Exhibit 10.1
LEASE AGREEMENT
THIS LEASE, dated January 29, 1990, is made by and between The Prudential
Insurance Company of America, a New Jersey corporation (herein called "Lessor"),
and Unit Distribution of Utah, Inc., a Utah corporation (herein called
"Lessee").
W I T N E S S E T H:
1. Lease of Premises. Lessor hereby leases to Lessee and Lessee leases
from Lessor for the term, at the rental, and upon all of the conditions set
forth herein, that certain real property situated in 1051 South Industrial
Parkway, Clearfield, Utah 84015, and legally described on Exhibit A attached
hereto and made a part hereof, together with all improvements and appurtenances
belonging to or in any way pertaining to said property and non-exclusive use and
benefit of all guaranties, warranties, licenses and other rights which affect
the Premises (such as real estate, improvements and appurtenances hereinafter
sometimes referred to as the "Premises," and the building located thereon is
hereafter sometimes referred to as the "Building").
2. Term.
2.1 Initial Term. The term of this Lease for which the Premises are hereby
demised shall commence on January 29, 1990, and end on December 31, 2003, unless
sooner terminated as provided herein.
2.2 Option to Renew. Provided this Lease is in full force and effect and
provided further that Lessee is not then in default under this Lease, the Lessor
hereby grants to Lessee the option to extend the term of this Lease for an
additional three (3)-year period (the "Option Period") commencing on the day
following the end of the initial Lease term on the same terms and conditions set
forth in this Lease except as set forth in the following sentence. Subject to
adjustment as provided in Section 3.2 below. Subject to adjustment as provided
in Section 3.2 below, the Basic Rent during the extension period shall equal the
lesser of the prevailing market rate on the day after the date the initial Lease
term ends or the Basic Rent at the commencement of this Lease increased by five
(5) percent per annum. In no event, however, shall the rent during the Option
Period be less than the existing rental rate immediately prior to the
commencement of such Option Period. Lessee shall give Lessor not less than nine
(9) months prior written notice of the exercise of the foregoing option, time
being of the essence. If not so exercised, Lessee's option under this paragraph
shall be null and void. For a period of fifteen (15) days after Lessee gives
notice of its election to exercise its option, Lessee and Lessor shall attempt
to agree on the prevailing market rate. If the parties are unable to agree on
such rate within such fifteen (15) day period, Lessor and Lessee shall within
fifteen (15) days thereafter agree on an independent appraiser, who shall be a
member of a nationally recognized appraisal firm, to determine the prevailing
market rate. On the date the appraiser is appointed, each party shall
simultaneously submit to the appraiser its proposed prevailing market rate, and
the appraiser shall within thirty (30) days of his appointment determine whether
Lessor's or Lessee's proposed rate is closer to the actual prevailing market
rate. The proposed rate which the appraiser determines is closer to
the prevailing market rate shall then be the rental rate during the Option
Period. In no event shall the appraiser have the right to compromise between the
proposed rates or choose some other rate. The appraiser may examine the Premises
and any other information which the appraiser deems applicable to the
determination of the prevailing market rate, and the parties may submit any
additional information which is applicable to the determination. If the parties
hereto cannot agree on the appraiser within fifteen (15) days, either party may
thereafter apply to the American Arbitration Association for the appointment of
the appraiser. The decision of the appraiser shall be final and binding upon the
parties hereto, except that Lessee may revoke its election to exercise its
option by notice to Lessor within thirty (30) days of the decision by the
appraiser if Lessee disagrees with the decision of the appraiser, in which case
Lessee's option shall be null and void. All costs and expenses of the appraiser
shall be paid by the losing party in the appraisal.
3. Rent.
3.1 Basic Rent. Lessee shall pay annually to Lessor as rent for the
Premises hereof EIGHT HUNDRED EIGHTY-FIVE THOUSAND SIX HUNDRED DOLLARS
($885,600.00) in equal monthly installments of SEVENTY-THREE THOUSAND EIGHT
HUNDRED DOLLARS ($73,800.00) in advance, on the first day of each calendar month
(the "Basic Rent"). Basic Rent for any period during the term hereof which is
for less than one month shall be a pro rata portion of the monthly installment.
Basic Rent shall be payable in lawful money of the United States to Lessor at
the address stated herein or to such other persons or at such other places as
Lessor may designate in writing. Basic Rent shall be payable without deduction
or offset except as set forth in Section 5.1 below.
3.2 CPI Adjustment. Commencing June 1, 1990, and on each annual anniversary
date thereafter (each such date being referred to herein as an "Adjustment
Date"), the Basic Rent for the original term of this Lease shall be increased by
the percentage increase in the "Revised Consumer Price Index for all Urban
Consumers - U.S. City Average (1982-1984 = 100)" published by the Bureau of
Labor Statistics of the United States Department of Labor (the "CPI") for the
twelve-month period immediately preceding such Adjustment Date. Notwithstanding
the foregoing, in no event shall the Basic Rent during the original term of this
Lease increase on any Adjustment Date by more than four (4) percent of the Basic
Rent payable immediately prior to such Adjustment Date. The Basic Rent for any
Option Period shall be adjusted on the first year anniversary of the
commencement of the Option Period and on each annual anniversary date thereafter
(each such date being referred to herein as an "Option Period Adjustment Date")
by the lesser of four (4) percent or the percentage increase in the CPI for the
twelve-month period immediately preceding such Option Period Adjustment Date.
The Basic Rent payable hereunder shall never be less than the Basic Rent set
forth in Section 3.1 as a result of decreases in the Consumer Price Index. If on
any Adjustment Date or any Option Period Adjustment Date, the change in the CPI
is not available, Lessee shall continue to pay rent at the existing rate until
such change is available, and shall pay Lessor any additional amounts due on the
first rental payment date after such changes become available.
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3.3 Interest on Late Payments. If any Basic Rent to Lessor due hereunder is
not paid within two (2) business days of the due date, Lessee shall pay interest
to Lessor on such rent at a rate of three (3) percent over the base rate on
corporate loans at large U.S. money center commercial banks, as most recently
published by the Wall Street Journal, Midwest Edition, from time to time (the
"Default Rate").
3.4 Additional Rent. Except as set forth herein, the, intention of this
Lease is that it is a "triple net" lease and that the rent payable hereunder
shall be absolutely net to Lessor; and, except as set forth herein, Lessee shall
pay when due hereunder all insurance, taxes, utility costs and maintenance
expenses accrued during the Lease term (hereinafter called "additional rent").
4. Use of Premises, etc.
4.1 Use. Lessee covenants and agrees that the Premises are to be used and
occupied by Lessee for the purpose of warehousing and offices or any other use
not inconsistent with such uses. Except as may be otherwise set forth in Section
4.5 below regarding environmental matters, Lessee shall not use nor permit any
sublessee or occupant to use the Premises for any unlawful purpose, violate any
applicable zoning or building regulations or restrictions, suffer or permit any
condition which may make void or voidable any insurance then in force with
respect to the Premises or render unobtainable any coverages required hereunder
or materially increase any insurance after the end of the Lease term (except due
solely to vacation by Lessee) or otherwise suffer or permit any condition to
occur which will injure the reputation of the Premises or which would create
offensive or noxious odors, gases, noise or smoke or constitute a nuisance.
Lessee shall not use or permit the use of the Premises in any way that will
create waste.
4.2 Compliance with Law. Except as may be otherwise set forth in Section
4.5 below regarding environmental matters, Lessee shall at all times during the
term hereof, at Lessee's expense, promptly comply and cause all sublessees and
occupants to comply with all statutes, ordinances, rules, regulations, orders,
and requirements of public authorities in effect on the commencement of this
Lease, including any extension thereof, applicable to or regulating Lessee's use
of the Premises (as opposed to those applicable to or regulating the Premises
itself which shall be governed by Section 5.1 below). Lessee, at its sole cost
and expense, after notice to Lessor, may contest, by appropriate proceedings
prosecuted diligently and in good faith, the validity, or applicability of any
law or requirement of any public authority, provided that (a) Lessor shall not
be subject to criminal penalty or to prosecution for a crime, or any other fine
or charge, nor shall the Premises or any part thereof or the Building, or any
part thereof, be subject to being condemned or vacated, nor shall the Premises
or Building, or any part thereof, be subjected to any lien or encumbrance in
excess of $25,000.00 (which amount shall be increased each January lst by the
increase in the CPI over the preceding year), by reason of non-compliance or
otherwise by reason of such contest unless adequate security is given as set
forth below; (b) before the commencement of such contest, if such contest may
result in a lien or other encumbrance in excess of $25,000.00 (which amount
shall be increased each January 1st by the increase in the CPI over the
preceding year), Lessee shall furnish to Lessor a cash deposit or other security
in amount, form and substance satisfactory to Lessor and shall indemnify Lessor
against the cost of such contest and against all liability for damages,
interest, penalties and
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expenses (including reasonable attorneys' fees and expenses), resulting from or
incurred in connection with such contest or non-compliance during such contest;
(c) such non-compliance or contest shall not constitute or result in any
violation of any mortgage of the Lessor's interest in the Premises, or if any
such mortgage shall permit such noncompliance or contest on condition of the
taking of action or furnishing of security by Lessor, such action shall be taken
and such security shall be furnished at the expense of Lessee; (d) such
non-compliance or contest shall not prevent Lessee from obtaining any and all
permits and licenses necessary in connection with the operation of the Building;
and (e) Lessee shall keep Lessor advised as to the status of such proceedings.
Without limiting the application of the above, Lessor shall be deemed subject to
prosecution for a crime if Lessor, or any officer, director, partner,
shareholder or employee of Lessor, as an individual, is charged with a crime of
any kind or degree whatsoever, whether by service of a summons or otherwise,
unless such charge is withdrawn before Lessor or such officer, director,
partner, shareholder or employee of Lessor (as the case may be) is required to
plead or answer thereto.
4.3 Acceptance of Premises. Lessee hereby accepts the Premises subject to
all currently applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use of the Premises and subject to
all easements and other exceptions to title existing as of the date of the
commencement of this Lease and accepts this Lease subject thereto and to all
matters disclosed thereby. Lessee, or an affiliate of Lessee, was the previous
owner of the Premises and is familiar with the Premises; and, therefore, Lessee
accepts the Premises "as is," i.e., in its current condition with no
representations or warranties.
4.4 Utilities. Lessor does not guarantee that any utility services will be
available to the Premises, and no interruption in utility service will cause an
abatement in the rent due hereunder. No interruption in utility service will be
deemed a constructive eviction of Lessee or impose any liability on Lessor
except for interruption of utility service caused by actions of Lessor.
4.5 Compliance with Environmental Laws. Subject to the provisions set forth
below, including, without limitation, Section 4.5(i) below, Lessee covenants and
agrees to be responsible for damage to the Premises resulting from violations of
Environmental Laws (as defined below) or any other violation of this Section 4.5
to the extent resulting from Lessee's actions or the actions of Lessee's
sublessees or occupants of the Premises during the term of this Lease. (In no
event, however, shall Lessee be responsible to Lessor for environmental
conditions caused by parties other than Lessee or Lessee's sublessees,
occupants, agents, contractors, employees or invitees, nor shall Lessee be
obligated to Lessor to improve, clean up or remediate the Premises to a lesser
level of contamination than existed on the Premises at the commencement of this
Lease.) In this context throughout the term of the Lease, Lessee, at its sole
cost, shall perform and abide by the following obligations:
(a) Lessee's activities shall comply, and Lessee shall cause any
activities by any sublessee or occupant to comply, at all times during the term
of the Lease, with all federal, state, local or other governmental body's
environmental or pollution-related laws, statutes, rules, regulations,
ordinances or orders (including judicial interpretations thereof) (hereinafter
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"Environmental Laws"), including, without limitation, all such Environmental
Laws concerning the discovery, discharge, release, or cleanup of any "Hazardous
Substance" or "Toxic Substance" for which the Lessee is in any way responsible
under the Comprehensive Environmental Response Compensation and Liability Act,
42 U.S.C. (S) 9601 et seq. ("CERCLA"), the Hazardous Materials Transportation
Act, 49 U.S.C. (S) 1802, the Resource Conservation and Recovery Act, 42 U.S.C.
(S) 6901 et seq. ("RCRA"), the Toxic Substance Control Act of 1976, as amended,
15 U.S.C. (S) 2601 et seq., and so-called Superfund or Superlien law, or any
similar federal, state or local law.
(b) Lessee shall obtain, or cause any sublessee or occupant to obtain,
all necessary permits, licenses, certifications and other necessary
authorizations (hereinafter "Permits") required by any federal, state, local or
other governmental body's Environmental Laws in connection with Lessee's or any
sublessee's or occupant's activities. Lessee shall comply at all times with the
terms and conditions of such Permits. Lessee shall not use the Premises, or
request a permit to use the Premises, as a treatment, storage or disposal
facility under RCRA or any similar federal, state or local Environmental Law,
without the prior written consent of Lessor (except, subject to the provisions
in Paragraph (c) immediately below, that the Premises may be used as a storage
facility to the extent such activity is ancillary to Lessee's business). Lessee
shall not install any underground storage tanks at the Premises without the
prior written consent of Lessor, and if such consent is granted, Lessee shall be
fully responsible for compliance with all technical and financial responsibility
requirements under any Environmental Law.
(c) If Lessor determines that any activity on the Premises presents a
risk of serious environmental harm to the Premises which would require
substantial cleanup or remediation expenses, Lessor shall provide notice to
Lessee of such determination and the details thereof. Lessee shall have thirty
(30) days from receipt of this notice to provide written notice to Lessor of its
decision to either terminate the activity or provide to Lessor the guarantee of
GATX Corporation for the cost of cleanup of any environmental damage caused by
the specified activity. Lessee shall have sixty (60) days from the date of its
notice to Lessor to comply with Lessee's decision in the notice to Lessor.
(d) For purposes of this Lease, the term "Hazardous Substances" shall
mean the following: (i) any "hazardous substance" defined as such in (or for
purposes of) CERCLA, as may be amended from time to time, or any so-called
"superfund" or "superlien" law, including the judicial interpretation thereof;
(ii) any "pollutant or contaminant" as defined in 42 U.S.C.A. (S) 9601(33);
(iii) any material defined as "hazardous waste" pursuant to 40 C.F.R. Part 260;
(iv) any petroleum or petroleum products, including crude oil or any fraction
thereof; (v) natural gas, natural gas liquids, liquified natural gas, or
synthetic gas usable for fuel; (vi) any "hazardous chemical" as defined pursuant
to 29 C.F.R. Part 1910; and (vii) any other substance, regardless of physical
form, that is subject to any other law or other present or future requirement of
any governmental authority regulating, relating to, or imposing obligations,
liability, or standards of conduct concerning the protection of the environment,
human health, plant life, animal life, natural resources, or property from the
presence in the environment of hazardous substances, from whatever source.
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(e) During the term of this Lease, Lessee shall use its best efforts
not to cause or permit to exist, as a result of an intentional or unintentional
action or omission on its part, or on the part of any sublessee or other user or
occupant of the Premises, a releasing, spilling, leaking, pumping, emitting,
pouring, emptying or dumping (hereinafter "Release") of any Hazardous Substance
into the environment, including, without limitation, any surface or subsurface
waters (including groundwater), ambient air, or onto any land surface or
subsurface strata. Lessee shall give immediate oral and written notice of any
Releases of Hazardous Substances to Lessor which release also requires
notification to any governmental agency, detailing all relevant facts and
circumstances. All Releases of Hazardous Substances during the term of this
Lease by Lessee or any sublessee or other user or occupant of the Premises will
be promptly cleaned up or remedied to the satisfaction of the federal, state, or
local regulatory agency or official having jurisdiction, and all costs and
expenses associated with such cleanup or remediation shall be borne solely by
the Lessee.
(f) Lessee shall at all times keep the Premises free of any lien or
encumbrance against the Premises arising out of any environmental law, statute,
ordinance, regulation, rules, judgments or orders (hereinafter "Environmental
Lien") and resulting from any activity of Lessee or Lessee's sublessees or
occupants of the Premises. In the event that an Environmental Lien caused by
Lessee or Lessee's sublessees or occupants of the Premises is filed against the
Premises, within thirty (30) days from the date that Lessee is given notice that
the Environmental Lien has been filed against the Premises, or within such
shorter period of time in the event that the governmental authority has
commenced steps to cause the Premises to be sold pursuant to the lien, then
Lessee shall either (i) pay the claim and remove the lien from the Premises, or
(ii) furnish (a) a bond satisfactory to Lessor in the amount of the claim out of
which the lien arises, (b) a cash deposit in the amount of the claim out of
which the lien arises, or (c) other security satisfactory to Lessor in an amount
sufficient to discharge the claim out of which the lien arises. If any
Environmental Lien is filed against the Premises which is not caused by Lessee
or Lessee's sublessees or occupants of the Premises, Lessee shall promptly
notify Lessor upon Lessee's obtaining knowledge of such lien.
(g) Lessee shall promptly provide to Lessor true and complete copies
of any and all submissions, filings, applications, claims, citations, notices
and orders made by and between the Lessee and the United States Environmental
Protection Agency, the United States Occupational Safety and Health
Administration, or any other federal, state or local authority pursuant to any
Environmental Laws or any laws relating to occupational safety and health. Upon
Lessor's written request, Lessee shall also promptly provide to Lessor all other
documents, reports, directions and correspondence made by and between the Lessee
and the United States Environmental Protection Agency, the United States
Occupational Safety and Health Administration, or any other federal, state or
local authority pursuant to any Environmental Laws or any laws relating to
occupational safety and health, true and complete copies of any environmental
audits, sampling plans, sampling results, remedial investigations, feasibility
studies, or any other reports or findings dealing with the Lessee's compliance
with any Environmental Laws, or with any Releases of Hazardous Substances on the
Premises.
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(h) The failure of Lessee to comply with any of the provisions of this
Lease relating to environmental matters which is not cured within the applicable
grace period set forth in Section 11 shall constitute a default by Lessee under
Section 11 of this Lease, entitling Lessor to all of the rights and remedies
provided therefor.
(i) Notwithstanding anything to the contrary in this Lease, in no
event shall Lessee be obligated to Lessor to comply with Environmental Laws
except as expressly set forth in this Section 4.5. Moreover, in the event Lessee
is required to cleanup or remediate any Release of Hazardous Substance pursuant
to this Section 4.5, such cleanup or remediation need only be performed to a
level needed to comply with the Environmental Laws in effect on the date the
Release occurred; but Lessee shall not be responsible to Lessor with respect to
any Release for violations of Environmental Laws which are enacted after the
date the Release occurs.
(j) Lessee hereby agrees to defend, indemnify and hold Lessor and its
successors and assigns harmless from and against any and all claims, proceedings
under CERCLA, RCRA, or any other so-called "Superfund" or "Superlien" law, law
suits, administrative proceedings, liabilities, losses, demands, fines,
penalties, judgments, orders, notice letters, damages (including consequential
damages), costs and expenses, foreseen or unforeseen (including, without
limitation, cleanup costs and reasonable attorneys' fees, engineers' fees and
consultants' fees arising by reason of any of the aforesaid or an action against
the Lessor under this indemnity), arising from, out of or by reason of any
breach of this Section occurring during the term of this Lease. This
indemnification and the terms and provisions of this Section 4.5 shall survive
the expiration or sooner termination of this Lease.
(k) All reviews and approvals by Lessor pursuant to this Section 4.5
are for Lessor's benefit, and in no event shall Lessor have any liability to
Lessee for errors or omissions in connection with Lessor's review or approval of
any documents or other matters submitted by Lessee to Lessor for review or
approval.
5. Maintenance, Repairs and Alterations.
5.1 Lessee's Obligations.
(a) Lessee covenants throughout the term of the Lease, at Lessee's
sole cost and expense (except as set forth below), to (a) except as otherwise
specifically set forth in Section 4.5 above regarding environmental matters,
maintain the Premises, including any parking areas which constitute a part of
the Premises, in compliance with building, zoning, fire codes, and with all
other applicable laws, orders, ordinances, rules, regulations, requirements of
all federal, state and municipal governments or appropriate bodies, departments,
commissions and boards thereof currently in effect or hereafter in effect,
subject to Lessee's right to contest such matters in accordance with the
provisions of Section 4.2 above; (b) take good care of the Premises, including
the buildings and improvements now or at any time erected thereon, the
mechanical systems (including, without limitation, HVAC system, electrical
system, overhead doors, the grounds and all parking areas), equipment, fixtures,
motors and machinery thereof, fences and vaults, if any, and to keep the
Premises in the same order and condition as they are as of the date hereof,
subject to ordinary wear and tear; (c) make, within a reasonable time, all
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reasonably necessary repairs, interior and exterior, structural and
nonstructural, ordinary as well as extraordinary, foreseen as well as
unforeseen, including repairs necessitated by the acts of sublessees or
customers of Lessee; (d) comply with all covenants and restrictions applicable
to the Premises; (e) maintain all off-site facilities, the upkeep of which is
the obligation of the owner of the Premises; and (f) Lessee shall replace the
roof of the Premises no later than December 31, 1996 subject to provisions
regarding amortization of Approved Capital Expenditures set forth in Section
5.1(b) below.
(b) If any Approved Capital Expenditures (as defined below) are
required during the Lease term because of Lessee's obligations set forth in (a)
through (e) above, the Approved Capital Expenditure will be amortized over the
useful life thereof. The useful life shall be determined in accordance with
generally accepted accounting principles ("GAAP"), with Lessee paying for the
portion of such Approved Capital Expenditure which will be amortized over the
Lease term and Lessor paying for the portion of such Approved Capital
Expenditure which will not be amortized during the Lease term. (If this Lease
gives Lessee an option to extend the Lease term and Lessee exercises such
option, Lessee shall reimburse Lessor as additional rent hereunder on the first
day of each lease year during such extension period for the portion of the
Approved Capital Expenditure allocable to such year which has been paid by
Lessor and amortized as set forth in the preceding sentence.) Lessee and Lessor
shall each pay their proportionate share of the Approved Capital Expenditure
directly to the contractor making such repair or improvement when payment is due
under the contractor's invoice. Payments of such proportionate share by Lessee
shall be deemed additional rent hereunder. If either party does not pay its
share of the Approved Capital Expenditure when due (for purposes of this Section
4.2, the "defaulting party"), the other party (for purposes of this Section 4.2,
the "paying party") may pay the defaulting party's share of the Approved Capital
Expenditure. In such case, the defaulting party shall pay to the paying party on
demand the amount the paying party has paid on behalf of the defaulting party
plus interest at the Default Rate from the date paid by the paying party to the
date reimbursed by the defaulting party. If Lessor fails to pay its share of any
Approved Capital Expenditure when due hereunder and Lessee pays such share,
Lessee shall be entitled to offset such amount against the Basic Rent due
hereunder. For purposes of this Lease, "Capital Expenditures" shall mean
expenditures for repairs or improvements costing in excess of $50,000 (which
amount shall be increased each January lst by the increase in the CPI over the
preceding year) which are capitalized in accordance with GAAP); and "Approved
Capital Expenditure" shall mean any Capital Expenditure approved by Lessor or
the third-party architect in accordance with the procedures set forth below in
this Section 5.1 or reasonable Capital Expenditures incurred in the event of an
emergency. Lessor and Lessee shall meet annually to review the condition of the
Premises and to determine whether any Capital Expenditures will be needed within
the following year and the reasonable cost of such Capital Expenditures. Lessor
or Lessee may also notify each other during the year if either one believes a
Capital Expenditure is necessary which was not addressed during the annual
meeting, except in the case of an emergency (in which case the Capital
Expenditure may be made without approval, but Lessee shall notify Lessor thereof
as soon as reasonably possible after incurring the same). Lessor shall not
unreasonably withhold its approval of any Capital Expenditure or the cost
thereof. If the cost of the Capital Expenditure will exceed the amount approved
by Lessor by more than fifty percent (50%) in the case of Capital Expenditures
of less than $100,000 or twenty-five percent (25%) in
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the case of Capital Expenditures costing $100,000 or more, Lessee shall obtain
Lessor's approval of the increased cost, which approval shall not be
unreasonably withheld. If Lessor and Lessee disagree on (i) whether an
expenditure is a Capital Expenditure, (ii) whether a Capital Expenditure is
needed, (iii) the reasonable cost of the Capital Expenditure, or (iv) on the
useful life of the Capital Expenditure, they shall agree, in the case of (ii)
and (iii) above, upon a qualified architect skilled in the area of required
expertise, and, in the case of (i) and (iv) above, an accountant from a
nationally recognized accounting firm. Such architect or accountant shall make
the decision within thirty (30) days, which decision shall be final and binding
on the parties hereto. If the parties hereto cannot agree on a qualified
architect or accountant within thirty (30) days, either party may apply to the
American Arbitration Association for the appointment of such architect or
accountant. Notwithstanding the provisions set forth above, Lessor and Lessee
hereby agree and stipulate that the useful life for any Capital Expenditure for
a roof replacement, in whole or in part, shall be 15 years. For any Capital
Expenditures, Lessor shall have the right to approve all plans and
specifications, any contractors, architects and engineers, any architectural and
engineering contracts, any general contracts (including, if it is an Approved
Capital Expenditure, the pricing thereunder), all insurance policies and
coverages relating to such work, and all governmental permits, licenses and
approvals, which approval by Lessor shall not be unreasonably withheld, and
shall be given or withheld in the time periods and in accordance with the
procedures set forth in Section 5.4(a). Notwithstanding the foregoing, Lessor's
review of the plans and specifications, contracts, insurance, governmental
licenses, permits and approvals, and contractors, architects and engineers are
only for Lessor's benefit, and Lessor assumes no liability for any errors or
omissions in connection with its review and approval thereof.
5.2 Surrender. On the last day of the term or extended term hereof, or on
any sooner termination, Lessee shall surrender the Premises to Lessor in the
same condition as when received (with all repairs, if any, completed which were
required to be completed under that certain Purchase and Sale Agreement, which
is being entered into concurrently herewith by Lessor, GATX Corporation and Unit
Development Corporation and any repairs necessitated by the acts of sublessees
or customers of Lessee), broom clean, except for ordinary wear and tear,
alterations which Lessee is permitted under this Lease, environmental matters to
the extent Lessee is not responsible therefor pursuant to Section 4.5 above,
and, to the extent Lessee is not required to repair hereunder, damage by fire or
other casualty. Lessee shall repair any damage to the Premises occasioned by the
removal of Lessee's trade fixtures, furnishings and equipment, which repair
shall include, but not be limited to, the patching and filling of holes and
repair of any structural damage.
5.3 Lessor's Rights. If Lessee fails to perform Lessee's obligations under
this Section 5, Lessor may at its option (but shall not be required to) enter
upon the Premises, after ten (10) days' prior written notice to Lessee (except
for cases of emergency or imminent threat of damage to person or property where
such notice will not be required) and put the same in good order, condition and
repair, which shall include the right to cause the Premises to comply with all
requirements set forth in Paragraph 5.1 hereinabove, and the cost thereof shall
become due and payable to Lessor together with Lessee's next rental installment;
provided, however, if Lessee commences to perform such obligations within such
ten (10) day period and diligently pursues
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such performance thereafter and completes the same within a reasonable time,
subject to force majeure (defined for purposes of this Lease as events outside
the reasonable control of Lessee), Lessor shall not have any right to perform
such obligations.
5.4 Alterations.
(a) Lessee shall not, without Lessor's prior written consent, make any
structural alterations to the Premises or any alterations costing in excess of
$100,000 (which amount shall be increased each January l/st/ by the increase in
the CPI over the preceding year); provided, however, such consent shall not be
unreasonably withheld unless such alterations adversely affect the Building's
mechanical systems or affect the structural walls, roofs or other load-bearing
supports on the Premises. Without limiting the foregoing, the erecting of inside
partitions, walls, offices and mounting of trade fixtures is considered
nonstructural and therefore does not require Lessor's approval so long as these
alterations do not exceed $100,000 per alteration (which amount shall be
increased each January 1st by the increase in the CPI over the preceding year).
Should Lessee make any alterations requiring Lessor's approval without approval
having been given, Lessor may require Lessee to remove any or all of the same
upon demand. If Lessee desires to make any alterations requiring Lessor's
approval, Lessee shall so notify Lessor and submit to Lessor plans and
specifications for such alterations and reasonable evidence of the availability
of funds to pay for such alterations. Lessor shall have twenty (20) days to
respond to such submissions; and if Lessor fails to respond to such submissions
within such twenty (20) day period, they shall be deemed approved, provided that
Lessor's reasonable request for more information shall not be deemed a failure
to respond. Upon Lessor's approval of the plans and specifications, Lessee will
obtain workmen's compensation and other insurance (including, without
limitation, builder's risk insurance) necessary in connection with such work, in
amounts reasonably satisfactory to Lessor, and all necessary governmental
licenses, permits and approvals, and Lessee shall provide Lessor with evidence
of such before the work commences. Lessor shall also have the right to
reasonably approve the contractor for any alteration which requires Lessor's
consent. Notwithstanding the foregoing, Lessor's review of the plans and
specifications, insurance, governmental licenses, permits and approvals are only
for Lessor's benefit, and Lessor assumes no liability for any errors or
omissions of Lessor in connection with any such review and approval. All
alterations shall be done in a workmanlike manner using materials comparable in
quality to those found on the Premises and shall comply with all applicable
governmental laws, ordinances, regulations and terms and conditions of all
licenses and permits for such work.
(b) Lessee has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Lessee, operation
of law or otherwise, to attach to or be placed upon Lessor's title or interest
in the Building or Premises, and any and all liens and encumbrances created by
Lessee shall attach to Lessee's interest only. Except as set forth below, Lessee
covenants and agrees not to suffer or permit any lien of mechanics, materialmen,
laborers or any similar lien to be placed against the Building or the Premises
with respect to work or services claimed to have been performed for, or
materials claimed to have been furnished to, Lessee or to the Premises by
contractors retained by Lessee, or any sublessee or occupant of the Premises;
and in case of any such lien attaching, or claim
10
thereof being asserted, Lessee covenants and agrees within thirty (30) days of
learning thereof to cause it to be released and removed of record, if it is
possible to do so without satisfying the lien. In the event such lien cannot be
released and removed through appropriate proceedings within such thirty (30) day
period, Lessee shall cause such lien to be bonded or insured over by a title
insurer or surety reasonably satisfactory to Lessor, or provide Lessor with a
letter of credit, certificate of deposit or other comparable security in the
amount of 125% of the amount of such lien (provided, however, that Lessee shall
not be required to post such bond or other security for liens of less than
$25,000.00 [which amount shall be increased each January l/st/ by the increase
in the CPI over the preceding year] in amount). Lessee thereafter shall be
entitled to contest such lien as long as Lessee shall contest such lien
diligently by appropriate proceedings (provided such contest shall not cause any
sale, foreclosure or forfeiture of the Premises by reason of such nonpayment)
and cause the same to be removed or discharged prior to entry of any order
foreclosing the same. In the event that any such lien is not so released and
removed, bonded over or secured against, or in the event Lessee shall fail to
contest such lien as required by the preceding sentence, Lessor may, upon notice
to Lessee, take all action necessary to release and remove such lien and avail
itself of any security therefor provided by Lessee (without any duty to
investigate the validity thereof), and Lessee shall promptly upon notice
reimburse Lessor for all sums, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by Lessor (and not
covered by insurance, bond or other security provided by Lessee) in connection
with the release and removal of such lien.
(c) Lessee shall be required to remove all alterations which Lessee
has constructed during the Lease term which cost in excess of $25,000 to remove
at the time the alteration is to be removed (which amount shall be increased
each January l/st/ after the date hereof by the increase in the CPI over the
preceding year). Notwithstanding the preceding sentence, prior to making any
alterations Lessee shall have the right to request that Lessor decide whether
Lessee shall be required to remove such alterations at the end of the Lease
term; and Lessee will not be required to remove such alterations unless Lessor
notifies Lessee, at the time Lessee makes such request, that Lessee will be
required to remove the alteration at the end of the Lease term. All other
alterations made under this Lease and not removed by Lessee shall become the
property of Lessor and shall remain upon and be surrendered with the Premises at
the expiration of the term of this Lease unless Lessee shall elect to remove any
such alterations and restore the Premises to its condition prior to the making
of such alterations, provided, however, that Lessee may not remove any
structural alterations, or alterations required to keep the Premises in
compliance with applicable laws without the Lessor's prior written consent in
its sole discretion.
5.5 Rail Spur Agreements. Lessee covenants to maintain, comply with and
renew, when necessary, any rail spur agreements with respect to the Premises,
provided that if Lessee desires to cancel any such agreement, Lessee may do so
upon thirty (30) days notice to Lessor if (i) the cost of maintaining such
agreement goes up by 100% or more from the date hereof, (ii) Lessee is not then
using the rail spur, and (iii) Lessee is not required to have rail service
available to the Premises under any sublease in effect with respect to the
Premises, unless Lessor elects within such thirty (30) day period to pay all
charges accruing under such agreement after such thirty (30) day period. If
Lessee at any time thereafter desires to use such rail service, Lessee
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shall so notify Lessor in writing, and Lessee shall thereupon resume
responsibility for maintaining, complying with and renewing such agreements
(subject to the foregoing provisions of this Section 5.5). In addition, Lessee
shall pay Lessor fifty percent (50%) of all charges incurred by Lessor pursuant
to the preceding sentence from the date of Lessor's assumption of such
agreements through the date of Lessee's notice.
6. Insurance; Indemnity.
6.1 Insurance. Lessee shall obtain and pay for all insurance required
hereunder, subject to being commercially available.
6.2 Liability Insurance. Lessee shall obtain and keep in force during the
term of this Lease a policy of commercial general liability insurance, including
contractual liability insurance, insuring Lessee against liability arising out
of the ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be in an amount of not less than
$1,000,000 for injury to or death of one person in any one accident or
occurrence and in an amount of not less than $5,000,000 for injury to or death
of more than one person in any one accident or occurrence. Such insurance shall
further insure Lessee against liability for property damage of at least
$5,000,000 per accident or occurrence, or such insurance can be obtained with a
combined single limit per occurrence, subject to being commercially available,
of $10,000,000 per location without reduction for events at other locations. All
such insurance policies may provide for commercially reasonable deductibles,
which, as long as such insurance is part of the GATX Corporation insurance
program (with GATX Corporation being responsible for payment of such
deductibles) may be up to $2,000,000. Such insurance policies shall name Lessor
and Lessor's mortgagee as additional insured's and shall contain a clause in
favor of Lessor and Lessor's mortgagee stating that the policy not be cancelled
without thirty (30) days prior notice to Lessor. The insurance limits set forth
herein shall be adjusted from time to time in accordance with the limits
customarily maintained in the industry for similar properties in similar
locations; provided such insurance limits shall never be less than those set
forth herein. If Lessee shall fail to procure and maintain said insurance,
Lessor may, but shall not be required to, procure and maintain the same upon
notice to Lessee, but at the expense of Lessee, which expense shall be paid upon
demand.
6.3 Property Insurance. Lessee shall obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or damage to
the Building, excluding footings, foundations and excavations, if any, in an
amount, or with an agreed amount clause, sufficient to prevent Lessee or Lessor
from becoming co-insurers under provisions of applicable policies of insurance,
but in no event less than 80% (subject to periodic review and reasonable
approval by Lessor) of the full replacement value thereof, but excluding
foundations, against all perils included within the classification of "all risk
coverage" or special coverage. All such insurance policies may provide for
commercially reasonable deductibles which, as long as such insurance is part of
the GATX Corporation insurance program (with GATX Corporation being responsible
for payment of such deductibles), may be up to $500,000. If a specified perils
policy applies, then the policy or policies of insurance maintained shall
include or a separate policy shall provide "difference in conditions" through
the endorsement or the separate policy;
12
provided, however, Lessee shall not be required to obtain earthquake insurance
in amounts in excess of those maintained in the industry on similar properties
in similar locations. Lessee shall also obtain boiler and machinery insurance if
applicable. All of the foregoing insurance shall contain a standard Mortgagee's
or Lessor's interest clause in favor of Lessor and Lessor's mortgagee. Said
insurance shall provide for payment of losses thereunder to the Lessee and the
Lessor (and, if requested by Lessor in writing, to the holder of a first
mortgage or deed of trust on the Premises, as a trustee holding said funds on
behalf of Lessor, to be used in discharge of Lessee's obligations hereunder), as
their respective interests may appear. Lessee shall have the right to adjust all
losses unless this Lease is terminated pursuant to Section 7.1 below, in which
case Lessor shall have the right to adjust all losses. Any insurance proceeds
payable to Lessee under the policies of insurance required under this Paragraph
6.3 in amounts of $100,000 or less (or $5,000,000 or less if an affiliate of
GATX Corporation is the Lessee and if GATX agrees in writing [the form and
content of which must be reasonably satisfactory to Lessor] that such proceeds
will be applied in the manner required by this Lease) (which amount shall be
increased each January 1st by an increase in the CPI over the preceding year),
shall be paid to Lessee and applied by Lessee to pay the costs of repair and
restoration in accordance with this Section 6, and any balance held upon
completion of the repairs as provided for in this Section 6 shall be the sole
property of Lessee. Any insurance proceeds payable to Lessee under the policies
of insurance required under this Paragraph 6.3 in excess of $100,000 (or
$5,000,000 if an affiliate of GATX Corporation is the Lessee) (which amount
shall be increased each January l/st/ by an increase in the CPI over the
preceding year), shall be held by the first mortgagee as set forth above or by
an insurance trustee mutually agreed upon by Lessee and Lessor, who shall apply
such funds to restoration in accordance with procedures customarily used for
construction loans. Any insurance payments hereunder which are to be payable to
Lessee shall be assigned and endorsed over to Lessee if paid to Lessor. The
insurance policy or policies obtained hereunder shall provide that they may not
be cancelled without thirty (30) days prior notice to Lessor. If Lessee shall
fail to procure and maintain any such insurance, Lessor may, but shall not be
required to, upon notice to Lessee, procure and maintain the same at the expense
of Lessee.
6.4 Insurance Policies. Insurance required hereunder shall be in companies
or Groups rated B+-XII or better in "Best's Insurance Reports Property-Casualty"
or any other company reasonably acceptable to Lessor. Lessee shall deliver to
Lessor certificates evidencing the existence and amounts of such insurance and
shall deliver to Lessee copies of the portions of such policies applicable to
the Premises certified as true and correct by the Lessee. No such policy shall
be cancellable or subject to other material modification (defined as increase in
the deductible, reduction in limits or additional exclusions) except after
thirty (30) days' prior written notice to Lessor. Lessee shall, prior to the
expiration of such policies, furnish Lessor with renewals or "binders" thereof,
or in the event Lessee fails to do so, Lessor may order, upon notice to Lessee,
such insurance and charge the cost thereof to Lessee, which amount shall be
payable by Lessee upon demand.
6.5 Waiver of Subrogation. Lessee shall, in obtaining any policies of
insurance required hereunder covering damage to the Premises, obtain policies
including a waiver of the insurer's rights of subrogation against Lessor, if the
same are obtainable.
13
6.6 Indemnity. Except as may be otherwise set forth in Section 4.5 above,
Lessee shall indemnify and hold harmless Lessor from and against any and all
claims arising from Lessee's use of the Premises, or from the conduct of
Lessee's business or from any activity, work or things done, permitted or
suffered by Lessee in or about the Premises, and shall further indemnify and
hold harmless Lessor from and against any and all claims arising from any breach
or default in the performance of any obligation on Lessee's part to be performed
under the terms of this Lease, or arising from any negligence of the Lessee, or
any of Lessee's agents or contractors, or arising from any action, damage or
injury, however occurring, on the Premises, or and from and against all costs,
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon; and in case any action or
proceeding be brought against Lessor by reason of any such claim, Lessee upon
notice from Lessor shall defend the same at Lessee's expense with counsel
reasonably approved by Lessor. Notwithstanding the foregoing, Lessee shall not
be obligated to indemnify and hold Lessor harmless to the extent any claims
arise out of Lessor's own negligence or willful misconduct. Lessor agrees to
indemnify, defend and hold harmless Lessee against any claims or costs,
including reasonable attorney's fees, arising from Lessor's negligence or
willful misconduct during the term of this Lease or from such acts or conduct of
any employee, agent or contractor of Lessor; provided, however, Lessor's
negligence and willful misconduct shall not include negligence or misconduct
imputed to Lessor on account of any condition in or about the Premises unless
caused by the affirmative act of Lessor or its employees or its agents (which
for purposes hereof shall not include Lessee).
6.7 Self-Insurance. Subject to the approval of Lessor, which shall not be
unreasonably withheld, Lessee may elect not to obtain such insurance but instead
self-insure for up to $10,000,000 as part of GATX Corporation's corporate
insurance program as long as Lessee is an affiliate of GATX Corporation. In the
event Lessee elects to self-insure, Lessee shall deliver to Lessor a certificate
certifying that Lessee is part of GATX Corporation's self-insurance program. In
connection with such approval by Lessor, Lessee shall deliver to Lessor such
information regarding such self-insurance program as Lessor may reasonably
require to evaluate such program.
7. Damage or Destruction.
7.1 Damage During Term. Except as set forth below, if the Premises are
damaged during the term of this Lease, Lessee shall, at Lessee's expense, repair
such damage as soon as reasonably possible, subject to delays due to force
majeure, and this Lease shall continue in full force and effect. Subject to
Section 6, any insurance proceeds received or to be received by Lessor or any
mortgagee named as loss payee shall be made available to Lessee to effect such
repair. Before any repair or restoration costing more than $100,000 (which
amount shall be increased each January l/st/ by the increase in the CPI over the
preceding year) is made, Lessee shall provide Lessor with information showing
that the insurance proceeds, together with other funds available to Lessee, are
adequate for the repair or restoration and that it is feasible to rebuild the
Premises. In no event shall the rent due hereunder abate as a result of any such
damage unless this Lease is terminated as set forth below. Notwithstanding the
foregoing, if the Building and other improvements on the Premises are
substantially destroyed during the last two
14
years of the Lease term (or during the last two years of any Option Period if
Lessee has exercised any renewal option herein), Lessee shall have the option,
exercisable by written notice given by Lessee within sixty (60) days of such
destruction, to terminate this Lease, effective as of the date of destruction,
without rebuilding the Premises by (i) assigning to Lessor all of its right,
title and interest in any insurance proceeds on the Premises and (ii) paying to
Lessor any coinsurance amounts and deductibles applicable thereto at the time
the insurance proceeds are so paid. In addition, if the Building and other
improvements on the Premises are substantially destroyed before the last two
years of the Lease term (or the last two years of any Option Period if Lessee
has exercised any renewal option herein), Lessee shall have the option,
exercisable by written notice given by Lessee within sixty (60) days of such
destruction, to (a) not rebuild the Premises and to place the insurance proceeds
(together with an amount equal to all co-insurance and deductibles under the
applicable policies) in escrow pursuant to an escrow agreement and with an
escrow agent reasonably satisfactory to Lessor and Lessee, and (b) continue to
pay the Basic Rent and additional rent to the Lessor until the end of the term
of the Lease. Any interest earned on the insurance proceeds placed in escrow
shall be payable to Lessee. Lessee shall have the right to decide how the funds
held in escrow are invested, provided Lessor shall have the right to approve any
investments which approval shall not be unreasonably withheld; provided,
however, if Lessee elects to invest the funds in securities backed by the United
States government or in investment grade debt obligations, no such approval
shall be required. At the end of the Lease term all such insurance proceeds
shall be payable to Lessor. If Lessee chooses not to rebuild within such sixty
(60)-day period, Lessor and Lessee shall both have the right, at any time before
one year prior to the expiration of the Lease, to choose to use the insurance
proceeds put in escrow to rebuild the Premises. If Lessee so chooses to rebuild,
Lessee shall give written notice thereof to Lessor; and (subject to the
requirements of this Lease regarding restoration by Lessee and payment and
application of insurance proceeds) Lessee shall be entitled to use the amounts
so deposited in escrow for such rebuilding. If Lessor so chooses to rebuild the
Premises at any time, (i) this Lease shall terminate (except as to the
obligation of Lessee to pay Basic Rent and additional rent provided immediately
below), effective as of the date of the exercise of Lessor's option to rebuild
the Premises, (ii) Lessee shall assign to Lessor all of its right, title and
interest in any insurance proceeds, and (iii) Lessee shall also pay to Lessor
Basic Rent and additional rent (provided such additional rent shall not exceed
that customarily paid in the past under the terms of this Lease) for a period of
one year from the date of the exercise of Lessor's option to rebuild the
Premises and terminate this Lease.
7.2 Termination -- Advance Payments. Upon termination of this Lease
pursuant to this Section 7, an equitable adjustment shall be made concerning any
advance payments made by Lessee to Lessor or on Lessor's behalf pursuant to
Section 8.
8. Real Property Taxes.
8.1 Payment of Taxes. Lessee shall pay all real property taxes which are
due and payable (or are assessed during the Lease term and payable within a
period of two years after the end of the Lease term) with respect to the
Premises during the term of this Lease; provided, however, Lessee shall not be
required to pay any special assessments which are assessed, but not payable,
during the term of this Lease. All such payments shall be made prior to the
delinquency
15
date of such payment, provided, however, that if, by law, any such tax is
payable, or may at the option of the taxpayer be paid, in installments (whether
or not interest shall accrue on the unpaid balance of such tax), Lessee shall
pay the same together with any accrued interest on the unpaid balance of such
tax in installments as the same respectively become due and before any fine,
penalty, interest or cost may be added thereto for the non-payment of any such
installment and interest. Lessee shall promptly furnish Lessor with satisfactory
evidence that such taxes have been paid. If any such taxes paid or to be paid by
Lessee shall cover any period of time after the expiration of the term hereof,
Lessee's share of such taxes shall be equitably prorated to cover only the
period of time within the year during which the term of this Lease shall be in
effect, and Lessor shall pay or reimburse Lessee, as the case may be, to the
extent required. With respect to any real property tax for public improvements
or benefits which by law is payable, or at the option of the taxpayer may be
paid in installments, Lessee shall pay those installments which become due and
payable during the term of this Lease, provided the taxes shall be equitably
prorated as provided above. If Lessee shall fail to pay any such taxes, Lessor
shall have the right to pay the same, in which case Lessee shall repay such
amount to Lessor with Lessee's next rent installment.
8.2 Definition of "Real Property" Tax. As used herein, the term "real
property taxes" shall include any form of assessment, levy, surcharge, penalty
or tax imposed by any authority having the direct or indirect power to tax,
including any city, county, state or federal governmental, or any school,
agricultural, lighting, drainage, industrial waste treatment or other
improvement district thereof, as against the Premises. Nothing in this Lease
shall require Lessee to pay franchise, estate, inheritance, succession, capital
levy or transfer tax of Lessor, or any income, excess profits or revenue tax or
any other tax, assessments, charge or levy upon the rent payable by Lessee under
this Lease, except that Lessee shall pay any such tax which is, in whole or in
part, in substitution for any other real property tax. If any such substitute
real property tax shall be imposed on a graduated scale, Lessee shall be liable
for only such substitute real property tax as would be payable if the rent
payable under this Lease were the only income subject thereto and the Premises
and Lessor's interest under this Lease were the only property of Lessor subject
thereto.
8.3 Personal Property Taxes. Lessee shall pay prior to delinquency all
taxes assessed against, levied or payable during the Lease term upon trade
fixtures, furnishings, equipment and all other personal property of Lessee
contained in the Premises.
8.4 Lessee's Right to Contest Real Property Taxes. All other provisions of
this Lease to the contrary notwithstanding, Lessee shall not be required to pay,
discharge or remove any real property taxes or real property tax liens so long
as Lessee shall in good faith and with due diligence contest the same or the
validity thereof by appropriate legal proceedings, provided that: (a) Lessee
shall first make all contested payments, under protest if it desires, unless
such proceedings shall suspend the collection thereof; (b) neither the Premises,
the Building, nor any part thereof or interest therein are at any time in any
danger of being sold, forfeited, lost or interfered with; and (c) pending any
such legal proceedings, Lessee shall deposit with Lessor cash or other security
reasonably satisfactory to Lessor in an amount equal to not less than 125% of
the amount of the real property taxes or real property tax liens so contested if
the taxes or lien
16
equal or exceed $25,000 (which amount shall be increased each January 1st by the
increase in the CPI over the preceding year). Lessee will consult with Lessor in
connection with any such contest. Lessor shall not be required to join in any
such proceeding unless it shall be necessary for it to do so in order to
properly prosecute such proceeding and Lessor shall have been fully indemnified
against all costs and expenses in connection therewith, nor shall Lessor be
subjected to any liability for the payment of any costs or expenses in
connection with any proceeding brought by Lessee, and Lessee shall indemnify and
save harmless Lessor from any such costs or expenses (including, without
limitation, reasonable attorneys' fees and expenses). In the event that Lessee
at any time institutes suit to recover any real property taxes paid by Lessee
under protest in Lessor's name, and provided all of the requirements of this
section are met, Lessee shall have the right, at its sole expense, to institute
and prosecute such suit or suits in Lessor's name, in which event Lessee
covenants and agrees to indemnify Lessor and save it harmless from and against
all costs, charges or liabilities in connection with any such suit, including,
without limitation, reasonable attorneys' fees and expenses. All funds recovered
as a result of any such suit shall belong to Lessee. Pending the diligent
prosecution of any such legal proceedings, Lessor shall not have the right to
pay, remove or discharge the real property taxes or real property tax liens so
contested; provided, however, that if Lessee fails to prosecute such contest
with due diligence, or if a default has occurred under this Lease, or if, at the
conclusion of such contest, Lessee fails to pay the real property taxes, Lessor
may pay any item for which Lessor would be entitled to make advances under
Section 8.1 hereof. Upon the termination of such legal proceedings, Lessee shall
pay all amounts necessary for the removal and discharge of said real property
taxes, if any, then payable and the interest and penalties in connection
therewith, and the charges accruing in such legal proceedings. If Lessee is
unsuccessful in such legal proceedings, it shall promptly comply, at its sole
cost and expense, with any final decision rendered in connection with such
proceeding, and Lessor may, upon the final disposition of such contest, apply
the money deposited as security pursuant to subsection (c) of this section in
satisfying the requirements of any such adverse decision. Notwithstanding the
foregoing, Lessee shall not be entitled to contest any real property taxes or
real property tax liens, without Lessor's prior written consent, which is not to
be unreasonably withheld, if the determination in any such contest will be
binding upon Lessor upon expiration of the term of this Lease. Lessor shall have
the right to participate, at its sole election and cost, in any proceedings
which would be binding on Lessor.
8.5 Proration. Nine months prior to the termination of this Lease, Lessee
shall make a deposit with Lessor for any real property tax assessed against the
Premises during the term of this Lease which is the responsibility of Lessee
hereunder and that is not due and payable prior to the end of the term. The
amount of the deposit shall equal the real estate tax discounted at the base
rate on corporate loans at large U.S. money center commercial banks, as most
recently published by the Wall Street Journal, Midwest Edition, from the date of
deposit to the last due date of each installment of the real estate tax. If the
amount of tax is not known at the time the Lease terminates, the amount of
deposit shall be equal to the most recent ascertainable tax times 105% per year
from the year of the most recent ascertainable tax to the year for which such
amounts are being deposited. Such tax shall then be reprorated when the actual
amount of the tax becomes known. Lessee shall be given a credit for the full
pre-discounted amount deposited with Lessor when the taxes are paid or
re-prorated.
17
9. Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises during the
term of this Lease, together with any taxes thereon.
10. Assignment and Sublettting.
10.1 Lessor's Consent Required. Except as set forth below, Lessee shall not
voluntarily or by operation of law assign, transfer, mortgage, or otherwise
transfer or encumber all or any part of Lessee's interest in this Lease or in
the Premises, without Lessor's prior written consent. Any attempted assignment,
transfer, mortgage or encumbrance without such consent shall be void, and shall
constitute a breach of this Lease.
10.2 Lessee Affiliate. Notwithstanding the provisions of Paragraph 10.1
hereof, but subject to the provisions of the following sentence, Lessee may
assign this Lease without Lessor's consent, to Associated Unit Companies, Inc.
("Associated") or any corporation controlled by Associated, or to any
corporation resulting from the merger or consolidation with Lessee, or to any
person or entity which acquires substantially all the assets of Lessee as a
going concern, provided said assignee assumes, in full, the obligations of
Lessee under this Lease. Notwithstanding the foregoing, (i) Lessee shall not
become a subsidiary of GATX Corporation or any other entity controlling,
controlled by or under common control with GATX Corporation, directly or
indirectly, other than Associated (or a wholly-owned subsidiary, either directly
or through any number of parent-subsidiary affiliations, of Associated), nor
(ii) shall Lessee transfer or permit to be transferred the interests or
operations, including assets used therein, of Lessee in the Premises to GATX
Corporation or any entity controlling, controlled by or under common control
with GATX Corporation other than Associated (or a wholly-owned subsidiary,
either directly or through any number of parent-subsidiary affiliations, of
Associated) (unless the entity acquiring the assets, interests, operations of
Lessee shall join in the guaranty of this Lease given by Associated to Lessor at
the time this Lease was executed).
10.3 Subleases. Notwithstanding the provisions of Paragraph 10.1, Lessee
may sublease the Premises or any part thereof without Lessor's consent provided
that the terms of such subleases will not result in the violation of any terms
of this Lease and no subleases shall be entered into which extend beyond the
term of this Lease.
10.4 Trade Fixtures. Notwithstanding the provisions of Paragraph 10.1,
Lessor and Lessee acknowledge that Lessor has no interest in Lessee's trade
fixtures, and therefore Lessee may install and remove these fixtures at any
time, subject to Paragraph 5.2, and Lessee may mortgage or transfer these trade
fixtures without Lessor's consent. For purposes of this Lease, trade fixtures
shall mean any items attached to the Premises which are not integral to the
operation of the Building which are used for serving Lessee's sublessees or
customers in the conduct of the business being carried on at the Premises,
including, but not limited to, racks, conveyors and cranes (excluding overhead
cranes, which shall be considered the property of Lessor and not trade
fixtures). In no event shall any item which is required to keep the Premises in
compliance with any law be considered a trade fixture. If Lessor and Lessee
cannot agree upon whether any item is a trade fixture hereunder, either party
may apply to the American
18
Arbitration Association for the appointment of an impartial third party to
arbitrate the dispute. All costs and expenses of the arbitration shall be paid
by the losing party in such arbitration. Lessor shall not be obligated to join
in any severance agreements or to subject its interest in the Premises to any
liens relating to any trade fixture.
10.5 No Release Of Lessee. Regardless of Lessor's consent, no subletting or
assignment shall release Lessee or alter the liability of Lessee to pay the rent
and to perform all other obligations to be performed by Lessee hereunder. The
acceptance of rent by Lessor from any other person shall not be deemed to be a
waiver by Lessor of any provision hereof. Consent to one assignment shall not be
deemed consent to any subsequent assignment.
10.6 Subrogation. Upon default of Lessee, which default is not cured within
the applicable grace period, Lessor shall become subrogated to the rights of
Lessee against any sublessees or assignees of Lessee's interest hereunder.
11. Defaults; Remedies.
11.1 Defaults. The occurrence of any one or more of the following events
shall constitute a default hereunder by Lessee:
(a) The failure by Lessee to make any payment of Basic Rent required
to be made by Lessee hereunder, as and when due, and such failure shall continue
for a period of three (3) business days after written notice thereof by Lessor
to Lessee;
(b) The failure by Lessee to make any payment of additional rent
required to be made by Lessee hereunder, as and when due, and such failure shall
continue for ten (10) days after written notice thereof by Lessor to Lessee;
(c) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee,
other than described in paragraphs (a) and (b) above, and such failure shall
continue for a period of thirty (30) days after written notice thereof from
Lessor to Lessee; provided, however, that if the nature of Lessee's default is
such that more than thirty (30) days are reasonably required for its cure, then
Lessee shall not be deemed to be in default if Lessee has commenced such cure
within said thirty day period and thereafter diligently pursues such cure to
completion and cures the default within six (6) months of written notice from
Lessor of the default unless such cure cannot be accomplished within six (6)
months because of a third party, in which case, such default shall be cured (i)
within one (1) year after written notice from Lessor if the delay is due to a
third party which is not a governmental entity or (ii) prior to the expiration
of the Lease term if the delay is due to a governmental entity;
(d) (i) The making by Lessee of any general assignment or general
arrangement for the benefit of creditors; (ii) the filing by or against Lessee
of a petition to have Lessee adjudged a bankrupt or a petition for
reorganization or arrangement under any bankruptcy, insolvency or other laws
relating to the readjustment of indebtedness generally (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60)
19
days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within sixty
(60) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within sixty (60)
days;
(e) Any default by any lessee, including any successor or assignee,
under any other lease listed on Exhibit B which is not cured within the
applicable grace period therein.
11.2 Remedies. In the event of any such default by Lessee, Lessor may at
any time thereafter, with or without notice or demand and without limiting
Lessor in the exercise of any right or remedy which Lessor may have under the
laws of the state where the Premises is located by reason of such default,
terminate this Lease or terminate Lessee's right to possession of the Premises
without terminating this Lease; and in either case Lessee shall immediately
surrender possession of the Premises to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (a) all damages incurred by Lessor by reason of
Lessee's default including, but not limited to, the cost of recovering
possession of the Premises; reasonable expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and any reasonable real estate commission actually paid; and the value of the
rent and all other sums provided herein to be paid by Lessee to or for the
benefit of Lessor or the Premises for the remainder of the Lease term, less the
fair rental value of the Premises (including any other sums which would be paid
for the benefit of the Premises as part of such fair rental value) for said
period, discounted to present value at the rate of ten percent (10%) per annum,
or (b) hold Lessee liable for rent and all other charges required to be paid by
Lessee up to the time of such termination of Lessee's right to possession under
this Lease, or of recovery of possession of the Premises by Lessor, as the case
may be, and thereafter, Lessee agrees to pay the amount of rent reserved herein
and all other charges required to be paid by Lessee, less the net avails of
reletting, if any, and the same shall be due and payable by Lessee to Lessor on
the days when payment of such amounts would be payable under this Lease. If
Lessor elects to pursue its remedies under subparagraph (b) above, then upon the
Lessor's recovering possession of the Premises, Lessor shall use reasonable
diligence to relet the Premises or such part or parts thereof as may be
practicable, for the account of the Lessee or otherwise, and receive and collect
the rents therefor, applying the same first to the payment of such reasonable
expenses as Lessor may have incurred in recovering possession of the Premises,
including reasonable attorneys' fees, and in putting the same into good order or
condition for preparing or altering the same for re-rental (including costs and
expenses for subdividing space by demising walls or otherwise, or leasing to
multiple tenants or users), and all other reasonable expense, commissions, and
charges paid, assumed, or incurred by Lessor in or about reletting the Premises,
and then to the fulfillment of the covenants of Lessee hereunder. Any such
reletting herein provided for may be for the remainder of the term of this Lease
as originally granted or for a longer or shorter period.
11.3 Lessor's Right to Payment. Wherever this Lease requires that Lessee
make payments for the benefit of Lessor or the Premises, Lessor shall have the
right after a default by Lessee which is not cured within the applicable grace
period, to make such payment upon prior written notice to Lessee. The amount so
paid by Lessor shall become immediately due and
20
payable from Lessee to Lessor, and Lessee shall pay Lessor interest on such
amounts paid by Lessor at the rate set forth in Section 3.3 above.
11.4 Escrow for Taxes and Insurance. Upon the occurrence of any default by
Lessee which is not cured within the applicable grace period, Lessor may require
Lessee to make payments on a monthly basis of the sums required to be paid under
the Lease by Lessee for real estate taxes and insurance premiums.
12. Condemnation. If the Premises or any area comprising part of the
Premises are taken under the power of eminent domain, or sold to a governmental
body under the threat of the exercise of said power (all of which are herein
called "condemnation"), this Lease shall terminate as to the part so taken as of
the date the condemning authority takes title or possession, whichever first
occurs. If the portion of the Premises taken under the power of eminent domain
is such that the remaining portion of the Premises can be economically used for
its intended purposes, this Lease shall remain in full force and effect as to
the portion of the Premises remaining, except that the rent shall be reduced in
the proportion that any Building floor area taken bears to the total floor area
of the Building, and shall be equitably reduced in the event of a reduction of
land areas not covered by the Building; provided, however, that there shall be
no abatement in rent if the condemnation award is sufficient to restore the
Premises completely and is made available to Lessee for such restoration.
Notwithstanding the foregoing, if less than five percent (5%) of the land area
of the Premises, not including the Building or any parking, is taken by
condemnation, and the remaining portion of the Premises can be economically used
for its intended purposes, there shall be no rent reduction. If there is a
temporary taking of the Premises, or-a portion thereof, Lessee shall not be
entitled to any rent abatement, but shall be entitled to any award from the
condemning authority payable for any period falling within the Lease term. Any
award for the taking of all or any part of the Premises under the power of
eminent domain or any payment made under threat of the exercise of such power
shall be the property of Lessor, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Lessee shall be entitled
to any award for loss of or damage to Lessee's trade fixtures and removable
personal property or for moving expenses. Lessee shall be entitled to make a
separate claim for business interruption provided any award therefor does not
reduce the Lessor's award, but Lessor agrees not to make a claim for business
interruption. In the event that this Lease is not terminated by reason of such
condemnation, Lessor shall make available to Lessee any severance damages
received by Lessor in connection with such condemnation so that Lessee may
repair any damage to the Premises caused by such condemnation. The cost of such
repair, to the extent it exceeds such severance damages, shall be amortized over
the useful life of the repair, with Lessee paying for the portion of such cost
which will be amortized over the Lease term and Lessor paying for the portion of
such cost which will not be amortized during the Lease term except that if the
cost of repair exceeds such severance damages either party can terminate this
Lease.
13. Holding Over. If Lessee remains in possession of the Premises after
expiration of the term hereof, Lessee shall be a tenant-at-will and shall pay
Lessor rent at the rate of 125% of the rental rate in effect at the end of the
Lease term; provided, however, nothing herein shall be
21
deemed to give Lessee a right to remain in possession of the Premises after the
expiration of the Lease term.
14. Broker's Fee. Lessor and Lessee both represent and warrant they have
dealt with no broker with regard to this transaction, and agree to indemnify and
hold each other harmless from any brokerage claims, demands or suits that might
arise out of any facts constituting a breach of such representation and
warranty.
15. General Provisions.
15.1 Estoppel Certificate.
(a) Either party shall at any time upon not less than twenty-one (21)
days' prior written notice from the other party execute, acknowledge and deliver
to the other party a statement in writing in the form attached hereto as
Exhibits C and D respectively, (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, (ii) acknowledging that there are not, to such party's
knowledge, any uncured defaults on the part of the other party hereunder, or
specifying such defaults if any are claimed, and (iii) certifying to such other
matters as may be reasonably requested by the other party. Any such statement
may be conclusively relied upon by any prospective party having an interest in
the Premises.
(b) Either party's failure to deliver such statement within such time
shall be conclusive upon such party (i) that this Lease is in full force and
effect, without modification except as may be represented by the other party,
and (ii) that there are no uncured defaults in the other party's performance.
15.2 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
15.3 Incorporation Of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
Agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification.
15.4 Notices. Notices shall be either (i) personally delivered (including
delivery by Federal Express or other reputable courier service) to the offices
set forth below, in which case they shall be deemed delivered on the date of
delivery to said offices; (ii) sent by Western Union telegram, in which case
they shall be deemed delivered on the date Western Union delivers its telephonic
communication; (iii) sent by telecopy, in which case they shall be deemed
delivered on the date receipt of the same is confirmed by the receiving party;
or (iv) sent by certified mail, return receipt requested, in which case they
shall be deemed delivered on the date shown on the receipt unless delivery is
refused or delayed by the addressee, in which event they shall be deemed
delivered two (2) days after the date of deposit in the U.S. mail. For purposes
of Notices, the addresses of the parties shall, until changed as herein
provided, be given as follows:
22
To Lessor:
The Prudential Insurance Company of America
c/o The Prudential Realty Group
751 Broad Street
4 Prudential Plaza
Newark, New Jersey 07102-3777
Attention: Stephen Parker
With a copy to:
Sonnenschein Carlin Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Mark F. Mehlman, Esq.
Scott A. Lindquist, Esq.
To Lessee:
Associated Unit Companies, Inc.
1800 Gulf Life Tower
Jacksonville, Florida 32207
Attention: President
With a copy to:
GATX Corporation
120 South Riverside Plaza
Chicago, Illinois 60606
Attention: General Counsel
The parties hereto and their respective successors, legal representatives and
assigns shall have the right to specify as its address any other address by
giving at least ten (10) days' written notice to the other party.
15.5 Waivers. No waiver by Lessor of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Lessee of the same or any other provision. Lessor's consent to or approval of
any act shall not be deemed to render unnecessary the obtaining of Lessor's
consent to or approval of any subsequent act of Lessee. The acceptance of rent
hereunder by Lessor shall not be a waiver of any preceding breach or the failure
of Lessee to pay the particular rent so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of acceptance of such rent.
15.6 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, whenever possible, be cumulative with all other
remedies at law or in equity.
23
15.7 Binding Effect; Choice Of Law. Subject to any provisions hereof
restricting assignment by Lessee, this Lease shall bind the parties, their
successors and assigns. This Lease shall be governed by the laws of the state
where the Premises are located.
15.8 Subordination.
(a) This Lease, at Lessor's option, shall be subordinate to any
mortgage or deed of trust now or hereafter placed upon the Premises and to any
and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof, provided the
holder of such mortgage or deed of trust agrees that Lessee's right to quiet
possession of the Premises shall not be disturbed so long as Lessee shall pay
the rent and observe and perform all of the provisions of this Lease. Lessor
agrees to deliver to Lessee, concurrently with the execution of any mortgage or
deed of trust which is prior to this Lease; (i) a non-disturbance agreement of
the mortgagee or trustee, in form reasonably requested by the mortgagee or
trustee, assuring the Lessee's quiet enjoyment of the Premises so long as Lessee
is not in default, and (ii) the Agreement of the mortgagee or trustee permitting
the use of insurance and condemnation proceeds as provided for herein. If any
mortgagee or trustee shall elect to have this Lease prior to the lien of its
mortgage or deed of trust, and shall give written notice thereof to Lessee, this
Lease shall be deemed prior to such mortgage or deed of trust, whether this
Lease is dated prior or subsequent to the date of said mortgage or deed of trust
or the date of recording thereof. Lessee shall attorn, as lessee under this
Lease, to the purchaser at any foreclosure sale or to the mortgagee, if the
mortgagee becomes owner of the fee estate, and this Lease shall continue in
force and effect as a direct Lease between Lessee and purchaser or mortgagee.
(b) Subject to the provisions of Paragraph 15.8(a) hereof, Lessee
agrees to execute any documents reasonably required to effectuate such
subordination or to make this Lease prior to the lien of any mortgage or deed of
trust, as the case may be.
15.9 Lessor's Access. Lessor and Lessor's agents shall have the right to
enter the Premises at reasonable times upon reasonable notice for the purpose of
inspecting the same (provided no notice shall be required in the event of an
emergency), and showing the same to prospective purchasers or lenders provided
they do not disturb the conduct of Lessee's business. Lessor shall indemnify and
hold Lessee harmless from all claims and liabilities resulting from Lessor's
acts and omissions in connection with such entry. Lessor may, with Lessee's
permission, place on or about the Premises any ordinary "For Sale" signs and
Lessor may without Lessee's permission, at any time during the last one hundred
twenty (120) days of the term hereof, place on or about the Premises any
ordinary "For Lease" signs, all without rebate of rent or liability to Lessee.
Lessor shall also have the right to enter the Premises at any time to cure any
defaults hereunder by Lessee which Lessor is permitted at that time to cure.
Lessor shall use reasonable efforts to keep confidential any information
regarding Lessee's operations which Lessor learns while on the Premises.
24
15.10 Corporate Authority. Lessor and Lessee each represent and warrant to
the other that it is duly authorized to execute and deliver this Lease and that
this Lease is binding upon it in accordance with its terms.
15.11 Consents. Whenever in this Lease the consent of one party is required
to an act of the other party such consent may be withheld in such party's sole
discretion unless this Lease requires that such consent not be unreasonably
withheld. A failure by any party to respond to a request for consent within
thirty (30) days of notice shall be deemed consent by such party.
15.12 Quiet Possession. Lessor covenants and agrees that upon Lessee's
paying the rent reserved hereunder and observing and performing all of the
covenants, conditions and provisions on Lessee's part to be observed and
performed hereunder, Lessee shall not be disturbed in its possession of the
Premises by any act of Lessor, its agents, employees, lessees and contractors,
so long as Lessee timely performs its obligations under this Lease.
15.13 Captions. Section and paragraph captions are not a part hereof.
15.14 Time of Essence. Time is of the essence of this Lease, and all
provisions herein specifying time periods shall be strictly construed.
15.15 Relocation. For a period of one year after expiration of the primary
term of this Lease and only so long as the initial Lessor (or another
"institutional" purchaser which is not in the business of developing or
operating warehouses, but for this purpose ownership of warehouses operated by
others shall not be deemed "operating" warehouses) owns the Premises, Lessee
shall not transfer any of Lessee's business being conducted on the Premises at
the termination of the primary term of this Lease to any warehouse developed by
Lessee or its affiliates that is within a ten (10) mile radius of the Premises
(a "Lessee Warehouse") unless the Premises are no longer suitable for the
business being conducted thereon. If Lessee determines that the Premises are no
longer suitable for the business being conducted thereon, Lessee shall deliver
to Lessor an affidavit executed by an officer of GATX Corporation on behalf of
such corporation certifying that the Premises are no longer suitable for the
business being conducted thereon and setting forth the reasons why. Upon receipt
of such affidavit Lessor shall have the right to make the Premises suitable to
Lessee, if possible, at Lessor's sole cost and expense, within the time
reasonably required by Lessee. If Lessor is able to make the Premises suitable
for Lessee within the time reasonably required by Lessee, Lessee shall not be
permitted to transfer the business to a Lessee Warehouse unless Lessee agrees to
extend the Lease term for one (1) additional year after the expiration of the
primary term of this Lease. Such extension shall be at the rate for Basic Rent
in effect for the period immediately prior to such extension adjusted in the
manner provided in Section 3.2 for adjustments during the primary term of this
Lease. Lessee shall be under no obligation to use or occupy the Premises during
such extension period provided it pays all Basic Rent and additional rent due
hereunder, and this Lease shall terminate at the end of such one (1) year period
without any further restrictions pursuant to this Section 15.15. In no event
shall the provisions of this Section 15.15 apply if Lessee has exercised any
option to renew the term of this Lease.
25
15.16 No Personal Liability of Lessor. Any liability of Lessor under this
Lease shall be limited to its interest in the Premises, and in no event shall
any personal liability be asserted against Lessor in connection with this Lease.
Notwithstanding the foregoing, Lessor shall remain personally liable for any
obligations to make contributions for Capital Expenditures as set forth under
this Lease and for claims and liabilities to third parties resulting from
Lessor's acts and omissions in connection with Lessor's entry onto the Premises.
15.17 Meaning of "Lessor." The term "Lessor" as used in this Lease, means
only the lessor from time to time, and upon transferring its interest in the
Premises, such transferring lessor shall be relieved from any further obligation
or liability accruing after the transfer of its interest, so long as the
successor lessor agrees to be bound by all of the transferring lessor's
obligations under this Lease.
26
IN WITNESS WHEREOF, the parti6s hereto have executed this Lease on the date
first above written.
Lessor
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA,
a New Jersey corporation
ATTEST:
/s/ ILLEGIBLE By: /s/ ILLEGIBLE
--------------------------- -----------------------------
Secretary Title: Vice President
Lessee
UNIT DISTRIBUTION OF UTAH, INC.,
a Utah corporation
ATTEST: By: /s/ ILLEGIBLE
-----------------------------
Title: Vice President
/s/ ILLEGIBLE
---------------------------
Secretary
27
EXHIBIT A
PARCEL A:
A part of Section 12, Township 4 North, Range 2 West, Salt Lake Base and
Meridian, U.S. Survey:
Beginning at a point on the Easterly right-of-way of the Denver and Rio Grande
Western Railroad Company at a point North 89(degree) 48' 24" West 797.03 feet
along the Quarter Section Line from the center of said Section 12, running
thence North 34(degree) 41'43" West along said Easterly right-of-way line
parallel with an 33.0 feet distant Northeasterly measured at right angle from
the centerline of the main track of said railroad company as now constructed and
operated, a distance of 1588.60 feet to the Southwest corner of the property
conveyed to Clearfield City Corporation in Book 518 on Page 736-7 of Official
Records; thence along the South line of said property, North 55(degree) 18' 17"
East 954.03 feet to a point 8.5 feet Northeasterly from the centerline of lead
tract A-28; thence five courses parallel and 8.5 feet Northeasterly along said
track as follows: South 16(degree) 24' 40" East 50.54 feet; along the arc of a
5712.65 foot radius curve to the left 67.44 feet (Long Chord bears South
16(degree) 44' 57" East 67.44 feet); South 17(degree) 05' 15" East 432.22 feet;
along the arc of a 450.78 foot radius curve to the left 138.44 feet (Long Chord
bears South 25(degree) 53' 07" East 137.89 feet) and South 34(degree) 41' East
263.66 feet; thence South 79(degree) 41' East 59.39 feet; thence South
33(degree) 05' 24" East 359.15 feet; thence South 35(degree) 56' 10" East 457.12
feet; thence South 10(degree) 19' West 59.39 feet to a point 8.5 feet
Northeasterly of said track; thence South 34(degree) 41' East 51.96 feet
parallel and 8.5 feet Northeasterly of said track; thence South 55(degree)
18'17" West a distance of 765.92 feet (765.28 feet to close) to a point on the
Easterly right-of-way line of the Denver and Rio Grande Railroad Company; thence
North 34(degree) 41' 43" West along said line 287.43 feet to the point of
beginning.
EXCEPTING THEREFROM the following described property:
BEGINNING at a point South 89(degree) 48' 25" East 359.04 feet and South
0(degree) 10' 55" West 497.05 feet to the Easterly line of the D & R G `Railroad
right-of-way and South 34(degree) 41' 43" East 1023.0 feet along said
right-of-way, and North 55(degree) 18' 17" East 41.0 feet from the Northwest
corner of Section 12, Township 4 North, Range 2 West, Salt Lake Meridian, in the
City of Clearfield, and running thence South 34(degree) 41' 43" East 281.0 feet;
thence North 55(degree) 18' 17" East 99.25 feet to an existing fence; thence
Northeasterly 399 feet, more or less, along said fence to a point North
55(degree) 18' 17" East 340.95 feet from the point of beginning; thence South
55(degree) 18' 17" West 340.95 feet to the point of beginning.
PARCEL B:
A parcel of land situated in Section 12, Township 4 North, Range 2 West, Salt
Lake Base and Meridian, in Clearfield City, Davis County, Utah, more
particularly described as follows:
BEGINNING at a point an the Northeasterly right-of-way line of the Denver & Rio
Grande Western Railroad Company, at a point 797.03 feet North 89(degree) 48' 24"
West, along the Quarter Section line and 287.41 feet South 34(degree) 41' 43"
East from the center of said Section 12, said point
being the most Southerly corner of that certain parcel of land heretofore
conveyed by National Distribution Systems to Freeport Industrial Center by
Special Warranty Deed dated July 29, 1975, recorded on the records of Davis
County, October 25, 1979, Book 798, Page 372, thence along the Southerly line of
said conveyed parcel, North 55(degree) 18' 17" East, a distance of 434.80 feet;
thence South 34(degree) 46' 20" East, along the Northeasterly line of an
existing building a distance of 885.50 feet; thence South 55(degree) 22'12"
West, a distance of 436.18 feet, to a point on the Northeasterly right-of-way
line of said Denver & Rio Grande Western Railroad Company; thence North
34(degree) 41'00" West, a distance of 885.00 feet to the point of beginning.
PARCEL C:
A part of Section 12, Township 4 North, Range 2 West, Salt Lake Base and
Meridian, U.S. Survey:
Beginning at a point 797.03 feet North 89(degree) 48' 24" West along the Quarter
Section line; 287.41 feet South 34(degree) 41' 43" East; and 434.80 feet North
55(degree) 18' 17" East from the Center of said Section 12; running thence North
55(degree) 18' 17" East 330.48 feet to the Westerly line of the Oregon Short
Line Railroad property; thence two (2) courses along said Westerly line as
follows: South 34(degree) 41' East 530.71 feet and South 29(degree) 57' East
406.02 feet to the Northeast corner of the Americold Corporation Property;
thence South 55(degree) 22' 12" West 731.78 feet along the Northerly line of
said property to the Easterly line of the Denver and Rio Grande Western Railroad
property; thence North 34(degree) 41' West 49.50 feet along said Easterly line;
thence North 55(degree) 22' 12" East 436.18 feet to the Easterly edge of an
existing building extended; thence North 34(degree) 46' 20" West 885.50 feet
along said building and building extended to the point of beginning.
PARCEL D.
TOGETHER WITH a 60 foot right-of-way, the West line of which is described as
follows: (right-of-way Easement "A").
BEGINNING at a point South 89(degree) 48' 25" East 359.04 feet and South
0(degree) 10' 55" West 33.00 feet from the Northwest corner of Section 12,
Township 4 North, Range 2 West, Salt Lake Base and Meridian, and running thence
South 0(degree) 10' 55" West 464.05 feet; thence South 34(degree) 41' 43" East
1023.00 feet to the Northwest corner of said property, said 60 foot right-of-way
being contiguous with the public right-of-way of 700 South Street.
29
Exhibit B
Leases
1. That certain lease dated as of January. 29, 1990 between The Prudential
Insurance Company of America, as lessor, and Unit Distribution of
California, Inc., as lessee, for the property located at 5600 East Francis
Street, Ontario, California 91746.
2. That certain lease dated as of January 29, 1990 between The Prudential
Insurance Company of America, as lessor, and Unit Distribution of
California, Inc., as lessee, for the property located at 5590 East Francis
Street, Ontario, California 91746.
3. That certain lease dated as of January 29, 1990 between The Prudential
Insurance Company of America, as lessor, and Unit Distribution of Utah,
Inc., as lessee, for the property located at Freeport Industrial Center,
1201 South Industrial Parkway, Clearfield, Utah 84015.
4. That certain lease dated as of January 29, 1990 between The Prudential
Insurance Company of America, as lessor, and Unit Distribution of Utah,
Inc., as lessee, for the property located at Freeport Industrial Center,
1051 South Industrial Parkway, Clearfield, Utah 84015.
EXHIBIT C
FORM OF LESSEE'S ESTOPPEL CERTIFICATE/1/
Lessor [Lessor's Mortgagee
________________________________ _______________________________
________________________________ _______________________________
Attention: _____________________ Attention: ____________________]
Re: Lease dated ________________, 1990 (the
"Lease"), by and between __________________________
("Lessee"), as lessee, and ___________________________
("Lessor"), as lessor.
Ladies and Gentlemen:
With respect to the Lease, Lessee does hereby certify to Lessor,
[________________ ("Lessor's Mortgagee") or _____________________________
("Lessor's Purchaser"), and its [their respective) successors and assigns, the
matters set forth herein. We understand that in Section 15.1 of the Lease,
Lessor has required a certification from us in the form set forth herein. (we
have been informed that Lessor will be assigning all of its right, title and
interest in and to the Lease to Lessor's Mortgagee/Lessor's Purchaser. We
understand that as a condition precedent to (Lessor's Mortgagee disbursing a
loan to Lessor/Lessor's Purchaser acquiring the Premises), Lessor's
Mortgagee/Lessor's Purchaser has required a certification from us in the form
set forth herein.] Accordingly, in consideration of the matters herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, we hereby certify as follows:
1. The Lessee is the lessee under that certain Lease dated __________,
1990 by and between Lessee and Lessor, covering those premises demised
under the Lease (the "Premises"), consisting of certain real property and
appurtenances thereto, together with a building (the "Building") located at
[ADDRESS], [CITY], [STATE], [ZIP CODE].
__________________________
/1/ All references in brackets (e.g., references to the Lessor's Mortgagee, or
to the Lessor's Purchaser, etc.) are for inclusion where the estoppel
certificate will be used to induce Lessor's Mortgagee to fund a loan, or to
induce Lessor's Purchaser to consummate a sale.
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