EXHIBIT 10.8
LEASE AGREEMENT
by and between
DELAWARE PANE (TX), LP,
a Delaware limited partnership
as LANDLORD
and
ATRIUM COMPANIES, INC.,
a Delaware corporation,
as TENANT
Premises: ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇
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..............................................................10
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.................................................15
12. Maintenance and Repair...........................................15
13. Alterations and Improvements.....................................16
14. Permitted Contests...............................................16
15. Indemnification..................................................17
16. Insurance........................................................18
17. Casualty and Condemnation........................................20
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................................................26
23. Remedies and Damages Upon Default................................28
24. Notices..........................................................31
25. Estoppel Certificate.............................................31
26. Surrender........................................................32
27. No Merger of Title...............................................32
28. Books and Records................................................32
29. Determination of Value...........................................33
30. Non-Recourse.....................................................35
31. Financing........................................................35
32. Subordination, Non-Disturbance and Attornment....................35
33. Tax Treatment; Reporting.........................................36
34. Financial Covenants..............................................36
35. Option to Purchase...............................................36
36. Security Deposit.................................................37
37. Miscellaneous....................................................38
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Guarantors
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LEASE AGREEMENT, made as of this 18th day of November, 1999,
between DELAWARE PANE (TX), LP, a Delaware limited partnership
("Landlord"), with an address c/o W. P. ▇▇▇▇▇ & Co., Inc., ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and ATRIUM COMPANIES, INC., 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
(collectively, the "LEASED PREMISES"): (a) the premises described in EXHIBIT "A"
hereto, together with the Appurtenances (collectively, the "LAND"); (b) a
to-be-built manufacturing facility which shall contain approximately 205,000
square feet and any other buildings, structures and other improvements hereafter
constructed on the Land in accordance with the Construction Management Agreement
(collectively, the "IMPROVEMENTS"); and (c) the fixtures, machinery, equipment
and other property described in EXHIBIT "B" hereto (collectively, the
"EQUIPMENT").
2. CERTAIN DEFINITIONS.
"Acquisition Fee" shall mean the fee of $381,675.00
which shall be paid by Landlord to W. P. ▇▇▇▇▇ & Co., Inc. and which shall
not be included in calculating Basic Rent.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways,
curbs, gores and vault spaces adjoining any of the Leased Premises.
"Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations, reconstructions, renewals, replacements or
removals of and all substitutions or replacements for any of the Improvements or
Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land, including (a)
easements over other lands granted by any Easement Agreement and (b) any
streets, ways, alleys, vaults, gores or strips of land adjoining the Land.
"Architect" shall mean sma + architects.
"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 and EXHIBIT D.
"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.
"Change Order" shall mean Change Order as defined in the
Construction Management Agreement.
"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.
"Construction Management Agreement" shall mean that certain
Construction and Development Management Agreement of even date herewith between
Landlord and Developer pursuant to which Developer, as manager for Landlord,
will cause the construction of the Improvements on the Land, as the same may be
amended, supplemented or modified from time to time with Tenant's approval,
which shall not be unreasonably withheld or delayed.
"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
34.
"Default Termination Amount" shall mean the Default
Termination Amount as defined in Paragraph 23(a)(iii).
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Developer" shall mean Codel, Inc., a Texas corporation.
"Direct Costs" shall mean Direct Costs as defined in Section
1.01 of the Construction Management Agreement.
"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 Hazardous
Substances, in each case as amended and as now or hereafter in effect,
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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 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 the Leased Premises under any Environmental
Law, or (e) any violation of or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph
1.
"Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).
"Fair Market Value" shall mean the higher of (a) the fair
market value of the Leased Premises as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased Premises
as of the Relevant Date as affected and encumbered by this Lease and assuming
that the Term has been extended for all extension periods provided for herein.
For all purposes of this Lease, Fair Market Value shall be determined in
accordance with the procedure specified in Paragraph 29.
"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.
"Final Completion Date" shall mean the first day of the first
calendar month following the date upon which (a) the Improvements, excluding all
"punch list" items,
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shall have been substantially completed in accordance with the Plans as
certified to by the Architect, and (b) all permits and licenses required for the
occupancy of the Improvements have been obtained, which shall be no later than
August 1, 2000.
"First Option" shall mean First Option as defined in Paragraph
35.
"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.
"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, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance 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 and polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph
15.
"Indirect Costs" shall mean Indirect Costs as defined in
Section 1.01 of the Construction Management Agreement.
"Initial Term" shall mean the Initial Term as defined in
Paragraph 5.
"Initial Term Commencement Date" shall mean the Initial Term
Commencement Date as defined in Paragraph 5.
"Insurance Requirements" shall mean the requirements of all
insurance policies required to be maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Landlord's Share of Project Costs" shall mean the lesser of
(i) $8,000,000 (or such greater amount as shall have been agreed to in writing
by Landlord and Tenant pursuant to Change Orders) plus the Acquisition Fee and
(ii) actual Project Costs, including all Direct Costs, Indirect Costs and the
Acquisition Fee, all of which shall have been approved in writing by Tenant.
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"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 Primary Commencement Date and ending at midnight on
the last day of the twelfth (12th) consecutive calendar month following the
month in which the Primary Term Commencement Date occurred, and each succeeding
twelve (12) month period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental Laws and
Laws relating to accessibility to, usability by, and discrimination against,
disabled individuals) and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Tenant or to any of the Leased
Premises, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or restoration of any of the Leased Premises,
even if compliance therewith necessitates structural changes or improvements or
results in interference with the use or enjoyment of any of the Leased Premises.
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note.
"Loan" shall mean any loan made by one or more Lenders to
Landlord, which loan is secured by a Mortgage and an Assignment and evidenced by
a Note.
"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.
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"Option Exercise Notice" shall mean Option Exercise Notice as
defined in Paragraph 35.
"Partial Casualty" shall mean any Casualty which does not
constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does
not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on EXHIBIT "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Plans" shall mean the plans and specifications prepared by
the Architect (as defined in the Construction Management Agreement) for the
construction of the Improvements.
"Prepayment Premium" shall mean any payment (other than a
payment of principal and/or interest which Landlord is required to make under a
Note or a Mortgage) by reason of any prepayment by Landlord of any principal due
under a Note or Mortgage, and which may be (in lieu of such prepayment premium
or prepayment penalty) (i) a "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 a 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.
"Primary Term" shall mean the Primary Term as defined in
Paragraph 5.
"Primary Term Commencement Date" shall mean the date of this
Lease.
"Prime Rate" shall mean the annual interest rate as published,
from time to time, in THE WALL STREET JOURNAL as the "Prime Rate" in its column
entitled "Money Rate". The 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.
"Project Cost" shall mean the sum of all Direct Costs and
Indirect Costs incurred or to be incurred in connection with the acquisition of
the Land, the construction of the Improvements and the acquisition and
installation of the Equipment, which shall include the Acquisition Fee but which
shall not include any third party financing costs.
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"Purchase Price" shall mean with respect to the First Option
the greater of (a) Landlord's Share of Project Costs and the applicable
Prepayment Premium which Landlord will be required to pay in prepaying any Loan
with proceeds of the Purchase Price and (b) Fair Market Value and with respect
to the Second Option, the greater of (x) Landlord's Share of Project Costs and
(y) Fair Market Value.
"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
.
"Renewal Term" shall mean Renewal Term as defined in Paragraph
5.
"Rent" shall mean, collectively, Basic Rent and
Additional Rent.
"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased Premises by any
governmental authority, civil or military, whether 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 35.
"Security Deposit" shall mean Security Deposit 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 a majority
of the Voting Stock of which is at the time owned, or the management of which is
otherwise controlled, directly or indirectly, through one or intermediaries, or
both, by such Person.
"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
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have taken place as of the later of the date actual physical possession is taken
by the condemnor, or the date on which the right to compensation and damages
accrues under the law applicable to the Leased Premises.
"Term" shall mean the Primary Term and the Initial Term,
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 Landlord's Share of Project Costs and the applicable
Prepayment Premium which Landlord will be required to pay in prepaying any Loan
with the proceeds of the Termination Amount.
"Termination Date" shall mean Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
"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) LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL
TAKE THE LEASED PREMISES AS IS ON THE FINAL COMPLETION DATE. 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, SUBJECT, HOWEVER, TO
TENANT'S RIGHTS TO MAKE A CLAIM AGAINST
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DEVELOPER UNDER THE CONSTRUCTION MANAGEMENT AGREEMENT. TENANT ACKNOWLEDGES THAT
THE LEASED PREMISES IS OF ITS SELECTION AND TO ITS SPECIFICATIONS. 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) Except as provided in Paragraph 35 hereof with respect to
an option to purchase the Leased Premises, Tenant acknowledges that Tenant has
only the leasehold right of possession and use of the Leased Premises as
provided herein.
(d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, in conjunction with Landlord, the right to enforce all
assignable warranties, guaranties, indemnities, causes of action and similar
rights (collectively, "WARRANTIES") which Landlord may have against Developer
and any manufacturer, seller, engineer, contractor or builder in respect of any
of the Leased Premises. Such assignment shall remain in effect until an Event of
Default occurs or until the expiration or earlier termination of this Lease
(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 Warranties, guaranties,
indemnities and other rights shall automatically revert to Landlord. Tenant
shall enforce the Warranties in accordance with their respective terms.
(e) Tenant acknowledges that Tenant has reviewed the
Construction Management Agreement and pursuant to the Construction Management
Agreement, Developer will cause the Improvements to be constructed with funds to
be provided by Landlord as more particularly described in the Construction
Agency Agreement. Landlord will not make any representations or warranties with
respect to the Improvements; provided, however, if the Developer shall default
under the Construction Management Agreement and Landlord shall fail in a timely
manner to exercise its remedies thereunder or otherwise enforce the Construction
Management Agreement, Tenant after notice to Landlord, shall have the right to
so exercise or enforce the rights of Landlord thereunder.
4. USE OF LEASED PREMISES; QUIET ENJOYMENT.
(a) Tenant may occupy and use the Leased Premises for an
office and manufacturing facility 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
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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 an emergency, in which no notice shall be required) for the purpose of
inspecting the Leased Premises, verifying compliance or non-compliance by Tenant
with its obligations hereunder and the existence or non-existence of an Event of
Default or event which with the passage of time and/or notice would constitute
an Event of Default, showing the Leased Premises to prospective Lenders and
purchasers and taking such other action with respect to the Leased Premises as
is permitted by any provision hereof.
5. TERM.
(a) Subject to the provisions hereof, Tenant shall have and
hold the Leased Premises for a primary term (the "PRIMARY TERM") commencing on
the date hereof (the "PRIMARY TERM COMMENCEMENT DATE") and terminating at
midnight on the last day of the calendar month in which the Final Completion
Date occurs, which shall not, in any event, occur later than August 1, 2000 (the
"PRIMARY TERM EXPIRATION DATE") and for an initial term (such initial term, as
extended or renewed in accordance with the provisions hereof, being called the
"INITIAL TERM") commencing on the day (the "INITIAL TERM COMMENCEMENT DATE")
immediately following the Primary Term Expiration Date. The Initial Term shall
terminate on the last day of the two hundred fortieth (240th) calendar month
following the Initial Term Commencement Date (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.
(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 Initial 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 Initial 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 and, in any event, Landlord shall have the right during the
last year of the Term, to (i) advertise the availability of the Leased Premises
for sale or reletting and to erect upon the Leased Premises signs indicating
such availability and (ii) show 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") on the applicable basic rent payment dates
described in EXHIBIT "D" hereto (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 or to such other address as Landlord may
direct by not less than fifteen (15) days prior written notice to Tenant.
7. ADDITIONAL RENT.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "ADDITIONAL RENT"):
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(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 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 Paragraphs7(a)(ii) and 7(a)(iv)
by reason of such late payment or non-payment or 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").
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(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.
(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
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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, and 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
repairs 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 Escrow Payments shall not be commingled with
other funds of Landlord or other Persons and interest thereon shall accrue for
the benefit of Tenant from the date such monies are received and invested until
the date such monies are disbursed to pay Escrow Charges. Landlord shall apply
the Escrow Payments to the payment of the Escrow Charges in such order or
priority as Landlord shall determine or as required by law. If at any time the
Escrow Payments theretofore paid to Landlord shall be insufficient for the
payment of the Escrow Charges, Tenant, within ten (10) days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord.
10. COMPLIANCE WITH LAWS AND EASEMENT AGREEMENTS; ENVIRONMENTAL
MATTERS.
(a) Tenant shall, at its expense, comply with and conform to,
and cause the Leased Premises and any other Person occupying any part of the
Leased Premises to comply with and conform to, all Insurance Requirements and
Legal Requirements (including all applicable Environmental Laws). Tenant shall
not at any time (i) cause, permit or suffer to occur any Environmental Violation
or (ii) permit any sublessee, assignee or other Person occupying the Leased
Premises under or through Tenant to cause, permit or suffer to occur any
Environmental Violation and, 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, and no other Person shall have the right to rely on any such
reports.
(b) Tenant, at its sole cost and expense, will at all times
promptly and faithfully abide by, discharge and perform all of the covenants,
conditions and agreements contained in any Easement Agreement on the part of
Landlord or the occupier to be kept and performed thereunder. Tenant will not
alter, modify, amend or terminate any Easement Agreement, give any consent or
approval thereunder, or enter into any new Easement Agreement without, in each
case, the prior written consent of Landlord, 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, then upon prior written notice from Landlord, Tenant shall permit such
persons as Landlord may designate ("SITE REVIEWERS") to visit the Leased
Premises and perform, as agents of Tenant, environmental site investigations and
assessments ("SITE
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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 to not reasonably
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. 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.
(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 reasonably satisfactory to Landlord in form
and substance and in an amount equal to or greater than Landlord's reasonable
estimate, based upon a Site Assessment performed pursuant to Paragraph 10(c), of
the anticipated cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if an
Environmental Violation occurs or is found to exist and the Term would otherwise
terminate or expire, then, at the option of Landlord, the Term shall be
automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to correct any Environmental Violation
which occurs or is found to exist, Landlord shall have the right (but no
obligation) to take any and all actions as Landlord shall deem necessary or
advisable in order to cure such Environmental Violation.
(g) Tenant shall notify Landlord immediately after becoming
aware of any Environmental Violation (or alleged Environmental Violation) or
noncompliance with any of the covenants contained in this Paragraph 10 and shall
forward to Landlord immediately upon receipt thereof copies of all orders,
reports, notices, permits, applications or other communications relating to any
such violation or noncompliance.
(h) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall contain covenants
of the other party not to at any time (i) cause any Environmental Violation to
occur or (ii) permit any Person occupying the Leased Premises through said
subtenant or concessionaire to cause any Environmental Violation to occur.
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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 FOLLOWING THE FINAL
COMPLETION DATE AND PAYMENT IN FULL OF LANDLORD'S SHARE OF PROJECT COSTS, WITH
RESPECT TO ANY ALTERATIONS LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES
OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR
OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND THAT NO
MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED PREMISES.
LANDLORD MAY AT ANY TIME, AND AT LANDLORD'S REQUEST TENANT SHALL PROMPTLY POST
ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "RECORD") all such instruments as may be required or permitted by
any present or future Law in order to evidence the respective interests of
Landlord and Tenant in the Leased Premises, and shall cause a memorandum of this
Lease (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such places
as may be required or permitted by any present or future Law in order to protect
the validity and priority of this Lease.
12. MAINTENANCE AND REPAIR.
(a) Tenant shall at all times maintain the Leased Premises and
the Adjoining Property in as good repair and appearance as they are in on the
Final Completion Date 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 Final Completion Date
or the date of its installation, except for ordinary wear and tear. Tenant shall
take every other action necessary or appropriate for the preservation and safety
of the Leased Premises. Tenant shall promptly make all Alterations of every kind
and nature, whether foreseen or unforeseen, which may be required to comply with
the foregoing requirements of this Paragraph 12(a). Landlord shall not be
required to make any Alteration, whether foreseen or unforeseen, or to maintain
any of the Leased Premises or Adjoining Property in any way, and Tenant hereby
expressly waives any right which may be provided for in any Law now or hereafter
in effect to make Alterations at the expense of Landlord or to require Landlord
to make Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12
shall be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall
(i) encroach upon any setback or any property, street or right-of-way adjoining
the Leased Premises, (ii) violate the provisions of any restrictive covenant
affecting the Leased Premises, (iii) hinder or obstruct any easement or
right-of-way to which any of the Leased Premises is subject or (iv) impair the
rights of others in, to or under any of the foregoing, Tenant shall, promptly
after receiving notice or otherwise acquiring knowledge thereof, either (A)
obtain from 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
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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, following the Final Completion Date, 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 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 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"), whether or not Landlord's
consent is required, then (i) the market value of the Leased Premises shall not
be lessened by any such Work or its usefulness impaired, (ii) all such Work
shall be performed by Tenant in a good and workmanlike manner, (iii) all such
Work shall be expeditiously completed in compliance with all Legal Requirements,
(iv) all such Work shall comply with the Insurance Requirements, (v) if any such
Work involves the replacement of Equipment or parts thereto, all replacement
Equipment or parts shall have a value and useful life equal to the greater of
(A) the value and useful life on the Final Completion Date 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.
14. PERMITTED CONTESTS. Notwithstanding any other provision of
this Lease, Tenant shall not be required to (a) pay any Imposition, (b)
discharge or remove any lien referred to in Paragraph 11 or 13, (c) comply with
any Legal Requirement 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
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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 (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).
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(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 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) From and after the Final Completion Date insurance
against physical loss or damage to the Improvements and Equipment as provided
under a standard "All Risk" property policy including but not limited to flood
(if the Leased Premises is in a flood zone) and earthquake coverage in amounts
not less than the actual replacement cost of the Improvements and Equipment.
Such policies shall contain a Replacement Cost endorsement 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) From and after the Final Completion Date, workers'
compensation insurance covering all persons employed by Tenant in connection
with any work done on or about any of the Leased Premises for which claims for
death, disease or bodily injury may be asserted against Landlord, Tenant or any
of the Leased Premises or, in lieu of such Workers' Compensation Insurance, a
program of self-insurance complying with the rules, regulations and requirements
of the appropriate agency of the State.
(iv) From and after the Final Completion Date,
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
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Expediting Expenses and Ammonia Contamination, and $500,000 for Hazardous
Materials Clean-Up Expense and may contain a deductible not to exceed $50,000.
(v) From and after the Final Completion Date, 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
the Leased Premises are being undertaken, builder's risk insurance covering the
total completed value including any "soft costs" with respect to the
Improvements being altered or repaired (on a completed value, non-reporting
basis), replacement cost of work performed and equipment, supplies and materials
furnished in connection with such construction or repair of Improvements or
Equipment, together with such "soft cost" endorsements and such other
endorsements as Landlord may reasonably require and general liability, worker's
compensation and automobile liability insurance with respect to the Improvements
being constructed, altered or repaired.
(vii) 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 or above and which are admitted in, and approved
to write insurance policies by, the State Insurance Department for the State.
The insurance policies (i) shall be for such terms as Landlord may reasonably
approve and (ii) shall be in amounts sufficient at all times to satisfy any
coinsurance requirements thereof. The insurance referred to 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 to 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.
17. CASUALTY AND CONDEMNATION.
(a) If any Casualty to the Leased Premises occurs, 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
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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, 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 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 Leased 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
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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) the entire Leased Premises shall be taken by a
Taking or (ii) any substantial portion of the Leased Premises shall be taken by
a Taking or all or any substantial portion of the Leased Premises shall be
damaged or destroyed by a Casualty and, in such case, Tenant certifies and
covenants to Landlord that it will forever abandon operations at the Leased
Premises (each of the events described in the above clauses (i) and (ii) shall
hereinafter be referred to as a "TERMINATION EVENT"), then (x) in the case of
(i) above, Tenant shall be obligated, within thirty (30) days after Tenant
receives a Condemnation Notice and (y) in the case of (ii) above, Tenant shall
have the option, within thirty (30) days after Tenant receives a Condemnation
Notice or thirty (30) days after the Casualty, as the case may be, to give to
Landlord written notice of the Tenant's option to terminate this Lease (a
"TERMINATION NOTICE") in the form described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease on the first Basic Rent Payment Date which
occurs at least sixty (60) days after the Fair Market Value Date (the
"TERMINATION DATE"), (ii) a binding and irrevocable offer of Tenant to pay to
Landlord the Termination Amount and (iii) if the Termination Event is an event
described in Paragraph 18(a)(ii), the certification and covenants described
therein and a certified resolution of the Board of Directors of Tenant
authorizing the same. Promptly upon the delivery to Landlord of a Termination
Notice, Landlord and Tenant shall commence to determine the Fair Market Value.
(c) If Landlord shall reject such offer to terminate this
Lease 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 on the Termination Date and, in such event the Termination
Amount shall not be payable; provided that, if Tenant has not satisfied all
Monetary Obligations and all other obligations and liabilities under this Lease
which have arisen on or prior to the Termination Date (collectively, "REMAINING
OBLIGATIONS") on the Termination Date, then Landlord may, at its option, extend
the date on which this Lease may terminate to a date which is no later than the
first Basic Rent Payment Date after the Termination Date on which Tenant has
satisfied all Remaining Obligations. Upon such termination (i) all obligations
of Tenant hereunder shall terminate except for any Surviving Obligations, (ii)
Tenant shall immediately vacate and shall have no further right, title or
interest in or to any of the Leased Premises and (iii) the Net Award shall be
retained by Landlord. Notwithstanding anything to the 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
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on which this Lease is to terminate automatically shall be extended to the first
Basic Rent Payment Date after the receipt by Landlord of the full amount of the
Net Award provided that, if Tenant has not satisfied all Remaining Obligations
on such date, then Landlord may, at its option, extend the date on which this
Lease may terminate to a date which is no later than the first Basic Rent
Payment Date after such date on which Tenant has satisfied all such Remaining
Obligations.
(d) Unless Tenant shall have received a Rejection not later
than the thirtieth (30th) day following the Fair Market Value Date, Landlord
shall be conclusively presumed to have accepted such offer. If such offer is
accepted by Landlord then, on the Termination Date, Tenant shall pay to Landlord
the Termination Amount and all Remaining Obligations and, if requested by
Tenant, Landlord shall (i) convey to Tenant the Leased Premises or the remaining
portion thereof, if any, and (ii) pay to or assign to Tenant Landlord's entire
interest in and to the Net Award, all in accordance with Paragraph 20.
19. RESTORATION.
(a) Landlord (or Lender if required by any Mortgage) shall
hold Net Award in excess of 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;
(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;
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(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 is purchased by Tenant pursuant to
any provision of this Lease, Landlord need not convey any better title thereto
than that which was conveyed to Landlord, and Tenant shall accept such title,
subject, however, to the Permitted Encumbrances and to all other liens,
exceptions and restrictions on, against or relating to any of the Leased
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises which have been
created by or resulted from acts or omissions of Landlord after the date of this
Lease, unless the same are Permitted Encumbrances or customary utility easements
benefiting the Leased Premises or were created with the concurrence of Tenant or
as a result of a default by Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the Leased
Premises pursuant to any provision of this Lease (any such date the "PURCHASE
DATE"), Tenant shall pay to Landlord, or to any Person to whom Landlord directs
payment, the Relevant Amount therefor specified herein, in Federal Funds, less
any credit of the Net Award received and retained by Landlord or a Lender
allowed against the Relevant Amount, and Landlord shall deliver to Tenant (i) a
special warranty deed which describes the premises being conveyed and conveys
the title thereto as provided in Paragraph 20(a), (ii) such other instruments as
shall be necessary to transfer to Tenant or its designee any other property (or
rights to any Net Award not yet received by Landlord or a Lender) then required
to be sold by Landlord to Tenant pursuant to this Lease and (iii) any Net Award
received by Landlord, not credited to Tenant against the Relevant Amount and
required to be delivered by Landlord to Tenant pursuant to this Lease; provided,
that if any Monetary Obligations remain outstanding on such date, then Landlord
may deduct from the Net Award the amount of such Monetary Obligations. If on the
Purchase Date any Monetary Obligations remain outstanding and no Net Award is
payable to Tenant by Landlord or the amount of such Net Award is less than the
amount of the Monetary Obligations, then Tenant shall pay to Landlord on the
Purchase Date the amount of such Monetary Obligations. Upon the completion of
such purchase, this Lease and all obligations and liabilities of Tenant
hereunder shall terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be delayed after
(i) the Termination Date, in the event of a purchase pursuant to Paragraph 18
or, (ii) the date scheduled
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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 34(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 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 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 the Leased 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
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date of such assignment, by a written instrument delivered to Landlord at the
time of such assignment. Each sublease of any of the Leased Premises shall be
subject and subordinate to the provisions of this Lease. No assignment or
sublease 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 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 35 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:
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(i) a failure by Tenant to make any payment of any
Monetary Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise specifically
mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant herein
or in any certificate, demand or request made pursuant hereto proves to be
incorrect, now or hereafter, in any material respect;
(iv) a default beyond any applicable cure period or at
maturity by Tenant or 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 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) The breach of any Covenant shall occur;
(viii) Tenant shall (A) voluntarily be adjudicated a
bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for the Leased Premises, (C) file a petition seeking
relief under the bankruptcy or other similar laws of the United States, any
state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(ix) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for
any of the Leased Premises or approving a petition filed against Tenant which
seeks relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, and such order, judgment or decree shall remain
undischarged or unstayed ninety (90) days after it is entered;
(x) the Leased Premises shall have been vacated unless
required with respect to a Casualty or Alterations or shall have been abandoned;
(xi) Tenant shall be liquidated or dissolved or shall
begin proceedings towards its liquidation or dissolution;
(xii) the estate or interest of Tenant in any of the
Leased Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to
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be sold or transferred or such process shall not be vacated or discharged within
ninety (90) days after it is made;
(xiii) a failure by Tenant to perform or observe, or a
violation or breach of, or a misrepresentation by Tenant under any provision of
any Assignment or any other document between Tenant and Lender, if such failure,
violation, breach or misrepresentation gives rise to a default beyond any
applicable cure period with respect to any Loan;
(xiv) a failure by Tenant to maintain in effect any other
license or permit necessary for the use, occupancy or operation of the Leased
Premises;
(xv) Tenant fails to occupy the Leased Premises on the
Final Completion Date; or
(xvi) 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), (xv) or (xvi) 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 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 the Leased Premises, Landlord may re-enter and repossess the
Leased Premises, by summary proceedings or any other legal proceedings. Upon or
at any time after taking possession of the Leased Premises, Landlord may, by
peaceable means or legal process, remove
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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 the Leased Premises pursuant to
clause (i) above, Landlord shall have the right to relet any of the Leased
Premises to such tenant or tenants, for such term or terms, for such rent, on
such conditions and for such uses as Landlord in its sole discretion may
determine, and collect and receive any rents payable by reason of such
reletting. Landlord may make such Alterations in connection with such reletting
as it may deem advisable in its sole discretion. Notwithstanding any such
reletting, Landlord may collect the damages set forth in Paragraph 23(b)(ii).
(iii) Landlord may, upon notice to Tenant, require Tenant
to make an irrevocable offer to terminate this Lease upon payment to Landlord of
an amount (the "DEFAULT TERMINATION AMOUNT") specified in the next sentence. The
"Default Termination Amount" shall be the greatest of (A) the 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, (B) the sum of the Landlord's Share of Project Costs
and the applicable Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Default Termination Amount or (C) an
amount equal to the Present Value of the entire Basic Rent from the date of such
purchase to the date on which the Term would expire, assuming that the Term has
been extended for all extension periods, if any, provided for in this Lease.
Upon such notice to Tenant, Tenant shall be deemed to have made such offer and
shall, if requested by Landlord, within ten (10) days following such request
deposit with Landlord as payment against the Default Termination Amount the
amount described in (B) above and Landlord and Tenant shall promptly commence to
determine Fair Market Value. Within thirty (30) days after the Fair Market Value
Date, Landlord shall accept or reject such offer. If Landlord accepts such offer
then, on the tenth (10th) business day after such acceptance, Tenant shall pay
to Landlord the Default Termination Amount and, at the request of Tenant,
Landlord will convey the Leased Premises to Tenant or its designee in accordance
with Paragraph 20. Any rejection by Landlord of such offer shall have no effect
on any other remedy Landlord may have under this Lease.
(iv) Landlord may declare by notice to Tenant the entire
Basic Rent (in the amount of Basic Rent then in effect) for the remainder of the
then current Term to be immediately due and payable. Tenant shall immediately
pay to Landlord all such Basic Rent discounted to its Present Value, all accrued
Rent then due and unpaid, all other Monetary Obligations which are then due and
unpaid and all Monetary Obligations which arise or become due by reason of such
Event of Default (including any Costs of Landlord). Upon receipt by Landlord of
all such accelerated Basic Rent and Monetary Obligations, this Lease shall
remain in full force and effect and Tenant shall have the right to possession of
the Leased Premises from the date of such receipt by Landlord to the end of the
Term, and subject to all the provisions of this Lease, including the obligation
to pay all increases in Basic Rent and all Monetary Obligations that
subsequently become due, except that (A) no Basic Rent which has been prepaid
hereunder shall be due thereafter during the said Term, (B) Tenant shall have no
option to extend or renew the Term and (C) Tenant shall have no further rights
under Paragraph 35.
(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
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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.
(c) 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 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.
(d) 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.
(e) 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.
(f) No termination of this Lease, repossession or reletting of
the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(g) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD OR
TENANT HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY.
(h) 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.
(i) 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
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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.
(j) 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.
(k) 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 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 given 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
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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 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 a nationally recognized firm of independent
certified public accountants. Tenant shall also furnish to Landlord within
forty-five (45) days after the end of each of the three remaining quarters
unaudited financial statements and all other quarterly reports of Tenant,
certified by Tenant's chief financial officer, and all filings, if any, of Form
10-K, Form 10-Q and other required filings with the Securities and Exchange
Commission pursuant to the provisions of the Securities Exchange Act of 1934, as
amended, or any other Law. All 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
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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" or 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:
(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 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 (or Third Party Purchaser with
respect to a determination under clause (D) below) shall endeavor to agree upon
such Fair Market Value within thirty (30) days after the date (the "APPLICABLE
INITIAL DATE"") on which (A) Tenant provides Landlord with notice of its
intention to terminate this Lease and purchase the Leased Premises pursuant to
Paragraph 18, (B) Landlord provides Tenant with notice of its intention to
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redetermine Fair Market Value pursuant to Paragraph 20(c), (C) Landlord provides
Tenant with notice of Landlord's intention to require Tenant to make an offer to
terminate this Lease pursuant to Paragraph 23(a)(iii) or (D) 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 (and given to Landlord by Tenant) as of the
Relevant Date. 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. 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 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
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(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.
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 offset 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.
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33. TAX TREATMENT; REPORTING. Landlord and Tenant each acknowledge
that each shall treat this transaction as a true lease for state law purposes
and shall report this transaction as a Lease for Federal income tax purposes.
For Federal income tax purposes each shall report this Lease as a true lease
with Landlord as the owner of the Leased Premises and Equipment and Tenant as
the lessee of such Leased Premises and Equipment including: (1) treating
Landlord as the owner of the property eligible to claim depreciation deductions
under Section 167 or 168 of the Internal Revenue Code of 1986 (the "CODE") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
34. 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 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;
35. 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
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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 35 AND ANY EXERCISE THEREOF BY
TENANT SHALL CEASE AND TERMINATE AND SHALL BE NULL AND VOID. IN SUCH EVENT
TENANT SHALL EXECUTE A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LANDLORD SHALL
REASONABLY REQUEST EVIDENCING THE TERMINATION OF THE FIRST OPTION AND, IF
APPLICABLE, THE SECOND OPTION.
36. SECURITY DEPOSIT.
(a) Concurrently with the execution of this Lease, Tenant
shall deliver to Landlord a security deposit in the amount of One Hundred Fifty
Thousand and No/100 ($150,000) (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 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
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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 36(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 36 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 36. 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.
37. MISCELLANEOUS.
(a) The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
(b) As used in this Lease, the singular shall include the
plural and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien" shall
mean "lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform under this
Lease may be performed at any time and from time to time by Landlord or any
person or entity
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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.
(d) Landlord shall in no event be construed for any purpose to
be a partner, joint venturer or associate of Tenant or of any subtenant,
operator, concessionaire or licensee of Tenant with respect to any of the Leased
Premises or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by
Tenant on or about the effective date hereof at Landlord's request constitute
the entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating to
the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject
matter of this Lease and have each fully participated in the negotiation and
drafting of this Lease. Accordingly, this Lease shall be construed without
regard to the rule that ambiguities in a document are to be construed against
the drafter.
(f) This Lease may be modified, amended, discharged or waived
only by an agreement in writing signed by the party against whom enforcement of
any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land and
bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of Landlord, its successors and assigns. If there is more than one
Tenant, the obligations of each shall be joint and several.
(h) If any one or more of the provisions contained in this
Lease shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(i) All exhibits attached hereto are incorporated herein as if
fully set forth.
(i) This Lease shall be governed by and construed and enforced
in accordance with the Laws of the State.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
DELAWARE PANE (TX), LP,
a Delaware limited partnership
By: PANE (TX) QRS 14-26, INC.,
General Partner
By:
----------------------------
First Vice President
TENANT:
ATRIUM COMPANIES, INC.,
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
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EXHIBIT A
PREMISES
Being a tract of land situated in the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Survey, Abstract ▇▇. ▇▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ and being a part of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ of Premier Industrial Park South, an Addition to the City of ▇▇▇▇▇,
▇▇▇▇▇▇ County, Texas by plat thereof recorded in Volume L, Page 190, Map
Records, Collin County, Texas and being more particularly described as follows:
BEGINNING at a 1/2" iron found on the south right-of-way line of ▇▇▇▇▇▇▇ ▇▇▇▇
(60' R.O.W.) for the most northerly northeast corner of ▇▇▇ ▇, ▇▇▇▇▇ ▇ of said
Addition;
THENCE North 90(0)00'00" East, along the south right-of-way line ▇▇▇▇▇▇▇ ▇▇▇▇
(60' R.O.W.) a distance of 709.06 feet to a 1/2" iron rod found for the
beginning of a curve to the right having a central angle of 00(0)34'23", a
radius of 2,000.00 feet and a chord which bears South 89(0)42'49" East a
distance of 20.00 feet;
THENCE Southeasterly, along the south right-of-way line of ▇▇▇▇▇▇▇ ▇▇▇▇ (60'
R.O.W.) and said curve to the right, an arc distance of 20.00 feet to a 5/8"
iron rod set for corner;
THENCE South 00(0)00'00" East, a distance of 924.31 feet to a 5/8" iron rod set
for corner on the north line of a 12.5163 acre tract of land conveyed to
Independent Bank of Wylie by deed recorded in Volume 2639, Page ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇;
THENCE North 89(0)32'38" West, along the north line of said 12.5163 acre tract,
a distance of 1,157.49 feet to a 60D nail found for an ell corner of a 10.701
acre tract of land conveyed to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ by deed recorded in Volume 1580,
Page ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, and being the northwest corner of
said 12.5163;
THENCE North 03(0)28'33" East, along the East line of said 10.701 acre tract, a
distance of 462.16 feet to a 1/2" iron rod found for the most westerly southwest
corner of said Lot 2;
THENCE South 51(0)51'48" East, along a southwest line of said Lot 2, a distance
of 190.50 feet to a 1/2" iron rod set for corner;
THENCE South 39(0)27'13" East, along a southwest line of said Lot 2, a distance
of 256.00 feet to a 1/2" iron rod set for corner;
THENCE North 90(0)00'00" East, along the south line of said Lot 2, a distance of
162.87 feet to a 1/2" iron rod set for the southeast corner of said Lot 2;
THENCE 00(0)00'00" West, along an east line of said Lot 2, a distance of 566.70
feet to a 1/2" iron rod set for the most easterly northeast corner of said Lot
2;
THENCE South 90(0)00'00" West, along a north line of said Lot 2, a distance of
75.00 feet to a 1/2" iron rod found for a reentrant corner of said Lot 2;
THENCE North 00(0)00'00" West, along an east line of said Lot 2, a distance of
202.50 feet to the Point of Beginning and containing 749,492 square feet or
17.206 acres of land.
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 C
PERMITTED ENCUMBRANCES
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
1999, and subsequent years, and subsequent taxes and assessments by any
taxing authority for prior years due to change in land usage or ownership.
3. Rights of parties in Possession.
4. A 20 foot building setback line along the North property line as set
forth on the recorded plat and dedication, as shown on the survey
prepared by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Registered Public Surveyor No. 3949,
dated November 5, 1999, and revised November 17, 1999.
5. Easement as shown on the recorded plat and dedication by document
recorded in Volume 3088, page 640, and as shown on the survey
prepared by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Registered Public Surveyor No. 3949,
dated November 5, 1999, and revised November 17, 1999.
6. Easement to Collin County Soil Conservation District; recorded on October
10, 1956, Volume 522, page ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇; shown
on plat in southwest portion, and as shown on the survey prepared by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Registered Public Surveyor No. 3949, dated November 5,
1999, and revised November 17, 1999.
7. The flood plain in the southeast corner of subject property
disclosed by the examination of survey prepared by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Registered Public Surveyor No. 3949, dated November 5,
1999, and revised November 17, 1999.
8. A 30 foot temporary construction easement adjacent to and north of the 20
foot permanent easement located in the south and southwest portion of the
subject property; recorded July 11, 1989, Volume 3088, Page ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, and as shown on the survey prepared by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Registered Public Surveyor No. 3949, dated November 5,
1999, and revised November 17, 1999.
9. Any discrepancies, conflicts, or shortages in area or boundary lines, or
any encroachments or protrusions, or any overlapping of improvements.
10. Homestead or community property or survivorship rights, if any, of any
spouse of any insured.
EXHIBIT D
BASIC RENT PAYMENTS
1. BASIC RENT TO AND INCLUDING THE FUNDING DEADLINE.
(a) Commencing on December 1, 1999, and continuing on the
first day of each succeeding month to and including the month in which the Final
Completion Date occurs, Basic Rent shall be payable monthly on each Basic Rent
Payment Date in an amount equal to .007292 multiplied by the amount advanced by
Landlord for Landlord's Share of Project Costs (exclusive of the Acquisition
Fee) for the Leased Premises which shall be calculated based on the number of
days each advance is outstanding prior to such Basic Rent Payment Date. The
amount set forth in the foregoing sentence shall, absent manifest error, be
conclusively determined from the books and records of Landlord. Tenant shall
have the right, upon reasonable prior notice, to inspect Landlord's books and
records to verify the accuracy of Landlord's calculation of Basic Rent.
(b) On each Basic Rent Payment Date that occurs on or prior
to, but not after the Final Completion Date, and relates to any period occurring
prior to the Funding Deadline, Landlord shall approve as an advance of
Landlord's Share of Project Costs, the monthly installments of Basic Rent
payable under this Paragraph 1 and will credit each such advance against the
installment of Basic Rent then due and owing; provided, however, that (i) from
and after the Final Completion Date Landlord's obligation to make any further
advance for future installments of Basic Rent shall terminate and all such
future payments of Basic Rent shall be made by Tenant.
2. BASIC RENT FROM AND AFTER THE FUNDING DEADLINE. Commencing on
the Final Completion Date and continuing on the first day of each calendar month
thereafter until the expiration of the Term, Basic Rent shall be payable in an
amount equal to the product of 10.75% multiplied by Landlord's Share of Project
Costs for the Leased Premises (exclusive of the Acquisition Fee). Promptly
following the Final Completion Date, Landlord and Tenant shall execute an
addendum to this Lease setting forth the numerical amount of the initial annual
and monthly payments of Basic Rent payable for the Leased Premises. Basic Rent
shall be subject to the adjustments provided for in Paragraphs 3, 4 and 5.
3. CPI ADJUSTMENTS TO BASIC RENT. The Basic Rent shall be
subject to adjustment, in the manner hereinafter set forth, for increases in the
index known as United States Department of Labor, Bureau of Labor Statistics,
Consumer Price Index, All Urban Consumers, United States City Average, All
Items, (1982-84=100) ("CPI") or the successor index that most closely
approximates the CPI. If the CPI shall be discontinued with no successor or
comparable successor index, Landlord and Tenant shall attempt to agree upon a
substitute index or formula, but if they are unable to so agree, then the matter
shall be determined by arbitration in accordance with the rules of the American
Arbitration Association then prevailing in New York City. Any decision or award
resulting from such arbitration shall be final and binding upon Landlord and
Tenant and judgment thereon may be entered in any court of competent
jurisdiction. In no event will the Basic Rent as adjusted by the CPI adjustment
be less than the Basic Rent in effect for the two (2) year period immediately
preceding such adjustment.
4. EFFECTIVE DATES OF CPI ADJUSTMENTS. Basic Rent shall not be
adjusted to reflect changes in the CPI until the second (2nd) anniversary 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 second (2nd) anniversary of the First Full Basic Rent Payment Date and
thereafter on the fourth (4th), sixth (6th), eighth (8th), tenth (10th), twelfth
(12th), fourteenth (14th), sixteenth (16th), eighteenth (18th) and, if the
Initial Term is extended, on each second (2nd) anniversary of the First Full
Basic Rent Payment Date thereafter, Basic Rent shall be
adjusted to reflect increases in the CPI during the most recent two (2) year
period immediately preceding each of the foregoing dates (each such date being
hereinafter referred to as the "BASIC RENT ADJUSTMENT DATE").
5. METHOD OF ADJUSTMENT FOR CPI ADJUSTMENT.
(a) As of each Basic Rent Adjustment Date when the average CPI
determined in clause (i) below exceeds the Beginning CPI (as defined in this
Paragraph 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 5% of
the Basic Rent in effect immediately prior to such Basic Rent Adjustment Date
shall be added to the Basic Rent in effect immediately prior to such Basic Rent
Adjustment Date; provided, however, that if for any two (2) year period the
percentage increase in the CPI is less than 5% the difference between 5%, and
the actual percentage increase 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. 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.
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EXHIBIT E
GUARANTORS
1. Atrium Corporation
2. Atrium Door and Window Company - West Coast
3. Atrium Door and Window Company of the Northeast
4. Atrium Door and Window Company of New York
5. Atrium Door and Window Company of Arizona
6. Atrium Door and Window Company of New England
7. Door Holdings, Inc.
8. ▇.▇. ▇▇▇▇▇ Company, Inc.
9. Total Trim, Inc.
10. Wing Industries Holdings, Inc.
11. Wing Industries, Inc.
12. H.I.G. Vinyl, Inc.
13. Heat, Inc.
14. Thermal Industries, Inc.
15. Best Built, Inc.
16. Champagne Industries, Inc.
17. Total Trim, Inc.-South
18. ▇.▇. ▇▇▇▇▇ Company-South