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LEASE AGREEMENT
by and between
CBS (PA) QRS 14-12, INC.
a Delaware Corporation
as LANDLORD
and
CONTRAVES ▇▇▇▇▇▇▇▇ SYSTEMS, L.P.,
a Delaware limited partnership
as TENANT
Premises: Pittsburgh, PA
Dated as of: December __, 1998
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TABLE OF CONTENTS
Page
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Parties..................................................................................................1
1. Demise of Premises...................................................................................1
2. Certain Definitions..................................................................................1
3. Title and Condition..................................................................................8
4. Use of Leased Premises; Quiet Enjoyment..............................................................9
5. Term................................................................................................10
6. Basic Rent..........................................................................................11
7. Additional Rent.....................................................................................11
8. Net Lease; Non-Terminability........................................................................12
9. Payment of Impositions..............................................................................13
10. Compliance with Laws and Easement Agreements; Environmental Matters................................15
11. Liens; Recording...................................................................................16
12. Maintenance and Repair.............................................................................17
13. Alterations and Improvements.......................................................................18
14. Permitted Contests.................................................................................18
15. Indemnification....................................................................................19
16. Insurance..........................................................................................20
17. Casualty and Condemnation..........................................................................23
18. Termination Events.................................................................................25
19. Restoration........................................................................................26
20. Procedures Upon Purchase...........................................................................27
21. Assignment and Subletting; Prohibition against Leasehold Financing.................................28
22. Events of Default..................................................................................30
23. Remedies and Damages Upon Default..................................................................32
24. Notices............................................................................................35
25. Estoppel Certificate...............................................................................36
26. Surrender..........................................................................................36
27. No Merger of Title.................................................................................36
28. Books and Records..................................................................................37
29. Determination of Value.............................................................................38
30. Non-Recourse as to Landlord........................................................................40
31. Financing..........................................................................................41
32. Subordination, Non-Disturbance and Attornment......................................................41
33. Financial Covenants................................................................................42
34. Tax Treatment; Reporting...........................................................................42
35. Option to Purchase.................................................................................43
36. Right of First Refusal.............................................................................43
37. Miscellaneous......................................................................................45
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Financial Covenants
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LEASE AGREEMENT, made as of December , 1998, between CBS (PA) QRS
14-12, INC., a Delaware Corporation ("Landlord"), with an address c/o W. P.
▇▇▇▇▇ & Co., Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
and CONTRAVES ▇▇▇▇▇▇▇▇ SYSTEMS, L.P., a Delaware limited partnership ("Tenant"),
with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
In consideration of the rents and provisions herein stipulated
to be paid and performed, Landlord and Tenant hereby covenant and agree as
follows:
1. Demise of Premises. Landlord hereby demises and lets to
Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon
the provisions hereinafter specified, the following described property
(collectively, the "Leased Premises"): (a) the premises described in Exhibit "A"
hereto, together with the Appurtenances (collectively, the "Land"); (b) the
buildings, structures and other improvements now or hereafter constructed on the
Land (collectively, the "Improvements"); and (c) the fixtures, machinery,
equipment and other property described in Exhibit "B" hereto (collectively, the
"Equipment").
2. Certain Definitions.
"Acquisition Cost" shall mean $6,806,283.
"Additional Rent" shall mean Additional Rent as
defined in Paragraph 7.
"Adjoining Property" shall mean all sidewalks,
driveways, curbs, gores and vault spaces adjoining any of the Leased Premises.
"Alterations" shall mean all changes, additions,
improvements or repairs to, all alterations, reconstructions, renewals,
replacements or removals of and all substitutions or replacements for any of the
Improvements or Equipment, both interior and exterior, structural and
non-structural, and ordinary and extraordinary.
"Appurtenances" shall mean all tenements,
hereditaments, easements, rights-of-way, rights, privileges in and to the Land,
including (a) easements over other lands granted by any Easement Agreement and
(b) any streets, ways, alleys, vaults, gores or strips of land adjoining the
Land.
"Assignment" shall mean any assignment of rents and
leases from Landlord to a Lender which (a) encumbers any of the Leased Premises
and (b) secures Landlord's obligation to repay a Loan, as the same may be
amended, supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in
Paragraph 6.
"Basic Rent Payment Dates" shall mean the Basic Rent
Payment Dates as defined in Paragraph 6.
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"Casualty" shall mean any injury to or death of any
person or any loss of or damage to any property (including the Leased Premises)
included within or appurtenant to the Leased Premises or arising from the
Adjoining Property.
"Commencement Date" shall mean Commencement Date as
defined in Paragraph 5.
"Condemnation" shall mean a Taking and/or a
Requisition.
"Condemnation Notice" shall mean written notice or
actual knowledge of the institution of or intention to institute any proceeding
for Condemnation.
"Costs" of a Person or associated with a specified
transaction shall mean all reasonable costs and expenses incurred by such Person
or associated with such transaction, including without limitation, attorneys'
fees and expenses, court costs, brokerage fees, escrow fees, title insurance
premiums, mortgage commitment fees, mortgage points, recording fees and transfer
taxes, as the circumstances require.
"Covenants" shall mean the covenants and agreements
described on Exhibit "E".
"CPI" shall mean CPI as defined in Exhibit "D"
hereto.
"Default Termination Amount" shall mean the Default
Termination Amount as defined in Paragraph 23(a)(iii).
"Default Rate" shall mean the Default Rate as defined
in Paragraph 7(a)(iv).
"Easement Agreement" shall mean any conditions,
covenants, restrictions, easements, declarations, licenses and other agreements
listed as Permitted Encumbrances or as may hereafter affect the Leased Premises.
"Environmental Law" shall mean (i) whenever enacted
or promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity, (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous
Conditions or Hazardous Activities, in each case as amended and as now or
hereafter in effect, and (ii) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
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obligations or injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Hazardous Substance. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act, the
federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic
Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act and the federal Hazardous Materials Transportation Act,
each as amended and as now or hereafter in effect and any similar state or local
Law.
"Environmental Violation" shall mean (a) any direct
or indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or within the Leased Premises, or from
the Leased Premises to the environment, in violation of any Environmental Law or
in excess of any reportable quantity established under any Environmental Law or
which could result in any liability to Landlord, Tenant or Lender, any Federal,
state or local government or any other Person for the costs of any removal or
remedial action or natural resources damage or for bodily injury or property
damage, (b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within the Leased Premises or which extends to any
Adjoining Property in violation of any Environmental Law or in excess of any
reportable quantity established under any Environmental Law or which could
result in any liability to any Federal, state or local government or to any
other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (c) the abandonment or
discarding of any barrels, containers or other receptacles containing any
Hazardous Substances in violation of any Environmental Laws, (d) any activity,
occurrence or condition which could result in any liability, cost or expense to
Landlord or Lender or any other owner or occupier of the Leased Premises, or
which could result in a creation of a lien on the Leased Premises under any
Environmental Law, or (e) any violation of or noncompliance with any
Environmental Law.
"Equipment" shall mean the Equipment as defined in
Paragraph 1.
"Event of Default" shall mean an Event of Default as
defined in Paragraph 22(a).
"Fair Market Value" shall mean the higher of (a) the
fair market value of the Leased Premises as of the Relevant Date as if
unaffected and unencumbered by this Lease or (b) the fair market value of the
Leased Premises as of the Relevant Date as affected and encumbered by this Lease
and assuming that the Term has been extended for all extension periods provided
for herein. For all purposes of this Lease, Fair Market Value shall be
determined in accordance with the procedure specified in Paragraph 29.
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"Fair Market Rental Value" shall mean the fair market
rental value of the Leased Premises for the relevant Renewal Term determined in
accordance with the procedure specified in Paragraph 29.
"Fair Market Value Date" shall mean the date when the
Fair Market Value or the Fair Market Rental Value is determined in accordance
with Paragraph 29.
"Federal Funds" shall mean federal or other
immediately available funds which at the time of payment are legal tender for
the payment of public and private debts in the United States of America.
"Hazardous Activity" means any activity, process,
procedure or undertaking which directly or indirectly (i) procures, generates or
creates any Hazardous Substance; (ii) causes or results in (or threatens to
cause or result in) the release, seepage, spill, leak, flow, discharge or
emission of any Hazardous Substance into the environment (including the air,
ground water, watercourses or water systems), (iii) involves the containment or
storage of any Hazardous Substance; or (iv) would cause the Leased Premises or
any portion thereof to become a hazardous waste treatment, recycling,
reclamation, processing, storage or disposal facility within the meaning of any
Environmental Law.
"Hazardous Condition" means any condition which would
support any claim or liability under any Environmental Law, including the
presence of underground storage tanks.
"Hazardous Substance" means (i) any substance,
material, product, petroleum, petroleum product, derivative, compound or
mixture, mineral (including asbestos), chemical, gas, medical waste, or other
pollutant, in each case whether naturally occurring, man-made or the by-product
of any process, that is toxic, harmful or hazardous or acutely hazardous to the
environment or public health or safety or (ii) any substance supporting a claim
under any Environmental Law, whether or not defined as hazardous as such under
any Environmental Law. Hazardous Substances include, without limitation, any
toxic or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined
in Paragraph 9(a).
"Improvements" shall mean the Improvements as defined
in Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in
Paragraph 15.
"Initial Term" shall mean Initial Term as defined in
Paragraph 5.
"Insurance Requirements" shall mean the requirements
of all insurance policies required to be maintained in accordance with this
Lease.
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"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of
law, code, ordinance, order, judgment, decree, injunction, rule, regulation,
policy, requirement or administrative or judicial determination, even if
unforeseen or extraordinary, of every duly constituted governmental authority,
court or agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first
Lease Year, the period commencing on the Commencement Date and ending at
midnight on the last day of the twelfth (12th) consecutive calendar month
following the month in which the Commencement Date occurred, and each succeeding
twelve (12) month period during the Term.
"Leased Premises" shall mean the Leased Premises as
defined in Paragraph 1.
"Legal Requirements" shall mean the requirements of
all present and future Laws (including but not limited to Environmental Laws and
Laws relating to accessibility to, usability by, and discrimination against,
disabled individuals) and all covenants, restrictions and conditions now or
hereafter of record which are or purport to be applicable to Tenant or to any of
the Leased Premises, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or restoration of any of the Leased
Premises, even if compliance therewith necessitates structural changes or
improvements or results in interference with the use or enjoyment of any of the
Leased Premises.
"Lender" shall mean any person or entity (and their
respective successors and assigns) which may, after the date hereof, make a Loan
to Landlord or is the holder of any Note.
"Loan" shall mean any loan made by one or more
Lenders to Landlord, which loan is secured by a Mortgage and an Assignment and
evidenced by a Note.
"Monetary Obligations" shall mean Rent and all other
sums payable by Tenant under this Lease to Landlord, to any third party on
behalf of Landlord or to any Indemnitee.
"Mortgage" shall mean any mortgage or deed of trust
from Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable
to Landlord or Lender by reason of a Condemnation whether pursuant to a judgment
or by agreement or otherwise, or (b) the entire proceeds of any insurance
required under clauses (i), (ii) (to the extent
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payable to Landlord or Lender), (iv), (v) or (vi) of Paragraph 16(a), as the
case may be, less any expenses incurred by Landlord and Lender in collecting
such award or proceeds.
"Note" shall mean any promissory note evidencing
Landlord's obligation to repay a Loan, as the same may be amended, supplemented
or modified.
"Offer Amount" shall mean the greater of (a) the Fair
Market Value of the Leased Premises as of the Relevant Date and (b) the sum of
the Acquisition Cost and the applicable Prepayment Premium which Landlord will
be required to pay in prepaying any Loan with the proceeds of the Offer Amount.
"Option Exercise Notice" shall mean Option Exercise
Notice as defined in Paragraph 35.
"Partial Casualty" shall mean any Casualty which does
not constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation
which does not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on Exhibit "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership,
association, corporation or other entity.
"Prepayment Premium" shall mean any payment (other
than a payment of principal and/or interest which Landlord is required to make
under a Note or a Mortgage) by reason of any prepayment by Landlord of any
principal due under a Note or Mortgage, and which may be (in lieu of such
prepayment premium or prepayment penalty) a "make whole" clause requiring a
prepayment premium in an amount sufficient to compensate the Lender for the loss
of the benefit of the Loan due to a prepayment (the "YMP"); provided, however,
such prepayment premium shall not exceed the greater of (x) one (1%) percent of
the then outstanding principal balance of the Loan and (y) the YMP that would be
due on a loan with an original principal balance equal to the lesser of (A) the
actual principal Loan balance or (B) 70% of the Acquisition Cost.
"Present Value" of any amount shall mean such amount
discounted by a rate per annum which is the lower of (a) the Prime Rate at the
time such present value is determined or (b) seven percent (7%) per annum.
"Prime Rate" shall mean the annual interest rate as
published, from time to time, in The Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The
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Prime Rate may not be the lowest rate of interest charged by any "large U.S.
money center commercial banks" and Landlord makes no representations or
warranties to that effect. In the event The Wall Street Journal ceases
publication or ceases to publish the "Prime Rate" as described above, the Prime
Rate shall be the average per annum discount rate (the "Discount Rate") on
ninety-one (91) day bills ("Treasury Bills") issued from time to time by the
United States Treasury at its most recent auction, plus three hundred (300)
basis points. If no such 91-day Treasury Bills are then being issued, the
Discount Rate shall be the discount rate on Treasury Bills then being issued for
the period of time closest to ninety-one (91) days.
"Relevant Amount" shall mean the Termination Amount
or the Default Termination Amount, or the Offer Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately
prior to the date on which the applicable Condemnation Notice is received, in
the event of a Termination Notice under Paragraph 18 which is occasioned by a
Taking, (b) the date immediately prior to the date on which the applicable
Casualty occurs, in the event of a Termination Notice under Paragraph 18 which
is occasioned by a Casualty, (c) the date when Fair Market Value is
redetermined, in the event of a redetermination of Fair Market Value pursuant to
Paragraph 20(c), (d) the date immediately prior to the Event of Default giving
rise to the need to determine Fair Market Value in the event Landlord provides
Tenant with notice of its intention to require Tenant to make a termination
offer under Paragraph 23(a)(iii) and (d) the date immediately prior to the date
on which Tenant's Option Exercise Notice is delivered to Landlord.
"Remaining Sum" shall mean Remaining Sum as defined
in Paragraph 19(c).
"Renewal Term" shall mean Renewal Term as defined in
Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and
Additional Rent.
"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased Premises by any
governmental authority, civil or military, whether (i) pursuant to an agreement
with such governmental authority in settlement of or under threat of any such
requisition or confiscation or (ii) otherwise.
"Site Assessment" shall mean a Site Assessment as
defined in Paragraph 10(c).
"State" shall mean the Commonwealth of Pennsylvania.
"Surviving Obligations" shall mean any obligations of
Tenant under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
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"Taking" shall mean (a) any taking or damaging of all
or a portion of any of the Leased Premises (i) in or by condemnation or other
eminent domain proceedings pursuant to any Law, general or special, or (ii) by
reason of any agreement with any condemnor in settlement of or under threat of
any such condemnation or other eminent domain proceeding, or (iii) by any other
lawful governmental or quasi-governmental action, or (b) any de facto
condemnation. The Taking shall be considered to have taken place as of the later
of the date actual physical possession is taken by the condemnor, or the date on
which the right to compensation and damages accrues under the law applicable to
the Leased Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of (a)
Fair Market Value or (b) the sum of the Acquisition Cost and any Prepayment
Premium which Landlord will be required to pay in prepaying any Loan with
proceeds of the Termination Amount
"Termination Date" shall mean Termination Date as
defined in Paragraph 18.
"Termination Event" shall mean a Termination Event as
defined in Paragraph 18.
"Termination Notice" shall mean Termination Notice as
defined in Paragraph 18(a).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to (i) the
rights of any Persons in possession of the Leased Premises, (ii) the existing
state of title of any of the Leased Premises, including any Permitted
Encumbrances, (iii) any state of facts which an accurate survey or physical
inspection of the Leased Premises might show, (iv) all Legal Requirements,
including any existing violation of any thereof, and (v) the condition of the
Leased Premises as of the commencement of the Term, without representation or
warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises is in good
condition and repair at the inception of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS
FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE
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THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii)
USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION,
(xiii) DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS
SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE
LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL RISKS INCIDENT
THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES
IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAS
BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT
OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR
PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the
title to the Leased Premises prior to the execution and delivery of this Lease
and has found the same to be satisfactory for the purposes contemplated hereby.
Tenant acknowledges that (i) fee simple title (both legal and equitable) is in
Landlord and except, as provided in Paragraph(s) 35 and 36 hereof with respect
to an option and certain rights of refusal to purchase the Leased Premises that
Tenant has only the leasehold right of possession and use of the Leased Premises
as provided herein, (ii) the Improvements conform to all material Legal
Requirements and all Insurance Requirements, (iii) all easements necessary or
appropriate for the use or operation of the Leased Premises have been obtained,
(iv) all contractors and subcontractors who have performed work on or supplied
materials to the Leased Premises have been fully paid, and all materials and
supplies have been fully paid for, (v) the Improvements have been fully
completed in all material respects in a workmanlike manner of first class
quality, and (vi) all Equipment necessary or appropriate for the use or
operation of the Leased Premises has been installed and is presently fully
operative in all material respects.
(d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, all assignable warranties, guaranties, indemnities and
similar rights (collectively, "Warranties") which Landlord may have against any
manufacturer, seller, engineer, contractor or builder in respect of any of the
Leased Premises. Such assignment shall remain in effect until an Event of
Default occurs or until the expiration or earlier termination of this Lease,
whereupon such assignment shall cease and all of Warranties, guaranties,
indemnities and other rights shall automatically revert to Landlord. Tenant
shall enforce the Warranties in accordance with their respective terms.
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4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for general,
executive and administrative offices, light manufacturing and uses incidental
thereto in connection with Tenant's business and for no other purpose without
Landlord's prior written consent, which consent shall not be unreasonably
withheld or delayed so long as the proposed use (A) is not, in Landlord's
reasonable business judgment, likely to increase any liability on the part of
Landlord or Lender, taking into account factors such as environmental concerns,
product liability and the like, (B) does not violate the prohibitions in clauses
(i) through (v) below, and (C) is consented to by Lender, if such consent is
required under the Mortgage. Tenant shall not use or occupy or permit any of the
Leased Premises to be used or occupied, nor do or permit anything to be done in
or on any of the Leased Premises, in a manner which would or might (i) violate
any Law or Legal Requirement, (ii) make void or voidable or cause any insurer to
cancel any insurance required by this Lease, or make it difficult or impossible
to obtain any such insurance at commercially reasonable rates, (iii) make void
or voidable, cancel or cause to be cancelled or release any warranty, guaranty
or indemnity, (iv) cause structural injury to any of the Improvements or (v)
constitute a public or private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of
Default has occurred and is continuing, Tenant shall quietly hold, occupy and
enjoy the Leased Premises throughout the Term, without any hindrance, ejection
or molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may enter upon and examine any of
the Leased Premises at such reasonable times during business hours as Landlord
may select and upon reasonable notice to Tenant (except in the case of an
emergency, in which no notice shall be required) for the purpose of inspecting
the Leased Premises, verifying compliance or non-compliance by Tenant with its
obligations hereunder and the existence or non-existence of an Event of Default
or event which with the passage of time and/or notice would constitute an Event
of Default, showing the Leased Premises to prospective Lenders and purchasers
and taking such other action with respect to the Leased Premises as is permitted
by any provision hereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have and
hold the Leased Premises for an initial term ("Initial Term", the Initial Term,
as extended or renewed in accordance with the provisions hereof, being called
the "Term") commencing on the date hereof (the "Commencement Date") and ending
on the last day of the one hundred eightieth (180th) calendar month next
following the date hereof (the "Expiration Date"). If all Rent and all other
liquidated sums due hereunder shall not have been fully paid by the end of the
Term, Landlord may, at its option, upon written notice to Tenant, extend the
Term until all said sums shall have been fully paid.
(b) Provided that if, on or prior to the Expiration Date or
any other Renewal Date (as hereinafter defined) this Lease shall not have been
terminated pursuant to any
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provision hereof, then on the Expiration Date and on the fifth (5th),
anniversary of the Expiration Date (the Expiration Date and each such
anniversary being a "Renewal Date"), the Term shall be deemed to have been
automatically extended for an additional period of five (5) years (each such
extension, a "Renewal Term"), unless Tenant shall notify Landlord in writing in
recordable form at least fifteen (15) months prior to the next Renewal Date that
Tenant is terminating this Lease as of the next Renewal Date. Any such extension
of the Term shall be subject to all of the provisions of this Lease, as the same
may be amended, supplemented or modified.
(c) If Tenant exercises its option not to extend or further
extend the Term, or if an Event of Default occurs, then Landlord shall have the
right during the remainder of the Term then in effect and, in any event,
Landlord shall have the right during the last year of the Term, to (i) advertise
the availability of the Leased Premises for sale or reletting and to erect upon
the Leased Premises signs indicating such availability and (ii) upon reasonable
notice to Tenant, show the Leased Premises to prospective purchasers or tenants
or their agents at such reasonable times during business hours as Landlord may
select; provided that, Landlord shall use reasonable efforts to minimize any
interference with the operation of Tenant's business during any such showing.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for the
Leased Premises during the Term, the amounts determined in accordance with
Exhibit "D" hereto ("Basic Rent"), commencing on the first day of January, 1999,
and continuing on the first day of each April, July, October and January
thereafter during the Term (each such day being a "Basic Rent Payment Date");
provided that, pro rata Basic Rent for the period from the date hereof through
and including December 31, 1998 shall be paid on the date hereof. Each such
rental payment shall be made, at Landlord's sole discretion, (a) to Landlord at
its address set forth above and/or to such one or more other Persons, (but in no
event more than four (4) persons, including Landlord) at such addresses and in
such proportions as Landlord may direct by fifteen (15) days' prior written
notice to Tenant (in which event Tenant shall give Landlord notice of each such
payment concurrent with the making thereof), and (b) by a check hand delivered
at least five (5) business days before or mailed at least ten (10) days before
the applicable Basic Rent Payment Date, or in Federal Funds.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided herein,
all costs and expenses of Tenant, Landlord and any other Persons specifically
referenced herein which are incurred in connection or associated with (A) the
ownership, use, non-use, occupancy, possession, operation, condition, design,
construction, maintenance, alteration, repair or restoration of any of the
Leased Premises, (B) the performance of any of Tenant's obligations under this
Lease, (C) the sale or other transfer of the Leased Premises to Tenant pursuant
to the terms of this Lease, (D) any Condemnation proceedings, (E) the
adjustment, settlement or
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compromise of any insurance claims involving or arising from any of the Leased
Premises, except to the extent arising solely from the negligence, willful
misconduct or criminal conduct of Landlord at or about the Premises, (F) the
prosecution, defense or settlement of any litigation involving or arising from
any of the Leased Premises, this Lease, or the sale of the Leased Premises to
Landlord, except to the extent arising solely from the negligence, willful
misconduct or criminal conduct of Landlord at or about the Premises, (G) the
exercise or enforcement by Landlord, its successors and assigns, of any of its
rights under this Lease, (H) any amendment to or modification or termination of
this Lease made at the request of Tenant, (I) Costs of Landlord's counsel and
reasonable internal Costs of Landlord incurred in connection with any act
undertaken by Landlord (or its counsel) at the request of Tenant, or incurred in
connection with any act of Landlord performed on behalf of Tenant, (J) the
reasonable internal Costs of Landlord incurred in connection with any act
undertaken by Landlord at the request of Tenant or Tenant's failure to act
promptly in an emergency situation, and (K) any other items specifically
required to be paid by Tenant under this Lease;
(ii) after the date all or any portion of any
installment of Basic Rent is due and not paid, an amount equal to five percent
(5%) of the amount of such unpaid installment or portion thereof;
(iii) a sum equal to any additional sums (including
any late charge, default penalties, interest and fees of Lender's counsel) which
are payable by Landlord to any Lender under any Note by reason of Tenant's late
payment or non-payment of Basic Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "Default Rate") of
five percent (5%) over the Prime Rate per annum on the following sums until paid
in full: (A) all overdue installments of Basic Rent from the respective due
dates thereof, (B) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant, from the date of
payment thereof by Landlord, and (C) all other overdue amounts of Additional
Rent, from the date when any such amount becomes overdue.
(b) Tenant shall pay and discharge (i) any Additional Rent
referred to in Paragraph 7(a)(i) when the same shall become due, provided that
amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within five (5) days after Landlord's demand for payment thereof,
and (ii) any other Additional Rent, within five (5) days after Landlord's demand
for payment thereof.
(c) In no event shall amounts payable under Paragraph
7(a)(ii), (iii) and (iv) exceed the maximum amount permitted by applicable Law.
(d) Notwithstanding anything to the contrary contained herein,
Landlord acknowledges that it is the intent of this Lease that Tenant shall only
be obligated to pay any applicable Prepayment Premium with respect to (i) the
payment of the Termination Amount under ▇▇▇▇▇▇▇▇▇ ▇▇, (▇▇) the payment of the
Default Termination Amount under
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Paragraph 23 and (iii) the payment of the Offer Amount in connection with the
exercise by Tenant of the option to purchase under Paragraph 37.
8. Net Lease; Non-Terminability.
(a) This is a net lease and all Monetary Obligations shall be
paid without notice or demand (except in the case of Additional Rent) and
without set-off, counterclaim, recoupment, abatement, suspension, deferment,
diminution, deduction, reduction or defense (collectively, a "Set-Off").
(b) Except as otherwise expressly provided herein, this Lease
and the rights of Landlord and the obligations of Tenant hereunder shall not be
affected by any event or for any reason, including the following: (i) any damage
to or theft, loss or destruction of any of the Leased Premises, (ii) any
Condemnation, (iii) Tenant's acquisition of ownership of any of the Leased
Premises other than pursuant to an express provision of this Lease, (iv) any
default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement, (v) any latent or other defect in any of the
Leased Premises, (vi) the breach of any warranty of any seller or manufacturer
of any of the Equipment, (vii) any violation of any provision of this Lease by
Landlord, (viii) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or winding-up of, or other proceeding
affecting Landlord, (ix) the exercise of any remedy, including foreclosure,
under any Mortgage or Assignment, (x) any action with respect to this Lease
(including the disaffirmance hereof) which may be taken by Landlord, any
trustee, receiver or liquidator of Landlord or any court under the Federal
Bankruptcy Code or otherwise, (xi) any interference with Tenant's use of the
Leased Premises, (xii) market or economic changes or (xiii) any other cause,
whether similar or dissimilar to the foregoing, any present or future Law to the
contrary notwithstanding. Nothing herein shall, however, prevent Tenant from
seeking injunctive relief against Landlord if Landlord breaches its obligations
under Paragraph 4(b) or from seeking equitable relief against Landlord if it
breaches its obligations under Paragraphs 35 or 36.
(c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and the obligations of Tenant hereunder shall continue unaffected
unless the requirement to pay or perform the same shall have been terminated
pursuant to an express provision of this Lease. The obligation to pay Rent or
amounts equal thereto shall not be affected by any collection of rents by any
governmental body pursuant to a tax lien or otherwise, even though such
obligation results in a double payment of Rent. All Rent payable by Tenant
hereunder shall constitute "rent" for all purposes (including Section 502(b)(6)
of the Federal Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
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9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal property,
franchise, sales and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all assessments and
levies, all permit, inspection and license fees, all rents and charges for
water, sewer, utility and communication services relating to any of the Leased
Premises, all ground rents and all other public charges whether of a like or
different nature, even if unforeseen or extraordinary, imposed upon or assessed
against (i) Tenant, (ii) Tenant's leasehold interest in the Leased Premises,
(iii) any of the Leased Premises, (iv) Landlord, solely as a result of or
arising in respect of the acquisition (subject to any limitation in respect
thereof set forth in Paragraph 31 hereof), ownership, occupancy, leasing, use,
possession or sale of the Leased Premises to Tenant pursuant to the provisions
hereof any activity conducted on any of the Leased Premises, or the Rent, or (v)
any Lender by reason of any Note, Mortgage, Assignment or other document
evidencing or securing a Loan (subject to any limitation in respect thereof set
forth in Paragraph 31 hereof) and which (as to this clause (v)) Landlord has
agreed to pay (collectively, the "Impositions"); provided, that nothing herein
shall obligate Tenant to pay (A) income, excess profits or other taxes of
Landlord or Lender solely which are determined on the basis of Landlord's (or
Lender's) net income or net worth (unless such taxes are in lieu of or a
substitute for any other tax, assessment or other charge upon or with respect to
the Leased Premises which, if it were in effect, would be payable by Tenant
under the provisions hereof or by the terms of such tax, assessment or other
charge), (B) any estate, inheritance, succession, gift or similar tax imposed on
Landlord, (C) any capital gains tax imposed on Landlord in connection with the
sale of the Leased Premises to any Person or (D) any transfer tax imposed on
Landlord in connection with the sale of the Lease Premises to any Person other
than Tenant or an Affiliate of Tenant and subject to the negotiated terms of
Tenant's exercise of its right of first refusal under Paragraph 36. If any
Imposition may be paid in installments without interest or penalty, Tenant shall
have the option to pay such Imposition in installments; in such event, Tenant
shall be liable only for those installments which accrue or become due and
payable during the Term. Tenant shall prepare and file all tax reports required
by governmental authorities which relate to the Impositions. Tenant shall
deliver to Landlord (1) copies of all settlements and notices pertaining to the
Impositions which may be issued by any governmental authority within ten (10)
days after Tenant's receipt thereof, (2) receipts for payment of all taxes
required to be paid by Tenant hereunder within thirty (30) days after the due
date thereof and (3) receipts for payment of all other Impositions within ten
(10) days after Landlord's request therefor.
(b) Landlord shall have the right, at any time if required by
Lender (provided that Landlord shall use its good faith efforts to preclude the
requirement for Escrow Payments in connection with a Loan), and at any time
following the occurrence of an Event of Default, to require Tenant to pay to
Landlord an additional monthly sum (each an "Escrow Payment") sufficient to pay
the Escrow Charges (as hereinafter defined) as they become due. As used herein,
"Escrow Charges" shall mean real estate taxes on the Leased Premises or payments
in lieu thereof and premiums on any insurance required by this Lease. Landlord
shall determine the amount of the Escrow Charges and of each Escrow Payment. As
long as the Escrow
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Payments are being held by Landlord the Escrow Payments shall not be commingled
with other funds of Landlord or other Persons and interest thereon shall accrue
for the benefit of Tenant from the date such monies are received and invested
until the date such monies are disbursed to pay Escrow Charges. Landlord shall
apply the Escrow Payments to the payment of the Escrow Charges in such order or
priority as Landlord shall determine or as required by law. If at any time the
Escrow Payments theretofore paid to Landlord shall be insufficient for the
payment of the Escrow Charges, Tenant, within ten (10) days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord.
10. Compliance with Laws and Easement Agreements; Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform to,
and cause the Leased Premises and any other Person occupying any part of the
Leased Premises to comply with and conform to, all Insurance Requirements and
Legal Requirements (including all applicable Environmental Laws). Tenant shall
not at any time (i) cause, permit or suffer to occur any Environmental Violation
or (ii) permit any sublessee, assignee or other Person occupying the Leased
Premises under or through Tenant to cause, permit or suffer to occur any
Environmental Violation and, at the request of Landlord or Lender, Tenant shall
promptly remediate or undertake any other appropriate response action to correct
any existing Environmental Violation, however immaterial.
(b) Tenant, at its sole cost and expense, will at all times
promptly and faithfully abide by, discharge and perform all of the covenants,
conditions and agreements contained in any Easement Agreement on the part of
Landlord or the occupier to be kept and performed thereunder. Tenant will not
alter, modify, amend or terminate any Easement Agreement, give any consent or
approval thereunder, or enter into any new Easement Agreement without, in each
case, the prior written consent of Landlord.
(C) In connection with any sale or financing of the Leased
Premises or if an Event of Default exists and in any event at any time that, in
the opinion of Landlord or Lender, a reasonable basis exists to believe that an
Environmental Violation exists, upon prior written notice from Landlord, Tenant
shall permit such persons as Landlord may designate ("Site Reviewers") to visit
the Leased Premises and perform, as agents of Tenant, environmental site
investigations and assessments ("Site Assessments") on the Leased Premises for
the purpose of determining whether there exists on the Leased Premises any
Environmental Violation or any condition which could result in any Environmental
Violation. Such Site Assessments may include both above and below the ground
testing for Environmental Violations and such other tests as may be necessary,
in the opinion of the Site Reviewers, to conduct the Site Assessments. Tenant
shall supply to the Site Reviewers such historical and operational information
regarding the Leased Premises as may be reasonably requested by the Site
Reviewers to facilitate the Site Assessments, and shall make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. The cost of performing and reporting any Site Assessments shall be paid
by Tenant with respect to (i) the first Site Assessment in any five (5)
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year period, (ii) any Site Assessment required by Lender or any governmental
authority, (iii) any Site Assessment following a known Environmental Violation
at the Leased Premises and (iv) any Site Assessment in which an Environmental
Violation is discovered.
(d) If an Environmental Violation occurs or is found to exist
and, in Landlord's reasonable judgment, the cost of remediation of, or other
response action with respect to, the same is likely to exceed $100,000, Tenant
shall provide to Landlord, within ten (10) days after Landlord's request
therefor, adequate financial assurances that Tenant will effect such remediation
in accordance with applicable Environmental Laws. Such financial assurances
shall be a bond or letter of credit reasonably satisfactory to Landlord in form
and substance and in an amount equal to or greater than Landlord's reasonable
estimate, based upon a Site Assessment performed pursuant to Paragraph 10(c), of
the anticipated cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if an
Environmental Violation occurs or is found to exist and the Term would otherwise
terminate or expire, then, at the option of Landlord, the Term shall be
automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to correct any Environmental Violation
which occurs or is found to exist, Landlord shall have the right (but no
obligation) to take any and all actions as Landlord shall deem necessary or
advisable in order to cure such Environmental Violation.
(g) Tenant shall notify Landlord immediately after becoming
aware of any Environmental Violation (or alleged Environmental Violation) or
noncompliance with any of the covenants contained in this Paragraph 10 and shall
forward to Landlord immediately upon receipt thereof copies of all orders,
reports, notices, permits, applications or other communications relating to any
such violation or noncompliance.
(h) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall contain covenants
of the other party not to at any time (i) cause any Environmental Violation to
occur or (ii) permit any Person occupying the Leased Premises through said
subtenant or concessionaire to cause any Environmental Violation to occur.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or permit
to be created or to remain and shall promptly discharge or remove any lien, levy
or encumbrance on any of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Lease, other than any Mortgage or Assignment, the
Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of
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Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES. LANDLORD MAY AT ANY TIME, AND AT LANDLORD'S REQUEST TENANT SHALL
PROMPTLY, POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH NON-LIABILITY
OF LANDLORD, TO THE EXTENT THEN ENFORCEABLE UNDER THE LAWS OF THE STATE.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "record") all such instruments as may be required or permitted by
any present or future Law in order to evidence the respective interests of
Landlord and Tenant in the Leased Premises, and shall cause a memorandum of this
Lease (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such places
as may be required or permitted by any present or future Law in order to protect
the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain the Leased Premises and
the Adjoining Property in as good repair and appearance as they are in on the
date hereof and fit to be used for their intended use in accordance with the
better of the practices generally recognized as then acceptable by other
companies in its industry or observed by Tenant with respect to the other real
properties owned or operated by it, and, in the case of the Equipment, in as
good mechanical condition as it was on the later of the date hereof or the date
of its installation, except for ordinary wear and tear. Tenant shall take every
other action necessary or appropriate for the preservation and safety of the
Leased Premises. Tenant shall promptly make all Alterations of every kind and
nature, whether foreseen or unforeseen, which may be required to comply with the
foregoing requirements of this Paragraph 12(a) and to insure that the
Improvements are year 2000 compliant. Landlord shall not be required to make any
Alteration, whether foreseen or unforeseen, or to maintain any of the Leased
Premises or Adjoining Property in any way, and Tenant hereby expressly waives
any right which may be provided for in any Law now or hereafter in effect to
make Alterations at the expense of Landlord or to require Landlord to make
Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12 shall
be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall
(i) encroach upon any setback or any property, street or right-of-way adjoining
the Leased Premises, (ii) violate the provisions of any restrictive covenant
affecting the Leased Premises, (iii) hinder or obstruct any easement or
right-of-way to which any of the Leased Premises is subject or (iv) impair the
rights of others in, to or under any of the foregoing, Tenant shall, promptly
after receiving notice or otherwise acquiring knowledge thereof, either (A)
obtain from
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all necessary parties waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation, hindrance, obstruction
or impairment, whether the same shall affect Landlord, Tenant or both, or (B)
take such action as shall be necessary to remove all such encroachments,
hindrances or obstructions and to end all such violations or impairments,
including, if necessary, making Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained the
prior written consent of Landlord and Lender and provided that no Event of
Default then exists, to make (i) any single non-structural Alteration or any
series of related non-structural Alterations to the Leased Premises that do not,
in either event, cost in excess of $250,000 and to install Equipment in the
Improvements or accessions to the Equipment that, as to such Equipment or
accessions, do not cost in excess of $250,000, so long as at the time of
construction or installation of any such Equipment or Alterations no Event of
Default exists and the value and utility of the Leased Premises is not
diminished thereby. If the cost of any Alterations, series of related
Alterations, Equipment or accessions thereto is in excess of $250,000, the prior
written approval of Landlord and Lender shall be required, such approval not to
be unreasonably withheld or delayed. Tenant shall not construct upon the Land
any additional buildings without having first obtained the prior written consent
of Landlord and Lender.
(b) If Tenant makes any Alterations pursuant to this Paragraph
13 or as required by Paragraph 12 or 17 (such Alterations and actions being
hereinafter collectively referred to as "Work"), whether or not Landlord's
consent is required, then (i) the market value of the Leased Premises shall not
be lessened by any such Work or its usefulness impaired, (ii) all such Work
shall be performed by Tenant in a good and workmanlike manner, (iii) all such
Work shall be expeditiously completed in compliance with all Legal Requirements,
(iv) all such Work shall comply with the Insurance Requirements, (v) if any such
Work involves the replacement of Equipment or parts thereto, all replacement
Equipment or parts shall have a value and useful life equal to the greater of
(A) the value and useful life on the date hereof of the Equipment being replaced
or (B) the value and useful life of the Equipment being replaced immediately
prior to the occurrence of the event which required its replacement, (vi) Tenant
shall promptly discharge or remove all liens filed against any of the Leased
Premises arising out of such Work, (vii) Tenant shall procure and pay for all
permits and licenses required in connection with any such Work, (viii) all such
Work shall be the property of Landlord and shall be subject to this Lease, and
Tenant shall execute and deliver to Landlord any document requested by Landlord
evidencing the assignment to Landlord of all estate, right, title and interest
(other than the leasehold estate created hereby) of Tenant or any other Person
thereto or therein, and (ix) Tenant shall comply, to the extent requested by
Landlord or required by this Lease, with the provisions of Paragraph 19(a),
whether or not such Work involves restoration of the Leased Premises.
14. Permitted Contests. Notwithstanding any other provision of this
Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge or
remove any lien referred to in Paragraph 11 or 13 or (c) take any action with
respect to any encroachment, violation,
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hindrance, obstruction or impairment referred to in Paragraph 12(b) (such
non-compliance with the terms hereof being hereinafter referred to collectively
as "Permitted Violations"), so long as at the time of such contest no Event of
Default exists and so long as Tenant shall contest, in good faith, the
existence, amount or validity thereof, the amount of the damages caused thereby,
or the extent of its or Landlord's liability therefor by appropriate proceedings
which shall operate during the pendency thereof to prevent or stay (i) the
collection of, or other realization upon, the Permitted Violation so contested,
(ii) the sale, forfeiture or loss of any of the Leased Premises or any Rent to
satisfy or to pay any damages caused by any Permitted Violation, (iii) any
interference with the use or occupancy of any of the Leased Premises, (iv) any
interference with the payment of any Rent, or (v) the cancellation or increase
in the rate of any insurance policy or a statement by the carrier that coverage
will be denied. Tenant shall provide Landlord security which is satisfactory, in
Landlord's reasonable judgment, to assure that such Permitted Violation is
corrected, including all Costs, interest and penalties that may be incurred or
become due in connection therewith. While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by law to correct
such Permitted Violation and Tenant's contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject Landlord to the risk
of any civil or criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save and
hold harmless Landlord, Lender and all other Persons described in Paragraph 30
(each an "Indemnitee") from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs (including attorneys' fees and
costs), causes of action, suits, claims, demands or judgments of any nature
whatsoever, howsoever caused, without regard to the form of action and whether
based on strict liability, negligence or any other theory of recovery at law or
in equity, arising from (i) any matter pertaining to the acquisition (or the
negotiations leading thereto), ownership, use, non-use, occupancy, operation,
condition, design, construction, maintenance, repair or restoration of the
Leased Premises or Adjoining Property, (ii) any casualty in any manner arising
from the Leased Premises or Adjoining Property, whether or not Indemnitee has or
should have knowledge or notice of any defect or condition causing or
contributing to said casualty, (iii) any violation by Tenant of any provision of
this Lease, any contract or agreement to which Tenant is a party (including any
agreement, document or instrument executed by Tenant for the benefit of any
Lender), any Legal Requirement or any
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Permitted Encumbrance or any other encumbrance consented to by Tenant or (iv)
any alleged, threatened or actual Environmental Violation, including (A)
liability for response costs and for costs of removal and remedial action
incurred by the United States Government, any state or local governmental unit
or any other Person, or damages from injury to or destruction or loss of natural
resources, including the reasonable costs of assessing such injury, destruction
or loss, incurred pursuant to Section 107 of CERCLA, or any successor section or
act or provision of any similar state or local Law, (B) liability for costs and
expenses of abatement, correction or clean-up, fines, damages, response costs or
penalties which arise from the provisions of any of the other Environmental Laws
and (C) liability for personal injury or property damage arising under any
statutory or common-law tort theory, including damages assessed for the
maintenance of a public or private nuisance or for carrying on of a dangerous
activity.
(b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in the event of a
conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its choice
to monitor the defense of any such action) and (ii) such Indemnitee shall notify
Tenant to resist or defend such action or proceeding by retaining counsel
reasonably satisfactory to such Indemnitee, and such Indemnitee will cooperate
and assist in the defense of such action or proceeding if reasonably requested
so to do by Tenant. In the event of a conflict of interest or dispute or during
the continuance of an Event of Default, Landlord shall have the right to select
counsel, and the cost of such counsel shall by paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall
survive any termination, expiration or rejection in bankruptcy of this Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (if the Leased Premises is in a flood
zone) and earthquake coverage in amounts not less than the actual replacement
cost of the Improvements and Equipment. Such policies shall contain Replacement
Cost and Agreed Amount Endorsements and shall contain deductibles not more than
$50,000 per occurrence.
(ii) Commercial General Liability Insurance
(including but not limited to Incidental Medical Malpractice and Host Liquor
Liability) and Business Automobile Liability Insurance (including Non-Owned and
Hired Automobile Liability) against claims for personal and bodily injury, death
or property damage occurring on, in or as a result of the use of the Leased
Premises, in an amount not less than $11,000,000 per occurrence/annual aggregate
and all other coverage extensions that are usual and customary for properties of
this size and type
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provided, however, that the Landlord shall have the right to require such higher
limits as may be reasonable and customary for properties of this size and type.
(iii) Workers' compensation insurance covering all
persons employed by Tenant in connection with any work done on or about any of
the Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such Workers' Compensation Insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State.
(iv) Comprehensive Boiler and Machinery Insurance on
any of the Equipment or any other equipment on or in the Leased Premises, in an
amount not less than $5,000,000 per accident for damage to property. Such
policies shall include at least $5,000,000 per accident for Off-Premises Service
Interruption, Ammonia Contamination and Hazardous Materials Clean-Up Expense
(including $25,000 for Expediting Expenses), and may contain a deductible not to
exceed $50,000.
(v) Business Income/Extra Expense Insurance at limits
sufficient to cover 100% of the period of indemnity not less than one year from
time of loss. Such insurance shall name Landlord as loss payee solely with
respect to Rent payable to or for the benefit of Landlord as its interest
appears under this Lease.
(vi) During any period in which substantial
Alterations at the Leased Premises are being undertaken, builder's risk
insurance covering the total completed value including any "soft costs" with
respect to the Improvements being altered or repaired (on a completed value,
non-reporting basis), replacement cost of work performed and equipment, supplies
and materials furnished in connection with such construction or repair of
Improvements or Equipment, together with such "soft cost" endorsements and such
other endorsements as Landlord may reasonably require and general liability,
worker's compensation and automobile liability insurance with respect to the
Improvements being constructed, altered or repaired.
(vii) Such other insurance (or other terms with
respect to any insurance required pursuant to this Paragraph 16, including
without limitation amounts of coverage, deductibles, form of mortgagee clause)
on or in connection with any of the Leased Premises as Landlord or Lender may
reasonably require, which at the time is usual and commonly obtained in
connection with properties similar in type of building size, use and location to
the Leased Premises, including, without limitation, if available, earthquake
insurance to the extent of any significant geotechnical changes in the regional
area surrounding the Leases Premises.
(b) The insurance required by Paragraph 16(a) shall be written
by companies which have a Best's rating of A:X or above and are admitted in, and
approved to write insurance policies by, the State Insurance Department for the
State. The insurance policies (i) shall be for such terms as Landlord may
reasonably approve and (ii) shall be in amounts sufficient at all times to
satisfy any coinsurance requirements thereof. The insurance referred to
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in Paragraphs 16(a)(i), 16(a)(iv) and 16(a)(vi) shall name Landlord as Owner and
Lender as loss payee and Tenant as its interest may appear. The insurance
referred to in Paragraph 16(a)(ii) shall name Landlord and Lender as additional
insureds, and the insurance referred to in Paragraph 16(a)(v) shall name
Landlord as insured and Lender and Landlord as loss payee. If said insurance or
any part thereof shall expire, be withdrawn, become void, voidable, unreliable
or unsafe for any reason, including a breach of any condition thereof by Tenant
or the failure or impairment of the capital of any insurer, or if for any other
reason whatsoever said insurance shall become reasonably unsatisfactory to
Landlord, Tenant shall immediately obtain new or additional insurance reasonably
satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i), (iv),
(v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender. Each policy required by
any provision of Paragraph 16(a), except clause (iii) thereof, shall provide
that it may not be cancelled, substantially modified or allowed to lapse on any
renewal date except after thirty (30) days' prior notice to Landlord and Lender.
Each such policy shall also provide that any loss otherwise payable thereunder
shall be payable notwithstanding (i) any act or omission of Landlord or Tenant
which might, absent such provision, result in a forfeiture of all or a part of
such insurance payment, (ii) the occupation or use of any of the Leased Premises
for purposes more hazardous than those permitted by the provisions of such
policy, (iii) any foreclosure or other action or proceeding taken by Lender
pursuant to any provision of the Mortgage, Note, Assignment or other document
evidencing or securing the Loan upon the happening of an event of default
therein or (iv) any change in title to or ownership of any of the Leased
Premises.
(d) Tenant shall keep and maintain the insurance coverage
required by Paragraph 16(a), in force and effect throughout the Term and shall
renew or replace each policy and deliver to Landlord evidence of such policies
and the renewals thereof, and shall deliver to Landlord all original
certificates of such required insurance coverage at least twenty (20) days prior
to the expiration date of such policy.
(e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant, provided that such "blanket"
or umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16 and provided further that Tenant shall provide to Landlord a
Statement of Values which shall be reviewed annually and amended as necessary
based on Replacement Cost Valuations. The original or a certified copy of each
such "blanket" or umbrella policy shall promptly be delivered to Landlord.
(f) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii) all
requirements of the insurers thereunder applicable to Landlord, Tenant or any of
the Leased Premises or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the
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Leased Premises, even if such compliance necessitates Alterations or results in
interference with the use or enjoyment of any of the Leased Premises.
(g) Tenant shall not carry separate insurance concurrent in
form or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as named
insureds, with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord original certificates of insurance therefor and, upon the written
request of Landlord shall deliver the original policies thereof.
(h) All policies shall contain effective waivers by the
carrier against all claims for insurance premiums against Landlord and shall
contain full waivers of subrogation against the Landlord.
(i) All proceeds of any insurance required under Paragraph
16(a) shall be payable as follows:
(i) Proceeds of insurance payable under clauses (ii)
and (iii) of Paragraph 16(a) and proceeds attributable to the general liability
coverage of Builder's Risk insurance under clause (vi) of Paragraph 16(a) shall
be payable to the Person entitled to receive such proceeds.
(ii) All proceeds of insurance payable under clauses,
(iv) and (vii) of Paragraph 16(a) shall be payable to Landlord or, if required
by the Mortgage, to Lender and that portion of any proceeds of insurance payable
under clause (v) of Paragraph 16(a) to which Landlord is entitled to hereunder
shall be payable to Landlord or, if required by the Mortgage, to Lender.
(iii) Proceeds of insurance required under clause (i)
of Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16(a) shall be payable to Landlord or, if required by the Mortgage, to Lender,
and applied as set forth in Paragraph 17. Tenant shall apply the Net Award to
restoration of the Leased Premises in accordance with the applicable provisions
of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty to the Leased Premises occurs, Tenant
shall give Landlord and Lender immediate notice thereof. Landlord and Lender are
hereby authorized to adjust, collect and compromise, in their discretion and
upon written notice to Tenant (except that no notice to Tenant shall be required
if an Event of Default has occurred and is continuing), all claims under any of
the insurance policies required by Paragraph 16(a) (except public liability
insurance claims payable to a Person other than Tenant, Landlord or Lender) and
to execute and deliver on behalf of Tenant all necessary proofs of loss,
receipts, vouchers and releases required
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by the insurers. Provided that no Event of Default has occurred and is
continuing, Tenant shall be entitled to participate with Landlord and Lender in
any adjustment, collection and compromise of the Net Award payable in connection
with a Casualty. Tenant agrees to sign, upon the request of Landlord and Lender,
all such proofs of loss, receipts, vouchers and releases. If Landlord or Lender
so requests, Tenant shall adjust, collect and compromise any and all such
claims, and Landlord and Lender shall have the right to join with Tenant
therein. Any adjustment, settlement or compromise of any such claim shall be
subject to the prior written approval of Landlord and Lender, and Landlord and
Lender shall have the right to prosecute or contest, or to require Tenant to
prosecute or contest, any such claim, adjustment, settlement or compromise. Each
insurer is hereby authorized and directed to make payment under said policies,
including return or unearned premiums, directly to Landlord or, if required by
the Mortgage, to Lender instead of to Landlord and Tenant jointly, and Tenant
hereby appoints each of Landlord and Lender as Tenant's attorneys-in-fact to
endorse any draft therefor. The rights of Landlord under this Paragraph 17(a)
shall be extended to Lender if and to the extent that any Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation Notice,
shall notify Landlord and Lender thereof. Landlord and Lender are authorized to
collect, settle and compromise, in their discretion (and, if no Event of Default
exists, upon notice to Tenant), the amount of any Net Award. Provided that no
Event of Default has occurred and is continuing, Tenant shall be entitled to
participate with Landlord and Lender in any Condemnation proceeding or
negotiations under threat thereof and to contest the Condemnation or the amount
of the Net Award therefor. No agreement with any condemnor in settlement or
under threat of any Condemnation shall be made by Tenant without the written
consent of Landlord and Lender. Subject to the provisions of this Paragraph
17(b), Tenant hereby irrevocably assigns to Landlord any award or payment to
which Tenant is or may be entitled by reason of any Condemnation, whether the
same shall be paid or payable for Tenant's leasehold interest hereunder or
otherwise; but nothing in this Lease shall impair Tenant's right to any award or
payment on account of Tenant's trade fixtures, equipment or other tangible
property which is not part of the Equipment, moving expenses or loss of
business, if available, to the extent that and so long as (i) Tenant shall have
the right to make, and does make, a separate claim therefor against the
condemnor and (ii) such claim does not in any way reduce either the amount of
the award otherwise payable to Landlord for the Condemnation of Landlord's fee
interest in the Leased Premises or the amount of the award (if any) otherwise
payable for the Condemnation of Tenant's leasehold interest hereunder. The
rights of Landlord under this Paragraph 17(b) shall also be extended to Lender
if and to the extent that any Mortgage so provides.
(c) If any Partial Casualty (whether or not insured against)
or Partial Condemnation shall occur, this Lease shall continue, notwithstanding
such event, and there shall be no abatement or reduction of any Monetary
Obligations. Promptly after such Partial Casualty or Partial Condemnation,
Tenant, as required in Paragraphs 12(a) and 13(b), shall commence and diligently
continue to restore the Leased Premises as nearly as possible to their value,
condition and character immediately prior to such event (assuming the Leased
Premises to have been in the condition required by this Lease). So long as no
Event of Default exists, any Net Award up to
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and including $250,000 shall be paid by Landlord to Tenant and Tenant shall
restore the Leased Premises in accordance with the requirements of Paragraphs
12(a) and 13(b) of this Lease. Any Net Award in excess of $250,000 shall (unless
such Casualty resulting in the Net Award is a Termination Event) be made
available by Landlord (or Lender, if required by the terms of any Mortgage) to
Tenant for the restoration of any of the Leased Premises pursuant to and in
accordance with the provisions of Paragraph 19 hereof. If any Casualty or
Condemnation which is not a Partial Casualty or Partial Condemnation shall
occur, Tenant shall comply with the terms and conditions of Paragraph 18.
18. Termination Events.
(a) If (i) the entire Leased Premises shall be taken by a
Taking or (ii) any substantial portion of the Leased Premises shall be taken by
a Taking or all or any substantial portion of the Leased Premises shall be
damaged or destroyed by a Casualty and, in such case, Tenant certifies and
covenants to Landlord that it will forever abandon operations at the Leased
Premises (each of the events described in the above clauses (i) and (ii) shall
hereinafter be referred to as a "Termination Event"), then (x) in the case of
(i) above, Tenant shall be obligated, within thirty (30) days after Tenant
receives a Condemnation Notice and (y) in the case of (ii) above, Tenant shall
have the option, within thirty (30) days after Tenant receives a Condemnation
Notice or thirty (30) days after the Casualty, as the case may be, to give to
Landlord written notice of the Tenant's option to terminate this Lease (a
"Termination Notice") in the form described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease on the first Basic Rent Payment Date which
occurs at least sixty (60) days after the Fair Market Value Date (the
"Termination Date"), (ii) a binding and irrevocable offer of Tenant to pay to
Landlord the Termination Amount and (iii) if the Termination Event is an event
described in Paragraph 18(a)(ii), the certification and covenants described
therein and a certified resolution of the Board of Directors of Tenant
authorizing the same. Promptly upon the delivery to Landlord of a Termination
Notice, Landlord and Tenant shall commence to determine the Fair Market Value.
(c) If Landlord shall reject such offer to terminate this
Lease by written notice to Tenant (a "Rejection"), which Rejection shall contain
the written consent of Lender, not later than thirty (30) days following the
Fair Market Value Date, then this Lease shall terminate on the Termination Date;
provided that, if Tenant has not satisfied all Monetary Obligations and all
other obligations and liabilities under this Lease which have arisen on or prior
to the Termination Date (collectively, "Remaining Obligations") on the
Termination Date, then Landlord may, at its option, extend the date on which
this Lease may terminate to a date which is no later than the first Basic Rent
Payment Date after the Termination Date on which Tenant has satisfied all
Remaining Obligations. Upon such termination (i) all obligations of Tenant
hereunder shall terminate except for any Surviving Obligations, (ii) Tenant
shall immediately vacate and shall have no further right, title or interest in
or to any of the Leased Premises and (iii) the Net Award shall be retained by
Landlord. Notwithstanding anything to the
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contrary hereinabove contained, if Tenant shall have received a Rejection and,
on the date when this Lease would otherwise terminate as provided above,
Landlord shall not have received the full amount of the Net Award payable by
reason of the applicable Termination Event, then the date on which this Lease is
to terminate automatically shall be extended to the first Basic Rent Payment
Date after the receipt by Landlord of the full amount of the Net Award provided
that, if Tenant has not satisfied all Remaining Obligations on such date, then
Landlord may, at its option, extend the date on which this Lease may terminate
to a date which is no later than the first Basic Rent Payment Date after such
date on which Tenant has satisfied all such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not later
than the thirtieth (30th) day following the Fair Market Value Date, Landlord
shall be conclusively presumed to have accepted such offer. If such offer is
accepted by Landlord then, on the Termination Date, Tenant shall pay to Landlord
the Termination Amount and all Remaining Obligations and, if requested by
Tenant, Landlord shall (i) convey to Tenant the Leased Premises or the remaining
portion thereof, if any, and (ii) pay to or assign to Tenant Landlord's entire
interest in and to the Net Award, all in accordance with Paragraph 20.
19. Restoration.
(a) Landlord (or Lender if required by any Mortgage) shall
hold Net Award in excess of $250,000 in a fund (the "Restoration Fund") and
disburse amounts from the Restoration Fund only in accordance with the following
conditions:
(i) prior to commencement of restoration, (A) the
architects, contracts, contractors, plans and specifications for the restoration
shall have been approved by Landlord, (B) Landlord and Lender shall be provided
with mechanics' lien insurance (if available) and acceptable performance and
payment bonds which insure satisfactory completion of and payment for the
restoration, are in an amount and form and have a surety acceptable to Landlord,
and name Landlord and Lender as additional dual obligees, and (C) appropriate
waivers of mechanics' and materialmen's liens shall have been filed;
(ii) at the time of any disbursement, no Event of
Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested, (D) a satisfactory bringdown of
title insurance and (E) other evidence of cost and payment so that Landlord can
verify that the amounts disbursed from time to time are
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represented by work that is completed, in place and free and clear of mechanics'
and materialmen's lien claims;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the applicable
requirements of this Lease;
(v) Landlord may retain ten percent (10%) of the
Restoration Fund until the restoration is fully completed;
(vi) if the Restoration Fund is held by Landlord, the
Restoration Fund shall not be commingled with Landlord's other funds and shall
bear interest at a rate agreed to by Landlord and Tenant; and
(vii) such other reasonable conditions as Landlord or
Lender may impose.
(b) Prior to commencement of restoration and at any time
during restoration, if the estimated cost of completing the restoration work
free and clear of all liens, as determined by Landlord, exceeds the amount of
the Net Award available for such restoration, the amount of such excess shall,
upon demand by Landlord, be paid by Tenant to Landlord to be added to the
Restoration Fund. Any sum so added by Tenant which remains in the Restoration
Fund upon completion of restoration shall be refunded to Tenant. For purposes of
determining the source of funds with respect to the disposition of funds
remaining after the completion of restoration, the Net Award shall be deemed to
be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after
completion of the restoration and the payment of any refund due Tenant pursuant
to Paragraph 19(b), such sum (the "Remaining Sum") shall be retained by Landlord
or, if required by a Note or Mortgage, paid by Landlord to a Lender. If the
Remaining Sum is (i) retained by Landlord, each installment of Basic Rent
payable for the period commencing with the first Basic Rent Payment Date after
completion of the Alterations and ending with the twelfth (12th) Basic Rent
Payment Date after such date shall be reduced by an amount equal to one-twelfth
(1/12th) of such Remaining Sum, or (ii) paid to Lender, then each installment of
Basic Rent thereafter payable shall be reduced in the same amount as payments
are reduced under any Note if the Loan corresponding to such Note is reamortized
to reflect such payment, in each case until such Remaining Sum has been applied
in full or until the Term has expired, whichever occurs first. Upon the
expiration of the Term, any portion of the Remaining Sum which has not been so
applied shall be retained by Landlord.
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20. Procedures Upon Purchase.
(a) If the Leased Premises is purchased by Tenant pursuant to
any provision of this Lease, Landlord need not convey any better title thereto
than that which was conveyed to Landlord, and Tenant shall accept such title,
subject, however, to the Permitted Encumbrances and to all other liens,
exceptions and restrictions on, against or relating to any of the Leased
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises which have been
created by or resulted solely from acts of Landlord after the date of this
Lease, unless the same are Permitted Encumbrances or customary utility easements
benefiting the Leased Premises or were created with the concurrence of Tenant or
as a result of a default by Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the Leased
Premises pursuant to any provision of this Lease (any such date the "Purchase
Date"), Tenant shall pay to Landlord, or to any Person to whom Landlord directs
payment, the Relevant Amount therefor specified herein, in Federal Funds, less
any credit of the Net Award received and retained by Landlord or a Lender
allowed against the Relevant Amount, and Landlord shall deliver to Tenant (i) a
special warranty deed which describes the premises being conveyed and conveys
the title thereto as provided in Paragraph 20(a), (ii) such other instruments as
shall be necessary to transfer to Tenant or its designee any other property (or
rights to any Net Award not yet received by Landlord or a Lender) then required
to be sold by Landlord to Tenant pursuant to this Lease and (iii) any Net Award
received by Landlord, not credited to Tenant against the Relevant Amount and
required to be delivered by Landlord to Tenant pursuant to this Lease; provided,
that if any Monetary Obligations remain outstanding on such date, then Landlord
may deduct from the Net Award the amount of such Monetary Obligations; and
further provided, that if any event has occurred which, in Landlord's reasonable
judgment, is likely to subject any Indemnitee to any liability which Tenant is
required to indemnify against pursuant to Paragraph 15, then an amount shall be
deducted from the Net Award which, in Landlord's reasonable judgment, is
sufficient to satisfy such liability, which amount shall be deposited in an
escrow account with a financial institution reasonably satisfactory to Landlord
and Tenant pending resolution of such matter. If on the Purchase Date any
Monetary Obligations remain outstanding and no Net Award is payable to Tenant by
Landlord or the amount of such Net Award is less than the amount of the Monetary
Obligations, then Tenant shall pay to Landlord on the Purchase Date the amount
of such Monetary Obligations. Upon the completion of such purchase, this Lease
and all obligations and liabilities of Tenant hereunder shall terminate, except
any Surviving Obligations.
(c) If the completion of such purchase shall be delayed after
(i) the Termination Date, in the event of a purchase pursuant to Paragraph 18
or, (ii) the date scheduled for such purchase, in the event of a purchase under
any other provision of this Lease then (x) Rent shall continue to be due and
payable until completion of such purchase and (y) at Landlord's sole option,
Fair Market Value shall be redetermined and the Relevant Amount
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payable by Tenant pursuant to the applicable provision of this Lease shall be
adjusted to reflect such redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord shall be
prorated as of the Purchase Date, and the prorated unapplied balance shall be
deducted from the Relevant Amount due to Landlord; provided, that no
apportionment of any Impositions shall be made upon any such purchase.
21. Assignment and Subletting; Prohibition against Leasehold Financing.
(a) Tenant may not assign this Lease, voluntarily or
involuntarily, whether by operation of law or otherwise, or sublet any of the
Leased Premises (except as expressly provided below) at any time to any other
Person without the prior written consent of Landlord, which consent, in the
event of an assignment, may be withheld by Landlord for any or no reason and any
such purported sublease or assignment in violation of this Paragraph 21(a) shall
be null and void.
(i) Tenant shall have the right, upon thirty (30)
days prior written notice to Landlord and Lender, to enter into one or more
subleases that demise, in the aggregate, up to but not in excess of twenty-five
percent (25%) of the gross space in the Improvements with no consent or approval
of Landlord being required or necessary ("Pre-approved Sublet"). Other than
pursuant to Pre-approved Sublets, at no time during the Term shall Tenant enter
into subleases for more than twenty-five percent (25%) of the gross space in the
Lease Premises without the prior written consent of Landlord, which consent
shall be granted or withheld based on a review of the Review Criteria (as
defined below) as they relate to the proposed sublessee and the terms of the
proposed sublease. Landlord and Lender shall be deemed to have acted reasonably
in granting or withholding consent if such grant or disapproval is based on
their review of the Review Criteria.
(ii) As used herein, "Review Criteria" shall mean,
collectively, information regarding the: (A) credit, (B) management, (C)
operating history, (D) proposed use of the Leased Premises and (E) risk factors
associated with the proposed use of the Leased Premises by the proposed
sublessee taking into account factors such as environmental concerns, product
liability and the like. Landlord and Lender shall review such information and
shall approve or disapprove no later than the thirtieth (30th) day following
receipt of all such information, and Landlord and Lender shall be deemed to have
acted reasonably in granting or withholding consent if such grant or disapproval
is based on their review of the Review Criteria applying prudent business
judgment.
(b) If Tenant assigns all its rights and interest under this
Lease, the assignee under such assignment shall expressly assume all the
obligations of Tenant hereunder, actual or contingent, including obligations of
Tenant which may have arisen on or prior to the date of such assignment, by a
written instrument delivered to Landlord at the time of such assignment. Each
sublease of any of the Leased Premises shall be subject and subordinate to the
provisions of this Lease. No assignment or sublease shall affect or reduce any
of the obligations
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of Tenant hereunder, and all such obligations shall continue in full force and
effect as obligations of a principal and not as obligations of a guarantor, as
if no assignment or sublease had been made. No assignment or sublease shall
impose any additional obligations on Landlord under this Lease.
(c) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease consented to by Landlord, deliver a
duplicate original copy thereof to Landlord which, in the event of an
assignment, shall be in recordable form.
(d) As security for performance of its obligations under this
Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title
and interest of Tenant in and to all subleases now in existence or hereafter
entered into for any or all of the Leased Premises, any and all extensions,
modifications and renewals thereof and all rents, issues and profits therefrom.
Landlord hereby grants to Tenant a license to collect and enjoy all rents and
other sums of money payable under any sublease of any of the Leased Premises,
provided, however, that Landlord shall have the absolute right at any time upon
notice to Tenant and any subtenants if required by a Lender, or at any time
following the occurrence of an Event of Default, to revoke said license and to
collect such rents and sums of money and to retain the same. Tenant shall not
consent to, cause or allow any modification or alteration of any of the terms,
conditions or covenants of any of the subleases or the termination thereof,
without the prior written approval of Landlord, which consent shall not be
unreasonably withheld, nor shall Tenant accept any rents more than thirty (30)
days in advance of the accrual thereof nor do nor permit anything to be done,
the doing of which, nor omit or refrain from doing anything, the omission of
which, will or could be a breach of or default in the terms of any of the
subleases.
(e) Tenant shall not have the power to mortgage, pledge or
otherwise encumber its interest under this Lease or any sublease of the Leased
Premises, and any such mortgage, pledge or encumbrance made in violation of this
Paragraph 21 shall be void and of no force and effect.
(f) Subject to the provisions of Paragraphs 35 and 36 hereof,
option to purchase/right of first refusal, Landlord may sell or transfer the
Leased Premises at any time without Tenant's consent to any third party (each a
"Third Party Purchaser"). In the event of any such transfer, Tenant shall attorn
to any Third Party Purchaser as Landlord so long as such Third Party Purchaser
and Landlord notify Tenant in writing of such transfer. At the request of
Landlord, Tenant will execute such documents confirming the agreement referred
to above and such other agreements as Landlord may reasonably request, provided
that such agreements do not increase the liabilities and obligations of Tenant
hereunder.
22. Events of Default.
(a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph 22(b)) shall,
at the sole option of Landlord, constitute an "Event of Default" under this
Lease:
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(i) a failure by Tenant to make any payment of any Monetary
Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise specifically
mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant herein or
in any certificate, demand or request made pursuant hereto proves to be
incorrect, now or hereafter, in any material respect;
(iv) a default beyond any applicable cure period or at
maturity by Tenant or Guarantor in any payment of principal or interest on any
obligations for borrowed money having an original principal balance of
$3,000,000 or more in the aggregate, or in the performance of any other
provision contained in any instrument under which any such obligation is created
or secured (including the breach of any covenant thereunder), (x) if such
payment is a payment at maturity or a final payment, or (y) if an effect of such
default is to cause, or permit any Person to cause, such obligation to become
due prior to its stated maturity;
(v) a default by Tenant beyond any applicable cure period in
the payment of rent under, or in the performance of any other material provision
of, any other lease or leases that have, in the aggregate, rental obligations
over the terms thereof of $1,000,000 or more if the landlord under any such
lease or leases commences to exercise its remedies thereunder;
(vi) a final, non-appealable judgment or judgments for the
payment of money in excess of $1,000,000 in the aggregate shall be rendered
against Tenant and the same shall remain undischarged for a period of sixty (60)
consecutive days;
(vii) The breach of any Covenant shall occur;
(viii) Tenant shall (A) voluntarily be adjudicated a bankrupt
or insolvent, (B) seek or consent to the appointment of a receiver or trustee
for itself or for the Leased Premises, (C) file a petition seeking relief under
the bankruptcy or other similar laws of the United States, any state or any
jurisdiction, (D) make a general assignment for the benefit of creditors, or (E)
be unable to pay its debts as they mature;
(ix) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for
any of the Leased Premises or approving a petition filed against Tenant which
seeks relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, and such order, judgment or decree shall remain
undischarged or unstayed sixty (60) days after it is entered;
(x) the Leased Premises shall have been vacated or abandoned;
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(xi) Tenant shall be liquidated or dissolved or shall begin
proceedings towards its liquidation or dissolution;
(xii) the estate or interest of Tenant in any of the Leased
Premises shall be levied upon or attached in any proceeding and such estate or
interest is about to be sold or transferred or such process shall not be vacated
or discharged within sixty (60) days after it is made;
(xiii) a failure by Tenant to perform or observe, or a
violation or breach of, or a misrepresentation by Tenant under any provision of
any Assignment or any other document between Tenant and Lender, if such failure,
violation, breach or misrepresentation gives rise to a default beyond any
applicable cure period with respect to any Loan;
(xiv) a failure by Tenant to maintain in effect any other
license or permit necessary for the use, occupancy or operation of the Leased
Premises; or
(xv) Tenant shall sell or transfer or enter into an agreement
to sell or transfer all or substantially all of its assets or Voting Stock other
than in accordance with the provisions and limitations in the Covenants on
Exhibit E;
(b) No notice or cure period shall be required in any one or more of
the following events: (A) the occurrence of an Event of Default under clause (i)
(except as otherwise set forth below), (iii), (iv), (v), (vi), (vii), (viii),
(ix), (x), (xi), (xii), (xiii), (xiv) or (xv) of Paragraph 22(a); (B) the
default consists of a failure to provide any insurance required by Paragraph 16
or an assignment or sublease entered into in violation of Paragraph 21; or (C)
the default is such that any delay in the exercise of a remedy by Landlord could
reasonably be expected to cause irreparable harm to Landlord. If the default
consists of the failure to pay any Monetary Obligation under clause (i) of
Paragraph 22(a), the applicable cure period shall be three (3) business days
from the date on which notice is given, but Landlord shall not be obligated to
give notice of, or allow any cure period for, any such default more than one (1)
time within any Lease Year. If the default consists of a default under clause
(ii) or clause (xiv) of Paragraph 22(a), other than the events specified in
clauses (B) and (C) of the first sentence of this Paragraph 22(b), the
applicable cure period shall be twenty (20) days from the date on which notice
is given or, if the default cannot be cured within such twenty (20) day period
and delay in the exercise of a remedy would not (in Landlord's reasonable
judgment) cause any material adverse harm to Landlord or any of the Leased
Premises, the cure period shall be extended for the period required to cure the
default (but such cure period, including any extension, shall not, in the
aggregate, exceed the lesser of (1) one hundred twenty (120) days or (2) such
shorter period required under a Mortgage, but in no event less than sixty (60)
days); provided that, Tenant shall commence to cure the default within the said
twenty-day period and shall actively, diligently and in good faith proceed with
and continue the curing of the default until it shall be fully cured.
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23. Remedies and Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's
intention to terminate this Lease on a date specified in such notice. Upon such
date, this Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire and terminate. Upon such termination, Tenant shall immediately
surrender and deliver possession of the Leased Premises to Landlord in
accordance with Paragraph 26. If Tenant does not so surrender and deliver
possession of the Leased Premises, Landlord may re-enter and repossess the
Leased Premises, with or without legal process, by peaceably entering the Leased
Premises and changing locks or by summary proceedings, ejectment or any other
lawful means or procedure. Upon or at any time after taking possession of the
Leased Premises, Landlord may, by peaceable means or legal process, remove any
Persons or property therefrom. Landlord shall be under no liability for or by
reason of any such entry, repossession or removal. Notwithstanding such entry or
repossession, Landlord may (A) exercise the remedy set forth in and collect the
damages permitted by Paragraph 23(a)(iii) or (B) collect the damages set forth
in Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of the Leased Premises pursuant to
clause (i) above, Landlord shall have the right to relet any of the Leased
Premises to such tenant or tenants, for such term or terms, for such rent, on
such conditions and for such uses as Landlord in its sole discretion may
determine, and collect and receive any rents payable by reason of such
reletting. Landlord may make such Alterations in connection with such reletting
as it may deem advisable in its sole discretion. Notwithstanding any such
reletting, Landlord may collect the damages set forth in Paragraph 23(b)(ii).
(iii) Landlord may, upon notice to Tenant, require Tenant
to make an irrevocable offer to terminate this Lease upon payment to Landlord of
an amount (the "Default Termination Amount") specified in the next sentence. The
"Default Termination Amount" shall be the greatest of (A) the Fair Market Value
of the Leased Premises, (B) the sum of the Acquisition Cost and Prepayment
Premium which Landlord will be required to pay in prepaying any Loan with
proceeds of the Default Termination Amount or (C) an amount equal to the Present
Value of the entire Basic Rent from the date of such purchase to the date on
which the Term would expire, assuming that the Term has been extended for all
extension periods, if any, provided for in this Lease. Upon such notice to
Tenant, Tenant shall be deemed to have made such offer and shall, if requested
by Landlord, within ten (10) days following such request deposit with Landlord
as payment against the Default Termination Amount the amount described in (B)
above and Landlord and Tenant shall promptly commence to determine Fair Market
Value. Within thirty (30) days after the Fair Market Value Date, Landlord shall
accept or reject such offer. If Landlord accepts such offer then, on the tenth
(10th) business day after such
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acceptance, Tenant shall pay to Landlord the Default Termination Amount and, at
the request of Tenant, Landlord will convey the Leased Premises to Tenant or its
designee in accordance with Paragraph 20. Any rejection by Landlord of such
offer shall have no effect on any other remedy Landlord may have under this
Lease.
(iv) Landlord may declare by notice to Tenant the entire
Basic Rent (in the amount of Basic Rent then in effect) for the remainder of the
then current Term to be immediately due and payable. Tenant shall immediately
pay to Landlord all such Basic Rent discounted to its Present Value, all accrued
Rent then due and unpaid, all other Monetary Obligations which are then due and
unpaid and all Monetary Obligations which arise or become due by reason of such
Event of Default (including any Costs of Landlord). Upon receipt by Landlord of
all such accelerated Basic Rent and Monetary Obligations, this Lease shall
remain in full force and effect and Tenant shall have the right to possession of
the Leased Premises from the date of such receipt by Landlord to the end of the
Term, and subject to all the provisions of this Lease, including the obligation
to pay all increases in Basic Rent and all Monetary Obligations that
subsequently become due, except that (A) no Basic Rent which has been prepaid
hereunder shall be due thereafter during the said Term, (B) Tenant shall have no
option to extend or renew the Term and (C) Tenant shall have no further rights
under Paragraph 35 (Option to Purchase).
(b) The following constitute damages to which Landlord shall
be entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph
23(a)(i) but not its remedy under Paragraph 23(a)(ii) (or attempts to exercise
such remedy and is unsuccessful in reletting the Leased Premises) then, upon
written demand from Landlord, Tenant shall pay to Landlord, as liquidated and
agreed final damages for Tenant's default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of (A) all Basic Rent from the date of such
demand to the date on which the Term is scheduled to expire hereunder in the
absence of any earlier termination, re-entry or repossession over (B) the then
fair market rental value of the Leased Premises for the same period. Tenant
shall also pay to Landlord all of Landlord's Costs in connection with the
repossession of the Leased Premises and any attempted reletting thereof,
including all brokerage commissions, legal expenses attorneys' fees, employees'
expenses, costs of Alterations and expenses and preparation for reletting.
(ii) If Landlord exercises its remedy under Paragraph
23(a)(i) or its remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant
shall, until the end of what would have been the Term in the absence of the
termination of the Lease, and whether or not any of the Leased Premises shall
have been relet, be liable to Landlord for, and shall pay to Landlord, as
liquidated and agreed current damages all Monetary Obligations which would be
payable under this Lease by Tenant in the absence of such termination less the
net proceeds, if any, of any reletting pursuant to Paragraph 23(a)(ii), after
deducting from such proceeds all of Landlord's
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Costs (including the items listed in the last sentence of Paragraph 23(b)(i)
hereof) incurred in connection with such repossessing and reletting; provided,
that if Landlord has not relet the Leased Premises, such Costs of Landlord shall
be considered to be Monetary Obligations payable by Tenant. Tenant shall be and
remain liable for all sums aforesaid, and Landlord may recover such damages from
Tenant and institute and maintain successive actions or legal proceedings
against Tenant for the recovery of such damages. Nothing herein contained shall
be deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when the Term would have expired by its own terms had
there been no such Event of Default.
(c) Notwithstanding anything to the contrary herein contained,
in lieu of or in addition to any of the foregoing remedies and damages, Landlord
may exercise any remedies and collect any damages available to it at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder or
at law or in equity.
(d) Landlord shall not be required to mitigate any of its
damages hereunder unless required to by applicable Law. If any Law shall validly
limit the amount of any damages provided for herein to an amount which is less
than the amount agreed to herein, Landlord shall be entitled to the maximum
amount available under such Law.
(e) No termination of this Lease, repossession or reletting of
the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, LANDLORD AND TENANT WAIVES ANY RIGHT TO A TRIAL BY JURY.
(g) Upon the occurrence of any Event of Default, Landlord
shall have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose.
(h) No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(i) Tenant hereby waives and surrenders, for itself and all
those claiming under it, including creditors of all kinds, (i) any right and
privilege which it or any of
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them may have under any present or future Law to redeem any of the Leased
Premises or to have a continuance of this Lease after termination of this Lease
or of Tenant's right of occupancy or possession pursuant to any court order or
any provision hereof, and (ii) the benefits of any present or future Law which
exempts property from liability for debt or for distress for rent.
(j) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.
24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated above or when delivery is
refused. A copy of any notice given by Tenant to Landlord shall simultaneously
be given by Tenant to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chairman, Real Estate Department. For the
purposes of this Paragraph, any party may substitute another address stated
above (or substituted by a previous notice) for its address by giving fifteen
(15) days' notice of the new address to the other party, in the manner provided
above.
25. Estoppel Certificate. At any time upon not less than ten (10)
days' prior written request by either Landlord or Tenant (the "Requesting
Party") to the other party (the "Responding Party"), the Responding Party shall
deliver to the Requesting Party a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by any court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation.
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26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear. Upon such surrender, Tenant shall (a)
remove from the Leased Premises all property which is owned by Tenant or third
parties other than Landlord and (b) repair any damage caused by such removal.
Property not so removed shall become the property of Landlord, and Landlord may
thereafter cause such property to be removed from the Leased Premises. The cost
of removing and disposing of such property and repairing any damage to any of
the Leased Premises caused by such removal shall be paid by Tenant to Landlord
upon demand. Landlord shall not in any manner or to any extent be obligated to
reimburse Tenant for any such property which becomes the property of Landlord
pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased Premises
by reason of the fact that the same Person may acquire or hold or own, directly
or indirectly, (a) the leasehold estate created hereby or any part thereof or
interest therein and (b) the fee estate in any of the Leased Premises or any
part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.
28. Books and Records.
(a) Tenant shall keep adequate records and books of account
with respect to the finances and business of Tenant generally and with respect
to the Leased Premises, in accordance with generally accepted accounting
principles ("GAAP") consistently applied, and shall permit Landlord and Lender
by their respective agents, accountants and attorneys, upon reasonable notice to
Tenant, to visit and inspect the Leased Premises and examine (and make copies
of) the records and books of account and to discuss the finances and business
with the officers of Tenant, at such reasonable times as may be requested by
Landlord. Upon the request of Lender or Landlord (either telephonically or in
writing), Tenant shall provide the requesting party with copies of any
information to which such party would be entitled in the course of a personal
visit.
(b) Tenant shall deliver to Landlord and to Lender one hundred
twenty (120) days of the close of each fiscal year, annual audited financial
statements of Tenant prepared by a nationally recognized firm of independent
certified public accountants. Tenant shall also furnish to Landlord within
forty-five (45) days after the end of each of the three remaining quarters
unaudited financial statements and all other quarterly reports of Tenant,
certified by Tenant's chief financial officer, and all filings, if any, of Form
10-K, Form 10-Q and other required filings with the Securities and Exchange
Commission pursuant to the provisions of the Securities Exchange Act of 1934, as
amended, or any other Law. All annual financial statements shall be accompanied
(i) by an opinion of said accountants stating that (A) there are
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no qualifications as to the scope of the audit and (B) the audit was performed
in accordance with GAAP and (ii) by the affidavit of the president or a vice
president of Tenant, dated within five (5) days of the delivery of such
statement, stating that (C) the affiant knows of no Event of Default, or event
which, upon notice or the passage of time or both, would become an Event of
Default which has occurred and is continuing hereunder or, if any such event has
occurred and is continuing, specifying the nature and period of existence
thereof and what action Tenant has taken or proposes to take with respect
thereto and (D) except as otherwise specified in such affidavit, that Tenant has
fulfilled all of its obligations under this Lease which are required to be
fulfilled on or prior to the date of such affidavit.
(c) Landlord, Lender and their respective agents, accountants
and attorneys, shall consider and treat on a strictly confidential basis (i) any
information contained in the books and records of Tenant, (ii) any copies of any
books and records of Tenant, and any financial statements of Tenant pursuant to
Paragraph 28(b) which are delivered to or received by them and which are
conspicuously stamped "CONFIDENTIAL". Landlord, Lender, and their respective
agents, accountants and attorneys, shall conspicuously ▇▇▇▇ all copies of such
documents as "Confidential". Neither Landlord, Lender, nor their respective
agents, accountants and attorneys, shall disclose any information contained in
Tenant's books and records nor distribute copies of any of such books and
records nor Tenant's financial statements to any other Persons without the prior
written consent of the chief operating officer of Tenant. The restrictions
contained in this Paragraph 28(c) shall not prevent disclosure by Landlord or
Lender of any information in any of the following circumstances:
(i) Upon the order of any court or administrative agency
to the extent required by such order and not effectively stayed or by appeal or
otherwise;
(ii) Upon the request, demand or requirement of any
regulatory agency or authority having jurisdiction over such party, including
the Securities and Exchange Commission (whether or not such request or demand
has the force of law);
(iii) That has been publicly disclosed other than by
breach of this Paragraph 28(c) by Lender or Landlord or by any other Person who
has agreed with Landlord or Lender to abide by the provisions of this Paragraph
28(c);
(iv) To counsel or accountants for Lender or Landlord or
counsel or accountants for such other Person who has agreed to abide by the
provisions of this Paragraph 28(c);
(v) While an Even of Default exist, in connection with the
exercise of any right or remedy under this Lease or any other related document;
(vi) Independently developed by Landlord or Lender to the
extent that confidential information provided by Tenant is not used to develop
such information'
(vii) In any reporting to the beneficiaries;
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(viii) As otherwise required by Law.
29. Determination of Value.
(a) Whenever a determination of Fair Market Value or Fair
Market Rental Value is required pursuant to any provision of this Lease, such
Fair Market Value or Fair Market Rental Value shall be determined in accordance
with the following procedure:
(i) Landlord and Tenant (or Third Party Purchaser with
respect to a determination under clause (D) below) shall endeavor to agree upon
such Fair Market Value within thirty (30) days after the date (the "Applicable
Initial Date"") on which (A) Tenant provides Landlord with notice of its
intention to terminate this Lease and purchase the Leased Premises pursuant to
Paragraph 18, (B) Landlord provides Tenant with notice of its intention to
redetermine Fair Market Value pursuant to Paragraph 20(c), (C) Landlord provides
Tenant with notice of Landlord's intention to require Tenant to make an offer to
terminate this Lease pursuant to Paragraph 23(a)(iii) or (D) Tenant provides
Landlord with Tenant's Option Exercise Notice pursuant to Paragraph 35(a).
Landlord and Tenant shall endeavor to agree on Fair Market Rental Value on the
date (also, an "Applicable Initial Date") which is six (6) calendar months prior
to the expiration of the then current Term unless Tenant has previously
exercised its option pursuant to Paragraph 5(b) not to have the Term
automatically extended. Upon reaching such agreement, the parties shall execute
an agreement setting forth the amount of such Fair Market Value or Fair Market
Rental Value.
(ii) If the parties shall not have signed such agreement
within thirty (30) days after the Applicable Initial Date, Tenant shall within
fifty (50) days after the Applicable Initial Date select an appraiser and notify
Landlord in writing of the name, address and qualifications of such appraiser.
Such appraiser shall determine a Fair Market Value or Fair Market Rental Value,
as applicable, based upon a written appraisal as of the Relevant Date, within
twenty (20) days after the later to occur of (A) the date of selection of such
appraiser by Tenant and (B) the date that Landlord notifies Tenant that such
appraiser is acceptable and the determination of such appraiser shall be binding
and conclusive upon Landlord and Tenant. If such appraiser shall not be
acceptable to Landlord, in its sole and absolute discretion, or if such
appraiser shall fail to make its determination as required herein within such
twenty (20) day period, then within twenty-five (25) days following Landlord's
receipt of Tenant's notice of the appraiser selected by Tenant, Landlord shall
select an appraiser and notify Tenant of the name, address and qualifications of
such appraiser. Such two appraisers shall endeavor to agree upon Fair Market
Value or Fair Market Rental Value, as applicable, based on a written appraisal
made by each of them (and given to Landlord by Tenant) as of the Relevant Date.
If such two appraisers shall agree upon a Fair Market Value or Fair Market
Rental Value, as applicable, the amount of such Fair Market Value or Fair Market
Rental Value, as applicable, as so agreed shall be binding and conclusive upon
Landlord and Tenant.
(iii) If such two appraisers shall be unable to agree upon
a Fair Market Value or Fair Market Rental Value, as applicable, within twenty
(20) days after the
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selection of an appraiser by Landlord, then such appraisers shall advise
Landlord and Tenant of their respective determination of Fair Market Value or
Fair Market Rental Value, as applicable, and shall select a third appraiser to
make the determination of Fair Market Value or Fair Market Rental Value, as
applicable. The selection of the third appraiser shall be binding and conclusive
upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree upon
the designation of a third appraiser within ten (10) days after the expiration
of the twenty (20) day period referred to in clause (iii) above, or if such
third appraiser does not make a determination of Fair Market Value or Fair
Market Rental Value, as applicable, within twenty (20) days after his selection,
then such third appraiser or a substituted third appraiser, as applicable,
shall, at the request of either party hereto, be appointed by the President or
Chairman of the American Arbitration Association in New York, New York. The
determination of Fair Market Value or Fair Market Rental Value, as applicable,
made by the third appraiser appointed pursuant hereto shall be made within
twenty (20) days after such appointment.
(v) If a third appraiser is selected, Fair Market Value or
Fair Market Rental Value, as applicable, shall be the average of the
determination of Fair Market Value or Fair Market Rental Value, as applicable,
made by the third appraiser and the determination of Fair Market Value or Fair
Market Rental Value, as applicable, made by the appraiser (selected pursuant to
Paragraph 29(a)(ii) hereof) whose determination of Fair Market Value is nearest
to that of the third appraiser. Such average shall be binding and conclusive
upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to this
Paragraph 29(a) shall (A) be independent qualified MAI appraisers (B) have no
right, power or authority to alter or modify the provisions of this Lease, (C)
utilize the definition of Fair Market Value or Fair Market Rental Value, as
applicable, hereinabove set forth above, and (D) be registered in the State if
the State provides for or requires such registration. The Cost of the procedure
described in this Paragraph 29(a) above shall be borne entirely by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended to
the date specified for termination in the particular provision of this Lease
pursuant to which the determination of Fair Market Value is being made. If, by
virtue of any delay, Fair Market Rental Value is not determined by the
expiration or termination of the then current Term, then until Fair Market
Rental Value is determined, Tenant shall continue to pay Basic Rent during the
succeeding Renewal Term in the same amount which it was obligated under this
Lease to pay prior to the commencement of the Renewal Term. When Fair Market
Rental Value is determined, the appropriate Basic Rent shall be calculated
retroactive to the commencement of the Renewal Term and Tenant shall either
receive a refund from Landlord (in the case of an overpayment) or shall pay any
deficiency to Landlord (in the case of an underpayment).
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(c) In determining Fair Market Value as defined in clause (b) of
the definition of Fair Market Value, each appraiser shall add (a) the Present
Value of the Rent for the remaining Term, assuming the Term has been extended
for all extension periods provided herein (with assumed increases in the CPI to
be determined by the appraisers) using a discount rate (which may be determined
by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and (b) the Present Value of the Leased Premises as
of the end of such Term (having assumed the Term has been extended for all
extension periods provided herein). The appraisers shall further assume that no
default then exists under the Lease, that Tenant has complied (and will comply)
with all provisions of the Lease, and that Tenant has not violated (and will not
violate) any of the Covenants.
(d) In determining Fair Market Rental Value, each appraiser shall
determine the amount that a willing tenant would pay, and a willing landlord of
a comparable building located in a radius of five (5) miles of the Leased
Premises would accept, at arm's length, to rent a building of comparable size
and quality as the Improvements, taking into account: (a) the age, quality,
condition (as required by the Lease) of the Improvements; (b) that the Leased
Premises will be leased as a whole or substantially as a whole to a single user;
(c) a lease term of five (5) years; (d) an absolute triple net lease; and (e)
such other items that professional real estate appraisers customarily consider.
30. Non-Recourse as to Landlord. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against the Leased Premises and
not against any other assets, properties or funds of (i) Landlord, (ii) any
director, officer, member, general partner, shareholder, limited partner,
beneficiary, employee or agent of Landlord or any general partner of Landlord or
any of its members or general partners (or any legal representative, heir,
estate, successor or assign of any thereof), (iii) any predecessor or successor
partnership or corporation (or other entity) of Landlord or any of its general
partners, shareholders, officers, directors, members, employees or agents,
either directly or through Landlord or its general partners, shareholders,
officers, directors, employees or agents or any predecessor or successor
partnership or corporation (or other entity), or (iv) any Person affiliated with
any of the foregoing, or any director, officer, employee or agent of any
thereof.
31. Financing.
(a) Tenant agrees to pay, at the closing of the purchase of the
Leased Premises, if incurred at or prior thereto, or otherwise within ten (10)
days following written request from Landlord, all costs and expenses incurred by
Landlord in connection with the purchase and leasing of the Leased Premises and
the financing of the initial Loan, including, without limitation, (1) the cost
of appraisals, environmental reports, legal fees and expenses of Landlord's and
Lender's counsel and any mortgage "points" or commitment fees, in an aggregate
amount not to exceed $80,000 and (2) all survey costs and title insurance
charges, fees and premiums.
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(b) Tenant agrees to pay, within three (3) business days of
written demand therefor, any cost, charge or expense (other than the principal
of the Note and interest thereon at the contract rate of interest specified
therein) imposed upon Landlord by Lender pursuant to the Note, the Mortgage or
the Assignment which is not caused solely by the gross negligence or willful
misconduct of Landlord and which is not otherwise reimbursed by Tenant to
Landlord pursuant to any other provision of this Lease.
(c) If Landlord desires to obtain or refinance any Loan, Tenant
shall negotiate in good faith with Landlord concerning any request made by any
Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant shall agree, upon request of Landlord, to supply any such
Lender with such notices and information as Tenant is required to give to
Landlord hereunder and to extend the rights of Landlord hereunder to any such
Lender and to consent to such financing if such consent is requested by such
Lender. Tenant shall provide any other consent or statement and shall execute
any and all other documents that such Lender requires in connection with such
financing, including any environmental indemnity agreement and subordination,
non-disturbance and attornment agreement, so long as the same do not materially
adversely affect any right, benefit or privilege of Tenant under this Lease or
increase any of Tenant's monetary obligations under this Lease or materially
increase any of Tenant's non-monetary obligations under this Lease. Such
subordination, nondisturbance and attornment agreement may require Tenant to
confirm that (a) Lender and its assigns will not be liable for any
misrepresentation, act or omission of Landlord and (b) Lender and its assigns
will not be subject to any counterclaim, demand or offset which Tenant may have
against Landlord.
32. Subordination, Non-Disturbance and Attornment.
(a) This Lease and Tenant's interest hereunder shall be
subordinate to any Mortgage or other security instrument hereafter placed upon
the Leased Premises by Landlord, and to any and all advances made or to be made
thereunder, to the interest thereon, and all renewals, replacements and
extensions thereof, provided that any such Mortgage or other security instrument
(or a separate instrument in recordable form duly executed by the holder of any
such Mortgage or other security instrument and delivered to Tenant) shall
provide that, so long as no Event of Default has occurred and is continuing
under the terms of this Lease and if Landlord shall not otherwise have the right
to terminate this Lease pursuant to any applicable provision hereof, (i) the
successor-in -interest to Landlord under this Lease ( the "Successor Landlord")
shall recognize this Lease and Tenant's rights hereunder, (ii) Tenant will not
be joined as a party defendant in any foreclosure action or proceeding which may
be instituted or taken by any Lender (other than for the purpose of instituting
such action against Landlord, if required by Law), and (iii) Tenant's use and
possession of the Leased Premises shall not be disturbed nor shall Tenant's
leasehold estate or rights under this Lease be affected in any way by reason of
any default by Landlord under any Mortgage.
(b) If the interest of Landlord under this Lease shall be
transferred by reason of a foreclosure action (or deed in lieu thereof) or other
proceeding, then, except as provided below, Lender, as the Successor Landlord,
shall be bound to Tenant under all of the
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terms and covenants of this Lease with the same force and effect as if such
Successor Landlord were the Landlord hereunder. The provisions of this Paragraph
32 shall be effective and self operative without the execution of any further
instruments. However, the Successor Landlord, upon request, shall execute and
deliver a certificate or other instrument which Tenant may reasonably request to
confirm that such Successor Landlord is bound by the provisions hereof.
(c) The Successor Landlord shall not and shall not be deemed to
(a) adopt or in any other manner be responsible or liable for any
representations or warranties made by Landlord, or be liable for any act,
omission or default of Landlord, or be subject to any offsets or defenses which
Tenant might have against Landlord, in each such case to the extent arising
prior to the date the Successor Landlord acquires title to the Leased Premises,
(b) be bound by any prepayment of rents or other charges under the lease for
more than one (1) month in advance unless such amendment, modification or
prepayment was approved in writing by the Successor Landlord, (c) be liable to
Tenant for any refund of any security deposit made by Tenant or any sublessee
pursuant to any sublease, except to the extent that the Successor Landlord has
actually received such security deposit, or (d) be liable to Tenant in any event
for any matter relating to the use, operation, repair, maintenance, condition or
legal compliance of the Leased Premises, except to extent expressly provided in
this Lease and then only from after the date Successor acquires legal title to
the Leased Premises.
33. Financial Covenants. Tenants hereby covenants and agrees to
comply with all the covenants and agreements described in Exhibit "E" hereto.
34. Tax Treatment; Reporting. Landlord and Tenant each acknowledge
that each shall treat this transaction as a true lease for state law purposes
and shall report this transaction as a Lease for Federal income tax purposes.
For Federal income tax purposes each shall report this Lease as a true lease
with Landlord as the owner of the Leased Premises and Equipment and Tenant as
the lessee of such Leased Premises and Equipment including: (1) treating
Landlord as the owner of the property eligible to claim depreciation deductions
under Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
35. Option to Purchase.
(a) Landlord does hereby give and grant to Tenant the option to
purchase the Leased Premises (i) for a purchase price (the "Purchase Price")
equal to the Offer Amount and (ii) on any date (the "Option Purchase Date")
between six (6) months prior to the fifteenth (15th) anniversary of the date
hereof and the fifteenth (15th) anniversary date hereof which is mutually
agreeable to Landlord and Tenant, but in any event not sooner than thirty (30)
days after the Fair Market Value Date. If Tenant intends to exercise such
option, Tenant shall give written notice ("Tenant's Option Exercise Notice") to
Landlord to such effect not earlier than twenty-four (24) months prior to the
fifteenth (15th) anniversary of the date hereof and not later than eighteen (18)
months prior to fifteenth (15th) anniversary of the date hereof. Promptly
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upon receipt of such notice by Landlord, the parties shall commence to determine
Fair Market Value.
(b) If Tenant shall exercise the foregoing option to purchase the
Leased Premises, on the later to occur of (i) the Option Purchase Date or (ii)
the date when Tenant has paid the Offer Amount and has satisfied all other
Monetary Obligations, Landlord shall convey the Leased Premises to Tenant in
accordance with Paragraph 20 hereof; provided, that if an Event of Default has
occurred and is continuing on the Option Purchase Date, Landlord, at its sole
option, may terminate Tenant's option to purchase hereunder. IF THIS LEASE SHALL
TERMINATE FOR ANY REASON PRIOR TO THE DATE ORIGINALLY FIXED HEREIN FOR THE
EXPIRATION OF THE TERM, OR IF TENANT SHALL FAIL TO GIVE THE AFORESAID NOTICE OF
INTENTION TO PURCHASE, TIME BEING OF THE ESSENCE, THE OPTION PROVIDED IN THIS
PARAGRAPH 35 AND ANY EXERCISE THEREOF BY TENANT SHALL CEASE AND TERMINATE AND
SHALL BE NULL AND VOID. IN SUCH EVENT TENANT SHALL EXECUTE A QUITCLAIM DEED AND
SUCH OTHER DOCUMENTS AS LANDLORD SHALL REASONABLY REQUEST EVIDENCING THE
TERMINATION OF ITS OPTION.
36. Right of First Refusal.
(a) Except as otherwise provided in clause (e) of this Paragraph
36, and provided an Event of Default does not then exist if Landlord shall enter
into a contract for the sale (the "Sale Contract") of the Leased Premises with a
Third Party Purchaser (such Sale Contract to be conditioned upon Tenant's
failure to exercise its right under Paragraph 36(b)), Landlord shall give
written notice to Tenant of the Sale Contract, together with a copy of the
executed Sale Contract and the name and business address of the Third Party
Purchaser.
(b) For a period of thirty (30) days following receipt of such
notice, Tenant shall have the right and option, exercisable by written notice to
Landlord given within said thirty (30) day period, to elect to purchase the
Leased Premises at the purchase price and upon all the terms and conditions set
forth in such Sale Contract except that no contingencies contained in such Sale
Contract as to environmental assessments, engineering studies, inspection of the
Leased Premises, availability of financing, sale of other property, state of the
title to or encumbrances on the Leased Premises, or any other condition or
contingency to the Third Party Purchaser's obligation to purchase the Leased
Premises which pertains to the condition of the Leased Premises, the Third Party
Purchaser's ability to take certain action or any other factor beyond the
control of Landlord, shall apply to Tenant's obligation to purchase the Leased
Premises under this Paragraph 36, and Tenant shall be obligated to purchase the
Leased Premises without any such condition or contingency.
(c) If at the expiration of the aforesaid thirty (30) day period
Tenant shall have failed to exercise the aforesaid option, Landlord may sell the
Leased Premises to such Third Party Purchaser upon the terms set forth in such
contract.
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(d) Except as otherwise specifically provided herein, the closing
date for any purchase of the Leased Premises by Tenant pursuant to this
Paragraph 36 shall be the earlier to occur of (i) ninety (90) days after the
date of Tenant's notice to Landlord of its intention to purchase the Leased
Premises upon the terms of a Sale Contract with a Third Party Purchaser or (ii)
the closing date provided in such Sale Contract. At such closing Landlord shall
convey the Leased Premises to Tenant in accordance with, and Tenant shall pay to
Landlord the purchase price and other consideration set forth in, the applicable
contract.
(e) Tenant shall have the right during the Term to exercise the
foregoing right of first refusal upon (i) each proposed sale of the Leased
Premises during the Term hereof. NOTWITHSTANDING ANYTHING TO THE CONTRARY, IF
TENANT FAILS TO TIMELY EXERCISE THE RIGHT OF FIRST REFUSAL GRANTED PURSUANT TO
THIS PARAGRAPH 36, OR IF THIS LEASE TERMINATES OR THE TERM EXPIRES, SUCH RIGHT
SHALL TERMINATE AND BE NULL AND VOID AND OF NO FURTHER FORCE AND EFFECT. IN SUCH
EVENT TENANT SHALL EXECUTE A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LANDLORD
SHALL REASONABLY REQUEST EVIDENCING THE TERMINATION OF ITS RIGHT OF FIRST
REFUSAL.
(f) If Tenant does not exercise its right of first refusal to
purchase the Leased Premises and the Leased Premises are transferred to a Third
Party Purchaser, Tenant will attorn to any Third Party Purchaser as Landlord so
long as such Third Party Purchaser and Landlord notify Tenant in writing of such
transfer. At the request of Landlord, Tenant will execute such documents
confirming the agreement referred to above and such other agreements as Landlord
may reasonably request, provided that such agreements do not increase the
liabilities and obligations of Tenant hereunder.
(g) The provisions of this Paragraph 36 shall not apply to or
prohibit (i) any mortgaging, subjection to deed of trust or other hypothecation
of Landlord's interest in the Leased Premises, (ii) any sale of the Leased
Premises pursuant to a private power of sale under or judicial foreclosure of
any Mortgage or other security instrument or device to which Landlord's interest
in the Leased Premises is now or hereafter subject, (iii) any transfer of
Landlord's interest in the Leased Premises to a Lender, beneficiary under deed
of trust or other holder of a security interest therein or their designees by
deed in lieu of foreclosure, (iv) any transfer of the Leased Premises to any
governmental or quasi-governmental agency with power of condemnation, (v) any
transfer of the Leased Premises to any affiliate of Landlord or to any entity
for whom W. P. ▇▇▇▇▇ & Co., Inc., ▇▇▇▇▇ Diversified LLC or any of their
affiliates provides management services or investment advice, (vi) any Person to
whom Landlord sells all or substantially all of its assets, or (vii) any
transfer of the Leased Premises to any of the successors or assigns of any of
the Persons referred to in the foregoing clauses (i) through (iv). Nothing in
this subparagraph (g) shall be deemed to be a waiver of the applicable
substantive and procedural rules of the State relating to notice of the
institution of foreclosure proceedings or, except as otherwise expressly
provided in this Lease, be deemed to require any payment by Tenant as a
consequence of any of the transfers listed in this subparagraph (g).
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37. Miscellaneous.
(a) The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
(b) As used in this Lease, the singular shall include the plural
and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien" shall
mean "lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform under this
Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except as otherwise specifically provided herein, Except as otherwise
expressly provided in this Lease, Landlord shall have the right, at its sole
option, to withhold its consent whenever such consent is required under this
Lease for any reason or no reason. Time is of the essence with respect to the
performance by Tenant of its obligations under this Lease.
(d) Landlord shall in no event be construed for any purpose to be
a partner, joint venturer or associate of Tenant or of any subtenant, operator,
concessionaire or licensee of Tenant with respect to any of the Leased Premises
or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by Tenant
on or about the effective date hereof at Landlord's request constitute the
entire agreement between the parties and supersede all prior understandings and
agreements, whether written or oral, between the parties hereto relating to the
Leased Premises and the transactions provided for herein. Landlord and Tenant
are business entities having substantial experience with the subject matter of
this Lease and have each fully participated in the negotiation and drafting of
this Lease. Accordingly, this Lease shall be construed without regard to the
rule that ambiguities in a document are to be construed against the drafter.
(f) This Lease may be modified, amended, discharged or waived
only by an agreement in writing signed by the party against whom enforcement of
any such modification, amendment, discharge or waiver is sought.
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(g) The covenants of this Lease shall run with the land and bind
Tenant, its successors and assigns and all present and subsequent encumbrancers
and subtenants of any of the Leased Premises, and shall inure to the benefit of
Landlord, its successors and assigns. If there is more than one Tenant, the
obligations of each shall be joint and several.
(h) If any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(i) This Lease shall be governed by and construed and enforced in
accordance with the Laws of the State.
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IN WITNESS WHEREOF, Landlord and Tenant have caused
this Lease to be duly executed under seal as of the day and year first above
written.
LANDLORD:
CBS (PA) QRS 14-12, INC.
By:_______________________
Title:____________________
WITNESS: TENANT:
CONTRAVES ▇▇▇▇▇▇▇▇ SYSTEMS, L. P.
By: Optics Acquisition Company, L.L.C.
General Partner
By:__________________ By:___________________________
Title:_______________ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Secretary
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EXHIBIT A
PREMISES
52
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances
of every kind and nature whatsoever now or hereafter affixed or attached to or
installed in any of the Leased Premises (except as hereafter provided),
including all electrical, anti-pollution, heating, lighting (including hanging
fluorescent lighting), incinerating, power, air cooling, air conditioning,
humidification, sprinkling, plumbing, cleaning, fire prevention, fire
extinguishing and ventilating systems, devices and machinery and all engines,
pipes, pumps, tanks (including exchange tanks and fuel storage tanks), motors,
conduits, ducts, steam circulation coils, blowers, steam lines, compressors, oil
burners, boilers, doors, windows, loading platforms, lavatory facilities,
stairwells, fencing (including cyclone fencing), passenger and freight elevators
and garage units, together with all additions thereto, substitutions therefor
and replacements thereof required or permitted by this Lease, but excluding all
personal property and trade fixtures of any sublessee of Tenant and all of
Tenant's personal property and all trade fixtures, machinery, office,
manufacturing and warehouse equipment which are not necessary to the operation,
as buildings, of the buildings which constitute part of the Leased Premises; and
specifically excluding Tenant's overhead crane, lifting equipment, portable
clean rooms and telephone equipment.
53
EXHIBIT C
PERMITTED ENCUMBRANCES
54
EXHIBIT D
BASIC RENT PAYMENTS
1. Initial Term; Basic Rent. Subject to the adjustments provided
for in Paragraphs 2, 3 and 4 below, Basic Rent payable in respect of the Initial
Term shall be $643,500.00 per annum, payable quarterly in advance on each Basic
Rent Payment Date, in equal installments of $160,875.00 each.
2. Basic Rent During Each Renewal Term. Subject to the adjustments
provided for in Paragraphs 2, 3 and 4 below, Basic Rent for each Renewal Term,
shall be payable quarterly in advance in an amount equal to the greater of (A)
one hundred percent (100%) of the Fair Market Rental Value (as determined in
accordance with Paragraph 29 of this Lease) as of the first day of the
applicable Renewal Term and (B) (i) for the first Renewal Term, the sum of Basic
Rent in effect as of the last calendar quarter immediately prior to the
Expiration Date, any increase as a result of any adjustment to Basic Rent on the
fifteenth (15th) anniversary of the First Full Basic Rent Payment Date as
provided below and (ii) for the Second Renewal Term, if applicable, the Basic
Rent in effect as of the last calendar quarter immediately prior to the
expiration of the first Renewal Term.
3. CPI Adjustments to Basic Rent. The Basic Rent shall be subject
to adjustment, in the manner hereinafter set forth, for increases in the index
known as United States Department of Labor, Bureau of Labor Statistics, Consumer
Price Index, All Urban Consumers, United States City Average, All Items,
(1982-84=100) ("CPI") or the successor index that most closely approximates the
CPI. If the CPI shall be discontinued with no successor or comparable successor
index, Landlord and Tenant shall attempt to agree upon a substitute index or
formula, but if they are unable to so agree, then the matter shall be determined
by arbitration in accordance with the rules of the American Arbitration
Association then prevailing in New York City. Any decision or award resulting
from such arbitration shall be final and binding upon Landlord and Tenant and
judgment thereon may be entered in any court of competent jurisdiction. In no
event will the Basic Rent as adjusted by the CPI adjustment be less than the
Basic Rent in effect for the three (3) year period immediately preceding such
adjustment.
4. Effective Dates of CPI Adjustments. Basic Rent shall not be
adjusted to reflect changes in the CPI until the third (3rd) anniversary of the
Basic Rent Payment Date on which the first full quarterly installment of Basic
Rent shall be due and payable (the "First Full Basic Rent Payment Date"). As of
the third (3rd) anniversary of the First Full Basic Rent Payment Date and
thereafter on the sixth (6th), ninth (9th) and twelfth (12th) and, if the
Initial Term is extended, on the fifteenth (15th), eighteenth (18th),
twenty-first (21st), and twenty-fourth (24th) anniversaries of the First Full
Basic Rent Payment Date, Basic Rent shall be adjusted to reflect increases in
the CPI during the most recent three (3) year period immediately preceding each
of the foregoing dates (each such date being hereinafter referred to as the
"Basic Rent Adjustment Date").
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5. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date when the average CPI
determined in clause (i) below exceeds the Beginning CPI (as defined in this
Paragraph 5(a)), the Basic Rent in effect immediately prior to the applicable
Basic Rent Adjustment Date shall be multiplied by a fraction, the numerator of
which shall be the difference between (i) the average CPI for the three (3) most
recent calendar months (the "Prior Months") ending prior to such Basic Rent
Adjustment Date for which the CPI has been published on or before the
forty-fifth (45th) day preceding such Basic Rent Adjustment Date and (ii) the
Beginning CPI, and the denominator of which shall be the Beginning CPI (the
product of such multiplication, divided by the Basic Rent, and expressed as a
percentage increase, the "Actual CPI Increase"). An amount equal to the lesser
of (x) the Actual CPI Increase and (y) 9.27% of the Basic Rent (based upon 3%
per annum compounded) in effect immediately prior to such Basic Rent Adjustment
Date shall be added to the Basic Rent in effect immediately prior to such Basic
Rent Adjustment Date. As used herein, "Beginning CPI" shall mean the average CPI
for the three (3) calendar months corresponding to the Prior Months, but
occurring three (3) years earlier. If the average CPI determined in clause (i)
is the same or less than the Beginning CPI, the Basic Rent will remain the same
for the ensuing three (3) year period.
(b) Effective as of a given Basic Rent Adjustment Date, Basic
Rent payable under this Lease until the next succeeding Basic Rent Adjustment
Date shall be the Basic Rent in effect after the adjustment provided for as of
such Basic Rent Adjustment Date.
(c) Notice of the new annual Basic Rent shall be delivered to
Tenant on or before the tenth (10th) day preceding each Basic Rent Adjustment
Date, but any failure to do so by Landlord shall not be or be deemed to be a
waiver by Landlord of Landlord's rights to collect such sums. Tenant shall pay
to Landlord, within ten (10) days after a notice of the new annual Basic Rent is
delivered to Tenant, all amounts due from Tenant, but unpaid, because the stated
amount as set forth above was not delivered to Tenant at least ten (10) days
preceding the basic Rent Adjustment Date in question.
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COVENANTS
1. Corporate Existence; Control; Mergers, Etc.
(a) Tenant shall, and shall cause each of its Subsidiaries to,
maintain its corporate existence, rights and franchises in full force and effect
in its jurisdiction of incorporation. Tenant shall, and shall cause its
Subsidiaries to qualify and remain qualified as a corporation in each
jurisdiction in which failure to receive or retain such qualification would have
an adverse effect on the business, operations or financial condition of the
enterprise comprised of the Tenant and its Subsidiaries taken as a whole.
(b) At all times during the Term, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall,
directly or indirectly, own and control the voting rights with respect to at
least 51% of Tenant's Voting Stock; provided that, Tenant shall be permitted to
sell, convey or transfer all of Tenant's Voting Stock to a Person if such Person
shall have a publicly traded unsecured debt rating of (i) Baa or better from
▇▇▇▇▇'▇ Investor Services, Inc., or (ii) BBB or better from Standard and Poor's
Corporation, or (iii) in the event both such rating agencies cease to furnish
such ratings, a comparable rating by a rating agency acceptable to Landlord and
Lender.
(c) The Tenant shall not consolidate with or merge into any
other Person unless, immediately following such consolidation or merger (i) the
surviving corporation shall have, on a proforma basis, either [(1)(A) an
Adjusted Consolidated Net Worth of not less than the greater of (x) Five Million
Dollars ($5,000,000) and (y) the Tenant's Consolidated Net Worth immediately
preceding such consolidation or merger and (B) the ratio of Tenant's shareholder
equity to long term debt shall not be less than 1:1 or (2) an Adjusted
Consolidated Net Worth of not less than Twenty Million Dollars ($20,000,000)],
(ii) the Board of Directors of Tenant immediately prior to such merger or
consolidation remains in control following such merger or consolidation; and
(iii) the senior management does not change in any material respect following
such merger or consolidation; provided, however, that the provisions of clauses
(ii) and (iii) hereof shall not be applicable if the surviving corporation
following such merger or consolidation has a publicly traded unsecured debt
rating of (A) Baa or better from ▇▇▇▇▇'▇ Investor Services, Inc., or (B) BBB or
better from Standard and Poor's Corporation, or (C) in the event both such
rating agencies cease to furnish such ratings, a comparable rating by a rating
agency acceptable to Landlord and Lender.
(d) The Tenant shall not in a single transaction or series of
related transactions, sell or convey, transfer, abandon or lease all or
substantially all of its assets to any Person. Notwithstanding the foregoing,
Tenant shall have the right in a single transaction or a series of related
transactions to sell or convey all or substantially all of its assets to a
Person if (i) this Lease and the obligations of Tenant hereunder shall be
transferred to, and assumed by, such Person as part of such transaction and (ii)
immediately after such transaction, on a proforma basis, such Person shall have
a publicly traded unsecured debt rating of (i) Baa or better from ▇▇▇▇▇'▇
Investor Services, Inc., or (ii) BBB or better from Standard and Poor's
Corporation, or (iii) in the event both such rating agencies cease to furnish
such ratings, a comparable rating by a rating agency acceptable to Landlord and
Lender.
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(e) The Tenant shall not make any substantial change in the
nature of its business.
2. Restricted Payments.
(a) Tenant shall not, directly or indirectly make, or cause or
permit any Subsidiary of the Tenant to make, any Restricted Payment, unless at
the time thereof, and after giving effect thereto:
(i) no Event of Default shall have occurred and be
continuing; and
(ii) the Tenant's Consolidated Net Worth equals or exceeds
$5,000,000; and
(iii) such Restricted Payment, together with all other
Restricted Payments made from the commencement date of the Term to the
date of such Restricted Payment does not exceed the sum of fifteen
percent (15%) of the Tenant's Consolidated Net Income on a cumulative
basis beginning with an including the fiscal year in which the Term
commenced to the month immediately preceding the date of such
Restricted Payment.
(b) The Tenant shall not, and shall not permit any Subsidiary,
to compensate directors, officers and employees of Tenant and its Subsidiaries
for services rendered in such capacity unless such compensation is in good faith
and on terms no less favorable to the Tenant or such Subsidiary than those that
could have been obtained in a comparable transaction on an arm's-length basis
from an unrelated Person, and the board of directors of the Tenant or such
Subsidiary approve the same.
3. Definitions. For the purpose of this Exhibit "E" the following
terms shall have the following meanings:
"Consolidated Net Income: shall mean, for any period, the
aggregate net income (or loss) of Tenant and its Subsidiaries for such period on
a consolidated basis, determined in accordance with GAAP.
"Consolidated Net Worth" shall mean, at any date, the net
worth of Tenant and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States of America, applied on a
consistent basis.
"Person" shall mean an individual, partnership, association,
corporation or other entity.
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"Restricted Payment" shall mean and include (a) any direct or
indirect purchase, redemption or other acquisition or retirement for value of
any equity security of Tenant or any option, warrant or right to acquire any
such equity security, or any security convertible into or exchangeable for any
such equity security, (b) any dividend, distribution, loan advance, guarantee,
extension of credit or other payment or transfer, whether in cash or property
and whether direct or indirect, to or for the benefit any Person holding an
equity interest in the Tenant (other than a payment or distribution to or for
the benefit of such Person for the purpose of the payment of income taxes),
whether or not such interest is evidenced by a security, or any affiliate of any
such Person, and (c) any direct or indirect purchase, redemption, prepayment or
other acquisition or retirement for value, prior to its stated maturity,
scheduled repayment or scheduled sinking fund payment of any subordinated debt
of the Tenant or any Subsidiary held by any Person described in clause (b)
above.
"Subsidiary" of any Person means a corporation a majority of
the Voting Stock of which is at the time owned, or the management of which is
otherwise controlled, directly or indirectly, through one or intermediaries, or
both, by such Person.
"Voting Stock" means shares of stock of a corporation having
ordinary voting power to elect the board of directors or other managers of such
corporation.
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