Exhibit 10.7
LEASE AGREEMENT
by and between
DELAWARE FRAME (TX), LP,
a Delaware limited partnership
as LANDLORD
and
ATRIUM COMPANIES, INC.,
a Delaware corporation,
as TENANT
Premises: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
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Dated as of: November 18, 1999
TABLE OF CONTENTS
PAGE
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.....................................................................9
6. Basic Rent..............................................................10
7. Additional Rent.........................................................10
8. Net Lease; Non-Terminability............................................11
9. Payment of Impositions..................................................12
10. Compliance with Laws and Easement Agreements; Environmental Matters....13
11. Liens; Recording.......................................................14
12. Maintenance and Repair.................................................15
13. Alterations and Improvements...........................................15
14. Permitted Contests.....................................................16
15. Indemnification........................................................17
16. Insurance..............................................................18
17. Casualty and Condemnation..............................................21
18. Termination Events.....................................................22
19. Restoration............................................................23
20. Procedures Upon Purchase...............................................24
21. Assignment and Subletting; Prohibition against Leasehold Financing.....25
22. Events of Default......................................................27
23. Remedies and Damages Upon Default......................................29
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24. Notices................................................................32
25. Estoppel Certificate...................................................32
26. Surrender..............................................................32
27. No Merger of Title.....................................................33
28. Books and Records......................................................33
29. Determination of Value.................................................34
30. Non-Recourse...........................................................36
31. Financing..............................................................36
32. Subordination, Non-Disturbance and Attornment..........................36
33. Financial Covenants....................................................36
34. Bifurcation of Lease...................................................37
35. Tax Treatment; Reporting...............................................37
36. Option to Purchase.....................................................38
37. Security Deposit.......................................................38
38. Excess Land............................................................40
39. Miscellaneous..........................................................40
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Permitted Encumbrances
Exhibit "D" - Basic Rent Payments
Exhibit "E" - Acquisition Cost
Exhibit "F" - Percentage Allocation of Basic Rent
Exhibit "G" - Guarantors
Exhibit "H" - Tenant Post-Closing Environmental Obligations
Exhibit "I" - Post-Closing Repair Obligations
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LEASE AGREEMENT, made as of this 18th day of November, 1999, between
DELAWARE FRAME (TX), LP, a Delaware limited partnership ("LANDLORD"), with an
address c/o W.P. ▇▇▇▇▇ & Co., Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and ATRIUM COMPANIES, a Delaware corporation ("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
(hereinafter referred to collectively as the "LEASED PREMISES" and individually
as the "Dallas Premises" "Industrial Premises" and "▇▇▇▇▇▇▇▇▇▇ Premises" each of
which premises is more particularly described in the applicable description in
EXHIBIT "A" attached hereto and made a part hereof and shall include the
portions of items (a), (b) and (c) of this Paragraph 1 located thereon or
therein and appertaining thereto): (a) the premises described in EXHIBIT "A"
hereto, together with the Appurtenances (collectively, the "LAND"); (b) the
buildings, structures and other improvements 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" of each of the Related Premises shall mean
the amount set forth opposite such premises on EXHIBIT "E" hereto.
"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.
"Affected Premises" shall mean the Affected Premises as
defined in Paragraph 18.
"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, 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.
"Casualty" shall mean any injury to or death of any person or
any loss of or damage to any property (including the Leased Premises) included
within or related to the Leased Premises or arising from the Adjoining Property.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"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.
"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, reasonable
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 set forth in Paragraph
33.
"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).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter be approved in writing by Tenant.
"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 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 any
Hazardous Substance, in each case as amended and as now or hereafter in effect,
and (ii) any common law or equitable doctrine (including, without limitation,
injunctive relief and tort doctrines such as negligence, nuisance, trespass and
strict liability) that may impose liability or obligations 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
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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, (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, (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 any Related 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).
"Excess Land" shall mean Excess Land as defined in Paragraph
38.
"Fair Market Value" of either the Leased Premises or any
Related Premises, as the case may be, and the context may require, shall mean
the higher of (a) the fair market value of the Leased Premises or any Related
Premises, as the case may be, as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased Premises
or Related Premises, as the case may be, 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.
"Fair Market Value Date" shall mean the date when the Fair
Market Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately
available funds which at the time of payment are legal tender for the payment of
public and private debts in the United States of America.
"First Option" shall mean First Option as defined in Paragraph
36.
"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.
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"Guarantors" shall mean, jointly and severally, those Persons
listed on EXHIBIT "E".
"Guaranty" shall mean the Guaranty and Suretyship Agreement
dated as of the date hereof from Guarantor to Landlord guaranteeing the payment
and performance by Tenant of all of Tenant's obligations under the Lease.
"Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant,
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
regulated under any Environmental Law or which may form the basis for any
Environmental Violation, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead,
polychlorinated biphenyls.
"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.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"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 related to accessibility to, usability by, and discrimination against,
disabled individuals) and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Tenant or to any of the Leased
Premises or Related Premises, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or restoration of any of
the Leased Premises or Related Premises, even if compliance therewith
necessitates structural changes or improvements or
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results in interference with the use or enjoyment of any of the Leased Premises
or Related 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.
"Major Alteration Cost" shall mean $500,000, increased
annually as of the first day of each second Lease Year by an amount determined
by multiplying the Major Alteration Cost then in effect by the percentage
increase in the CPI over such two year period capped at 5% and adding the
product of such multiplication to the Major Alteration Cost then in effect.
"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 or as otherwise required under this Lease.
"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 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.
"Option Exercise Notice" shall mean Option Exercise Notice as
defined in Paragraph 36.
"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
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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 (i) "make whole" or yield maintenance clause requiring a prepayment
premium or (ii) a defeasance payment (such defeasance payment to be an amount
equal to the positive difference between (a) the total amount required to
defease a Loan and (b) the outstanding principal balance of the Loan as of the
date of such defeasance, in the case of either (i) or (ii) in an amount
sufficient to compensate the Lender for the loss of the benefit of the Loan due
to prepayment.
"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 interest rate per annum as
published, from time to time, in THE WALL STREET JOURNAL as the "Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the lowest rate of
interest charged by any "large U.S. money center commercial banks" and Landlord
makes no representations or warranties to that effect. In the event THE WALL
STREET JOURNAL ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate
(the "DISCOUNT RATE") on ninety-one (91) day bills ("TREASURY BILLS") issued
from time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Purchase Price" shall mean (a) with respect to the First
Option, the greater of (i) Acquisition Cost of the Leased Premises and the
applicable Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Purchase Price and (ii) Fair Market
Value and (b) with respect to the Second Option, the greater of (x) Acquisition
Cost of the Leased Premises and (y) Fair Market Value.
"Related Premises" shall mean any one of the Dallas Premises,
Industrial Premises, ▇▇▇▇▇▇▇▇▇▇ Premises.
"Relevant Amount" shall mean the Termination Amount, the
Default Termination Amount or the Purchase Price, 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), or (e) the date on which Landlord receives an Option Exercise
Notice.
"Remaining Premises" shall mean the Related Premises which are
not Affected Premises under Paragraph 18.
"Renewal Term" shall mean Renewal Term as defined in Paragraph
5.
"Rent" shall mean, collectively, Basic Rent and Additional
Rent.
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"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased Premises by any
governmental authority, civil or military, whether pursuant to an agreement with
such governmental authority in settlement of or under threat of any such
requisition or confiscation, or otherwise.
"S & P" shall mean Standard & Poor's Corporation.
"Second Option" shall mean Second Option as defined in
Paragraph 36.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the State of Texas.
"Subsidiary(ies)" of any Person means a corporation or
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, but such Person.
"Surviving Obligations" shall mean any obligations of Tenant
under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a
portion of any of the Leased Premises (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 means, or
(b) any de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the law applicable to the Related Premises.
"Term" shall mean the Term as defined in Paragraph 5,
including any exercised Renewal Term.
"Termination Amount" shall mean the greater of (a) the sum of
the Fair Market Value and the applicable Prepayment Premium which Landlord will
be required to pay in prepaying any Loan with proceeds of the Termination Amount
or (b) the sum of the Acquisition Cost and the applicable Prepayment Premium
which Landlord will be required to pay in prepaying any Loan with proceeds of
the Termination Amount.
"Termination Date" shall mean the Termination Date as defined
in Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party Purchaser
as defined in Paragraph 21(f).
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"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.
3. TITLE AND CONDITION.
(a) The Leased Premises are demised and let subject to (i) the
Mortgage and Assignment presently in effect, (ii) the rights of any Persons in
possession of the Leased Premises, (iii) the existing state of title of any of
the Leased Premises, including any Permitted Encumbrances, (iv) any state of
facts which an accurate survey or physical inspection of the Leased Premises
might show, (v) all Legal Requirements, including any existing violation of any
thereof, and (vi) 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 are 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 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 IT
WAS THE OWNER AND OCCUPANT OF THE LEASED PREMISES AND IS FULLY FAMILIAR WITH THE
LEASED PREMISES AND THAT THE LEASED PREMISES ARE 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 acknowledges that (i) except, as provided in
Paragraph 36 hereof with respect to an option to purchase the Leased Premises,
Tenant has only the leasehold right of possession and use of the Leased Premises
as provided herein, (ii) this Lease is a single Lease for multiple properties
and shall not be terminable with respect to less than all of the Leased Premises
or severable with respect to any one or more Related Premises except as
specifically provided herein, (iii) the Improvements conform to all material
Legal Requirements and all Insurance Requirements, (iv) to the best of its
knowledge all easements necessary or appropriate for the use or operation of the
Leased Premises have been obtained, (v) to the best of
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its knowledge all contractors and subcontractors who have performed work on or
supplied materials to the Leased Premises have been fully paid to date, and all
materials and supplies have been fully paid for, (vi) the Improvements have been
fully completed in all material respects in a workmanlike manner of first class
quality, and (vii) to the best of its knowledge 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 the expiration or
earlier termination of this Lease (unless Tenant or its affiliate or designee
acquires the Leased Premises, in which instance such assignment shall become
permanent and irrevocable), whereupon such assignment shall cease and all of
said Warranties, guaranties, indemnities and other rights shall automatically
revert to Landlord. Tenant shall enforce all Warranties in accordance with their
respective terms.
4. USE OF LEASED PREMISES; QUIET ENJOYMENT.
(a) Tenant may occupy and use the Leased Premises for office
and manufacturing facilities and for no other purpose without the prior written
consent of Landlord which shall not be unreasonably withheld or delayed. 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 (i) violate any Law, Environmental Law or
Legal Requirement, (ii) make void or voidable or cause any insurer to cancel any
insurance required by this Lease, or make it impossible to obtain any such
insurance, (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 physical
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 as Landlord may select and upon
reasonable notice to Tenant (except in the case of any emergency, in which event
no notice shall be required) for the purpose of inspecting the Leased Premises,
verifying compliance or 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 (such 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 two
hundred forty-eighth (248th) calendar month next following the date hereof (the
"EXPIRATION DATE"). If all Rent and all other sums due hereunder shall not have
been fully paid by the end of the Term, Landlord may, at its option, extend the
Term until all said sums shall have been fully paid.
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(b) Provided that if, on or prior to the Expiration Date or
any other Renewal Date (as hereinafter defined) this Lease shall not have been
terminated pursuant to any provision hereof, then on the Expiration Date and on
the fifth (5th) anniversary of the Expiration Date (the Expiration Date and 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, then Landlord shall have the right during the remainder of the
Term then in effect, to (i) advertise the availability of any of the Leased
Premises for sale or reletting and to erect upon any of the Leased Premises
signs indicating such availability and (ii) show any of the Leased Premises to
prospective purchasers or tenants or their agents at such reasonable times as
Landlord may select.
6. BASIC RENT. Tenant shall pay to Landlord, as annual rent
for the Leased Premises during the Term, the amounts determined in accordance
with EXHIBIT "D" hereto ("BASIC RENT"), commencing on the first day of the first
month following the date hereof and continuing on the same day of each month
thereafter during the Term (each such day being a "BASIC RENT PAYMENT DATE").
Each such rental payment shall be made to Landlord by check or by wire transfer
at its address set forth above to such other address as Landlord may direct by
not less than fifteen (15) days prior written notice to Tenant. Basic Rent from
the date Landlord acquires the Leased Premises to and including November 30,
1999 shall be paid on the date Landlord acquires the Leased Premises.
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 and Landlord which are incurred in connection or
associated with (A) the ownership, use, non-use, occupancy, possession,
operation, condition, design, construction, maintenance, alteration, repair or
restoration of any of the Leased Premises, (B) the performance of any of
Tenant's obligations under this Lease, (C) any sale or other transfer of any of
the Leased Premises to Tenant under this Lease, (D) any Condemnation
proceedings, (E) the adjustment, settlement or compromise of any insurance
claims involving or arising from any of the Leased 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, (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 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 four percent (4%) of the
amount of such unpaid
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installment or portion thereof, provided, however, that with respect to the
first two late payments of all or any portion of any installment of Basic Rent
in any Lease Year, the Late Charge shall not be due and payable unless the Basic
Rent has not been paid within five (5) days' following the due date 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 an Event of
Default and which are in excess of the late charge and interest at the Default
Rate that is payable by Tenant to Landlord under Paragraphs 7(a)(ii) and
7(a)(iv) by reason of such late payment or non-payment or 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 expiration of any
applicable notice and cure period, (B) all overdue amounts of Additional Rent
relating to obligations which Landlord shall have paid on behalf of Tenant, from
five (5) days after the date on which Tenant receives notice 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.
8. NET LEASE; NON-TERMINABILITY.
(a) This is a net lease and all Monetary Obligations shall be
paid without notice or demand and without set-off, counterclaim, recoupment,
abatement, suspension, deferment, diminution, deduction, reduction or defense
(collectively, a "SET-OFF").
(b) Except as otherwise expressly provided herein, this Lease
and the rights of Landlord and the obligations of Tenant hereunder shall not be
affected by any event or for any reason, including the following: (i) any damage
to or theft, loss or destruction of any of the Leased Premises, (ii) any
Condemnation, (iii) Tenant's acquisition of ownership of any of the Leased
Premises other than pursuant to an express provision of this Lease, (iv) any
default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement, (v) any latent or other defect in any of the
Leased Premises, (vi) the breach of any warranty of any seller or manufacturer
of any of the Equipment, (vii) any violation of any provision of this Lease by
Landlord, except for dispossession, eviction or ejection of Tenant in violation
of this Lease, (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, except for dispossession, eviction or ejection of
Tenant in violation of this Lease, (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.
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(c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and the obligations of Tenant hereunder shall continue unaffected
unless the requirement to pay or perform the same shall have been terminated
pursuant to an express provision of this Lease. All Rent payable by Tenant
hereunder shall constitute "rent" for all purposes (including Section 502(b)(6)
of the 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.
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, gross receipts 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 as a result of or
arising in respect of the acquisition, ownership, occupancy, leasing, use,
possession or sale of any of the Leased Premises, any activity conducted on any
of the Leased Premises, or the Rent, or (v) any Lender by reason of any Note,
Mortgage, Assignment or other document evidencing or securing a Loan 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) 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 or (C) any capital gains tax
imposed on Landlord in connection with the sale of the Leased Premises to any
Person. 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 following the occurrence of
an Event of Default and, in any event if required by Lender, 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 and any reserves for capital improvements, deferred maintenance or
repair required by any Lender. Landlord shall reasonably determine the amount of
the Escrow Charges and of each Escrow Payment. As long as the Escrow Payments
are being held by Landlord the
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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 Changes. 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 Tenant shall promptly remediate or undertake any
other appropriate response action to correct any existing Environmental
Violation, however immaterial. Any and all reports prepared with respect to the
Leased Premises shall be provided to Landlord and Lender upon finalization of
such report.
(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, prior written consent of Landlord, which shall not be unreasonably
withheld or delayed.
(c) In connection with any sale, financing or refinancing of
the Leased Premises, within the six month period prior to the expiration of the
Term, if required by Lender or at any other time that, in the opinion of
Landlord, 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 ---------------- 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 available and as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments, and shall
make reasonably available for meetings with the Site Reviewers appropriate
personnel having knowledge of such matters. The Site Reviewers shall conduct
themselves in such a manner as not to unreasonably interfere with the operation
of Tenant's business and shall give written notice of the proposed site
investigation and date of entry at least three (3) days prior to such requested
date of entry. If a Site Assessment is conducted because Landlord or Lender has
reasonable cause to believe that an Environmental Violation exists or if any
Event of Default exists, the cost of performance and reporting any such Site
Assessments shall be paid by Tenant. The cost of all other Site Assessments
shall be paid for by Landlord.
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(d) If an Environmental Violation occurs or is found to exist
and, in Landlord's reasonable judgment (based upon the estimate of Landlord's
qualified environmental consultant), 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 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 thereto which are identical to the covenants contained in
this Paragraph 10.
11. LIENS; RECORDING.
(a) Tenant shall not, directly or indirectly, create or permit
to be created or to remain and shall promptly discharge or remove any lien, levy
or encumbrance on any of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Lease, other than any Mortgage or Assignment, the
Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord or any
Easement Agreement approved in writing by Landlord and Lender, such approval not
to be unreasonably withheld. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR
UNDER TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES
OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF
THE LEASED PREMISES. LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED
PREMISES REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "RECORD") all such instruments as may be required or permitted by
any present or
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future Law in order to evidence the respective interests of Landlord and Tenant
in any of the Leased Premises, and shall cause a memorandum of this Lease (or,
if such a memorandum cannot be recorded, this Lease), and any supplement hereto
or thereto, to be recorded in such manner and in such places as may be required
or permitted by any present or future Law in order to protect the validity and
priority of this Lease.
12. MAINTENANCE AND REPAIR.
(a) Tenant shall at all times maintain each Related Premises
and the Adjoining Property in as good repair and appearance as each is 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 each
Related 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). Such Alterations shall include
Alterations required in order to insure that the Improvements are "year 2000"
compliant (that is capable of correctly and accurately processing, providing
and/or receiving date data from, into and between the 20th and 21st centuries,
and the years 1999 and 2000 and beyond, including recognizing that the year 2000
is a leap year; and does not operate abnormally or inaccurately or cease to
operate as a result of the inability to correctly and accurately process,
provide and/or receive date data from, into, and between the 20th and 21st
centuries and the years 1999 and 2000 and beyond). Landlord shall not be
required to make any Alteration, whether foreseen or unforeseen, or to maintain
any of the Related 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
any of the Leased Premises, (ii) violate the provisions of any restrictive
covenant affecting any of the Leased Premises, (iii) hinder or obstruct any
easement or right-of-way to which any of the Leased Premises is subject or (iv)
impair the rights of others in, to or under any of the foregoing, Tenant shall,
promptly after receiving notice or otherwise acquiring knowledge thereof, either
(A) obtain from all necessary parties waivers or settlements of all claims,
liabilities and damages resulting from each such encroachment, violation,
hindrance, obstruction or impairment, whether the same shall affect Landlord,
Tenant or both, or (B) take such action as shall be necessary to remove all such
encroachments, hindrances or obstructions and to end all such violations or
impairments, including, if necessary, making Alterations.
13. ALTERATIONS AND IMPROVEMENTS.
(a) Tenant shall have the right, without having obtained the
prior written consent of Landlord and Lender and provided that no Event of
Default then exists, to make (i) Alterations or a series of related Alterations
that, as to any such Alterations or series of related Alterations, do not cost
in excess of the Major Alteration Cost with respect to any Related Premises and
(ii) to install Equipment in the Improvements or accessions to the Equipment
that, as to such Equipment or accessions, do not cost in excess of the Major
Alteration Cost, so long as at the time of construction or installation of any
such Equipment or Alterations no Event of
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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 the Major
Alteration Cost, 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"), 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
requirements of all insurance policies required to be maintained by Tenant
hereunder, (v) if any such Work involves the replacement of Equipment or parts
thereto, all replacement Equipment or parts shall 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 (assuming such Replaced Equipment was then in the condition required
by this Lease), (vi) Tenant shall promptly discharge, remove or bond 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 Paragraphs 12(a) and 19(a), whether or not such Work involves
restoration of the Leased Premises.
(c) Tenant shall cause the repairs described in EXHIBIT "I" to
be completed by the expiration of the time periods provided therein.
14. PERMITTED CONTESTS. Notwithstanding any other provision of
this Lease, Tenant shall not be required to (a) pay any Imposition, (b) comply
with any Legal Requirement, (c) discharge or remove any lien referred to in
Paragraph 11 or 13 or (d) take any action with respect to any encroachment,
violation, 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, (v) the cancellation or
increase in the rate of any insurance policy or a statement by the carrier that
coverage will be denied or (vi) the enforcement or execution of any injunction,
order or Legal Requirement with respect to the Permitted Violation. 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 or other
entity reasonably approved by Landlord
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(provided, however, that a court of competent jurisdiction shall be deemed
reasonable), 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, ANY LEGAL
REQUIREMENT OR ANY PERMITTED ENCUMBRANCE OR ANY ENCUMBRANCE TENANT CONSENTED TO
OR THE MORTGAGE OR ASSIGNMENT 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. TENANT SHALL NOT BE RESPONSIBLE FOR
COSTS ARISING FROM AN ENVIRONMENTAL VIOLATION TO THE EXTENT THAT SUCH
ENVIRONMENTAL VIOLATION WAS DIRECTLY CAUSED BY THE INTENTIONAL ACTS OF LANDLORD
OR LANDLORD'S AGENTS (OTHER TENANT AND TENANT'S AGENTS).
(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), THE COST OF WHICH SHALL BE PAID BY
TENANT AND (II) SUCH INDEMNITEE SHALL NOTIFY TENANT TO RESIST
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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 REASONABLE
COST OF SUCH COUNSEL SHALL BY PAID BY TENANT.
(C) THE OBLIGATIONS OF TENANT UNDER THIS PARAGRAPH 15 WITH
RESPECT TO ANY MATTER THAT EXISTED OR OCCURRED PRIOR TO THE EXPIRATION,
TERMINATION OR REJECTION IN BANKRUPTCY OF THIS LEASE SHALL SURVIVE ANY
TERMINATION, EXPIRATION OR REJECTION IN BANKRUPTCY OF THIS LEASE.
THE INDEMNITY SET FORTH IN THIS SECTION 15 SHALL NOT BE IMPAIRED OR AFFECTED BY
NEGLIGENCE ON THE PART OF LANDLORD OR ANYONE ACTING ON BEHALF OF LANDLORD.
16. INSURANCE.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (to the extent that a Related 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
a Replacement Cost endorsements and shall contain deductibles not more than
$25,000 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 $15,000,000 per occurrence/annual aggregate
and all other coverage extensions that are usual and customary for properties of
this size and type provided, however, that the Landlord shall have the right to
require such higher limits as may be reasonable and customary for properties of
this size and type.
(iii) 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 or
States in which the Leased Premises are located.
(iv) Comprehensive Boiler and Machinery Insurance on any
of the Equipment or any other equipment on or in the Leased Premises in an
amount not less than $5,000,000 per accident for damage to property. Either such
Boiler and Machinery policy or the All-Risk policy required in (i) above shall
include at least $1,000,000 per incidence for Off-Premises Service Interruption,
$1,000,000 for Expediting Expenses and Ammonia Contamination, and $500,000 for
Hazardous Materials Clean-Up Expense and may contain a deductible not to exceed
$50,000.
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(v) Business Interruption and Extra Expense Insurance at
limits to cover 100% of losses and/or expenses incurred over 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 the Landlord under this Lease.
(vi) During any period in which substantial Alterations at
any Related 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, workers'
compensation and automobile liability insurance with respect to the Improvements
being constructed, altered or repaired.
(vii) Environmental insurance if requested by Landlord and
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.
(b) The insurance required by Paragraph 16(a) shall be written
by companies which have an investment grade rating of "A" or better or a
comparable claims paying ability assigned by S & P or equivalent rating agency
approved by Landlord and Lender and which are admitted in, and approved to write
insurance policies by, the State Insurance Department for the states in which
the Leased Premises are located. 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 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.
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(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least thirty (30) days prior to the expiration date of
such policy, and shall promptly deliver to Landlord all original certificates of
insurance.
(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 upon Landlord's request, but not more often than once each
Lease Year, and amended as necessary based on Replacement Cost Valuations. The
original or a certificate 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 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 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 payable under clauses (ii), (iii) and (iv) 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) 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 by Landlord or Lender and applied as set forth in
Paragraph 17 or, if applicable, Paragraph 18. Tenant shall apply the Net Award
to restoration of the Leased Premises in accordance with the applicable
provisions of this Lease unless a Termination Event shall have occurred and
Tenant has given a Termination Notice.
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17. CASUALTY AND CONDEMNATION.
(a) If any Casualty occurs to any of the Related Premises,
Tenant shall give Landlord and Lender notice thereof as soon as practicable. So
long as no Event of Default exists Tenant is hereby authorized to adjust,
collect and compromise all claims under any of the insurance policies required
by Paragraph 16(a) (except public liability insurance claims payable to a Person
other than Tenant, Landlord or Lender) and to execute and deliver on behalf of
Landlord all necessary proofs of loss, receipts, vouchers and releases required
by the insurers and Landlord and Lender shall have the right to join with Tenant
therein. Any final adjustment, settlement or compromise of any such claim shall
be subject to the prior written approval of Landlord and Lender, which shall not
be unreasonably withheld, and Landlord shall have the right to prosecute or
contest, or to require Tenant to prosecute or contest, any such claim,
adjustment, settlement or compromise. If an Event of Default exists, Tenant
shall not be entitled to adjust, collect or compromise any such claim or to
participate with Landlord in any adjustment, collection and compromise of the
Net Award payable in connection with a Casualty. Tenant agrees to sign, upon the
reasonable request of Landlord, all such proofs of loss, receipts, vouchers and
releases. Each insurer is hereby authorized and directed to make payment under
said policies, including return of 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. So long as no Event of Default exists,
Tenant is authorized to collect, settle and compromise the amount of any Net
Award and Landlord shall have the right to join with Tenant herein. If an Event
of Default exists, Landlord shall be authorized to collect, settle and
compromise the amount of any Net Award and Tenant shall not be entitled to
participate with Landlord in any Condemnation proceeding or negotiations under
threat thereof or 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,
which shall not be unreasonably withheld. 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 to any Related Premises, this Lease shall
continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary Obligations, except as provided in Paragraph 17(d).
Promptly after such Partial Casualty or Partial Condemnation, Tenant, as
required in Paragraph 12(a), shall commence and diligently continue to restore
the Leased Premises as nearly as possible to their value, condition and
character immediately prior to such event (assuming the Leased Premises to have
been in condition required by this Lease). So
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long as no Event of Default exists, any Net Award up to and including the Major
Alteration Cost shall be paid by Landlord to Tenant and Tenant shall restore the
applicable Related Premises in accordance with the requirements of Paragraph
13(b) of this Lease. Any Net Award in excess of the Major Alteration Cost 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.
(d) In the event of a Requisition of any of the Leased
Premises, if any Net Award payable by reason of such Requisition is (i) retained
by Landlord, each installment of Basic Rent payable on or after the date on
which the Net Award is paid to Landlord shall be reduced by a fraction, the
denominator of which shall be the total amount of all Basic Rent due from such
date to and including the last Basic Rent Payment Date for the then existing
Term and the numerator of which shall be the amount of such Net Award retained
by Landlord, or (ii) paid to Lender, then each installment of Basic Rent
thereafter payable shall be reduced in the same amount and for the same period
as payments are reduced under the Note until such Net Award has been applied in
full or until the Term has expired, whichever occurs first. Upon the expiration
of the Term, any portion of such Net Award which shall not have been previously
credited to Tenant shall be retained by Landlord.
18. TERMINATION EVENTS.
(a) If (i) all of any Related Premises shall be taken by a
Taking or (ii) any substantial portion of any Related Premises shall be taken by
a Taking or all or any substantial portion of any Related Premises shall be
totally damaged or destroyed by a Casualty and, in any such case, Tenant
certifies and covenants to Landlord that it will forever abandon operations at
the Related Premises, (any one or all of the Related Premises described in the
above clauses (i) and (ii) above being hereinafter referred to as the "AFFECTED
PREMISES" and 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 (a "TERMINATION NOTICE") of the Tenant's option to
terminate this Lease as to the Affected Premises in the form described in
Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease as to the Affected Premises 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 the Termination Amount and (iii) if the Termination Event is an
event described in Paragraph 18(a)(ii), the certification and covenant described
therein and a certified resolution of the Board of Directors of Tenant
authorizing the same. Promptly upon the delivery to Landlord of a Termination
Notice, Landlord and Tenant shall commence to determine Fair Market Value.
(c) If Landlord shall reject such offer to terminate this
Lease as to the Affected Premises pursuant to Paragraph 18(b) above 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 as to the Affected Premises on the
Termination Date and in such event the Termination Amount shall not be payable;
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provided that, if Tenant has not satisfied all Monetary Obligations and all
other obligations and liabilities under this Lease which have arisen as to the
Affected Premises (collectively, "REMAINING OBLIGATIONS") on or prior to the
Termination Date, then Landlord may, at its option, extend the date on which
this Lease may terminate as to the Affected Premises 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 as to the Affected Premises 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 Affected
Premises and (iii) the Net Award shall be retained by Landlord. Notwithstanding
anything to the 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
as to the Affected Premises 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 convey to Tenant or its designee the Affected Premises or
the remaining portion thereof, if any, all in accordance with Paragraph 20.
(e) In the event of the termination of this Lease as to the
Affected Premises as hereinabove provided, this Lease shall remain in full force
and effect as to the Remaining Premises; provided, that the Basic Rent for the
Remaining Premises to be paid after such termination shall be the Basic Rent
otherwise payable hereunder with respect to the Leased Premises multiplied by a
percentage equal to the sum of the percentages set forth on EXHIBIT "F" for the
Remaining Premises.
19. RESTORATION.
(a) Landlord (or Lender if required by any Mortgage) shall
hold any Net Award in excess of the Major Alteration Cost 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 reasonably approved by Landlord, (B) Landlord and Lender shall
be provided with mechanics' lien insurance (if available) and acceptable
performance and payment bonds (or other security reasonably satisfactory to
Landlord and Lender) 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 or unbonded;
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(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 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 reasonably agreed to by Landlord and Tenant; and
(vii) such other reasonable and customary 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 any refund to Tenant pursuant to Paragraph
19(b), such sum shall be retained by Landlord or, if required by a Note or
Mortgage, paid by Landlord to a Lender.
20. PROCEDURES UPON PURCHASE.
(a) If the Leased Premises or any Related 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 or its designee shall accept such title, subject, however, to the
Permitted Encumbrances and to all other liens, exceptions and restrictions on,
against or relating to any of the Leased Premises or the applicable Related
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 or the applicable
Related Premises which have been created by or resulted from acts or omissions
of Landlord after the date of this Lease, unless the same are Permitted
-24-
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 or any of the Related 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. If on the Purchase Date any Monetary Obligations remain
outstanding and no Net Award is payable to Tenant by Landlord or the amount of
such Net Award is less than the amount of the Monetary Obligations, then Tenant
shall pay to Landlord on the Purchase Date the amount of such Monetary
Obligations. Upon the completion of such purchase, this Lease and all
obligations and liabilities of Tenant hereunder with respect to the applicable
Related Premises (but not with respect to the Remaining Premises) shall
terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be delayed after
(i) the Termination Date, in the event of a purchase pursuant to Paragraph 18
or, (ii) the date scheduled for such purchase, in the event of a purchase under
any other provision of this Lease then (x) Rent shall continue to be due and
payable until completion of such purchase and (y) at Landlord's sole option,
Fair Market Value shall be redetermined and the Relevant Amount payable by
Tenant pursuant to the applicable provision of this Lease shall be adjusted to
reflect such redetermination.
(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) (i) Tenant shall have the right, upon thirty (30) days
prior written notice to Landlord and Lender, with no consent of Landlord or
Lender being required or necessary ("PREAPPROVED ASSIGNMENT") to assign this
Lease by operation of law or otherwise to any Person ("PREAPPROVED ASSIGNEE")
(A) that is, and at all times during the Term continues to be, a wholly-owned
subsidiary of Tenant or (B) that immediately following such assignment will have
a publicly traded unsecured senior debt rating of "Baa2" or better from ▇▇▇▇▇'▇
Investors Services, Inc. or a rating of "BBB" or better from S & P, and in the
event all of such rating agencies cease to furnish such ratings, then a
comparable rating by any rating agency reasonably acceptable to Landlord and
Lender. or (c) that complies with the requirements of Paragraph 33(d) of this
Lease.
(ii) If Tenant desires to assign this Lease, whether by
operation of law or otherwise, to a Person ("NON-PREAPPROVED ASSIGNEE") who
would not be a Preapproved
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Assignee ("NON-PREAPPROVED ASSIGNMENT") then Tenant shall, not less than ninety
(90) days prior to the date on which it desires to make a Non-Preapproved
Assignment submit to Landlord and Lender information regarding the following
with respect to the Non-Preapproved Assignee (collectively, the "REVIEW
CRITERIA"): (A) credit, (B) capital structure, (C) management, (D) operating
history, (E) proposed use of the Leased Premises and (F) risk factors associated
with the proposed use of the Leased Premises by the Non-Preapproved Assignee,
taking into account factors such as environmental concerns, product liability
and the like. Landlord and Lender shall review such information and shall
approve or disapprove the Non-Preapproved Assignee 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. In the event Landlord and Lender have not
responded within such thirty (30) day period, the Non-Preapproved Assignment
shall be deemed approved.
(b) 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 thirty percent (30%) of the
gross space in the Improvements of each Related Premises with no consent or
approval of Landlord being required or necessary ("Preapproved Sublet"). Other
than pursuant to Preapproved Sublets, at no time during the Term shall subleases
for more than thirty percent (30%) of the gross space in any Related Premises
without the prior written consent of Landlord, which consent shall be granted or
withheld based on a review of the Review Criteria 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.
(c) 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 Related Premises shall be subject and subordinate to the
provisions of this Lease. No assignment or sublease made as permitted by this
Paragraph 21 shall affect or reduce any of the obligations 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.
(d) With respect to any Preapproved Assignment or Preapproved
Sublet, Tenant shall provide to Landlord information reasonably required by
Landlord to establish that any proposed Preapproved Assignment or Preapproved
Sublet satisfies the criteria set forth above.
(e) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease, deliver a duplicate original copy
thereof to Landlord which, in the event of an assignment, shall be in recordable
form.
(f) As security for performance of its obligations under this
Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title
and interest of Tenant in and to all subleases 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
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to revoke said license and to collect such rents and sums of money and to retain
the same; provided that Tenant shall receive a credit against Rent next due and
owing for any amounts so collected and retained by Landlord. 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 or delayed, 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.
(g) 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.
(h) Subject to the provisions of Paragraph 36 hereof, 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 and such Third Party Purchaser agrees in writing to perform Landlord's
obligations under this Lease. 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:
(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 any Guarantor in any payment of principal or interest on
any obligations for borrowed money having an original principal balance of
$5,000,000 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 such obligation to become due prior to its stated maturity;
(v) a default by Tenant or any Guarantor beyond any
applicable cure period in the payment of rent under, or in the performance of
any other material provision
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of, any other lease between Landlord or any affiliate or Subsidiary of Landlord
or Corporate Property Associates 14 Incorporated that has, in the aggregate,
rental obligations over the term thereof of $5,000,000 or more if the landlord
under any such lease 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 or any Guarantor and the same shall remain undischarged for a
period of sixty (60) consecutive days;
(vii) 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 any of the Related 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;
(viii)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 Related 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 ninety (90) days after it is entered;
(ix) any of the Related Premises shall have been vacated
(unless required with respect to a Casualty or Alterations) or shall have been
abandoned;
(x) Tenant shall be liquidated or dissolved or shall begin
proceedings towards its liquidation or dissolution;
(xi) the estate or interest of Tenant in any of the
Related Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within ninety (90) days after it is made;
(xii) 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;
(xiii) a failure by Tenant to maintain in effect any
license or permit necessary for the use, occupancy or operation of any of the
Related Premises;
(xiv) The breach of any Covenant shall occur; or
(xv) an Event of Default (as defined in the Guaranty)
beyond any applicable cure period shall occur under the Guaranty.
(b) No notice or cure period shall be required in any one or
more of the following events except as specifically set forth in such clause:
(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) 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
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default consists of the failure to pay any Monetary Obligation under clause (i)
of Paragraph 22(a), the applicable cure period shall be five (5) days from the
date on which notice is given, but Landlord shall not be obligated to give
notice of, or allow any cure period for, any such default more than twice within
any Lease Year. If the default consists of a default under clause (ii) of
Paragraph 22(a), other than the events specified in clauses (B) and (C) of the
first sentence of this Paragraph 22(b), the applicable cure period shall be
thirty (30) days from the date on which notice is given or, if the default
cannot be cured within such thirty (30) 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 cure period
permitted under the terms of the Mortgage then in effect), provided that Tenant
shall commence to cure the default within the said thirty-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.
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 all of the Leased Premises, Landlord may re-enter and repossess
any of the Leased Premises by summary proceedings or any other legal
proceedings. Upon or at any time after taking possession of any of the Leased
Premises, Landlord may, by peaceable means or legal process, remove any Persons
or property therefrom. Landlord shall be under no liability to Tenant or any
other Person for or by reason of any such entry, repossession or removal.
Notwithstanding such entry or repossession, Landlord may (A) exercise the remedy
set forth in and collect the damages permitted by Paragraph 23(a)(iii) or (B)
collect the damages set forth in Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of any of the Leased Premises
pursuant to clause (i) above, Landlord shall have the right 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 in its entirety for an
amount (the "DEFAULT TERMINATION AMOUNT") specified in the next sentence. The
"Default Termination Amount" shall be the greatest of (A) the sum of the Fair
Market Value of the Leased Premises and the applicable Prepayment Premium which
Landlord will be required to pay in prepaying any Loan with proceeds of the
Default Termination Amount or (B) the sum of the Acquisition Cost and the
applicable Prepayment Premium which Landlord will be required to pay in
prepaying any Loan
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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, Landlord and Tenant shall promptly commence to determine Fair
Market Value. Within thirty (30) days after the Fair Market Value Date, Landlord
shall accept or reject such offer. If Landlord accepts such offer then, on the
tenth (10th) business day after such acceptance, Tenant shall pay to Landlord
the Default Termination Amount and, at the request of Tenant, Landlord will
convey the Leased Premises to Tenant or its designee 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 36.
(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, reasonable 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
any of the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD OR
TENANT HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE 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 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, provided, however, that in no
event shall Landlord be entitled to collect from Tenant
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amounts due under Paragraph 23(a)(iii) if Landlord receives from Tenant all
amounts under Paragraph 23(a)(iv) or if Landlord receives from Tenant all
amounts due under Paragraph 23(a)(iv), Landlord shall not be entitled to collect
from Tenant amounts due under Paragraph 23(a)(iii). 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 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chairman, Real Estate Department and any
notice by Landlord to Tenant shall simultaneously be given to Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇. 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.
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
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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 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 within
ninety (90) days of the close of each fiscal year, annual audited financial
statements of Tenant prepared by nationally recognized 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 financial statements shall be prepared in accordance with GAAP
consistently applied. All annual financial statements shall be accompanied (i)
by an opinion of said accountants stating that (A) there are 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" sent with a cover letter clearly indicating
such status.
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:
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(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) By Lender in connection with the securitization of a
Loan to the investors therein, the underwriter of securities backed by such Loan
and representatives of a nationally recognized statistical rating agency.
(vi) While an Event of Default exists, in connection with
any judicial proceedings;
(vii) Independently developed by Landlord or Lender to the
extent that confidential information provided by Tenant is not used to develop
such information;
(viii) In any reporting to the shareholder of Landlord;
(ix) As otherwise required by Law.
29. DETERMINATION OF VALUE.
(a) Whenever a determination of Fair Market Value is required
pursuant to any provision of this Lease, such Fair Market Value shall be
determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon such
Fair Market Value within thirty (30) days after the date (the "APPLICABLE
INITIAL DATE") on which (A) Tenant provides Landlord with notice of its
intention to terminate this Lease and purchase the Affected 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
purchase the Leased Premises pursuant to Paragraph 23(a)(iii) or (D) Landlord
receives an Option Exercise Notice. Upon reaching such agreement, the parties
shall execute an agreement setting forth the amount of such Fair Market Value.
(ii) If the parties shall not have signed such agreement
within thirty (30) days after the 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.
Within twenty (20) days following Landlord's receipt of Tenant's notice of the
appraiser selected by Tenant, Landlord shall select an appraiser and notify
Tenant of the name, address and qualifications of such appraiser. Such two
appraisers shall endeavor to agree upon Fair Market Value based on a written
appraisal made by each of them as
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of the Relevant Date (and given to Landlord by Tenant). If such two appraisers
shall agree upon a Fair Market Value, the amount of such Fair Market Value as so
agreed shall be binding and conclusive upon Landlord and Tenant.
(iii) If such two appraisers shall be unable to agree upon
a Fair Market Value within twenty (20) days after the selection of an appraiser
by Landlord, then such appraisers shall advise Landlord and Tenant of their
respective determination of Fair Market Value and shall select a third appraiser
to make the determination of Fair Market Value. The selection of the third
appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree upon
the designation of a third appraiser within ten (10) days after the expiration
of the twenty (20) day period referred to in clause (iii) above, or if such
third appraiser does not make a determination of Fair Market Value within twenty
(20) days after his selection, then such third appraiser or a substituted third
appraiser, as applicable, shall, at the request of either party hereto, be
appointed by the President or Chairman of the American Arbitration Association
in New York, New York. The determination of Fair Market Value made by the third
appraiser appointed pursuant hereto shall be made within twenty (20) days after
such appointment.
(v) If a third appraiser is selected, Fair Market Value
shall be the average of the determination of Fair Market Value made by the third
appraiser and the determination of Fair Market Value made by the appraiser
(selected pursuant to Paragraph 29(a)(ii) hereof) whose determination of Fair
Market Value is nearest to that of the third appraiser. Such average shall be
binding and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to this
Paragraph 29(a) shall (A) be independent qualified MAI appraisers (B) have no
right, power or authority to alter or modify the provisions of this Lease, (C)
utilize the definition of Fair Market Value hereinabove set forth above, and (D)
be registered in the State if the State provides for or requires such
registration.
(vii) The Cost of the procedure described in this
Paragraph 29(a) above shall be borne by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended
with respect to the Leased Premises or the Affected Premises, as applicable, 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.
(c) In determining Fair Market Value as defined in clause (b)
of the definition of Fair Market Value, the appraisers 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.
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30. NON-RECOURSE.
(a) 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 or manager or advisor of any of the
foregoing, or any director, officer, employee or agent of any thereof.
(b) Anything contained herein to the contrary notwithstanding,
any claim based on or in respect of any liability of Tenant under this Lease
shall be enforced only against the assets, properties and funds of Tenant and
not against the assets, properties or funds of any director, officer,
shareholder or employee of Tenant.
31. FINANCING. 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 non-material and non-monetary 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 materially increase Tenant's 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 offsets which Tenant
may have against Landlord.
32. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. 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 for the recognition of this
Lease and all Tenant's rights hereunder unless and until an Event of Default
exists or Landlord shall have the right to terminate this Lease pursuant to any
applicable provision hereof.
33. FINANCIAL COVENANTS.
(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
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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) The Tenant shall not consolidate with or merge into any
other Person unless, immediately following such consolidation or merger, the
surviving corporation shall have, on a proforma basis, Consolidated Net Worth of
not less than the greater of (A) Seventy-five Million Dollars ($75,000,000), or
(B) the Tenant's Consolidated Net Worth immediately preceding such consolidation
or merger.
(c) The Tenant shall not make any substantial change in the
nature of its business.
(d) Tenant shall not in a single transaction 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 the following conditions are met:
(i) the assignment is otherwise in accordance with the
requirements of Paragraph 21 of the Lease; and
(ii) immediately after such transaction, on a proforma
basis, such Person shall have a Consolidated Net Worth of not less than the
greater of (A) the Consolidated Net Worth of Tenant on the date hereof, (B) the
Tenant's Consolidated Net Worth immediately preceding such transaction, (C) the
senior management of such Person shall have not less than seven (7) years
experience in the business of Tenant, and (D) this Lease is assigned to such
Person.
34. BIFURCATION OF LEASE . Upon the written request and at the
cost of Landlord, Tenant agrees that the Lease (including all economic terms)
shall be bifurcated with respect to the Leased Premises, and if the bifurcation
is in connection with the sale of any one or more of the Related Premises (any
such premises, a "Landlord Sale Premises"), (i) Tenant will attorn to any
purchaser with respect to the Landlord Sale Premises purchased so long as such
purchaser assumes the obligations of Landlord under the Lease with respect to
the Landlord Sale Premises; and (ii) the terms of the Lease will remain in full
force and effect with respect to the Landlord Sale Premises except that the
Basic Rent will be that percentage of the then Basic Rent which is allocated to
the Landlord Sale Premises as set forth on EXHIBIT "F" ----------- attached
hereto and made a part hereof; and (iii) the terms of the Lease will remain in
full force and effect with respect to the remaining Related Premises except that
the Basic Rent will be the sum of the percentages of the then Basic Rent which
is allocated to the remaining Related Premises as set forth on EXHIBIT "F"
attached hereto ----------- and made a part hereof. At the request of Landlord,
Tenant will execute such documents confirming the agreements referred to above
and such other agreements as Landlord may reasonably request provided that such
agreements will not result in any cost to Tenant and will not increase the
liabilities and obligations of Tenant hereunder.
35. 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
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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.
36. OPTION TO PURCHASE.
(a) Landlord does hereby give and grant to Tenant the option
(the "OPTION") to purchase the Leased Premises (i) for the Purchase Price and
(ii) on any date (the "OPTION PURCHASE DATE") (A) within the thirty (30) day
period prior to the last day of the one hundred eightieth (180th) calendar month
following the Initial Term Commencement Date (the "FIRST OPTION") or, (B) if the
First Option is not exercised, within the thirty (30) day period prior to the
last day of the two hundred fortieth (240th) calendar month following the
Initial Term Commencement Date (the "SECOND OPTION"), in either case if and only
if this Lease is then in full force and effect. The Option Purchase Date shall
be mutually agreeable to Landlord and Tenant. If Tenant intends to exercise
either the First Option or the Second Option, Tenant shall give written notice
("OPTION EXERCISE NOTICE") to Landlord that it is making an irrevocable exercise
not later than twelve (12) months prior to the first day of the one hundred
eightieth (180th) month following the Initial Term Commencement Date or, if the
First Option is not exercised, twelve (12) months prior to the first day of the
two hundred fortieth (240th) month following the Initial Term Commencement Date.
Promptly upon receipt of the Option Exercise Notice by Landlord, the parties
shall commence to determine Fair Market Value.
(b) If Tenant shall exercise the Option to purchase the Leased
Premises, on the later to occur of (i) the Option Purchase Date, but no later
than the last day of the one hundred eightieth (180th) calendar month following
the Initial Term Commencement Date with respect to the First Option, or if the
Second Option is exercised, no later than the last day of the two hundred
fortieth (240th) calendar month following the Initial Term Commencement Date or
(ii) the date when Tenant has paid the Purchase Price and has satisfied all
other Monetary Obligations, Landlord shall convey title to 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 the Option. 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 OPTION EXERCISE NOTICE WITH
RESPECT TO THE FIRST OPTION AND, IF APPLICABLE, THE SECOND OPTION BY THE
REQUIRED DATE, TIME BEING OF THE ESSENCE, THE FIRST OPTION OR, IF APPLICABLE,
THE SECOND OPTION PROVIDED IN THIS PARAGRAPH 36 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 THE FIRST OPTION AND, IF
APPLICABLE, THE SECOND OPTION.
37. SECURITY DEPOSIT.
(a) Concurrently with the execution of this Lease, Tenant
shall deliver to Landlord a security deposit in the amount of Six Hundred
Thousand and No/100 ($600,000) (the "SECURITY DEPOSIT"). The Security Deposit
shall be in the form of (i) an irrevocable Letter of Credit (the "LETTER OF
CREDIT") issued by a bank reasonably acceptable to Landlord and in form and
substance reasonably acceptable to Landlord or (ii) a transferable certificate
of deposit (the "CERTIFICATE OF Deposit") from a bank reasonably acceptable to
Landlord and in form and substance reasonably acceptable to Landlord. The
Security Deposit shall remain in full force and effect as security for the
payment by Tenant of the Rent and all other charges or payments to be
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paid hereunder and the performance of the covenants and obligations contained
herein. The Letter of Credit or Certificate of Deposit, as the case may be,
shall, either provide for automatic renewals or be renewed at least thirty (30)
days prior to any expiration thereof. If the Letter of Credit or Certificate of
Deposit has not been renewed by such date, time being of the essence, Landlord
shall have the right at any time after the thirtieth (30th) day before such
expiration date to draw on the Letter of Credit or Certificate of Deposit, in
which event the proceeds ("CASH SECURITY DEPOSIT") shall be deposited in an
interest-bearing account and held in accordance with all applicable Legal
Requirements and subject to the terms of this Lease. At any time and from time
to time, Tenant shall have the right to provide a Letter of Credit or
Certificate of Deposit to Landlord in substitution for a Cash Security Deposit,
and upon the delivery of the Letter of Credit or Certificate of Deposit to
Landlord in substitution for a Cash Security Deposit, the Cash Security Deposit
and all interest that has accrued thereon and has not previously been paid to
Tenant will be delivered to Tenant.
(b) Notwithstanding anything to the contrary set forth herein,
so long as no Event of Default has occurred and is then continuing the Security
Deposit shall be released to Tenant if and when Tenant shall have achieved a
credit rating on its senior unsecured debt of not less than BBB from Standard &
Poor's Corporation (the "RELEASE RATING"), provided that if at any time after
Tenant achieves a Release Rating, the Tenant's credit rating becomes less than
the Release Rating, Tenant shall repost or redeposit with Landlord the Security
Deposit in accordance with the provisions of Paragraph 37(a).
(c) If at any time an Event of Default shall have occurred and
be continuing beyond the applicable grace period, if any, Landlord shall be
entitled, at its sole discretion, to draw on the Letter of Credit or Certificate
of Deposit or to withdraw the Cash Security Deposit or to foreclose on the
Security Deposit Mortgage and to apply the proceeds in payment of (i) any Rent
or other charges for the payment of which Tenant shall be in default, (ii) any
expense incurred by Landlord in curing any default of Tenant, and/or (iii) any
other sums due to Landlord in connection with any default or the curing thereof,
including, without limitation, any damages incurred by Landlord by reason of
such default. If any portion of the Security Deposit is used, retained or
applied by Landlord for any purpose set forth above, Tenant shall, within ten
(10) days after demand therefor is made by landlord, provide to Landlord cash or
a Letter of Credit which complies with the requirements of this Paragraph 37 and
is in the original principal amount thereof.
(d) If the Security Deposit is held by Landlord at the
expiration of the Term and so long as no Event of Default exists, the Letter of
Credit, Certificate of Deposit or the Cash Security Deposit, as the case may be,
shall be returned to Tenant within fifteen (15) days following the expiration of
the Term.
(e) Landlord shall have the right to designate Lender or any
other holder of a Mortgage as the beneficiary of the Letter of Credit
Certificate of Deposit or Cash Security Deposit during the term of the
applicable Loan and in such event Lender shall have all of the rights of
Landlord under this Paragraph 37. Tenant covenants and agrees to execute such
agreements, consents and acknowledgments as may be requested by Landlord from
time to time to change the holder of the Security Deposit as hereinabove
provided; provided, however, in no event shall such transfer relieve Landlord of
its obligations to return the Security Deposit to Tenant.
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38. EXCESS LAND.
So long as no Event of Default then exists, Landlord agrees to cause
that portion of the ▇▇▇▇▇▇▇▇▇▇ Premises described in EXHIBIT A-2 hereto (the
"EXCESS LAND") to be released from the terms of this Lease and conveyed to
Tenant provided that the following conditions are satisfied: (A) the ▇▇▇▇▇▇▇▇▇▇
Premises shall have been subdivided in compliance with all applicable
subdivision laws, Legal Requirements and Easement Agreements so that the Excess
Land and the remainder of the ▇▇▇▇▇▇▇▇▇▇ Premises (the "Retained Premises") are
separate tracts, (B) after such sale both the Excess Land and the Retained
Premises shall comply with all applicable Laws, Legal Requirements and Easements
Agreements, (C) the release of the excess Land does not materially impact the
functional use, Legal use or viability of the Retained Premises, (D) Tenant
shall have complied with all requirements of Lender set forth in the Mortgage
with respect to the release of the Excess Land, and (E) all costs of Landlord,
Lender and Tenant in connection with the conveyance of the Excess Land and in
complying with the above conditions, including reasonable attorneys' fees, shall
be borne solely by Tenant. Landlord, as record title holder to the Excess Land,
shall cooperate with Tenant in obtaining a lawful subdivision of the Leased
Premises with separate parcels consisting of the Excess Land and the Retained
Premises, at no cost to Landlord. If Landlord conveys the Excess Land, then,
except for Surviving Obligations this Lease shall terminate with respect to the
Excess Land, but shall remain in full force and effect with respect to the
Retained Premises, the Dallas Premises, and the Industrial Premises provided,
however, that in no event will the release of the Excess Land from this Lease
amend, reduce or modify any of the obligations and liabilities of Tenant
hereunder, including the obligations to pay Basic Rent in the amount set forth
in EXHIBIT "D" hereto. Landlord represents and warrants to Tenant that the
Mortgage permits the release of the Excess Land without the payment of any
amounts, other than Lender's cost and expenses in connection with such release.
39. MISCELLANEOUS.
(a) The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
(b) As used in this Lease, the singular shall include the
plural and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien" shall
mean "lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, 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. Time is of the essence with respect to the performance by Tenant of
its obligations under this Lease.
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(d) Landlord shall in no event be construed for any purpose to
be a partner, joint venture 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.
(g) The covenants of this Lease shall run with the land and
bind Tenant, its successors and assigns and all present and subsequent
encumbrances 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.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFE BLANK INTENTIONALLY]
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(h) Notwithstanding any provision in this Lease to the
contrary, all Surviving Obligations of Tenant shall survive the expiration or
termination of this Lease with respect to any Related Premises.
(i) If any one or more of the provisions contained in this
Lease shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(j) All exhibits attached hereto are incorporated herein as if
fully set forth.
(k) This Lease shall be governed by and construed and enforced
in accordance with the Laws of the State.
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:
DELAWARE FRAME (TX), LP,
a Delaware limited partnership
By: FRAME (TX) QRS 14-25, INC.,
General Partner
By:
---------------------------------
First Vice President
TENANT:
ATRIUM COMPANIES, INC.,
a Delaware corporation
By:
---------------------------------------
President
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EXHIBIT A
PREMISES
DALLAS PREMISES:
Being a tract of land in the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Survey, Abstract No. 845, and
being all of City of Dallas Block 2-E/7940, Revised Brook Hollow Industrial
District Number One, an addition to the City of Dallas, Dallas County, Texas,
according to the Map thereof recorded in Volume 8, Page 235, of the Map Records
of Dallas County, Texas, and also being all that certain tract of land conveyed
to ▇▇▇▇▇▇▇▇ Industrial Properties, Ltd. by Warranty Deed recorded in Volume
95129, Page ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, and being more particularly
described as follows:
BEGINNING at a 5/8" iron rod set for corner at the intersection of the southwest
right-of-way line of Ambassador Row (70' R.O.W.) with the northwest right-of-way
line of Profit Drive (60' R.O.W;
THENCE S 38(Degree)09'00" W, along said northwest line of Profit Drive, a
distance of 871.20 feet to a 5/8" iron rod set for corner in the northeast
right-of-way line of the M.&K. T Railroad (40' R.O.W.);
THENCE N 51(Degree)51'00" W, along said northeast right-of-way line, a distance
of 900.00 feet to a 5/8" iron rod set for corner at the beginning of a curve to
the right having a central angle of 90(Degree)00'00", a radius of 300.00 feet
and a tangent of 300.00 feet;
THENCE along said curve to the right and with said railroad right-of-way line,
an arc distance of 472.24 feet to a 5/8" iron rod set for corner in the
southeast line of said railroad;
THENCE N 38(Degree)09'00" E, along the southeast right-of-way line of said
railroad, a distance of 571.20 feet to a 5/8" iron rod set for corner in the
southwest line of the abovementioned Ambassador Row;
THENCE S 51(Degree)51'00" E, along said southwest line, a distance of 1200.00
feet to the POINT OF BEGINNING AND CONTAINING 1,026,126 square feet or 23.5566
acres of land, more or less.
INDUSTRIAL PREMISES:
All that certain lot, tract or parcel of land lying and being situated in the
City of Greenville, ▇▇▇▇ County, Texas, a part of the ▇. ▇▇▇▇ Survey, Abstract
No. 901, and being Lots 1 and 2 in Block 1 of the Replat of Lot 1 in Block 1,
Wing Industries Addition, according to the Replat thereof in Volume 400, Pages
1528 and 1529, Plat Records, ▇▇▇▇ County, Texas and containing 21.415 acres of
land, according to said Plat.
▇▇▇▇▇▇▇▇▇▇ PREMISES:
BEING two tracts of parcels of land situated partially within the City of
Greenville, ▇▇▇▇ County, Texas, being parts of the ▇▇▇▇▇ ▇▇▇▇ Survey, Abstract
No. 249, being the same two tracts as follows: (1) all of the 20.000 acres
conveyed by the Greenville Industrial Development Foundation, Inc. to Liquid
Paper Corporation by Deed recorded in the Deed Records of ▇▇▇▇ County in Volume
804, Page 239; (2) all of the 74.0936 acres conveyed by ▇▇▇▇▇ General
Corporation to Liquid Paper Corporation by Deed recorded in said Deed Records in
Volume 804, Page 235, said two tracts being more particularly described as
follows:
TRACT 1:
BEGINNING at a nail set at the Southeast corner of said 20.000 acre tract,
said corner being North 01 degrees 34 minutes 25 seconds East, 346.81 feet
from the Northwest corner of the ▇. ▇. ▇▇▇▇ Survey, Abstract No. 446;
THENCE North 88 degrees 05 minutes 15 seconds West, along the South line of said
20.000 acre tract, 1436.13 feet to a nail set at the Southwest corner of said
20.000 acre tract, for a corner, said corner being marked further by a steel rod
offset North 01 degrees 34 minutes 22 seconds East, 35.00 feet in the North line
of ▇▇▇▇▇▇ ▇▇▇▇▇ Road;
THENCE North 01 degrees 34 minutes 22 seconds East, 607.00 feet to a steel rod
set at the Northwest corner of said 20.000 acre tract, for a corner;
THENCE South 88 degrees 05 minutes, 15 seconds East, 1435.00 feet to the
Southeast corner of said 20.000 acre tract, for a corner, said corner being
marked by a steel rod offset North 88 degrees 05 minutes 15 seconds West, 10.00
feet in the West line of ▇▇ ▇▇▇▇▇▇▇▇▇▇ Drive;
THENCE South 01 degrees 27 minutes 58 seconds West, along said West line of ▇▇
▇▇▇▇▇▇▇▇▇▇ Drive and the East line of said 20.000 acre tract, 607.00 feet to
return to the Place of Beginning and containing 20.004 acres of land, of which
1.285 acres lie in the right-of-way easements described in the instrument
recorded in said Deed Records in Volume 828, Page 699.
TRACT 2:
BEGINNING at a P. K. nail set at the Northeast corner of said 20.000 acre tract,
said corner being the Southernmost Southeast corner of said 74.0936 acre tract,
said corner being in ▇▇ ▇▇▇▇▇▇▇▇▇▇ Drive and being marked by a 5/8 inch iron rod
offset North 88 degrees 05 minutes 15 seconds West, 10.00 feet in the West line
of said ▇▇ ▇▇▇▇▇▇▇▇▇▇ Drive;
THENCE North 88 degrees 05 minutes 15 seconds West, along the South line of said
74.0936 acre tract and the North line of said 20.000 acre tract, 1435.00 feet to
a 1/2 inch iron rod found at the Northwest corner of said 20.000 acre tract,
said corner also being the Southernmost interior corner of said 74.0936 acre
tract;
THENCE South 01 degrees 34 minutes 22 seconds West, 607.00 feet to a P. K. nail
set at the Southwest corner of said 20.000 acre tract and the Southernmost
Southeast corner of said 74.0936 acre tract, said corner being in ▇▇▇▇▇▇ ▇▇▇▇▇
Road and being marked further by a 1/2 inch iron rod found offset North 01
degrees 34 minutes 22 seconds East, 35.00 feet in the North line of said ▇▇▇▇▇▇
▇▇▇▇▇ Road;
THENCE North 38 degrees 05 minutes 16 seconds West, 327.23 feet to a 1/2 inch
iron rod found at the Southwest corner of said 74.0936 acre tract;
2
THENCE North 01 degrees 17 minutes 55 seconds East, along the West line of said
74.0936 acre tract, 2381.14 feet to a 1/2 inch iron rod found for the Northwest
corner of said 74.0936 acre tract, said corner being in a fence line;
THENCE South 38 degrees 39 minutes 51 seconds East, along said fence line,
1005.63 feet to a 1/2 inch iron rod found for corner at the Northernmost
Northeast corner of said 74.0936 acre tract;
THENCE South 02 degrees 08 minutes 15 seconds West, 49.53 feet to a 1/2 inch
iron rod found at the Northernmost interior corner of said 74.0936 acre tract;
THENCE South 88 degrees 29 minutes 34 seconds East, 745.15 feet to a 5/8 inch
iron rod found at the Northernmost Northeast corner of said 74.0936 acre tract;
THENCE South 00 degrees 46 minutes 01 seconds West, 951.16 feet to a cut "X" set
at the Northernmost Southeast corner of said 74.0936 acre tract, said corner
being marked by a 1/2 inch iron rod found in concrete offset North 88 degrees 48
minutes 42 seconds West, 18.04 feet, said corner also being the Northeast corner
of a 1.550 acre tract described in the Quit Claim Deed to American Telephone and
Telegraph Company, recorded in said Deed Records in Volume 742, Page 546;
THENCE North 88 degrees 48 minutes 42 seconds West, 258.51 feet to a 1/2 inch
iron rod found in concrete at the Northwest corner of said 1.550 acre tract,
said corner also being an interior corner of said 74.0936 acre tract;
THENCE South 01 degrees 10 minutes 46 seconds West, 250.43 feet to a 1/2 inch
iron rod found in concrete at the Southwest corner of said 1.550 acre tract,
said corner being an interior corner of said 74.0936 acre tract;
THENCE South 88 degrees 49 minutes 20 seconds East, 270.67 feet to a P. K. nail
set at the Southeast corner of said 1.550 acre tract, said corner also being the
Southernmost Northeast corner of said 74.0936 acre tract and being marked by a
1/2 inch iron rod found in concrete offset North 88 degrees 18 minutes 49
seconds West, 20.39 feet;
THENCE South 00 degrees 41 minutes 05 seconds West, along the East line of said
74.0936 acre tract, 370.35 feet to a P. K. nail set for corner, said corner
being marked by a 5/8 inch iron rod offset Westerly 10.000 feet in said West
line of ▇▇ ▇▇▇▇▇▇▇▇▇▇ Drive;
THENCE South 01 degrees 27 minutes 58 seconds West, 168.30 feet to the Point of
Beginning and containing 3,228,788 square feet or 74.12 acres of land, of which
0.342 acres lie in the right-of-way easement described in instrument recorded in
Volume 828, Page 699, ▇▇▇▇ County Deed Records.
3
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, lifting, 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, overhead
cranes 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 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.
EXHIBIT B
PERMITTED ENCUMBRANCES
DALLAS PREMISES:
1. Any titles or rights asserted by anyone, including, but not limited to,
persons, the public, corporations, governments or other entities, (a) to
tidelands, or lands comprising the shores or beds of navigable or perennial
rivers and streams, lakes, bays, gulfs or oceans; or (b) to lands beyond the
line of the harbor or bulkhead lines as established or changed by any
government; or (c) to filled-in lands, or artificial islands; or (d) to
statutory water rights, including riparian rights; or (e) to the area extending
from the line of mean low tide to the line of vegetation, or the rights of
access to that area or easement along and across that area.
2. Standby fees, taxes and assessments by any taxing authority for the year
2000, and subsequent years, and subsequent taxes and assessments by any taxing
authority for prior years due to change in land usage or ownership.
3. Building lines and easements as shown on Plat recorded in Volume/Cabinet
28, Page 235 of the Map or Plat records of Dallas County, Texas, as shown on the
survey prepared by ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Inc., File No. C99233,
dated July 15, 1999 and revised November 15, 1999.
4. Easement for electric transmission and/or distribution lines granted to
Dallas Power and Light Company by Associated Wholesale Grocers of Dallas, Inc.
by instrument dated May 17, 1955, filed May 24, 1955, recorded in Volume 4268,
Page 72 of the Deed Records of Dallas County, Texas, as shown on the survey
prepared by ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Inc., File No. C99233, dated
July 15, 1999 and revised November 15, 1999.
5. Easements for the installation, operation and maintenance of
underground/overhead electrical distribution systems granted to Dallas Power &
Light Company and Southwestern ▇▇▇▇ Telephone Company by Affiliated Food Stores,
Inc., by instrument dated September 4, 1968, filed September 17, 1968, recorded
in Volume 68183, Page 1008 of the Deed Records of Dallas County, Texas, as shown
on the survey prepared by ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Inc., File No.
C99233, dated July 15, 1999 and revised November 15, 1999.
6. Easements for the installation, operation and maintenance of
underground/overhead electrical distribution systems granted to Dallas Power &
Light Company and Southwestern ▇▇▇▇ Telephone Company by Affiliated Food Stores,
Inc., by instrument dated July 12, 1972, filed July 25, 1972, recorded in Volume
72145, Page 989 of the Deed Records of Dallas County, Texas, as shown on the
survey prepared by ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Inc., File No. C99233,
dated July 15, 1999 and revised November 15, 1999.
7. Easements for the installation, operation and maintenance of
underground/overhead electrical distribution systems granted to Dallas Power &
Light Company and Southwestern ▇▇▇▇ Telephone Company by Affiliated Food Stores,
Inc., by instrument dated December 18, 1975, filed January 30, 1976, recorded in
Volume 76021, Page 749 of the Deed Records of Dallas County, Texas, as shown on
the survey prepared by ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Inc., File No.
C99233, dated July 15, 1999 and revised November 15, 1999.
C-3
EXHIBIT B
8. Terms, conditions and stipulations of that certain Voluntary Cleanup
Program Final Certificate of Completion Agreement by and between Texas Natural
Conservation Commission and Atrium Door and Window Company, dated September 4,
1998, filed April 14, 1999, recorded in Volume 99072, Page 5338 of the Deed
Records of Dallas County, Texas.
9. The following variations disclosed on the Survey prepared by ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Drake, Inc., dated July 15, 1999 and revised November 15, 1999, File
No. C99233:
(A) One-story metal warehouse encroaches onto the fifteen foot D.P. &
L. Co. and S.W.B.T. Co. easement, Volume 76021, Page 749.
(B) One-story metal warehouse encroaches onto the fifteen foot D.P. &
L. Co. and S.W.B.T. Co. easement, Volume 72145, page 989.
(C) One-story metal warehouse encroaches onto the fifteen foot D.P. &
L. Co. and S.W.B.T. Co. easement, Volume 68183, page 1008.
(D) Variations between the westerly and southwesterly record lines of
title and a six foot chain link fence.
(E) Light standards located west and southwest of westerly and
southwesterly record line of title.
10. Rights of parties in possession.
11. Shortages in area.
INDUSTRIAL PREMISES:
1. Any titles or rights asserted by anyone, including, but not limited to,
persons, the public, corporations, governments or other entities, (a) to
tidelands, or lands comprising the shores or beds of navigable or perennial
rivers and streams, lakes, bays, gulfs or oceans, or (b) to lands beyond the
line of the harbor or bulkhead lines as established or changed by any
government, or (c) to filled-in lands, or artificial islands, or (d) to
statutory water rights, including riparian rights, or (e) to the area extending
from the line of mean low tide to the line of vegetation, or the right of access
to that area or easement along and across the area.
2. Standby fees, taxes and assessments by any taxing authority for the year
2000, and subsequent years, and subsequent taxes and assessments by any taxing
authority for prior years due to change in land usage or ownership.
3. Easement to the City of Greenville dated August 7, 1997, recorded in
Volume 464, Page 772, ▇▇▇▇ County Real Property Records, as shown on the
survey prepared by Wisdom Engineering, Inc., dated November 17, 1999, O.B.
No. 990689.
4. Waiver of damages or claims for location of obstruction on utility
easements dated October 27, 1993, recorded in Volume 293, Page 427, ▇▇▇▇ County
Real Property Records.
C-4
EXHIBIT B
5. Thirty foot utility easement located in the Northwest corner of the
tract; twenty-six foot St. Louis Southwestern railroad easement along the
entire West boundary line of the tract; ten foot utility easement across the
entire South and East property lines and a twenty foot utility easement
across the Easternmost boundary line abutting US Highway 69, all as reflected
on the Replat of Wing Industries which Plat is to be filed in the Plat
Records of ▇▇▇▇ County, Texas, as shown on the survey prepared by Wisdom
Engineering, Inc., dated November 17, 1999, O.B. No. 990689.
6. Easements for the installation, operation and maintenance of
underground/overhead electrical distribution systems granted to Texas Power &
Light Company by J.P. Germany and wife, Mrs. ▇▇▇▇▇▇ Germany, and Ava English
and her husband, Jno. L. English, by instrument dated August 26, 1916, filed
None Shown, recorded in Volume 225, Page 253 of the Deed Records of ▇▇▇▇
County, Texas, as shown on the survey prepared by Wisdom Engineering, Inc.,
dated November 17, 1999, O.B. No. 990689.
7. Right of Way Easement to Lone Star Gas Company, filed May 26, 1964,
recorded in Volume 626, Page 442, ▇▇▇▇ County Deed Records, as shown on
survey prepared by Wisdom Engineering dated October 22, 1996, as shown on the
survey prepared by Wisdom Engineering, Inc., dated November 17, 1999, O.B.
No. 990689.
8. Right of Way Easement to Concord Water Supply Corp., filed June 11,
1965, recorded in Volume 634, Page 74, ▇▇▇▇ County Deed Records, as shown on
survey prepared by Wisdom Engineering dated October 22, 1996, as shown on the
survey prepared by Wisdom Engineering, Inc., dated November 17, 1999, O.B.
No. 990689.
9. The following items disclosed on the survey prepared by Wisdom
Engineering, Inc., dated November 17, 1999, O.B. No. 990689:
(A) Railroad spur track located on undetermined east of the 20 foot
railroad easement, recorded in Volume 721, Page 428.
(B) Railroad track encroaches over property line beginning at the southwest
corner through the northern portion of subject property
(C) Railroad track encroaches into thirty foot drain and utility easement
located in northwest corner of subject property.
10. Rights of parties in possession.
11. Shortages in area.
C-5
EXHIBIT B
▇▇▇▇▇▇▇▇▇▇ PREMISES:
1. Any titles or rights asserted by anyone, including, but not limited to,
persons, the public, corporations, governments or other entities, (a) to
tidelands, or lands comprising the shores or beds of navigable or perennial
rivers and streams, lakes, bays, gulfs or oceans, or (b) to lands beyond the
line of the harbor or bulkhead lines as established or changed by any
government, or (c) to filled-in lands, or artificial islands, or (d) to
statutory water rights, including riparian rights, or (e) to the area extending
from the line of mean low tide to the line of vegetation, or the right of access
to that area or easement along and across the area.
2. Standby fees, taxes and assessments by any taxing authority for the year
2000, and subsequent years, and subsequent taxes and assessments by any taxing
authority for prior years due to change in land usage or ownership.
3. Easement executed by L.L. ▇▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇▇▇ to Lone Star Gas
Company, dated June 25, 1926, recorded in Volume 308, Page 284, ▇▇▇▇ County Deed
Records, as effected by Partial Release of Easement dated January 23, 1978,
recorded in Volume 808, Page 595, ▇▇▇▇ County Deed Records, as shown on the
survey prepared by Wisdom Engineering, Inc., dated November 18, 1999, Job No.
990688.
4. Easement and Right of Way executed by Liquid Paper Corporation and L.P.
Manufacturing Corporation, to County of ▇▇▇▇, State of Texas, dated March 29,
1979, recorded in Volume 828, Page 553), ▇▇▇▇ County Deed Records, as shown on
the survey prepared by Wisdom Engineering, Inc., dated November 18, 1999, Job
No. 990688.
5. Roadway easement dated August 21, 1996 executed by DowBrands, Inc. to
Enserch Corporation, of record in Volume 418, Page 85, ▇▇▇▇ County Real
Property Records, as shown on the survey prepared by Wisdom Engineering,
Inc., dated November 18, 1999, Job No. 990688.
6. Easement granted by Dow Consumer Products, Inc. to
Missouri-Kansas-Texas Railroad Company, as evidenced by the instrument dated
February 15, 1987, recorded in Volume 94, Page 311 of the ▇▇▇▇ County Real
Property Records, as shown on the survey prepared by Wisdom Engineering,
Inc., dated November 18, 1999, Job No. 990688.
7. Easement granted by Dow Consumer Products, Inc. to
Missouri-Kansas-Texas Railroad Company, as evidenced by the instrument dated
February 15, 1987, recorded in Volume 94, Page 315 of the ▇▇▇▇ County Real
Property Records, as shown on the survey prepared by Wisdom Engineering,
Inc., dated November 18, 1999, Job No. 990688.
8. Easement granted by DowBrands, Inc. to Greenville Electric Utility
System, as evidenced by the instrument dated March 12, 1990, recorded in
Volume 167, Page 224 of the ▇▇▇▇ County Real Property Records, as shown on
the survey prepared by Wisdom Engineering, Inc., dated November 18, 1999, Job
No. 990688.
9. Industrial Solid Waste Disposal Notice filed for record in Volume 248,
Page 749, ▇▇▇▇ County Real Property Records.
10. The following items found on the survey prepared by Wisdom Engineering,
Inc., dated November 18, 1999, Job No. 990688, disclosing the following
variations:
C-6
EXHIBIT B
(A) Spur track in southeasterly portion of Premises is located west of
the westerly line of railroad easement recorded in Volume 94, Page
313.
(B) There are variations between the southerly, easterly, and northerly
record lines of title and the Survey. To wit: that portion of the
Premises lying north of the record line of title and south of the
fence located approximately 89.58 feet north of the record line of
title.
(C) Power poles and lines located along the easterly portion of the
Premises.
(D) Power poles and lines located along the westerly portion of the
Premises.
11. Rights of parties in possession.
12. Shortages in area.
C-7
EXHIBIT D
BASIC RENT PAYMENTS
1. BASIC RENT. Subject to the adjustments provided for in
Paragraphs 2, 3 and 4 below, Basic Rent payable in respect of the Term shall be
$2,075,000 per annum, payable monthly in advance on each Basic Rent Payment
Date, in equal installments of $172,916.67 each.
2. 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 five (5) year period immediately preceding the
first adjustment or the two (2) year period immediately preceding each
adjustment after the first adjustment.
3. EFFECTIVE DATES OF CPI ADJUSTMENTS. Basic Rent shall not be
adjusted to reflect changes in the CPI until the fifth (5th) anniversary (the
"FIRST ADJUSTMENT DATE") of the Basic Rent Payment Date on which the first full
monthly installment of Basic Rent shall be due and payable (the "FIRST FULL
BASIC RENT PAYMENT DATE"). As of the fifth (5th) anniversary of the First Full
Basic Rent Payment Date and thereafter on the seventh (7th), ninth (9th),
eleventh (11th), thirteenth (13th), fifteenth (15th), seventeenth (17th),
nineteenth (19th) and, if the initial Term is extended, on the twenty-first
(21st), twenty-third (23rd), twenty-fifth (25th), twenty-seventh (27th) and
twenty-ninth (29th) anniversaries of the First Full Basic Rent Payment Date,
Basic Rent shall be adjusted to reflect increases in the CPI during the most
recent five (5) year period immediately preceding the First Adjustment Date and
during the most recent two (2) year period immediately preceding each of the
foregoing dates after the First Adjustment Date (the First Adjustment Date and
each other such date being hereinafter referred to as the "BASIC RENT ADJUSTMENT
DATE").
4. 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 4(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. An
amount equal to the lesser of (x) the product of such multiplication or (A)
12.5% of the Basic Rent in effect immediately prior to the First Adjustment Date
shall be added to the Basic Rent in effect immediately prior to the First
Adjustment Date and (B) 5% of the Basic Rent in effect immediately prior to each
Basic Rent Adjustment Date subsequent to the First Adjustment Date shall be
added to the Basic Rent in effect immediately prior to such Basic Rent
Adjustment Date; provided, however, that with respect to the first increase in
Basic Rent the increase in the CPI is less than 12.5% or if with respect to any
subsequent increase in Basic Rent the increase in the CPI is less than 5%, the
difference between
(x) 12.5% with respect to the first Basic Rent increase and 5% with respect to
any subsequent Basic Rent increase and (y) the actual percentage increase in the
CPI shall be carried forward for purposes of calculating subsequent Basic Rent
increases. As used herein, "BEGINNING CPI" shall mean the average CPI for the
three (3) calendar months corresponding to the Prior Months, but occurring five
(5) years earlier with respect to the first adjustment and two (2) years earlier
with respect to each subsequent adjustment. 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 two (2) 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.
-2-
EXHIBIT E
ACQUISITION COST
Dallas Premises $ 12,685,340.00
Industrial Premises $ 3,095,666.00
▇▇▇▇▇▇▇▇▇▇ Premises $ 5,093,340.00
--------------
TOTAL $ 20,874,346.00
EXHIBIT F
PERCENTAGE ALLOCATION OF BASIC RENT
Dallas Premises 59.78%
Industrial Premises 15.28%
▇▇▇▇▇▇▇▇▇▇ Premises 24.94%
------
TOTAL 100%
If any of the Related Premises ceases to be subject to this Lease, the
percentage shown on this Exhibit F for each of the Related Premises which
remains subject to this Lease shall be adjusted proportionately so that the
total of such percentages shall be 100%.
EXHIBIT G
GUARANTORS
1. Atrium Door and Window Company - West Coast
2. Atrium Door and Window Company of the Northeast
3. Atrium Door and Window Company of New York
4. Atrium Door and Window Company of Arizona
5. Atrium Door and Window Company of New England, Inc.
6. Door Holdings, Inc.
7. ▇.▇. ▇▇▇▇▇ Company, Inc.
8. Total Trim, Inc.
9. Wing Industries Holdings, Inc.
10. Wing Industries, Inc.
11. H.I.G. Vinyl, Inc.
12. Heat, Inc.
13. Thermal Industries, Inc.
14. Best Built, Inc.
15. Champagne Industries, Inc.
16. Total Trim, Inc. - South
17. ▇.▇. ▇▇▇▇▇ Company-South
EXHIBIT H
TENANT'S POST-CLOSING ENVIRONMENTAL OBLIGATIONS
Tenant shall conduct the following actions within the time period
specified and shall reimburse Landlord for all of Landlord's reasonable costs,
including reasonable attorney's fees, incurred by Landlord in reviewing Tenant's
progress in completing the activities listed below. Within ten (10) days of the
date on which Tenant is to complete an activity listed below, Tenant shall
provide the Landlord with written notification, informing Landlord whether the
activity has been completed. Tenant's failure to timely comply with any of the
obligations hereunder shall constitute an Event of Default.
A. INACTIVE UNDERGROUND STORAGE TANKS - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ PROPERTY
1. Within 180 days of the date of this Lease, Tenant shall have
either removed the two inactive underground storage formerly
used for gluing operations or shall have permanently abandoned
the tanks in place in accordance with all applicable
requirements, including the permanent removal-from-service
requirements of 30 Texas Administrative Code, Chapter 334,
Section 334.55.
2. In the event that Tenant discovers that a release from
either or both tanks has occurred, Tenant shall promptly
implement such corrective action as is necessary and required
by all applicable Legal Requirements.
B. WASTE OIL ABOVEGROUND STORAGE TANK (AST) - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ PROPERTY
1. Within 90 days of the date of this Lease, Tenant shall
either prepare and maintain a spill prevention and control plan
to address potential spills or releases from the waste oil AST
in the Ruan Building or shall have caused secondary containment
to be provided around the waste oil AST.
C. REPORTING
Written notification by Tenant to Landlord required herein
shall be addressed to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Asset Management Associate
W.P. ▇▇▇▇▇ & Co., Inc.
Environmental Asset Management Department
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
EXHIBIT I
POST-CLOSING REPAIR OBLIGATIONS
ISSUE
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ - DALLAS PREMISES COMPLETION DATE
1. STORM WATER DRAINAGE: Restore positive End of 2nd Lease Year
drainage at the loading dock area on the north side
of the Improvements.
2. CONCRETE: (a) Repair crack in concrete wall June 1, 2000
at the southeast side of the site.
(b) Repair sidewalks and the cracks in the End of lst Lease Year
retaining wall.
(c) Replace damaged concrete at the north End of 2nd Lease Year
loading docks and an asphalt overlay in damaged
areas.
(d) Replace damaged subgrade and asphalt End of 1st Lease Year
in the employee parking lot, and cut and replace
severely damaged concrete.
3. PAVING AREA: Repair paving and restripe parking. End of 2nd Lease Year
4. SUBSTRUCTURES/FOUNDATION: Cut out and replace End of 1st Lease Year
nearly 1000 SF of damaged concrete floor slab at
the warehouse areas.
5. ASBESTOS: Undertake an asbestos survey in End of 1st Lease Year
accordance with current guidelines on the steel
columns and beams in the north side of the building.
6. EXTERIOR WALLS: (a) Recaulk vertical expansion As needed
joints.
(b) Paint exterior walls, repair cracks, End of 2nd Lease Year
recaulk vertical joints, and repair loose grout
in the exterior walls of the Ruan truck building
within the next 2 years.
7. HVAC:
(a) Replace the large Carrier compressor and End of 1st Lease Year
chiller unit at the Vinyl office
(b) Replace package units in the Vinyl office. As needed
8. ADA REQUIREMENTS: (a) Properly stripe and End of 1st Lease Year
▇▇▇▇ "van accessible" disabled parking space by H-R
Windows.
(b) Install proper signage in the visitor lot. End of 1st Lease Year
(c) Provide a ramp from the parking area to End of 1st Lease Year
the Atrium Vinyl space.
(d) Provide at least one accessible restroom End of 1st Lease Year
at both the Atrium Vinyl products and H-R
Windows Space.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ - INDUSTRIAL PREMISES
1. PAVING: Cut out and replace deteriorated End of 1st Lease Year
areas of concrete at drive entry lanes, and route
and seal cracks throughout original loading and
storage area around the north and east sides of
the building.
2. MECHANICAL SYSTEMS:
(a) Replace five inoperable unit heaters. May 1, 2000
(b) Replace nine smaller heating units. As needed
3. ADA REQUIREMENTS: (a) Replace incorrect May 1, 2000
parking signage.
May 1, 2000
(b) Renovate restrooms to meet accessibility
guidelines.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ - ▇▇▇▇▇▇▇▇▇▇ PREMISES
1. CONCRETE: Repair upheavals at control joints May 1, 2000
in sidewalk from western side of parking lot to
lunch room side entry.
2. EXTERIOR WALLS:
(a) Reseal panel joints. May 1, 2000
(b) Paint upper portion of these panels and End of 1st Lease Year
reseal lower portion.
3. ROOF: (a) Re-flash all parapet walls at End of 1st Lease Year
warehouse.
2
(b) Replace EPDM membrane. As needed
4. ADA REQUIREMENTS: (a) Redesign restrooms to May 1, 2000
meet accessibility guidelines.
(b) Fix slope of handicap ramp. May 1, 2000
3