Exhibit 10.39
AMENDED AND RESTATED
LEASE
THIS AMENDED AND RESTATED LEASE (this "Lease") entered into as of November
10, 2004 and effective as of July 1, 2004 (the "Effective Date"), by and between
CFK REALTY PARTNERS, LLC, an Illinois limited liability company ("Lessor"),
whose address is c/o Xxxxxxx X. Xxxxx 00000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxxx XX
00000 and MERCURY AIR GROUP, INC., a Delaware corporation ("Lessee"), whose
address is 0000 XxXxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
W I T N E S S E T H :
THAT, in consideration of the mutual covenants and agreements herein
contained, Lessor and Lessee hereby covenant and agree as follows:
1. CERTAIN DEFINED TERMS. The following terms shall have the following meanings
for all purposes of this Lease:
"ADA" has the meaning set forth in Section 15.C.
"ADDITIONAL RENTAL" has the meaning set forth in Section 5.B.
"AFFILIATE" means any Person which directly or indirectly controls,
is under common control with, or is controlled by any other Person. For purposes
of this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
"APPLICABLE REGULATIONS" means all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and approvals of each
Governmental Authority having jurisdiction over Lessee and/or the Property,
including, without limitation, all health, building, fire, safety and other
codes, ordinances and requirements and all applicable standards of the National
Board of Fire Underwriters and the ADA, in each case, as amended, and any
judicial or administrative interpretation thereof, including any judicial order,
consent, decree or judgment applicable to Lessee.
"BASE ANNUAL RENTAL" means $439,968.
"BASE MONTHLY RENTAL" means an amount equal to 1/12 of the
applicable Base Annual Rental.
"BUSINESS DAY" means a day on which banks located in Los Angeles,
California are not required or authorized to remain closed (other than a
Saturday and Sunday).
"CODE" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101
ET SEQ., as amended.
"DE MINIMIS AMOUNTS" shall mean, with respect to any given level of
Hazardous Materials, that level or quantity of Hazardous Materials in any form
or combination of forms, the use, storage or release of which does not
constitute a violation of, or require regulation or remediation under, any
Environmental Laws and is customarily employed in the ordinary course of, or
associated with, similar businesses located in the state in which the Property
is located.
"DEFAULT RATE" means 18% per annum or the highest rate permitted by
law, whichever is less.
"EFFECTIVE DATE" has the meaning set forth in the Preamble.
"ENVIRONMENTAL LAWS" means any present and future federal, state and
local laws, statutes, ordinances, rules and regulations relating to Hazardous
Materials and/or the protection of human health or the environment, by reason of
a Release or a Threatened Release of Hazardous Materials or relating to
liability for or costs of Remediation or prevention of Releases. "Environmental
Laws" includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations, rulings, orders or decrees promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. "Environmental Laws" also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
Governmental Authority of the environmental condition of the property; requiring
notification or disclosure of Releases or other environmental condition of the
Property to any Governmental Authority or other person or entity, whether or not
in connection with transfer of title to or interest in property; relating to
nuisance, trespass or other causes of action related to Hazardous Materials; and
relating to wrongful death, personal injury, or property or other damage in
connection with the physical condition or use of the Property by reason of the
presence of Hazardous Materials in, on, under or above the Property.
"ENVIRONMENTAL LIENS" has the meaning set forth in Section 15.D(ix).
"EVENT OF DEFAULT" has the meaning set forth in Section 22.
"GAAP" means generally accepted accounting principles consistently
applied.
"GOVERNMENTAL AUTHORITY" means any governmental authority, agency,
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department, commission, bureau, board, instrumentality, court or
quasi-governmental authority of the United States, the state in which the
Property is located or any political subdivision thereof.
"HAZARDOUS MATERIALS" means (i) any toxic substance or hazardous
waste, substance, solid waste, or related material, or any pollutant or
contaminant; (ii) radon gas, asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
which contains dielectric fluid containing levels of polychlorinated biphenyls
in excess of federal, state or local safety guidelines, whichever are more
stringent, or any petroleum product; (iii) any substance, gas, material or
chemical which is or may be defined as or included in the definition of
"hazardous substances," "toxic substances," "hazardous materials," "hazardous
wastes," "regulated substances" or words of similar import under any
Environmental Laws; and (iv) any other chemical, material, gas or substance the
exposure to or release of which is or may be prohibited, limited or regulated by
any Governmental Authority that asserts or may assert jurisdiction over the
Property or the operations or activity at the Property, or any chemical,
material, gas or substance that does or may pose a hazard to the health and/or
safety of the occupants of the Property or the owners and/or occupants of
property adjacent to or surrounding the Property.
"INDEMNIFIED PARTIES" means Lessor and Lender and their directors,
officers, shareholders, trustees, beneficial owners, partners, members, and any
directors, officers, shareholders, trustees, beneficial owners, partners,
members of any beneficial owners, partners or members of Lessor or Lender, and
all employees, agents, servants, representatives, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any of the
foregoing, including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of the assets and
business of Lessor or Lender, as applicable.
"LEASE TERM" shall have the meaning described in Section 4.
"LENDER" means General Electric Capital Business Asset Funding
Corporation, a Washington corporation, its successors and assigns, any successor
lender in connection with any loan secured by Lessor's interest in the Property,
and any servicer of any loan secured by Lessor's interest in the Property.
"LOAN DOCUMENTS" means, collectively, the Notes, the Mortgages and
all other documents, instruments and agreements executed in connection therewith
or contemplated thereby, all as amended and supplemented and any and all
replacements or substitutions thereof.
"LOSSES" means any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys'
fees, court costs and other costs of defense).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
net worth or operation of Lessee, or the Property, including, without
limitation, the operations of any
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of the Property as a Permitted Facility and/or the value of the Property, or
(ii) Lessee's ability to perform its obligations under this Lease.
"MORTGAGES" means, collectively, the mortgages, deeds of trust or
deeds to secure debt, assignments of rents and leases dated December 31, 2001
executed by Lessor for the benefit of Lender with respect to the Property, as
such instruments may be amended, restated and/or supplemented from time to time
and any and all replacements or substitutions thereof.
"NOTE" means the promissory note dated December 31, 2001 executed by
Lessor and payable to Lender with respect to the Property, as such note may be
amended, restated and/or substituted from time to time.
"NOTICES" means, when used herein, written notice.
"PARTICIPATION" means the granting of any participations in any
document evidencing loan obligations or any or all servicing rights with respect
thereto.
""PERMITTED FACILITY" means the operation of an office building and
other related operations as currently in use.
"PERSON" means any individual, corporation, partnership, limited
liability company, trust, unincorporated organization, Governmental Authority or
any other form of entity.
"PERSONALTY" means all machinery, appliances, furniture, equipment,
trade fixtures and other personal property of Lessee (excluding inventory) from
time to time situated on or used in connection with the Property.
"PREPAYMENT CHARGES" means, for purposes of this Lease, an amount
equal to any prepayment premium or charge, yield maintenance payment, or other
cost or expense imposed on Lessor by the applicable Lender in connection with
the payment of the applicable Note(s) or promissory note(s) prior to the
expiration of the Primary Term.
"PRIMARY TERM" means the period commencing on the Effective Date and
expiring June 30, 2014.
"QUESTIONNAIRES" means the environmental questionnaires completed by
Lessee with respect to the Property and submitted to General Electric Capital
Business Funding Corporation in connection with the mortgage loan on the
Property.
"PROPERTY" means the parcels of land located at 0000 XxXxxxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 and legally described in EXHIBIT A
attached hereto, all rights, privileges and appurtenances associated therewith,
and all buildings, structures, fixtures and other improvements now or hereafter
located on such real estate (excluding Personalty and inventory).
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"RELEASE" means any depositing, discharging, leaking, spilling,
injecting, pumping, pouring, emptying, escaping, dumping or disposing of
Hazardous Materials into the environment, except for De Minimis Amounts.
"REMEDIATION" means any response, remedial, removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Materials, any actions to prevent, cure or mitigate any
Release, any inspection, investigation, study, monitoring, assessment, sampling
and testing, laboratory or other analysis relating to any Hazardous Materials.
"THREATENED RELEASE" means a substantial likelihood of a Release
which requires action pursuant to Environmental Law to prevent or mitigate
damage to the soil, surface waters, groundwaters, land, stream sediments,
surface or subsurface strata, ambient air or any other environmental medium
comprising or surrounding the Property which may result from such Release.
"TITLE COMPANY" means such other nationally recognized title
insurance company reasonably acceptable to Lessor.
"TRANSFER" means any sale, transfer or assignment of any document
evidencing loan obligations, or any or all servicing rights with respect
thereto.
2. CANCELLATION OF ORIGINAL LEASE. This Amended and Restated Lease supercedes
and renders null and void that certain lease by and between Lessor and Lessee
for the Property dated December 31, 2001;
3. DEMISE OF PROPERTIES. In consideration of the rentals and other sums to be
paid by Lessee and of the other terms, covenants and conditions on Lessee's part
to be kept and performed, Lessor hereby leases to Lessee, and Lessee hereby
takes and hires, the Property. The Property is leased to Lessee "AS IS" and
"WHERE IS" without representation or warranty by Lessor and subject to the
rights of parties in possession, to the existing state of title, any state of
facts which an accurate survey or physical inspection might reveal, and all
Applicable Regulations now or hereafter in effect. Lessee has examined the
Property and title to the Property and has found all of the same satisfactory
for all of Lessee's purposes.
4. LEASE TERM. The Lease Term for all of the Property shall commence as of the
Effective Date and shall expire on June 30, 2014, unless terminated sooner as
provided in this Lease. The time period during which this Lease shall actually
be in effect is referred to herein as the "Lease Term".
5. RENTAL, OTHER PAYMENTS AND SECURITY DEPOSIT.
(a) If the Effective Date is a date other than the first day of the
month, Lessee shall pay Lessor on the Effective Date the Base Monthly Rental
prorated on the basis of the ratio that the number of days from the Effective
Date through the last day in the month containing the Effective Date bears to
the number of days in such month. Thereafter, on or before the first day
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of each succeeding calendar month, Lessee shall pay Lessor in advance the Base
Monthly Rental.
(b) All sums of money required to be paid by Lessee under this Lease
which are not specifically referred to as rent ("Additional Rental") shall be
considered rent although not specifically designated as such. Lessor shall have
the same remedies for nonpayment of Additional Rental as those provided herein
for the nonpayment of Base Annual Rental.
6. REPRESENTATIONS AND WARRANTIES OF LESSOR. The representations and warranties
of Lessor contained in this Section are being made to induce Lessee to enter
into this Lease and Lessee has relied and will continue to rely upon such
representations and warranties. Lessor represents and warrants to Lessee as of
the Effective Date as follows:
(a) ORGANIZATION, AUTHORITY AND STATUS OF LESSOR.
(i) Lessor has been duly organized and is validly existing and
in good standing under the laws of the State of Illinois. All necessary
company action has been taken to authorize the execution, delivery and
performance by Lessor of this Lease and the other documents, instruments
and agreements provided for herein.
(ii) The person who has executed this Lease on behalf of
Lessor is duly authorized so to do.
(b) ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligation of Lessor, enforceable against Lessor in accordance with its
terms.
7. REPRESENTATIONS AND WARRANTIES OF LESSEE. The representations and warranties
of Lessee contained in this Section are being made to induce Lessor to enter
into this Lease and Lessor has relied, and will continue to rely, upon such
representations and warranties. Lessee represents and warrants to Lessor as of
the Effective Date as follows:
(a) ORGANIZATION, AUTHORITY AND STATUS OF LESSEE.
(i) Lessee has been duly organized or formed, is validly
existing and in good standing under the laws of its state of incorporation
or formation and is qualified to do business in any jurisdiction where
such qualification is required. All necessary corporate action has been
taken to authorize the execution, delivery and performance by Lessee of
this Lease and of the other documents, instruments and agreements provided
for herein. Lessee is not a "foreign corporation", "foreign partnership",
"foreign trust", "foreign limited liability company" or "foreign estate",
as those terms are defined in the Internal Revenue Code and the
regulations promulgated thereunder. Lessee's United States tax
identification number is correctly set forth on the signature page of this
Lease.
(ii) The person who has executed this Lease on behalf of
Lessee is duly authorized to do so.
(b) ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligation of Lessee, enforceable against Lessee in accordance with its
terms.
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(c) LITIGATION. There are no suits, actions, proceedings or
investigations pending, or, to the best of its knowledge, threatened against or
involving Lessee or the Property before any arbitrator or Governmental Authority
which might reasonably result in any Material Adverse Effect.
(d) ABSENCE OF BREACHES OR DEFAULTS. Lessee is not in default under
any document, instrument or agreement to which Lessee is a party or by which
Lessee, is a party or by which Lessee, or the Property or any of Lessee's
property is subject or bound, which default could reasonably be expected to
result in a Material Adverse Effect. The authorization, execution, delivery and
performance of this Lease and the other documents, instruments and agreements
provided for herein will not result in any breach of or default under any
document, instrument or agreement to which Lessee is a party or by which Lessee,
the Property, or any of Lessee's property is subject or bound. The
authorization, execution, delivery and performance of this Lease and the
documents, instruments and agreements provided for herein will not violate any
applicable law, statute, regulation, rule, ordinance, code, rule or order.
(e) LIABILITIES OF LESSOR. Lessee is not liable for any indebtedness
for money borrowed by Lessor and has not guaranteed any of the debts or
obligations of Lessor.
8. RENTALS TO BE NET TO LESSOR. The Base Annual Rental payable hereunder shall
be net to Lessor, so that this Lease shall yield to Lessor the rentals specified
during the Lease Term, and that all costs, expenses and obligations of every
kind and nature whatsoever relating to the Property shall be performed and paid
by Lessee.
9. TAXES AND ASSESSMENTS. Lessee shall pay prior to the earlier of delinquency
or the accrual of interest on the unpaid balance, all taxes and assessments of
every type or nature assessed against, imposed upon or arising with respect to
Lessor, the Property, this Lease, the rental or other payments due under this
Lease or Lessee during the Lease Term which affect in any manner the net return
realized by Lessor under this Lease, including, without limitation, the
following:
(a) All taxes and assessments upon the Property or any part thereof
and upon any Personalty, whether belonging to Lessor, Lessee, or any tax or
charge levied in lieu of such taxes and assessments;
(b) All taxes, charges, license fees and or similar fees imposed by
reason of the use of the Property by Lessee; and
(c) All excise, transaction, privilege, license, sales, use and
other taxes upon the rental or other payments due under this Lease, the
leasehold estate of either party or the activities of either party pursuant to
this Lease.
Notwithstanding the foregoing, but without limiting the preceding
obligation of Lessee to pay and cause to be paid all taxes which are imposed on
the rental or other payments due under this Lease, in no event will Lessee be
required to pay any net income taxes (i.e., taxes which are determined taking
into account deductions for depreciation, interest, taxes and ordinary and
necessary business expenses) or franchise taxes of Lessor (unless imposed in
lieu of other taxes that would otherwise be the obligation of Lessee under this
Lease, including, without limitation,
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any "gross receipts tax" or any similar tax based upon gross income or receipts
of Lessor with respect to this Lease which does not take into account deductions
from depreciation, interest, taxes and/or ordinary or necessary business
expenses), any transfer taxes of Lessor, or any tax imposed with respect to the
sale, exchange or other disposition by Lessor, in whole or in part, of the
Property or Lessor's interest in this Lease (other than transfer or recordation
taxes imposed in connection with the transfer of the Property to Lessee, the
substitution of a Substitute Property or the termination of this Lease pursuant
to the provisions of this Lease).
All taxing authorities shall be instructed to send all tax and assessment
invoices to Lessee and Lessee shall promptly provide Lessor and Lender with
copies of all tax and assessment invoices received by Lessee. Upon request,
Lessee shall also provide Lessor and Lender with evidence that such invoices
were paid in a timely fashion. Lessee may, at its own expense, contest or cause
to be contested (in the case of any item involving more than $1,000.00, after
prior written notice to Lessor), by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any item specified in this Section or lien therefor,
provided that (i) such proceeding shall suspend the collection thereof from the
Property or any interest therein, (ii) neither the Property nor any interest
therein would be in any danger of being sold, forfeited or lost by reason of
such proceedings, (iii) no Event of Default has occurred, and (iv) Lessee shall
have deposited with Lessor adequate reserves for the payment of the taxes,
together with all interest and penalties thereon, unless paid in full under
protest, or Lessee shall have furnished the security as may be required in the
proceeding or as may be required by Lessor to ensure payment of any contested
taxes.
10. UTILITIES. Lessee shall contract, in their own name, for and pay when due
all charges for the connection and use of water, gas, electricity, telephone,
garbage collection, sewer use and other utility services supplied to the
Property during the Lease Term. Under no circumstances shall Lessor be
responsible for any interruption of any utility service.
11. INSURANCE. Throughout the Lease Term, Lessee shall maintain with respect to
the Property, at its sole expense, the types and amounts of insurance specified
in the Loan Documents:
12. TAX AND INSURANCE IMPOUND. Upon the occurrence of an Event of Default,
Lessor may require Lessee to pay to Lessor sums which will provide an impound
account (which shall not be deemed a trust fund) for paying up to the next one
year of taxes, assessments and/or insurance premiums for the Property. Upon such
requirement, Lessor will estimate the amounts needed for such purposes and will
notify Lessee to pay the same to Lessor in equal monthly installments, as nearly
as practicable, in addition to all other sums due under this Lease. Should
additional funds be required at any time, Lessee shall pay the same to Lessor on
demand. Lessee shall advise Lessor of all taxes and insurance bills which are
due and shall cooperate fully with Lessor in assuring that the same are paid
timely. Lessor may deposit all impounded funds in accounts insured by any
federal or state agency and may commingle such funds with other funds and
accounts of Lessor. Interest or other gains from such funds, if any, shall be
the sole property of Lessor. In the event of any default by Lessee, Lessor may
apply all impounded funds against any sums due from Lessee to Lessor. Lessor
shall give to Lessee an annual accounting showing all credits and debits to and
from such impounded funds received from Lessee.
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13. PAYMENT OF RENTAL AND OTHER SUMS. All rental and other sums which Lessee is
required to pay hereunder shall be the unconditional obligation of Lessee and
shall be payable in full when due without any setoff, abatement, deferment,
deduction or counterclaim whatsoever. Upon execution of this Lease, Lessee shall
upon Lender's request establish arrangements whereby payments of the Base
Monthly Rental and impound payments, if any, are transferred by Automated
Clearing House Debit directly from Lessee's bank account to such account as
Lender may designate, provided, however, that Lender shall immediately refund to
Lessor the difference between the amount received by Lender hereunder and any
amounts required to be paid by Lessor to Lender pursuant to the Loan Documents.
Any delinquent payment (that is, any payment not made within five calendar days
after the date when due) shall, in addition to any other remedy of Lessor, incur
a late charge of 5% (which late charge is intended to compensate Lessor for the
cost of handling and processing such delinquent payment and should not be
considered interest) and bear interest at the Default Rate, such interest to be
computed from and including the date such payment was due through and including
the date of the payment; provided, however, in no event shall Lessee be
obligated to pay a sum of late charge and interest higher than the maximum legal
rate then in effect.
14. USE. Lessee shall occupy the Property promptly following the Effective Date
and, except during periods when the Property is untenantable by reason of fire
or other casualty or condemnation (provided, however, during all such periods
while the Property is untenantable, Lessee shall strictly comply with the terms
and conditions of Section 20 of this Lease).
Lessee shall not, by itself or through any assignment, sublease or
other type of transfer, convert the Property to a use other than a Permitted
Facility during the Lease Term without Lessor's consent, which consent shall not
be unreasonably withheld or delayed. Lessor may consider any or all of the
following in determining whether to grant its consent, without being deemed to
be unreasonable: (i) whether the rental paid to Lessor would be equal to or
greater than the anticipated rental assuming continued existing use, (ii)
whether the proposed rental to be paid to Lessor is reasonable considering the
converted use of the Property and the customary rental prevailing in the
community for such use, (iii) whether the converted use will be consistent with
the highest and best use of the Property, and (iv) whether the converted use
will increase Lessor's risks or decrease the value of the Property.
15. COMPLIANCE WITH LAWS, RESTRICTIONS, COVENANTS AND ENCUMBRANCES.
(a) Lessee's use and occupation of the Property, and the condition
thereof, shall, at Lessee's sole cost and expense, comply in all material
respects with all Applicable Regulations and all restrictions, covenants and
encumbrances of record with respect to the Property. In addition to the other
requirements of this Section, Lessee shall, at all times throughout the Lease
Term, comply with all Applicable Regulations, including, without limitation, in
connection with any maintenance, repairs and replacements of the Property
undertaken by Lessee as required by Section 16 of this Lease.
(b) Lessee will not permit any act or condition to exist on or about
the Property which will increase any insurance rate thereon, except when such
acts are required in the normal course of business and Lessee shall pay for such
increase.
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(c) Without limiting the generality of the other provisions of this
Section, Lessee agrees that it shall be responsible for complying in all
respects with and causing compliance in all respects with the Americans with
Disabilities Act of 1990, as such act may be amended from time to time, and all
regulations promulgated thereunder (collectively, the "ADA"), as it affects the
Property, including, but not limited to, making required "readily achievable"
changes to remove any architectural or communications barriers, and providing
auxiliary aides and services within the Property. Lessee further agrees that any
and all alterations made to the Property during the Lease Term will comply with
the requirements of the ADA. All plans for alterations which must be submitted
to Lessor under the provisions of Section 17 must include a statement from a
licensed architect or engineer certifying that they have reviewed the plans, and
that the plans substantially comply with all applicable provisions of the ADA.
Any subsequent approval or consent to the plans by Lessor shall not be deemed to
be a representation of Lessor's part that the plans comply with the ADA, which
obligation shall remain with Lessee. Lessee agrees that it will defend,
indemnify and hold harmless the Indemnified Parties from and against any and all
Losses caused by, incurred or resulting from Lessee's failure to comply with its
obligations under this Section.
(d) Lessee represents and warrants to Lessor, as of the Effective
Date, to Lessee's knowledge and except as disclosed in the Questionnaires:
(i) Neither the Property nor Lessee are in violation of, or
subject to, any pending or threatened investigation or inquiry by any
Governmental Authority or to any remedial obligations under any
Environmental Laws, and this representation and warranty would continue to
be true and correct following disclosure to the applicable Governmental
Authorities of all relevant facts, conditions and circumstances, if any,
pertaining to the Property.
(ii) No permits, licenses or similar authorizations to
construct, occupy, operate or use any buildings, improvements, fixtures
and equipment forming a part of the Property by reason of any
Environmental Laws have been obtained or are required to be obtained,
except for such permits, licenses or authorizations the failure of which
to obtain could reasonably be expected to have a Material Adverse Effect.
(iii) No Hazardous Materials have been used, handled,
manufactured, generated, produced, stored, treated, processed,
transferred, disposed of or otherwise Released in, on, under, from or
about the Property, except in De Minimis Amounts.
(iv) The Property does not contain Hazardous Materials, other
than in De Minimis Amounts, or underground storage tanks.
(v) There is no threat of any Release migrating to the
Property.
(vi) There is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in connection
with the Property which could reasonably be expected to have a material
adverse effect.
(vii) Lessee has not received any written or oral notice or
other communication from any person or entity (including but not limited
to a Governmental
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Authority) relating to Hazardous Materials or Remediation thereof, of
possible liability of any person or entity pursuant to any Environmental
Law, other environmental conditions in connection with the Property, or
any actual or potential administrative or judicial proceedings in
connection with any of the foregoing, in each case with respect to a
condition or event that could reasonably be expected to have a Material
Adverse Effect.
(viii) Lessee has truthfully and fully provided to Lessor, in
writing, any and all information relating to environmental conditions in,
on, under or from the Property that is known to Lessee and that is
contained in Lessee's files and records, including but not limited to any
reports relating to Hazardous Materials in, on, under to or from the
Property.
(ix) All uses and operations on or of the Property, whether by
Lessee or any other person or entity, have been in compliance with all
Environmental Laws and permits issued pursuant thereto, except for such
non-compliance which could not reasonably be expected to have a Material
Adverse Effect; there have been no Releases in, on, under to or from the
Property, except in De Minimis Amounts; there are no Hazardous Materials
in, on, or under or to Lessee's knowledge, migrating to the Property,
except in De Minimis Amounts; and the Property has been kept free and
clear of all liens and other encumbrances imposed pursuant to any
Environmental Law (the "Environmental Liens"). Lessee has not allowed any
tenant or other user of the Property to do any act that materially
increased the dangers to human health or the environment, posed an
unreasonable risk of harm to any person or entity (whether on or off the
Property), impaired the value of the Property, is contrary to any
requirement of any insurer, constituted a public or private nuisance,
constituted waste, or violated any covenant, condition, agreement or
easement applicable to the Property.
(e) Lessee covenants to Lessor during the Lease Term that: (i) the
Property shall not be in violation of or subject to any investigation or inquiry
by any Governmental Authority or to any remedial or other obligations under any
Environmental Laws, except for such violations or investigations or inquiries
which relate to Hazardous Materials in De Minimis Amounts which are or will be
handled in accordance with applicable law. If any such investigation or inquiry
is initiated, Lessee shall promptly notify Lessor; (ii) all uses and operations
on or of the Property, whether by Lessee or any other person or entity, shall be
in compliance with all Environmental Laws and permits issued pursuant thereto;
(iii) there shall be no Releases in, on, under or from the Property, except in
De Minimis Amounts; (iv) there shall be no Hazardous Materials in, on, or under
the Property, except in De Minimis Amounts; (v) Lessee shall keep the Property
free and clear of all Environmental Liens, whether due to any act or omission of
Lessee or any other person or entity; (vi) Lessee shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to
subsection (f) below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (vii)
Lessee shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
the Property as may be reasonably requested by Lessor and where there is an
independent reasonable reason to perform such investigation (including but not
limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Lessor the reports and other results thereof, and Lessor and the
other Indemnified
11
Parties shall be entitled to rely on such reports and other results thereof;
(viii) Lessee shall, at its sole cost and expense, comply with all reasonable
written requests of Lessor to (1) reasonably effectuate Remediation of any
condition (including but not limited to a Release) in, on, under or from the
Property where such Remediation is required under applicable Environmental Law;
(2) comply with any Environmental Law; (3) comply with any directive from any
Governmental Authority; and (4) take any other reasonable action necessary or
appropriate for protection of human health or the environment where such
Remediation is required under applicable Environmental Law; (ix) Lessee shall
not do or allow any other tenant or other user of the Property to do any act
that materially increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any person or entity (whether on or off the
Property), impairs or may impair the value of the Property, is contrary to any
requirement of any insurer or Lender, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (x) Lessee shall immediately notify Lessor in
writing of (A) any presence of Releases or Threatened Releases in, on, under,
from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to any of the Property; (C) any actual
Environmental Lien; (D) any required or proposed Remediation of environmental
conditions relating to the Property; and (E) any written or oral notice or other
communication of which Lessee becomes aware from any source whatsoever
(including but not limited to a Governmental Authority) relating in any way to
Hazardous Materials or Remediation thereof, possible liability of any person or
entity pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with anything referred to in this Section.
(f) Lessor, Lender and any other person or entity designated by
Lessor, including but not limited to any receiver, any representative of a
Governmental Authority, and any environmental consultant, shall have the right,
after five Business Days' prior written notice to Lessee (except that in the
event of an emergency no such prior notice shall be required) but not the
obligation, to enter upon the Property at all reasonable times (including,
without limitation, in connection with any Participation or Transfer or in
connection with a proposed sale or conveyance of the Property or a proposed
financing or refinancing secured by the Property or in connection with the
exercise of any remedies set forth in this Lease, the Mortgages or the other
Loan Documents, as applicable) to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in the sole and absolute discretion of the party conducting the
assessment but which events shall be reasonable and in proportion to the
environmental conditions at the property) and taking samples of soil,
groundwater or other water, air, or building materials, and conducting other
invasive testing; provided, however, that any such persons (except in
emergencies) shall use reasonable efforts to undertake any such assessments or
investigations so as to minimize the impact on business operations at the
Property. Lessee shall cooperate with and provide access to Lessor, Lender and
any other person or entity designated by Lessor. Any such assessment and
investigation shall be at Lessee's sole cost and expense.
(g) Lessee shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless each of the Indemnified Parties for, from
and against any and all Losses (excluding Losses suffered by an Indemnified
Party directly arising out of such
12
Indemnified Party's gross negligence or willful misconduct; provided, however,
that the term "gross negligence" shall not include gross negligence imputed as a
matter of law to any of the Indemnified Parties solely by reason of the Lessor's
interest in the Property or Lessor's failure to act in respect of matters which
are or were the obligation of Lessee under this Lease) and costs of Remediation
(whether or not performed voluntarily), engineers' fees, environmental
consultants' fees, and costs of investigation (including but not limited to
sampling, testing, and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas) imposed upon or
incurred by or asserted against any Indemnified Parties, and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (i) any presence of any Hazardous Materials in, on, above, under or
from the Property; (ii) any past or present Release or Threatened Release in,
on, above, under or from the Property; (iii) any activity by Lessee, any person
or entity affiliated with Lessee or any other tenant or other user of the
Property in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from the Property of any
Hazardous Materials at any time located in, under, on or above the Property;
(iv) any activity by Lessee, any person or entity affiliated with Lessee or any
other tenant or other user of the Property in connection with any actual or
proposed Remediation of any Hazardous Materials at any time located in, under,
on or above the Property, whether or not such Remediation is voluntary or
pursuant to court or administrative order, including but not limited to any
removal, remedial or corrective action; (v) any non-compliance or violations of
any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Property or operations thereon, including but not limited to
any failure by Lessee, any person or entity affiliated with or any other tenant
or other user of the Property to comply with any order of any Governmental
Authority in connection with any Environmental Laws; (vi) the imposition,
recording or filing of any Environmental Lien encumbering the Property; (vii)
any administrative processes or proceedings or judicial proceedings in any way
connected with any matter addressed in this Section; (viii) any Remediation
required pursuant to Environmental Laws relating to injury to, destruction of or
loss of natural resources in any way connected with the Property, including but
not limited to costs to investigate and assess such injury, destruction or loss;
(ix) any acts of Lessee, any person or entity affiliated with Lessee or any
other tenant or user of the Property in arranging for disposal or treatment, or
arranging with a transporter for transport for disposal or treatment, of
Hazardous Materials owned or possessed by Lessee, any person or entity
affiliated with Lessee or any other tenant or user of the Property, at any
facility or incineration vessel owned or operated by another person or entity
and containing such or similar Hazardous Materials; (x) any acts of Lessee, any
person or entity affiliated with Lessee or any other tenant or user of the
Property, in accepting any Hazardous Materials for transport to disposal or
treatment facilities, incineration vessels or sites selected by Lessee, any
person or entity affiliated with Lessee or any other tenant or user of the
Property, from which there is a Release, or a Threatened Release of any
Hazardous Materials which causes the incurrence of costs for Remediation; (xi)
any personal injury, wrongful death, or property damage arising under any
statutory or common law or tort law theory, relating to the use or presence of
Hazardous Materials at the Property; and (xii) any misrepresentation or
inaccuracy in any representation or warranty or material breach or failure to
perform any covenants or other obligations pursuant to this Section.
(h) The obligations of Lessee and the rights and remedies of the
Indemnified
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Parties under the foregoing subsections D through G shall survive the
termination, expiration and/or release of this Lease.
16. CONDITION OF PROPERTIES; MAINTENANCE. Lessee, at its own expense, will
maintain all parts of the Property in good repair and sound condition, except
for ordinary wear and tear, and will take all action and will make all
structural and non-structural, foreseen and unforeseen and ordinary and
extraordinary changes and repairs or replacements which may be required to keep
all parts of the Property in good repair and sound condition. Lessee waives any
right to (i) require Lessor to maintain, repair or rebuild all or any part of
the Property or (ii) make repairs at the expense of Lessor, pursuant to any
Applicable Regulations at any time in effect.
17. WASTE; ALTERATIONS AND IMPROVEMENTS. Lessee shall not commit actual or
constructive waste upon the Property. Lessee shall not alter the exterior,
structural, plumbing or electrical elements of the Property in any manner
without the consent of Lessor, which consent shall not be unreasonably withheld,
conditioned or delayed (it being understood and agreed that to the extent Lessor
is required to obtain the approval of Lender with respect to any such
alterations, Lessor shall in no event be deemed to have unreasonably withheld
Lessor's approval thereof if Lender shall not have given its approval if
required); provided, however, Lessee may undertake nonstructural alterations to
the Property costing less than $50,000.00 without Lessor's consent. If Lessor's
consent is required hereunder and Lessor consents to the making of any such
alterations, the same shall be made according to plans and specifications
approved by Lessor and subject to such other conditions as Lessor shall require.
All alterations shall be made by Lessee at its sole expense by licensed
contractors and in accordance with all applicable laws governing such
alterations. Any work at any time commenced by Lessee on the Property shall be
prosecuted diligently to completion, shall be of good workmanship and materials
and shall comply fully with all the terms of this Lease. Upon completion of any
alterations, Lessee shall promptly provide Lessor with (i) evidence of full
payment to all laborers and materialmen contributing to the alterations, (ii) to
the extent Lessor is required to preapprove plans and specifications for such
alterations, an architect's certificate certifying the alterations to have been
completed in conformity with the plans and specifications, (iii) a certificate
of occupancy (if the alterations are of such a nature as would require the
issuance of a certificate of occupancy), and (iv) any other documents or
information reasonably requested by Lessor. Any addition to or alteration of the
Property shall automatically be deemed a part of the Property and belong to
Lessor, and Lessee shall execute and deliver to Lessor such instruments as
Lessor may require to evidence the ownership by Lessor of such addition or
alteration. Lessee shall execute and file or record, as appropriate, a "Notice
of Non-Responsibility," or any equivalent notice permitted under applicable law
in the state where the Property is located.
18. INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold harmless
each of the Indemnified Parties from and against any and all Losses (excluding
Losses suffered by an Indemnified Party arising out of the gross negligence or
willful misconduct of such Indemnified Party; provided, however, that the term
"gross negligence" shall not include gross negligence imputed as a matter of law
to any of the Indemnified Parties solely by reason of the Lessor's interest in
the Property or Lessor's failure to act in respect of matters which are or were
the obligation of Lessee under this Lease) caused by, incurred or resulting from
Lessee's operations of or relating in any manner to the Property, whether
relating to their original design or construction, latent defects, alteration,
maintenance, use by Lessee or any person thereon,
14
supervision or otherwise, or from any breach of, default under, or failure to
perform, any term or provision of this Lease by Lessee, its officers, employees,
agents or other persons, or to which any Indemnified Party is subject because of
Lessor's interest in the Property, including, without limitation, Losses arising
from (1) any accident, injury to or death of any person or loss of or damage to
property occurring in, on or about the Property or portion thereof or on the
adjoining sidewalks, curbs, parking areas, streets or ways, (2) any use, non-use
or condition in, on or about, or possession, alteration, repair, operation,
maintenance or management of, the Property or any portion thereof or on the
adjoining sidewalks, curbs, parking areas, streets or ways, (3) any
representation or warranty made herein by Lessee, in any certificate delivered
in connection herewith or in any other agreement to which Lessee is a party or
pursuant thereto being false or misleading in any material respect as of the
date of such representation or warranty was made, (4) performance of any labor
or services or the furnishing of any materials or other property in respect to
the Property or any portion thereof, (5) any taxes, assessments or other charges
which Lessee is required to pay or cause to be paid under Section 10, (6) any
lien, encumbrance or claim arising on or against the Property or any portion
thereof under any Applicable Regulation or otherwise which Lessee is obligated
hereunder to remove and discharge or cause to be removed or discharged, or the
failure to comply with any Applicable Regulation, (7) the claims of any
invitees, patrons, licensees or subtenants of all or any portion of the Property
or any Person acting through or under Lessee or otherwise acting under or as a
consequence of this Lease or any sublease, (8) any act or omission of Lessee or
their agents, contractors, licensees, subtenants or invitees, and (9) any
contest referred to in Section 9. It is expressly understood and agreed that
Lessee's obligations under this Section shall survive the expiration or earlier
termination of this Lease for any reason.
19. QUIET ENJOYMENT. So long as Lessee shall pay the rental and other sums
herein provided and shall keep and perform all of the terms, covenants and
conditions on its part herein contained, Lessee shall have, subject and
subordinate to Lessor's rights herein, the right to the peaceful and quiet
occupancy of the Property. Notwithstanding the foregoing, however, in no event
shall Lessee be entitled to bring any action against Lessor to enforce its
rights hereunder if an Event of Default shall have occurred and be continuing.
20. CONDEMNATION OR DESTRUCTION.
(a) In the event of a taking of all or any part of the Property for
any public or quasi-public purpose by any lawful power or authority by exercise
of the right of condemnation or eminent domain or by agreement between Lessor,
Lessee and those authorized to exercise such right ("Taking") or the
commencement of any proceedings or negotiations which might result in a Taking
or any damage to or destruction of the Property or any part thereof (a
"Casualty"), Lessee will promptly give written notice thereof to Lessor,
generally describing the nature and extent of such Taking, proceedings,
negotiations or Casualty and including copies of any documents or notices
received in connection therewith. Thereafter, Lessee shall promptly send Lessor
copies of all correspondence and pleadings relating to any such Taking,
proceedings, negotiations or Casualty. During all periods of time following a
Casualty, Lessee shall ensure that the subject Property is secure and does not
pose any risk of harm to adjoining property owners or occupants or
third-parties.
(b) In the event of (i) a Taking of the whole of the Property, other
than for
15
temporary use, (ii) a Taking of substantially all of the Property (other than
for temporary use) that results in Lessee making a good faith determination that
the restoration and continued use of the remainder of the Property as a
Permitted Facility would be uneconomic (each of (i) and (ii), a "Total Taking"),
or (iii) a Casualty of substantially all of the Property that results in Lessee
making a good faith determination that the restoration and continued use of the
Property as a Permitted Facility would be uneconomic (a "Total Casualty"),
Lessor shall be entitled to receive the entire award, insurance proceeds or
payment in connection therewith without deduction for any estate vested in
Lessee by this Lease. Lessee hereby expressly assigns to Lessor all of its
right, title and interest in and to every such award, insurance proceeds or
payment and agrees that Lessee shall not be entitled to any award, insurance
proceeds or payment for the value of Lessee's leasehold interest in this Lease.
Lessee shall be entitled to claim and receive any award or payment from the
condemning authority expressly granted for the taking of Personalty, the
interruption of its business and moving expenses, but only if such claim or
award does not adversely affect or interfere with the prosecution of Lessor's
claim for the Total Taking or otherwise reduce the amount recoverable by Lessor
for the Total Taking. Lessee shall be entitled to claim and receive any
insurance proceeds with respect to the Personalty, the interruption of its
business and moving expenses, but only if such claim or proceeds does not
adversely affect or interfere with the prosecution of Lessor's claim for the
Total Casualty or otherwise reduce the amount recoverable by Lessor for the
Total Casualty.
In the event of a Total Taking or Total Casualty, Lessee shall have
the right to terminate this Lease by notice (the "Termination Notice") given to
Lessor not later than 30 days after the Total Taking or Total Casualty, as
applicable. The Termination Notice must: (i) specify a date on which this Lease
with respect to the Property shall terminate, which date shall be the last day
of a calendar month occurring not earlier than 120 days and not later than 150
days after the delivery of such notice (the "Early Termination Date"); (ii)
contain a certificate executed by the president, chief financial officer or
treasurer of Lessee which (X) describes the Total Taking or Total Casualty, (Y)
represents and warrants that either the whole of the Property has been taken, or
that substantially all of the Property has been taken and Lessee has determined
in good faith that the restoration and continued use of the remainder of the
Property as a Permitted Facility would be uneconomic, or that substantially all
of the Property has been damaged or destroyed and Lessee has determined in good
faith that the restoration and continued use of the Property as a Permitted
Facility would be uneconomic, and contains a covenant by Lessee that neither
Lessee or any Affiliate of Lessee will use such Property for a period of 2 years
following the Early Termination Date.
(c) In the event of a Taking of all or any part of the Property for
a temporary use ("Temporary Taking"), this Lease shall remain in full force and
effect without any reduction of Base Annual Rental, Additional Rental or any
other sum payable hereunder. Except as provided below, Lessee shall be entitled
to the entire award for a Temporary Taking, whether paid by damages, rent or
otherwise, unless the period of occupation and use by the condemning authorities
shall extend beyond the date of expiration of this Lease, in which case the
award made for such Taking shall be apportioned between Lessor and Lessee as of
the date of such expiration. At the termination of any such Temporary Taking,
Lessee will, at its own cost and expense and pursuant to the terms of Section 17
above, promptly commence and complete the restoration of the Property affected
by such Temporary Taking; provided, however, Lessee shall not be required to
restore such Property if the Lease Term shall expire prior to, or within one
16
year after, the date of termination of such Temporary Taking, and in such event
Lessor shall be entitled to recover the entire award relating to the Temporary
Taking.
(d) In the event of a Taking which is not a Total Taking or a
Temporary Taking ("Partial Taking") or of a Casualty which is not a Total
Casualty (a "Partial Casualty"), all awards, compensation or damages shall be
paid to Lessor, and Lessor shall have the option to (i) terminate this Lease,
provided that, as long as the Mortgage is still outstanding, Lessor shall have
obtained Lender's prior written consent, by notifying Lessee within 60 days
after Lessee gives Lessor notice of such Partial Casualty or that title has
vested in the taking authority or (ii) continue this Lease in effect, which
election may be evidenced by either a notice from Lessor to Lessee or Lessor's
failure to notify Lessee that Lessor has elected to terminate this Lease within
such 60-day period. Lessee shall have a period of 60 days after Lessor's notice
that it has elected to terminate this Lease during which to elect to continue
this Lease on the terms herein provided. If Lessor elects to terminate this
Lease and Lessee does not elect to continue this Lease or shall fail during such
60-day period to notify Lessor of Lessee's intent to continue this Lease, then
this Lease shall terminate as of the last day of the month during which such
period expired. Lessee shall then immediately vacate and surrender the Property,
all obligations of either party hereunder shall cease as of the date of
termination (provided, however, Lessee's obligations to the Indemnified Parties
under any indemnification provisions of this Lease (including, without
limitation, Sections 15 and 18) and Lessee's obligations to pay Base Annual
Rental, Additional Rental and all other sums (whether payable to Lessor or a
third party) accruing under this Lease prior to the date of termination shall
survive such termination) and Lessor may retain all such awards, compensation or
damages. If Lessor elects not to terminate this Lease, or if Lessor elects to
terminate this Lease but Lessee elects to continue this Lease, then this Lease
shall continue in full force and effect on the following terms: (i) all Base
Annual Rental, Additional Rental and other sums and obligations due under this
Lease shall continue unabated, and (ii) Lessee shall promptly commence and
diligently prosecute restoration of the Property to the same condition, as
nearly as practicable, as prior to such Partial Taking or Partial Casualty as
approved by Lessor. Subject to reasonable conditions for disbursement imposed by
Lessor, Lessor shall promptly make available in installments as restoration
progresses an amount up to but not exceeding the amount of any award,
compensation or damages received by Lessor after deducting all costs, fees and
expenses incident to the collection thereof, including all costs and expenses
incurred by Lessor and Lender in connection therewith (the "Net Restoration
Amount"), upon request of Lessee accompanied by evidence reasonably satisfactory
to Lessor that such amount has been paid or is due and payable and is properly a
part of such costs and that Lessee has complied with the terms of Section 17
above in connection with the restoration. Prior to the disbursement of any
portion of the Net Restoration Amount with respect to a Partial Casualty, Lessee
shall provide evidence reasonably satisfactory to Lessor of the payment of
restoration expenses by Lessee up to the amount of the insurance deductible
applicable to such Partial Casualty. Lessor shall be entitled to keep any
portion of the Net Restoration Amount which may be in excess of the cost of
restoration, subject to the rights of Lender under the Loan Documents, and
Lessee shall bear all additional costs, fees and expenses of such restoration in
excess of the Net Restoration Amount. If this Lease is terminated as a result of
a Partial Casualty, simultaneously with such termination Lessee shall pay Lessor
an amount equal to the insurance deductible applicable to such Partial Casualty.
(e) Any loss under any property damage insurance required to be
maintained
17
by Lessee shall be adjusted by Lessor and Lessee. Any award relating to a Total
Taking or a Partial Taking shall be adjusted by Lessor or, at Lessor's election,
Lessee. Notwithstanding the foregoing or any other provisions of this Section to
the contrary, if at the time of any Taking or any Casualty or at any time
thereafter Lessee shall be in default under this Lease and such default shall be
continuing, Lessor is hereby authorized and empowered but shall not be
obligated, in the name and on behalf of Lessee and otherwise, to file and
prosecute Lessee's claim, if any, for an award on account of such Taking or for
insurance proceeds on account of such Casualty and to collect such award or
proceeds and apply the same, after deducting all costs, fees and expenses
incident to the collection thereof, to the curing of such default and any other
then existing default under this Lease and/or to the payment of any amounts owed
by Lessee to Lessor under this Lease, in such order, priority and proportions as
Lessor in its discretion shall deem proper.
(f) Notwithstanding the foregoing, nothing in this Section 20 shall
be construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and characterizations set forth in Lease.
21. INSPECTION. Lessor and its authorized representatives shall have the right,
upon giving reasonable advance notice, to enter the Property or any part thereof
at reasonable times in order to inspect the same and make photographic or other
evidence concerning Lessee's compliance with the terms of this Lease or in order
to show the Property to prospective purchasers and lenders. Lessee hereby waives
any claim for damages for any injury or inconvenience to or interference with
Lessee's business, any loss of occupancy or quiet enjoyment of the Property and
any other loss occasioned by such entry so long as Lessor shall have used
reasonable efforts not to unreasonably interrupt Lessee's normal business
operations. Lessee shall keep and maintain at the Property or Lessee's corporate
headquarters full, complete and appropriate books of account and records of
Lessee's business relating to the Property in accordance with GAAP. Lessee's
books and records shall be open for inspection at reasonable times and upon
reasonable notice by Lessor, Lender and their respective auditors or other
authorized representatives and shall show such information as is reasonably
necessary to determine compliance with Lessor's obligations under the Loan
Documents.
22. DEFAULT, REMEDIES AND MEASURE OF DAMAGES.
(a) Each of the following shall be an event of default under this
Lease (each, an "Event of Default"):
(i) If any representation or warranty of Lessee set forth in
this Lease is false as and when made in any material respect, or if Lessee
renders any statement or account which is false as and when made in any
material respect;
(ii) If any rent or other monetary sum due under this Lease
is not paid within five days from the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, Lessor shall
not be entitled to exercise its remedies set forth below unless and until
Lessor shall have given Lessee written notice thereof and a period of five
days from the delivery of such written notice shall have elapsed without
such Event of Default being cured;
18
(iii) If Lessee fails to pay, prior to delinquency, any taxes,
assessments or other charges, the failure of which to pay will result in
the imposition of a lien against the Property or the rental or other
payments due under this Lease or a claim against Lessor, unless Lessee is
contesting such taxes, assessments or other charges in accordance with the
provisions of Section 10 of this Lease; provided, however, notwithstanding
the occurrence of such an Event of Default, Lessor shall not be entitled
to exercise its remedies set forth below unless and until Lessor shall
have given Lessee written notice thereof and a period of 5 days from the
delivery of such written notice shall have elapsed without such Event of
Default being cured;
(iv) If Lessee becomes insolvent within the meaning of the
Code, files or notifies Lessor that it intends to file a petition under
the Code, initiates a proceeding under any similar law or statute relating
to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts (collectively, hereinafter, an "Action"), becomes the subject of
either a petition under the Code or an Action which is not dissolved
within 90 days after filing, or is not generally paying its debts as the
same become due;
(v) If Lessee vacates or abandons the Property other than in
accordance with the provisions of Section 15 of this Lease;
(vi) If Lessee fails to observe or perform any of the other
covenants, conditions or obligations of this Lease; provided, however, if
any such failure does not involve the payment of any monetary sum, is not
willful or intentional, does not place any rights or property of Lessor in
immediate jeopardy, and is within the reasonable power of Lessee to
promptly cure after receipt of notice thereof, all as determined by Lessor
in its reasonable discretion, then such failure shall not constitute an
Event of Default hereunder, unless otherwise expressly provided herein,
unless and until Lessor shall have given Lessee notice thereof and a
period of 30 days shall have elapsed, during which period Lessee may
correct or cure such failure, upon failure of which an Event of Default
shall be deemed to have occurred hereunder without further notice or
demand of any kind being required. If such failure cannot reasonably be
cured within such 30 day period, as determined by Lessor in its reasonable
discretion, and Lessee is diligently pursuing a cure of such failure, then
Lessee shall have a reasonable period to cure such failure beyond such 30
day period, which shall in no event exceed 90 days after receiving notice
of such failure from Lessor. If Lessee shall fail to correct or cure such
failure within such 90-day period, an Event of Default shall be deemed to
have occurred hereunder without further notice or demand of any kind being
required;
(vii) If a final, nonappealable judgment is rendered by a
court against Lessee which has a material adverse effect on either the
ability to conduct business at the Property for its intended use or
Lessee's ability to perform its obligations under this Lease, or is in the
amount of $1,000,000.00 or more that is not covered by insurance, and in
either event is not discharged or provision made for such discharge within
60 days from the date of entry thereof; or
(viii) If Lessee shall fail to maintain or cause to be
maintained insurance in accordance with the requirements of Section 12 of
this Lease.
19
(b) Upon the occurrence of an Event of Default, with or without
notice or demand, except the notice prior to default required under certain
circumstances by subsection A. above or such other notice as may be required by
statute and cannot be waived by Lessee (all other notices being hereby waived),
Lessor shall be entitled to exercise, at its option, concurrently, successively,
or in any combination, all remedies available at law or in equity, including
without limitation, any one or more of the following:
(i) To terminate this Lease, whereupon Lessee's right to
possession of the Property shall cease and this Lease, except as to
Lessee's liability, be terminated.
(ii) To reenter and take possession of the Property and, to
the extent permissible, all franchises, licenses, area development
agreements, permits and other rights or privileges of Lessee pertaining to
the use and operation of the Property and to expel Lessee and those
claiming under or through Lessee, without being deemed guilty in any
manner of trespass or becoming liable for any loss or damage resulting
therefrom, without resort to legal or judicial process, procedure or
action. To extent permitted by applicable law, no notice from Lessor
hereunder or under a forcible entry and detainer statute or similar law
shall constitute an election by Lessor to terminate this Lease unless such
notice specifically so states. If Lessee shall, after default, voluntarily
give up possession of the Property to Lessor, deliver to Lessor or its
agents the keys to the Property, or both, such actions shall be deemed to
be in compliance with Lessor's rights and the acceptance thereof by Lessor
or its agents shall not be deemed to constitute a termination of this
Lease. Lessor reserves the right following any reentry and/or reletting to
exercise its right to terminate this Lease by giving Lessee written notice
thereof, in which event this Lease will terminate as specified in said
notice.
(iii) To bring an action against Lessee for any damages
sustained by Lessor or any equitable relief available to Lessor.
(iv) To relet the Property or any part thereof for such term
or terms (including a term which extends beyond the original Lease Term),
at such rentals and upon such other terms as Lessor, in its sole
discretion, may determine, with all proceeds received from such reletting
being applied to the rental and other sums due from Lessee in such order
as Lessor may, in it sole discretion, determine, which other sums include,
without limitation, all repossession costs, brokerage commissions,
attorneys' fees and expenses, employee expenses, alteration, remodeling
and repair costs and expenses of preparing for such reletting.
(v) Lessor shall attempt to mitigate damages in a commercially
reasonable manner. Lessor reserves the right following any reentry and/or
reletting to exercise its right to terminate this Lease by giving Lessee
written notice thereof, in which event this Lease will terminate as
specified in said notice.
(vi) To recover from Lessee all rent and other monetary sums
then due and owing under this Lease; and (y) to accelerate and recover
from Lessee the present value (discounted at the rate of 6% per annum) of
all rent and other monetary sums scheduled to become due and owing under
this Lease after the date of such breach for the
20
entire original scheduled Lease Term, provided, however, in no event shall
such recovery be less than the prepayment charges corresponding to the
Property.
(vii) To recover from Lessee all costs and expenses, including
reasonable attorneys' fees, court costs, expert witness fees, costs of
tests and analyses, travel and accommodation expenses, deposition and
trial transcripts, copies and other similar costs and fees, paid or
incurred by Lessor as a result of such breach, regardless of whether or
not legal proceedings are actually commenced.
(viii) To immediately or at any time thereafter, and with or
without notice, at Lessor's sole option but without any obligation to do
so, correct such breach or default and charge Lessee all costs and
expenses incurred by Lessor therein. Any sum or sums so paid by Lessor,
together with interest at the Default Rate, shall be deemed to be
Additional Rental hereunder and shall be immediately due from Lessee to
Lessor. Any such acts by Lessor in correcting Lessee's breaches or
defaults hereunder shall not be deemed to cure said breaches or defaults
or constitute any waiver of Lessor's right to exercise any or all remedies
set forth herein.
(ix) To immediately or at any time thereafter, and with or
without notice, except as required herein, set off any money of Lessee
held by Lessor under this Lease against any sum owing by Lessee hereunder.
(x) To seek any equitable relief available to Lessor,
including, without limitation, the right of specific performance.
All powers and remedies given by this Section to Lessor, subject to
applicable law, shall be cumulative and not exclusive of one another or of any
other right or remedy or of any other powers and remedies available to Lessor
under this Lease, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements of Lessee contained in
this Lease, and no delay or omission of Lessor to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any other or
subsequent Event of Default or impair any rights or remedies consequent thereto.
Every power and remedy given by this Section or by law to Lessor may be
exercised from time to time, and as often as may be deemed expedient, by Lessor,
subject at all times to Lessor's right in its sole judgment to discontinue any
work commenced by Lessor or change any course of action undertaken by Lessor.
If Lessee shall fail to observe or perform any of its obligations
under this Lease or in the event of an emergency, then, without waiving any
Event of Default which may result from such failure or emergency, Lessor may,
but without any obligation to do so, take all actions, including, without
limitation, entry upon the Property to perform Lessee's obligations, immediately
and without notice in the case of an emergency and upon five days written notice
to Lessee in all other cases. All expenses incurred by Lessor in connection with
performing such obligations, including, without limitation, reasonable
attorneys' fees and expenses, together with interest at the Default Rate from
the date any such expenses were incurred by Lessor until the date of payment by
Lessee, shall constitute Additional Rental and shall be paid by Lessee to Lessor
upon demand.
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23. LIENS; MORTGAGES, SUBORDINATION, NONDISTURBANCE AND ATTORNMENT. Lessor's
interest in this Lease and/or the Property shall not be subordinate to any liens
or encumbrances placed upon the Property by or resulting from any act of Lessee,
and nothing herein contained shall be construed to require such subordination by
Lessor. Lessee shall keep the Property free from any liens for work performed,
materials furnished or obligations incurred by Lessee. NOTICE IS HEREBY GIVEN
THAT LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE,
DEED OF TRUST, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART
OF THE PROPERTY OR LESSEE'S LEASEHOLD INTEREST THEREIN OR THE PERSONALTY, AND
ANY SUCH PURPORTED TRANSACTION WHICH IS NOT APPROVED BY LESSOR SHALL BE VOID.
FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE DEEMED A TORTIOUS
INTERFERENCE WITH LESSOR'S RELATIONSHIP WITH LESSEE AND LESSOR'S OWNERSHIP OF
THE PROPERTY. NOTWITHSTANDING THE FOREGOING, LESSEE MAY PLACE OR ALLOW TO BE
PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, SECURITY INTEREST OR OTHER ENCUMBRANCE
OF ANY KIND UPON ALL OR ANY PART OF LESSEE'S LEASEHOLD INTEREST OR THE
PERSONALTY TO SECURE OBLIGATIONS OF LESSEE OR ITS AFFILIATES TO INSTITUTIONAL
LENDERS FOR INDEBTEDNESS AND OTHER OBLIGATIONS OR ANY REFINANCING THEREOF
("INSTITUTIONAL LOANS").
If any landlord, mortgagee, receiver, Lender or other secured party
elects to have this Lease and the interest of Lessee hereunder be superior to
any of the Mortgages or any such ground lease, mortgage, trust deed or deed to
secure debt and evidences such election by notice given to Lessee, then this
Lease and the interest of Lessee hereunder shall be deemed superior to any such
Mortgage, ground lease, mortgage, trust deed or deed to secure debt, whether
this Lease was executed before or after such Mortgage, ground lease, mortgage,
trust deed or deed to secure debt and in that event such landlord, mortgagee,
receiver, Lender or other secured party shall have the same rights with respect
to this Lease as if it had been executed and delivered prior to the execution
and delivery of such Mortgage, ground lease, mortgage, trust deed or deed to
secure debt and had been assigned to such landlord, mortgagee, receiver, Lender
or other secured party.
Although the foregoing provisions shall be self-operative and no future
instrument of subordination shall be required, upon request by Lessor, Lessee
shall execute and deliver whatever instruments may be required for such
purposes, and in the event Lessee fails so to do within 10 days after demand,
Lessee does hereby make, constitute and irrevocably appoint Lessor as its agent
and attorney-in-fact and in its name, place and stead so to do, which
appointment shall be deemed coupled with an interest.
In the event any purchaser or assignee of Lender at a foreclosure sale
acquires title to the Property, or in the event Lender or any assignee otherwise
succeeds to the rights of Lessor as landlord under this Lease, Lessee shall
attorn to Lender or such purchaser or assignee, as the case may be (a "Successor
Lessor"), and recognize the Successor Lessor as lessor under this Lease, and
this Lease shall continue in full force and effect as a direct lease between the
Successor Lessor and Lessee, provided that the Successor Lessor shall only be
liable for any obligations of the lessor under this Lease which accrue after the
date that such Successor Lessor acquires title.
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The foregoing provision shall be self operative and effective without the
execution of any further instruments.
24. ESTOPPEL CERTIFICATE.
(a) At any time, but not more often than twice every 12 months, and
from time to time, Lessee shall, promptly and in no event later than 10 days
after a request from Lessor or Lender, execute, acknowledge and deliver to
Lessor or Lender a certificate in the form supplied by Lessor, Lender or any
present or proposed mortgagee or purchaser designated by Lessor, certifying: (i)
that Lessee has accepted the Property (or, if Lessee has not done so, that
Lessee has not accepted the Property, and specifying the reasons therefor); (ii)
that this Lease is in full force and effect and has not been modified (or if
modified, setting forth all modifications), or, if this Lease is not in full
force and effect, the certificate shall so specify the reasons therefor; (iii)
the commencement and expiration dates of the Lease Term, including the terms of
any extension options of Lessee; (iv) the date to which the rentals have been
paid under this Lease and the amount thereof then payable; (v) whether there are
then any existing defaults by Lessor in the performance of its obligations under
this Lease, and, if there are any such defaults, specifying the nature and
extent thereof; (vi) that no notice has been received by Lessee of any default
under this Lease which has not been cured, except as to defaults specified in
the certificate; (vii) the capacity of the person executing such certificate,
and that such person is duly authorized to execute the same on behalf of Lessee;
(viii) that neither Lessor nor Lender has actual involvement in the management
or control of decision making related to the operational aspects or the
day-to-day operations of the Property; and (ix) any other information reasonably
requested by Lessor, Lender or such present or proposed mortgagee or purchaser.
(b) If Lessee shall fail or refuse to sign a certificate in
accordance with the provisions of this Section within 10 days following a
written request by Lessor, Lessee irrevocably constitutes and appoints Lessor as
its attorney-in-fact to execute and deliver the certificate to any such third
party, it being stipulated that such power of attorney is coupled with an
interest and is irrevocable and binding; provided, however, that Lessor's
execution and delivery of such certificate on behalf of Lessee shall not cure
any default arising by reason of Lessee's failure to execute and deliver such
certificate.
25. ASSIGNMENT; SUBLETTING.
(a) Lessor shall have the right to sell or convey all, but not less
than all, of the Property or to assign its right, title and interest as Lessor
under this Lease in whole, but not in part. In the event of any such sale or
assignment other than a security assignment, provided Lessee receives written
notice that such purchaser or assignee has assumed all of Lessor's obligations
under this Lease, Lessee shall attorn to such purchaser or assignee and Lessor
shall be relieved, from and after the date of such transfer or conveyance, of
liability for the performance of any obligation of Lessor contained herein,
except for obligations or liabilities accrued prior to such assignment or sale.
(b) Lessee acknowledges that Lessor has relied both on the business
experience and creditworthiness of Lessee a and upon the particular purposes for
which Lessee a intend to use the Property in entering into this Lease. Without
the prior written consent of Lessor
23
which will not be unreasonably withheld and except as provided below: (i) except
as provided in Section 23, Lessee shall not assign, transfer or convey this
Lease or any interest therein, whether by operation of law or otherwise; and
(ii) Lessee shall not sublet or license the use of all or any part of the
Property provided, however, in the event of a foreclosure of any leasehold
mortgage, a substitute Lessee may be designated by Lessee's institutional Lender
without the consent of Lessor or any Substitute Lessor. Nothing contained herein
shall limit any assignment, pledge or transfer of any stock ownership interest
in Leasee, and nothing shall limit the transferability of interests in the
Lessee.
(c) Notwithstanding the foregoing, Lessee shall have the right to
sublease the Property, without the prior written consent of Lessor or Lender, if
the following conditions are satisfied:
(i) no Event of Default shall have occurred and be continuing
under this Lease as of the effective date of such sublease;
(ii) any such sublease shall be subordinate to this Lease and
the Mortgage corresponding to the Property to which such sublease relates;
(iii) Lessee shall remain liable under this Lease
notwithstanding such sublease; and
(iv) the Property subject to such subleases shall be used as a
Permitted Facility and shall otherwise be operated and maintained in
accordance with the terms and conditions of this Lease.
Lessee shall not have the right to sublease the Property if the square footage
of the portion of the Property to be subleased event exceeds 20% of the total
square footage of the Property, unless the consent of the Lender is obtained.
26. NOTICES. All notices, consents, approvals or other instruments required or
permitted to be given by either party pursuant to this Lease shall be in writing
and given by (i) hand delivery, (ii) facsimile, (iii) express overnight delivery
service or (iv) certified or registered mail, return receipt requested, and
shall be deemed to have been delivered upon (a) receipt, if hand delivered, (b)
transmission, if delivered by facsimile, (c) the next Business Day, if delivered
by express overnight delivery service, or (d) the third Business Day following
the day of deposit of such notice with the United States Postal Service, if sent
by certified or registered mail, return receipt requested. Notices shall be
provided to the parties and addresses (or facsimile numbers, as applicable)
specified below:
If to Lessee: Mercury Air Group, Inc.
0000 XxXxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Lessor: CFK Realty Partners, LLC
00
x/x Xxxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above. No such notices, consents, approvals or other communications
shall be valid unless Lender receives a duplicate original thereof at the
following address:
General Electric Capital Business Asset Funding Corporation
00000 XX 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone:
or to such other address or such other person as Lender may from time to time
specify to Lessor and Lessee in a notice delivered in the manner provided above.
27. HOLDING OVER. If Lessee remains in possession of the Property after the
expiration of the term hereof, Lessee, at Lessor's option and within Lessor's
sole discretion, may be deemed a tenant on a month-to-month basis and shall
continue to pay rentals and other sums in the amounts herein provided, except
that the Base Monthly Rental shall be increased by 150%, and to comply with all
the terms of this Lease; provided that nothing herein nor the acceptance of rent
by Lessor shall be deemed a consent to such holding over. Lessee shall defend,
indemnify, protect and hold the Indemnified Parties harmless from and against
any and all Losses resulting from Lessee's failure to surrender possession upon
the expiration of the Lease Term, including, without limitation, any claims made
by any succeeding lessee. The terms of this Section 27 shall survive the
expiration of the Lease Term.
28. LANDLORD'S LIEN. Lessor hereby waives any landlord's lien with respect to
Personalty whether arising under any agreement between the Parties hereto or
pursuant to any law, ordinance, regulation or otherwise.
29. REMOVAL OF PERSONALTY. At the expiration of the Lease Term, and if Lessee is
not then in breach hereof, Lessee may remove all Personalty from the Property.
Lessee shall repair any damage caused by such removal and shall leave the
Property broom clean and in good and working condition and repair inside and
out. Any property of Lessee left on the Property on the tenth day following the
expiration of the Lease Term shall, at Lessor's option, automatically and
immediately become the property of Lessor.
30. FINANCIAL STATEMENTS. Within 45 days after the end of each fiscal quarter
and within 120 days after the end of each fiscal year of Lessee, Lessee shall
deliver to Lessor and Lender (i) complete financial statements of Lessee
including a balance sheet, profit and loss
25
statement, statement of cash flows and all other related schedules for the
fiscal period then ended; and (ii) income statements for the business at the
Property. All such financial statements shall be prepared in accordance with
GAAP and shall be certified to be accurate and complete by Lessee (or the
Treasurer or other appropriate officer of Lessee). Lessee understands that
Lessor and Lender will rely upon such financial statements and Lessee represents
that such reliance is reasonable. In the event that Lessee's property and
business at the Property is ordinarily consolidated with other business for
financial statement purposes, such financial statements shall be prepared on a
consolidated basis showing separately the sales, profits and losses, assets and
liabilities pertaining to the Property with the basis for allocation of overhead
of other charges being clearly set forth. The financial statements delivered to
Lessor and Lender need not be audited, but Lessee shall deliver to Lessor and
Lender copies of any audited financial statements of Lessee which may be
prepared, as soon as they are available.
31. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes, lockouts,
acts of God, enemy or hostile governmental action, civil commotion, fire or
other casualty beyond the control of the party obligated to perform shall excuse
the performance by such party for a period equal to any such prevention, delay
or stoppage, except the obligations imposed with regard to rental and other
monies to be paid by Lessee pursuant to this Lease and any indemnification
obligations imposed upon Lessee under this Lease.
32. TIME IS OF THE ESSENCE. Time is of the essence with respect to each and
every provision of this Lease in which time is a factor.
33. LESSOR'S LIABILITY. Notwithstanding anything to the contrary provided in
this Lease, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Lease by Lessor, that (i) there
shall be absolutely no personal liability on the part of Lessor, its successors
or assigns and the trustees, members, managers, partners, shareholders,
officers, directors, employees and agents of Lessor and its successors or
assigns, to Lessee with respect to any of the terms, covenants and conditions of
this Lease, (ii) Lessee waives all claims, demands and causes of action against
the trustees, members, managers, partners, shareholders, officers, directors,
employees and agents of Lessor and its successors or assigns in the event of any
breach by Lessor of any of the terms, covenants and conditions of this Lease to
be performed by Lessor, and (iii) Lessee shall look solely to the Property for
the satisfaction of each and every remedy of Lessee in the event of any breach
by Lessor of any of the terms, covenants and conditions of this Lease to be
performed by Lessor, or any other matter in connection with this Lease or the
Property, such exculpation of liability to be absolute and without any exception
whatsoever.
34. CONSENT OF LESSOR.
(a) Unless specified otherwise herein, Lessor's consent to any
request of Lessee may be conditioned or withheld in Lessor's sole discretion.
Lessor shall have no liability for damages resulting from Lessor's failure to
give any consent, approval or instruction reserved to Lessor, Lessee's sole
remedy in any such event being an action for injunctive relief.
(b) It is understood and agreed that to the extent Lessor is
required to obtain the consent, approval, agreement or waiver of Lender with
respect to a matter for which Lessor's
26
approval has been requested under this Lease, Lessor shall in no event be deemed
to have unreasonably withheld Lessor's consent, approval, agreement or waiver
thereof if Lender shall not have given its approval if required.
35. WAIVER AND AMENDMENT. No provision of this Lease shall be deemed waived or
amended except by a written instrument unambiguously setting forth the matter
waived or amended and signed by the party against which enforcement of such
waiver or amendment is sought. Waiver of any matter shall not be deemed a waiver
of the same or any other matter on any future occasion. No acceptance by Lessor
of an amount less than the monthly rent and other payments stipulated to be due
under this Lease shall be deemed to be other than a payment on account of the
earliest such rent or other payments then due or in arrears nor shall any
endorsement or statement on any check or letter accompanying any such payment be
deemed a waiver of Lessor's right to collect any unpaid amounts or an accord and
satisfaction.
36. SUCCESSORS BOUND. Except as otherwise specifically provided herein, the
terms, covenants and conditions contained in this Lease shall bind and inure to
the benefit of the respective heirs, successors, executors, administrators and
assigns of each of the parties hereto.
37. NO MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, shall not result in a merger of Lessor's and
Lessee's estates, and shall, at the option of Lessor, either terminate any or
all existing subleases or subtenancies, or operate as an assignment to Lessor of
any or all of such subleases or subtenancies.
38. CAPTIONS. Captions are used throughout this Lease for convenience of
reference only and shall not be considered in any manner in the construction or
interpretation hereof.
39. SEVERABILITY. The provisions of this Lease shall be deemed severable. If any
part of this Lease shall be held unenforceable by any court of competent
jurisdiction, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
40. CHARACTERIZATION.
(a) It is the intent of the parties hereto that the business
relationship created by this Lease and any Lease related documents is solely
that of a long-term commercial lease between landlord and tenant and has been
entered into by both parties in reliance upon the economic and legal bargains
contained herein. None of the agreements contained herein, is intended, nor
shall the same be deemed or construed, to create a partnership between Lessor
and Lessee, to make them joint venturers, to make Lessee an agent, legal
representative, partner, subsidiary or employee of Lessor, nor to make Lessor in
any way responsible for the debts, obligations or losses of Lessee.
(b) Lessor and Lessee acknowledge and warrant to each other that
each has been represented by independent counsel and has executed this Lease
after being fully advised by said counsel as to its effect and significance.
This Lease shall be interpreted and construed in a fair and impartial manner
without regard to such factors as the party which prepared the
27
instrument, the relative bargaining powers of the parties or the domicile of any
party. Whenever in this Lease any words of obligation or duty are used, such
words or expressions shall have the same force and effect as though made in the
form of a covenant.
41. EASEMENTS. During the Lease Term Lessor shall have the right to grant
utility easements on, over, under and above the Property without the prior
consent of Lessee, provided that such easements will not materially interfere
with Lessee's.
42. BANKRUPTCY.
(a) As a material inducement to Lessor executing this Lease, Lessee
acknowledges and agrees that Lessor is relying upon (i) the financial condition
and specific operating experience of Lessee and Lessee's obligation to use the
Property specifically in accordance with system-wide requirements imposed from
time to time on Permitted Facilities, (ii) Lessee's timely performance of all of
its obligations under this Lease notwithstanding the entry of an order for
relief under the Code for Lessee and (iii) all defaults under this Lease being
cured promptly and this Lease being assumed within 60 days of any order for
relief entered under the Code for Lessee, or this Lease being rejected within
such 60 day period and the Property surrendered to Lessor.
(b) Accordingly, in consideration of the mutual covenants contained
in this Lease and for other good and valuable consideration, Lessee hereby
agrees that:
(i) All obligations that accrue under this Lease (including
the obligation to pay rent), from and after the date that an Action is
commenced shall be timely performed exactly as provided in this Lease and
any failure to so perform shall be harmful and prejudicial to Lessor;
(ii) Any and all obligations under this Lease that become due
from and after the date that an Action is commenced and that are not paid
as required by this Lease shall, in the amount of such rents, constitute
administrative expense claims allowable under the Code with priority of
payment at least equal to that of any other actual and necessary expenses
incurred after the commencement of the Action;
(iii) Any extension of the time period within which Lessee may
assume or reject this Lease without an obligation to cause all obligations
coming due under this Lease from and after the date that an Action is
commenced to be performed as and when required under this Lease shall be
harmful and prejudicial to Lessor;
(iv) Any time period designated as the period within which
Lessee must cure all defaults and compensate Lessor for all pecuniary
losses which extends beyond the date of assumption of this Lease shall be
harmful and prejudicial to Lessor;
(v) Any assignment of this Lease must result in all terms and
conditions of this Lease being assumed by the assignee without alteration
or amendment, and any assignment which results in an amendment or
alteration of the terms and conditions of this Lease without the express
written consent of Lessor shall be harmful and prejudicial to Lessor;
28
(vi) Any proposed assignment of this Lease to an assignee that
does not possess financial condition, operating performance and experience
characteristics equal to or better than the financial condition, operating
performance and experience of Lessee as of the Effective Date shall be
harmful and prejudicial to Lessor;
(vii) The rejection (or deemed rejection) of this Lease for
any reason whatsoever shall constitute cause for immediate relief from the
automatic stay provisions of the Code, and Lessee stipulates that such
automatic stay shall be lifted immediately and possession of the Property
will be delivered to Lessor immediately without the necessity of any
further action by Lessor; and
(viii) Assumption or rejection of this Lease shall be (a) in
its entirety and (b) in strict accordance with the specific terms and
conditions of this Lease.
(c) No provision of this Lease shall be deemed a waiver of Lessor's
rights or remedies under the Code or applicable law to oppose any assumption
and/or assignment of this Lease, to require timely performance of Lessee's
obligations under this Lease, or to regain possession of the Property as a
result of the failure of Lessee to comply with the terms and conditions of this
Lease or the Code.
(d) Notwithstanding anything in this Lease to the contrary, all
amounts payable by Lessee to or on behalf of Lessor under this Lease, whether or
not expressly denominated as such, shall constitute "rent" for the purposes of
the Code.
(e) For purposes of this Section addressing the rights and
obligations of Lessor and Lessee in the event that an Action is commenced, the
term "Lessee" shall include Lessee's successor in bankruptcy, whether a trustee,
Lessee as debtor in possession or other responsible person.
43. OTHER DOCUMENTS. Each of the parties agrees to sign such other and further
documents as may be necessary or appropriate to carry out the intentions
expressed in this Lease.
44. ATTORNEYS' FEES. In the event of any judicial or other adversarial
proceeding between the parties concerning this Lease, to the extent permitted by
law, the prevailing party shall be entitled to recover all of its reasonable
attorneys' fees and other costs in addition to any other relief to which it may
be entitled. Lessor shall, upon demand, be entitled to all attorneys' fees and
all other costs incurred in the preparation and service of any notice or demand
hereunder, whether or not a legal action is subsequently commenced. References
in this Lease to Lessor's attorneys' fees and/or costs shall mean both the fees
and costs of independent counsel retained by Lessor with respect to the matter
and the fees and costs incurred in connection with the matter.
45. ENTIRE AGREEMENT. This Lease and any other instruments or agreements
referred to herein, constitute the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations,
warranties or agreements except as herein provided. Without limiting the
foregoing, Lessee specifically acknowledges that neither Lessor nor any agent,
officer, employee or representative of Lessor has made any representation or
warranty regarding the projected profitability of the business to be conducted
on the Property. Furthermore, Lessee acknowledges that Lessor did not prepare or
assist in the preparation of any
29
of the projected figures used by Lessee in analyzing the economic viability and
feasibility of the business to be conducted by Lessee at the Property.
46. FORUM SELECTION; JURISDICTION; VENUE; CHOICE OF LAW. There are substantial
contacts between the parties and the transactions contemplated herein and the
State of California. For purposes of any action or proceeding arising out of
this Lease, the parties hereto expressly submit to the jurisdiction of all
federal and state courts located in the State of California. Lessee and Lessor
consent that they may be served with any process or paper by registered mail or
by personal service within or without the State of California in accordance with
applicable law. Furthermore, Lessee and Lessor waive and agree not to assert in
any such action, suit or proceeding that they are not personally subject to the
jurisdiction of such courts, that the action, suit or proceeding is brought in
an inconvenient forum or that venue of the action, suit or proceeding is
improper. This Lease shall be governed by the internal laws of the State of
California without regard to its principles of conflicts of law.
47. COUNTERPARTS. This Lease may be executed in one or more counterparts, each
of which shall be deemed an original.
48. NO BROKERAGE. Lessor and Lessee represent and warrant to each other that
they have had no conversation or negotiations with any broker concerning the
leasing of the Property. Each of Lessor and Lessee agrees to protect, indemnify,
save and keep harmless the other, against and from all liabilities, claims,
losses, costs, damages and expenses, including attorneys' fees, arising out of,
resulting from or in connection with their breach of the foregoing warranty and
representation.
49. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES. LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF
LESSOR AND LESSEE, LESSEE'S USE OR OCCUPANCY OF THE PROPERTY, AND/OR ANY CLAIM
FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE
PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN
NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, LESSEE AND
LESSOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHTS THEY MAY
HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM EACH
OTHER AND ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR EMPLOYEES OR
ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE
OTHER PARTY OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF
OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED
HERETO. THE WAIVER BY EITHER PARTY
30
OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF
THEIR BARGAIN.
50. RELIANCE BY LENDER. Lessee acknowledges and agrees that Lender may rely on
all of the representations, warranties and covenants set forth in this Lease,
that Lender is an intended third-party beneficiary of such representations,
warranties and covenants and that Lender shall have all rights and remedies
available at law or in equity as a result of a breach of such representations,
warranties and covenants, including to the extent applicable, the right of
subrogation.
51. DOCUMENT REVIEW. In the event Lessee makes any request upon Lessor requiring
Lessor, Lender or the attorneys of Lessor or Lender to review and/or prepare (or
cause to be reviewed and/or prepared) any documents, plans, specifications or
other submissions in connection with or arising out of this Lease, then Lessee
shall reimburse Lessor or its designee promptly upon Lessor's demand therefor
for all out-of-pocket costs and expenses incurred by Lessor in connection with
such review and/or preparation plus a reasonable processing and review fee.
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of
the date first above written.
LESSOR:
CFK REALTY PARTNERS, LLC,
an Illinois limited liability company
By: its manager
By: --------------------------------
Printed Name: Xxxxxx X. Xxxxx, Xx.
Its: Manager
LESSEE:
MERCURY AIR GROUP, INC., a Delaware
corporation
By:
---------------------------------
Printed Name: Xxxxx X. Xxxxxx
Its: Executive Vice President & General Counsel
------------------------------------
Lessee's Tax Identification Number:
11-800515
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POWER OF ATTORNEY
Lessor may act as attorney-in-fact or otherwise on behalf of Lessee
pursuant to Sections 23 and 24of this Lease. This power of attorney is coupled
with an interest, is durable and is not affected by subsequent disability or
incapacity of the principal or lapse of time.
/s/ /s/
--------------------- ---------------------
Witness Lessee
STATE OF CALIFORNIA ]
] SS.
COUNTY OF _______ ]
The foregoing instrument was acknowledged before me on _______________ by
_________________, a member of CFK REALTY PARTNERS, LLC, an Illinois limited
liability company, on behalf of the limited liability company.
/s/
------------------
Notary Public
My Commission Expires:
STATE OF CALIFORNIA ]
] SS.
COUNTY OF ___________ ]
The foregoing instrument was acknowledged before me on _____________ by
___________________ of MERCURY AIR GROUP, INC., a Delaware corporation, on
behalf of the corporation.
/s/
------------------
Notary Public
My Commission Expires:
32
