lender or any
other owner or occupier of the Leased Premises, or which results, or could
result, in a
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creation of a lien on the Leased 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).
"Expiration Date" shall mean Expiration Date as defined in
Paragraph 5.
"Fair Market Value" shall be as defined 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.
"Ground Lessor" shall mean the Burlington Northern Railroad
Company, a Delaware corporation and Washington Central Railroad Company, a
Washington corporation.
"Guarantor" shall mean Del Monte Foods Company, a Maryland
corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement dated
as of the date hereof from Guarantor to Landlord guaranteeing the payment and
performance by Tenant of all of Tenant's obligations under the Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance in violation of any Environmental Law; (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) in
violation of any Environmental Law or in excess of any reportable quantity;
(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 could reasonably
be expected to give rise to 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 subject to regulations under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. 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.
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"Impositions" shall mean the Impositions as defined in Paragraph
9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1 and shall include any Major Alterations.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Initial Term" shall mean Initial Term as defined in Paragraph 5.
"Initial Term Commencement Date" shall mean Initial Term
Commencement Date as defined in Paragraph 5.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Landlord Encumbrances" shall mean any defects in title or
matters affecting title to the Leased Premises created by Landlord, except for
the Mortgage and Assignment and defects or matters created at the request of,
with the concurrence of or as a result of any act of Tenant.
"Landlord's Share of Project Costs" shall mean $1,737,754.79.
"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 Initial Term Commencement Date and ending at
midnight on the last day of the twelfth (12th) consecutive calendar month
following the month in which the Initial Term 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 any of the Leased Premises, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or restoration
of any of the Leased 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.
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may make a Loan to Landlord or is the holder of
any Note.
"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.
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"Major Alterations" shall mean Major Alterations as defined in
Paragraph 34.
"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, singly or collectively, any one or more
mortgages or deeds of trust from Landlord to a Lender or a trustee for the
benefit of 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 (1), (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 Assignment" shall have the meaning set forth in
Paragraph 21.
"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 the greater of (a) Fair Market Value or
(b) the sum of the Landlord's Share of Project Costs for the Leased Premises and
any Prepayment Premium which Landlord will be required to pay in prepaying the
Loan with proceeds of the Offer Amount.
"Original Lease" shall mean Original Lease as defined in the
Recitals.
"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).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"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, 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, however, that Tenant shall not be required to
pay the Prepayment Premium on any amount in excess of $500,000.
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"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.
"Railroad Ground Lease" shall mean that certain Term Lease (Lease
No. 524,245) made May 1, 1996 between Burlington Northern Railroad Company and
Washington Central Railroad Company, as lessor, and Tenant, as lessee, for a
portion of the Leased Premises, as assigned to Landlord by that certain
Assignment of Lease dated June 27, 1996 by Burlington Northern Railroad Company
and Washington Central Railroad Company.
"Relevant Amount" shall mean the Offer Amount, the Termination
Amount or the Default Termination 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 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), (e) the Fair Market Value Date in the event Tenant exercises its
option to purchase the Leased Premises pursuant to Paragraph 37, or (f) with
respect to a Non-Preapproved Assignment, the earlier of the date on which
Landlord issues notice of the Non-Preapproved Assignment to Tenant or the date
that is immediately prior to the date on which the Non-Preapproved Assignment
occurs.
"Remaining Sum" shall mean Remaining Sum as defined in Paragraph
19(c).
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased Premises by any
governmental authority, civil or military, whether pursuant to an agreement with
such governmental authority in settlement of or under threat of any such
requisition or confiscation, or otherwise.
"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).
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"State" shall mean the State of Washington.
"Surviving Obligations" shall mean any obligations of Tenant
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 (1) 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 (iii) by any other means, 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 Leased Premises.
"Term" shall mean the Initial Term and any extensions thereof.
"Termination Amount" shall mean the greater of (a) Fair Market
Value or (b) the sum of the Landlord's Share of Project Costs for the Leased
Premises, 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).
"Third Party Purchaser" shall mean the Third Party Purchaser as
defined in Paragraph 21(h).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to (1) the
rights of any Persons in possession of the Leased Premises, (ii) the existing
state of title of any of the Leased Premises, including any Permitted
Encumbrances, (iii) any state of facts which an accurate survey or physical
inspection of the Leased Premises might show, (iv) all Legal Requirements,
including any existing violation of any thereof, and (v) the condition of the
Leased Premises as of the commencement of the Term, without representation or
warranty by Landlord except as to Landlord Encumbrances.
(b) 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
(EXCEPT
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THAT LANDLORD REPRESENTS AND WARRANTS THAT THERE ARE NO LANDLORD ENCUMBRANCES),
(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
LANDLORD HAS NO OBLIGATION WITH RESPECT TO CONSTRUCTION OF THE IMPROVEMENTS. IN
THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY
NATURE, WHETHER LATENT OR PATENT, LANDLORD AND LENDER SHALL NOT HAVE ANY
RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY 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 OR LENDER, 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. TENANT DOES NOT WAIVE ANY CLAIM AGAINST ANY PARTY EXCEPT LANDLORD AND
LENDER UNDER THE FOREGOING LANGUAGE.
(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 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) the
Improvements conform to all material Legal Requirements and all Insurance
Requirements, (iii) all easements necessary for Tenant's use or operation of
each Leased Premises have been obtained, (iv) subject to Tenant's rights under
Paragraph 14 all contractors and subcontractors who have performed work on or
supplied materials to the Leased Premises shall have been fully paid, and all
materials and supplies have been fully paid for, and (v) all Equipment necessary
or appropriate for Tenant's use or operation of the Leased Premises shall have
been installed and shall be operational.
(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 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 Leased Premises for commercial or
industrial uses and for no other purpose without the prior written consent of
Landlord. 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 be reasonably likely to (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 quietly hold, occupy and enjoy the
Leased Premises
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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 noncompliance 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 provision hereof, Tenant shall have and hold the
Leased Premises for an initial term (such initial term as extended or renewed in
accordance with the provisions hereof being called herein the "Initial Term")
commenced on October ____, 2001 ("Initial Term Commencement Date"). Subject to
the provisions hereof, the Initial Term shall expire on June 30, 2016
("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 Tenant shall have the right on
the Expiration Date and on the tenth (10th), twentieth (20th) and thirtieth
(30th) anniversaries of the Expiration Date (the Expiration Date and each such
anniversary being a "Renewal Date"), to extend the Term for an additional period
of ten (10) years (each such period being referred to herein as "Renewal Term"),
upon written notice to Landlord in recordable form at least one (1) year prior
to the next Renewal Date (each such notice, a "Renewal Notice") that Tenant is
extending this Lease as of the next Renewal Date for the next Renewal Term. If
Tenant fails to provide any Renewal Notice, Landlord shall provide to Tenant a
reminder notice that Tenant has failed to provide the required Renewal Notice,
and Tenant shall have thirty (30) days after receipt of such reminder notice to
give the required Renewal Notice, time being of the essence. 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.
(c) If Tenant does not exercise its option pursuant to Paragraph
5(b) to extend the Term, or if an Event of Default occurs, 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) upon reasonable prior notice to Tenant show any of the Leased Premises
to prospective purchasers or tenants or their agents at such reasonable times
during business hours as Landlord may select.
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") and on the dates described in Paragraph 1 of
Exhibit "D" (each such date being a "Basic Rent Payment Date"). Basic Rent shall
be paid to Landlord at its address set forth above and/or to such one other
Person, 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) in
funds available to Landlord or such other Person on each Basic Rent Payment
Date.
7. Additional Rent.
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(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, and all reasonable costs and expenses of 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 (including any contest or prosecution in connection therewith) under
insurance covering any of the Leased Premises, (F) the prosecution or defense of
any litigation related to the Leased Premises, this Lease, or the sale of the
Leased Premises to Landlord and arising from an act or omission of Tenant
provided, however, that in the event of legal action between Landlord and Tenant
where Tenant is the prevailing party, Landlord shall pay Tenant's reasonable
costs and attorneys' fees, (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 and reasonable internal Costs of Landlord
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 written request of Tenant, or incurred in connection with any
act of Landlord performed on behalf of Tenant if Tenant is obligated to take
such action under this Lease and has refused to do so within the period required
herein or if no such period is specified, within a reasonable time following
notice from Landlord, and (J) 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 ("Late Charge") equal to five percent
(5%) of the amount of such unpaid installment or portion thereof, provided,
however, that with respect to the first late payment in any Lease Year the Late
Charge shall not be due and payable unless two (2) days have elapsed following
telephonic notice followed by facsimile notice that such payment has not been
received;
(iii) a sum equal to any additional sums (including any late
charge, 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; and
(iv) interest at the rate (the "Default Rate") of three percent
(3%) 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 Tenant has received notice that any such amount has become overdue.
(b) 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 thirty (30) days after Landlord's demand for payment thereof, and
(ii) any other Additional Rent, within thirty (30) days after Landlord's demand
for payment thereof.
(c) In no event shall amounts payable under Paragraph 7(a)(ii),
(iii) and (iv) exceed the maximum amount permitted by applicable Law.
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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. 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 the any of Leased Premises, all ground rents
and all other public charges whether of a like or different nature, even if
unforeseen or extraordinary, imposed upon or assessed against (i) Tenant's
possessory interest in the Leased Premises, (ii) any of the Leased Premises,
(iii) 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
(iv) any Lender by reason of any Note, Mortgage, Assignment or other document
evidencing or securing a Loan and which (as to this clause (iv)) Landlord has
agreed to pay and that is normal and customary for similar financings
(collectively, the "Impositions"); provided, that nothing herein shall obligate
Tenant to pay (A) income, 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
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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), (B) any estate, inheritance, succession, gift or similar tax imposed
on Landlord or Lender or (C) any capital gains or other tax imposed on Landlord
in connection with the sale of the Leased Premises to any Person, except for any
transfer or recording tax payable in connection with a sale to Tenant or its
designee. If any Imposition may be paid in installments without interest or
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) receipts for payment of all taxes required
to be paid by Tenant hereunder within thirty (30) days after the due date
thereof and (2) within thirty (30) days following Landlord's request, (A) copies
of all settlements and notices pertaining to the Impositions which may be issued
by any governmental authority and (B) receipts for payment of all other
Impositions.
(b) Landlord shall have the right during the existence of an Event
of Default to require Tenant to pay to Landlord or Lender, if required by the
terms of any Mortgage, an additional monthly sum (each an "Escrow Payment")
sufficient to pay the Escrow Charges (as herein 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 determine the amount of the Escrow Charges and of
each Escrow Payment. As long as the Escrow Payments are being held by Landlord
and not Lender, the Escrow Payments shall not be commingled with other funds of
Landlord or other Persons and interest shall accrue thereon for the benefit of
Tenant and which shall serve as additional security for the obligations of
Tenant hereunder from the date such monies are received by or on behalf of
Landlord to the date such monies are disbursed to pay 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 or Lender,
as the case may be.
10. Compliance with Laws, Easement Agreements and Railroad Ground Lease;
Environmental Matters.
(a) Tenant shall, at its expense, be in material compliance with and
conform to, and cause the Leased Premises and any other Person occupying any
part of the Leased Premises to be in material compliance with and conform to,
all Insurance Requirements and Legal Requirements (except that Tenant and the
Leased Premises shall be in absolute compliance with all applicable
Environmental Laws pertaining to the Leased Premises). 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 by, discharge and perform all of the covenants, conditions
and agreements contained in the Railroad Ground Lease and 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 consent shall not be unreasonably conditioned. If Landlord fails to
respond to any request for consent to any such alteration, modification,
amendment or termination of an existing Easement Agreement, or for consent to
any new Easement Agreement, in any case within ten (10) days after receipt of
Tenant's request therefor, Landlord shall be deemed to have given such consent.
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Any such Easement Agreement, as altered, modified or amended, or any such new
Easement Agreement, shall automatically be a Permitted Encumbrance.
(c) Not more frequently than once every three (3) years and at any
other time required by a Lender or if in the opinion of Landlord or Lender, a
reasonable basis exists to believe that an Environmental Violation exists, upon
prior written notice from Landlord, Tenant shall permit such professional
environmental consultants as Landlord may designate ("Site Reviewers") to visit
the Leased Premises at reasonable times and upon reasonable prior notice to
Tenant and perform 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 reasonably be expected to result in any Environmental Violation.
Such Site Assessments may include both above and, if a reasonable basis exists
to believe that an Environmental Violation exists or if reasonably recommended
by a Site Reviewer, below the ground testing for Environmental Violations and
such other tests (other than below the ground or groundwater testing except as
permitted above) 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. Not more frequently than once every
three (3) years during the Term Tenant shall pay up to $7,000 of the Cost of a
Phase I Site Assessment for the Leased Premises except that, if an Environmental
Violation is found to exist, Tenant shall pay all of the costs of performing and
reporting any Site Assessments required by Landlord or Lender with respect to
such Environmental Violation.
(d) If an Environmental Violation occurs or is found to exist and,
in Landlord's reasonable judgment, the cost of remediation of the same is likely
to exceed $500,000, Tenant shall provide to Landlord, within ten (10) days after
Landlord's request therefor, reasonable financial assurances that Tenant will
effect such remediation in accordance with applicable Environmental Laws.
(e) Notwithstanding any other provision of this Lease, if an
Environmental Violation occurs or is found to exist with respect to the Leased
Premises that in the reasonable opinion of Landlord causes the fair market
rental value of the Leased Premises to be less than would otherwise be the case
and the Term would otherwise terminate or expire, then, at the option of
Landlord, the Term shall be automatically extended beyond the date of
termination or expiration and this Lease shall remain in full force and effect
but at a monthly rent equal to the fair market rental value of the Leased
Premises absent such Environmental Violation beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) If, in Landlord's reasonable discretion, Tenant fails to
promptly commence to comply and diligently pursue compliance 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, at
Tenant's expense (but no obligation), to take any and all actions as Landlord
shall deem reasonably necessary or advisable in order to cure such Environmental
Violation.
(g) Tenant shall notify Landlord immediately after becoming aware of
any violation of any Environmental Law or other material Environmental Violation
(or alleged violation of any Environmental Law or other material Environmental
Violation) and upon the request of Landlord shall forward to Landlord
immediately upon receipt thereof copies of all
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orders, reports, notices, permits, applications or other communications relating
to any such violation.
(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 comparable to the covenants contained in this
Paragraph 10(b), (c), (f) and (g).
(i) Tenant, at its sole cost and expense, will at all times and
faithfully abide by, discharge and perform all of the covenants, conditions,
and agreements contained in the Railroad Ground Lease and will not alter,
modify, amend or terminate or attempt to alter, modify, amend or terminate the
Railroad Ground Lease, or give any consent or approval thereunder without in
each case prior written consent of Landlord.
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 and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord. NOTICE IS
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 the Leased Premises and the
Adjoining Property in as good repair and appearance as each is in on the Initial
Term Commencement Date and fit to be used for their intended use in accordance
with recognized industry standards and, in the case of the Equipment, in good
mechanical condition, in all cases except for ordinary wear and tear. Tenant
shall take every other reasonable action necessary or appropriate for the
preservation and safety of the Leased 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 the Leased Premises or Adjoining Property in any
way, and 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.
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(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 (iv) impair the
rights of others in, to or under any of the foregoing, Tenant shall, promptly
after receiving a demand to remove or correct such condition from a Person
entitled to make such demand, 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 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 Alterations or a series of
related Alterations that, as to any such Alterations or series of related
Alterations, do not cost in excess of $1,000,000 with respect to the Leased
Premises and to install Equipment in the Improvements or accessions to the
Equipment that, as to such Equipment or accessions, do not cost in excess of
$1,000,000, 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 or Equipment or accessions thereto is in excess of
the amounts specified above, 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
costing in excess of $1,000,000 without having first obtained the prior written
consent of Landlord and Lender, such consent not to be unreasonably withheld,
conditioned or delayed. If Landlord or Lender fails to respond to any written
request for consent within thirty (30) days after receipt of such consent, such
consent shall be deemed given.
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or
Paragraph 34 or as required by Paragraph 12 or 17 (such Alterations and actions
being hereinafter collectively referred to as "Work"), then (1) as to Work other
than Work done pursuant to a Legal Requirement, 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 function in a manner that is the better of
(A) the functioning of the Equipment or parts being replaced or, (B) the
functioning of similar Equipment or parts in other warehouses owned or used by
Tenant, (vi) subject to Tenant's rights under Paragraph 14, Tenant shall
promptly discharge or remove all liens filed against any of the Leased Premises
arising out of such Work, (vii) Tenant shall procure and pay for all permits and
licenses required in connection with any such Work, (viii) all such Work (except
for additions that are paid for by Tenant and can be readily removed without
substantial damage to the Improvements and are not a replacement for any of the
Improvements or Equipment) shall be the property of Landlord and shall be
subject to this Lease, and Tenant shall execute and deliver to Landlord any
document. 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 reasonably requested by Landlord or required by this
Lease, with the provisions of Paragraph 19(a), whether or not such Work involves
restoration of the Leased Premises.
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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, (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b) or (d) comply with any Legal Requirements (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, validity or interpretation 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 (1) 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 material interference with the use or occupancy of any of
the Leased Premises, (iv) any interference with the payment of any Rent, (v) the
cancellation or increase in the rate of any insurance policy or a statement by
the carrier that coverage will be denied or (vi) the enforcement or execution of
any injunction, order or Legal Requirement with respect to the Permitted
Violation. If the amount being contested is reasonably estimated by Landlord to
be in excess of Two Hundred Fifty Thousand Dollars ($250,000) or if otherwise
required by the terms of the Mortgage, Tenant shall provide Landlord security
which is satisfactory in Landlord's reasonable judgment, to assure that such
Permitted Violation is corrected if Tenant's contest is unsuccessful, including
all Costs, interest and penalties that may reasonably be expected to 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 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 civil or criminal liability.
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") for, from and against any and all liabilities, losses, damages.
(including punitive damages), penalties, Costs (including attorneys, fees and
costs), causes of action, suits, claims, demands or judgments of any nature
whatsoever, howsoever caused, without regard to the form of action and whether
based on strict liability, gross negligence, negligence or any other theory of
recovery at law or in equity (other than those based on the gross negligence or
willful misconduct of such Indemnitee or based on activities by such Indemnitee
in connection with the sale or reletting of the Leased Premises to any Person
except a sale to Tenant or its designee and except for activities that are based
on representations by or obligations and liabilities of Tenant or Guarantor),
arising from (i) any matter 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
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provision of this Lease, any contract or agreement to which Tenant is a party
and which relates to the Leased Premises, any Legal Requirement or any Permitted
Encumbrance or (iv) any alleged, threatened 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, (13)
liability for costs and expenses of abatement, correction or cleanup, 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 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 at its
expense and defend such action (it being understood that Landlord may employ
counsel of its choice to monitor the defense of any such action) and (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.
(c) The obligations of Tenant under this Paragraph 15 shall survive
any termination, expiration or rejection in bankruptcy of this Lease.
(d) For the sole purpose of effecting the indemnification
obligations under this Lease and not for the benefit of any employees of Tenant
or Guarantor or any third parties unrelated to the parties indemnified under
this Lease Tenant specifically and expressly waives any immunity that may be
granted it under the Washington State Industrial Insurance Act, Title 51 RCW.
(Tenant's Initials:____). Further the indemnification obligations under this
Lease shall not be limited in any way by any limitation on the amount or type of
damages, compensation or benefits payable to or for any third party under Worker
Compensation Acts, Disability Benefit Acts or other employee benefit acts.
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 the Leased Premises are in a flood
zone) and earthquake coverage (to the extent the Leased Premises are in a
critical earthquake zone) in amounts not less than the actual replacement cost
of the Improvements and Equipment, subject to a deductible or self-insurance
retention not to exceed $500,000 except that with respect to earthquake
coverage, the deductible or self-insurance retention shall not exceed 5% of
replacement cost as long as such insurance is available. Such policies shall
contain Replacement Cost and Agreed Amount Endorsements.
(ii) Commercial general liability and automobile liability
insurance 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, subject to a
deductible or self-insurance retention not to exceed $500,000 including but not
limited to garagekeepers liability, non-owned and hired automobile
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liability and all other coverage extensions that are usual and customary for
properties of this size and type provided, however, that the Landlord shall have
the right to require such higher limits, up to a maximum of $50 million, 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 including but not
limited to service interruption, expediting expenses, ammonia contamination,
hazardous clean-up and comprehensive object definition, in an amount not less
than $15,000,000, subject to a deductible or self-insurance retention not to
exceed $500,000 for damage to property resulting from such covered perils as
found in a standard comprehensive boiler & machinery policy.
(v) Business income/interruption insurance to include loss of
rents at limits sufficient to cover 100% of the annual rental income on an
actual loss sustained basis with a period of indemnity not less than one year
from the time of loss, subject to deductible or self-insurance retention not to
exceed $500,000.
(vi) During any period in which substantial Alterations at the
Leased 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.
(vii) Such other insurance which at the time is usual and
commonly obtained in connection with properties similar 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:VIII or above (provided that any
carrier providing such insurance which is not rated by Best shall also be deemed
acceptable unless Landlord objects to such carrier within ten (10) days of
receipt of notice by Landlord that such carrier is providing coverage). The
insurance policies shall be in amounts sufficient at all times to satisfy any
coinsurance requirements thereof, unless such coinsurance requirements are
waived in writing by the insurer. The insurance referred to in Paragraphs
16(a)(i), 16(a)(iv) and 16(a)(vi) shall name Landlord, Lender and Tenant as loss
payees and as their interests may appear. 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, Tenant shall immediately obtain new or
additional insurance in compliance with Paragraph 16(a).
(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 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 written notice to
Landlord and Lender. Each such policy shall also provide that any loss otherwise
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payable thereunder with respect to the Leased Premises 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 Landlord's fee simple interest in 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 thereof prior to the expiration date of such
policy, and shall promptly deliver to Landlord copies of all such insurance
certified by a senior officer of Tenant to be true and correct.
(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 comply with the provisions of this Paragraph 16. A
copy of each such "blanket" or umbrella policy certified by a senior officer of
Tenant to be true and correct shall promptly be delivered to Landlord.
(f) Replacement costs of Improvements and Equipment may be
redetermined not more frequently than once every twelve (12) months at the
Landlord's request and shall be determined based on insurance carrier trends for
corporations of established reputation engaged in the same or similar business
of the Tenant.
(g) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii) all
reasonable requirements of the insurers thereunder applicable to Landlord,
Tenant (in connection with the Leased Premises) 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 copies thereof
certified by a senior officer of Tenant.
(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) The insurance referred to in Paragraphs 16(a)(i), 16(a)(iv)
and 16(a)(vi) shall name Landlord, Lender and Tenant as loss payees, as their
interests 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 Tenant as insured and Lender and Landlord as
loss payees to the extent of amounts payable by Tenant under the Lease.
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(ii) Each insurer is hereby authorized and directed to make
payment of insurance proceeds in excess of $500,000, or if an Event of Default
exists, in any amount directly to Landlord or, if required by the Mortgage or
requested by Lender pursuant to 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. If no Event of Default
exists, proceeds up to and including $500,000 shall be paid directly to Tenant.
17. Casualty and Condemnation.
(a) If any Casualty occurs the insurance proceeds for which is
reasonably estimated by Tenant to be equal to or in excess of One Hundred
Thousand Dollars ($100,000), Tenant shall give Landlord and Lender immediate
nonce 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) 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 if the amount of
any such claim is in excess of Five Hundred Thousand Dollars ($500,000). Any
adjustment, settlement or compromise of any such claim in excess of $500,000
shall be subject to the prior written approval of Landlord, which shall not be
unreasonably withheld, conditioned or delayed. Landlord shall have the right to
prosecute or contest any such claim, adjustment, settlement or compromise and,
in connection therewith, Tenant hereby irrevocably assigns to Landlord any and
all interest it has or may have in such claim. 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 or 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 in excess of $500,000 directly to Landlord or, if required by the
Mortgage or requested by Landlord or Lender pursuant to 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. Landlord and Lender are authorized to
collect, settle and compromise, in their discretion (and, if no Event of Default
exists, upon notice to Tenant), the amount of any Net Award. Provided that no
Event of Default has occurred and is continuing, Tenant shall be entitled to
participate with Landlord and Lender in any Condemnation proceeding or
negotiations under threat thereof and 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 and Lender, 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.
(c) If any Partial Casualty (whether or not insured against) or
Partial Condemnation shall occur, this Lease shall continue, notwithstanding
such event, and there shall
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be no abatement or reduction of any Monetary obligations, except as provided in
Paragraph 19(c). 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 practicable 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). Upon the receipt
by Landlord of the entire Net Award of such Partial Casualty or Partial
Condemnation, Landlord shall make such Net Award available to Tenant for
restoration in accordance with and subject to the provisions of Paragraph 19(a).
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.
18. Termination Events.
(a) If (i) all of the Leased Premises shall be taken by a Taking
or (ii) any substantial portion of any Leased Premises shall be taken by a
Taking or all or any substantial portion of the Leased 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 Lease
Premises or (iii) Landlord receives notice from Ground Lessor that Ground Lessor
is exercising its right under Section 11(b) of the Railroad Ground Lease to
terminate the Ground Lease or (iv) the holder of any mortgage encumbering the
interest of Ground Lessor commences to foreclose or otherwise acquire the
interest of Ground Lessor in the Leased Premises (each of the events described
in the above clauses (i), (ii), (iii) and (iv) shall hereinafter be referred to
as a "Termination Event"), then (x) in the case of (i) and (iii) above, Tenant
shall be obligated, within thirty (30) days after Tenant receives a Condemnation
Notice or within thirty (30) days after Tenant receives a termination notice
from Ground Lessor, as the case may be, and (y) in the case of (iv) above within
ten (10) days after Tenant receives notice that any such holder has commenced to
foreclose or otherwise acquire Ground lessor's interest in the Leased Premises,
and (z) in the case of (ii) above, Tenant shall have the option, within thirty
(30) days after Tenant receives a Condemnation Notice or thirty (30) 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 in the form
described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease on the first Basic Rent Payment Date which
occurs at least thirty (30) days after the Fair Market Value Date (the
"Termination Date"), (ii) a binding and irrevocable offer of Tenant to purchase
the Leased Premises for a price equal to 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
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 on the Termination Date;
provided that, if Tenant has not satisfied all Monetary Obligations and all
other obligations and liabilities under this Lease which have arisen
(collectively, "Remaining Obligations") on or prior to the Termination Date,
then Landlord may, at its option, extend the date on which this Lease may
terminate to a date which is no later than the first Basic Rent Payment Date
after the Termination Date on which Tenant has satisfied all Remaining
Obligations. Upon such termination (i) all obligations of Tenant hereunder shall
terminate except for any Surviving Obligations, (ii) Tenant shall promptly
vacate and shall have no further right, title or interest in or to the Leased
Premises and (iii) the Net Award or payment by Ground Lessor, as the case may
be, shall be retained by Landlord. Notwithstanding anything to the contrary
hereinabove contained, if Tenant shall have received a Rejection and, on the
date
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when this Lease would otherwise terminate as provided above, Landlord shall not
have received the full amount of the Net Award payable by reason of the
applicable Termination Event, then on the Termination Date Tenant shall assign
to Landlord all of its right, title and interest, if any, in and to the Net
Award.
(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 or Lender,
if the Mortgage requires or permits Lender to so require, the Termination Amount
and all Remaining Obligations and, if requested by Tenant, Landlord shall convey
to Tenant or its designee the Leased Premises or the remaining portion thereof,
if any, all in accordance with Paragraph 20.
19. Restoration; Reduction of Rent.
(a) If (on the basis of a cost breakdown provided by Tenant) the
cost of restoration in the event of a Casualty is reasonably estimated by
Landlord and Lender to be Five Hundred Thousand ($500,000) or less, then, so
long as an Event of Default has not occurred and is continuing, such amount
shall be paid to and retained by Tenant, and Tenant shall promptly restore the
Leased Premises in accordance with and subject to Paragraph 12 and Paragraph 13
hereof. As long as an Event of Default has not occurred and is continuing, any
Net Award in excess of Five Hundred Thousand ($500,000) that is paid to Landlord
or Lender shall be made available to Tenant for restoration of the Leased
Premises and Landlord (or Lender if required by any Mortgage) shall hold such
Net Award in a separate trust fund not commingled with any other funds (the
"Restoration Fund") and disburse amounts from the Restoration Fund only in
accordance with the following conditions:
(i) prior to commencement of restoration, (A) the
architects, contracts, contractors, plans and specifications for the restoration
shall have been approved by Landlord, which approval shall not be unreasonably
withheld, delayed or conditioned, (B) Landlord and Lender shall be provided with
mechanics, lien insurance or an acceptable payment bond which insures
satisfactory payment for the restoration, is in an amount and form and have a
surety reasonably acceptable to Landlord, and name Landlord and Lender as
additional dual obligees;
(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;
(iii) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last disbursement,
upon receipt of (A) 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) conditional waivers of liens,
(C) a satisfactory bringdown of title insurance and (D) other evidence of cost
and payment so that Landlord and Lender can verify that the amounts disbursed
from time 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 or the
Director of Property Management 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 complies with
the applicable requirements of this Lease;
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(v) Landlord may retain ten percent (10%) of the
restoration fund until 50% of the restoration is fully completed;
(vi) the Restoration Fund shall not be commingled with
Landlord's other funds and shall bear interest at a commercially available rate;
and
(vii) such other reasonable conditions consistent with
customary construction loan disbursement practices 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 reasonably determined by Landlord or Lender, exceeds the
amount of the Net Award available for such restoration, the amount of such
excess shall, upon demand by Landlord, be paid by Tenant to Landlord or Lender,
if so required or permitted by the terms of the Mortgage, 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 finds 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 any refund to Tenant pursuant to Paragraph 19(b), such
sum (the "Remaining Sum") shall be retained by Landlord or Lender, each
Installment of Basic Rent payable on or after the date on which the Net Award is
paid to Landlord shall be reduced by a fraction, the denominator of which shall
be the total amount of all Basic Rent due from such date to and including the
last day of the Term and the numerator of which shall be the amount of such Net
Award retained by Landlord and/or Lender.
20. Procedures Upon Purchase.
(a) If the Leased Premises are purchased by Tenant pursuant to
any provision of this Lease, Landlord need not convey any better title thereto
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
other liens, exceptions and restrictions on, against or relating to any of the
Leased Premises 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 which have been
created by or resulted solely from acts 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 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 and
allowed against the Relevant Amount, and Landlord shall deliver to Tenant (i) a
special warranty deed (or with respect to the leasehold portion of the Leased
Premises, a special warranty assignment of ground lease) which describes the
premises being conveyed and conveys the title thereto as provided in Paragraph
20(a), (ii) such other 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, 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; and further
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provided, that if any event has occurred which, in Landlord's reasonable
judgment, is likely to subject any Indemnitee to any liability which Tenant is
required to indemnify against pursuant to Paragraph 15, then an amount shall be
deducted from the Net Award which, in Landlord's reasonable judgment, is
sufficient to satisfy such liability, which amount shall be deposited in an
escrow account with a financial institution reasonably satisfactory to Landlord
and Tenant on terms and conditions reasonably satisfactory to Landlord and
Tenant, pending resolution of such matter. 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
Leased 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, except as specifically provided in the
following sentence, (x) Rent shall continue to be due and payable until
completion of such purchase and (y) at Landlord's sole option, Fair Market Value
shall be redetermined and the Relevant Amount payable by Tenant pursuant to the
applicable provision of this Lease shall be adjusted to reflect such
redetermination. If, however, the delay for completion of such purchase is
caused solely by an act of or failure to act by Landlord, Tenant's obligation to
pay Rent until completion of the purchase shall be limited to that portion of
Basic Rent equal to the payments of principal and interest payable on the Loan,
and such payments shall be payable directly to the Lender and shall be credited
against the purchase price payable by Tenant to Landlord.
(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.
21. Assignment and Subletting.
(a)(i) Tenant shall have the right, upon thirty (30) days prior
written notice to Landlord and Lender, 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
an Affiliate of Tenant or (B) which immediately following such assignment has,
or is a direct or indirect subsidiary of a parent corporation that has executed
(or will, as a condition to such assignment, execute) a guaranty of the
obligations of Tenant hereunder substantially in the form of the Guaranty and
has, a publicly traded unsecured senior debt rating that is the higher of (1)
the then publicly traded unsecured senior debt rating of Guarantor or (2) a
rating of "A" or better from ▇▇▇▇▇'▇ Investors Services, Inc. or a rating of "A"
or better from Standard & Poor's Corporation (or in the event both of such
rating agencies cease to furnish such ratings, then a comparable rating by any
rating agency reasonably acceptable to Landlord and Lender).
(ii) If Tenant desires to assign this Lease to a Person
("Non-Preapproved Assignee") who would not be a Preapproved Assignee
("Non-Preapproved Assignment") then Tenant shall, not less than forty-five (45)
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: (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
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Non-Preapproved Assignee no later than the twentieth (20th) 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 a review of the above-described criteria applying such review
standards as are customary in private placement transactions.
(iii) If Landlord or Lender withhold consent to the
Non-Preapproved Assignment and Tenant desires to complete the Non-Preapproved
Assignment, Tenant shall 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 on the first Basic Rent Payment Date
occurring thirty (30) days 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 Lender 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, Tenant shall deposit in escrow with Lender an amount (the
"Deposit Amount") equal to one hundred percent (100%) of the sum of the Project
Cost and any Prepayment Premium. The Deposit Amount shall be held by and
invested by 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.
(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. Nothing provided herein shall constitute a
waiver by Landlord of the obligation of Tenant to 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 by the foregoing notice to Tenant not later than the thirtieth
(30th) day following receipt of information described in the foregoing Paragraph
21(a)(iv), 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.
(b) (i) 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 at any time of thirty-three and one-third percent
(33 1/3%) of the gross space in the Improvements for a term of up to ten (10)
years (but not extending beyond the Expiration Date) with no consent or approval
of Landlord being required or necessary ("Preapproved Sublet"). Other than
pursuant to a Preapproved Sublet, no portion of the Leased Premises shall be
subleased during the Term to any other Person without the prior written consent
of Landlord and Lender, which consent shall not be unreasonably withheld or
delayed, and which consent shall be granted or withheld based on a review of the
following criteria as they relate to the proposed sublessee: (1) credit, (2)
capital structure, (3) management, (4) operating history and (5) the proposed
use of the sublet portion of the Improvements, taking in account factors related
to the proposed subtenant's use of the Leased Premises such as environmental
concerns. 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 above-described criteria.
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(c) If Tenant assigns all its rights and interest under this Lease, the
assignee under such assignment shall expressly assume all of 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. Following any assignment (i) to a Person that
satisfies the test for a Preapproved Assignee under clause (B) of Paragraph 21
(a)(i) or (ii) to a Non-Preapproved Assignee that is approved by Lender and
that immediately following the Non-Preapproved Assignment has a publicly traded
unsecured senior debt rating of not less than "Baa" from ▇▇▇▇▇'▇ Investors
Services, Inc. or a rating of not less than "BBB" from Standard & Poor's
Corporation (or in the event both of such rating agencies cease to furnish such
ratings, then a comparable rating by a rating agency reasonably acceptable to
Landlord and Lender), Tenant and Guarantor shall be deemed released from their
respective obligations and liabilities under this Lease and the Guaranty that
arise after the date of such Preapproved Assignment or Non-Preapproved
Assignment described in clause (ii) above, as the case may be, and do not
relate to any act or failure to act by Guarantor or Tenant that occurred prior
to the date of such assignment. Except as specifically provided in the
foregoing sentence, no assignment or sublease made as permitted by this
Paragraph 21 shall affect or reduce any of the obligations of Tenant hereunder
or of Guarantor under the Guaranty, 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) With respect to any Preapproved Assignment or Preapproved Sublet,
Tenant shall provide to Landlord information reasonably required by Landlord to
establish that any proposed Preapproved Assignment or Preapproved Sublet
satisfies the criteria set forth above.
(e) 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.
(f) 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 and any guaranty executed in
connection therewith, 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 Leased Premises, provided, however, that Landlord
shall have the absolute right at any time during the existence of an Event of
Default, 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 as a credit
against Rent. Tenant shall not (i) consent to, cause or allow any material
modification or alteration of any of the terms, conditions or covenants of the
subleases or any guaranty thereof or the termination or surrender of any
sublease or guaranty thereof, (ii) anticipate Rents prior to the accrual
thereof, or (iii) waive or release any tenant or guarantor thereunder from any
material obligation or performance, without the prior written approval of
Landlord, which consent shall not be unreasonably withheld, nor shall Tenant do
or 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 material breach of or
material default in the terms of any subleases. Tenant shall, with respect to
each sublease, observe and perform each and every condition to be performed by
Tenant thereunder, give prompt notice to Landlord and Lender of any notice
given or received under any sublease or guaranty thereof, enforce, short of
termination, each sublease and guaranty thereof and appear in and defend any
action growing out of or in any manner connected with any sublease or guaranty
thereof, provided, that, if Tenant shall fail or refuse to
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so enforce or defend Landlord or Lender shall have such right which shall be
exercisable at the sole cost and expense of Tenant.
(g) Tenant shall have the right to grant a first lien leasehold
mortgage on, or to pledge its leasehold interest in, the Leased Premises to its
senior lender, and a second and a third lien leasehold mortgage on the Leased
Premises to its other lenders but shall not have the power to otherwise
mortgage, pledge or otherwise encumber its interest under this 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. Landlord and
Lender shall execute such documents as may be reasonably requested by Tenant's
lender who holds a first lien leasehold mortgage and are customarily acceptable
to Landlord and Lender in order to afford to such leasehold mortgagee rights of
notice and an opportunity to cure an Event of Default and the benefits of any
non-disturbance and attornment agreement in favor of Tenant, provided, however,
that any entity that becomes a successor tenant under this Paragraph 21(g) shall
be required to be in compliance with all of the terms of this Lease.
(h) Subject to Tenant's rights under Paragraphs 37 and 38,
Landlord may sell or transfer the Leased Premises at any time without Tenant's
consent to any third party (a "Third Party Purchaser"). 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. At the request of Landlord, Tenant, at no cost or
expense to 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. no event shall Tenant have any obligation to attorn to, or recognize
more than one Person at one time as, Landlord.
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 by Guarantor under the Guaranty or by Tenant or Guarantor in any certificate,
demand or request made pursuant hereto proves to be incorrect in any material
respect when made;
(iv) a default beyond any applicable cure period or at
maturity by Tenant or Guarantor in any payment of principal or interest on any
obligations for borrowed money having an outstanding principal balance of
$10,000,000 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);
(v) a final, non-appealable judgment or judgments for the
payment of money in excess of $15,000,000 in the aggregate shall be rendered
against Tenant or Guarantor and the same shall remain undischarged for a period
of sixty (60) consecutive days;
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(vi) Tenant or Guarantor shall (A) voluntarily be
adjudicated a bankrupt or insolvent, (B) seek or consent to the appointment of a
receiver or trustee for itself or the Leased Premises, (C) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(vii) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant and Guarantor, a receiver or trustee
for it or for the Leased Premises or approving a petition filed against Tenant
or Guarantor, as the case may be, 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 ninety (90) days
after it is entered;
(viii) the Leased Premises shall have been vacated or
abandoned;
(ix) Tenant or Guarantor shall be liquidated or dissolved
or shall begin proceedings towards its liquidation or dissolution;
(x) the estate or interest of Tenant in the Leased
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, or a
violation or breach of, or a misrepresentation by Tenant under, any provision of
any Assignment or any other document executed by Tenant and Lender with respect
to this Lease or the Loan, if such failure, violation, breach or
misrepresentation gives rise to a default beyond any applicable cure period with
respect to any Loan, giving the Lender the right to accelerate the Loan and such
default has not been cured;
(xii) a failure by Tenant to maintain in effect any
license or permit necessary for the use, occupancy or operation of the Leased
Premises;
(xiii) a Non-Preapproved Assignment shall occur and Tenant
shall have failed to comply with the provisions, of Paragraph 21(a)(iii) through
(v);
(xiv) Guarantor shall have failed to comply with or a
breach shall occur with respect to any of the representations, warranties or
covenants set forth in the Guaranty;
(xv) Tenant shall sell or transfer or enter into an
agreement to sell or transfer all or substantially all of its assets unless such
sale shall include an assignment of this Lease in compliance with Paragraph 21;
(xvi) an Event of Default shall exist under the Original
Lease;
(xvii) a default shall exist under the Railroad Ground
Lease which would give the ground lessor under the Railroad Ground Lease the
right to terminate; or
(xviii) Tenant shall fail to make a rejectable offer under
Paragraph 18(a)(iii) or (iv) within the time periods provided therein.
(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),
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(viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii) or (xviii) of
Paragraph 22(a); (B) the default consists of a failure to provide insurance with
the types of coverage and in the amounts referred to in clauses (i), (ii), (iv),
(v) and (vi) of Paragraph 16(a) (but excluding a default consisting of a failure
to provide insurance which meets any of the other specific requirements in
clauses (i), (ii), (iv), (v) and (vi) of Paragraph 16(a)) or 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 under clause (i) of Paragraph 22(a), the
applicable cure period shall be five (5) 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 Lease Year. If
the default consists of a default under clause (ii) 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 twenty (20) days from the
date on which notice is given or, if the default cannot with reasonable
diligence be cured within such twenty (20) 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 ninety (90) days),
provided that Tenant shall commence to cure the default within the said
twenty-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. If the
default consists of a default under clause (ii) with respect to the failure to
provide insurance which meets all of the requirements in clauses (i), (ii),
(iv), (v) and (vi) of Paragraph 16(a), or clauses (iii) or (xiv) of Paragraph
22(a), the applicable cure period shall be twenty (20) days from the date on
which notice is given provided that the default or the granting of a cure period
does not directly or indirectly cause the Lender to declare Landlord in default
of the Loan.
23. Remedies and Damages Upon Default. If an Event of Default shall have
occurred and is continuing.
(a) 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 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 or without 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 and whether or not
the Lease has been terminated, 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) After repossession of any of the Leased Premises
pursuant to clause (i) above, Landlord shall have the right with or without
terminating this Lease and as agent of Tenant, if appropriate, to relet any of
the Leased Premises to such tenant or tenants, for
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such term or terms, for such rent, on such conditions and for such uses as
Landlord in its sole 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 sole discretion.
Notwithstanding any such reletting, Landlord may collect the damages set forth
in Paragraph 23(b)(ii).
(iii) 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 greater of (A) the Fair Market Value
of the Leased Premises or (B) the sum of the Project Cost and Prepayment Premium
which Landlord will be required to pay in prepaying any Loan with proceeds of
the Default Termination Amount. 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 thirty
(30) 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 "as is," with all faults and without warranty 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.
(iv) 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)(ii):
(i) If Landlord exercises its remedy under Paragraph
23(a)(i) but not its remedy under Paragraph 23(a)(ii) (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 (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 Costs in connection with the
repossession of the Leased Premises and any attempted reletting thereof,
including all brokerage commissions, legal expenses attorneys, fees, employees,
expenses, costs of Alterations and expenses and preparation for reletting.
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(ii) If Landlord exercises its remedy under Paragraph
23(a)(i) or its remedies under Paragraph 23(a)(i) and 23(a)(ii), 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)(ii), 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) Notwithstanding anything to the contrary herein contained, if
the Event of Default is solely an Event of Default under Paragraph 22(a)(iv)
hereof, and such Event of Default ceases to exist prior to the date that
Landlord commences a judicial action to exercise a remedy hereunder, then
Landlord shall discontinue the exercise of remedies under this Paragraph 23(b)
with respect to such Event of Default but not with respect to any other Event of
Default.
(e) 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.
(f) No termination of this Lease, repossession or reletting of
any of the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(g) WITH RESPECT TO ANY REMEDY OR PROCEEDING HEREUNDER, LANDLORD
AND TENANT WAIVE ANY RIGHT TO A TRIAL BY JURY.
(h) During the existence 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.
(i) 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.
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(j) 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.
(k) 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 for all purposes when delivered in person or
by Federal Express or other reliable 24-hour delivery service or facsimile
followed by Federal Express or other reliable delivery service or by five (5)
business days after being deposited in the United States mail, by registered or
certified mall, return receipt requested, postage prepaid, addressed to the
other party at its address stated above. A copy of any notice given by Tenant
to Landlord shall simultaneously be given by Tenant to ▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, 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.
25. Estoppel Certificate. At any time upon not less than ten (10) days,
prior written request by Landlord Lender, or Tenant (the "Requesting Party") to
Landlord or Tenant (the "Responding Party"), the Responding Party shall deliver
to the Requesting Party or its designee 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 a 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 purchase 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, and except for ordinary
wear and tear. 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 shall become the property of Landlord, and Landlord may thereafter cause
such property to be
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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 a 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 or shall cause Guarantor to keep adequate
records with respect to the Leased Premises and books of account with respect to
the finances and business of Tenant generally and in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and shall permit
Landlord and Lender by their respective agents, accountants and attorneys, upon
reasonable notice to Tenant, to visit and inspect the Leased Premises and
examine (and make copies of) the records and books of account and to discuss the
finances and business with the officers of Tenant, at such reasonable times as
may be requested by Landlord. Upon the request of Lender or Landlord (either
telephonically or in writing), Tenant shall provide and shall cause Guarantor to
provide the requesting party with copies of any information to which such party
would be entitled in the course of a personal visit.
(b) Tenant shall deliver to Landlord and to Lender within
ninety-five (95) days of the close of each fiscal year, annual audited financial
statements of Tenant or Guarantor prepared by nationally recognized independent
certified public accountants. Tenant shall also furnish to Landlord (i) within
fifty (50) days after the end of each of the three remaining quarters unaudited
financial statements, certified by Tenant's chief financial officer or a
financial vice president together with a copy of any compliance certificate
furnished by Tenant to its senior lender or lenders, (ii) as and when provided
to Tenant's senior lender or lenders Tenant's annual operating plan and (iii)
all filings, if any, of Form 10-K, Form 10-Q and other required flings with the
Securities and Exchange Commission pursuant to the provisions of the Securities
Exchange Act of 1934, as amended, or any other Law. All financial statements of
Tenant shall be prepared in accordance with GAAP consistently applied, except
that quarterly statements shall be subject to year-end adjustments and to the
absence of footnotes. All annual financial statements shall be accompanied by an
opinion of said accountants stating that (C) there are no qualifications as to
the scope of the audit and (D) the audit was performed in accordance with GAAP,
and the certificate of the chief financial officer or a financial vice president
of Tenant, dated within five (5) days of the delivery of such statement, stating
that (E) such Person 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 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 (F) except
as otherwise specified in such affidavit, that such Person has no knowledge if
any respect in which Tenant has not fulfilled all of its obligations under this
Lease which are required to be fulfilled on or prior to the date of such
affidavit.
(c) Landlord and its agents, accountants and attorneys, shall
consider and treat on a strictly confidential basis (i) any information
contained in the books and records of Tenant, (ii) any copies of any books and
records of Tenant, and any financial statements of
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Tenant pursuant to Paragraph 28(b) which are delivered to or received by them.
Neither Landlord nor its agents, accountants and attorneys, shall disclose any
information contained in Tenant's books and records nor distribute copies of any
of such books and records nor Tenant's financial statements to any other
Persons without the prior written consent of the chief operating officer or the
financial vice president of Tenant.
The restrictions contained in this Paragraph 28(c) shall not
prevent disclosure by Landlord any information that is generally available to
the public or 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;
(ii) Upon the request, demand or requirement of the
Securities and Exchange Commission (the "SEC") or otherwise upon the request,
demand or requirement of any other regulatory agent or authority having
Jurisdiction over such party, but subject to the consent of Tenant, which shall
not be unreasonably withheld and shall be deemed given if required by law;
(iii) That has been publicly disclosed by Tenant in a
press release or other public announcement of general circulation;
(iv) To counsel or accountants for Landlord who has agreed
to abide by the provisions of this Paragraph 28(c);
(v) While an Event of Default exists, in connection with
the exercise of any right or remedy under this Lease or any other related
document;
(vi) Independently developed by Landlord to the extent
that confidential information provided by Tenant is not used to develop such
information;
(vii) with respect to financial information and
information that Landlord, the SEC or its attorneys deem to be material, in any
reporting to the shareholders of Landlord or the shareholders or prospective
shareholders (whether through a registered public offering or otherwise) of
Landlord's parent company;
(viii) In connection with any sale, financing or
refinancing of the Leased Premises, provided that any recipient of such
information shall agree to be bound by the terms of this Paragraph 28(c);
(ix) From Landlord to Lender; or
(x) As otherwise required by Law.
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 "Fair Market Value
Date") on which (A) Tenant provides Landlord with notice of its intention to
terminate this Lease and purchase the Leased Premises pursuant to Paragraph 18,
(B) Landlord provides Tenant with notice of its
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intention to redetermine Fair Market Value pursuant to Paragraph 20(c), (C)
Tenant provides Landlord with an Intended Assignment Notice pursuant to
Paragraph 21(a)(iii), (D) 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), or (E) Tenant provides Landlord with notice
pursuant to Paragraph 38(a) of its intention to exercise its option to purchase
the Leased Premises. 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 Fair Market Value Date, Tenant shall within
fifty (50) days after the Fair Market Value Date select an appraiser and notify
Landlord in writing of the name, address and qualifications of such appraiser.
Within twenty (20) 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 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 hereinabove set forth above, and (D)
be registered in the State if the State provides for or requires such
registration.
(vii) The Cost Of the procedure described in this
Paragraph 29(a) above shall be borne entirely by 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 to the date
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specified for termination in the particular provision of this Lease pursuant to
which the determination of Fair Market Value is being made.
(c) "Fair Market Value" of the Leased Premises shall mean (i) for
all purposes except for the determination of the Default Termination Amount, the
fair market value of the Leased Premises as of the Relevant Date as affected and
encumbered by this Lease, without any assumption that the Term will or will not
be extended for any of the extension periods provided for herein, or (ii) for
the purpose of a determination of the Default Termination Amount, the fair
market value of the Leased Premises as of the Relevant Date as affected and
encumbered by this Lease and assuming that the Term has been extended for all
extension periods provided for herein. For purposes of determining Fair Market
Value under clause (i) of the foregoing sentence, the appraisers shall:
(I) determine the Basic Rent payable hereunder during the
remainder of the Initial Term or then effective Renewal Term, assuming that CPI
increases during the remainder of the Initial Term will occur at the same
average rate of increase as during the portion of the Term already then past;
and then
(II) discount such Basic Rent so as to represent a present
value, using a discount rate intended to represent the market capitalization
rate applicable to long-term lease obligations of the Tenant (based on the
credit standing of the Tenant), as affected by the location of the Leased
Premises; and then
(III) determine the assumed future replacement cost of the
Improvements at the end of the Initial Term, using Landlord's Share of Project
Costs and assuming increases therein using the Means Construction Cost Index
(the "Means Index") for the portion of the Term already past and increases in
the Means Index which occur at the same average rate of increase thereafter
until the end of the Term; and then
(IV) subtract from such assumed future replacement cost
physical depreciation and functional obsolescence (but not external
obsolescence) applicable to the Improvements as of the end of the Term; and then
(V) discount the result obtained under the foregoing
clause (IV) so as to represent a present value, using a discount rate based on
the market capitalization rate for properties similar to the Leased Premises in
the location of the Leased Premises; and then
(VI) add together the present values determined under the
foregoing clause (II) and (V).
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 enforced only against the Leased Premises 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. LLC, W.P. ▇▇▇▇▇
Incorporated and any Person affiliated with any of the foregoing, or any
director, officer, employee or agent of any thereof).
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31. Financing. If Landlord desires to obtain or refinance any Loan,
Tenant, except as otherwise provided in Paragraph 7(a)(i), shall, at no cost to
Tenant, negotiate in good faith with Landlord concerning any request made by any
Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant agrees, 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 a Certificate of No Default with respect to its then
existing credit agreements, any environmental indemnity agreement which shall
contain substantially similar provisions to the applicable provisions in this
Lease and any subordination, non-disturbance and attornment agreement, so long
as in any such case the same do not materially adversely affect any right,
benefit or privilege of Tenant under this Lease or materially increase Tenant's
obligations under this Lease. Such subordination, non-disturbance and attornment
agreement 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.
32. Subordination. This Lease and Tenant's interest hereunder shall be
subordinate to any Mortgage or other security instrument 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, in form and substance reasonably satisfactory to Tenant, for the
recognition of this Lease and all Tenant's rights hereunder by any purchaser at
foreclosure or acceptance of a deed in lieu thereof unless and until an Event of
Default exists, and that the Lender recognizes and agrees to be bound by the
provisions of Paragraphs 16, 17 and 19 of this Lease, and, with respect to any
Loan, that the Lender agrees to release the Mortgage insofar as it encumbers
Abandonment Premises under Paragraph 36 hereof upon such terms and conditions as
may be agreed to between Lender and Landlord, but which shall not require a
payment to Lender in excess of the Abandonment Offer Amount or otherwise impose
conditions upon such release not within the control of 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 business expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
34. Financing Major Alterations.
(a) Should Tenant, during the Term of this Lease, desire to make
Alterations to the Leased Premises which are not readily removable without
causing material damage to the Leased Premises and which will cost in excess of
$500,000 ("Major Alterations"), Tenant shall, prior to the commencement of
construction of such Major Alterations, offer by written notice to Landlord (a
"Payment Offer") to accept payment from Landlord for the costs (the "Alteration
Cost") thereof, to wit: cost of labor and materials, financing fees, legal fees,
survey, title insurance and other normal and customary loan or construction
costs.
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(b) Should Landlord accept Tenant's offer, which acceptance shall
be made in writing within sixty (60) days after receipt by Landlord of such
offer, Landlord and Tenant shall enter into good faith negotiations regarding
the execution and delivery of a written agreement of modification of this Lease,
which agreement shall provide for the following:
(i) payment by Landlord to Tenant of the Alteration Cost
within one hundred twenty (120) days of the date of Landlord's acceptance of
such Payment Offer, or in installment payments as agreed, or on the date of
completion of the Major Alterations, whichever shall be the later;
(ii) an increase in the annual Basic Rent payable during
the Amortization Period (as hereinafter defined) to an amount sufficient to
amortize the Alteration Costs ("Total Financing") over a period (the
"Amortization Period") which shall be the remainder of the then current Term
and, if Tenant so elects, any additional extension periods provided for herein
(so long as Tenant shall confirm any such extension periods included in the
Amortization Period by a written waiver of its right to give notice of its
intention not to renew this Lease prior to the expiration of such extension
periods), at such rate of interest and upon such other terms as shall be agreed
upon between Landlord and Tenant, but which shall be no less favorable than the
prevailing interest rate and terms for unsecured loans in a principal amount
equal to the Total Financing for borrowers with credit ratings equivalent to
that of Tenant's at that time;
(iii) provide a rate of return to Landlord on Landlord's
equity investment in the Leased Premises equal to that enjoyed by Landlord
hereunder immediately prior to such proposed increase in Basic Rent; and
(iv) such other changes and amendments to this Lease as
may be necessary and appropriate in view of such payment of the Alteration Cost
by Landlord to Tenant.
Tenant shall pay all Costs incurred by Landlord in connection with any such
modification to this Lease and such financing, including closing costs,
brokerage fees, taxes, recording charges and legal fees and expenses.
(c) To the extent that the terms of the Mortgage or any other
document encumbering any of the Leased Premises shall require the consent of
Lender and/or the holder or holders of any encumbrance on any of the Leased
Premises (the "Encumbrancers") to the addition or construction of any Major
Alterations or to the financing thereof by Landlord, the rights and obligations
of Landlord and Tenant under Paragraph 12 and this Paragraph 34 are expressly
conditioned upon Tenant's obtaining, prior to the commencement of any
construction, the Encumbrances' written consent to such construction and to
Landlords obtaining, in the event Landlord has accepted Tenant's offer to accept
payment for the Major Alterations, the Encumbrancers' written consent to such
financing.
(d) Should Tenant's offer to accept payment for the Major
Alterations not be accepted by Landlord within said sixty (60) day period, or
should Landlord and Tenant be unable in good faith to agree upon the terms of
the modification of this Lease, Tenant shall, subject to the provisions of
Paragraph 13 of this Lease, have the right to construct the Major Alterations at
Tenant's sole cost and expense. In any event, the construction of the Major
Alterations shall be performed in accordance with the provisions of Paragraph 12
hereof and the Major Alterations shall be the property of Landlord and part of
the Leased Premises subject to this Lease.
(e) Nothing contained in this Paragraph 34 shall be construed to
modify Paragraph 13 hereof, and the provisions of Paragraph 12 and Paragraph 13
shall apply to
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all Major Alterations made or constructed hereunder provided, however, that
Landlord's consent shall be required for all Major Alterations.
35. INTENTIONALLY DELETED.
36. Economic Abandonment. Provided that an Event of Default does not
exist, Tenant shall have the right at any time during the Term hereof to
terminate this Lease with respect to the Leased Premises (the "Abandonment
Premises") that Tenant shall have determined that the Abandonment Premises shall
not be used for at least seven (7) years in its business operations. 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 nine (9)
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 Abandonment 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 there for and (iii) certifying
that Tenant then intends forever 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.
Tenant may exercise its rights under this Paragraph 36 only one time.
The Abandonment Offer Amount shall be the sum of (A)(i) 110% of (ii)
Landlord's Share of Project Costs with respect to the Abandonment Premises,
reduced by the Acquisition Fee, and (B) any Prepayment Premium which Landlord
will be required to pay in prepayment of any Loan with proceeds of the
Abandonment Offer Amount. 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.
Landlord shall accept or reject such offer by notice to Tenant given not
later than ninety (90) days prior to the Abandonment Date. 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 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 or interest in or to
any of the Abandonment Premises.
Unless Landlord shall have rejected such offer by the foregoing notice
to Tenant not later than the ninetieth (90th) day prior to the Abandonment Date,
Landlord shall be conclusively presumed to have accepted such offer. If such
offer is accepted by Landlord, Tenant shall pay to Landlord the Abandonment
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.
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) hereof as constituting an election by Tenant of its rights
under this Paragraph 36 and as an irrevocable offer of Tenant to purchase the
Abandonment Premises at the price and upon the terms hereinabove more
specifically provided.
37. Option to Purchase.
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(a) Subject to the consent of the ground lessor under the
Railroad Ground Lease, Landlord does hereby give and grant to Tenant the option
to purchase the entire Leased Premises (i) for a Purchase Price (the "Purchase
Price") equal to the Offer Amount and (ii) on any date (the "Option Purchase
Date") during the one year period that commences on June 28, 2006 (the "Option
Period") which is mutually agreeable to Landlord and Tenant, but in any event
not sooner than thirty (30) days after the Fair Market Value Date. If Tenant
intends to exercise such option, Tenant shall give written notice to Landlord to
such effect not later than December 28, 2005. Promptly upon receipt of such
notice, by Landlord, the parties shall commence to determine Fair Market Value.
(b) If Tenant shall exercise the foregoing option to purchase the
Leased Premises, on the later to occur of (i) the Option Purchase Date or (ii)
the date when Tenant has paid the Offer Amount and has satisfied all other
Monetary Obligations, Landlord shall convey the Leased Premises to Tenant in
accordance with Paragraph 20 hereof; provided, that if an Event of Default has
occurred and is continuing on the Option Purchase Date, Landlord, at its sole
option, may terminate Tenant's option to purchase hereunder. If this Lease shall
terminate for any reason prior to the date originally fixed herein for the
expiration of the Term, or if Tenant shall fail to give the aforesaid notice of
intention to purchase, time being of the essence, the option provided in this
Paragraph 38 and any exercise thereof by Tenant shall cease and terminate and
shall be null and void.
(c) Landlord shall use all reasonable efforts to obtain the
agreement of the Lender that the Loan that shall encumber the Leased Premises
during the Option Period (the "Assumable Loan") may be assumed by the Tenant as
partial payment of the Offer Amount; provided that (i) Landlord shall have no
obligation to make or to be obligated to make any payment to Lender as a
condition to requesting or obtaining such consent and (ii) Tenant shall agree
(A) to be personally liable and, if requested by Lender, that Guarantor will be
personally liable for repayment and performance of the Assumable Loan and (B)
that the Lease and Guaranty shall remain in full force and effect during the
term of the Assumable Loan.
38. Right of First Refusal.
(a) Except as otherwise provided in Paragraph 38(e), and provided
an Event of Default does not then exist, if Landlord shall enter into a contract
(the "Sale Contract") for the sale 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 Paragraph 38(a), then promptly following the
execution thereof, Landlord shall give written notice to Tenant, together with a
copy of the executed Sale Contract.
For a period of fifteen (15) days following receipt of such
notice, Tenant shall have the right and option, exercisable by written notice to
Landlord given within said fifteen (15) day period, to elect to purchase the
Leased Premises at the purchase price and upon all the terms and conditions set
forth in the Sale Contract except that no contingencies contained in such Sale
Contract as to environmental assessments, engineering studies, inspection of the
Leased Premises, 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, shall apply to Tenant's obligation to purchase
the Leased Premises under this Paragraph 38, and Tenant shall be obligated to
purchase the Leased Premises without any such condition or contingency.
If at the expiration of the aforesaid fifteen (15) 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.
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(b) Except as otherwise specifically provided herein, the closing
date for any purchase of the Leased Premises by Tenant pursuant to this
Paragraph 38 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 the 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 Sale Contract.
(c) Tenant shall have the right to exercise the foregoing right
of first refusal upon (i) each proposed sale of the Leased Premises prior to
June 28, 2006 and (ii) notwithstanding the lack of exercise by Tenant in (i)
above, one (1) time on or after June 28, 2006; provided, that if, following
compliance with the procedure described in Paragraph 38(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 falls to exercise the right of first refusal granted
pursuant to this Paragraph (c), subsection (ii), on or after June 28, 2006 and
the sale to the Third Party Purchaser is consummated, or if the Term of this
Lease shall terminate or expire, such rights of first refusal granted pursuant
to this Paragraph 38 shall terminate and be null and void and of no further
force and effect.
(d) If Tenant does not exercise its right of first refusal to
purchase the Leased Premises and the Leased Premises are transferred to a Third
Party Purchaser, Tenant will attorn to any Third Party Purchaser as Landlord so
long as such Third Party Purchaser and Landlord notify Tenant in writing of such
transfer. At the request of Landlord and at not cost or expense to Tenant,
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.
(e) The provisions of Paragraph 38 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 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 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 of Landlord or to any entity sponsored by W.P.
▇▇▇▇▇ & Co., LLC, W.P. ▇▇▇▇▇ Incorporated or either of their successors, (vi)
any transfer of the interest of one of the Persons that comprise Landlord to the
other Person that comprises Landlord, (vii) any sale to any Person to whom
either of the parents of the Landlord sells all or substantially all of its
assets, or (viii) any transfer of the Leased Premises to any of the successors
or assigns of any of the Persons referred to in the foregoing clauses (ii) and
(iii).
39. 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,
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liability, covenant and/or condition"; (v) "any of the Leased Premises" shall
mean "the Leased Premises or any part 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, Landlord shall have
the right, at its sole option, to withhold or delay its consent whenever such
consent is required under this Lease for any reason or no reason. 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 and 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 survive the expiration or termination
of this Lease with respect to the Leased 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.
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IN WITNESS THEREOF, Landlord and Tenant have caused this Lease to
be duly executed under seal as of the day and year first above written.
LANDLORD:
▇▇▇▇▇ (PA) QRS 11-36,
a Pennsylvania business trust
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Trustee
-------------------------------
▇▇▇▇▇ (PA) QRS 12-10,
a Pennsylvania business trust
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Trustee
-------------------------------
TENANT:
DEL MONTE CORPORATION,
a New York corporation
By:
----------------------------------
Title:
-------------------------------
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IN WITNESS THEREOF, Landlord and Tenant have caused this Lease to
be duly executed under seal as of the day and year first above written.
LANDLORD
▇▇▇▇▇ (PA) QRS 11-36,
a Pennsylvania business trust
By:
----------------------------------
Title:
-------------------------------
▇▇▇▇▇ (PA) QRS 12-10,
a Pennsylvania business trust
By:
----------------------------------
Title:
-------------------------------
TENANT:
DEL MONTE CORPORATION,
a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: SENIOR VICE PRESIDENT & TREASURER
-------------------------------
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