EXHIBIT 10.27
LEASE AGREEMENT
by and between
CORPORATE PROPERTY ASSOCIATES 2
and
CORPORATE PROPERTY ASSOCIATES 3
as
LANDLORD
and
CLEO, INC.
as
TENANT
Dated: November 15, 1995
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TABLE OF CONTENTS
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Lease Agreement
1. Demise of Premises
2. Certain Definitions
3. Title and Conditions
4. Use of Leased Premises; Quiet Enjoyment
5. Term
6. Rent
7. Net Lease; Non-Terminability
8. Payment of Impositions; Compliance with Law;
Environmental Matters
9. Liens; Recording and Title; Easements
10. Indemnification
11. Maintenance and Repair
12. Alterations
13. Condemnation
14. Insurance
15. Restoration; Reduction of Rent
16. Procedures Upon Purchase
17. Assignment and Subletting
18. Permitted Contests
19. Conditional Limitations; Default Provision
20. Additional Rights of Landlord
21. Notices
22. Estoppel Certificate
23. Surrender
24. Risk of Loss
25. No Merger of Title
26. Books and Records
27. Option to Purchase
28. Non-Recourse
29. Miscellaneous
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List of Exhibits
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Exhibit A Description of Leased Premises
Exhibit B List of Machinery and Equipment
Exhibit C Intentionally Omitted
Exhibit D Permitted Encumbrances
Exhibit E Intentionally Omitted
Exhibit F Rent Schedule
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LEASE AGREEMENT, executed the 15th day of November, 1995, between
CORPORATE PROPERTY ASSOCIATES 2 and CORPORATE PROPERTY ASSOCIATES 3
(collectively, "Landlord"), both California limited partnerships with an address
c/o W. P. Carey & Co., Inc., 50 Rockefeller Plaza, New York, New York 10020 and
CLEO, INC. ("Tenant"), a Tennessee corporation with an address at 4025 Viscount,
Memphis, Tennessee 38118.
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In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets to Tenant,
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and Tenant hereby takes and leases from Landlord, for the term or terms and upon
the provisions hereinafter specified, the following described property which
shall include the portions of items (i), (ii) and (iii) of this Paragraph 1
located therein or appertaining thereto (collectively the "Leased Premises"):
(i) the premises described in Exhibit "A" attached hereto and made a part
hereof, together with the easements, rights and appurtenances thereunto
belonging or appertaining (collectively, the "Land"); (ii) the buildings,
structures and other improvements constructed and to be constructed on the Land
(collectively, the "Improvements"); and (iii) that machinery and equipment
installed in and upon the Improvements described in Exhibit "B" attached hereto,
together with all additions and accessions thereto, substitutions therefor and
replacements thereof permitted by this Lease (collectively, the "Equipment").
2. Certain Definitions.
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(a) "Additional Rent" shall mean Additional Rent as defined in Paragraph
6.
(b) "Adjoining Property" shall mean all sidewalks, curbs, gores and vault
spaces adjoining any of the Leased Premises.
(c) "Alterations" shall mean all changes, additions, improvements or
repairs to, all alterations, reconstructions, renewals or removals of and all
substitutions or replacements for any of the Improvements or Equipment, both
interior and exterior, structural and non-structural, and ordinary and
extraordinary.
(d) "Assignments" shall mean any assignment of rents and lessor's interest
in leases from Landlord to First Lender and such other assignments as are
executed by Landlord.
(e) "Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
(f) "Basic Rent Payment Dates" shall mean the Basic Rent Payment Dates as
defined in Paragraph 6.
(g) "Beginning CPI" shall mean the Beginning CPI as defined in Exhibit F.
(h) "Casualty Termination Date" shall mean the Casualty Termination Date
as defined in Paragraph 14(b).
(i) "Closing Date" shall mean the Closing Date as defined in Paragraph
16(b).
(j) "Condemnation" shall mean a Taking and/or a Requisition.
(k) "Condemnation Termination Date" shall mean the Condemnation
Termination Date as defined in Paragraph 13(b).
(l) "Default Rate" shall mean the Default Rate as defined in Paragraph 6.
(m) "Ending CPI" shall mean the Ending CPI as defined in Exhibit F.
(n) "Environmental Law" shall mean whenever enacted or promulgated, any
applicable federal, state, foreign and local law, statute, ordinance, rule,
regulation, or code relating to pollution or protection of the environment or to
health and safety, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of Hazardous Substances
into the environment (including ambient air, surface water, groundwater, or
land) and (ii) the processing, use, generation, treatment, storage, disposal,
recycling, or remediation of Hazardous Substances or Hazardous Conditions.
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(o) "Environmental Violation" shall mean (a) any direct or indirect
discharge, disposal, spillage, emission, escape, pumping, pouring, injection,
leaching, release, seepage, filtration or transporting of any Hazardous
Substance at, upon, under, onto or within the Leased Premises, or from the
Leased Premises to the environment, in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which could result in any liability to Landlord, Tenant or First Lender, any
Federal, state or local government or any other Person for the costs of any
removal or remedial action or natural resources damage or for bodily injury or
property damage, (b) any deposit, storage, dumping, placement or use of any
Hazardous Substance at, upon, under or within the Leased Premises or which
extends to any Adjoining Property in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which could result in any liability to any Federal, state or local government or
to any other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (c) the abandonment or
discarding of any barrels, containers or other receptacles containing any
Hazardous Substances in violation of any Environmental Laws, (d) any Hazardous
Condition which results in any liability, cost or expense to Landlord or First
Lender or any other owner or occupier of the Leased Premises, or which could
result in a creation of a lien on the Leased Premises under any Environmental
Law, or (e) any material violation of or noncompliance with any Environmental
Law; provided, however, Environmental Violation shall not include any matter
described in the foregoing clauses (a) through (e) of this definition that (i)
arises out of or relates to a condition existing at the Leased Premises on the
date of this Lease, (ii) arises or results from the migration of any Hazardous
Substance onto the Leased Premises from any other property, or (iii) arises or
accrues due to acts or omissions occurring prior to the date of this Lease.
(p) "Event of Default" shall mean an Event of Default as defined in
Paragraph 19(a).
(q) "Final Payment" shall mean the final payment to Landlord of Net
Proceeds or of a Net Award or of a Remaining Sum, as applicable, and "Final
Payment Date" shall mean the first Basic Rent Payment Date occurring after said
Final Payment.
(r) "First Lender" shall mean the holder of a note or notes secured by a
first priority mortgage encumbering the Leased Premises, or if there be more
than one such holder, then the trustee for such holders or any other entity
designated to act on their behalf; and "First Loan" shall mean the loan made by
First Lender secured by the Mortgage, and evidenced by the First Note. Any other
provision of this Lease to the contrary notwithstanding, so long as no First
Lender exists to exercise such rights or give such consents, all rights and
remedies granted to the First Lender under this Lease shall be deemed suspended
and of no force and effect and neither Landlord nor Tenant shall have any
obligation under this Lease to seek or obtain the prior consent, approval or
waiver of the First Lender for any matter arising under or relating to this
Lease unless a specific alternate procedure is set forth in any particular
provision hereof in a case where there is no First Lender.
(s) "First Note" shall mean a promissory note or notes from Landlord to
First Lender, secured by the Mortgage and the Assignment to First Lender.
(t) "Guarantor" shall mean CSS Industries, Inc., a Delaware corporation,
the parent of Tenant, and its successors and assigns.
(u) "Guaranty" shall mean the Guaranty and Suretyship Agreement in favor
of Landlord, dated of even date herewith, executed by Guarantor, as the same may
hereafter be amended.
(v) "Hazardous Conditions" shall mean conditions of the environment,
including soil, surface water, groundwater, subsurface strata or the ambient
air, relating to or arising out of the use, handling, storage, treatment,
recycling, generation, release, disposal, or threatened release of Hazardous
Substances.
(w) "Hazardous Substances" shall mean any pollutant, contaminant,
hazardous or toxic substance, hazardous waste, or other chemicals, substances or
materials subject to regulation under any Environmental Law.
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(x) "Impositions" shall mean the Impositions as defined in Paragraph 8.
(y) "Institutional Investor" shall mean an insurance company, savings
bank, trust company or commercial bank (acting as trustee under any trust or
under any public or private indenture or otherwise), savings and loan
association, real estate investment trust, pension fund, company or foundation
having gross assets of more than $25,000,000, any government or any agency of
any government or entity owned in substantial part by any government or agency
thereof.
(z) "Law" shall mean any constitution, statute or rule of law.
(aa) "Legal Requirements" shall mean all present and future Laws, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations and
requirements, even if unforeseen or extraordinary, of every duly constituted
governmental authority or agency and all covenants, restrictions and conditions
now or hereafter of record which may be applicable to Tenant or to any of the
Leased Premises, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of any of the Leased Premises,
even if compliance therewith necessitates structural changes or improvements or
results in interference with the use or enjoyment of any of the Leased Premises.
(bb) "Mortgage" shall mean any first priority mortgage or deed of trust
encumbering the Leased Premises.
(cc) "Net Award" shall mean the entire award payable to Landlord by
reason of a Condemnation, less any expenses incurred by Landlord in collecting
such award.
(dd) "Net Proceeds" shall mean the entire proceeds of any insurance
required under clauses (i), (ii), (iv) and (v) of Paragraph 14(a), less any
expenses incurred by Landlord in collecting such proceeds.
(ee) "Offer Amount" shall mean Offer Amount as defined in Paragraph 13(b)
and 14(h).
(ff) "Permitted Encumbrances" shall mean all covenants, restrictions,
reservations, liens, conditions and easements of record, together with those
encumbrances permitted pursuant to Paragraph 9(d).
(gg) "Remaining Sum" shall mean the Remaining Sum as defined in Paragraph
15(a).
(hh) "Rent Adjustment Date" shall mean January 1, 2002.
(ii) "Replaced Equipment" shall mean the Replaced Equipment as defined in
Paragraph 11.
(jj) "Replacement Equipment" shall mean the Replacement Equipment as
defined in Paragraph 11.
(kk) "Requisition" shall mean any temporary requisition or confiscation of
the use or occupancy of any of the Leased Premises by any governmental
authority, civil or military, whether pursuant to an agreement with such
governmental authority in settlement of or under threat of any such requisition
or confiscation, or otherwise.
(ll) "Retention Date" shall mean the date on which the amount of a
Remaining Sum is finally determined.
(mm) "Site Assessments" shall mean Site Assessments as defined in
Paragraph 8(c).
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(nn) "Site Reviewers" shall mean Site Reviewers as defined in Paragraph
8(c).
(oo) "State" shall mean the State or Commonwealth in which the Leased
Premises are situate.
(pp) "Taking" shall mean any taking, other than a Requisition, by a duly
constituted governmental authority or agency having jurisdiction of any of the
Leased Premises in or by condemnation or other eminent domain proceedings
pursuant to any Law, general or special, or by reason of any agreement with any
condemnor in settlement of or under threat of any such condemnation or other
eminent domain proceeding, or by any other means, or any de facto condemnation.
(qq) "Term" shall mean the Term as defined in Paragraph 5.
(rr) "Termination Value" shall mean $15,000,000.
3. Title; Condition; Subordination.
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(a) The Leased Premises are demised and let subject to (i) the rights of
any parties in possession of any of the Leased Premises, (ii) the existing state
of title of the Leased Premises, including the Permitted Encumbrances, as of the
commencement of the Term, (iii) any state of facts which an accurate survey or
physical inspection of the Leased Premises might show, (iv) all Legal
Requirements, including any existing violation of any thereof, and (v) the
condition of the Leased Premises as of the commencement of the Term, without
representation or warranty by Landlord; it being understood and agreed, however,
that the recital of the Permitted Encumbrances herein shall not be construed as
a revival of any thereof which for any reason may have expired. The provisions
of this Paragraph 3(a) shall not be construed to preclude Tenant from enforcing
any remedies it may have against Landlord by virtue of a determination that
Landlord is in breach of or in default under a provision of this Lease, or
against third parties other than Landlord or its successors by virtue of the
existence of any Legal Requirement.
(b) TENANT ACKNOWLEDGES THAT LANDLORD HAS NOT MADE AND WILL NOT MAKE ANY
INSPECTION OF ANY OF THE LEASED PREMISES, AND LANDLORD LEASES AND WILL LEASE AND
TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS, AND TENANT ACKNOWLEDGES
THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY)
HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO ITS FITNESS FOR
USE OR PURPOSE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, AS TO THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, AS TO
LANDLORD'S TITLE THERETO, OR AS TO VALUE, COMPLIANCE WITH SPECIFICATIONS,
LOCATION, USE, CONDITION, MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY OR
OPERATION, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY
TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND TO
ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN INSPECTED BY TENANT
AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF
THE LEASED PREMISES OF ANY NATURE, WHETHER PATENT OR LATENT, LANDLORD SHALL NOT
HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL
OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF
THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED; AND THE FOREGOING PROVISIONS ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, ARISING PURSUANT
TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR
OTHERWISE. TENANT ALSO ACKNOWLEDGES THAT FOR PURPOSES OF THIS LEASE THE
CONDITION OF THE LAND, THE IMPROVEMENTS AND THE EQUIPMENT COMPRISING THE LEASED
PREMISES ARE DEEMED TO HAVE BEEN IN GOOD CONDITION AND REPAIR ON JANUARY 25,
1982. TENANT FURTHER ACKNOWLEDGES THAT LANDLORD HAS NO OBLIGATION TO MAINTAIN OR
REPAIR
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THE LEASED PREMISES AND THAT TENANT HAS THE SOLE OBLIGATION TO DO SO AS MORE
PARTICULARLY SET FORTH HEREIN.
(c) Tenant represents to Landlord that Tenant has found the state of title
to the Leased Premises to be satisfactory for the purposes contemplated hereby,
and acknowledges that title is in Landlord and that Tenant has only those rights
with respect to the Leased Premises as provided in this Lease. Tenant further
acknowledges and represents to Landlord that to the best of Tenant's knowledge,
(i) the Improvements conform to all Legal Requirements and all requirements of
the carriers of all insurance on any of the Leased Premises, (ii) all necessary
easements have been obtained, (iii) all contractors and subcontractors have been
fully paid and all material and supplies have been fully paid for, (iv) the
Improvements have been fully completed in a workmanlike manner of first class
quality, and (v) all Equipment has been installed and is fully operative. If any
of the foregoing representations prove to be incorrect, Tenant acknowledges that
it is Tenant's obligation and responsibility to remedy any problem resulting
therefrom or relating thereto.
(d) Landlord hereby assigns, without recourse or warranty whatsoever, to
Tenant all warranties, guarantees and indemnities, express or implied, and
similar rights which Landlord may have against any manufacturer, seller,
engineer, contractor or builder in respect of any of the Leased Premises,
including any rights and remedies existing under contract or pursuant to the
Uniform Commercial Code. Such assignment shall remain in effect so long as no
Event of Default exists hereunder or until the termination of this Lease.
Landlord hereby agrees to execute and deliver at Tenant's expense such further
documents, including powers of attorney, as Tenant may reasonably request (and
which, in the good faith judgment of Landlord, do not adversely affect a
substantial general interest of Landlord) in order that Tenant may have the full
benefit of the assignment effected or intended to be effected by this Paragraph
3(d).
(e) Landlord represents to Tenant that on the date of execution of this
Lease there exists no Mortgage encumbering the Leased Premises. Notwithstanding
the foregoing, this Lease automatically shall be subject and subordinate to the
lien of any Mortgage hereafter placed upon the Leased Premises on condition that
the holder of the Mortgage agrees in writing not to disturb Tenant in its
rights, use and possession of the Leased Premises under this Lease or to
terminate this Lease, except to the extent permitted to Landlord by the terms of
this Lease, notwithstanding the foreclosure or the enforcement of the Mortgage.
4. Use of Leased Premises; Quiet Enjoyment.
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(a) Tenant may occupy and use the Leased Premises for any lawful purpose,
provided that no Alterations may be made except in accordance with Paragraph 12,
no Equipment may be removed from the Leased Premises except in accordance with
Paragraphs 11(c), 13(d) and 14(h), and such use will not otherwise violate any
provision of this Paragraph 4. Tenant shall not permit any unlawful occupation,
business or trade to be conducted on any of the Leased Premises or any use to be
made thereof contrary to any applicable Legal Requirement. Tenant shall not use
or occupy or permit any of the Leased Premises to be used or occupied, nor do or
permit anything to be done in or on any of the Leased Premises, in a manner
which would or might (i) violate any certificate of occupancy affecting any of
the Leased Premises, (ii) make void or voidable any insurance then in force with
respect to any of the Leased Premises, (iii) make it difficult or impossible to
obtain fire or other insurance which Tenant is required to furnish hereunder,
(iv) cause structural injury to any of the Improvements, or (v) constitute a
public or private nuisance or waste.
(b) Subject to the provisions of Paragraphs 3 and 7(b), so long as no Event
of Default exists hereunder, Landlord covenants that neither Landlord nor anyone
rightfully claiming by, through or under Landlord, shall do any act to disturb
the peaceful and quiet occupation and enjoyment of the Leased Premises, provided
that Landlord may enter upon and examine any of the Leased Premises at
reasonable times upon reasonable prior written notice to Tenant.
5. Term.
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(a) Subject to the provisions hereof, Tenant shall have and hold the Leased
Premises for an initial term (the "Term") commencing on the date hereof and
ending on December 31, 2005.
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If all Basic Rent for the entire Term, all Additional Rent and all other sums
due hereunder shall not have been fully paid on the latter date, the Term shall
automatically be extended until all said sums shall have been fully paid.
Landlord shall have the right during the last twelve months of the Term to (i)
advertise the availability of the Leased Premises for sale or for reletting and
to erect upon the Leased Premises signs indicating such availability (provided
that such signs do not unreasonably interfere with the use of the Leased
Premises by Tenant), and (ii) show the Leased Premises to prospective purchasers
or tenants at such reasonable times during normal business hours as Landlord may
select.
(b) Landlord hereby grants to Tenant the right at Tenant's option to extend
the Term of this Lease for two (2) separate and additional periods of five (5)
years each after the expiration of the initial term hereof (each additional
five-year period is hereinafter referred to as a "renewal term"). Each such
renewal term shall be subject to all the terms and conditions of this Lease as
if the Term originally included such renewal term, except that Basic Rent during
such renewal periods shall be calculated as set forth on Exhibit F, Section B.
Upon the exercise of any such option, the Term shall include such renewal term
therein. Tenant may exercise each of its options to extend the Term only by
giving written notice of such extension to Landlord no earlier than twenty-four
(24) months and no later than twelve (12) months prior to the expiration of the
Term then in effect. Each renewal option may not be exercised if an Event of
Default has occurred and is continuing on the date notice of the renewal is
given to Landlord. In addition, the then current term may not be extended if, on
the date the term is to be extended, an Event of Default has occurred and is
continuing but Landlord may, in its sole discretion and without the consent of
Tenant, waive such condition.
6. Rent.
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(a) Tenant shall pay to Landlord, as rent for the Leased Premises during
the Term, the amounts determined in accordance with the schedule contained in
Exhibit "F" attached hereto ("Basic Rent"), in advance, commencing on the first
day of the first month next following the date hereof and continuing on the
first day of each month thereafter during the Term (the said days being called
the "Basic Rent Payment Dates"), and shall pay the same at Landlord's address
set forth above, or at such other place or to such other person as Landlord from
time to time may designate to Tenant in writing, by check such that funds will
be available in payment of said check on or before the date Basic Rent is due
and in moneys which at the time of such payment shall be legal tender for the
payment of public or private debts in the United States of America. Pro rata
Basic Rent shall be due for the period from the date hereof through the last day
of November, 1995 and shall be paid contemporaneously with the execution of this
Lease by Tenant.
(b) Tenant shall pay and discharge when the same shall become due, as
additional rent, all other amounts and obligations whether payable to Landlord
or others ("Additional Rent") which Tenant assumes or agrees to pay or discharge
pursuant to this Lease (except that amounts payable as liquidated damages
pursuant to Paragraph 19(b)(4) shall not constitute Additional Rent), together
with every fine, penalty, interest and cost which may be added for non-payment
or late payment thereof. In the event of any failure by Tenant to pay or
discharge any of the foregoing, Landlord shall have all rights, powers and
remedies provided herein, by law or otherwise, in the event of non-payment of
Basic Rent.
(c) If any installment of Basic Rent is not paid on the due date thereof,
Tenant shall pay to Landlord immediately and without demand an amount equal to
four percent of the amount of such installment. In addition, Tenant shall pay to
Landlord on demand interest at the maximum legal rate permitted to be collected
under applicable law from time to time (the "Default Rate") on all installments
of Basic Rent more than one month past due, commencing on the Basic Rent Payment
Date next succeeding the Basic Rent Payment Date on which said installment was
originally due, and on all amounts of Additional Rent owed to Landlord from the
due date thereof until paid in full and on all amounts of Additional Rent
relating to obligations which Landlord shall have paid on behalf of Tenant, from
the date of payment thereof, until paid in full.
7. Net Lease; Non-Terminability.
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(a) This is a net lease and Basic Rent, Additional Rent and all other sums
payable hereunder by Tenant shall be paid without notice or demand, and without
set-off, counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense.
(b) Except as otherwise expressly provided in this Lease, (aa) this Lease
shall not terminate, (bb) Tenant shall not have any right to terminate this
Lease during the Term, (cc) Tenant shall not be entitled to any set-off,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense of or to Basic Rent, Additional Rent or any
other sums payable under this Lease, and (dd) the obligations of Tenant under
this Lease shall not be affected by any interference with Tenant's use of any of
the Leased Premises for any reason, including the following: (i) any damage to
or destruction of any of the Leased Premises by any cause whatsoever, (ii) any
Condemnation, (iii) the prohibition, limitation or restriction of Tenant's use
of any of the Leased Premises, (iv) any eviction by paramount title or
otherwise, (v) Tenant's acquisition of ownership of any of the Leased Premises
other than pursuant to an express provision of this Lease, (vi) any default on
the part of Landlord hereunder or under any other agreement, (vii) any latent or
other defect in, or any theft or loss of, any of the Leased Premises, (viii) the
breach of any warranty of any seller or manufacturer of any of the Equipment,
(ix) any violation of Paragraph 4(b) by Landlord, or (x) any other cause,
whether similar or dissimilar to the foregoing, any present or future Law to the
contrary notwithstanding. It is the intention of the parties hereto that the
obligations of Tenant hereunder shall be separate and independent covenants and
agreements, that Basic Rent, Additional Rent and all other sums payable by
Tenant hereunder shall continue to be payable in all events (or, in lieu
thereof, Tenant shall pay amounts equal thereto), and that the obligations of
Tenant hereunder shall continue unaffected, unless the requirement to pay or
perform the same shall have been terminated pursuant to an express provision of
this Lease.
(c) Tenant agrees that it shall remain obligated under this Lease in
accordance with its provisions and that, except as otherwise expressly provided
herein, it shall not take any action to terminate, rescind or avoid this Lease,
notwithstanding (i) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding-up or other proceeding affecting
Landlord, (ii) the exercise of any remedy, including foreclosure, under the
Mortgage, or (iii) any action with respect to this Lease (including the
disaffirmance hereof) which may be taken by any trustee, receiver or liquidator
of Landlord or by any court.
(d) Except as expressly provided for in this Lease, Tenant waives all
rights which may now or hereafter be conferred by law (i) to quit, terminate or
surrender this Lease or any of the Leased Premises, or (ii) to any set-off,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense of or to Basic Rent, Additional Rent or any
other sums payable under this Lease.
(e) Nothing in this Paragraph 7 shall be construed to preclude Tenant from
enforcing such remedies as it may have against Landlord or third parties arising
by virtue of a determination that Landlord is in breach of or default under a
provision of this Lease, other than those remedies specifically waived.
8. Payment of Impositions; Compliance with Law; Environmental Matters.
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(a) Subject to the provisions of Paragraph 18 relating to contests, Tenant
shall, before interest or penalties are due thereon, pay and discharge all taxes
of every kind and nature (including real and personal property, sales, use,
income, franchise, withholding, profits and gross receipts taxes), all charges
for any easement or agreement maintained for the benefit of any of the Leased
Premises, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges, all ground rents, and all
other public charges whether of a like or different nature, even if unforeseen
or extraordinary, imposed upon, or in respect of or be measured by or become a
lien upon, or assessed against (i) Landlord or Tenant as a result of the
acquisition, use, or leasing of the Leased Premises or any portion thereof, (ii)
any of the Leased Premises or (iii) arising in respect of the occupancy, use or
possession thereof or any activity conducted on the Leased Premises or any part
thereof, or the Basic Rent or Additional Rent (including, without limitation,
any gross income tax or excise tax levied by any governmental body on or with
respect to the receipt of such Basic Rent or Additional Rent [computed as if
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such Basic Rent or Additional Rent or Landlord's income from the Leased
Premises were the only income of Landlord (collectively, the "Impositions").
Nothing herein shall obligate Tenant to pay (i) franchise, capital stock
or similar taxes, if any, of Landlord, and assessments, levies and liens arising
therefrom, (ii) transfer, income, profits or revenue taxes and assessments,
levies and liens arising therefrom, other than any gross receipts or gross
income taxes imposed or levied upon or measured by Basic Rent, Additional Rent
or other sums payable by Tenant pursuant to this Lease, or (iii) any estate,
inheritance, succession, gift, capital levy or similar tax, unless the taxes
referred to in clauses (i) and (ii) above are in lieu of or a substitute for any
other tax or assessment upon or with respect to any of the Leased Premises
which, if such other tax or assessment were in effect, would be payable by
Tenant. In the event that any assessment against any of the Leased Premises may
be paid in installments, Tenant shall have the option to pay such assessment in
installments; and in such event, Tenant shall be liable only for those
installments which become due and payable during the Term. Tenant shall prepare
and file all tax reports required by governmental authorities which relate to
the Impositions. If any such reports require information from Landlord not
available to or known by Tenant, or signatures of Landlord, Tenant shall request
same from Landlord and upon obtaining such information from Landlord, shall
prepare and file such tax reports. Tenant shall deliver to Landlord, with the
affidavit of the chief financial officer of Tenant required under Paragraph 26,
copies of real estate tax notices, bills and/or assessments relating to the
Leased Premises and evidence of payment of same.
(b) Tenant shall promptly comply with and conform to all of the Legal
Requirements (including all Environmental Laws but not including any matter
expressly excluded from the definition of Environmental Violation), subject
to the provisions of Paragraph 18 hereof.
(c) Upon prior reasonable written notice from Landlord, Tenant shall permit
such persons as Landlord may designate ("Site Reviewers") to visit the Leased
Premises during normal business hours and perform, as agents of Landlord, in a
manner that does not unduly interfere with Tenant's business operations,
environmental site investigations and assessments ("Site Assessments") on the
Leased Premises for the purpose of determining whether there exists on the
Leased Premises any Environmental Violation or any condition which could result
in any Environmental Violation. Such Site Assessments may include both above and
below the ground testing for Environmental Violations and such other tests as
may be necessary, in the opinion of the Site Reviewers, to conduct the Site
Assessments. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Leased Premises in the possession or
control of Tenant as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments, and shall make available for meetings with the
Site Reviewers appropriate personnel having knowledge of such matters. The cost
of performing and reporting Site Assessments shall be paid by Landlord, except
if performed pursuant to Paragraph 8(d) hereof.
(d) If Tenant fails to correct any Environmental Violation which occurs or
is found to exist, Landlord shall have the right (but no obligation) at Tenant's
sole cost and expense to take any and all actions as Landlord shall deem
necessary or advisable in order to cure such Environmental Violation including,
without limitation, the right to perform Site Assessments.
(e) Tenant shall notify Landlord as expeditiously as possible after
becoming aware of any Environmental Violation (or alleged Environmental
Violation) or noncompliance with any of the covenants contained in this
Paragraph 8 and shall forward to Landlord immediately upon receipt thereof
copies of all orders, reports, notices, permits, applications or other
communications relating to any such violation or noncompliance.
(f) All future leases, subleases or concession agreements relating to the
Leased Premises entered into by Tenant shall contain covenants of the other
party to not at any time (i) cause any Environmental Violation to occur or (ii)
permit any Person occupying the Leased Premises through said subtenant or
concessionaire to cause any Environmental Violation to occur.
9. Liens; Recording and Title; Easements.
-------------------------------------
(a) Tenant shall not, directly or indirectly, create or permit to be
created or to remain, and shall promptly discharge, any lien on any of the
Leased Premises or Basic Rent, Additional
- 12 -
Rent or any other sums payable by Tenant under this Lease, other than (i) the
Mortgage, (ii) this Lease and any subleases hereunder, (iii) the Assignment,
(iv) the Permitted Encumbrances, (v) any mortgage, lien, encumbrance or other
charge created by or resulting from any act or omission of Landlord and (vi)
liens for Impositions not yet payable or being contested as permitted pursuant
to Paragraph 8. The existence of any mechanics', laborers', materialmen's,
suppliers' or vendors' liens or any right in respect thereof shall not
constitute a violation of' this Paragraph 9 if discharged within sixty (60) days
of completion of the labor or services or delivery of the materials which gave
rise to imposition of said liens. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT
BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
TENANT, OR TO ANYONE HOLDING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT,
AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES.
(b) Tenant shall execute, deliver and record, file or register from time to
time all such instruments as may be required by any present or future Law in
order to evidence the respective interests of Landlord and Tenant in any of the
Leased Premises, and shall cause this Lease, or a memorandum of this Lease, and
any supplement hereto or to such other instrument, if any, as may be
appropriate, to be recorded, filed or registered and re-recorded, refiled or re-
registered in such manner and in such places as may be required by any present
or future Law in order to publish notices and protect the validity of this
Lease.
(c) Nothing in this Lease and no action or inaction by Landlord shall be
deemed or construed to mean that Landlord has granted to Tenant any right, power
or permission to do any act or to make any agreement which may create, give rise
to, or be the foundation for, any right, title, interest or lien in or upon the
estate of Landlord in any of the Leased Premises.
(d) Landlord agrees from time to time at the request of Tenant (but at
Tenant's sole cost and expense) (i) to grant easements, licenses, rights of way
and other rights and privileges in the nature of easements for gas, electric,
telephone and other utilities for the purpose of serving the Leased Premises,
provided such easements shall, in the reasonable opinion of First Lender, have
no more than a de minimis adverse effect on the value of the Leased Premises,
(ii) to release similar existing utility easements and appurtenances which are
for the benefit of the Leased Premises, and (iii) to execute and deliver any
instrument necessary or appropriate to confirm such grants or releases to any
person, with or without consideration but only in each case upon obtaining the
prior approval of First Lender described in (i) above and delivery of (x) a
certificate of the President or a Vice President of Tenant stating that such
grant or release is not detrimental to the proper conduct of the business of
Tenant, the consideration, if any, being paid for such grant or release, and
that such consideration is being paid to Tenant and that such grant or release
does not materially impair the use of the Leased Premises for the purposes for
which it is then held by Tenant or materially impair its value; and (y) a duly
authorized undertaking of Tenant, in form and substance satisfactory to
Landlord, to the effect that Tenant will remain obligated under the terms of
this Lease to the same extent as if such easement, license, right of way or
other right or privilege had not been granted or released, and that Tenant will
perform all obligations of the grantor or releasor under such instrument of
grant or release.
10. Indemnification. (a) Tenant agrees to pay, protect, indemnify, save
---------------
and hold harmless Landlord from and against any and all liabilities, losses,
damages, penalties, costs, expenses (including all reasonable attorneys' fees
and expenses), causes of action, suits, claims, demands or judgments of any
nature whatsoever, howsoever caused, arising from (i) any of the Leased Premises
or Adjoining Property or the use, non-use, occupancy, condition, design,
construction, maintenance, repair or rebuilding of any of the Leased Premises or
Adjoining Property, and any injury to or death of any person or any loss of or
damage to any property in any manner arising therefrom, connected therewith or
occurring thereon, whether or not Landlord has or should have knowledge or
notice of the defect or conditions, if any, causing or contributing to said
injury, death, loss, damage or other claim, (ii) any violation by Tenant of any
provision of this Lease or of any contract or agreement to which Tenant is a
party or of any Legal Requirement or Permitted Encumbrance, (iii) any
Environmental Violation; or (iv) any other cause, provided, however, if any such
liability, loss, damage, penalty, cost or expense, cause of action, suit, claim,
demand or judgment results from any tortious act or omission of Landlord, its
agents or employees, or if any such act
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or omission is determined to be a breach or default by Landlord under this
Lease, the foregoing indemnity of Tenant shall apply only to the extent of the
insurance coverage maintained (or required to be maintained, if greater) by
Tenant pursuant to the provisions of Paragraph 14 of this Lease.
(b) In case any action or proceeding is brought against Landlord by reason
of any such claim, (i) Tenant may, except in the event of a conflict of interest
or a dispute between Tenant and Landlord during the continuance of an Event of
Default, retain its own counsel and defend such action (it being understood that
Landlord may, at Landlord's sole cost and expense, employ counsel of its choice
to monitor the defense of any such action) and (ii) Landlord shall notify Tenant
to resist or defend such action or proceeding by retaining counsel reasonably
satisfactory to Landlord, and Landlord will cooperate and assist in the defense
of such action or proceeding if reasonably requested so to do by Tenant.
(c) The obligations of Tenant under this Paragraph 10 shall survive any
termination, expiration or rejection in bankruptcy of this Lease. The
obligations of Tenant under this Paragraph 10 shall also apply whether or not
the act or omission giving rise to such indemnification occurred prior to the
date of this Lease, except for indemnification obligations relating to
Environmental Violations (which by definition arise only due to acts or
omissions arising after the date hereof).
11. Maintenance and Repair.
-----------------------
(a) Tenant shall at all times, including any Requisition period or any
period of occupancy by others, maintain the Leased Premises and the Adjoining
Property in good repair and appearance and, shall maintain the Equipment in good
mechanical condition, except for ordinary wear and tear, and shall promptly make
all Alterations (substantially equivalent in quality and workmanship to the
original work) of every kind and nature, whether foreseen or unforeseen, which
may be required to be made upon or in connection with any of the Leased Premises
in order to keep and maintain the Land and Improvements in as good repair and
appearance as they were on January 25, 1982, and the Equipment in as good
mechanical condition as it was originally, except for ordinary wear and tear on
such Land, Improvements and Equipment. Tenant shall do or cause others to do all
shoring of the Leased Premises or Adjoining Property or of foundations and walls
of the Improvements and every other act necessary or appropriate for the
preservation and safety thereof, by reason of or in connection with any
excavation or other building operation upon any of the Leased Premises or
Adjoining Property, whether or not Landlord shall, by any Legal Requirement, be
required to take such action or be liable for failure to do so. Landlord shall
not be required to make any Alteration, whether foreseen or unforeseen, or to
maintain any of the Leased Premises or Adjoining Property in any way, and Tenant
hereby expressly waives the right to make Alterations at the expense of
Landlord, which right may be provided for in any Law now or hereafter in effect.
(b) In the event that any Improvement, now or hereafter constructed, shall
encroach upon any property, street or right-of-way adjoining any of the Leased
Premises or Adjoining Property, shall violate the provisions of any restrictive
covenant affecting any of the Leased Premises, shall hinder or obstruct any
easement or right-of-way to which any of the Leased Premises is subject, or
shall impair the rights of others in, to or under any of the foregoing then,
promptly after written request of Landlord, Tenant shall either (i) obtain valid
and effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation, hindrance, obstruction or
impairment, whether the same shall affect Landlord, Tenant or both, or (ii) take
such action as shall be necessary to remove such encroachments, hindrances or
obstructions and to end such violations or impairments, including, if necessary,
and if and to the extent permitted by First Lender an Alteration. Any such
Alteration shall be made in conformity with the provisions of Paragraph 12.
(c) Landlord shall have the right, upon notice to Tenant (or without notice
in case of emergency), to enter upon any of the Leased Premises for the purpose
of making any Alterations which may be necessary by the occurrence of an Event
of Default by reason of Tenant's failure to comply with the provisions of
subparagraphs (a) and (b) of this Paragraph 11. Except in case of emergency, the
right of entry shall be exercised at reasonable times and at reasonable hours.
The cost of any such entry together with the cost of all such Alterations shall
be Additional Rent; and Tenant shall pay the same to Landlord, together with
interest thereon at the Default Rate from the time of payment by Landlord until
paid
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by Tenant, immediately upon written demand therefor and upon submission of
evidence of Landlord's payment of such costs.
(d) Tenant shall, from time to time, replace with other operational
equipment or parts (the "Replacement Equipment") any of the Equipment (the
"Replaced Equipment") which shall have (i) become worn out, obsolete or unusable
for the purpose for which it is intended, (ii) been taken by a Condemnation as
provided in Paragraph 13(d) to the extent Replacement Equipment is required to
service the portion of the Improvements remaining after such Condemnation, or
(iii) been lost, stolen, damaged or destroyed as provided in Paragraph 14(h);
provided, however, that the Replacement Equipment shall (l) be in good operating
condition, (2) have a value and useful life at least equal to the value and
estimated useful life of the Replaced Equipment immediately prior to the time
that the Replaced Equipment had become so worn out, obsolete or unusable, so
taken, or so lost, stolen, damaged or destroyed, and (3) be suitable for a use
which is the same or similar to that of the Replaced Equipment. All Replacement
Equipment shall become the property of Landlord, shall be free and clear of all
liens and rights of others except for the Mortgage and the Permitted
Encumbrances and shall become a part of the Equipment to the same extent as the
Replaced Equipment had been. If so requested by Landlord in writing, Tenant
shall cause to be executed and delivered to Landlord, effective as of the
expiration of the applicable Term or the sooner termination of this Lease, an
invoice, bill of sale or other appropriate instrument evidencing the transfer or
assignment to Landlord of all estate, right, title and interest of Tenant or any
other party in and to the Replacement Equipment, free from all liens and other
exceptions to title except as aforesaid; and Tenant shall pay all taxes, fees,
costs and other expenses that may become payable as a result thereof. At the
expiration of the Term or the sooner termination of this Lease, the Equipment
shall be in good operating condition, ordinary wear and tear excepted.
(e) Tenant acknowledges that it has been advised by Gibson Greetings, Inc.,
a prior tenant of the Leased Premises pursuant to a Lease Agreement dated
January 25, 1982, that expired contemporaneously with the execution of this
Lease, that the roof over certain portions of the Improvements is anticipated to
need major repairs within the next few years. Tenant further acknowledges that
Paragraph 11(a) of this Lease obligates Tenant, and not Landlord, to maintain
the roof in as good repair and appearance as it was on January 25, 1982,
ordinary wear and tear excepted. Tenant has requested that Landlord grant Tenant
a period of six (6) months following the date of this Lease ("Roof Evaluation
Period") to evaluate the condition of the roof and to identify those areas of
the roof that are not presently in good condition and are in need of repair.
Prior to the expiration of the Roof Evaluation Period, Tenant shall (i) notify
Landlord in writing of the results of Tenant's evaluation of the condition of
the roof and of Tenant's intended action including with such notice a copy of
the contractor proposal accepted by Tenant; (ii) commence all necessary roof
repair work; and (iii) thereafter promptly and with due diligence complete the
same. All such work shall be done at Tenant's sole cost and expense in a good
and workmanlike manner and in conformity with the requirements of this Lease.
Landlord agrees Athat during the Roof Evaluation Period Landlord shall not
assert that the Tenant is in default of its obligation to maintain and repair
the roof as expressed in this Lease. Such forebearance by Landlord is expressly
without prejudice to Landlord's rights and remedies under this Lease following
the expiration of the Roof Evaluation Period on May 15, 1996.
12. Alterations. (a) Tenant shall at its expense, from time to time, have
-----------
the right to make Alterations, construct upon the Land additional Improvements,
install equipment in the Improvements or accessions to the Equipment, and in the
course of same demolish portions or all of existing improvements provided that
(aa) the proposed Alterations, additions or other improvements or equipment or
accessions thereto shall not reduce the value of the Leased Premises or its
usefulness, (bb) all such Alterations, construction and installations shall be
performed in a good and workmanlike manner, (cc) all such Alterations,
construction and installations shall be expeditiously completed in compliance
with all Legal Requirements, (dd) all work done in connection with any such
Alteration, construction or installation shall comply with the requirements of
any insurance policy required to be maintained by Tenant hereunder, (ee) Tenant
shall promptly pay all costs and expenses of any such Alteration, construction
or installation and shall discharge all liens filed against any of the Leased
Premises arising out of the same, (ff) Tenant shall procure and pay for all
permits and licenses required in connection with any such Alteration,
construction or installation, (gg) all such Alterations, construction and
installations shall be the property of Landlord and shall be subject to this
Lease, (hh) Tenant shall obtain in advance the written consent, which consent
shall not be unreasonably withheld, of Landlord and First Lender for all
improvements in excess of 5% of the
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Termination Value for the respective Leased Premises and (ii) Tenant shall
comply, to the extent requested by Landlord, with the provisions of Paragraph
12(c) below.
(b) Tenant may, at its expense, install and remove additional equipment and
machinery used or useful in Tenant's business, which equipment and machinery
shall remain the property of Tenant and not become part of the real estate,
provided that Tenant agrees in connection with any installation of additional
equipment or machinery, to comply with the provisions of subsections (aa), (bb),
(cc), (dd), (ee), and (ff) of Paragraph 12(a) above. Any equipment of Tenant not
removed by Tenant within 15 days after the expiration or earlier termination of
this Lease shall be considered abandoned by Tenant and may be appropriated,
sold, destroyed or otherwise disposed of by Landlord without first giving notice
thereof and without obligation to account therefor. Tenant agrees to pay all
costs and expenses incurred in removing, storing and disposing of Tenant's
equipment. Tenant will repair, at its expense, all damage to the Leased Premises
caused by removal of Tenant's equipment whether effected by Landlord or Tenant.
Landlord shall not be responsible for any loss or damage to Tenant's equipment
under any circumstances. Landlord shall, from time to time upon Tenant's written
request, execute appropriate documents for the benefit of equipment lenders or
lessors confirming the provisions of this Paragraph 12(b).
(c) If the estimated cost of such Alterations is equal to or exceeds
$250,000, (i) prior to commencement of restoration, the architects, contracts,
contractors, plans and specifications for the Alterations shall have been
approved by Landlord which approval shall not be unreasonably withheld, and
Landlord shall be provided with mechanics' lien insurance or such other
reasonable assurance against mechanics' liens, accrued or inchoate, as Landlord
shall require and acceptable performance and payment bonds, which are in an
amount and form and have a surety reasonably acceptable to Landlord, and name
Landlord and First Lender each as additional obligees; and (ii) at the time
construction of any Alteration is proposed to commence, no Event of Default or
event which would constitute an Event of Default by notice or grace period or
both shall exist and no mechanics' or materialmen's liens shall have been filed
and remain undischarged except as permitted pursuant to Paragraph 9(a) above.
13. Condemnation.
-------------
(a) Tenant, immediately upon obtaining knowledge of the institution of any
proceeding for Condemnation, shall notify Landlord thereof and Landlord shall be
entitled to participate, with Tenant in any Condemnation proceeding at Tenant's
expense. Subject to the provisions of this Paragraph 13 and Paragraph 15, Tenant
hereby irrevocably assigns to Landlord any award or payment to which Tenant is
or may be entitled by reason of any Condemnation, whether the same shall be paid
or payable for Tenant's leasehold interest hereunder or otherwise but nothing in
this Lease shall impair Tenant's right to any award or payment on account of
Tenant's trade fixtures, equipment or other tangible property, moving expenses,
loss of business and the like, if available, to the extent Tenant shall have a
right to make a separate claim therefor against the appropriate governmental
authority, but in no event shall any such separate claim be based upon the value
of Tenant's leasehold interest. To the extent of such right Tenant shall not be
deemed to have assigned the same to Landlord.
(b) If (i) the entire Leased Premises or (ii) any substantial portion of
the Leased Premises, which portion, in Tenant's judgment, is sufficient to
render the remaining portion thereof unsuitable or uneconomic for the use of
Tenant or any other tenant to which the Leased Premises might be leased, shall
be taken by a Taking or (iii) First Lender shall retain the Net Award pursuant
to the Assignment, then Tenant shall, in the case of (i) above and may, in the
case of (ii) and (iii) above, not later than thirty (30) days after any such
Taking, give notice to Landlord of its intention to terminate this Lease on any
Basic Rent Payment Date specified in such notice, which date (the "Condemnation
Termination Date") shall not be prior to the actual date of the vesting of title
in the condemning authority. Such notice shall contain (1) an irrevocable offer
of Tenant to purchase the remaining portion of the Leased Premises, (or in the
case of a Taking of the entire Leased Premises, the Net Award payable in
connection with such Taking or the right to receive the same when made, if
payment thereof has not yet been made) on the Condemnation Termination Date at
an amount (the "Offer Amount") not less than the Termination Value for the
Leased Premises, and (2) in the event that Tenant seeks to terminate this Lease
pursuant to clause (ii) of this paragraph 13(b), a certificate of Tenant, signed
by the President or a Vice President thereof, stating that the portion of the
Leased Premises so taken is sufficient to fulfill the conditions set forth in
clause (ii) of
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this Paragraph 13(b) and certifying that Tenant will forever abandon operations
on the remainder of the Leased Premises.
Tenant agrees that no rejection of an offer hereunder shall be effective
for any purpose unless consented to by First Lender. If Landlord shall reject
such offer by notice to Tenant containing the written consent of First Lender to
such rejection not later than the twentieth day prior to the Condemnation
Termination Date, then upon (i) payment of all installments of Basic Rent,
Additional Rent and any other charges then due and unpaid and (ii) compliance by
Tenant with all its other obligations and liabilities under this Lease which
have arisen on or prior to the Condemnation Termination Date, this Lease shall
terminate as to the entire Leased Premises, and Tenant shall immediately vacate
and have no further right, title or interest in or to any of the Leased Premises
and the Basic Rent Installments shall abate as of the Condemnation Termination
Date and Tenant shall receive a refund of any Basic Rent paid by Tenant which is
attributable to the period following the Condemnation Termination Date.
Unless Landlord shall have rejected such offer by the foregoing notice to
Tenant not later than the twentieth day prior to the Condemnation Termination
Date, Landlord shall be conclusively presumed to have accepted such offer. On
the Condemnation Termination Date, Tenant shall pay to Landlord the Offer Amount
and, provided an Event of Default does not exist hereunder, Landlord shall
convey to Tenant or its designee the remaining portion of the Leased Premises,
if any, in accordance with the provisions of Paragraph 16, at the option of
Tenant, and Landlord shall (i) assign to Tenant or its designee its entire
interest in and to the Net Award; (ii) deliver to Tenant such Net Award or any
part thereof which shall have been received by Landlord; or (iii) credit the
full amount of the Net Award against the Offer Amount.
Commencing on any Condemnation Termination Date, the installments of
Basic Rent shall be reduced by the amount equal to the product of the Basic Rent
payable immediately prior to such Taking multiplied by a fraction, the numerator
of which shall be the amount of the Net Award so retained and the denominator of
which shall be the sum of the then Termination Values for the Leased Premises or
portion thereof remaining after all prior reductions in Basic Rent pursuant to
this Paragraph 13 or Paragraph 15.
(c) In the event of any Condemnation of any of the Land or Improvements
which does not result in a Termination of this Lease, the Term shall
nevertheless continue and there shall be no abatement or reduction of Basic
Rent, Additional Rent or any other sums payable by Tenant hereunder, except as
specifically provided in this subparagraph (C). Subject to the requirements of
Paragraph 15, the Net Award of such Condemnation shall be retained by Landlord
and, promptly after such Condemnation and payment of the Net Award to Landlord,
Tenant, in conformity with the provisions of Paragraph 11(a), shall commence and
diligently continue to restore the Land and Improvements as nearly as possible
to their value, condition and character immediately prior to such Condemnation.
Upon the Final Payment to Landlord of the Net Award of a Taking which falls
within the provisions of this subparagraph (c), then Landlord shall make the Net
Award available to Tenant for restoration, in accordance with the provisions of
clauses (i) through (iv) Paragraph 15(a). If after Tenant restores as aforesaid
a surplus remains from the Net Award, such surplus shall be retained by Landlord
and each installment of Basic Rent after the Final Payment Date shall be
reduced, in accordance with the provisions of Paragraph 15(b).
In the event of a Requisition of any of the Land or Improvements, the Term
shall not be reduced or affected in any way and Tenant shall continue to pay in
full all Basic and Additional Rent stipulated in this Lease. Tenant shall be
entitled to receive the entire Net Award; provided, however, that:
(i) If the Requisition is for a period not extending beyond the Term and if
such Net Award is made in a lump sum, the same shall be held in an interest-
bearing investment or account approved by Tenant, Landlord and any First Lender
by Chicago Title Insurance Company as condemnation trustee, as a fund which
shall be withdrawn by Tenant on a pro rata basis (such proration to take into
account the estimated amount of any future increases in Basic Rent which are to
occur during the period of such Requisition and to allow a proportionate amount
of interest accumulated to date to be withdrawn) on each Basic Rent Payment Date
over the same time period as such Requisition, provided that if such Requisition
results in changes or Alterations to the Leased Premises that would necessitate
an expenditure
- 17 -
to restore the Leased Premises to its former condition, then Tenant shall make
such restorations and a portion of the Net Award sufficient to pay the cost
thereof shall be paid to Tenant in the manner specified in clauses (i) through
(iv) of Paragraph 15(a) over the course of such restoration.
(ii) If the Requisition is for a period extending beyond the Term of this
Lease, the Net Award shall be apportioned on a present value basis between
Landlord and Tenant as of the stated expiration date of the Term and Tenant's
share thereof, if paid in a lump sum, shall be paid to the aforesaid
condemnation trustee and applied in accordance with the provisions of clause (i)
above; provided, however, that the portion of any Net Award required to pay for
restoration, on a present value basis, shall remain the property of Landlord if
the Term shall expire prior to such restoration.
(d) If any of the Equipment shall be taken by a Condemnation other than a
Condemnation which falls within the provisions of Paragraph 13(b), the Term
shall nevertheless continue and there shall be no abatement or reduction of
Basic Rent, Additional Rent or any other sums payable by Tenant hereunder.
Tenant shall, whether or not the Net Award is sufficient for the purpose in
addition to the other restorations and repairs required to be made by Tenant,
promptly replace the Equipment so taken, in accordance with the provisions of
Paragraph 11(d), and the Net Award of such a Condemnation shall thereupon be
payable to Tenant.
(e) No agreement with any condemnor in settlement of or under threat of any
Condemnation shall be made by either Landlord or Tenant without the written
consent of the other. Notwithstanding the foregoing provisions of this Paragraph
13, in the event Tenant, at its expense, makes leasehold improvements to the
premises which are permitted by Paragraph 12, having a cost in excess of
$100,000, and for which Tenant is not reimbursed, Tenant shall have the right to
claim in any condemnation proceeding for and, subject to the prior payment of
the indebtedness secured by the Mortgage, shall be entitled to receive out of
any condemnation award or payment, the then fair market value of such leasehold
improvements.
14. Insurance.
----------
(a) Tenant shall maintain at its sole cost and expense, the following
insurance with deductible provisions not exceeding $250,000 per occurrence:
(i) Insurance against loss or damage to the Improvements and Equipment
by fire and other risks from time to time included under standard extended and
additional extended coverage policies, vandalism and malicious mischief,
sprinkler, plate glass and flood, in amounts not less than the actual
replacement value of the Improvements and Equipment, excluding footings and
foundations and other parts of the Improvements which are not insurable. Such
policies shall contain the "Replacement Cost" Endorsement.
(ii) General public liability insurance against claims for bodily
injury, death or property damage occurring on, in or about any of the Leased
Premises or the Adjoining Property, in an amount not less than $5,000,000
Dollars for bodily injury or death to any one person, not less than $10,000,000
Dollars for any one accident, and not less than $1,000,000 Dollars for property
damage. Policies for such insurance shall be for the mutual benefit of Landlord,
Tenant and First Lender.
(iii) Workmen's compensation insurance covering all persons employed
in connection with any work done on or about any of the Leased Premises for
which claims for death or bodily injury could be asserted against Landlord,
Tenant or any of the Leased Premises, or in lieu of such workmen's compensation
insurance, a program of self-insurance complying with the rules, regulations and
requirements of the appropriate agency of the State from time to time in force.
(iv) Boiler and pressure vessel insurance on any of the Equipment
which by reason of its use or existence is capable of bursting, erupting,
collapsing or exploding, in an amount not less than $5,000,000 Dollars for
damage to property, bodily injury or death resulting from such perils.
(v) Such other insurance, including war-risk if and to the extent
available from the United States Government or any agency thereof, on any of the
Leased Premises as Landlord and
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First Lender may require, which at the time is commonly obtained in connection
with properties similar to the Leased Premises.
(b) The insurance required by Paragraph 14(a) shall be written by
companies of recognized financial standing which are authorized to do an
insurance business in the appropriate State and which are rated by A-XV or
better by A. M. Best Company, Inc. The insurance policies (i) shall be for such
terms as Landlord shall give its approval, which approval shall not be
unreasonably withheld or delayed, (ii) shall be in amounts sufficient at all
times to satisfy any co-insurance requirements thereof and (iii) shall name
Landlord and Tenant as insured parties, as their respective interests may
appear. If said insurance or any part thereof shall expire, be withdrawn, become
void by breach of any condition thereof by Tenant or become void or unsafe by
reason of the failure or impairment of the capital of any insurer, or if for any
other reason whatsoever said insurance shall not be reasonably satisfactory to
Landlord, Tenant shall immediately obtain new or additional insurance
satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i), (iv) and (v) of
Paragraph 14(a) shall contain standard non-contributory mortgagee clauses in
favor of and acceptable to First Lender and shall provide that all property
losses insured against shall be adjusted by Tenant (subject to Landlord's and
First Lender's approval of final settlement of estimated losses of $750,000 or
more). Each policy shall provide that it may not be cancelled except after 30
days prior notice to Landlord and First Lender and that any loss otherwise
payable thereunder shall be payable notwithstanding (i) any act or omission of
Landlord or Tenant which might, absent such provision, result in a forfeiture of
all or a part of such insurance payment, (ii) the occupation or use of any of
the Leased Premises for purposes more hazardous than permitted by the provisions
of such policy, (iii) any foreclosure or other action or proceeding taken by
First Lender pursuant to any provision of the Mortgage upon the happening of an
event of default therein, or (iv) any change in title or ownership of any of the
Leased Premises.
(d) Tenant shall pay as they become due all premiums for the insurance
required by this Paragraph 14, shall renew or replace each policy, shall deliver
to Landlord evidence of the payment of the full premium therefor with the
affidavit of the chief financial officer of Tenant required under Paragraph 26,
and shall deliver to Landlord all original policies or duplicate originals; and
in the event of Tenant's failure to comply with any of the foregoing
requirements, Landlord shall be entitled, two days after giving notice to
Tenant, to procure such insurance if Tenant shall not have complied with the
foregoing requirements prior to the expiration of such two-day period. Any sums
expended by Landlord in procuring such insurance shall be Additional Rent and
shall be repaid by Tenant, together with interest thereon at the Default Rate
from the time payment is due until fully paid by Tenant, within five (5) days of
written demand therefor by Landlord.
(e) Anything in this Paragraph 14 to the contrary notwithstanding, any
insurance which Tenant is required to obtain pursuant to Paragraph 14(a) may be
carried under a "blanket" policy or policies covering other properties or
liabilities of Tenant, and may be effected by a combination of basic and excess
or umbrella policies, provided that such "blanket" policy or policies otherwise
comply with the provisions of this Paragraph 14. The amount of the total
insurance allocated to the Leased Premises, which amount shall be not less than
the amounts required pursuant to this Paragraph 14, shall be specified either
(i) in each such "blanket" policy, or (ii) in a written statement, which Tenant
shall deliver to Landlord, from the insurer thereunder.
(f) Tenant shall promptly comply with and conform to (i) all provisions
of each insurance policy and (ii) all requirements of the insurers thereunder,
applicable to Landlord, Tenant or any of the Leased Premises or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Leased Premises, even if such compliance necessitates
structural changes or improvements or results in interference with the use or
enjoyment of any of the Leased Premises. Tenant shall not use any of the Leased
Premises in any manner which would permit the insurer to cancel any insurance
policy unless Tenant obtains, prior to such cancellation, substitute insurance
in accordance with the provisions of this Paragraph 14 which permits such use of
the Leased Premises.
(g) In the event of any loss in excess of $25,000, Tenant shall give
Landlord immediate notice thereof. Tenant is hereby authorized to adjust,
collect and compromise, in its discretion, all claims under any of the insurance
policies required by this Paragraph 14 (subject to Landlord's and First
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Lender's approval of final settlement of estimated losses of $750,000 or more)
and to execute and deliver all necessary proofs of loss, receipts, vouchers and
releases required by the insurers; and Tenant agrees to sign, upon request of
Landlord, all such proofs of loss, receipts, vouchers and releases. Landlord and
First Lender shall have the right to prosecute or contest, or to require Tenant
to prosecute or contest, any claim, adjustment, settlement or compromise in the
amount of $750,000 or more. Landlord will join in, at Tenant's request, any
prosecution of a claim against, or contesting of any settlement proposed by, an
insurer, provided Tenant indemnifies Landlord against all costs, liabilities and
expenses in connection with the prosecution of such contest. All proceeds of any
insurance required under clauses (i), (ii), (iv) and (v) of Paragraph 14(a)
shall be payable to First Lender, or at its option an insurance trustee
designated by First Lender, and reasonably satisfactory to Landlord and Tenant,
or if there be no First Lender then an insurance trustee selected by Landlord
and reasonably satisfactory to Tenant and each insurer is hereby authorized and
directed to make payment under said policies, except for return of unearned
premiums or dividends which shall be paid to Tenant, directly to First Lender or
such insurance trustee (instead of to Landlord and Tenant jointly) for
disbursement in accordance with the provisions of this Lease; and Tenant hereby
appoints Landlord and First Lender and each of them as Tenant's attorneys-in-
fact to endorse any draft therefor. If Landlord is an Institutional Investor and
there is no First Lender then Landlord or an insurance trustee designated by
Landlord and reasonably satisfactory to Tenant shall receive and disburse the
insurance proceeds specified in the immediately preceding sentence.
In the event of any casualty (whether or not insured against and
whether or not, if insured against, the Net Proceeds, if any, available for
restoration shall be sufficient to pay for such) resulting in damage to any of
the Leased Premises, the Term shall nevertheless continue and there shall be no
abatement or reduction of Basic Rent, Additional Rent or any other sums payable
by Tenant hereunder, except as hereinafter in this subparagraph (g) specifically
provided. Subject to the provisions of Paragraph 15, the Net Proceeds of such
casualty shall be retained by Landlord and, except as hereinafter specifically
provided in subparagraph (h) following, Tenant shall promptly after such
casualty (whether or not insured against and whether or not, if insured against,
the Net Proceeds, available for restoration, shall be sufficient to pay for such
restoration so long as the First Lender does not retain the Net Proceeds
pursuant to the Mortgage), as required in Paragraph 11(a), commence and
diligently continue to restore the Land and Improvements as nearly as possible
to their value, condition and character immediately prior to such damage, in
accordance with the provisions of clauses (i) through (iv) of Paragraph 15(a);
provided, however, in no event shall Tenant be required to restore if First
Lender is entitled to retain the Net Proceeds pursuant to the Mortgage or if the
casualty is uninsurable under the policies required to be maintained by Tenant
hereunder, and in the reasonable judgment of First Lender, the fair market value
of the Leased Premises is not materially impaired by such damage. In the event
the Net Proceeds exceed the Termination Value for such Premises, then unless
Landlord and Tenant shall agree, if so requested by First Lender, to extend the
remaining term of this Lease (including any Renewal Term exercised by Lessee) to
a term at least 15 years beyond the Final Payment Date of said Net Proceeds,
First Lender shall be entitled to retain such Net Proceeds. Upon payment to
Landlord of such Net Proceeds, Landlord shall make the Net Proceeds available to
Tenant for restoration, in accordance with the provisions of Paragraph 15(a).
If, after tenant restores as aforesaid a surplus remains from the Net Proceeds,
such surplus shall be retained by Landlord and each instalment of Basic Rent
payable on and after the Final Payment Date shall be reduced, in accordance with
the provisions of Paragraph 15(b). In the event of any loss of any of the
Equipment which does not fall within the provisions of the immediately preceding
paragraph, the Term shall nevertheless continue and there shall be no abatement
or reduction of Basic Rent, Additional Rent or any other sums payable by Tenant
hereunder. Tenant shall, whether or not the Net Proceeds are sufficient for the
purpose, promptly repair or replace such Equipment, in accordance with the
provisions of Paragraph 11(c), and the Net Proceeds of such loss shall thereupon
be payable to Tenant.
(h) If (i) the entire Leased Premises or (ii) all or any substantial portion
of the Leased Premises, which portion, in Tenant's judgment, is sufficient to
render the remaining portion thereof unsuitable or uneconomical for restoration
for continued use and occupancy by Tenant or any other tenant to which the
Leased Premises might be leased, shall be damaged or destroyed by fire or other
casualty, or if (iii) the First Lender shall retain the Net Proceeds payable as
a result of said fire or other casualty pursuant to the Mortgage, then Tenant
may, not later than ninety (90) days after such occurrence, give notice to
Landlord of its intention to terminate this Lease on any Basic Rent Payment Date
specified in such notice, as to the entire Leased Premises, which date (the
"Casualty Termination Date") shall be not less than ninety (90) nor more than
one hundred twenty (120) days after such notice. Such notice shall contain
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(1) an irrevocable offer of Tenant to purchase the Leased Premises on the
Casualty Termination Date at an amount (the "Offer Amount") not less than the
Termination Value for the entire Leased Premises, and (2) in the event that
Tenant seeks to terminate this Lease pursuant to clause (ii) of this Paragraph
14(h), a certificate of Tenant, signed by the President or a Vice President
thereof, stating that the portion of the Leased Premises so damaged or destroyed
is sufficient to fulfill the conditions set forth in clause (ii) of this
Paragraph and certifying that Tenant will not restore the Leased Premises for
the use to which such premises was devoted prior to such damage or destruction.
Tenant agrees that no rejection of an offer hereunder shall be effective
for any purpose unless consented to by First Lender. If Landlord shall reject
such offer by notice to Tenant containing the written consent of First Lender
not later than the twentieth day prior to the Casualty Termination Date, then
upon (i) payment of all installments of Basic Rent, Additional Rent and any
other charges then due and unpaid and (ii) compliance by Tenant with all other
obligations and liabilities under this Lease which have arisen on or prior to
the Casualty Termination Date, this Lease shall terminate, and Tenant shall
immediately vacate and have no further right, title or interest in or to any of
the Leased Premises.
Unless Landlord shall have rejected such offer by the foregoing notice to
Tenant not later than the twentieth day prior to the Casualty Termination Date,
Landlord shall be conclusively presumed to have accepted such offer. On the
Casualty Termination Date, Tenant shall pay to Landlord the Offer Amount,
Landlord shall convey to Tenant or its designee the Leased Premises or
appropriate portion thereof in accordance with the provisions of Paragraph 16
and, at the option of Tenant, Landlord shall (i) assign to Tenant or its
designee all rights to receive the Net Proceeds payable in connection with such
damage or destruction; (ii) deliver to Tenant such Net Proceeds or any part
thereof which shall have been received by Landlord; or (iii) credit the full
amount of the Net Proceeds against the Offer Amount.
(i) Tenant shall not carry separate insurance concurrent in form or
contributing in the event of loss with that required in this Paragraph 14 unless
(i) Landlord is included therein as a named insured, with loss payable as
provided herein, and (ii) such separate insurance complies with the other
provisions of this Paragraph 14. Tenant shall immediately notify Landlord of
such separate insurance and shall deliver to Landlord duplicate original
policies therefor.
15. Restoration; Reduction of Rent.
------------------------------
(a) Unless the Net Proceeds or Net Award are retained by First Lender
pursuant to the Assignment, Landlord shall cause the Net Proceeds or
Net Award to be disbursed in accordance with the following conditions:
(i) if the estimated cost of restoration is equal to or exceeds $250,000,
prior to commencement of restoration, the architects, contracts, contractors,
plans and specifications for the restoration shall have been approved by
Landlord, and Landlord shall be provided with mechanics' lien insurance or such
other reasonable assurance against mechanics' liens, accrued or inchoate, as
Landlord may reasonably require and acceptable performance and payment bonds
reasonably acceptable to Landlord in an amount and form and have a surety
reasonably acceptable to Landlord, and name Landlord and First Lender each as
additional obligees;
(ii) at the time of any disbursement, no Event of Default or event which
would constitute an Event of Default by notice or grace period or both shall
exist and no mechanics' or materialmen's liens shall have been filed and remain
undischarged except as permitted pursuant to Paragraph 9(a) above; provided that
if any Event of Default shall be subsequently cured and the Lease restored to
good standing, any disbursement withheld shall be promptly paid over to Tenant;
(iii) if the estimated cost of restoration is equal to or exceeds
$250,000, disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of (1) satisfactory evidence, including architects' certificates, of the
stage of completion, of the estimated cost of completion and of performance of
the work to date in a good and workmanlike manner in accordance with the
contracts, plans and specifications, (2) waivers of liens, (3) contractors' and
subcontractors' sworn statements, (4) a satisfactory bringdown of title
insurance, and (5) other evidence of cost and payment so that Landlord can
verify that the amounts disbursed from
- 21 -
time to time are represented by work that is completed, in place and free and
clear of mechanics' lien claims; or if the estimated cost of restoration is less
than $250,000, such disbursement shall be made in a lump sum payment upon Final
Payment by the insurer, subject to satisfaction of the condition set forth in
clause (ii) of this Paragraph 15(a).
(iv) each request for disbursement shall be accompanied by a certificate
of Tenant, signed by the President or any Vice President thereof, describing the
work for which payment is requested, stating the cost incurred in connection
therewith and stating that Tenant has not previously received payment for such
work; the certificate to be delivered by Tenant upon completion of the work
shall, in addition, state that the work has been completed and complies with the
applicable requirements of this Lease;
(v) Landlord may retain ten percent of the restoration fund until the
restoration is fully completed subject to reduction of the retained
amount upon approval by First Lender in accordance with local custom;
(vi) the restoration fund shall not bear interest but shall not be
commingled with First Lender's or depositary's other funds;
(vii) at all times the undisbursed balance of the restoration fund shall
be not less than the cost of completing the restoration work free and clear of
all liens; and
(viii) Landlord may impose other reasonable conditions provided the same
are also imposed upon such disbursements by the First Lender or any subsequent
holder of a first mortgage or deed of trust.
In addition, prior to commencement of restoration and at any time during
restoration, if the estimated cost of restoration, exceeds the amount of the Net
Proceeds or the Net Award available for such restoration, the amount of such
excess shall be paid by Tenant to First Lender or depositary to be added to the
restoration fund. Any sum which remains in the restoration fund upon completion
of restoration shall be refunded to Tenant up to the amount of Tenant's deposits
pursuant to the immediately preceding sentence. If no such refund is required
or any sum remains in the restoration fund after such refund, such sum remaining
in the restoration fund upon completion of restoration (the "Remaining Sum")
shall be retained by Landlord.
(b) In the event that there is a Remaining Sum upon completion of restoration,
or if there is no damage in condemnation, then each installment of Basic Rent
payable on or after the Final Payment Date or the Retention Date, as applicable,
shall be reduced by an amount equal to the product of the Basic Rent payable
immediately prior to such Date multiplied by a fraction, the numerator of which
shall be the Net Proceeds or Net Award not made available for restoration by
First Lender or the Remaining Sum, as the case may be, and the denominator of
which shall be the then aggregate Termination Values for all the Leased Premises
or portion thereof remaining after all prior reductions in Basic Rent pursuant
to Paragraph 13 or this Paragraph 15.
16. Procedures Upon Purchase.
-------------------------
(a) In the event of the purchase of any of the Leased Premises by Tenant
pursuant to any provision of this Lease, Landlord need not transfer and convey
to Tenant or its designee any better title thereto than that which was
transferred and conveyed to Landlord, and Tenant shall accept such title,
subject, however, to all liens, exceptions and restrictions on, against or
relating to the Leased Premises and to all applicable laws, regulations and
ordinances, but free of the lien of and security interest created by the
Mortgage, the Assignment, and any and all other liens, exceptions and
restrictions on, against or relating to the Leased Premises which have been
created by or resulted from acts of Landlord, unless the same were created with
the concurrence of Tenant.
(b) Upon the date fixed for any such purchase of any of the Leased Premises
pursuant to any provision of this Lease, Tenant shall pay to Landlord
or to any person to whom Landlord
- 22 -
directs payment, at its address set forth above, or at any other place
designated by Landlord, the Offer Amount therefor specified herein, or, as the
case may be, the purchase price therefor as determined pursuant to the
provisions of Paragraph 27, in lawful money of the United States, less any
credits of the Net Award or Net Proceeds allowed against the Offer Amount
pursuant to the provisions of Paragraphs 13(b) and 14(h), and Landlord shall
thereupon deliver to Tenant (i) a special warranty deed which describes any of
the Leased Premises then being sold to Tenant and conveys and transfers the
title thereto which is described in Paragraph 16(a), together with (ii) such
other instruments as shall be necessary to transfer to Tenant or its designee
any other property (or rights to any Net Proceeds or Net Award not yet received
by Landlord) then required to be sold by Landlord pursuant to this Lease and
(iii) any Net Award or Net Proceeds received by Landlord and not credited to
Tenant against the Offer Amount. Tenant shall pay all charges incident to such
conveyance and transfer, including Landlord's reasonable counsel fees, escrow
fees, recording fees, title insurance or guarantee premiums and all applicable
federal, state and local taxes which may be incurred or imposed by reason of
such conveyance and transfers and/or by reason of the delivery of said deed and
other instruments. Upon the completion of such purchase, but not prior thereto
(whether or not any delay in the completion of or the failure to complete such
purchase shall be the fault of Landlord, provided that Tenant shall have the
right to pursue its remedies, if any, against Landlord for such failure or delay
except for those waived pursuant to Paragraph 7), this Lease and all obligations
hereunder (including the obligations to pay Basic Rent and Additional Rent)
shall terminate with respect to any of the Leased Premises conveyed to Tenant,
except any obligations and liabilities of Tenant under this Lease which arose on
or prior to such date of purchase; provided, however, that if there shall be a
delay in the foregoing purchase and payment due to the fault of Landlord at any
time after the First Note shall have been paid in full, all obligations imposed
on Tenant pursuant to this Lease shall, if Tenant so elects in writing and
thirty (30) days after delivery of written notice to Landlord, terminate with
respect to the Leased Premises or portion thereof to be sold, as the case may
be, as of the date provided in this Lease for completion of such purchase and
payment (the "Closing Date"); provided, further, however, if the First Note
shall not have been fully paid at the time of such delay caused by Landlord, the
portion of the Basic Rent payable after the Closing Date in excess of the debt
service on the First Note shall be held by the First Lender and not remitted to
Landlord until First Lender receives written instructions jointly executed by
Landlord and Tenant as to the disposition of all such funds or a final judgment
of a court of competent jurisdiction has been delivered to First Lender
instructing First Lender as to the disposition thereof. Any prepaid Basic Rent
or other prepaid sums paid to Landlord shall be prorated as of the date the
purchase is completed, and the prorated unapplied balance shall be deducted from
the Offer Amount due to Landlord.
No apportionment of any Impositions shall be made upon such purchase,
Tenant being liable for payment thereof during the Term, as Tenant, and
being liable thereafter as owner.
17. Assignment and Subletting. Tenant may not assign this Lease without
-------------------------
the prior written consent of Landlord, which consent shall not be unreasonably
withheld, nor shall Tenant sublet the Leased Premises in its entirety at any
time without the prior written consent of Landlord, which consent shall not be
unreasonably withheld; provided, however, that Tenant may sublet portions of the
Leased Premises without such consent. Each sublease of any portion of the Leased
Premises shall be subject and subordinate to the provisions of this Lease; if
Tenant assigns all its rights and interest under this Lease, the assignee under
such assignment shall expressly assume all the obligations of Tenant hereunder,
including obligations, actual or contingent, of Tenant which may have arisen on
or prior to the date of such assignment, by a written instrument delivered to
Landlord at the time of such assignment; and no assignment or sublease made as
permitted by this Paragraph shall affect or reduce any of the obligations of
Tenant hereunder, and all such obligations shall continue in full force and
effect as obligations of a principal and not as obligations of a guarantor, as
if no assignment or sublease had been made. No assignment or sublease shall
impose any obligations on Landlord under this Lease. Tenant shall, within ten
(10) days after the execution and delivery of any such assignment, deliver a
duplicate original copy thereof in recordable form to Landlord, and within ten
(10) days after the execution and delivery of any such sublease, Tenant shall
deliver a duplicate original copy thereof to Landlord.
Upon the occurrence of an Event of Default under this Lease, Landlord shall
have the right to collect and enjoy all rents and other sums of money payable
under any sublease of any of the Leased Premises, and Tenant hereby irrevocably
and unconditionally assigns such rents and money to Landlord, which assignment
may be exercised upon and after (but not before) the occurrence of an Event of
Default. From and after the date, if any, that such Event of Default is cured,
such rents shall again become payable
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to Tenant. Tenant shall not mortgage or pledge this Lease, and any such
mortgage or pledge made in violation of this Paragraph shall be void.
18. Permitted Contests. Notwithstanding any provision of this Lease to the
contrary, Tenant shall not be required to (i) pay any Imposition, (ii) comply
with any Legal Requirement or with the requirements of any insurance policy
referred to in Paragraph 12(a), (iii) discharge or remove any lien referred to
in Paragraph 9 or 12, or (iv) take any action with respect to any encroachment,
violation, hindrance, obstruction or impairment referred to in Paragraph 11(b),
so long as Tenant shall contest, in good faith and at its expense, the
existence, the amount or the validity thereof, the amount of the damages caused
thereby, or the extent of its or Landlord's liability therefor, by appropriate
proceedings (or in the case of non-compliance with regulations of the National
Fire Protection Association or said other body exercising similar function in
accordance with the rules of such Board or body) which shall operate during the
pendency thereof to prevent (i) the collection of, or other realization upon,
the Imposition or lien so contested, (ii) the sale, forfeiture or loss of any of
the Leased Premises, any Basic Rent or any Additional Rent to satisfy the' same
or to pay any damages caused by the violation of any such Legal Requirement or
by any such encroachment, violation, hindrance, obstruction or impairment, (iii)
any interference with the use or occupancy of any of the Leased Premises, (iv)
any interference with the payment of any Basic Rent or any Additional Rent, and
(v) the cancellation of any fire or other insurance policy, unless such policy
is replaced prior to its cancellation by a successor policy complying with the
provisions of this Lease. Tenant shall provide security reasonably satisfactory
to Landlord assuring the payment, compliance, discharge, removal and/or other
action, including all costs, attorneys' fees, interest and penalties in the
event that the contest is unsuccessful. If, and only if, any such proceedings
are pending and the required security is held by Landlord, Landlord shall not
have the right to pay, remove or cause to be discharged the Imposition or lien
thereby being contested. Tenant further agrees that each such contest shall be
promptly and diligently prosecuted to a final conclusion, except that Tenant
shall, so long as the conditions of the first sentence of this Paragraph are at
all times complied with, have the right to attempt to settle or compromise such
contest through negotiations. Tenant shall pay, and save Landlord harmless
against, any and all losses, judgments, decrees and costs (including all
reasonable attorneys' fees and expenses) in connection with any such contest and
shall, promptly after the final determination of such contest, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith, together with all
penalties, fines, interest, costs and expenses thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject Landlord to the risk
of any civil or criminal liability.
19. Conditional Limitations; Default Provision.
------------------------------------------
(a) The occurrence of any one or more of the following shall constitute an
Event of Default under this Lease: (i) a failure by Tenant to make (regardless
of the pendency of any bankruptcy, reorganization, receivership, insolvency or
other proceeding, in law, in equity, or before any administrative tribunal,
which have or might have the effect of preventing Tenant from complying with the
provisions of this Lease) any payment of Basic Rent, Additional Rent or other
sum herein required to be paid by Tenant, which failure continues uncorrected
for a period of 10 days or more after written notice thereof to Tenant; (ii) a
failure by Tenant to duly perform and observe or a violation or breach of any
other provision hereof or the Assignment of Lease to First Lender, which
failure, violation or breach continues uncorrected for a period of 20 days or
more after written notice thereof to Tenant, provided that, if such failure,
violation or breach cannot be cured within a period of 20 days, then the same
shall not be deemed to continue if Tenant proceeds promptly and with due
diligence to cure the same and completes the curing thereof; (iii) Tenant or
Guarantor shall (a) voluntarily be adjudicated a bankrupt or insolvent, (b) seek
or consent to the appointment of a receiver or trustee for itself or for any of
the Leased Premises, (c) file a petition commencing a voluntary case under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, (d) make a general assignment for the benefit of creditors, or (e)
be unable to pay its debts as they mature; (iv) a court shall enter an order,
judgment or decree appointing, with the consent of Tenant, a receiver or trustee
for it or for any of the Leased Premises or approving a petition filed against
Tenant which seeks relief under the bankruptcy or other similar laws of the
United States, any state or any jurisdiction, and such order, judgment or decree
shall remain in force, undischarged or unstayed, ninety days after it is
entered; (v) the Leased Premises shall have been abandoned; (vi) Tenant or
Guarantor shall be liquidated or dissolved or shall begin proceedings towards
its liquidation or dissolution, other than pursuant to the acquisition by a
transferee corporation of substantially all the assets and an assumption by
- 24 -
such transferee of all liabilities provided the net worth of such transferee,
after giving affect to such acquisition and assumption, computed in accordance
with generally accepted accounting principles, is not materially less than that
of the transferor corporation immediately prior to such acquisition; (vii) the
estate or interest of Tenant in any of the Leased Premises shall be levied upon
or attached in any proceeding and such estate or interest is about to be sold or
transferred or such process shall not be vacated or discharged within ninety
days after such levy or attachment; or (viii) any material adverse change in the
financial condition of Tenant or Guarantor.
(b) If an Event of Default shall have occurred, Landlord shall have the
right at its option, then or at any time thereafter to do any one or
more of the following without demand upon or notice to Tenant.
(1) Landlord may give Tenant notice of Landlord's intention to terminate
this Lease on a date specified in such notice. Upon the date therein specified,
the Term, the estate hereby granted and all rights of Tenant hereunder, shall
expire and terminate as if such date were the date hereinbefore fixed for the
expiration of the Term, but Tenant shall remain liable for all its obligations
hereunder, including its liability for Rent, as hereinafter provided.
(2) Landlord may, whether or not the Term of this Lease shall have been
terminated pursuant to clause (1) above, (a) give Tenant notice to surrender any
of the Leased Premises to Landlord immediately or on a date specified in such
notice, at which time Tenant shall surrender and deliver possession of the
Leased Premises or the specified portion thereof to Landlord or (b) re-enter and
repossess any of the Leased Premises by force, summary proceedings, ejectment or
any other means or procedure. Upon or at any time after taking possession of any
of the Leased Premises, Landlord may remove any persons or property therefrom.
Landlord shall be under no liability for or by reason of any such entry,
repossession or removal. No such entry or repossession shall be construed as an
election by Landlord to terminate this Lease unless Landlord gives a written
notice of such intention to Tenant pursuant to clause (1) above.
(3) After repossession of any of the Leased Premises pursuant to clause
(2) above, whether or not this Lease shall have been terminated pursuant to
clause (1) above, Landlord shall use reasonable efforts to relet the Leased
Premises or any part thereof, to such Tenant or Tenants for such term or terms
(which may be greater or less than the period which would otherwise have
constituted the balance of the Term) for such rent, on such conditions (which
may include concessions or free rent) and for such uses as Landlord, in its
absolute discretion, may determine; and Landlord may collect and receive any
rents payable by reason of such reletting. Provided Landlord has used reasonable
efforts to relet, Landlord shall not be responsible or liable for any failure to
relet the Leased Premises or any part thereof. If Landlord shall use reasonable
efforts to collect any rent due upon any reletting, it shall not be responsible
for any failure to collect any said rent. Landlord may make such Alterations as
Landlord, in its sole discretion may deem advisable. Tenant agrees to pay
Landlord, as Additional Rent, immediately upon demand, all expenses incurred by
Landlord in obtaining possession, in performing Alterations and in reletting any
of the Leased Premises, including fees and commissions of attorneys, architects,
agents and brokers.
(4) Whether or not Landlord shall have collected any current damages
pursuant to Paragraph 19(d), Landlord may, upon written demand to Tenant,
recover from Tenant, and Tenant shall pay to Landlord, as and for liquidated and
agreed final damages for Tenant's default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
excess, if any, of (a) all Basic Rent and Additional Rent from the date of such
demand for what would be the then unexpired term of this Lease in the absence of
such expiration, termination, re-entry or repossession, discounted at the rate
of 12% per annum over (b) the then fair rental value of the Leased Premises
(determined by applying a discount rate of 12% per annum) for the same period.
If any Law shall validly limit the amount of such liquidated final damages to
less than the amount above agreed upon, Landlord shall be entitled to the
maximum amount allowable under such Law.
(5) Landlord may exercise any other right or remedy now or hereafter
existing by Law or in equity.
- 25 -
(c) No expiration or termination of this Lease pursuant to Paragraph 19(b)
(1) or any other provision of this Lease, by operation of law or otherwise,
repossession of any of the Leased Premises pursuant to Paragraph 19(b) (2) or
otherwise, or reletting of any of the Leased Premises pursuant to Paragraph
19(b) (3), shall relieve Tenant of any of its liabilities and obligations
hereunder, including the liability for Basic and Additional Rent, all of which
shall survive such expiration, termination, repossession or reletting.
(d) In the event of any expiration or termination of this Lease or
repossession of any of the Leased Premises by reason of the occurrence of an
Event of Default, Tenant shall pay to Landlord Basic Rent, Additional Rent and
all other sums required to be paid by Tenant to and including the date of such
expiration, termination or repossession and, thereafter, Tenant shall, until the
end of what would have been the Term in the absence of such expiration,
termination or repossession, and whether or not any of the Leased Premises shall
have been relet, be liable to Landlord for, and shall pay to Landlord monthly,
on the Basic Rent Payment Dates as liquidated and agreed current damages (i)
Basic Rent, Additional Rent and all other sums which would be payable under this
Lease by Tenant in the absence of such expiration, termination or repossession,
less (ii) the net proceeds, if any, of any reletting pursuant to Paragraph 19(b)
(3), after deducting from such proceeds all of Landlord's expenses in connection
with such reletting (including all repossession costs, brokerage commissions,
legal expenses, attorneys' fees, employees' expenses, costs of Alterations and
expenses of preparation for reletting). Tenant hereby agrees to be and remain
liable for all sums aforesaid; and Landlord may recover such damages from Tenant
and to institute and maintain successive actions or legal proceedings against
Tenant for the recovery of such damages. Nothing herein contained shall be
deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when the Term would have expired by limitation had
there been no such Event of Default.
(e) The words "enter," "re-enter," or "re-entry," as used in this Paragraph
19 are not restricted to their technical meaning.
(f) With respect to any remedy or proceeding of Landlord hereunder, Tenant
waives (a) any right to a trial by jury and (b) the service of any
notice which may be required by a present or future law or decision.
20. Additional Rights of Landlord.
------------------------------
(a) No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by law or in equity. Tenant
acknowledges that time is of the essence in the performance of its obligations
under this Lease. No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any
Basic or Additional Rent or other sum due hereunder with knowledge of the
breach of any provision contained in this Lease shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in a writing signed by Landlord. In
addition to the other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief in
case of the violation, or attempted or threatened violation, of any of the
provisions of this Lease, or to specific performance of any of the provisions
of this Lease.
(b) Tenant hereby waives and surrenders, for itself and all those claiming
under it, including creditors of all kinds, (i) any right and privilege which it
or any of them may have under any present or future law to redeem any of the
Leased Premises or to have a continuance of this Lease after termination of this
Lease or of Tenant's right of occupancy or possession pursuant to any court
order or any provision hereof, and (ii) the benefits of any present or future
law which exempts property from liability for debt or for distress for rent.
(c) Tenant shall pay to Landlord, as Additional Rent, all the expenses
incurred by Landlord in connection with any Event of Default or the exercise of
any remedy by reason of an Event of
- 26 -
Default, including reasonable attorneys' fees and expenses. If Landlord shall be
made a party to any litigation commenced against Tenant or any litigation
pertaining to this Lease or any of the Leased Premises, at the option of
Landlord, Tenant, at its expense, shall provide Landlord with counsel reasonably
satisfactory to Landlord and, in any event, Tenant shall pay all costs and
reasonable attorneys' fees incurred or paid by Landlord in connection with such
litigation; provided, however, if Landlord (but not First Lender or its nominee
as successor Landlord) shall be the losing party as to any claim by Landlord
against Tenant, then Landlord shall not be entitled to reimbursement by Tenant
for any expenses incurred by Landlord in pursuing such claim against Tenant.
21. Notices. All notices, demands, requests, consents, approvals, offers,
-------
statements and other instruments or communications required or permitted to be
given pursuant to the provisions of this Lease shall be in writing and shall be
deemed to have been given for all purposes when delivered in person or when
deposited in the United States mail, by registered or certified mail, return
receipt requested, postage prepaid, addressed to the other party at its address
stated above. For the purposes of this Paragraph, any party may substitute its
address by giving fifteen days' notice to the other party, in the manner
provided above.
22. Estoppel Certificates. Landlord or Tenant, as the case may be, shall,
---------------------
at any time and from time to time, upon not less than twenty days' prior written
request by the other, execute, acknowledge and deliver to the requesting party a
statement in writing, executed by a general partner of Landlord or by the
President or a Vice President of Tenant, as the case may be, certifying (i) that
this Lease is unmodified and in full effect (or, if there have been
modifications, that this Lease is in full effect as modified, and setting forth
such modifications), (ii) the dates to which Basic Rent, Additional Rent and all
other sums payable hereunder have been paid, (iii) that to the knowledge of the
signer of such certificate no default by either Landlord or Tenant exists
hereunder or specifying each such default of which the signer may have
knowledge; and (iv) that, in the case of any statement being given by Tenant, to
the knowledge of the signer of such certificate, there are no proceedings
pending or threatened against Tenant before or by any court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant, or if any such proceedings are
pending or threatened to said signer's knowledge, specifying and describing the
same. It is intended that any such statements may be relied upon by First
Lender, Landlord or their assignees or by any prospective purchaser of the
Leased Premises or by any transferee or assignee of Tenant's interest in the
Lease or a sublessee of Tenant. Any certificate required under this Paragraph 22
shall (i) state briefly the nature and scope of the examination or investigation
upon which the statements contained in such certificate are based, (ii) state
that in the opinion of each person signing such certificate he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to the subject matter of such certificate, and (iii) certify
to the correctness of the statements contained therein.
23. Surrender. Upon the expiration or earlier termination of this Lease,
---------
Tenant shall peaceably leave and surrender the Leased Premises (except for any
portion thereof with respect to which this Lease has previously terminated) to
Landlord in the same condition in which the Leased Premises were originally
received from Landlord at the commencement of this Lease, except as repaired,
rebuilt, restored, altered, replaced, added to or destroyed as permitted or
required by any provision of this Lease, and except for ordinary wear and tear.
Tenant shall remove from the Land and Improvements on or prior to such
expiration or earlier termination, trade fixtures, machinery, equipment or other
all property situated thereon which is owned by Tenant or third parties other
than Landlord and Tenant, at its expense, shall, on or prior to such expiration
or earlier termination, repair any damage caused by such removal. Property not
so removed shall become the property of Landlord, and Landlord may thereafter
cause such property to be removed from the Leased Premises and the cost of
removing and disposing of such property and repairing any damage to any of the
Leased Premises caused by such removal shall be borne by Tenant. Landlord shall
not in any manner or to any extent be obligated to reimburse Tenant for any
property which becomes the property of Landlord as a result of such expiration
or earlier termination.
24. Risk of Loss. The risk of loss or of decrease in the enjoyment and
beneficial use of any of the Leased Premises in consequence of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosure, attachments, levies or executions
(other than by Landlord and those claiming from, through or under Landlord) is
assumed by Tenant, and Landlord shall in no event be answerable or accountable
therefor. Except as otherwise
- 27 -
specifically provided in this Lease none of the events mentioned in this
Paragraph shall entitle Tenant to any abatement of Basic Rent or Additional
Rent; provided, however, in no event shall Tenant be required to pay more than
the Basic Rent or Additional Rent due under Paragraph 6 of this Lease
notwithstanding any attachment, levy or execution thereon by any party claiming
by, under, or through Landlord.
25. No Merger of Title. There shall be no merger of this Lease nor of the
------------------
leasehold estate created by this Lease with the fee estate in or ownership of
any of the Leased Premises by reason of the fact that the same person,
corporation, firm or other entity may acquire or hold or own, directly or
indirectly, (a) this Lease or the leasehold estate created by this Lease or any
interest in this Lease or in such leasehold estate, and (b) the fee estate or
ownership of any of the Leased Premises or any interest in such fee estate or
ownership; and no such merger shall occur unless and until all persons,
corporations, firms and other entities having any interest in (i) this Lease or
the leasehold estate created by this Lease and (ii) the fee estate in or
ownership of the Leased Premises or any part thereof sought to be merged shall
join in a written instrument effecting such merger and shall duly record the
same.
26. Books and Records. Tenant shall keep adequate records and books of
-----------------
account with respect the finances and business of Tenant generally, in
accordance with generally accepted accounting principles consistently applied
and shall permit Landlord by its agents, accountants and attorneys, to visit and
inspect the Leased Premises and examine the records and books of account and to
discuss the finances and business with the officers of Tenant, at such
reasonable times as may be requested by Landlord.
Tenant shall deliver to Landlord as soon as available to Tenant all
publicly filed periodic reports, statements and other information relating to
the financial condition of Guarantor, filed with and/or required by the
Securities and Exchange Commission including, but not limited to, all filings of
Form 10K and Form 10Q.
Tenant shall also deliver to Landlord as soon as available annual financial
statements of Tenant and such other relevant financial data as Landlord may
reasonably require pertaining to Tenant or to the Leased Premises. All financial
statements shall be accompanied by a certificate of the chief financial officer
of Tenant, dated within five days of the delivery of such statements, stating
that such officer knows of no default which has occurred and is continuing
hereunder, or, if any such default has occurred and is continuing, specifying
the nature and period of existence thereof and what action Tenant has taken or
proposes to take with respect thereto and, except as otherwise specified,
stating that, to the knowledge of the affiant, Tenant has fulfilled all of its
obligations under this Lease which are required to be fulfilled on or prior to
the date of such affidavit. THE FOREGOING PARAGRAPH SHALL HAVE NO FORCE OR
EFFECT SO LONG AS TENANT IS PART OF THE GUARANTOR'S CONSOLIDATED REPORTING GROUP
FOR PURPOSES OF FEDERAL INCOME TAXATION.
27. Option to Purchase. Landlord does hereby give and grant to Tenant the
------------------
option to purchase the Leased Premises at any time during the Term and any
renewal term beginning January 1, 2002, so long as there is no monetary Event of
Default which has not been cured both at the time of exercise of the option and
at the time of title closing on the purchase. If there is a non-monetary Event
of Default existing either at the time of the exercise of the option or at the
time of title closing on the purchase which adversely affects the fair market
value of the Leased Premises in the reasonable opinion of Landlord and Landlord
and Tenant are unable to agree upon the purchase price, the arbitration
appraisers who are to determine fair market value, as set forth below in this
Paragraph 27, shall be instructed to disregard such default and, instead,
determine fair market value as if Tenant were in full compliance with its
obligations hereunder including, without limitation, its maintenance and repair
obligations.
Tenant may exercise its option to purchase the Leased Premises by giving
Landlord at least six (6) months (but no more than 12 months) written notice of
Tenant's intention to purchase the Leased Premises. If Tenant shall exercise its
option to purchase the Leased Premises, the title closing shall take place on
the date specified in Tenant's written notice, which date shall be at least six
(6) months after the date of the notice, except that if the date specified is
not a business day then the said title closing shall take place on the first
business day following such date. All of the terms, covenants, and provisions
contained in Paragraph 16 hereof shall apply to the sale and conveyance of the
Leased Premises pursuant to this Paragraph 27. If this Lease shall terminate for
any reason prior to the date originally fixed herein for
- 28 -
the expiration of the Term, the option provided in this Paragraph 27 and any
exercise thereof by Tenant shall cease and terminate and shall be null and void.
The purchase price to be paid by Tenant to Landlord upon the sale and
conveyance of the Leased Premises pursuant to this Paragraph 27 shall be the
greater of (a) $15,000,000, or (b) the fair market value of the Leased Premises
as of the date of the exercise of the option to purchase by Tenant. However, in
no event shall the purchase price exceed $16,250,000. The parties shall endeavor
to agree upon such fair market value. Upon reaching such agreement, the parties
shall execute an instrument setting forth such agreed fair market value. If the
parties shall not have signed such agreement fixing such fair market value
within thirty (30) days after the exercise by Tenant of its option to purchase,
such fair market value shall be determined by arbitration as herein provided.
Within sixty (60) days following the exercise by Tenant of its option to
purchase, Tenant shall select an appraiser and shall notify Landlord in writing
of the name and address of such appraiser. Within ten (10) days thereafter,
Landlord shall select an appraiser and shall notify Tenant of the name and
address of such appraiser. The appraiser selected by Tenant and the appraiser
selected by Landlord shall endeavor to reach agreement upon the fair market
value of the Leased Premises as of the date of the exercise of the option to
purchase by Tenant. If the said two appraisers shall agree upon such fair market
value, the amount of such fair market value as agreed by the said two appraisers
shall be binding and conclusive upon Landlord and Tenant. If the appraiser
selected by Tenant and the appraiser selected by Landlord shall be unable to
agree upon such fair market value within twenty (20) days after the selection of
an appraiser by Landlord, then the said two appraisers shall select a third
appraiser to make the determination of such fair market value and the
determination of such third appraiser shall be binding and conclusive upon
Landlord and Tenant. In the event the appraiser selected by Tenant and the
appraiser selected by Landlord shall be unable to agree upon the designation of
a third appraiser within ten (10) days after the expiration of the aforesaid
twenty (20) day period, then such third appraiser, at the request of either
party, shall be selected by the President or Chairman of the American
Arbitration Association in New York City, New York. The determination of fair
market value made by the third appraiser appointed pursuant hereto shall be
binding and conclusive upon Landlord and Tenant. The costs of the above
described arbitration proceeding shall be borne equally by Landlord and Tenant.
The appraisers shall have no right, power or authority to alter or modify the
terms and provisions contained herein, and in determining the fair market value
of the Leased Premises the appraisers shall utilize the definition of fair
market value set forth herein. For the purposes of this Paragraph 27, the term
"fair market value" shall mean the value of the Leased Premises vacant and free
of this Lease and any and all other leases affecting the Leased Premises or any
part thereof and free of the Mortgage and any other mortgages or deeds of trust.
28. Non-Recourse. Anything contained herein to the contrary
------------
notwithstanding, any claim based on or in respect of any liability of Tenant
under this Lease shall be enforced only against the Leased Premises and not
against any other assets, properties or funds of (i) Landlord or any director,
officer, general partner, limited partner, employee or agent of Landlord (or any
legal representative, heir, estate, successor assign of any thereof), (ii) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, either directly or through Landlord or any predecessor or successor
partnership or corporation (or other entity) of Landlord, or (iii) any other
person or entity (including Carey Corporate Property, Inc., W. P. Carey & Co.
Inc., Carey Corporate Property Management, Inc. or any person, corporation or
other entity affiliated with any of the foregoing).
29. Miscellaneous. The paragraph headings in this Lease are used only for
-------------
convenience in finding the subject matters and are not part of this Lease
or to be used in determining the intent of the parties or otherwise
interpreting this Lease. As used in this Lease, the singular shall include
the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including
but not limited to"; (b) "provisions" shall mean "provisions, terms,
agreements, covenants and/or conditions"; (C) "lien" shall mean "lien,
charge, encumbrance, title retention agreement, pledge, security interest,
mortgage and/or deed of trust"; (d) "obligation" shall mean "obligation,
duty, agreement, liability, covenant and/or condition" (e) "any of the
Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (f) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (g) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (h) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest
therein"; and (i) "any of the Adjoining Property" shall mean "the Adjoining
Property or any part thereof or interest therein." Any act which Landlord
is permitted to perform under this Lease may be
- 29 -
performed at any time and from time to time by Landlord or any person or entity
designated by Landlord. Any act which Tenant is required to perform under this
Lease shall be performed at Tenant's sole cost and expense. Each appointment of
Landlord as attorney-in-fact for Tenant under this Lease is irrevocable and
coupled with an interest. Landlord has the right to refuse to grant its consent
subject to the express provisions set forth in this Lease governing the
withholding of such consent by Landlord in certain circumstances. This Lease may
be modified, amended, discharged or waived only by an agreement in writing
signed by the party against whom enforcement of any such modification,
amendment, discharge or waiver is sought. The covenants of this Lease shall run
with the land and bind Tenant, the heirs, distributees, personal
representatives, successors and assigns of Tenant, and all present and
subsequent encumbrancers and subtenants of any of the Leased Premises, and shall
inure to the benefit of Landlord, its successors and assigns. In the event there
is more than one Tenant, the obligation of each shall be joint and several. In
the event any one or more of the provisions contained in this Lease shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Lease, but this Lease shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Lease will be
simultaneously executed in several counterparts, each of which, when so executed
and delivered, shall constitute an original, fully enforceable counterpart for
all purposes except that only the counterpart stamped or marked "Counterpart
Number I" shall constitute "chattel paper" or other "collateral" within the
meaning of the Uniform Commercial Code in effect in any jurisdiction. This Lease
shall be governed by and construed according to the law of the state of
Tennessee.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed under seal as of the day and year first above written.
CORPORATE PROPERTY ASSOCIATES 2
By: W.P. Carey & Co., Inc.,
General Partner
By:_______________________
CORPORATE PROPERTY ASSOCIATES 3
By: W.P. Carey & Co., Inc.,
General Partner
By:_______________________
CLEO, INC.
By______________________________
Chairman of the Board
Attest:______________________
Secretary
- 30 -
EXHIBIT A
Description of Leased Premises
- 31 -
EXHIBIT B
List of Machinery and Equipment
Any machinery, equipment or fixtures owned by Landlord and used in the operation
of the buildings located on the Leased Premises or used for maintenance of the
integrity of such buildings as buildings, including but without limitation
thereto, all equipment, fixtures, systems and apparatus for the heating,
lighting, plumbing, fire preventing, fire extinguishing, ventilating, air
cooling and air conditioning of the said buildings; and all elevators,
escalators, storm doors and windows, sump pump, partitions and ducts located on
the Leased Premises.
- 32 -
EXHIBIT C
Intentionally Omitted
- 33 -
EXHIBIT D
Permitted Encumbrances
All matters of record to the extent valid and enforceable.
- 34 -
EXHIBIT E
Intentionally Omitted.
- 35 -
EXHIBIT F
Rent Schedule
A. Basic Rent for Initial Term:
---------------------------
1. Basic Rent. The Basic Rent due from November 15, 1995 through
----------
December 31, 2001 shall be $1,500,000 per annum, payable in monthly installments
of $125,000 each, in advance, on the Basic Rent Payment Dates. Basic Rent for
the month in which this Lease is executed shall be prorated for such month and
paid to Landlord on the date this Lease is executed.
2. CPI Adjustments to Basic Rent. Basic Rent shall be subject to
-----------------------------
adjustment, in the manner hereinafter set forth, for changes in the index known
as "United States Bureau of Labor Statistics, Consumer Price Index for All Urban
Consumers (CPI-U)," United States City Average, All Items (1982-84=100) ("CPI")
or the successor index that most closely approximates the CPI. If the CPI shall
be discontinued with no successor or comparable successor index, Landlord and
Tenant shall attempt to agree upon a substitute index or formula, but if they
are unable to so agree, then the matter shall be determined by arbitration in
accordance with the rules of the American Arbitration Association then
prevailing in New York City, New York. Any decision or award resulting from such
arbitration shall be final and binding upon Landlord and Tenant and judgment
thereon may be entered in any court of competent jurisdiction.
3. Effective Dates of CPI Adjustments. Basic Rent shall not be adjusted
----------------------------------
to reflect changes in the CPI until January 1, 2002 (the "Rent Adjustment
Date"). As of the Rent Adjustment Date, Basic Rent shall be adjusted to reflect
changes in the CPI during the period commencing November 1, 1995 and ending
October 31, 2001.
4. Method of Adjustment. (a) On the Rent Adjustment Date, the Rent in
--------------------
effect immediately prior to the Rent Adjustment Date shall be multiplied by a
fraction, the numerator of which shall be the difference between (i) the Ending
CPI and (ii) the Beginning CPI, and the denominator of which shall be the
Beginning CPI. The product of such multiplication shall be added to the Basic
Rent in effect immediately prior to such Rent Adjustment Date; provided,
however, that the Basic Rent payable on and after the Rent Adjustment Date shall
not be less than $1,689,300 per annum nor more than $1,897,950 per annum.
(b) As used herein, "Beginning CPI" shall mean the CPI reported for the
month of November 1995. As used herein, "Ending CPI" shall mean the CPI reported
for the month of October 2001.
(c) Effective as of the Rent Adjustment Date, Basic Rent payable under
this Lease shall be the Basic Rent in effect after the adjustment provided for
as of such Rent Adjustment Date.
(d) Notice of the new annual Basic Rent shall be delivered to Tenant on
or before the tenth (10th) day preceding the Rent Adjustment Date.
B. Basic Rent for Renewal Terms.
-----------------------------
1. If Tenant exercises its option to renew the Lease, Basic Rent during
such renewal term or terms, as the case may be, will be based on the fair market
rental value of the Leased Premises determined as set forth in paragraph B.2
below.
2. (a) Landlord and Tenant shall endeavor to agree on fair market rental
value at least eighteen (18) months prior to the date the then current Term is
to expire. If Landlord and Tenant are unable to reach agreement on the fair
market rental value of the Leased Premises within such time period, the
procedure set forth in paragraph 27 for determining the fair market value of the
Leased Premises shall
- 36 -
be followed except that the appraisers shall be instructed to determine the fair
rental value, and not fair market value, with no "ceiling" or "floor" on the
fair rental value.
(b) In determining fair market rental value, the appraisers shall
determine the amount that a willing tenant would pay, and a willing landlord of
a comparable property located in a radius of 10 miles of the Leased Premises
would accept, at arm's length, to rent a property of comparable size and quality
as the Leased Premises during the extended term; taking into account: (a) the
age, quality, and condition of the Improvements; (b) that the Leased Premises
will be leased as a whole or substantially as a \whole to a single user; (c) a
lease term of five (5) years; (d) the fact that the lease will be a net lease of
the exact type as this Lease; and (e) such other items that professional real
estate appraisers customarily consider.
(c) If, by virtue of any delay, fair market rental value is not
determined by the expiration or termination of the then current Term, then until
fair market rental value is determined, Tenant shall continue to pay Basic Rent
during the succeeding renewal term in the same amount which it was obligated
under this Lease to pay prior to the commencement of the renewal term. When fair
market rental value is determined, the appropriate Basic Rent shall be
calculated retroactive to the commencement of the renewal term and Tenant shall
either receive a refund from Landlord (in the case of an overpayment) or shall
pay any deficiency to Landlord (in the case of an underpayment).
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