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Exhibit 10.c
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LEASE AND DEVELOPMENT AGREEMENT
Dated as of May 29, 1996
between
ASSET HOLDINGS COMPANY VI, L.L.C., as Lessor
and
HUFFY CORPORATION, as Lessee
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Lease Financing
for Huffy Corporation
Light Manufacturing Facility
Waukesha County, Wisconsin
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TABLE OF CONTENTS
(Lease and Development Agreement)
Page
ARTICLE I DEFINITIONS; INTERPRETATION.......................................1
ARTICLE II LEASE OF LEASED PROPERTY.........................................1
SECTION 2.1 Lease of Land...................................................1
SECTION 2.2 Lease of Improvements...........................................1
SECTION 2.3 Other Property..................................................2
SECTION 2.4 Nature of Transaction...........................................2
ARTICLE III CONSTRUCTION AND EQUIPPING OF THE IMPROVEMENTS..................2
SECTION 3.1 Commencement of Construction....................................2
SECTION 3.2 Completion of Construction......................................2
SECTION 3.3 Permits; Approvals; Storage.....................................3
SECTION 3.4 Inspection......................................................3
ARTICLE IV RENT.............................................................3
SECTION 4.1 Basic Rent......................................................3
SECTION 4.2 Supplemental Rent...............................................4
SECTION 4.3 Method of Payment...............................................4
SECTION 4.4 Late Payment....................................................5
SECTION 4.5 Net Lease; No Setoff, Etc.......................................5
SECTION 4.6 Lessee to Cooperate with Lessor.................................6
ARTICLE V CONDITION AND USE OF LEASED PROPERTY..............................6
SECTION 5.1 Waivers.........................................................6
ARTICLE VI LIENS, EASEMENTS, PARTIAL CONVEYANCES............................7
ARTICLE VII MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND
ADDITIONS...................................................................8
SECTION 7.1 Maintenance and Repair; Compliance With Law.....................8
SECTION 7.2 Alterations.....................................................9
SECTION 7.3 Title to Alterations...........................................10
ARTICLE VIII USE...........................................................10
ARTICLE IX INSURANCE.......................................................10
SECTION 9.1 Insurance Coverages............................................10
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SECTION 9.2 Liability Insurance....................................................11
SECTION 9.3 Policies...............................................................11
SECTION 9.4 Loss Payee Provisions .................................................12
SECTION 9.5 Other Insurance........................................................12
SECTION 9.6 Loss Deductibles.......................................................12
ARTICLE X ASSIGNMENT AND SUBLEASING................................................13
ARTICLE XI LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE...............................13
SECTION 11.1 Event of Loss.........................................................13
SECTION 11.2 Event of Taking.......................................................13
SECTION 11.3 Casualty..............................................................14
SECTION 11.4 Condemnation..........................................................15
SECTION 11.5 Verification of Restoration and Rebuilding............................15
SECTION 11.6 Application of Payments...............................................15
SECTION 11.7 Prosecution of Awards.................................................16
SECTION 11.8 Application of Certain Payments Not Relating to an Event of Taking....17
SECTION 11.9 Other Dispositions....................................................17
SECTION 11.10 No Rent Abatement....................................................17
ARTICLE XII INTEREST CONVEYED TO LESSEE............................................17
ARTICLE XIII EVENTS OF DEFAULT.....................................................18
ARTICLE XIV ENFORCEMENT............................................................19
SECTION 14.1 Remedies..............................................................19
SECTION 14.2 Remedies Cumulative; No Waiver; Consents..............................22
ARTICLE XV SALE, RETURN OR PURCHASE OF LEASED PROPERTY.............................22
SECTION 15.1 Lessee's Option to Purchase...........................................22
SECTION 15.2 Purchase Obligation...................................................23
SECTION 15.3 Acceleration of Purchase Obligation...................................23
SECTION 15.4 Determination of Purchase Price.......................................23
SECTION 15.5 Purchase Procedure....................................................23
SECTION 15.6 Option to Remarket....................................................25
SECTION 15.7 Rejection of Sale.....................................................27
SECTION 15.8 Return of Leased Property ............................................28
SECTION 15.9 Effect of Conveyance to Lessee........................................29
ARTICLE XVI LESSEE'S EQUIPMENT.....................................................30
ARTICLE XVII RIGHT TO PERFORM FOR LESSEE...........................................30
ARTICLE XVIII MISCELLANEOUS........................................................30
SECTION 18.1 Reports...............................................................30
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SECTION 18.2 Binding Effect; Successors and Assigns; Survival...............30
SECTION 18.3 Quiet Enjoyment................................................30
SECTION 18.4 Notices........................................................31
SECTION 18.5 Severability...................................................31
SECTION 18.6 Amendment; Complete Agreements.................................31
SECTION 18.7 Construction...................................................31
SECTION 18.8 Headings.......................................................31
SECTION 18.9 Counterparts...................................................31
SECTION 18.10 Governing Law.................................................31
SECTION 18.11 Discharge of Lessee's Obligations by its Affiliates...........32
SECTION 18.12 Liability of Lessor Limited ..................................32
SECTION 18.13 Estoppel Certificates.........................................32
SECTION 18.14 No Joint Venture..............................................33
SECTION 18.15 No Accord and Satisfaction....................................33
SECTION 18.16 No Merger.....................................................33
SECTION 18.17 Survival......................................................33
SECTION 18.18 Chattel Paper.................................................33
SECTION 18.19 Time of Essence...............................................33
SECTION 18.20 Recordation of Lease..........................................33
SECTION 18.21 Investment of Security Funds..................................34
APPENDIX I Definitions and Interpretation
APPENDIX II Description of Leased Property
APPENDIX III Schedule of Scheduled Rent
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LEASE AND DEVELOPMENT AGREEMENT
THIS LEASE AND DEVELOPMENT AGREEMENT (the "Lease"), dated as of May 29, 1996, is
between ASSET HOLDINGS COMPANY VI, L.L.C., a Massachusetts limited liability
company, as Lessor, and HUFFY CORPORATION, an Ohio corporation, as Lessee.
PRELIMINARY STATEMENT
In accordance with the terms and provisions of this Lease and the other
Operative Documents, (i) the Lessor has acquired the Land and agreed to lease
the Land to the Lessee, (ii) the Lessee has agreed to construct the Improvements
on the Land for the Lessor and, when completed, to lease the Improvements from
the Lessor as part of the Leased Property under this Lease, (iii) the Lessor and
the Lessee wish to obtain, and the Lender has agreed to provide, funding in the
amount of $6,400,000 for the acquisition of the Land and the total estimated
cost of development and construction of the Improvements, and (iv) Lessor has
expended from its own equity resources the sum of $200,000 to pay a portion of
the cost of the acquisition of the Land.
NOW, THEREFORE, in consideration of the mutual agreements contained in this
Lease and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in Appendix I hereto for
all purposes hereof and the rules of interpretation set forth in Appendix I
hereto shall apply to this Lease.
ARTICLE II
LEASE OF LEASED PROPERTY
SECTION 2.1 Lease of Land. Lessor hereby demises and leases Lessor's interest in
the Land to Lessee, and Lessee hereby rents and leases Lessor's interest in the
Land from Lessor, for the Lease Term.
SECTION 2.2 Lease of Improvements. Lessor hereby demises and leases Lessor's
interest in the Improvements (whether or not the Construction thereof has been
completed) to Lessee, and Lessee hereby rents and leases Lessor's interest in
the Improvements (whether or not the Construction thereof has been completed)
from Lessor, for the Lease Term. The demise and lease of the Improvements
pursuant to this Section shall include any additional right, tide or interest in
the Improvements which may at any time be acquired by Lessor, the intent being
that all right, title and interest of Lessor in and to the Improvements shall at
all times be demised and leased hereunder.
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SECTION 2.3 Other Property. Lessee may from time to time own or hold under lease
from Persons other than Lessor furniture, trade fixtures and equipment located
on or about the Leased Property that is not subject to this Lease.
SECTION 2.4 Nature of Transaction. It is the intent of the parties hereto that:
(a) for Federal, State and local income tax purposes, the Lease shall be treated
as the repayment and security provisions of a loan by the Lessor to the Lessee,
and that the Lessee shall be treated as the legal and beneficial owner entitled
to any and all benefits of ownership of the Leased Property or any part thereof;
and that all payments of Basic Rent during the Lease Term shall be treated as
payments of interest and principal, as the case may be, in respect of such loan;
(b) if a bankruptcy court or other court of competent jurisdiction shall at any
time determine that the transactions represented by this Lease and the other
Operative Documents either (i) do not constitute a true leasing transaction or
(ii) shall be treated as a financing or other transaction, then in any such
event, this Lease shall be treated as a deed of trust and security agreement,
mortgage and security agreement or other similar instrument with a power of sale
from Lessee, as mortgagor to the Lessor for the benefit of the Lender, as
mortgagee, encumbering the Leased Property, and the payment by Lessee of the
Basic Rent shall be treated as payments of interest and the payment of Lessee of
any amounts in respect of the Lease Balance shall be treated as repayments of
principal, and (c) the Mortgage and the Assignment of Lease and Rents create a
lien and security interest in the Collateral (as defined in the Mortgage) and
this Lease, subject to certain limited exceptions.
ARTICLE III
CONSTRUCTION AND EQUIPPING OF THE IMPROVEMENTS
SECTION 3.1 Commencement of Construction. Lessee shall, for the benefit of
Lessor, cause the Construction to be commenced, performed and completed by the
General Contractor pursuant to the Construction Contract. Until the Construction
is completed, the portions of the Improvements under construction shall, and
upon completion of Construction the completed Improvements shall, be a part of
the Leased Property.
SECTION 3.2 Completion of Construction. Lessee shall endeavor to achieve
satisfactory performance from the General Contractor under the Construction
Contract. Lessee shall cause the Completion Date for the Improvements to occur
on or prior to the Completion Deadline. Lessee may make changes to the Plans and
Specifications, shall review requests for changes, shall negotiate proposals for
changes made by the General Contractor and shall prepare and sign change orders.
Lessee shall develop and implement procedures for the review and processing of
applications by the General Contractor, subcontractors, materialmen and other
Persons involved in the Construction for progress and final payments, and shall
provide to Lessor such certifications for payment as are required under the
Participation Agreement. Lessee's obligations under this Section shall not be
diminished or affected by any insufficiency of the Loan or by the costs of
Construction exceeding amounts received from the Loan. In the event that the
costs of Construction exceed the Loan, such excess shall be paid by Lessee from
Lessee's own funds.
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SECTION 3.3 Permits: Approvals: Storage. Lessee shall be responsible for
obtaining or causing the General Contractor to obtain all applicable zoning,
wetlands, subdivision, building and other permits for the Construction, and
shall also be responsible for obtaining or causing the General Contractor to
obtain all other approvals from authorities having jurisdiction over the
Construction, the Land or the Improvements. Lessee shall monitor the progress of
the Construction. Lessee shall arrange for the delivery and storage, protection
and security of materials, systems and equipment which are to be incorporated
into the Improvements until such items are incorporated into the Improvements.
SECTION 3.4 Inspection. At any time upon three (3) Business Days prior notice to
Lessee, Lessor, the Lender and their authorized representatives may inspect the
Leased Property and the books and records of Lessee relating to the Leased
Property and make copies and abstracts therefrom. All reasonable and documented
out-of-pocket costs of such inspection incurred by Lessor or Lender shall be
paid by Lessee promptly after receipt by Lessee of a written request for such
payment. No inspection shall unreasonably interfere with Lessee's operations or
the operations of any other occupant of the Leased Property. None of the
inspecting parties shall have any duty to make any such inspection or inquiry
and none of the inspecting parties shall incur any liability or obligation by
reason of not making any such inspection or inquiry. None of the inspecting
parties shall incur any liability or obligation by reason of making any such
inspection or inquiry unless and to the extent such inspecting party, during the
course of such inspection, causes damage to either the Leased Property, any
property of Lessee or any property of any other Person or to a Person.
ARTICLE IV
RENT
SECTION 4.1 (a) Basic Rent. The first Rent Payment Date shall be the first day
of the first month which next follows the earlier to occur of the Completion
Date or the Completion Deadline, and beginning on that date, Lessee shall
commence making payments of Basic Rent to Lessor in installments payable in
arrears on each Rent Payment Date during the Lease Term. Lessee shall pay no
Basic Rent for the period from the Closing Date to but not including the earlier
to occur of the Completion Date or the Completion Deadline. Basic Rent shall
equal the sum of the Facility Rent, the Index Rent and the Scheduled Rent, and
shall be payable in installments on each Rent Payment Date in the respective
amounts set forth below.
(b) Facility Rent. On the Rent Payment Date which falls on June 1, 1997, Lessee
shall pay an initial installment of Facility Rent in the sum of $17,537.
Commencing on the Rent Payment Date which falls on July 1, 1997, and on each
Rent Payment Date thereafter until (i) the Lease Balance shall be paid in full
on the Lease Termination Date, or (ii) the payment by Lessee of the Recourse
Deficiency Amount and the fulfillment of the provisions of clauses (i) through
(xiii) of Section 15.6, Lessee shall pay monthly installments of Facility Rent
in arrears with respect to the immediately preceding month, and each such
installment shall be in an amount which equals the product obtained by
multiplying Lessor's Investment by one-twelfth of the percentage which
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equals the sum of (i) the Adjusted LIBOR Rate in effect with respect to the Loan
during the immediately preceding month plus (ii) 2.51%.
(c) Index Rent. On each Rent Payment Date on which Basic Rent is payable, the
Lessee shall pay as Index Rent an amount equal to all interest accrued and
unpaid on the Loan as of the Rent Payment Date in question.
(d) Scheduled Rent. On each Rent Payment Date, Lessee shall pay the installment
of Scheduled Rent then due and payable. Attached hereto as Appendix III is a
schedule of the Scheduled Rent due and payable on each Rent Payment Date. It is
the intention of the parties hereto and the Lender that the respective
installments of Scheduled Rent set forth on the schedule of Scheduled Rent shall
be in an amount (but not in excess) sufficient to pay required payments of
principal on the Loan and the Note. Accordingly, the parties hereto agree to
adjust the schedule of Scheduled Rent set forth in Appendix III to the extent
necessary to reflect the actual outstanding principal amount of the Loan, in the
event of (i) a partial prepayment of the Loan, or (ii) that the aggregate total
of the Loan Advances made under the Loan as of the Completion Date equals less
than the Loan Commitment. Any such adjustment shall be made (i) in the case of a
partial prepayment, by multiplying the remaining unpaid installments of
Scheduled Rent on Appendix III by a fraction, the numerator of which is the
aggregate total of Loan Advances made under the Loan less the amount of
principal prepaid on the Loan, and the denominator of which is the amount of the
Loan Commitment, and (ii) in the event that the aggregate total of Loan Advances
equals less than the Loan Commitment as of the Completion Date, by multiplying
the installments of Scheduled Rent as set forth on Appendix III by a fraction,
the numerator of which is the aggregate total of Loan Advances under the Loan,
and the denominator of which is the Loan Commitment, provided that the
installment of Scheduled Rent due on the Lease Termination Date shall equal the
amount necessary to pay the then outstanding principal balance of the Loan in
full.
SECTION 4.2 Supplemental Rent. Lessee shall pay to Lessor, or to whomever shall
be entitled thereto as expressly provided herein or in any other Operative
Document or in the Facilitation Agreement dated the date hereof between the
Lessee, the Lessor and β.β. Management Corporation (the "Facilitation
Agreement"), any and all Supplemental Rent promptly as the same shall become due
and payable. In particular, the Lessee agrees to pay to the Lessor or its
designee as Supplemental Rent (i) on the Closing Date and on May 1st of each
succeeding year during the Lease Term, the annual Facilitation Fee in the sum of
$3,500, (ii) amounts necessary to reimburse Lessor for reasonable legal fees and
expenses in connection with the transaction contemplated by the Operative
Documents; and (iii) such other amounts as Lessor and Lessee shall mutually
agree upon. In the event of any failure on the part of Lessee to pay any
Supplemental Rent, which failure constitutes an Event of Default, Lessor shall
have all rights, powers and remedies provided for herein or by law or in equity
or otherwise in the case of nonpayment of Basic Rent. All Supplemental Rent to
be paid pursuant to this Section shall be payable in the type of funds and in
the manner set forth in Section 4.3.
SECTION 4.3 Method of Payment. Basic Rent shall be paid to the Lender.
Supplemental Rent (including amounts due under Article XV hereof) shall be paid
to Lessor (or to such Person as
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may be entitled thereto) or, in each case, to such Person as Lessor (or such
other Person) shall specify in writing to Lessee, and at such place as Lessor
(or such other Person) shall specify in writing to Lessee, which specifications
by Lessor shall be given by Lessor at least ten Business Days prior to the due
date therefor. Each payment of Rent (including payments under Article XV hereof)
shall be made by Lessee prior to 10:00 a.m., Dayton, Ohio time, at the place of
payment in funds consisting of lawful currency of the United States of America
which shall be immediately available on the scheduled date when such payment
shall be due, unless such scheduled date shall not be a Business Day, in which
case such payment shall be made on the next succeeding Business Day.
SECTION 4.4 Late Payment. If any Basic Rent shall not be paid when due, Lessee
shall pay to Lessor, as Supplemental Rent, interest (to the maximum extent
permitted by law) on such overdue amount from and including the due date thereof
to but excluding the Business Day of payment thereof at the Overdue Rate.
SECTION 4.5 Net Lease: No Setoff. Etc. This Lease is a net lease and,
notwithstanding any other provision of this Lease, Lessee shall pay all Basic
Rent and Supplemental Rent, and all costs, charges, taxes, assessments and other
expenses (foreseen or unforeseen) for which Lessee or any Indemnitee is or shall
become liable by reason of Lessee's or such Indemnitee's estate, right, title or
interest in the Leased Property, or that are connected with or arise out of the
acquisition, installation, possession, use, occupancy, maintenance, ownership,
leasing, repairs and rebuilding of, or addition to, the Leased Property or any
portion thereof, including, without limitation, the Construction or the
financing of the Construction and any other amounts payable hereunder shall be
paid without counterclaim, setoff, deduction or defense and without abatement,
suspension, deferment, diminution or reduction, and Lessee's obligation to pay
all such amounts throughout the Lease Term is absolute and unconditional. The
obligations and liabilities of Lessee hereunder shall in no way be released,
discharged or otherwise affected for any reason, including without limitation
(i) any defect in the condition, merchantability, design, quality or fitness for
use of the Leased Property or any part thereof, or the failure of the Leased
Property to comply with all Applicable Law, including any inability to occupy or
use the Leased Property by reason of such non-compliance, (ii) any damage to,
removal, abandonment, salvage, loss, contamination of or Release from, scrapping
or destruction of or any requisition or taking of the Leased Property or any
part thereof, (iii) any restriction, prevention or curtailment of or
interference with any use of the Leased Property or any part thereof including
eviction, (iv) any defect in title to or rights to the Leased Property or any
Lien on such title or rights or on the Leased Property, (v) any change, waiver,
extension, indulgence or other action or omission or breach in respect of any
obligation or liability of any Person requested or consented to by Lessee, (vi)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceedings relating to Lessee, Lessor,
the Lender or any other Person, or any action taken with respect to this Lease
by any trustee or receiver of Lessee, Lessor, the Lender or any other Person, or
by any court, in any such proceeding, (vii) any failure on the part of the
Lessor to perform or comply with any of the terms of this Lease, any other
Operative Document or of any other agreement where such failure was caused by
Lessee's failure to perform its obligations under the Operative Documents,
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(viii) any disaffirmance of this Lease or any provision hereof or any of the
other Operative Documents or any provision of any thereof by Lessee, (ix) any
action by any court, administrative agency or other Governmental Authority, (x)
any restriction, prevention or curtailment of or interference with the
Construction or any use of the Leased Property or any part thereof or (xi) any
other occurrence whatsoever, whether similar or dissimilar to the foregoing,
whether or not either Lessee shall have notice or knowledge of any of the
foregoing. Except as specifically set forth in Articles XV or XI of this Lease,
this Lease shall be noncancellable by Lessee for any reason whatsoever and
Lessee, to the extent permitted by Applicable Law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Lease, or to any diminution, abatement or reduction of Rent payable by Lessee
hereunder. Lessee assumes the sole responsibility for the condition, use,
operation, maintenance, and management of the Leased Property and Lessor shall
have no responsibility in respect thereof and shall have no liability for damage
to the property of either Lessee or any subtenant of Lessee on any account or
for any reason whatsoever other than by reason of Lessor's willful misconduct or
breach of any of its express obligations under any Operative Document.
SECTION 4.6 Lessee to Cooperate with Lessor. The Lessee hereby agrees to use ts
best efforts to supply Lessor with all such information necessary in order for
Lessor to maintain its books and accounts and prepare all required federal,
state and local tax returns.
ARTICLE V
CONDITION AND USE OF LEASED PROPERTY
SECTION 5.1 WAIVERS. Lessee acknowledges that, as of the date hereof, the Land
vacant and unimproved, and no part of the Improvements have been constructed
thereon. During the Lease Term, Lessor's interest in the Improvements (whether
or not completed) and the Land is demised and let by Lessor "AS IS" subject to
(i) the rights of any parties in possession thereof, (ii) the state of the title
thereto existing at the time Lessor acquired its interest in the Leased
Property, (iii) any state of facts which an accurate survey or physical
inspection might show (including the survey delivered on the Closing Date), (iv)
all Applicable Law and (v) any violations of Applicable Law which may exist upon
or subsequent to the commencement of the Lease Term. LESSEE ACKNOWLEDGES THAT,
ALTHOUGH LESSOR WILL OWN AND HOLD TITLE TO THE LEASED PROPERTY, LESSEE IS SOLELY
RESPONSIBLE FOR THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE
IMPROVEMENTS AND ANY ALTERATIONS. NEITHER LESSOR NOR THE LENDER HAVE MADE OR
SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE,
MERCHANTABILITY, TITLE, HABITABILITY, CONDITION, DESIGN, OPERATION, OR FITNESS
FOR USE OF THE LEASED PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LEASED PROPERTY (OR ANY PART THEREOF), ALL SUCH WARRANTIES BEING HEREBY
DISCLAIMED, AND NEITHER LESSOR NOR THE
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LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE
FAILURE OF THE LEASED PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY
APPLICABLE LAW except that Lessor hereby represents and warrants that the Leased
Property is and shall at all times remain free of Lessor Liens. As between
Lessor and Lessee, Lessee has been afforded full opportunity to inspect the
Land, is satisfied with the results of its inspections of the Land and is
entering into this Lease solely on the basis of the results of its own
inspections and all risks incident to the matters discussed in the two preceding
sentences, as between Lessor or the Lender, on the one hand, and Lessee, on the
other, are to be borne by Lessee. The provisions of this Article have been
negotiated and, except to the extent otherwise expressly stated, the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by Lessor or the Lender, express or implied, with
respect to the Leased Property that may arise pursuant to any law now or
hereafter in effect or otherwise.
ARTICLE VI
LIENS; EASEMENTS; PARTIAL CONVEYANCES
Commencing on the Completion Date and thereafter, Lessee shall not directly or
indirectly create, incur or assume, any Lien on or with respect to the Leased
Property, the Construction, title thereto, or any interest therein including any
Liens which arise out of the possession, use, occupancy, construction, repair or
rebuilding of the Leased Property or by reason of labor or materials furnished
or claimed to have been furnished to Lessee, or any of its contractors or agents
or by reason of the financing of any personalty or equipment purchased or leased
by Lessee or Alterations constructed by Lessee, except in all cases Permitted
Liens.
Notwithstanding the foregoing paragraph, at the request of Lessee, Lessor shall,
from time to time during the Lease Term and upon reasonable advance written
notice from Lessee and receipt of the materials specified in the next succeeding
sentence, consent to and join in any (i) grant of easements, licenses, rights of
way and other rights in the nature of easements, including, without limitation,
utility easements to facilitate Lessee's use, development and construction of
the Leased Property, (ii) release or termination of easements, licenses, rights
of way or other rights in the nature of easements which are for the benefit of
the Land, the Improvements or any portion thereof, (iii) dedication or transfer
of portions of the Land, not improved with a building, for road, highway or
other public purposes, (iv) execution of agreements for ingress and egress and
amendments to any covenants and restrictions affecting the Land, the
Improvements or any portion thereof and (v) request to any Governmental
Authority for platting or subdivision or replatting or resubdivision approval
with respect to the Land or any portion thereof or any parcel of land of which
the Land or any portion thereof forms a part or a request for any variance from
zoning or other governmental requirements. Lessor's obligations pursuant to the
preceding sentence shall be subject to the requirements that:
(i) any such action shall be at the sole cost and expense of Lessee and Lessee
shall pay all reasonable and documented out-of-pocket costs of Lessor in
connection therewith (including,
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without limitation, the reasonable and documented fees of attorneys, architects,
engineers, planners, appraisers and other professionals reasonably retained by
Lessor in connection with any such action);
(ii) Lessee shall have delivered to Lessor a certificate of a Responsible
Officer of Lessee stating that (1) such action will not cause the Land, the
Improvements or any portion thereof to fail to comply in any material respect
with the provisions of this Lease or any other Operative Documents or in any
material respect with Applicable Law and (2) such action will not materially
reduce the Fair Market Sales Value, utility or useful life of the Land or the
Improvements nor Lessor's interest therein;
(iii) all consideration received, if any, in connection with such action (net of
all reasonable out-of- pocket expenses incurred by Lessee in connection
therewith) shall be paid to the Lender within ten (10) Business Days following
receipt thereof and shall constitute a Qualified Payment (to the extent
consistent with the definition thereof) and be applied to reduce the Loan; and
(iv) in the case of any release or conveyance, if Lessor so requests and to the
extent available without undue expense, Lessee will cause to be issued and
delivered to Lessor by the Title Insurance Company an endorsement to the Title
Policy pursuant to which the Title Insurance Company agrees that its liability
for the payment of any loss or damage under the terms and provisions of the
Title Policy will not be affected by reason of the fact that a portion of the
real property referred to in Schedule A of the Title Policy has been released or
conveyed by Lessor.
ARTICLE VII
MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS
SECTION 7.1 Maintenance and Repair: Compliance With Law. Lessee, at its own
expense, shall at all times during the Lease Term (i) maintain the Leased
Property in good repair and condition (subject to ordinary wear and tear), in
accordance with prudent industry standards and, in any event, in no less a
manner as other similar facilities owned or leased by Lessee, (ii) make all
Alterations in accordance with, and maintain (whether or not such maintenance
requires structural modifications or Alterations) and operate and otherwise keep
the Leased Property in compliance with, all Applicable Laws and (iii) make all
material repairs, replacements and renewals of the Leased Property or any part
thereof which may be required to keep the Leased Property in the condition
required by the preceding clauses (i) and (ii). Lessee shall perform the
foregoing maintenance obligations regardless of whether the Leased Property is
occupied or unoccupied. Lessee waives any right that it may now have or
hereafter acquire to (i) require Lessor to maintain, repair, replace, alter,
remove or rebuild all or any part of the Leased Property or (ii) make repairs at
the expense of Lessor pursuant to any Applicable Law or other agreements or
otherwise. Lessor shall not be liable to Lessee or to any contractors,
subcontractors, laborers, materialmen, suppliers or vendors for services
performed or material provided on or in connection
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with the Leased Property or any part thereof. Lessor shall not be required to
maintain, alter, repair, rebuild or replace the Leased Property in any way.
SECTION 7.2 Alterations. The Lessee shall have the right, at any time and from
time to time, to make such Alterations, structural or otherwise, to the Leased
Property as the Lessee shall deem necessary or desirable, subject to the
following conditions:
(a) No Alterations shall be undertaken until the Lessee shall have procured and
paid for, so far as the same may be required from time to time, all required
municipal and other governmental permits and authorizations of the various
municipal departments and governmental subdivisions having jurisdiction, and the
Lessor, at the Lessee's expense, shall join in the application for such permits
or authorizations whenever such action is necessary;
(b) Any structural Alterations, or any Alterations undertaken as a single
project and involving an estimated cost aggregating more than $500,000, shall,
if requested by the Lender, be conducted under the supervision of an architect
or engineer licensed as such in the State; selected by the Lessee and reasonably
acceptable to the Lender, and no such work shall be undertaken until preliminary
plans and outline specifications and budget estimates therefor, prepared and
approved in writing by such architect or engineer, stating that the same comply
with the provisions of this Article, shall have been submitted to and approved
by the Lessor and the Lender;
(c) All Alterations will comply in all respects with the provisions of the
Operative Documents and shall be of such a character that, when completed, the
Fair Market Sales Value of the Improvements shall be not less than the Fair
Market Sales Value of the Improvements immediately before any such Alterations.
(d) All work done in connection with any Alterations shall be done in a good and
workmanlike manner and in compliance with applicable building and zoning laws
and with all other Applicable Laws; the cost of any such Alterations shall be
paid in cash or its equivalent, so that the Leased Property shall at all times
be free of Liens for labor and materials supplied or claimed to have been
supplied (other than inchoate liens or liens bonded off in accordance with
Applicable Law and with Lender's consent); and the work of any Alterations shall
be prosecuted with reasonable dispatch, unavoidable delays excepted;
(e) Worker's compensation insurance covering all persons employed in connection
therewith and with respect to whom death or bodily injury claims could be
asserted against the Lessor, the Lender or the Lessee or the Leased Property and
general liability and property damage insurance (which may be effected by
indorsement, if obtainable, on the insurance required to be carried pursuant to
Section 9.2) for the mutual benefit of the Lessor, the Lender or the Lessee with
limits of not less than those required to be carried pursuant to said Section
9.2 shall be maintained by the Lessee at all times when any work is in process
in connection with any Alterations.
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SECTION 7.3 Title to Alterations. Title to all Alterations shall without further
act vest in Lessor (subject to Lessee's right to remove trade fixtures, personal
property and equipment which were not acquired with funds advanced by Lessor or
Lender) and shall be deemed to constitute a part of the Leased Property and be
subject to this Lease.
ARTICLE VIII
USE
Lessee shall use the Leased Property or any part thereof only for the purpose of
a manufacturing and production facility and related office and warehouse uses,
and such other uses that may be available under the zoning applicable to the
Land as of the date of this Lease.
ARTICLE IX
INSURANCE
SECTION 9.1 Insurance Coverages. At all times during the Lease Term the Lessee,
at its sole cost and expense, shall keep the Improvements insured for the mutual
benefit of the Lender, Lessor and Lessee against:
(a) loss or damage by fire, and such other risks as may be included in the
so-called "All Risk" form of insurance providing coverage against all risk of
physical loss, in an amount satisfactory to Lender, but in any event not less
than the then Full Replacement Cost of the Improvements;
(b) loss or damage from leakage of sprinkler systems now or hereafter installed
in the Improvements, in such amount as Lender may reasonably require;
(c) [omitted]
(d) loss or damage by explosion of high pressure steam boilers, air conditioning
equipment, pressure vessels, motors or similar apparatus, now or hereafter
installed in the Improvements in such limits with respect to any one accident as
may reasonably be required by Lender from time to time, but not less than
$100,000;
(e) flood hazard coverage, if available under any applicable federal flood
insurance program, in an amount reasonably satisfactory to Lender; and
(f) during the Construction and at any time during which any part of the
improvements or any Alteration are under construction, and as to any part of the
Improvements or any Alteration under construction, builder's risk coverage under
a so-called "all risks" non-reporting completed value form of policy.
(g) such other hazards and in such amounts as Lender may reasonably require
provided that such insurance is then customarily maintained with respect to
similar properties in the State.
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The term "Full Replacement Cost" shall mean the actual replacement cost of the
Improvements (excluding foundation and excavation costs) without physical
depreciation. Full Replacement Cost shall be determined at the request of Lender
by an architect, appraiser, appraisal company or one of the insurers, selected
and paid by the Lessee and reasonably acceptable to Lender, but such
determination shall not be required to be made more frequently than once every
24 months.
SECTION 9.2 Liability Insurance. Tenant shall also maintain insurance for the
mutual benefit of the Lessor, the Lender, each other Indemnitee, and the Lessee
against claims for bodily injury or property damage, under a policy of general
public liability insurance, with such limits as may reasonably be required by
the Lessor or the Lender from time to time, but not less than $1,000,000
combined single limit, with excess umbrella liability coverage of not less than
$5,000,000.
SECTION 9.3 Policies. All insurance provided for under this Lease shall be
effected under valid enforceable policies issued by insurers of recognized
responsibility. Upon the execution of this Agreement, the Lessee shall deliver
to the Lender and the Lessor original certificates of such insurance in form
reasonably satisfactory to the Lender. At any time upon request of the Lender,
the Lessee shall provide copies of such policies to the Lender and the Lessor.
At least 30 days prior to the expiration date of any policy, certificates
thereof in form reasonably satisfactory to the Lender shall be delivered as
aforesaid, together with satisfactory evidence of payment of the premium
thereon. All policies referred to in Section 9.1 shall contain agreements by the
insurers that (i) any loss shall be payable to the Lessor, the Lessee and the
Lender, notwithstanding any act or negligence of the Lessee which might
otherwise result in forfeiture of said insurance, (ii) such policies shall not
be canceled except upon 30 days' prior written notice to each named insured and
loss payee, (iii) the coverage afforded thereby shall not be affected by the
performance of any work in or about the Leased Property and (iv) waiving all
rights of subrogation against the Lessor, Lender, the Indemnitees, Lessee and
their respective officers, employees, members, directors, incorporators,
shareholders and agents.
SECTION 9.4 Loss Payee Provisions. Except as provided in Section 9.3, all
policies of insurance required herein shall name the Lender, Lessor, and Lessee
as the insureds as their respective interests may appear. Subject to the
provisions and limitations of this Section, all policies referred to in Section
9.1 shall also provide for any loss to be payable to Lender as its interest may
appear, pursuant to a standard mortgagee clause or endorsement. The loss, if
any, under the policies referred to in Section 9.1 shall be adjusted with the
insurance companies by the Lessee except that no loss shall be adjusted without
the prior written approval of the Lender which shall not be unreasonably
withheld. The loss, if any, under all policies referred to in Section 9.1 shall
be payable to the Lender. All such policies shall expressly provide that loss
thereunder shall be adjusted and paid as provided in this Section. Any loss paid
to the Lessee under any insurance policy referred to in Section 9.1 shall be
held by the Lessee in trust for application to the cost of restoring, repairing,
replacing or rebuilding the Improvements. Any loss paid to the Lender shall be
disbursed by it in accordance with the provisions of Section 11.6 of this Lease.
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SECTION 9.5 Other Insurance. Nothing in this Article shall prevent the Lessee
from taking out insurance of the kind and in the amounts provided for under
Section 9.1 or 9.2 under a blanket insurance policy or policies which can cover
other properties owned or operated by the Lessee as well as the Leased Property;
provided, however, that any such policy of insurance provided for under Section
9.1 shall (a) specify therein, or the Lessee shall furnish the Lessor and the
Lender with a written statement from the insurers under such policies
specifying, the amount of the total insurance allocated to the Improvements,
which amount shall be not less than the amount required by said Section 9.1 to
be carried, and (b) not contain any clause which would result in the insured
thereunder being required to carry insurance with respect to the property
covered thereby in an amount equal to a minimum specific percentage of the value
of such property in order to prevent the insured therein named from becoming a
co-insurer of any loss with the insurer under such policy. The Lessee shall
furnish to the Lessor and the Lender, within 30 days after the filing thereof
with any insurance rate-making body, copies of the schedule or make-up of all
property covered by every such policy of blanket insurance.
SECTION 9.6 Loss Deductibles. All insurance provided for under this Agreement
may contain loss deductible clauses in such amounts as the Lessee maintains from
time to time with respect to comparable insurance maintained by Lessee on
comparable properties owned or leased by Lessee.
ARTICLE X
ASSIGNMENT AND SUBLEASING
Except as provided in the next following sentence, Lessee may not assign any of
its right, title or interest in, to or under this Lease. Lessee may assign or
sublease all or any portion of the Leased Property; provided, however, that (i)
all obligations of Lessee (or, in the case of a merger, consolidation or sale of
all or substantially all of Lessee's assets, Lessee's successor if (A) such
successor has a net worth, determined in accordance with GAAP, at least equal to
that of Lessee as of the end of the most recent fiscal quarter of Lessee, (B)
such successor assumes in writing all of Lessee's obligations under the
Operative Documents without qualification or reservation and (C) immediately
after giving effect to such merger, consolidation or sale, no Event of Default
exists) shall continue in full effect as obligations of a principal and not of a
guarantor or surety, as though no assignment or sublease had been made, (ii) any
such sublease shall be expressly subject and subordinate to this Lease, the Loan
Agreements, the Mortgage and the other Operative Documents except to the extent
the Lease remains effective under the Non-Disturbance and Attornment Agreement
and (iii) each such sublease shall terminate on or before the Lease Termination
Date.
ARTICLE XI
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
SECTION 11.1 Event of Loss. Any event (i) which would otherwise constitute a
Casualty during the Lease Term, (ii) which, in the good-faith judgment of
Lessee, renders repair and restoration of the Leased Property impractical or
uneconomical and (iii) as to which Lessee, within sixty (60)
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days after the occurrence of such event, delivers to Lessor and the Lender an
Officer's Certificate notifying Lessor and the Lender of such event and of such
judgment, shall constitute an "Event of Loss". In the case of any other event
which constitutes a Casualty, Lessee shall restore and rebuild the Leased
Property pursuant to Section 11.3. If an Event of Loss other than an Event of
Taking shall occur, Lessee shall pay to Lessor on the next Rent Payment Date
following delivery of the Officer's Certificate pursuant to clause (iii) of the
preceding sentence an amount equal to the Lease Balance. Upon Lessor's receipt
of such Lease Balance on such date, Lessor shall cause Lessor's interest in the
Leased Property to be conveyed to Lessee in accordance with and subject to the
provisions of Section 15.5 "Purchase Procedure" hereof. Upon completion of such
purchase, but not prior thereto, this Lease and all obligations hereunder shall
terminate, except with respect to obligations and liabilities hereunder, actual
or contingent, that have arisen or relate to events occurring on or prior to
such date of purchase, or which are expressly stated herein to survive
termination of this Lease. Upon the consummation of the purchase of the Leased
Property pursuant to this Section, any proceeds derived from insurance required
to be maintained by Lessee pursuant to this Lease for Leased Property remaining
after payment of such purchase price shall be paid over to, or retained by,
Lessee or as it may direct, and Lessor shall assign to Lessee, without warranty,
all of Lessor's rights to and interest in insurance required to be maintained by
Lessee pursuant to this Lease.
SECTION 11.2 Event of Taking. Any event (i) which constitutes a taking of title
to the Leased Property or (ii) (A) which would otherwise constitute a
Condemnation, (B) which, in the good- faith judgment of Lessee, renders
restoration and rebuilding of the Leased Property impossible, impractical or
uneconomical and (C) as to which Lessee, within sixty (60) days after the
occurrence of such event, delivers to Lessor and the Lender an Officer's
Certificate notifying Lessor and the Lender of such event, of such judgment and
of the date (or Lessee's best estimate thereof) on which Lessee shall be
required to relinquish possession of the Leased Property (or the affected
portion thereof), shall constitute an "Event of Taking". In the case of any
other event which constitutes a Condemnation Lessee shall restore and rebuild
the Leased Property pursuant to Section 11.4. If an Event of Taking shall occur,
Lessee shall pay to Lessor (i) on the next Rent Payment Date following the
occurrence of such Event of Taking, in the case of an Event of Taking described
in clause (i) of the second preceding sentence or (ii) on the Rent Payment Date
next preceding the date on which Lessee is required to relinquish possession of
the Leased Property (or the affected portion thereof), in the case of an Event
of Taking described in clause (ii) of the second preceding sentence, an amount
equal to the Lease Balance. Upon Lessor's receipt of the Lease Balance on such
date, Lessor shall cause Lessor's interest in the Leased Property to be conveyed
to Lessee in accordance with and subject to the provisions of Section 15.5
"Purchase Procedure" hereof; provided, however, that (A) such conveyance may be
by special warranty deed, but free and clear of Lessor's Liens and the lien of
the Mortgage, (B) such conveyance shall be subject to all rights of the
condemning authority, (C) Lessor shall have no obligation to remove title
defects other than Lessor Liens and the lien of the Mortgage and (D) Lessee's
ability to obtain a title insurance policy shall not affect Lessee's obligation
to purchase Lessor's interest in the Leased Property. Upon completion of such
purchase, but not prior thereto, this Lease and all obligations hereunder shall
terminate, subject to the provisions of
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Section 18.17 hereof. Upon the consummation of the purchase of the Leased
Property pursuant to this Section, all Awards received by Lessor, after
deducting any reasonable and documented costs incurred by Lessor in collecting
such Awards, received or payable on account of an Event of Taking during the
Lease Term shall be paid to Lessee, and all rights of Lessor in Awards not then
received shall be assigned to Lessee by Lessor. If no Event of Default has
occurred and is then continuing, Lessee shall have the right to negotiate with
the condemning authority and receive all Awards, subject to the terms of this
Lease.
SECTION 11.3 Casualty. If a Casualty shall occur, Lessee shall rebuild and
restore the Leased Property, will complete the same prior to the Lease
Termination Date, and will cause the conditions set forth in Section 3.3 of the
Participation Agreement to be fulfilled with respect to such restoration and
rebuilding prior to the Lease Termination Date; provided, however, that with
respect to any such Casualty occurring after the original satisfaction of the
Construction Conditions, such restoration and rebuilding will be performed, and
the Improvements, as applicable, will be restored and rebuilt, in accordance
with the Plans and Specifications as in existence on the date on which the
certificate of occupancy for the Improvements was issued, as such Plans and
Specifications may have been modified in respect of Alterations completed prior
to the occurrence of such Casualty pursuant to Section 7.2, with such additional
modifications to such Plans and Specifications as Lessor shall consent to in
writing, which consent shall not be unreasonably held or delayed.
SECTION 11.4 Condemnation. If a Condemnation shall occur, Lessee shall rebuild
and restore the Leased Property to the extent practicable, will complete the
same prior to the Lease Termination Date, and will cause the conditions set
forth in Section 3.3 of the Participation Agreement to be fulfilled with respect
to such restoration and rebuilding prior to the Lease Termination Date;
provided, however, that within sixty (60) days after Lessee's receipt of any
Awards with respect to such Condemnation, Lessee shall pay to Lender, which
amounts shall be applied to the Lease Balance, (A) the portion, if any, of such
Awards which are identified, by the condemner, as being allocable to the Land or
(B) if no such identification is made by the condemner, the portion, if any, of
such Awards which are, in Lessee's good-faith and reasonable judgment, allocable
to the Land; and provided, further, that with respect to any such Condemnation
occurring after the original satisfaction of the Construction Conditions, such
restoration and rebuilding will be performed, and the Improvements, as
applicable, will be restored and rebuilt, in accordance with the Plans and
Specifications as in existence on the date on which the certificate of occupancy
for the Improvements, as applicable, was issued, as such Plans and
Specifications may have been modified in respect of Alterations completed prior
to the occurrence of such Casualty pursuant to Section 7.2 or modified to adjust
for a Condemnation of the Leased Property pursuant to Section 11.3, with such
additional modifications to such Plans and Specifications as Lessor shall
consent to in writing, which consent shall not be unreasonably withheld or
delayed.
SECTION 11.5 Verification of Restoration and Rebuilding. Lessee will promptly
notify Lender and Lessor of the completion of the restoration or rebuilding of
the Improvements, as applicable,
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after a Casualty or Condemnation. After completion of such restoration and
rebuilding and in order to verify Lessee's compliance with the foregoing
Sections 11.3 and 11.4, Lessor, the Lender and their authorized representatives
may, upon three (3) Business Days' notice to Lessee, inspect the Leased Property
and the completion of the restoration and rebuilding of the Improvements, as
applicable. All reasonable and documented out-of-pocket costs of such inspection
incurred by Lessor and the Lender will be paid by Lessee promptly after written
request. No such inspection shall unreasonably interfere with Lessee's
operations or the operations of any other occupant of the Leased Property. None
of the inspecting parties shall have any duty to make any such inspection or
inquiry and none of the inspecting parties shall incur any liability or
obligation by reason of not making any such inspection or inquiry. None of the
inspecting parties shall incur any liability or obligation by reason of making
any such inspection or inquiry unless and to the extent such inspecting party
causes damage to the Leased Property or any property of Lessee or any other
Person during the course of such inspection.
SECTION 11.6 Application of Payments.
(a) All proceeds (except for payments under insurance policies maintained other
than pursuant to Article IX of this Lease) received at any time by Lessor,
Lessee or the Lender from any Governmental Authority or other Person with
respect to any Condemnation or Casualty to the Leased Property or any part
thereof or with respect to an Event of Loss or an Event of Taking, plus the
amount of any payment that would have been due from an insurer but for Lessee's
self- insurance or deductibles ("Loss Proceeds"), shall (except to the extent
Section 11.9 applies) be applied as follows:
(i) In the event Lessee purchases the Leased Property pursuant to Section 11.1
or Section 11.2, such Loss Proceeds shall be applied as set forth in Section
11.1 or Section 11.2, as the case may be;
(ii) In the event of a Casualty at such time when no Event of Default has
occurred and is continuing and Lessee is obligated to repair and rebuild the
Leased Property pursuant to Section 11.3, Lessee may, in good faith and
subsequent to the date of such Casualty, certify to Lender and to the applicable
insurer that no Event of Default has occurred, in which event the applicable
insurer shall pay the Loss Proceeds to Lessee and, if requested by Lessee,
Lender and Lessor shall so direct the insurer; and
(iii) In the event of a Condemnation at such time when no Event of Default has
occurred and is continuing and Lessee is obligated to repair and rebuild the
Leased Property pursuant to Section 11.4, Lessor and Lender (if required) shall
upon Lessee's request assign to Lessee, Lessor's and Lender's (if applicable)
interest in any applicable Awards except for Awards (or portions thereof)
described in Section 11.4(A) or (B); and
(iv) As provided in Section 11.8 if such Section is applicable.
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(b) During any period of repair or rebuilding pursuant to this Article, this
Lease will remain in full force and effect and Basic Rent shall continue to
accrue and be payable without abatement or reduction. Lessee shall maintain
records setting forth information relating to the receipt and application of
payments in accordance with this Section. Such records shall be kept on file by
Lessee at its offices and shall be made available to Lessor and the Lender upon
request.
SECTION 11.7 Prosecution of Awards.
(a) If, during the continuance of any Event of Default, any Condemnation shall
occur, Lessee shall give to Lessor and the Lender promptly, but in any event
within sixty (60) days after the occurrence of such Condemnation, written notice
of such occurrence and the date thereof, generally describing the nature and
extent of such Condemnation. With respect to any Event of Taking or any
Condemnation, Lessee shall control the negotiations with the relevant
Governmental Authority as to any proceeding in respect of which Awards are
required, under Section 11.6, to be assigned or released to Lessee; provided,
however, that if Event of Default shall have occurred and be continuing Lessor
shall control such negotiations. Lessee hereby irrevocably assigns, transfers
and sets over to Lessor all rights of Lessee to any Award made during the
continuance of an Event of Default on account of any Event of Taking or any
Condemnation and, if there will not be separate Awards to the Lessor and the
Lessee on account of such Event of Taking or Condemnation, irrevocably
authorizes and empowers Lessor during the continuance of an Event of Default,
with full power of substitution in the name of Lessee or otherwise (but without
limiting the obligations of Lessee under this Article), to file and prosecute
what would otherwise be Lessee's claim for any such Award and, in the case of
Lessor, to collect, receipt for and retain the same; provided, however, that in
any event Lessor may participate in any such negotiations, and no settlement
will be made without Lessor's prior consent, not to be unreasonably withheld or
delayed.
(b) Notwithstanding the foregoing, Lessee may prosecute, and Lessor shall have
no interest in, any claim with respect to Lessee's trade fixtures, other
personal property and equipment and Lessee's relocation expenses.
SECTION 11.8 Application of Certain Payments Not Relating to an Event of Taking.
In case of a requisition for temporary use of all or a portion of the Leased
Property which is not an Event of Taking, this Lease shall remain in full force
and effect, without any abatement or reduction of Basic Rent, and the Awards for
the Leased Property shall, unless an Event of Default has occurred and is
continuing, be paid to Lessee.
SECTION 11.9 Other Dispositions. Notwithstanding the foregoing provisions of
this Article, so long as an Event of Default shall have occurred and be
continuing, any amount that would otherwise be payable to or for the account of,
or that would otherwise be retained by, Lessee pursuant to this Article shall be
paid to Lessor as security for the obligations of Lessee under this Lease and,
at such time thereafter as no Event of Default shall be continuing, such amount
shall be
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paid promptly to Lessee to the extent not previously applied by Lessor in
accordance with the terms of this Lease or the other Operative Documents.
SECTION 11.10 No Rent Abatement. Rent shall not βββββ hereunder by reason of any
Casualty, any Event of Loss, any Event of Taking or any Condemnation of the
Leased Property, and Lessee shall continue to perform and fulfill all of
Lessee's obligations, covenants and agreements hereunder notwithstanding such
Casualty, Event of Loss, Event of Taking or Condemnation until the Lease
Termination Date. The foregoing notwithstanding, if and to the extent that,
pursuant to the provisions of this Lease and the other Operative Documents, Loss
Proceeds or Awards are paid over to and permanently retained by the Lender or
Lessor, Lessee shall receive as a credit against its obligation to pay Basic
Rent or, as applicable, the Lease Balance, in the amount of any such Loss
Proceeds or Awards.
ARTICLE XII
INTEREST CONVEYED TO LESSEE
If a bankruptcy court or other court of competent jurisdiction determines that
the transaction represented by this Lease will not be enforced as a true lease,
or will be treated as a financing or other transaction, then in such event it is
the intention of the parties hereto (i) that this Lease be treated as a mortgage
and security agreement encumbering the Leased Property, (ii) that Lessor shall
have, as a result of such determination, all of the rights, powers and remedies
of a mortgagee available under Applicable Law to take possession of and sell
upon the occurrence of an Event of Default (whether by foreclosure or otherwise)
the Leased Property, (iii) that the effective date of such mortgage and security
agreement shall be the effective date of this Lease, (iv) that the recording of
this Lease, the Memorandum of Lease, or any other instrument referencing this
provision shall be deemed to be the recording of such mortgage and security
agreement and (v) that the obligations secured by such mortgage and security
agreement shall include the Loan and all Basic Rent and Supplemental Rent
hereunder and all other obligations of and amounts due from Lessee hereunder and
under the Operative Documents but without duplication.
ARTICLE XIII
EVENTS OF DEFAULT
The following events shall constitute Events of Default (whether any such event
shall be voluntary or involuntary or come about or be effected by operation of
law or pursuant to or m compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) Lessee shall fail to make any payment of Basic Rent when due and such
failure shall continue for a period of 10 days after Lender shall have given
Lessee written notice of such failure;
22
(b) Lessee shall fail to make any payment of Supplemental Rent when due and such
failure shall continue for a period of 10 days after Lessee's receipt of written
notice of such failure from Lessor;
(c) Lessee shall fail to pay the Loan or Lease Balance when due pursuant to
Sections 11.1, 11.2, 15.1 or 15.2, or Lessee shall fail to pay the Recourse
Deficiency Amount when required pursuant to Article XV;
(d) Lessee shall fail to maintain insurance as required by Article IX hereof;
(e) Lessee shall fail to satisfy the conditions set forth in Section 3.3 of the
Participation Agreement and such failure shall continue for a period of 30 days
after the Lessee shall have been given written notice of such failure;
(f) A "default", "event of default" or other similar occurrence shall have
occurred and be continuing under any other loan agreement, credit agreement,
revolving credit agreement, mortgage, security agreement, lease agreement,
participation agreement or other agreement between Lessee, or any Affiliate of
Lessee, and Lender or between Lessee, or any Affiliate of Lessee, and Lessor, or
any Affiliate of Lessor, evidencing or securing any Indebtedness of Lessee
exceeding $5,000,000;
(g) The filing by Lessee of any petition for dissolution or liquidation of
Lessee, or the commencement by Lessee of a voluntary case under any applicable
bankruptcy, insolvency or other similar law for the relief of debtors, foreign
or domestic, now or hereafter in effect, or Lessee shall have consented to the
entry of an order for relief in an involuntary case under any such law, or the
appointment of or taking possession by a receiver, custodian or trustee (or
other similar official) for Lessee or any substantial part of its property, or a
general assignment by Lessee for the benefit of its creditors, or Lessee shall
have taken any corporate action in furtherance of any of the foregoing; or the
filing against Lessee of an involuntary petition in bankruptcy which results in
an order for relief being entered or, notwithstanding that an order for relief
has not been entered, the petition is not dismissed within ninety (90) days of
the date of the filing of the petition, or the filing under any law relating to
bankruptcy, insolvency or relief of debtors of any petition against Lessee which
either (i) results in a finding or adjudication of insolvency of Lessee or (ii)
is not dismissed within ninety (90) days of the date of the filing of such
petition;
(h) Any representation or warranty by Lessee in any Operative Document or in any
certificate or document delivered to Lessor pursuant to any Operative Document
shall have been incorrect in any material respect when made and has resulted in
a Material Adverse Effect on Lessee; or
(i) The occurrence of any breach of the Lessee's financial covenants set forth
in Section 5.4 of the Participation Agreement.
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(j) Lessee shall fail in any material respect to timely perform or observe any
covenant, condition or agreement (not included in clause (a), (b), (c), (d),
(e), (f), (g), (h) or (i) of this Article) to be performed or observed by it
hereunder or under the other Operative Documents and such failure shall continue
for a period of 30 days after Lessee's receipt of written notice thereof from
Lessor (provided, however, if such failure is other than the payment of money
and is of such nature that it can be corrected but not within the applicable
period, then that failure shall not constitute an Event of Default so long as
Lessee institutes curative action within the applicable period and diligently
pursues that action to completion).
ARTICLE XIV
ENFORCEMENT
SECTION 14.1 Remedies. Upon the occurrence of any Event of Default and at any
time thereafter, Lessor may, so long as such Event of Default is continuing, do
one or more of the following as Lessor in its sole discretion shall determine,
without limiting any other right or remedy Lessor may have on account of such
Event of Default (including, without limitation, the obligation of Lessee to
purchase the Leased Property as set forth in Sections 15.2 and 15.3):
(a) Lessor may, by notice to Lessee, rescind or terminate this Lease as of the
date specified in such notice; provided, however, that (i) no reletting, reentry
or taking of possession of the Leased Property by Lessor will be construed as an
election on Lessor's part to terminate this Lease unless a written notice of
such intention is given to Lessee, (ii) notwithstanding any reletting, reentry
or taking of possession, Lessor may at any time thereafter elect to terminate
this Lease for a continuing Event of Default and (iii) no act or thing done by
Lessor or any of its agents, representatives or employees and no agreement
accepting a surrender of the Leased Property shall be valid unless the same be
made in writing and executed by Lessor.
(b) Lessor may (i) demand that Lessee, and Lessee shall upon the written demand
of Lessor, return the Leased Property promptly to Lessor in the manner and
condition required by, and otherwise in accordance with all of the provisions
of, Articles VII and XV hereof as if the Leased Property were being returned at
the end of the Lease Term, and Lessor shall not be liable for the reimbursement
of Lessee for any costs and expenses incurred by Lessee in connection therewith
and (ii) without prejudice to any other remedy which Lessor may have for
possession of the Leased Property, and to the extent and in the manner permitted
by Applicable Law, enter upon the Leased Property and take immediate possession
of (to the exclusion of Lessee) the Leased Property or any part thereof and
expel or remove Lessee and any other Person who may be occupying the Leased
Property, by summary proceedings or otherwise, all without liability to Lessee
for or by reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or otherwise and, in
addition to Lessor's other damages, Lessee shall be responsible for the
reasonable and documented costs and expenses of reletting, including brokers
fees and the reasonable and documented costs of any alterations or repairs made
by Lessor.
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(c) Lessor may (i) sell all or any part of the Leased Property at public or
private sale, as Lessor may determine, free and clear of any rights of Lessee
and without any duty to account to Lessee with respect to such action or
inaction or any proceeds with respect thereto (except to the extent required by
clause (ii) of this subsection if Lessor shall elect to exercise its rights
thereunder) in which event Lessee's obligation to pay Basic Rent hereunder for
periods commencing after the date of such sale shall be terminated or
proportionately reduced, as the case may be and (ii) if Lessor shall so elect,
demand that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the date of
such sale, as liquidated damages for loss of a bargain and not as a penalty (the
parties agreeing that Lessor's actual damages would be difficult to predict, but
the aforementioned liquidated damages represent a reasonable approximation of
such amount) (in lieu of Basic Rent due for periods commencing on or after the
Rent Payment Date coinciding with such date of sale (or, if the sale date is not
a Rent Payment Date, the Rent Payment Date next preceding the date of such
sale)), an amount equal to (A) the excess, if any, of (1) the sum of all Rent
due and unpaid to and including such Rent Payment Date plus an amount equal to
the Lease Balance as of the date of sale (or, if the Event of Default occurs
prior to the Completion Date, an amount equal to the sum of the principal of and
all interest due and unpaid on the Note plus an amount equal to Lessor's
Investment) over (2) the net proceeds of such sale (that is, after deducting all
costs and expenses incurred by Lessor incident to such conveyance (including,
without limitation, all costs, expenses, fees, premiums and taxes described in
Section 15.5(b)), plus (B) interest at the Overdue Rate on the foregoing amount
from such Rent Payment Date until the date of payment. Any amounts so collected
pursuant to this subsection shall be applied (after first deducting amounts
expended by Lessor in connection with the Leased Property and the Operative
Documents and not then reimbursed) to reduce the Lease Balance. Lessor agrees,
upon Lessee's written request and at Lessee's sole expense, to provide Lessee
with an accounting showing in reasonable detail the application of amounts
collected pursuant to this subsection.
(d) Lessor may, at its option, elect not to terminate the Lease, and continue to
collect all Basic Rent, Supplemental Rent and all other amounts due Lessor
(together with all costs of collection) and enforce Lessee's obligations under
this Lease as and when the same become due, or are to be performed, and at the
option of Lessor, upon any abandonment of the Leased Property by Lessee and
re-entry of same by Lessor, Lessor may, in its sole and absolute discretion,
elect not to terminate this Lease and may make such reasonable alterations and
necessary repairs in order to relet the Leased Property, and relet the Leased
Property or any part thereof for such term or terms (which may be for a long
term extending beyond the term of this Lease) and at such rental or rentals and
upon such other terms and conditions as Lessor in its reasonable discretion may
deem advisable. Upon each such reletting all rentals actually received by Lessor
from such reletting shall be applied to Lessee's obligations hereunder in such
order, proportion and priority as Lessor may elect in Lessor's sole and absolute
discretion, and if such rentals received from such reletting during any Rent
Period are less than the Rent to be paid during that Rent Period by Lessee
hereunder, Lessee shall pay any deficiency, as calculated by Lessor, to Lessor
on the Rent Payment Date in such Rent Period.
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(e) If the Leased Property has not been sold, the Lessor may, whether or not the
Lessor shall have exercised or shall thereafter at any time exercise any of its
rights under paragraph (b), (c) or (d) of this Section with respect to the
Leased Property, demand, by written notice to the Lessee specifying a date (the
"Final Rent Payment Date") not earlier than ten (10) days after the date of such
notice, that the Lessee purchase, on the Final Rent Payment Date, the Leased
Property in accordance with the provisions of Sections 15.2. 15.4 and 15.5;
provided, however, that (i) such purchase shall occur on the date set forth in
such notice, notwithstanding the provision in Section 15.3 calling for such
purchase to occur on the Lease Termination Date and (ii) the Lessor's
obligations under Section 15.5(a) shall be limited to delivery of a deed without
warranty and ββββ of sale without warranty of the Leased Property, without
recourse or warranty, but free and clear of the Lessor's Liens.
(f) To the extent not inconsistent with subsection (e), Lessor may exercise any
other right or remedy that may be available to it under Applicable Law, or
proceed by appropriate court action (legal or equitable) to enforce the terms
hereof or to recover damages for the breach hereof. Separate suits may be
brought to collect any such damages for any Rent Period(s), and such suits shall
not in any manner prejudice Lessor's right to collect any such damages for any
subsequent Rent Period(s), or Lessor may defer any such suit until after the
expiration of the Lease Term, in which event such suit shall be deemed not to
have accrued until the expiration of the Lease Term.
(g) Lessor may retain and apply against Lessor's damages all sums which Lessor
would, absent such Event of Default, be required to pay, or turn over, to Lessee
pursuant to the terms of this Lease.
SECTION 14.2 Remedies Cumulative: No Waiver: Consents. To the extent permitted
by, and subject to the mandatory requirements of, Applicable Law (subject in all
events to Section 14. 1(e) hereof), each and every right, power and remedy
herein specifically given to Lessor or otherwise in this Lease shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by Lessor, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any right, power
or remedy. No delay or omission by Lessor in the exercise of any right, power or
remedy or in the pursuit of any remedy shall impair any such right, power or
remedy or be construed to be a waiver of any default on the part of Lessee or to
be an acquiescence therein. Lessor's consent to any request made by Lessee shall
not be deemed to constitute or preclude the necessity for obtaining Lessor's
consent, in the future, to all similar requests. No express or implied waiver by
Lessor of any Event of Default shall in any way be, or be construed to be, a
waiver of any future Event of Default. To the extent permitted by Applicable
Law, Lessee hereby waives any rights now or hereafter conferred by statute or
otherwise that may require Lessor to sell, lease or otherwise use the Leased
Property or part thereof in mitigation of Lessor's damages upon the occurrence
of an
26
Event of Default or that may otherwise limit or modify any of Lessor's rights or
remedies under this Article.
ARTICLE XV
SALE, RETURN OR PURCHASE OF LEASED PROPERTY
SECTION 15.1 Lessee's Option to Purchase. Subject to the terms and conditions
and provisions set forth in this Article, Lessee shall have the option (the
"Purchase Option"), exercisable at any time during the Lease Term on or prior to
the tenth Business Day next preceding the Lease Termination Date, to purchase
from Lessor Lessor's interest in the Leased Property at the Purchase Option
Price. Such option must be exercised by written notice to Lessor and Lender,
which exercise shall be irrevocable, and such notice will specify the closing
date for Lessee's purchase of the Leased Property, which date shall be (i) not
less than ten (10) Business Days or more than 90 calendar days following
Lessor's receipt of such notice and (ii) in any event not later than the Lease
Termination Date. If the Purchase Option is exercised pursuant to the foregoing,
then, subject to the provisions set forth in this Article, on such closing date,
Lessor shall convey to Lessee, and Lessee shall purchase from Lessor, Lessor's
interest in the Leased Property. If Lessee fails to exercise the Purchase Option
in a timely manner, then the Purchase Option shall thereupon automatically
terminate without any further action of Lessor, and the Purchase Option shall
thereafter be of no force or effect. The Purchase Option granted to Lessee
pursuant to this Section is exclusive of the purchase option provided to Lessee
pursuant to Section 14.1(e).
SECTION 15.2 Purchase Obligation. Unless (i) Lessee shall have properly
exercised the Purchase Option and purchased the Leased Property pursuant
thereto, (ii) Lessee shall have properly exercised the Remarketing Option and
shall have fulfilled all of the conditions of Section 15.6 hereof and Lessor
shall have sold its interest in the Leased Property pursuant thereto or (iii)
Lessee shall have properly exercised the Remarketing Option and shall have
fulfilled all of the conditions of Section 15.6 hereof but Lessor shall have
rejected such sale pursuant to Section 15.6(xi) and Lessee shall then have
timely fulfilled all of its obligations under Section 15.7 and 15.8 hereof,
then, subject to the terms, conditions and provisions set forth in this Article,
Lessee shall purchase from Lessor, and Lessor shall convey to Lessee, on the
Lease Termination Date all of Lessor's interest in the Leased Property. Lessee
may designate, in a notice given to Lessor not less than ten (10) Business Days
prior to the closing of such purchase (time being of the essence), the
transferee to whom the conveyance shall be made (if other than to Lessee), in
which case such conveyance shall (subject to the terms and conditions set forth
herein) be made to such designee; provided, however, that such designation of a
transferee shall not cause Lessee to be released, fully or partially, from any
of its obligations under this Lease.
SECTION 15.3 Acceleration of Purchase Obligation. Lessee shall be obligated to
purchase Lessor's interest in the Leased Property immediately, automatically and
without notice upon the occurrence of any Event of Default specified in clause
(g) of Article XIII provided, however, that
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(without affecting any of Lessee's obligations under Section 15.5 or otherwise)
Lessor's obligations under Section 15.5(a) shall be limited to delivery of a
quit claim deed of the Leased Property.
SECTION 15.4 Determination of Purchase Price. Upon the purchase by Lessee of
Lessor's interest in the Leased Property pursuant to Sections 15.2 or 15.3, the
purchase price for the Leased Property shall be an amount equal to the Lease
Balance as of the closing date therefor.
SECTION 15.5 Purchase Procedure.
(a) If Lessee shall purchase Lessor's interest in the Leased Property pursuant
to any provision of this Lease (other than as provided in Section 15.3), (i)
Lessee shall accept from Lessor, and Lessor shall convey to Lessee, the Leased
Property by a duly executed and acknowledged special warranty deed of the Leased
Property in recordable form, (ii) upon the date fixed for any purchase of
Lessor's interest in the Leased Property hereunder, Lessee shall pay to the
order of Lessor the Lease Balance by wire transfer of federal funds and (iii)
Lessor shall convey to Lessee Lessor's interest in the Leased Property via the
special warranty deed described above and Lessor will execute and deliver to
Lessee such other documents as may be legally required in order to effect such
conveyance, and such other documents as may be required by the escrow agent in
order to close escrow and issue to Lessee an ALTA owner's title policy subject
only to (A) the exceptions set forth on Schedule B of the Title Policy other
than the Mortgage and the Assignment of Lease and Rents, (B) such exceptions
created or caused by Lessee, or otherwise resulting from any act or failure to
act by Lessee, or consented to by Lessee and (C) taxes and assessments not yet
due and payable.
(b) In the event that Lessee exercises the Remarketing Option pursuant to
Section 15.6 and fulfills all of the conditions set forth in clauses (i) through
(xiii) thereof, and if Lessor does not reject the purchase offer for the Leased
Property as provided in Section 15.6 (xi), then upon payment of the purchase
price and the satisfaction by such purchaser of all of the applicable closing
conditions, Lessor shall convey to such purchaser Lessor's interest in the
Leased Property by a duly executed and acknowledged special warranty deed of the
Leased Property in recordable form, and Lessor will execute and deliver to such
purchaser (or the Lessee, as appropriate) such other documents as may be legally
required in order to effect such conveyance, and such other documents as may be
required by such purchaser's title insurance company in order to issue to such
purchaser an ALTA owner's title insurance policy subject only to (i) the
exceptions set forth on Schedule B of the Title Policy, other than the Mortgage
and the Assignment of Lease and Rents, (ii) such exceptions created or caused by
Lessee, or otherwise resulting from any act or failure to act by the Lessee, or
consented to by the Lessee and (iii) taxes and assessments not yet due and
payable.
(c) Lessee shall, at Lessee's sole cost and expense, obtain all required
governmental and regulatory approval and consents and shall make such filings as
required by Applicable Law. In the event that Lessor is required by Applicable
Law to take any action in connection with such purchase and sale, Lessee shall
pay all costs incurred by Lessor in connection therewith. In
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addition, all charges incident to such conveyance, including, without
limitation, Lessee's attorneys' fees, Lessor's reasonable attorneys' fees,
commissions, Lessee's and Lessor's escrow fees, recording fees, title insurance
premiums and all applicable documentary transfer or other transfer taxes and
other taxes required to be paid in order to record the transfer documents that
might be imposed by reason of such conveyance and the delivery of such deed
shall be borne entirely and paid by Lessee.
(d) Upon expiration or termination of this Lease resulting in conveyance of
Lessor's interest in the title to the Leased Property to Lessee, there shall be
no apportionment of taxes, insurance, utility charges or other charges payable
with respect to the Leased Property, all of such taxes, insurance, utility or
other charges due and payable with respect to the Leased Property prior to
termination being payable by Lessee hereunder and all due after such time being
payable by Lessee as the then owner of the Leased Property.
SECTION 15.6 Option to Remarket. Subject to the fulfillment of each of the
conditions set forth in this Section, Lessee shall have the option (the
"Remarketing Option") to market the Leased Property for Lessor and to procure a
purchaser therefor. Lessee's effective exercise and consummation of the
Remarketing Option shall be subject to the due and timely fulfillment of each of
the following provisions, the failure of any of which shall render the
Remarketing Option and Lessee's exercise thereof null and void, in which event,
Lessee shall be obligated to perform its obligations under Section 15.2
"Purchase Obligation":
(i) Not earlier than six months before the scheduled Lease Termination Date,
Lessee shall give to Lessor written notice of Lessee's exercise of the
Remarketing Option, which exercise shall be irrevocable unless otherwise agreed
in writing by the Lender.
(ii) Not later than ten (10) Business Days prior to the Lease Termination Date,
Lessee shall deliver to Lessor an environmental assessment of the Leased
Property dated not later than forty- five (45) days prior to the Lease
Termination Date. Such environmental assessment shall be prepared by an
environmental consultant selected by Lessee and reasonably acceptable to Lessor
and the Lender, shall be in form, detail and substance reasonably acceptable to
Lessor and the Lender, and shall otherwise indicate the environmental condition
of the Leased Property to be the same as described in the Environmental Audit.
(iii) On the date of Lessee's notice to Lessor of Lessee's exercise of the
Remarketing Option, each of the Construction Conditions shall have been timely
satisfied and no Event of Default shall exist, and thereafter, no Event of
Default shall exist under this Lease.
(iv) Lessee shall have completed all Alterations, restoration and rebuilding of
the Leased Property pursuant to Sections 7.2, 11.3 and 11.4 (as the case may be)
and shall have fulfilled all of the conditions and requirements in connection
therewith pursuant to said Sections, in each case by the date on which Lessor
receives Lessee's notice of Lessee's exercise of the Remarketing Option (time
being of the essence), regardless of whether the same shall be within Lessee's
control.
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(v) Once Lessee has exercised the Remarketing Option as provided in clause (i)
hereof, Lessee shall, as nonexclusive agent for Lessor, use commercially
reasonable efforts to sell Lessor's interest in the Leased Property and will
attempt to obtain the highest purchase price therefor. Lessee will be
responsible for hiring brokers and making the Leased Property available for
inspection by prospective purchasers. Lessee shall promptly provide any
maintenance records relating to the Leased Property to Lessor and any potential
purchaser upon request, and shall otherwise do all things necessary to sell and
deliver possession of the Leased Property to the purchaser. All such marketing
of the Leased Property shall be at Lessee's sole expense. Lessee shall allow
Lessor, the Lender and any potential qualified purchaser access to the Leased
Property for the purpose of inspecting the same.
(vi) Lessee shall submit all bids to Lessor and the Lender and Lessor and the
Lender will have the right to review the same and the right to submit any one or
more bids. All bids shall be on an "all- cash" basis (at least up to the Lease
Balance amount). Lessee shall procure bids from one or more bona fide
prospective purchasers and shall deliver to Lessor and the Lender not less than
ninety (90) days prior to the Lease Termination Date a binding written
irrevocable offer by such purchaser offering (subject to customary conditions
which do not violate the provisions of clause viii, below) the highest
"all-cash" bid to purchase the Leased Property. Such purchaser shall not be
Lessee or any Subsidiary or Affiliate of Lessee. The written offer must specify
the Lease Termination Date as the closing date.
(vii) On the Lease Termination Date, Lessee shall surrender the Leased Property
in accordance with Section 15.8 hereof.
(viii) In connection with any such sale of the Leased Property, Lessee may
provide to the purchaser any such customary "seller's" indemnities,
representations and warranties regarding title, absence of Liens (except
Lessor's Liens) and the condition of the Leased Property, including, without
limitation, an environmental indemnity, as Lessee may determine to provide in
the exercise of its business judgment and sole discretion, provided, however,
that no such indemnities, representations or warranties shall be binding on
Lessor, nor shall they create liabilities, charges, offsets or Claims,
contingent or otherwise, which could diminish, offset or impose a lien upon the
amount of the cash proceeds payable to Lessor under such purchase offer, nor
shall Lessor be under any obligation to join in or become obligated for the
same, except that Lessor shall fulfill all of the requirements set forth in
clause (b) of Section 15.5, and such requirements are incorporated herein by
reference. As to Lessor, any such sale shall be made on an "as is, with all
faults" basis without representation or warranty by Lessor other than the
absence of Lessor's Liens.
(ix) Lessor shall pay from the sale proceeds, all prorations, credits, costs and
expenses of the sale of the Leased Property, including without limitation the
cost of all title insurance, surveys, environmental reports, appraisals,
transfer taxes, Lessor's reasonable attorneys' fees, commissions, escrow fees,
recording fees, and all applicable documentary and other transfer taxes.
30
(x) Lessee shall pay to the Lender on the Lease Termination Date (or to such
other Person as Lessor shall notify Lessee in writing or, in the case of
Supplemental Rent, to the Person entitled thereto) an amount equal to the
Recourse Deficiency Amount in the type of funds specified in Section 4.3 hereof.
(xi) If the selling price (net of closing costs and prorations and other amounts
payable by Lessor under clause (ix) above, as reasonably estimated by Lessor)
plus the Recourse Deficiency Amount is less than the Lease Balance, then Lessor
may, by notice to Lessee and in Lessor's sole and absolute discretion, reject
such offer to purchase, in which event the parties will proceed according to the
provisions of Section 15.7 "Rejection of Sale" hereof.
(xii) If Lessor does not reject such purchase offer as provided above, the
closing of such purchase of the Leased Property by such purchaser must occur on
the Lease Termination Date, contemporaneously with Lessee's surrender of the
Leased Property in accordance with Section 15.8 hereof.
(xiii) If Lessor does not reject the purchase offer as provided above, then the
purchase shall be consummated on the Lease Termination Date and the gross
proceeds of the sale (i.e., without deduction for any marketing, closing or
other costs, prorations or commissions) shall be paid directly to Lessor;
provided, however, that if the sum of the gross proceeds from such sale plus the
Recourse Deficiency Amount exceeds the Lease Balance, as of such date, then the
excess shall be paid to Lessee on the Lease Termination Date.
If one or more of the foregoing provisions shall not be fulfilled as of the
Lease Termination Date or if the Leased Property is not purchased as aforesaid
for any other reason whatsoever other than solely due to rejection by Lessor of
such sale pursuant to subsection (xi) above, then Lessor may, at Lessor's option
and in Lessor's sole discretion, (i) declare by written notice to Lessee the
Remarketing Option to be null and void (whether or not it has been theretofore
exercised by Lessee), in which event all of Lessee's rights under this Section
shall immediately terminate and Lessee shall be obligated to purchase the Leased
Property pursuant to Section 15.2 on the Lease Termination Date or (ii) permit
and require Lessee on behalf of Lessor to consummate the sale of the Leased
Property to such purchaser, in which event the gross proceeds shall be paid as
set forth in Section 15.6(xiii) above and all of Lessor's rights and remedies
set forth herein, in the other Operative Documents, at law or in equity or
otherwise shall be preserved as set forth in Section 14.2 hereof. If the
prospective purchaser breaches its offer to purchase, then Lessor may, in
Lessor's sole discretion, declare the Remarketing Option to be null and void, in
which event all of Lessee's rights under this Section shall immediately
terminate and Lessee shall be obligated to purchase the Leased Property pursuant
to Section 15.2. The Lessee shall have no right, power or authority to bind the
Lessor in connection with any proposed sale of the Leased Property.
SECTION 15.7 Rejection of Sale. (a) Notwithstanding anything contained herein to
the contrary, if Lessor rejects the purchase offer for the Leased Property as
provided in Section 15.6(xi), then (i) Lessee shall pay to the Lender (or to
such other Person as Lessor shall direct) the Recourse
31
Deficiency Amount pursuant to Section 15.6(xi), (ii) Lessor shall retain title
to the Leased Property and (iii) in addition to Lessee's other obligations
hereunder, Lessee will reimburse Lessor, within ten (10) Business Days after
written request, for all reasonable costs and expenses incurred by Lessor during
the period ending on the first anniversary of the Lease Termination Date in
connection with the marketing, sale, closing or transfer of the Leased Property,
which obligation shall survive the Lease Termination Date and the termination or
expiration of this Lease.
(b) Following any rejection by Lessor of the purchase offer for the Leased
Property pursuant to the provisions of Section 15.6(xi), subject to the
condition that Lessee shall have:
(i) timely paid the Recourse Deficiency Amount to Lessor on or before the Lease
Termination Date,
(ii) duly and timely fulfilled each of the other provisions of clauses (i)
through (xiii) of Section 15.6 on or before the Lease Termination Date, and
(iii) on and after the Lease Termination Date, timely fulfilled each and every
obligation of the Lessee under the Lease Agreement, the Participation Agreement
and the other Operative Documents on its part to be performed, and no Event of
Default shall have occurred, then,
upon the subsequent sale of the Leased Property by Lessor to a third party,
Lessor shall pay to Lessee an amount equal to the Lessor's gain (if any) on the
sale, computed taking into account Lessor's total investment in the Leased
Property (including, without limitation, the unpaid balance of the Loan, if any,
and the unrecovered balance of Lessor's Investment) plus all of Lessor's
unreimbursed costs and expenses (capital or otherwise) relating to the Leased
Property, plus an annual return thereon computed at the Overdue Rate, less the
net avails of any reletting of the Leased Property or any part thereof. To the
extent that Lessor shall receive payment m the form of purchase-money
indebtedness in connection with any such sale, Lessor's duty to account to
Lessee pursuant to this Section 15.7(b) shall be suspended until such time as
Lessor receives payment thereon.
SECTION 15.8 Return of Leased Property. If Lessor retains title to the Leased
Property pursuant to Section 15.7 hereof, then Lessee shall, on the Lease
Termination Date, and at its own expense, return possession of the Leased
Property to Lessor for retention by Lessor or if Lessee properly exercises the
Remarketing Option and fulfills all of the conditions of Section 15.6 hereof and
Lessor does not reject such purchase offer pursuant to Section 15.6(xi), then
Lessee shall (unless by agreement with the purchaser Lessee is to remain in
possession of the Leased Property), on the Lease Termination Date and at its own
cost, transfer possession of the Leased Property to the independent purchaser
thereof, in each case by surrendering the same into the possession of Lessor or
such purchaser, as the case may be, free and clear of all Liens other than
Lessor Liens and Liens described in clause (vi) of the definition of Permitted
Liens, in as good condition as it was on the Completion Date (as modified by
Alterations permitted by this Lease), ordinary wear
32
and tear excepted, and in compliance with Applicable Law. Lessee shall, on and
within a reasonable time before and after the Lease Termination Date, cooperate
with Lessor and the independent purchaser of the Leased Property in order to
facilitate the ownership and operation by such purchaser of the Leased Property
after the Lease Termination Date, which cooperation shall include the following,
all of which Lessee shall do on or before the Lease Termination Date or as soon
thereafter as is reasonably practicable: providing all books and records
regarding the maintenance and ownership of the Leased Property and all know-how,
data and technical information relating thereto to the extent in Lessee's
possession, providing a current copy of the Plans and Specifications, assigning
all licenses necessary for the operation and maintenance of the Leased Property
to the extent Lessee has the legal right to do so and cooperating in seeking and
obtaining all necessary Governmental Action relating to occupancy but not
special use by the purchaser thereof. Lessee shall have also paid the cost of
all Alterations commenced prior to the Lease Termination Date. The obligation of
Lessee under this Article shall survive the expiration or termination of this
Lease.
SECTION 15.9 Effect of Conveyance to Lessee. Upon conveyance of the Leased
Property after the exercise by Lessee of any of its rights to purchase the
Leased Property, including its rights under Section 14.1(e) or after exercise of
the Remarketing Option, this Lease shall automatically terminate unless Lessee
otherwise elects in writing.
ARTICLE XVI
LESSEE'S EQUIPMENT
After any repossession of the Leased Property (whether or not this Lease has
been terminated), Lessee, at its expense and so long as such removal of such
Alteration shall not result in a violation of Applicable Law, shall, within a
reasonable time after such repossession or within sixty (60) days after Lessee's
receipt of Lessor's written request (whichever shall first occur), remove all of
Lessee's trade fixtures, personal property and equipment from the Leased
Property (to the extent that the same can be readily removed from the Leased
Property without causing material damage to or materially impairing the value of
the Leased Property); provided, however, that Lessee shall not remove any
fixture, equipment or personal property which constitutes part of the Leased
Property. Any of Lessee's trade fixtures, personal property and equipment not so
removed by Lessee within such period shall be considered abandoned by Lessee,
and title thereto shall without further act vest to Lessor, and may be
appropriated, sold, destroyed or otherwise disposed of by Lessor without notice
to Lessee and without obligation to account therefor and Lessee will pay Lessor,
upon written demand, all reasonable and documented costs and expenses incurred
by Lessor in removing, storing or disposing of the same and all costs and
expenses incurred by Lessor to repair any damage to the Leased Property caused
by such removal. Lessee will immediately repair at its expense all damage to the
Leased Property caused by any such removal (unless such removal is effected by
Lessor, in which event Lessee shall pay all reasonable costs and expenses
incurred by Lessor for such repairs). Lessor shall have no liability in
exercising Lessor's rights under this Article, nor shall Lessor be responsible
for any loss of or damage to Lessee's personal property and equipment in
connection therewith.
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ARTICLE XVII
RIGHT TO PERFORM FOR LESSEE
If Lessee shall fail to perform or comply with any of its agreements contained
herein Lessor may, on thirty (30) days' prior notice (or such lesser period
afforded by Applicable Law or any third party, except that no notice shall be
required in the case of a default in the observance of the obligations to
maintain insurance pursuant to Article IX) to Lessee, perform or comply with
such agreement, and Lessor shall not thereby be deemed to have waived any
default caused by such failure, and the amount of such payment and the amount of
the expenses of Lessor (including reasonable attorney's fees and expenses)
incurred in connection with such payment or the performance of or compliance
with such agreement, as the case may be, shall be deemed Supplemental Rent,
payable by Lessee to Lessor within ten (10) days' after written demand therefor.
ARTICLE XVIII
MISCELLANEOUS
SECTION 18.1 Reports. To the extent required under Applicable Law and to the
extent it is reasonably practical for Lessee to do so, Lessee shall prepare and
file in timely fashion, or, where such filing is required to be made by Lessor
or it is otherwise not reasonably practical for Lessee to make such filing,
Lessee shall prepare and deliver to Lessor (with a copy to the Lender) within a
reasonable time prior to the date for filing and Lessor shall file, any material
reports with respect to the condition or operation of the Leased Property that
shall be required to be filed with any Governmental Authority.
SECTION 18.2 Binding Effect: Successors and Assigns: Survival. The terms and
provisions of this Lease, and the respective rights and obligations hereunder of
Lessor and Lessee, shall be binding upon their respective successors, legal
representatives and assigns (including, in the case of Lessor, any Person to
whom Lessor may transfer the Leased Property or any interest therein in
accordance with the provisions of the Operative Documents), and inure to the
benefit of their respective permitted successors and assigns, and the rights
hereunder of the Lender shall inure (subject to such conditions as are contained
herein) to the benefit of the Lender's permitted successors and assigns.
SECTION 18.3 Quiet Enjoyment. Lessor covenants that, so long as no Event of
Default has occurred and is continuing, it will not interfere in Lessee's or any
of its sublessees' quiet enjoyment of the Leased Property in accordance with
this Lease during the Lease Term.
SECTION 18.4 Notices. Unless otherwise specified herein, all notices, offers,
acceptances, rejections, consents, requests, demands or other communications to
or upon the respective parties hereto shall be in accordance with Section 8.2 of
the Participation Agreement.
34
SECTION 18.5 Severability. Any provision of this Lease that shall be prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and Lessee shall remain
liable to perform its obligations hereunder except to the extent of such
unenforceability. To the extent permitted by Applicable Law, the parties hereby
waive any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
SECTION 18.6 Amendment; Complete Agreements. Neither this Lease nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, except by an instrument in writing signed by Lessor and Lessee in
accordance with the provisions of Section 8.4 of the Participation Agreement.
This Lease, together with the other Operative Documents, is intended by the
parties as a final expression of their lease agreement and as a complete and
exclusive statement of the terms thereof, all negotiations, considerations and
representations between the parties having been incorporated herein and therein.
No course of prior dealings between the parties or their officers, employees,
agents or Affiliates shall be relevant or admissible to supplement, explain, or
vary any of the terms of this Lease or any other Operative Document. Acceptance
of, or acquiescence in, a course of performance rendered under this or any prior
agreement between the parties or their Affiliates shall not be relevant or
admissible to determine the meaning of any of the terms of this Lease or any
other Operative Document. No representations, undertakings, or agreements have
been made or relied upon in the making of this Lease other than those
specifically set forth in the Operative Documents.
SECTION 18.7 Construction. This Lease shall not be construed more strictly
against any one party, it being recognized that both of the parties hereto have
contributed substantially and materially to the preparation and negotiation of
this Lease.
SECTION 18.8 Headings. The Table of Contents and headings of the various
Articles and Sections of this Lease are for convenience of reference only and
shall not modify, define or limit any of the terms or provisions hereof.
SECTION 18.9 Counterparts. This Lease may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 18.10 Governing Law. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF WISCONSIN APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY, PERFORMANCE, THE CREATION OF THE LEASEHOLD
ESTATE HEREUNDER AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT TO SUCH
ESTATE.
35
SECTION 18.11 Discharge of Lessee's Obligations by its Affiliates. Lessor agrees
that performance of any of Lessee's obligations hereunder by one or more of
Lessee's Affiliates or one or more of Lessee's sublessees of the Leased Property
or any part thereof shall constitute performance by Lessee of such obligations
to the same extent and with the same effect hereunder as if such obligations
were performed by Lessee, but no such performance shall excuse Lessee from any
obligation not performed by it or on its behalf under the Operative Documents.
SECTION 18.12 Liability of Lessor Limited. Except as otherwise expressly
provided below in this Section, it is expressly understood and agreed by and
between Lessee, Lessor and their respective successors and assigns that nothing
herein contained shall be construed as creating any personal liability of Lessor
or any of its constituent members or other Affiliates, or JH Management
Corporation, or any of their respective incorporators, stockholders, officers,
directors, employees or agents, individually or personally, to perform any
covenant, either express or implied, contained herein, all such personal
liability, if any, being expressly waived by Lessee and by each and every Person
now or hereafter claiming by, through or under Lessee, and that, so far as
Lessor or any of its constituent members or other Affiliates, or JH Management
Corporation, or any of their respective incorporators, stockholders, officers,
directors, employees or agents, individually or personally, is concerned, Lessee
and any Person claiming by, through or under Lessee shall look solely to, and
the liability of Lessor hereunder shall be limited to, the right, title and
interest of Lessor in the Leased Property, any proceeds from Lessor's sale or
encumbrance thereof, and any Awards or Loss Proceeds (provided, however, that
Lessee shall not be entitled to any double recovery) for the performance of any
obligation under this Lease and under the Operative Documents and the
satisfaction of any liability arising therefrom.
SECTION 18.13 Estoppel Certificates. Each party hereto agrees that at any time
and from time to time during the Lease Term, it will promptly, but in no event
later than thirty (30) days after request by the other party hereto, execute,
acknowledge and deliver to such other party or to the Lender, any prospective
purchaser (if such prospective purchaser has signed a commitment or letter of
intent to purchase the Leased Property or any part thereof) assignee or
mortgagee or third party designated by such other party, a certificate stating
(i) that this Lease is unmodified and in force and effect (or if there have been
modifications, that this Lease is in force and effect as modified, and
identifying the modification agreements), (ii) the date to which Basic Rent has
been paid, (iii) whether or not there is any existing default by Lessee in the
payment of Basic Rent or any Supplemental Rent hereunder, and whether or not
there is any other existing default by either party with respect to which a
notice of default has been served, and, if there is any such default, specifying
the nature and extent thereof, (iv) whether or not, to the knowledge of the
signer, there are any setoffs, defenses or counterclaims against enforcement of
the obligations to be performed hereunder existing in favor of the party
executing such certificate and (v) other matters concerning the status of the
Lease and any of the Operative Documents to which the Lessee is a party that may
be reasonably requested; provided, however, that no such certificate may be
requested unless the requesting party has a good faith reason for such request.
36
SECTION 18.14 No Joint Venture. Any intention to create a joint venture or
partnership relation between Lessor and Lessee is hereby expressly disclaimed.
SECTION 18.15 No Accord and Satisfaction. The acceptance by Lessor of any sums
from Lessee (whether as Basic Rent or otherwise) in amounts which are less than
the amounts due and payable by Lessee hereunder is not intended, nor shall any
such acceptance be construed, to constitute an accord and satisfaction of any
dispute between Lessor and Lessee regarding sums due and payable by Lessee
hereunder, unless Lessor specifically deems it as such in writing.
SECTION 18.16 No Merger. In no event shall the leasehold interests, estates or
rights of Lessee hereunder merge with any interests, estates or rights of Lessor
in or to the Leased Property, it being understood that such leasehold interests,
estates and rights of Lessee hereunder shall be deemed to be separate and
distinct from Lessor's interests, estates and rights in or to the Leased
Property, notwithstanding that any such interests, estates or rights shall at
any time or times be held by or vested in the same person, corporation or other
entity.
SECTION 18.17 Survival. The obligations of Lessee to be performed under this
Lease prior to the Lease Termination Date and the obligations of Lessee pursuant
to Article IV, Articles XI, XII, XIV, Sections 15.2, 15.3, 15.4, 15.5, 15.8,
Articles XVI and XVII, and Sections 18.10 and 18.12 shall survive the expiration
or termination of this Lease. The extension of any applicable statute of
limitations by Lessor, Lessee, the Lender or any Indemnitee shall not affect
such survival.
SECTION 18.18 Chattel Paper. To the extent that this Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code in any applicable
jurisdiction), no security interest in this Lease may be created through the
transfer or possession of any counterpart other than the original counterpart,
which shall be identified as the original counterpart by the receipt of Lessor
on its signature page.
SECTION 18.19 Time of Essence. Time is of the essence of this Lease.
SECTION 18.20 Recordation of Lease. Lessee will, at its expense, cause the
Memorandum of Lease to be recorded in the proper office or offices in the State
and the municipality in which the Land is located.
SECTION 18.21 Investment of Security Funds. Any amounts not payable to Lessee
(which amounts shall be paid to or retained by Lessor), pursuant to any
provision of Article IX, XI or XV or this Section solely because an Event of
Default shall have occurred and be continuing, shall be held by the Lender, on
behalf of Lessee, as security for the obligations of Lessee under this Lease and
the Participation Agreement. At such time as no Event of Default shall be
continuing, such amounts, net of any amounts previously applied to Lessee's
obligations hereunder or under the Participation Agreement, shall be paid to
Lessee or such sublessee or transferee, as the case may be. Any such amounts
which are held by the Lender pending payment to Lessee or such sublessee or
transferee, as the case may be, shall until paid to Lessee or such sublessee or
37
transferee, as the case may be, as provided hereunder or, as long as any of the
Loan Agreements is in effect, until applied against Lessee's obligations herein
and under the Participation Agreement and distributed as provided in Section 3
of the Loan Agreement or (after the Loan Agreements are no longer in effect) in
connection with any exercise of remedies hereunder, be invested by the Lender as
directed from time to time in writing by Lessee (provided, however, if an Event
of Default has occurred and is continuing such investment will be directed by
Lessor) and at the expense and risk of Lessee, in investments reasonably
approved by the Lender. Any gain (including interest received) realized as the
result of any such investment (net of any fees, commissions and other expenses,
if any, incurred in connection with such investment) shall be applied in the
same manner as the principal invested.
[THIS SPACE INTENTIONALLY LEFT BLANK]
38
IN WITNESS WHEREOF, the parties hereto have caused this Lease and Development
Agreement to be executed by their respective duly authorized officers as of the
day and year first above written.
ASSET HOLDINGS COMPANY VI, L.L.C., as Lessor
By: Asset Holdings Corporation I, as Managing Member
By: /s/ βββββββ ββββββββ
Name: βββββββ ββββββββ
Title: Vice President
HUFFY CORPORATION, as Lessee
By: /s/ ββββββ β. ββββββ
Name: ββββββ β. ββββββ
Title: Vice President and Treasurer
39
APPENDIX I
TO
PARTICIPATION AGREEMENT, LEASE AND
DEVELOPMENT AGREEMENT AND LOAN AGREEMENT
DEFINITIONS AND INTERPRETATION
[See separate text]
40
APPENDIX I
TO
PARTICIPATION AGREEMENT, LEASE AND
DEVELOPMENT AGREEMENT AND LOAN AGREEMENT
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear contrary intention
appears, (i) the singular number includes the plural number and vice versa, (ii)
reference to any Person includes such Person's successors and assigns but, if
applicable, only if such successors and assigns are permitted by the Operative
Documents, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually, (iii) reference to any gender
includes each other gender, (iv) reference to any agreement (including any
Operative Document), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms of the other Operative
Documents and reference to any promissory note includes any promissory note
which is an extension or renewal thereof or a substitute or replacement
therefor, (v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated thereunder
and reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision, (vi) reference in any Operative
Document to any Article, Section, Appendix, Schedule or Exhibit means such
Article or Section thereof or Appendix, Schedule or Exhibit thereto, (vii)
"hereunder", "hereof", "hereto" and words of similar import shall be deemed
references to an Operative Document as a whole and not to any particular
Article, Section or other provision hereof, (viii) "including" (and with
correlative meaning "include") means including without limiting the generality
of any description preceding such term, (ix) "or" is not exclusive and (x)
relative to the determination of any period of time, "from' means "from and
including" and "to" and "through" mean "to but not including".
B. Accounting Terms. In each Operative Document, unless expressly otherwise
provided, accounting terms shall be construed and interpreted, and accounting
determinations and computations shall be made, in accordance with GAAP.
C. Conflict in Operative Documents. If there is any conflict between any
Operative Documents, such Operative Document shall be interpreted and construed,
if possible, so as to avoid or minimize such conflict but, to the extent (and
only to the extent) of such conflict, the Participation Agreement shall prevail
and control.
D. Defined Terms. Unless a clear contrary intention appears, terms defined
herein have the respective indicated meanings when used in each Operative
Document.
41
"Acceleration" means the automatic acceleration of Lessee's obligation to
purchase Lessor's interest in the Leased Property pursuant to the provisions of
Section 15.3 of the Lease.
"Address" means, with respect to any Person, such Person's address set forth in
Section 8.2 of the Participation Agreement or such other address as such Person
shall have identified to the parties to the Participation Agreement in writing.
"Adjusted LIBOR Rate" means the rate per annum equal to the quotient obtained by
dividing the applicable LIBOR Rate by the percentage obtained by subtracting
from 100% the applicable LIBOR Reserve Percentage on the date of calculation.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, the term "control" (including the correlative
meanings of the terms "controlling," controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise; provided, however, (but without limiting the
foregoing) that no pledge of voting securities of any Person without the current
right to exercise voting rights with respect thereto shall by itself be deemed
to constitute control over such Person.
"After-Tax Basis" means (i) with respect to any payment to be received by an
Indemnitee (which, for purposes of this definition, shall include any Tax
Indemnitee), the amount of such payment supplemented by a further payment or
payments so that, after deducting from such payments the amount of all Taxes
(net of any current credits, deductions or other Tax benefits arising from the
payment by the Indemnitee of any amount, including Taxes, for which the payment
to be received is made) actually imposed currently on the Indemnitee by any
Governmental Authority or taxing authority with respect to such payments, the
balance of such payments shall be equal to the original payment to be received
and (ii) with respect to any payment to be made by any Indemnitee, the amount of
such payment supplemented by a further payment or payments so that, after
increasing such payment by the amount of any current credits or other Tax
benefits realized by the Indemnitee under the laws of any Governmental Authority
or taxing authority resulting from the making of such payments, the sum of such
payments (net of such credits or benefits) shall be equal to the original
payment to be made; provided, however, for the purposes of this definition, and
for purposes of any payment to be made to either the Lessee or a Tax Indemnitee
on an after-tax basis, it shall be assumed that federal, state and local taxes
are payable at the highest combined marginal federal and state statutory income
tax rate (taking into account the deductibility of state income taxes for
federal income tax purposes) applicable to corporations from time to time and
that such Indemnitee or the Lessee has sufficient income to utilize any
deductions, credits (other than foreign tax credits, the use of which shall be
determined on an actual basis) and other Tax benefits arising from any payments
described in clause (ii) of this definition.
42
"Alterations" means the construction or installation of non-trade fixtures,
alterations, improvements, modifications and additions to the Leased Property
including without limitation, any repair or restoration pursuant to Article XI
of the Lease or otherwise.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations by
any Governmental Authorities, and applicable judgments, decrees, injunctions,
writs, orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment (including,
without limitation, wetlands) and those pertaining to the construction, use or
occupancy of the Leased Property) and any restrictive covenant or deed
restriction or easement of record affecting the Leased Property.
"Architect" means MSI General Corporation, a Wisconsin corporation.
"Assignment of Lease and Rents" means the Assignment of Lease and Rents dated as
of the date hereof from the Lessor to the Lender, together with any other
amendments or supplements thereto.
"Awards" means any award or payment received by or payable to the Lender, the
Lessor or the Lessee on account of any Condemnation or Event of Taking (less the
actual costs, fees and expenses incurred in the collection thereof, for which
the Person incurring the same shall be reimbursed from such award or payment).
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended.
"Base Rate" means the rate of interest published or announced from time to time
by the Lender as its base rate, which rate may not necessarily represent the
lowest or best rate actually charged to any customer. Any rate of interest
hereunder which is calculated using the Base Rate shall change automatically and
immediately as and when the Base Rate shall change without notice to the Lessor
or the Lessee, and any notice of such change in the Base Rate to which the
Lessor or the Lessee may otherwise be entitled is hereby waived, and any such
change shall not alter any of the terms and conditions of the Participation
Agreement, the Loan Agreement or the Operative Documents.
"Basic Rent" means the sum of the Facility Rent plus the Index Rent plus the
Scheduled Rent payable on each Rent Payment Date, as provided in Section 4.1 of
the Lease.
"Borrowing Date" has the meaning specified in Section 2.4(a) of the
Participation Agreement.
"Business Day" means any day other than a Saturday, Sunday or other day on which
banks are required or authorized to be closed for business in Dayton, Ohio;
provided, however, that the
43
term "Business Day" shall also exclude any day on which commercial banks are not
open for international business (including dealings in U.S. dollar deposits) in
the London Interbank Market.
"Casualty" means an event of damage or casualty relating to all or part of the
Leased Property which does not constitute an Event of Loss.
"Claims" means liabilities, obligations, damages, losses, demands, penalties,
fines, claims, actions, suits, judgments, settlements, utility charges, costs,
expenses and disbursements (including, without limitation, reasonable legal fees
and expenses) of any kind and nature whatsoever.
"Closing Date" means May 30, 1996.
"Code", means the Internal Revenue Code of 1986, as amended.
"Completion Date" means the first Loan Payment Date on which the conditions
specified in Section 3.3 of the Participation Agreement shall have been
satisfied.
"Completion Deadline" means May 1, 1997.
"Condemnation" means any condemnation, requisition, confiscation, seizure or
other taking or sale of the use, occupancy or title to the Leased Property or
any part thereof in, by or on account of any actual eminent domain proceeding or
other action by any Governmental Authority or other Person under the power of
eminent domain, or any transfer in lieu of or in anticipation thereof, which in
any case does not constitute an Event of Taking. A Condemnation shall be deemed
to have "occurred" on the earliest of the dates that use, occupancy or title is
taken.
"Construction" means the development and construction of the Improvements
pursuant to the Plans and Specifications.
"Construction Conditions" means the conditions set forth in Section 3.3 of the
Participation Agreement.
"Construction Consultant" means the firm of architects or engineers retained by
the Lender pursuant to Section 2.7 of the Participation Agreement.
"Construction Contract" means that certain Development Agreement dated April 10,
1996 executed between the Lessor, as Owner, MSI Development Corporation, as
Developer, and the Lessee, as Tenant, as such agreement may be supplemented,
modified or amended.
"Construction Force Majeure Event" means (i) an act of God arising after the
Closing Date, (ii) any cause, circumstance or event arising after the Closing
Date and not reasonably within the control of the Lessee or (iii) any change in
any state or local law, regulation or other legal requirement arising after the
Closing Date and relating to the use of the Land or the construction
44
of the Improvements on the Land, which prevents the Lessee from completing the
Construction prior to the Completion Deadline and which could not have been
avoided or which cannot be remedied by the Lessee through the exercise of all
commercially reasonable efforts or the expenditure of funds and, in the case of
clauses (i) and (ii) of this definition, the existence or potentiality of which
was not known to and could not have been discovered prior to the Closing Date
through the exercise of due diligence by the Lessee.
"Contractual Obligation" means, as applied to any Person, any provision of any
Securities issued by that Person or any indenture, mortgage, deed of trust,
contract, undertaking, agreement, instrument or other document to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject (including, without limitation, any
restrictive covenant affecting any of the properties of such Person).
"Deed" means the Special Warranty Deed dated on or about the Closing Date from
MSI Development Corporation, a Wisconsin corporation, as grantor, to the Lessor,
as grantee, conveying title to the Land.
"Environmental Laws" means and include the Resource Conservation and Recovery
Act of 1976, (RCRA) 42 U.S.C. Sections 6901-6987, as amended by the Hazardous
and Solid Waste Amendments of 1984, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Sections 9601-9657, (CERCLA), the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. Sections 1801-1812,
the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2671, the Clean Air
Act, 42 U.S.C. Sections 7401 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Sections 136 et seq., and all similar federal, state
and local environmental laws, ordinances, rules, orders, statutes, decrees,
judgments, injunctions, codes and regulations, and any other federal, state or
local laws, ordinances, rules, codes and regulations relating to the
environment, human health or natural resources or the regulation or control of
or imposing liability or standards of conduct concerning human health, the
environment, Hazardous Materials or the clean-up or other remediation of the
Leased Property, or any part thereof, as any of the foregoing may have been from
time to time amended, supplemented or supplanted.
"Environmental Permits" means all permits, licenses, authorizations,
certificates and approvals of Governmental Authorities required by Environmental
Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time or any successor federal statute.
"Event of Default" means any event or condition designated as an "Event of
Default" in Article XIII of the Lease.
"Event of Loss" is defined in Section 11.1 of the Lease.
45
"Event of Taking" is defined in Section 11.2 of the Lease.
"Facilitation Agreement" is defined in Section 4.2 of the Lease.
"Facilitation Fee" means the amount specified as the Facilitation Fee to be paid
by the Lessee to the Lessor as set forth in Section 4.2 of the Lease and in the
Facilitation Agreement.
"Facility Rent" means amounts payable as Facility Rent as specified in Section
4.1 of the Lease.
"Fair Market Rental Value" means, with respect to the Leased Property, the fair
market rental value as determined by an independent appraiser chosen by the
Lessor (and reasonably) acceptable to the Lessee and the Lender) that would be
obtained in an arm's-length lease between an informed and willing lessee and an
informed and willing lessor, in either case under no compulsion to lease' and
neither of which is related to the Lessor or the Lessee for the lease of the
Leased Property on the terms set forth, or referred to, in the Lease. Such fair
market rental value shall be calculated as the value for the use of the Leased
Property to be leased in place at the Land assuming, in the determination of
such fair market rental value, that the Leased Property is in the condition and
repair required to be maintained by the terms of the Lease (unless such fair
market rental value is being determined for the purposes of Section 14.1 of the
Lease and except as otherwise specifically provided in the Lease, in which case
this assumption shall not be made).
"Fair Market Sales Value" means, with respect to the Leased Property or any
portion thereof, the fair market sales value as determined by an independent
appraiser chosen by the Lessee (and reasonably acceptable to the Lender) .that
would be obtained in an arms-length transaction between an informed and willing
buyer (other than a lessee currently in possession) and an informed and willing
seller, under no compulsion, respectively, to buy or sell and neither of which
is related to the Lessor or the Lessee, for the purchase of the Leased Property.
Such fair market sales value shall be calculated as the value for the use of the
Leased Property assuming, in the determination of such fair market sales value,
that the Leased Property is in the condition and repair required to be
maintained by the terms of the Lease (unless such fair market sales value is
being determined for purposes of Section 14.1 of the Lease and except as
otherwise specifically provided in the Lease, or the Participation Agreement, in
which case this assumption shall not be made).
"Federal Funds Rate" means, for any period, a fluctuating interest rate
(expressed as a per annum rate) equal for each day during such period to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rates are not so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the Lender from
three federal funds brokers of recognized standing selected by the Lender. All
determinations of the Federal Funds Rate by the Lender shall, in the absence of
demonstrable error, be binding and conclusive upon the Lessor and the Lessee.
46
"Final Rent Payment Date" is defined in Section 14.1(e) of the Lease.
"Financial Advisor" means Banc One Capital Corporation, Columbus, Ohio.
"Fiscal Year" means the fiscal year of the Lessee, which shall be the twelve
(12) monthly accounting periods ending on the last calendar day of May or such
other period as the Lessee may designate and the Lender may approve in writing.
"GAAP" means generally accepted accounting principles in the United States of
America as in effect from time to time.
"General Contractor" means MSI General Corporation, a Wisconsin corporation, or
such other general contractor under the Construction Contract as may be selected
by the Lessee.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or required by any Applicable
Law and shall include, without limitation, all siting, building, environmental
and operating permits and licenses that are required for the acquisition,
construction, use, occupancy, zoning and operation of the Leased Property.
"Governmental Authority" means the government of the United States of America,
the government of any other nation, any political subdivision of the United
States of America or any other nation (including, without limitation, any state,
territory, federal district, municipality or possession) and any federal, state,
county, municipal or other governmental or regulatory authority, agency, board,
body, commission, instrumentality or court, or any political subdivision
thereof.
"Hazardous Material" means any substance, waste or material which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction
thereof, petroleum derivatives, by products and other hydrocarbons and is or
becomes regulated by any Governmental Authority, including any agency,
department, commission, board or instrumentality of the United States, the State
of Wisconsin or any political subdivision thereof and also including asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs") and radon
gas.
"Improvements means the buildings, structures and improvements described on
Appendix II of the Lease to be located on the Land, along with all fixtures used
or useful in connection with the operation of the Leased Property, including,
without limitation, all furnaces, boilers, compressors, elevators, fittings,
pipings, connectives, conduits, ducts, partitions, equipment and apparatus of
every kind and description now or hereafter affixed or attached or used or
useful in connection with the buildings, and all Alterations (including all
restorations, repairs, replacements and
47
rebuilding of such buildings, improvements and structures) thereto (but in all
the above cases excluding trade fixtures and any personal property owned by the
Lessee).
"Indemnitee" means the Lender and the Lessor, and their respective successors,
permitted assigns, permitted transferees, employees, officers, directors and
agents thereof (and, in the case of the Lessor, also including its constituent
members, its managers, and their respective officers, employees, directors,
agents, incorporators and stockholders); provided, however, that in no event
shall the Lessee be an Indemnitee.
"Indemnitee Group" means the respective employees, officers, directors and
agents of the Lender or the Lessor (and, in the case of the Lessor, also
including its constituent members and their respective officers, employees,
directors, agents, incorporators and stockholders), as applicable; provided,
however, that in no event shall the Lessee be a member of an Indemnitee Group.
"Indemnified Claims" is defined in Section 7.3 of the Participation Agreement.
"Index Rent" means an amount equal to all interest accrued and unpaid on the
Loan as of each Rent Payment Date on which Basic Rent shall be due and payable.
"Interest Period" means, (i) for each Loan Advance prior to the Completion Date,
the period commencing on the Borrowing Date for such Loan Advance and ending on
the last day of the one, two or three month period selected by Lessee pursuant
to the provisions of Section 2.4 of the Loan Agreement and, thereafter with
respect to the continuation thereof, each succeeding period commencing on the
last day of the immediately preceding Interest Period and ending on the last day
of the one, two or three month period selected by Lessee pursuant to the
provisions of Section 2.4 of the Loan Agreement; and, (ii) upon the
consolidation of each Loan Advance into a single Loan as of the Completion Date,
the three-month period commencing on the Completion Date, and each successive
three-month period thereafter until the Lease Termination Date.
"Land" means the land described in Appendix II to the Lease.
"Laws" means all ordinances, statutes, rules, regulations, orders, injunctions,
writs, treaties or decrees of any Governmental Authority or any governmental or
political subdivision or agency thereof, or of any court or similar entity
established by any thereof.
"Lease" means the Lease and Development Agreement, dated as of the date hereof
between the Lessor and the Lessee, together with any amendments or supplements
thereto.
"Lease Balance" means, as of any date of determination, an amount equal to the
sum of (i) the principal of the Loan then outstanding, any premium applicable to
the prepayment thereof, all accrued and unpaid interest on the Loan and, without
duplication, all other amounts owing by the Lessee to Lender or Lessor under the
Operative Documents plus (ii) all accrued and unpaid Facility Rent (prorated to
the date of payment) and an amount equal to Lessor's Investment.
48
"Lease Term" means (i) the period commencing on the Closing Date, and ending on
the Scheduled Termination Date or (ii) such shorter period as may result from
earlier termination of the Lease as provided therein.
"Lease Termination Date" means the Scheduled Termination Date or such earlier
date on which the Lease Term shall end as provided in the Lease.
"Leased Property" means the Improvements and the Land.
"Lender" means Bank One, Dayton, N.A. and its permitted successors and assigns.
"Lessee" means Huffy Corporation, an Ohio corporation, and its permitted
successors and assigns.
"Lessor" means Asset Holdings Company VI, L.L.C., a Massachusetts limited
liability company.
"Lessor Indemnitee" means the Lessor, its successors and permitted assigns,
permitted transferees, incorporators, members, employees, officers, manager and
agents.
"Lessor's Investment" means the sum of $200,000.
"Lessor Liens" means Liens on or against the Leased Property or any portion
thereof, the Lease or any payment of Rent (i) which result from any act of, or
any Claim against, the Lessor unrelated to the exercise of Lessor's rights under
the Operative Documents or (ii) which result from any Tax owed by the Lessor,
except any Tax for which the Lessee is obligated to indemnify the Lessor.
"LIBOR Rate" means, for any Interest Period for any LIBOR Rate Loan, an interest
rate per annum equal to the London Interbank Offered Rate for a term comparable
to the term of the Interest Period, as published in the Federal Reserve
Statistical Bulletin for the applicable Borrowing Date; provided, however, that
in the event such a rate for a particular Interest Period term is not published
therein, "LIBOR Rate", with respect to such Interest Period term, shall mean an
interest rate per annum at which the Lender is offered deposits in U.S. dollars
in the London Interbank Market in accordance with its customary business
practice at approximately 10:00 a.m., Dayton, Ohio time, two (2) business days
prior to the commencement of such Interest Period in principal amounts
approximately equal to the outstanding principal amount of the Loan or Loan
Advance, whichever may be applicable, and with maturity comparable to such
Interest Period.
"LIBOR Reserve Percentage" means the reserve requirement including any
supplemental and emergency reserves (expressed as a percentage) applicable to
member banks of the Federal Reserve System in respect of eurocurrency
liabilities under Regulation D of the Board of Governors of the Federal Reserve
System, or any substituted or amended reserve requirements
49
applicable to member banks of the Federal Reserve System which is in effect as
of the date hereof and taking into account any transitional requirements thereto
becoming effective during the term of the Loan.
"Lien" means any lien, mortgage, deed of trust, encumbrance, pledge, charge,
lease, easement, servitude, right of others (legal or equitable) or security
interest of any kind, including any thereof arising under any conditional sale
or other title retention agreement.
"Loan" is defined in Section 2.1 of the Loan Agreement and shall also at all
times refer, collectively, to the aggregate total of all of the Loan Advances.
"Loan Advance" means any advance from time to time by the Lender to the Lessee
(acting on behalf of the Lessor) pursuant to Section 2.2 of the Participation
Agreement of amounts available to be borrowed under the Loan.
"Loan Agreement" means the Loan Agreement dated as of the date hereof, between
the Lender and the Lessor, together with all amendments and supplements thereto.
"Loan Commitment" means the aggregate total amount of Loan Advances which Lender
has committed to make under the Loan Agreement, up to the maximum principal sum
of $6,400,000.
"Loan Documents" means the Loan Agreement, the Note, the Mortgage, the
Assignment of Lease and Rents, the Security Agreement and Assignment and all
documents and instruments executed and delivered in connection with each of the
foregoing.
"Loan Event of Default" means any of the events specified in Section 5.1 of the
Loan Agreement, provided that any requirement for the giving of notice, the
lapse of time, or both or any other condition, event or act has been satisfied.
"Loan Payment Date" means the first Business Day of each month during the Lease
Term, commencing on the first Business Day of the first month following the
Closing Date.
"Loan Potential Event of Default" means any event, condition or failure which,
with notice or lapse of time or both, would become a Loan Event of Default.
"Loss Proceeds" shall have the meaning specified in Section 11.6 of the Lease.
"Material Adverse Effect" means a material adverse effect upon (i) the
consolidated financial condition, operations, performance or properties of the
Lessee and its Subsidiaries, or (ii) the ability of the Lessee to perform in any
material respect under the Operative Documents.
50
"Memorandum of Lease" means the Memorandum of Lease dated as of the date hereof
between Lessee and Lessor which describes the Lease and certain of its
provisions and is intended to be recorded in the Waukesha County, Wisconsin real
property records.
"Mortgage" means that certain Mortgage and Security Agreement dated as of the
date hereof made and executed by Lessor and delivered to Lender with respect to
the Leased Property.
"Non-Disturbance and Attornment Agreement" means that certain Subordination,
Non- Disturbance and Attornment Agreement, dated as of the date hereof, by and
among the Lender, the Lessor and the Lessee, together with any amendments or
supplements thereto.
"Note" means the promissory note issued by Lessor to the Lender under the Loan
Agreement to evidence the Loan, together with any amendments or supplements
thereto or replacements thereof.
"Officer's Certificate" of a Person means a certificate signed by the Chairman
of the Board or the President or any Executive Vice President or any Senior Vice
President or any other Vice President of such Person signing with the Treasurer
or any Assistant Treasurer or the Controller or any Assistant Controller or the
Secretary or any Assistant Secretary of the such Person, or by any Vice
President who is also Controller or Treasurer signing alone.
"Operative Documents" means the Participation Agreement, the Deed, the Lease,
the Security Agreement and Assignment, the Note, the Loan Agreement, the
Assignment of Lease and Rents, the Mortgage and the Non-Disturbance and
Attornment Agreement.
"Overdue Rate" means the lesser of (i) the highest interest rate permitted by
Applicable Law and (ii) an interest rate per annum (calculated on the basis of a
365-day (or 366-day, if appropriate year) equal to the Base Rate in effect from
time to time.
"Participation Agreement" means the Participation Agreement dated as of the date
hereof among the Lender, the Lessor and the Lessee, together with all amendments
and supplements thereto.
"Permitted Liens" means (i) the respective rights and interests of the Lessee,
the Lessor and the Lender as provided in the Operative Documents, (ii) Lessor
Liens, (iii) Liens for Taxes either not yet due or being contested in good faith
and by appropriate proceedings, so long as enforcement thereof is stayed pending
such proceedings, (iv) materialmen's, mechanics', workers', repairmen's,
employees' or other like Liens arising after the Closing Date in the ordinary
course of business for amounts either not yet due or being contested in good
faith and by appropriate proceedings, so long as enforcement thereof is stayed
pending such proceedings, (v) Liens arising after the Closing Date out of
judgments or awards with respect to which at the time an appeal or proceeding
for review is being prosecuted in good faith, so long as the enforcement thereof
has been stayed pending such appeal or review, (vi) easements, rights of way,
reservations, servitudes and rights of others against the Land which are listed
on Schedule B to the Title Policy or
51
permitted by Article VI of the Lease, (vii) assignments, leases and subleases
expressly permitted by the Operative Documents, and (viii) liens which are not
otherwise permitted by clauses (i) through (vii) of this definition, do not
violate the restrictions on the Lessee set forth in Section 5.4 of the
Participation Agreement and secure obligations not exceeding $100,000 at any one
time.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, nonincorporated
organization or government or any agency or political subdivision thereof.
"Plans and Specifications" means the final plans and specifications for the
Improvements as such Plans and Specifications may be hereafter amended,
supplemented or otherwise modified from time to time.
"Potential Event of Default" means any event, condition or failure which, with
notice or lapse of time or both, would become an Event of Default.
"Purchase Option" is defined in Section 15.1 of the Lease.
"Purchase Option Price" means an amount equal to the Lease Balance as of the
closing date of the purchase of the Leased Property pursuant to the exercise by
the Lessee of the Purchase Option set forth in Section 15.1 of the Lease.
"Qualified Payment" shall mean any monies paid or payable to the Lessor or the
Lender and identified in the Lease or any other Operative Document as a
"Qualified Payment", it being agreed that all Qualified Payments shall be paid
to the Lender as a pre-payment of the Loan to be applied against principal
payments or installments of the Loan in the inverse order of maturity, but
without (unless agreed in writing by the Lender and the Lessee) affecting or
giving rise to any change or adjustment of the Basic Rent except the installment
due on the Lease Termination Date.
"Recourse Deficiency Amount" means the sum of $4,148,000.
"Regulations" means the income tax regulations promulgated from time to time
under and pursuant to the Code.
"Release" means the release, deposit, disposal or leak of any Hazardous Material
into or upon or under any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.
"Release Date" means the date that the Loan has been paid in full.
"Remarketing Option" is defined in Section 15.6 of the Lease.
52
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Rent Payment Date" means the first day of each month during the Lease Term
commencing on the first day of the first month which next follows the Completion
Date.
"Rent Period" means initially the period commencing on the Completion Date and
ending on the first Rent Payment Date, and thereafter each period from one Rent
Payment Date to the next following Rent Payment Date.
"Requirements of Law" means, as to any Person, the charter and by-laws or other
organizational or governing documents of such Person, and any law, rule or
regulation, permit, approval, authorization, license or variance, order or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject, including, without
limitation, the Securities Act, the Securities Exchange Act, Regulations G, T, U
and X, and any building, environmental or land use requirement or permit or
occupational safety or health law, rule or regulation.
"Responsible Officer" means the President, any Senior Vice President or
Executive Vice President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer, or any Assistant Treasurer.
"Scheduled Rent" means, for the Lease Term, the rent payable pursuant to Section
4.1(c) of the Lease on each Rent Payment Date in the amount set forth in
Appendix III to the Lease, as such Appendix may be adjusted in the circumstances
described in Section 4.1 of the Lease.
"Scheduled Termination Date" means May 1, 2004.
"SEC" means the United States Securities and Exchange Commission.
"Securities" means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Security Agreement and Assignment" means the Security Agreement and Assignment
(Construction Contract, Permits, Licenses and Governmental Approvals, and Plans,
Specifications
53
and Drawings), dated as of the date hereof from the Lessee to the Lender,
together with any amendments or supplements thereto.
"State" means the State of Wisconsin.
"Subsidiary" means for any Person any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
are at the time directly or indirectly owned by such Person.
"Supplemental Rent" means any and all amounts, liabilities and obligations other
than Basic Rent which the Lessee assumes or agrees or is otherwise obligated to
pay under the Lease or any other Operative Document (whether or not designated
as Supplemental Rent) to the Lessor, the Lender or any other party, including,
without limitation, amounts under Article XVII of the Lease, Fair Market Sales
Value payments and indemnities and damages for breach of any covenants,
representations, warranties or agreements.
"Tax" or "Taxes" is defined in Section 7.4(a) of the Participation Agreement.
"Tax Indemnitee" means the Lessor, the Lender and their respective Affiliates,
successors, permitted assigns, permitted transferees, employees, officers,
directors and agents thereof (and, in the case of the Lessor, also including its
incorporators, manager, members, and in particular, the manager in its capacity
as the tax matters partner) provided, however, that in no event shall the Lessee
be a Tax Indemnitee.
"Title Insurance Company" means Chicago Title Insurance Company and its
successors and assigns.
"Title Policy" is defined in Section 3.1 of the Participation Agreement.
"UCC" means the Uniform Commercial Code of Ohio, as in effect from time to time.
"Unfunded Benefit Liabilities" means, with respect to any Employee Benefit Plan
at any time, the amount of unfunded benefit liabilities of such Employee Benefit
Plan at such time as determined under ERISA Section 4001(a)(18) which shall not
be less than the accumulated benefit obligation, as disclosed in accordance with
FAS 87, over the fair market value of Employee Benefit Plan assets.
54
APPENDIX II
DESCRIPTION OF LEASED PROPERTY
I. Land:
βββ β ββ βββββββββ ββββββ βββ ββ. ββββ, recorded March 27, 1996 in Volume 69 of
Certified Survey Maps on Pages 93-102 as Document No. 2111418, being a
redivision βββ β ββ βββββββββ ββββββ βββ ββ. ββββ in part of the NW 1/4, NE 1/4,
SW 1/4 and SE 1/4 of the Northwest 1/4 of Section 34 and part of the SE 1/4 and
SW 1/4 of the Southwest 1/4 of Section ββ, ββββ β βββββ, βββββ ββ ββββ, βββββββ
ββ ββββββ, ββββββ of Waukesha, State of Wisconsin.
II. Improvements:
A light manufacturing building containing approximately 182,400 square feet to
be constructed on the Land according to the Plans and Specifications and any and
all buildings, structures, replacements, furnishings, fixtures, fittings and
other improvements and property of every kind and character now or hereafter
located or erected on the Land, together with all buildings or construction
materials, equipment, appliances, machinery, plant equipment, fittings,
apparatus, fixtures and other articles of any kind or nature whatsoever now or
hereafter found on, affixed to or attached to the Land, including (without
limitation) all motors, boilers, engines and devices for the operation of pumps,
and all heating, electrical, lighting, power, plumbing, air conditioning,
refrigeration and ventilation equipment (but in all the above cases excluding
trade fixtures and any personal property owned by the Lessee).
55
APPENDIX III Page 1 of 2
---------------------------------
MONTH SCHEDULED RENT*
---------------------------------
May-97 $0
---------------------------------
Jun-87 $8,749
---------------------------------
Jul-97 $8,795
---------------------------------
Aug-97 $8,841
---------------------------------
Sep-97 $8,888
---------------------------------
Oct-97 $8,935
---------------------------------
Nov-97 $8,983
---------------------------------
Dec-97 $9,030
---------------------------------
Jan-98 $9,078
---------------------------------
Feb-98 $9,126
---------------------------------
Mar-98 $9,174
---------------------------------
Apr-98 $9,223
---------------------------------
May-98 $9,272
---------------------------------
Jun-98 $9,321
---------------------------------
Jul-98 $9,370
---------------------------------
Aug-98 $9,420
---------------------------------
Sep-98 $9,469
---------------------------------
Oct-98 $9,620
---------------------------------
Nov-98 $9,570
---------------------------------
Dec-98 $9,621
---------------------------------
Jan-99 $9,671
---------------------------------
Feb-99 $9,723
---------------------------------
Mar-99 $9,774
---------------------------------
Apr-99 $9,826
---------------------------------
56
----------------------------------
MONTH SCHEDULED RENT*
----------------------------------
May-99 $9,878
----------------------------------
Jun-99 $9,930
----------------------------------
Jul-99 $9,983
----------------------------------
Aug-99 $10,036
----------------------------------
Sep-99 $10,089
----------------------------------
Oct-99 $10,142
----------------------------------
Nov-99 $10,196
----------------------------------
Dec-99 $10,250
----------------------------------
Jan-2000 $10,304
----------------------------------
Feb-2000 $10,358
----------------------------------
Mar-2000 $10,413
----------------------------------
Apr-2000 $10,468
----------------------------------
*Per section 4.1 (d) of the Lease and Development Agreement
57
APPENDIX III Page 2 of 2
-------------------------------
MONTH SCHEDULED RENT*
-------------------------------
May-2000 $10,524
-------------------------------
Jun-2000 $10,579
-------------------------------
Jul-2000 $10,635
-------------------------------
Aug-2000 $10,692
-------------------------------
Sep-2000 $10,748
-------------------------------
Oct-2000 $10,805
-------------------------------
Nov-2000 $10,862
-------------------------------
Dec-2000 $10,920
-------------------------------
Jan-2001 $10,977
-------------------------------
Feb-2001 $11,036
-------------------------------
Mar-2001 $11,094
-------------------------------
Apr-2001 $11,153
-------------------------------
May-2001 $11,212
-------------------------------
Jun-2001 $11,271
-------------------------------
Jul-2001 $11,331
-------------------------------
Aug-2001 $11,391
-------------------------------
Sep-2001 $11,451
-------------------------------
Oct-2001 $11,511
-------------------------------
Nov-2001 $11,572
-------------------------------
Dec-2001 $11,634
-------------------------------
Jan-2002 $11,695
-------------------------------
Feb-2002 $11,757
-------------------------------
Mar-2002 $11,819
-------------------------------
Apr-2002 $11,882
-------------------------------
58
-------------------------------
MONTH SCHEDULED RENT*
-------------------------------
May-2002 $11,945
-------------------------------
Jun-2002 $12,008
-------------------------------
Jul-2002 $12,071
-------------------------------
Aug-2002 $12,135
-------------------------------
Sep-2002 $12,200
-------------------------------
Oct-2002 $12,264
-------------------------------
Nov-2002 $12,329
-------------------------------
Dec-2002 $12,394
-------------------------------
Jan-2003 $12,460
-------------------------------
Feb-2003 $12,526
-------------------------------
Mar-2003 $12,592
-------------------------------
Apr-2003 $12,659
-------------------------------
May-2003 $12,726
-------------------------------
Jun-2003 $12,793
-------------------------------
Jul-2003 $12,861
-------------------------------
Aug-2003 $12,929
-------------------------------
Sep-2003 $12,997
-------------------------------
Oct-2003 $13,066
-------------------------------
Nov-2003 $13,135
-------------------------------
Dec-2003 $13,205
-------------------------------
Jan-2004 $13,274
-------------------------------
Feb-2004 $13,345
-------------------------------
Mar-2004 $13,415
-------------------------------
Apr-2004 $13,486
-------------------------------
May-2004 $5,491,216
-------------------------------
Per section 4.1 (d) of the Lease and Development Agreement