LEASE AGREEMENT
dated as of
August 1, 1995
by and between
First Fidelity Bank, National Association, not in its individual
capacity,
but solely as the trustee under that certain
Trust Agreement 1995-1 dated as of July 1, 1995, as Owner-Lessor
and
TIFFANY AND COMPANY, a New York corporation, as Lessee
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. AGREEMENT TO LEASE . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 4. CONDITIONS PRECEDENT PRIOR TO BASIC TERM COMMENCEMENT DATE . . 4
SECTION 5. RENTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 7. NET LEASE; NONTERMINABILITY . . . . . . . . . . . . . . . . . . 8
SECTION 8. TAXES AND OTHER CHARGES; LAWS AND AGREEMENTS . . . . . . . . . 9
SECTION 9. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10. OWNERSHIP OF THE LEASED PROPERTY . . . . . . . . . . . . . . . 12
SECTION 11. OWNER'S DISCLAIMER; ACKNOWLEDGEMENT BY LESSEE . . . . . . . . 12
SECTION 12. REPRESENTATIONS OF PARTIES . . . . . . . . . . . . . . . . . . 13
SECTION 13. MAINTENANCE; QUIET ENJOYMENT . . . . . . . . . . . . . . . . . 16
SECTION 14. COMPLIANCE WITH LEGAL REQUIREMENTS . . . . . . . . . . . . . . 18
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SECTION 15. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 16. LOSS, DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . 21
SECTION 17. ADDITIONS AND IMPROVEMENTS; REMOVAL . . . . . . . . . . . . . 25
SECTION 18. RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 19. ASSIGNMENTS AND SUBLEASING . . . . . . . . . . . . . . . . . . 26
SECTION 20. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . 28
SECTION 21. ENVIRONMENTAL INDEMNITY. . . . . . . . . . . . . . . . . . . . 31
SECTION 22. INDEMNIFICATION AND HOLD HARMLESS AGREEMENT . . . . . . . . . 32
SECTION 23. EVENTS OF DEFAULT BY LESSEE . . . . . . . . . . . . . . . . . 34
SECTION 24. REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . 36
SECTION 25. OWNER'S RIGHT TO PERFORM FOR LESSEE . . . . . . . . . . . . . 38
SECTION 26. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 27. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 28. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 29. LESSEE'S EXTENSION LEASE OPTIONS AND END OF TERM PURCHASE
OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 30. THIRD PARTY SALE OF LEASED PROPERTY . . . . . . . . . . . . . 41
SECTION 31. END OF TERM ADJUSTMENT . . . . . . . . . . . . . . . . . . . . 43
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SECTION 32. PROCEDURE FOR OWNER CONVEYANCE . . . . . . . . . . . . . . . . 44
SECTION 33. TIME OF THE ESSENCE; MANNER OF PAYMENT . . . . . . . . . . . . 45
SECTION 34. RETURN OF LEASED PROPERTY . . . . . . . . . . . . . . . . . . 45
SECTION 35. FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . 47
SECTION 36. RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 37. NO RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 38. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 39. VENUE; GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 48
SECTION 40. ESTOPPEL CERTIFICATE . . . . . . . . . . . . . . . . . . . . . 49
SECTION 41. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . 49
SECTION 42. NONRECOURSE . . . . . . . . . . . . . . . . . . . . . . . . . 49
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LIST OF EXHIBITS
EXHIBIT A Legal Description of Land
EXHIBIT A-1 Description of Improvements to be
Constructed pursuant to Construction
Agency Agreement
EXHIBIT B Rental Factor
EXHIBIT C Interest Rate Terms
EXHIBIT D Termination Value Percentages
EXHIBIT E Purchase Price Percentages
EXHIBIT F Percentages for Maximum Lessee
Risk Amount and Maximum Owner Risk Amount
LIST OF SCHEDULES
SCHEDULE I List of Listed Permits
SCHEDULE II List of Acceptable Hazardous Materials
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease"), dated as of August 1,
1995, by and between First Fidelity Bank, National Association, a
national banking association, not in its individual capacity,
except as expressly set forth herein, but solely as trustee under
that certain Trust Agreement 1995-1 dated as of July 1, 1995, as
owner-lessor hereunder ("Owner") and TIFFANY AND COMPANY, a
corporation organized and operated under the laws of the State of
New York, as lessee hereunder ("Lessee").
PRELIMINARY STATEMENT
Lessee has entered into an Agreement for Purchase and Sale
of Real Estate by and between Pru Beta-3, as seller, and Lessee,
as purchaser, dated as of November 4, 1994 (the "P&S") to acquire
a parcel of land consisting of approximately 40.713 acres, more
or less, located in the Township of Parsippany-Troy Hills, Morris
County, New Jersey, more particularly described in Exhibit A
attached hereto (the "Land"). Lessee wishes to cause the
construction of an office building, distribution center,
warehouse facility and light manufacturing facility more
particularly described in Exhibit A-1 hereof (all site
improvements, base building, building systems, equipment and
related fixtures now or hereafter existing on the Land, and any
substitutions or replacements of or additions to the same are
referred to as the "Improvements"). Lessee has determined that
the most advantageous financing for the acquisition of the Land
and the design and construction of the Improvements can be
realized by assigning purchaser's rights under the P&S to Owner,
permitting Owner to purchase the Land, contracting with Owner to
construct the Improvements as Owner's agent and leasing the Land
and Improvements (collectively, with all easements, privileges,
rights and appurtenances thereto, the "Leased Property") from
Owner pursuant to this Lease. Concurrently with the assignment
of the P&S by Lessee to Owner, and Owner's purchase of the Land,
Owner and Lessee will enter into this Lease for the Leased
Property, which Lease is intended to be an operating lease for
accounting purposes under GAAP. The date upon which Lessee
assigns the P&S to the Owner, the Owner acquires the Land and
Lessee and Owner enter into this Lease is referred to as the
"Closing Date".
On the Closing Date, Owner will purchase the Land pursuant
to the P&S for a purchase price of $4,800,000 and pay a broker's
commission equal to eight percent (8%) of said purchase price to
Cushman & Wakefield of New Jersey, Inc., a portion of which
amount will be provided by the beneficiary of Owner, First
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Fidelity Bank, not in its individual capacity but solely as
trustee under that certain Trust Agreement 1995-2 dated as of
July 1, 1995 (the "Beneficiary"), from the proceeds of a loan
(the "Investor Loan") in the amount of $1,925,000 to be made to
the Beneficiary by Stellar Capital Corporation ("Construction
Lender"). Lessee and Owner will enter into a Construction Agency
Agreement on the Closing Date which will provide, among other
things, that Lessee will construct the Improvements upon the Land
as agent for Owner. Pursuant to the Construction Agency
Agreement, Owner will finance the purchase of the Land and
payment of the brokerage commission therefor (to the extent the
proceeds of the Investor Loan are insufficient) and will finance
the construction of the Improvements from the proceeds from a
Construction Loan to be made to Owner by the Construction Lender
in an amount not to exceed $36,575,000. Lessee, Owner and
Construction Lender have agreed upon a total "Project Budget"
proposed by Lessee for all Development Costs. Lessee has agreed
that if at any time the undisbursed portion of the funds
available for advance by the Construction Lender under the
Construction Loan, together with any unadvanced Owner's Equity,
is not sufficient to pay for all Development Costs, then Lessee,
out of its own funds, will pay all Development Costs (or such
Development Costs of the particular line item of the Project
Budget for which there is a deficiency) until (A) there is no
longer any deficiency and (B) there are sufficient undisbursed
funds available under the Loan to pay all remaining Development
Costs. The Project Budget includes three major subcategories of
Development Costs including "Acquisition Costs", "Hard Costs" and
"Soft Costs". The Project Budget does not include any amounts
allocated for the cost of furniture, fixtures and equipment,
other than equipment which forms a part of the building systems.
The Lease provides for an Interim Term during which the
Improvements are to be completed by Lessee (provided, however,
such completion shall take place on or before January 31, 1997,
subject to extension pursuant to Section 4(a) of the Lease). If
Lessee satisfies all of the conditions set forth in Section 4(a)
of the Lease on or prior to the date set forth therein, has not
previously given notice to the Owner that it has elected not to
enter into the Basic Lease Term and Owner is not entitled to
terminate the leasehold estate created hereby pursuant to Section
4(c) hereof, a Basic Lease Term shall commence and continue until
the Basic Lease Term Expiration Date. Upon the expiration of the
Basic Lease Term, Lessee will have options to extend the Lease
for nine (9) consecutive one (1)-year Extension Lease Terms. At
the end of the Interim Lease Term, Basic Lease Term or any
Extension Lease Term, Lessee has an option to purchase the Leased
Property for the Purchase Price set forth in this Lease. If
Lessee does not exercise its option to purchase the Leased
Property, Lessee is obligated to solicit bids for the purchase of
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the Leased Property from third parties. If the Leased Property
is sold to a third party pursuant to the provisions of the Lease
or is returned to the Owner upon the completion of the Interim
Lease Term, the Basic Lease Term or any Extension Lease Term or
upon any Termination Date, Lessee will be obligated to pay the
applicable End of Term Adjustment provided for in this Lease to
Owner.
On the date hereof, BOT Financial Corporation or a designee
thereof ("LC Issuer") shall enter into a Reimbursement and
Remarketing Agreement with the Beneficiary pursuant to which the
LC Issuer will issue or agree to issue its Letter of Credit for
the benefit of the holder of the Investor Loan in an amount up to
the Maximum Owner Risk Amount.
The construction of the Improvements shall be undertaken by
Lessee, as agent under the Construction Agency Agreement. In
connection therewith, Lessee has previously entered into and
assigned to Owner on the Closing Date or will enter into or will
receive and approve on or before the Closing Date as agent
thereunder, the following documents:
(a) Guaranteed Maximum Price Construction Contract with
Turner Construction Company, as general contractor dated July 31,
1995;
(b) Agreement for Architectural and Engineering Services
with Perkins & Will Architects, P.C., dated December 15, 1993
("Architect's Contract");
(c) Agreements other design and engineering services which
are more particularly listed in Exhibit E to the Construction
Loan Agreement;
(d) The plans, specifications and working drawings prepared
by the Architect which are more particularly listed in Exhibit E
to the Construction Loan Agreement; and
(e) The other contracts and documents described in Section
5.1 of the Construction Loan Agreement.
The foregoing documents, as they may be hereafter amended or
supplemented in accordance with the Transaction Documents from
time to time, are referred to as the "Approved Construction
Documents".
At Closing, Lessee, as agent for Owner under the
Construction Agency Agreement, will accept the assignment of the
Development Services Agreement made as of the 4th day of
November, 1994 between Lessee and PIC Realty, a Delaware
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corporation having an office at 751 Broad Street, Newark, New
Jersey and Lessee shall be reimbursed for all costs incurred
under such Development Services Agreement (to the extent of such
expense as shown on the Project Budget) pursuant to the terms of
the Construction Agency Agreement.
In consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
Section 1. Definitions. Unless the context otherwise
requires, and except as specifically provided herein, each of the
capitalized terms shall have the meaning set forth in the
Definitions Appendix attached to this Lease, as the same may be
amended, modified or supplemented from time to time.
Unless otherwise expressly stated, the words "this Lease,"
"herein," "hereunder," "hereof" or other like words mean and
include this Lease, all exhibits hereto and each amendment and
supplement hereto.
Section 2. Agreement to Lease. Owner hereby leases, lets
and demises unto Lessee, and Lessee hereby leases, rents and
takes possession from Owner, all of the Owner's right, title and
interest in (i) the Land, (ii) all Improvements now or hereafter
constructed thereon and (iii) all easements, privileges, rights
and appurtenances thereto (the Land, Improvements and all such
easements, privileges, rights and appurtenances are collectively
referred to herein as the "Leased Property"), to have and to hold
the same for the Term, subject to the covenants, agreements,
terms, conditions, limitations and provisions hereinafter set
forth.
Section 3. Term.
The Interim Lease Term shall commence on the Closing Date,
and, unless this Lease is sooner terminated pursuant to the
provisions hereof, shall end on the day immediately preceding the
Basic Term Commencement Date. Subject to the conditions set
forth in Section 4(a) below and the exercise of Lessee's right to
elect to enter into the Basic Lease Term pursuant to Section 29
hereof, the Basic Lease Term shall commence on the Basic Term
Commencement Date, and, unless this Lease is sooner terminated
pursuant to the provisions hereof, shall end on the Basic Lease
Term Expiration Date, or if this Lease is extended pursuant to
Section 29(a) hereof, on the last day of the last Extension Lease
Term hereof for which this Lease is renewed.
Section 4. Conditions Precedent Prior to Basic Term
Commencement Date.
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(a) Unless otherwise waived in writing by the Owner or the
Lender, the right of Lessee to lease the Leased Property from the
Owner under this Lease beyond the Interim Lease Term is subject
to the fulfillment of each of the following conditions of the
Owner during and as of the end of the Interim Lease Term: (i)
Lessee shall perform all of its obligations under the
Construction Agency Agreement, as agent or for itself, during the
Interim Lease Term; (ii) no event which is a Default or an Event
of Default hereunder or under the Construction Agency Agreement
has occurred and is continuing; (iii) Owner shall have received a
certificate from the Lender's Construction Consultant that the
Improvements are Substantially Complete and shall also have
received such other documents, appraisals, opinions, certificates
and waivers, as Owner may require in the exercise of reasonable
business judgment, including, if requested, certificates from the
Architect and General Contractor, in form and substance
reasonably satisfactory to assure Owner that the Improvements are
ready for occupancy and that no liens or claims are outstanding
against the Leased Property (other than Permitted Liens), and
(iv) Lessee shall have satisfied each of the foregoing conditions
on or before January 31, 1997, provided, however, that if an act
or event of Force Majeure occurs which prevents Lessee from
completing the Improvements by January 31, 1997, Lessee shall be
entitled to an extension beyond January 31, 1997 in which to
satisfy such conditions, provided, however, that such extension
shall not extend beyond the earlier to occur of July 31, 1997 or
the number of days which the act or event of Force Majeure
delayed completion of the Improvements.
(b) If such conditions set forth in Section 4(a) above have
not been met in full to the satisfaction of Owner by January 31,
1997 (or such later date determined in accordance with paragraph
(a) above for delays due to an act or event of Force Majeure) and
regardless of whether Lessee has elected not to enter the Basic
Lease Term pursuant to Section 29(a) hereof, Owner may declare by
written notice to Lessee that an amount equal to the sum of (i)
all unpaid Base Rental and Additional Rental for all Rental
Periods through the payment date specified in the notice, plus
(ii) an amount equal to one hundred percent (100%) of all Project
Costs (incurred through the date of payment) including, without
limitation, all Interim Rental accruing during the Construction
Period, plus, (iii) to the extent such amounts have not been
included in Project Costs, all interest, costs, fees,
reimbursements and all other amounts due and payable to either
Owner or Lender under the Transaction Documents, including,
without limitation, the costs to complete the Improvements
incurred to the date of payment shall be due and payable on a
date specified by Owner in such notice. Upon payment of such
amount to Owner by Lessee, Owner shall transfer to Lessee all of
the Owner's interest in the Leased Property to Lessee in
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accordance with the terms and provisions of Section 32 hereof,
and this Lease shall terminate without any further action being
required, and all rights and obligations hereunder and thereunder
shall cease, except for those which by their terms survive the
termination of this Lease.
(c) Lessee agrees that it shall use its reasonable good
faith efforts to arrange for (x) a Long-Term Loan between the
Owner and Long-Term Lender on terms and conditions acceptable to
Owner and Lessee to be effective as of the Conversion Date and
(y) the assignment as of the Conversion Date of the Investor Loan
by the Construction Lender for consideration and on terms and
conditions which are acceptable to the Construction Lender, such
arrangements to be made prior to the expiration of the Interim
Lease Term. The financing described in (x) and (y) above is
referred to as the "Takeout Financing." If the Takeout Financing
has not been entered into by the Owner and Long-Term Lender on or
prior to January 31, 1996, the Owner may elect in its sole and
absolute discretion to terminate the leasehold estate created
hereby, such termination to be effective on January 31, 1997 (or
such later date permitted for delays due to an act or event of
Force Majeure by which date Lessee is required to meet in full to
the satisfaction of the Owner the conditions set forth in Section
4(a)) (the date of the termination of the Lessee's leasehold
estate pursuant to this sentence will be deemed the "Termination
Date" applicable to the Interim Lease Term). Unless Lessee
notifies Owner, Lender and LC Issuer in writing on or prior to
January 31, 1996 that such Takeout Financing has been entered
into, it shall be conclusively deemed by the parties hereto that
there has been a failure by Owner and the Long-Term Lender to
enter into the Takeout Financing on or prior to January 31, 1996.
The Owner shall be conclusively deemed to have exercised its
right to elect to terminate the leasehold estate for a failure to
enter into the Takeout Financing unless Owner shall have given
written notice to Lessee on or before February 10, 1996 that the
Owner has not elected to terminate the leasehold estate created
hereby. If Owner elects (or is deemed to have elected) to
terminate the leasehold estate for a failure to enter into the
Takeout Financing as aforesaid, Lessee shall be entitled, at its
option (x) to give notice that the Lessee intends to remarket the
Leased Property in accordance with Section 30(a) hereof and to
pay to Owner on the Termination Date the End of Term Adjustment
as set forth in Section 31(a) or 31(b), as applicable, or (y) to
give notice ("Special Nonreturn Option Notice") that on the
Termination Date, (A) the Leased Property will be sold to a third
party pursuant to a bid which meets the requirements of Section
30(b) below or (B) the Lessee will purchase the Owner's interest
in the Leased Property in accordance with Section 32 hereof for
an amount equal to the Purchase Price applicable to the Interim
Lease Term or (C) if Owner and the Long-Term Lender enter into
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the Takeout Financing on or before January 31, 1997 (or such
later date permitted for delays due to an act or event of Force
Majeure by which date Lessee is required to meet in full to the
satisfaction of the Owner the conditions set forth in Section
4(a) hereof) and the conditions set forth in Section 4(a) hereof
to the commencement of the Basic Term have been met in full to
the satisfaction of the Owner, to enter into the Basic Lease
Term, in which case the election by Owner (whether deemed or
otherwise) to terminate the leasehold estate created hereby shall
be rescinded without further notice or action being required of
any party. To exercise the option set forth in clause (x) above
to remarket the Leased Property and to pay to Owner on the
Termination Date the applicable End of Term Adjustment, the
Lessee shall give written notice to the Owner, Construction
Lender and LC Issuer on or prior to February 15, 1996 that Lessee
intends to exercise such option. If the Lessee elects to
exercise the option set forth in clause (x) above, the Leased
Property shall be returned to the Owner in accordance with the
provisions of Section 34 hereof on the Termination Date (unless
delivered to a bidder in accordance with Section 30(b) hereof).
If Lessee does not give Owner, the Construction Lender and LC
Issuer notice that the Lessee intends to exercise the option set
forth in clause (x) above on or prior to February 15, 1996, the
Lessee shall be conclusively deemed to have issued a Special
Nonreturn Option Notice. If Lessee has issued (or is deemed to
have issued) a Special Nonreturn Option Notice and the Lessee
desires to sell the Property to a third party, it shall be
required to submit a third-party bid which meets the requirements
of Section 30(b) no later than thirty (30) days prior to the
Termination Date; otherwise, (i) the Lessee shall be obligated to
purchase the Leased Property on the Termination Date as if an
election to purchase had been made under Section 29(b) hereof, or
(ii) if the conditions to the rescission of Owner's election to
terminate the leasehold estate of Lessee described in subclause
(C) of clause (y) above have been met, to enter into the Basic
Lease Term. If the Lessee elects to purchase the Leased Property
after a Special Nonreturn Option Notice has been issued (or
deemed issued), then notwithstanding the provisions of Section 19
below, Lessee may freely assign its option to purchase to any
third party.
Section 5. Rental. Lessee shall pay to Owner (or as
otherwise directed in writing by Owner as to place and manner of
payment) the Base Rental and Additional Rental in the amounts, at
the times and in the manner set forth below, such amounts
constituting in the aggregate the total of the rental payable
under this Lease, as follows:
(a) Lessee hereby agrees to pay Base Rental semiannually in
arrears on the first day of each January and July during the
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Basic Lease Term and each Extension Lease Term in an amount equal
to the applicable Rental Factor (as shown on Exhibit B hereto, as
such Exhibit may be revised by Owner from time to time in
accordance with Section 5(c) hereof) multiplied by the Project
Costs. During and after the Interim Lease Term but prior to the
Basic Term Commencement Date, Interim Rental shall be capitalized
and added to Project Costs in an amount equal to the sum of (x)
for each day during the Interim Lease Term on and after which the
Owner's Equity has been contributed, an amount equal to a
fraction, the numerator of which is the then Interim Rental Rate
and the denominator of which is 360, multiplied by the Owner s
Equity, plus (y) all interest accruing during the Construction
Period on advances made on the Construction Loan to the extent
that such interest has not been funded by a further advance under
the Construction Loan.
(b) In addition to the Base Rental, Lessee agrees during the
Term to pay as Additional Rental to the Owner or the Person
entitled to receive the same all of the following:
(i) All "taxes and other impositions" (as defined in
Section 8(a) hereof);
(ii) Insurance premiums, if any, on all insurance
required to be obtained and maintained in force and effect by
Lessee under the provisions of Section 15 of this Lease;
(iii) All other costs and expenses of every nature
whatsoever incurred by Lessee incident to the ownership,
management, maintenance, repair, replacement, restoration, and
operation of the Leased Property;
(iv) All indemnities, fees and expenses (not
otherwise paid or provided for out of the proceeds of the Loan or
the Owner's Equity) incurred by Owner or which the Owner is
obligated to pay in connection with the transactions contemplated
in this Lease or the Loan;
(v) All amounts, liabilities and obligations which
Lessee assumes or agrees to pay hereunder to Owner or others,
including, if any, payments of Termination Value, indemnities,
and any Reinvestment Premium that may become payable by Lessee
hereunder, in addition to any other amounts due as Base Rental
and Additional Rental hereunder; and
(vi) In the event Lessee shall fail to pay Base
Rental or Additional Rental or any other payment (including,
without limitation, the Maximum Lessee Risk Amount, Termination
Value or Purchase Price) owing in respect hereof in accordance
with the terms of this Lease on the date fixed for such payment
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or upon the occurrence of an Event of Default, an additional
amount calculated daily from and after the date fixed for payment
until paid or upon the occurrence of the Event of Default and
during the continuance thereof, as the case may be, equal to the
product of (A) a fraction, the numerator of which is the then
effective Default Rate applicable under the Loan and the
denominator of which is 360 multiplied by (B) the Termination
Value (or, if the Basic Term Commencement Date has not occurred,
100% of all Project Costs plus the amount described in clause
(iii) of Section 4(b) above). Amounts constituting Additional
Rental under this clause (vi) shall be payable by Lessee
immediately upon demand, or if no demand is made, upon the first
day of each month.
Amounts constituting Additional Rental payable pursuant
to clauses (i), (ii), (iii) and (iv) of this Section 5(b) shall
be paid by Lessee directly to the person or persons to whom such
amounts are payable. The obligation of Lessee to pay all such
amounts shall survive the termination of this Lease.
(c) The Owner shall determine and compute the amount of
Interim Rental accrued during and after the Interim Lease Term
but prior to the Basic Term Commencement Date and add such amount
to the other Project Costs and, upon such determination by Owner,
Owner will provide the Lessee with a written statement of the
total Project Costs. Exhibit F sets forth the Maximum Lessee Risk
Amount and Maximum Owner Risk Amount applicable prior to the
Basic Term Commencement Date. The Rental Factor, Termination
Value, Purchase Price, Maximum Lessee Risk Amount and Maximum
Owner Risk Amount shall be determined by the Owner prior to the
Conversion Date and will be effective as of the Basic Term
Commencement Date for the Maximum Term. Said amounts will be
determined by Owner to reflect the actual interest rates
established for the Long-Term Loan and Investor Loan for all
periods after the Basic Term Commencement Date. On the Basic
Term Commencement Date, the Owner shall prepare and deliver to
Lessee exhibits to this Lease which sets forth the actual Rental
Factor (Exhibit B), Termination Value Exhibit D), Purchase Price
(Exhibit E), Maximum Lessee Risk Amount (Exhibit F) and Maximum
Owner Risk Amount (Exhibit F) after such adjustment. All such
amounts will be determined to provide that the Purchase Price
shall amortize to seventy-five percent (75%) of Project Costs at
the expiration of the Maximum Term. The determination of Project
Costs and of the Rental Factor, the Termination Value, Purchase
Price, Maximum Lessee Risk Amount and Maximum Owner Risk Amount
by Owner shall, in the absence of manifest error, be deemed
conclusive.
(d) All payments of Base Rental and Additional Rental
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required to be made by Lessee to Owner shall be made in good
funds. While any of the Construction Loan, Long-Term Loan or
Investor Loan remains outstanding, all payments hereunder
assigned to Lender, whether Base Rental, Additional Rental or
otherwise, shall be paid in such manner as shall be designated by
such Lender. If neither the Construction Loan, the Long-Term
Loan nor the Investor Loan are outstanding, all payments
hereunder shall be paid in such manner as designated by Owner or
any other Assignee.
Section 6. Use. Lessee may use the Leased Property,
including related amenities such as a parking garage, for office
purposes, distribution, warehousing, light manufacturing,
research and development (or any one or more of such uses) or for
any other lawful uses as may be permitted by Owner and which are
consistent with all covenants and restrictions of Permitted
Liens.
Section 7. Net Lease; Nonterminability
(a) This Lease is a "net lease." All costs, expenses and
obligations of every kind and nature whatsoever relating to the
Leased Property and the appurtenances thereto and the use and
occupancy thereof by Lessee or anyone claiming by, through or
under Lessee which may arise or become due during or with respect
to the period constituting the Term hereof shall be paid by
Lessee, and Lessee shall indemnify the Indemnified Parties
against any of the foregoing as provided in Section 8 below.
Lessee assumes, during the Term of this Lease, the sole
responsibility for the condition, use, operation, maintenance,
subletting and management of the Leased Property, neither Owner
nor any other Indemnified Party shall have any responsibility in
respect thereof, nor shall Owner nor any other Indemnified Party
have any liability for damage incurred by any Person or for
damage to the property of Lessee or any sublessee of Lessee for
any reason whatsoever. Without limiting the generality of the
foregoing, during the Term of this Lease, Lessee shall perform
all of the obligations of the sublessor under any subleases
affecting all or any part of the Leased Property which Lessee may
hereinafter enter into as sublessor to the extent that Lessee's
failure to perform such obligations could result in the
occurrence of an Event of Default under this Lease.
(b) Lessee acknowledges and agrees that its obligations
hereunder, including, without limitation, its obligations to pay
Base Rental and Additional Rental, shall be unconditional and
irrevocable under any and all circumstances and shall not be
subject to cancellation, termination, modification or repudiation
by Lessee. This Lease shall not terminate, nor shall Lessee have
any right to terminate this Lease, and Lessee shall perform all
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obligations hereunder, including the payment of all Base Rental
and Additional Rental, without notice, demand, counterclaim, set-
off, deduction, defense or recoupment, and without abatement,
suspension, deferment, diminution or reduction for any reason,
including, without limitation, any past, present or future claims
which Lessee may have against the Owner, Construction Lender,
Long-Term Lender, LC Issuer, BFS or any other Person for any
reason whatsoever; any defect in the Leased Property or any
portion thereof, or in the title, condition, design,
construction, habitability or fitness for a particular use
thereof; any damage to or destruction or loss of all or part of
the Leased Property; any restriction, deprivation (including
eviction) or prevention of, or any interference with or
interruption of, any use or occupancy of the Leased Property
(whether due to any defect in or failure of Owner's title to the
Leased Property, any Owner Lien or otherwise); any condemnation,
requisition or other taking or sale of the use, occupancy or
title to the Leased Property; any action, omission or breach on
the part of the Owner under this Lease (including without
limitation, any breach of the Owner's representations and
warranties set forth in Section 12 hereof) or under any other
agreement between Owner and Lessee, or any other indebtedness or
liability, howsoever and whenever arising, of Owner, any Assignee
or Lessee to any other Person, or by reason of insolvency,
bankruptcy or similar proceedings by or against Owner, any
Assignee or Lessee; the inadequacy or inaccuracy of the
description of the Leased Property or the failure to demise and
let to Lessee the property intended to be leased hereby; Lessee's
acquisition of ownership of the Leased Property or any sale or
other disposition of the Leased Property; the impossibility or
illegality of performance by Owner or Lessee or both; the failure
of Owner to deliver possession of the Leased Property on the
Closing Date; any action of any court, administrative agency or
other governmental authority; or any other cause, whether similar
or dissimilar to the foregoing, any present or future law
notwithstanding; it being the intention of the parties hereto
that all Base Rental and Additional Rental payable by Lessee
hereunder shall continue to be payable in all events and in the
manner and at the times herein provided, without notice or
demand, unless the obligation to pay the same shall be terminated
pursuant to the express provisions of this Lease.
(c) Lessee will remain obligated under this Lease in
accordance with its terms, and will not take any action to
terminate, rescind or avoid this Lease for any reasons,
notwithstanding any bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding affecting Owner, or
any assignee of Owner, or any action with respect to this Lease
which may be taken by any receiver, trustee or liquidator, or any
assignee of Owner or by any court in any such proceeding. Lessee
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waives all rights at any time conferred by statute or otherwise
to quit, terminate or surrender this Lease or the Leased Property
(except as otherwise expressly provided in Sections 4(c), 16(c)
or 29 hereof), or to any abatement, reduction, deferment or set-
off of any Base Rental, Additional Rental or other sum payable by
Lessee hereunder, for damage, loss or expense suffered by Lessee
on account of any cause referred to in this Section 7 or
otherwise.
Section 8. Taxes and Other Charges; Laws and Agreements.
(a) Lessee agrees to pay, defend and indemnify and hold each
Indemnified Party harmless on an after-tax basis from any and all
Federal, state, local and foreign taxes, fees, withholdings,
levies, imposts, duties, assessments and charges of any kind and
nature whatsoever, including, without limitation, all amounts
payable hereunder as Additional Rental hereunder, together with
any penalties, fines or interest thereon (herein called "taxes or
other impositions") attributable to any given period prior to or
within the Indemnification Period, howsoever imposed, whether
levied or imposed upon or asserted against Owner, Trust Company,
Beneficiary, W. Jeffrey Kramer ("Kramer"), any Assignee, Lessee,
the Leased Property, or any portion thereof (including, without
limitation, taxes and assessments referred to in clause (i) of
Section 5(b) hereof) or any other Indemnified Party, by any
Federal, state or local government or taxing authority in the
United States, or by any taxing authority or governmental
subdivision of a foreign country, upon or with respect to (a) the
Leased Property or any portion thereof (including, without
limitation, all fixtures, equipment and personal property which
forms a part of the Leased Property), (b) the acquisition,
manufacture, construction, ordering, purchase, ownership,
delivery, leasing, subleasing, re-leasing, possession, use,
maintenance, registration, re-registration, titling, re-titling,
licensing, documentation, return, repossession, foreclosure,
condemnation, conveyance, assignment, sale or other application
or disposition of the Leased Property or any other portion
thereof, (c) the rentals, receipts or earnings arising from the
Leased Property or other portion thereof, or (d) this Lease, the
Base Rental or Additional Rental payable by Lessee hereunder or
any of the Transaction Documents, provided, however, that the
foregoing indemnity shall not apply to and nothing in this Lease
shall require the payment by the Lessee of (i) any taxes or
impositions based upon or measured solely by any Principal
Party's gross, net or taxable income, tax preferences or
dividends paid or taxes payable in the nature of capital gains,
excess profits, accumulated earnings or personal holding company
taxes of such Principal Party, unless any such tax is in lieu of
or in substitute for any other taxes of such Principal Party or
impositions upon or with respect to the Leased Property which, if
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such other taxes or impositions were in effect, would be payable
by Lessee hereunder; (ii) any franchise, estate, inheritance,
succession, capital stock tax, unless any such tax is in lieu of
or in substitute for any other taxes of such Principal Party or
impositions upon or with respect to the Leased Property which, if
such other taxes or impositions were in effect, would be payable
by Lessee hereunder; (iii) any taxes of the Trust Company or the
Beneficiary imposed on or measured by the administrative fees
earned by such Persons in connection with the transaction
contemplated herein; (iv) any taxes of an Indemnified Party
arising by reason of any voluntary transfer of the Lease or
Leased Property or part thereof other than (A) a transfer by
Owner pursuant to an exercise of remedies which are enforceable
after the occurrence of an Event of Default hereunder, (B) a
transfer constituting an Owner Conveyance hereunder; or (C) a
subsequent transfer by the Lender or any nominee, designee or
affiliate thereof if such entity purchases the Leased Property at
a foreclosure sale or accepts a deed-in-lieu of foreclosure to
the Leased Property, and (v) any taxes of an Indemnified Party
arising by reason of the voluntary transfer by the Beneficiary of
its interests held pursuant to the Trust Agreement. As used
herein, the term "Indemnification Period" means the period
commencing on the Closing Date and ending on the date that the
Owner or any Assignee sells, transfers or otherwise conveys such
Person's interest in and to the Leased Property to the Lessee or
a third person. "Principal Party" means any Indemnified Party
other than the Owner, the Beneficiary, the Trust Company or
Kramer. Lessee will promptly notify Owner of all reports or
returns required to be made with respect to any tax or other
imposition with respect to which Lessee is required to indemnity
hereunder, and will promptly provide each of them with all
information necessary for the making and timely filing of such
reports or returns by Owner. If Owner requests that any such
reports or returns be prepared and filed by Lessee, Lessee will
prepare and file the same if permitted by applicable law to file
the same, and if not so permitted, Lessee shall prepare such
report or returns for signature by Owner, and shall forward the
same, together with immediately available funds for payment of
any tax or other imposition due, to Owner, at least ten (10) days
in advance of the date such payment is due. Upon written
request, Lessee shall furnish Owner with copies of all paid
receipts or other appropriate evidence of payment for all taxes
or other impositions paid by Lessee pursuant to this Section 8.
All of the indemnities contained in this Section 8 shall continue
in full force and effect notwithstanding the expiration or
earlier termination of this Lease in whole or in part, including
the expiration or termination of the Term with respect to the
Leased Property, and are expressly made for the benefit of, and
shall be enforceable by, Owner and each Assignee.
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(b) Notwithstanding the provisions of paragraph (a) of this
Section 8 and the provisions of Section 9 and so long as no
Default or Event of Default shall have occurred and be
continuing, Lessee shall have the right to contest, by
appropriate legal proceedings, any tax, charge, levy, assessment,
lien or other encumbrance affecting the Leased Property, and to
postpone payment of or compliance with the same during the
pendency of such contest, provided that (i) the commencement and
continuation of such proceedings shall suspend the collection
thereof from, and suspend the enforcement thereof against, the
Person on whom such tax, charge, levy, assessment, lien or other
encumbrance is sought to be imposed and/or the Leased Property,
(ii) no part of the Leased Property nor any Base Rental or
Additional Rental or other sums payable by Lessee hereunder shall
be in danger of being sold, forfeited, attached or lost, (iii)
there shall not exist (x) any interference with the use and
occupancy of the Leased Property or any part thereof, or (y) any
interference with the payment of Base Rental or any Additional
Rental (other than the portion subject to the contest), (iv)
Lessee shall promptly prosecute such contest to a final
settlement or conclusion, or if Lessee deems it advisable to
abandon such contest, Lessee shall promptly pay or perform the
obligation which was the subject of such contest and (v) at no
time during the permitted contest shall there be a risk of the
imposition of criminal liability on Owner for failure to comply
therewith. If (i) any such contest shall involve an amount of
money or potential loss (including penalties and similar charges)
in excess of $250,000, and (ii) either the Lessee's Parent is not
then Investment Grade or a Default or an Event of Default shall
have occurred and be continuing, then Lessee shall either (A)
deposit with the Owner an amount equal to 125% of the tax,
charge, levy, assessment, lien or other encumbrance affecting the
Leased Property, or (B) post an equivalent bond for security
issued by a surety or other issuer reasonably acceptable to Owner
and containing such terms which are reasonably acceptable to
Owner. Lessee shall not postpone the payment of any such tax,
charge, levy, assessment, lien or other encumbrance for such
length of time as shall permit the Leased Property, or any lien
thereon created by such item being contested, to be sold or
foreclosed by federal, state, county or municipal authority for
the non-payment thereof. Lessee shall not postpone compliance
with any such law, rule, order, ordinance, regulation or other
governmental requirement if Owner will thereby be subject to
criminal prosecution, or if any municipal or other governmental
authority shall be in a position according to applicable law to
commence and carry out any action which would prevent compliance
with the same or to foreclose or sell any lien affecting all or
part of the Leased Property which shall have arisen by reason of
such postponement or failure of compliance. Owner agrees to
provide Lessee with a copy of any of its tax returns upon the
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written request of Lessee.
Section 9. Liens. Lessee represents and warrants that on
the Closing Date, fee simple title in the Leased Property will be
vested in Owner subject only to Permitted Liens. Subject to the
provisions of paragraph (b) of Section 8, Lessee will promptly,
but in any event no later than 60 days after Lessee acquires
actual knowledge of the filing thereof but in any event prior to
the enforcement of the same, at its own expense, remove and
discharge of record, by bond or otherwise, any charge, lien,
security interest or encumbrance upon the Leased Property, upon
any Base Rental, or upon any Additional Rental or other sums
payable by Lessee under this Lease which arises for any reason
(except for Owner Liens) including all liens which arise out of
Lessee's possession, use, construction, operation and occupancy
of the Leased Property, but not including any Permitted Liens.
Nothing contained in this Lease shall be construed as
constituting the consent or request of Owner, express or implied,
to or for the performance by any contractor, laborer,
materialman, or vendor of any labor or services or for the
furnishing of any materials for construction, alteration,
addition, repair or demolition of or to the Leased Property or
any part thereof. Notice is hereby given that Owner will not be
liable for any labor, services or materials furnished or to be
furnished to Lessee, or to anyone holding an interest in the
Leased Property or any part thereof by, through or under Lessee,
and that no mechanic's or other liens for any such labor,
services or materials shall attach to or affect the interest of
Owner in and to the Leased Property. In the event of the failure
of Lessee to discharge any charge, lien, security interest or
encumbrance within the time period set forth above and otherwise
as aforesaid, except during the pendency of any contest permitted
and conducted pursuant to paragraph (b) of Section 8, Owner may
(but shall not be required to) discharge such items by payment or
bond or both, and Lessee will repay to Owner, upon demand, any
and all amounts paid therefor, or by reason of any liability on
such bond, and also any and all reasonable incidental expenses,
including reasonable attorney's fees, incurred by Owner in
connection therewith.
Section 10. Ownership of the Leased Property.
(a) The Owner and the Lessee intend that (i) for financial
accounting purposes with respect to the Lessee, this Lease will
be treated as an "operating lease" pursuant to Statement of
Financial Accounting Standards No. 13, as amended, but (ii) for
federal and all state and local income tax purposes, (A) this
Lease will be treated as a financing arrangement, (B) the
Construction Lender and the Long-Term Lender will be deemed
lenders making loans for the benefit of the Lessee, which loans
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are secured by all of the Leased Property, and (C) the Lessee
will be treated as the owner of all of the Leased Property and
will be entitled to all tax benefits ordinarily available to an
owner of a property similar to the Leased Property for such tax
purposes. Owner and Beneficiary shall take no action
inconsistent with such intent for tax purposes, provided that
nothing in this Section 10(a) shall deemed to restrict the
Owner's right to exercise any remedies after the occurrence of an
Event of Default.
(b) This Lease is a lease intended as security. Lessee
hereby grants to Owner a security interest in all of the Lessee's
right, title and interest in and to the Leased Property
(including, without limitation, all site improvements, base
building, building systems, equipment and related fixtures now or
hereafter existing on the Land), together with any substitutions,
replacements and additions thereto, all of the Lessee's rights in
and to the Approved Construction Documents and all general
intangibles related to the Leased Property and all of Lessee's
rights, claims and damages arising from warranties (whether
express or implied) of architects, contractors and subcontractors
with respect to the development and construction of the
Improvements, and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, investments, securities
or other property, whether in cash, investments, securities or
other property. The Owner and the Lessee shall, to the extent
consistent with this Lease, take such actions and execute,
deliver, file and record such other documents, financing
statements, mortgages and deeds of trust as may be necessary to
ensure that, if this Lease were deemed to create a security
interest in the Leased Property in accordance with this Section
10, such security interest would be deemed to be a perfected
security interest of first priority under applicable federal,
state and local law, subject only to Permitted Liens, and will be
maintained as such throughout the Term.
Section 11. Owner's Disclaimer; Acknowledgement by Lessee.
The Leased Property is demised and let in its present condition
without representation and warranty by Owner subject to (i)
Permitted Liens, (ii) the rights of parties in possession, (iii)
the state of title transferred to Owner on the Closing Date
pursuant to the P&S, (iv) any state of facts which an accurate
survey or physical inspection might show, (v) the existing
environmental condition of the Leased Premises, (vi) all
applicable laws, rules, regulations, ordinances and restrictions,
including, without limitation, all Environmental Legal
Requirements, now in effect or hereafter adopted by any
governmental authority having jurisdiction, and (vii) any
violation of such laws, rules, regulations, ordinances and
restrictions occurring on or before the Closing Date. Lessee has
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examined the Leased Property and the Owner's title and interest
thereto and has found as between Lessee and Owner (and each
Person claiming by, through or under Owner) the same to be
satisfactory for all purposes.
LESSEE REPRESENTS, WARRANTS AND ACKNOWLEDGES THAT THE
CONSTRUCTION OF THE IMPROVEMENTS ON THE LAND WILL BE WITHIN THE
EXCLUSIVE CONTROL OF, AND WILL BE THE SOLE RESPONSIBILITY OF,
LESSEE. OWNER HAS NOT MADE AN INSPECTION OF THE LEASED PROPERTY
AND MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LEASED PROPERTY OR ANY PORTION THEREOF OR THE
LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY,
HABITABILITY, ENVIRONMENTAL CONDITION, COMPLIANCE WITH
SPECIFICATIONS, CONDITION, OPERATION, ABSENCE FROM DEFECTS
(PATENT OR LATENT), DURABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE LEASED PROPERTY OR ANY PORTION THEREOF; AND ALL
RISKS INCIDENTAL TO THE LEASED PROPERTY SHALL BE BORNE BY THE
LESSEE AND THE OWNER SHALL HAVE NO RESPONSIBILITY WITH RESPECT
THERETO. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IN
THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE LEASED
PROPERTY OR ANY PORTION THEREOF, WHETHER PATENT OR LATENT,
WHETHER DISCOVERABLE BY LESSEE, OWNER SHALL NOT HAVE ANY
RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY
DIRECT OR INDIRECT DAMAGE TO PERSONS OR PROPERTY RESULTING
THEREFROM, OR FOR LESSEE'S LOSS OF USE OF THE LEASED PROPERTY, OR
ANY PORTION THEREOF, OR FOR ANY INTERRUPTION IN LESSEE'S
BUSINESS CAUSED BY LESSEE'S INABILITY TO USE THE LEASED PROPERTY,
OR ANY PORTION THEREOF, FOR ANY REASON WHATSOEVER. THE
PROVISIONS OF THIS SECTION 11 HAVE BEEN NEGOTIATED BY LESSEE AND
OWNER AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND DISCLAIMER
BY OWNER OF ANY AND ALL WARRANTIES BY OWNER WITH RESPECT TO THE
LEASED PROPERTY OR ANY PORTION THEREOF, WHETHER EXPRESS OR
IMPLIED, AND WHETHER ARISING UNDER THE UNIFORM COMMERCIAL CODE,
ANY OTHER APPLICABLE LAW OR OTHERWISE. LESSEE REPRESENTS AND
WARRANTS TO OWNER THAT THE PROVISIONS OF THIS SECTION 11 ARE
ENFORCEABLE BY OWNER AGAINST LESSEE (AND THOSE CLAIMING BY,
THROUGH OR UNDER LESSEE) AND THAT OWNER SHALL NOT HAVE ANY
LIABILITY FOR ANY OF THE MATTERS SUBJECT TO THIS DISCLAIMER.
Section 12. Representations of Parties.
Lessee hereby represents and warrants to Owner that as
of the Closing Date and at all times during the Term as follows:
(a) Lessee is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
York, with full corporate power and authority to own its
properties and to conduct its business as currently conducted.
(b) Lessee is qualified to do business as a foreign
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corporation and is in good standing in the State of New Jersey.
(c) Lessee has the corporate power and authority to enter
into this Lease and the Transaction Documents to which it is a
party and to carry out and perform the obligations of Lessee
under the terms hereof and thereof.
(d) The execution, delivery and performance by Lessee of
this Lease and the Transaction Documents to which it is a party
have been duly authorized by all the necessary corporate action
of Lessee and do not (A) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award applicable to Lessee, (B) result in a
breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to
which Lessee is a party or by which it or its properties are
bound, or (C) result in, or require, the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest
or other charge or encumbrance. Lessee is not in violation of or
in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or reward or any such
indenture, agreement, lease or instrument described in this
paragraph.
(e) The Lease and the Transaction Documents to which Lessee
is a party have been duly executed and delivered by Lessee and
constitute the legal, valid and binding obligations of Lessee
enforceable against Lessee in accordance with their terms,
including, without limitation, the choice of laws provisions
therein.
(f) Neither the execution and delivery of this Lease, nor
the payment and performance by Lessee of all of its obligations
hereunder, require the consent or approval of, the giving of
notice to, or the registration, filing or recording with, or the
taking of any other action in respect of, any Federal, state,
local or foreign government or governmental authority or agency
or other Person other than the recording of a Memorandum of
Lease.
(g) All balance sheets, statements of profit and loss and
other financial data that have been delivered to Owner and Lender
with respect to Lessee's Parent (A) are complete and correct in
all material respects, (B) accurately present the financial
condition of Lessee's Parent on the dates for which, and the
results of its operations for the periods for which, the same
have been furnished, and (C) have been prepared in accordance
with generally accepted accounting principles consistently
applied throughout the periods covered thereby, and there has
been no material adverse change in the condition of Lessee or
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Lessee's Parent, financial or otherwise, since the date of the
most recent financial statements delivered to Owner with respect
to Lessee's Parent;
(h) Except as otherwise stated in Schedule I (the "Listed
Permits"), Lessee holds all licenses, certificates and permits
(including any applicable environmental permits) from
governmental authorities necessary to complete the Improvements
pursuant to the Construction Agency Agreement and/or required to
construct the Improvements as contemplated in the Approved
Construction Documents and prior to the Basic Term Commencement
Date, shall obtain all licenses, certificates and permits
(including applicable environmental permits) from governmental
authorities necessary to occupy and use the Leased Property for
its intended purposes. All such licenses, certificates and
permits will remain in full force and effect and be complied with
in all respects.
(i) No litigation or administrative proceedings of or before
any court, tribunal or governmental body is pending, or, to the
knowledge of Lessee, threatened against Lessee or any of its
properties or with respect to this Lease which, if adversely
determined, would have a material adverse effect on the business,
assets or financial condition of Lessee or upon its right to
enter into this Lease or the validity or effectiveness thereof.
(j) Lessee is not in default in the payment or performance
of any of its material obligations or in the performance of any
material contract, agreement or other instrument to which it is a
party or by which it or any of its assets may be bound and which
will continue to exist subsequent to the date hereof.
(k) The Leased Property is not subject to any mortgage,
lien, pledge, charge, encumbrance, security interest or title
retention or other security agreement or arrangement of any
nature whatsoever, except for Permitted Liens.
(l) Lessee has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection
with the transaction contemplated in this Lease or the other
Transaction Documents, except for the fee payable to Cushman and
Wakefield, which fee is listed on the Project Budget and shall be
paid promptly upon becoming due in accordance with the
Construction Agency Agreement.
Owner hereby represents and warrants to Lessee that as of
the Closing Date and at all times during the Term as follows:
(a) Trust Company is a national banking association duly
organized, validly existing and in good standing under the laws
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of the United States of America with full corporate power and
authority to own its properties and to conduct the business
contemplated under the Transaction Documents.
(b) Trust Company is either qualified to do business and is
in good standing in the State of New Jersey or because of the
nature of its activities, Owner is not required to be qualified
to do business in the State of New Jersey.
(c) Owner has the power and authority under its Trust
Agreement to enter into this Lease and the Transaction Documents
to which it is a party and to carry out and perform the
obligations of Owner under the terms hereof and thereof.
(d) The execution, delivery and performance by Owner of this
Lease and the Transaction Documents to which it is a party have
been duly authorized and do not (A) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award applicable to Owner, (B) result in a
breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to
which Owner is a party or by which it or its properties are
bound, or (C) result in, or require, the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest
or other charge or encumbrance. Owner is not in violation of or
in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or reward or any
such indenture, agreement, lease or instrument described in this
paragraph.
(e) The Lease and the Transaction Documents to which Owner
is a party have been duly executed and delivered by Owner and
constitute the legal, valid and binding obligations of Owner
enforceable against Owner in accordance with their terms,
including, without limitation, the choice of laws provisions
therein.
(f) Neither the execution and delivery of this Lease, nor
the performance by Owner of all of its obligations hereunder,
requires the consent or approval of, the giving of notice to, or
the registration, filing or recording with, or the taking of any
other action in respect of, any Federal, state, local or foreign
government or governmental authority or agency or other Person
other than the recording of a Memorandum of Lease.
(g) No litigation or administrative proceedings of or before
any court, tribunal or governmental body is pending, or, to the
knowledge of Owner, threatened against Owner or any of its
properties or with respect to this Lease which, if adversely
determined, would have a material adverse effect on the business,
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assets or financial condition of Owner or upon its right to enter
into this Lease or the validly or effectiveness thereof.
(h) Owner has not contracted with a broker or a finder
relating to or in connection with the transactions contemplated
in this Lease or the other Transaction Documents.
(i) Owner will not, during the entire term of this Lease,
engage in any business other than the business of owning the
Leased Property and will not incur any debts other than the debts
contemplated in the Transaction Documents and debts incurred to
satisfy and discharge such debts.
Section 13. Maintenance; Quiet Enjoyment.
(a) In addition to the other covenants contained in this
Lease, Lessee hereby further covenants and agrees that during the
Term of this Lease:
(i) Lessee acknowledges that on and as of the Basic Term
Commencement Date, all Improvements will be in new condition,
repair and appearance, subject only to the completion of the
"punchlist items" set forth in writing on such date and
referenced in Section 10.15 of the Construction Agency Agreement.
Lessee shall, at its cost and expense, keep and maintain the
Improvements, including any altered, rebuilt, additional or
substituted buildings, structured and other improvements thereto,
in the same condition as on the Basic Term Commencement Date (or
with respect to any "punchlist items" acquired or constructed
subsequent thereto, in the same condition as on the date that
such "punchlist items" have been Substantially Completed and the
provisions of Section 10.15 of the Construction Agency Agreement
in respect thereof have been satisfied), ordinary wear and tear
excepted, and on a basis consistent with the operation and
maintenance of first class office buildings, warehouse facilities
and/or light manufacturing facilities and other uses permitted
under Section 6 hereof, as the case may be, comparable in style
and location to the Leased Property and in no event less than the
standards applied by Lessee or its Affiliates in the operation of
other comparable properties owned or leased by Lessee or its
Affiliates. Lessee will make all structural and nonstructural,
and ordinary and extraordinary changes, repairs and replacements,
foreseen or unforeseen, which may be required, whether or not
caused by its act or omission, to be made upon or in connection
with the Improvements in order to keep the same in such
condition, including taking, or causing to be taken, action
necessary to maintain the Leased Property in compliance with the
provisions of any insurance policy with respect to the Leased
Property and any applicable Legal Requirements, including all
applicable Environmental Legal Requirements. Lessee shall
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provide or cause to be provided all security service, custodial
service, janitorial service and other services necessary for the
proper upkeep and maintenance of the Leased Property.
(ii) Lessee covenants to perform or observe all
terms, covenants or conditions of any Permitted Liens, easement
or maintenance agreements to which it may at any time be a party
or to which the Leased Property or any portion thereof is subject
at any time or any other like matters which now or hereafter
affect the Leased Property, the Owner, the Lease or any one of
the foregoing. Lessee shall, at its expense, use its reasonable
efforts, consistent with sound business practice, to enforce
compliance with any Permitted Liens, easement, or maintenance
agreements or similar agreements benefiting the Leased Property
or any portion thereof by any other Person subject to such
agreement, provided, however, that if a failure to comply with
any of the foregoing would adversely affect the utility, fair
market value or useful life of the Leased Property, the Lessee
shall enforce compliance with the same. Lessee expressly waives
the right to make repairs at the expense of the Owner pursuant to
any law at any time in effect that would impose any such
obligations on a lessor or give any such rights to a lessor.
Lessee shall not abandon the Leased Property or any portion
thereof or commit waste thereon.
(iii) If any Improvements situated on the Leased
Property at any time during the Term of this Lease shall encroach
upon any property, street or right-of-way adjoining or adjacent
to the Leased Property, or shall violate the agreements or
conditions contained in any restrictive covenant affecting the
Leased Property or any part thereof, or shall impair the rights
of others under or obstruct any easement or right-of-way to which
the Leased Property is subject, then, promptly after the written
request of Owner or any Person affected by any such encroachment,
violation, impairment or obstruction, Lessee shall, at its
expense, either (A) obtain effective waivers or settlements of
all claims, liabilities and damages resulting from each such
encroachment, violation, impairment or obstruction whether the
same shall affect Owner, Lessee, the Construction Lender, the
Long-Term Lender or the LC Issuer or any one or more of the
foregoing, or (B) make such changes in the Improvements on the
Leased Property and take such other action as shall be necessary
to remove such encroachments or obstructions and to end such
violations or impairments, including, if necessary, the
alteration or removal of any Improvement on the Leased Property.
Any such alteration or removal shall be made in conformity with
the requirements of Section 17 to the same extent as if such
alteration or removal were an alteration under Section 17 of this
Lease and there shall be no abatement of Basic Rental or
Additional Rental by reason of such alteration or removal.
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(iv) Owner shall have no obligation to incur any
expense of any kind or character in connection with the
management, operation or maintenance of the Leased Property
during the Term of this Lease. Owner shall not be required at
any time to make any improvements, alterations, changes,
additions, repairs or replacements of any nature whatsoever in or
to the Leased Property. Lessee shall use and operate the Leased
Property or cause it to be used and operated only by personnel
authorized by Lessee, and Lessee shall use reasonable precautions
to prevent loss or damage to the Leased Property from fire and
other hazards.
(v) Lessee shall pay all charges for utility,
communication and other services on or about the Leased Property,
whether or not payment therefor shall become due after the Term
of this Lease.
(vi) Other than the provisions of Section 13(b)
hereof, Lessee shall perform all covenants and agreements (except
for those covenants and agreements which are by their express
terms capable of being, or specifically required to be, performed
by Owner acting alone) which it and/or Owner agree to perform
under the Construction Loan Documents, the Long-Term Loan
Documents, the Construction Agency Agreement and the other
Transaction Documents.
(b) Owner hereby covenants and agrees that during the Term
of this Lease it shall not take any affirmative action which will
interfere with the quiet use and enjoyment of the Leased Property
by Lessee, that it will not fail to take any affirmative action
required to prevent interference with the quiet use and enjoyment
of the Leased Property as contemplated under this Lease by
Lessee, unless such interference arises out of a Default or Event
of Default by Lessee and that each lender whose debt is secured
by a lien on the Leased Property shall enter into an agreement
with Lessee to such effect that such lender shall not disturb
Lessee's occupancy of the Leased Property and shall respect all
Lessee's right under this Lease, including Lessee's right to
purchase as provided in Section 4(c) above and in Section 29
below, so long as no Event of Default shall have occurred under
this Lease and provided that Lessee shall have entered into an
agreement, satisfactory in all respects to Lessee, subordinating
its interest in the Leased Property to the lien of such lender
and agreeing to attorn to such lender in the event of
foreclosure. Owner further covenants and agrees that, so long as
no Default or Event of Default shall have occurred and be
continuing and provided that Lessee shall bear all associated
costs, it shall take all reasonably necessary actions as owner of
the Leased Property (i) to permit Lessee or its nominee to
exercise Owner's voting rights as a member of the Campus
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Conservation and Management Association, Inc., a New Jersey not-
for-profit corporation (the "Association") and serve as Owner's
representative on the Association's Design Review Committee,
provided that such exercise and representation shall be
consistent with and permitted by the By-Laws and Articles of
Incorporation of the Association; and (ii) to grant and/or to
convey such necessary utility easements or rights of passage over
the Leased Property as may be necessary to enable the Lessee to
operate the Leased Property for the uses permitted under Section
6 hereof.
Section 14. Compliance with Legal Requirements. Lessee
shall at all times, at Lessee's own cost and expense, perform and
comply with all laws, rules, orders, ordinances, regulations and
requirements now or hereafter enacted or promulgated, of every
government and municipality having jurisdiction over the Leased
Property and of any agency thereof, relating to the Leased
Property, or the improvement thereon, or the facilities or
equipment thereon or therein, or the streets, sidewalks, vaults,
vault spaces, curbs and gutters adjoining the Leased Property, or
the appurtenances to the Leased Property, or the franchise and
privileges connected therewith (collectively, "Legal
Requirements"), whether or not such Legal Requirements so
involved shall necessitate structural changes, improvements,
interference with use and enjoyment of the Leased Property,
replacements or repairs, extraordinary as well as ordinary, and
Lessee shall so perform and comply, whether or not such Legal
Requirements shall now exist or shall hereafter be enacted or
promulgated, and whether or not such Legal Requirements can be
said to be within the present contemplation of the parties
hereto. Lessee shall, at its expense, comply with all provisions
of insurance policies required pursuant to Section 15 hereof, and
with the provisions of all Permitted Liens and all contracts,
agreements, instruments and restrictions existing at the
commencement of this Lease or thereafter suffered or permitted by
Lessee, affecting the Leased Property or any part thereof or the
ownership, occupancy, use, operation or possession thereof.
Lessee shall at all times comply with the terms of and perform
its obligations under any assignment to Lender of this Lease and
any consent of Lessee to such assignment.
Notwithstanding the foregoing provisions of this Section 14
and so long as no Default or Event of Default shall have occurred
and be continuing, Lessee shall have the right to contest by
appropriate legal proceedings, any order or other direction
issued by any federal, state or local governmental agency which
order or direction affects the Lessee or the Leased Property, and
to postpone compliance with the same during the pendency of such
contest, provided that (i) the commencement and continuation of
such proceedings shall suspend the enforcement of such order or
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direction, (ii) no part of the Leased Property nor any Base
Rental or Additional Rental or other sums payable by Lessee
hereunder shall be in danger of being sold, forfeited, attached
or lost, (iii) there shall not exist (x) any interference with
the use or occupancy of the Leased Property or any part thereof,
or (y) any interference with the payment of Base Rental or
Additional Rental (iv) Lessee shall promptly prosecute such
contest to a final settlement or conclusion, or if Lessee deems
it advisable to abandon such contest, Lessee shall promptly pay
or perform the obligation which was the subject to such contest,
and (v) at no time during the permitted contest shall there be a
risk of the imposition of criminal liability on Owner for failure
to comply therewith. If (i) any such contest shall involve an
amount of money, or potential loss (including penalties and
similar charges) in excess of $100,000, and (ii) either Lessee's
Parent is not then Investment Grade or a Default or an Event of
Default shall have occurred and be continuing, then Lessee shall
either (A) deposit with the Owner an amount equal to 125% of the
amount of money or potential loss involved in such contest or (B)
post an equivalent bond for security issued by a surety or other
issuer reasonably acceptable to Owner and containing such terms
which are reasonably acceptable to Owner. In no event shall
Lessee postpone the payment or performance of the order or
direction for such length of time as shall permit the Leased
Property, or any lien thereon created by such order or direction
being contested, to be sold or foreclosed by any federal, state,
county or municipal authority for the nonpayment or
nonperformance thereof. Lessee shall not postpone compliance
with any such order or direction if Owner will thereby be subject
to criminal prosecution, or if any governmental authority shall
be in a position according to applicable law to commence or carry
out any action which would then prohibit compliance with same or
to foreclose or sell any lien affecting all or a part of the
Leased Property which shall have arisen by reason of such
postponement or failure of compliance.
Section 15. Insurance. Lessee shall during the Term of
this Lease obtain and maintain or cause to be obtained and
maintained at all times the following insurance:
(1) A policy or policies of insurance against loss or
damage to the Leased Property and all replacement and
additions thereto known as "all risk" without exception
(other than those approved by Owner in writing). During the
Construction Period, the Lessee shall maintain builder's
risk insurance in "completed value non-reporting form" (and
which shall include all insurance required to be carried by
Lessee, as "owner," under the provisions of the construction
contracts let by Lessee). Such insurance shall insure the
Improvements, including all materials in storage and while
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in transit during the Construction Period, against loss or
damage by fire or other casualty, with extended coverage and
with coverage for such other hazards (including "collapse,"
"explosion," "underground hazards," "vandalism and malicious
mischief," and coverage in so-called "all-risk" form) as
either the Owner or the Lender may from time to time
require. All such insurance shall contain a replacement
cost endorsement (which shall evidence coverage of 100% of
full replacement cost, with only those deductibles approved
by Owner, Lender and LC Issuer) and, if required by either
Owner or Lender, an agreed amount endorsement.
(2) If any portions of the Leased Property is located in
an area designated by the Secretary of Housing and Urban
Development as having special flood hazards, flood insurance
in the maximum available amount.
(3) Comprehensive public liability insurance, naming
Owner, Beneficiary, Kramer and Trust Company, each as
insured and Lender and LC Issuer, each as additional
insured, against legal liability for claims for death,
personal injury, bodily injury, or property damage occurring
on, in or about the Leased Property and the adjoining land,
streets, sidewalks or ways or occurring as a result of
construction and use of the Improvements on the Land or as a
result of any activities taking place on the Leased Property
after construction, with liability insurance limits of not
less than $20,000,000 combined single limit for personal
injury and property damage.
(4) Boiler and machinery insurance commencing at such
time as fixtures and equipment are connected and ready for
use.
(5) Workers' compensation insurance issued by a
responsible carrier authorized under the laws of the State
of New Jersey to insure employers against liability for
compensation or in lieu thereof, such workers' compensation
insurance to cover all persons employed by Lessee in
connection with the Leased Property and to cover full
liability for compensation under any such act aforesaid.
(6) Business interruption insurance to cover loss
resulting from delay of the completion of the Improvements.
After the Basic Term Commencement Date, such insurance shall
cover loss of use, total or partial, of any part of the
Leased Property in an amount sufficient at all times to pay
the total Base Rental and Additional Rental payable under
this Lease with respect to the Leased Property for a period
adequate to cover the period of loss of use of any part of
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the Leased Property. Such policy shall provide that the
amount payable thereunder shall not be less than an amount
equal to one (1) year's Base Rental and Additional Rental.
(7) Professional liability insurance covering all
architects and engineers involved in the design and/or
construction of the Improvements.
(8) Such other insurance coverages in such amounts as
the Owner may reasonably request consistent with the
customary practices of prudent developers and owners of
similar properties or which Owner is required to maintain
under either the Construction Loan or Long-Term Loan.
The originals or duplicate originals of such policies
required shall be deposited with the Owner by Lessee on the
Closing Date and thereafter, no less frequently than annually and
in no event later than thirty (30) days prior to the commencement
of the Basic Lease Term and each Extension Lease Term. With
respect to the policies described under subparagraphs (1), (2),
(4) and, if applicable, (8), the Lessee also shall deliver
originals or duplicate originals evidencing the coverage required
under said subparagraphs to Lender; with respect to all other
insurance, the Lessee shall deliver insurance certificates naming
Lender as the certificateholder, the form and substance of such
certificates to be satisfactory to Lender and shall be issued by
the insurer or a duly authorized agent of the insurer and shall
be accompanied by evidence of the full payment of premiums.
All policies of property insurance provided for therein
shall name the Owner and Trust Company as insured, and all
liability policies (other than the policies discussed under
paragraph (7) above) shall name the Owner, Trust Company, Lender
and LC Issuer as additional insured, as its interests may appear
and the policies required under paragraphs (1), (2), (4) and (6)
above shall identify the Owner as the owner of the Leased
Property. The Lessee shall be required to deliver copies of
insurance certificates evidencing the insurance coverage required
under paragraph (7) received from its architects and engineers in
the form required under the Lessee's agreements with such
parties. In addition, all insurance required under this Lease
shall be with companies and in form, amounts and with coverage
and deductibles satisfactory to the Lender, and containing a
standard mortgagee clause form endorsement naming the Lender as
loss payee and mortgagee. All insurance carriers shall have a
Best Insurance Guide rating of "A-XI" or better (or an equivalent
rating from another publication of a similar nature as shall be
in current use and approved by the Owner and the Lender) and
shall be qualified to do business in the State of New Jersey.
All policies required under this Section 15 shall provide that
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(i) the insurance evidence thereby shall not be cancelled or
modified without at least thirty (30) days' prior written notice
from the insurance carrier to the Owner and the Lender, (ii) no
act or omission on the part of the Lessee shall invalidate the
coverage as to the Owner, Trust Company and LC Issuer and no act
or omission on the part of the Owner or the Lessee shall
invalidate the coverage as to the Lender and (iii) no claims
shall be paid thereunder without ten (10) days' advance written
notice to the Owner and the Lender. Furthermore, the Lessee
shall be required to deliver renewal policies of all insurance
required under this Section 15, together with written evidence of
full payment of the annual premiums therefor, at least thirty
(30) days prior to the expiration of the existing insurance
period. All insurance policies and endorsements shall be fully
prepaid and nonassessable. The Lessee shall not obtain any
separate or additional insurance which is contributing in the
event of loss unless the Owner, Trust Company, LC Issuer and
Lender are each insured thereunder (as their interests may
appear) and the policies therefor are satisfactory to the Owner
and the Lender.
Section 16. Loss, Damage or Destruction.
(a) Risk of Loss, Damage or Destruction. Lessee hereby
assumes all risk of loss, damage, theft, Taking, destruction,
confiscation, requisition or commandeering, partial or complete,
of or to the Leased Property, however caused or occasioned, such
risk to be borne by Lessee with respect to the Leased Property
from and after the Closing Date. Lessee agrees that no
occurrence specified in the preceding sentence shall impair, in
whole or in part, any obligation of Lessee under this Lease,
including, without limitation, the obligation to pay Base Rental
and Additional Rental.
(b) Lessee hereby assigns to Owner any award, compensation,
insurance proceeds or other payment to which Lessee may become
entitled by reason of its interest in the Leased Property, (i) if
the Leased Property, or any portion thereof, is damaged or
destroyed by fire or other hazard or casualty or cause (a
"Casualty"), or (ii) by reason of any condemnation, requisition
or other taking or sale of the use, occupancy or title to the
Leased Property or any portion thereof in, by or on account of
any actual or threatened Taking. So long as no Event of Default
has occurred and is continuing, Lessee shall, at its cost and
expense, in the name and on behalf of Owner, Lessee, Lender, LC
Issuer or otherwise, appear in any such proceeding or other
action, to negotiate, accept and prosecute any claim for any
award, compensation, insurance proceeds or other payment on
account of any such loss, damage or destruction, condemnation,
requisition or other taking or sale and to cause any such award,
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compensation, insurance proceeds or other payment to be paid to
Owner. Lessee shall use its commercially reasonable efforts to
achieve the maximum award or other recovery obtainable under the
circumstances. Any negotiated awards, settlement or recoveries
shall be subject to Owner's prior approval. Owner may appear in
any such proceeding or other action, in a manner consistent with
the foregoing and the costs and expenses of any such appearance
shall be borne by Lessee and payable to Owner as Additional Rent.
If an Event of Default has occurred and is continuing, the Owner
shall have the right to negotiate, adjust and settle such awards,
settlements and recoveries without the approval of Lessee.
Unless either the Lessee's Parent is not then Investment Grade or
a Default or an Event of Default shall have occurred and be
continuing, the Lessee shall be entitled to receive all amounts
paid or payable for any Casualty or Taking of all or any portion
of the Leased Property, subject to the prior rights of Lender and
less any costs and expenses incurred by Owner or Lender in
connection with the negotiation, settlement or collection of such
amounts (the amounts received for any Casualty, less such costs
and expenses, shall be referred to as the "Net Casualty Award"
and the amounts received for any Taking, less such costs and
expenses, shall be referred to as the "Net Taking Award"),
otherwise the Owner shall be entitled to receive the Net Taking
Award or the Net Casualty Award. All such amounts shall be
applied either (x) to the payment of the Termination Value and
the other amounts due under Section 16(c) hereof, if such
Casualty or Taking results in, or the Lessee elects to deem such
Casualty or Taking as, an Event of Loss, or (y) to pay in
accordance with Section 16(d) hereof for the actual cost of
repair, restoration, rebuilding or replacement of the
Improvements by Lessee (collectively, "Cost To Repair") if such
Casualty or Taking does not result in, or the Lessee does not
elect to deem such Casualty or Taking as, an Event of Loss.
(c) If a Taking or Casualty to the Leased Property occurs,
Lessee shall give Owner immediate telephonic notice thereof
followed promptly by written notice, and describe in reasonable
detail in each case the circumstances of the Taking or Casualty
and the damage to or loss of the Leased Property. If the Taking
or Casualty constitutes an Event of Loss, Lessee shall pay to
Owner on the Rent Payment Date next following the date of such
Event of Loss (or, if prior to the Basic Term Commencement Date,
on the thirtieth (30th) day after the final determination that
the Taking or Casualty constitutes an Event of Loss or, if after
the Basic Term Commencement Date, on the last day of the Rental
Period in which such Event of Loss occurs if there is no
succeeding Rent Payment Date) the sum of (i) all unpaid Base
Rental due on or before such Rent Payment Date or such last day
of the Rental Period, plus (ii) the Termination Value as of the
Rent Payment Date next following the date of such Event of Loss,
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or if the Event of Loss occurs prior to the Basic Term
Commencement Date, an amount equal to one hundred percent (100%)
of all Project Costs (incurred through the date of payment) in
lieu of the Termination Value plus, to the extent such amounts
have not been included in Project Costs, all interest, costs,
fees, reimbursements and other amounts due and payable either to
Owner or Lender under the Transaction Documents, plus (iii)
Additional Rental due as of the date of payment of the amounts
specified in the foregoing clauses (i) and (ii), plus (iv) the
Reinvestment Premium. Any payments received at any time by Owner
or by Lessee constituting Net Casualty Award or Net Taking Award
from any insurer or other party (except Lessee) as a result of
the occurrence of such Event of Loss will be applied in reduction
of Lessee's obligation to pay the foregoing amounts, if not
already paid by Lessee, or, if already fully paid by Lessee, will
be applied to reimburse Lessee for its payment of such amount.
Upon payment in full of such Termination Value, Base Rental,
Additional Rental and Reinvestment Premium, (A) the obligation of
Lessee to pay Base Rental hereunder shall terminate and the Term
of this Lease shall thereupon terminate, and (B) the Owner shall
transfer to Lessee all of the Owner's interest in the Leased
Property in accordance with the provisions of Section 32 hereof.
As used in this Lease, the term "Termination Value" of the Leased
Property as of any Rent Payment Date means an amount determined
by multiplying the Project Costs by the percentage set forth
opposite such Rent Payment Date on the schedule of Termination
Values appearing in Exhibit D. An "Event of Loss" shall be
deemed to have occurred if either (a) with respect to a Casualty,
the Costs To Repair is equal to or greater than sixty-six and
two-thirds percent (66 2/3%) of the full replacement cost of the
Improvements; or (b) with respect to a Taking, the Taking renders
the Leased Property or any substantial portion thereof
permanently unfit for its intended use under the Lease. For
purposes of determining whether an Event of Loss has occurred, it
shall be assumed that the Leased Property or the affected portion
had been repaired or restored to the fullest extent reasonably
practicable. Either the Owner or the Lessee may declare that the
Taking or Casualty constitutes an Event of Loss, provided,
however, that the Lessee may deem such Taking or Casualty as an
"Event of Loss," regardless of the amount of the Costs To Repair,
with respect to a Casualty, and regardless of the effect of the
Taking on the utility of the Leased Property, with respect to a
Taking, and pay the Owner the Termination Value and the other
amounts required to be paid under this Section 16(c). Upon
making such determination, the party making such determination
shall notify the other party in writing thereof. If Owner
determines that such Taking or Casualty constitutes an Event of
Loss, it shall notify the Lessee thereof and the Lessee shall
have ten (10) days from the date the Owner delivers notice of its
determination to initiate a challenge in writing to such
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determination pursuant to the provisions of Section 16(f) below.
If no challenge in writing is made by the Lessee of an Owner's
determination of an Event of Loss, such determination shall be
binding upon Lessee. If Owner and Lessee determine that such
Taking or Casualty does not constitute an Event of Loss (or if
Owner's determination of an Event of Loss is not upheld after
arbitration pursuant to Section 16(f) hereof), Lessee shall be
required to repair, replace and restore the Leased Property as
provided in paragraph (d) below.
(d) If a Taking or Casualty to the Leased Property occurs
which does not result in (or is not otherwise deemed to
constitute) an Event of Loss and the Lessee elects to repair,
replace and restore the Leased Property, it shall, at its sole
cost and regardless of whether any amounts constituting a Net
Casualty Award or Net Taking Award are made available to Lessee
for such purpose, proceed with diligence and promptness to carry
out any demolition and to restore, repair, replace and/or rebuild
the Leased Property, as nearly as practicable, to a condition and
fair market value not less than the condition required to be
maintained and fair market value thereof immediately prior to
such Taking or Casualty. No repair or restoration work
undertaken by Lessee pursuant to this Section shall violate the
terms of any Permitted Lien or other restriction, easement,
condition or covenant or other matter affecting title to the
Leased Property, and shall be undertaken and completed in a good
and workmanlike manner and in compliance in all material respects
with all Legal Requirements then in effect with respect to the
Leased Property. If the Lessee elects to repair, replace and
restore the Leased Property, it agrees to submit for approval by
Owner all plans, specifications, cost estimates and contracts for
the restoration or repair of the loss or damage, provided,
however, the Owner shall not unreasonably withhold such approval
provided that the utility, fair market value and useful life of
the Leased Property after the restoration or repair is not less
than the utility, fair market value and useful life of the Leased
Property prior to the Taking or Casualty.
Unless otherwise agreed to by Owner, any Net Casualty Award
or Net Taking Award received by Owner will be released in partial
monthly disbursements equal to ninety percent (90%) of the value
of the work completed (or if the contract is on a cost-plus
basis, then monthly advances of ninety percent (90%) of the costs
of the work completed if less than the value of the work). The
release by Owner of Net Casualty Awards or Net Taking Awards
shall be subject to the satisfaction of the following conditions:
(i) no Default or Event of Default shall have occurred
and be continuing hereunder;
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(ii) Owner is in receipt of any architect's
certificates, contractor's sworn statements and other evidence of
costs, payments and completion as the Owner may require and
satisfactory evidence of payment and release of all Liens of
contractors, sub-contractors, and materialmen and of any other
Person providing work, service or materials in connection with
the repair, replacement and restoration of the Leased Premises;
(iii) Receipt by Owner of all approvals of any
municipal or other governmental authorities having jurisdiction
over the Leased Premises and all approvals required under any
Permitted Liens.
The final payment shall be released by Owner upon completion
of the restoration and repairs provided that the conditions set
forth above have been met in full. The Lessee agrees at the
Owner's request to provide the Owner with copies of any as-built
surveys and as-built plans and specifications of the Leased
Property after completion of the restoration and repair of the
Leased Property.
(e) The Lessee's obligation to pay Base Rental and
Additional Rental shall not abate by reason of a Taking or a
Casualty, and this Lease shall continue in full force and effect
and Lessee shall continue to perform and fulfill all obligations,
covenants and agreements hereunder notwithstanding such Taking or
Casualty.
(f) In the event the Lessee objects to the Owner's
determination that a Taking or a Casualty constitutes an Event of
Loss and notifies the Owner in writing of its objection, the
parties agree in good faith to attempt to resolve the dispute
through negotiation and agree to refer the matter to one or more
of their respective officers or employees who have the authority
to resolve the dispute. If no resolution is reached within ten
(10) days (or such longer period as the parties may mutually
determine), then Lessee and Owner shall submit to arbitration
before a single arbiter in Morristown, New Jersey, under the
Commercial Arbitration Rules of the American Arbitration
Association then in effect. The resulting decision of the
arbiter shall be deemed final from which no appeal or review may
be taken. All expenses and costs of such arbitration shall be
borne by the party not prevailing in the proceeding.
(g) If a Taking or Casualty occurs while the Construction
Loan is outstanding, then notwithstanding the provisions of this
Section 16 to the contrary, the rights of the parties hereto as
to the adjustment of claims, the retainage of the proceeds of a
Taking or Casualty, the use of such proceeds to repair or restore
the Leased Property or to pay the Construction Loan and any other
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matters pertaining to a Taking or Casualty shall be determined in
accordance with the provisions of Section 14 of the Construction
Loan Agreement. The exercise by Lender of any right by the
Construction Lender to accelerate the Construction Loan in
accordance with Section 14 of the Construction Loan Agreement
shall be conclusively deemed an "Event of Loss" hereunder which
requires the payment of the amounts set forth in Section 16(c)
above. If the Construction Lender applies any proceeds of a
Taking or a Casualty to pay-down the Construction Loan, the
amount of the Project Costs payable by Lessee shall be
appropriately reduced hereunder.
Section 17. Additions and Improvements; Removal. Prior to
the Basic Term Commencement Date, Lessee shall cause the
development and construction of the Improvements in accordance
with the Approved Construction Documents and subject to the terms
and conditions of this Lease, the Construction Agency Agreement
and the other Transaction Documents. Subject to the requirements
of law, Lessee shall have the right (from and after the Basic
Term Commencement Date) during the Term of this Lease to make any
additions or improvements to the Leased Property to attach
fixtures, structures or signs, and to affix any personal property
to the Leased Property, so long as (i) the utility, fair market
value and useful life of the Leased Property is not thereby
reduced, (ii) prior to the construction of any structural
improvement, Lessee shall deliver a certificate of an AIA
registered architect and a certificate of a registered engineer
to the effect that the planned structural improvement will comply
with all Legal Requirements, will not adversely affect or
interfere with the utility, operation or structural integrity of
the then existing Improvements and shall conform to the character
and quality of the existing Improvements, (iii) Lessee shall
finance such construction with its own funds or through a
borrowing unsecured by the Leased Property. Each such
improvement (and all fixtures and equipment included as a part
thereof) shall be deemed a part of the Leased Property and become
part of Owner's property. Lessee may remove, during or at the
expiration or other termination of the Term of this Lease, all
equipment and personal property placed or installed in or upon
the Leased Property after the Basic Term Commencement Date by
Lessee or under its authority, other than any equipment or
personal property included as a part of the Leased Property title
to which, prior to the exercise of Lessee's purchase option or a
third party sale, is held by the Owner, provided that Lessee
shall repair any damage to the Leased Property resulting from
such removal.
Section 18. Right Of Entry. Representatives of the Owner
shall have the right to enter upon the Leased Property (and to
review and copy Lessee's records regarding the Leased Property)
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during reasonable business hours (i) to inspect the same
(including, without limitation, the use of photographic and video
equipment) or (ii) for any purpose connected with the rights or
obligations of the parties under this Lease.
Section 19. Assignments and Subleasing.
(a) By Lessee. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
BELOW, LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF
OWNER IN EACH INSTANCE, SUBLEASE OR OTHERWISE RELINQUISH
POSSESSION OF THE LEASED PROPERTY OR ANY PART THEREOF, OR ASSIGN,
TRANSFER, MORTGAGE OR ENCUMBER ITS RIGHTS, INTERESTS OR
OBLIGATIONS HEREUNDER AND ANY ATTEMPTED SUBLEASE, RELINQUISHMENT,
ASSIGNMENT, TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL AND
VOID. Furthermore, Lessee shall not be permitted to merge,
consolidate or sell a substantial portion of its assets (other
than inventory in the ordinary course of its business) without
Owner's prior written consent in each instance unless each of the
following conditions are met in full or waived in writing by
Owner (i) the surviving, resulting or acquiring entity expressly
assumes in writing all of Lessee's past, current and future
obligations and liabilities under this Lease, the form and
content of such documentation, including an opinion of counsel,
to be satisfactory to Owner in its sole and absolute discretion,
(ii) at the time of such merger, consolidation or sale, no Event
of Default shall have occurred and be continuing, (iii) all of
the representations of Lessee set forth in Section 12 hereof
shall be true and correct with respect to the surviving,
resulting or acquiring entity as if made directly by such entity
as of the date of the merger, consolidation or sale (except that
such entity may be a corporation organized under the laws of a
jurisdiction other than the State of New York and may be a
partnership, limited liability company or business trust provided
that such entity is duly qualified to transact business in the
State of New Jersey); and (iv) prior to the consummation of such
merger, consolidation or sale, the Owner has received a
certificate from one of the so-called "big six" firms of
independent certified public accountants (or any of their
successors) selected by Lessee and approved by the Owner to the
effect that the tangible net worth (as determined in accordance
with GAAP consistently applied) of such surviving, resulting or
acquiring entity shall be no less than the tangible net worth of
Lessee immediately prior to such merger, consolidation or sale;
notwithstanding the foregoing, Lessee may freely sublet all or
any portion of the Leased Premises at any time after the Basic
Lease Term Commencement Date, for all or any portion of the
remaining Term, and may assign this Lease or any of its rights
hereunder, provided however, (i) that Lessee remains primarily
liable hereunder (as a principal and not as a surety), (ii)
Lessee certifies in writing to Owner, in advance of such sublease
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or assignment, that such sublease or assignment does not
materially adversely affect the value of the Leased Property,
provided that such certification shall not be necessary in the
case of any sublease or assignment to any corporation,
partnership, limited liability company or business trust
controlling, controlled by or under common with Lessee by reason
of stock or equity ownership of greater than fifty percent (50%),
(iii) the proposed sublease provides that it terminates no later
than the day prior to the Termination Date, (iv) the sublease
expressly states that it is subject and subordinate to this
Lease, (v) the proposed sublease contains provisions regarding
use, lien lifting, maintenance, insurance, casualty and
condemnation, additions and improvements, right of entry,
environmental matters, repossession after default and further
assurances all in favor of the Lessee, as sublessor under the
proposed sublease, which are, in the reasonable determination of
the Owner, no less favorable to the Lessee, as sublessor, than
the corresponding provisions of this Lease are to the Owner, (vi)
if the Lessee's Parent is not Investment Grade at any time while
the proposed sublease is in effect, the Lessee will execute and
deliver any documents and instruments and take any actions
reasonably required by Owner to collaterally assign the Lessee's
interest in and rights under the sublease to the Owner and, if
required by the Lender, to the Lender, and (vii) Lessee notifies
the Owner in writing of the sublease and delivers an executed
copy thereof to Owner.
(b) By Owner. This Lease and all Base Rental and Additional
Rental (except for the Excepted Rights) due and to become due
hereunder is being contemporaneously assigned by Owner to Lender,
and Owner is contemporaneously herewith granting a mortgage and a
security interest in this Lease, the Base Rental and all
Additional Rental (except for the Excepted Rights) due and to
become due hereunder to Construction Lender under the Assignment
of Leases and Rents. On or prior to the Basic Term Commencement
Date, the Construction Lender shall assign such Assignment of
Leases and of Rents to the Long-Term Lender, or the Owner and
Long-Term Lender may enter into a separate collateral assignment
of this Lease, to secure the Long-Term Loan and any and all other
obligations of the Owner to the Long-Term Lender. Lessee and
Owner agree that the Base Rental, all Additional Rental (other
than the Excepted Rights) and any other amounts payable by Lessee
to Owner hereunder (except with respect to the Excepted Rights)
shall be paid directly to Lender (on behalf of Owner) or upon its
written order until the Loan shall have been paid in full. The
Lender may re-assign and/or grant a security interest in any of
such rights, obligations, title or interest assigned to such
Lender. Lessee agrees to execute the Assignment of Leases and
Rents and other documents that may be requested by Owner or the
Lender. Lessee acknowledges receipt of an executed counterpart
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of the Loan Documents and Investor Loan Documents. Any Person to
whom any sale, assignment, transfer or grant of security interest
is made by Owner is herein called an "Assignee"
Without limiting the foregoing or any of the provisions of
Section 7 hereof, Lessee further acknowledges and agrees that (i)
the rights of the Lender in and to the sums payable by Lessee
under any provision of this Lease shall not be subject to any
abatement whatsoever and shall not be subject to any defense,
set-off, counterclaim or recoupment whatsoever, whether by reason
of failure of or defect in Owner's title, or any interruption
from whatsoever cause in the use, operation or occupancy of the
Leased Property, or any damage to, loss, destruction, reduction
or impairment of the Leased Property for any reason whatsoever,
or by reason of any other indebtedness or liability, howsoever
and whenever arising, of Owner to Lessee or to any other Person
or for any cause whatsoever, it being the intent hereof that
Lessee shall be unconditionally and absolutely obligated to pay
directly to the Lender (on behalf of Owner) all of the Base
Rental and all Additional Rental (except the Excepted Rights
which remain payable directly to Owner) payable by Lessee
hereunder; (ii) Lessee's covenants, representations and
warranties in this Lease (including, without limitation, in
Section 12 hereof) shall be deemed to be made to and for the
benefit of, the Lender and the LC Issuer as well as Owner; and
(iii) the Lender shall be entitled to the benefit of all
covenants and obligations to be performed by Lessee under this
Lease, except Lessee's covenants and obligations relating to
Excepted Rights. Notwithstanding the assignment to the Lender,
Lessee and Owner acknowledge that all obligations of Owner to
Lessee under this Lease shall be and remain enforceable by Lessee
against, and only against, Owner. Notwithstanding the foregoing,
Owner agrees that Lessee's rights under this Lease shall not be
subordinate to the rights of any mortgagee or other lender taking
security in the Leased Property unless such mortgagee or lender
shall agree, with or for the benefit of Lessee, that it shall not
disturb Lessee's possession under the Lease and shall respect
Lessee's right to purchase the Leased Property under the terms of
this Lease, so long as no Event of Default shall have occurred
and be continuing under this Lease. If a mortgagee or lender who
has taken security in the Leased Property shall succeed to the
rights of the Owner under this Lease, whether through possession
or foreclosure action or delivery of a new lease or deed, then at
the request of such party so succeeding to Owner's rights
("Successor Owner"), the Lessee shall be deemed to have attorned
to and recognized such Successor Owner as the lessor under this
Lease, and shall promptly execute and deliver any instrument that
such Successor Owner may reasonably request to evidence such
attornment, provided, however, that the Lessee shall be entitled
to receive from such Successor Owner an agreement not to disturb
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Lessee's possession under this Lease (so long as no Event of
Default shall have occurred and be continuing) as a condition to
the execution and delivery of such attornment agreement. Upon
such attornment, this Lease shall continue in full force and
effect as if it were a direct lease between the Lessee and the
Successor Owner, and all of the terms, covenants and conditions
of this Lease shall remain applicable after such attornment.
Upon the payment in full of all indebtedness outstanding
under the Loan and the termination of the Lender's security
interest in the Leased Property in accordance with the provisions
of the Mortgage, the Owner may re-assign, sell or transfer and/or
grant a security interest in, this Lease, in whole or in part
and/or Leased Property to any Person, and upon notice of such
assignment, sale, transfer or grant, Lessee shall comply with the
requests and demands of such Person as if such Person was the
Lender as provided above provided that such Person shall agree,
with or for the benefit of Lessee, that it shall not disturb
Lessee's possession under the Lease and shall respect Lessee's
right to purchase the Leased Premises under the terms of this
Lease, so long as no Event of Default shall have occurred and be
continuing under this Lease
Section 20. Environmental Matters. Lessee hereby
represents and warrants to and covenants with Owner, Trust
Company, Beneficiary, Kramer, the Construction Lender, the Long-
Term Lender, LC Issuer, BFS, Trust Company, and their respective
Affiliates, successors, assigns, stockholders, partners,
directors, officers, trustees, employees, beneficiaries,
attorneys and accountants and any other Person claiming by
through or under Owner, its Beneficiary, the Construction Lender,
the Long-Term Lender, LC Issuer, BFS, Trust Company or any of
their assignees (collectively, "Indemnified Parties") as follows:
(a) Lessee covenants and agrees that (i) Lessee shall comply
and cause each permitted sublessee and assignee to comply with
all Environmental Legal Requirements, including, but not limited
to, Hazardous Materials Legal Requirements, applicable to the
Leased Property or as required by any governmental agency or
third party, and (b) Lessee shall take, and cause each permitted
sublessee and assignee to take, all remedial action necessary to
avoid any liability of Lessee, or any Indemnified Party for, and
to avoid the imposition of, or to discharge, any liens on the
Leased Property, as a result of, any failure to comply with
Environmental Legal Requirements with respect to the Leased
Property.
(b) Without limiting the generality of the foregoing, Lessee
agrees that it shall not:
(i) release any Hazardous Materials on or under the
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Leased Property or fail to take commercially reasonable
precautions to prevent the release or threat of release of any
Hazardous Materials on or under the Leased Property;
(ii) generate any Hazardous Materials on or under the
Leased Property or fail to take commercially reasonable
precautions to prevent the generation of Hazardous Materials on
or under, or the migration of Hazardous Materials to, the Leased
Property;
(iii) except in compliance with all Environmental
Legal Requirements, store or utilize, or permit any Hazardous
Materials to be stored or utilized on the Leased Property
provided, however, that the materials listed in Schedule II
attached may be used on or about the Lease Property and stored on
the Leased Property in the quantities listed in such Schedule
provided that all Environmental Legal Requirements are complied
with in connection with such use or storage;
(iv) dispose of or permit any Hazardous Materials to
be disposed of on the Leased Property except in compliance with
all Environmental Legal Requirements; and
(v) use, or allow the Leased Property to be used, in a
manner which does not comply with all Environmental Legal
Requirements.
(c) Lessee shall provide Owner with prompt written notice,
but in no event later than ten (10) Business Days after obtaining
any actual knowledge or actual notice thereof, of any of the
following conditions: (i) the presence, or any release or threat
of release, of any Hazardous Materials on, under or from the
Leased Property, whether or not caused by any of the Indemnified
Parties; (ii) any Environmental Enforcement Action instituted or
threatened in writing; or (iii) any condition or occurrence on
the Leased Property that constitutes a violation of any of the
Environmental Legal Requirements.
(d) Upon Lessee obtaining knowledge or notice of: (i) the
violation of any Environmental Legal Requirement related to the
Leased Property, or (ii) the presence, or any release or any
threat of release, of any Hazardous Materials on, under, or from
the Leased Property, which is lawfully claimed by any
governmental agency or third party to violate any other
Environmental Legal Requirement, or any combination thereof,
Lessee shall immediately take all reasonable actions to cure or
eliminate any such violation of any such Environmental Legal
Requirement and, where applicable, to arrange for the assessment,
monitoring, clean-up, containment, removal, remediation, or
restoration of the Leased Property as are required pursuant to
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any Hazardous Materials Legal Requirements or by any governmental
authority.
(e) Owner shall have the right (but not the obligation) to
require Lessee, at its own cost and expense, to obtain a
professional environmental assessment of the Leased Property in
accordance with Owner's requirements and sufficient in scope to
determine compliance with Hazardous Materials Legal Requirements
upon the occurrence of any one or more of the following events:
(i) an Event of Default hereunder; or (ii) upon receipt of any
notice of any of the conditions specified in Section 20(c) hereof
unless Lessee complies with the remedial actions required
pursuant to Section 20(d) or (iii) upon any return of the Leased
Property in accordance with Section 34(d) hereof.
(f) Owner may exercise its rights and remedies under all of
this paragraph (f) only upon and following the existence of one
or more of the following events or conditions: (i) an Event of
Default has occurred and is continuing; (ii) an Indemnified
Party, or an affiliate thereof, or any nominee or designee of an
Indemnified Party or an affiliate thereof has taken possession of
all or some portion of the Leased Property based upon an Event of
Default; (iii) an Indemnified Party, or an affiliate thereof or
any nominee or designee of an Indemnified Party or an affiliate
thereof, has commenced foreclosure proceedings or has acquired
title to all or some portion of the Leased Property by virtue of
foreclosure or deed in lieu of foreclosure; or (iv) a claim has
been asserted against an Indemnified Party for which
indemnification is provided herein, but Lessee has not undertaken
or is not continuing to pursue, after having undertaken,
commercially reasonable efforts to remediate, defend and
otherwise indemnify any such Indemnified Party. In any of such
events, the Owner shall have the right, but not the obligation,
through such representatives or independent contractors as it may
designate, to enter upon the Leased Property and to expend funds
to:
(A) cause one or more environmental assessments of
the Leased Property to be undertaken, if Owner in its sole
discretion determines that such assessment is appropriate.
Such environmental assessments shall be reasonable in scope
considering the history and use of the Leased Property and
the data available from prior reports, provided, however,
the foregoing shall not limit or restrict the reasonable
discretion of the Owner's engineers and consultants in
formulating the exact parameters of any such site assessment
and such site assessment may include, without limitation,
(i) detailed visual inspections of the Leased Property,
including without limitation all storage areas, storage
tanks, drains, drywells and leaching areas; (ii) the taking
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of soils and surface and sub-surface water samples; (iii)
the performance of soils and ground water analysis; and (iv)
the performance of such other investigations or analysis as
are necessary or appropriate and consistent with sound
professional environmental engineering practice in order for
Owner to obtain a complete assessment of the compliance of
the Leased Property and the use thereof with all
Environmental Legal Requirements and to make a determination
as to whether or not there is any risk of contamination (x)
to the Leased Property resulting from Hazardous Materials
originating on, under, or from any surrounding property or
(y) to any surrounding property resulting from Hazardous
Materials originating on, under, or from the Leased
Property;
(B) cure any breach of the representations, warranties,
covenants and conditions made by or imposed upon Lessee
under this Lease including without limitation any violation
by Lessee, or by the Leased Property, of any of the
Environmental Legal Requirements;
(C) take all actions as are necessary to (i) prevent the
migration of Hazardous Materials on, under, or from the
Leased Property to any other property; or (ii) prevent the
migration of any Hazardous Materials on, under, or from any
other property to the Leased Property;
(D) comply with, settle, or otherwise satisfy any
Environmental Enforcement Action as the same relates to the
Leased Property including, but not limited to, the payment
of any funds or penalties imposed by any governmental
authority and the payment of all amounts required to remove
any lien or threat of lien on or affecting the Leased
Property; and
(E) comply with, settle, or otherwise satisfy any
Environmental Legal Requirement and correct or abate in
accordance with all applicable Environmental Legal
Requirements any environmental condition on, or which
threatens, the Property and which could cause damage or
injury to the Property or to any person.
(g) Any amounts reasonably paid or advanced by Owner and all
reasonable costs and expenditures incurred in connection with any
action taken pursuant to the terms of this Section 20, including
but not limited to environmental consultants' and experts' fees
and expenses, attorneys' fees and expenses, court costs and all
costs of assessment, monitoring, clean-up, containment,
remediation, removal and restoration, with interest thereon at
the then effective rate applicable under Section 25 hereof shall
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be a demand obligation of Lessee to the Owner if not paid within
ten (10) days after notice, and, to the extent not prohibited by
law, and shall be deemed to be Additional Rental hereunder.
(h) The exercise by Owner of any one or more of the rights
and remedies set forth in this Section 20 shall not operate or be
deemed to place upon Owner any responsibility for the operation,
control, care, service, management, maintenance or repair of the
Leased Property.
(i) Without limiting the generality of the other provisions
of this Section 20, any partial exercise by Owner of any one or
more of the rights and remedies set forth in this Section 20
including, without limitation, any partial undertaking on the
part of Owner to cure any failure by any of Lessee, or of the
Leased Property, or any other occupant, prior occupant or prior
owner thereof, to comply with any of the Hazardous Materials
Legal Requirements shall not obligate the Owner to complete such
actions taken or require Owner to expend further sums to cure
such non-compliance.
Section 21. Environmental Indemnity. Lessee hereby agrees
that it shall at its sole cost and expense indemnify, defend,
exonerate, protect and save harmless each Indemnified Party on an
after-tax basis against and from any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements or
expenses of any kind or nature whatsoever, including, without
limitation, attorneys' and experts' fees and disbursements, which
may at any time be imposed upon, incurred by, or asserted or
awarded against Owner or an Indemnified Party and arising from or
out of any of the following, or any claims alleging any of the
following:
(a) Any Hazardous Materials on, in, under, or which emanated
from, all or any portion of the Leased Property, or which may
hereafter be on, in, under or emanate from, all or any portion of
the Leased Property whenever discovered;
(b) The violation of any Hazardous Materials Legal
Requirements by Lessee, or with respect to the Leased Property,
existing on or before the date hereof or which may so exist in
the future, whenever discovered;
(c) The violation of any Environmental Legal Requirement by
Lessee, or with respect to the Property, existing on or before
the date hereof or which may so exist in the future, whenever
discovered;
(d) Any material breach of warranty or representation made
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under or pursuant to Section 20 hereof;
(e) Any Environmental Enforcement Action with respect to the
Leased Property, whenever asserted; and
(f) The enforcement of this Section 21 or the assertion by
Lessee of any defense to the obligations of Lessee hereunder,
which is not sustained by a final order of a court of competent
jurisdiction which is not subject to further appeal, whether any
of such matters arise before, during or after the Term of this
Lease or the taking of possession of all or any portion of the
Leased Property by the Owner, and specifically including therein,
without limitation, the following which are incurred following an
Event of Default: (i) costs incurred for any of the matters set
forth in Section 20 of this Agreement; and (ii) costs and
expenses incurred in ascertaining the existence or extent of any
asserted violation of any Environmental Legal Requirements
relating to the Leased Property and any remedial action taken on
account thereof including, without limitation, the costs, fees
and expenses of engineers, geologists, chemists, other
scientists, attorneys, surveyors, and other professionals, or
testing and analyses performed in connection therewith.
(g) The obligations of Lessee under this Section 21 are not
subject to any limitation as to amount. Nothing herein shall
limit the right of an Indemnified Party to obtain injunctive
relief or to pursue equitable remedies under this Section 21.
The provisions of this Section 21, and the obligations of Lessee
under this Section 21, shall apply from the Closing Date
(notwithstanding the failure of Lessee to satisfy any condition
set forth in Section 4(a) hereof), and shall survive and continue
in full force and effect, notwithstanding the expiration or
earlier termination of this Lease in whole or in part, including
the expiration or termination of the Term, and are expressly made
for the benefit of, and shall be enforceable by, each Indemnified
Party, provided, however, that notwithstanding the foregoing, the
Lessee shall not have any indemnification obligations to the
Indemnified Parties for a violation of any Hazardous Materials
Legal Requirements or Environmental Legal Requirements or for any
Environmental Enforcement Actions attributable solely to any
facts or circumstances arising after possession of the Leased
Property has been returned to Owner, the Termination Date has
occurred and the Owner has relet or sold the Leased Property.
Section 22. Indemnification and Hold Harmless Agreement. To
the fullest extent not prohibited by applicable law, Lessee
hereby agrees to indemnify and hold harmless each Indemnified
Party, on an after-tax basis from and against any and all losses,
damages, injuries, costs or expenses (including reasonable
attorneys' fees and expenses) and from and against any and all
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suits, demands, claims, actions or other proceedings whatsoever,
brought by any entity or person whatsoever (except suits brought
by Lessee against an Indemnified Party in which Lessee is the
prevailing party) and arising or allegedly arising from (i) this
Lease or the Transaction Documents; (ii) any transaction
contemplated hereby or thereby; (iii) the acquisition, financing,
construction, installation, ownership, lease and operation of the
Leased Property (including patent or latent defects in the Land
or Improvements, whether or not discoverable by Lessee or any
Indemnified Party), including, without limitation, any suit,
demand, claim or action arising under the Loan Documents by
reason of Lessee being in default or failing to otherwise perform
thereunder, hereunder or under the Construction Agency Agreement
or under any other Transaction Document; (iv) the defense of any
suit, demand, claim, action or other proceeding brought against
such Indemnified Party in connection with the foregoing; (v) the
enforcement of any provision of this Lease; (vi) damage, injury
or death to any Person or damage to the property of any Person,
due to any defect in the Land or Improvements, or any act or
omission of any person including the defense of any suit, demand,
claim, action or other proceeding brought against such
Indemnified Party in connection with such damage or injury; (vii)
any claims based upon absolute or strict liability in tort or
claims based upon patent, trademark, tradename or copyright
infringement; and (viii) any action taken in good faith by such
Indemnified Party in connection with this Lease or the Leased
Property; except that, as to any Indemnified Party, the foregoing
indemnities shall not apply to the following:
(i) losses, damages, injuries, costs or expenses
solely and directly caused by the gross negligence or
willful misconduct of such Indemnified Party;
(ii) losses, damages, injuries, costs or
expenses solely and directly caused by the mishandling
or misapplication by any Indemnified Party of payments
made by the Lessee hereunder if such payments are made
to such Indemnified Party in accordance with the
Transaction Documents;
(iii) the inaccuracy in any material respect
of any representation or warranty made by such
Indemnified Party in any of the Transaction Documents;
(iv) the creation or existence of an Owner
Lien attributable to such Indemnified Party;
(v) if such Indemnified Party is the Owner,
Lender, or the Beneficiary, the voluntary disposition of
the Leased Property or the Lease, other than in
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connection with (A) a voluntary disposition permitted
after the occurrence of an Event of Default, (B) an
Owner Conveyance, (C) the voluntary assignment by the
Beneficiary of its ownership interest under the Trust
Agreement, or (D) a subsequent transfer by the Lender or
any nominee, designee or affiliate thereof if such
entity purchases the Leased Property at a foreclosure
sale or accepts a deed-in-lieu of foreclosure of the
Leased Property;
(vi) any other matters expressly excluded
from any other indemnity provisions contained in the
Transaction Documents pursuant to which the Lessee has
agreed to indemnify any Indemnified Party; and
(vii) acts or events that occur after the
Indemnification Period.
Lessee shall give each Indemnified Party prompt notice of
any occurrence, event or condition known to Lessee as a
consequence of which any Indemnified Party may be entitled to
indemnification hereunder. Lessee shall forthwith upon demand of
any such Indemnified Party reimburse such Indemnified Party for
amounts expended by it in connection with any of the foregoing or
pay such amounts directly. Lessee shall be subrogated to an
Indemnified Party's rights in any matter with respect to which
Lessee has actually reimbursed such Indemnified Party for amounts
expended by it or has actually paid such amounts directly
pursuant to this Section 22. In case any action, suit or
proceeding is brought against any Indemnified Party in connection
with any claim indemnified against hereunder, such Indemnified
Party will, promptly after receipt of notice of the commencement
of such action, suit or proceeding, notify Lessee thereof,
enclosing a copy of all papers served upon such Indemnified
Party, but failure to give such notice or to enclose such papers
shall not relieve Lessee from any liability hereunder. Lessee
may, and upon such Indemnified Party's request will, at Lessee's
expense, resist and defend such action, suit or proceeding, or
cause the same to be resisted or defended by counsel selected by
Lessee and reasonably satisfactory to such Indemnified Party and
in the event of any failure by Lessee to do so, Lessee shall pay
all costs and expenses (including, without limitation, attorney's
fees and expenses) incurred by such Indemnified Party in
connection with such action, suit or proceeding. The provisions
of this Section 22, and the obligations of Lessee under this
Section 22, shall apply from the Closing Date (notwithstanding
the failure of Lessee to satisfy any condition set forth in
Section 4(a) hereof), and shall survive and continue in full
force and effect, notwithstanding the expiration or earlier
termination of this Lease in whole or in part, including the
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expiration or termination of the Term, and are expressly made for
the benefit of, and shall be enforceable by, each Indemnified
Party. The foregoing obligation of Lessee to indemnify the
Indemnified Parties as aforesaid shall not operate as a
limitation or waiver of any rights that Lessee may have (whether
directly, by assignment, by subrogation or otherwise) against
either the LC Issuer or Owner arising by reason of the occurrence
of an Event of Default described in Section 23(i) hereof.
Section 23. Events of Default by Lessee. Any of the
following events shall constitute Events of Default under this
Lease:
(a) Lessee shall fail to make any payment of Base Rental
within ten (10) days after the same is due and payable or fails
to make any payment of Additional Rent when the same becomes due
and payable and such failure continues for thirty (30) days after
written notice thereof is given to Lessee; or
(b) Lessee shall fail to pay the Termination Value, Purchase
Price or End of Term Adjustment, as applicable, when the same
becomes due and payable; or
(c) Lessee shall fail to observe or perform any of its
covenants or agreements set forth in Sections 4(b), 4(c), 15,
16(c), 19, 29, 30, 31, 32 or 34 of this Lease or shall fail to
obtain any of the Listed Permits and such failure to obtain any
of the Listed Permits materially delays the commencement,
continuation or completion of the development or construction of
the Improvements; or
(d) Lessee shall fail to perform or observe any other
covenant, condition, or agreement to be performed or observed by
it under this Lease and such failure shall continue unremedied,
for thirty (30) days after written notice to Lessee specifying
such failure and demanding the same to be remedied, provided,
however, that no Event of Default shall be deemed to have
occurred with respect to breach of any covenant, condition or
agreement that cannot be remedied, with the exercise of
reasonable diligence on Lessee's part, within such thirty (30)
day period, if Lessee commences cure of such failure within such
thirty (30) day period and diligently pursues such cure to
completion, provided further, however, that the period given to
the Lessee to remedy such failure should not exceed a total of
ninety (90) days from the initial notice of default is given to
Lessee, provided further still, that if such failure relates to a
failure to comply with Environmental Legal Requirements, such
ninety (90) day period may be extended to such longer period as
may be reasonably necessary to remedy such failure; or
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(e) Lessee or Lessee's Parent shall be in default (i) under
any of the Construction Loan Documents, Long-Term Loan Documents,
Investor Loan Documents, the Construction Agency Agreement, any
other Transaction Document or any lease, loan agreement or other
agreement, instrument or document heretofore, now or hereafter
entered into between Lessee and Owner, or between Lessee and any
parent, subsidiary or affiliate of Owner, or between Lessee and
Lender, or between Lessee and LC Issuer, or between Lessee's
Parent and Owner or between Lessee's Parent and Lender or between
Lessee's Parent and LC Issuer or (ii) under any promissory note
or guarantee heretofore, now or hereafter executed by Lessee or
Lessee's Parent and delivered to any party referred to in clause
(i) above evidencing or guaranteeing a loan made by any such
party to Lessee, Lessee's Parent or Owner; or any obligation of
Lessee or Lessee's Parent, to any Person (other than Owner, or
any parent, subsidiary or affiliate of Owner) in excess of $2
million relating to the payment of borrowed money or the payment
of rent or hire under any lease agreement, shall be declared to
be due and payable or otherwise accelerated prior to the maturity
thereof by reason of a default in payment or performance by
Lessee or Lessee's Parent (excluding any such default which is
being contested in good faith by Lessee or Lessee's Parent by
appropriate proceedings and the liability for which has not been
reduced to judgment); or an attachment or other Lien shall be
filed or levied against a substantial part of the property of
Lessee or Lessee's Parent (taken in aggregate), and such judgment
shall continue unstayed and in effect, or such attachment or Lien
shall continue undischarged or unbonded, for a period of thirty
(30) days; or
(f) Lessee or Lessee's Parent shall become insolvent or make
an assignment for the benefit of creditors or consent to the
appointment of a trustee or receiver; or a trustee or a receiver
shall be appointed for Lessee or Lessee's Parent or for a
substantial part of its property without its consent and shall
not be dismissed for a period of sixty (60) days; or any petition
for the relief, reorganization or arrangement of Lessee or
Lessee's Parent, or any other petition in bankruptcy or for the
liquidation, insolvency or dissolution of Lessee or Lessee's
Parent, shall be filed by or against Lessee or Lessee's Parent
and, if filed against Lessee or Lessee's Parent, shall be
consented to or be pending and not be dismissed for a period of
sixty (60) days, or an order for relief under any bankruptcy or
insolvency law shall be entered by any court or governmental
authority of competent jurisdiction with respect to Lessee or
Lessee's Parent; or any execution or writ or process shall be
issued under any action or proceeding against Lessee or Lessee's
Parent whereby any of the Leased Property may be taken or
restrained (other than a Taking); or Lessee's or Lessee's
Parent's corporate existence shall cease; or Lessee or Lessee's
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Parent shall (whether in one transaction or a series of
transactions) without Owner's prior written consent, sell,
transfer or dispose of, or pledge or otherwise encumber, all or
substantially all of its assets or property, or consolidate or
merge with any other entity (except as otherwise permitted under
Section 19(a) hereof), or become the subject of, or engage in, a
leveraged buy-out or any other form of corporate reorganization;
(g) any representation, warranty, statement or certification
made by Lessee under this Lease or in any document or certificate
furnished to Owner or any Assignee in connection herewith or
pursuant hereto, shall prove to be untrue or incorrect in any
material respect when made, or shall be breached;
(h) a default or an Event of Default shall have occurred
under the Lease Guaranty; or
(i) (A) the Lender shall be unable to make a draw
request under any outstanding Letter of Credit because it has
deemed that the conditions in such Letter of Credit for a drawing
thereunder not to have been met or (B) a Draw Conditions Failure
shall have occurred and, in the case of either (A) or (B), the
Lessee shall not have previously delivered a Nonreturn Option
Notice pursuant to Section 30(d) hereof or shall not have issued,
or shall not be deemed to have issued a Special Nonreturn Option
Notice pursuant to Section 4(c) hereof.
Section 24. Remedies Upon Default. Upon the occurrence of
any Event of Default and at any time thereafter so long as the
same shall be continuing, Owner may exercise one or more of the
following remedies:
(a) The Owner may take action at law or in equity to
collect any payments then due or thereafter to become due under
this Lease, or to enforce performance and observance of any term,
covenant or condition of this Lease applicable to Lessee.
(b) The Owner may, in addition to or in lieu of taking such
action at law or in equity as it may otherwise be entitled to,
terminate the leasehold estate created hereby by giving Lessee
not less than forty-five (45) days' prior written notice of the
date Owner elects to make such termination effective (such notice
period is referred to as the "Standstill Period") and, subject to
the Lessee's rights under Section 24(e) below, the Owner may upon
or after the completion of the Standstill Period repossess the
Leased Property without further notice, either by summary
proceeding or other suitable action either at law or in equity or
otherwise, and without being deemed guilty of any manner of
trespass and without prejudice to any remedies which might
otherwise be used to demand, sue for or collect arrears of Base
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Rental and Additional Rental and any other accrued obligations of
Lessee under this Lease, and Lessee hereby waives all statutory
rights (including without limitation rights of redemption, if
any, to the extent such rights may be lawfully waived), provided,
however, that if the Basic Lease Term or Extension Lease Term
then in effect would otherwise expire during said Standstill
Period, such Basic Lease Term or Extension Lease Term shall be
extended to the end of the Standstill Period and Lessee shall be
liable for the payment of all Basic Rent and Additional Rent
during such extended rental period. In calculating the amount of
any deficiency for which Lessee shall be liable hereunder, there
shall be included, in addition to Base Rental and Additional
Rental, the value of all other considerations agreed to be paid
or performed by Lessee under this Lease. In calculating the
amounts to be paid by Lessee pursuant to the foregoing sentence,
there shall also be included all of the Owner's reasonable
expenses in connection with any sale or reletting of the Leased
Property, including, without limitation, all repossession costs,
brokerage commissions, fees for legal services and expenses of
preparing the Leased Property for such sale or reletting, it
being agreed by Lessee that the Owner may, but shall not be
obligated to, (A) relet the Leased Property or any other portion
thereof for a term or terms which may at the Owner's option be
equal to or less than or exceed the period which would otherwise
have constituted the balance of the Interim Lease Term, the Basic
Lease Term or an Extension Lease Term then in effect and may
grant such concessions and free rent as the Owner in its
reasonable judgment considers advisable or necessary to relet the
same, (B) make such alterations, repairs and decorations in or to
the Leased Property as the Owner in its reasonable judgment
considers advisable or necessary to sell or relet the same, or
(C) keep the Leased Property vacant. No action of the Owner in
accordance with the foregoing or failure to sell or relet or to
collect rent upon reletting shall operate or be construed to
release or reduce Lessee's liability hereunder except (i) that a
sale of the Leased Property not subject to this Lease shall
terminate any further accruals of rent hereunder and Owner's only
remedy in respect of such rentals shall be pursuant to Section
24(c) below. Upon the occurrence and during the continuation of
an Event of Default, the Owner shall also be entitled to
foreclose upon any fixtures, furniture or equipment or other
personalty which is part of the Leased Property pursuant to the
Uniform Commercial Code of New Jersey.
(c) Whether or not Owner shall have exercised, or shall
thereafter at any time exercise, any of its rights under
subsection (a) or (b) above with respect to the Leased Property
(but subject to Lessee's rights set forth in Section 24(e)
hereof), Owner, by written notice to Lessee specifying a payment
date, may demand that Lessee pay to Owner, and Lessee shall pay
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to Owner, on the payment date specified in such notice
("Liquidated Damage Payment Date") which shall not be earlier
than the end of the Standstill Period and shall not be later than
the end of the then applicable Interim Lease Term, Basic Lease
Term or Extension Lease Term (if the Standstill Period expires
after the applicable Interim Lease Term, Basic Lease Term or
Extension Lease Term, the Liquidated Damage Payment Date shall be
the first Business Day after the last day of the Standstill
Period), as liquidated damages for loss of a bargain and not as a
penalty (in lieu of the Base Rental due for the Leased Property
for any Rental Period commencing after the Liquidated Damage
Payment Date and in lieu of the exercise by Owner of its remedies
under subsection (b) above in the case of a reletting of the
Leased Property or with respect to a sale of the Leased
Property), the sum of (i) all unpaid Base Rental payable for all
Rental Periods through the Liquidated Damage Payment Date
specified in such notice, plus (ii) all unpaid Additional Rental
due with respect to such Leased Property as of the Liquidated
Damage Payment Date, plus (iii) an amount equal to the
Termination Value of such Leased Property computed as of the Rent
Payment Date coincident with or next preceding the Liquidated
Damage Payment Date, or if the Liquidated Damage Payment Date
occurs prior to the Basic Term Commencement Date, an amount equal
to one hundred percent (100%) of all Project Costs incurred as of
the later of (A) Liquidated Damage Payment Date or (B) the date
of payment, plus, to the extent such amounts have not been
included in Project Costs, all interest, cost, fees,
reimbursements and all other amounts due and payable either to
Owner or Lender under the Transaction Documents and which are
incurred prior to the date of payment, and, on payment of such
amounts, Owner shall convey the Leased Property to Lessee as an
Owner's Conveyance as provided in Section 32 below.
(d) Subject to Lessee's rights under Section 24(e) below,
Owner may exercise any other right or remedy which may be
available to it under applicable law or proceed by appropriate
court action to enforce the terms hereof or to recover damages
for the breach hereof or to rescind this Lease. The remedies
herein conferred upon and reserved to the Owner are not intended
to be exclusive of any other available remedy or remedies which
the Owner may have at law or in equity, but each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given under this Lease or now or hereafter existing
at law or in equity. No delay or omission to exercise any right
or power accruing upon any Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and
as often as may be deemed expedient. In order to entitle the
Owner to exercise any remedy reserved to it in this Section, it
shall not be necessary to give any notice, other than such notice
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as may be required in this Section.
In addition, Lessee shall be liable for all costs and
expenses, including without limiting the generality of the
foregoing, reasonable attorney's fees, incurred by Owner or any
Assignee by reason of the occurrence of any Event of Default or
the exercise of Owner's remedies with respect thereto, including
all costs and expenses incurred in connection with the surrender
of the Leased Property in accordance with Section 33 hereof or in
placing the Leased Property in the condition required by said
Section. No express or implied waiver by Owner of any Event of
Default shall in any way be, or be construed to be, a waiver of
any future or subsequent Event of Default. To the extent
permitted by applicable law, Lessee hereby waives any rights now
or hereafter conferred by statute or otherwise which may require
Owner to sell, lease or otherwise use the Leased Property in
mitigation of Owner's damages as set forth in this Section 24 or
which may otherwise limit or modify any of Owner's rights and
remedies in this Section 24.
Notwithstanding any provision contained in this Lease to the
contrary, any and all remedies available to Owner upon the
occurrence of an Event of Default shall survive the termination
of this Lease.
(e) If the Owner notifies the Lessee that it elects to
repossess the Leased Property pursuant to Section 24(b) hereof or
to rescind the Lease pursuant to Section 24(d) hereof, the Lessee
shall be entitled to require the Owner to exercise the remedies
set forth in Section 24(c) hereof in lieu of repossessing the
Leased Property or in lieu of rescinding the Lease by delivering
to the Owner at any time during the Standstill Period written
notice of its election to have the Owner exercise its remedies
under Section 24(c). Unless the Owner specifies another date as
the Liquidated Damage Payment Date pursuant to the notice
required under Section 24(c) hereof, the Liquidated Damage
Payment Date shall be the first Business Day after the last day
of the Standstill Period. If no notice of such election by
Lessee is received by Owner within the Standstill Period, the
Owner may pursue the remedies set forth in Section 24(b) or
Section 24(d) hereof.
Section 25. Owner's Right to Perform for Lessee. If Lessee
fails to make any payment of Additional Rental required to be
made by it hereunder or fails to obtain the insurance required by
Section 16 hereof or to otherwise perform or comply with any of
its material agreements contained herein, Owner may (but shall
not be required) itself, after notice to Lessee, make such
payment or perform or comply with such agreement, and the amount
of such payment and the amount of the reasonable expenses of
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Owner incurred in connection with such payment or the performance
of or compliance with such agreement, together with interest on
all such amounts calculated at a per annum rate equal to the rate
equal to the Default Rate applicable under the Loan shall be due
and payable by Lessee upon demand by Owner; provided, however,
that no such payment, performance or compliance by Owner shall be
deemed to cure or waive any Event of Default hereunder.
Section 26. Expenses. Lessee agrees, whether or not the
transactions contemplated by this Lease are consummated, but
solely to the extent such are incurred in connection with the
transactions contemplated under the Transaction Documents (i) to
pay the fees and expenses of the Trust Company (and any
successors or co-trustees) for ordinary or extraordinary services
as trustee under the Trust Agreement, including, without
limitation, the reasonable fees and expenses of its counsel, (ii)
all fees and expenses of the Owner, Beneficiary, Construction
Lender, the Long-Term Lender, LC Issuer (except that no fees
shall be payable by the Lessee or any other party to the LC
Issuer for the issuance of the Letter of Credit) and BFS
including, without limitation, the reasonable fees and expenses
of their respective counsel and (iii) to pay to or reimburse
Owner, Beneficiary, Construction Lender, Long-Term Lender, LC
Issuer and BFS for (A) the payment of lien searches, filing and
transfer fees, and taxes, fees and expenses relating to the
titling and registration of and recording of this Lease or any
mortgage, collateral, assignment of leases and rents, UCC
financing statements and any other security documents with
respect to the Leased Property incurred by or on behalf of Owner,
Construction Lender, Long-Term Lender and LC Issuer, (B)
appraisal fees, engineering fees, environmental assessments,
title insurance fees, survey costs and (C) all other fees and
expenses which the Owner is obligated to pay in connection with
the negotiation and documentation of, and consummation of the
transactions contemplated by, and the ongoing performance of the
various parties under this Lease, the Construction Loan
Documents, the Long-Term Loan Documents, the Investor Loan
Documents, the Construction Agency Agreement, the Transaction
Documents, and any other instruments and documents related to the
transaction described in this Lease and said other documents,
including, without limiting the generality of the foregoing, the
organization and qualification of the Owner. The obligation of
Lessee to pay all such fees, expenses and other amounts shall
survive the termination of this Lease for any reason.
Section 27. Further Assurances. Further Assurances .
Lessee will promptly and duly execute and deliver to Owner and
any Assignee of Owner such other documents and assurances,
including, without limitation, such amendments to this Lease as
may be reasonably required by Owner and by any Assignee of Owner,
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and Uniform Commercial Code financing statements and continuation
statements, and will take such further action as Owner or any
Assignee of Owner may from time to time reasonably request in
order to carry out more effectively the intent and purposes of
this Lease and to establish and protect the rights and remedies
created or intended to be created in favor of Owner and of any
Assignee of Owner and their respective rights, title and
interests in and to the Leased Property or portions thereof.
Owner, at Lessee's sole cost and expense, will promptly and
duly execute and deliver to Lessee and any permitted assignee of
Lessee such other documents and assurances, including, without
limitation, such amendments to this Lease as may be reasonably
required by Lessee and by any permitted assignee of Lessee, and
will take such further action as Lessee or any permitted assignee
of Lessee may from time to time reasonably request in order to
carry out more effectively the intent and purposes of this Lease
and to establish and protect the rights and remedies created or
intended to be created in favor of Lessee and of any permitted
assignee of Lessee and their respective rights, title and
interests in and to the Leased Property or portions thereof.
Section 28. Notices. All notices provided for or required
under the terms and provisions hereof shall be in writing, and
any such notice shall be deemed given (a) when personally
delivered, (b) when deposited in the United States mails, with
proper postage prepaid, for first class certified mail, return
receipt requested, or (c) when delivered by an overnight courier
service, addressed (i) if to Owner or Lessee, at their respective
addresses as set forth below or at such other address as either
of them shall, from time to time, designate in writing to the
other, and (ii) if to any Assignee, to the address of such
Assignee as such Assignee shall designate in writing to Owner and
Lessee.
If to Owner:
First Fidelity Bank, National Association, trustee
c/o First Fidelity Bank
10 State House Square
Hartford, Connecticut 06103
Attn: W. Jeffrey Kramer
With a copy to:
James G. Scantling, Esq.
Bingham, Dana & Gould
100 Pearl Street
Hartford, Connecticut 06103-4507
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If to Lessee:
Tiffany and Company
727 Fifth Avenue
New York, NY 10022
Attn: General Counsel
With a copy to:
Tiffany and Company
5 Sylvan Way
Parsippany, New Jersey 07054
Attn: Assistant Treasurer
Copies of any notices sent either to Owner or Lessee shall
be delivered to each Assignee and to the LC Issuer. Notices sent
to the LC Issuer shall be sent to the address set forth below:
BOT Financial Corporation
125 Summer Street
Boston, Massachusetts 02110
Attn: Senior Vice President-Administration
Section 29. Lessee's Extension Lease Options and End of
Term Purchase Options.
(a) If (i) if no Default and no Event of Default shall have
occurred and be continuing; and (ii) this Lease shall not have
been earlier terminated, Lessee shall be entitled, at its option
upon written notice to Owner, as hereinafter provided, to enter
into the Basic Lease Term if all of the conditions set forth in
Section 4(a) hereof have been met and Owner is not entitled to
terminate the leasehold estate pursuant to Section 4(c) hereof at
the expiration of the Interim Lease Term and after the Basic
Lease Term Expiration Date, to extend this Lease annually for up
to nine consecutive Extension Lease Terms of one (1) year each.
The Lessee shall be conclusively deemed to have elected to enter
into the Basic Lease Term unless Lessee shall give written notice
to Owner on or prior to January 31, 1996 that Lessee will not
enter into the Basic Lease Term. The first Extension Lease Term
will commence on the day immediately following the Basic Lease
Term Expiration Date, and each succeeding Extension Lease Term
will commence on the day immediately following the last day of
the immediately preceding Extension Lease Term. All of the
provisions of this Lease shall be applicable during each
Extension Lease Term. Except during the ninth (9th) Extension
Lease Term, this Lease shall be deemed automatically extended for
the succeeding Extension Lease Term without the necessity of any
notice or the taking of any other action unless Lessee shall give
written notice to Owner that Lessee does not elect to extend the
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Lease for the next succeeding Extension Lease Term at least three
hundred and sixty-five (365) days prior to the last day of the
then current Term. Unless Lessee has exercised its purchase
option under Section 4(c) or Section 29(b) hereof or Lessee has
delivered to Owner a Nonreturn Option Notice or has issued or is
deemed to have issued a Special Nonreturn Option Notice, in the
event Lessee elects not to enter into the Basic Lease Term or to
exercise said extension option the Leased Property shall be
returned to Owner in accordance with the provisions of Section 34
hereof, in which case the provisions of Section 31(b) hereof
shall apply(unless delivered to a bidder in accordance with
Section 30(b) hereof, in which case the provisions of Section
31(a) shall apply). If the Leased Property has not been so
returned or delivered to Owner on the last day of the then
effective Interim Lease Term, Basic Lease Term or Extension Lease
Term, as the case may be, Lessee shall pay Base Rental and
Additional Rental payable as provided in Section 34(f) hereof.
If Lessee elects not to enter into the Basic Lease Term or has
not renewed this Lease for an Extension Lease Term as provided
above, then during the period from February 1, 1996 to the end of
the Interim Lease Term and during the three hundred sixty-five
(365)-day period preceding the date on which the then effective
Basic Lease Term or Extension Lease Term, as the case may be,
shall terminate or expire, Owner may, subject to all applicable
governmental laws, rules and regulations, place signs in
locations on the grounds in front of the Leased Property
advertising that the same will be available for rent or purchase.
(b) If (i) no Default and no Event of Default shall have
occurred and be continuing which, in the reasonable opinion of
the Owner, materially and adversely affects the ability of the
Lessee to effect a purchase of the Leased Property under this
Lease, and (ii) this Lease shall not have been earlier
terminated, Lessee shall be entitled, at its option, upon written
notice to Owner, as hereinafter provided, to purchase Owner's
interest in the Leased Property in accordance with Section 32
hereof, on the then applicable Termination Date, for an amount
equal to the Purchase Price applicable to the Interim Lease Term,
Basic Lease Term or Extension Lease Term thereof then ending
(i.e., the Termination Date), plus, in the event that Lessee
exercises its purchase option hereunder prior to the end of the
Maximum Term, the Reinvestment Premium, if any. To exercise said
purchase option, Lessee shall give written notice to Owner to
such effect at least three hundred sixty-five (365) days prior to
the expiration of the then current Term. If Lessee gives written
notice of its exercise of its right to purchase to Owner, such
notice shall constitute a binding obligation of Lessee to
purchase the Leased Property and to pay Owner the Purchase Price
and, if applicable, the Reinvestment Premium on the Termination
Date. Notwithstanding the provisions of Section 19 above, Lessee
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may freely assign its option to purchase to any third party.
Section 30. Third Party Sale of Leased Property.
(a) Remarketing Obligations. If Lessee does not exercise
either its option to to enter into the Basic Lease Term or renew
this Lease or its option to purchase the Leased Property and
regardless of whether the Lessee has delivered a Nonreturn Option
Notice, then Lessee shall have the obligation during the final
three hundred sixty-five (365) days of the then current Term (the
"Remarketing Period"), to use such commercially reasonable
efforts as would be made by a self- interested property owner in
the area to actively market commercial property to obtain bona
fide bids for the Leased Property from prospective purchasers who
are financially capable of purchasing the Leased Property for
cash on an as-is, where-is basis, without recourse or warranty on
the terms and conditions set forth in Section 32 hereof
applicable to Owner Conveyances. The Lessee shall be responsible
for hiring brokers who shall be reasonably acceptable to Owner
and promptly upon Owner's request, shall permit inspection of the
Leased Property and any maintenance records relating to the
Leased Property by Owner, Assignee or any potential purchasers,
and shall otherwise do all things necessary to sell and deliver
possession of the Leased Property to any purchaser. All such
marketing of the Leased Property shall be at Lessee's sole
expense. The Lessee shall allow the Owner and any potential
purchaser access to the Leased Property for purposes of showing
the same. All bids received by Lessee prior to the end of the
Basic Lease Term, or Extension Lease Term if applicable, shall be
immediately certified to Owner in writing, setting forth the
amount of such bid and the name and address of the person or
entity submitting such bid. Notwithstanding the foregoing, Owner
shall have the right, but not the obligation, to seek bids for
the Leased Property during the Remarketing Period.
(b) Delivery of Leased Property to Third Party Buyer. Not
later than the Termination Date, Lessee shall deliver the Leased
Property to the bidder, if any, who shall have submitted such
highest bid during the Remarketing Period, and Owner shall
simultaneously therewith sell (or cause to be sold), its
ownership in such Leased Property to such bidder, provided, that
Owner shall not be obligated to sell the Leased Property if
either (x) all of the conditions set forth in Sections 29(b), 32
and 33 have not been complied with on or before such Termination
Date or (y) the Net Proceeds of Sale of the Leased Property would
be less than the Maximum Owner Risk Amount applicable as of the
Termination Date; and, further provided, that in any event, Owner
shall not sell the Leased Property under the circumstances
described in clause (y) without the prior written consent of the
LC Issuer. The Net Proceeds of Sale shall be retained by the
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Owner. This Section 30(b) is for the benefit of, and may be
enforced by, LC Issuer as a third party beneficiary.
(c) Delivery of Appraisals and Reports. Owner shall have
the right in its sole discretion, but not the obligation, to
retain a third party as its agent for the purpose of determining
compliance of the Lessee with the conditions applicable to a
return of the Leased Property pursuant to Section 34, at Lessee's
cost and expense. Upon the request of Owner and at Lessee's sole
cost and expense, Lessee shall provide Owner with a written
report describing in reasonable detail Lessee's efforts during
the Remarketing Period to obtain bona bids for the purchase of
the Leased Property, including a list of all Persons approached
for the purpose of soliciting bids to purchase the Leased
Property.
(d) Nonreturn Option Notice. If Lessee does not exercise
either its option to enter into the Basic Lease Term or to renew
this Lease or its option to purchase the Leased Property at the
end of the Term and if no Default or Event of Default has
occurred and is continuing, then at any time on or prior to July
31, 1996, if the Termination Date is to occur prior to the Basic
Term Commencement Date, or one-hundred eighty (180) days prior to
the last day of the then current Basic Lease Term or Extension
Lease Term, as the case may be, the Lessee may deliver to the
Owner a written notice that on the Termination Date either the
Leased Property will be sold to a third party pursuant to a bid
which meets the requirements of Section 30(b) above or the Lessee
shall purchase the Leased Property for the full Purchase Price
and Reinvestment Premium, if any. The written notice described
in the preceding sentence is referred to as a "Nonreturn Option
Notice." If the Lessee delivers a Nonreturn Option Notice to
Owner and the Lessee desires to sell the Leased Property to a
third party, it shall be required to submit a third-party bid
which meets the requirements of Section 30(b) no later than
thirty (30) days prior to the Termination Date; otherwise, the
Lessee shall be obligated to purchase the Leased Property on the
Termination Date as if it had elected to purchase the Leased
Property pursuant to Section 29(b).
Section 31. End of Term Adjustment.
(a) This Section 31(a) shall apply only if a sale of the
Leased Property has been consummated on or prior to the
Termination Date pursuant to Section 30(b) hereof. If the Net
Proceeds of Sale of the Leased Property from a sale to a third
party are less than the Purchase Price of the Leased Property as
of such Termination Date, Lessee shall, on the Termination Date,
pay to Owner as an End of Term Adjustment, in immediately
available funds, an amount equal to such deficiency (a
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"Deficiency") as an adjustment to the Rent payable under this
Lease; provided, however, that if all of the Limited Lessee Risk
Conditions have been met, the amount of the Deficiency payable by
Lessee with respect to the Leased Property shall not exceed the
Maximum Lessee Risk Amount then applicable. If the Net Proceeds
of Sale of the Leased Property exceed the Purchase Price, Owner
shall pay to Lessee an amount equal to such excess as an
adjustment to the Rent paid or payable under this Lease;
provided, however, that Owner shall have the right to offset
against such adjustment payable by Owner, any other amounts then
due and payable from Lessee to Owner hereunder or under any other
agreements between Owner and Lessee. Lessee shall also pay to
Owner on the Termination Date the Base Rental due and payable for
the Leased Property on the Termination Date, plus all Additional
Rental then due and owing. Owner's obligation to sell (or cause
to be sold) the Leased Property to a third party under Section 30
is contingent upon the receipt of the amounts, if any, payable by
Lessee pursuant to this Section 31(a) and Section 31(c).
(b) If upon the expiration of the Interim Lease Term, the
Basic Lease Term or any Extension Lease Term or upon any
Termination Date, Lessee does not purchase the Leased Property
pursuant to Section 4(c) or Section 29 hereof, a third party sale
is not consummated in accordance with Section 30 hereof, the
Lessee does not elect to enter into the Basic Lease Term or does
not extend the Term of the Lease by an Extension Term pursuant to
Section 29(a) hereof, then Lessee shall, on the Termination Date,
pay to Owner as an End of Term Adjustment as an adjustment to the
rent payable under this Lease, an amount equal to (i) the Maximum
Lessee Risk Amount then applicable if all of the Limited Lessee
Risk Conditions have been met, or (ii) the Purchase Price, if all
of the Limited Lessee Risk Conditions have not been met, plus, in
either case, the Base Rental due and payable on the Termination
Date, plus all Additional Rental then due and owing. The total
selling price realized from any sale of the Leased Property after
the Termination Date shall be retained by Owner. Lessee shall
remain liable for the payment of, and upon the consummation by
Owner of the sale of the Leased Property after the Termination
Date, Lessee shall pay or reimburse Owner for the payment of, all
applicable sales, excise, transfer, recording or other taxes
imposed as a result of such sale, and fees and all expenses
incurred by Owner as a result of such sale, including, without
limitation, expenses incurred in titling and registering the
conveyance of Owner's title to the Leased Property, title
insurance fees and expenses and fees and expenses of counsel, but
the Lessee shall not be required to pay or reimburse Owner for
any tax based upon or measured solely by Owner's or Beneficiary's
gross, net or taxable income realized upon such sale or any taxes
payable in the nature of capital gains, unless any such tax is in
lieu of or a substitute for any sales, excise, transfer or
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recording taxes imposed as a result of a sale of the Leased
Property.
(c) If the Lender submits a draw request to the LC Issuer
for payment of the Letter of Credit and there is a Draw
Conditions Failure, such shall constitute an Event of Default by
Lessee hereunder, but the occurrence of an Event of Default for
such reason shall not operate as a limitation or waiver of any
rights that Owner, Beneficiary or Lessee may have against LC
Issuer for wrongful dishonor, and in such event, (i) Owner agrees
to take all actions (and agrees to cause the Beneficiary and any
Assignee to take all actions) which are reasonably required to
preserve any claims against the LC Issuer and (ii) upon payment
in full of all amounts due from Lessee at the expiration of this
Lease, the Owner shall assign (and agrees to cause the
Beneficiary and any Assignee to assign) all of its rights against
LC Issuer to the Lessee. If an Event of Default described in
Section 23(i) hereof shall have occurred by reason of the Owner's
default under the Reimbursement and Remarketing Agreement, the
Lessee shall be subrogated to the LC Issuer's rights against the
Owner and Leased Property, all as provided in Section 13 of the
Reimbursement and Remarketing Agreement.
(d) In the event a Termination Date occurs prior to the last
day of the Maximum Term hereof, Lessee shall pay to Owner on the
Termination Date, in addition to any other obligations hereunder,
the Reinvestment Premium, if any
(e) If (A), as of the Termination Date, the Lessee shall
have met all of the Limited Lessee Risk Conditions and the Lessee
shall not have received notice of the occurrence of an Event of
Default described in Section 23(i) hereof, and (B) an Event of
Default described in Section 23(i) hereof subsequently occurs on
or after the Termination Date, then the Lessee shall pay in
immediately available funds and on demand from Owner (or its
Assignee) an amount equal to the difference, if any, between (x)
the amount which would have been payable by the Lessee on the
Termination Date under Section 31(a) or 31(b) hereof as if the
Limited Lessee Risk Conditions were not met as of such date and
(y) the amount actually paid by Lessee on the Termination Date
pursuant to Section 31(a) or 31(b) hereof, plus interest at the
Default Rate on such difference for the period from the
Termination Date to the date of payment.
Section 32. Procedure for Owner Conveyance. In the event
of an Owner Conveyance, the terms and conditions of this Section
32 shall apply. On the closing date for such transfer:
(i) (A) The Owner shall have received all amounts due and
payable to it under the applicable provisions of this Lease, and
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without limitation of the foregoing, Lessee shall have paid all
Basic Rental and Additional Rental and all other sums due and
payable by Lessee under this Lease, through the date of
consummation of the transfer, in each case in funds of the type
specified and otherwise in accordance with Section 33 hereof.
(ii) Each Owner's Conveyance shall be made by a good and
sufficient bargain and sale deed, or such other instruments as
may be appropriate in the circumstances, which shall transfer all
of the Owner's interest in the Leased Property to Lessee or third
party, as the case may be. OWNER'S TRANSFER OF ITS OWNERSHIP IN
THE LEASED PROPERTY SHALL BE ON AN AS-IS, WHERE-IS BASIS, WITHOUT
ANY REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS
TO THE DESIGN, CONDITION, QUALITY, CAPACITY, MERCHANTABILITY,
HABITABILITY, DURABILITY, SUITABILITY OR FITNESS OF THE LEASED
PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER
CONCERNING THE LEASED PROPERTY OR ANY PORTION THEREOF. LESSEE
AND, IF APPLICABLE, ANY THIRD PARTY SHALL WAIVE ANY CLAIM
(INCLUDING ANY CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN
TORT OR INFRINGEMENT) IT MIGHT HAVE AGAINST OWNER FOR ANY LOSS,
DAMAGE (INCLUDING INCIDENTAL OR CONSEQUENTIAL DAMAGE) OR EXPENSE
CAUSED BY THE LEASED PROPERTY OR BY LESSEE'S LOSS OF USE THEREOF
FOR ANY REASON WHATSOEVER. Owner shall convey all of its then
right, title and interest in and to the Leased Property to Lessee
or third party, as the case may be, free and clear of any Owner
Liens (other than Permitted Liens), and any liens securing debt
incurred by Owner, whether recourse or otherwise, including but
not limited to the Construction Loan and the Long-Term Loan and
any replacements for or additions to the foregoing, but NO
REPRESENTATION OR WARRANTY SHALL BE MADE BY OWNER AS TO THE
EXISTENCE OF ANY OTHER LIENS OR ENCUMBRANCES ON THE LEASED
PROPERTY AS OF THE DATE OF SALE.
(iii) The Lessee shall have paid all charges and expenses
incident to the transfer of the Leased Property in an Owner's
Conveyance, including, without limitation, all transfer taxes,
recording fees, title insurance premiums and federal, state and
local taxes arising as a result of such transfer. Lessee shall
have paid all fees and expenses of Owner's counsel and Lender's
counsel incurred by reason of the transfer.
Section 33. Time of the Essence; Manner of Payment. The
provisions of this Lease requiring the payment by Lessee to the
Owner or to any third party, whether such payments are for Base
Rental, Additional Rental, Termination Value, Purchase Price, End
of Term Adjustment, Maximum Lessee Risk Amount, Late Charges or
otherwise are of the essence of this Lease, and time is of the
essence for any payment and performance of such obligations of
Lessee set forth herein. All payments to be made to Owner
hereunder shall be in immediately available funds paid by wire
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transfer to an account designated by Owner, or at Owner's
request, by certified or cashier's check.
Section 34. Return of Leased Property.
(a) Upon the expiration or earlier termination of the Term
(unless Lessee has purchased the Leased Property pursuant to
Section 4(c) or Section 29 hereof, or has delivered a Nonreturn
Option Notice or has issued or is deemed to have issued a Special
Nonreturn Option Notice), Lessee will vacate and surrender and
deliver possession of the Leased Property to Owner in broom clean
condition and in the condition required pursuant to Section 13(a)
hereof. Lessee shall remove from the Leased Property on or prior
to such expiration or earlier termination of this Lease, all
personal property, furniture and fixtures (other than equipment
and fixtures which form a part of the building systems) situated
thereon which is not the property of Owner, and shall repair any
damage caused by such removal. Property not so removed shall
become the property of Owner, and Owner may cause such property
to be removed from the Leased Property and disposed of, and
Lessee shall pay the reasonable cost of any such removal and
disposition and of repairing any damage caused by such removal.
(b) Except for surrender upon the expiration or earlier
termination of the Term hereof, no surrender to Owner of this
Lease or of the Leased Property shall be valid or effective
unless agreed to and accepted in writing by Owner and any
Assignee of Owner.
(c) Without limiting the generality of the foregoing, upon
the surrender and return of the Leased Property to Owner
pursuant to this Section 34, the Leased Property shall (i) be
capable of being immediately utilized by a third-party purchaser
or third-party lessee without further inspection, construction,
repair, replacement, alterations or improvements, licenses,
permits, or approvals, except for any of the foregoing required
solely by virtue of the change in ownership (other than to Owner
or Assignee), use or occupancy of the Leased Property, (ii) be in
accordance and compliance with all Legal Requirements and
Environmental Legal Requirements including, without limitation,
any of the foregoing required by virtue of a change in ownership,
use or occupancy of the Leased Property other than to Lessee,
(iii) be free and clear of all Liens, other than any Permitted
Liens and Owner Liens and any liens securing debt incurred by
Owner, whether recourse or otherwise, including but not limited
to the Construction Loan, the Investor Loan and the Long-Term
Loan and any replacements for or additions to the foregoing.
(d) On or prior to the date of such surrender and return of
the Leased Property, Owner shall have received from Lessee, at
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Lessee's expense, evidence satisfactory to Owner and each
Assignee, of compliance with the provisions of this Section 34,
including without limitation, an environmental assessment for the
Leased Property addressed in form and substance satisfactory to
Owner and each Assignee or, in lieu of addressing to such parties
directly, accompanied by a letter permitting Owner and each
Assignee to rely thereon, performed by an independent, licensed
professional engineer satisfactory to Owner and each Assignee,
and which assessment (x) shall be sufficient in scope to
determine compliance with the applicable Environmental Legal
Requirements, (y) shall reveal no actual or potential
environmental liabilities which cannot be remediated by Lessee as
provided in the following clause (z), and (z) if such
environmental assessment reveals the need for additional review,
Lessee shall have provided such additional information or
environmental assessments as are required by Owner and each
Assignee and, subject to Section 20 hereof, any remediation
recommended therein to be performed shall have been performed,
and evidence of compliance with Section 34(c)(ii).
(e) Upon such return of the Leased Property to Owner, Lessee
shall deliver to Owner a then current title insurance policy or a
binding commitment to issue a title insurance policy written by a
title insurance company reasonably acceptable to Owner, insuring
good and marketable title in the Leased Property in an amount
equal to the Termination Value determined as of the Termination
Date, unencumbered except for Owner Liens or Permitted Liens.
Upon the request of Owner, Lessee shall continue to maintain its
insurance policies for the Leased Property required under Section
15 hereof if able to do so on a commercially reasonable basis,
provided that Owner pays or reimburses Lessee for its pro rata
costs thereof.
(f) Until the Leased Property has been returned to Owner in
the condition required under Section 34(a) through (d) hereof,
Lessee shall continue to pay Owner, on the same dates on which
Base Rental was payable during the Basic Lease Term or any
Extension Lease Term thereof, 125% of the Base Rental that was
payable on the last Rent Payment Date of the Basic Lease Term
thereof, or if the Term has been renewed pursuant to Section
29(a) hereof, 125% of the same Base Rental that was payable on
each Rent Payment Date during the last Extension Lease Term,
plus, in each case, all Additional Rental for which Lessee is
liable applicable to such periods.
(g) The provisions of this Section 34 are of the essence of
this Lease, and any breach thereof shall be deemed an Event of
Default hereunder, and upon application to any court of equity
having jurisdiction in the premises, Owner shall be entitled to a
decree against Lessee requiring specific performance of the
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covenants of Lessee set forth in this Section 34.
Section 35. Financial Information. Lessee agrees to
furnish Owner (a) as soon as available, and in any event within
105 days after the last day of each fiscal year of Lessee, a copy
of the balance sheet of Lessee's Parent on a consolidated basis
as of the end of such fiscal year, and related consolidated
statements of income and retained earnings of Lessee's Parent for
such fiscal year, certified by an independent certified public
accounting firm of recognized standing, each on a comparative
basis with corresponding statements for the prior fiscal year,
and a copy of Lessee's Parent's form 10-K, if any, filed with the
Securities and Exchange Commission for such fiscal year; (b)
within 50 days after the last day of each fiscal quarter of
Lessee's Parent (except the last such fiscal quarter), a copy of
the balance sheet as of the end of such quarter, and statement of
income and retained earnings covering the fiscal year to date of
Lessee Parent on a consolidated basis, each on a comparative
basis with the corresponding period of the prior year, all in
reasonable detail and certified by the treasurer or principal
financial officer of Lessee's Parent, together with a copy of
Lessee's Parent's form 10-Q, if any, filed with the Securities
and Exchange Commission for such quarterly period; (c)
contemporaneously with its transmittal to each stockholder of
Lessee's Parent and to the Securities and Exchange Commission,
all such other financial statements and reports as Lessee's
Parent shall send to its stockholders and to the Securities and
Exchange Commission; (d) as soon as available to Lessee's Parent,
the notice of any material adjustment resulting from any audit of
the books and/or records of Lessee's Parent by any taxing
authority having jurisdiction over Lessee's Parent; and (e) such
additional financial information as Owner may reasonably request
concerning Lessee's Parent.
Section 36. Recording. Lessee will execute, acknowledge,
deliver and cause to be recorded or filed in the manner and place
required by any present or future law, a memorandum hereof, and
all other instruments, including, without limitation, financing
statements, continuation statements, releases and instruments of
similar character, which shall be reasonably requested by Owner
or any Assignee as being necessary or appropriate in order to
protect Owner's or Assignee's respective interests in the Leased
Property or to publish notice of or to create, maintain and
protect the lien and security interest intended to be created by
the mortgage securing the Loan and the other obligations of Owner
to Lender upon, and the interest of Lender in, the Leased
Property. If Lessee shall fail to comply with this Section 36,
Owner shall be and is hereby irrevocably appointed the agent and
attorney in fact of Lessee, to comply therewith, but this
sentence shall not prevent any default in the observance of this
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Section 36 by Lessee from constituting an Event of Default in
accordance with the provisions of this Lease. Lessee may record
a memorandum hereof whether or not requested by Owner.
Section 37. No Reliance. Lessee and Owner hereby mutually
acknowledge that in negotiating the terms of this Lease and all
other related agreements and documents, each has sought, obtained
and relied exclusively upon such accounting, actuarial, tax and
legal advice from its own or other independent sources as it has
deemed necessary, and further acknowledges that neither Lessee,
Owner, Lender, LC Issuer, BFS or any Assignee nor any of their
respective affiliates or personnel has represented or warranted
the legal, tax, economic, accounting, or other consequences of
the terms and provisions hereof and of the other related
agreements and documents.
Section 38. Miscellaneous. Any provision of this Lease
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating or
diminishing Owner's rights under the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable
law, Lessee hereby waives any provision of law which renders any
provision of this Lease prohibited or unenforceable in any
respect. In no event shall any amounts payable hereunder,
whether payable as Base Rental, Additional Rental or otherwise,
exceed any limits imposed by applicable law. To the extent any
amounts received by Owner exceeds the maximum amount permitted,
such payment shall be credited to future Base Rental payable
hereunder or at Owner's option, be refunded to Lessee. No term
or provision of this Lease may be amended, altered, waived,
discharged or terminated orally, but may be amended, altered,
waived, discharged or terminated only by an instrument in writing
signed by a duly authorized officer of the party against which
the enforcement of the amendment, alteration, waiver, discharge
or termination is sought. A waiver on any one occasion shall not
be construed as a waiver on a future occasion. All of the
covenants, conditions and obligations contained in this Lease
shall be binding upon and shall inure to the benefit of the
respective successors and assigns of Owner and (subject to the
restrictions of Section 19 hereof) Lessee. This Lease, the
Construction Agency Agreement and each related instrument,
document, agreement and certificate, collectively constitute the
complete and exclusive statement of the terms of the agreement
between Owner and Lessee with respect to the leasing of the
Leased Property, and cancel and supersede any and all prior oral
or written understandings with respect thereto.
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Section 39. Venue; Governing Law. Lessee agrees that at
Owner's sole election any suit, action or proceeding brought by
Owner against Lessee in connection with or arising out of this
Lease may be brought in any federal or state court in the State
of New Jersey, and Lessee waives personal service of all process
upon it and consents that service of process may be made by mail
or messenger directed to it at its address set forth above and
that service so made shall be deemed to be completed upon the
earlier of actual receipt or three (3) days after the same shall
have been posted to Lessee's said address. Nothing herein
contained shall affect Owner's right to serve legal process in
any other manner permitted by law or to bring any suit, action or
proceeding against Lessee or its property in the courts of any
other jurisdiction. This Lease shall in all respects be governed
by, and constructed in accordance with, the laws of the State of
New Jersey, including all matter of construction, validity and
performance.
Section 40. Estoppel Certificate. Lessee agrees from time
to time, upon not less than ten (10) days' prior written notice
from Owner, Lender or LC Issuer, to execute, acknowledge and
deliver to Owner, Lender or LC Issuer or any other Person
designated by Owner, Lender or LC Issuer , a statement in form
and substance reasonably satisfactory to the Person requesting
same certifying that this Lease is unmodified and in full force
and effect (or if there have been modifications, that this Lease
is in full force and effect as modified and stating the
modifications), the dates to which Base Rental and Additional
Rental have been paid, and stating whether or not, to the best
knowledge of the signer of the certificate, Owner is in default
in performance of any covenant, agreement or condition in this
Lease and, if so, specifying each such default of which the
signer may have knowledge, it being intended that any such
statement may be relied upon by any prospective purchasers of the
Leased Property, any assignee of Owner, Lender or LC Issuer or
any prospective mortgage lender.
Section 41. Survival of Representations, Warranties and
Covenants. All representations, warranties, agreements,
covenants and obligations of Lessee herein are material, shall be
deemed to have been relied upon by Owner, and, unless by their
express terms expire as of an earlier date, shall survive and
continue in full force and effect notwithstanding the expiration
or earlier termination of this Lease in whole or in part,
including the expiration or termination of the Term with respect
to the Leased Property.
Section 42. Nonrecourse.
(a) Any provision of this Lease to the contrary
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notwithstanding, the liability of the Owner hereunder, if any,
shall be satisfied solely from the assets held in trust by the
Owner, including the Leased Property. This Lease is a trust
obligation of the Owner, and no recourse under or upon any
representation, warranty, obligation, covenant or agreement
contained herein or for any claim based hereon or in respect
hereto shall be had against any past, present or future trustee,
co-trustee, beneficiary, settlor, officer, employee or agent, as
such, of the Owner or any of their respective assets or
properties.
(b) It is expressly understood and agreed by the parties
hereto that (i) this Lease is executed and delivered by First
Fidelity Bank, National Association, not individually or
personally but solely as trustee under the Trust Agreement 1995-1
dated as of July 1, 1995 with the Beneficiary in the exercise of
powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements herein made on the
part of the Owner is made and intended not as personal
representations, undertakings and agreements by First Fidelity
Bank, National Association, but is made and intended for the
purpose for binding only the Owner as the trustee under the Trust
Agreement, (iii) under no circumstances shall First Fidelity
Bank, National Association, be personally liable for the payment
of any indebtedness or expenses of the Trustee or be liable for
the breach or failure of any obligation, representation, warranty
or covenant made or undertaken by the Owner under this Lease.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be duly executed under seal by their duly authorized
representatives effective as of the date first written above.
First Fidelity Bank, National Association,
not in its individual capacity but solely as
Trustee under Trust Agreement 1995-1
dated as of July 1, 1995
(Owner)
_________________________________
By:______________________________
Title:____________________________
TIFFANY AND COMPANY
(Lessee)
_________________________________
By:______________________________
Title:_____________________________
COUNTERPART NO.____ OF ____ SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS.
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Schedule I
List of Listed Permits
1) Foundation Permit
2) Building Permit
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