LEASE AGREEMENT
by and between
A.L INDUSTRIER AS
as LANDLORD
and
APOTHEKERNES LABORATORIUM AS
as TENANT
Dated as of: October 3, 1994
PREMISES: Harbitzalleen 3, 5 and 5B
0275 Oslo
Norway
TABLE OF CONTENTS
Page
1. Demise of Premises . . . . . . . . . . . . . . . . . . . 1
2. Certain Definitions . . . . . . . . . . . . . . . . . . 1
3. Title and Condition . . . . . . . . . . . . . . . . . . 5
4. Use of Leased Premises; Quiet Enjoyment . . . . . . . . 5
5. Term . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Net Lease; Tenant's Payments . . . . . . . . . . . . . . 10
8. Payment of Impositions; Compliance with Law . . . . . . 10
9. Liens; Recording and Title . . . . . . . . . . . . . . . 11
10. [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . 12
11. Maintenance and Repair . . . . . . . . . . . . . . . . . 12
12. Alterations . . . . . . . . . . . . . . . . . . . . . . 13
13. Condemnation . . . . . . . . . . . . . . . . . . . . . . 14
14. Insurance . . . . . . . . . . . . . . . . . . . . . . . 16
15. Restoration . . . . . . . . . . . . . . . . . . . . . . 18
16. Assignment and Subletting . . . . . . . . . . . . . . . 19
17. Permitted Contests . . . . . . . . . . . . . . . . . . . 20
18. Conditional Limitations; Default Provision . . . . . . . 21
19. Additional Rights of Landlord . . . . . . . . . . . . . 24
20. Notices . . . . . . . . . . . . . . . . . . . . . . . . 25
21. Estoppel Certificate . . . . . . . . . . . . . . . . . . 25
22. Surrender . . . . . . . . . . . . . . . . . . . . . . . 25
23. No Merger of Title . . . . . . . . . . . . . . . . . . . 26
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24. Environmental . . . . . . . . . . . . . . . . . . . . . 27
25. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 27
26. Termination by Tenant . . . . . . . . . . . . . . . . . 27
27. Indemnification . . . . . . . . . . . . . . . . . . . . 27
28. Mortgage by Landlord . . . . . . . . . . . . . . . . . . 28
29. Partial Invalidity . . . . . . . . . . . . . . . . . . . 28
30. Parking Area . . . . . . . . . . . . . . . . . . . . . . 28
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LEASE AGREEMENT, made as of this 3rd day of October, 1994,
between A.L Industrier AS a Norwegian corporation ("Landlord"),
with an address of Postboks 158 Soyen, N-0212 Oslo 2, Norway and
Apothekernes Laboratorium AS, a corporation organized and
existing under the laws of the Kingdom of Norway ("Tenant"), with
an address of Postboks 158 Skoyen, N-212 Oslo 2, Norway.
R E C I T A L S:
A. A. L. Laboratories, Inc., and Apothekernes Laboratorium
A.S are parties to a certain Restructuring Agreement dated as of
May 16, 1994 (the "Restructuring Agreement").
B. Pursuant to the transactions contemplated by the
Restructuring Agreement, Landlord has agreed to lease to Tenant
and Tenant has agreed to lease from Landlord the Leased Premises
(as hereinafter defined) on the terms and conditions herein
contained.
In consideration of the rents and provisions herein stipu-
lated to be paid and performed, Landlord and Tenant hereby
covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets
to Tenant, and Tenant hereby takes and leases from Landlord, for
the term or terms and upon the provisions hereinafter specified,
the following described property (collectively, the "Leased
Premises"): (i) the real property described in Exhibit "A"
attached hereto and made a part hereof, together with all
easements, rights and appurtenances thereunto belonging or
pertaining (collectively, the "Land"); (ii) the buildings,
structures and other improvements now constructed on the Land
(collectively the "Building and Land Improvements") as more
particularly described on Exhibit "B" attached hereto and all
machinery and equipment installed therein or used therewith
exclusive of Trade Fixtures (as hereinafter
defined)(collectively, the "Building Equipment"). The Building
Equipment does not include trade fixtures, production equipment,
machinery and related tools and equipment used by Tenant in
Tenant's business conducted from the Leased Premises (the "Trade
Fixtures"). The Trade Fixtures are owned by Tenant and shall
remain the property of Tenant during and after the term of this
Lease.
2. Certain Definitions.
"Additional Rent" shall mean Additional Rent as defined
in Paragraph 6(b).
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"Adjoining Property" shall mean all sidewalks, curbs,
gores and vault spaces adjoining any of the Leased Premises.
"Alterations" shall mean all changes, additions,
improvements or repairs to, all alterations, reconstruction,
renewals or removals of and all substitutions or replacements for
any of the Building and Land Improvements or Building Equipment,
both interior and exterior, structural and nonstructural, and
ordinary and extraordinary, including, without limitation, the
construction of new or additional structures, buildings or other
improvements.
"Award Notice" shall have the meaning ascribed to it in
Section 13(c)
"Basic Rent" shall mean Basic Rent as defined in
Paragraph 6(a).
"Basic Rent Payment Dates" shall mean the Basic Rent
Payments Dates as defined in paragraph 6(a).
"Building Equipment" shall mean the Building Equipment
as defined in Paragraph 1.
"Commencement" or Commencement Date" shall mean the
Commencement Date as defined in Paragraph 5(a)
"Condemnation" shall mean a Taking and/or a
Requisition.
"Condemnation Notice" shall mean notice or knowledge of
the institution of or intention to institute any proceeding for
Condemnation.
"Default Rate" shall mean the Default Rate as defined
in Paragraph 6(c).
"Disputed Amount" shall have the meaning set forth in
Paragraph 6(b).
"Dispute Notice" shall have the meaning set forth in
Paragraph 6(b).
"Escrow" shall mean an escrow account to be established
by Landlord and Tenant with an escrow agent reasonably acceptable
to Landlord and Tenant into which shall be deposited the Net
Proceeds or Net Award, as applicable, from a casualty event or
Condemnation, for disbursement in accordance with the terms of
the Lease and the agreement establishing the Escrow.
"Expense Notice" shall have the meaning set forth in
Paragraph 6(b).
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"Event of Default" shall mean an Event of Default as
defined in Paragraph 18(a).
"Impositions" shall mean the Impositions as defined in
Paragraph 8(a).
"Improvements" shall mean the Building and Land
Improvements as defined in Paragraph 1.
"Land" shall mean the Land as defined in Paragraph 1.
"Landlord's Portion shall have the meaning ascribed to
it in Section 13(a).
"Law" shall mean any constitution, statute, rule of
law, code, ordinance, order, judgment, decree, injunction, rule,
regulation or requirement, whether now existing or hereafter
enacted even if unforeseen or extraordinary, of every duly
constituted governmental authority, court, agency, or subdivision
of any of the foregoing.
"Leased Premises" shall mean the Leased Premises as
defined in Paragraph 1.
"Legal Requirements" shall mean all present and future
Laws, and all covenants, restrictions and conditions now or here-
after of record which may be applicable to Landlord, Tenant or to
any of the Leased Premises, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair
or reconstruction of any of the Leased Premises, even if
compliance therewith necessitates structural changes or
improvements or results in interference with the use or enjoyment
of any of the Leased Premises.
"Net Award" shall mean the entire award payable to
Landlord by reason of a Condemnation, less any expenses incurred
by Landlord in collecting such award.
"Net Proceeds" shall mean the entire proceeds of any
insurance required under Paragraph 14(a), to the extent payable
to Landlord, less any expenses incurred by Landlord in collecting
such proceeds.
"Permitted Encumbrances" shall mean all covenants,
restrictions, reservations, liens, conditions and easements
presently of record with respect to the Land, which do not have a
material adverse effect on the operation or use of the Leased
Premises in connection with Tenant's business.
"Permitted Uses" shall have the meaning ascribed to it
in Section 4(a).
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"Person" shall mean individual, partnership, associa-
tion, corporation or other entity.
"Reimbursement Cap" shall mean an amount of Norwegian
Kronor equal to the sum amount of $2.5 million based on the
exchange rate quoted by the Oslo Stock Exchange at 12:00 noon on
the date hereof multiplied by a fraction the numerator of which
is a generally recognized cost of living index published by the
Government of Norway and having general applicability as a
measure of the cost of living in Norway for the year in which the
expiration or other termination of the Term occurs and the
denominator of which shall be the same index for the month and
year in which the Commencement Date occurs.
"Remaining Leased Premises" shall have the meaning
ascribed to it in Section 13(c).
"Renewal Term" shall have the meaning given to it in
Paragraph 5(b).
"Rent" shall mean Basic Rent and Additional Rent.
"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased
Premises by any governmental authority, civil or military,
whether pursuant to an agreement with such governmental authority
in settlement of or under threat of any such requisition or
confiscation, or otherwise.
"Restructuring Agreement" shall have the meaning set
forth in Recital Paragraph A.
"Restoration Sum" shall mean the Restoration Sum as
defined in paragraph 13(c).
"Sale Agreement" shall have the meaning given to in
Paragraph 3(d).
"State" shall mean the Kingdom of Norway.
"Taking" shall mean any taking of any of the Leased
Premises in or by condemnation or other eminent domain proceed-
ings pursuant to any Law, general or special, or by reason of any
agreement with any condemnor in settlement of or under threat of
any such condemnation or other eminent domain proceeding, or by
any other means, or any de facto condemnation.
"Tenant's Portion" shall have the meaning ascribed to
it in Section 13(a).
"Term" shall mean the term as defined in Paragraph 5.
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"Termination Date" shall mean the Termination Date as
defined in Paragraph 5.
"Trade Fixtures" shall have the meaning set forth in
Section 1.
3. Title and Condition.
(a) Landlord hereby represents and warrants to Tenant
that the Leased Premises are demised and let subject only to
(i) the Permitted Encumbrances, (ii) any state of facts which an
accurate survey and physical inspection of the Leased Premises
would show, (iii) all Legal Requirements, it being understood and
agreed, however, that the recital of the Permitted Encumbrances
herein shall not be construed as a revival of any thereof which
for any reason may have expired or terminated and (iv) the
matters set forth on Schedule 3.5(c) to the Restructuring
Agreement.
(b) Tenant hereby acknowledges that it is presently in
possession of the Leased Premises and hereby accepts the same in
their current, "as is" condition.
(c) Landlord hereby assigns, without recourse or
warranty whatsoever, to Tenant all warranties, guaranties and
indemnities, express or implied, and similar rights which
Landlord may have against any manufacturer, seller, engineer,
contractor or builder in respect of any of the Leased Premises,
including any rights and remedies existing under contract or
applicable law and including all existing warranties relating to
the construction of the Improvements on the Leased Premises;
provided, however, that such assignment shall terminate and be of
no further force or effect, and all the said warranties,
guaranties, indemnities and other rights shall automatically
revert to Landlord without the requirement of any further action
by the parties, upon the occurrence of an Event of Default
resulting in termination of this Lease, such assignment shall
cease.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Landlord represents and warrants to Tenant that,
to the best of Landlord's knowledge, use of the Leased Premises
by Tenant for the uses and purposes presently conducted thereon
by Tenant (the "Permitted Uses") does not violate any Legal
Requirements existing at Commencement except as to violations the
existence of which do not materially impair the continued use of
the Leased Premises for the Permitted Uses and except as set
forth on Schedule 3(c) of the Restructuring Agreement. Tenant
shall not permit any unlawful occupation, business or trade to be
conducted on any of the Leased Premises or any use to be made
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thereof contrary to any applicable Legal Requirement then in
effect. Tenant shall not use or occupy or permit any of the
Leased Premises to be used or occupied, nor do or permit anything
to be done in or on any of the Leased Premises, in a manner which
would or might reasonably be expected to (i) violate any
certificate of occupancy affecting any of the Leased premises,
(ii) make void or voidable any insurance then in force with
respect to any of the Leased Premises, (iii) make it impossible
to obtain fire or other insurance which Tenant is required to
furnish hereunder, (iv) subject to the terms of Paragraph 12
hereof, cause material structural injury to any of the
Improvements, or (v) constitute a public or private nuisance or
waste.
(b) Landlord agrees that, upon Tenant's paying the
Basic Rent, Additional Rent and other charges herein reserved,
and performing and observing the covenants, conditions and
agreements hereof upon the part of Tenant to be performed and
observed, Tenant shall and may peaceably hold and enjoy the
Leased Premises during the Term (as it may be extended), without
interruption or disturbance from Landlord or persons claiming
through or under Landlord, subject, however, to the terms of this
Lease. This covenant shall be construed as running with the land
to and against subsequent owners and successors in interest and
is not, nor shall it operate or be construed as, a personal
covenant of Landlord, except to the extent of Landlord's interest
in the Leased Premises.
5. Term.
(a) Subject to the provisions hereof, Tenant shall
have and hold the Leased Premises for a term (the "Term")
commencing on October 3, 1994 (the "Commencement Date") and
ending on October 3, 2014.
(b) Subject to the following notice requirements, and
provided that at the time of such notice Tenant is not then in
default under the terms of this Lease, Tenant is hereby granted
the further right (each a "Renewal Option") to renew the Term of
this Lease for four (4) additional consecutive five (5) year
terms (each a "Renewal Term"). The Basic Rent for each Renewal
Term shall be the then prevailing fair rental value of the Leased
Premises as determined in accordance with this Paragraph 5(b).
Tenant shall exercise each Renewal Option, if at all, by written
notice to Landlord not less than twelve (12) months prior to the
expiration of the then current Term (a "Renewal Notice"). If
Tenant shall fail to exercise one or more Renewal Options, such
failure shall be deemed for all purposes of this Lease to be a
waiver of all subsequent Renewal Options. All the terms and
provisions of this Lease shall apply to each Renewal Term, except
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that: (i) Basic Rent for each year or portion thereof in a
Renewal Term shall be equal to the then current Market Rate (as
hereinafter defined); and (ii) Tenant shall have only the
remaining, unexercised renewal options. In the event that Tenant
timely exercises a Renewal Option, Landlord and Tenant each agree
to execute an amendment to this Lease in a form reasonably
acceptable to Tenant and Landlord reflecting the extension of the
Term by the Renewal Term on the terms and conditions set forth in
this Paragraph 5(b). If Tenant shall exercise a Renewal Option,
on the fifteenth (15) business day after the receipt by Landlord
of the Renewal Notice, Landlord and Tenant shall each submit to
the other in writing each party's proposed rental rate structure
to be applicable to the Renewal Term. Each of Landlord's and
Tenant's proposed rental rate structure (the "Market Rate") shall
address each of the following and shall reflect the current terms
and conditions which each party believes would in good faith be
proposed to third parties seeking comparable lease terms in
accordance with local custom: (a) base rental rate; (b) all
items of additional rent including, without limitation, the
method of real estate tax and operating expense recovery; ( c )
indexed, fixed or stepped increases to lease rental; (d) cash
allowance for tentative improvements; and (e) rental abatement.
If the Market Rates proposed by the two parties differ by less
than ten percent, then such difference shall be split equally
between the two proposed rate structures, and the Market Rate for
purposes of this Paragraph 5(b) shall be the average of the two
proposals. If such difference exceeds ten percent, then Landlord
and Tenant shall have thirty (30) days in which to negotiate in
good faith in an effort to agree upon a Market Rate. If Landlord
and Tenant are unable to agree on the Market Rate in such thirty
(30) day period, then the Market Rate shall be determined in
accordance with the following procedure:
I. Not later than thirty (30) days following the
expiration of the above thirty (30) day period, Landlord and
Tenant shall each appoint an independent real estate appraiser,
who shall have at least ten (10) years of appraisal experience
with respect to commercial and industrial rental properties
similar in nature and location to the Leased Premises
("Landlord's Appraiser" and "Tenant's Appraiser", respectively).
In the event that either Landlord or Tenant shall fail to appoint
their respective appraisers within a period of ten (10) days
after written notice and the other party to make such
appointment, then the appraiser appointed by the party not in
default hereunder shall appoint a second appraiser given the
qualifications set forth above. Not later than fifteen (15) days
after the appointment of the last to be appointed of Landlord's
Appraiser and Tenant's Appraiser, Landlord's Appraiser and
Tenant's Appraiser shall appoint a third appraiser, who shall
have qualifications comparable to the Landlord's Appraiser and
the Tenant's Appraiser (the "Referee"). In the event that
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Landlord's Appraiser and Tenant's Appraiser are unable to agree
on the identity of the Referee within said fifteen (15) day
period, such Referee shall be appointed by generally recognized
commercial arbitration association of good repute, from its
qualified panel of arbitrators, and shall be a person having the
qualifications set forth above.
II. Each of the Referee, Landlord's Appraiser and
Tenant's Appraiser shall promptly prepare its good faith estimate
of the Market Rate. On the fifteenth (15) day after the
appointment of the Referee, the Referee, Landlord's Appraiser and
Tenant's Appraiser shall each simultaneously submit to Landlord
and Tenant in sealed envelopes their respective opinions of
Market Rate, together with such written data in support of said
opinions as each respective appraiser shall deem appropriate. If
all three opinions of Market Rate are within ten percent of one
another, then the Market Rate for purposes of this Paragraph 5(b)
shall be the average of the three opinions of Market Rate. If
any one of the three opinions of Market Rate shall differ from
the other two by ten percent or more, then such opinion shall be
disregarded, and the Market Rate for purposes of this Paragraph
5(b) shall be the average of the remaining two opinions of Market
Rate. If no two of the opinions of Market Rate are within ten
percent of each other, then the Market Rate for purposes of this
Paragraph 5(b) shall be the average of the two closest opinions.
Each party shall pay the costs and expenses associated with the
appraiser selected by such party and shall share equally the
costs and expenses of the Referee.
6. Rent.
(a) Tenant shall pay to Landlord, as annual rent for
the Leased Premises during the Term, the sum of one dollar
($1.00) ("Basic Rent"), commencing on the Commencement Date and
continuing on the first and each subsequent anniversary of the
Commencement Date thereafter during the Term (the said days being
called the "Basic Rent Payment Dates"), and shall pay the same at
Landlord's address set forth above, or at such other places or to
such other Persons as Landlord from time to time may designate to
Tenant in writing. In addition, Tenant shall pay as additional
rent the amounts more particularly set forth below in Paragraph
6(b). Each payment of Rent (Basic or Additional) shall be made
in Norwegian Kronor.
(b) In addition to Basic Rent, Impositions and all
other items of additional rent hereunder, Tenant shall pay and
discharge when the same shall become due, as additional rent, all
expenses of ownership and operation of the Leased Premises other
than expenses that would not be incurred if Tenant rather than
Landlord owned the Leased Premises, together with all other
amounts and obligations which Tenant assumes or agrees to pay or
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discharge pursuant to this Lease, together with every fine,
penalty, interest and cost which may be lawfully added by the
third party payee or collecting authority for nonpayment or late
payment thereof (collectively "Additional Rent"). In the event
of any failure by Tenant to pay or discharge any of the
foregoing, Landlord shall have all rights, powers and remedies
provided herein, by law or otherwise, in the event of nonpayment
of Basic Rent. All payments of Additional Rent due hereunder
shall, if not payable directly by Tenant to the party to which
such amounts are owed, be due and payable not later than fifteen
(15) days after receipt by Tenant of an itemized invoice therefor
from Landlord documenting in reasonable detail the amount and
nature of the expenses included therein (an "Expense Notice").
If Tenant shall dispute the nature or amount of any charges
included on an Expense Notice and shall so notify Landlord in
writing (a "Dispute Notice") prior to the expiration of fifteen
(15) days after receipt of such Expense Notice, then Tenant shall
pay the amount not in dispute as required hereby and the amount
so disputed (the "Disputed Amount") shall not become due and
payable until such dispute has been resolved; provided, however,
if the Disputed Amount shall include amounts attributable to
Impositions, Tenant shall pay the portion of the Disputed Amount
allocable to Impositions with all undisputed amounts but shall
for all purposes hereof be deemed to have reserved all rights to
continue to dispute the payment thereof, and, if such dispute is
resolved in favor of Tenant, Tenant shall be entitled to receive
from Landlord a refund of any Disputed Amount so paid. If
Landlord and Tenant cannot or do not reach agreement as to the
payment of the Disputed Amount within fifteen (15) days after
receipt by Landlord of a Dispute Notice, then either party hereto
may submit the matter to binding arbitration pursuant to Chapter
32 of the Norwegian Civil Procedure Act. The costs and expenses
of any arbitrator or arbitrators so engaged shall be shared
equally by the parties; provided, however, that each party shall
be responsible for the payment of all professional fees and
expenses incurred by such party in connection with any such
arbitration. The amount, if any, required to be paid by Tenant
to Landlord as a result of such arbitration shall be paid to
Landlord, with interest at the Default Rate from the date which
is fifteen (15) days after receipt of the Expense Notice not
later than fifteen (15) days after the decision is rendered in
the arbitration.
(c) In the event of and from and after the date of
occurrence of any Event of Default in the payment of any sum
payable hereunder by Tenant as Rent and until such Event of
Default is fully cured, Tenant shall pay to Landlord, within ten
(10) days following demand by Landlord, as Additional Rent,
interest on the principal amount of the unpaid sums at the rate
(the "Default Rate") which is equal to one-month LIBOR plus two
percent (2%) on the following sums until paid in full: (i) all
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overdue installments of Basic Rent from the respective due dates
thereof, (ii) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant,
from the date of payment thereof by Landlord, and (iii) on all
other overdue amounts of Additional Rent from the date Landlord
demands payment. If, at any time, any sum paid or payable by
Tenant to Landlord under any provision of this Lease exceeds the
maximum amount permitted by applicable law, such sum shall be
immediately and automatically reduced to the maximum amount
permitted by applicable law and any sum paid in excess of such
maximum amount shall, as of the date of such payment, be
automatically credited to the advance payment of Basic Rent next
becoming due and otherwise unpaid.
(d) In the event of termination of this Lease as to
the entire Leased Premises pursuant to paragraph 13(a) or 14(c)
of this Lease, Tenant's obligation to pay rent or any other sum
payable under this Lease by Tenant shall terminate on the
effective date as such termination.
7. Net Lease; Tenant's Payments.
(a) This is a net lease and Basic Rent, Additional Rent
and all other sums payable hereunder by Tenant shall be paid
without notice or demand, and without set-off, counterclaim,
recoupment, abatement, suspension, deferment, diminution, deduc-
tion, reduction or defense (collectively, a "Set-Off"), except as
expressly set forth in Paragraph 6(b) hereof. It is the
intention of the parties hereto that the obligations of Tenant
hereunder shall be separate and independent covenants and agree-
ments, that Basic Rent, Additional Rent and all other sums
payable by Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated
pursuant to an express provision of this Lease.
(b) Each and every payment and expenditure due from
Tenant under this Lease, other than Basic Rent, shall be deemed
to be Additional Rent hereunder, whether or not the provisions
requiring payment of such amounts specifically so state, and
shall be payable, unless otherwise provided in this Lease, within
ten (10) days after written demand by Landlord, and in the case
of the non-payment of any such amount, Landlord shall have, in
addition to all of its other rights and remedies, all the rights
and remedies available to Landlord hereunder or by law in the
case of non-payment of Basic Rent. Unless expressly otherwise
provided in this Lease, the performance and observance by Tenant
for all the terms, covenants and conditions of this Lease to be
performed and observed by Tenant shall be at Tenant's sole cost
and expense.
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8. Payment of Impositions; Compliance with Law.
(a) Subject to the provisions of Paragraph 17 hereof
(relating to contests), Tenant shall, before interest or
penalties are due thereon, pay and discharge all taxes of every
kind and nature (including real and personal property, income,
franchise, withholding, capital gains, profits and gross receipts
taxes), all charges for any easement or agreement maintained for
the benefit of any of the Leased Premises, all general and
special assessments, levies, permits, inspection and license
fees, all water and sewer rents and charges, all charges for
utility and communication services relating to any of the Leased
Premises, and all other public charges whether of a like or
different nature, even if unforeseen or extraordinary, to the
extent imposed upon or assessed against for periods of time
during the Term (collectively, the "Impositions"). Tenant shall
not be required to pay any Imposition assessed specially on the
Leased Premises as the result of non-compliance by Landlord or
the Leased Premises at or prior to Commencement with Legal
Requirements existing at Commencement.
Nothing herein shall obligate Tenant to pay federal,
state or local (i) franchise, capital stock or similar taxes, if
any, of Landlord, (ii) income, excess profits or other taxes, if
any, of Landlord, determined on the basis of its net income,
(iii) any estate, inheritance, succession, gift or similar tax,
or (iv) any capital gains tax imposed on Landlord by the State in
connection with the sale of the Leased Premises to any Person
other than Tenant or Tenant's designee or any capital gains tax.
In the event that any assessment against any of the Leased
Premises may be paid in installments, Tenant shall have the
option to pay such assessment in installments; provided that all
installments of any such assessment relating to a period of time
during the Term shall be paid by Tenant in full prior to the
expiration of the Term by lapse of time or otherwise. Tenant
shall prepare and file all tax reports required by governmental
authorities which relate to the Impositions. Tenant shall
deliver to Landlord, within fifteen (15) days of receipt thereof,
copies of all settlements and notices pertaining to the
Impositions which may be issued by any governmental authority
and, within thirty (30) days after the end of each calendar year
of the Term, receipts for payments of all Impositions made during
such year.
(b) Tenant shall promptly comply with and conform to
all of the Legal Requirements, subject to the provisions of
Paragraph 17 hereof. Tenant shall not be required to correct any
condition of or on the Leased Premises which existed at
Commencement and represented at Commencement a violation or
noncompliance by Landlord or the Leased Premises of or with any
Legal Requirement existing at Commencement.
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9. Liens; Recording and Title.
(a) Subject to the provisions of Paragraph 17 hereof
relating to contests, Tenant shall not, directly or indirectly,
create or permit to be created or to remain, and shall promptly
discharge or remove, any lien on any of the Leased Premises or
Basic Rent, Additional Rent or any other sums payable by Tenant
under this Lease, other than any Permitted Encumbrances and any
mortgage, lien, encumbrance or other charge created by or
resulting from any act or omission of Landlord before or after
Commencement. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO TENANT OR TO ANYONE HOLDING ANY OF THE LEASED
PREMISES THROUGH OR UNDER TENANT, AND THAT NO MECHANICS, OR OTHER
LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO
OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES. Landlord hereby represents and warrants to Tenant that
no such liens or claims for lien exist as of the Commencement
Date.
(b) If requested by Landlord or Tenant the other party
shall, at the expense of the requesting party, execute, deliver
and, when appropriate, record, file or register from time to time
all such instruments as may be required by any present or future
Law in order to evidence the respective interests of Landlord and
Tenant in any of the Leased Premises and shall, at Tenant's
expense, cause this Lease, or a memorandum of this Lease, and any
supplement hereto or to such other instrument, if any, as may be
appropriate, to be recorded, filed or registered and re-recorded,
refiled or re-registered in such manner and in such places as may
be required by any present or future Law in order to publish
notices and protect the validity or priority of this Lease.
(c) Nothing in this Lease and no action or inaction by
Landlord shall be deemed or construed to mean that Landlord has
granted to Tenant any right, power or permission to do any act or
to make any agreement which may create, give rise to, or be the
foundation for, any right, title, interest or lien in or upon the
estate of Landlord, subject to this Lease, in any of the Leased
Premises.
10. [INTENTIONALLY OMITTED]
11. Maintenance and Repair.
(a) Tenant shall at all times maintain the Leased
Premises and, to the extent required by applicable Legal
Requirements, the Adjoining Property, in substantially the same
condition of repair and appearance existing at Commencement and
in compliance in all material respects with all Legal
Requirements now or hereafter enacted, except for ordinary wear
- 12 -
and tear and damage by fire or other casualty. Tenant's
obligations under this Paragraph 11 shall include, but not be
limited to, maintaining and repairing the following: (i) the
roof and all structural elements of the Improvements; (ii) all
heating, air-conditioning and ventilating equipment and systems,
and all utility conduits, fixtures and equipment; (iii) all
interior and exterior walls and surfaces; (iv) all floors and
ceilings; (v) all signs; (vi) all glass, windows and doors and
(vii) all landscaping, roadways, parking or other exterior
improvements to the Land (including ice and snow removal).
Tenant shall do or cause others to do all shoring of the Leased
Premises or Adjoining Property or of foundations and walls of the
Improvements and every other act necessary or appropriate for the
preservation and safety thereof, by reason of or in connection
with any excavation or other building operation upon any of the
Leased Premises or Adjoining Property; provided, however, that
with respect to Adjoining Property, Tenant shall take such
actions only to the extent, Landlord shall, by any Legal
Requirement, be required to take such action or be liable for
failure to do so. Landlord shall not be required to make any
Alteration, whether foreseen or unforeseen, or to maintain any of
the Leased Premises or Adjoining Property in any way, unless such
maintenance or Alteration shall represent repair or correction of
conditions existing at Commencement which were not in compliance
with the representation and warranty contained in paragraph 4(a).
Any Alteration made by Tenant pursuant to this Subparagraph (a)
or pursuant to Subparagraph (b) of this Paragraph 11 shall be
made in conformity with the provisions of Paragraph 12.
(b) In the event that any Improvement, constructed by
Tenant after Commencement shall encroach upon any property,
street or right-of-way adjoining any of the Leased Premises or
upon any Adjoining Property, shall violate the provisions of any
restrictive covenant affecting any of the Leased Premises, shall
hinder or obstruct any easement or right-of-way to which any of
the Leased Premises is subject, or shall impair the rights of
others in, to or under any of the foregoing, Tenant shall,
promptly after receiving notice or otherwise acquiring knowledge
thereof, either (i) obtain valid and effective waivers or
settlements of all claims, liabilities and damages resulting from
each such encroachment, violation, hindrance, obstruction or
impairment, whether the same shall affect Landlord, Tenant or
both, or (ii) take such action as shall be necessary to remove
all such encroachments, hindrances or obstructions and to end all
such violations or impairments, including, if necessary, making
Alterations.
(c) Landlord shall have the right (but no obligation),
upon notice to Tenant (or without notice in case of emergency),
to enter upon any of the Leased Premises for the purpose of
making any Alterations which may be necessary by reason of
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Tenant's failure to comply with any provision of subparagraphs
(a) and (b) of this Paragraph 11. Promptly thereafter, Landlord
shall notify Tenant of such entry (if occurring in an emergency
without prior notice) and shall specify the cost thereof. Except
in case of emergency, the right of entry shall be exercised at
reasonable times and at reasonable hours. The cost of any such
entry, together with the cost of all such Alterations, shall be
Additional Rent; and Tenant shall pay the same to Landlord within
ten (10) days following written demand, therefor by Landlord,
which shall be accompanied by an itemized statement of such
costs. If not paid by Tenant within ten (10) days after proper
demand by Landlord, any sums payable under this paragraph 11(c)
shall thereafter be subject to payment by Tenant of interest
thereon at the Default Rate.
12. Alterations. Provided no default by Tenant has
occurred and is continuing hereunder, and subject to the
limitations hereinafter set forth, Tenant shall have the right to
(a) make any Alterations or (b) construct upon the Land any addi-
tional Improvements, without requirement of any consent or
approval of Landlord, such right to be exercised only in a manner
consistent with the reasonable and prudent business judgment
customarily exercised by owners of properties similar in nature
and use to the Leased Premises. Tenant agrees that (i) all such
Alterations shall be reasonably related to the conduct of
Tenant's business on the Leased Premises and construction or
installations shall be performed in a good and workmanlike
manner, (ii) all such Alterations, construction and installations
shall be expeditiously completed in compliance with all Legal
Requirements, (iii) all work done in connection with any such
Alteration, construction or installation shall comply with the
requirements of all insurance policies required to be maintained
by Tenant hereunder, (iv) prior to commencement of any such work,
Tenant shall give Landlord not less than twenty (20) days' prior
written notice to permit Landlord to file notices of non-
responsibility, and Tenant shall not commence any work until such
notices of non-responsibility have been filed, (v) Tenant shall
promptly pay all costs and expenses of any such Alteration,
construction or installation and shall discharge or remove all
liens filed against any of the Leased Premises arising out of the
same, (vi) Tenant shall procure (with joinder in any application
by Landlord, if necessary) and pay for all permits and licenses
required in connection with any such Alteration, construction or
installation, (vii) all such Alterations, construction and
installations shall be the separate property of Tenant during the
Term; and (viii) Tenant shall give Landlord not less than
seventy-five (75) days written notice prior to the commencement
of the demolition or removal of Improvements located upon the
Leased Premises as of the Commencement Date and having a value in
excess of 10% of the value of the Improvements then located on
the Leased Premises.
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13. Condemnation.
(a) Immediately upon Landlord or Tenant receiving or
acquiring a Condemnation Notice, Landlord or Tenant shall notify
the other party thereof. Landlord, at Landlord's expense, shall
be entitled to participate in any Condemnation proceeding and/or
negotiations under threat thereof and to contest the Condemnation
and/or the amount of the award therefor. Subject to the
provisions of this Paragraph 13, Tenant hereby irrevocably
assigns to Landlord any award or payment to which Tenant is or
may be entitled by reason of any Condemnation, to the extent the
same shall be paid or payable for Tenant's leasehold interest in
the Land and any Improvements and Building Equipment owned by
Landlord and existing thereon as of the Commencement Date (the
"Landlord's Portion); provided, however, Landlord hereby
irrevocably assigns to Tenant any award or payment to which
Landlord is or may be entitled by reason of any Condemnation to
the extent the same is paid or payable for Landlord's interest in
any Alterations (the "Tenant's Portion"). Nothing in this Lease
shall impair Tenant's right to any award or payment on account of
any Alterations or of Tenant's trade equipment, moving expenses
or loss of business, if available, to the extent that and so long
as (i) Tenant shall have the right to make, and does make, a
separate claim therefor against the condemnor, and (ii) such
claim does not otherwise reduce either the amount of the award
otherwise payable to Landlord for the Condemnation of Landlord's
fee interest in the Land.
(b) The entire Net Award for such Condemnation shall
be deposited into the Escrow and shall be disbursed therefrom as
set forth in Paragraph 13(c) hereof.
(c) If any portion of the Improvements, including
Building Equipment, or any appurtenance to the Leased Premises is
taken in Condemnation which Tenant, in Tenant's reasonable
discretion and taking into account the uses and purposes for
which the Leased Premises have been demised and let, considers
necessary to performance of its business operations at the Leased
Premises, then Tenant may elect to: (i) apply the Net Award for
restoration and replacement of the remaining portion of the
Leased Premises affected by such Condemnation (the "Remaining
Leased Premises"); or (ii) to terminate this Lease. Tenant shall
provide written notice of such election to Landlord not later
than one hundred eighty (180) days after the date on which Tenant
shall have received the Condemnation Notice, but in any event, no
later than the date which is sixty days prior to the date on
which possession of the Leased Premises or portion thereof is
required to be turned over to the condemning authority. In the
absence of such notice, Tenant shall be deemed to have elected to
terminate this Lease pursuant to clause (ii) above. If Tenant
elects to repair or restore the Remaining Leased Premises,
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restoration of the Remaining Leased Premises shall be performed
under Paragraph 15 of this Lease. Tenant may elect to restore
less than all of the Remaining Leased Premises. In the event
that Tenant shall elect to terminate this Lease, then such
termination shall be effective on the effective date of the
Condemnation as though the Term had expired on such date. In any
such event, Tenant shall submit a proposed division of the Net
Award setting forth: (i) the amount to be applied to restoration
of the Leased Premises under this Paragraph 13(c) (the
"Restoration Sum") if Tenant shall have elected to apply the Net
Award to repair and restoration of the Remaining Leased Premises;
or, (ii) the proposed allocation of the Net Award between the
Landlord's Portion and the Tenant's Portion if Tenant shall have
elected to terminate this Lease (the "Award Notice"). Landlord
shall have thirty (30) days following receipt of the Award Notice
to accept or reject the same and to provide Tenant with written
notice of Landlord's decision. If Landlord rejects the Award
Notice, Landlord may require that determination of the
Restoration Sum or the allocation of the Net Award between the
Landlord's Portion and the Tenant's Portion (the "Award
Allocation"), as he case may be, be submitted to binding
arbitration under Paragraph 13(d). In the absence of such
written rejection timely given, the Net Award shall be disbursed
from the Escrow in accordance with the Award Notice.
(d) If Landlord gives Tenant notice of election of
arbitration as permitted under to paragraph 13(c), Tenant and
Landlord shall each select an independent real estate appraiser
who is duly licensed to perform such appraisals in the State and
has at least ten(10) years experience in performing appraisals of
industrial plant real property of the nature of the Leased
Premises. The appraisers shall agree to a Restoration Sum or
Award Allocation, as the case may be, and submit same in writing
to Landlord and Tenant within forty-five (45) days following
their appointment. If the two (2) appraisers cannot agree, their
separate determination shall be averaged and shall be deemed to
represent their decision. If Landlord and Tenant both accept the
decision of the two (2) appraisers, the Restoration Sum or Award
Allocation, as the case may be, shall be the amount so
determined. If either Landlord or Tenant rejects the decision of
the two (2) appraisers, the two (2) appraisers shall jointly
select a third appraiser who is qualified hereunder within ten
(10) days following notice of rejection. The third appraiser
shall submit a proposed Restoration Sum or Award Allocation, as
the case may be, within thirty (30) days following appointment.
So long as the third appraiser's proposed Restoration Sum or
Award Allocation, as the case may be, is neither less than 80%
of, nor more than 120% of the original two (2) appraisers'
decision (whether determined by their agreement or by averaging),
it shall be final and binding on Landlord and Tenant. If the
third appraiser's proposed Restoration Sum or Award Allocation,
- 16 -
as the case may be, is less than 80% of the previous appraisers'
decision, it shall be increased to equal 80% of said amount, and
if it is more than 120% of the previous appraisers' decision, it
shall be decreased to equal 120% of said amount and shall
thereafter be final and binding on Landlord and Tenant. In the
event Tenant elects to apply the Net Award for restoration and
replacement of the remaining portion of the Leased Premises, any
Net Award not paid out by Tenant to third parties in connection
with such restoration shall be paid to Landlord to the extent of
the Landlord's Portion (as determined by the procedure set forth
above) with any remaining balance to be retained by Tenant.
14. Insurance.
(a) Tenant, at its sole cost and expense, shall
obtain, maintain and keep in full force and effect "all risks"
property insurance (including flood and earthquake coverage)
which shall insure the Improvements against physical damage or
destruction in the form from time to time in general use in the
State. Said policy or policies shall insure the Improvements and
Building Equipment on a replacement cost basis for their full
insurable value. All such policies shall name Landlord as an
insured and shall include an undertaking by the insurer to notify
Landlord and Tenant in writing not less than thirty (30) days
prior to any material change, cancellation or other termination
thereof. Such policy shall contain a deductible in an amount
determined by Tenant in Tenant's sole discretion. Any deductible
will be for the account of Tenant.
(b) Tenant, at its sole cost and expense, shall also
obtain, maintain and keep in full force and effect the following
insurance:
(i) "All risk" property insurance including flood
and earthquake coverage against physical damage or destruction
upon property of every description and kind owned by Tenant or
owned by third parties and in the custody of Tenant and located
at the Leased Premises.
(ii) Comprehensive general liability insurance
coverage to include personal injury, bodily injury, broad form
property damage, operations hazard, owner's protective coverage,
blanket contractual liability, products and completed operations
liability, naming Landlord as an additional insured, in an amount
per occurrence of not less than what is customary in Norway for
properties similar to the Leased Premises and business similar to
the business of Tenant conducted thereon combined single limit
bodily injury and property damage.
(c) In the event of any casualty resulting in damage
to any of the Improvements and/or Building Equipment, Tenant
- 17 -
shall take all steps reasonably required to recover any claims
available under applicable insurance, and the Net Proceeds
attributable thereto shall be deposited into the Escrow. If
Tenant, in Tenant's reasonable discretion and taking into account
the uses and purposes for which the Leased Premises have been
demised and let, considers the damaged Improvements and/or
Building Equipment necessary to performance of its business
operations at the Leased Premises, and if Tenant shall decide, in
Tenant's reasonable discretion, that such damaged Improvements
and/or Building Equipment cannot be completely restored within
the time period necessary for resumption of use of said
Improvements in Tenant's business operations, then Tenant may
elect to terminate this Lease. In the event of such election by
Tenant, to the extent permitted by applicable Norwegian law, the
Net Proceeds for damage attributable to Alterations and other
property or equipment owned by Tenant shall be disbursed from the
Escrow to Tenant, and the portion of such Net Proceeds
attributable to Improvements and Building Equipment existing on
the Land as of the Commencement Date shall be disbursed from the
Escrow to Landlord. In the event that Landlord and Tenant cannot
agree upon the division of such Net Proceeds, either party may
require that the determination be submitted to binding
arbitration in accordance with the procedure set forth under
Paragraph 13(d).
(d) In the event of any casualty resulting in damage
to any of the Improvements and/or Building Equipment, and
provided that Tenant does not elect to terminate this Lease
pursuant to Paragraph 14(c) hereof, the Term shall continue and
Tenant shall promptly after such casualty, as required in
Paragraph 11(a), commence and diligently continue to restore the
Improvements and Building Equipment as nearly as possible to the
condition and character required by Tenant in connection with the
operation of its business, in accordance with the provisions of
Paragraphs 12 and 15. Tenant shall give written notice to
Landlord of Tenant's election under Paragraph 14(c) hereof within
ninety (90) days after the date of any such casualty and in the
absence of such written notice, Tenant shall be deemed to have
elected to terminate this Lease.
(e) Landlord and Tenant each hereby release the other
from any and all liability or responsibility for any direct or
consequential loss, injury or damage to the Leased Premises, or
its contents, caused by fire or any other casualty, during the
Term, even if such fire or other casualty may have been caused by
the negligence (but not the gross negligence of willful act) of
the other party or one for whom such party may be responsible.
Inasmuch as the above mutual waivers will preclude the assignment
of any aforesaid claim by way of subrogation (or otherwise) to an
insurance company (or any other person), Tenant hereby agrees, if
required by the policies of fire and other property insurance
- 18 -
required to be maintained by Tenant pursuant hereto, to give
written notice of the terms of said mutual waivers, and to have
said insurance policies properly endorsed, if necessary, to
prevent the invalidation of said insurance coverage by reason of
said waivers.
(f) If Tenant shall elect to terminate this Lease in
the event of damage by fire or other casualty, then Tenant shall,
prior to the effective date of such termination, place the
damaged portion of the Leased Premises in a reasonably safe and
secure condition.
15. Restoration.
In the event that Net Proceeds or a Net Award
(including, for purposes of this paragraph, any portion thereof
representing a Restoration Sum) are applied by Tenant for the
restoration of any of the Land, Improvements or Building
Equipment, Tenant shall disburse such Net Proceeds or Net Award
as follows. Disbursements shall be made from time to time in
accordance with such terms and procedures as Tenant shall
reasonably require and upon receipt of (A) satisfactory evidence,
including architects' certificates, of the stage of completion,
of the estimated cost of completion and of performance of the
work to date in a good and workmanlike manner in accordance with
the contracts and plans and specifications, (B) waivers of liens,
and (C) contractors' and subcontractors' sworn statements as to
completed work for which payment is requested.
16. Assignment and Subletting. So long as no default by
Tenant has occurred and is continuing, Tenant may assign this
Lease or sublet all or any of the Leased Premises at any time to
any other party without the prior written consent of Landlord
but subject to all other terms and provisions of this Lease. No
assignment or sublease shall impose any additional obligations on
Landlord under this Lease. Within ten (10) days after the
execution and delivery of any such sublease, Tenant shall deliver
an original counterpart thereof to Landlord. Upon the occurrence
and during the continuance of an Event of Default under this
Lease, Landlord shall have the right immediately or at any time
thereafter to collect and enjoy all rents and other sums of money
payable under any sublease of any of the Leased Premises, and
Tenant hereby irrevocably and unconditionally assigns such rents
and money to Landlord, which assignment may be exercised upon and
after (but not before) the occurrence of an Event of Default.
(Tenant hereby agrees to execute any document (including without
limitation an assignment or waiver) required to effect the
assignment granted by Tenant to Landlord in the foregoing
sentence.) It shall be a condition of the validity of any
assignment or subletting that the assignee or sublessee agrees
directly with Landlord, in form reasonably satisfactory to
- 19 -
Landlord, to be bound by all the obligations of the Tenant
hereunder, including, without limitation, the obligation to pay
the rent and other amounts provided for under the Lease, but
neither such assignment or subletting nor the agreement of said
assignee or subtenant shall relieve the Tenant named herein of
any of the obligations of the tenant hereunder, and Tenant shall
remain fully and primarily liable therefor. No assignment,
subletting or use of the Leased Premises by any third party shall
permit any Alteration which is not otherwise permitted pursuant
to Paragraph 12 of this Lease. Notwithstanding the foregoing:
(i) any assignment of this Lease first made, first taking effect,
or, to the extent continuing after the expiration of the Initial
Term, shall be permitted without the consent of Landlord only if
same is in connection with a sale of the portion of the business
of Tenant conducted from the Leased Premises; (ii) any subletting
of the Leased Premises shall terminate at the end of the Initial
Term unless such subletting is made in connection with a sale of
the portion of the business of Tenant conducted from the Leased
Premises; and (iii) after the Initial Term, no subletting shall
be permitted except in connection with a sale of the portion of
the business of Tenant conducted from the Leased Premises,
provided that Tenant shall be permitted to sublet up to twenty
five percent (25%) of the Leased Premises so long as Tenant
continues to use the remaining seventy five percent (75%) of the
Leased Premises for the Permitted Uses. Any profit received by
Tenant, determined after taking into account all costs and
expenses incurred by Tenant in connection therewith, as a result
of any such assignment or subletting shall be retained by Tenant,
unless, as a result of any such assignment or subletting Tenant
no longer occupies any material portion of the Leased Premises,
and the use then being made of the Leased Premises by the
sublessee or assignee is not reasonably related to the business
previously conducted from the Leased Premises by Tenant.
17. Permitted Contests. In instances where payment,
compliance or performance is otherwise the obligation of Tenant
under this Lease, Tenant shall not be required to (i) pay any
Imposition, (ii) comply with any Legal Requirement,
(iii) discharge or remove any lien referred to in Paragraph 9 or
12, (iv) take any action with respect to any encroachment, viola-
tion, hindrance, obstruction or impairment referred to in
Paragraph 11(b), or (v) comply with a provision of an insurance
policy carried hereunder or a requirement of an insurer there-
under, so long as Tenant shall contest, in good faith and at its
expense, the existence, the amount or the validity thereof, the
amount of the damages caused thereby or the extent of its or
Landlord's liability therefor, by appropriate proceedings which
shall operate during the pendency thereof to prevent (i) the
collection of, or other realization upon, the Imposition, lien or
claim so contested, (ii) the sale, forfeiture or loss of any of
the Leased Premises, any Basic Rent or any Additional Rent to
- 20 -
satisfy the same or to pay any damages caused by the violation of
any such Legal Requirement or by any such encroachment, viola-
tion, hindrance, obstruction or impairment, (iii) any interfer-
ence with the use or occupancy of any of the Leased Premises,
(iv) any interference with the payment of any Basic Rent or any
Additional Rent, and (v) the cancellation or modification of any
fire or other insurance policy, or any restriction on its full
enforceability by Tenant or Landlord in accordance with its terms
or on the right to collect the proceeds thereof. While any
proceedings which comply with the requirements of this Paragraph
17 are pending, Landlord shall not have the right to pay, remove
or cause to be discharged the Imposition, lien or claim thereby
being contested. Tenant further agrees that each such contest
shall be promptly and diligently prosecuted to a final conclu-
sion, except that Tenant shall, so long as the conditions of this
Paragraph 17 are at all times complied with, have the right to
attempt to settle or compromise such contest through negotia-
tions. Tenant shall pay, and save Landlord harmless against, any
and all losses, judgments, decrees and costs (including, without
limitation all reasonable attorneys' fees and expenses) in
connection with any such contest and shall, promptly after the
final determination of such contest, fully pay and discharge the
amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses
thereof or in connection therewith, and perform all acts, the
performance of which shall be ordered or decreed as a result
thereof. No such contest shall subject Landlord to the risk of
any civil or criminal liability.
18. Conditional Limitations; Default Provision.
(a) The occurrence of any one or more of the following
shall constitute an Event of Default under this Lease: (i) a
failure by Tenant to make when due any payment of Basic Rent,
Additional Rent or other sum herein required to be paid by Tenant
which failure shall continue for ten (10) days after written
demand for such payment by Landlord; or (ii) a failure by Tenant
duly to perform and observe, or a violation or breach of, any
other provision hereof which failure, violation or breach shall
continue for thirty (30) or more days after written and specific
demand for its cure is made by Landlord to Tenant unless Tenant
shall have commenced the cure of such failure, violation or
breach and shall be diligently pursuing the same to completion,
or (iii) Tenant vacates or abandons the Leased Premises and such
vacation or abandonment shall continue for a period of thirty
(30) days after notice by Landlord to Tenant.
(b) If an Event of Default shall have occurred,
Landlord shall have the right at its option, then or at any time
- 21 -
thereafter to do any one or more of the following without further
demand upon or notice to Tenant:
(i) Landlord may give Tenant notice of Landlord's
intention to terminate this Lease on a date specified
in such notice, which date shall not be less than sixty
(60) days following such notice. Upon the date therein
specified, the Term, the estate hereby granted and all
rights of Tenant hereunder, shall expire and terminate
as if such date were the date hereinbefore fixed for
the expiration of the Term. Nevertheless, Tenant shall
be and remain liable for all of its obligations under
this Lease, including its liability for Rent, as
hereinafter provided.
(ii) Landlord may, whether or not the Term of this
Lease shall have been terminated pursuant to clause (i)
above, (A) give Tenant notice to surrender any of the
Leased Premises to Landlord on a date specified in such
notice, which date shall not be less than sixty (60)
days following the giving of such notice, at which time
Tenant shall surrender and deliver possession of the
Leased Premises or the specified portion thereof to
Landlord, or (B) reenter and repossess any of the
Leased Premises, with legal process, or without legal
process upon ninety (90) days notice to Tenant, by
peaceably entering the Leased Premises and changing
locks or by summary proceedings, ejectment or any other
lawful means or procedure. Upon or any time after
taking possession of any of the Leased Premises,
Landlord may, by peaceable means or legal process,
remove any Persons or property therefrom. Landlord
shall be under no liability for or by reason of any
such entry, repossession or removal. No such notice or
demand to Tenant to surrender or deliver possession of
the Leased Premises or entry or repossession shall be
construed as an election by Landlord to terminate this
Lease unless Landlord gives a written notice of such
intention to Tenant pursuant to clause (i) above.
(iii) Whether or not this Lease shall have been
terminated pursuant to clause (i) above or Landlord
shall have taken possession of the Leased Premises
pursuant to clause (ii) above, Landlord shall have the
right (but shall be under no obligation) (A) to reenter
the Leased Premises at any time and from time to time
and/or (B) to relet any of the Leased Premises to such
tenant or tenants, for such term or terms (which may be
greater or less than the period which would otherwise
have constituted the balance of the Term), for such
rent, on such conditions and for such uses as Landlord,
- 22 -
in its absolute discretion, may determine, and Landlord
may collect and receive any rents payable by reason of
such reletting. Any rents received by Landlord, less
Landlord's costs of reletting, shall be credited to
Tenant's Rent liability under this Lease. Landlord
shall have any and all duties to mitigate damages
provided by any applicable law. Landlord shall not
otherwise be responsible or liable for any failure to
relet the Leased Premises or any part thereof or for
any failure to collect any rent due upon any such
reletting. Landlord may make such Alterations as
Landlord, in its sole discretion, may deem advisable.
Such Alterations shall be made at Landlord's expense
unless Landlord is otherwise permitted to make them
under paragraph 11(c) hereof. Landlord may appoint a
receiver to protect Landlord's interest under this
Lease and may eject some, all or no persons from the
Leased Premises. Landlord shall be entitled to receive
and retain all rents, profits and income from the use,
operation or occupance of any of the Leased Premises.
(iv) Landlord at its option may, but shall not be
obligated to, without waiving any default, make any
payment required of Tenant herein or comply with any
agreement, term, covenant or condition required hereby
to be performed by Tenant. The amount so paid,
together with interest at the Default Rate from the
date of such payment by Landlord, shall be for the
account and at the expense of Tenant, and shall be due
and payable by Tenant to Landlord as Additional Rent
five (5) days after notice by Landlord to Tenant.
(v) Landlord may exercise any other right or
remedy now or hereafter existing by Law or in equity.
(vi) If an Event of Default has occurred and
Landlord has exercised its right under this Section 18,
Tenant hereby consents to eviction without a court
decision in accordance wit the Enforcement Act, Section
13-2, 3rd sentence, litera a) and b). Tenant may not
submit a counterclaim to the Landlord or make reduced
payments, unless the counterclaim is approved by the
Landlord.
(c) This Lease shall continue in full force and
effect, all of Tenant's liabilities and obligations hereunder
shall continue and Landlord may enforce all of its rights and
remedies hereunder, including the right to receive Rent and all
other sums payable to Landlord hereunder, unless this Lease shall
terminate or be terminated pursuant to Paragraph 13, 14 or 5,
whether or not (i) Tenant shall have abandoned the Leased
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Premises, (ii) Landlord shall have exercised any rights or
remedies hereunder, including the right to make Alterations
pursuant to Paragraph 11(c) hereof, or (iii) a receiver is
appointed to protect Landlord's interest under this Lease.
No expiration or termination of this Lease pursuant to
Paragraph 18(b)(i) or any other provision of this Lease, by
operation of law or otherwise, before the Termination Date
provided in Paragraph 5 or, if applicable, the date of any
termination occurring under Paragraphs 13 or 14, no repossession
of any of the Leased Premises pursuant to Paragraph 18(b)(ii) or
otherwise (unless Landlord shall occupy the Leased Premises or
any portion thereof for use by Landlord or any affiliate of
Landlord for its own business purposes), nor any reletting of any
of the Leased Premises pursuant to Paragraph 18(b)(iii) shall
relieve Tenant of any of its liabilities for Rent (except to the
extent that Tenant is entitled to receive credit for net rents
received by Landlord resulting from reletting of any portion of
the Leased Premises), all of which shall survive such expiration,
termination, repossession or reletting.
(d) With respect to any remedy or proceeding of
Landlord hereunder, Tenant and Landlord waive (i) any right to a
trial by jury.
19. Additional Rights of Landlord
(a) No right or remedy conferred upon or reserved to
Landlord is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative
and in addition to any other right or remedy given hereunder or
now or hereafter existing by Law or in equity. Upon the occur-
rence of any Event of Default, Landlord shall have the right (but
no obligation) to perform any act required of Tenant hereunder,
whether as agent for Tenant or otherwise; and the cost thereof
shall be Additional Rent hereunder and shall be paid by Tenant to
Landlord, together with interest thereon at the Default Rate from
the Date payment of such cost is demanded by Landlord, until it
shall be fully paid by Tenant. Tenant acknowledges that time is
of the essence in the performance of its obligations under this
Lease. No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease, or (ii) to
exercise any option, right, power or remedy contained in this
Lease shall be construed as a waiver, modification or
relinquishment thereof. A receipt by Landlord of any Basic or
Additional Rent or other sum due hereunder with knowledge of the
breach of any provision contained in this Lease shall not be
deemed a waiver of such breach, and no waiver by Landlord of any
provision of this Lease shall be deemed to have been made unless
expressed in a writing signed by Landlord. In addition to the
other remedies provided in this Lease, Landlord shall be enti-
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tled, to the extent permitted by applicable Law, to injunctive
relief in case of the violation, or attempted or threatened
violation, of any of the provisions of this Lease, or to specific
performance of any of the provisions of this Lease. Tenant shall
likewise have recourse, to the extent permitted by applicable
law, to injunctive relief and specific performance, in the event
of violation, or attempted or threatened violation, of any of the
provisions of this Lease by Landlord.
(b) In the event of any litigation commenced by
Landlord or Tenant for enforcement of or damages for breach of
any term, covenant, provision or obligation of this Lease, the
prevailing party shall be entitled to receive reimbursement from
the other party of all costs and expenses incurred in such
proceedings by the prevailing party, including reasonable
attorneys fees and expenses.
(c) If Landlord shall be made a party to any
litigation commenced by any third party and pertaining to any
obligation assumed or to be performed by Tenant under this Lease
and not performed by Tenant as required hereunder, Tenant shall
pay all costs, including, without limitation, all reasonable
attorney's fees and expenses, incurred or paid by Landlord in
connection with such litigation.
(d) Except for breaches of the representation and
warranty set forth in Paragraph 3(a) hereof, with respect to
which Tenant hereby reserves all remedies it may have hereunder,
at law, or in equity, Tenant shall neither assert nor seek to
enforce any claim for breach of this Lease against any of
Landlord's assets other than Landlord's interest in the Leased
Premises, and Tenant agrees to look solely to such interest for
the satisfaction of any liability of Landlord under this Lease,
it being specifically agreed that neither Landlord, nor any
successor, holder of Landlord's interest hereunder, nor any
beneficiary of any trust of which any person from time to time
holding Landlord's interest is trustee, nor any such trustee,
shall ever be personally liable for any such liability.
20. Notices. All notices, demands, requests, consents,
approvals, offers, statements and other instruments or communica-
tions (other than payments of Rent) required or permitted to be
given pursuant to the provisions of this Lease shall be in
writing and shall be deemed to have been given for all purposes
when given in accordance with the provisions of Section 7.1 of
the Restructuring Agreement.
21. Estoppel Certificate. Tenant shall, at any time and
from time to time, upon not less than twenty (20) days' prior
written request by Landlord, execute, acknowledge and deliver to
Landlord a statement in writing, executed by a general partner of
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Tenant, certifying (i) 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 setting forth
such modifications, (ii) the dates to which Basic Rent,
Additional Rent and all other sums payable hereunder have been
paid, (iii) that, to the actual knowledge of the signer of such
certificate, no default by either Landlord or Tenant exists
hereunder or specifying each such default of which the signer may
have actual knowledge. It is intended that any such statements
by Tenant may be relied upon by Landlord, any prospective
purchaser from Landlord of the Leased Premises and any
prospective lender to Landlord whose loan is intended to be
secured by the Leased Premises or Landlord's rights under this
Lease, but only if such Persons other than Landlord are
specifically identified to Tenant upon request by Landlord for
the estoppel certificate. Any certificate required under this
Paragraph 21 shall (i) state briefly the nature and scope of the
examination or investigation upon which the statements contained
in such certificate are based, which nature and scope shall be
reasonably satisfactory to Landlord, and (ii) certify to the
correctness of the statements contained therein.
22. Surrender.
(a) Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased
Premises (except for any portion thereof with respect to which
this Lease has previously terminated) to Landlord in
substantially the same condition in which the Leased Premises
were originally received from Landlord at the Commencement except
as repaired, rebuilt, restored, altered, replaced or added to as
permitted or required by any provision of this Lease, except for
ordinary wear and tear and for any damage by fire or other
casualty which Tenant is not required by the provisions of this
Lease to repair or restore and except for the removal of Trade
Fixtures and other property of Tenant as hereinafter provided.
Tenant shall remove from the Leased Premises on or prior to such
expiration or earlier termination all Trade Fixtures and Building
Equipment and other property which is owned by Tenant or third
parties other than Landlord and Tenant, and Tenant, at its
expense, shall, on or prior to such expiration or earlier
termination, repair any damage caused by such removal. Property
not so removed shall, at the option of Landlord, become the
property of Landlord. Landlord may thereafter cause such
property to be removed from the Leased Premises subject to the
provisions of any agreement made in writing between Landlord and
any third party having an interest in such property; and the cost
of removing and disposing of such property and repairing any
damage to any of the Leased Premises caused by such removal shall
be borne by Tenant.
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(b) Upon surrender of the Leased Premises in
accordance with the provisions of Paragraph 22(a) hereof,
Landlord shall pay to Tenant the then book value of all
Alterations made by Tenant during the Term or any Renewal Term as
reflected in Tenant's books calculated in accordance with United
States generally accepted accounting principles consistently
applied. Notwithstanding the foregoing, Landlord shall not be
required to reimburse Tenant for the book value of any
Alterations made by Tenant during the final five (5)years of the
Term the book value of which at the expiration of the Term shall
exceed the Reimbursement Cap. Further, Landlord's obligation to
reimburse Tenant for the then book value of Alterations
constructed by Tenant during the final five (5) years of the Term
shall, with respect to alterations constructed in any single year
in such five year period, be limited to one-fifth of the
Reimbursement Cap. Landlord's obligations under this Paragraph
22(b) shall not apply with respect to Alterations constructed by
Tenant the cost of which was paid for out of Net Awards or Net
Proceeds pursuant to Sections 13 and 15 hereof, to the extent
such Net Awards or Net Proceeds would have been payable to
Landlord had Tenant elected to terminate this Lease pursuant to
either of such Sections and (ii) Alterations relating to Trade
Fixtures.
23. No Merger of Title. There shall be no merger of this
Lease nor of the leasehold estate created by this Lease with the
fee estate in or ownership of any of the Leased Premises by
reason of the fact that the same Person may acquire or hold or
own, directly or indirectly, (a) the leasehold estate created by
this Lease or any part thereof or interest therein or any
interest of Tenant in this Lease, and (b) the fee estate or
ownership of any of the Leased Premises or any interest in such
fee estate or ownership; and no such merger shall occur unless
and until all Persons having any interest in (i) this Lease as
Tenant or the leasehold estate created by this Lease, and
(ii) this Lease as Landlord or the fee estate in or ownership of
the Leased Premises or any part thereof sought to be merged shall
join in a written instrument effecting such merger and shall duly
record the same.
24. Environmental. The provisions of Section 7.2(b)(v) of
the Restructuring Agreement are incorporated herein by this
reference with respect to the Leased Premises.
25. Miscellaneous. The paragraph headings in this Lease
are used only for convenience in finding the subject matters and
are not a part of this Lease or to be used in determining the
intent of the parties or otherwise interpreting this Lease. As
used in this Lease, the singular shall include the plural as the
context requires. In the event any one or more of the provisions
contained in this Lease shall for any reason be held to be
- 27 -
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision of this Lease, but this Lease shall be construed
as if such invalid, illegal or unenforceable provision had never
been contained herein. This Lease shall be governed and con-
strued according to the Laws of the State. Any dispute arising
out of or in connection with this Agreement and/or any agreement
arising out of this Agreement shall, if no amicable settlement
can be reached through negotiations, be finally settled by
arbitration in Oslo, Norway The arbitration proceedings shall
be held in accordance with Chapter 32 of the Norwegian Civil
Procedure Act.
26. Termination by Tenant. Notwithstanding any other term
of this Lease to the contrary, Tenant shall have the right to
terminate this Lease at any time upon not less than twelve (12)
months prior written notice thereof to Landlord. Upon any such
termination, this Lease shall terminate and expire on the date
specified in Tenant's notice as if the Term had expired by lapse
of time.
27. Indemnification. Tenant hereby agrees to indemnify and
defend Landlord, its officers, directors and employees, against,
and hold them harmless from, any loss, liability, claim, damage
or expense (including reasonable legal fees and expenses,
collectively, a "Loss") for or on account of or arising from or
in connection with or otherwise with respect to (i) any liability
assumed by Tenant under this Lease and (ii) the conduct of the
business of Tenant at the Leased Premises after the Commencement
Date and any liability of Tenant incurred in connection therewith
or relating thereto. Pursuant to the terms of this indemnity,
the Landlord shall be indemnified by Tenant against Losses or
claims of third parties arising from the liabilities and business
activities of Tenant described in the preceding sentence and made
against the Landlord's officers or directors and employees by
reason of the fact that such Persons are officers or directors,
and employees of the Landlord, except in cases of Landlord's own
negligence or wilful misconduct, or instances of default under
this Lease by Landlord. The termination of any claim, issue or
matter with respect to Landlord by judgment or settlement shall
not in itself create a presumption that the Landlord is not
entitled to indemnity hereunder.
28. Mortgage by Landlord. Notwithstanding any other
provision of this Lease to the contrary, Landlord shall have the
right to mortgage, pledge, assign or otherwise encumber
(collectively, a "Mortgage") its interest in the Land provided
that any such Mortgage shall be expressly and without
qualification subordinate to this Lease and the rights of Tenant
hereunder, such subordination to be evidenced by a written
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agreement in form reasonably satisfactory to Tenant executed by
the party to whom such Mortgage is given.
29. Partial Invalidity. In the event any one or more of the
provisions contained in this Lease shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or enforceability shall not affect any
other provision hereof, but each shall be construed as if such
invalid, illegal or unenforceable provision had never been
included hereunder.
30. Parking Area. By lease agreement dated January 21,
1984, Landlord currently leases from Norges Spatsbaner certain
real property consisting of approximately 4,823 square meters of
land which is used as parking in connection with the Leased
Premises (the "Parking Area"). A true and correct copy of the
lease for the Parking Area (the "Parking Lease"), including all
amendments and modifications thereto, if any, is attached hereto
as Exhibit B. Landlord shall use all commercially reasonable
efforts to obtain the consent required under the Parking Lease to
permit Landlord to sublease the Parking Area to Tenant, and, if
such consent is obtained, Landlord and Tenant shall enter into a
sublease of the Parking Area on substantially the same terms and
conditions as the Parking Lease and the rent payable under such
sublease shall be the rent and other sums payable under the
Parking Lease (the "Parking Sublease"). The Parking Sublease
shall terminate on the first to occur of the termination of the
Parking Lease and the termination of this Lease. Until such time
a Landlord shall obtain the consent required for the Parking
Sublease, Tenant shall be permitted to use the Parking Area on
the same terms and conditions as are applicable to the Leased
Premises pursuant hereto, subject to any additional restrictions
or limitations as may be set forth in the Parking Lease and
Tenant shall reimburse Landlord for all expenses incurred by
Landlord under the Parking lease during such period promptly upon
receipt of an invoice therefor from Landlord. Landlord hereby
covenants and agrees with Tenant that Landlord shall take all
actions reasonably necessary to perform its obligations as the
tenant under the Parking Lease, including, without limitation the
payment of rent thereunder; provided, however, that all costs and
expenses incurred by Landlord in so doing, less the amount of
rent payable by Tenant under the Parking Sublease, if any, shall
be payable by Tenant as additional rent hereunder.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this
Lease to be duly executed as of the day and year first above
written.
LANDLORD:
A.L INDUSTRIER AS
By: /s/ E.W. Sissener
Title: Managing Director
TENANT:
APOTHEKERNES LABORATORIUM AS
By: /s/ E.W. Sissener
Title: Managing Director
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EXHIBIT A
Estate no. 31, lot no. 60 and lot no. 161 in Oslo
municipality (in Norwegian: gnr. 31, bnr. 60 og 161 i Oslo
kommune).