MASTER LEASE ------------ THIS MASTER LEASE ("this Lease"), is made and entered into as of the ___ day of May, 2001 by and between FARMLAND INDUSTRIES, INC, a Kansas corporation ("Landlord"), and ADM/Farmland, Inc., a Delaware corporation ("Tenant") and Archer-Daniels Midland Company ("ADM"); STATEMENT OF BACKGROUND A. Landlord, Tenant and ADM, which owns all of the issued and outstanding shares of stock in Tenant, have entered into that certain Purchase Agreement, dated as of the date of this Lease (the "Agreement"). B. Capitalized terms used in this Statement of Background that are defined in this Lease and that are not otherwise defined in the Agreement or related agreements shall have the meanings given to them below in this Lease. C. Pursuant to the Agreement, Landlord has agreed to lease or sublease, as the case may be, to Tenant, and Tenant has agreed to lease or sublease, as the case may be, from Landlord certain grain facilities on the terms and conditions set forth in this Lease. D. In accordance with the terms of this Lease, Landlord and Tenant shall execute a Memorandum of Lease with respect to each of the Leased Premises setting forth the detailed description of the Leased Premises, incorporating by reference the terms and conditions of this Lease, and setting forth such other terms and conditions as may be appropriate in accordance with the provisions of Section 20.20 of this Lease. ------------- ARTICLE I - - ------------------ LEASE AND SUBLEASE 1.01 Granting of Leasehold. Landlord hereby rents, leases and lets to Tenant and Tenant hereby rents, leases --------------------- and hires from Landlord, for the rentals and upon and subject to the terms and conditions hereinafter set forth, the real property described in Exhibit A-1 attached hereto and by reference made a part hereof (the "Direct ----------- Leased Facilities"), together with all buildings and improvements located thereon and together with the equipment, fixtures, machinery, appliances and other property located thereon and itemized (or if not itemized, other property located thereon) in Exhibit A-2 attached hereto and by reference made a part hereof (all of the ----------- aforesaid collectively referred to herein as the "Direct Leased Premises"), subject to covenants, easements, restrictions, reservations and declarations of record, if any. 1.02 Granting of Subleasehold. Landlord hereby rents, subleases and sublets to Tenant and Tenant hereby ------------------------- rents, subleases and hires from Landlord, for the rentals and upon and subject to the terms and conditions hereinafter set forth, the real property described in Exhibit A-3 attached hereto and by reference made a part ----------- hereof (the "Subleased Facilities" and, together with the Direct Leased Facilities, the "Leased Facilities"), together with all buildings and improvements located thereon and together with the equipment, fixtures, machinery, appliances and other property located thereon and itemized (or if not itemized, other property located thereon) in Exhibit A-4 attached hereto and by reference made a part hereof (all of the aforesaid collectively ----------- referred to herein as the "Subleased Premises" and, together with the Direct Leased Premises, the "Leased Premises"), subject to (a) covenants, easements, restrictions, reservations and declarations of record, if any, and (b) the terms and conditions of the leases described on Exhibit A-3 pursuant to which Landlord leases the ----------- Subleased Premises (each a "Prime Lease" and collectively the "Prime Leases"). 1.03 Grain Licenses. Landlord shall accommodate Tenant, subject to applicable law and --------------- regulations, with respect to existing licenses owned by Landlord in a manner that would allow Tenant to conduct the operations authorized by such license. Such accommodation is to be on a temporary basis, and Tenant agrees to obtain in a prompt manner all grain licenses necessary for it to conduct its business. ARTICLE II - - ------------------ TERM AND RENEWALS 2.01 Term. The basic term (the "Basic Term") of this Lease shall commence as of the date hereof and end on ---- June 30, 2006. The term "Lease Year," as used herein means each period during the term of this Lease commencing on July 1 of a year and ending on the following June 30 of said year; provided that the first Lease Year will mean the period beginning on the date hereof and ending on June 30, 2002. 2.02 Option to Renew. The Tenant is hereby granted four (4) separate options to renew the Basic Term of this --------------- Lease, each option period to be for five (5) years. Tenant's occupancy of the Leased Premises during such renewal periods shall be on the same terms and conditions as the Basic Term hereof, and it shall not be necessary for Landlord and Tenant to execute a renewal lease or any other document to evidence such renewal. If one or more of such options are exercised, each renewal term shall commence immediately on the expiration of the prior term. Tenant may exercise such options by giving written notice thereof to Landlord at least six (6) months prior to the termination of the then current term of this Lease, provided that Tenant is not in default hereunder at the time any such notice of extension is given. The options, if exercised, shall each be exercised successively. In the event Tenant exercises its right to extend the term of this Lease for the four (4) option periods set forth above, and Tenant makes a bona fide offer to Landlord to purchase all or part of the Leased Premises no later than 180 days prior to the expiration of the fourth (4th) renewed term, and Landlord does not accept such offer, then Tenant shall have the right to renew the term of this Lease for one additional five (5) year period for the Leased Premises that were the subject of the bona fide offer. 2.03 Option to Terminate. In the event of three (3) consecutive Lease Years, with a Loss from the operation ------------------- of the Leased Premises in each such Lease Year, either Landlord or Tenant may terminate this Lease by providing written notice to the other party no later than ninety (90) days following the end of the third of the three consecutive Lease Years for which Losses occurred, which termination shall be effective six (6) months after receipt of the termination notice. 2.04 Purchase Option. (a) Tenant shall have the option to purchase all or part of the Leased --------------- Premises in the event Landlord elects to sell or otherwise transfer or dispose of, directly or indirectly, all or part of the Leased Premises to a third party. Tenant's option to purchase shall be exercised, if at all, within ninety (90) days after Landlord gives Tenant notice that it has elected to sell all or part of the Leased Premises. The option to purchase set forth above shall expire upon the first anniversary of the expiration of the Basic Term and the nonrenewal of a renewal term or, if the term is renewed, upon the expiration of a renewal term and nonrenewal of the term at the time of such expiration. The purchase option may be exercised by Tenant at any time during the period that this Lease is in effect but only in the event Landlord elects to sell all or part of the Lease Premises to a third party during such term. (b) In the event Tenant exercises its purchase option pursuant to (a) above, the purchase price for the Leased Premises shall be the higher of (i) eighty percent of the book value of the Leased Premises (excluding the book value of any improvements, alterations and additions to the Leased Premises made by Tenant), and (ii) eighty percent of the fair market value of the Leased Premises (excluding the fair market value of any improvements, alterations and additions to the Leased Premises made by Tenant). In determining the applicable purchase price under this Section 2.04(b), appraisals shall be made by three appraisers, one each appointed by Tenant and Landlord (the "Appointed Appraisers"), and the third (the "Independent Appraiser") designated by mutual agreement of the Appointed Appraisers. The fair market value for purposes of this Section 2.04(b), shall be the average of the fair market value determined by the Independent Appraiser and the fair market value in the aggregate of all the Facilities which is determined by the Appointed Appraiser next nearest to that of the Independent Appraiser, such appraisals to be completed not less than forty-five (45) days prior to the closing date. (c) In the event the purchase option set forth in Section 2.04(a) is exercised, the closing, subject to the other provisions of this Section 2.04, shall take place at a time and place fixed by the written notice of exercise. (d) In the event the purchase option set forth in Section 2.04(a) is exercised, Tenant shall receive, upon payment of the applicable purchase price, Landlord's general warranty deed (or equivalent deed or deeds) sufficient to convey good, valid and marketable title to the Leased Premises to Tenant, free and clear of all liens, claims and encumbrances which either (i) secure an obligation for borrowed money created by Landlord or an affiliate of Landlord, (ii) result from the failure of Landlord or an affiliate of Landlord to pay any amounts which Landlord or such affiliate is obligated to pay, or (iii) were created or suffered to be created by Landlord or its affiliate and which adversely affect, to any material extent, the usefulness of the Leased Premises, provided that in any such instance Tenant shall have specified its objections to such lien, claim, encumbrance or defect by notice given to Landlord prior to the closing, in which event the closing shall be extended for a reasonable period of time to permit Landlord to cure such objections. (e) Landlord shall pay for all documentary stamps for deeds and other instruments of conveyance, real estate excise or transfer taxes. Tenant shall pay for the cost of filing or recording such deeds and other instruments. ARTICLE III - - ------------------ RENT 3.01 Basic Rent. Landlord reserves and Tenant covenants and agrees to pay to Landlord with respect to each ---------- Lease Year during the Basic Term and during any Renewal Term basic rent ("Basic Rent") as follows: (a) For each of the Direct Leased Premises, an amount equal to the aggregate Impositions (as defined in Section 5.01 of this Lease) and depreciation (in accordance with the depreciation schedule ------------- incorporated into Exhibit A-2) with respect to such Direct Lease Premises for each Lease Year; ------------ provided, however, that with respect to any Lease Year that does not coincide with the calendar or fiscal year with respect to which such Taxes or depreciation relates, the amount payable under this Subsection (a) shall be prorated based on the period of such calendar or fiscal year --------------- occurring during such Lease Year. (It is acknowledged that Tenant's payment of the Impositions directly to the appropriate authority discharges Tenant's payment responsibility pertaining to such Impositions hereunder). (b) For each of the Subleased Premises, an amount equal to the aggregate amounts payable by Landlord under the Prime Lease respecting such Subleased Premises, plus amortization (in accordance with the amortization schedule incorporated into Exhibit A-4) for the leasehold improvements of such ----------- Subleased Premises for each Lease Year; provided, however, that with respect to any Lease Year that does not coincide with the year or other period with respect to which such payments or amortization relates, the amount payable under this Subsection (b) shall be prorated based on -------------- the period of such calendar or fiscal year occurring during such Lease Year. Basic Rent shall be adjusted in accordance with changes in depreciation and amortization, Impositions and amount payable by Landlord under the Prime Lease. All Basic Rent shall be due and payable annually in advance during the term of this Lease on the first day of each Lease Year without demand or setoff; provided that Tenant shall be entitled to set off Landlord's portion of any Loss against Basic Rent due and payable. 3.02 Payments. All payments hereunder by one party to the other shall be made as the same shall become due -------- in lawful money of the United States of America at the address specified in Section 18.01 of this Lease, or to -------------- such other party or at such other address as hereinafter may be designated by the party entitled to such payment by written notice delivered to the other party at least ten (10) days prior to the next ensuing rental payment date. 3.03 No Abatement. No abatement, diminution or reduction of rent, charges or other compensation shall be ------------- claimed by or allowed to Tenant, or any persons claiming under it, under any circumstances, whether for inconvenience, discomfort, interruption of business, or otherwise, arising from the making of alterations, changes, additions, improvements or repairs to any buildings now on or which may hereafter be erected on the Leased Premises, by virtue or because of any present or future governmental laws, ordinances, requirements, orders, directions, rules or regulations or by virtue or arising from, and during, the restoration of the Leased Premises after the destruction or damage thereof by fire or other cause or the taking or condemnation of a portion only of the Leased Premises or arising from any other cause or reason, except as otherwise expressly provided herein. 3.04 Additional Rent. Tenant shall pay as "Additional Rent" all payments of whatever nature which Tenant is ---------------- obligated to pay or assume under the provisions of this Lease. Rent; Variable Rent; Profit and Loss. If, at the end of any Lease Year, there has been Profit from the -------------------------------------- operation of the Leased Premises for such period, Tenant shall within forty-five (45) days after the end of such period, pay to Landlord an amount equal to fifty percent (50%) of the Profit arising from the operation of the Leased Premises for such period. If, at the end of any Lease Year, there has been a Loss from the operation of the Leased Premises for such period, Landlord shall within forty-five (45) days after the end of such period, pay to Tenant an amount equal to fifty percent (50%) of the Loss arising from the operation of the Leased Premises for such period. Tenant shall, at all times, keep complete, separate and accurate records and books of account with respect to Profits and Losses arising from the operation of the Leased Premises. Tenant shall maintain monthly and annual financial statements with respect to its operation of the Leased Premises, fairly reflecting Revenue and Expenses with respect to such operations and shall provide Landlord copies of such statements as soon as reasonably practicable. At any time during Tenant's normal business hours, Landlord or its representative shall have the right to inspect those books and records of Tenant which relate to Profits and Losses from the operation of the Leased Premises; provided, however, neither Landlord not its representatives shall have any right to inspect any books or records of Tenant which are not directly related to the operation of the Leased Premises or which relate to any other business engaged in or conducted by any affiliate of Tenant; and further provided, that Landlord and its representatives shall not unreasonably interfere with Tenant's operation of the Leased Premises. For purposes hereof, (i) "Profits" shall mean, if Revenue is greater than Expense, the amount remaining after subtracting Expense from Revenue; (ii) "Losses" shall mean, if Expense is greater than Revenue, the amount remaining after subtracting Revenue from Expense; (iii) "Revenue" shall have the meaning set forth below; and (iv) "Expense" shall have the meaning set forth below. 3.05 Total Rent. The term "Total Rent," as used herein, means the total amount of all Basic Rent and ----------- Additional Rent payable by Tenant pursuant to the terms of this Lease. 3.06 Definition of Revenue and Expenses. ----------------------------------- (a) Revenue, including hedging gains and losses, and Expenses will be determined in accordance with generally accepted accounting principles. (b) Expenses shall include the Basic Rent under subsections 3.01 (a) and (b) of the Lease. (c) Expenses shall not include any provision for Federal, state or local income taxes. (d) Expenses shall include a reasonable charge for administrative services provided by ADM or ADM affiliates to ADM/Farmland, Inc. Charges for such services shall not exceed the charges allocated by ADM to any other ADM affiliate for comparable services. Such services will consist of the following: human resources, accounts payable, payroll, accounts receivable, credit, safety, environmental, finance, position accounting, settlement accounting, general accounting, audit, legal, maintenance services, information systems, letters of credit, insurance and ad valorum taxes. Initially, the charge for such services is estimated to be $.0075 per bushel marketed. (e) Expenses shall include interest. ADM will provide all financing for ADM/Farmland, Inc. at an interest rate equal to Libor plus 210 basis points. (f) In the event of any dispute between the parties respecting the calculation of Net Profit, the parties shall refer such dispute to the Advisory Board for resolution. If, after 30 days, the Advisory Board has not resolved such dispute, then the parties shall agree upon an independent public accounting firm to resolve such dispute, and if they cannot reach agreement as to such firm within 15 days after such 30-day period, the dispute will be resolved by Arthur Anderson. ARTICLE IV - - ------------------ USE AND OCCUPANCY 4.01 Use of Leased Premises. Subject to the provisions of this Article, Tenant shall have the right to use ----------------------- the Leased Premises only and exclusively for storage and handling of grain and grain products and related purposes and for such other purposes, if any, as may be approved in writing by Landlord. Not less frequently than quarterly during the Basic Term and any renewal term, Landlord and Tenant shall meet as an Advisory Board to discuss the operation of the Leased Premises, the financial results thereof, the prospects therefor and such other matters as the parties deem appropriate. Tenant shall inform the Advisory Board of all strategic and business plans, projections and information relating to the Leased Facilities and their future operation. 4.02 Compliance with Laws. Tenant shall comply with, and make all alterations, changes or repairs to the --------------------- Leased Premises (structural or otherwise) required by, and will at all times use the Leased Premises in conformance with, any and all statutes, laws, ordinances, orders, judgments, decrees, regulations, directions and requirements of all federal, state, local and other governments or governmental authorities, now or hereafter applicable to the Leased Premises or to any public ways adjoining the Leased Premises or Tenant's business and operations thereon, specifically including, without limitation, any laws, statutes, ordinances, requirements or regulations respecting grain storage safety, dust control, occupational safety and health, environmental protection and toxic waste or hazardous substances handling, treatment, storage or disposal. Additionally, Tenant will comply with and make all alterations, changes or repairs to the Leased Premises (structural or otherwise) which are required by any insurers. Subject to the provisions of Article IX hereof, all alterations, ---------- changes or repairs made pursuant to this Article IV shall be deemed a part of the Leased Premises and the sole ---------- property of Landlord, and Tenant shall not have any right to remove any such alterations, changes or repairs. Promptly upon receipt by Tenant of any notices, complaints, assessments or reports with respect to the condition or safety of the Leased Premises from any governmental authority or any insurer, Tenant shall provide a copy of such notice, complaint, assessment or report to Landlord. 4.03 Tenant shall have the right to cease operations at any time with respect to any of the Leased Premises; provided that Tenant shall continue to pay Basic Rent and perform on-going maintenance, including compliance with 4.02 above, with respect to any such Leased Premises, on the terms and conditions set forth herein, and further provided that Tenant shall consult with the Advisory Board before exercising the right to cease operations. 4.04 Operating Covenants. -------------------- (a) Without the express approval of the Advisory Board, Tenant and ADM agree that Tenant will not materially expand the scope of its business conducted through the operation of the Facilities. (b) ADM agrees to cause Tenant to operate Tenant's business, and Tenant agrees to operate its business, in a prudent manner and in a manner intended to maximize Net Profit. (c) ADM agrees that during the term of this Lease, ADM and its Affiliates shall not acquire any facilities that compete in the grain elevator or grain handling business in the trade territory of Tenant without first giving Tenant the opportunity to acquire such facility. This restriction shall not apply to grain elevator and grain handling assets that are incidental to grain processing operations. For purposes of this provision, "trade territory" shall be defined as the area within a fifty (50) mile radius of any of the Leased Premises. (d) ADM agrees that it will, directly or indirectly (a) cause Tenant to operate the Facilities and the related grain business in a manner substantially the same as ADM operates its other grain elevator and grain handling businesses, (b) not divert revenues from the Tenant that would, in the normal course of business, have been revenues earned by or available to Tenant, and (c) not divert or allocate costs or expenses to the Tenant that would, in the normal course of business, have been costs or expenses of ADM or its Affiliates. (e) ADM and Tenant agree that any transaction between Tenant and ADM or between Tenant and any Affiliate of ADM shall be on terms that are "arm's length". (f) Under the Agreement, Tenant has agreed to be the assignee with respect to the following: (i) "Supply Agreement" dated June 11, 1999, by and between Farmland Industries, Inc. and Frito Lay, Inc.; (ii) "Elevator Storage Lease", dated May 13, 1998, by and between Farmland Industries, Inc. and Country Home Milling, L.P.; and (g) Rail Car Leases. Landlord is the lessee under the railroad care leases identified on --------------- Schedule 4.04(f) attached hereto (the "Rail Car Leases"). Landlord agrees that Tenant shall have the sole right to use the grain hoppers and other railroad cars (the "Rail Cars") that are leased by Landlord under the Rail Car Leases and Tenant agrees to use the Rail Cars in conjunction with the grain handling and grain businesses conducted at the Facilitates. Except for the obligation to make lease rental payments, Tenant agrees to discharge and perform all of Landlord's duties and obligations as lessee under the Rail Car Leases as and when required by the Rail Car Leases. Landlord shall continue to be responsible for all lease rentals under the Rail Car Leases, and Tenant shall pay to Landlord for the usage of the Rail Cars contemplated herein and amount equal to the then Market Rate (as hereafter defined) for the type of Rail Car being used. Such usage payment shall be made by Tenant to Landlord at the same time periodic lease rental payments are required to be made under the applicable Rail Car Lease. Landlord and Tenant shall each be responsible for 50% of the excess mileage surcharge pertaining to pool car usage for the year 2002. Tenant shall be responsible for the excess mileage surcharge pertaining to pool car usage after the year 2002 and during the term hereof. As used herein, "Market Rate" shall mean the lease rental rate for a particular type of railroad car (taking into account whether or not the lease is full service or not) as determined by averaging the quotes obtained from two vendors acceptable to Landlord. The Market Rate on the date hereof is set forth on Schedule 4.04(f) hereto. The Market Rate shall be adjusted as of [July 1] of each year during the term hereof and such Market Rate shall be used for the 12 months beginning on such [July 1]. Landlord and Tenant agree that the foregoing provisions are solely for the benefit of Landlord and Tenant and not for the benefit of any lessor under the Rail Car Leases or of any other person, firm, corporation or entity. Landlord shall not renew any Rail Car Leases without the prior written consent of Tenant. Landlord may cancel or amend any Rail Car Lease without prior written consent of Tenant; provided, however, Landlord will give Tenant sixty (60) days prior written notice of any such cancellation. ARTICLE V - - ------------------ IMPOSITIONS 5.01 Impositions. Tenant shall bear, pay and discharge, before the delinquency thereof, all taxes and ----------- assessments, general and special, if any, which may be lawfully taxed, charged, levied, assessed or imposed upon or against or be payable for or in respect of the Leased Premises or any part thereof, or Tenant's interest in the Leased Premises under this Lease, or Tenant's interest in the Leased Premises, with respect to any period during the term of this Lease including any new lawful taxes and assessments not of the kind enumerated above to the extent that the same are made, levied or assessed in lieu of or in addition to taxes or assessments now customarily levied against real or personal property, and further including all water and sewer charges, assessments and other governmental charges and impositions whatsoever, foreseen or unforeseen, which if not paid when due would encumber Landlord's or Tenant's title to the Leased Premises (all of the foregoing being herein referred to as "Impositions"). In the event any special assessment taxes are lawfully levied and assessed which may be paid in installments, Tenant shall be required to pay only such installments thereof as become due and payable during the life of this Lease as and when the same become due and payable; provided, however, that in the case of any such installment that is payable with respect to an assessment period during which the term of this Lease commences or terminates, Tenant shall pay a proportionate share of such installment prorated on the basis of the date of such commencement or termination. Landlord shall, promptly upon receipt of any and all government statements, charges and bills relating to the Impositions referred to in this Section 5.01, deliver such ------------- statements, charges and bills to Tenant. 5.02 Receipted Statements. Within thirty (30) days after the last day for payment, without penalty or --------------------- interest, of an Imposition which Tenant is required to bear, pay and discharge pursuant to the terms hereof, Tenant shall deliver to Landlord a copy of the statement issued therefor duly receipted to show the payment thereof, or a copy of the payment by Tenant therefor certified as authentic by an officer of Tenant. 5.03 Contest of Impositions. Tenant shall have the right, in its or Landlord's name, to contest the validity ---------------------- or amount of any Imposition which Tenant is required to bear, pay and discharge pursuant to the terms of this Article by appropriate legal proceedings instituted at least ten (10) days before the Imposition complained of becomes delinquent if, and provided, Tenant, before instituting any such contest, gives Landlord written notice of its intention so to do and, if requested by Landlord, deposits with Landlord a bond in favor of Landlord (with a surety acceptable to Landlord) in a penal sum at least 125% of the amount of the Imposition so contested, conditioned on the payment, if so adjudged, of the contested Imposition, and if, and provided further, Tenant diligently prosecutes any such contest, at all times effectively stays or prevents any official or judicial sale therefor, under execution or otherwise, and promptly pays any final judgment enforcing the Imposition so contested and thereafter promptly procures record release or satisfaction thereof. Tenant shall hold Landlord whole and harmless from any costs and expenses Landlord may incur related to any such contest. ARTICLE VI - - ------------------ INSURANCE 6.01 Property Insurance. Tenant shall, throughout the life of this Lease, at Tenant's sole cost and expense, ------------------- keep the Leased Premises and all parts thereof constantly insured, by such insurance company or companies as may be reasonably approved by Landlord, in an amount equal to the full replacement value thereof, with a deductible not to exceed $100,000. Notwithstanding the previous sentence, except for those Subleased Premises where the terms of Landlord's lease of such Subleased Premises requires the amount of property insurance to be equal to the full replacement value thereof, Tenant may, at Tenant's sole cost and expense, keep the Leased Premises and all parts thereof constantly insured, by such insurance company or companies as may be reasonably approved by Landlord, in an amount equal to the actual cash value thereof plus the cost of demolition, with a deductible not to exceed $100,000. The policy or policies shall be in the form of an "all-risk" extended coverage insurance policy. The term "full replacement value," as used herein, shall mean the full actual repair and/or replacement cost and such "full replacement value" shall be determined from time to time at the request of Landlord or Tenant but not more frequently than once every twenty-four (24) months by an appraiser or appraisal company or the insurer, to be selected and paid by Tenant, subject to Landlord's reasonable approval. Concurrently with the execution of this Lease and thereafter not less than ninety (90) days prior to the expiration dates of the expiring policies, originals or certificates of the policies provided for in this Article, each bearing notations evidencing payment of the premiums or other evidence of such payment reasonably satisfactory to Landlord, shall be delivered by Tenant to Landlord. All policies of such insurance, and all renewals thereof, shall name Landlord, Tenant and Landlord's Mortgagee (as hereinafter defined) as insureds as their respective interests may appear in such manner as Landlord may reasonably require and as Landlord's Mortgagee may require, shall contain a provision that such insurance shall not terminate (whether by lapse, cancellation or otherwise) or be amended in any manner without at least ninety (90) days' written notice to Landlord, Tenant and Landlord's Mortgagee and shall be payable to, or to the order of, Tenant, Landlord and Landlord's Mortgagee, as their respective interests may appear. The proceeds of such policies shall be used and applied in the manner set forth in Article XV hereof. ---------- 6.02 Public Liability Insurance; Auto Insurance; Workers Compensation. Tenant further covenants and agrees --------------------------------------------------------------------- to maintain at all times during the life of this Lease comprehensive general public liability insurance under which Tenant shall be named as insured and Landlord and Landlord's Mortgagee shall be named as additional insureds with respect to the Leased Premises, properly protecting and indemnifying Landlord and such Landlord's Mortgagee in an amount not less than $5,000,000 combined single limit coverage, or such greater amounts as may be required from time to time by Landlord. Such public liability insurance shall include a contractual liability endorsement and the form of such policies shall be subject to Landlord's reasonable approval. The policies of the insurance described above shall contain a provision that such insurance shall not terminate (whether by lapse, cancellation or otherwise) or be amended in any manner without at least ninety (90) days' advance written notice to Landlord and Tenant. Such policies or copies or certificates thereof shall be furnished to Landlord. Tenant further covenants and agrees to maintain at all times during the life of this Lease insurance providing coverage for all losses whatsoever arising from the ownership, maintenance, operation or use of any automobile, truck or other motor vehicle under which Tenant shall be named as insured and Landlord and Landlord's mortgagee shall be named as additional insureds with respect to the Leased Premises, properly protecting and indemnifying Landlord and such Landlord's mortgagee in an amount not less than $2,000,000 combined single limit coverage, or such greater amounts as may be required from time to time by Landlord. Tenant further covenants and agrees to maintain at all times during the life of this lease workers compensation insurance (in the statutory amount) and Employer's Liability insurance with limits of not less than $1,000,000 per occurrence, covering all persons employed in connection with any work done on or about the Leased Premises or improvements thereon with respect to which claims for bodily injury or death could be asserted against Farmland or the Leased Premises. The policy(ies) for all such insurance shall be endorsed to waive the insurer's right to subrogate against Farmland. Tenant will required that any contractor conducting work on the Leased Premises be covered by Worker's Compensation insurance in accordance with the requirements set forth above. 6.03 Indemnity by Tenant. Tenant shall indemnify, protect, defend and save Landlord harmless from and -------------------- against any and all claims, demands, liabilities, losses and costs, including attorneys' fees, arising from (a) damage or injury, actual or claimed, of whatsoever kind or character, to property or persons, occurring or allegedly occurring in, on or about the Leased Premises or with respect to any of the operations and activities occurring or allegedly occurring in, on or about the Leased Premises during the term of this Lease, (b) any breach by Tenant of any of the covenants and agreements set forth herein or any default by Tenant hereunder, (c) any "release" (as defined in 42 U.S.C.ss.9601(22)) or threat of a "release", actual or alleged, of any "hazardous substances" (as defined in 42 U.S.C.ss.9601(14)) placed, buried, stored or disposed of upon or about the Leased Premises during the term of this Lease, or respecting any products or materials located upon, delivered to or in transit to or from the Leased Premises during the term of this Lease, regardless of whether such release or threat of a release or alleged release or threat of a release occurs as the result of the negligence or misconduct of Tenant or any third party or otherwise, or (d) any violation occurring during the term of this Lease, actual or alleged, of any law, statute, ordinance, rule or regulation of any governmental or quasi-governmental authority, specifically including without limitation any environmental protection or toxic waste or hazardous substance handling, treatment, storage or disposal laws, statutes, ordinances, rules or regulations, upon or about the Leased Premises or respecting any products or materials hereafter located upon, delivered to or in transit to or from the Leased Premises, regardless of whether such violation or alleged violation occurs as the result of the negligence or misconduct of Tenant or any third party or otherwise, except for violations directly caused by or contributed to Landlord or prior occupants of the Leased Premises. Tenant's indemnity obligations hereunder shall not be limited by the amount of insurance required in Section 6.02. 6.04 Indemnity by Landlord. Landlord shall and covenants and agrees to indemnify, protect, defend and save --------------------- Tenant harmless from and against any and all claims, demands, liabilities, losses and costs, including attorneys' fees, arising from (a) damage or injury, actual or claimed, of whatsoever kind or character, to property of persons, occurring or allegedly occurring in, on or about the Leased Premises or with respect to any of the operations and activities occurring or allegedly occurring in, on or about the Leased premises prior to the date hereof, (b) any breach by Landlord of any of the covenants and agreements set forth herein or any default by Landlord hereunder, (c) any "release" (as defined in 42 U.S.C.ss.m9601(22)) or threat of a "release", actual or alleged, of any "hazardous substances" (as defined in 42 U.S.C.ss.9601 (14)) placed, buried, stored or disposed of upon or about the Leased Premises prior to the date of this Lease, or respecting any products or materials located upon, delivered to or in transit to or from the Leased Premises prior to the date of this Lease, regardless of whether such release or threat of release or alleged release occurred as a result of the negligence or misconduct of Landlord or any third party or otherwise, or (d) any violation occurring prior to the date of this Lease, actual or alleged ,of any law, statute, ordinance, rule or regulation of any governmental or quasi-governmental authority, specifically including without limitation any environmental protection or toxic waste or hazardous substance handling, treatment, storage or disposal laws, statues, ordinances, rules or regulations, upon or above the Leased Premises or respecting any products or materials heretofore located upon, delivered to or in transit to or from the Leased Premises, regardless of whether such violation or alleged violation occurred as the result of the negligence or misconduct or Landlord or any third party or otherwise. 6.05 Insurance During Construction. During the course of any construction on or about the Leased Premises, ------------------------------- Tenant shall provide and maintain builders' all-risk completed value, nonreporting form insurance, in such amounts, with such companies, upon such forms and containing such endorsements as may be reasonably approved by Landlord, which policies of insurance shall name Landlord and Landlord's Mortgagee as additional insureds in such manner as said parties may require. Tenant shall also provide labor and material payment and performance bonds with respect to any construction on or about the Leased Premises, which bonds shall name Landlord and Landlord's Mortgagee as co-obligees in such manner as such parties may require. The terms and form of such bonds and the surety shall be subject to the reasonable prior approval of Landlord. 6.06 Waiver of Subrogation. Tenant waives any right to recover against Landlord and its directors, officers, --------------------- agents, employees, subsidiaries and affiliates with respect to any damage or liability, including but not limited to damage or liability attributable to the negligence of Landlord or any of its directors, officers, agents, employees, subsidiaries or affiliates, to the extent such damage or liability either is within the insurance coverage required hereunder or is covered by any other insurance that is maintained by or for the benefit of Tenant, and Tenant shall cause each such policy of insurance to include an endorsement acknowledging the insurer's waiver of its right of subrogation against Landlord and its directors, officers, agents, employees subsidiaries and affiliates. The provisions of this Section shall control over anything to the contrary contained in this Lease. ARTICLE VII - - ------------------ ASSIGNMENT AND SUBLEASE 7.01 Assignment and Sublease. Tenant will not (a) assign, mortgage, pledge, sell, or in any other manner ------------------------- transfer, convey or dispose of this Lease or any interest therein or part thereof, whether voluntary, involuntary or by operation of law, or (b) sublet or sublicense all or any part of the Leased Premises, without obtaining in each case the prior written consent thereto of Landlord. No assignment, mortgage, pledge, sale, other transfer, conveyance or disposition, sublicense or sublease shall release or discharge Tenant from its duties and obligations under this Lease. Any consent by Landlord to any of the aforesaid acts shall be held to apply only to the specific transaction thereby authorized; such consent shall not be construed as a waiver or release of the duty of Tenant, or the successors or assigns of Tenant, to obtain from Landlord consent to any other such acts. The transfer at any time during the term of this Lease of a cumulative total of more than 49% of the voting stock of Tenant or any other transfer (cumulative or otherwise) of any stock, stock rights, warrants or any other interest in Tenant which operates as or results in a change of control of Tenant whether by sale, assignment, gift or any other manner (including without limitation any involuntary transfers or transfers by operation of law), shall, unless made with Landlord's prior consent, be deemed an unauthorized assignment of this Lease and a default by Tenant under this Lease. ARTICLE VIII - - ------------------ REPAIRS AND MAINTENANCE 8.01 Repairs and Maintenance. Tenant agrees that it will during the life of this Lease keep and maintain the ------------------------ Leased Premises and all parts thereof and all machinery or equipment which is a part of or is in, on or about the Leased Premises clean, safe and operational and in as good a condition and state of repair as the same shall be on the date hereof, ordinary wear and tear excepted, making such repairs or replacements as may be necessary or appropriate from time to time, even if compliance with such covenant requires Tenant to make structural or mechanical alterations, additions or improvements to the Leased Premises or any part thereof, and that Tenant shall, during the term hereof, keep the Leased Premises and all parts thereof free from filth, nuisance or conditions unreasonably increasing the danger of fire or explosion. Except to the extent provided for under Section 9.02, Landlord shall not be responsible for any repairs, maintenance or replacements needed with respect - ------------ to the Leased Premises. 8.02 Removal of Machinery and Equipment. Except as may be required in the ordinary and usual maintenance and ---------------------------------- operation of the Leased Premises, Tenant shall not have the right, without Landlord's prior written consent, to remove from the Leased Premises and sell or otherwise dispose of any machinery and equipment which constitutes a part of the Leased Premises or which is in, on or about the Leased Premises without replacing such machinery and equipment with substitute machinery and equipment capable of performing the same function as the machinery and equipment removed with equal efficacy. If Landlord consents to any such removal, Tenant shall pay all the costs and expenses of any and all such removal and shall immediately repair at its expense all damage to the Leased Premises caused thereby. Any and all machinery and equipment of whatever nature placed on or about the Leased Premises pursuant to the provisions of this Article shall be and become part of the Leased Premises, and Tenant shall not have the right, upon any termination of this Lease, by lapse of time or otherwise, to remove any of such machinery and equipment. Tenant's rights to remove or replace any machinery or equipment is and shall be subject to the other terms and provisions of this Lease. ARTICLE IX - - ------------------ ALTERATIONS 9.01 Alteration of Leased Premises or Improvements. Subject to Section 9.02, Tenant shall have the right, ------------------------------------------------ without Landlord's prior written consent, to make additions, changes or alterations in and to any part of the Leased Premises. All additions, changes or alterations made by Tenant shall (a) be made in a workmanlike manner and in strict compliance with all applicable statutes, laws, ordinances, rules, regulations and requirements and the requirements, rules and regulations of all insurers under the policies required to be carried under the provisions of this Lease, (b) shall not adversely affect the structural integrity of the Leased Premises, (c) shall not adversely affect the efficacy of the Leased Premises, (d) shall not adversely affect the value of the Leased Premises, and (e) when commenced, be prosecuted to completion with due diligence. With respect to any such addition, change or alteration that would be capitalized under generally accepted accounting principles, (i) depreciation or amortization of the cost of such addition, change or alternation shall be an Expense item for purposes of Section 3.06, and (ii) upon expiration or other termination of this Lease (other than for default by Tenant), and provided Tenant has paid all Rent and performed all of Tenant's other obligations under this Lease, Landlord shall reimburse Tenant for the underpreciated cost of such addition, change or alteration as of the date of such expiration or termination. 9.02 Capital Repairs, Alterations or Improvements. Notwithstanding anything to the contrary in Article VIII ---------------------------------------------- ------------ or Section 9.01 of this Lease, in the event that Tenant desires to make any repair, alteration or improvement to ------------ the Leased Premises costing in excess of $500,000 and that would be capitalized under generally excepted accounting principles (a "Capital Improvement"), Tenant shall request that Landlord approve such Capital Improvement in writing in accordance the provisions of this Section. Any request by Tenant pursuant to this Section shall be in writing and shall describe the justification for, and the nature and cost of, such Capital Improvement and shall include a proposed schedule for the depreciation of the cost of such Capital Improvement. The depreciation or amortization of the cost of such Capital Improvement shall be an Expense item for purposes of Section 3.06. Landlord shall reply in writing to Tenant's request within thirty (30) days of Landlords' receipt of such request. If Landlord fails to reply within such thirty (30) day period, Landlord shall be deemed to have consented to such Capital Improvement. If Landlord does not consent to a Capital Improvement that is reasonably necessary to make a Leased Facility structurally sound, safe for employees, operationally viable, or to comply with legal requirements, Tenant may terminate this Lease with respect to such Leased Facility on not less than thirty (30) days written notice to Landlord. In the event that Landlord gives its written approval to such Capital Improvement and Tenant thereafter makes such Capital Improvement, then, at the expiration or other termination of this Lease (other than for default by Tenant), and provided that Tenant has paid all Rent and performed all of Tenant's other obligations under this Lease, Landlord shall reimburse Tenant for the undepreciated cost of such Capital Improvement as of the date of such expiration or termination in accordance with the approved depreciation schedule. ARTICLE X - - ------------------ PERMITS 10.01 Securing of Permits and Authorizations. Tenant shall not do or permit others under its control to do ---------------------------------------- any material work in or about the Leased Premises, or related to any material repair, rebuilding, restoration, replacement, alteration of or addition to the Leased Premises, or any part thereof, unless Tenant shall have first procured and paid for all requisite municipal and other governmental permits and authorizations. ARTICLE XI - - ------------------ MECHANICS' LIENS 11.01 Mechanics' Liens. Tenant shall not do or suffer anything to be done whereby the Leased Premises or any ----------------- part thereof may be encumbered by any mechanics, or other similar lien and if, whenever and as often as any mechanics, or other similar lien is filed against the Leased Premises or any part thereof, purporting to be for or on account of any labor, materials or services furnished in connection with any work in or about the Leased Premises done by, for or under the authority Tenant or anyone claiming by, through or under Tenant, Tenant shall discharge the same of record within thirty (30) days after the date of filing. Notice is hereby given that Landlord does not authorize or consent to and shall not be liable for any labor or materials furnished to Tenant or anyone claiming by, through or under Tenant upon credit, and that no mechanics, or other similar lien for any such labor, services or materials shall attach to or affect the reversionary or other estate of Landlord in and to the Leased Premises or any part thereof. 11.02 Contest of Lien. Tenant, notwithstanding the above, shall have the right to contest any such mechanics, --------------- or other similar lien if within said thirty (30) day period stated above it notifies Landlord in writing of its intention so to do and, if requested by Landlord, deposits with Landlord a bond in favor of Landlord, with a surety company acceptable to Landlord, in the total sum equal to 125% of the amount of the lien claim so contested, indemnifying and protecting Landlord and Landlord's Mortgagee from and against any liability, loss, damage, cost and expense of whatever kind or nature growing out of or in any way connected with said lien and the contest thereof, and if, and provided further, Tenant diligently prosecutes such contest, at all times effectively stays or prevents any official or judicial sale of the Leased Premises, or any part thereof or interest therein, under execution or otherwise, and pays or otherwise satisfies any final judgment adjudging or enforcing such contested lien claim and thereafter promptly procures record release or satisfaction thereof. ARTICLE XII - - ------------------ UTILITIES 12.01 Utilities. All utilities and utility services used by Tenant in, on or about the Leased Premises shall --------- be paid for by Tenant and shall be contracted for by Tenant in Tenant's own name, and Tenant shall, at its sole cost and expense, procure any and all permits, licenses or authorizations necessary in connection therewith. ARTICLE XIII - - ------------------ LANDLORD'S ACCESS 13.01 Access to Premises. Landlord, for itself and its duly authorized representatives and agents, reserves ------------------ the right to enter the Leased Premises during the business hours of Tenant, on not less than twenty-four (24) hours notice to Tenant (except in situations reasonably deemed by Landlord to constitute emergencies) during the life of this Lease for the purpose of (a) examining and inspecting the same, and (b) performing such work in and about the Leased Premises made necessary by reason of Tenant's default under any of the provisions of this Lease provided that Landlord may not perform any such work unless it shall have given notice thereof to Tenant and unless within thirty (30) days after the giving of such notice Tenant shall not have commenced such work or shall not have proceeded diligently to complete same, (c) showing the Leased Premises to any prospective purchaser or mortgagee of the Leased Premises, and (d) during the last one (1) year of the term hereof, to exhibit the Leased Premises to prospective tenants or purchasers thereof. Landlord may, during the progress of said work mentioned in (b) above, keep and store on the Leased Premises all necessary materials, supplies and equipment, and Landlord shall not be liable for any inconvenience, annoyances, disturbance, loss of business or other damage suffered by reason of the performance of any such work or by the storage of materials, supplies and equipment or by Landlord's exercise of any of its rights under this Lease. In exercising its rights hereunder, Landlord shall not unreasonably interfere with the operation of the Leased Premises. ARTICLE XIV - - ------------------ EMINENT DOMAIN 14.01 Eminent Domain as to All or a Substantial Part of any Leased Premises. If during the life of this Lease ----------------------------------------------------------------------- title to all or a substantial part of the Leased Premises covered by any Memorandum of Lease (as contemplated by Section 20.20 of this Lease) be condemned by any authority having the power of eminent domain, or transferred in - ------------- lieu thereof, this Lease shall terminate with respect to such Leased Premises on the date that possession of the property condemned or transferred in lieu thereof is required to be surrendered to the condemning authority and all rent with respect to such Leased Premises shall be apportioned as of such date. All awards or payments received from the condemnation (or transfer in lieu thereof) of title of all or a substantial part of the Leased Premises (whether made entirely to Tenant or Landlord or partially to Landlord and partially to Tenant) shall be apportioned between Landlord and Tenant and other parties in interest as provided in Section 14.05. It is agreed ------------- that a substantial part of the Leased Premises shall be deemed taken if Tenant reasonably determines that the remaining part of the Leased Premises is not and cannot reasonably be made adequate to permit Tenant to operate the Leased Premises in substantially the manner as the same was previously operated. 14.02 Eminent Domain as to Less Than a Substantial Part. If during the life of this Lease title to less than ---------------------------------------------------- a substantial part of the Leased Premises be condemned (or transferred in lieu thereof) by any authority having the power of eminent domain, this Lease shall not be thereby terminated with respect to the Leased Premises and neither the term nor any of the obligations of either party under this Lease shall be reduced or affected in any way; provided that Tenant shall receive an annual credit toward Basic Rent in an amount equal to the depreciation which would have been incurred by Landlord for such years with respect to the part of the Leased Premises condemned (or transferred in lieu thereof). All awards or payments received from such condemnation of title to less than a substantial part of the Leased Premises or transfer in lieu thereof shall, when received, become the absolute property of Landlord, and Tenant hereby assigns and transfers to Landlord any and all such awards or payments and agrees that it shall not have any interest therein. Tenant agrees to promptly repair or rebuild the Leased Premises to as nearly as possible the same condition as prior to the taking. Before commencing any such repairing or rebuilding, Tenant shall deliver to Landlord the plans for such work which shall be subject to Landlord's written approval, which approval will not be unreasonably withheld. After deducting all reasonable attorneys' fees and other costs incurred by Landlord in connection with such condemnation or transfer in lieu thereof, the Landlord shall promptly make an amount of Landlord's funds equal to the balance of the awards or payments received by it available for the purpose of reimbursing Tenant for all proper and bona fide costs and expenses respecting such repairing and rebuilding; provided, however, Tenant shall not be entitled to such reimbursements unless it has delivered to Landlord proof reasonably satisfactory to Landlord (such proof to be as required pursuant to a disbursing agreement to be entered into by Landlord and Tenant) that (i) such costs and expenses for which reimbursement is claimed have been actually paid by Tenant or are due to contractors, subcontractors, laborers, materialmen or suppliers, and (ii) the overall job is proceeding satisfactorily. If the amount of Landlord's funds available for such reimbursement as determined above shall be insufficient to pay in full the cost of such repairs or rebuilding, Tenant shall nevertheless proceed to complete the work and provide and furnish all other moneys necessary to complete all such repairs or rebuildings. Landlord and Tenant agree and acknowledge that the maximum amount which Landlord is required to pay in reimbursement for the costs of repairing and rebuilding shall be the lesser of (A) the amount of Landlord's funds available for reimbursement as determined above, or (B) the actual cost of such repairing and rebuilding. Landlord shall have the right to make any checks payable directly to any contractor, subcontractor, laborer, materialmen or supplier directly or jointly to Tenant or any or all of such parties as Landlord may elect. 14.03 Eminent Domain as to Use. If during the life of this Lease the use, for a limited period, of all or ------------------------- part of the Leased Premises be condemned by any authority having the power of eminent domain (or transferred in lieu thereof), this Lease shall not be thereby terminated and neither the term nor any of the obligations of either party under this Lease shall be reduced or affected in any way. All awards or other payments received for the condemnation (or transfer in lieu thereof) during the life of this Lease of the use, for a limited period, of all or part of the Leased Premises, whether by way of damages, rent or otherwise, shall, when received, become the absolute property of Landlord, and Tenant hereby assigns and transfers to Landlord any and all such awards or payments and agrees that it shall not have any interest therein; provided that the rent payable by Tenant shall abate during any such period. If the condemnation (or transfer in lieu thereof) of the use, for a limited period, of all or part of the Leased Premises shall end before the termination of the term, Tenant shall, upon being restored to possession, restore the Leased Premises as nearly as may be possible to the condition existing immediately prior to such condemnation or transfer in lieu thereof. 14.04 Withholding of Reimbursement. Notwithstanding anything to the contrary herein, Landlord shall have the ----------------------------- right at any time and from time to time to withhold payment of all or any part of Landlord's funds equal to the amount of the awards or payments from any condemnation (or sale in lieu thereof) to Tenant which would otherwise be payable to Tenant for reimbursement pursuant to Section 14.02 hereof in the event (a) Tenant is in default in -------------- the payment of Basic Rent or Additional Rent, (b) Landlord has given notice to Tenant of any other default on Tenant's part under this Lease, or (c) a default described in Section 16.01(c) has occurred. In the event Tenant ----------------- shall cure the defaults specified in (a) and (b) above or a default specified in (c) above shall cease to exist, Landlord shall make payments from Landlord's funds to Tenant in accordance with the provisions of this Article; provided, however, that if this Lease is terminated or Landlord otherwise re-enters and takes possession of the Leased Premises or any part thereof without terminating this Lease under the provisions of Article XVI, then the ----------- obligations of Landlord with respect to, and all rights of Tenant in and to any funds of Landlord for reimbursement of the costs of repairing and rebuilding shall cease. Landlord hereby agrees that any amounts received at any time (even after termination of this Lease) by Landlord as the result of any satisfaction of judgment by Tenant, settlement of any legal action against Tenant or by way of voluntary payment by Tenant shall be deemed received in payment of Total Rent hereunder, and if the total amounts received by Landlord in such manner are sufficient to cure Tenant's default in payment of Total Rent and Tenant has otherwise cured its defaults hereunder, Tenant shall, to the extent Tenant has expended sums to repair and rebuild the Leased Premises for which Tenant (i) is entitled to reimbursement as provided in Section 14.02 above, and (ii) has not -------------- received reimbursement, be entitled to receive reimbursement as provided in Section 14.02 above, for such amounts ------------- expended, and Landlord shall promptly reimburse Tenant for such amounts expended as provided in Section 14.02 ------------- above. 14.05 Apportionment of Award After Taking of All or a Substantial Part. If any taking under power of eminent ------------------------------------------------------------------- domain (or sale in lieu thereof) shall result in a termination of this Lease with respect to any of the Leased Premises (as provided for in Section 14.01 hereof), the total award shall be apportioned between Landlord and -------------- Tenant as follows: (a) Landlord shall be entitled to receive out of the award an amount equal to the fair market value of the Leased Premises taken, as unencumbered by this Lease, or the fair market value of the Leased Premises taken as affected by this Lease, whichever shall be higher; and (b) Tenant (including anyone claiming an interest through or under Tenant) shall be entitled to receive out of the award, that amount equal to the unamortized cost of the leasehold improvements of Tenant, if any, and the present value of remaining leasehold interest of Tenant in this Lease for the Basic Term or the Renewal Term then in effect; and (c) any remaining balance shall be paid to Landlord. (d) if such award shall be insufficient to pay fully Landlord and Tenant the amounts due to each pursuant to (a) and (b) above, such award shall be apportioned between Landlord and Tenant in proportion to the amounts due to each pursuant to (a) and (b) above. 14.06 Rights Hereunder Shall Prevail. Landlord and Tenant hereby agree that notwithstanding any provision --------------------------------- which may be made in the judgment or decree entered in any proceedings concerning the respective rights of Landlord and Tenant in and to any award or awards made therein, the total amounts awarded to Landlord and Tenant in such proceedings shall be held and disbursed in accordance with the provisions of this Lease. ARTICLE XV - - ------------------ DAMAGE OR DESTRUCTION BY CASUALTY 15.01 Damage or Destruction by Fire or Other Casualty. If at any time during the life of this Lease any part -------------------------------------------------- of the Leased Premises is damaged or destroyed by fire or other casualty, this Lease shall not be thereby terminated and neither the term nor any of the obligations (including the payment of Total Rent) of either party under this Lease shall be reduced or affected in any way, unless the parties agree otherwise. If Tenant elects to rebuild, Tenant shall proceed with due diligence to repair or rebuild the damaged or destroyed Leased Premises to as nearly as possible the same condition as it was in immediately prior to such damage or destruction. Tenant shall first submit to Landlord, and secure Landlord's written approval of, the plans for repairing or rebuilding, which approval shall not be unreasonably withheld. All proceeds of insurance shall become the absolute property of Landlord, and Tenant hereby assigns and transfers to Landlord any and all such proceeds and agrees that it shall not have any interest therein. After deducting from said insurance proceeds all reasonable attorneys, fees and other costs incurred by Landlord in connection with securing such proceeds, Landlord shall promptly make an amount of Landlord's funds equal to the balance thereof available for the purpose of reimbursing Tenant for all proper and bona fide costs and expenses respecting such repairing or rebuilding; provided, however, Tenant shall not be entitled to such reimbursement unless it has delivered to Landlord the same type of proof as described by Section 14.02 hereof and as provided for in a disbursing agreement to be entered into between Landlord and - -------------- Tenant. If the amount of Landlord's funds available for reimbursement as determined above shall be insufficient to pay in full the cost of such repairs or rebuildings, Tenant shall nevertheless proceed to complete the work and provide and furnish all other moneys necessary to complete such repairs or rebuildings. Landlord and Tenant agree and acknowledge that the maximum amount which Landlord is required to pay in reimbursement for the costs of repairing and rebuilding shall be the lesser of (i) the amount of Landlord's funds available for reimbursement as determined above or (ii) the actual costs of such repairing and rebuilding. Landlord shall have the right to make any checks payable directly to any contractor, subcontractor, laborer, materialmen or supplier directly or jointly to Tenant or any or all of such parties as Landlord may elect. 15.02 Withholding of Reimbursement. Notwithstanding anything to the contrary herein, Landlord shall have the ----------------------------- right at any time and from time to time to withhold payment of all or any part of Landlord's funds equal to the amount of the insurance moneys to Tenant which would otherwise be payable to Tenant for reimbursement pursuant to Section 15.01 hereof in the event (a) Tenant is in default in the payment of Basic Rent or Additional Rent, (b) - -------------- Landlord has given notice to Tenant of any other default on Tenant's part under this Lease or (c) a default described under Section 16.01(c) has occurred. In the event Tenant shall cure the defaults specified in (a) and ----------------- (b) above or a default specified in (c) above shall cease to exist, Landlord shall make payments from Landlord's funds to Tenant in accordance with the provisions of this Article; provided, however, that if this Lease is terminated or Landlord otherwise re-enters and takes possession of the Leased Premises or any part thereof without terminating this Lease under the provisions of Article XVI, then the obligations of Landlord with respect ----------- to, and all rights of the Tenant in and to, any funds of Landlord for reimbursement of the costs of repairing and rebuilding shall cease. Landlord hereby agrees that any amounts received at any time (even after termination of this Lease) by Landlord as the result of any satisfaction of judgment by Tenant, settlement of any legal action against Tenant or by way of voluntary payment by Tenant shall be deemed received in payment of Total Rent hereunder, and if the total amounts received by Landlord in such manner are sufficient to cure Tenant's default in payment of Total Rent and Tenant has otherwise cured its defaults hereunder, Tenant shall, to the extent Tenant has expended sums to repair and rebuild the Leased Premises for which Tenant (i) is entitled to reimbursement as provided in Section 15.01 above, and (ii) has not received reimbursement, be entitled to receive ------------- reimbursement as provided in Section 15.01 above, for such amounts expended, and Landlord shall promptly -------------- reimburse Tenant for such amounts expended as provided in Section 15.01 above. ------------- ARTICLE XVI - - ------------------ DEFAULT 16.01 Default Provisions. This Lease is made on condition that if: ------------------ (a) Tenant fails to pay when due any installment of Basic Rent or Additional Rent, and such failure to pay continues for ten (10) days after written notice from Landlord of such failure; or (b) Tenant fails to keep or perform any other covenant or obligation contained in this Lease, the Agreement, any of the Transaction Documents (as that term is defined in the Agreement) or any Memorandum of Lease on Tenant's part to be kept or performed, and Tenant fails to remedy the same within thirty (30) days after Landlord has given Tenant written notice specifying such failure (or within such additional period, if any, as may be reasonably required to cure such failure if it is of such nature that it cannot be cured within said thirty (30) day period because of governmental restriction or other cause beyond the control of Tenant); or (c) Tenant shall file a voluntary petition under any bankruptcy law or an involuntary petition under any bankruptcy law is filed against Tenant in a court having jurisdiction and said court shall order relief against Tenant; or Tenant generally is not paying its debts as such debts become due; or Tenant makes an assignment for the benefit of its creditors; or a custodian, trustee or receiver is appointed or retained to take charge of and manage any substantial part of the assets of Tenant; or any execution or attachment shall issue against Tenant whereupon the Leased Premises, or any part thereof, or any interest therein of Tenant under this Lease shall be taken and the same is not released prior to judicial sale thereunder (each of the events described in this subparagraph being deemed a default under the provisions of this Lease); then Landlord may at Landlord's election then or at any time thereafter, and while such default shall continue, give Tenant written notice of Landlord's termination of this Lease, and, upon such notice, Tenant's rights to possession of the Leased Premises shall cease and this Lease shall thereupon be terminated, and Landlord may re-enter and take possession of the Leased Premises and any machinery or equipment thereon as its own property; or Landlord may remain out of possession of the Leased Premises and treat the term of the Lease as subsisting and in full force and effect, in which event Landlord shall have all rights and remedies available at law, in equity or hereunder; and as an alternative remedy Landlord may, at Landlord's election, without terminating the term, or this Lease, re-enter the Leased Premises or take possession thereof pursuant to legal proceedings or pursuant to any notice provided for by law, and having elected to re-enter or take possession of the Leased Premises without terminating the term, or this Lease, Landlord shall use reasonable diligence as Tenant's agent to relet the Leased Premises, or parts thereof, for such term or terms and at such rental and upon such other terms and conditions as Landlord may reasonably deem advisable, with the right to make alterations and repairs to the Leased Premises, and no such re-entry or taking of possession of the Leased Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease, and no such re-entry or taking of possession by Landlord shall relieve Tenant of its obligation to pay Basic Rent or Additional Rent (at the time or times provided herein), or of any of its other obligations under this Lease, all of which shall survive such re-entry or taking of possession, and Tenant shall continue to pay the Basic Rent and Additional Rent provided for in this Lease until the end of the term and whether or not the Leased Premises shall have been relet, less the net proceeds, if any, of any reletting of the Leased Premises after deducting all of Landlord's expenses in or in connection with such reletting, including without limitation all repossession costs, brokerage commissions, legal expenses, expenses of employees, alterations costs and expenses of preparation for reletting. Having elected either to remain out of possession and treating this Lease as remaining in full force and effect or to re-enter or take possession of Leased Premises without terminating the term, or this Lease, Landlord may by notice to Tenant given at any time thereafter while Tenant is in default in the payment of Basic Rent or Additional Rent or in the performance of any other obligation under this Lease, elect to terminate this Lease and, upon such notice, this Lease shall thereupon be terminated. If in accordance with any of the foregoing provisions of this Article Landlord shall have the right to elect to re-enter and take possession of the Leased Premises, Landlord may enter and expel Tenant and those claiming through or under Tenant and remove the property and effects of both or either without being guilty of any manner of trespass and without prejudice to any remedies for arrears of rent or preceding breach of covenant. 16.02 Performance of Tenant's Obligations by Landlord. If Tenant shall fail to keep or perform any of its ---------------------------------------------------- obligations as provided in this Lease then Landlord may (but shall not be obligated so to do) upon the continuance of such failure on Tenant's part for ten (10) days after notice of such failure is given Tenant by Landlord (except that such notice need not be given in any case reasonably deemed by Landlord to constitute an emergency), and without waiving or releasing Tenant from any obligation hereunder, as an additional but not exclusive remedy, make any such payment or perform any such obligation, and all sums so paid by Landlord and all necessary incidental costs and expenses incurred by Landlord in performing such obligation shall be deemed Additional Rent and shall be paid to Landlord on demand, and if not so paid by Tenant, Landlord shall have the same rights and remedies provided for in this Article XVI in the case of default by Tenant in the payment of ------------ Basic Rent. 16.03 Default Interest. Any sums due from either party to the other hereunder shall, from and after the due ----------------- date thereof, bear interest at a per annum rate equal to LIBOR plus 210 basis points. The rate of interest applicable herein shall fluctuate concurrently with fluctuations in the LIBOR, and if the rate herein provided for shall ever exceed the highest rate provided by law, the rate shall be considered as automatically reduced to such highest rate. 16.04 Default by Landlord. Landlord shall be in default hereunder in the event Landlord -------------------- fails to keep or perform any covenant, obligation or agreement contained in this Lease, the Agreement, any of the Transaction Documents or any Memorandum of Lease, on Landlord's part to be kept or performed, and Landlord fails to remedy the same within thirty (30) days after Tenant has given Landlord written notice specifying such failure (or within such additional period, if any, as may be reasonably required to cure such failure if it is of such nature that it cannot be cured within such thirty (30) day period because of governmental restriction or other cause beyond the control of Landlord). In event of Landlord's default hereunder, Tenant shall be entitled to any remedy available at law or in equity. 16.05 Costs to Enforce. Each party covenants to pay and to indemnify the other against all ------------------ reasonable costs and charges, including counsel fees, lawfully and reasonably incurred in the successful enforcement of any agreement by the other party contained in this Lease. ARTICLE XVII - - ------------------ SURRENDER AND OWNERSHIP 17.01 Surrender of Possession. Upon accrual of Landlord's right of re-entry because of Tenant's default ------------------------- hereunder or upon the cancellation or termination of this Lease by lapse of time or otherwise, Tenant shall, upon Landlord's demand, peacefully surrender possession of the Leased Premises to Landlord in as good a condition and state of repair as existed on the date hereof, ordinary wear and tear excepted. ARTICLE XVIII - - ------------------ NOTICE 18.01 Notices. All notices required or desired to be given hereunder shall be in writing and all such notices ------- and other written documents required or desired to be given hereunder shall be deemed duly served and delivered for all purposes (a) upon Landlord, if mailed by certified mail, postage prepaid, addressed to Landlord at 12200 N. Ambassador Drive, Kansas City, Missouri 64163, Attention: President with a copy to General Counsel at the same address, or at such other place as Landlord from time to time may designate in writing to Tenant, and (b) upon Tenant, if mailed by certified mail, postage prepaid, addressed to Tenant at 4666 Fairies Parkway, Decatur, Illinois 62525, Attention: President, with a copy to General Counsel at the same address, or at such other place as Tenant from time to time may designate in writing to Landlord. All notices given by certified mail as aforesaid shall be deemed duly given as of the date they are so mailed. ARTICLE XIX - - ------------------ NET LEASE 19.01 Net Lease. This Lease shall be deemed and construed to be a "triple-net lease," and Tenant shall pay --------- the Basic Rent and all Additional Rent under this Lease free of any charges, assessments, impositions or deductions of any kind and except as expressly set forth in Sections 3.01 and 14.03, without abatement, deduction, or set-off, and in no event shall Landlord be required to make any payments, bear any expenses or be under any other obligation or liability in connection with this Lease except as expressly provided in this Lease or in the Agreement. ARTICLE XX - - ------------------ MISCELLANEOUS 20.01 Rights and Remedies. The rights and remedies reserved by Landlord and Tenant hereunder and those -------------------- provided by law shall be construed as cumulative and continuing rights. No one of them shall be exhausted by the exercise thereof on one or more occasions. Landlord and Tenant shall each be entitled to specific performance and injunctive or other equitable relief for any breach or threatened breach of any of the provisions of this Lease, notwithstanding the availability of an adequate remedy at law, and each party hereby waives the right to raise such defense in any proceeding in equity. 20.02 Waiver of Breach. No waiver of any breach of any covenant or agreement herein contained shall operate ---------------- as a waiver of any subsequent breach of the same covenant or agreement or as a waiver of any breach of any other covenant or agreement, and in case of a breach by either party of any covenant, agreement or undertaking, the non-defaulting party may nevertheless accept from the other any payment or payments or performance hereunder without in any way waiving its right to exercise any of its rights and remedies provided for herein or otherwise with respect to any such default or defaults which were in existence at the time such payment or payments or performance were accepted by it. 20.03 Force Majeure. In the event either party hereto shall be delayed or hindered in or prevented from the -------------- performance of any act required under this Lease by reason of acts of God, strikes, lockouts, labor troubles, inability to procure materials, failure of power, restrictive governmental law or regulations, court or other judicial order, riots, insurrection, war or other reason of a like nature not the fault of the party delayed in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay, and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. The provisions of this Section shall not (a) operate to excuse Tenant from prompt payment of Basic Rent or Additional Rent; (b) operate to excuse Landlord from prompt payment of any amounts due Tenant hereunder; and (c) be applicable to delays resulting from the inability of a party to obtain financing or to proceed with its obligations under this Lease because of a lack of funds. 20.04 Quiet Enjoyment and Possession. Landlord covenants that so long as Tenant shall not be in default under ------------------------------- this Lease, Tenant shall and may peaceably and quietly have, hold and enjoy the Leased Premises leased hereunder free from interference by Landlord or any party claiming, by, through or under Landlord and that Landlord will defend Tenant's enjoyment and possession thereof against all parties claiming by, through or under Landlord, subject to all of the terms and provisions hereof. 20.05 Organizational Covenants of Tenant. Tenant covenants that it is a corporation duly organized and ------------------------------------- existing under the laws of the State of Delaware, with lawful power and authority to enter into this Lease, acting by and through its duly authorized officers. Tenant further covenants that the execution of this Lease and the performance of the terms of this Lease by Tenant will not result in a breach of any of the terms of, or constitute a default under, any indenture, mortgage, deed of trust, lease, or other agreement or instrument to which Tenant is a party, or by which it or any of its property is bound, or the Tenant's Articles of Incorporation or By-laws, or any order, rule or regulation applicable to Tenant or its property of any court or other governmental body. Tenant shall maintain its corporate existence and shall not, without the prior written consent of Landlord, dissolve, liquidate or otherwise dispose of all or substantially all of its assets, or consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it. 20.06 Organizational Covenants of Landlord. Landlord represents, warrants, covenants and agrees that it is a corporation duly organized, validly existing and in good standing under the laws of the State of Kansas, with lawful power and authority to enter into this Lease, acting by and through its duly authorized officers. Landlord further represents, warrants, covenants and agrees that the execution of this Lease and the performance of the terms of this Lease by Landlord will not result in a breach of any of the terms of, or constitute a default under, any indenture, mortgage, deed of trust, lease, or other contract, instrument or agreement to Landlord is a party, or by which it or any of its property is bound, or Landlord's Articles of Incorporation or By-laws, or any order, rule or regulation applicable to Landlord or its property of any court or other governmental body. 20.07 Amendments. This Lease may be amended, changed or modified only by a written agreement duly ---------- executed by Landlord and Tenant. 20.08 Construction and Enforcement. This Lease shall be construed and enforced in accordance with ------------------------------ the laws of the State of Kansas. Wherever in this Lease it is provided that either party shall or will make any payment or perform or refrain from performing any act or obligation, each such provision shall, even though not so expressed, be construed as an express covenant to make such payment or to perform, or not to perform, as the case may be, such act or obligation. The terms "Landlord" and/or "Tenant" and all pronouns used herein referring to "Landlord" and/or "Tenant" shall include the singular and plural, and masculine, feminine and neuter gender, as the context and circumstances require, and if there be two or more included in the term, the provisions hereof shall apply to each, jointly and severally. 20.09 Invalidity of Provisions of Lease. If for any reason any provision hereof shall be determined ----------------------------------- to be invalid or unenforceable, the validity and effect of the other provisions hereof shall not be affected thereby. 20.10 Covenants Run With The Leased Premises. The covenants, agreements and conditions herein ------------------------------------------ contained shall run with the Leased Premises and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, subject, however, to the provisions of Article VII hereof. ----------- 20.11 Headings. The Article and Section headings shall not be treated as a part of this Lease or as ----------------- affecting the true meaning of the provisions hereof. 20.12 Execution of Counterparts. This Lease may be executed simultaneously in two or more ------------------------------------ counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 20.13 Estoppel Certificate by Tenant. Tenant will execute, acknowledge and deliver to Landlord, ----------------------------------------- within ten (10) days after Landlord's written request therefor, a written statement certified by an officer of Tenant to the effect that (a) this Lease is unmodified and in full force and effect (or, if there have been modifications, that the Lease is in full force and effect, as modified, and stating the modifications), (b) the dates, if any, to which Basic Rent and Additional Rent have been paid, and (c) no notice has been received by Tenant and Tenant is not otherwise aware of any default which has not been cured, except as to defaults specified in said certificate. Such certificate shall also contain such additional information, statements and agreements as Landlord shall reasonably request. Any such certificate may be relied upon by any prospective purchaser or mortgagee of the Leased Premises or any part thereof. 20.14 No Liability on Landlord. Neither Landlord nor its employees or agents shall be liable for any --------------------------------- damages to property of Tenant or any third party or of others entrusted to employees of Landlord or its agents, nor for the loss of or damages to any property of Tenant by theft or otherwise, whether or not due to the negligence of Landlord, its agents or employees, unless such loss or damage is the result of Landlord's gross negligence or intentional misconduct. Neither Landlord nor its agents shall be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or snow or leaks from any part of the Leased Premises or from the pipes, appliances or plumbing works or from the roof, street or sub-surface or from any other place or by dampness or by any other cause of whatsoever nature, whether or not due to the negligence of Landlord, its agents, or employees; nor shall Landlord or its employees or agents be liable for any such damage caused by other tenants or persons in the Leased Premises or caused by operations in connection with or resulting from any private, public or quasi public work and Tenant hereby covenants and agrees to indemnify and hold harmless Landlord against any claims, costs, demands, losses or liabilities with respect to any of the matters referred to in this Section. ------- 20.15 Landlord's Mortgagees. (a) Landlord may, at any time and from time to time, grant mortgages, deeds of ---------------------- trust or other liens or encumbrances on any of the Leased Premises in accordance with the terms and provisions hereof, and any holder thereof is referred to in this Lease as "Landlord's Mortgagee." (b) This Lease and Tenant's interest and rights hereunder are and shall be subject and subordinate at all times to the lien of any mortgage or deed of trust now existing or hereafter created on or against the Leased Premises, and all amendments, restatements, renewals, modifications, consolidations, assignments and extensions thereof, without the necessity of any further instrument or act on the part of Tenant; provided, however, that as to any mortgage or deed of trust hereafter created, such subordination shall be effective only if such Landlord's Mortgagee agrees that, as long as Tenant is not in default hereunder, Tenant's possession of such of the Leased Premises as are encumbered thereby, on and subject to all of the provisions of this Lease, will not be disturbed. Tenant agrees, at the election of any Landlord's Mortgagee, to attorn to any such mortgagee. Tenant further agrees upon demand to execute, acknowledge and deliver such instruments confirming such subordination and such instruments of attornment as shall be requested by any such mortgagee. The term "mortgage" whenever used in this Lease shall be deemed to include deeds of trust and any reference to a mortgagee shall be deemed to include the beneficiary under a deed of trust. (c) Tenant agrees that neither any foreclosure of any such mortgage, nor the institution of any suit, action or other proceeding against Landlord, nor any foreclosure or dispossession proceeding brought by any Landlord's Mortgagee to recover possession of any of the Leased Premises, shall, by operation of law or otherwise, result in the cancellation or termination of this Lease or the obligations of Tenant hereunder, and upon the request of any such Landlord's Mortgagee, Tenant covenants and agrees to execute an instrument in writing satisfactory to such Landlord's Mortgagee or to the purchaser of the mortgaged premises in foreclosure whereby Tenant attorns to such successor in interest. (d) Upon request from Tenant within thirty (30) days after the date hereof, Landlord shall use reasonable efforts to obtain from the current holder of each mortgage constituting a lien upon any of the Leased Premises an agreement, in recordable form reasonably acceptable to Tenant, an agreement that, so long as Tenant is not in default hereunder, Tenant's possession of the Leased Premises so encumbered, on and subject to all of the provisions of this Lease, shall not be disturbed. (e) Landlord shall have the right to make a collateral assignment and encumber its rights under this Lease and all related documents. Landlord will give Tenant notice of such assignment and encumbrance. 20.16 No Partnership. Landlord does not in any way or for any purpose become a partner of Tenant in the --------------- conduct of its business or otherwise, nor a joint venturer or a member of a joint enterprise with Tenant. 20.17 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than (a) the ------------------------ monthly installment of Basic Rent or (b) Additional Rent then due and payable shall be deemed to be other than on account of the earliest such amount due, nor shall any endorsement or statement on any check or any letter accompanying any check be deemed an accord and satisfaction. 20.18 Holding Over. In the event Tenant remains in possession of the Leased Premises after the expiration of ------------ the tenancy created under this Lease, and without the execution of a new lease, Tenant, at the option of Landlord, shall be deemed to be occupying the Leased Premises as a tenant from month to month, at one hundred fifty percent (150%) the Total Rent for the last Lease Year of the term, subject to all of the other conditions, provisions and obligations of this Lease insofar as the same are applicable to a month to month tenancy. 20.19 Survival of Obligations. All obligations of Tenant or Landlord which by their nature involve ------------------------- performance, in any particular, after the end of the term of this Lease, or which cannot be ascertained to have been fully performed until after the end of the term of this Lease, shall survive the expiration or earlier termination of the term of this Lease. By way of clarification, and not by way of limitation,ss. Section 2.04, 6.03 and 6.04 shall survive expiration or termination hereof. 20.20 Memorandum of Lease. Landlord and Tenant shall execute a separate memorandum of lease with respect to -------------------- each of the Leased Premises in form appropriate for recording in the appropriate recording office for the jurisdiction in which such Leased Premises is located (each a "Memorandum of Lease"). Each Memorandum of Lease shall (a) operate to lease or sublease to Tenant the specific Leased Premises to which such Memorandum of Lease relates on all of the same terms and conditions of this Lease as if the terms and conditions of this Lease were fully set forth in such Memorandum of Lease in full with respect to such Leased Premises, and (b) supplement the terms and conditions of the lease or sublease of such Leased Premises as may be appropriate to comply with or take into account the laws, customs and practices of the jurisdiction in which such Leased Premises are located and any special circumstances and considerations applicable to such Leased Premises (including, but not limited to special circumstances and considerations applicable by reason of the terms and conditions of the Prime Lease to which Subleased Premises are subject). Each Memorandum of Lease shall be enforceable as a distinct lease or sublease of such Leased Premises in accordance with the enforcement procedures applicable in such jurisdiction; provided, however, that the existence of a default under or with respect to any Memorandum of Lease shall constitute a default under and with respect to each and all Memoranda of Lease. To the extent that any of the terms or conditions of any Memorandum of Lease conflict with any of the terms or conditions of this Lease, the terms and conditions of such Memorandum of Lease shall control with respect to the Leased Premises subject to such Memorandum of Lease. 20.21 Obligation of ADM. Archer Daniels Midland Company hereby executes this Lease solely for the ----------------- purpose of agreeing to and acknowledging its joint and severable liability for the liabilities and obligations of ADM Farmland, Inc. hereunder.IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed as of the date first above written. FARMLAND INDUSTRIES, INC. ------------------------- By ----------------------------------------------------- President LANDLORD ADM/FARMLAND, INC, ------------------ ATTEST: By ----------------------------------------------------- President TENANT ARCHER DANIELS MIDLAND COMPANY By:____________________________________ Its:_____________________________________ EXHIBIT A-1 ----------- [List the Direct Leased Facilities -(including Facilities and Western Region Facilities)] EXHIBIT A-2 ----------- [List equipment at the Direct Leased Facilities] EXHIBIT A-3 ----------- [List the Subleased Facilities -(including Facilities and Western Region Facilities) and include description of each Prime Lease] EXHIBIT A-4 ----------- [List equipment at the Subleased Facilities]
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8-K Filing
Farmland Industries Inactive 8-KCurrent report
Filed: 21 May 01, 12:00am