EXHIBIT 10.10
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SAG Partners,
Landlord
AND
Rayovac Corporation,
Tenant
AGREEMENT OF LEASE
Dated: May 14, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
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AGREEMENT OF LEASE, made as of this day of May, 1985 by and between SAG
PARTNERS, a Wisconsin general partnership having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Landlord") and RAYOVAC CORPORATION, a Delaware
corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Tenant").
W I T N E S S E T H:
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ARTICLE I
LEASE OF PROPERTY; TERM OF LEASE
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1.1 Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord, subject to all the terms, conditions and covenants herein contained,
(a) all that certain tract or parcel of land located in Madison, Dane County,
Wisconsin (the "Land"), more particularly described in Exhibit A annexed hereto
and made a part of this lease, and (b) the Building and Improvements (as such
terms are hereinafter defined) to be constructed by Landlord on the Land in
accordance with the plans and specifications described in Exhibit B annexed
hereto and made a part of this lease, together with and subject to the
easements, rights, privileges and other benefits described in Exhibit C annexed
hereto and made a part or this lease. The Demised Premises are leased subject
only to the permitted exceptions (the "Permitted Exceptions") described in
Exhibit D annexed hereto and made a part of this lease. The Land, the Building
and Improvements and the matters described in Exhibit C are hereinafter
collectively referred to as the "Demised Premises". Each party hereby expressly
covenants and agrees to keep, observe and perform all of the covenants and
conditions contained herein on the part of such party to be kept, observed and
performed.
1.2 The term of this lease shall commence on the Commencement Date, as
defined in Section 2.1(d) hereof, and shall end at midnight on the last day of
the month in which occurs the eighteenth (18th) anniversary of the Commencement
Date unless this lease shall sooner terminate or be extended as hereinafter
provided. The expiration date specified in this lease, as such date may be
extended through tenant options, shall hereinafter be referred to as the
"Expiration Date". Without limiting any rights which the parties hereto may have
as a result of such occurrence, this lease shall terminate and be of no further
force and effect if the Commencement Date has not occurred by July 1, 1989.
1.3 Promptly after the Commencement Date, Landlord and Tenant shall
enter into a written agreement which fixes the Commencement Date and the
Expiration Date. If Landlord and Tenant do not agree thereon within thirty (30)
days after request
therefor by either party, then such dates shall be determined by arbitration
pursuant to Article XXII hereof.
ARTICLE II
DEFINITIONS
2.1 For all purposes of this lease, and all agreements supplemental
hereto, the terms defined in this Section shall have the meanings specified in
this Section unless the context expressly otherwise requires:
(a) The term "Building" shall mean the 79,409 square foot Tech Center
(including its machinery, equipment and fixtures) and the four-story 159,518
square foot office building (including its machinery, equipment and fixtures) to
be constructed by Landlord on the Land, as more particularly described in the
Plans and Specifications hereinafter defined, together with all additions
thereto and/or replacements thereof.
(b) The term "Business Hours" shall mean the hours of 8:00 A.M. to 6:00
P.M. on Mondays through Fridays and the hours of 9:00 A.M. to 1:00 P.M. on
Saturday, but shall exclude such hours occurring on all days observed by the
Federal or State government as legal holidays.
(c) The term "Certificate of Occupancy" shall mean a certificate issued
by Madison, Dane County, Wisconsin, with respect to the Building.
(d) The term "Commencement Date" shall mean the earlier to occur of (a)
the Date of Completion of Landlord's Work, or (b) the date that Tenant takes
possession of the Demised Premises. If Tenant's obligations to pay Fixed Rent
and/or Additional Rent commence on a day other than the first day of a calendar
month, the Fixed Rent and Additional Rent shall be pro rated for the calendar
month in which they commence based on the number of days from the commencement
of the obligation until the end of said month.
(e) The term "Completion Certificates" shall mean certificates prepared
by Landlord's architect which set forth and certify the date upon which all of
the following have been completed: (i) Landlord's Work has been completed in
accordance with the Plans and Specifications; (ii) all machinery, equipment and
fixtures (including, but not limited to, plumbing, electrical, elevator, and
heating, ventilation and air conditioning machinery and equipment) are installed
and in place in accordance with the Plans and Specifications; (iii) all
utilities (including, but not limited to, water, sewer and electric) are
available to the Building; and (iv) a temporary or permanent Certificate of
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Occupancy and a Board of Fire Underwriters Certificate have been issued.
Landlord's architect may issue Completion Certificates with reference to
(i) and (ii) above notwithstanding the fact that minor or insubstantial details
of construction, mechanical adjustment or decoration remain to be performed, the
non-completion of which do not materially interfere with Tenant's use and
occupancy of the Demised Premises for Tenant's normal business purposes.
(f) The term "Date of Completion" shall be the date set forth in the
Completion Certificates described in Section 2.1(e) above, as such date may be
altered pursuant to Section 3.2.
(g) The term "Imposition" shall mean all real estate taxes, assessments,
special assessments, and all other taxes and charges of every kind and nature
whatsoever, ordinary or extraordinary, foreseen or unforeseen, general or
special, levied or imposed upon the Demised Premises or arising from the use,
occupancy or possession of the Demised Premises, but shall not include (i) any
special assessment such as an assessment for curb-cuts and traffic control
assessments or charges such as "tap charges" or "connection charges" or items of
a similar nature which are assessed or imposed or arise during the usual course
of construction of the Demised Premises, or (ii) any franchise, excise,
corporate, estate, inheritance, succession, capital levy or transfer tax of
Landlord or any income, profits or revenue tax upon the income of Landlord;
provided, however, that if at any time during the term of this lease, the
methods of taxation prevailing upon the Commencement Date of this lease shall be
altered so that in lieu of, or as a supplement to, the whole or any part of the
Impositions then levied, assessed or imposed on the Demised Premises, there
shall be levied, assessed or imposed, wholly or partially, a tax, assessment,
levy, imposition or charge upon (i) the rent or the income arising from the
operation of the Demised Premises or any part thereof, or (ii) the use and
occupancy of the Demised Premises, or any part thereof, or (iii) the business of
Landlord in renting the Demised Premises, then all such taxes, assessments,
levies, impositions or charges shall be deemed to be included within the term
"Impositions" to the extent that same would be payable if the Demised Premises
were the sole property of Landlord subject thereto and Tenant shall pay and
discharge the same as herein provided.
(h) The term "Improvements" shall mean the improvements other than the
Building (including landscaping, lighting, paved walkways and driveways, and
paved parking for approximately 475 cars) to be constructed by Landlord on the
Land, as more particularly described in the Plans and Specifica-
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tions hereinafter defined, together with all additions thereto and/or
replacements thereof.
(i) The term "Landlord's Work" shall mean the Building to be constructed
by Landlord in accordance with the Plans and Specifications and the laws of
public authorities (as hereinafter defined). All of Landlord's Work shall be
performed and completed in a good and workmanlike manner consistent with
standards of construction practice prevailing in Dane County, Wisconsin for
commercial buildings of like quality and free from all liens, charges and
encumbrances except for the Permitted Exceptions. All of Landlord's Work shall
be performed at Landlord's sole cost and expense, except for those items set
forth in Exhibit E annexed hereto and made a part of this lease which shall be
performed at Tenant's sole cost and expense. Tenant shall pay for such items
within five (5) days of receiving a notice requesting payment for any of such
items.
(j) The term "laws of public authorities" shall mean any law, ordinance,
regulation, order, rule, proclamation, decree or requirement, ordinary or
extraordinary, foreseen or unforeseen, of the Federal or any state or municipal
government, or any political subdivision, agency or instrumentality thereof, or
of any other public or quasi-public authority or group, including the Wisconsin
Board of Fire Underwriters, any local board thereof or any group having similar
functions, having jurisdiction over the Demised Premises.
(k) The term "Lease Year" shall mean the calendar year in which the
Commencement Date occurs and each subsequent calendar year in which occurs any
portion of the term of this lease. The term "Complete Lease Year" shall describe
a Lease Year consisting of twelve (12) full calendar months; the term "Partial
Lease Year" shall mean a Lease Year which does not consist of twelve (12) full
calendar months.
(l) The term "person" shall include any person, partnership,
corporation, firm or other legal entity.
(m) The term "Plans and Specifications" shall mean (1) a complete set of
drawings covering all aspects of construction and preparation of the Demised
Premises including site, landscape, structural, architectural, mechanical and
electrical drawings, and (2) a complete set of specifications covering all
elements of construction, which drawings and specifications were filed with and
approved by the Building Department of Madison, Dane County, Wisconsin, and
which Plans and Specifications are more particularly described and set forth on
annexed Exhibit B, as such Plans and Specifications may be amended from time to
time in accordance with the terms of this lease.
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(n) The term "Tax Year" shall mean the period of twelve months adopted
as the fiscal year for real estate tax purposes by the appropriate governmental
authorities.
(o) The term "Unavoidable Delays" shall mean delays beyond the
reasonable control of Landlord, due to strikes, lock-outs, acts of God,
inability to obtain labor or materials despite the timely ordering and payment
therefor in accordance with customary construction practice, government
restrictions, enemy action, civil commotion, fire, flood, casualty, or other
similar causes beyond the reasonable control of Landlord.
ARTICLE III
PREPARATION FOR OCCUPANCY
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3.1 Landlord shall undertake and complete Landlord's Work in the manner
contemplated by Section 2.1(i) of this lease. Landlord shall make no material
change in Landlord's Work without the prior written consent of Tenant, which
Tenant shall not unreasonably withhold or delay.
3.2 In the event that the Date of Completion is delayed as the probable
result of any change in the Plans and Specifications requested by Tenant, or as
the probable result of any willful act or omission of Tenant, then the Date of
Completion shall be deemed to occur on the date when it would have occurred but
for such delay, provided that Tenant's rights and obligations under this lease
other than the payment of Fixed Rent and Additional Rent shall not commence
until the actual Date of Completion. Following its receipt of a notice
requesting payment, Tenant shall promptly reimburse Landlord for any extra costs
incurred by Landlord as a result of (a) changes requested by Tenant, whether or
not such changes delayed the Date of Completion, and (b) delays as described
above.
3.3 Prior to the Commencement Date, Landlord shall afford Tenant access
to the Building for the purpose of decorating the Building and making
alterations thereto which do not involve its structure or systems, at Tenant's
sole cost and expense, provided that in Landlord's reasonable judgment such
access will not interfere with the completion of Landlord's Work. Landlord
reserves the right to terminate Tenant's access if, in Landlord's sole judgment,
interference with the completion of Landlord's Work occurs. Any work performed
by Tenant shall be completed in a good and workmanlike manner and in compliance
with Article VII of this lease.
3.4 In the event Tenant intends to take possession of the Demised
Premises prior to the Date of Completion of Landlord's Work, Tenant shall notify
Landlord at least five (5) days prior to such taking of possession.
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3.5 In the event that the Date of Completion of Landlord's Work has not
occurred by May 31, 1986, then Landlord agrees to indemnify and hold Tenant
harmless from and against any claims, loss, costs, liability and expenses
(including attorneys' fees) incurred by Tenant as the result of (a) Tenant
holding over following the expiration of its lease at First Wisconsin Plaza, or
(b) extra moving and other costs incurred by Tenant due to the delay in the Date
of Completion of Landlord's Work. To make a claim pursuant to this Section 3.5,
Tenant shall provide Landlord with a statement clearly itemizing Tenant's
recoverable expenditures.
3.6 Upon receipt of the final Certificate of Occupancy and the Board of
Fire Underwriters Certificate covering the Building, Landlord shall deliver such
original certificates to Tenant.
3.7 Landlord represents that the following conditions will exist as of
the date of final completion of the Building and Improvements:
(a) The Building and Improvements will be in compliance with all
applicable and material laws of public authorities relating to zoning, land use
and building code requirements;
(b) The Building's HVAC, electrical, plumbing and other systems will be
in working order; and
(c) The Building and Improvements will be free from defects.
ARTICLE IV
RENT; ESCROW DEPOSIT
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4.1 Tenant covenants and agrees to pay to Landlord (or to any other
person designated herein) as rent for the Demised Premises the following:
(a) Fixed Rent amounting to $2,850,000.00 per annum, subject to increase
based upon increases in the Consumer Price Index (the "CPI Adjustments") as
provided in Section 4.2 (herein referred to as "Fixed Rent"); and
(b) Additional Rent consisting of all other sums of whatsoever nature
which shall become due and payable by Tenant hereunder, and for default in the
payment of which Landlord shall have the same remedies as for a default in the
payment of Fixed Rent (herein referred to as "Additional Rent").
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4.2 CPI Adjustments to the Fixed Rent shall be made on the seventh (7th)
and fourteenth (14th) anniversaries of the Commencement Date and at such other
times as are described in Article XXII of this lease (the "CPI Adjustment
Dates"). The base for computing the CPI Adjustments is the "Consumer Price Index
for all Urban Consumers, Milwaukee, Wisconsin, All Items (1967=100)" issued by
the Bureau of Labor Statistics of the United States Department of Labor (the
"Index") in effect for the month immediately prior to the month in which the
Commencement Date occurs (the "Beginning Index"). The Index published for the
month immediately preceding the CPI Adjustment Date in question (the "Adjustment
Index") is to be used in determining the amount of the increase in Fixed Rent.
Thus, if the Adjustment Index has increased over the Beginning Index, the
initial Fixed Rent specified in Section 4.1(a) shall increase commencing with
the CPI Adjustment Date in question by 60% of $2,850,000 multiplied by the
percentage increase of the Adjustment Index over the Beginning Index.
4.3 Landlord shall, promptly after each CPI Adjustment Date, deliver to
Tenant a statement setting forth the amount of the CPI Adjustment and the basis
for such computation. Until Tenant has received such statement from Landlord,
the Fixed Rent shall be paid in an amount equal to the Fixed Rent in effect
prior to such CPI Adjustment Date. On the first day of the month following
receipt of the statement of the CPI Adjustment, Tenant shall pay, in addition to
the adjusted Fixed Rent for such month, an amount equal to the difference
between the amount paid by Tenant from the applicable CPI Adjustment Date and
the amount Tenant should have paid using the adjusted Fixed Rent.
4.4 Landlord shall not be required to make any adjustments or
recomputations, retroactive or otherwise, by reason of any revision which may
later be made in the figure of the Index first published for any month.
4.5 If the Index ceases to use the 1967 average equalling 100 as the
basis of calculation, or if a change is made in the term or number of items
contained in the Index, or if the Index is altered, modified, converted or
revised in any other way, then the Index shall be adjusted to the figure that
would have been arrived at had the change in the manner of computing the Index
in effect upon the Commencement Date of this Lease not been made. If such Index
shall no longer be published by said Bureau, then any substitute or successor
index published by said Bureau or other governmental agency of the United
States, and similarly adjusted as aforesaid, shall be used. If such Index (or a
successor or substitute index similarly adjusted) is not available, a reliable
governmental or other reputable publication selected by Landlord and evaluating
the information theretofore used in determining the Index shall be used.
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4.6 The Fixed Rent shall be payable without demand in equal monthly
installments, in advance, on the first day of each and every calendar month
during the term of this lease (except that the first monthly installment or pro
rata portion thereof shall be due and payable as provided in Section 2.1(d)).
4.7 Tenant shall pay the Fixed Rent by good and sufficient check
(subject to collection) drawn on a bank which is a member of the Federal Reserve
System to Landlord at the address aforesaid or at such other place as Landlord
may designate by notice.
4.8 Tenant shall pay to Landlord, throughout the term of this lease, the
Fixed Rent and Additional Rent (except with respect to those items of Additional
Rent which are due and payable to persons other than Landlord), free of any
charges, assessments, impositions or deductions of any kind, and without
abatement or setoff except as hereinafter otherwise expressly provided. Tenant's
obligations hereunder shall survive the expiration or earlier termination of the
term of this lease.
4.9 As of the Commencement Date, Tenant shall deposit the sum of
$2,000,000 into an escrow account held by an escrow agent which is acceptable to
the holder of the first permanent mortgage on the Demised Premises (the
"Lender"). Tenant shall have the exclusive right to direct the investment
(including reinvestment) of the funds deposited, subject to limitations as to
the categories of permissible investments and as to the liquidity of such
investments. In the event of Tenant's default beyond any applicable grace period
in the payment of Fixed Rent or Additional Rent due and payable pursuant to this
lease, the deposit, together with all interest earned thereon, shall be made
available to Landlord in such amounts as are necessary to cure Tenant's default.
If at the time of such default by Tenant, either (a) Landlord is simultaneously
in default beyond any applicable grace period to Lender, or (b) the outstanding
principal balance of Lender's mortgage loan is due, then the entire deposit,
together with all interest earned thereon, shall be made available to Lender in
reduction of the outstanding principal balance payable by Landlord to Lender. In
the event that Tenant fully and faithfully complies with its payment obligations
pursuant to this lease, the deposit, together with all interest earned thereon,
shall be returned to Tenant upon the earlier to occur of the date when the
Demised Premises are free and clear of all fee mortgages or the Expiration Date.
All of the above terms shall be incorporated in an Escrow Agreement
which shall be acceptable to Lender and which shall be substantially in the form
of Exhibit F annexed hereto and made a part of this lease.
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ARTICLE V
USE
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5.1 Tenant shall have the right to use and occupy the Demised Premises
for any lawful purpose including but not limited to any purpose permitted by
variance, special permit or other application, provided that such use will in no
way impair the character, reputation or appearance of the Building as a first
class office building or diminish the value of the Demised Premises.
5.2 Tenant shall not use, improve or occupy, or suffer or permit the
use, improvement or occupancy of the Demised Premises contrary to the laws of
public authorities (including applicable zoning laws) or in violation of
insurance policies then in force or of the Certificate of Occupancy, as the same
may be amended from time to time, issued for the Building.
ARTICLE VI
OBLIGATION TO MAINTAIN AND REPAIR
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6.1 Tenant, at its expense, shall promptly make all necessary interior,
non-structural repairs to the Building and the fixtures, appurtenances and
installations therein, which repairs are not necessitated by the negligence of
Landlord, its employees, contractors or agents. In addition, Tenant shall be
responsible, at its expense, for making all repairs to any special or
supplemental Mechanical Systems (as hereinafter defined) and/or communications
systems installed by or at the request of Tenant. Tenant shall not, however, be
responsible for repairing any Mechanical Systems installed in accordance with
Exhibit B attached hereto.
6.2 Except as otherwise provided in this Article VI and in Article XI,
Landlord shall maintain the Demised Premises in good working order and repair
consistent with the standards prevailing in first class commercial office
protection in Madison, Wisconsin. Without limiting its obligations, Landlord,
among other things, shall regularly maintain, service and repair plumbing,
heating, ventilation, air conditioning, sprinkler, electrical and all other
mechanical systems and all equipment, machinery, fixtures and appurtenance
thereto ("Mechanical Systems"); make all structural repairs when required;
maintain and repair the parking lot (including any necessary repaving), vaults
(if any), signs, railings, roof of the Building, exterior lighting fixtures,
exterior electrical work, pipes and mains (unless owned by the utility company),
curbs and utility connections; maintain and repair all sidewalks, driveways and
plazas abutting the Building and on the Demised Premises; keep the Demised
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Premises painted and landscaped in a manner consistent with the standards
prevailing in first class commercial office projects in Madison, Wisconsin; keep
the Demised Premises clean and free of debris, snow and ice; and repair all
broken glass.
6.3 Landlord shall arrange for rubbish removal and shall provide
cleaning services for the Building during other than Business Hours in
accordance with Exhibit G annexed hereto and made a part of this lease. In no
event, however, shall Landlord be responsible for cleaning any space containing
computer facilities.
6.4 Subject to the provisions of Section 6.5, Tenant shall pay to
Landlord as Additional Rent within ten (10) days of receipt of Landlord's
statement clearly itemizing Landlord's expenditures and setting forth the amount
payable by Tenant, all amounts in excess of $132,000 (the "Repair Base")
expended by Landlord during any Complete Lease Year to fulfill its obligations
pursuant to Section 6.2 and all amounts in excess of $128,000 (the "Cleaning
Base") expended by Landlord during any Complete Lease Year to fulfill its
obligations pursuant to Section 6.3. Appropriate pro rata adjustments shall be
made to determine the sums payable by Tenant pursuant to this Section 6.4 in the
event of a Partial Lease Year. Landlord may ▇▇▇▇ Tenant monthly when Landlord
has incurred obligations in excess of the Repair Base or the Cleaning Base, as
the case may be.
6.5 Tenant shall pay to Landlord as Additional Rent, within ten (10)
days of receipt of Landlord's statement itemizing Landlord's expenditures and
setting forth the amount payable by Tenant, the entire cost of all maintenance,
service and repairs performed by Landlord pursuant to Section 6.2 as a result of
the following:
(a) Damage or injury to the Building (including its fixtures,
appurtenances and Mechanical Systems) or to any other portion of the Demised
Premises resulting from the carelessness, omission, neglect, negligence or
improper conduct of Tenant or its employees, contractors, agents, licensees or
invitees; and
(b) The erection by Tenant of signs and specialized exterior lighting
fixtures upon the Demised Premises.
In the event Tenant pays any Additional Rent pursuant to this Section
6.5, then the Repair Base in Section 6.4 shall be increased, for that Lease Year
only, by an amount equal to such Additional Rent payment. If Tenant disputes the
amount to be paid pursuant to this Section 6.5, then such dispute may be
submitted to arbitration pursuant to Article XXII hereof.
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6.6 Landlord warrants that the structure (including but not limited to
foundation, exterior walls and cross beams, but excluding the Mechanical
Systems) of the Building will be free of all defects for a period of one (1)
year after the Commencement Date, and that the roof of the Building will be free
of all defects for a period of five (5) years after the Commencement Date.
Landlord, upon receipt of notice thereof from Tenant during the time periods
specified herein, shall correct any such defect to the reasonable satisfaction
of Tenant, and the cost of such repairs shall not be included in calculations of
the amounts expended by Landlord pursuant to Section 6.4. Any notice delivered
by Tenant pursuant to this section shall include the certified statement of a
qualified architect or engineer chosen by Tenant specifying the defect(s) in
reasonable detail.
Landlord shall transfer to Tenant all transferable warranties and
guaranties then in effect with respect to the Building or any of the Mechanical
Systems after the date on which Landlord shall no longer be responsible therefor
and Tenant shall thereupon be entitled to avail itself of any such warranties
and guaranties.
Anything in this Section 6.6 to the contrary notwithstanding, Landlord's
warranties and obligations herein shall not apply to any defects or deficiencies
caused by (i) decorations or alterations made by Tenant pursuant to Section 3.4
or Section 7.1, or (ii) the carelessness, omission, neglect, negligence or
improper conduct of Tenant or its employees, contractors, agents, invitees or
licensees. In addition, Landlord warranties shall not apply to the Tech Center.
6.7 Landlord warrants to discharge any liens filed against the Demised
Premises arising in connection with Landlord's Work or Landlord's repairs
pursuant to Section 6.2 promptly after receipt of notice thereof and to pay all
monies due and payable by Landlord in connection therewith.
6.8 Tenant shall not be entitled to claim a constructive eviction from
the Demised Premises for failure of Landlord to perform its obligations
hereunder unless Tenant shall have first notified Landlord of the condition or
conditions giving rise thereto, and if the complaint be justified, unless
Landlord shall have failed to commence and diligently prosecute to completion
the remedy for such conditions within a reasonable time after receipt of such
notice, provided that if Tenant is unable to use or occupy the Demised Premises
or portion thereof as a result of any such condition or conditions (and any
dispute in respect thereof which is submitted to arbitration is so determined by
the arbitrators to be the case), then Tenant, subject to Section 6.9, shall be
entitled to a pro rata abatement in Fixed Rent and Additional Rent for the
duration of the period during which Tenant is unable to use and occupy the
Demised Premises or
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portion thereof. In such event, Landlord shall reimburse Tenant for any Fixed
Rent and Additional Rent paid by Tenant applicable to the period during which
Tenant shall have been unable to use and occupy the Demised Premises or portion
thereof and unless paid or credited to Tenant's account within thirty (30) days
after Tenant's right to an abatement has been conclusively established, said
reimbursement shall include interest thereon at the rate publicly announced from
time to time by Chemical Bank as its prime rate from the date of each such
payment made by Tenant to the date of reimbursement by Landlord. Landlord shall
use its best efforts to remedy any such condition or conditions described above.
6.9 Landlord reserves the right, without any liability whatsoever or
abatement of Fixed Rent or Additional Rent, to stop the Mechanical Systems or to
restrict or suspend access to portions of the parking lot or other areas of the
Demised Premises, whenever required, to perform such repairs and other work as
is the obligation of Landlord under the terms of this lease, provided that
except in the event of an emergency and only if Landlord is unable in such case
to give prior notice, Landlord will notify Tenant in advance of any such
stoppage, restriction or suspension and, if ascertainable, will notify Tenant of
its estimated duration. Landlord agrees to use its best efforts to prosecute and
complete the work necessary to enable full resumption of such service or such
access as promptly as possible and to minimize interference with Tenant's use
and enjoyment of the Demised Premises; provided that Landlord shall be under no
obligation to prosecute the work during other than Business Hours.
Notwithstanding the foregoing, if the stoppage of any Mechanical Systems shall
continue for forty-eight (48) consecutive hours and provided that Tenant is
unable to use or occupy the Demised Premises or any portion thereof as a result
of such stoppage, then Fixed Rent and Additional Rent shall thenceforth
proportionately ▇▇▇▇▇ based on the amount of space which cannot be used or
occupied by Tenant until such stoppage ceases and Tenant is able to resume
occupancy of the Demised Premises or portion thereof.
ARTICLE VII
ALTERATIONS
7.1 Tenant, at its own cost and expense, may make additions, alterations
and changes (collectively, "alterations") in and to the Demised Premises from
time to time during the term of this lease as Tenant may deem necessary or
desirable, without the prior approval of Landlord, subject to compliance with
the following:
(a) The alterations shall be made in a good and workmanlike manner, in
compliance with all insurance requirements
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and laws of public authorities, and all necessary permits and licenses shall be
timely obtained;
(b) With respect to structural alterations only, copies of all necessary
permits and licenses, together with plans and specifications applicable to the
alterations, shall be delivered to Landlord at least ten (10) business days
prior to commencement of the alterations, and Tenant shall pay Landlord, upon
notice, a reasonable charge for the costs (including legal, architectural and
engineering fees) incurred by Landlord in reviewing the permits, licenses, plans
and specifications;
(c) The Demised Premises shall at all times be kept free of liens for
labor or materials supplied to the Demised Premises;
(d) Tenant shall indemnify and hold Landlord harmless from and against
any cost or claim (including attorneys' fees and disbursements) made in
connection with any lien or otherwise resulting from the prosecution of the
alterations; and
(e) Prior to commencing the alterations, Tenant or its contractors shall
procure and shall thereafter maintain at all times when any work is in progress,
workmen's compensation insurance, general liability insurance and standard form
of fire and extended coverage insurance (with Builder's Risk endorsement, if
appropriate), appropriate in coverage and amount.
Notwithstanding the foregoing, alterations that (i) increase Landlord's
maintenance, repair and cleaning costs pursuant to Section 6.2 or Section 6.3,
or (ii) change the exterior appearance of the Demised Premises, or (iii) impact
adversely upon the structural integrity of the Building or (iv) detract from or
diminish the value of the Demised Premises as a commercial office project, shall
be made only with the prior written consent of Landlord.
ARTICLE VIII
TENANT'S PROPERTY
-----------------
8.1 All fixtures, equipment, improvements and appurtenances which are
affixed to the Building and/or to the Demised Premises by Tenant in such manner
as to be part of the realty during the term of this lease (other than Tenant's
Property, as defined in Section 8.3 hereof) shall be and remain a part of the
Demised Premises and shall become the property of Landlord at the expiration of
the term of this lease and thus shall not be removed by Tenant, except as
hereinafter expressly provided. Tenant alone shall be entitled to take
depreciation on all such
13
fixtures, equipment, improvements and appurtenances during the term of this
lease.
8.2 Tenant shall have the right, on notice to Landlord (and with the
consent of Landlord in instances where the anticipated cost exceeds $50,000), to
replace any Mechanical System in the Building on or after the Commencement Date
where replacement thereof is reasonably required by Tenant for use and occupancy
of the Demised Premises, provided that such replacement Mechanical System shall
be at least equal in capacity and in quality to the original and further
provided that Landlord's warranty as to such replacement Mechanical System shall
cease as of the date of the replacement. Tenant alone shall be entitled to take
depreciation on any such replacement Mechanical System during the term of this
lease, but shall not be entitled to remove such Mechanical System upon the
expiration or earlier termination of the term of this lease.
8.3 All counters, screens, grille work, cages, railings, partitions,
paneling, other business and trade fixtures, machinery and equipment,
communications equipment, signs, computers and amenities, whether or not
attached to or built into the Building, which are located in the Building by
Tenant on the Commencement Date or thereafter installed in the Building by or
for the account of Tenant or any subtenant of Tenant and can be removed without
permanent structural damage to the Building, and all furniture, furnishings and
other articles of personal property owned by Tenant or a subtenant of Tenant and
located in the Building (all of which are herein collectively called "Tenant's
Property") shall be and shall remain the property of Tenant or any such
subtenant (and only Tenant or any such subtenant may take depreciation thereon),
as the case may be, and may be installed or removed at any time and from time to
time during the term of this lease, at the option of Tenant, provided that (i)
such installation or removal is accomplished without damage to the Building, is
conducted in accordance with all laws of public authorities, insurance
requirements and terms of this lease, and (ii) Tenant shall repair or shall pay
the actual cost to repair any damage to the Building resulting from such
installation or removal. Tenant's obligation pursuant to clause (ii) herein
shall survive the expiration or earlier termination of the term of this lease.
8.4 Any of Tenant's Property (excluding money, securities or like
valuables) which shall remain in the Building in excess of five (5) business
days after the Expiration Date or earlier termination of this lease may, at the
option of Landlord, be deemed to have been abandoned and either may be retained
by Landlord as its property or be disposed of, without accountability, in such
manner as Landlord may deem appropriate, at Tenant's expense.
14
ARTICLE IX
PAYMENT OF IMPOSITIONS; SEPARATE TAX LOT
----------------------------------------
9.1 Landlord shall be responsible for the payment of all Impositions.
However, from and after the Commencement Date (the "Imposition Date") and
thereafter throughout the term of this lease, Tenant shall pay to Landlord as
Additional Rent, within ten (10) days of receipt of Landlord's statement clearly
setting forth the amount payable by Tenant, or at least 30 days prior to the
date that payments are due to the taxing authorities or any superior mortgagee,
whichever date is later, all Impositions in excess of $491,381 (the "Base Tax")
for any Tax Year occurring entirely during the term of this lease. Tenant shall
pay such Additional Rent notwithstanding the pendency of a contest or proceeding
brought by either Landlord or Tenant.
In the event the assessed value of the Demised Premises is decreased ar
a direct result of a substantial change in the Land or the rentable floor space
of the Building, including such a change resulting from a condemnation or
casualty, unrelated to normal depreciation in valuation, then the Base Tax shall
be appropriately reduced to take into account the change in the Land or the
rentable floor space of the Building.
9.2 All Impositions for the Tax Year in which the Imposition Date occurs
and all Impositions for the Tax Year in which the expiration or earlier
termination of the term of this lease (but not as the result of Tenant's
default) occurs shall be apportioned between Landlord and Tenant on a basis
consistent with the principles underlying the provisions of this Article IX,
taking into consideration the portion of such Tax Year which shall have elapsed
after the Commencement Date and prior to the expiration or earlier termination
of the term of this lease.
9.3 In the event that Landlord or Tenant shall fail to pay such
Impositions or Additional Rent, as the case may be, as may be the obligation of
such party hereunder, the other party may, at its election, pay the same in
accordance with the provisions of Article XIX hereof.
9.4 Landlord shall at all times have the right, but not the obligation,
to contest any such Impositions in any manner permitted by law and/or to
endeavor, through proceedings or otherwise, to obtain a lowering of the assessed
valuation of the Demised Premises for the purpose of reducing the Impositions.
Any such contest or proceeding may include prompt appeals from any judgments,
decrees or orders until a determination is made by a court having final
jurisdiction in the matter. All actions taken by Landlord to commence, prosecute
and settle contests or proceedings shall be performed at the expense of Tenant,
and
15
Tenant shall reimburse Landlord within fifteen (15) days after Landlord
furnishes a statement specifying the costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Landlord.
9.5 Upon obtaining the consent of Landlord, which consent shall not be
unreasonably withheld, Tenant may diligently bring any contest or proceeding
described in Section 9.4 at its own expense and in its own name, or, whenever
required by law or any rule or regulation or order to make such action or
proceeding effective, in Landlord's name.
Landlord agrees, at the request of Tenant, to cooperate with Tenant in
effecting such contest or proceeding, including, without limitation, executing
any and all documents reasonably necessary in connection with such contest or
proceeding, but without expense or liability to Landlord. Tenant hereby agrees
to indemnify and hold Landlord harmless from all costs, expenses (including
reasonable attorneys' fees and disbursements), claims, loss, liability and
damage by reason of, or in connection with, any such contest or proceeding.
Tenant shall keep Landlord advised as to the status of such contest or
proceeding.
9.6 Landlord and Tenant agree that no settlement of any proceeding by
Landlord or Tenant, as the case may be, shall result in an assessed valuation of
the Demised Premises for such tax year greater than the assessed valuation of
the Demised Premises for such tax year as originally imposed, unless the other
party reasonably consents thereto.
9.7 If, by reason of any contest or proceeding, all or any part of the
amount of any Imposition shall be refunded or returned to Landlord, then
Landlord shall promptly pay to Tenant the entire portion of the refund which is
attributable to the amount of such Imposition in excess of the Base Tax, less
the reasonable costs incurred by Landlord in obtaining such refund.
9.8 Notwithstanding anything to the contrary contained in this Article
IX, neither Landlord nor Tenant shall bring any contest or proceeding which
would violate the terms of the Waiver of Objection to Assessed Valuation,
executed by Landlord on January 15, 1985, a copy of which is annexed hereto as
Exhibit H.
ARTICLE X
UTILITIES
---------
10.1 From and after the Commencement Date, Landlord shall pay when due
all charges for water, sewer, gas, electricity, and fuel used on or about the
Demised Premises. Tenant shall pay to Landlord as Additional Rent, within ten
(10) days of
16
receipt of Landlord's statement clearly setting forth the amount payable by
Tenant, all amounts in excess of $350,000 (the "Utility Base") expended by
Landlord during any Complete Lease Year. Appropriate pro rata adjustments shall
be made to determine the sums payable by Tenant pursuant to this Section 10.1 in
the event of a Partial Lease Year. Landlord may ▇▇▇▇ Tenant monthly when
Landlord has incurred obligations in excess of the Utility Base.
10.2 In no event shall Tenant's use of electric current in the Demised
Premises exceed the capacity of any of the electrical conductors or other
equipment in or otherwise serving the Demised Premises.
ARTICLE XI
COMPLIANCE WITH LAWS
--------------------
11.1 Subsequent to the Commencement Date and except for (i) unfinished
Landlord's Work as described in Section 2.1(i), (ii) Landlord's warranties under
Section 6.6 hereof, and (iii) maintenance and repairs which Landlord is
obligated to perform pursuant to Section 6.2 (but not including maintenance and
repairs which would not reasonably be required in the absence of laws of public
authorities taking effect after the Commencement Date), Tenant, at its expense,
shall diligently comply with all laws of public authorities applicable to the
Demised Premises.
11.2 Tenant may, at its expense, (and, if necessary, in the name of but
without expense to Landlord) contest, by appropriate proceedings prosecuted
diligently and in good faith, the validity or applicability to the Demised
Premises of any law of public authority, and Landlord shall cooperate with
Tenant in such proceedings, and shall execute any documents or pleadings
reasonably required by Tenant for such purpose, provided that Landlord shall not
be subject to the risk of criminal prosecution or penalty or the risk of
material civil liability, nor shall the Demised Premises or any Fixed Rent or
Additional Rent be in danger of being forfeited or lost by reason of
non-compliance or otherwise by reason of such contest. Tenant hereby agrees to
indemnify and hold Landlord harmless from all costs, expenses (including
reasonable attorneys' fees and disbursements), claims, loss, liability and
damage by reason of or in connection with any such proceeding unless the
proceeding is due to Landlord's failure to observe or perform its obligations
under this lease, in which latter event Landlord shall be entitled to enter the
proceedings in place of Tenant and shall indemnify and hold Tenant harmless as
aforesaid. Tenant shall keep Landlord advised as to the status of such
proceedings.
17
11.3 Notwithstanding any provision of this lease to the contrary, if,
after the Building and Improvements are completed in accordance with the Plans
and Specifications, any future law of public authority applicable to the Demised
Premises requires changes or alterations to be made which under generally
accepted accounting principles would be deemed to be capital expenditures, then
it is agreed that Tenant shall do the work (subject to Landlord's right to
approve the cost thereof and, at its election, to perform the work at the same
or lower estimated cost, including the reasonable costs of any required
architects and/or engineers) and the cost thereof shall be apportioned between
Landlord and Tenant on a straight-line basis over a period of eighteen (18)
years; it being agreed, for the purpose of this lease, that any such expenditure
shall be deemed to have a useful life expectancy of eighteen (18) years. The
cost of the expenditure shall be initially paid in full by Tenant at the time of
performance of the work, but shall ultimately be allocated so that Tenant shall
only be responsible for that portion thereof attributable to the period up to
the Expiration Date (as same may be extended in accordance with the terms of
this lease) and Landlord shall be responsible for that portion attributable to
the period after the Expiration Date. Landlord shall reimburse Tenant on the
Expiration Date for that portion of the cost allocable to Landlord as
hereinabove provided, with simple interest thereon at an annual rate of 10% from
the date of Tenant's final payment for the work.
ARTICLE XII
ASSIGNMENT AND SUBLETTING; LEASEHOLD MORTGAGE
12.1 Tenant shall have the right to assign its interest in this lease or
to sublet all or any portion of the Demised Premises, provided that (a) in
Landlord's reasonable judgment, such assignee or sublessee, and the use to which
the assignee or sublessee intends to put the Demised Premises, shall be of a
character appropriate to the character, reputation and appearance of the Demised
Premises as a first class office project; (b) the financial condition of such
assignee or sublessee shall be reasonably acceptable to Landlord; and (c) the
assignment or subletting meets all requirements imposed by Lender and the holder
at the time of the proposed assignment or subletting of any other fee mortgage
upon all or any portion of the Demised Premises. Tenant shall not be permitted
to proceed with the proposed assignment or subletting until it receives
Landlord's written confirmation that conditions (a), (b) and (c) above have been
met and until Tenant complies with all other requirements specified herein in
Article XII.
12.2 The conditions of clauses (a) and (b) of Section 12.1 hereof shall
not apply to transactions with a corporation
18
into or with which Tenant is merged or consolidated or with an entity to which
substantially all of Tenant's assets are transferred (provided such merger or
transfer of assets is for a good business purpose and not principally for the
purpose of transferring the leasehold estate created hereby, and provided
further, that the assignee has a net worth at least equal to or in excess of the
net worth of Tenant immediately prior to such merger or transfer), nor shall
such conditions apply to transactions with an entity which controls or is
controlled by Tenant or is under common control with Tenant.
12.3 Any assignment or transfer, whether made pursuant to Section 12.1
or Section l2.2, shall be made only if, and shall not be effective until the
assignee shall execute, acknowledge and deliver to Landlord a recordable
agreement, in form and substance reasonably satisfactory to Landlord, whereby
the assignee shall assume the obligations and performance of this lease and
agree to be personally bound by and upon all of the covenants, agreements,
terms, provisions and conditions hereof on the part of Tenant to be performed or
observed and whereby the assignee shall agree that the provisions of this
Article XII shall, notwithstanding such an assignment or transfer, continue to
be binding upon it in the future.
12.4 Tenant shall, within ten (10) days after the execution and delivery
of an assignment or sublease, deliver a conformed copy thereof (and,
subsequently, any amendment(s) or modification(s) thereto) to Landlord.
12.5 The liability of Tenant for the due performance by Tenant of the
obligations on its part to be performed under this lease, shall not be
discharged, released or impaired in any respect by an agreement or stipulation
made by Landlord or any grantee or assignee of Landlord, by way of mortgage, or
otherwise, extending the time of or modifying any of the obligations contained
in this lease, or by any waiver or failure of Landlord to enforce any of the
obligations on Tenant's part to be performed under this lease, and Tenant shall
continue liable hereunder. If any such agreement or modification operates to
increase the obligations of a tenant under this lease, the liability under this
Section 12.5 of the Tenant named in the lease or any of its successors in
interest (unless such party shall have expressly consented in writing to such
agreement or modification), shall continue to be no greater than if such
agreement or modification had not been made. To charge Tenant named in this
lease and its successors in interest, no demand or notice of any default shall
be required; Tenant and each of its successors in interest hereby expressly
waives any such demand or notice.
19
12.6 In consideration for any exercise of its rights pursuant to Section
12.1 or Section 12.2, Tenant shall promptly pay to Landlord, as Additional Rent:
(i) in the case of an assignment, an amount equal to one-half (1/2) of
all sums and other considerations paid to Tenant by the assignee for or by
reason of such assignment (including, but not limited to, sums paid for the
sale or rental of Tenant's Property, less, in the case of a sale thereof,
the then net unamortized or undepreciated cost thereof determined on the
basis of Tenant's federal income tax returns); and
(ii) in the case of a sublease, one-half (1/2) of any rents,
additional charges or other consideration payable under the sublease to
Tenant by the subtenant which is in excess of the Fixed Rent and Additional
Rent accruing during the term of the sublease in respect of the subleased
space (at the rate per square foot payable by Tenant hereunder) pursuant to
the terms hereof (including, but not limited to, sums paid for the sale or
rental of Tenant's Property, less, in the case of the sale thereof, the net
unamortized or undepreciated cost thereof, determined on the basis of
Tenant's federal income tax returns).
The sums payable under this Section 12.6(ii) shall be paid to Landlord as and
when paid by the subtenant to Tenant. Notwithstanding this Section 12.6(ii),
however, Tenant shall be obligated to pay Landlord all excess rents, additional
charges or other consideration relating to a sublease of that portion of the
Building described in Exhibit I attached hereto and made a part of this lease.
12.7 Landlord's consent to any sublease or assignment shall not be
deemed or construed to modify, amend or affect the terms and provisions of this
lease, or Tenant's obligations hereunder, which shall continue to apply to the
occupants thereof, as if the sublease or assignment had not been made. Tenant
covenants that, notwithstanding any assignment or sublease, whether or not in
violation of the provisions of this lease, and notwithstanding the acceptance of
Fixed Rent or Additional Rent by Landlord from an assignee or sublessee or any
other party, Tenant shall remain fully and primarily liable for the payment of
the Fixed Rent and Additional Rent due and to become due under this lease and
for the performance of all of the covenants, agreements, terms, provisions and
conditions of this lease on the part of Tenant to be performed or observed. In
the event that Tenant defaults in the payment of any Fixed Rent or Additional
Rent, Landlord is authorized to collect any rents due or accruing from any
assignee, subtenant or other occupant of the Demised Premises and to apply the
net amounts collected to the Fixed Rent
20
and Additional Rent reserved herein, and the receipt of any such amounts by
Landlord from an assignee or subtenant, or other occupant of any part of the
Demised Premises, shall not be deemed or construed as releasing Tenant from
Tenant's obligations hereunder or the acceptance of that party as a direct
tenant.
12.8 Tenant shall include, or cause to be included, in each sublease a
provision prohibiting the assignment of the sublease or subletting thereunder
without complete compliance with the terms of this Article XII. If such sublease
or subletting is assigned or further sublet without complete compliance with the
terms of this Article XII, Tenant shall immediately terminate such sublease, or
arrange for the termination thereof, and proceed expeditiously to have the
occupant thereunder dispossessed.
12.9 Notwithstanding any other provision of this lease to the contrary,
the extension options contained in Article XXII may not be sold, assigned or
otherwise transferred separately from this lease.
12.10 Tenant shall have the right to mortgage this lease and Tenant's
leasehold estate herein ("leasehold mortgage") at any time, and from time to
time, without limit as to amount and number and on any terms Tenant may deem
desirable, and to assign this lease and existing or future subleases, license
agreements and concession agreements and the rentals and fees thereunder to the
holder of any such mortgage ("leasehold mortgagee") as additional collateral
security for the indebtedness secured by the leasehold mortgage, provided such
mortgage is subordinate to the first mortgage on the Demised Premises and any
future fee mortgage permitted under this lease.
12.11 If Tenant shall have executed and delivered a leasehold mortgage
and the leasehold mortgagee shall have notified Landlord to such effect giving
its name and address; (a) Landlord concurrently shall serve upon such leasehold
mortgagee a copy of each notice, consent, approval, request or demand given to
Tenant under this lease, and (b) such leasehold mortgagee shall have the right,
for a period of ten (10) days more than is given to Tenant, to remedy or cause
to be remedied any default which is the basis of a notice; and Landlord shall
accept performance by such leasehold mortgagee as performance by Tenant.
Notwithstanding the above, the leasehold mortgagee shall not have extra time to
remedy a default in the event of an emergency or the potential forfeiture of an
interest or right of Landlord or where the leasehold mortgagee is an affiliate
of Tenant.
21
ARTICLE XIII
SUBORDINATION; NON-DISTURBANCE; NOTICE
--------------------------------------
TO SUPERIOR MORTGAGEES
----------------------
13.1 Subject to the conditions provided in Section 13.2 hereof, this
lease shall be subject and subordinate to the lien of all mortgages now or
hereafter encumbering the Demised Premises, and to each advance made or
hereafter to be made under such mortgages, and to all renewals, modifications,
consolidations, replacements and extensions of such mortgages. The fee mortgages
to which this lease is subject and subordinate pursuant to this Section 13.1 are
hereinafter sometimes called "superior mortgages" and the holder of a superior
mortgage at the time referred to is hereinafter sometimes called "superior
mortgagee."
13.2 Notwithstanding the provisions of Section 13.1 hereof, the
subordination of this lease to any superior mortgage is subject to the express
condition that so long as this lease is in full force and effect and Tenant is
not in default beyond the expiration of any applicable grace period, (a) the
rights of Tenant under this lease (including but not limited to the rights of
Tenant under Article XV and Article XVI with respect to the disposition of the
proceeds of any casualty or with respect to any condemnation award, as the case
may be) shall in no manner be affected thereby, (b) Tenant shall not be joined
as a party defendant in any foreclosure action or proceeding which may be
instituted or taken by the holder of such superior mortgage and (c) Tenant shall
not be evicted from the Demised Premises nor shall Tenant's leasehold estate
hereunder be terminated or disturbed by reason of any default under such
superior mortgage.
13.3 In the event Tenant has the right pursuant to any provision in this
lease, immediately or after lapse of a period of time, to cancel or to terminate
this lease, or to claim a partial or total eviction, Tenant shall not exercise
such right (a) until it has given written notice of the act or omission
triggering the right to Landlord and to each superior mortgagee whose name and
address shall previously have been furnished to Tenant in writing and (b) unless
such act or omission shall be one which is not capable of being remedied by
Landlord or such superior mortgagees within a reasonable period of time, until a
reasonable period of time for remedying such act or omission shall elapse during
which the superior mortgagees shall be entitled to remedy the same but shall
fail to commence any good faith efforts to do so (which reasonable period shall
be at least fifteen (15) days more than the period to which Landlord is entitled
under this lease, after similar notice, to effect such remedy). Once a superior
mortgagee commences good faith efforts within a reasonable period of time to
remedy Landlord's default, Tenant shall not exercise its rights as aforesaid
22
provided that the superior mortgagee continues with diligence and continuity to
remedy the act or omission.
13.4 If the holder of a superior mortgage shall succeed to the rights of
Landlord under this lease, whether through foreclosure or delivery of a deed in
lieu thereof or for any other reason whatsoever, then at the request of such
party (herein sometimes called "successor landlord") Tenant shall attorn to and
shall recognize such successor landlord as Landlord under this lease, and shall
promptly execute and deliver any instrument that such successor landlord may
reasonably request to evidence such attornment. Upon such attornment, this lease
shall continue in full force and effect as a direct lease between the successor
landlord and Tenant upon all of the terms, conditions and covenants as are set
forth in this lease; provided, however, that the successor landlord shall not
(a) be liable for any previous act or omission of Landlord under this lease or
(b) be subject to any offset, not expressly provided for in this lease, which
theretofore shall have accrued to Tenant against Landlord or (c) be bound by any
previous prepayment of more than one month's Fixed Rent unless such prepayment
shall have been expressly approved in writing by the successor landlord or (d)
be liable for the return of any escrow deposit provided for in this lease,
unless such deposit shall actually have been deposited with the successor
landlord.
13.5 So long as there is a first superior mortgage encumbering the
Demised Premises, Landlord and Tenant, without first obtaining the written
consent of the holder of the first superior mortgage, will not enter into any
agreement, the effect of which would be to (a) cancel, terminate or surrender
this lease or (b) reduce the Fixed Rent or require the prepayment of any Fixed
Rent (or Additional Rent) in advance of the date specified in this lease or (c)
create any offsets or claims against the Fixed Rent except as is expressly
provided for by the terms of this lease.
13.6 Within twenty (20) days after written request by Landlord, Tenant
shall execute a subordination and non-disturbance agreement consistent with the
provisions of this lease evidencing the subordination of this lease to any
superior mortgage.
ARTICLE XIV
INSURANCE
---------
14.1 From and after the Commencement Date, Landlord, at its own cost and
expense, shall maintain in effect for the benefit of Landlord and Tenant:
23
(a) insurance covering the Demised Premises against loss or damage by
fire and such risks as are customarily included in extended coverage
endorsements attached to fire insurance policies covering comparable property in
the vicinity of the Demised Premises, in an amount not less than the full
replacement cost thereof, but which may include a deductible not to exceed
$25,000 per occurrence; and
(b) boiler and machinery insurance in an amount not less than
$1,000,000; provided, however, that for so long as there shall be no high
pressure boiler in the Building, Landlord shall carry insurance in a comparable
amount covering damage incurred as a result of the explosion or rupture of steam
pipes (a "Difference in Conditions Policy").
The words "full replacement cost" as used in subdivision (a) of this Section
14.1 shall mean the cost of actual replacement (excluding foundation and
excavation costs and cost of underground flues, pipes and drains).
14.2 From and after the Commencement Date, Tenant, at its own cost and
expense, shall maintain for the mutual benefit of Landlord and Tenant:
(a) public liability insurance in the minimum amount of $10,000,000 with
respect to bodily injury or death resulting from any one accident, and not less
than $1,000,000 with respect to property damage. Landlord may reasonably request
increases in the amounts of liability insurance maintained by Tenant to raise
coverage to the levels existing at comparable properties in the vicinity of the
Demised Premises;
(b) rent insurance for the benefit of Landlord in an amount equal to the
sum of (i) the Fixed Rent payable by Tenant for the subsequent period of one
full year (regardless of whether one full year shall be then remaining in the
term of this lease), and (ii) all of the Additional Rent which Tenant would be
required to pay to Landlord pursuant to Articles VI, IX, and X for the
subsequent period of one full year (regardless of whether one full year shall be
then remaining in the term of this lease) in the event that Landlord's total
expenditures pursuant to such Articles for the previous period of one full year
increase by 12%; and
(c) such other or additional insurance in such amounts and forms against
other insurable hazards as may be reasonably required by Landlord or by the
terms of the first superior mortgage.
14.3 The insurance required under this Article XIV shall be effected by
valid and enforceable policies acceptable to the first superior mortgagee and
issued by insurance
24
companies licensed to do business in the State of Wisconsin, with a general
policyholder's rating of at least "A" and a financial rating of at least Class
XI, as rated in the latest edition of Best's Insurance Guide. Any insurance
policy or policies under this Article may cover the Demised Premises and any
other properties owned or operated by Tenant or Landlord, provided that any such
policy or policies shall identify the Demised Premises and shall comply with the
requirements of this Article.
14.4 Upon the Commencement Date and thereafter, not less than thirty
(30) days prior to the expiration date of any expiring policies theretofore
furnished pursuant to this Article, certificates of such policies or renewal
policies, as the case may be, shall be delivered by the party required to obtain
such policies to the other party. If the Demised Premises are covered by any
superior mortgages, certificates of the policies for the insurance required
under this Article shall be delivered to the holder of each superior mortgage as
well. If Landlord requests, Tenant shall deliver the actual insurance policies
(rather than insurance certificates) to the holder of the first superior
mortgage.
14.5 All policies of insurance required under Section 14.1 shall name
Landlord and Tenant as the insured parties, as their respective interests may
appear, and also shall be payable, under a standard non-contributory mortgagee
endorsement, to the holder of any superior mortgage covering the Demised
Premises. Each policy of insurance required under Sections 14.1 and 14.2 shall
contain an agreement by the insurer that it will not be cancelled, allowed to
lapse or reduced in amount without at least twenty (20) days' prior written
notice to Landlord, Tenant and the holder of any superior mortgage, the name and
address of which is furnished to the insurer.
14.6 All policies described in Sections 14.1 and 14.2 shall be written
as primary policies and not contributing to or being in excess of any other
coverage which Landlord or Tenant, as the case may be, may carry. Each policy,
including the policy described in Section 14.7, shall provide that any loss
otherwise payable thereunder shall be payable notwithstanding any act,
negligence or omission of Landlord or Tenant which might, absent such provision,
result in a forfeiture of all or a part of such insurance payment, or the
occupation or use of any portion of the Demised Premises for purposes more
hazardous than permitted by the provisions of such policy. All policies of fire
and extended coverage insurance pursuant to Section 14.1 shall contain "agreed
amount" endorsements, provided, however, that in lieu thereof Landlord may elect
to have the then full replacement cost of the Demised Premises determined at
reasonable intervals (but not less often than once every two years) by the
underwriter of fire insurance on the Demised Premises or, if such underwriter
will not act, by a qualified appraiser satisfactory to Landlord. Upon
25
completion, a copy of such determination shall be promptly delivered to Tenant.
14.7 From and after the Commencement Date, Tenant, at its own cost and
expense, shall maintain a fire insurance policy or policies covering the full
replacement value of Tenant's Property.
14.8 Each policy described in this Article XIV shall contain appropriate
clauses, if obtainable, providing that the insurer (a) waives it's right of
subrogation against all parties hereto with respect to losses payable under such
policy or policies and/or (b) agrees that such policy or policies shall not be
invalidated if any insured thereunder shall waive in writing, prior to any loss,
any or all rights of recovery against any other party for losses covered by such
policy or policies. The waiver of subrogation or permission for release referred
to herein shall extend to the agents, employees and invitees of each party and,
in the case of Tenant, shall also extend to any other person occupying or using
the Demised Premises.
14.9 In the event of any loss, Tenant shall give Landlord immediate
notice thereof. Landlord shall have the right to prosecute or contest, or to
require Tenant to prosecute or contest, any claim under any of the insurance
policies, or any adjustment, settlement or compromise thereof. All proceeds of
any insurance required under Section 14.1 or Section 14.2 shall be payable,
subject to the provisions of Article XV, to any superior mortgagees or, in the
event that the superior mortgagees do not require the proceeds or that there are
no superior mortgagees, to Landlord.
14.10 In the event that a superior mortgagee shall require that escrow
deposits be made for the payment of any of the insurance policies required to be
maintained hereunder by Tenant, then Tenant shall, in lieu of directly paying
for such insurance, pay to Landlord the amount of the escrow deposits required
by the superior mortgagee. Such payments shall be made not less than ten (10)
days prior to the date such payments are required by the superior mortgagee.
ARTICLE XV
DESTRUCTION OR DAMAGE
---------------------
15.1 Subject to Sections 15.2 and 15.3, in case of damage to or total or
partial destruction (other than by reason of condemnation proceedings) of the
Building and Improvements, Landlord, at its expense (whether or not the
insurance proceeds are sufficient to cover the cost thereof), shall restore,
replace, build, repair or rebuild the damaged or destroyed Building
26
and Improvements to a safe and lawful condition so that the Building and
Improvements shall be restored to the extent practicable to their condition
immediately prior to such damage or destruction. In the event that Landlord
wishes to rebuild the Building and Improvements pursuant to plans incorporating
an improved architectural design which is suitable for Tenant's purposes and
would provide Tenant with at least the amount of usable space provided by the
current Building and Improvements, then Tenant shall not unreasonably withhold
its consent. Any restoration, replacement, building, repair or rebuilding is
sometimes referred to in this Article and in Article XVI hereof as the "Work."
The Work shall be commenced within ninety (90) days after the receipt of the
insurance proceeds by the superior mortgagee or Landlord and shall proceed with
reasonable diligence to completion subject to Unavoidable Delays. Any excess
insurance proceeds over and above the amount utilized for the Work, together
with any interest thereon, shall be paid over to Landlord and shall be the sole
property of Landlord.
15.2 In the event of damage or destruction of more than 25% of the
rentable square foot area of the Building occurring (a) during the last two (2)
years of the initial term of this lease or of the First Extended Term (as
described in Article XXII) or (b) during the last five (5) years of the Second
Extended Term (as described in Article XXII), Landlord and Tenant shall each
have the right to elect to terminate this lease by notice given to the other
party within ninety (90) days after the date of the damage or destruction. In
such event the term of this lease shall end on the date of notice with the same
effect as if that date was the date stipulated herein as the Expiration Date;
except that in the event of Landlord's termination, Fixed Rent shall be
apportioned as of the date of notice with respect to the undamaged portion of
the Building and as of the date of the damage with respect to the unusable
portion of the Building. Notwithstanding the above, Tenant shall not be entitled
to terminate pursuant to clause (a) if it has exercised its Article XXII
extension option for the First Extended Term or the Second Extended Term, as the
case may be. In addition, Landlord's notice of termination in reliance upon the
circumstances described in clause (a) shall be ineffective if, within seven (7)
days after receipt of such notice, Tenant exercises its option for an extended
term.
15.3 In the event the amount of insurance proceeds available following
damage to or total or partial destruction of the Building and Improvements
occurring prior to the last year of the 10 year period (as defined in Section
31.1) exceeds the total outstanding mortgage balance held by Lender (as defined
in Section 4.9) at the time such insurance proceeds first become available, then
Lender shall be permitted to retain that portion of the proceeds which equals
the mortgage debt. In such event, Landlord shall attempt with reasonable
diligence to obtain
27
alternative financing for the purpose of restoring or rebuilding the Building
and Improvements. If such financing requires the payment of interest at an
annual rate greater than 13.625%, then Tenant shall pay the amounts described in
Section 31.1(a) and shall be permitted to rely upon the protections afforded by
Sections 31.2 and 31.3. If Landlord is unable to obtain alternative financing
within ninety (90) days of Lender's notice regarding its retention of a portion
of the proceeds, then Landlord shall give Tenant a notice of termination of this
lease. Thereupon, the lease shall terminate and the Fixed Rent shall be
apportioned in the manner described in Section 15.2.
15.4 There shall be no abatement or reduction of Fixed Rent or
Additional Rent by reason of any such damage or destruction (except to the
extent of any rent insurance proceeds actually received by Landlord therefor)
nor shall Tenant be entitled to surrender possession of the Demised Premises by
reason thereof, except as otherwise provided in Section 15.2 hereof.
15.5 No damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from the repair or
restoration of any portion of the Building or Improvements pursuant to Section
15.1, nor shall Landlord be required to repair or replace (or reimburse Tenant
for the cost of repairing or replacing) all or any portion of Tenant's Property.
To the extent possible, reasonable efforts will be made during the progression
of the Work to minimize interference with any continued use by Tenant of
portions of the Building and Improvements.
ARTICLE XVI
CONDEMNATION
------------
16.1 If at any time during the term of this lease, title to all or
substantially all of the Demised Premises shall be taken in condemnation
proceedings or by any right of eminent domain, this lease, and the estate hereby
granted, shall terminate on the date of such taking (the "Taking Date") and the
Fixed Rent and Additional Rent shall be apportioned as of and paid to the Taking
Date; provided, however, that if the condemning authority fails to take
possession of the Demised Premises on the Taking Date, then for such period of
time as Tenant remains in possession of the Demised Premises Tenant shall
continue to pay the appropriate use and occupancy charge to the party legally
entitled to receive the same, and provided further, that the foregoing
obligation of Tenant to pay the use and occupancy charge shall in no way be
construed to limit Tenant's right to vacate the Demised Premises from and after
the Taking Date. For the purpose of this Section 16.1 the term "substantially
all of the Demised Premises" shall mean a taking of such portion of the
28
Demised Premises (including the parking area) that the untaken portion cannot,
in Tenant's reasonable opinion, be practically or economically used or converted
for the use that Tenant is then making of the Demised Premises. As promptly as
possible after Tenant receives notice of the portion of the Demised Premises
subject to a material taking, Tenant shall give Landlord preliminary notice of
whether Tenant considers such contemplated taking to be of substantially all of
the Demised Premises. When title to the portion of the Demised Premises so taken
vests in the condemning authority, whether by agreement of the parties or a
court determination, within fourteen (14) days thereafter, Tenant shall give
Landlord a final notice of whether Tenant considers such taking to be of
substantially all of the Demised Premises.
In the event of a taking subject to this Section 16.1, any award or
awards payable by reason thereof (other than any award or awards payable to
Tenant pursuant to Section 16.4), less any costs incurred in collecting the same
(the "net award") shall be paid to Landlord, or to any superior mortgagee if it
shall so require.
16.2 In the event of a taking of less than substantially all of the
Demised Premises, the term of this Lease shall not be reduced or affected in any
way, and the net award therefrom shall be paid to Landlord, or to any superior
mortgagee if it shall so require. Following any such taking, Landlord shall, at
its sole cost and expense, proceed with reasonable diligence, subject to
Unavoidable Delays, to repair and restore the Demised Premises to substantially
its former condition to the extent that the same may be feasible and so as to
constitute a complete architectural unit. From and after the Taking Date, Fixed
Rent payable hereunder shall be reduced in a proportion equal to the reduction
in the rentable square foot area of the Building. Tenant shall not be entitled
to any reduction in Fixed Rent as a result of the taking of the Improvements, or
any portion thereof.
16.3 If the whole or any part of the Demised Premises or of Tenant's
interest in this lease shall be taken in condemnation proceedings or by any
right of eminent domain for a temporary use or occupancy and such temporary use
or occupancy is not such as to render in Tenant's reasonable opinion the
remaining term of this lease impracticable for the purposes contemplated
hereunder, the term of this lease shall not be reduced or affected in any way
and Tenant shall continue to pay Fixed Rent and Additional Rent, without
reduction or abatement (except to the extent of any rent insurance proceeds
actually received by Landlord therefor), in the manner and at the times herein
specified and, except only to the extent that Tenant is prevented from so doing
pursuant to the terms of the order of the condemning authority, Tenant shall
continue to perform and observe all of the other covenants, agreements, terms
and provisions of this lease as if such temporary taking had not occurred;
provided,
29
however, that in the event, as hereinabove provided, that Tenant determines in
its reasonable opinion that the remaining portion of the term is impracticable,
Tenant shall have the right to cancel this lease effective as of the date of
such temporary taking by notice given to Landlord within sixty (60) days after
the date of such temporary taking. In such event, Landlord shall be entitled to
receive the entire award for the temporary taking, shall reimburse Tenant for
any Fixed Rent and Additional Rent paid by Tenant subsequent to the date of the
temporary taking, and shall pay any remaining portion of the award to the Lender
in reduction of the outstanding principal balance of the first permanent
mortgage. In the event of any such temporary taking, except if Tenant exercises
the lease cancellation right described above, Tenant shall be entitled to
receive the entire amount of any award for such temporary taking, whether such
award is paid by way of damages, rent or otherwise, unless such period of
temporary use or occupancy shall extend beyond the Expiration Date, in which
case such award, after payment to Landlord therefrom of the estimated cost of
restoration of the Demised Premises to the extent that any such award is
intended to compensate for damage to the Demised Premises, shall be apportioned
by Tenant and Landlord as of the Expiration Date in the same ratio that the part
of the entire period for which such compensation is made falling before the
Expiration Date bears to that part falling after the Expiration Date. Landlord
shall pay any portion of the award relating to the period after the Expiration
Date to the Lender in reduction of the outstanding principal balance of the
first permanent mortgage. Promptly after obtaining possession of the Demised
Premises or portion thereof after the expiration of any temporary use or
occupancy thereof pursuant to any such temporary taking, Tenant shall, after
receipt of the proceeds awarded as a result of any such temporary taking, repair
and restore the Demised Premises or portion thereof, as the case may be.
16.4 Tenant shall be entitled to appear, claim and receive in any
proceeding relating to any taking a separate award or awards for a taking of
Tenant's Property and, subject to the rights of the first superior mortgagee to
be paid in full, the value of the unexpired term of the leasehold (including any
separate award which may be made or valued for the options to extend the term of
this lease as provided for in Article XXII hereof) and for Tenant's moving
expenses. Landlord hereby expressly assigns to Tenant any and all right and for
interest which Landlord may have in and to any award made in respect of Tenant's
Property and Tenant's moving expenses. The proceeds of any award of condemnation
made for the value of the unexpired term of the leasehold over and above that
portion of the award payable to the holder of the first superior mortgage shall
be equitably allocated between Landlord and Tenant. In the event of any taking,
the parties agree to cooperate in applying for and in prosecuting any claims
with respect to such taking.
30
16.5 Any dispute under this Article XVI shall be determined by
arbitration pursuant to Article XXIV hereof.
ARTICLE XVII
INDEMNIFICATION
---------------
17.1 Tenant shall indemnify and save Landlord harmless from and against
all liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including reasonable architects' and attorneys' fees, which may be
imposed upon or incurred by or asserted against Landlord by reason of any of the
following occurrences during the term of this lease:
(a) any work or thing done in, on or about the Demised Premises, or any
part thereof, by Tenant or any party other than Landlord or its agents;
(b) any use, non-use, possession, occupation, condition, operation,
maintenance or management of the Demised Premises, or any part thereof;
(c) any negligence on the part of Tenant or any of its agents,
contractors, servants, employees, subtenants, licensees or invitees;
(d) any accident, injury or damage to any person or property occurring
in, on or about the Demised Premises or any part thereof, except if arising in
connection with Landlord's Work or the breach of Landlord's maintenance and
repair obligations under Article VI hereof (provided that Tenant gave Landlord
prompt notice of any potentially dangerous condition requiring repair of which
Tenant was actually aware); or
(e) any failure on the part of Tenant to perform or comply with any of
the covenants, agreements, terms, provisions, conditions or limitations
contained in this lease on its part to be performed or complied with.
In case any action or proceeding is brought against Landlord by reason of any
such claim, Tenant, upon written notice from Landlord, shall at Tenant's expense
resist and defend such action or proceeding by counsel approved by Landlord in
writing, which approval shall not be unreasonably withheld. The obligations of
Tenant under this Section 17.1 arising by reason of any such occurrence taking
place during the term of this lease shall survive the expiration or early
termination of this lease.
17.2 Landlord shall indemnify and save Tenant harmless from and against
all liabilities, obligations, damages, penalties, claims, costs, charges and
expenses (including reasonable
31
architects' and attorneys' fees) which may be imposed upon or incurred by or
asserted against Tenant by reason of any of the following occurrences:
(a) any negligence on the part of Landlord or any of its agents,
contractors, servants, employees, subtenants, licensees or invitees;
(b) any accident, injury or damage to any person or property occurring
in, on or about the Demised Premises or any part thereof as the result of
Landlord's Work or the breach of Landlord's maintenance and repair obligations
under Article VI hereof (provided that Tenant gave Landlord prompt notice of any
potentially dangerous condition requiring repair of which Tenant was actually
aware); or
(c) any failure on the part of Landlord to perform or comply with any of
the covenants, agreements, terms, provisions, conditions or limitations
contained in this lease on its part to be performed or complied with.
In case any action or proceeding is brought against Tenant by reason of
any such claim, Landlord, upon written notice from Tenant, shall at Landlord's
expense resist and defend such action or proceeding. The obligations of Landlord
under this Section 17.2 arising by reason of any such occurrence taking place
prior to or during the term of this lease shall survive the expiration or early
termination of this lease.
ARTICLE XVIII
DEFAULT PROVISIONS
------------------
18.1 This lease and the term and estate hereby granted are subject to
the limitation that:
(a) Whenever Tenant shall default in the payment of any installment of
Fixed Rent on any day upon which the same ought to be paid and if such default
shall continue for five (5) days after Landlord shall have given to Tenant
written notice specifying such default, or whenever Tenant shall default in the
payment of any other sum payable by Tenant hereunder as an item of Additional
Rent on any day upon which the same ought to be paid and if such default shall
continue for ten (10) days after Landlord shall have given to Tenant a written
notice specifying such default; or
(b) whenever Tenant shall do, or permit anything to be done, whether by
action or inaction, contrary to any of the covenants, agreements, terms or
provisions of this lease, or
32
shall fail in the keeping and performance of any of the covenants, agreements,
terms or provisions contained in this lease which on the part or on behalf of
Tenant are to be kept or performed (other than those referred to in the
foregoing subsection (a) of this Section), and Tenant shall fail to commence to
take steps to remedy the same within fourteen (14) days after Landlord shall
have given Tenant a written notice specifying the same, or, having so commenced,
shall thereafter fail to proceed with diligence and continuity to remedy the
same (unless the failure relates to a matter which with due diligence cannot
reasonably be commenced within the 14-day period); or
(c) whenever an involuntary petition shall be filed against Tenant under
any bankruptcy or insolvency law or under the reorganization provisions of any
law of like import, or a receiver of Tenant or of or for its property shall be
appointed without the acquiescence of Tenant, or whenever this lease or the
estate hereby granted or the unexpired balance of the term would, by operation
of law or otherwise, devolve upon or pass to any person, except in accordance
with the terms hereof, and such situation under this subsection (c) shall
continue and shall not be remedied by Tenant within sixty (60) days; or
(d) whenever Tenant shall make an assignment of its property for the
benefit of creditors or shall file a voluntary petition under any bankruptcy or
insolvency law, or whenever any court of competent jurisdiction shall approve a
petition filed by Tenant under the reorganization provisions of the United
States Bankruptcy Act or under the provisions of any successor law, or whenever
a petition shall be filed by Tenant under the arrangement provisions of the
United States Bankruptcy Act or under the provisions of any successor law; or
(e) whenever the Demised Premises or any portion thereof shall be
abandoned,
then, in any of said cases set forth in the foregoing subsections, regardless of
and notwithstanding the fact that Landlord has or may have some other remedy
under this lease or by virtue hereof, or in law or in equity, Landlord may give
to Tenant a notice (the "second notice") of intention to end the term of this
lease specifying a day not less than ten (10) days thereafter and, upon giving
of the second notice, this lease and the term and estate hereby granted shall
expire and terminate upon the day so specified in the second notice, as fully
and completely and with the same force and effect as if the day so specified was
the date hereinbefore fixed as the Expiration Date, and all rights of Tenant
under this lease shall expire and terminate, but Tenant shall remain liable for
damages as hereinafter provided.
18.2 In the event of the termination of this lease or re-entry by
Landlord, under any of the provisions of this Article
33
XVIII or pursuant to law, by reason of default hereunder on the part of Tenant,
Tenant will pay to Landlord, as damages, at the election of Landlord, either:
(a) a sum which at the time of such termination of this lease or at the
time of any such re-entry by Landlord, as the case may be, represents the then
value (using a discount rate of 8% per annum) of the excess, if any, of:
(i) the aggregate of any delinquent Fixed Rent and Additional Rent and
the Fixed Rent and Additional Rent which would have been payable by Tenant
(conclusively presuming that Additional Rent would increase each year by
(A) the average percentage which it annually increased during the period
(not to exceed 5 years) prior to the lease termination or re-entry, or (B)
if this lease has been in effect for less than three years at the time of
termination or re-entry, 12%) for the period commencing with such earlier
termination of this lease or the date of any such re-entry, as the case may
be, and ending with the Expiration Date had not this lease been so
terminated or had Landlord not so re-entered the Demised Premises, over
(ii) the then fair market rental value of the Demised Premises for the
same period, or
(b) sums equal to the Fixed Rent and Additional Rent which would have
been payable by Tenant (determined pursuant to the method described in Section
18.2(a)(i)) had not this lease been so terminated, or had Landlord not so
re-entered the Demised Premises, payable upon the days specified herein for such
payment following such termination or such re-entry and until the date herein
specified as the Expiration Date; provided, however, that if Landlord shall
re-let the Demised Premises during said period, Landlord shall credit Tenant
with the rents, if any, as and when received by Landlord from such re-letting,
it being understood that any such re-letting may be for a period shorter or
longer than the remaining term of this lease; but in no event shall Tenant be
entitled to recessive any excess of such rents over the sums payable by Tenant
to Landlord hereunder, nor shall Tenant be entitled in any suit for the
collection of damages pursuant to this subsection to a credit in respect of any
rents from a re-letting, except to the extent that such rents are actually
received by Landlord.
Whether Landlord elects damages pursuant to (a) or (b) above, Tenant
shall also pay to Landlord as damages an amount equal to the expenses incurred
in terminating this lease or in re-entering the Demised Premises and in securing
possession thereof, including attorneys' fees, as well as the expenses of
re-letting, including altering and preparing the Demised Premises
34
for new tenants, brokers' commissions and attorneys' fees, rent concessions, and
all other expenses properly chargeable against the Demised Premises and the
rental thereof.
If the Demised Premises or any part thereof are re-let by Landlord for
the unexpired portion of the term of this lease, or any part thereof, before
presentation of proof of such damages to any court, commission or tribunal, the
amount of rent reserved upon such re-letting shall, prima facie, be the fair
market rental value for the Demised Premises, or part thereof, so re-let during
the term of the re-letting. No such re-letting shall constitute a surrender or
acceptance of a surrender.
Suit or suits for the recovery of damages pursuant to subsection (b), or
any installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall be deemed to require Landlord to
postpone suit until the date when the term of this lease would have expired if
it had not been terminated under the provisions of this Article XVIII or under
any provisions of law, or had Landlord not re-entered the Demised Premises.
Nothing herein contained shall be construed as limiting or precluding the right
of Landlord to prove for and obtain as liquidated damages by reason of the
termination of this lease an amount equal to the maximum allowed by any statute
or rule of law.
All references in this Section 18.2 to Expiration Date shall mean the
date the lease term then in effect (without the exercise of any extension option
by Tenant) would have expired had the lease not been terminated. Notwithstanding
the above, if prior to the termination of the lease, Tenant had exercised an
extension option pursuant to Article XXII for an additional term, then
Expiration Date shall mean the date such extension term would have expired (even
if such extension term had not commenced prior to termination of the lease).
18.3 If this lease shall terminate by reason of a default on the part of
Tenant as provided for herein, Landlord shall have the right to re-enter the
Demised Premises either by summary proceedings or by any other judicial
proceeding and may repossess the Demised Premises and dispossess Tenant and any
other person from the Demised Premises and remove any and all of their property
and effects therefrom, at the sole cost and expense of Tenant.
18.4 Tenant, on its own behalf and on behalf of any and all persons
claiming through or under Tenant, including creditors of all kinds, does hereby
waive and surrender all right and privilege which they or any of them might have
under or by reason of any present or future law to redeem the Demised Premises
or to have a continuance of this lease for the term hereby demised after being
dispossessed or ejected therefrom by process
35
of law, under the terms of this lease or after the termination of this lease as
herein provided.
18.5 The words "enter", "entry", "re-enter" and "re-entry" are not
restricted to their technical legal meaning.
ARTICLE XIX
RIGHT TO PERFORM OTHER PARTY'S OBLIGATIONS;
-------------------------------------------
CUMULATIVE REMEDIES; WAIVERS
----------------------------
19.1 If Tenant shall default in the observance or performance of any
term or covenant on its part to be observed or performed under this lease, then
Landlord, without being under any obligation to do so and without thereby
waiving such default, may remedy such default for the account and at the expense
of Tenant, immediately without notice in case of emergency, or in any other case
only provided that Tenant shall fail to commence to remedy such default within
the applicable grace period and thereafter proceed with diligence and continuity
to complete such remedy. Landlord shall have the right to enter the Demised
Premises for the purpose of remedying such default, without notice in the case
of emergency, but otherwise only after reasonable prior written notice to
Tenant. If Landlord makes any expenditures or incurs any obligations for the
payment of money in connection therewith including, but not limited to,
reasonable attorneys' fees and disbursements, in instituting, prosecuting or
defending any action or proceeding, such sums paid or obligations incurred, with
interest from the time of the expenditure at the Interest Rate (as defined in
Section 19.5), shall be deemed Additional Rent hereunder and shall be payable by
Tenant on demand or with the next installment of Fixed Rent.
19.2 If Landlord shall default in the observance or performance of any
term or covenant on its part to be observed or performed under or by virtue of
any of the terms or provisions of this lease, Tenant, without being under any
obligation to do so and without thereby waiving such default, may remedy such
default for the account and at the expense of Landlord, immediately without
giving notice in case of emergency, or in any other case only provided that
Landlord shall fail to commence and diligently prosecute to completion the
remedy for such default within a reasonable time after Tenant shall have
notified Landlord in writing of such default. If Tenant makes any expenditures
or incurs any obligations for the payment of money in connection therewith
including, but not limited to, reasonable attorneys' fees and disbursements, in
instituting, prosecuting or defending any action or proceeding, such sums paid
or obligations incurred, with interest from the time of the expenditure at the
Interest Rate (as defined in Section 19.5), shall be paid to it by Landlord on
demand. If Landlord fails to make such payment within
36
thirty (30) days of Tenant's notice, then Tenant shall be entitled to set off
such expenditure against that portion of the next due installment(s) of Fixed
Rent which exceeds the monthly or quarterly payment of principal and/or interest
due under any superior mortgages affecting the Demised Premises.
19.3 Landlord may enjoin any breach or threatened breach by Tenant of
any covenant, agreement, term, provision or condition herein contained. The
mention in this lease of any particular remedy available to Landlord shall not
preclude Landlord from any other remedy it might have, either at law or in
equity. Landlord's failure to insist upon the strict performance or observance
of any of the covenants, agreements, terms, provisions or conditions of this
lease or to exercise any right, remedy or election herein contained or permitted
by law shall not constitute or be construed as a waiver or relinquishment for
the future of such covenant, agreement, term, provision, condition, right,
remedy or election, but the same shall continue and remain in full force and
effect. Any rights or remedies that may exist at law, in equity or otherwise
upon breach of any covenant, agreement, term, provision or condition in this
lease contained, shall be distinct, separate and cumulative rights and remedies
and no one of them, whether exercised or not, shall be deemed to be in exclusion
of any other. No covenant, agreement, term, provision or condition of this lease
shall be deemed to have been waived unless such waiver is in writing, signed by
the party sought to be charged or such party's agent duly authorized in writing
to any act or matter, and such waiver shall apply only with respect to the
particular act or matter to which such consent is given and shall not relieve
either Landlord or Tenant, as the case may be, from the obligation, whenever
required under this lease, to obtain the consent of the other party to any other
act or matter.
19.4 Receipt or acceptance of Fixed Rent by Landlord shall not be deemed
a waiver of any default under this lease or of any rights which Landlord may be
entitled to exercise under this lease by reason of such default. If Tenant is in
arrears in the payment of Fixed Rent or Additional Rent beyond the expiration of
the applicable grace period, Tenant waives the right, if any, to designate the
items against which any payments made by Tenant are to be credited and Tenant
agrees that Landlord may apply any payments made by Tenant to any items as
Landlord sees fit irrespective of and notwithstanding any designation or request
by Tenant as to the items against which any such payments shill be credited. No
employee of Landlord or of Landlord's agents shall have the power to accept the
keys of the Building prior to the termination of this lease, and the delivery of
keys to any employee of Landlord or of Landlord's agents shall not operate as a
termination of this lease or as a surrender or acceptance of a surrender of the
Demised Premises. This lease may not be changed orally, but only by an agreement
in writing
37
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought.
19.5 If any installment of Fixed Rent (other than that portion of such
installment to which Tenant's right of set-off relates, if allowable as herein
provided in Section 19.2) or any item of Additional Rent which is payable to
Landlord in accordance with the provisions of this lease shall be in arrears for
more than ten (10) days after such installment or payment is due, then Tenant
shall pay interest thereon at the Interest Rate from the due date of such
installment or payment to the date of payment. "Interest Rate" shall mean a rate
per annum equal to the lesser of (a) 3% above the commercial lending rate
announced from time to time by Chemical Bank (New York, New York) as its prime
rate for 90 day unsecured loans, or (b) the maximum applicable legal rate, if
any.
19.6 Landlord and Tenant hereby waive trial by jury in any action,
proceeding or counterclaim brought by either against the other with respect to
any matter whatsoever arising out of or in any way connected with this lease,
the relationship of Landlord and Tenant, or in connection with Tenant's use and
occupancy of the Demised Premises.
ARTICLE XX
BROKERAGE FEES AND COMMISSIONS
------------------------------
20.1 Landlord represents and warrants to Tenant that there is no broker
involved with or who brought about this lease transaction. Tenant covenants that
it dealt with no broker in connection with this lease transaction.
20.2 Tenant agrees that should any claim be made against Landlord by any
broker for commissions or other compensation in connection with the negotiation
or execution of this lease, which claim results from the inaccuracy of Tenant's
covenant in Section 20.1, then Tenant will defend, indemnify and hold Landlord
harmless from any and all liabilities, claims, suits, demands, judgments, costs,
interest and expenses (including attorneys' fees and disbursements) incurred in
connection with such claim.
20.3 Landlord agrees that should any claim be made against Tenant by any
broker for commissions or other compensation in connection with (i) the
negotiation or execution of this lease and/or (ii) the placement of any
financing secured by a fee interest in the Demised Premises, which claim results
from the inaccuracy of Landlord's covenant in Section 20.1, then Landlord will
defend, indemnify and hold Tenant harmless from any and all liabilities, claims,
suits, demands, judgments, costs, interest
38
and expenses (including attorney's fees and disbursements) incurred in
connection with such claim.
ARTICLE XXI
QUIET ENJOYMENT; TRANSFER OF
----------------------------
LANDLORD'S INTEREST
-------------------
21.1 Landlord covenants that Tenant shall quietly enjoy the Demised
Premises without hindrance or molestation, subject only to the covenants,
agreements, terms, provisions and conditions of this lease.
21.2 It is expressly understood and agreed that the term "Landlord" as
used in this lease means only the owner for the time being of the Demised
Premises, and in the event of the sale, assignment or transfer by such owner of
its or their interest in the Demised Premises, such owner shall thereupon be
released and discharged from all covenants and obligations of Landlord
thereafter accruing provided that such covenants and obligations shall be
binding upon each new owner during the period of its ownership of the Demised
Premises.
21.3 Tenant shall look only to Landlord's estate and property in the
Demised Premises (and the proceeds thereof), for the satisfaction of Tenant's
remedies for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder, and no other property or assets of Landlord shall be subject ▇▇ ▇▇▇▇,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this lease, the relationship of Landlord and
Tenant, or Tenant's use and occupancy of the Demised Premises.
21.4 It is understood and agreed that the relationship between the
parties hereto is that of Landlord and Tenant, and nothing contained in this
lease shall be deemed to create a partnership or joint venture herein.
ARTICLE XXII
OPTIONS TO EXTEND TERM
----------------------
22.1 Provided that Tenant shall not then be in default with respect to
any material covenant of this lease beyond the expiration of the applicable
grace period, if any, Tenant shall have the option to extend the term of this
lease for an additional period of ten (10) years (the "First Extended Term");
provided, however, that (a) Tenant shall notify Landlord not earlier than
twenty-four (24) months and not later than the date which is
39
eighteen (18) months prior to the then Expiration Date that Tenant desires such
extension and (b) such extension shall be on the same terms, covenants and
conditions as are contained in this lease, except with respect to (i) the annual
Fixed Rent which shall be determined in the manner provided for in Section 22.2,
(ii) such provisions in this lease which apply only to the initial term, and
(iii) the option herein granted to extend the initial term of this lease.
22.2 (a) Fixed Rent payable by Tenant during the First Extended Term of
this lease shall be equal to $2,850,000 per annum, subject to the CPI
Adjustments hereinafter described.
(b) The first day of the First Extended Term shall be a CPI Adjustment
Date. Accordingly, if the Adjustment Index for such CPI Adjustment Date has
increased over the Beginning Index, the initial Fixed Rent specified in Section
22.2(a) shall increase commencing with such CPI Adjustment Date by the product
of the following: $2,850,000 multiplied by the percentage increase of the
Adjustment Index over the Beginning Index.
(c) The seventh (7th) anniversary of the commencement date of the
First Extended Term shall also be a CPI Adjustment Date. Accordingly, if the
Adjustment Index for such CPI Adjustment Date has increased over the Index in
effect for the month immediately preceding the month in which the First Extended
Term commenced (the "First Extension Index"), then the Fixed Rent determined
pursuant to Section 22.2(b) shall increase commencing with such CPI Adjustment
Date by the product of the following: 60% of the Fixed Rent determined pursuant
to Section 22.2(b) multiplied by the percentage increase of the Adjustment Index
over the First Extension Index.
22.3 Provided that Tenant shall not then be in default with respect to
any material covenant of this lease beyond the expiration of the applicable
grace period, if any, Tenant shall have the option to extend the term of this
lease for an additional second period of ten (10) years (the "Second Extended
Term"); provided, however, that (a) Tenant shall notify Landlord not earlier
than twenty-four (24) months and not later than eighteen (18) months prior to
the then Expiration Date that Tenant desires such extension. If the option is so
exercised, the Second Extended Term shall be on the same terms, covenants and
conditions as are contained in this lease, except with respect to (i) the annual
Fixed Rent which shall be determined in the manner provided for in Section 22.4,
(ii) such provisions in this lease which apply only to the initial term or the
First Extended Term and (iii) the option herein granted to extend the First
Extended Term of this lease.
40
22.4 (a) Fixed Rent payable by Tenant during the Second Extended Term of
this lease shall be equal to $2,850,000 per annum, subject to the CPI
Adjustments hereinafter described.
(b) The first day of the Second Extended Term shall be a CPI Adjustment
Date. Accordingly, if the Adjustment Index for such CPI Adjustment Date has
increased over the Beginning Index, the initial Fixed Rent specified in Section
22.4 (a) shall increase commencing with such CPI Adjustment Date by the product
of the following: $2,850,000 multiplied by the percentage increase of the
Adjustment Index over the Beginning Index.
(c) The seventh (7th) anniversary of the commencement date of the
Second Extended Term shall also be a CPI Adjustment Date. Accordingly, if the
Adjustment Index for such CPI Adjustment Date has increased over the Index in
effect for the month immediately preceding the month in which the Second
Extended Term commenced (the "Second Extension Index"), then the Fixed Rent
determined pursuant to Section 22.4(b) shall increase commencing with such CPI
Adjustment Date by the product of the following: 60% of the Fixed Rent
determined pursuant to Section 22.4(b) multiplied by the percentage increase of
the Adjustment Index over the Second Extension Index.
ARTICLE XXIII
NOTICES
-------
23.1 All notices, demands, requests or other communications which may be
or are required to be given, served or sent by either party to the other shall
be in writing and shall be deemed to have been properly given or sent if (a)
hand delivered, (b) mailed by registered or certified mail, return receipt
requested, with postage prepaid, or (c) sent by Express Mail or a national
commercial courier service (e.g., Purolator Delivery Service or Federal
Express), for next day delivery, to be confirmed in writing by said courier or
service, addressed as follows:
(a) If intended for Tenant:
Rayovac Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
With a copy to:
Rayovac Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
41
(b) If intended for Landlord:
SPG Partners
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Accounting Manager
With a copy to:
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Sterling
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Such notices, demands, requests or other communications shall be deemed to have
been given on the date which is three (3) days after it shall have been mailed,
sent or delivered as aforesaid. Each of the above may designate by notice in
writing and delivered as set forth above a new address to which any notice,
demand, request or communication shall thereafter be so mailed, sent or
delivered for all purposes hereunder.
ARTICLE XXIV
ARBITRATION
-----------
24.1 In each instance specified in this lease in which it is stated that
disputes thereunder shall be determined by arbitration, such arbitration shall
be conducted as provided in this Article XXIV.
24.2 The party requesting arbitration shall do so by giving notice to
that effect to the other party, specifying in said notice the nature of the
dispute and the person chosen as the arbitrator for such party. Within ten (10)
days, the other party by notice to the original party shall appoint a second
person as arbitrator on its behalf. The arbitrators thus appointed shall appoint
a third person, and such three arbitrators shall as promptly as possible resolve
such dispute. If the second arbitrator shall not have been appointed as
aforesaid, the first arbitrator shall proceed to resolve the dispute.
24.3 If the two arbitrators appointed by the parties shall be unable to
agree, within ten (10) days after the appointment of the second arbitrator, upon
the appointment of a third arbitrator, they shall give written notice to the
parties of such failure to agree, and, if the parties fail to agree upon the
selection of such third arbitrator within ten (10) days after the arbitrators
appointed by the parties give notice as aforesaid,
42
then within five (5) days thereafter either of the parties, upon notice to the
other party, may request such appointment by the American Arbitration
Association (or any organization successor thereto), or in its absence, refusal,
failure or inability to act, may apply for a court appointment of such
arbitrator.
24.4 The arbitration shall be conducted in accordance with the then
prevailing rules of the American Arbitration Association (or successor
organization) in the City of Madison (or, if a branch does not exist in such
city, Milwaukee). The arbitrators are to be qualified commercial real estate
practitioners with at least ten (10) years continuous experience in the
commercial real estate business with skills relevant to the dispute. The
arbitrators shall have the right to retain and consult experts and competent
authorities skilled in the matters under arbitration. The arbitrators shall
render an award within sixty (60) days after the appointment of the third
arbitrator, which decision and award shall be final and conclusive on the
parties. Such award shall be in writing and counterpart copies thereof shall be
delivered to each of the parties. In rendering such decision and award, the
arbitrators shall not add to, subtract from or otherwise modify the provisions
of this lease.
24.5 If for any reason whatsoever the written decision and award of the
arbitrators shall not be rendered within sixty (60) days as aforesaid, then at
any time thereafter, before such decision and award shall have been rendered,
either party may apply to any court having proper jurisdiction, by action,
proceeding or otherwise (but not by a new arbitration proceeding) as may be
proper to determine the matter in dispute consistent with the provisions of this
lease.
24.6 Each party shall pay the fees and expenses of the arbitrator
appointed by or for such party, and the fees and expenses of the third
arbitrator and all other expenses of the arbitration (other than the fees and
disbursements of attorneys and witnesses for each party) shall be borne by the
parties equally.
24.7 Subject to Section 24.8, when any non-monetary matter in dispute
shall be referred to arbitration, any default hereunder claimed by either party
by reason of the matter in dispute shall be deemed suspended provided that the
party so claimed to be in default shall proceed diligently and in good faith
with the arbitration, until the dispute is determined adversely to the party
claimed to be in default and notice thereof is given to such party, whereupon
such party (whether Tenant or Landlord) shall have the same opportunity to cure
such default as is provided for in this lease as if such notice of determination
was the first notice given to the party in default. With regard to monetary
disputes only, Tenant shall pay the disputed amount to Landlord in accordance
with the terms of this lease pending the
43
outcome of the arbitration proceeding. If Tenant prevails, Landlord shall
reimburse Tenant for the amount awarded, with interest thereon at the rate equal
to the rate announced by Chemical Bank from time to time in effect as its prime
rate from the date of payment by Tenant through and including the date of such
reimbursement.
24.8 Notwithstanding any other provision in this Article XXIV to the
contrary, if Tenant is in default beyond any applicable grace period with regard
to a certain matter at the time it serves a notice upon Landlord requesting
submission of such matter to arbitration, Landlord shall not thereby be
precluded from the subsequent exercise of any remedies for default to which
Landlord is entitled pursuant to this lease, at law or in equity.
ARTICLE XXV
ESTOPPEL CERTIFICATES: MEMORANDUM OF LEASE
------------------------------------------
25.1 Each party agrees, at any time and from time to time, as requested
by the other party, upon not less than thirty (30) days prior notice, to execute
and deliver to the other party a statement certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), certifying the dates to which the Fixed Rent and Additional Rent
have been paid, stating whether or not, to the best knowledge of the signer, the
other party is in default in the performance of any of its obligations under
this Lease, and, if so, specifying each such default of which the signer may
have knowledge, and certifying as to such additional information as the other
party may reasonably request, it being intended that any such statement
delivered pursuant hereto may be relied upon by others with whom the party
requesting such certificate may be dealing.
25.2 Landlord and Tenant shall execute, acknowledge and deliver a
memorandum of this lease in recordable form simultaneously with the execution
and delivery of this lease; said memorandum shall under no circumstances be
deemed or construed to change or otherwise affect any of the obligations or
provisions of this lease. Tenant shall pay for the cost of recording the
memorandum.
ARTICLE XXVI
INVALIDITY OF PARTICULAR PROVISIONS; CONSTRUCTION
-------------------------------------------------
26.1 If any term or provision of this lease or the application thereof
to any person or circumstance shall, to any extent, be invalid and
unenforceable, the remainder of this
44
lease, or the application of such term or provision to persons or circumstances
other than those as to which it is held invalid and unenforceable, shall not be
affected thereby, and each term and provision of this lease shall be valid and
enforced to the fullest extent permitted by law.
26.2 This lease shall be construed and enforced in accordance with the
laws of the State of Wisconsin.
ARTICLE XXVII
SURRENDER OF PREMISES
---------------------
27.1 Upon the Expiration Date or upon the earlier termination of the
term of this lease, Tenant shall quit and surrender to Landlord the Demised
Premises, broom clean, in good order, condition, and repair, ordinary wear and
tear and damage by fire, the elements or other casualty excepted, and Tenant
shall remove all of its Personal Property as herein provided. Tenant's
obligation to observe and perform this covenant shall survive the expiration or
earlier termination of the term of this lease.
27.2 If Tenant fails to surrender possession of the Demised Premises
upon the Expiration Date or earlier termination of the term of this lease,
Landlord may elect, by notice to Tenant, to treat Tenant as a holdover for a
further term of 3 months at twice the Fixed Rent and Additional Rent which
Tenant was required to pay during the last month prior to expiration or
termination. In addition to the above, if the Demised Premises are not
surrendered upon the expiration or earlier termination of the term of this
lease, Tenant shall indemnify and hold Landlord harmless from and against any
claims, loss, costs, liability and expenses (including attorneys' fees)
resulting therefrom, including any claims made by any succeeding lessee founded
upon such delay.
27.3 If the last day of the term of this lease falls on a Sunday, this
lease shall end on the immediately preceding business day. If Tenant shall have
removed all or substantially all of its employees and Personal Property from the
Demised Premises at any time during the last month of the term of this lease,
Landlord may immediately enter and alter, renovate and redecorate the Demised
Premises, without elimination, diminution or abatement of rent, or incurring
liability to Tenant for any compensation, and such acts by Landlord shall have
no effect upon this lease.
45
ARTICLE XXVIII
COVENANTS BINDING
-----------------
28.1 The covenants, agreements, terms, provisions and conditions of this
lease shall be binding upon and inure to the benefit of the successors and
assigns of Landlord and Tenant.
ARTICLE XXIX
LANDLORD'S ACCESS
-----------------
29.1 Landlord and its authorized representatives shall have the right,
upon reasonable advance notice to Tenant, to enter the Demised Premises or any
part or parts thereof, during Business Hours, accompanied by a duly authorized
representative of Tenant, if Tenant makes such representative available, (i) to
examine the Demised Premises to ascertain if Tenant has performed its
obligations under this lease, (ii) to show the Demised Premises to prospective
purchasers or mortgagees, (iii) to effect repairs to the Demised Premises
pursuant to Landlord's obligations under Article VI of this lease, (iv) during
the period commencing eighteen (18) months prior to the end of the term of this
lease (if Tenant shall not have exercised the applicable option to extend the
term pursuant to Article XXII), to show the Demised Premises to prospective
tenants and (v) for the purpose of making such repairs in or to the Demised
Premises as may be provided for by this lease or as may be mutually agreed upon
by the parties. Landlord shall be allowed to take all materials into the Demised
Premises that may be required for such repairs and actions. Landlord's rights
under this Section 29.1 shall be exercised in such manner as to cause the least
practicable interference with Tenant's use and occupancy of the Demised
Premises.
29.2 In addition to Landlord's rights under Section 29.1 above, Landlord
and its authorized representatives shall have the right to enter upon the
Demised Premises, or any part thereof, at such times as such entry shall be
required by circumstances of emergency affecting the Demised Premises or the
safety of its occupants without prior notice to Tenant. In such event, Landlord,
or its authorized representative, shall, if feasible, be accompanied by a duly
authorized representative of Tenant, if Tenant makes such representative
available.
46
ARTICLE XXX
APPLICATION OF INSURANCE PROCEEDS
---------------------------------
30.1 In any case in which Tenant shall be obligated under any provision
of this lease to pay to Landlord any loss, cost, damage, liability or expense
suffered or incurred by Landlord, Landlord shall allow Tenant as an offset
against the amount thereof the net proceeds of any insurance collected by
Landlord for or on account of such loss, cost, damage, liability or expense,
provided that the allowance of such offset does not invalidate or prejudice the
policy or policies under which such proceeds were payable.
30.2 In any case in which Landlord shall be obligated under any
provisions of this lease to pay to Tenant any loss, cost, damage, liability or
expense suffered or incurred by Tenant, Tenant shall allow to Landlord as an
offset against the amount thereof the net proceeds of any insurance collected by
Tenant for or on account of such loss, cost, damage, liability or expense,
provided that the allowance of such offset does not invalidate or prejudice the
policy or policies under which such proceeds were payable.
ARTICLE XXXI
CHANGES IN DEBT SERVICE COSTS
-----------------------------
31.1 Prior to the date of this lease, Landlord received a permanent loan
commitment from Northwestern Mutual Life Insurance Company ("Northwestern") in
the amount of $10,000,000. The term of the loan is to be ten (10) years from the
date such loan is fully advanced (the "10 year period"), and Landlord is to pay
interest on the outstanding principal balance at an annual rate of 13.625% in
accordance with a 30 year amortization schedule.
In the event Landlord elects to obtain refinancing at the conclusion of
the 10 year period, whether from Northwestern or any other institutional lender,
then Landlord shall be responsible for the payment of points and all fees
incurred in connection with obtaining the loan (the "Loan Fees"), and Tenant
shall have the following rights and obligations:
(a) If Landlord obtains a loan which requires the payment of interest at
an annual rate greater than 13.625%, then Tenant shall be obligated to pay each
month as Additional Rent to Landlord an amount equal to (i) the monthly debt
service payment which Landlord is required to make, less (ii) the monthly debt
service payment which Landlord would be required to make in the event the annual
interest rate was 13.625%.
47
(b) If Landlord obtains a loan which requires the payment of interest at
an annual rate less than 13.625%, then Tenant shall receive a monthly credit
against its payments of Additional Rent pursuant to this lease in an amount
equal to (i) the monthly debt service payment which Landlord would be required
to make in the event the annual interest rate was 13.625%, less (ii) the monthly
debt service payment which Landlord is required to make. Tenants credit,
however, shall be reduced by the amount of the Loan Fees, and shall not apply to
that portion of the difference between (i) and (ii), if any, which results from
Landlord obtaining a loan at an annual interest rate of less than 12.125% (the
"1.5% Limitation").
In the event Landlord elects to refinance its loan prior to the
conclusion of the 10 year period, whether from Northwestern or any other
institutional lender, then Landlord shall be responsible for the payment of all
Loan Fees and any prepayment of all Loan Fees and any prepayment fees, and
Tenant shall have the following rights and obligations:
(c) If Landlord, in the expectation that interest rates will be higher
at the conclusion of the 10 year period, obtains a loan which requires the
payment of interest at an annual rate greater than 13.625%, then Tenant shall
not be obligated to pay Additional Rent prior to the conclusion of the 10 year
period as a result of the increased debt service. However, following the 10 year
period, Tenant shall be obligated to pay the amounts described above in (a).
(d) If Landlord obtains a loan which requires the payment of interest at
an annual rate less than 13.625%, then Tenant shall receive no credit against
its payments of Additional Rent pursuant to this lease prior to the conclusion
of the 10 year period as a result of the decreased debt service. However,
following the 10 year period, Tenant shall receive the credit (as adjusted by
the Loan Fees and the 1.5% Limitation) described above in (b), provided that
Tenant's credit shall be further reduced by an amount equal to any prepayment
fees paid by Landlord which Landlord did not recover as a result of debt service
savings generated by the lower interest rate prior to the conclusion of the 10
year period.
31.2 Landlord shall attempt with reasonable diligence to obtain the best
available interest rate and terms for a refinancing loan of such amount, term
and amortization schedule as Landlord shall choose. Landlord shall not obtain a
loan with a term that is longer than twenty-five (25) years without Tenant's
consent. In the event that Landlord intends to accept a loan which requires
interest payments at an annual rate of 16.625% or higher at any time during its
first five (5) years, then Landlord shall serve Tenant with notice of Landlord's
intention to obtain the loan. In such event, Tenant shall have
48
the right for a period of thirty (30) days to find an institutional lender
willing to make a substantially similar loan upon more favorable terms. If
Tenant informs Landlord within the thirty (30) day period of the availability of
a more favorable loan, Landlord shall seek to obtain such loan, provided that
the terms and conditions of the loan are reasonably satisfactory to Landlord. If
Tenant is unable to find a more favorable loan, then Landlord may proceed to
obtain the loan which it originally proposed.
31.3 In the event the principal amount of any refinancing loan obtained
by Landlord exceeds $10,000,000, then all calculations pursuant to Section 31.1
shall be appropriately adjusted as though the loan was for the sum of
$10,000,000.
31.4 Under no circumstances shall Tenant be required to pay Additional
Rent pursuant to Section 31.1, subsections (b) and (d). The Loan Fees and
prepayment fees described therein shall be deemed never to exceed the amount of
Tenant's credits (as adjusted by the 1.5% Limitation) described therein.
31.5 Any dispute arising pursuant to this Article XXXI shall be resolved
in accordance with the arbitration provisions of Article XXIV.
ARTICLE XXXII
MISCELLANEOUS
-------------
32.1 If an excavation or other substructure work shall be made on land
adjacent to the Demised Premises, or shall be authorized to be made, Tenant
shall afford the person causing or authorized to cause such excavation a license
to enter upon the Demised Premises for the purpose of doing such work as shall
be necessary to preserve the Demised Premises from injury or damage and to
support the same by proper foundations, without any claim for damage or
indemnity against Landlord, or diminution or abatement of rent; provided,
however, that any such work caused by Landlord shall be performed in such manner
as shall cause the least practicable amount of interference with Tenant's use
and occupancy of the Demised Premises.
32.2 Tenant shall be permitted to name the Building subject to the
consent of Landlord, which consent shall not be unreasonably withheld. Tenant
shall also have the right to place on the exterior of the Building and on the
Demised Premises a sign or signs which are permitted by the applicable laws of
public authority and are in keeping with the character and quality of the
Demised Premises as a first class commercial office project. Tenant shall remove
such sign or signs on the Expiration Date or sooner termination of this lease.
49
32.3 Tenant may install and utilize, and once installed modify, a
microwave, satellite or other antenna communications system on the roof of the
Building. Tenant shall furnish detailed plans and specifications for such system
(or modification) to Landlord for its approval, which approval shall not be
unreasonably withheld or delayed. Upon approval, such system shall be installed,
at Tenant's expense, by a contractor selected by Tenant. Tenant shall be
responsible for procuring whatever licenses or permits may be required for the
use of such system or operation of any equipment served thereby, but Landlord
agrees to join with Tenant, to the extent necessary, in any such applications.
Tenant's antenna system shall not constitute a nuisance or materially interfere
with the operation of the basic Building systems or with the normal use of the
area surrounding the Building by occupants thereof. Landlord makes no warranties
whatsoever as to the permissibility of such a system under the laws of public
authorities.
32.4 The Article headings in this lease and in the Index to this lease
are inserted only as a matter of convenience and shall have no effect whatsoever
in construing this lease.
32.5 Landlord agrees that Tenant shall be owner of and shall be entitled
to receive any and all investment tax credits in connection with the
construction of the Building, and Landlord agrees to cooperate to the extent
required by Tenant and at the sole expense of Tenant in order to enable Tenant
to receive the investment tax credits.
32.6 Landlord or its agents shall not be liable for any injury or damage
to persons or property resulting from fire, explosion, falling plaster, steam,
gas, electricity, water, rain or snow or leaks from any part of the Building or
from pipes, appliances or plumbing works or from the roof, street or subsurface,
or from any other place or by dampness or by any other cause of whatsoever
nature, unless caused by or due to the act or neglect of Landlord, its agents,
servants or employees or caused by or due to Landlord's failure to comply with
its obligations under this lease. Tenant shall give prompt notice to Landlord in
case of fire or other casualty or accidents occurring in the Demised Premises or
if Tenant becomes aware of any damage or defective condition requiring repair in
any Mechanical System or any other portion of the Demised Premises.
32.7 Tenant agrees to fully cooperate with Landlord in providing such
financial information concerning Tenant and the Demised Premises as any superior
mortgagee(s) may reasonably require.
32.8 This lease contains the entire agreement between the parties and
all prior negotiations and agreements are merged herein. Tenant acknowledges
that neither Landlord nor any agent
50
or representative of Landlord has made any statement or promise upon which
Tenant has relied with respect to any matter or thing relating to the Demised
Premises, except as is expressly set forth in this lease.
32.9 Tenant shall not place a floor load upon any floor of the Building
exceeding the floor load per square foot area which it was designed to carry and
which is allowed by the laws of public authorities.
32.10 Any review by Landlord of plans and specifications or alterations
to be performed by Tenant shall not be deemed to be a representation or warranty
by Landlord that the same is properly designed to perform the function for which
it is intended or complies with the laws of public authorities.
IN WITNESS WHEREOF, the parties hereto have duly executed this lease
agreement as of the day and year first above written.
SPG PARTNERS. Landlord
WITNESS: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- ------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
RAYOVAC CORPORATION, Tenant
WITNESS: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- ------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
..
51
STATE OF WISCONSIN)
) ss.
COUNTY OF DANE )
Personally came before me this 14th day of May, 1985, the above-named
▇▇▇▇▇▇ ▇. ▇▇▇▇ known to me to be one of the general partners of SPG Partners, a
Wisconsin general partnership, who executed the above instrument and
acknowledged the same on behalf of said partnership.
/s/ ▇.▇. ▇▇▇▇▇
----------------------------------
Notary Public, State of Wisconsin
My commission: 12-15-85
--------
STATE OF WISCONSIN)
) ss.
COUNTY OF DANE )
Personally came before me this 14th day of May, 1985 the above-named
▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me to be the President and Vice
President, respectively, of RAYOVAC Corporation, a Delaware corporation, who
executed the above instrument and acknowledged the same on behalf of said
corporation.
/s/ ▇.▇. ▇▇▇▇▇
----------------------------------
Notary Public, State of Wisconsin
My commission: 12-15-85
--------
THIS INSTRUMENT DRAFTED BY:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Brattle, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Kheel
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
52
FIRST AMENDMENT TO AGREEMENT OF LEASE
THIS FIRST AMENDMENT TO AGREEMENT OF LEASE, made as of this 24th day
June, 1986, by and between SPG PARTNERS, a Wisconsin general partnership having
an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Landlord") and
RAYOVAC CORPORATION, having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have entered into an agreement of lease
dated May 14, 1985 and covering certain lands located in the City of Madison,
Dane County, Wisconsin, all as more particularly described therein (the
"Lease"); and
WHEREAS, the parties hereto desire to amend the Lease in accordance with
the terms hereof.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant do hereby agree
as follows:
1. Section 1.3 of the Lease is hereby deleted in its entirety.
2. Section 2.1(d) of the Lease is hereby amended to read in full as follows:
(d) The term "Commencement Date" shall mean December 15, 1985. For
the period from the Commencement Date through December 31,
1985, the Fixed Rent and Additional Rent shall be 16/31 of the
amount of Fixed Rent and Additional Rent that would have been due
had the Commencement Date occurred on December 1, 1985.
3. Section 4.1(a) is hereby amended to read in full as follows:
(a) Fixed Rent amounting to $2,600,000.00 per annum, 60% of which amount
(i.e., $1,560,000.00) shall be subject to adjustment based upon
changes in the Consumer Price Index (the "CPI Adjustments") as
provided in Section 4.2 (herein referred to as "Fixed Rent"); and
4. Section 4.2 is hereby amended to read in full as follows:
4.2 CPI Adjustments to the Fixed Rent shall be made on the seventh (7th)
and fourteenth (14th) anniversaries of the Commencement Date and at
such other times as are described in Article XXLI of this lease (the
"CPI Adjustment Dates"). The base for computing the CPI Adjustments is
the
53
"Consumer Price Index for all Urban Consumers, Milwaukee, Wisconsin. All
Items (1967 = 100)" issued by the Bureau of Labor Statistics of the United
States Department of Labor (the "Index") in effect for the month
immediately prior to the month in which the Commencement Date occurs (the
"Beginning Index"). The Index published for the month immediately preceding
the CPI Adjustment Date in question (the "Adjustment Index") is to be
compared to the Beginning Index in determining the amount of the adjustment
in Fixed Rent. Notwithstanding anything contained herein to the contrary,
Fixed Rent shall never be reduced as a result of this Section 4.2 to an
amount less than $2,600,000.00 per annum. Thus, if the Adjustment Index has
increased over the Beginning Index, the initial Fixed Rent specified in
Section 4.1(a) shall increase commencing with the CPI Adjustment Date in
question by 60% of $2,600,000.00 multiplied by the percentage increase of
the Adjustment Index over the Beginning Index. If the Adjustment Index has
remained constant, or has decreased, in comparison to the Beginning Index,
the initial Fixed Rent specified in Section 4.1(a) shall remain unchanged.
If the Adjustment Index with respect to the second or any subsequent CPI
Adjustment Date is increased over the Beginning Index but has decreased
from the Adjustment Index in effect for the month immediately preceding the
next preceding CPI Adjustment Date, then the Fixed Rent as of such second
or subsequent CPI Adjustment Date shall be adjusted to be equal to 60% of
$2,600,000.00 multiplied by the percentage increase of the Adjustment Index
over the Beginning Index, notwithstanding the fact that this may lead to a
decrease in Fixed Rent established upon the previous Adjustment Date.
(a) Example 1: Assume that the Beginning Index (i.e., the Index in
effect for November, 1985) is 333.9. Assume that the Index for
November, 1992 is equal to 500. Thus, as of December 15, 1992, 60% of
the Fixed Rent (or, $1,560,000.00) will increase by the percentage of
increase in the Index (i.e., 500 less 333.9, or 166.1, which,
when expressed as a percentage of 333.9, is equal to 49.75%). Thus,
the Fixed Rent for the period commencing on December 15, 1992 would
equal ($2,600,000.00 plus [49.75% of $1,560,000.00]), or
$3,376,100.00.
(b) Example 2: Assume the same facts as set forth in Example 1, above,
except that the Index for November, 1992 has decreased to 300. Under
these circumstances, the Fixed Rent would remain unchanged for the
period commencing on December 15, 1992 and would be equal to
$2,600,000.00 per annum.
54
(c) Example 3: Assume the same facts as set forth in Example 1, above.
Further assume that the Index for November, 1999 is equal to 400. To
compute the Fixed Rent for the period beginning on December 15, 1999,
60% of the initial Fixed Rent (or, $1,560,000.00) will increase by the
percentage of increase in the Index, measured from the Beginning Index
(i.e., 400 less 333.9, or 66.1, which, when expressed as a
percentage of 333.9 is equal to 19.8%). Thus, the Fixed Rent for the
period commencing on December 15, 1999 would be equal to
($2,600,000.00 plus [19.8% of $1,560,000]) or $2,908,880 per annum.
Note that in this example, the rent has actually decreased from the
rent in effect for the period commencing on December 15,
1992 as set forth in Example 1.
5. Section 4.9 of the Lease is hereby amended to read in full as follows:
4.9 Prior to the Commencement Date of the Permanent Loan as that term
is defined in the Promissory Note dated February 8, 1985, executed by
Landlord as Obligor to Northwestern Mutual Life Insurance Company ("NML")
(NML or any replacement lender being hereinafter referred to as the
"Lender") and amended by Amendment of Terms of Note dated May 1, 1986 (as
amended the "Note") which Note is secured by a mortgage to NML bearing the
dame date (the "NML Mortgage"). Tenant shall deposit the sum of $1,000,000
into an escrow account held by an escrow agent which is acceptable to the
Lender. Tenant shall have the exclusive right to direct the investment
(including reinvestment) of the funds deposited, subject to limitations as
to the categories of permissible investments and as to the liquidity of
such investments. In the event of Tenant's default beyond any applicable
grace period in the payment of Fixed Rent or Additional Rent due and
payable pursuant to this Lease, the deposit, together with all interest or
other income then on deposit in the escrow account, shall be made available
to Landlord in such amounts as are necessary to cure Tenant's default. If
at the time of such default by Tenant, either (a) Landlord is
simultaneously in default beyond any applicable grace period under the Note
and NML Mortgage or under any replacement mortgage loan and Lender has
accelerated the balance due under its note, or (b) the Note is at maturity
and Landlord is in default in its payment of the outstanding principal
balance then due and owing, then the entire deposit, including all interest
or other income then on deposit in the escrow account, shall be made
available to Lender in reduction of the outstanding principal balance
payable by Landlord to Lender. Tenant shall be entitled to withdraw from
the escrow account, within thirty (30) days after June 30 of each year, an
amount equal to the amount of income
55
(interest, dividends and the like) and the net gain (the aggregate of
gains over losses) realized upon the investments held in the escrow
account if, and only if, there is at the time of such withdrawal no
default by Tenant in the payment of Fixed Rent or Additional Rent due
under this Lease and the balance remaining in the escrow account is not
less than $1,000,000. In the event NML at any time subsequent hereto
consents to, or in the event replacement financing obtained from a
lender other than NML permits the escrow account balance to be less
than the escrow account balance presently required under the NML
Mortgage and this Section 4.9. Tenant shall be permitted on the
effective date of such consent or refinancing, to reduce the escrow
account balance to such lesser amount, but in no event at any time
shall the escrow account balance be less than $750,000.
All of the above terms shall be incorporated in an Escrow Agreement
which shall be acceptable to Lender and which shall be substantially in the form
of Exhibit F annexed hereto and which replaces the Exhibit F originally annexed
to this Lease. In the event that the escrow account is, at some time subsequent
hereto, not required by NML or is not required under the terms of replacement
financing obtained from a lender other than NML, Tenant shall then be required
to maintain a security deposit of $750,000, to be held by an escrow agent chosen
by the Landlord and reasonably acceptable to Tenant pursuant to an Escrow
Agreement, which shall be substantially the same as the form of Exhibit F
annexed hereto, excepting that all provisions relating to or in favor of a
Lender, which include, but may not be limited to, paragraphs 2, 6, and that
portion of paragraph 7 relating to foreclosure, shall be removed from such
Escrow Agreement.
6. A new Section 4.10 is hereby added to the Lease, to read in full as
follows:
4.10 Within fifteen (15) days of the end of each Complete Lease Year
or Partial Lease Year, as the case may be, Landlord shall deliver to Tenant
a statement clearly itemizing Landlord's expenditures during such Complete
Lease Year or Partial Lease Year to fulfill its obligations pursuant to
Sections 6.2, 6.3, 9.1 and 10.1. The first $1,101,381.00 expended by
Landlord to fulfill such obligations during any Complete Lease Year is
referred to herein as the "Base Amount." (In the case of a Partial Lease
Year, the Base Amount shall be reduced pro rata based on the number of days
contained in such Partial Lease Year). If, during any Complete or Partial
Lease Year, Landlord's expenditures to fulfill such obligations exceed the
Base Amount, then Tenant shall pay Landlord, the amount by which such
expenditures exceed the Base Amount as Additional Rent. Landlord may, at
its option, either: (a) if the Landlord
56
has advanced funds to pay the expenditure, it may ▇▇▇▇ the amount that such
expenditure is in excess of the Base Amount to Tenant, who shall pay
Landlord such amount within fifteen (15) days after Landlord's giving of
notice to Tenant of the amount to be paid by Tenant, or (b) if Landlord has
not advanced the funds to pay the expenditure, it may: (i) ▇▇▇▇ the amount
that such expenditure is in excess of the Base Amount to Tenant, who shall
pay Landlord such amount as Additional Rent at least ten (10) days prior to
the date when payment of the expenditure is due; or (ii) send the ▇▇▇▇ (or
bills) for such excess expenditures directly to Tenant, who shall pay such
▇▇▇▇ (or bills) directly on or before the date when payment of such ▇▇▇▇
(or bills) is due. Landlord may ▇▇▇▇ Tenant monthly when Landlord has
incurred obligations in excess of the Base Amount.
7. Section 6.4 of the Lease is hereby amended to read in full as follows.
6.4 Tenant's obligation to pay for a portion of the costs incurred by
Landlord to fulfill Landlord's obligations under Sections 6.2 and 6.3 are
set forth in Section 4.10.
8. The second sentence of Section 6.6 is hereby amended to read in full as
follows:
Landlord, upon receipt of notice thereof from Tenant during the time
periods specified herein, shall correct any such defect to the reasonable
satisfaction of Tenant, and the cost of such repairs shall not be included
in calculations of the amounts expended by Landlord pursuant to Section
4.10.
9. Section 8.4 of the Lease is hereby amended to read in full as follows:
8.4 Any of Tenant's property (excluding money, securities or like
valuables) which shall remain in the Building in excess of thirty (30) days
following an involuntary termination of this lease, or in excess of five
(5) business days after the Expiration Date or the early termination of the
Lease, may, at the option of Landlord, be deemed to have been abandoned and
either may be retained by Landlord as its property or be disposed of,
without accountability, in such manner as Landlord may deem appropriate, at
Tenant's expense.
10. Section 9.1 of the Lease is hereby amended to read in full as follows:
9.1 Landlord shall be responsible for the payment of all Impositions
subject, however, to Section 4.10.
57
11. Section 10.1 of the Lease is hereby amended to read in full as follows:
10.1 From and after the Commencement Date, Landlord shall pay when due
all charges for water, sewer, gas, electricity, and fuel on or about the
Demised Premises, subject, however, to Section 4.10.
12. The second sentence of Section 12.1 of the Lease is hereby amended to read
in full as follows:
Tenant shall not be permitted to proceed with the proposed assignment
or subletting until it receives Landlord's written confirmation, which
confirmation shall not be unreasonably withheld or delayed, that conditions
(a), (b) and (c), above have been met and until Tenant complies with all
other requirements specified in this Article XII.
13. Section 31.2 of the Lease is hereby amended to read in full as follows:
31.2 Landlord shall attempt, with reasonable diligence, to obtain the
best available interest rate and terms for a refinancing loan of such
amounts, term and amortization schedule as Landlord shall choose. In the
event that Landlord intends to accept a loan which requires interest
payments at an annual rate of 13.875% or higher at any time during its
first five (5) years, then Landlord shall serve Tenant with notice of
Landlord's intention to obtain the loan. In such event, Tenant shall have
the right for a period of sixty (60) days to find an institutional lender
willing to make a substantially similar loan upon more favorable terms. If
Tenant informs Landlord within the sixty (60)-day period of the
availability of a more favorable loan, Landlord shall seek to obtain such
loan, provided that the terms and conditions of the loan are reasonably
satisfactory to Landlord. If Tenant is unable to find a more favorable
loan, then Landlord may proceed to obtain the loan which it originally
proposed.
14. Section 31.3 of the Lease is hereby amended to read in full as follows:
31.3 In the event the principal amount of any refinancing loan
obtained by Landlord exceeds $10,000,000, and/or provides for payments
which are based on an amortization less than a thirty (30)-year basis, then
all calculations of Additional Rent made pursuant to Section 31.1 shall be
appropriately adjusted as though the loan was for the sum of $10,000,000
with equal monthly payments of principal and interest being based on a
30-year amortization schedule.
58
15. This Amendment shall take effect only upon its execution by Landlord and
Tenant, and upon obtaining the written consent of the superior mortgagee as
required under Section 13.5.
16. Except as modified herein, all remaining terms and conditions of the
Lease shall remain in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as
of the date first above written.
SPG PARTNERS, a Wisconsin
general partnership ("Landlord")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇,
General Partner
RAYOVAC CORPORATION, a Delaware
corporation ("Tenant")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇,
Chairman and Chief
Executive Officer
59
Attest: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President/Controller
STATE OF Wisconsin )
) ss.
COUNTY OF Dane )
Personally came before me this 23rd day of June , 1986, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇ who acknowledge that they are
all general partners of SPG Partners, a Wisconsin general partnership, who
executed and acknowledged the above instrument on behalf of said partnership.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Notary Public, State of WI
My commission: April 9, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.
COUNTY OF Dane )
Personally came before me this 23rd day of June , 1986, ▇▇▇▇▇▇ ▇. ▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, known to me to be the Chairman and Chief Executive
Officer and Vice President/Controller, respectively, of RAYOVAC Corporation, a
Delaware corporation, who executed the above instrument and acknowledged the
same on behalf of said corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Notary Public, State of WI
My commission: April 9, 1989
This instrument drafted by:
▇▇▇▇▇▇▇, BEST & FRIEDRICH
One South ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
60
AMENDMENT TO BUILDING LEASE
THIS AMENDMENT TO BUILDING LEASE (the "Amendment") is entered into this
22nd day of February, 1996, by and between ▇▇▇▇▇▇ PROPERTIES, LLC ("Landlord")
and RAYOVAC CORPORATION ("Tenant").
R E C I T A L S:
A. Madison Real Estate Properties ("MREP") and Tenant entered into a
building lease dated March 31, 1988, covering certain real property located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in the City of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ County, Wisconsin (the
"Lease").
B. The landlord's interest in the Lease was transferred by MREP to
▇▇▇▇▇▇ Partners Limited, a Wisconsin general partnership. Landlord has succeeded
to the interest of ▇▇▇▇▇▇ Partners Limited in and to the Lease.
C. Landlord and Tenant desire to amend the Lease in the accordance with
the terms of this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant do hereby
agree as follows:
1. Definitions. All terms that are capitalized but not defined in this
Amendment and that are defined in the Lease shall have the meaning assigned to
such terms by the Lease.
2. Construction of Addition. Tenant hereby exercises its Option to cause
to be constructed an Addition to the Premises. The Addition shall be constructed
by Landlord at its sole expense pursuant to the plans and specifications that
are more particularly described on Exhibit A attached hereto and made a part
hereof, and shall consist of approximately sixty thousand (60,000) square feet.
61
3. Calculation of Rent for Addition. The construction budget for the
Addition is attached hereto as Exhibit B and made a part hereof. Landlord hereby
guarantees to Tenant that the cost of the building set forth on Exhibit B is a
guaranteed maximum price, subject to change only in accordance with change
orders approved by Landlord and Tenant. Any excess in cost to the Landlord over
the amount stated in Exhibit B (except as caused by approved change orders)
shall not result in any increase of the Minimum Annual Rent. The list of soft
costs and the landscaping allowance that are set forth on Exhibit B are subject
to adjustment based upon the actual amount of such costs once construction is
complete. To the extent that the costs set forth on Exhibit B for the following
items:
(a) prepayment penalty;
(b) points--refinance;
(c) points--construction loan; or
(d) landscaping (allowance)
increase or decrease above or below the amounts set forth in the budget, such
increases or decreases shall be passed through to Tenant in the form of a
changed price, which shall result in a changed rent pursuant to the formula set
forth in Exhibit C attached hereto and made a part hereof. For illustration,
assuming that the cost of the Addition is equal to One Million Seven Hundred
Seven Thousand Dollars ($1,707,000), then the amount of the Minimum Annual Rent
for the Addition shall be equal to Two Hundred Three Thousand Five Hundred
Fifty-Nine and 75/100 Dollars ($203,559.75).
5. Completion Date. Landlord agrees to substantially complete
construction of the Addition on or before July 1, 1996. The Minimum Annual Rent
for the Addition shall commence upon the earlier of the date on which the
Addition is substantially complete, as certified by Landlord's architect, or
upon the date that Tenant commences use of the Addition by moving freight into
the same.
62
6. No Other Changes. Except as modified hereby, all terms and conditions
of the Lease are hereby ratified and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
▇▇▇▇▇▇ PROPERTIES, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Member
RAYOVAC CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & Treasurer
63