EXHIBIT 10-L
LEASE AGREEMENT
by and between
WRENCH (DE) LIMITED PARTNERSHIP,
a Delaware limited partnership
as LANDLORD
and
TRUSERV CORPORATION
a Delaware corporation,
as TENANT
Premises: 1. Woodland, California
2. Corsicana, Texas
Dated as of: December 26, 2002
TABLE OF CONTENTS
Page
----
1. Demise of Premises ................................................ 1
2. Certain Definitions ............................................... 1
3. Title and Condition; Single Lease Transaction ..................... 10
4. Use of Leased Premises; Quiet Enjoyment ........................... 12
5. Term .............................................................. 13
6. Basic Rent ........................................................ 14
7. Additional Rent ................................................... 15
8. Net Lease: Non-Terminability ...................................... 16
9. Payment of Impositions ............................................ 16
10. Compliance with Laws and Easement Agreements; Environmental
Matters .......................................................... 18
11. Liens; Recording .................................................. 19
12. Maintenance and Repair ............................................ 20
13. Alterations and Improvements ...................................... 20
14. Permitted Contests ................................................ 22
15. Indemnification ................................................... 23
16. Insurance ......................................................... 24
17. Casualty and Condemnation ......................................... 27
18. Termination Events ................................................ 29
19. Restoration ....................................................... 30
20. Intentionally Omitted ............................................. 31
21. Assignment and Subletting: Prohibition against Leasehold Financing. 31
22. Events of Default ................................................. 34
23. Remedies and Damages Upon Default ................................. 37
24. Notices ........................................................... 41
25. Estoppel Certificate .............................................. 42
26. Surrender ......................................................... 42
27. No Merger of Title ................................................ 42
28. Books and Records ................................................. 43
29. Intentionally Omitted ............................................. 43
30. Non-Recourse as to Landlord ....................................... 43
31. Financing ......................................................... 44
32. Subordination, Non-Disturbance and Attornment ..................... 44
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33. Tax Treatment; Reporting .......................................... 44
34. Miscellaneous ..................................................... 45
EXHIBITS
Exhibit "A" - Land
Exhibit "B" - Fixtures
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Form of Subordination, Non-disturbance and Attornment
Agreement
Exhibit "F" - Premises Percentage Allocation of Basic Rent
Exhibit "G" - Patriot's Act Certification
Exhibit "H" - Post-closing Obligations
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LEASE AGREEMENT, made as of this 26th day of December, ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ (▇▇) LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord"),
with an address c/o W. P. ▇▇▇▇▇ & Co. LLC, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and TRUSERV CORPORATION, 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, with the intent to
be legally bound, as follows:
1. Demise of Premises. Landlord hereby demises and lets to Tenant,
and Tenant hereby takes and leases from Landlord, for the term and upon the
provisions hereinafter specified, the following described property (hereinafter
referred to collectively as the "Leased Premises" and individually as the
"California Premises", "Texas Premises": (a) the land described in Exhibit "A"
attached hereto, together with the Appurtenances (collectively, the "Land"); (b)
the buildings containing approximately 1,134,733 square feet in the aggregate,
structures and other improvements now or hereafter constructed on the Land
(collectively, the "Improvements"); and (c) the fixtures, machinery, equipment
and other property described in Exhibit "B" hereto (collectively, the
"Fixtures").
2. Certain Definitions.
"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 that Landlord
is required to maintain, replace and/or repair pursuant to any Legal Requirement
or Permitted Encumbrance.
"Affected Premises" shall mean the Affected Premises as
defined in Paragraph 18.
"Affiliate Leases" shall mean that certain lease agreement by
and between Hammer (DE) Limited Partnership and Tenant with respect to property
situate in Springfield, Oregon and Jonesboro, Georgia dated as of the date of
this Lease and that certain lease agreement by and between BOLT (DE) Limited
Partnership and Tenant with respect to property situate in Kingman, Arizona,
Springfield, Oregon and Fogelsville, Pennsylvania also dated as of the date of
this Lease, each as amended or modified from time to time.
"Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations or removals of and all substitutions or
replacements for any of the Improvements or Fixtures, 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, (b) any streets,
ways, alleys, vaults, gores or strips of land adjoining the Land, and (c) all
water, irrigation and drainage rights (whether riparian, appropriative or
otherwise) and all electrical users' rights, in or relating to or used in
connection
with the Land; all shares of stock evidencing any such rights; and all fixtures
and equipment used for production or distribution of water or electricity in
connection with any use of the Land.
"Assignment" shall mean any first priority 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.
"Bifurcated Lease" shall mean Bifurcated Lease as defined in
Paragraph 21(a)(i).
"Bifurcated Premises" shall mean Bifurcated Premises as
defined in Paragraph 21(a)(i).
"Business Day" shall mean any weekday, except for a national
holiday or a day on which national banks are closed in either Illinois or New
York.
"Casualty" shall mean any damage to or destruction of or which
affects the Leased Premises or Adjoining Property.
"Closing Agreement" shall mean that certain Closing Agreement
by and between Tenant and Landlord dated as of the date hereof.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Competitor" shall mean any Person whose primary business is
and who receives at least 10% of its revenues from the operation of a hardware
cooperative or the wholesale or retail sale or distribution of home improvement
and/or hardware products.
"Complete Assignment" shall mean Complete Assignment as
defined in Paragraph 21(a)(i).
"Condemnation" shall mean a Taking.
"Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Control Event" shall mean the failure by Tenant to perform
and observe, or a violation or breach of, Paragraphs 4(a), 4(c), 8(d), 10
(except with respect to an Environmental Violation caused by any subtenant or
Person who is not controlled by or in control of or under common control with
Tenant or any Environmental Violation that Tenant is diligently endeavoring to
cure but fails to cure within the cure period specified in Paragraph
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22(b)), 11, 12, 13, 14, 15, 16 (except for insurance required under Paragraph
16(a) that cannot be obtained from any insurance carrier at any cost despite
Tenant's best efforts), 17, 19, 21, 24, 25, 26, 28, 31, 32, 34(l).
"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.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect either Related Premises.
"Environmental Law" shall mean (i) whether in effect as of the
Commencement Date or thereafter enacted or promulgated, any applicable federal,
state, foreign and local law, statute, ordinance, rule, regulation, license,
permit, authorization, approval, consent, court order, judgment, decree,
injunction, code, requirement or agreement with any governmental entity, (x)
relating to pollution (or the cleanup thereof), or the protection of air, water
vapor, surface water, groundwater, drinking water supply, land (including land
surface or subsurface), plant, aquatic and animal life from injury caused by a
Hazardous Substance or (y) concerning exposure to, or the use, containment,
storage, recycling, reclamation, reuse, treatment, generation, discharge,
transportation, processing, handling, labeling, production, disposal or
remediation of any Hazardous Substance, Hazardous Condition or Hazardous
Activity, in each case as amended and as now or hereafter in effect, and (ii)
any common law or equitable doctrine (including, without limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations or injuries or damages due
to or threatened as a result of the presence of, exposure to, or ingestion of,
any Hazardous Substance. The term Environmental Law includes, without
limitation, the federal Comprehensive Environmental Response Compensation and
Liability Act of 1980, the Superfund Amendments and Reauthorization Act, the
federal Water Pollution Control Act, the federal Clean Air Act, the federal
Clean Water Act, the federal Resources Conservation and Recovery Act of 1976
(including the Hazardous and 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
which could reasonably be anticipated to result in any liability to Landlord,
Tenant or
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Lender, any Federal, state or local government or any other Person for the costs
of any removal or remedial action or natural resources damage or for bodily
injury or property damage, (b) any deposit, storage, dumping, placement or use
of any Hazardous Substance at, upon, under, within or migrating from the Leased
Premises in violation of any Environmental Law which could reasonably be
anticipated to result in any liability to any Federal, state or local government
or to any other Person for the costs of any removal or remedial action or
natural resources damage or for bodily injury or property damage, (c) the
abandonment or discarding of any barrels, containers or other receptacles
containing any Hazardous Substances in violation of any Environmental Laws, (d)
any activity, occurrence or condition which could result in any liability, cost
or expense to Landlord or Lender or any other owner or occupier of the Leased
Premises, or which could reasonably be anticipated to result in a creation of a
lien on either Related Premises as a result of any violation of any
Environmental Law or (e) any violation of or noncompliance with any
Environmental Law.
"Escrow Charges" shall mean Escrow Charges as defined in
Paragraph 9.
"Escrow Payment" shall mean Escrow Payment as defined in
Paragraph 9.
"Fitch" shall mean Fitch, Inc.
"Fixtures" shall mean the Fixtures as defined in Paragraph 1.
"Environmental Violation Extension Term" shall mean
Environmental Violation Extension Term as defined in Paragraph 10(e).
"Estoppel Certificate" shall mean Estoppel Certificate as
defined in Paragraph 25.
"Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).
"Expiration Date" shall mean Expiration Date as defined in
Paragraph 5.
"Fair Market Rent" shall mean Fair Market Rent as defined in
Paragraph 5(b).
"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.
"Fixtures" shall mean the Fixtures as defined in Paragraph 1.
"GAAP" shall mean GAAP as defined in Paragraph 28.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release, seepage, spill, leak, flow, discharge or emission of any
Hazardous Substance into the environment (including
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the air, ground water, watercourses or water systems), (iii) involves the
containment or storage of any Hazardous Substance; or (iv) would cause any of
the Leased Premises or any portion thereof to become a hazardous waste
treatment, recycling, reclamation, processing, storage or disposal facility
within the meaning of any Environmental Law.
"Hazardous Condition" means any condition which would support
any claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance supporting a claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead,
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Investment Grade Rating" means any of the following: (a) an
unsecured senior debt rating of Baa2 or better from ▇▇▇▇▇'▇, (b) an unsecured
senior debt rating of BBB or better by S&P or Fitch, or (c) if none of the
Rating Agencies furnish such ratings, then a comparable rating by any rating
agency reasonably acceptable to Landlord and Lender.
"Land" shall mean the Land as defined in Paragraph 1.
"Late Charge" shall mean Late Charge as defined in Paragraph
7(a)(ii).
"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 Bifurcation" shall mean Lease Bifurcation as defined in
Paragraph 21(a)(i).
"Lease Year" shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at midnight on the
last day of the twelfth
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(12th) consecutive calendar month following the month in which the Commencement
Date occurred, and each succeeding twelve (12) month period during the Term,
except that for the purposes of calculating Basic Rent in the thirtieth (30th)
Lease Year the thirtieth (30th) Lease Year shall be eleven (11) months.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1, except for Affected Premises and Bifurcated Premises after
termination of this Lease with respect thereto.
"Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental Laws and
Laws related to accessibility to, usability by, and discrimination against,
disabled individuals) and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to any of the Leased Premises or
Related Premises, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or restoration of any of the Leased
Premises or Related Premises, even if compliance therewith necessitates
structural changes or improvements or results in interference with the use or
enjoyment of any of the Leased Premises or Related Premises or requires Tenant
to carry insurance other than as required by this Lease.
"Lender" shall mean any person or entity (and its respective
successors and assigns) which may, on or after the date hereof, make a Loan to
Landlord or be the holder of a Note secured by a Mortgage, or, if more than one
Note is secured by a Mortgage, then Lender shall mean the agent or trustee for
such Note holders, provided that, in each case, Landlord has identified such
Lender in a written notice to Tenant together with contact information for such
Lender.
"Limited Remedy Default" shall mean an Event of Default
specified in the following clauses of Paragraph 22(a): clause (ii) unless such
default is a Control Event, clause (iii) if the misrepresentation is with
respect to the last sentence of Paragraph A.2 of the Closing Agreement, the
first sentence of Paragraph A.3 or the first sentence of Paragraph A.7 of the
Closing Agreement, clause (iv), clause (v), clause (viii) or clause (xiv) unless
such default is not a Limited Remedy Default under either of the Affiliated
Leases.
"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" means any structural, or series of related
Alterations, other than a Major Replacement, which will cost more than $750,000.
"Major Replacement" means any structural repair or structural
replacement which will cost more than $750,000.
"Monetary Obligations" shall mean Rent and all other sums
payable by Tenant under this Lease to Landlord or to any third party on behalf
of Landlord.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Services, Inc.
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"Mortgage" shall mean any first priority 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.
"Non-Preapproved Assignee" shall mean Non-Preapproved Assignee
as defined in Paragraph 21(a)(ii).
"Non-Preapproved Assignment" shall mean Non-Preapproved
Assignment as defined in Paragraph 21(a)(ii).
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Partial Assignment" shall mean Partial Assignment as defined
in Paragraph 21(a)(i).
"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).
"Permitted Violations" shall mean Permitted Violations as
defined in Paragraph 14.
"Person" shall mean an individual, partnership, association,
corporation, limited liability company, governmental entity or other entity.
"Pre-Approved Alteration" means (a) any non-structural
Alteration, (b) regardless of cost, the installation, removal or alteration of
non-loadbearing interior partition walls, exterior fences or loading docks or
the installation or alteration (but not the sealing) of dock doors, and (c) any
other structural Alteration which will cost $750,000 or less provided that
TruServ Corporation or a Preapproved Assignee is the Tenant of the Related
Premises which is the subject of the Alteration.
"Preapproved Assignee" shall mean Preapproved Assignee as
defined in Paragraph 21(a)(i).
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"Preapproved Assignment" shall mean Preapproved Assignment as
defined in Paragraph 21(a)(i).
"Preapproved Sublet" shall mean Preapproved Sublet as defined
in Paragraph 21(b).
"Premises Percentage Allocation" shall mean the percentage
allocated to each Related Premises in Exhibit "F" to this Lease as the same may
be adjusted in accordance with the formula specified in Exhibit "F".
"Present Value" of any amount shall mean such amount
discounted by seven (7%) percent per annum.
"Prime Rate" shall mean the interest rate per annum as
published, from time to time, in The Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the lowest rate of
interest charged by any "large U.S. money center commercial banks" and Landlord
makes no representations or warranties to that effect. In the event The Wall
Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate
(the "Discount Rate") on ninety-one (91) day bills ("Treasury Bills") issued
from time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Protected Sublease" shall mean Protected Sublease as defined
in Paragraph 21(b)(ii).
"Protected Subtenant" shall mean Protected Subtenant as
defined in Paragraph 21(b).
"Rating Agency" shall mean Moody's, S&P or Fitch.
"Related Premises" shall mean any one of the Texas Premises
and California Premises.
"Remaining Obligations" shall mean Remaining Obligations as
defined in Paragraph 18(c).
"Remaining Premises" shall mean the Related Premises which are
not Affected Premises under Paragraph 18 or Bifurcated Premises under Paragraph
21.
"Renewal Date" shall mean Renewal Date as defined in Paragraph
5.
"Renewal Term" shall mean Renewal Term as defined in Paragraph
5.
"Rent" shall mean, collectively, Basic Rent and Additional
Rent.
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"Requesting Party" shall mean Requesting Party as defined in
Paragraph 25.
"Responding Party" shall mean Responding Party as defined in
Paragraph 25.
"Restoration Fund" shall mean Restoration Fund as defined in
Paragraph 19(a).
"Review Criteria" shall mean Review Criteria as defined in
Paragraph 21(a)(ii).
"S&P" shall mean Standard & Poor's Corporation.
"Set-Off" shall mean Set-Off as defined in Paragraph 5.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"Surviving Obligations" shall mean any obligations of Tenant
under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a
portion of any of the Leased Premises (i) in or by condemnation or other eminent
domain proceedings pursuant to any Law, general or special, or (ii) by reason of
any agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means, or
(b) any de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor.
"Term" shall mean Term as defined in Paragraph 5.
"Termination Date" shall mean Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean Termination Event as defined in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
"Third Party Purchaser" shall mean Third Party Purchaser as
defined in Paragraph 21 (g).
"Threshold Amount" shall mean (i) $500,000 if TruServ
Corporation or a Preapproved Assignee is the Tenant and, (ii) in all other
instances, $100,000.
"Warranties" shall mean Warranties as defined in Paragraph
3(d).
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"Work" shall mean Work as defined in Paragraph 13(b).
3. Title and Condition; Single Lease Transaction.
(a) The Leased Premises are demised and let subject to (i) the
Mortgage and Assignment presently in effect, (ii) the rights of any Persons in
possession of the Leased Premises, (iii) the existing state of title of any of
the Leased Premises, including any Permitted Encumbrances, (iv) any state of
facts which an accurate survey or physical inspection of the Leased Premises
might show, (v) all Legal Requirements, including any existing violation of any
thereof, and (vi) the condition of the Leased Premises as of the commencement of
the Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises are in good
condition and repair at the inception of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS WHERE IS AND WITH
ALL FAULTS. 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, OR
(xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND
ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT
THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE
LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN THE
EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE,
WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW
OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the
title to the Leased Premises prior to the execution and delivery of this Lease
and has found the same to be satisfactory for the purposes contemplated hereby.
Tenant acknowledges that (i) Tenant has only a leasehold estate in the Leased
Premises, as provided herein, and (ii) to the best of Tenant's
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knowledge, (A) except as set forth in the property condition reports,
environmental reports, zoning reports or any other reports delivered to
Landlord, the Improvements conform to all material Legal Requirements and all
Insurance Requirements, (B) all easements necessary or appropriate for the use
or operation of the Leased Premises have been obtained, (C) all contractors and
subcontractors who have performed work on or supplied materials to the Leased
Premises have been fully paid, and all materials and supplies have been fully
paid for, (D) the Improvements have been completed in all material respects in a
workmanlike manner of quality consistent with industry standards, and (E) all
Fixtures necessary or appropriate for the use or operation of the Leased
Premises have been installed and are presently operative in all material
respects.
(d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, all assignable warranties, guaranties, indemnities and
similar rights (collectively "Warranties") which Landlord may have against any
manufacturer, seller (other than Tenant), engineer, contractor or builder in
respect of any of the Leased Premises. Such assignment shall remain in effect
until the expiration or earlier termination of this Lease, whereupon such
assignment shall cease and all of the Warranties shall automatically revert to
Landlord. In confirmation of such reversion Tenant shall execute and deliver
promptly any certificate or other document reasonably required by Landlord.
Landlord shall also retain the right to enforce any guaranties upon the
occurrence of an Event of Default. Tenant shall enforce all Warranties in
accordance with their respective terms.
(e) TENANT EXPRESSLY ACKNOWLEDGES AND AGREES THAT IT IS THE
EXPRESS INTENT OF LANDLORD AND TENANT TO CREATE, AND THAT THIS LEASE CONSTITUTES
A SINGLE LEASE WITH RESPECT TO EACH AND EVERY PARCEL OF LAND, IMPROVEMENTS AND
FIXTURES INCLUDED IN EACH AND ALL OF THE RELATED PREMISES (WHEREVER LOCATED)
AND, EXCEPT AS EXPRESSLY SET FORTH HEREIN, THIS LEASE SHALL NOT BE (OR BE DEEMED
TO BE) DIVISIBLE OR SEVERABLE INTO SEPARATE LEASES FOR ANY PURPOSE WHATSOEVER,
AND TENANT, ON BEHALF OF ITSELF AND ANY TRUSTEE OR LEGAL REPRESENTATIVE UNDER
THE FEDERAL BANKRUPTCY CODE OR ANY SIMILAR STATE INSOLVENCY PROCEEDING HEREBY,
WAIVES ANY RIGHT TO CLAIM OR ASSERT A CONTRARY POSITION IN ANY ACTION OR
PROCEEDING; IT BEING FURTHER UNDERSTOOD AND AGREED BY TENANT THAT THE PERCENTAGE
ALLOCATION OF BASIC RENT AS SET FORTH ON EXHIBIT "F" HEREOF IS INCLUDED TO
PROVIDE A FORMULA FOR RENT ADJUSTMENT, AND TO FACILITATE THE RIGHTS OF TENANT,
EACH PREAPPROVED ASSIGNEE AND EACH PROTECTED SUBTENANT IN THE CASES OF
ASSIGNMENT AND SUBLETTING, PARTIAL RENEWAL, CASUALTY, CONDEMNATION OR OTHER
PROVISIONS WITH RESPECT TO AFFECTED PREMISES, BIFURCATED PREMISES, PROTECTED
SUBLEASES AND LEASE TERMINATION UNDER CERTAIN CIRCUMSTANCES. ANY EVENT OF
DEFAULT SHALL BE DEEMED TO BE AN EVENT OF DEFAULT WITH RESPECT TO THE ENTIRE
LEASED PREMISES (WHEREVER LOCATED). THE FOREGOING AGREEMENTS AND WAIVERS BY
TENANT IN THIS PARAGRAPH 3(E) ARE MADE AS A MATERIAL INDUCEMENT TO LANDLORD TO
ENTER INTO THE TRANSACTION CONTEMPLATED BY THIS LEASE AND THAT, BUT FOR THE
11
FOREGOING AGREEMENTS AND WAIVERS BY TENANT, LANDLORD WOULD NOT CONSUMMATE THIS
LEASE TRANSACTION.
4. Use of Leased Premises; Quiet Enjoyment.
(a) The Leased Premises may be used and occupied for any
lawful purpose subject to the terms and conditions of this Paragraph 4. No
Related Premises shall be used or occupied, nor shall Tenant or any assignee or
subtenant do or permit anything to be done in or on either Related Premises
leased by such Person in a manner which would (i) violate any Law, Legal
Requirement or Permitted Encumbrance, the violation of which could reasonably be
anticipated to adversely affect the ability to use, maintain or occupy the
applicable Related Premises, (ii) take any action that would invalidate any
insurance policy required under ▇▇▇▇▇▇▇▇▇ ▇▇, (▇▇▇) constitute waste of either
Related Premises or in any way materially increases the risk of fire or other
hazard arising out of the operation of either Related Premises relative to the
risks arising from the use of the applicable Related Premises as the date hereof
or impair the value of either Related Premises in any material respect, (iv)
materially increase the risk of environmental damage, an Environmental Violation
or danger to human health or the environment relative to the risk arising from
the use of the applicable Related Premises as of the date hereof, or (v)
materially increase the wear and tear to the applicable Related Premises
relative to the wear and tear arising from the use of the applicable Related
Premises as of the date hereof.
(b) Subject to the provisions hereof, so long as no Event of
Default has occurred and is continuing, Tenant shall quietly hold, occupy and
enjoy the Leased Premises throughout the Term, without any hindrance, ejection
or molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may after reasonable notice to
Tenant, and, except as provided in Paragraph 10, at Landlord's sole expense
unless an Event of Default exists, but in any event not less than (2) Business
Days notice (except in the case of any emergency, in which event only advance
telephonic notice shall be required) enter upon and examine any of the Leased
Premises at such reasonable times during normal business hours as Landlord may
request (but not more often than twice each Lease Year or at any time during the
existence of an Event of Default) 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, subject to such reasonable restrictions as Tenant may impose, showing
the Leased Premises (or the applicable Related Premises) to prospective Lenders
and purchasers and taking such other action with respect to the Leased Premises
as is permitted by any provision hereof.
(c) In no event shall any portion of the Leased Premises be
used or occupied or permitted to be used or occupied for any of the following
purposes: (i) any dumping, disposing, incineration or reduction of garbage
(exclusive of appropriately screened dumpsters and/or recycling bins located in
the rear of any building and garbage disposal in the ordinary course of
business); (ii) any retail gas station; (iii) any central laundry or dry
cleaning plant or laundromat; or (iv) any vehicle repair, other than truck or
trailer repair in conjunction with the use of either Related Premises as a
distribution facility.
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5. Term.
(a) Subject to the provisions hereof, Tenant shall have and
hold the Leased Premises for an initial term (such term, as extended or renewed
in accordance with the provisions hereof, being called the "Term") commencing on
the date hereof (the "Commencement Date") and ending on December 31, 2022 (the
"Expiration Date").
(b) Tenant shall have the option to extend the initial twenty
(20) year Term as to the entire Leased Premises or either Related Premises for
up to two periods of, a first renewal term of nine years and eleven months and a
second renewal term of ten (10) years (each, a "Renewal Term") beginning,
respectively, on the day after the Expiration Date and the day after the date
that is nine years and eleven months after the Expiration Date (each, a "Renewal
Date"). Tenant shall notify Landlord in writing of its election to exercise the
applicable option as to either Related Premises no later than twelve (12) months
prior to the applicable Renewal Date, provided that the time within which Tenant
is obligated to give notice of the exercise of its option with respect to the
second Renewal Term for any applicable Related Premises shall be extended to the
date which is 10 days after Fair Market Rent is determined for such Related
Premises unless the delay in the determination thereof was caused by Tenant. The
annual Basic Rent for the first Renewal Term shall be the amount set forth on
Exhibit "D" (adjusted to reflect either Related Premises no longer included in
the Leased Premises during the first Renewal Term). The annual Basic Rent for
the second Renewal Term shall be the sum of the annual Fair Market Rent for each
applicable Related Premises during the second Renewal Term. All of the
provisions of this Lease, as the same may be amended, supplemented or modified
shall apply during each Renewal Term (except that Tenant shall not have the
right to any additional Renewal Terms). "Fair Market Rent" as used herein shall
mean an amount of annual rent for the Related Premises for the second Renewal
Term equivalent to the then-current fair market rate of annual effective net
rentals received in the general market area in which the applicable Related
Premises is located pursuant to an absolute net lease, for a similar lease term
with respect to real property having comparable characteristics, including, but
not limited to, age, location, condition and classification of the Improvements,
existing parking facilities and for tenants with a financial condition similar
to the then current financial condition of Tenant. The rental rate or other
terms of any then existing sublease or subleases of the applicable Related
Premises shall not be considered in establishing Fair Market Rent. In order to
exercise its option to extend the Term for the second Renewal Term, Tenant shall
first give Landlord written notice of Tenant's interest in doing so and
requesting the determination of the Fair Market Rent for each applicable Related
Premises for the second Renewal Term ("Tenant's Interest Notice"). Tenant's
Interest Notice shall be given not earlier than eighteen (18) months prior to
the Renewal Date for the second Renewal Term, and not later than fifteen (15)
months prior to the Renewal Date for the second Renewal Term. The latest date
upon which Tenant may give the Tenant's Interest Notice is referred to as the
"Interest Deadline Date." The Fair Market Rent for the second Renewal Term shall
be separately determined in accordance with the following procedure. The parties
shall first attempt to agree on the Fair Market Rent for the second Renewal
Term. If the parties do not agree on the Fair Market Rent within fifteen (15)
days following the receipt by Landlord of Tenant's Interest Notice then, within
ten (10) days after the expiration of such fifteen (15)-day period, the parties
shall attempt to agree upon an appraiser. If the parties agree upon an
appraiser, the appraiser so selected shall determine the Fair Market Rent within
thirty (30) days after selection. If the parties fail to so agree upon the
selection of one such appraiser within such
13
ten (10)-day period, then Tenant and Landlord shall each designate in a written
notice to the other, within fifteen (15) Business Days from the end of such ten
(10)-day period, one appraiser to determine the Fair Market Rent. In the event
either party fails to so select its own appraiser, the appraiser selected by the
other party shall determine Fair Market Rent. If two appraisers are so selected,
each appraiser shall independently determine the Fair Market Rent for such
Related Premises and complete and forward to Landlord and Tenant its separate
appraisal report within thirty (30) days after the expiration of such fifteen
(15)-business day period. Any appraisal report not so forwarded within such time
period shall be excluded. If only one such report is timely forwarded, then the
appraisal set forth therein shall be the Fair Market Rent. In the event the two
reports are both timely forwarded and the lower appraisal is at least ninety
percent (90%) of the higher appraisal, then the arithmetic mean of the two
appraisals shall be the Fair Market Rent. In the event the lower appraisal is
less than ninety percent (90%) of the higher appraisal then, within fifteen (15)
business days after the end of such thirty (30)-day period, the two appraisers
shall meet and select a third appraiser. In the event the two appraisers fail to
so select a third appraiser, either party may obtain court appointment of such
third appraiser. The third appraiser shall select one of the appraisals for each
applicable Related Premises as most accurately determining Fair Market Rent for
such Related Premises and promptly complete and forward its report to Landlord
and Tenant. The Fair Market Rent determined in such selected appraisal shall be
the Fair Market Rent for such Related Premises. All appraisers shall be members
in good standing of the American Institute of Real Estate Appraisers or any
organization succeeding thereto and shall have had not less than ten (10) years
experience with commercial real estate of the type of such Related Premises in
the location where such Related Premises is located. Tenant shall pay the fees
of all appraisers.
(c) If Tenant does not exercise its option pursuant to
Paragraph 5(b) to have the Term extended with respect to a Related Premises, or
if an Event of Default occurs, then Landlord shall have the right during the
remainder of the Term then in effect and, in any event, Landlord shall have the
right during the last year of the Term, to (i) advertise the availability of any
of the Leased Premises, or in the event that the Term is not extended with
respect to such Related Premises, for sale or reletting and to erect upon any of
the Leased Premises signs (in size and content and in locations reasonably
acceptable to Tenant) indicating such availability and (ii) show any of the
Leased Premises, or the applicable Related Premises in the event that the Term
is not extended with respect to such Related Premises, to prospective purchasers
or tenants or their agents at such reasonable times as Landlord may select.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for the
Leased Premises during the Term, the amounts determined in accordance with
Exhibit "D" hereto ("Basic Rent"), commencing on the twentieth (20th) day of
January, 2003, and continuing on the twentieth (20th) day of each April, July,
October, and January thereafter during the Term, provided that if the twentieth
(20th) day of such month is not a Business Day, the applicable Basic Rent
payment shall be due on the first Business Day following the twentieth (20th)
day of such month (each such day being a "Basic Rent Payment Date"). Tenant
shall pay Basic Rent for the period from the Commencement Date through January
19, 2003 on the Commencement Date. Each such rental payment shall be made in
Federal Funds to Landlord, pursuant to wire transfer instructions delivered to
Tenant from time to time or to such other Person, pursuant to wire transfer
instructions delivered to Tenant from time to time as Landlord may direct by not
14
less than fifteen (15) days' prior written notice to Tenant (in which event
Tenant shall give Landlord notice of each such payment promptly upon the making
thereof).
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided herein,
all reasonable costs and expenses of Tenant and Landlord which are incurred in
connection or associated with (A) the ownership, use, non-use, occupancy,
monitoring, possession, operation, condition, design, construction, maintenance,
alteration, repair or restoration of any of the Leased Premises, except for
Landlord's general overhead, (B) the performance of any of Tenant's obligations
under this Lease, (C) any Condemnation proceedings, (D) the adjustment,
settlement or compromise of any insurance claims involving or arising from any
of the Leased Premises, (E) the prosecution, defense or settlement of any
litigation involving or arising from any of the Leased Premises (unless caused
by the gross negligence or willful misconduct of Landlord or its agents), this
Lease, or the sale of the Leased Premises to Landlord provided, however, that in
the event of any litigation involving only Landlord and Tenant, Tenant shall be
responsible for such costs and expenses only if and to the extent that Tenant is
not the prevailing party in such litigation, (F) the exercise or successful
enforcement by Landlord, its successors and assigns, of any of its rights under
this Lease, (G) any amendment to or modification or termination of this Lease
made at the request of Tenant, (H) Costs of Landlord's counsel and reasonable
out-of-pocket Costs of Landlord incurred in connection with the preparation,
negotiation and execution of this Lease, or 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 to the extent
authorized by this Lease (I) the reasonable out-of-pocket 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, (J) all
costs and fees associated with the wire transfers of Rent payments, 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 by the applicable Basic Rent
Payment Date, an amount (the "Late Charge") equal to five percent (5%) of the
amount of such unpaid installment or portion thereof provided, however, that
with respect to the first late payment 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) interest at the rate (the "Default Rate") of four
percent (4%) over the Prime Rate per annum on the following sums until paid in
full: (A) all overdue installments of Basic Rent from five (5) days' following
its due date unless such overdue installments are paid in full within such five
(5) day period, (B) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant, from the date of
payment thereof by Landlord, and (C) all other overdue amounts of Additional
Rent, from the date when any such amount becomes overdue;
15
(b) If Landlord does not provide written notice to Tenant of
the sums owing pursuant to Paragraphs 7(a)(ii) and (iii) within ninety (90) days
after the date that the applicable Late Charge or default interest becomes due
and owing, Tenant shall not be liable for such amounts.
(c) 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 ten (10) Business Days after Landlord's demand for payment
thereof, and (ii) any other Additional Rent, within ten (10) Business Days after
Landlord's demand for payment thereof.
(d) In no event shall amounts payable under Paragraph 7(a)(ii)
and (iii) 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 (except as herein required) and without set-off,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense (collectively, a "Set-Off").
(b) Except as specifically 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 or cause whatsoever foreseen or unforeseen.
(c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and the obligations of Tenant hereunder shall continue unaffected
unless the requirement to pay or perform the same shall have been terminated
pursuant to an express provision of this Lease. The obligation to pay Rent or
amounts equal thereto shall not be affected by any collection of rents by any
governmental body pursuant to a tax lien arising out of the act or omission of
Tenant, even though such obligation results in a double payment of Rent. All
Rent payable by Tenant hereunder shall constitute "rent" for all purposes
(including Section 502(b)(6) of the Federal Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
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, use, gross receipts and rent taxes, transaction privilege,
education or other excise 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
16
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 possessory 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 to Landlord 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 or real property transfer or intangibles
tax imposed on Landlord in connection with the sale of the Leased Premises to
any Person. If any Imposition may be paid in installments without interest or
penalty, Tenant shall have the option to pay such Imposition in installments; in
such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall prepare and file all tax
reports required by governmental authorities which relate to the Impositions.
Tenant shall deliver to Landlord (1) copies of all settlements and notices
pertaining to the Impositions which may be issued by any governmental authority
within ten (10) days after Tenant's receipt thereof, (2) receipts for payment of
all taxes required to be paid by Tenant hereunder within thirty (30) days after
the due date thereof and (3) receipts for payment of all other Impositions
within ten (10) days after Landlord's request therefor.
(b) Following the occurrence of an Event of Default, Tenant
shall pay to Landlord such amounts (each an "Escrow Payment") monthly or
quarterly, at the option of Landlord (but not more often than monthly), so that
there shall be in an escrow account an amount sufficient to pay the Escrow
Charges (as hereinafter defined) as they become due provided, however, that each
Escrow Payment shall not be greater than one twelfth (in the case of monthly
payments) or one quarter (in the case of quarterly payments) of the annual
amount of the annual Escrow Charges as estimated by Landlord. As used herein,
"Escrow Charges" shall mean real estate taxes and assessments on or with respect
to the Leased Premises or payments in lieu thereof and premiums on any insurance
required by this Lease. Landlord shall reasonably determine the amount of the
Escrow Charges (it being agreed that if required by a Lender, such amount shall
equal any corresponding escrow installments required to be paid by Landlord) and
the amount of each Escrow Payment, taking into account any balance remaining in
escrow at the beginning of each Lease Year. The Escrow Payments may not be
commingled with other funds of Landlord or other Persons. Landlord shall apply
the Escrow Payments to the payment of the Escrow Charges in such order or
priority as they become due 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) Business Days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord. At the end
of the Term any Escrow Payments held by Landlord or Lender which are applicable
to any period after the expiration of the Term or the termination of this Lease
shall be promptly refunded to Tenant. Notwithstanding anything to the contrary
in this Paragraph 9(b), payment of Escrow Charges shall be required
17
only for six (6) months following the date on which the Event of Default which
gave rise to the requirement to make Escrow Payments is cured, provided,
however, that if a third Event of Default occurs, Landlord shall have the right
to require Tenant to pay and Tenant shall pay such Escrow Charges for the
balance of the Term.
10. Compliance with Laws and Easement Agreements; Environmental
Matters.
(a) Tenant shall, at its expense, 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, (ii) permit any sublessee,
assignee or other Person occupying the Leased Premises under or through Tenant
to cause, permit or suffer to occur any Environmental Violation and, at the
request of Landlord or Lender, Tenant shall promptly remediate or undertake any
other appropriate response action to correct any existing Environmental
Violation, and (iii) without the prior written consent of Landlord and Lender,
permit any drilling or exploration for or extraction, removal, or production of
any minerals from the surface or the subsurface of the Land, regardless of the
depth thereof or the method of mining or extraction thereof except that Tenant's
failure to prevent any Person (other than Tenant or any person claiming by,
through or under Tenant) from exercising a legal right to engage in subsurface
drilling or mining under the Texas Premises from an adjoining property shall not
constitute an Event of Default hereunder provided that Tenant gives Landlord
notice of any such drilling or mining promptly upon Tenant obtaining actual
knowledge thereof. Any and all reports prepared for or by Landlord with respect
to the Leased Premises shall be for the sole benefit of Landlord and Lender 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 unless (i)
Landlord gives its written consent, (ii) such alteration, modification,
amendment or termination does not reduce the value of the applicable Related
Premises or impair its use, and (iii) Tenant delivers to Landlord and Lender, at
Tenant's sole expense, a title endorsements satisfactory to Landlord and Lender
with respect thereto. Notwithstanding the foregoing, Landlord's consent shall be
deemed given if Landlord fails to object in writing (stating its reasons for
objecting) to such amendment or termination within thirty (30) days after
Landlord's receipt of written request for consent so long as Tenant's request
for consent is conspicuously marked in all capitals on both the outside of the
package and within such correspondence with the notation "THIS REQUEST FOR
CONSENT SHALL BE DEEMED GRANTED UNLESS RESPONDED TO WITHIN THIRTY (30) DAYS OF
RECEIPT".
(c) Upon prior written notice from Landlord, Tenant shall
permit such persons as Landlord may designate ("Site Reviewers") to visit the
Leased Premises and perform, as agents of Tenant, environmental site
investigations and assessments ("Site Assessments") on the Leased Premises (i)
in connection with any sale, financing or refinancing of the Leased
18
Premises, (ii) within the six month period prior to the expiration of the Term
with respect to a Related Premises, (iii) if required by Lender or the terms of
any credit facility to which Landlord is bound, (iv) if an Event of Default
exists, or (v) at any other time that, in the opinion of Landlord or Lender, a
reasonable basis exists to believe that an Environmental Violation or any
condition that could reasonably be expected to result in any Environmental
Violation exists. Such Site Assessments shall not include any invasive testing
(i.e. testing requiring boring, digging, demolition or similar activities)
unless Landlord has a reasonable belief that an Environmental Violation exists.
Tenant shall supply to the Site Reviewers such historical and operational
information regarding the Leased Premises as may be reasonably requested by the
Site Reviewers to facilitate the Site Assessments, and shall make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. The cost of performing and reporting Site Assessments shall be paid by
Tenant if an Environmental Violation is disclosed by such Site Assessment. In
all other events, the cost of performing and reporting such Site Assessments
shall be paid for by Landlord.
(d) If Tenant fails to promptly commence to comply with, and
thereafter diligently pursue compliance with, any requirement of any
Environmental Law in connection with 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 provided that, except in the case of an emergency,
Landlord shall provide Tenant at least ten (10) days written notice prior to the
commencement of any such remediation by Landlord.
(e) Tenant shall notify Landlord promptly 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 promptly upon receipt thereof copies of all orders, reports,
notices, permits, applications or other communications relating to any such
violation or noncompliance.
(f) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall contain covenants
of the other party thereto which are identical to the covenants contained in
Paragraph 10(a).
11. Liens; Recording.
(a) Subject to Paragraph 14 hereof, 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. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE
FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR
TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER
TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF
THE LEASED PREMISES. TO THE EXTENT REQUIRED BY LAW,
19
LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH
NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "record") all such instruments as may be required by any present
or future Law in order to evidence the respective interests of Landlord and
Tenant in any of the Leased Premises, and shall cause a memorandum of this Lease
(or, if such a memorandum cannot be recorded, this Lease), and any supplement
hereto or thereto, to be recorded in such manner and in such places as may be
required by any present or future Law in order to protect the validity and
priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain each Related Premises
and the Adjoining Property in as good repair and appearance as each is in on the
date hereof and fit to be used for their intended use in accordance with the
better of the practices generally recognized as then acceptable by other
companies in its industry or observed by Tenant with respect to the other real
properties owned or operated by it, and, in the case of the Fixtures, in as good
mechanical condition as it was on the later of the date hereof or the date of
its installation, except for ordinary wear and tear and, subject to Paragraph
17, damage by Casualty or Condemnation. Tenant shall take every other action
necessary or appropriate for the preservation and safety of each Related
Premises. Tenant shall promptly make all Alterations of every kind and nature,
whether foreseen or unforeseen, which may be required to comply with the
foregoing requirements of this Paragraph 12(a). Landlord shall not be required
to make any Alteration, whether foreseen or unforeseen, or to maintain either
Related Premises or Adjoining Property in any way, and Tenant hereby expressly
waives any right which may be provided for in any Law now or hereafter in effect
to make Alterations at the expense of Landlord or to require Landlord to make
Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12 shall
be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement hereafter constructed shall (i)
encroach upon any setback or any property, street or right-of-way adjoining any
of the Leased Premises, (ii) violate the provisions of any restrictive covenant
affecting any of the Leased Premises, (iii) hinder or obstruct any easement or
right-of-way to which any of the Leased Premises is subject or (iv) impair the
rights of others in, to or under any of the foregoing, Tenant shall, promptly
after receiving notice or otherwise acquiring knowledge thereof, either (A)
obtain from all necessary parties waivers or settlements of all claims,
liabilities and damages resulting from each such encroachment, violation,
hindrance, obstruction or impairment, whether the same shall affect Landlord,
Tenant or both, or (B) take such action as shall be necessary to remove all such
encroachments, hindrances or obstructions and to end all such violations or
impairments, including, if necessary, making Alterations.
13. Alterations and Improvements.
(a) Subject in each case to the requirements of Paragraph
13(b), Tenant shall have the right, without having obtained the prior written
consent of Landlord or Lender and provided that no Event of Default then exists,
(i) to make Pre-Approved Alterations
20
and (ii) to install or replace Fixtures or accessions to the Fixtures. If Tenant
desires to make any Major Alteration to either Related Premises the prior
written approval of Landlord and Lender shall be required. Withholding of such
approval shall be deemed reasonable only if the proposed Major Alteration will,
in the judgment of Landlord or Lender, as applicable, in each case exercised
reasonably and in good faith, fail to meet the requirements of Paragraph 13(b).
Any such withholding of approval shall be evidenced by notice to Tenant, given
within thirty (30) days after Tenant has submitted to Landlord design drawings
prepared by a licensed architect or engineer if a building permit is required,
or, if no building permit is required, such other reasonably detailed
description of the proposed Major Alteration, which shall be sufficient to
permit Landlord and Lender to make the determination required hereby, setting
forth the reason(s) for such withholding of approval. Tenant shall promptly
furnish Landlord with such other information as Landlord may reasonably request
during such thirty (30) day period regarding such proposed Major Alteration. In
the absence of such notice by Landlord or Lender, Landlord and Lender's approval
of the proposed Major Alteration shall be deemed given so long as Tenant's
request for approval is conspicuously marked in all capitals on both the outside
of the package and within such correspondence with the notation "THIS REQUEST
FOR APPROVAL SHALL BE DEEMED GRANTED UNLESS RESPONDED TO WITHIN THIRTY (30) DAYS
OF RECEIPT". Upon not less than thirty (30) days prior notice (which notice
shall include design drawings or other description sufficient to permit Landlord
and Lender to make the determination required hereby), Tenant shall have the
right to make Major Replacements unless, within said thirty (30) day period,
Landlord furnishes Tenant with a notice objecting to the Major Replacement,
which Landlord notice shall be accompanied by the certification of an
independent architect or, if applicable, engineer that the proposed Major
Replacement constitutes a material modification of the structure it is replacing
(and, therefore, constitutes a Major Alteration) or such Major Replacement, if
completed in the manner proposed, will be of such lesser quality or utility as
to be below any reasonable standards for comparable buildings in the applicable
locale. Tenant shall not construct upon the Land any additional buildings (other
than storage sheds or garages not requiring foundations) or install any
underground storage tanks without having first obtained the prior written
consent of Landlord and Lender which as to underground storage tanks may be
withheld by Landlord or Lender in their sole and absolute discretion. Upon the
expiration or termination of the Term with respect to a Related Premises,
Landlord shall have the right to require Tenant to remove any Alterations except
for Pre-Approved Alterations which complied with Paragraph 13(b), Major
Replacements, Alterations required by Law and Alterations which Landlord
approved in writing, unless such approval was specifically conditioned upon
removal of such Alteration.
(b) If Tenant makes any Alterations pursuant to this Paragraph
13 or as required by Paragraph 12 or 17 (such Alterations and actions being
hereinafter collectively referred to as "Work"), then (i) the market value and
utility of the applicable Related of Premises shall not be lessened by any such
Work, (ii) all such Work shall be performed by Tenant in a good and workmanlike
manner, (iii) all such Work shall be expeditiously completed in compliance with
all Legal Requirements, (iv) all such Work shall comply with the requirements of
all insurance policies required to be maintained by Tenant hereunder, (v) if any
such Work involves the replacement of Fixtures or parts thereto, all replacement
Fixtures or parts shall have a value and useful life equal to (A) if the
Fixtures are being replaced because they are obsolete or worn out, the value and
useful life on the date hereof of the Fixtures being replaced or (B) if the
Fixtures are being replaced because of damage or the occurrence of a Casualty,
the value and
21
useful life of the Fixtures being replaced immediately prior to the occurrence
of the event which required its replacement (assuming such replaced Fixtures
were then in the condition required by this Lease), (vi) subject to Paragraph
14, Tenant shall promptly discharge or remove all liens filed against any of the
Leased Premises arising out of such Work, (vii) Tenant shall procure and pay for
all permits and licenses required in connection with any such Work, (viii) all
such Work shall be the property of Landlord and shall be subject to this Lease,
and Tenant shall execute and deliver to Landlord any document requested by
Landlord evidencing the assignment to Landlord of all estate, right, title and
interest (other than the leasehold estate created hereby) of Tenant or any other
Person thereto or therein, (ix) if any such Alterations are Major Alterations or
Major Replacements, Tenant shall provide to Landlord reasonable financial
assurances of the availability of funds necessary to complete such Alterations
and (x) 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 or (c) 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") and may dispute
or contest the same, so long as at the time of such non-compliance no Event of
Default with respect to the Related Premises to which the Permitted Violation
pertains, 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 applicable Related 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 applicable
Related Premises, (iv) any interference with the payment of any Rent, or (v) the
cancellation or increase in the rate of any insurance policy or a statement by
the carrier that coverage will be denied. Tenant shall provide Landlord security
which is satisfactory, in Landlord's reasonable judgment, to assure that such
Permitted Violation is corrected, including all Costs, interest and penalties
that may be incurred or become due in connection therewith. While any
proceedings which comply with the requirements of this Paragraph 14 are pending
and the required security is held by Landlord, Landlord shall not have the right
to correct any Permitted Violation thereby being contested unless Landlord is
required by Law to correct such Permitted Violation and Tenant's contest does
not prevent or stay such requirement as to Landlord. Each such contest shall be
promptly and diligently prosecuted by Tenant to a final conclusion, except that
Tenant, so long as the conditions of this Paragraph 14 are at all times complied
with, has the right to attempt to settle or compromise such contest through
negotiations. Tenant shall pay any and all losses, judgments, decrees and Costs
in connection with any such contest and shall, promptly after the final
determination of such contest, fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
or in connection therewith, together with all penalties, fines, interest and
Costs thereof or in connection therewith, and perform all acts the performance
of which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any civil or criminal liability.
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15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save and
hold harmless Landlord from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs (including reasonable 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 (except for gross negligence or willful misconduct in
connection with any act or omission by the Landlord seeking indemnification),
arising from (i) any matter pertaining to the acquisition (except for any
acquisition fees or similar payments to W.P. ▇▇▇▇▇ & Co. LLC or any of its
affiliates), ownership, leasing, use, non-use, occupancy, operation, management,
condition, design, construction, maintenance, repair or restoration of any of
the Leased Premises or the condition, use, repair or restoration of the
Adjoining Property, (ii) any casualty in any manner arising from any of the
Leased Premises or of the Adjoining Property, whether or not Landlord 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 first occurring prior to the later of the termination of
this Lease with respect to, or Tenant's vacation of, the applicable Related
Premises, including (A) liability for response costs and for costs of removal
and remedial action incurred by the United States Government, any state or local
governmental unit or any other Person, or damages from injury to or destruction
or loss of natural resources, including the reasonable costs of assessing such
injury, destruction or loss, incurred pursuant to Section 107 of CERCLA, or any
successor section or act or provision of any similar state or local Law, (B)
liability for costs and expenses of abatement, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any of
the other Environmental Laws and (C) liability for personal injury or property
damage arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying on
of a dangerous activity.
(b) Landlord shall pay, protect, indemnify, defend, save and
hold harmless Tenant from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs (including attorneys' fees and
costs reasonably and actually incurred), causes of action, suits, claims,
demands or judgments arising from the gross negligence or intentional misconduct
of Landlord.
(c) In case any action or proceeding is brought against Tenant
or Landlord by reason of any such claim, (i) Landlord or Tenant, as the case may
be, may, except in the event of a conflict of interest or a dispute between
Tenant and any Landlord or during the continuance of an Event of Default, retain
its own counsel and defend such action (it being understood that Landlord or
Tenant, as the case may be, may employ counsel of its choice to monitor the
defense of any such action, the cost of which shall be paid by the indemnifying
party) and (ii) such Landlord or Tenant shall notify Landlord or Tenant, as the
case may be, to resist or defend such action or proceeding by retaining counsel
reasonably satisfactory to such Landlord or Tenant, as the case may be, and such
Landlord or Tenant, as the case may be, will cooperate and assist in the defense
of such action or proceeding if reasonably requested to do so
23
by Tenant or Landlord, as the case may be. 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 and actual cost of
such counsel shall be paid by Tenant.
(d) The obligations of Tenant and Landlord under this
Paragraph 15 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 BEHALF OF LANDLORD.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against risk of physical loss or damage to
the Improvements and Fixtures as provided under "All Risk" coverage, and
including customarily excluded perils of hail, windstorm, flood coverage (if the
Leased Premises is in a flood zone), earthquake and, to the extent required by
Lender, terrorism insurance in amounts not less than the actual replacement cost
of the Improvements and Fixtures; provided that, if Tenant's insurance company
is unable or unwilling to include any of all of such excluded perils, Tenant
shall have the option of purchasing coverage against such perils from another
insurer on a "Difference in Conditions" form or through a stand-alone policy.
Such policies shall contain Replacement Cost and Agreed Amount Endorsements and
shall contain deductibles not more than $250,000 per occurrence (except
earthquake insurance with respect to the California Premises, which shall have a
deductible of not more than $500,000 and terrorism insurance at either Related
Premises, which shall have a deductible of not more than two (2%) of the actual
replacement value of the Improvements and Fixtures at the applicable Related
Premises). If any of the Improvements constitute a legal non-conforming
structure under applicable building, zoning or land use laws, such policies
shall also include an ordinance or law coverage endorsement which will contain
Coverage A: "Loss Due to Operation of Law" (with a minimum liability limit equal
to Replacement Cost with a waiver of any co-insurance provisions or an Agreed
Value Endorsement), Coverage B: "Demolition Cost" and Coverage C: "Increased
Cost of Construction" coverages. Notwithstanding the foregoing, terrorism
insurance coverage shall not be required if it is not available at commercially
reasonable rates (as determined by Landlord and Lender in their sole
discretion); provided however, if a rating agency in connection with a
securitization of a Loan or in connection with its rating surveillance of the
certificates issued pursuant to a securitization of a Loan would not provide or
maintain a rating for any portion of such Loan or such certificates which would
otherwise be available but for the failure to maintain such terrorism insurance,
Tenant will so maintain such terrorism insurance if obtainable from any insurer
or any governmental authority with the deductibles set forth above.
(ii) Commercial General Liability Insurance 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
24
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) Worker's compensation insurance covering all
persons employed by Tenant in connection with any work done on or about any of
the Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such Workers' Compensation Insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State
or States in which the Leased Premises are located.
(iv) Comprehensive Boiler and Machinery Insurance on any
of the Fixtures 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
Off-Premises Service Interruption with limits of $1,500,000 per occurrence for
property damage, $1,500,000 per occurrence for time element; $750,000 per
occurrence for expediting expense; $275,000 per occurrence for ammonia
contamination; and $375,000 per occurrence for hazardous materials clean-up and
with a deductible not to exceed $250,000.
(v) Business Interruption Insurance at limits to cover
100% of losses and/or expenses incurred over the period of indemnity not less
than twelve (12) months 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 either Related Premises are being undertaken, Tenant shall cause each
contractor to obtain builder's risk insurance covering in the aggregate 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
Fixtures, together with such "soft cost" endorsements and such other
endorsements as Landlord may reasonably require and general liability, workers'
compensation and automobile liability insurance with respect to the Improvements
being constructed, altered or repaired.
(vii) 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 for properties of similar location, size, type, value and use
(b) The insurance required by Paragraph 16(a) shall be written
by companies which (i) have a Best's rating of A:X or above and a claims paying
ability rating of AA or better by S&P or equivalent rating agency approved by
Landlord and Lender in their sole discretion and (ii) are approved to write
insurance policies by, the State Insurance Department for the states in which
the Leased Premises are located. Notwithstanding clause "(i)" of the preceding
sentence, provided that each of the following insurance carriers meet the
requirements of clause "(ii)" of the preceding sentence, then, (A) the insurance
required pursuant to Paragraph
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16(a)(i) may be on policies written by (1) Continental Casualty Co. so long as
it maintains an S&P claims paying ability rating of A- or better, (2) American
Guaranty Ins. Co. so long is it maintains an S&P claims paying ability rating of
A+ or better, and (3) Liberty Mutual Insurance Co. so long as it maintains an
S&P claims paying ability rating of A+ or better, and (B) the insurance required
pursuant to Paragraph 16(a)(iv) may be on policies written by Commonwealth
Insurance Co. so long as it maintains an S&P claims paying ability rating of BBB
or better, provided, however, that in the event that any of the preceding
insurance carriers fails to maintain its corresponding rating set forth above,
then such insurance carrier shall be replaced with an insurance carrier meeting
the requirements set forth in the first sentence of this Paragraph 16(b). The
insurance policies 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), 16(a)(v) and 16(a)(vi) shall name Landlord and Lender as
loss payees and Tenant as its interest may appear. The insurance referred to in
Paragraph 16(a)(ii) shall name Landlord and Lender as additional insureds. 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, Tenant shall immediately obtain new or additional insurance satisfying
the requirements of this Paragraph 16. If the availability of the types and
amounts of insurance coverages required under Paragraph 16(a) shall change in
the commercial insurance marketplace for properties that are of a similar size,
scope, location and usage as any applicable Related Premises, at Tenant's
request Landlord shall review such coverages available at the time and, if
Landlord deems appropriate (in its sole and absolute discretion), adjust the
types and amounts of insurance required.
(c) Each insurance policy referred to in clauses (i), (iv),
(v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender. Each policy required by
any provision of Paragraph 16(a), except clause (iii) thereof, shall provide
that it may not be cancelled substantially modified or allowed to lapse on any
renewal date except after thirty (30) days' prior notice to Landlord and Lender.
Each such policy shall also provide that any loss otherwise payable thereunder
shall be payable notwithstanding (i) any act or omission of Landlord or Tenant
which might, absent such provision, result in a forfeiture of all or a part of
such insurance payment, (ii) the occupation or use of any of the Leased Premises
for purposes more hazardous than those permitted by the provisions of such
policy, (iii) any foreclosure or other action or proceeding taken by Lender
pursuant to any provision of the Mortgage, Note, Assignment or other document
evidencing or securing the Loan upon the happening of an event of default
therein or (iv) any change in title to or ownership of any of the Leased
Premises.
(d) Tenant shall 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 prior to the expiration date of such policy, and shall
promptly deliver to Landlord all original certificates of insurance at least
fifteen (15) days prior to the expiration date thereof, which certificates shall
bear notations evidencing payment of applicable premiums and, if required by
Lender, certified policies as soon as available.
(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
26
"blanket" or umbrella policy or policies covering other properties or
liabilities of Tenant, provided that such "blanket" or umbrella policy or
policies otherwise comply with the provisions of this Paragraph 16 and provided
further that Tenant shall provide to Landlord a Statement of Values which shall
be reviewed annually and amended as necessary based on Replacement Cost
Valuations. The original or a certified copy of each such "blanket" or umbrella
policy shall promptly be delivered to Landlord.
(f) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii) all
requirements of the insurers thereunder applicable to Landlord, Tenant or any of
the Leased Premises or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the 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 or certified copies 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 in which event the Net Award shall be
retained by Landlord.
17. Casualty and Condemnation.
(a) If any Casualty to either of the Related Premises occurs
the insurance proceeds for which are reasonably estimated by Tenant to be equal
to or in excess of the Threshold Amount, Tenant shall give Landlord and Lender
immediate notice thereof. So long as (i) no Event of Default, exists, and (ii)
Tenant does not give a Termination Notice to Landlord, Tenant is hereby
authorized to adjust, collect and compromise all claims under any of
27
the insurance policies required by Paragraph 16(a) (except public liability
insurance claims payable to a Person other than Tenant, Landlord or Lender) and
to execute and deliver on behalf of Landlord all necessary proofs of loss,
receipts, vouchers and releases required by the insurers and Landlord 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, and Landlord and Lender shall have the right to prosecute
or contest, or to require Tenant to prosecute or contest, any such claim,
adjustment, settlement or compromise. 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 and, in such event, agrees to
sign, upon the request of Landlord, all such accurate proofs of loss, receipts,
vouchers and releases. Each insurer is hereby authorized and directed to make
payment under said policies, if required by the Mortgage, to Lender instead of
to Landlord and Tenant jointly. 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, promptly upon receiving a Condemnation Notice,
shall notify Landlord and Lender thereof. So long as (i) no Event of Default,
exists and (ii) Tenant does not give a Termination Notice to Landlord, 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. 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
Fixtures, 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 applicable Related Premises
or the amount of the award (if any) otherwise payable for the Condemnation of
Tenant's leasehold interest hereunder. The rights of Landlord under this
Paragraph 17(b) shall also be extended to Lender if and to the extent that any
Mortgage so provides.
(c) If any Partial Casualty (whether or not insured against)
or Partial Condemnation shall occur to either Related Premises, this Lease shall
continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary Obligations. Promptly after such Partial Casualty or
Partial Condemnation, Tenant, as required in Paragraph 12(a), shall commence and
diligently continue to restore the applicable Related Premises as nearly as
possible to its value, condition and character immediately prior to such event
(assuming such Related Premises to have been in the condition required by this
Lease). So long as no Event of Default exists, any Net Award up to and including
the Threshold Amount shall, unless such Casualty or Condemnation resulting in
the Net Award is a Termination Event, be paid by
28
Landlord to Tenant and Tenant shall restore the applicable Related Premises in
accordance with the requirements of Paragraph 13(b) of this Lease. Any Net Award
in excess of the Threshold Amount shall (unless such Casualty or Condemnation
resulting in the Net Award is a Termination Event) be made available by Landlord
(or Lender if the terms of the Mortgage so require) to Tenant for the
restoration of any of the applicable Related Premises pursuant to and in
accordance with and subject to the provisions of Paragraph 19 hereof. If any
Casualty or Condemnation which is not a Partial Casualty or Partial Condemnation
shall occur, Tenant shall comply with the terms and conditions of Paragraph 18.
With respect to the California Premises, Landlord and Tenant waive the
provisions of California Civil Code Sections 1932(2) and 1933(4) and California
Code of Civil Procedure Section 1265.130.
18. Termination Events.
(a) If either (i) all of either Related Premises shall be
taken by a Taking, or (ii) any substantial portion of either Related Premises
shall be taken by a Taking or (iii) all or any substantial portion of either
Related Premises shall be damaged or destroyed by a Casualty during the last
twelve (12) months of the Term and at the time of such Casualty no Event of
Default exists (any one or all of the Related Premises described in the above
clauses (i) and (ii) above being hereinafter referred to as the "Affected
Premises" and each of the events described in the above clauses (i), (ii) and
(iii) 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)or (iii) above,
Tenant shall have the option, within thirty (30) days after Tenant receives a
Condemnation Notice or thirty (30) days after the Casualty, as the case may be,
to give to Landlord written notice (a "Termination Notice") in the form
described in Paragraph 18(b) of the Tenant's election to terminate this Lease as
to the Affected Premises. If Tenant elects under clause (y) above not to give
Landlord a Termination Notice, then Tenant shall rebuild or repair the Leased
Premises in accordance with Paragraphs 17 and 19.
(b) A Termination Notice shall contain notice of Tenant's
intention to terminate this Lease as to the Affected Premises thirty (30) days
after delivery of the Termination Notice (the "Termination Date") and any
amounts prepaid by Tenant and attributable to the Affected Premises for any
period after the Termination Date shall be refunded to Tenant.
(c) This Lease shall terminate as to the Affected Premises on
the Termination Date or, in the case of a Casualty at such later date on which,
(A) Tenant has paid all insurance deductibles associated with the Net Award and
(B) Landlord has received confirmation that the insurance proceeds payable
pursuant to Paragraph 16(a)(i) shall be paid to Landlord in full without offset
and deduction. If Tenant has not satisfied all Monetary Obligations and all
other non-contingent obligations and liabilities under this Lease which have
arisen as to the Affected Premises (collectively, "Remaining Obligations") on or
prior to the Termination Date, then Landlord may, at its option, extend the
Termination Date as to the Affected Premises to a date which is no later than
thirty (30) days after the date on which Tenant has satisfied all Remaining
Obligations. Upon such termination (i) all obligations of Tenant hereunder as to
the Affected Premises shall terminate except for any Surviving Obligations, (ii)
Tenant shall immediately vacate and shall have no further right, title or
interest in or to the
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Affected Premises and (iii) the Net Award shall be retained by Landlord and (iv)
any amounts prepaid by Tenant and attributed to the Affected Premises for any
period after the Termination Date shall be refunded to Tenant.
(d) In the event of the termination of this Lease as to the
Affected Premises as hereinabove provided, this Lease shall remain in full force
and effect as to the Remaining Premises; provided, that the Basic Rent for the
Remaining Premises to be paid after such termination shall be the Basic Rent
otherwise payable hereunder with respect to the Leased Premises multiplied by a
percentage equal to the percentage set forth on Exhibit "F" for the Remaining
Premises.
19. Restoration.
(a) If any Net Award is in excess of the Threshold Amount,
Landlord (or Lender if required by any Mortgage) shall hold the Net Award 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 and a budget, which
budget may include a redevelopment fee payable to Tenant or its designee, for
the restoration shall have been approved by Landlord, (B) Landlord and Lender
shall be provided with mechanics' lien insurance (if available) and performance
and payment bonds in customary form and amounts issued by a surety reasonably
acceptable to Landlord, and name Landlord and Lender as additional dual
obligees, and (C) if the Related Premises being restored is the Pennsylvania
Premises, 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 (other than those
being contested in compliance with Paragraph 14) shall have been filed against
the applicable Related Premises and remain undischarged;
(iii) disbursements shall be made from time to time in
an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested, (D) a satisfactory bringdown of
title insurance and (E) other reasonable evidence of cost and payment so that
Landlord and Lender 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,
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also stating that, to the best knowledge of such person, the work has been fully
completed and complies with the applicable requirements of this Lease;
(v) Landlord may retain ten percent (10%) of the
Restoration Fund until the restoration is fully completed;
(vi) the Restoration Fund shall not be commingled with
Landlord's other funds and shall bear interest at a rate agreed to by Landlord
and Tenant; and
(vii) such other reasonable 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 reasonably 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. Intentionally Omitted.
21. Assignment and Subletting: Prohibition against Leasehold
Financing.
(a) (i) Except as specifically provided in this Paragraph 21
and subject to the terms hereof, Tenant shall not assign this Lease, voluntarily
or involuntarily, whether by operation of law or otherwise. 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") (A) to assign this Lease either in its entirety ("Complete
Assignment") or (B) from time to time to cause Landlord to bifurcate this Lease
into two leases ("Lease Bifurcation"), one lease for one Related Premises (the
"Bifurcated Premises") to be leased to a Preapproved Assignee (as hereinafter
defined) upon the terms and conditions set forth in this Lease (but shall
specifically provide that it is not cross-defaulted this Lease), and one lease
for the remaining Related Premises which will continue to be subject to this
Lease, as amended (each, a "Bifurcated Lease"), provided that (1) the Basic Rent
under each such Bifurcated Lease shall be allocated among each of the Related
Premises as provided in Exhibit "F", (2) Tenant assigns its interest in this
Lease with respect to the Bifurcated Premises (each such Lease Bifurcation, a
"Partial Assignment") in accordance with the terms and conditions of this
Paragraph 21, and (3) any such Complete Assignment or each Partial Assignment is
to a Person (a "Preapproved Assignee") which meets the following applicable
criteria: (x) in the case of a Complete Assignment which, as a matter of Law,
results from a merger, the successor Tenant shall have, after giving effect to
such merger, a net worth at least equal to Tenant's net
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worth immediately prior to such merger, (y) in the case of the sale of all or
substantially all of the assets of Tenant, (i) the sale shall result in a
Complete Assignment, and (ii) immediately after giving effect to such purchase,
the assignee shall have a net worth at least equal to Tenant's net worth
immediately prior to such purchase, and (z) in all other cases, immediately
following such assignment the assignee will have an Investment Grade Rating. All
determinations of net worth in this Paragraph 21(a)(i) shall be made in
accordance with GAAP.
(ii) If Tenant desires to assign this Lease, whether by
operation of law, through a Complete Assignment or a Partial Assignment, or
otherwise, to a Person (a "Non-Preapproved Assignee") who would not be a
Preapproved Assignee (a "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. If a response is not received by
Tenant from Landlord and Lender by the expiration of such thirty (30) day period
such Non-Preapproved Assignee shall be deemed disapproved.
(iii) If Tenant assigns its rights and interest under
this Lease except as expressly set forth below, the assignee under such
assignment shall expressly assume all the obligations of Tenant hereunder,
actual or contingent, including the obligations of Tenant which may have arisen
on or prior to the date of such assignment, by a written instrument delivered to
Landlord at the time of such assignment. With respect to each assignment, the
assignee shall not be required to assume the obligations of Tenant which may
have arisen on or prior to the date of such assignment with respect to the
Leased Premises or the Bifurcated Premises, as applicable, if Tenant provides
Landlord evidence satisfactory to Landlord in its reasonable discretion that (1)
the Leased Premises or the Bifurcated Premises, as applicable, is in the
physical condition required by this Lease as evidenced by report issued by an
independent thirty party engineering firm reasonably acceptable to Landlord, (2)
no Environmental Violation exists as evidenced by a report issued by an
environmental consulting firm reasonably acceptable to Landlord, and (3) all
applicable Impositions have been properly adjusted between Tenant and the
assignee as of the assignment date. Upon a Complete Assignment to a Preapproved
Assignee which has an Investment Grade Rating in accordance with the terms and
conditions of this Paragraph 21, Tenant shall be relieved of all of its
obligations under this Lease arising after such Complete Assignment. Upon a
Complete Assignment where the assignee is a Preapproved Assignee solely on the
basis of clause "(y)" of Paragraph 21(a)(i), Tenant shall be relieved of all of
its obligations under this Lease, whether arising before or after such Complete
Assignment, provided that such Preapproved Assignee assumes all of Tenant's
obligations under the Lease, actual or contingent, including the obligations of
Tenant which may have arisen on or prior to the date of such Complete
Assignment, by a written instrument delivered to Landlord at the time of such
assignment. Upon a Partial Assignment of this Lease to a Preapproved Assignee
which has
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an Investment Grade Rating in accordance with the terms and conditions of this
Paragraph 21, Tenant shall be relieved of all of its obligations under this
Lease with respect to the Bifurcated Premises arising after such assignment. No
assignment shall impose any additional obligations on Landlord under this Lease,
and, except as expressly set forth above, no assignment shall affect or reduce
any of the obligations of Tenant (including but not limited to Tenant's
liability with respect to Surviving Obligations), which shall remain in full
force and effect as obligations of a principal and not as obligations of a
guarantor, as if no assignment had been made.
(b) (i) Tenant shall not have the right to sublet all or any
portion of either Related Premises without having obtained the approval of
Landlord which consent shall not be unreasonably withheld or delayed. Landlord
agrees that it shall not have the right to withhold or delay its consent to any
proposed subletting so long as Tenant agrees in writing at the time consent to
such subletting is requested to assign to Landlord the subrents collected
thereunder in accordance with the terms and provisions of Paragraph 21(e) (a
"Preapproved Sublet").
(ii) With respect to any sublease of an entire Related
Premises for a term of at least five (5) years or, if less, the balance of the
Term minus one day which sublease requires the subtenant to pay Rent at least
equal to Basic Rent and Additional Rent allocable to such Related Premises and
comply with all other terms and conditions of this Lease to the extent
applicable to the Related Premises (such sublease being referred to as a
"Protected Sublease") and such subtenant either (A) meets the criteria of a
Preapproved Assignee pursuant to Paragraph 21(a)(i) or (B) has been approved by
Landlord and Lender in accordance with the procedure set forth in clause (ii) of
Paragraph 21(a), (each such subtenant, a "Protected Subtenant"), so that if this
Lease is terminated by reason of the occurrence of an Event of Default, Landlord
will recognize such Protected Sublease as a direct lease of the Related
Premises. Such recognition and agreement by Landlord to treat such sublease as a
Protected Sublease, shall not be effective unless such Protected Subtenant
executes and delivers to Landlord a subordination, non-disturbance and
attornment agreement in the form attached hereto as Exhibit "E" (modified as
appropriate to govern the Landlord and such subtenant as the parties and the
sublease as the protected leasehold). With respect to a proposed Protected
Subtenant pursuant to clause "(B)" above, Landlord shall provide its approval or
disapproval in writing within thirty (30) days of Tenant's written request and
submission of all required information and any disapproval by Landlord shall
state the reasons for such disapproval.
(iii) Each sublease of either of the Related Premises
shall (A) subject to the provisions of Paragraphs 21(b) and 32, be expressly
subject and subordinate to this Lease and any Mortgage encumbering the Leased
Premises; (B) not extend beyond the then current Term minus one day; (C) subject
to the provisions of Paragraphs 21(b) and 32, terminate upon any termination of
this Lease, unless Landlord elects in writing, to cause the sublessee to attorn
to and recognize Landlord as the lessor under such sublease, whereupon such
sublease shall continue as a direct lease between the sublessee and Landlord
upon all the terms and conditions of such sublease; and (D) bind the sublessee
to all covenants contained in Paragraphs 4(a), 10 and 12 with respect to
subleased premises to the same extent as if the sublessee were the Tenant. No
sublease shall affect or reduce any of the obligations of Tenant hereunder or,
except as provided in Paragraph 21(b)(ii), impose any additional obligations on
Landlord under this Lease.
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(c) Concurrently with Tenant's execution of any assignment or
sublease, Tenant shall provide to Landlord a completed certification
substantially in the form attached hereto as Exhibit "G", executed by the
proposed assignee/sublessee and, in connection with a Preapproved Assignment or
Protected Sublease, such other information reasonably required by Landlord to
establish that any proposed Preapproved Assignment or Protected Sublease
satisfies the criteria set forth above.
(d) Tenant shall, within ten (10) Business 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.
(e) The provisions of this Paragraph 21(e) shall be applicable
in the event of a request by Tenant for consent to a Preapproved Sublet pursuant
to Paragraph 21(b) or with respect to any Protected Sublease. Tenant shall
grant, convey and assign to Landlord all right, title and interest of Tenant in
and to such sublease any and all extensions, modifications and renewals thereof
and all rents, issues and profits therefrom which assignment shall not be
subject to any assignment from Tenant to any other Person. Landlord shall grant
to Tenant a license to collect and enjoy all rents and other sums of money
payable under such sublease, provided, however, that during the continuance of
an Event of Default, 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 apply the same to Rent next due and owing. Tenant
shall not consent to, cause or allow any modification or alteration of any of
the terms, conditions or covenants of any Protected Subleases or the termination
thereof, without the prior written approval of Landlord which consent shall not
be unreasonably withheld nor shall Tenant accept any rents more than thirty (30)
days in advance of the accrual thereof.
(f) Tenant shall not have the power to mortgage, pledge or
otherwise encumber its interest under this Lease or any sublease of either of
the Related Premises, and any such mortgage, pledge or encumbrance made in
violation of this Paragraph 21 shall be void and of no force and effect.
(g) Landlord may sell or transfer its interest in the Leased
Premises at any time without Tenant's consent to any third party (each a "Third
Party Purchaser"), provided, however, Landlord shall not, without Tenant's prior
written consent which consent shall not be unreasonably withheld, delayed or
conditioned, sell the Leased Premises or assign its interest in this Lease to
(i) to a Competitor of Tenant or (ii) a Person with which Tenant would be
required to consolidate its financial statements under GAAP. In the event of any
such transfer not in violation of this Paragraph 21(g), Tenant shall attorn to
any Third Party Purchaser as Landlord so long as such Third Party Purchaser and
Landlord notify Tenant in writing of such transfer. At the request of Landlord,
Tenant will execute such documents confirming the agreement referred to above
and such other agreements as Landlord may reasonably request, provided that such
agreements do not increase the liabilities and obligations of Tenant hereunder.
22. Events of Default.
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(a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph 22(b)) shall,
at the sole option of Landlord, constitute an "Event of Default" under this
Lease.
(i) a failure by Tenant to make any payment of any
Monetary Obligation on or prior to its due date, 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 in any material adverse respect and the circumstances giving rise
to such misrepresentation or breach of warranty are continuing and would
reasonably be anticipated to have a material adverse effect upon Tenant's
ability to perform its obligations under this Lease or upon either Related
Premises, in each case with Landlord applying commercially reasonable standards;
(iv) 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 either of the Related Premises, (C) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, or (D) make a general assignment for the benefit
of creditors;
(v) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for
either of the Related Premises or approving a petition filed against Tenant
which seeks relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, and such order, judgment or decree shall
remain undischarged or unstayed ninety (90) days after it is entered;
(vi) either Related Premises (A) shall have been vacated
other than (1) due to a Casualty to or Condemnation of such Related Premises so
long as Tenant is diligently negotiating an insurance settlement or endeavoring
to restore the Related Premises or (2) as a result of Tenant having decided to
cease its business operations at such location so long as Tenant is diligently
seeking an assignment or sublet (which diligence shall be deemed evidenced by a
listing of such Related Premises with a real estate broker or agent at market
terms), or (B) shall have been abandoned;
(vii) Tenant shall voluntarily liquidate or dissolve or
shall begin proceedings towards its liquidation or dissolution except by filing
bankruptcy proceedings;
(viii) the estate or interest of Tenant in either of the
Related Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within sixty (60) days after it is made;
(ix) a failure by Tenant to perform or observe, or a
violation or breach of, or a misrepresentation by Tenant under any document
between Tenant and Lender or
35
from Tenant to Lender, if such failure, violation, breach or misrepresentation
gives rise to a default beyond any applicable cure period with respect to any
Loan;
(x) a failure by Tenant to maintain in effect any
material license or permit necessary for the use, occupancy or operation of
either Related Premises, in each case with Landlord applying commercially
reasonable standards;
(xi) Tenant shall in a single transaction or series of
related transactions sell, convey, transfer or lease all or substantially all of
its assets unless concurrently with such sale the interest of Tenant in this
Lease is assigned to the purchaser, lessee or transferee of such assets who
complies with the requirements of Paragraph 21 of this Lease and who shall
assume in writing all of the obligations of Tenant hereunder;
(xii) Tenant shall fail to deliver the Estoppel
Certificate described in Paragraph 25 within the time period specified therein
provided that such request for an Estoppel Certificate clearly states that the
failure to provide said Estoppel Certificate will be an Event of Default under
this Lease if not delivered within said time period;
(xiii) Tenant shall fail to execute and deliver the
subordination, non-disturbance and attornment agreement in accordance with the
requirements of Paragraph 32 within fifteen (15) Business Days of written
request by Landlord provided that such request clearly states that the failure
to execute and deliver such agreement will be an Event of Default under this
Lease if not delivered within said time period; or
(xiv) An Event of Default (as that term is defined in
each of the Affiliate Leases) under either of the Affiliate Leases shall occur.
(b) No notice or cure period shall be required in any one or
more of the following events: (A) the occurrence of an Event of Default under
clause (i) (except as otherwise set forth below), (iii), (iv), (v), (vi), (vii),
(viii), (ix), (x), (xi), (xii), (xiii) or (xiv) of Paragraph 22(a); (B) a
failure to provide any insurance required by Paragraph 16 or an assignment or
sublease entered into in violation of Paragraph 21; or (C) the default is such
that any delay in the exercise of a remedy by Landlord could reasonably be
expected to cause irreparable harm to Landlord. If the default consists of the
failure to pay any Monetary Obligation under clause (i) of Paragraph 22(a), the
applicable cure period shall be five (5) Business Days from the date on which
notice is given, but if the default consists of the failure to pay Basic Rent,
Landlord shall not be obligated to give notice of such default in more than one
(1) time 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 provided
Tenant has commenced to cure such default with such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same or, if the
default cannot be cured within such thirty (30) day period and Tenant, in the
reasonable opinion of Landlord and Lender, thereafter diligently and
expeditiously proceeds to cure same (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 so
long as it shall require Tenant in the exercise of due diligence to cure such
default, it being agreed that no such
36
extension shall be for a period in excess of one hundred and five (105) days
unless (x) Landlord determines in its reasonable discretion that Tenant is
diligently and expeditiously curing the applicable default and (y) the
applicable default does not relate to an Environmental Violation (except for an
Environmental Violation that cannot be cured within such one hundred and five
(105) day period due solely to the failure of a governmental agency to approve a
remediation plan or provide any permit required for Tenant to remediate in which
case the one hundred and five (105) day period shall be extended, so long as
Tenant is diligently and expeditiously curing the applicable default, by the
number of days elapsed between the date Tenant submits a remediation plan or
applies for a permit to the appropriate governmental authority and the date such
plan is approved or permit is issued by the appropriate governmental authority,
but in addition in no event shall such extension exceed one year from the date
notice was originally given by Landlord to Tenant of such default). The notices
described in this Paragraph 22(b) are in lieu and not in addition to the notice
under California Code of Civil Procedure 1161.
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 further demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's
intention to terminate this Lease on a date specified in such notice. Upon such
date, this Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire and terminate. Upon such termination, Tenant shall immediately
surrender and deliver possession of the Leased Premises to Landlord in
accordance with Paragraph 26. If Tenant does not so surrender and deliver
possession of all of the Leased Premises, Landlord may re-enter and repossess
any of the Leased Premises not surrendered, with or without legal process, by
peaceably entering any of the Leased Premises and changing locks or by summary
proceedings, ejectment or any other lawful means or procedure.
(ii) Landlord may repossess the Leased Premises without
terminating the Lease after obtaining an appropriate order from a court of
competent jurisdiction, and thereafter peacefully enter the Leased Premises and
changing locks or by other summary judicial proceedings.
(iii) Upon or at any time after taking possession of any
of the Leased Premises pursuant to Paragraph 23(a)(i) or 23(a)(ii), Landlord
may, by peaceable means or legal process, remove any Persons or property
therefrom. Landlord shall be under no liability for or by reason of any such
entry, repossession or removal. Notwithstanding such entry or repossession,
Landlord may collect the damages set forth in Paragraph 23(b)(i) and 23(b)(ii).
(iv) After repossession of any of the Leased Premises
pursuant to clause (i) or (ii) 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
37
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). Landlord shall consider any tenants or subtenants reasonably proposed
by Tenant and prepared to lease or sublet the Leased Premises or either Related
Premises on reasonable terms so as to mitigate Tenant's damages, but Landlord
shall be under no obligation to accept such proposed tenants or subtenants.
(v) 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, and (B) Tenant shall
have no option to extend or renew the Term.
(b) The following constitute damages to which Landlord shall
be entitled if Landlord exercises its remedies under Paragraph 23(a)(i), (ii)
and (iii):
(i) If Landlord exercises its remedy under Paragraphs
23(a)(i) or (ii) but not its remedy under Paragraph 23(a)(iv) (or attempts to
exercise such remedy and is unsuccessful in reletting the Leased Premises) then,
upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated
and agreed final damages for Tenant's default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of (A) all Basic Rent allocated for each
Related Premises (except for the California Premises) based on Exhibit "F" 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 each Related Premises (except for
the California Premises) for the same period. Tenant shall also pay to Landlord
all of Landlord's Costs in connection with the repossession of the Leased
Premises and any attempted reletting thereof, including all brokerage
commissions, legal expenses, reasonable attorneys' fees, employees' expenses,
costs of Alterations and expenses and preparation for reletting.
(ii) If Landlord exercises its remedy or remedies under
Paragraphs 23(a)(i), (ii), (iii) or (iv), 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)(iv), 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
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connection with such repossessing and reletting; provided, that if Landlord has
not relet the Leased Premises, such Costs of Landlord shall be considered to be
Monetary Obligations payable by Tenant. Tenant shall be and remain liable for
all sums aforesaid, and Landlord may recover such damages from Tenant and
institute and maintain successive actions or legal proceedings against Tenant
for the recovery of such damages. Nothing herein contained shall be deemed to
require Landlord to wait to begin such action or other legal proceedings until
the date when the Term would have expired by its own terms had there been no
such Event of Default.
(c) With respect to the California Premises, if Landlord
elects to terminate this Lease upon the occurrence of an Event of Default,
Landlord may collect from Tenant damages computed in accordance with the
following provisions in addition to Landlord's other remedies under this Lease:
(i) the worth at the time of award of any unpaid Rent
allocated to the California Premises pursuant to Exhibit "F" which has been
earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by
which any unpaid Rent allocated to the California Premises pursuant to Exhibit
"F" which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) the worth at the time of award of the amount by
which the unpaid Rent allocated to the California Premises pursuant to Exhibit
"F" for the balance of the Term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; plus
(iv) any other reasonable Cost necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom including, without limitation, brokerage
commissions, the cost of repairing and reletting the Leased Premises and
reasonable attorneys' fees; plus
(v) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable state law. Damages shall be due and payable from the date of
termination.
(d) For purposes of clauses (i) and (ii) of this Paragraph
23(c), the "worth at the time of award" shall be computed by adding interest at
the Default Rate to the past due Rent. For the purposes of clause (iii) of this
Paragraph 23 (c), the "worth" at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%).
(e) 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; provided, however, with respect to a Limited Remedy Default, the
aggregate amount Tenant shall be required to pay to Landlord (pursuant to
paragraph 23(a)(v) or otherwise) from and after the date of the occurrence
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of such Limited Remedy Default (the "Occurrence Date") with respect to Basic
Rent, Additional Rent and indemnification obligations under Paragraph 15(a)
shall be limited to the sum of (i) the present value as of the Occurrence Date,
discounted at the annual rate of eleven and 15/100 percent (11.15%), of all
Basic Rent reserved hereunder for the unexpired portion after the Occurrence
Date) of the Term devised herein as if this Lease had not expired or been
terminated, (ii) any amounts of Additional Rent which are due and payable or
have accrued under this Lease through the Occurrence Date, and (iii) any amounts
of Additional Rent which are due and payable or have accrued under this Lease
after the Occurrence Date while the Tenant remains in possession of the Leased
Premises or the applicable Related Premises, as applicable, after any Limited
Remedy Default that relates to Impositions, insurance, utilities, repairs,
maintenance, environmental maintenance, remediation and compliance and other
routine and customary costs and expenses of operating and maintaining the Leased
Premises or the applicable Related Premises, as applicable. Notwithstanding the
foregoing, if Tenant remains in possession of the Leased Premises or the
applicable Related Premises, as applicable, and assumes, ratifies or affirms
this Lease during any pending bankruptcy or other event described in 22(a)(iv)
or (v), then Tenant shall be obligated to pay all Basic Rent and Additional Rent
which become due and payable under this Lease without limitation by this
paragraph 23(d). Nothing contained in this paragraph 23(d) shall limit any
amounts payable by Tenant with respect to Basic Rent or Additional Rent if any
Event of Default that is not a Limited Remedy Default has occurred.
(f) Except as specifically provided in Paragraphs 23(a)(iv),
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.
(g) No termination of this Lease, repossession or reletting of
any of the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(h) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD OR
TENANT HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY.
Landlord and Tenant agree that this Lease constitutes a written consent to
waiver of trial by jury pursuant to the provisions of California Code of Civil
Procedure Section 631, and each of Landlord and Tenant does appoint the other
Person as its true and lawful attorney-in-fact, which appointment is coupled
with an interest, and does hereby authorize and empower the other Person, in its
name, place and stead, to file this Lease with the clerk of any court of
competent jurisdiction as statutory written consent to waiver of trial by jury.
(i) In addition to its other rights under this Lease, with
respect to the California Premises, Landlord has the remedy described in
California Civil Code Section 1951.4 which provides substantially as follows:
Landlord may continue the Lease in effect after Tenant's breach and abandonment
and recover the Rent as it becomes due, if Tenant has the right to sublet or
assign, subject only to reasonable limitations. In accordance with California
Civil Code Section 1951.4 (or any successor statute), Tenant acknowledges that
in the event Tenant breaches this Lease and abandons the Leased Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all
40
of its rights and remedies under this Lease, including the right to recover the
Rent as it becomes due under this Lease. Tenant acknowledges that the
limitations on subletting and assignment set forth in Paragraph 21 are
reasonable. Acts of maintenance or preservation or efforts to relet the Leased
Premises or the appointment of a receiver upon initiative of Landlord to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession.
(j) Intentionally Omitted.
(k) 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.
(l) No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(m) 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.
(n) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.
24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated on page one of this Lease or
when delivery is refused. Notices sent to Landlord shall be to the attention of
Director, Asset Management, and notices sent to Tenant shall be to the attention
of Chief Financial Officer. A copy of any notice given by Tenant to Landlord
shall simultaneously be given by Tenant to ▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chairman, Real Estate Department. A copy of
any notice by Landlord to Tenant shall simultaneously be given by Landlord to
Goldberg, Kohn, Bell, Black, ▇▇▇▇▇▇▇▇▇▇ & Moritz, Ltd., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. For the
41
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 fifteen
(15) Business Days' prior written request by either Landlord or Tenant (the
"Requesting Party") to the other party (the "Responding Party"), on not more
than three (3) occasions during any Lease Year, the Responding Party shall
deliver to the Requesting Party a statement in writing (the "Estoppel
Certificate"), 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, and (d) such other matters as the
Requesting Party may reasonably request. Any such statements by the Responding
Party may be relied upon for estoppel purposes only by the Requesting Party, any
Person whom the Requesting Party notifies the Responding Party in its request
for the Estoppel Certificate is an intended recipient or beneficiary of the
Estoppel Certificate, any Lender or their assignees and by any prospective
purchaser or mortgagee of any of the Leased Premises. Any Estoppel Certificate
required under this Paragraph 25 and delivered by Tenant shall state that, in
the opinion of each person signing the same, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
the subject matter of such Estoppel 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 or
Affected Premises, is applicable, to Landlord in the same condition in which the
Leased Premises or Affected Premises, if applicable, 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 or Affected Premises, if applicable, 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, after five (5) Business Days' prior notice to Tenant, thereafter
cause such property to be removed from the Leased Premises or Affected Premises,
if applicable. The cost of removing and disposing of such property and repairing
any damage to any of the Leased Premises or Affected Premises, if applicable,
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.
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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, which records and books with respect to the finances and
business of Tenant shall be kept in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and shall permit Landlord
and Lender by their respective agents, accountants and attorneys, upon
reasonable notice to Tenant, to visit and inspect the Leased Premises and
examine (and make copies of at the inspecting party's expense) the records and
books of account and to discuss the finances and business with the officers of
Tenant, at such reasonable times during normal business hours as may be
requested by Landlord and at Landlord's expense, provided, however, that
Landlord and Lender shall be limited to one personal visit per Lease Year to
discuss the finances and business of Tenant with the officers of Tenant. 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 one
hundred twenty (120) days of the close of each fiscal year, annual audited
financial statements of Tenant prepared by nationally recognized independent
certified public accountants. Tenant shall also furnish to Landlord within sixty
(60) 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 of Tenant shall be prepared in
accordance with GAAP consistently applied. All annual financial statements shall
be accompanied (i) by an opinion of said accountants (A) stating that such
financial statements present fairly the financial position for the periods
indicated, in conformity with GAAP applied on a consistent basis with prior
years and (B) which shall not be qualified or limited because of a restricted or
limited examination by the accountants of any material portion of Tenant's
records and (ii) by a certificate of the president or a vice president of
Tenant, dated within five (5) days of the delivery of such statement, stating
that such officer knows of no Event of Default, or event which, upon notice or
the passage of time or both, would become an Event of Default which has occurred
and is continuing hereunder or, if any such event has occurred and is
continuing, specifying the nature and period of existence thereof and what
action Tenant has taken or proposes to take with respect thereto.
29. Intentionally Omitted.
30. Non-Recourse as to Landlord. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be limited to actual damages and shall be
enforced only against Landlord's interest in the Leased Premises and not against
any other assets, properties or funds of (a) Landlord, (b) any director, member,
officer, general partner, limited partner, employee or agent of Landlord, or any
general partner of Landlord, any of its general partners or shareholders (or any
legal representative, heir, estate, successor or assign of any thereof), (c) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, or any of its general partners, either directly or through Landlord or
its general partners or any predecessor or successor partnership
43
or corporation or their shareholders, officers, directors, employees or agents
(or other entity), or (d) any other Person (including ▇▇▇▇▇ Property Advisors,
▇▇▇▇▇ Fiduciary Advisors, Inc., W. P. ▇▇▇▇▇ & Co., LLC, ▇▇▇▇▇ Management LLC,
and any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof).
31. Financing.
(a) Tenant agrees to pay all costs and expenses incurred by
Landlord in connection with Landlord's purchase, leasing and initial financing
of the Leased Premises including, without limitation, the cost of appraisals,
environmental reports, structural reports, title insurance, surveys, legal fees
and expenses, and Lender's points and commitment fee. Tenant shall not be
responsible for any acquisition or similar fee payable to W.P. ▇▇▇▇▇ & Co. LLC
or its affiliates or any costs or expenses incurred by Landlord in connection
with any financing of the Leased Premises subsequent to the initial financing.
(b) If Landlord desires to obtain or refinance any Loan,
Tenant shall negotiate in good faith with Landlord concerning any request made
by any Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant shall agree, upon request of Landlord, to supply any such
Lender with such notices and information as Tenant is required to give to
Landlord hereunder and to extend the rights of Landlord hereunder to any such
Lender and to consent to such financing if such consent is requested by such
Lender.
32. Subordination, Non-Disturbance and Attornment. This Lease and
Tenant's interest hereunder shall be superior to any Mortgage, other security
instrument or lien hereafter placed upon the Leased Premises by Landlord, and to
any and all advances made or to be made thereunder, to the interest thereon, or
any ground lease entered into by Landlord and all renewals, replacements and
extensions thereof, provided that Tenant hereby agrees to subordinate this Lease
to any Mortgage, ground lease or other security instrument so long as such
mortgagee, holder of a security interest or ground lessor enters into an
agreement with Tenant in substantially in the form of Exhibit "E", subject to
any modifications reasonably required by any Lender or ground lessor, with
respect to each Related Premises which do not materially affect Tenant's rights
hereunder.
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 Fixtures and Tenant as the
lessee of such Leased Premises and Fixtures including: (i) 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 Fixtures, (ii) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (iii) Landlord
reporting the Rent payments as rental income.
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34. 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
Fixtures" shall mean "the Fixtures or any part thereof or interest therein";
(ix) "any of the Adjoining Property" shall mean "the Adjoining Property or any
part thereof"; and (x) "best of knowledge of Tenant" (or words of similar
effect) shall mean to the actual knowledge of Tenant's then-current Chief
Financial Officer, Treasurer, General Counsel, Associate General Counsel for
Real Estate or, as to matters pertaining to either Related Premises, the
Distribution Center Manager for such Related Premises.
(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, Lender or
any person or entity designated by Landlord. Except as otherwise specifically
permitted herein to the contrary, Landlord and Lender shall not unreasonably
withhold, condition or delay their respective consent or approval whenever such
consent or approval is required under this Lease, except as otherwise provided
herein. Time is of the essence with respect to the performance by Tenant and
Landlord of their respective 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.
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(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) If the date for performance of any obligation of Landlord
or Tenant under this Lease is not a Business Day, the date for performance of
such obligation shall be the first Business Day following the date for
performance of such obligation.
(h) The covenants of this Lease shall run with the land and
bind Tenant, Landlord, and their respective its successors and permitted assigns
and all present and subsequent encumbrancers and subtenants of any of the Leased
Premises, and shall inure to the benefit of Landlord, Tenant, and their
respective successors and permitted assigns.
(i) Notwithstanding any provision in this Lease to the
contrary, all Surviving Obligations of Tenant shall survive the expiration or
termination of this Lease with respect to each Related Premises for a period of
ten (10) years.
(j) 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.
(k) All exhibits attached hereto are incorporated herein as if
fully set forth.
(l) Each of Landlord and Tenant hereby agree that the State of
New York has a substantial relationship to the parties and to the underlying
transaction embodied hereby, and in all respects (including, without limiting
the generality of the foregoing, matters of construction, validity and
performance) this Lease and the obligations arising hereunder shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and performed therein and all applicable law of the
United States of America; except that, at all times, the provisions for the
creation of the leasehold estate, enforcement of Landlord's rights and remedies
with respect to right of re-entry and repossession, surrender, delivery,
ejectment, dispossession, eviction or other in-rem proceeding or action
regarding either Related Premises pursuant to Paragraph 23 hereof shall be
governed by and construed according to the Laws of the State in which the
applicable Related Premises is located, it being understood that, to the fullest
extent permitted by law of such State, the law of the State of New York shall
govern the validity and the enforceability of the Lease, and the obligations
arising hereunder. To the fullest extent permitted by law, Tenant hereby
unconditionally and irrevocably waives any claim to assert that the law of any
other jurisdiction governs this Lease. Any legal suit, action or proceeding
against Tenant arising out of or relating to this Lease may be instituted in any
federal or state court sitting in the County of New York, State of New York, and
Tenant waives any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding in such County and State, and
Tenant hereby expressly and irrevocably submits to the jurisdiction of any such
court in any suit, action or proceeding. Notwithstanding the foregoing, nothing
herein shall prevent or prohibit Landlord from instituting any suit, action or
46
proceeding in any other proper venue or jurisdiction in which Tenant is located
or where service of process can be effectuated.
(m) Landlord covenants and agrees to comply with all
requirements of GAAP in effect as of the Commencement Date to the extent
necessary to prevent Tenant from being required to be consolidated with Landlord
for GAAP financial reporting purposes and to consider any proposed modification
to this Lease (which Landlord may approve or disapprove in its sole and absolute
discretion) and which is necessary to preserve such status and the treatment of
the Lease as an operating lease under GAAP. From time to time, Landlord will
furnish Tenant with such information regarding Landlord as Tenant may reasonably
request to permit Tenant and Tenant's accountants to determine the treatment of
the Lease for financial reporting purposes.
(n) This Lease may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same Lease.
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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:
WRENCH (DE) LIMITED PARTNERSHIP,
a Delaware limited partnership,
By: WRENCH (DE) QRS 15-32,
INC., its general partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
ATTEST: TENANT:
TRUSERV CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------- ---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Title: Vice President and Treasurer
[Corporate Seal]
48
EXHIBIT A
LAND
1. California Premises
ALL THOSE CERTAIN pieces of parcels of land situate, lying and being
in the North half of Section 28, Township 10 North Range 2 East, Mount Diablo
Base and Meridian, County of Yolo, State of California, being all of Parcels 1
and 3 as described in Deed, dated January 21, 1974 from Southern Pacific
Transportation Company to Southern Pacific Company, recorded October 3, 1974, in
Volume 1121, Pages 509 to 512, Official Records of Yolo County, described as
follows:
BEGINNING at the point of intersection of the Northwesterly line of
that tract of land described as Parcel No. 2 in Deed recorded October 15, 1937,
in Book 107, at Page 237, Official Records of said County, with the
Southwesterly line of that certain parcel of land described in Deed from State
of California to Southern Pacific Transportation Company, recorded October 8,
1971, in Volume 993 of Official Records at Page 125, Records of said County;
thence North 40 degrees 52' 51" West along said Southwesterly line, 368.70 feet;
thence leaving last said line North 49 degrees 07' 09" East 55.00 feet to a
point in the Northeasterly line of last said land from State of California;
thence along said Northeasterly line as follows: South 40 degrees 52' 51" East
17.98 feet to a point of tangent curve, easterly along said tangent curve to the
left with a radius of 362 feet, through an angle of 75 degrees 05'09", an arc
length of 474.40 feet, North 64 degrees 02'00" East 23.71 feet (shown as 31.32
feet in said Deed, dated January 21, 1974) to a point in the Easterly line of
land described as Parcel No. 1 in Deed recorded July 30, 1957, in Book 519 at
Page 480, of Official Records, Records of Yolo County, also being a point in the
Westerly line of land described as Parcel No. 2 in Deed dated October 14, 1937,
from ▇▇▇▇▇ ▇▇▇▇▇▇ et ux. to Southern Pacific Railroad Company recorded October
15, 1937, in Volume 107 of Official Records, Page 240, Records of said County;
thence leaving said Northeasterly line and along said Westerly line North 7
degrees 55' 47" East (shown as North 8 degrees 09' 30" East in said Deed dated
January 21, 1974) 165.89 feet to a point the Northerly line of last said land;
thence South 89 degrees 28' 58" East (shown as South 89 degrees 32' 00" East in
said Deed dated January 21, 1974) along last said Northerly line and the
Easterly prolongation thereof, 1,530.63 feet (shown as 1,520.05 feet in said
Deed dated January 21, 1974) to a point in the Easterly line of Section 28;
thence South 0 degrees 24' 49" West along last said line, 787.70 feet (shown as
815.29 feet in said Deed dated January 21, 1974) to a point in said Easterly
line of the Northeast one-quarter of said Section 28 from which an encased brass
disc set in concrete marking the Southeast corner of said Northeast one-quarter
bears South 00 degrees 24' 49" West 1160.84 feet; thence North 89 degrees 36'
18" West, 1,463.58 feet to a point in the Easterly line of that certain 19.37
acre tract of land described in Deed dated May 28, 1971, from Southern Pacific
Transportation Company to State of California, recorded in Book 982 of Official
Records at Page 304, Records of said County; thence Northerly along last said
Easterly line on a curve to the left having a radius of 1,800 feet and a central
angle of 0 degrees 08' 23" (tangent to said curve at last-mention point bears
North 40 degrees 44' 28" West) an arc distance of 4.39 feet to a point; thence
North 40 degrees 52' 51" West continuing along said Easterly line and the
Northerly prolongation thereof 530.06 feet to the point of beginning.
EXHIBIT A - 1
EXCEPTING THEREFROM that portion of the above-described parcels of
land included within the parcel of land described in Deed dated February 5,
1973, from Southern Pacific Transportation Company to K & M Enterprises, Inc.,
recorded May 21, 1973, in Book 1063 of Official Records, Page 6, Recorder of
said County.
ASSESSOR'S PARCEL NUMBER: ▇▇▇-▇▇▇-▇ AND 05.
2. Texas Premises
All that tract or parcel of land, situated in the City of Corsciana,
▇▇▇▇▇▇▇ County, Texas, being ▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇, according to the plat recorded
in Volume 6, Page 75, Plat Records of ▇▇▇▇▇▇▇ County, Texas. Said tract or
parcel of land being more fully described by metes and bounds as follows:
BEGINNING on a found 1/2" iron rod for the northwest corner of this
tract and the northwest corner of the above mentioned ▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇;
THENCE with said ROW N 81(degree) 18' 18" E 1606.93 feet to a found
1/2" iron rod for the northeast corner of this tract;
THENCE S 29(degree) 58' 25" E 1053.38 feet to a found1/2" iron rod
for the southeast corner of this tract located on the north ROW of the St. Louis
Southwestern Railroad;
THENCE with said north ROW S 77(degree) 40' 50" W 1923.69 feet to a
found 1/2" iron rod for the southwest corner of this tract;
THENCE N 12(degree) 17" 33" W 1105.36 feet to the place of beginning
and containing 42.51 acres of land.
2
EXHIBIT B
FIXTURES
All fixtures, machinery, apparatus, 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, racking, rolling stock, machinery,
office, manufacturing and warehouse equipment which are not necessary to the
operation of the Improvements which constitute part of the Leased Premises.
EXHIBIT B - 1
EXHIBIT C
PERMITTED ENCUMBRANCES
CALIFORNIA PREMISES
1. Real property taxes:
General and special taxes for the fiscal year 2002-2003
1st installment: $384.33 PAID
2nd installment: $384.33 due 2/1/03, delinquent 4/10/03
Parcel No.: ▇▇▇-▇▇▇-▇▇▇
Assessment No.: 37287
Code Area: 003001
Assessed Valuation:
Land: $21,084
Improvements: $0.00
Exemption: $0.00
Includes $13.91 for WDLND JU BD, $543.92 for ▇▇▇▇▇▇-Kentucky AD
General and special taxes for the fiscal year 2002-2003
1st installment: $86,324.14 PAID
2nd installment: $86,324.14 due 2/1/03, delinquent 4/10/03
Parcel No.: ▇▇▇-▇▇▇-▇▇▇
Assessment No.: 37288
Code Area: 003001
Assessed Valuation:
Land: $948,024
Improvements: $11,811,977
Exemption: $0.00
Includes $9,378.58 for WDLND JU BD, $21,169.98 for ▇▇▇▇▇▇-Kentucky AD
2. The Lien of Supplemental Taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.
3. An assessment under the Improvement Bond Act of 1915, installments of
which are collected with property taxes
District: WDLND JU ▇▇
▇▇▇▇ No.: 152
Assessment No.: ▇▇▇-▇▇▇-▇▇▇ AND 051
EXHIBIT C - 1
4. Any unpaid amounts now owning for utilities, of record or not, due the
CITY OF WOODLAND or County of Yolo, none now due or payable.
5. Easements and incidental rights in any portion of the land lying within
Pioneer Avenue.
6. Easement for the purposes stated therein, terms and conditions thereof and
incidental purposes as created in that certain instrument recorded March
22, 1957, in Book 509, Page 166, Official Records.
7. Easement for the purposes stated therein and incidental purposes as
created in that certain instrument recorded May 8, 1957, in Book 512, Page
567, Official Records.
8. Easement for the purposes stated therein and incidental purposes as
created in that certain instrument recorded March 29, 1965, in Book 793,
Page 237, Official Records.
9. Easement for the purposes stated therein, terms and conditions thereof and
incidental purposes as created in that certain instrument recorded
February 23, 1967, in Book 848, Page 659, Official Records.
10. Lack of abutter's rights in and to the freeway adjacent to the Westerly
line of said property, such rights having been released and relinquished
by deed to the State of California, recorded June 30, 1971, in Book 982
Page 304, Official Records.
11. Lack of abutter's rights in and to the freeway adjacent to the Westerly
line of said property, such rights having been released and relinquished
by deed to the State of California, recorded October 8, 1971, in Book 993,
Page 125, Official Records.
12. Lack of abutter's rights in and to the freeway adjacent to the Westerly
line of said property, such rights having been released and relinquished
by deed to the State of California, recorded November 30, 1973, in Book
1085, Page 27, Official Records.
13. Easement for the purposes stated therein, terms and conditions thereof and
incidental purposes as created in that certain instrument recorded October
3, 1974, in Book 1121, Page 509, Official Records and reserved by Southern
Pacific Company.
14. Terms, conditions and/or provisions contained in Development Agreement
dated October 22, 1984, executed by ▇▇▇▇▇▇ & Company and the City of
Woodland and recorded November 2, 1984, in Book 1674, Page 69, Official
Records.
15. Terms, conditions and/or provisions contained in Lessee Owner's Agreement
and Waiver, dated May 8, 1985, executed by ▇▇▇▇▇▇ and Company and Security
Pacific Equipment Leasing, Inc. and recorded June 3, 1985, in Book 1706,
Page 299, Official Records.
16. Easement for the purposes stated therein and incidental purposes as
created in that certain instrument recorded December 9, 1985, in Book
1741, Page 105, Official Records.
17. Easement for the purposes stated therein and incidental purposes as
created in that certain instrument recorded December 9, 1985, in Book
1741, Page 107, Official Records.
2
18. Easement for the purposes stated therein and incidental purposes as
created in that certain instrument recorded December 9, 1985, in Book
1741, Page 109, Official Records.
19. The following matters as disclosed by ALTA/ACSM Survey, prepared by ▇▇▇▇▇▇
& ▇▇▇▇▇▇, Inc., dated September 11, 1998, Job No. 980169 and updated
November 22, 2002:
a. the fact that a "Danger High Voltage Cable Buried Here" marker
is located in detention basin.
b. the fact that a fence meanders along property line.
c. the fact that utility boxes/vaults, transformer, telephone
vault, water vaults, propane tank, fire hydrants, concrete pad
with above ground diesel tank are located on said land.
d. the fact that poles with cameras lie inside easement areas.
e. the fact that railroad tract lies outside of recorded railroad
easement.
TEXAS PREMISES
1. Standby fees, taxes and assessments by any taxing authority for the year
2002 and subsequent years; and subsequent taxes and assessments by any
taxing authority for prior years due to change in land usage or ownership,
but not those taxes or assessments for prior years because of an exemption
granted to a previous owner of the property under Section 11.13, Texas Tax
Code, or because of improvements not assessed for a previous tax year.
2. Any titles or rights asserted by anyone, including but not limited to,
persons, the public, corporations, governments or other entities,
a. to tidelands, or lands comprising the shores or beds of
navigable or perennial rivers and streams, lakes, bays, gulfs
or oceans, or
b. to lands beyond the line of the harbor or bulkhead lines as
established or changed by any government, or
c. to filled-in lands, or artificial islands, or
d. to statutory water rights, including riparian rights, or
e. to the area extending from the line of mean low tide to the
line of vegetation, or the right of access to that area or
easement along and across that area.
3. The following matters and all terms of the documents creating or offering
evidence of the matters (We must insert matters or delete this exception):
a. Easements Affecting the Property as shown on Survey prepared
by ▇▇▇▇▇ Surveying Associates, dated 11/25/02;
i. Easement from St. Louis Southwestern Railway Company of
Texas of City of Corsicana, as shown by instrument dated
November 21, 1977, recorded in Volume 888, Page 547,
Deed Records ▇▇▇▇▇▇▇ County, Texas.
3
ii. Agreement dated February 8, 1983 executed by Industrial
Planners Group, Inc. to Texas Power & Light Company,
recorded in Volume 1001, Page 303, Deed Records of
▇▇▇▇▇▇▇ County, Texas.
iii. Easement shown in plat of ▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, recorded in Volume 6, Page 75, Plat Records
of ▇▇▇▇▇▇▇ County, Texas.
iv. Various electric, telephone and sewer lines over and
across the subject property without any apparent
easements therefor.
b. Mineral Reservations Affecting the Subject Property:
All oil, gas and other minerals in and under the herein
described property, together with the right of ingress and egress, mining and
oil drilling privileges appurtenant thereto, previously reserved or conveyed to
third parties by predecessors in title.
4
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent. (a) Basic Rent payable in respect of the Term shall
be payable quarterly in advance on each Basic Rent Payment Date, in equal
installments as set forth below. For purposes of clarification, the first Lease
Year shall include payments due on January 20, 2003, April 20, 2003, July 20,
2003 and October 20, 2003. Pro rata Basic Rent for the period from the date
hereof through the nineteenth day of January 2003 shall be paid on the date
hereof, and the final quarterly installment of Basic Rent shall be reduced pro
rata to reflect the actual number of days remaining in the Term.
Quarterly
Lease Year Annual Basic Rent Installments
---------- ----------------- -------------
1 $3,984,190.98 $ 996,047.74
2 $4,042,565.43 $1,010,641.36
3 $4,102,517.17 $1,025,629.29
4 $4,184,567.52 $1,046,141.88
5 $4,268,258.87 $1,067,064.72
6 $4,353,624.05 $1,088,406.01
7 $4,440,696.53 $1,110,174.13
8 $4,529,510.46 $1,132,377.61
9 $4,620,100.67 $1,155,025.17
10 $4,712,502.68 $1,178,125.67
11 $4,806,752.73 $1,201,688.18
12 $4,902,887.79 $1,225,721.95
13 $5,000,945.54 $1,250,236.39
14 $5,100,964.45 $1,275,241.11
15 $5,202,983.74 $1,300,745.94
16 $5,307,043.42 $1,326,760.85
17 $5,413,184.29 $1,353,296.07
18 $5,521,447.97 $1,380,361.99
19 $5,631,876.93 $1,407,969.23
20 $5,744,514.47 $1,436,128.62
21 $5,859,404.76 $1,464,851.19
22 $5,976,592.85 $1,494,148.21
23 $6,096,124.71 $1,524,031.18
24 $6,218,047.21 $1,554,511.80
25 $6,342,408.15 $1,585,602.04
26 $6,469,256.31 $1,617,314.08
27 $6,598,641.44 $1,649,660.36
28 $6,730,614.27 $1,682,653.57
29 $6,865,226.55 $1,716,306.64
30* $6,418,986.83
1ST, 2ND, 3RD PAYMENT $1,750,632.77
4TH PAYMENT $1,167,088.51
EXHIBIT D - 1
31-40 FMV
EXHIBIT D - 2
EXHIBIT E
FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
FORM OF
SUBORDINATION, NON-DISTURBANCE,
AND ATTORNMENT AGREEMENT
-----------------------------------------------
(Lender) (collectively, Lender)
- and -
-----------------
(Tenant)
- and -
-------------------------------
(Landlord)
Dated: ___________
Location: ___________
County: ___________
PREPARED BY AND UPON
RECORDATION RETURN TO:
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the
"Agreement") is made as of __________ by and among
________________________________________________, a ____________________, each
having an address at ___________________________________________________,
Attention: _____________ (collectively, "Lender"), TruServ Corporation, a
Delaware corporation, having an address at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: _____________ ("Tenant"), and ____________________, a
_________________, having an address at __________________ ("Landlord").
RECITALS:
A. Lender is the present owner and holder of a certain Deed of Trust
and, Security Agreement (the "Security Instrument") dated as of _______________,
given by Landlord to Lender which encumbers the fee simple absolute estate of
Landlord in certain premises described in Exhibit A attached hereto (the
"Property") and which, among other security instruments, secures the payment of
certain indebtedness owed by Landlord to Lender evidenced by a certain
promissory note dated December __ 2002, given by Landlord to Lender (the
"Note").
B. Tenant is the holder of a leasehold estate in the Property under
and pursuant to the provisions of a certain lease dated _________________
between Landlord, as landlord, and Tenant, as tenant (as amended from time to
time the "Lease"). All capitalized terms used in this Agreement and not
otherwise defined herein, shall have the meanings ascribed to such terms in the
Lease.
C. The Lease governs the use and occupancy of the Property and the
other Related Premises. Under the terms of the Lease, Tenant has the right to
assign the Lease as to one or more of the Related Premises to a Preapproved
Assignee, and upon such assignment Landlord is obligated to enter into a
separate Lease with such Preapproved Assignee. In addition, the Lease provides
that with respect to Protected Subleases, Landlord is obligated to recognize
each Protected Sublease as a direct lease with Landlord in the event an Event of
Default results in the termination of the Lease and no default exists under the
Protected Sublease.
D. On the terms and conditions hereinafter set forth, Tenant has
agreed to subordinate the Lease to the Security Instrument and to the lien
thereof and Lender has agreed to grant non-disturbance to Tenant under the
Lease, any Preapproved Assignee under a Bifurcated Lease and any subtenant under
a Protected Sublease. Accordingly, references herein to Tenant are intended to
refer to Tenant, any Preapproved Assignee, any Non-Preapproved which is approved
by Landlord for a Complete Assignment or a Partial Assignment or any Protected
Subtenant, as applicable, and references herein to the Lease are intended to
refer to the Lease, any Bifurcated Lease or any Protected Sublease, as
applicable.
AGREEMENT:
For good and valuable consideration, Tenant, Lender and Landlord
agree as follows:
1. Subordination. Subject to Sections 2 and 3, the Lease and all of the terms,
covenants and provisions thereof and all rights, remedies and options of Tenant
thereunder are and shall at all times continue to be subject and subordinate in
all respects to the terms, covenants and provisions of the Security Instrument,
as of the date hereof, and to the lien thereof, including without limitation,
all renewals, increases, modifications, spreaders, consolidations, replacements
and extensions thereof and to all sums secured thereby and advances made
thereunder with the same force and effect as if the Security Instrument had been
executed, delivered and recorded prior to the execution and delivery of the
Lease.
2. Non-Disturbance. If any action or proceeding is commenced by Lender for the
foreclosure of the Security Instrument or the sale of the Property, Tenant shall
not be named as a party therein unless such joinder shall be required by law,
provided, however, such joinder shall not result in the termination of the Lease
or disturb the Tenant's possession or use of the premises demised thereunder,
and the sale of the Property in any such action or proceeding and the exercise
by Lender of any of its other rights under the Note or the Security Instrument
shall be made subject to all rights of Tenant under the Lease, provided that at
the time of the commencement of any such action or proceeding or at the time of
any such sale or exercise of any such other rights (a) the Lease shall be in
full force and effect and (b) Tenant shall not be in default under any terms,
covenants or conditions of the Lease or of this Agreement on Tenant's part to be
observed or performed.
3. Attornment. If Lender or any other subsequent purchaser of the Property shall
become the owner of the Property by reason of the foreclosure of the Security
Instrument or the acceptance of a deed or assignment in lieu of foreclosure or
by reason of any other enforcement of the Security Instrument (Lender or such
other purchaser being hereinafter referred as "Purchaser"), and the conditions
set forth in Section 2 above have been met at the time Purchaser becomes owner
of the Property, the Lease shall not be terminated or affected thereby but shall
continue in full force and effect as a direct lease between Purchaser and Tenant
upon all of the terms, covenants and conditions set forth in the Lease and in
that event, Tenant agrees to attorn to Purchaser and Purchaser by virtue of such
acquisition of the Property shall be deemed to have agreed to accept such
attornment, provided, however, that Purchaser shall not be (a) liable for the
failure of any prior landlord (any such prior landlord, including Landlord and
any successor landlord, being hereinafter referred to as a "Prior Landlord") to
perform any of its obligations under the Lease which have accrued prior to the
date on which Purchaser shall become the owner of the Property, provided that
the foregoing shall not limit Purchaser's obligations under the Lease to correct
any conditions of a continuing nature that existed as of the date Purchaser
shall become the owner of the Property; provided further, however, that
Purchaser shall have received written notice of such omissions, conditions or
violations and has had a reasonable opportunity to cure the same, all pursuant
to the terms and conditions of the Lease; (b) subject to any offsets, defenses,
abatements or counterclaims which shall have accrued in favor of Tenant against
any Prior Landlord prior to the date upon which Purchaser shall become the owner
of the Property,
-2-
(c) bound by any payment of rents, additional rents or other sums which Tenant
may have paid more than three (3) months in advance to any Prior Landlord unless
(i) such sums are actually received by Purchaser or (ii) such prepayment shall
have been expressly approved of by Purchaser, (d) bound by any agreement
terminating or amending or modifying the rent, term, commencement date or other
material term of the Lease, or any voluntary surrender of the premises demised
under the Lease, made without Lender's prior written consent or (e) bound by any
assignment of the Lease or sublease of the Property, or any portion thereof,
made prior to the time Purchaser succeeded to Landlord's interest other than if
pursuant to the provisions of the Lease. Alternatively, upon the written request
of Lender or its successors or assigns, Tenant shall enter into a new lease of
the Premises with Lender or such successor or assign, at Lender's or such
successor or assign's cost and expense, for the then remaining term of the
Lease, upon the same terms and conditions as contained in the Lease, except as
otherwise specifically provided in this Agreement.
4. Notice to Tenant. After notice is given to Tenant by Lender that the Landlord
is in default under the Note and the Security Instrument and that the rentals
under the Lease should be paid to Lender pursuant to the terms of the assignment
of leases and rents executed and delivered by Landlord to Lender in connection
therewith, Tenant shall (but subject at all times to compliance with applicable
law) thereafter pay to Lender or as directed by the Lender, all rentals and all
other monies due or to become due to Landlord under the Lease and Landlord
hereby expressly authorizes Tenant to make such payments to Lender and hereby
releases and discharges Tenant from any liability to Landlord on account of any
such payments.
5. Lender's Consent; Proceeds and Awards. Tenant shall not, without obtaining
the prior written consent of Lender, (a) enter into any agreement materially
amending, modifying or terminating the Lease, (b) prepay any of the rents,
additional rents or other sums due under the Lease for more than three (3)
months in advance of the due dates thereof, (c) voluntarily surrender the
premises demised under the Lease or terminate the Lease without cause or shorten
the term thereof other than pursuant to the provisions of the Lease, or (d)
assign the Lease or sublet the premises demised under the Lease or any part
thereof other than pursuant to the provisions of the Lease; and any such
amendment, modification, termination, prepayment, voluntarily surrender,
assignment or subletting, without Lender's prior consent, shall not be binding
upon Lender. Lender acknowledges that in the event that Lender's consent or
approval is required under the terms of the Lease, Lender shall be bound by the
standards and time periods set forth in the Lease for granting or withholding
such consent or approval. Lender agrees that it will consider for approval,
which may be withheld by Lender in its sole and absolute discretion, any
amendments to the Lease proposed by Landlord and Tenant which are intended to
preserve the treatment of the Lease as an operating lease under generally
accepted accounting principles. Lender acknowledges that it is bound by the
provisions of the Lease concerning the payment and application of insurance
proceeds and condemnation awards, subject to Lender's rights under the Lease to
hold and disburse such proceeds.
6. Notice to Lender and Right to Cure. Tenant shall notify Lender of any default
by Landlord under the Lease as to which Tenant gives notice to Landlord and
agrees that, notwithstanding any provisions of the Lease to the contrary, no
notice of cancellation thereof or
-3-
of an abatement shall be effective unless Lender shall have received notice of
default giving rise to such cancellation or abatement and (i) in the case of any
such default that can be cured by the payment of money, until forty-five (45)
days shall have elapsed following the giving of such notice or (ii) in the case
of any other such default, until a reasonable period for remedying such default
shall have elapsed following the giving of such notice and following the time
when Lender shall have become entitled under the Security Instrument to remedy
the same, including such time as may be necessary to acquire possession of the
Property if possession is necessary to effect such cure, provided Lender, with
reasonable diligence, shall (a) pursue such remedies as are available to it
under the Security Instrument so as to be able to remedy the default, and (b)
thereafter shall have commenced and continued to remedy such default or cause
the same to be remedied. Notwithstanding the foregoing, Lender shall have no
obligation to cure any such default.
7. Notices. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof and
confirmed by telephone by sender, (ii) one (1) Business Day (hereinafter
defined) after having been deposited for overnight delivery with any reputable
overnight courier service, or (iii) three (3) Business Days after having been
deposited in any post office or mail depository regularly maintained by the U.S.
Postal Service and sent registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to Tenant: TruServ Corporation
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile No. _________________________
With a copy to: Goldberg, Kohn, Bell, Black,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ___________________________
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: _______________________________________
_______________________________________
_______________________________________
_______________________________________
Attention: ___________________________
With a copy to: _______________________________________
_______________________________________
_______________________________________
_______________________________________
Attention: ___________________________
-4-
or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section 7, the term "Business Day" shall
mean a day on which commercial banks are not authorized or required by law to
close in the state or commonwealth where the Property is located. Either party
by notice to the other may designate additional or different addresses for
subsequent notices or communications.
8. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of Lender, Tenant, Purchaser and their respective successors and
assigns.
9. Governing Law. This Agreement shall be deemed to be a contract entered into
pursuant to the laws of the State or Commonwealth where the Property is located
and shall in all respects be governed, construed, applied and enforced in
accordance with the laws of the State or Commonwealth where the Property is
located.
10. Miscellaneous. This Agreement may not be modified in any manner or
terminated except by an instrument in writing executed by the parties hereto. If
any term, covenant or condition of this Agreement is held to be invalid, illegal
or unenforceable in any respect, this Agreement shall be construed without such
provision. This Agreement may be executed in any number of duplicate originals
and each duplicate original shall be deemed to be an original. This Agreement
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Agreement. The failure of any party hereto to execute this Agreement, or
any counterpart hereof, shall not relieve the other signatories from their
obligations hereunder. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.
11. Joint and Several Liability. If Tenant consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several.
12. Definitions. The term "Lender" as used herein shall include the successors
and assigns of Lender and any person, party or entity which shall become the
owner of the Property by reason of a foreclosure of the Security Instrument or
the acceptance of a deed or assignment in lieu of foreclosure or otherwise. The
term "Landlord" as used herein shall mean and include the present landlord under
the Lease and such landlord's predecessors and successors in interest under the
Lease, but shall not mean or include Lender unless and until Lender has
succeeded to the interest of Landlord under the Lease. The term "Property" as
used herein shall mean the Property, the improvements now or hereafter located
thereon and the estates therein encumbered by the Security Instrument. The terms
"Tenant" and "Lease" shall have the alternative meanings set forth in Recital D
above.
13. Further Acts. Tenant will, at the cost of Tenant, and without expense to
Lender, do, execute, acknowledge and deliver all and every such further acts and
assurances as Lender shall, from time to time, require, for the better assuring
and confirming unto Lender the property and rights hereby intended now or
hereafter so to be, or for carrying out the intention or facilitating
-5-
the performance of the terms of this Agreement or for filing, registering or
recording this Agreement, or for complying with all applicable laws.
14. Limitations on Purchaser's Liability. In no event shall the Purchaser, nor
any heir, legal representative, successor, or assignee of the Purchaser have any
personal liability for the obligations of Landlord under the Lease and should
the Purchaser succeed to the interests of the Landlord under the Lease, Tenant
shall look only to the estate and property of any such Purchaser in the Property
for the satisfaction of Tenant's remedies for the collection of a judgment (or
other judicial process) requiring the payment of money in the event of any
default by any Purchaser as landlord under the Lease, and no other property or
assets of any Purchaser shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies under or with respect to the
Lease; provided, however, that the Tenant may exercise any other right or remedy
provided thereby or by law in the event of any failure by Landlord to perform
any such obligation.
15. Estoppel Certificate. Not more than once during any 12 month period, Tenant,
shall, from time to time, within fifteen (15) days after request by Lender,
execute, acknowledge and deliver to Lender a statement by Tenant as required
pursuant to Paragraph 25 of the Lease.
16. Recording. Either Landlord or Tenant may record this Agreement.
[NO FURTHER TEXT ON THIS PAGE]
-6-
IN WITNESS WHEREOF, Lender, Tenant and Landlord have duly executed
this Agreement as of the date first above written.
LENDER:
[LENDER],
a _________________
By:________________________________________
Name:______________________________________
Its:_______________________________________
TENANT:
TRUSERV CORPORATION,
a Delaware corporation
By:________________________________________
Name:______________________________________
Its:_______________________________________
LANDLORD:
[LANDLORD],
a _________________
By:________________________________________
Name:______________________________________
Its:_______________________________________
-7-
STATE OF___________ )
) ss.
COUNTY OF _________ )
On __________, before me, the undersigned, personally appeared
__________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public in and for said
County and State
Name:_________________________
(SEAL)
STATE OF___________ )
) ss.
COUNTY OF _________ )
On _____________, before me, the undersigned, personally appeared
__________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public in and for said
County and State
Name:_________________________
(SEAL)
-8-
STATE OF___________ )
) ss.
COUNTY OF _________ )
On __________, before me, the undersigned, personally appeared
__________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public in and for said
County and State
Name:_________________________
(SEAL)
-9-
EXHIBIT A TO SNDA
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT F
PREMISES PERCENTAGE ALLOCATION OF BASIC RENT
Texas Premises 64.61%
California Premises 35.39%
Total: 100%
If one Related Premises ceases to be subject to this Lease, the percentage shown
on this Exhibit F for the Related Premises which remains subject to this Lease
shall be adjusted to equal 100%.
EXHIBIT G
CERTIFICATION RELATED TO THE USA PATRIOT ACT
On behalf of [Insert name of subtenant/assignee] ("[Subtenant/Assignee]"),
I hereby certify to the following:
1. [Subtenant/Assignee] maintains a place of business that is located at a fixed
address (other than an electronic address or post office box) know as
__________________________.
2. [Subtenant/Assignee] is subject to the laws of the United State and has no
knowledge that it is not in full compliance with laws relating to bribery,
corruption, fraud, money laundering and the Foreign Corrupt Practices Act.
3. None of said Assignee/Subtenant or its, officers or directors appears on any
of the following lists maintained by the United States government ("Government
Lists"):
a. The two lists maintained by the United States Department of Commerce
(Denied Persons and Entities; the Denied Persons list can be found at
▇▇▇.▇▇▇.▇▇▇.▇▇▇/▇▇▇/▇▇▇▇▇▇▇.▇▇▇▇; the Entity List can be found at
▇▇▇.▇▇▇.▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇.▇▇▇;
b. The list maintained by the United States Department of Treasury
(Specially Designated Nationals and Blocked Persons, which can be found at
▇▇▇.▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇▇▇.▇▇▇);
c. Two lists maintained by the United States Department of State
(Terrorist Organizations and Debarred Parties; the State Department List of
Terrorists can be found at ▇▇▇.▇▇▇▇▇.▇▇▇/▇/▇▇/▇▇▇/▇▇/▇▇▇▇/▇▇▇▇.▇▇▇; the List of
Debarred Parties can be found at ▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇); and
d. Any other list of terrorists, terrorist organizations or narcotics
traffickers maintained pursuant to any of the rules and regulations of Office of
Foreign Assets Control, U.S. Department of the Treasury, or by any other
government.
4. To the best of [Subtenant/Assignee's] knowledge, [Subtenant/Assignee] does
not transact business on behalf of, or for the direct or indirect benefit of,
any individual or entity named on any Government List.
I, _____________________, certify that I have read and understand this
Certification and that the statements made in this certification and the
attached Annexes are true and correct.
This Certification is made on behalf of [[Subtenant/Assignee]].
__________________________________
(Signature)
__________________________________
(Title)
Executed on this _____ day of ___________, 200_.
EXHIBIT "H"
TENANT'S POST-CLOSING OBLIGATIONS
1. Environmental Obligations
(a) Tenant shall conduct the following actions at Tenant's sole cost and
expense and shall provide Landlord with a written status report, on or before
the 10th day of each April, July, October and January until satisfactory
completion of the activities listed below. Each of the activities listed below
in Paragraph 1(c) of this Exhibit "H" shall be completed no later than the first
anniversary of the Commencement Date unless a shorter time period is noted
below. Landlord shall, within thirty (30) days of written request of Tenant
(which request shall prominently state in all capitals on the outside of the
envelope and in the contained correspondence "THIS REQUEST FOR CONFIRMATION OF
COMPLETION OF ENVIRONMENTAL OBLIGATIONS SHALL BE DEEMED CONFIRMED BY LANDLORD IF
NOT RESPONDED TO WITHIN THIRTY (30) DAYS"), confirm that any action or actions
listed in Paragraph 1(c) of this Exhibit "H" which are described in Tenant's
request for confirmation have been satisfactorily completed or provide an
explanation as to why Landlord cannot provide such confirmation. If Landlord
does not so respond within thirty (30) days of receipt of Tenant's request, such
inaction shall be deemed confirmation that the action or actions described in
such request for confirmation from Tenant have been satisfactorily completed.
(b) Tenant shall reimburse Landlord for all of Landlord's reasonable
costs, including reasonable attorneys fees, incurred by Landlord in reviewing
Tenant's progress in completing the activities listed below. Tenant's failure to
timely comply with any of the obligations hereunder shall constitute an Event of
Default.
(c) Tenant shall comply with the following:
(i) Texas Premises
A. Underground Storage Tank Closure Documentation -Tenant
shall obtain and provide Landlord with copies of the closure documentation for
the removal of USTs in May 1998 which was submitted to the Texas Natural
Resource Conservation Commission ("TNRCC"). Tenant shall authorize a
representative from ATC to conduct a file review at the Texas Commission of
Environmental Quality (formerly TNRCC) office to obtain such documentation.
(d) The quarterly status reports and all other written reports or
submissions required to be made by Tenant in accordance with the provisions of
Paragraph 1 of this Exhibit "H" shall be addressed to:
▇▇▇▇▇ ▇▇▇▇▇▇
Asset Management Department
W. P. ▇▇▇▇▇ & Co., Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ telephone
(▇▇▇) ▇▇▇-▇▇▇▇ fax
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
with a second copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ telephone
(▇▇▇) ▇▇▇-▇▇▇▇ fax
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
2. Repair and Replacement Obligations. Except as set forth below, Tenant shall
provide Landlord with evidence reasonably satisfactory to Landlord of the
completion of the following repairs or replacements no later than the first
anniversary of the Commencement Date, provided, however any items listed below
relating to the Americans with Disability Act compliance may be satisfied by
Tenant providing evidence reasonably satisfactory to Landlord that the noted
repair is not required in order to comply with the Americans with Disabilities
Act or any other applicable Laws provided that Tenant delivers to Landlord such
evidence no later than the first anniversary of the Commencement Date. Landlord
shall, within thirty (30) days of request from Tenant, confirm whether the
completion evidence provided by Tenant is satisfactory with respect to each item
which is described in Tenant's request for confirmation (which request from
Tenant shall prominently state in all capitals on the outside of the envelope
and in the contained correspondence "THIS REQUEST FOR CONFIRMATION OF COMPLETION
OF REPAIRS SHALL BE DEEMED CONFIRMED BY LANDLORD IF NOT RESPONDED TO WITHIN
THIRTY (30) DAYS"), or provide an explanation as to why Landlord cannot provide
such confirmation. If Landlord does not so respond within thirty (30) days of
receipt of Tenant's request, such inaction shall be deemed confirmation that the
actions listed in Tenant's request for confirmation have been satisfactorily
completed.
(a) California Premises:
(i) Stripe and install signage for five (5) additional handicapped
accessible parking spaces, for a total of eight (8) handicapped spaces.
(b) Texas Premises:
(i) Replace the inoperable ten ton rooftop package unit or, if such
unit in the reasonable opinion of Landlord is not required for the
operation of the building, then at Tenant's option remove the unit
and repair any damage to roof associated with such removal or seal
the unit in manner that will prevent deterioration to either the
unit or the roof.
(ii) Stripe and install signage for seven (7) additional handicapped
accessible parking spaces.