Exhibit 10.35
LEASE AMENDMENT AGREEMENT
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THIS LEASE AMENDMENT AGREEMENT (this "Agreement") is made this 15th day
of November 1995 by and among 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 GIBSON GREETINGS, INC., formerly known as Gibson
Greeting Cards, Inc. ("Gibson"), a Delaware corporation, with an address at 2100
Section Road, Cincinnati, Ohio 45237.
W I T N E S S E T H
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WHEREAS, Landlord and Gibson entered into a Lease Agreement dated
January 25, 1982, as amended by Amendment dated June 25, 1985 and as further
amended by an undated Letter Agreement executed by Landlord and Gibson on or
about April 25, 1986 (collectively, as so amended, the "Lease"). Pursuant to the
Lease, Landlord is currently leasing to Gibson three parcels of Land, together
with the Improvements and Equipment erected thereon and pertaining thereto
(individually, the "Ohio Premises", the "Tennessee Premises" and the "Kentucky
Premises" and collectively, the "Leased Premises"). The Leased Premises are more
particularly described in the Lease.
WHEREAS, by Sublease of Tennessee Premises dated as of the first day of
January, 1989, Gibson subleased to CLEO, Inc., a Tennessee corporation, a
subsidiary of Gibson, ("CLEO") the Tennessee Premises (the "Sublease"). Landlord
consented to the Sublease by letter to Gibson dated December 30, 1988.
WHEREAS, a Memorandum of Lease was filed in Hamilton County, Ohio as to
the Ohio Premises, Madison County, Kentucky, as to the Kentucky Premises, and
Shelby County, Tennessee as to the Tennessee Premises, with respect to the
Lease.
WHEREAS, Gibson, with the consent of Landlord, is, contemporaneously
with the execution of this Agreement, selling all of the stock of CLEO to CSS
Industries, Inc., a Delaware corporation ("CSS") and terminating the Sublease.
WHEREAS, CLEO and Landlord, contemporaneously with the execution of this
Agreement, will execute a separate Lease Agreement with respect to the Tennessee
Premises.
WHEREAS, Landlord and Gibson wish to clarify their mutual rights, duties
and obligations under the Lease and make various amendments to the Lease all as
more particularly set forth herein.
NOW, THEREFORE, the parties hereto in consideration of the mutual
promises contained herein and intending to be legally bound hereby, covenant and
agree as follows:
1. The recitals set forth above, all exhibits attached hereto, if
any, and the Lease referred to therein, are incorporated herein by reference and
all definitions and document identifications, shall, except as expressly
provided to the contrary herein, have the same meanings in this Agreement as are
respectively ascribed to them in the Lease as if set forth in full in the body
of this Agreement.
2. The Lease is hereby terminated with respect to the Tennessee
Premises only. Accordingly, all references in the Lease to the Tennessee
Premises are hereby deleted and the term "Leased Premises" shall hereafter mean
collectively only the Ohio Premises and the Kentucky Premises.
3. From and after the date hereof Gibson shall be obligated to perform
all of the terms, covenants and conditions and shall hold all of the rights,
duties, obligations and benefits of the tenant under the Lease (including,
without limitation, liability for any Environmental Violation) as the same
applies to the Ohio Premises and the Kentucky Premises only, as the same may be
amended by this Agreement.
4. Gibson shall remain liable to Landlord for the performance of all
of tenant's liabilities, duties, obligations, covenants and agreements under the
Lease (including, without limitation, liability for any Environmental Violation)
as they pertain to the Tennessee Premises (a) which arose on or prior to the
date hereof or (b) which arise on or after the date hereof due to acts or
omissions of Gibson
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and/or conditions existing at the Tennessee Premises prior to the date hereof.
The foregoing agreement shall remain in full force and effect in favor of
Landlord, notwithstanding any agreement between Gibson and CLEO and/or CSS with
respect to assumption of liabilities under the Lease.
5. Landlord hereby agrees to enter into a direct Lease Agreement with
CLEO contemporaneously with the execution of this Agreement. Landlord hereby
acknowledges that (a) Basic Rent under the Lease has been paid through October
31, 1995; (b) to the knowledge of Landlord without independent investigation, no
Event of Default exists under the Lease with respect to the Tennessee Premises;
and (C) to the knowledge of Landlord without independent investigation, no
condition exists which with the giving of notice or the passage of time or both
would constitute an Event of Default under the Lease with respect to the
Tennessee Premises except that the roof is in disrepair and needs to be repaired
or replaced; provided, however, that Landlord shall take no action against
Gibson with reference to the condition of the roof until after May 15, 1996.
6. (a) Gibson shall pay to Landlord, within two (2) business days
following the execution and delivery of this Agreement, the sum of Twelve
Million Two Hundred Thousand Dollars ($12,200,000) (the "Consideration"). The
Consideration is a one-time lump sum payment as consideration for Landlord
terminating the Lease as to the Tennessee Premises. Such payment shall not
reduce or be credited toward the Basic Rent, Additional Rent or any other amount
owed to Landlord by Gibson under the Lease or otherwise.
7. (b) As directed by Landlord, Gibson shall wire the Consideration
directly to Principal Mutual Life Insurance Company ("Lender") to be applied
toward the payoff of the loan secured by a mortgage encumbering the Leased
Premises (the "Loan"). Landlord covenants that Landlord will initiate a wire
for the balance of funds necessary to fully pay off the Loan, including any
prepayment penalty, contemporaneously with confirmation of receipt of the wire
of the Consideration from Gibson to Lender.
8. Paragraph 5(a) of the Lease shall be amended to extend the Term of
the Lease through November 30, 2013.
The options to extend the Lease granted to Gibson in Paragraph 5(b) of
the Lease are hereby terminated. Paragraph 5(b) of the Lease is deleted in its
entirety and replaced by the following:
"(b) Landlord hereby grants to Tenant the right at Tenant's option to
extend the Term of this Lease for one additional period of ten (10)
years after the expiration of the initial Term hereof (the "Renewal
Term"). The Renewal Term shall be subject to all of the terms and
conditions of this Lease as if the Term originally included such Renewal
Term and upon the exercise of such option, the Term shall include such
Renewal Term therein. Tenant may exercise its option to extend the Term
only by giving written notice of such extension to Landlord no later
than twelve (12) months, and no earlier than 18 months, prior to the
expiration of the initial Term."
All other provisions of Paragraph 5 of the Lease remain unchanged and in
full force and effect.
In consideration of the extension of the Term of the Lease as provided
in Paragraph 7 above, Exhibit F of the Lease is deleted in its entirety and
Paragraph 6 of the Lease is amended to change Basic Rent as follows: Beginning
November 15, 1995, the Basic Rent shall be Three Million One Hundred Thousand
($3,100,000) Dollars per annum, payable monthly, in arrears, as more
particularly set forth in Paragraph 6 of the Lease. Every five (5) years, annual
Basic Rent shall increase twenty percent (20%) over the then current Basic Rent
as follows: For the period December, 2000 through November, 2005, inclusive,
Basic Rent shall be Three Million Seven Hundred Twenty Thousand ($3,720,000)
Dollars per annum; for the period December, 2005 through November, 2010,
inclusive, Basic Rent shall be Four Million Four Hundred Sixty-Four Thousand
($4,464,000) Dollars per annum; for the period December, 2010 through November,
2013, inclusive, Basic Rent shall be Five Million Three Hundred Fifty-Six
Thousand Eight Hundred ($5,356,800) Dollars per annum.
Basic Rent for the Ohio Premises, the Kentucky Premises and the
Tennessee Premises for the fourteen (14) days from November 1 through November
14, 1995, computed using the annual Basic Rent under the Lease in effect just
prior to this Agreement, shall be paid by Gibson on December 1, 1995. Basic
Rent, computed using the annual Basic Rent set forth above in this Paragraph 8,
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for the Ohio Premises and the Kentucky Premises for the sixteen (16) days from
November 15 through November 30, 1995 shall be paid by Gibson on December 1,
1995.
If Gibson exercises its option to extend the Lease pursuant to Paragraph
5(b) of the Lease as amended herein, the annual Basic Rent for the Renewal Term
shall be the lower of: (a) Six Million Four Hundred Twenty Eight Thousand One
Hundred Sixty ($6,428,160) Dollars; and (b) the fair market rental value of the
Leased Premises. The fair market rental value of the Leased Premises shall be
determined as follows: Landlord and Tenant shall endeavor to agree on fair
market rental value at least nine (9) months prior to the expiration of the then
current lease Term. If Landlord and Tenant are unable to reach agreement on the
fair market rental value of the Leased Premises within said time period, the
procedure set forth in Paragraph 27 of the Lease for determining the fair market
value of the Leased Premises shall be followed except that the appraisers shall
be instructed to determine fair market rental value, and not fair market value.
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 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 ten (10) years;
(d) an absolute triple net lease; and (e) such other items that professional
real estate appraisers customarily consider. The fair market rental value shall
be determined separately for each property comprising the Leased Premises. 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
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)."
All other provisions of Paragraph 6 remain unchanged and in full force
and effect.
9. In consideration of the extension of the Term of the Lease as provided
in Paragraph 7 above, Paragraph 27 of the Lease shall be amended as follows:
The options to purchase the Leased Premises granted to Gibson on the last
day of the tenth (10th) year of the Term and on the last day of the twentieth
(20th) year of the Term are hereby terminated.
Landlord hereby grants Gibson the option to purchase the Ohio Premises, the
Kentucky Premises or both on the last day of November, 2005 and, if Gibson does
not exercise this option, Landlord hereby grants Gibson a second option to
purchase the Ohio Premises, the Kentucky Premises or both on the last day of
November, 2010, and if Gibson does not exercise this option and has extended the
Lease pursuant to Paragraph 5(b) as amended herein, Landlord grants Gibson a
third option to purchase the Ohio Premises, the Kentucky Premises or both on the
last day of November, 2023. Accordingly, all references in Paragraph 27 of the
Lease to "the last day of the tenth (10th) year of the Term" shall be deleted
and replaced by "the last day of November, 2005," all references in Paragraph 27
of the Lease to "the last day of the twentieth (20th) year of the Term" shall be
deleted and replaced by "the last day of November, 2010" and a reference to the
third option granted herein on the last day of November, 2023 shall be added.
The options to purchase granted to Gibson hereunder may only be exercised
if no Event of Default has occurred which has not been cured both at the time of
the exercise of the option and at the time of title closing on such purchase.
If Tenant exercises its option to purchase the Ohio Premises, the Kentucky
Premises or both, the purchase price shall be the fair market value of such
premises at the time of the exercise of the option determined in accordance with
the provisions of Paragraph 27 of the Lease (the fair market value of both
premises comprising the Leased Premises shall be determined, even if Tenant
desires to buy only one such premises, if on the purchase date the Basic Rent
will not be determined by reference to the fair market rental value of the
Leased Premises). If Gibson exercises its option to purchase either the Ohio
Premises or the Kentucky Premises but not both, the Lease will continue with
respect to the premises not being purchased, if the Term of the Lease has not
terminated by the date of title closing on the purchase, and the Basic Rent for
such remaining premises shall be either (a) the fair market rental value of such
remaining premises, if Basic Rent is then being determined by reference to the
fair market rental value of each
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premises comprising the Leased Premises determined in accordance with the
provisions of Paragraph 6 of the Lease as amended in Paragraph 8 hereof, or (b)
if the Basic Rent is not then being determined by reference to fair market
rental value, the new Basic Rent shall be the product obtained by multiplying
Basic Rent then in effect by a fraction, the numerator of which is the fair
market value of the premises not being purchased and the denominator of which is
the fair market value of both properties comprising the Leased Premises.
All other provisions of Paragraph 27 remain unchanged and in full force
and effect.
10. The following definitions shall be added to Paragraph 2 of the
Lease:
11. (a) "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, discharge, 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.
12. (b) "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.
13. (C) "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.
14. (d) "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.
15. (e) "Renewal Term" shall have the meaning set forth in Paragraph
5(b) of the Lease as amended in Paragraph 7 of this Agreement.
16. The effectiveness of this Agreement, the Lease Agreement with CLEO
and the transactions contemplated by those documents is specifically conditioned
and contingent upon: (a) Landlord and CLEO entering into a Lease Agreement for
the Tennessee Premises in form and substance acceptable to Landlord; (b) CSS
executing a Guaranty and Suretyship Agreement in favor of Landlord, guarantying
CLEO's obligations under the lease with Landlord, in form and substance
acceptable to Landlord; and (C) receipt of the Consideration by Lender within
two (2) business days of the execution of this Agreement.
Except as expressly amended hereby, the Lease remains in full force and
effect in accordance with its terms.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
Signed and acknowledged in the presence of:
CORPORATE PROPERTY ASSOCIATES 2
By: W.P. Carey & Co., Inc.,
General Partner
__________________________ By:______________________
Name: Title:
__________________________
Name:
CORPORATE PROPERTY ASSOCIATES 3
By: W.P. Carey & Co., Inc.,
General Partner
__________________________ By: ____________________
Name: Title:
__________________________
Name:
GIBSON GREETINGS, INC.
__________________________ By:___________________________
Name: William L. Flaherty
Vice President and
Chief Executive Officer
__________________________
Name:
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COMMONWEALTH OF PENNSYLVANIA :
: ss.
COUNTY OF :
On this, the ____ day of November, 1995, before me, a notary public, the
undersigned officer, personally appeared __________________, who acknowledged
himself to be the ____________ of W.P. Carey & Co., Inc., a ______________
corporation, and that he, as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained, by signing the name
of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal the day and
year aforesaid.
Notary Public
My Commission Expires:
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COMMONWEALTH OF PENNSYLVANIA :
: ss.
COUNTY OF :
On this, the _____ day of November, 1995, before me, a notary public,
the undersigned officer, personally appeared William L. Flaherty, who
acknowledged himself to be the Vice President and Chief Financial Officer of
Gibson Greetings Inc., a Delaware corporation, and that he, as such officer,
being authorized to do so, executed the foregoing instrument for the purposes
therein contained, by signing the name of the corporation by himself as such
officer. IN WITNESS WHEREOF, I hereunto set my hand and official seal the day
and year aforesaid.
Notary Public
My Commission Expires:
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