Exhibit 10.11
AGREEMENT OF LEASE
This Agreement of Lease, or "Lease" made this 15th day of July, 1996, by
and between:
LANDLORD: ▇▇▇▇▇▇▇▇ County Economic Development Corporation, a
corporation duly organized pursuant to the laws of the State of Ohio,
(hereinafter referred to as "LANDLORD").
TENANT: Cabletron Systems, Inc., a corporation duly organized pursuant to
the laws of the State of Delaware, (hereinafter referred to as "TENANT").
WITNESSETH:
WHEREAS, it is in the intention of the LANDLORD to promote the creation of
additional employment opportunities for the citizens of Southeastern Ohio; and
WHEREAS, pursuant to mense agreements, the TENANT has agreed to create
additional employment opportunities for the citizens of Southeastern Ohio
subject to the LANDLORD leasing to TENANT the Leased Premises (hereinafter
defined);
NOW, THEREFORE, IN CONSIDERATION of One Dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, and the mutual promises contained herein,
the parties agree as follows:
DATA SHEET
A. LEASED PREMISES. The land described in Exhibit A, attached hereto and
made a part hereof, including all easements, rights, privileges and
appurtenances thereunto belonging or pertaining, and all of the right, title and
interest of LANDLORD therein, and in the streets and ways adjacent thereto,
together with the buildings and other structures and other improvements now or
hereafter to be erected upon the land, including, without limitation, the
building to be erected in accordance with the Building Plans attached hereto as
Exhibit B and made a part hereof (the "Building"), all machinery, fixtures and
equipment forming or becoming attached to said buildings or other structures,
including, but without limitation, sectional buildings, electric equipment, gas
equipment, plumbing equipment, heating, air conditioning and ventilating
equipment, elevators and escalators, awnings, screens, blinds, shades, cabinets,
stoves, disposals, refrigerators, floor coverings, lifts, sprinkler equipment,
incinerating equipment, fire alarm systems, trees, hardy shrubs and perennial
flowers, and also including all materials stored on the land for incorporation
into the improvements.
As set forth in the description of the land contained in Exhibit A, the
right to possession and quiet enjoyment by the TENANT of the land which is part
of the Leased Premises is subject to the right of the LANDLORD and/or a
representative of Allied- Signal Inc. to enter upon the land which is part of
the Leased Premises during TENANT's daytime business hours and upon reasonable
notice for the purposes of inspecting, examining, testing and performing any
maintenance to the monitoring well situate on the land which is part of the
Leased Premises, the presence and location of which is set forth in Exhibit A.
B. TERM. The term of the Lease shall commence on the Commencement
Date, as defined in, and as to be determined in accordance with, Article 3.B. of
this Lease, and shall continue for seven (7) years (the "Initial Term") unless
renewed and extended or unless sooner terminated in accordance with the terms of
this Lease.
TENANT shall have four (4) options to renew the term of this Lease, each
option to be for three (3) year extension terms (each such extension term is
hereinafter referred to as an "Extension Term").
C. PERMITTED USE. Any purpose or use permitted by any
governmental authority having jurisdiction acting under any present or future
law, statute, or ordinance.
D. TOTAL MINIMUM ANNUAL RENT. As set forth in Article 5 hereof.
ARTICLE 1. (PREMISES). LANDLORD hereby leases to TENANT, and TENANT hereby
leases from LANDLORD, subject to and with the benefit of the terms, covenants,
conditions and provisions of this Lease, the Leased Premises.
ARTICLE 2. (COVENANT OF QUIET ENJOYMENT). LANDLORD hereby warrants that it, and
no other person, corporation or entity has the right to lease the Leased
Premises, and further, that so long as TENANT shall perform each and every
covenant to be performed by TENANT hereunder, TENANT shall have peaceful and
quiet possession of the Leased Premises without hindrance on the part of
LANDLORD, its authorized representatives, anyone under LANDLORD'S control, or
anyone claiming by or through LANDLORD, subject only to the right of
Allied-Signal Inc. to inspect, examine, test and maintain the monitoring well as
described in Section A. of the Data Sheet.
ARTICLE 3. (TERM).
A. Term. The term of this Lease shall begin on the Commencement Date
(as defined in and determined in accordance with Article 3.B.) and shall
terminate (unless renewed or extended or sooner terminated in accordance with
the terms hereof) upon the expiration of seven (7) years. (The word "term" shall
mean the Initial Term and shall include all Extension Terms.)
B. Commencement Date Pre-Conditions. The "Commencement Date" shall be
the date which is five (5) days after the date upon which all of the following
events shall have occurred:
(i) Construction of the Building and all other improvements to the
Leased Premises, including, without limitation, site work, landscaping, access
roads, and parking areas, shall have been substantially completed as determined
in accordance with Article 3.C. below, and all LANDLORD's Work, as set forth in
Article 10 hereof shall have been substantially completed in accordance with the
"Building Plans" as set forth in Article 10 hereof. Notwithstanding the above,
to the extent that LANDLORD is prevented from substantially completing
landscaping by reason of weather, LANDLORD may cause the same to be accomplished
after the Commencement Date and the same shall not be deemed a precondition to
the Commencement Date.
(ii) TENANT shall have received from LANDLORD's architect a
certificate to the effect that the Leased Premises are substantially complete
and that LANDLORD's Work, as set forth in Article 10 hereof, has been
substantially completed in accordance with the Building Plans.
(iii) The Leased Premises shall have been delivered to TENANT for
TENANT's use, occupancy, and the completion of any TENANT improvements to be
made to the Leased Premises.
(iv) The LANDLORD's representative shall have delivered to TENANT
(at TENANT's cost and expense) a policy of title insurance in accordance with
Article 31 hereof and LANDLORD shall have correctly certified to TENANT that all
LANDLORD's representations and warranties of LANDLORD set forth herein are true
and complete in all material respects.
(v) Every certificate of occupancy or permit required by law to
permit the Leased Premises to be used for their intended purposes in accordance
with the terms of this Lease shall have been issued by the appropriate public
authority, shall have been delivered to TENANT, and shall be in effect. The
delivery of the required certificate(s) of occupancy or permit shall either be a
delivery in hand, evidenced by a written receipt signed by TENANT, or a delivery
by United States certified mail, postage prepaid, return receipt requested, to
the TENANT evidenced by an appropriately endorsed return receipt showing
delivery to the addressee. Notwithstanding the above, in the event that a final
certificate of occupancy or permit cannot be issued solely by reason of work to
be done by TENANT pursuant to the terms of this Lease, then this condition shall
be deemed satisfied if TENANT is provided with a temporary certificate of
occupancy or permit together with a certification from the applicable building
authority and LANDLORD's architect to the effect that a permanent certificate of
occupancy or permit shall be issued upon completion by TENANT of work to be
performed by TENANT in accordance with the terms hereof.
In no event shall the Commencement Date occur prior to April 1, 1997.
C. "Substantial Completion" Defined. The Leased Premises and LANDLORD's
Work shall be deemed "substantially completed" when all of LANDLORD's Work, as
defined and set forth in Article 10 hereof, has sufficiently advanced to permit
TENANT, upon completion of the Work to be performed by it hereunder, which shall
include the Work set forth in Exhibit B-1 attached hereto and made a part hereof
("TENANT's Work"), and upon installation of TENANT's equipment, fixtures and
inventory, to open the Leased Premises for business as intended by TENANT, and
the only items to be completed by LANDLORD are of a so-called "punch list"
nature which shall have no adverse impact upon the business operations of
TENANT. In any case, however, LANDLORD's Work shall not be deemed substantially
completed until:
(a) the Building has been permanently connected with all necessary
public utility lines and with municipal (or private) water and sewerage systems,
meeting all applicable governmental requirements and all requirements as set
forth in the Building Plans;
(b) the roof, all exterior walls and all finished floors of
the Building shall have been completed;
(c) all heating, air conditioning, ventilating, lighting, sprinkler
and plumbing fixtures and equipment (and all piping, wiring, duct work and other
facilities required for the intended use of such fixtures and equipment, or
required for the intended use of the water or sewage systems or of any utility
serving the Building) shall have been installed and be capable of operating in
accordance with applicable specifications;
(d) all interior painting and all work requiring
interior scaffolding in the Building shall have been completed;
(e) all floors and doors in the Building shall be free and clear
of all obstructions;
(f) all entrances and openings into the Premises and the
Building shall have been secured; and
(g) all parking areas and interior roadways serving the Leased
Premises as shown on the Building Plans shall have completed and access thereto
shall be available from the public ways.
D. Occupancy Prior To Commencement Date. TENANT shall accept possession
and take occupancy of the manufacturing sections of the Leased Premises
designated in Exhibit B at such time prior to the Commencement Date as those
sections have been substantially completed, but in no event earlier than the
later of the following: (i) March 1, 1997; and (ii) such time as the LANDLORD's
architect certifies to TENANT that the remainder of LANDLORD's Work at the
Leased Premises shall be substantially completed within thirty (30) days. During
such period after TENANT accepts possession and takes occupancy of such section
and prior to the Commencement Date, TENANT shall pay a pro rata portion of the
Minimum Annual Rent at the rates set forth in Article 5 (as the same may be
adjusted in accordance therewith) based upon the ratio that the number of square
feet of the Leased Premises with respect to which possession has been accepted
bears to the total square footage of the Leased Premises to be built. The period
between the date of such possession and the Commencement Date is hereinafter
referred to as the "Pre-Commencement Date Occupancy Period".
E. Construction Self-Help. TENANT shall, from time to time after taking
possession of the Leased Premises, submit to LANDLORD punch lists setting forth
all items which remain incomplete or which require correction or which are
defective of which TENANT is then aware. LANDLORD shall, prior to payment of
retainage to its contractor(s), which in any event shall not be until all punch
list items submitted by LANDLORD within thirty (30) days of the Commencement
Date have been corrected, promptly cause to be repaired, replaced, or completed
any of such items set forth in such punch lists. After such time as LANDLORD has
paid the retainage to its contractor(s), LANDLORD shall assign all construction
warranties to TENANT and shall cooperate with TENANT in causing the
contractor(s) to correct any defective items.
In the event that LANDLORD shall fail to fully complete all such punch list
items within thirty (30) days after receipt of any such punch list from TENANT
(or if any such work shall reasonably require more than thirty (30) days to
complete, LANDLORD shall fail to commence the same within said thirty (30) day
period and shall not be diligently prosecuting the same to completion), then
TENANT shall have the right to complete the same and to reimburse itself for all
costs and liabilities incurred (together with interest thereon at the Interest
Rate as hereinafter defined), and in doing so, by withholding the amount of such
costs, liabilities and interest from the next due and succeeding installment(s)
of Minimum Annual Rent and any other payments to be made to LANDLORD hereunder
on a cumulative basis, as such installment(s) and other payments come due, until
TENANT has been fully reimbursed.
The Interest Rate as used in this Lease shall be the Prime Rate of
interest then being quoted in the Wall Street Journal, as the same may change
from time to time, plus two percent (2%).
F. Notice of Lease; Commencement Date Agreement. LANDLORD and TENANT shall,
upon execution hereof, execute a recordable notice or memorandum of this Lease.
The notice shall contain such information as either party may request, except
the rent and other charges payable by TENANT, and shall include a recordable
copy of Exhibit A, which shall be furnished by LANDLORD. After the Commencement
Date, TENANT shall execute and deliver to LANDLORD counterpart copies of a
recordable instrument setting forth the Commencement Date, and LANDLORD, not
more than sixty (60) days following receipt of those copies from TENANT, shall
execute, deliver and redeliver to TENANT all such counterpart copies except one
(1) to be retained by LANDLORD. In no event shall the entire Lease be recorded.
G. Extensions to Term. TENANT shall have the right to extend this Lease
and the term hereunder for four (4) Extension Terms. Each Extension Term shall
be for three (3) years, on the same terms and conditions and provisions as the
original term hereof, except the rate of rental shall be adjusted as provided in
Article 5. Each Extension Term shall commence immediately after the end of the
Initial Term or the preceding Extension Term, as the case may be. Unless the
TENANT shall notify the LANDLORD in writing of its intention not to extend this
Lease at least ninety (90) days prior to the termination of the Initial Term, or
any Extension Term, as the case may be, then the TENANT shall be deemed to have
exercised its right to extend this Lease for the next Extension Term.
ARTICLE 4. (USE). TENANT shall at all times conduct its business in a reputable
manner and in accordance with law and will not conduct its business within the
Leased Premises contrary to any law, statute, regulation or ordinance. The
Leased Premises shall not be used in such manner, that in accordance with any
requirement of law or of any public authority, LANDLORD shall be obliged on
account of the purpose of manner of said use to make any addition or alteration
to the land or to the Building or improvements comprising the Leased Premises.
ARTICLE 5. (RENT). TENANT covenants and agrees to pay to LANDLORD at the address
set out in the heading of this Lease, or at such other place as LANDLORD may
designate in writing to TENANT, rental at the rates and times set forth below.
A. Minimum Annual Rent During The Initial Term. Minimum Annual Rent during
each of the first six (6) years of the Initial Term of this Lease shall be Five
Dollars Eighty Cents ($5.80) per square foot of Building annually, or Six
Hundred Ninety Six Thousand Dollars ($696,000.00) annually, payable monthly, in
advance, in installments of Fifty Eight Thousand Dollars ($58,000.00), on the
day of each month which is the same day as the Commencement Date, adjusted as
set forth in Article 5.B. below. During the seventh (7th) year of the Initial
Term, Minimum Annual Rent shall be Three Dollars Ninety Cents ($3.90) per square
foot of Building annually, or Four Hundred Sixty Eight Thousand Dollars
($468,000.00) annually, payable monthly, in installments of Thirty Nine Thousand
Dollars ($39,000.00) on the day of each month which is the same day as the
Commencement Date, adjusted as set forth in Article 5.B.
B. Adjustments To Minimum Annual Rent During The Initial Term. The LANDLORD has
represented that the acquisition of the Leased Premises and the construction of
improvements to the Leased Premises are to be financed by it as follows:
(i) An interim construction loan of Four Million Five Hundred
Thousand Dollars ($4,500,000.00) at an interest rate of Seven and Seventy Five
One Hundredths Percent (7.75%) for twelve (12) months (the "Construction Loan").
The Construction Loan is to be paid down to approximately One Million Four
Hundred Thousand Dollars ($1,400,000.00) at the time of receipt of permanent
financing described below and thereafter interest shall be payable at Seven and
Seventy Five One Hundredths Percent (7.75%) amortized over approximately nine
(9) years (the "Bank Loan").
(ii) A State 166 loan in the amount of Two Million Three Hundred
Thousand Dollars ($2,300,000.00) for a term of approximately seven (7) years
amortized over a period of approximately six (6) years with an interest rate of
Zero Percent (0%) for the first year, One Percent (1%) the second year, Two
Percent (2%) the third year, Three Percent (3%) the fourth year, and Four
Percent (4%) the fifth and sixth years of the amortization period (the "State
166 Loan").
(iii) A CDBG loan in the amount of Two Hundred Twenty Eight Thousand
Dollars ($228,000.00) at Three Percent (3%) interest over a term of six (6)
years with a one (1) year deferral of interest and principal (the "CDBG Loan").
The Bank Loan, the CDBG Loan, the State 166 Loan, and the Construction Loan are
hereinafter referred to as the "Loans".
(iv) A State 412 Grant in the amount of Three Hundred Thousand
Dollars ($300,000.00), an ARC Grant in the amount of Two Hundred Fifty Thousand
Dollars ($250,000.00), and a Grant from CDBG in the amount of Two Hundred
Seventy Two Thousand Dollars ($272,000.00) (the "Grants").
The Minimum Annual Rent as set forth in Article 5.A. above during the
Initial Term has been based upon the "Assumptions To Cabletron Building
Projections ("Assumption Sheet") and accompanying Ten (10) year Annual Cash Flow
Projections ("Cash Flow Projections") dated July , 1996, provided by LANDLORD
and attached hereto as Schedule 1 and made a part hereof. At least five (5) days
prior to the Commencement Date, LANDLORD shall provide to TENANT a statement
certified by LANDLORD as true and accurate, setting forth:
(a) actual project costs incurred itemized as set forth in item
Number 9 of the Assumption Sheet and providing adequate backup detail to allow
TENANT to review each expenditure made;
(b) actual amounts of grants and loans received together with the
payment terms and interest rates;
(c) a loan payment schedule to be attached to this Lease as Schedule
2 showing payment dates of interest and principal under the Loans;
(d) revisions to Schedule 1, if any, which LANDLORD and TENANT have
agreed upon.
LANDLORD shall provide TENANT with the opportunity to audit from time to time
all transactions and payments related to the project to determine actual costs
thereof upon five (5) days written notice from TENANT, and any items that
TENANT's audit accurately discloses as not properly includable in such project
costs shall be removed therefrom for the purposes of determining rental or the
amount of the purchase price of the Leased Premises under this Lease.
To the extent that (A) the actual costs (including contingencies) incurred
by LANDLORD for any of the items listed in item Number 9 of the Assumption Sheet
are less than as stated in such item Number 9, or (B) the original principal
amounts or interest rates for any of the Loans are less than as stated in
Schedule 1 or Schedule 2, or (C) the amount of the Grants are greater than as
set forth in Schedule 1, or (D) timing of payment of the amounts of interest or
project cost payments result in a net benefit to LANDLORD as compared to the
projections shown in Schedules 1 or 2, or (E) any Elective Changes are made by
TENANT to construction of the improvements in accordance with Article 10 hereof
which result in an agreed upon decrease in project costs as set forth in
Schedule 1, then, at TENANT's option to be provided by LANDLORD in writing
within thirty (30) days after the amounts of such charges have been delivered,
either
(x) The Minimum Annual Rent during the first six (6) years of
the Initial Term shall remain at Six Hundred Ninety Six Thousand Dollars
($696,000.00) per annum and during the seventh (7th) year of the Initial Term at
Four Hundred Sixty Eight Thousand Dollars ($468,000.00) per annum, as set forth
above, as it otherwise may be adjusted pursuant hereto and all savings and
increased cash flow from that shown on Schedule 2 shall be applied to reduce the
principal amounts of the Loans (payment first to be made on the Bank Loan to the
extent that the same is permissible), such that the cash on hand at the
beginning of each Lease Year as shown in Schedule 1 shall be no greater than as
shown on the Cash Flow Projection, or
(y) The Minimum Annual Rent shall be reduced to such amount as
is necessary to reduce the principal balances of the Loans at the same times and
dates as would exist had they been paid down in accordance with Schedules 1 and
2, such that the cash on hand at the beginning of each Lease Year as shown in
Schedule 1 shall be no greater than as shown on the Cash Flow Projection.
To the extent that (i) any Elective Changes are made by TENANT to the
construction of the improvements in accordance with Article 10 hereof, and to
the extent that such Elective Changes result in an agreed upon increase in the
project costs as set forth in Schedule 1, or (ii) any other changes are made to
the project which are approved in advance by TENANT (both as to nature and
amount) and which do not result from LANDLORD's negligence or failure to
properly insure, such excess costs shall be funded by the Bank Loan, and the
Minimum Annual Rent shall be increased to such amount as is necessary to reduce
the principal balance of the Bank Loan to the same amount as would exist at the
end of the Initial Term as set forth in Schedules 1 and 2.
C. Initial Payment of Minimum Annual Rent. Contemporaneous with the
execution of this Lease, TENANT shall deposit into a certificate of deposit or
interest bearing money market account, with a lending institution acceptable to
LANDLORD and TENANT which shall act as an escrow agent, the sum of One Million
Dollars ($1,000,000.00). Such sum, together with interest earned thereon, shall
be held in escrow by the escrow agent and shall be released from such escrow
only upon the TENANT providing such escrow agent with a certificate signed by
the President, Treasurer, or Secretary of TENANT stating that the Leased
Premises are substantially complete and that a Certificate of Occupancy has been
issued and that the Commencement Date has occurred. All interest earned prior to
the Commencement Date shall be used by LANDLORD to pay project costs as set
forth in Schedule 1. The One Million Dollar ($1,000,000.00) amount shall be
treated, as between LANDLORD and TENANT, as prepaid Minimum Annual Rent,
provided, however, that the same shall be held in an interest bearing account
and the same shall be utilized by LANDLORD solely to pay down the Loans as shown
on the Cash Flow Projection. TENANT shall not be required to make further
payments of Minimum Annual Rent during the term until the full amount of such
advance payment, plus interest earned after the Commencement Date, has been
amortized against payments of Minimum Annual Rent required under the Lease.
LANDLORD shall, on a quarterly basis, provide TENANT with a statement of
interest earned on the advance payment of rent.
In the event that TENANT terminates this Lease as elsewhere provided
herein, then upon receipt of a written certificate from the President,
Treasurer, or Secretary of TENANT, stating that the Lease has been terminated by
TENANT, such escrow agent or LANDLORD shall return such One Million Dollars
($1,000,000.00) or any remaining balance thereof, plus interest earned thereon,
to TENANT, and LANDLORD shall have no rights therein.
D. Minimum Annual Rent During Extension Terms. During each of
the Extension Terms, Minimum Annual Rent shall be equal to Two Hundred Forty
Thousand Dollars ($240,000.00) per year, payable in monthly installments of
Twenty Thousand Dollars ($20,000.00).
E. Representations of LANDLORD. LANDLORD represents and warrants that all
revenue generated from payments by TENANT or other sources hereunder shall be
utilized to reduce the balance of and pay any interest payable under the Loans
and that no cash on hand in excess of amounts set forth in Schedules 1 and 2
shall be retained by LANDLORD, that the Loans have no prepayment penalties
except as disclosed in Schedules 1 and 2, that no financing other than that set
forth in Schedules 1 and 2 shall be obtained in connection with the Leased
Premises, that no mortgages or other liens shall be placed upon the Leased
Premises other than to secure the Loans, that all amounts due under the Loans
shall be paid promptly when due, that funds representing actual cash on hand as
shown in Schedule 1 shall be segregated in an interest bearing account, all
interest to be treated as cash in hand, and that cash generated from payments
due under this Lease shall not be utilized other than to make payments under the
Loans.
F. Tax on Rentals. The TENANT shall pay, as additional rent, before any
fine, penalty, interest or cost may be added thereto for nonpayment, any tax
that may be levied, assessed or imposed upon or measured by the rents reserved
hereunder, or upon a commercial lease by any governmental authority acting under
any present or future law, excluding any tax that may be payable upon the income
of LANDLORD.
G. No Set Off. TENANT covenants to pay all rents when due and, except as
expressly permitted to the contrary hereunder, without any set off, deduction or
demand whatsoever. Any monies paid or expenses incurred by LANDLORD to correct
violations of any of the TENANT'S obligations hereunder shall constitute
additional rent. Any additional rent provided for in this Lease becomes due with
the next installment of Minimum Annual Rent due after receipt of notice by
TENANT of such additional rent from LANDLORD. Rentals and statements required of
TENANT shall be paid or delivered to LANDLORD at the place designated for
notices to LANDLORD. If any payment of rent or additional rent due hereunder is
received by LANDLORD more than ten (10) days after written notice that it has
not been paid, then LANDLORD may, in addition to any other remedies LANDLORD may
have for late payment of rent, assess a late charge in the amount of five
percent (5%) of the late payment plus reasonable costs and expenses incurred by
LANDLORD in collecting such late rental.
ARTICLE 6. (TAXES). TENANT shall pay to LANDLORD, upon written notice from
LANDLORD or, at TENANT's option directly to the appropriate taxing authority, as
additional rent, all real estate taxes levied against the land and Building of
the Leased Premises during the term hereof. For purposes of this Article, "real
estate taxes" shall include payments for special assessments which legally
benefit the property, excluding any special assessments arising in connection
with the initial construction of the improvements to the Leased Premises. If
special assessments are imposed on the property during any portion of the term
or any option term, LANDLORD shall elect, or TENANT may elect, to pay any such
special assessments over the longest possible period not to exceed the length of
the then current term of the Lease and all periods for which options have
theretofore been exercised.
TENANT may, at TENANT'S option and expense, contest any such taxes.
LANDLORD shall, if required, cooperate with TENANT in such contest. If LANDLORD
so desires, and with written approval of TENANT, LANDLORD may contest any taxes
not contested by TENANT. Any tax savings resulting from any such contest shall
be passed on to TENANT. If either LANDLORD or TENANT elects to contest the
taxes, any costs and fees incurred in such contest shall be the responsibility
of said party and all refunds, net of such costs and expenses which shall be
repaid to the party incurring the same, shall belong to TENANT.
For the Tax Year (as hereinafter defined) in which this Lease commences or
terminates, the provisions of this Article shall apply, but TENANT'S liability
for any taxes for such year shall be subject to a pro rata adjustment, based
upon the amount of time within said Tax Year during which the Term occurs.
Nothing herein or in this Lease otherwise contained shall require or be
construed to require TENANT to pay any inheritance, estate, succession,
transfer, gift, franchise, income, or profit taxes that are or may be imposed
upon LANDLORD, its successor or assigns unless the same are imposed by the
taxing authorities in substitution for real estate taxes, in which case such
taxes shall be paid as if the same were taxes pursuant to the terms hereof.
For the purpose of this Lease, the term "Tax Year" shall mean the twelve
(12) month period established as the real estate tax year by the taxing
authorities having lawful jurisdiction over the Leased Premises.
ARTICLE 7. (LEASE YEAR). The term "Lease Year" as used in this Lease shall mean
the period of twelve (12) consecutive full calendar months, with the first Lease
year beginning on the date of Commencement Date of this Lease as set forth in
Article 3 hereof. Each succeeding Lease year shall commence upon the anniversary
date of the Commencement Date of the first Lease Year.
ARTICLE 8. (MAINTENANCE). After such time as all contractors defects have been
remedied in accordance with Article 3, TENANT agrees to make all repairs
(including replacements and alterations where necessary) necessary to keep the
exterior, structure, and interior of the Leased Premises in good order, repair
and condition, excluding, however, any items which are the responsibility of
LANDLORD to correct owing to their delivery in defective condition,
incompleteness, or failure to comply with the Building Plans. The exterior and
structure shall include (without limitation) each of the following:
(i) the outside walls and exterior faces thereof;
(ii) the roof and all roof covering and components;
(iii) the foundations and floor slab;
(iv) the gutters, downspouts and roof drain systems;
(v) the marquees and the light fixtures (and the bulbs therefor)
which are attached to, or a part of the marquees;
(vi) all structural members;
(vii) all wiring, plumbing, pipes, conduits and other water,
sewerage, utility and sprinkler fixtures and equipment (including, without
limitation, all connections with and components of any private sewage system)
serving the Leased Premises which are located within the Leased Premises; and
(viii) window frames and window sashes.
TENANT agrees to keep the Leased Premises in good repair and to keep the
same in good order, and in a clean, sanitary and safe condition in accordance
with the laws of Ohio and in accordance with all directions, rules and
regulations of the health officer, fire marshal, building inspector or other
proper officers of the governmental agencies having jurisdiction, at the sole
cost of TENANT.
LANDLORD shall assign to TENANT the benefit of all guarantees and
warranties applicable to the Leased Premises, including initial construction
warranties and guaranties. LANDLORD represents and warrants that construction
warranties and guaranties as set forth in Exhibit B-2 attached hereto and made a
part hereof shall be received by LANDLORD in connection with its construction of
the improvements. LANDLORD agrees that it shall have included in all
construction contracts relating to the Leased Premises or the Building to which
LANDLORD is a party, a provision to the effect that any and all rights and
remedies of LANDLORD, as owner, under any such contract, relating to the quality
of construction, may be assigned to TENANT and are intended to be assigned to
and for the benefit of TENANT. LANDLORD further agrees to take all reasonable
actions as may be necessary or appropriate to aid TENANT in enforcing any of
such rights or remedies.
It is expressly understood that except as set forth in this Lease, that
LANDLORD shall have no obligation to make any repairs or replacements whatsoever
to the Leased Premises.
TENANT will promptly notify LANDLORD of any material damage to the Leased
Premises. LANDLORD shall have the right to inspect the nature, character and
extent thereof, and TENANT shall timely repair the same at its expense to
prevent further damage to the Leased Premises. If TENANT shall fail to commence
repairs hereunder and diligently pursue the same within thirty (30) days, of
receipt of notice to repair received from LANDLORD, LANDLORD may make the same
and TENANT agrees to pay, as additional rent, the cost thereof to LANDLORD plus
Interest on such costs, upon LANDLORD'S demand therefor.
ARTICLE 9. (UTILITIES). TENANT shall be solely responsible for promptly paying
all charges for heat, water, sewer, gas, electricity or any other utility used
or consumed in the Leased Premises during the Term.
ARTICLE 10. (CONSTRUCTION).
A. Landlord's Work. LANDLORD has prepared complete working drawings
and specifications (the "Building Plans") which are attached hereto as Exhibit
B. and made a part hereof. LANDLORD shall cause to be done all work set forth in
the Building Plans except work specifically designated as work to be done by
TENANT ("LANDLORD's Work").
LANDLORD warrants that Building Plans shall conform to applicable
governmental requirements (including, without limitation, all applicable
federal, state and local laws relating to "architectural barriers" affecting the
physically handicapped and to all environmental protection and zoning laws); and
to sound and generally accepted engineering practices as applied to the site
conditions.
The Building Plans have been submitted to TENANT for its approval, and
TENANT has approved the same.
Neither TENANT's approval of the Building Plans nor any inspection TENANT
may make of LANDLORD's Work shall relieve LANDLORD of its obligations to design
and perform LANDLORD's Work in accordance with the requirements stated in this
Article, and LANDLORD shall make all changes required to cure LANDLORD's failure
to discharge those obligations. LANDLORD shall be solely responsible for both
the cost of and any delay resulting from any correction in LANDLORD's Work
performed in accordance with the Building Plans, which correction is required by
any governmental authority having jurisdiction.
TENANT may require changes ("Elective Changes"), in the Building Plans and
construction work after TENANT's final approval thereof, other than those which
may become necessary. If any Elective Changes made by TENANT shall result in a
net increase or decrease in the cost of LANDLORD's Work, then the amount of such
net increase or decrease shall result in an increase or decrease in the Minimum
Annual Rent payable in accordance with Article 5 hereof. All such Changes,
whether Elective or otherwise, shall be submitted by written "change order"
signed by TENANT, it being understood and agreed that TENANT shall not be
required to accept and/or pay for any work deviating from the Building Plans
which is not covered by a proper "change order" or pay more for such work than
is stated in such "change order". Increased or reduced amounts payable on
account of any Elective Change required by TENANT shall be agreed upon between
LANDLORD and TENANT in advance before any such change is effectuated. Such
increased or decreased costs shall be certified to by LANDLORD's architect or
engineer or contractor. On TENANT's written request therefor, LANDLORD shall
deliver to TENANT reasonably satisfactory evidence substantiating in detail the
changes in the cost of LANDLORD's Work resulting from TENANT'S Elective Changes.
B. Construction. LANDLORD shall begin LANDLORD's Work on or prior to August
1, 1996, ("Starting Date") and shall diligently prosecute the completion of
LANDLORD's Work on all business days and weekends, as necessary, without
interruption, in a good and workmanlike manner, using first quality material, in
accordance with the Building Plans (as they may be changed, as provided above)
and with applicable governmental requirements. LANDLORD's Work shall be fully
completed no later than April 1, 1997 ("Completion Date").
LANDLORD agrees that it shall cause to be constructed the Building and
common areas serving the same in accordance with the Building Plans. LANDLORD
shall not allow any changes or revisions of the Building Plans without the
consent of TENANT.
C. TENANT's Work. TENANT's Work shall include only the work described in
Exhibit B-1. Exhibit B-1 shall be updated to include TENANT's Building plans
when the same have been prepared. Prior to delivery of possession, LANDLORD
shall, on such date(s) as it may deem consistent with good construction
practice, make the Premises available to TENANT for the performance of TENANT's
Work by TENANT prerequisite to the opening of its business or for the moving of
fixtures or equipment owned by TENANT into the Leased Premises. TENANT agrees
that with respect to such activities and work during such period, it will (i)
not damage, delay or interfere with the prosecution or completion of any work
being performed by LANDLORD; (ii) comply with all procedures and regulations
prescribed by LANDLORD from time to time for coordination of such work and
activities with any work being performed by LANDLORD; and (iii) have in full
force and effect comprehensive general liability insurance as called for in
Article 18 hereof satisfactory to LANDLORD.
D. TENANT's Termination Rights. If LANDLORD has not begun LANDLORD's Work
by the Starting Date, TENANT shall have the right to terminate this Lease at any
time thereafter, but before LANDLORD begins LANDLORD's Work. If LANDLORD has not
completed LANDLORD's Work by July 1, 1997, for any reason whatsoever, TENANT
shall have the right to terminate this Lease at any time thereafter, but before
LANDLORD's Work has been completed. TENANT's termination rights shall be
exercised by written notice to LANDLORD, and upon the giving of such notice the
One Million Dollars ($1,000,000.00) sum plus interest in the escrow account
described in Article 5 hereof shall be returned to TENANT upon certification to
the escrow agent by TENANT of its termination of this Lease, and all obligations
and liabilities of the parties under this Lease shall cease and terminate.
E. Entry and Inspection by TENANT. During the course of construction TENANT
shall appoint representative(s) who shall be on site on a daily basis and who
shall have the right to enter the Leased Premises to inspect and monitor
LANDLORD'S Work and the progress thereof, to approve changes therein, and to
install TENANT's fixtures, equipment and inventory, and for purposes incidental
thereto. TENANT shall provide LANDLORD with a listing of persons who are
authorized to approve changes to LANDLORD's Work.
F. Alterations and Decoration. TENANT shall have the right, from time to
time, to redecorate the Leased Premises, to add or remove windows, doors,
doorways and loading docks and to make such other interior and/or exterior,
structural and/or nonstructural installations, erections, changes, modifications
and alterations in, on or to such parts of the Leased Premises (and the roof and
walls) as TENANT shall deem expedient or desirable for its purposes, provided
such installations, erections, alterations and changes shall not impair the
structural soundness of the Building. TENANT shall not, however, make any
structural change to the Building which will result in a change in the area of
the Leased Premises (except minor changes resulting from the construction of
additional loading docks and doorways) without first having obtained LANDLORD's
written consent thereto, which LANDLORD agrees shall not unreasonably be
withheld or delayed. Within a reasonable time before beginning any work
affecting the structure of the Building, TENANT shall submit complete working
drawings and specifications therefor to LANDLORD for its approval, which
approval shall not be unreasonably withheld or delayed. All salvage from any
such work shall belong to TENANT, but all permanent improvements (except as
otherwise provided herein) shall belong to LANDLORD and become a part of the
realty. LANDLORD agrees that during the term hereof, it shall not make any
alterations or additions to the Premises without obtaining the prior written
consent of TENANT.
ARTICLE 11. (INSURANCE).
A. Liability Insurance. Effective upon the Commencement Date or such
earlier time as possession of the Leased Premises or any portion thereof is
delivered to TENANT, TENANT shall maintain with respect to the Premises (or the
portions thereof which are occupied by TENANT) and its activities thereon or
therefrom broad form comprehensive general liability insurance with minimum
limits of liability of at least Five Million Dollars ($5,000,000.00). TENANT
shall deliver a certificate of such insurance to LANDLORD upon the commencement
of the term and continuing evidence of such coverage annually. Such insurance
policy shall be in a form reasonably satisfactory to LANDLORD and shall be
placed with a company qualified to do business in the location of the Leased
Premises and which is reasonably acceptable to LANDLORD, and shall provide the
same cannot be canceled without at least thirty (30)days prior written notice to
LANDLORD.
Renewal insurance certificates shall be provided to LANDLORD not less than
thirty (30) days preceding the expiration of the prior policy.
B. Personal Property Insurance. TENANT shall carry, with respect to
its personal property, fixtures and equipment upon and its leasehold
improvements to the Premises, insurance against fire and such other insurance
and coverages as may be required by law or be dictated by prudent business
practices.
C. Worker's Compensation Insurance. TENANT shall carry
worker's compensation insurance covering all its employees, and if TENANT shall
contract with any independent contractor for the furnishing of labor, materials
or services to TENANT.
D. Limits. The limits and nature of insurance hereinabove provided may,
from time to time, be increased and expanded so as to provide comparable
protection subject to conditions existing from time to time as determined by
LANDLORD and TENANT. No insurance shall be required to be carried by TENANT
hereunder until the Commencement Date shall have occurred except with respect to
the making of its improvements in the Leased Premises.
E. Fire Or Casualty. On and after the Commencement Date, TENANT shall
maintain with respect to Building fire insurance (with "special coverage" or
"all risk" endorsements including "differences in conditions") in an amount not
less than the full replacement cost thereof naming LANDLORD and TENANT as
insureds. For the purposes of this Article the Leased Premises shall be deemed
to include, without limitation, improvements to the realty which may, from time
to time, be made (whether by TENANT or others), such as painting, light
fixtures, floor coverings, partitions, and signs, to the extent the same are
customarily insurable as a part of the realty and covered by TENANT'S fire
insurance. The proceeds of such insurance shall be applied in accordance with
Article 16 hereof.
F. Waiver of Subrogation. LANDLORD and TENANT agree that (insofar as and to
the extent that such agreement may be effective without invalidating or making
it impossible to secure insurance coverage or payment from responsible insurance
companies doing business in the State of Ohio) with respect to any property loss
which is covered by insurance then being carried by LANDLORD or TENANT,
respectively, the party carrying such insurance and suffering said loss releases
the other of and from any and all claims with respect to such loss; and they
further agree that their respective insurance companies shall have no right of
subrogation against the other on account thereof, even though extra premium may
result therefrom, unless the same would invalidate or prevent payment under said
policies of insurance.
ARTICLE 12. (INDEMNITY).
A. TENANT's Indemnity. After delivery of the Leased Premises or any
portion thereof to TENANT, TENANT will indemnify LANDLORD and save it harmless
and defend it from and against any and all claims, actions, damages, liability,
losses and expenses in connection with loss of life, personal injury and/or
damage to property arising from or out of any occurrence in, upon or at the
Leased Premises, or the occupancy or use by TENANT of the Leased Premises, or
any part thereof, or occasioned wholly or in part by any act or omission of
TENANT, its agents, contractors and their employees, employees, servants,
lessees or concessionaires, except to the extent that the same (i) results from
the negligence or wrongful act of LANDLORD or its servants, agents, contractors,
or invitees or (ii) related to the existence of Hazardous Waste (as defined
below) on the Premises or adjoining premises prior to the Commencement Date, or
(iii) the same occurs in a portion of the Premises not yet delivered to TENANT
or as a result of construction activities being conducted by LANDLORD.
B. Hazardous Waste Indemnity. TENANT hereby indemnifies and agrees to
defend, protect and hold LANDLORD, its employees or agents, harmless from and
against any and all losses, liabilities, fines, charges, damages, injuries,
penalties, response costs, costs, expenses and claims of any and every kind
whatsoever paid, incurred or suffered by, or asserted against the LANDLORD
including, without limitation, the costs of any required or necessary repair,
cleanup or detoxification, and the preparation and implementation of any
closure, remedial or other required plan and all reasonable costs and expenses
incurred by LANDLORD in connection therewith, including, but not limited to,
reasonable attorneys' fees for, with respect to the escape, seepage, leakage,
spillage, discharge, emission, discharging or release of any Hazardous Material
(as hereinafter defined) from or on the Leased Premises after TENANT takes
possession of the same as a result of the actions of TENANT or its servants,
agents, or subcontractors, except to the extent that the same results from
Hazardous Waste present on the Leased Premises or adjoining premises prior to
the time TENANT has taken possession of the same (including, without limitation,
any losses, liabilities, damages, injuries, costs, expenses or claims asserted
or arising under any federal, state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing liability
or standards of conduct concerning, any Hazardous Material).
LANDLORD hereby indemnifies and agrees to defend, protect and hold TENANT,
its employees or agents, harmless from and against any and all losses,
liabilities, fines, charges, damages, injuries, penalties, response costs,
costs, expenses and claims of any and every kind whatsoever paid, incurred or
suffered by, or asserted against the TENANT including, without limitation, the
costs of any required or necessary repair, cleanup or detoxification, and the
preparation and implementation of any closure, remedial or other required plans
and all reasonable costs and expenses incurred by TENANT in connection
therewith, including, but not limited to, reasonable attorneys' fees for, with
respect to, or as a direct or indirect result of the presence on or under, or
the escape, seepage, leakage, spillage, discharge, emission, discharging or
release of any Hazardous Material (as hereinafter defined) from or on the Leased
Premises occurring prior to TENANT taking possession of the Leased Premises or
resulting from the negligence of LANDLORD, its agents, servants, or
subcontractors (including, without limitation, any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any federal, state
or local statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Material).
For purposes herein, the term "Hazardous Material" means and includes any
flammable explosives, oil, radioactive materials, or hazardous, toxic or
dangerous waste, substance or related material included, but not limited to,
substance defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation, and Liability Act as amended, 42 U.S.C.
Section 9601, et seq.; or any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in
effect.
ARTICLE 13. (MECHANIC'S LIENS). TENANT and LANDLORD agree to promptly pay all
sums of money in respect of any labor, services, materials, supplies or
equipment furnished or alleged to have been furnished to, in, at, or about the
Leased Premises, or furnished to their respective agents, employees, contractors
or subcontractors, which may be secured, by any mechanics, materialman,
suppliers or other type of lien against the Leased Premises. In the event any
such or similar lien shall be filed, the party responsible therefor shall within
twenty-four (24) hours of receipt of notice thereof, give notice to the other
party of such lien, and shall, within ten (10) days after receiving notice of
the filing of the lien, discharge such lien by payment of the amount due the
lien claimant.
However, LANDLORD or TENANT may in good faith contest such lien provided
that within such ten (10) day period, TENANT or LANDLORD provides the other with
a surety bond protecting against said lien in an amount at least one and
one-half (1-1/2) times the amount claimed as a lien.
ARTICLE 14. (ASSIGNMENT OR SUBLETTING). TENANT shall and agrees not to sell,
assign, mortgage, pledge, franchise or in any manner transfer this Lease within
six (6) years of the commencement of this Lease, and thereafter, shall not do so
without the previous written consent of the LANDLORD, in each instance first
obtained, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, TENANT may at any time sublease all or portions of the Building or
the Leased Premises for a term not to exceed the balance of the term hereof plus
extensions thereof theretofore duly exercised by TENANT, and TENANT may assign
the lease in connection with a merger, consolidation, sale of all or
substantially all of the assets or stock of TENANT, or the like, or to a
subsidiary or to an affiliate of TENANT. Consent by LANDLORD to one assignment
of this Lease or to one sale, mortgage, pledge or other transfer, including
licensing or the grant of a concession, shall not be a waiver of LANDLORD's
right under this Article as to any subsequent similar action. Notwithstanding
any assignment or subletting, TENANT shall remain fully liable on this Lease and
shall not be released from performing any of the terms, covenants and conditions
of this Lease. This prohibition includes any subletting or assignment which
would otherwise occur by operation of law.
Notwithstanding anything herein contained to the contrary, unless
otherwise agreed at any time by the relevant State Authority funding the
applicable Grant described in Article 5 B. (iv), should TENANT assign its
interest in this Lease to a party other than to (i) a subsidiary or affiliate or
(ii) a party to a merger, consolidation, or sale of all or substantially all of
the assets of stock of TENANT, which has not agreed to directly assume the
obligations undertaken by TENANT with respect to the creation of employment
opportunities, then the amount of each such Grant shall be treated as being
amortized over ten (10) years on a straight line basis from the date of such
Grant, and any unamortized portion thereof at the time of such assignment shall
be payable to the City of Ironton, Ohio within thirty (30) days after such
assignment.
LANDLORD'S rights to assign this Lease are and shall remain unqualified.
Upon any sale of the Leased Premises and provided the purchaser assumes all
obligations under this Lease, LANDLORD shall thereupon be entirely freed of all
obligations of the LANDLORD hereunder and shall not be subject to any liability
resulting from any act or omission or event occurring after such conveyance,
except that any covenant or obligation of LANDLORD hereunder affecting land
owned or payment of Loans or cash flow shall continue. Upon the sale or other
transfer of LANDLORD'S interest in this Lease, TENANT agrees to recognize and
attorn to such transferee as LANDLORD, and TENANT further agrees to execute and
deliver a recordable instrument setting forth the provisions of this paragraph.
In the event of any such transfer by LANDLORD, TENANT may, at its election,
arrange to pay its rent directly to the holders of the Loans to ensure that the
same are reduced in accordance with Schedules 1 and 2 hereof.
ARTICLE 15. (EMINENT DOMAIN).
A. Taking Resulting In Termination Of Lease. If at any time during the
term of this Lease or any extension thereof the whole or substantially all of
the Leased Premises shall be taken for any public or quasi-public purpose by any
lawful power or authority by the exercise of the right of condemnation or
eminent domain or by agreement between the LANDLORD and those authorized to
exercise such right in lieu of such taking, this Lease and the term hereby
granted, shall terminate and expire on the date of such taking, and the Minimum
Annual Rent and additional rent and all other charges herein reserved and
provided to be paid by TENANT shall be appropriately adjusted and apportioned
and paid to the date of such taking.
In the event of a taking of a portion of the Leased Premises, TENANT shall
have the right to terminate this Lease effective as of the date of the taking by
giving the other in writing notice of such termination within thirty (30) days
after TENANT receives notice of the taking if:
(i) As a result of the taking the Leased Premises are deprivedo
of access from the public road serving the same; or
(ii) Such part of the Building or parking areas are taken as would
render the balance of said Building or parking areas, after restoration,
unsuitable in TENANT's reasonable judgment for the proper operation of its
business.
Upon any termination under the provisions of this Article 15, the Minimum
Annual Rent, additional rent, and all other sums to be paid by TENANT shall be
appropriately adjusted and apportioned and paid to the date of such taking.
In the event a taking results in the termination of this Lease pursuant to
the applicable provisions, then TENANT may exercise its option to purchase
hereunder (on or after September 1, 1998) at any time within one hundred eighty
(180) days prior to such taking, and in such event, the net proceeds of any
award or awards, after the payment of all expenses incurred in the recovery
thereof, shall be distributed to TENANT. If TENANT does not purchase, then the
net proceeds of any award shall be distributed as follows:
(i) By paying to the holders of the Loans an amount equal to the
unpaid balance of the Loans plus interest after payment by LANDLORD and
application against the Loans of all cash on hand generated from this Lease in
excess of the product of Twenty Five Thousand Dollars ($25,000.00) and the
number of full Lease Years from the Commencement Date through the date of
termination which is or should have been in the possession of LANDLORD at such
time in accordance with Schedules 1 and 2;
(ii) Unless otherwise agreed by the relevant State Authority funding
the applicable Grant, by paying to the City of Ironton, Ohio the unamortized
portion of any such Grant at the time of termination (such Grant being treated
as being amortized over ten (10) years on a straight line basis from the date of
such Grant); and
(iii) Any balance remaining shall be payable to TENANT.
In such event, any prepaid rental shall be returned to TENANT and LANDLORD
shall be permitted to retain any amounts of cash on hand in its possession
generated from this Lease up to an amount equal to the product of Twenty Five
Thousand Dollars ($25,000.00) and the number of full Lease Years from the
Commencement Date to the date of termination.
B. Taking Not Resulting In Termination Of Lease. If only a portion of the
Leased Premises is taken and this Lease is not terminated pursuant to the
applicable provisions of this Article 15, then this Lease shall continue in full
force and effect with respect to that part of the Leased Premises not so taken,
without any effect upon the term of this Lease or any diminution of TENANT'S
obligations thereunder except for the reduction in Minimum Annual Rent
hereinafter provided.
The net proceeds of any award or awards, after the payment of all expenses
incurred in the recovery thereof shall be distributed in the following order of
priority:
(i) First to LANDLORD and shall be used by LANDLORD so far as is
necessary in restoring the Building and other improvements constructed by
LANDLORD pursuant to this Lease;
(ii) To TENANT and shall be used by TENANT so far as necessary in
restoring TENANT's improvements to the Building and other improvements
constructed by TENANT pursuant to this Lease;
(iii) Any balance shall be used to reduce the principal balance of
the Loans, and to the extent that there is any excess, it shall be payable to
TENANT.
From the date of the taking and until completion of such restoration,
TENANT shall be entitled to a fair and proportionate abatement of the Minimum
Annual Rent according to the extent to which there has been interference with
its operation of its business. Upon completion of such restoration, the Minimum
Annual Rent thereafter payable shall be reduced equitably and proportionately,
based upon the extent to which TENANT's use of the Leased Premises has been
affected and the amount that the principal balance of the Loans has been
reduced, such that the balance of the Loans shall amortize to the amounts set
forth in Schedule 2 at the conclusion of the Initial Term.
ARTICLE 16. (DESTRUCTION). If the Leased Premises shall be partially damaged by
any casualty insurable under the insurance policy paid for by the TENANT
pursuant to the terms hereof, TENANT shall, upon receipt of the insurance
proceeds and except as provided below, promptly repair the same (including any
repairs to TENANT's improvements made hereunder). If the Leased Premises (a) by
reason of such occurrence are rendered wholly untenantable or (b) are damaged as
a result of a risk which is not covered by insurance or (c) are destroyed or
damaged to the extent of at least Thirty Five Percent (35%), Twenty Five Percent
(25%), or Fifteen Percent (15%) of the total cost of replacing the Leased
Premises, during the third-last, second-last, or last year, respectively of the
Initial Term or of any Extension Term hereof, or (d) are at any time damaged to
the extent of Sixty Percent (60%) or more of the then monetary value thereof,
then or in any of such events, TENANT may elect to cancel this Lease by notice
of cancellation within sixty (60) days after such event and thereupon this Lease
shall expire.
In the event that this Lease is terminated by TENANT pursuant to the terms
hereof, the insurance proceeds shall be payable in the following order or
priority:
(i) By paying to the holders of the Loans an amount equal to the
unpaid balance of the Loans plus interest after payment by LANDLORD and
application against the Loans of any cash on hand generated from this Lease
which is in LANDLORD's possession or which should be in LANDLORD's possession in
accordance with Schedules 1 or 2 in excess of the product of Twenty Five
Thousand Dollars ($25,000.00) and the number of full Lease Years from the
Commencement Date through the date of termination;
(ii) Unless otherwise agreed by the relevant State Authority funding
the applicable Grant, by paying to the City of Ironton, Ohio the unamortized
portion of any such Grant at the time of termination (such Grant being treated
as being amortized over ten (10) years on a straight line basis from the date of
such Grant); and
(iii) Any balance remaining shall be payable to TENANT.
In such event, any prepaid rental shall be returned to TENANT and LANDLORD
shall be permitted to retain any amounts of cash on hand in its possession
generated from this Lease up to an amount equal to the product of Twenty Five
Thousand Dollars ($25,000.00) and the number of full Lease Years from the
Commencement Date to the date of termination.
If at any time during the term, the whole or any part of the Leased
Premises shall be destroyed or damaged by fire or other casualty, then in each
such case the rent and the other charges payable by TENANT shall be abated in an
amount which reflects the nature and extent of the injury to the business
conducted in the Leased Premises at the time of the destruction or damage and to
which the Leased Premises have been thereby rendered unfit for their intended
purposes, as well as the extent to which the Leased Premises have thereby been
rendered unfit for the conduct of such business and the amount that the
principal balance of the Loans has been reduced, such that the balance of the
Loans shall amortize to the amounts set forth in Schedule 2 at the conclusion of
the Initial Term. Such abatement shall come into effect on the date on which the
destruction or damage occurred and shall continue in effect until LANDLORD has
restored the Leased Premises to then prior condition, and for any further period
of time which TENANT, in the exercise of reasonable diligence, may require to
open the restored portion of the Leased Premises for business in normal manner
or, if this Lease is terminated because of the destruction or damage, until the
termination date.
ARTICLE 17. (SURRENDER OF PREMISES). This Lease shall terminate at the end of
the Initial Term hereof, or any Extension Term hereof, and TENANT hereby waives
notice to vacate the Leased Premises and agrees that LANDLORD shall be entitled
to the benefit of all provisions of law respecting the summary recovery of
possession of premises from a tenant holding over to the same extent as if
statutory notice had been given. For the period of six (6) months prior to the
expiration of the Initial Term or any Extension Term (provided the option for
the next Extension Term has not been exercised), LANDLORD shall have the right
to display on the exterior of the Leased Premises in any window or doorway
thereof, the customary sign "For Rent" and during such period LANDLORD may show
the Leased Premises and all parts thereof to prospective tenants during normal
business hours.
On the last day of the term, as the same may be extended, or on the sooner
termination thereof, TENANT shall peaceably surrender the Leased Premises in
good order, condition and repair, broom clean, fire and other unavoidable
casualty and reasonable wear and tear only excepted. TENANT shall, at is
expense, remove its trade fixtures, equipment, and signs from the Leased
Premises and any property not removed on the last day of the term shall be
deemed abandoned. Any abandoned fixtures or property of TENANT may be removed by
LANDLORD, the cost of which shall be charged to TENANT as additional rent. Any
damages caused by TENANT in the removal of such items shall be repaired at the
TENANT'S expense. All alterations, additions, improvements and fixtures (other
than TENANT'S signs, trade fixtures, and equipment) which shall have been made
or installed by either LANDLORD or TENANT upon the Leased Premises and all hard
surface bonded or adhesively affixed flooring, shall remain upon and be
surrendered with Leased Premises as a part thereof, without disturbance,
molestation or injury, and without charge, at the expiration or termination of
this Lease and shall then become property of LANDLORD. If the Leased Premises be
not so surrendered, TENANT shall indemnify LANDLORD against loss, liability or
expense resulting from delay by TENANT in so surrendering the Leased Premises,
or failure to leave the Leased Premises in the condition required hereunder
including, but not limited to, claims made by any succeeding tenant founded upon
such delay. TENANT shall promptly surrender all keys to the Leased Premises to
LANDLORD at the place then fixed for payment of rent and shall inform LANDLORD
of combinations on any locks and safes on the Leased Premises.
ARTICLE 18. (DEFAULT). The following shall be Events of Default hereunder:
A. A default in the payment, when due, of any rent, whether additional or
Minimum which exists ten (10) days after TENANT's receipt of written notice from
LANDLORD that the same shall be due.
B. A default in the performance of any of TENANT'S obligations under this
Lease other than those set forth in paragraph (a) above which exists thirty (30)
days, and such additional time, if any, as is reasonably necessary to cure the
default if the default is of such a nature that it cannot be reasonable cured
within thirty (30) days, after the TENANT shall have received written notice
from the LANDLORD of such default; provided, however, that nothing contained
herein shall be construed as precluding the LANDLORD from having such remedy as
may be and become necessary in order to preserve the LANDLORD'S rights and the
interests of the LANDLORD in the Leased Premises and in this Lease, even before
the expiration of the grace period provided for in this paragraph, if, under the
particular circumstances then existing, the allowance of such grace or the
giving of such notice would prejudice or endanger the rights and estate of the
LANDLORD in this Lease and in the Leased Premises.
So long as any Event of Default shall exist, then LANDLORD, in addition to,
and not in limitation of, any and all other rights or remedies available to it
by law, shall have the right, without notice to terminate this Lease and to
reenter upon the Leased Premises (with or without process of law where the
default consists of nonpayment of rent, the TENANT hereby waiving any demand for
possession of the Leased Premises). TENANT covenants and agrees that upon such
termination, TENANT will surrender and deliver up the Leased Premises peaceably
to LANDLORD, or the agent or attorney for the LANDLORD, immediately upon such
termination. TENANT covenants, in case of any termination by reason of an Event
of Default by TENANT hereunder, to pay LANDLORD all costs of enforcing its
rights under this Lease (including, without limitation, reasonable attorneys'
fees and expenses), and loss of rent during the then current term. LANDLORD
agrees to utilize reasonable efforts to relet the Leased Premises in the event
of such termination.
ARTICLE 19. (HOLDING OVER). In the event TENANT remains in possession of the
Leased Premises after the expiration of this Lease and without the execution of
a new Lease, it shall be deemed to be occupying the Leased Premises as a tenant
at will at one and one quarter (1.25) times the Minimum Annual Rent last in
effect, subject to all the conditions, provisions and obligations of this Lease
insofar as the same can be applicable to a tenancy at will, cancelable by either
party upon thirty (30) days written notice to the other.
ARTICLE 20. (INSPECTION). TENANT will permit LANDLORD, its agents, employees and
contractors to enter all parts of the Leased Premises to inspect the same and to
enforce or carry out any provision of this Lease upon forty-eight (48) hours
written notice to TENANT, or immediately in case of an emergency.
ARTICLE 21. (NON-WAIVER). No reference to any specific right or remedy shall
preclude either party from exercising any other right or from having any other
remedy or from maintaining any action to which it may otherwise be entitled
either at law or in equity.
Either party's failure to insist upon a strict performance of any covenant
of this Lease or to exercise any option or right herein contained shall not be a
waiver of relinquishment for the future of such covenant, right or option, but
the same shall remain in full force and effect.
ARTICLE 22. (SUBORDINATION). LANDLORD reserves the right to subject and
subordinate this Lease to the lien of any mortgage or mortgage(s) hereinafter
placed against LANDLORD'S interest in said Leased Premises to secure the Loans
in amounts no greater than as set forth in Schedules 1 and 2. TENANT covenants
and agrees to execute and deliver upon demand of LANDLORD, its successors and
assigns, at any time during the term hereof, such further instruments and
certificates subordinating this Lease to a lien of any mortgage securing the
Loans, provided that all such instruments, of subordination shall recognize the
validity and contents of this Lease and the rights of the TENANT herein in the
event of a foreclosure of such mortgage upon the interest of LANDLORD, as long
as TENANT shall have faithfully performed all of the terms and covenants and
conditions of this Lease, and shall not be in default under the terms of any
such mortgage as aforesaid.
Whether or not this Lease is subordinated to any mortgages, LANDLORD
shall, within thirty (30) days of execution hereof, secure written agreements
from each holder of the Loans recognizing this Lease, agreeing not to disturb
TENANT's possession hereunder, and agreeing to and recognizing the prepayment of
rental by TENANT hereunder and the option to purchase of TENANT hereunder.
ARTICLE 23. (CAPTIONS & HEADINGS). The captions and headings used herein
are intended only for the convenience of the reference and are not to be used in
constructing this instrument.
ARTICLE 24. (APPLICABLE LAW). This Lease shall be construed under the laws of
the State of Ohio. If any provision of this Lease, or portion thereof, or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby and each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
ARTICLE 25. (SUCCESSORS). This Lease and the covenants and conditions herein
contained shall inure to the benefit of and be binding upon LANDLORD, its
successors and assigns, and upon TENANT, its successors and permitted assigns.
ARTICLE 26. (SIGNAGE). TENANT may erect such signs in the Leased Premises
as are permitted under law.
ARTICLE 27. (NO PARTNERSHIP). Any intention to create a joint venture
or partnership relation between the parties hereto is hereby expressly
disclaimed.
ARTICLE 28. (ESTOPPEL). TENANT agrees that at any time, and from time to time at
reasonable intervals, within ten (10) days after written request by LANDLORD,
TENANT will execute, acknowledge and deliver to LANDLORD, LANDLORD'S
mortgagee(s), or an assignee designated by LANDLORD, a writing ratifying this
Lease and certifying:
(i) that TENANT has entered into occupancy of the Leased
Premises and the date of such entry if such is the case;
(ii) that this Lease is in full force and effect, and has not been
assigned, modified, supplemented or amended in any way (or if there has been any
assignment, modification, supplement or amendment, identifying the same),
(iii) that this Lease represents the entire agreement between LANDLORD and
TENANT as to the subject matter hereof (or if there has been any assignment,
modification, supplement or amendment, identifying the same);
(iv) the date of commencement and expiration of the term;
(v) that all conditions under this Lease to be performed by LANDLORD
have been satisfied (and, if not, what conditions remain unperformed);
(vi) that to the knowledge of the signer of such writing, no default
exists in the performance or observance of any covenant or condition in this
Lease and there are no defenses or offsets of which the signer may have
knowledge;
(vii) that Minimum Annual Rent and all other rentals have been paid
under this Lease.
ARTICLE 29. (OPTION).
A. Option. The LANDLORD hereby grants to the TENANT the exclusive
and irrevocable option to purchase the Leased Premises subject to the terms of
this Article 29.
B. Price. The purchase price that TENANT shall pay to LANDLORD for
the Leased Premises shall be an amount equal to the sum of the amounts of all
principal outstanding and interest payable under the Bank Loan, State 166 Loan,
and CDBG Loan described in Schedule 1 plus, unless otherwise agreed by the
relevant State Authority funding the applicable Grant, the unamortized portion
of any such Grant at the time of termination (each such Grant being treated as
being amortized over ten (10) years on a straight line basis from the date of
such Grant, such amount to be paid to LANDLORD or the City of Ironton, Ohio, as
LANDLORD may direct), less the greater of (i) any amounts of cash on hand
resulting from the Lease in the possession of LANDLORD at the time of the
closing, and (ii) such amounts as should have been in LANDLORD's possession at
such time in accordance with Schedules 1 and 2, in either case in excess of the
product of the number of full lease years as have elapsed from the Commencement
Date to the time of the closing and Twenty Five Thousand Dollars ($25,000.00).
C. Term. The option hereby granted may be exercised at any time
during the Initial Term after September 7, 1998 or during any Extension Term
hereof, so long as this Lease is in full force and effect at such time,
provided, however, that the closing hereunder shall not occur prior to the
expiration of the second Lease Year of the term except as herein otherwise
provided.
D. Exercise of Option. The option hereby granted shall be exercised
by written notice delivered to the Landlord at the address stated herein.
E. Title. On the exercise by the TENANT of the option to purchase the
Leased Premises, the LANDLORD agrees to convey good and marketable fee simple
title to the Leased Premises free and clear of all liens, mortgages and other
encumbrances and subject only to: (i) matters set forth on Exhibits A and C
hereof, and (ii) encumbrances, restrictions, easements and other matters
affecting title to the land which are created subsequent to the date of this
Lease and approved at such time by the TENANT.
F. Closing. The sale hereby contemplated will be consummated as follows:
(i) Closing Date: The date of closing will be the date specified by the
TENANT by written notice to the LANDLORD but no earlier than thirty (30) days
after exercise of the option.
(ii) Seller's Instruments: At closing, the LANDLORD will deliver or
cause to be delivered to the TENANT a warranty deed covering the Leased Premises
and such additional documents as shall be reasonably requested by the TENANT to
consummate the purchase by the TENANT.
(iii) Buyer's Instruments: At closing, the TENANT will deliver to
the LANDLORD current funds in the amount of the purchase price of the Leased
Premises and such additional documents as shall be reasonably requested by the
LANDLORD to consummate the sale to the TENANT.
ARTICLE 30. (NOTICES). Any notice desired or required to be given under this
Lease shall be sent postage prepaid, registered or certified mail, return
receipt requested, as to LANDLORD: ▇▇▇▇▇▇▇▇ County Economic Development
Corporation, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and as to TENANT: Cabletron
Systems, Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Contracts Department, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as each
party may from time to time designate in writing to the other.
ARTICLE 31. (TITLE & ZONING).
A. LANDLORD's Title Warranties. LANDLORD hereby covenants with TENANT and
warrants and represents to TENANT that LANDLORD is the record owner of the land
described in Exhibit A in fee simple absolute. LANDLORD further covenants with
TENANT and also warrants and represents to TENANT as follows:
(i) that the Leased Premises, and all right of TENANT hereunder are
free and clear of all encumbrances and restrictions (whether contained in deeds,
leases or other instruments or agreements) except those described in Exhibit C;
and
(ii) that this Lease is and shall remain prior to all other interests
covering the Leased Premises, subject only to any mortgage to which this Lease
may be subordinated in accordance with the terms of this Lease; and
(iii) that LANDLORD and each person executing this Lease on behalf of
LANDLORD (or in any representative capacity) have full right and lawful
authority to execute this Lease; and
(iv) that there is no legal impediment whether arising out of any matter
described in Exhibit C, or out of any Building, zoning, fire, health, safety or
(environmental protection law, or otherwise) to the construction and use of the
Leased Premises for their intended purposes and in accordance with the
provisions of this Lease, or to the exercise and enjoyment by TENANT of its
rights and privileges under this Lease; and
(v) that, as of the Commencement Date, LANDLORD shall have complied with
all federal, state and local environment laws, ordinances and regulations
applicable to the Leased Premises (as a Building rather than for any particular
use), so that the business to be conducted by TENANT from the Leased Premises
may be operated in a normal manner and without hindrance or molestation from any
person or entity on account of any failure to comply with any of the same; and
(vi) that LANDLORD will not make or enter into any agreement, or Lease
which is inconsistent with any of TENANT's rights or privileges under this
Lease.
LANDLORD acknowledges that TENANT has relied on each of the foregoing
covenants, warranties and representations in executing this Lease, and that each
of the same is material.
B. TENANT's Remedies. If any warranty or representation contained in this
Article shall prove to be false, or if any change in applicable law shall have a
material, and substantially adverse effect on TENANT's right to conduct a
business in the Leased Premises, or if LANDLORD'S failure to perform any of its
obligations under this Lease or any of its obligations to any governmental
authority having jurisdiction over the Leased Premises shall prevent or
materially adversely affect TENANT'S use and enjoyment of the Leased Premises or
rights under this Lease, then, in any such case, TENANT shall have the right to
terminate this Lease by written notice to LANDLORD sent at any time thereafter.
TENANT's termination notice shall take effect on the sixtieth (60th) day after
LANDLORD's receipt of the notice, unless the default or other condition
justifying TENANT's termination has been cured or removed prior to that day,
provided, however, that if LANDLORD shall have commenced any administrative
and/or judicial proceeding during such sixty (60) day period, the objective of
which is to contest any such change in law, or any order, decree, law or
regulation preventing or affecting TENANT's use and enjoyment of the Leased
Premises or the Common Facilities, as aforesaid, and if LANDLORD shall be
diligently prosecuting any such proceedings in good faith, then said sixty (60)
day period shall be extended through a final adjudication (not subject to
further appeal) of any such proceedings. TENANT agrees to cooperate with
LANDLORD and participate, without cost to TENANT, in all such aforementioned
proceedings instituted by LANDLORD. The rent and other payments required of
TENANT under this Lease for the sixty (60) day period (as such sixty (60) day
period may be extended pursuant hereto) or the portion thereof ending with the
date on which the default or condition shall be cured or removed) shall be
abated in proportion to the extent of the injury to the business conducted in
the Leased Premises at the beginning of the period, and LANDLORD shall refund
all unearned rent and other charges paid in advance by TENANT.
C. Title Certificate. Within five (5) days after execution hereof, LANDLORD
shall deliver to TENANT at TENANT's expense, a current opinion, running to
TENANT, of an attorney of a title insurance company (each reasonably acceptable
to TENANT) setting forth the state of LANDLORD's title, which shall include,
without limitation, all encumbrances and restrictions upon the Leased Premises
and TENANT's rights hereunder as set forth in Exhibits A and C, and no others.
D. Title Insurance. In addition to and without limiting any of LANDLORD's
covenants, warranties and representations or any of TENANT's remedies under this
Article 30, LANDLORD's representative shall deliver to TENANT, contemporaneous
with the execution of this Lease, a commitment for a leasehold title insurance
policy, issued by a title insurance company reasonably satisfactory to TENANT,
which commitment shall provide for the issuance to TENANT of a Leasehold title
insurance policy insuring TENANT's Leasehold interest and TENANT's option to
purchase granted hereof in the Leased Premises in the amount of Five Million
Dollars ($5,000,000.00), in accordance with and subject only to matters
described in Exhibits A and C hereto attached. The policy shall be issued within
thirty (30) days of execution of this Lease. Upon issuance of such policy,
TENANT shall reimburse LANDLORD for the premiums payable in connection therewith
which are in excess of LANDLORD's title insurance costs shown in Schedule 1.
Such excess premium shall be equal to approximately Four Thousand Twenty Dollars
($4,020.00).
ARTICLE 31. (ENTIRE AGREEMENT). This Lease and the Exhibits thereto constitute
the full and complete agreement between the parties hereto and there are no
other terms, obligations, covenants, representations, warranties or conditions
other than contained herein.
IN WITNESS WHEREOF, LANDLORD and TENANT have caused this Lease to be
signed, sealed and delivered as of the day first above written.
LANDLORD: ▇▇▇▇▇▇▇▇ County TENANT: Cabletron Systems, Inc.
Development Economic
Corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President Its: Secretary
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Its: Treasurer