EXHIBIT 10.14
AFTER RECORDING MAIL TO:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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GROUND LEASE AGREEMENT
Dated as of December 19, 1997
between
CROWN PACIFIC LIMITED PARTNERSHIP
as Ground Lessor,
and
SELCO SERVICE CORPORATION,
as Ground Lessee
Port Angeles, Washington
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GROUND LEASE AGREEMENT (this "GROUND LEASE") dated as of December 19,
1997, between CROWN PACIFIC LIMITED PARTNERSHIP, a Delaware limited partnership,
as Ground Lessor, and SELCO SERVICE CORPORATION, an Ohio corporation, as Ground
Lessee.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Unless the context shall otherwise require, the capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned thereto
in the Lease Agreement dated as of December 19, 1997 between the Ground Lessor,
as lessee and construction agent, and the Ground Lessee, as lessor, with respect
to the Facility, as amended from time to time (the "LEASE AGREEMENT").
ARTICLE II
GRANT
Section 2.01. LEASE OF PARCEL. Ground Lessor is the owner of the fee
estate in and to a certain parcel of land located in ▇▇▇▇▇▇ County, Washington,
as more particularly described on Schedule A attached hereto (the "PARCEL").
Ground Lessor hereby leases the Parcel to Ground Lessee, and Ground Lessee
hereby leases the Parcel from Ground Lessor, for the Ground Lease Term
(hereinafter defined), subject to all the terms and conditions hereof, together
with all rights of way or uses, licenses, easements, tenements, hereditaments
and appurtenances now or hereafter belonging or pertaining to the Parcel.
Effective from and after the date hereof, Ground Lessor waives and relinquishes
any Lien or other right in the nature of a landlord's lien or privilege which it
might now or hereafter otherwise have in or with respect to the Parcel or any
part thereof.
Section 2.02. PERSONAL PROPERTY. The parties hereto acknowledge that
the title to the Facility and all Components now or hereafter constructed or
installed on the Parcel by any party (including, without limitation, Ground
Lessor or the Lessee under the Lease Agreement) during the Ground Lease Term
(hereinafter defined) are and will be owned by the Ground Lessee. It is the
intention of the parties that the separation of the title to the Parcel from the
title to the Facility is to remain so separated throughout the Ground Lease
Term. The Facility, to the greatest extent possible, shall for all purposes
and at all times be and remain personal property under the laws of the state in
which the Parcel and the Facility are located.
ARTICLE III
TERM
Section 3.01. GROUND LEASE TERM. This Ground Lease shall be
effective and the Parcel shall be subject to the terms and conditions of this
Ground Lease from and after the date hereof and shall terminate with respect to
the Parcel on the earlier to occur of (a) the date of Lessee's purchase of the
Facility pursuant to SECTION 19(b) of the Lease Agreement or (b) December 19,
2047, unless sooner terminated as provided or permitted herein (the "GROUND
LEASE TERM").
Section 3.02. ELECTION TO TERMINATE. Ground Lessee may elect to
terminate this Ground Lease at any time upon the payment of $1 to Ground Lessor.
Upon such termination, Ground Lessee's obligations hereunder shall terminate.
ARTICLE IV
PAYMENTS
Ground Lessee shall pay to Ground Lessor One Hundred Dollars ($100) as
rental payment for the Ground Lease Term, receipt of which is hereby
acknowledged by Ground Lessor.
ARTICLE V
QUIET ENJOYMENT
Ground Lessor represents and warrants that it has full right and
authority to lease the Parcel pursuant to the terms of this Ground Lease and
that it has good and marketable fee title to the Parcel free and clear of all
Liens, except for those exceptions to title set forth on Title Commitment dated
December 19, 1997 #NBG. No. 97-0719 of Chicago Title Insurance Company (the
"PERMITTED ENCUMBRANCES"), and Ground Lessor represents and warrants that, at
all times during the Ground Lease Term, it will defend and hold harmless Ground
Lessee and its successors and assigns in their peaceable, quiet, exclusive and
undisputed enjoyment of the Parcel against the claims of all Persons.
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ARTICLE VI
USE OF THE PARCEL
Ground Lessee may use the Parcel for any legal business purpose,
including, without limitation, the same purpose and business as Lessee may use
the Parcel for under the Lease Agreement.
ARTICLE VII
ALTERATIONS
During the Ground Lease Term, Ground Lessee, in its discretion, may
from time to time alter or improve, or cause to be altered or improved, the
Parcel or any part thereof, in any manner it deems necessary or desirable, to
carry on any activity permitted hereunder, including the construction, addition,
alteration, demolition and removal of any buildings, equipment, roads or other
structures, items of personal property or fixtures and any grading or
landscaping of the Parcel; PROVIDED, HOWEVER, that so long as the Lease
Agreement is in effect, Ground Lessee shall refrain from any action permitted
under this Article VII, except to the extent such action is undertaken by Ground
Lessee in its capacity as Lessor under, and in accordance with, the Lease
Agreement.
ARTICLE VIII
LIENS
Ground Lessor shall not directly or indirectly create, incur, assume
or suffer to exist any Lien on or with respect to the Parcel, the Facility,
title thereto or any interest therein, except Permitted Liens, and Ground Lessor
shall promptly, at its own expense, take such action as may be necessary to duly
discharge any such Lien. If Ground Lessor shall fail to promptly discharge any
such Lien, Ground Lessee, at its option, may cause the same to be so discharged,
and sums expended by Ground Lessee in connection therewith shall be repaid by
Ground Lessor to Ground Lessee on demand.
ARTICLE IX
TAXES AND CHARGES
So long as the Lease Agreement is in effect, Ground Lessor
acknowledges that the Lessee under the Lease Agreement shall be responsible for
the payment of all Taxes due with respect to the Parcel and the Facility. If
the Lease Agreement shall expire
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or be terminated and this Ground Lease shall remain in effect, Ground Lessor
shall pay or cause to be paid all Taxes due with respect to the Parcel and the
Facility; PROVIDED, HOWEVER, that Ground Lessor shall not be required to make
any such payments if Ground Lessor shall in good faith be contesting any such
Taxes, so long as such contest does not involve any material danger of the sale,
forfeiture or loss of any part of the Parcel, the Facility, title thereto or any
interest of Ground Lessee therein. If Ground Lessor fails to make any payment
required to be made by Ground Lessor, Ground Lessee at its option may pay the
same and any moneys so paid by Ground Lessee shall be repaid on an After-Tax
Basis by Ground Lessor to Ground Lessee on demand.
ARTICLE X
INSURANCE
So long as the Lease Agreement is in effect, Ground Lessor
acknowledges that the Lessee under the Lease Agreement shall be responsible for
maintaining insurance coverage with respect to the Parcel and the Facility in
accordance with SECTION 14 of the Lease Agreement. If the Lease Agreement shall
expire or be terminated and this Ground Lease shall thereafter remain in effect,
Ground Lessor shall, without cost to Ground Lessee, maintain or cause to be
maintained in effect throughout the remaining Ground Lease Term, with insurers
of recognized responsibility, insurance policies with respect to the Parcel and
the Facility insuring against loss or damage to the person and property of
Ground Lessee and others, all from such risks and in such amounts as owners of
similar properties maintain with respect to such property, including liability
insurance in an amount reasonably satisfactory to Ground Lessee; PROVIDED,
HOWEVER, that Ground Lessor shall in no event be required to maintain any such
insurance in amounts greater than is generally maintained by responsible owners
of similar property. If the Ground Lessor shall fail to maintain such insurance
during the remaining Ground Lease Term, the Ground Lessee may (but shall be
under no obligation to) maintain or cause such insurance to be maintained at the
sole cost and expense of the Ground Lessor.
ARTICLE XI
CASUALTY OR CONDEMNATION
Any payment, including condemnation awards, received at any time by
Ground Lessor or Ground Lessee from any Governmental Authority or other Person
as a result of the occurrence of an Event of Loss or a Requisition of Use when
the Lease Agreement is in effect shall be distributed in accordance with SECTION
13 of the Lease Agreement. Any such payment received by Ground Lessor or Ground
Lessee after the Lease Agreement has expired or has been terminated shall be
applied as follows: so much
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of such payments as shall be necessary to pay in full all sums owing to Ground
Lessee, as lessor under the Lease Agreement or under any other Operative
Document shall be retained by, or paid over to, Ground Lessee, and the balance
(if any) of such payments shall be retained by, or paid over to Ground Lessor.
ARTICLE XII
DEFAULT
Notwithstanding anything to the contrary contained in this Ground
Lease, no event, occurrence or failure to perform by (or on behalf of) Ground
Lessee shall constitute a default or an event of default hereunder, and Ground
Lessor shall have no right (whether conferred by statute or otherwise) to
terminate this Ground Lease or to take possession of the Parcel, so long as any
sums remain to be paid at any time by Lessee under the Lease Agreement or any
other Operative Document. After the expiration or termination of the Lease
Agreement, the following events shall constitute an event of default hereunder:
(a) The Ground Lessee shall consent to the appointment of a receiver,
trustee, liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of itself or for any substantial part of its property, or the Ground
Lessee shall not pay or generally be unable to pay, or admit in writing its
inability to pay, its debts generally as they come due, or shall make a general
assignment for the benefit of creditors;
(b) The Ground Lessee shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law (as now or hereafter in
effect), or the Ground Lessee shall consent to the entry of an order for relief
in an involuntary case under any such law;
(c) An order, judgment or decree shall be entered by any court having
jurisdiction in the premises for relief in respect of the Ground Lessee in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law (as now or hereafter in effect), or appointing a receiver, liquidator,
assignee, or for any substantial part of its property, or sequestering any
substantial part of the property of the Ground Lessee, or, ordering the winding
up or liquidating of the Ground Lessee's affairs, and any such order, judgment
or decree shall remain in force undismissed, unstayed or unvacated for a period
of sixty (60) days after the date of entry thereof; or
(d) A petition against the Ground Lessee in a proceeding under
applicable bankruptcy laws or other insolvency laws, as now or hereafter in
effect, shall be filed and shall not be withdrawn or dismissed within ninety
(90) days thereafter, or if, under the
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provisions of any law providing for reorganization or liquidation of
corporations which may apply to the Ground Lessee, any court of competent
jurisdiction shall assume jurisdiction, custody or control of the Ground Lessee
or of any substantial part of its property and such jurisdiction, custody or
control shall remain in force unrelinquished, unstayed or unterminated for a
period of sixty (60) days.
Ground Lessor shall have the right, after the occurrence and during the
continuance of an event of default hereunder (provided that the Lease Agreement
has terminated or expired), to take possession of the Parcel or to terminate
this Ground Lease by giving thirty (30) days written notice to Ground Lessee of
Ground Lessor's election to terminate same. The remedies set forth above are
exclusive of any other rights or remedies of Ground Lessor which exist at law or
in equity.
ARTICLE XIII
SUBLEASE; ASSIGNMENT; SALE
Section 13.01. BY GROUND LESSEE. Ground Lessee will not assign this
Ground Lease or any of its rights or interests hereunder and will not sublease
all or any portion of the Parcel, except that Ground Lessee may from time to
time:
(a) sublease all or any part of the Parcel and/or the Facility
pursuant to the Lease Agreement;
(b) sublease all or any part of the Parcel and/or the Facility or
assign this Ground Lease or any interests of Ground Lessee hereunder to any
Person after the termination or expiration of the Lease Agreement; and
(c) assign Ground Lessee's interests hereunder in connection with an
assignment of its interests as Lessor under the Lease Agreement.
In addition, in the event the Ground Lessor enters into a new leasing
arrangement pursuant to Section 19(a) of the Lease Agreement, the Ground Lessee
shall assign its interests hereunder to the lessor under such new leasing
arrangement. Any subletting or assignment permitted hereunder shall relieve
Ground Lessee of its obligations hereunder.
Section 13.02. BY GROUND LESSOR. So long as the Ground Lessee
(including its successors and assigns) is also the Lessor under the Lease
Agreement, Ground Lessor will not sell, transfer or convey the Parcel or any of
its rights or interests in the Parcel or assign this Ground Lease or any rights
or interests of Ground Lessor hereunder.
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ARTICLE XIV
NOTICES
Unless otherwise specifically provided herein, all notices and other
communications required or permitted hereunder shall be in writing and shall be
addressed and become effective as provided in the Lease Agreement.
ARTICLE XV
BINDING EFFECT; SUCCESSORS AND ASSIGNS
The terms and provisions of this Ground Lease and the respective
rights and obligations of Ground Lessee and Ground Lessor hereunder shall be
binding upon, and inure to the benefit of, their respective permitted successors
and assigns.
ARTICLE XVI
POSSESSION UPON TERMINATION
Upon termination of the Ground Lease Term, whether by lapse of time or
because of any of the conditions or provisions contained herein, Ground Lessee
will peaceably and quietly yield up and surrender possession of the Parcel to
Ground Lessor without representation or warranty.
ARTICLE XVII
GROUND LESSOR'S BANKRUPTCY
It is expressly understood and agreed that for purposes of Section
365(h) of the Bankruptcy Code, 11 U.S.C. Section 365(h), (a) Ground Lessee
shall be deemed to be in possession of the Parcel by virtue of the possessory
interest therein granted to Ground Lessee under this Ground Lease whether or not
all or any part of the Parcel has been subleased by Ground Lessee and (b) in the
event of any rejection or disaffirmance of this Ground Lease in any bankruptcy
or similar proceeding relating to Ground Lessor, Ground Lessee may elect to
remain in possession of the Parcel for the balance of the Ground Lease Term,
including all extensions exercisable hereunder, at the option of Ground Lessee.
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ARTICLE XVIII
INDEMNIFICATION
The Ground Lessor hereby agrees to indemnify, protect and keep
harmless each Indemnified Person pursuant to the provisions of SECTION 23 of the
Lease Agreement, which provisions are hereby incorporated herein by reference as
if fully set forth herein.
ARTICLE XIX
THE LEASE AGREEMENT
So long as the Lease Agreement remains in effect or the Lessee under
the Lease Agreement is otherwise liable for amounts in respect thereof or under
the other Operative Documents, Ground Lessor shall look solely to the Lessee
under the Lease Agreement for the performance and discharge of Ground Lessee's
obligations and liabilities under this Ground Lease (other than with respect to
Lessor's Liens and the restrictions on Ground Lessee's rights of assignment and
subleasing under Section 13.01) with the same force and effect as though Ground
Lessee had performed the same, and Ground Lessee shall have no liability
hereunder, no default or event of default shall arise hereunder and the rights
of Ground Lessee hereunder shall not be affected, as a result of any failure of
Ground Lessee to perform or discharge such liabilities or obligations
notwithstanding (a) any continuation of any such failure after the end of the
term of the Lease Agreement or (b) that such failure first became known or
apparent after the end of the term of the Lease Agreement. No such performance
or discharge by or on behalf of the Lessee under the Lease Agreement shall be
deemed an acknowledgment by Ground Lessor of the Lessee under the Lease
Agreement as Ground Lessee hereunder, or a merger of the Lease Agreement with
this Ground Lease or a merger of the estate of Lessor under the Lease Agreement
with the estate of the Lessee thereunder.
ARTICLE XX
PERSONAL LIABILITY/LIMITED RECOURSE
Section 10.01. PERSONAL LIABILITY. No officer, director, stockholder
or employee of the Ground Lessee shall become personally liable for the
performance or observance of any agreements, obligations, covenants or
conditions to be performed or observed by Ground Lessee under this Ground Lease,
or any liabilities with respect thereto.
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Section 10.02. LIMITED RECOURSE. Except as otherwise provided in the
proviso to this SECTION 10.02, nothing contained in this Ground Lease or in the
other Operative Documents shall be construed as creating any liability on the
part of any past or present shareholder, limited partner or general partner of
the Ground Lessor, the General Partner, or the MGP General Partners to pay any
amount on account of the Ground Lessor's obligations hereunder or under any
other Operative Document to which it is a party or to perform any covenant of
the Ground Lessor contained herein or therein; provided, however, that nothing
in this SECTION 10.02 shall be construed (i) to relieve any Person from
liability for fraud, concealment, or other intentional wrongdoing for which such
Person would otherwise be liable under any Applicable Law, either directly or on
behalf of the Ground Lessor, (ii) to restrict the joinder in any action of any
necessary party in order to seek enforcement of rights against the Ground Lessor
or any other party to any Operative Document or to restrict injunctive relief
against any Person to the extent necessary to obtain performance by the Ground
Lessor of any of its obligations under any Operative Document, or (iii) to
relieve any Person from liability for distributions, payments, or other
transfers made to such Person in violation of the Operative Documents or in
violation of or otherwise recoverable under any Applicable Law.
ARTICLE XXI
MISCELLANEOUS
Section 21.01. SEVERABILITY. Any provision of this Ground Lease that
shall be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 21.02. AMENDMENT. Neither this Ground Lease nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification shall be sought.
Section 21.03. HEADINGS. The Table of Contents and headings of the
various Articles and Sections of this Ground Lease are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
Section 21.04. COUNTERPARTS. This Ground Lease may be executed by
the parties hereto in separate counterparts. All such counterparts shall
together constitute but one and the same instrument.
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Section 21.05. GOVERNING LAW. THIS GROUND LEASE SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF WASHINGTON
APPLICABLE TO AGREEMENTS TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 21.06. RECORDING. This Ground Lease or a memorandum hereof
may be recorded by either party hereto in the appropriate real estate records
and Ground Lessor shall pay all costs of recording and all applicable recording
or transfer taxes or related charges.
Section 21.07. ESTOPPEL CERTIFICATES. Ground Lessor will execute,
acknowledge and deliver to Ground Lessee, promptly upon request an estoppel
certificate certifying (a) that this Ground Lease is unmodified and in full
force and effect (or, if there have been modifications, that this Ground Lease
is in full force and effect, as modified, and stating the date of each
instrument so modifying this Ground Lease), (b) the dates, if any, to which rent
has been paid and (c) whether any default exists hereunder known to it and, if
any such default exists, specifying the nature and period of existence thereof
and what action it is taking or proposes to take with respect thereto, and
whether notice thereof has been given to Ground Lessee. Any such certificate
may be relied upon by the Lessor, Ground Lessee and any prospective purchaser or
transferee of Ground Lessee's interest under this Ground Lease or any part
thereof.
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IN WITNESS WHEREOF, the undersigned have each caused this Ground Lease
to be duly executed and delivered and their corporate seals to be hereunto
affixed and attested as of the day and year first above written.
Ground Lessor:
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CROWN PACIFIC LIMITED PARTNERSHIP
BY CROWN PACIFIC MANAGEMENT
LIMITED PARTNERSHIP,
its general partner
By:
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Name:
Title:
Ground Lessee:
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SELCO SERVICE CORPORATION
By:
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Name:
Title:
SCHEDULE A
(the Parcel)