01-287182.07
01-287182.07
LEASE AGREEMENT
Between
GENERAL ELECTRIC CAPITAL BUSINESS
ASSET FUNDING CORPORATION,
a Delaware corporation,
as Lessor,
and
MANCHESTER TECHNOLOGIES INC.,
a New York corporation,
as Lessee.
Property Address: 000 Xxxx Xxxxxx
Hamlet of Hauppauge
Town of Smithtown
Suffolk County, New York
District: 0800
Section: 182.00
Block: 01.00
Lot: 022.005
Dated as of March 14, 2003
ii
01-287182.07
01-287182.07
Table of contents
Page
ARTICLE I
Section 1.01. Lease of Premises; Title and Condition......................1
Section 1.02. Use.........................................................2
Section 1.03. Term........................................................2
Section 1.04. Rent........................................................2
Section 1.05. Payment of Rent.............................................3
Section 1.06. Late Payment Charge.........................................3
ARTICLE II
Section 2.01. Disclaimer of Representation by Lessor......................3
Section 2.02. Premises Leased "As Is".....................................3
Section 2.03. Maintenance and Repair......................................4
Section 2.04. Alterations, Replacements and Additions.....................4
Section 2.05. Encumbrances................................................5
Section 2.06. Replacement of Lessor's Fixtures and Lessor's Equipment.....5
Section 2.07. Lessee To Comply With Covenants.............................6
Section 2.08. Lessor's Cooperation Clause.................................6
Section 2.09. Third-party Claims Against Lessor...........................6
ARTICLE III
Section 3.01. Removal.....................................................7
ARTICLE IV
Section 4.01. Restriction on Assignment or Other Transfer.................7
Section 4.02. Information About Proposed Transferee.......................7
Section 4.03. Terms Relating to Consent...................................7
Section 4.04. Subleases...................................................8
Section 4.05. Original Documents to Lessor................................8
Section 4.06. Effect of Transfer..........................................8
Section 4.07. Collection of Rent..........................................8
ARTICLE V
Section 5.01. Net Lease...................................................9
Section 5.02. Taxes and Assessments; Compliance With Law..................9
Section 5.03. Utility Services...........................................11
Section 5.04. No Adverse Possession......................................11
Section 5.05. Entry by Lessor............................................11
Section 5.06. Liens......................................................11
Section 5.07. Indemnification............................................12
Section 5.08. Environmental Compliance...................................12
ARTICLE VI
Section 6.01. Compensation...............................................14
Section 6.02. Casualty...................................................14
Section 6.03. Condemnation...............................................16
Section 6.04. Required Insurance Coverage................................17
Section 6.05. Separate Insurance Coverages...............................18
Section 6.06. Compliance With Insurance Requirements.....................18
Section 6.07. Additional Coverages.......................................18
Section 6.08. Policy Provisions..........................................19
Section 6.09. Companies and Form of Policies.............................19
Section 6.10. Handling of Proceeds by Lessor.............................19
Section 6.11. Handling of Proceeds by Depository.........................19
Section 6.12. Certificates of Coverage...................................19
Section 6.13. Procurement by Lessor......................................19
ARTICLE VII
Section 7.01. Events of Default..........................................20
Section 7.02. Remedies Upon Lessee's Default.............................20
ARTICLE VIII
Section 8.01. Lessee's Notices and Remedies..............................24
Section 8.02. Fee Mortgagee's Right To Cure..............................24
ARTICLE IX
Section 9.01. Subordination and Nondisturbance...........................24
Section 9.02. Election Not To Subordinate................................24
Section 9.03. Attornment.................................................24
Section 9.04. Limitations on Lessee......................................25
Section 9.05. No Merger of Fee and Leasehold Estates.....................25
Section 9.06. Changes to Lease Required by Fee Mortgagee.................25
ARTICLE X
Section 10.01. Estoppel Certificate.......................................25
Section 10.02. Financial Information......................................25
ARTICLE XI
Section 11.01. Quiet Enjoyment............................................26
ARTICLE XII
Section 12.01. Lessor's Reversionary Interest; Surrender of Premises......26
Section 12.02. Delivery of Rents and Records..............................26
Section 12.03. Acceptance of Surrender....................................27
Section 12.04. Holding Over...............................................27
ARTICLE XIII
Section 13.01. Definition of "Lessor".....................................27
Section 13.02. Exculpation of Lessor......................................27
ARTICLE XIV
Section 14.01. No Waiver, etc., by Parties................................27
Section 14.02. Notices, Etc...............................................27
Section 14.03. Separability...............................................28
Section 14.04. Headings...................................................28
Section 14.05. Relationship of Parties; Disclaimer........................28
Section 14.06. Operating Lease............................................28
Section 14.07. Joint Obligation...........................................29
Section 14.08. Prior Agreements...........................................29
Section 14.09. Recording..................................................29
Section 14.10. Proration of Rent..........................................29
Section 14.11. Authorization of Lease.....................................29
Section 14.12. Applicable Law.............................................29
Xxxxxxx 00.00. Xxxxxx Xxxxxx Funds........................................29
Section 14.14. Time of Performance........................................29
Section 14.15. "Force Majeure" Delays.....................................29
Section 14.16. Waiver of Jury Trial.......................................29
Section 14.17. Attorneys' Fees............................................30
Section 14.18. Amendments.................................................30
Section 14.19. Successors.................................................30
Section 14.20. Brokers....................................................30
Section 14.21. Construction...............................................30
Section 14.22. Execution in Counterparts..................................30
Section 14.23. Exhibits and Riders........................................30
SCHEDULE A........LEGAL DESCRIPTION
SCHEDULE B........CONTRACTUAL REQUIREMENTS
SCHEDULE C........PERMITTED EXCEPTIONS
SCHEDULE D........LESSEE INSURANCE REQUIRMENTES
SCHEDULE E........PERMANENT LOAN INSURANCE REQUIREMENTS
30
01-287182.07
01-287182.07
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the 14th
day of March 2003, by and between GENERAL ELECTRIC CAPITAL BUSINESS ASSET
FUNDING CORPORATION, a Delaware corporation (herein, with its successors and
assigns, "Lessor"), and MANCHESTER TECHNOLOGIES INC. , a New York corporation
(herein, together with permitted successors and assigns, called "Lessee").
ARTICLE I
Section 1.01. Lease of Premises; Title and Condition. In consideration of
the rents and covenants herein stipulated to be paid and performed by Lessee and
upon the terms and conditions herein specified, Lessor hereby leases to Lessee,
and Lessee hereby leases from Lessor, the premises (the "Premises") consisting
of:
(a) that parcel of land in the Hamlet of Hauppauge, Town of Smithtown,
Suffolk County, New York, commonly known as 000 Xxxx Xxxxxx, and more
particularly described in Schedule A attached hereto and made a part hereof
(the "Land");
(b) all of the buildings, structures, facilities, installations and
other improvements of every kind and description now or hereafter in, on,
over and under the Land (collectively, the "Improvements");
(c) any movable or not permanently affixed fixtures, machinery,
equipment, furnishings, moveable walls or partitions, or other personal
property used or procured for use in connection with the operation,
maintenance and protection of the Premises, which are located on or in the
Improvements on the Commencement Date (as defined in Section 1.03),
including (without limitation) plumbing, gas, electrical, heating,
ventilating, lighting and air conditioning systems, facilities used to
provide any utility services, parking and common area facilities,
refrigeration, garbage disposal, and all landscaping, paving and parking
areas, but except items, if any, included within the category of Lessee's
Equipment (collectively referred to herein as "Lessor's Equipment").
"Lessee's Equipment" shall mean all machinery, equipment, furniture,
furnishings and other personal property (i) installed by Lessee or its
permitted sublessees or permitted occupants in, on or about the Premises
and (ii) not used or procured for use in connection with the operation,
maintenance and protection of the Premises, as such, but used or procured
for use directly in connection with the business conducted thereon;
(d) all fixtures, machinery, equipment, and other items of property,
now or hereafter permanently affixed to or incorporated into the
Improvements, including (without limitation) boilers, furnaces, heaters,
electrical equipment, incineration, air and water pollution control, waste
disposal, sprinkler systems, fire and theft protection equipment, plumbing,
heating, ventilating, lighting and air conditioning systems, facilities
used to provide any utility services, parking and common area facilities,
and refrigeration systems and equipment, together with all replacements,
modifications, and alterations thereto, all of which, to the greatest
extent permitted by law, are hereby deemed by the parties hereto to
constitute real estate (collectively referred to herein as "Lessor's
Fixtures") (all the foregoing being included within the term
"Improvements"); and
(e) all of Lessor's right, title and interest, if any, in and to all
easements, rights-of-way, appurtenances and other rights and benefits
associated with the Land and to all public or xxxxxxx xxxxxxx, xxxxx,
xxxxxxx, alleys or passways, open or proposed, on or abutting the Land,
including (without limitation) the Contractual Requirements (as defined in
Section 2.07 hereof) attached hereto as Exhibit B (all of the foregoing
being included within the term "Land").
The Premises are leased to Lessee in their present condition without
representation or warranty by Lessor and subject to the rights of parties in
possession, to the existing state of title, the existing state and quality of
Improvements, any state of facts that an accurate survey or physical inspection
thereof might show, all zoning regulations, restrictions, rules and ordinances,
building restrictions and other laws and regulations now in effect or hereafter
adopted by any governmental authority having jurisdiction, to all applicable
Legal Requirements (as defined in Subsection 5.02(b)) now or hereafter in effect
and to Permitted Exceptions listed in Schedule C attached hereto. Lessee has
examined the Premises and title to the Premises and has found all of the same
satisfactory for all purposes.
Section 1.02. Use. Lessee may use the Premises or cause it to be used only
for Permitted Uses. "Permitted Uses" are defined as all uses permitted by law,
the certificate of occupancy and regulations of the applicable local planning,
building and other agencies. Lessee shall not use the Premises for any other
purpose without the prior written consent of Lessor, which consent may be
withheld in its absolute discretion. Without limiting the generality of the
foregoing, Lessor may condition or withhold such consent if the proposed use
will significantly alter the character or purpose or detract or diminish the
value or operating efficiency of the Premises, significantly impair the
revenue-producing capability of the Premises, adversely affect the ability of
Lessee to comply with this Lease, increase the use, handling, generation,
storage, transportation or disposal of any Hazardous Materials or constitute a
nuisance.
Section 1.03. Term.
This Lease shall be for an initial term (the "Lease Term") commencing on
March 14, 2003 (the "Commencement Date") and ending at midnight on March 31,
2018 (the "Expiration Date"), or such earlier date as this Lease is terminated
pursuant to its terms. Provided that Lessee shall not be in default under this
Lease beyond applicable periods of notice and cure as hereinafter set forth,
Lessee shall have four (4) options to renew this Lease for successive periods of
five (5) years each (such periods being referred to herein as the "Extended
Term"), on the same terms and conditions otherwise set forth herein. Each of
said options shall be exercised by Lessee's giving written notice to Lessor of
its exercise of such option at lease 180 days prior to the expiration of the
then-current term of this Lease.
Section 1.04. Rent.
(a) During the Lease Term, Lessee shall pay to Lessor the Basic Rent,
initially $360,000.00 per annum, which Basic Rent shall be increased
annually by two percent (2%). The Basic Rent shall be payable in equal
monthly installments, in advance, on the first day of each and every month.
Lessee shall perform all its obligations under this Lease at its sole cost
and expense, and shall pay all Basic Rent, additional charges and any other
sum due hereunder when due and payable, without notice or demand.
(b) Lessee shall pay, as additional rent, all other amounts, costs,
expenses, liabilities and obligations that Lessee herein assumes or agrees
to pay, and will reimburse Lessor for any payments thereof made by Lessor
in accordance with the terms and requirements of this Lease (collectively,
"Additional Rent"). Such expenses shall include (without limitation) (i)
the cost of air conditioning, electricity, heating, mechanical,
ventilation, water and sewer, and any elevator systems and all other
utilities, and the cost of supplies and equipment, and maintenance and
service contracts in connection therewith, (ii) the cost of repairs,
maintenance and cleaning of any common areas, (iii) the cost of fire,
extended coverage, sprinkler, public liability, property damage and other
insurance, (iv) [OMITTED], (v) fees, charges and other costs, including
management fees, consulting fees, legal fees and accounting fees, of all
independent contractors engaged by Lessor or reasonably charged by Lessor
if Lessor performs management services in connection with the Premises,
(vi) the cost of any license, permit or inspection fees, (vii) if requested
by Lessor following the occurrence of an Event of Default hereunder,
reasonable reserves to cover costs of long-term programmed maintenance,
including (without limitation) HVAC and any elevator system maintenance,
(viii) all taxes and assessments pursuant to Section 5.02(a), and (ix) any
other costs and expenses of any other kind whatsoever reasonably incurred
in managing, operating, maintaining and repairing the Premises, but
excluding costs of any special services rendered to individual tenants
(including Lessee) for which a special charge is made, other costs billed
to and paid by individual tenants (including Lessee) and costs paid by
proceeds of insurance. In the event of any failure by Lessee to pay any of
the Additional Rent, Lessor shall have all rights, powers and remedies
provided for herein or by law as in the case of nonpayment of the Basic
Rent.
Section 1.05. Payment of Rent. Lessee will pay to Lessor all Basic Rent and
Additional Rent by good check or checks subject to collection, at the principal
office of Lessor, or at such other place or to such agent as Lessor from time to
time may designate by written notice to Lessee given not later than the
twentieth day of the month for the following and subsequent months.
Section 1.06. Late Payment Charge. If Lessee shall fail to make payment
of any installment of Basic Rent, any payment of Additional Rent or any payment
of any other sums required by this Lease as provided in this Lease within ten
days after such payment is due (regardless of any notice requirements for
purposes of Article VII), Lessee shall pay to Lessor, in addition to such Basic
Rent, Additional Rent or other sum, a late charge equal to 5% of the amount so
delinquent, said charge being intended as stipulated compensation for the
additional costs and expenses incurred by Lessor because of such late payment
and not as a penalty.
ARTICLE II
Section 2.01. Disclaimer of Representation by Lessor. Lessee is fully
familiar with the physical condition of the Premises and all Improvements.
Lessor has made no representation as to the condition of the Premises or
Improvements or the fitness or availability thereof for any particular use and
none shall be implied from this Lease, and Lessor shall not be liable for any
latent or patent defect therein.
Section 2.02. Premises Leased "As Is". THE PREMISES, INCLUDING
IMPROVEMENTS, ARE DEMISED AND LEASED TO LESSEE "AS IS" AND IN THEIR PRESENT
CONDITION WITHOUT ANY REPRESENTATION OR WARRANTY BY LESSOR AS TO THEIR
COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS (AS
DEFINED IN SECTION 6.04) NOW OR HEREAFTER IN EFFECT OR AS TO THEIR COMPLIANCE
WITH APPLICABLE TERMS AND CONDITIONS OF ANY CONTRACTUAL REQUIREMENTS (AS DEFINED
IN SECTION 2.07).
LESSEE HAS INSPECTED, IS FULLY FAMILIAR WITH AND HEREBY ACCEPTS THE
PREMISES AND HAS FOUND THE SAME TO BE SATISFACTORY TO IT FOR ALL PURPOSES
RELATING TO THIS LEASE. LESSOR SHALL HAVE NO LIABILITY WHATSOEVER TO LESSEE IN
RESPECT OF OR ARISING OUT OF THE EXISTING STATE OF TITLE TO THE PREMISES OR OF
THE EXISTING CONDITION, STAGE OF COMPLETION OR QUALITY OF CONSTRUCTION OF THE
IMPROVEMENTS.
LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PREMISES OR OF ANY FIXTURES OR OTHER ITEMS CONSTITUTING ANY
PORTION THEREOF, OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY,
FITNESS FOR USE FOR A PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS
TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR WITH RESPECT TO
LESSOR'S TITLE THERETO OR OWNERSHIP THEREOF, AND ALL RISKS INCIDENT THERETO
SHALL BE BORNE BY LESSEE.
Section 2.03. Maintenance and Repair.
(a) Lessee acknowledges that it has received the Premises in good
order and repair. Lessee, at its own expense, will maintain all parts of
the Premises in good repair and condition and will take all action and will
make all structural and nonstructural, foreseen and unforeseen and ordinary
and extraordinary changes and repairs that may be required to keep all
parts of the Premises in good repair and condition (including, without
limitation, all painting, glass, utilities, conduits, fixtures and
equipment, foundation, roof, exterior walls, heating and air conditioning
systems, wiring, plumbing, sprinkler systems and other utilities, and all
paving, sidewalks, roads, parking areas, curbs and gutters and fences).
Lessor shall not be required to maintain, repair or rebuild all or any part
of the Premises. Lessee waives the right to require Lessor to maintain,
repair or rebuild all or any part of the Premises or make repairs at the
expense of Lessor pursuant to any Legal Requirement, agreement, contract,
covenant, condition or restrictions at any time.
(b) Replacement of or major repairs to all structural or mechanical
systems shall be undertaken by Lessee at its sole cost and expense. Such
replacements shall be made pursuant to and in accordance with plans and
specifications approved in advance by Lessor as required for Major
Alterations, such approval not to be unreasonably withheld.
(c) Lessee shall have the benefit of, and the right to enforce, all
builders' and manufacturers' warranties issued for the benefit of the
Premises so long as Lessee is not in default under the terms of this Lease
and all costs of Lessor's cooperation are borne by Lessee. Lessor agrees to
promptly cooperate with Lessee to the extent necessary or desirable to
enforce the provisions of all warranties.
Section 2.04. Alterations, Replacements and Additions. With respect to any
alteration, change, addition or improvement (herein collectively referred to as
an "Alteration") to any portion of the Premises:
(a) If such Alteration is not structural in nature and does not affect
the condition of the Improvements or any utilities and does not lessen the
value of the Premises as it is at the commencement of such work, and if the
cost thereof is less than $150,000, Lessor's consent to such Alteration
shall not be required. Such Alterations (referred to herein as "Minor
Alterations") shall be expeditiously completed in a good and workmanlike
manner and in compliance with all applicable Legal Requirements and
Insurance Requirements. Lessee shall pay the increased premium, if any,
charged by the insurance companies carrying insurance policies on the
Premises, to cover the additional risk during the course of such work.
Lessee shall provide Lessor upon request with evidence of payment for all
work done within 90 days after completion thereof. All such Alterations
made by Lessee to the existing (as of the date of this Lease) Improvements,
Lessor's Fixtures and Lessor's Equipment shall be and become part of the
Premises.
(b) If such Alteration is structural in nature or adversely affects
the value or utility of the Improvements or lessens the value of the
Premises as it is at the commencement of such work in any material respect,
or if the cost thereof is $150,000 or more, Lessor's prior written consent
to such alteration thereto shall be required, which consent shall not be
unreasonably withheld, delayed or conditioned. Such Alterations (referred
to herein as "Major Alterations") shall be performed in accordance with the
following requirements:
(i) Before commencing any Major Alteration, Lessee shall, upon
request, at Lessee's own cost and expense, deliver to Lessor an
endorsement to the commercial general liability policy required by
this Lease, which endorsement shall provide that such insurance will
cover work in progress;
(ii) Lessee shall pay the increased premium, if any, charged by
the insurance companies carrying insurance policies on the Premises,
to cover the additional risk during the course of such work;
(iii) All such Alterations made by Lessee to the existing (as of
the date of this Lease) Improvements, Lessor's Fixtures and Lessor's
Equipment shall be and become a part of the Premises;
(iv) Lessee shall, prior to the commencement of such work, submit
plans and specifications to Lessor for Lessor's approval. If Lessor
approves such plans and specifications, Lessee shall obtain all
necessary approvals from municipal departments and bureaus and from
any other municipal, state and federal authorities having supervision
or jurisdiction of the Premises, and a copy of all such necessary
approvals shall be delivered to Lessor;
(v) All of such work shall be completed substantially in
accordance with the plans and specifications approved by Lessor and in
accordance with all Legal Requirements;
(vi) No building now or hereafter erected upon the Premises shall
be demolished, nor shall Major Alteration be made thereto, without the
prior written consent of Lessor;
(vii) Lessee shall provide Lessor upon request with evidence of
payment for all work done within 90 days after completion thereof; and
(viii) Prior to the commencement of any such work, Lessee shall
furnish Lessor such security or assurances as are reasonably required
by Lessor to assure completion of the Major Alteration and payment of
the costs thereof, including Lessor's reasonable approval of the
proposed construction budget or estimated costs of construction and
Lessee's assurance that Lessee can and will pay all costs of
construction and will discharge all construction liens which may be
asserted on account of the work.
(c) The provisions of this Section shall also apply with respect to
any Alterations undertaken by any subtenant of any portion of the Premises.
Section 2.05. Encumbrances. If all or any part of the Improvements shall
encroach upon any property, street or right-of-way adjoining or adjacent to the
Premises, or shall violate the agreements or conditions affecting the Premises
or any part thereof, or shall hinder, obstruct or impair any easement or
right-of-way to which the Premises are subject, then, promptly after written
request of Lessor (unless such encroachment, violation, hindrance, obstruction
or impairment is not material) or of any person so affected, Lessee shall, at
its expense, either (a) obtain valid and effective waivers or settlements of all
claims, liabilities and damages resulting therefrom or (b) if Lessor consents
thereto, make such changes, including alteration or removal, to the Improvements
and take such other action as shall be necessary to remove or eliminate such
encroachments, violations, hindrances, obstructions or impairments.
Section 2.06. Replacement of Lessor's Fixtures and Lessor's Equipment.
(a) Lessee may, from time to time, and upon not less than 30 days'
prior written notice to Lessor, remove and dispose of any of Lessor's
Fixtures and Lessor's Equipment constituting a major component of the
Premises (i.e. plumbing, gas, electrical, heating, ventilating, lighting
and air conditioning systems) with Lessor's prior written consent. Such
consent shall not be unreasonably withheld so long as Lessee immediately
replaces such Lessor's Fixtures and Lessor's Equipment, constituting a
major component of the Premises, with items which are at least equal in
value and general utility to those removed, which are free of any liens or
security interests and the fee title to which is conveyed directly to
Lessor and made subject to this Lease.
(b) Lessee may, from time to time, and upon not less than 30 days'
prior written notice to Lessor, remove and dispose of any of Lessor's
Fixtures and Lessor's Equipment which does not constitute a major component
of the Premises so long as Lessee immediately replaces such Lessor's
Fixtures and Lessor's Equipment which are not major components of the
Premises with items which are at least equal in value and general utility
to those removed. Such components must be free of any liens or security
interests and the fee title to such must be, upon placement of such
components upon the Premises, conveyed directly to Lessor and made subject
of this Lease.
Section 2.07. Lessee To Comply With Covenants. Lessee agrees that it will
not use the Premises, or any part thereof, or suffer or permit the same to be
used in any manner or suffer or do anything upon the Premises or any part
thereof which may violate any material covenant, condition, reservation,
agreement, easement or restriction to which the Premises may be subject on the
Commencement Date or which may be imposed after said date which are consented to
in writing by Lessee, and Lessee agrees that it will observe and perform and
will comply with and carry out the provisions of all Contractual Requirements
during the Lease Term. "Contractual Requirements" are defined as all obligations
required under any covenants, conditions and restrictions, easement agreements,
operating agreements, equipment leases or other contractual obligations
applicable to and binding upon the Premises.
Section 2.08. Lessor's Cooperation Clause. Upon reasonable request from
time to time, Lessor shall join with Lessee in executing: (a) any conveyance,
dedication, grant of easement or license or other instrument as shall be
reasonably necessary to provide public utility service to the Premises or in
order to allow the Permitted Uses of the Premises by Lessee and (b) to the
extent that the signature or approval of Lessor is required by any governmental
body, applications for such permits or other governmental authorization or
approvals. Lessor will join in such applications or other documentation without
any cost or liability to Lessor in connection therewith, and Lessee shall
indemnify and hold Lessor harmless from any cost, liability or expense arising
therefrom.
Section 2.09. No Third-party Claims Against Lessor. Nothing contained in
this Lease shall constitute the consent or request of Lessor, express or
implied, by inference or otherwise, to any person, firm or entity for the
performance of any labor or the furnishing of any materials or other property in
respect of the Premises or any part thereof, or as giving Lessee any authority
to contract for or permit the rendering of any services or the furnishing of any
materials or other property so as to permit the making of any claim against
Lessor. Nothing in this Lease shall be deemed as giving Lessee any right, power
or authority to contract for or permit the rendering of any service or the
furnishing of any material that would give rise to any mechanic's or other lien
against Lessor's interest in the Premises. NOTICE IS HEREBY GIVEN THAT LESSOR
WILL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO LESSEE, OR TO ANYONE HOLDING AN INTEREST IN THE PREMISES (OR ANY
PART THEREOF) THROUGH OR UNDER LESSEE, AND THAT NO CONSTRUCTION, MECHANIC'S OR
OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT
THE INTEREST OF LESSOR IN THE PREMISES.
ARTICLE III
Section 3.01. Removal. Lessee may remove Lessee's Equipment at any time
during the Lease Term. Any of Lessee's Equipment not removed by Lessee prior to
the expiration of the Lease or earlier termination shall be considered abandoned
by Lessee and may be appropriated, sold, destroyed or otherwise disposed of by
Lessor without notice to Lessee; provided, however, that if Lessee shall not be
in material default at the time of the expiration of this Lease, if Lessee shall
request in writing and tender a check to Lessor for the prorated amount of the
Basic Rent for such period, Lessee shall be granted up to fourteen (14)
additional days for the removal of the Lessee's Equipment, provided further that
Lessor shall not be required to accede to such request if so doing will
interfere with the rights of a subsequent tenant of the Premises or with
Lessor's preparations required by the lease for such subsequent tenant,, Lessee
shall pay Lessor upon demand all reasonable costs and expenses incurred by
Lessor in removing, storing and disposing of same. Lessee will repair at its
expense all damage to the Premises necessarily caused by the removal of Lessee's
Equipment, whether effected by Lessee or by Lessor.
ARTICLE IV
Section 4.01. Restriction on Assignment or Other Transfer. Lessee covenants
and agrees for Lessee and its successors, assigns and legal representatives that
neither this Lease nor the Lease Term and estate hereby granted, nor any part
hereof or thereof, will be assigned or mortgaged, pledged or encumbered by
Lessee or otherwise transferred (whether voluntarily, involuntarily, by
operation of law, or otherwise) or for any purpose other than as set forth
herein, without the prior written consent of Lessor in every case (a
"Transfer"), except in accordance with this Article IV. For the purposes of this
Article IV, a Transfer shall be deemed to include any transfer, assignment or
encumbrance of the controlling interests in Lessee, whether occurring by reason
of one transaction or cumulatively in any two or more transactions; provided,
however, a Transfer shall not be deemed to occur solely as a result of the death
of any natural person or the transfer of any interest to a trust for
estate-planning purposes without the release of the transferor, and a merger or
consolidation in which Lessee is the surviving entity shall not require the
consent of Lessor. A Transfer of the Lease to an entity owned by Lessee or under
common control with Lessee shall not require the consent of Lessor provided that
the Lessee named herein shall remain liable for all obligations hereunder. If
the Transfer involves an assignment of this Lease, the assignee shall execute
and deliver to Lessor an agreement in form and substance in all respects
reasonably satisfactory to Lessor whereby such assignee assumes and agrees to be
bound by and perform all of the obligations of Lessee under this Lease.
Section 4.02. Information About Proposed Transferee. Notwithstanding
anything contained in Section 4.01, in the event Lessee wishes to assign or
otherwise make a Transfer of this Lease, Lessee shall first notify Lessor of the
name of the proposed transferee and of the material terms, provisions and
conditions contained in the proposed Transfer, and shall provide Lessor with
such information as to the proposed transferee's financial condition, business
experience and standing as Lessor may reasonably require.
Section 4.03. Terms Relating to Consent. Every Transfer shall be subject to
the following conditions:
(a) except as is otherwise set forth herein with respect to Transfers
which do not require the consent of Lessor, the proposed transferee shall
be of a financial standing which in Lessor's judgment (based on its
then-current underwriting criteria for similar properties and transactions)
will allow such proposed transferee to meet its obligations under this
Lease as they become due;
(b) the Premises shall be used by such transferee for a Permitted Use;
(c) there shall be no material default by Lessee which has not been
cured within any (if any) applicable cure period under any of the terms,
covenants and conditions of this Lease at the time that Lessor's consent to
any such Transfer is requested (if such consent is required) or on the
effective date of the Transfer; and
(d) Lessee shall reimburse Lessor for any reasonable expenses that may
be incurred by Lessor in connection with the proposed Transfer, including
(without limitation) the costs of making investigations as to the
acceptability of a proposed transferee as to whom consent is required and
all legal expenses incurred in connection with the granting of any such
requested consent to the Transfer;
(e) any request for or notice of an assignment of this Lease shall be
accompanied by the proposed instrument of assignment and the assignment
document will provide that the assignee cannot further transfer its
interest without complying with the transfer requirements of this Lease.
Section 4.04. Assignment and Subletting . (a) Lessee may sublease all or
any part of the Premises to one or more subtenants without the consent of
Lessor, provided the sublease is subordinate to this Lease and to the Fee
Mortgage, and the sublessee does not require a nondisturbance agreement with
Lessor. "Fee Mortgage" means any mortgage, deed of trust or similar instrument
encumbering real property to secure an obligation made by Lessor which is at any
time a lien on Lessor's interest in the Premises, the beneficiary of which is
referred to herein as "Fee Mortgagee." To the extent Lessor's consent is
required, the sublease shall be submitted to Lessor for review and approval. All
subleases shall expressly be made subject to the provisions of this Lease. Any
sublease of all or a portion of the Premises shall specifically state that it is
subject and subordinate to the terms and conditions of this Lease and to the Fee
Mortgage, that it shall be limited by the provisions hereof and that the lessee
thereunder shall not have any other or further rights than Lessee has under this
Lease. No sublease shall extend for any period longer than the term of this
Lease.
(b)......Lessee may assign this Lease, without the consent of Lessor, but
otherwise on the terms set forth in Section 4.01 above, provided that (i) no
such assignment shall release Lessee from its obligations hereunder or any lease
guarantor from its obligations under its lease guaranty, and (ii) if the
assignee shall reject this Lease in bankruptcy or if the Lease shall otherwise
be terminated without the consent of Lessor (other than in accordance with the
express terms of this Lease relating to casualty and condemnation), the Lessee
named herein and/or the lease guarantor on the date hereof shall enter into a
new lease with Lessor for the Premises, on the same terms as this Lease, for the
then-remaining term of this Lease.
Section 4.05. Original Documents to Lessor. In the event this Lease is
assigned or if more than 10% in the aggregate of the Premises is sublet a
duplicate original of the instrument[s] of assignment or subletting, as the case
may be, shall be sent to Lessor within 10 days after the effective date thereof.
Any assignee of this Lease shall assume the obligations of Lessee hereunder and
a duplicate original of such assumption shall be delivered to Lessor together
with the aforesaid duplicate original of the assignment instrument.
Section 4.06. Effect of Transfer. No such assignment, Transfer or sublease
shall release Lessee from liability hereunder or affect or reduce any
obligations of Lessee named herein or of any other Lessee assuming this Lease or
affect or reduce the rights of Lessor hereunder. All obligations of Lessee named
herein and of any other Lessee assuming this Lease shall continue in full effect
as the joint and several obligations of a principal and not of a guarantor or
surety, as though no assignment, Transfer or sublease had been made. In
connection therewith, Lessee named herein and each succeeding Lessee assuming
this Lease agrees that the joint and several liability of each hereunder shall
continue in full force and effect and shall not be terminated or affected by any
action which Lessor may take or fail to take against any Lessee hereunder or by
reason of any waiver of, or failure to enforce, any rights or remedies reserved
to Lessor, or otherwise.
Section 4.07. Collection of Rent. If Lessee's interest in this Lease is
assigned, whether or not in violation of the provisions hereof, Lessor may
collect Basic Rent and Additional Rent from the assignee. If the Premises is
sublet to, or occupied by, or used by, any person other than Lessee, whether or
not in violation hereof, Lessor after default by Lessee under this Lease, may
collect Basic Rent and Additional Rent from the subtenant, user or occupant. In
either case, no such assignment, sublease or collection shall affect Lessee's
obligations hereunder, and Lessor shall apply the net amount collected to the
Basic Rent, Additional Rent and other obligations of Lessee reserved in this
Lease in such order as Lessor elects.
ARTICLE V
Section 5.01. Net Lease.
(a) It is expressly understood and agreed by and between the parties
that this Lease is an absolute net lease, and the Basic Rent and all other
sums payable hereunder to or on behalf of Lessor shall be paid without
notice or demand and without setoff, counterclaim, abatement, suspension,
deduction or defense.
(b) Except as otherwise expressly provided in the Lease, this Lease
shall not terminate, nor shall Lessee have any right to terminate this
Lease or be entitled to the abatement of any rent or any reduction thereof,
nor shall the obligations hereunder of Lessee be otherwise affected, by
reason of any damage to or destruction of all or any part of the Premises
from whatever cause, the taking of the Premises or any portion thereof by
condemnation or otherwise, the prohibition, limitation or restriction of
Lessee's use of the Premises, or interference with such use by any private
person or corporation, or by reason of any eviction by paramount title or
otherwise, or for any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding, it
being the intention of the parties hereto that the rent and all other
charges payable hereunder to or on behalf of Lessor shall continue to be
payable in all events and the obligations of Lessee hereunder shall
continue unaffected, unless the requirement to pay or perform the same
shall be terminated pursuant to an express provision of this Lease. Nothing
contained in this Section shall be deemed a waiver by Lessee of any rights
that it may have to bring a separate action with respect to any default by
Lessor hereunder or under any other agreement.
(c) Lessee covenants and agrees that it will remain obligated under
this Lease in accordance with its terms and that Lessee will not take any
action to terminate, rescind or avoid this Lease, notwithstanding the
bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution, winding-up or other proceeding affecting Lessor
in any such proceeding and notwithstanding any action with respect to this
Lease which may be taken by any trustee or receiver of Lessor in any such
proceeding or by any court in any such proceeding.
(d) Lessee waives all rights now or hereafter conferred by law (i) to
quit, terminate or surrender this Lease or the Premises or any part thereof
or (ii) to any abatement, suspension, deferment or reduction of the rent,
or any other sums payable hereunder to or on behalf of Lessor, regardless
of whether such rights shall arise from any present or future constitution,
statute or rule of law. Nothing in the foregoing shall be construed to
negate any termination right that Lessee may have under the express terms
of this Lease.
Section 5.02. Taxes and Assessments; Compliance With Law.
(a) Subject to the provisions of subsection (d) below, Lessee shall
pay, prior to any interest, penalty, fine or cost that may be added for
nonpayment: (i) all taxes, assessments, levies, fees, water and sewer rents
and charges and all other governmental charges, general and special,
ordinary and extraordinary, foreseen and unforeseen, which are, at any time
prior to or during the Lease Term hereof, imposed or levied upon or
assessed against or which arise with respect to (A) the Premises, (B) any
Basic Rent, Additional Rent or other sums payable hereunder, (C) this Lease
or the leasehold estate hereby created or (D) the operation, possession or
use of the Premises; (ii) all gross receipts or similar taxes (i.e., taxes
based upon gross income which fail to take into account deductions with
respect to depreciation, interest, taxes or ordinary and necessary business
expenses, in each case relating to the Premises) imposed or levied upon,
assessed against or measured by any Basic Rent, Additional Rent or other
sums payable hereunder; (iii) all sales, value added, ad valorem, use and
similar taxes at any time levied, assessed or payable on account of the
acquisition, ownership, leasing, operation, possession or use of the
Premises; and (iv) all charges of utilities, communications and similar
services serving the Premises. Lessee shall not be required to pay any
franchise, estate, inheritance, transfer, income, capital gains or similar
tax of Lessor unless such tax is imposed, levied or assessed in
substitution for any other tax, assessment, charge or levy which Lessee is
required to pay pursuant to this Section; provided, however, that if, at
any time during the Lease Term, the method of taxation shall be such that
there shall be assessed, levied, charged or imposed on Lessor a capital
levy or other tax directly on the rents received therefrom, or upon the
value of the Premises or any present or future improvement or improvements
on the Premises, then all such levies and taxes or the part thereof so
measured or based shall be payable by Lessee, and Lessee shall pay and
discharge the same as herein provided. Lessee will furnish to Lessor,
promptly after demand therefor, proof of payment of all items referred to
above which are payable by Lessee. If any such assessment may legally be
paid in installments, Lessee may pay such assessment in installments; in
such event, Lessee shall be liable only for installments which become due
and payable with respect to any tax period occurring in whole or in part
during the Lease Term hereof; provided, however, that all amounts referred
to in this Section for the fiscal or tax year in which the Lease Term shall
expire shall be apportioned so that Lessee shall pay those portions thereof
which correspond with the portion of such year as are within the Lease Term
hereby demised.
(b) Lessee shall comply with and cause the Premises to comply with and
shall assume all obligations and liabilities with respect to (i) all laws,
ordinances and regulations and other governmental rules, orders and
determinations presently in effect or hereafter enacted, made or issued,
whether or not presently contemplated (collectively, "Legal Requirements"),
applicable to the Premises or the ownership, operation, use or possession
thereof and (ii) all agreements, contracts, insurance policies (including,
without limitation, to the extent necessary to prevent cancellation thereof
and to insure full payment of any claims made under such policies),
agreements, covenants, conditions and restrictions now or hereafter
applicable to the Premises or the ownership, operation, use or possession
thereof, including (without limitation) all such Legal Requirements,
contracts, agreements, covenants, conditions and restrictions that require
structural, unforeseen or extraordinary changes; provided, however, that,
with respect to any of the obligations of Lessee in clause (ii) above which
are not now in existence, Lessee shall not be required to so comply unless
Lessee is either a party thereto or has given its written consent thereto,
or unless the same is occasioned by Legal Requirements or Lessee's default
(including any failure or omission by Lessee) under this Lease. Nothing in
clause (ii) of the immediately preceding sentence or the following sentence
shall modify the obligations of Lessee under Section 5.07.
(c) If an Event of Default shall occur and be continuing, upon the
request of Lessor, Lessee shall, in addition to and concurrently with the
payment of Basic Rent as required in Subsection 1.04(a), each month pay
one-twelfth of the amount (as estimated by Lessor) of the annual taxes and
assessments described in Subsection 5.02(a) and the annual premiums for
insurance required in Section 6.04 next becoming due and payable with
respect to the Premises, and Lessee shall also pay to Lessor on demand
therefor the amount by which the actual taxes and assessments and insurance
premiums exceed the payment by Lessee required in this subsection.
(d) Lessee shall have the right before any delinquency occurs to
contest or object to the amount or validity of any such tax by appropriate
legal proceedings but this shall not be deemed or construed in any way as
relieving, modifying or extending Lessee's covenant to pay any such tax at
the time and in the manner in this Article provided, unless (i) the legal
proceedings shall operate to prevent the sale of the Leased Premises or any
part thereof to satisfy such tax prior to final determination of such
proceedings; or (ii) Lessee shall have provided a good and sufficient
undertaking as may be required or permitted by law to accomplish a stay of
such proceedings. Lessee agrees to promptly pay and satisfy any such tax
finally adjudicated adversely to Lessee and, if necessary to prevent a sale
or other loss or damage to Lessor prior to final adjudication, to pay such
tax under protest or take such other steps as may be necessary to prevent
any such sale, loss, or other image to Lessor. Lessor shall co-operate with
Lessee in such contest, without expense to Lessor, but shall not be
required to join in any such proceedings unless it shall be necessary for
it to do so in order properly to prosecute such proceedings and Lessor
shall have been fully indemnified to its satisfaction against all costs and
expenses in connection therewith. Lessor shall not be subjected to any
liability for the payment of any costs or expenses in connection with any
such proceedings brought by Lessee, and Lessee covenants to indemnity and
save Lessor harmless from any loss, cost, damage, and expense incurred by
Lessor in connection with or as a result of such proceedings. Lessee shall
notify Lessor of Lessee's intended action prior to contesting or objecting
to a tax.
Section 5.03. Utility Services. Lessee agrees to arrange for, and to pay or
cause to be paid all charges for, gas, water, sewer, electricity, light, heat,
power, telephone or other communication service or other utility or service
used, rendered or supplied to, upon or in connection with the Premises or any
portion thereof, throughout the Lease Term, and to indemnify Lessor and save it
harmless against any liability or damages arising from any interruption,
curtailment or stoppage of any such utility or service. Lessee shall also, at
its sole cost and expense, procure or cause to be procured any and all necessary
permits, licenses or other authorizations required for the lawful and proper use
and for the installation and maintenance upon the Premises of wires, pipes,
conduits, tubes and other equipment and appliances for use in supplying any such
utility service to or upon the Premises. Lessee expressly agrees that Lessor is
not, nor shall it be, required to furnish to Lessee or any other occupant of the
Premises, during the demised term, any water, sewer service, gas, heat,
electricity, light, power or any other facilities, equipment, labor, materials
or services of any kind whatsoever.
Section 5.04. No Adverse Possession. Lessee shall not suffer or permit the
Premises or any part or parts thereof to be used in such manner as might
reasonably tend to impair Lessor's title to the Premises or any portion thereof,
or in such manner as might reasonably make possible a claim or claims of adverse
usage or adverse possession, or of implied dedication of the Premises or any
portion thereof.
Section 5.05. Entry by Lessor. Lessor, the Fee Mortgagee and their
authorized representatives shall have the right to enter the Premises or any
portion thereof at all reasonable times upon reasonable prior notice (except in
cases of emergency, where no notice will be required) to Lessee (a) for the
purpose of inspecting the same (including without limitation any environmental
inspection) or, after the occurrence of an Event of Default by Lessee in
completing any alterations or repairs required hereunder, for the purpose of
doing any work, and may take all such action thereon as may be necessary or
appropriate for any such purpose (but nothing contained in this Lease or
otherwise shall create or imply any duty upon the part of Lessor to make any
such inspection or do any such work), and (b) for the purpose of showing the
Premises to prospective purchasers and mortgagees and, within 12 months prior to
the expiration of the Lease Term, for the purpose of showing the same to
prospective lessees. No such entry shall constitute an eviction of Lessee.
Section 5.06. Liens. Lessee will remove and discharge any charge, lien,
security interest or encumbrance upon the Premises or upon any Basic Rent,
Additional Rent or other sums payable hereunder which arises for any reason,
including (without limitation) all liens which arise out of the possession, use,
occupancy, construction, repair or rebuilding of the Premises or by reason of
labor or materials furnished or claimed to have been furnished to Lessee or for
the Premises, but not including (a) the liens and encumbrances set forth in
Schedule C, (b) this Lease and any assignment hereof or any sublease permitted
hereunder and (c) any mortgage, charge, lien, security interest or encumbrance
created or caused by Lessor or its agents, employees or representatives without
the consent of Lessee. Lessee may provide a bond or other security acceptable to
Lessor to remove or pay all costs associated with the removal of any such lien.
Nothing contained in this Lease shall be construed as constituting the consent
or request of Lessor, express or implied, to or for the performance (on behalf
of or for the benefit of Lessor) by any contractor, laborer, materialman or
vendor, of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to the Premises
or any part thereof. Notice is hereby given that Lessor will not be liable for
any labor, services or materials furnished or to be furnished to Lessee, or to
anyone holding an interest in the Premises or any part thereof through or under
Lessee, and that no mechanic's or other liens for any such labor, services or
materials shall attach to or affect the interest of Lessor in and to the
Premises.
Section 5.07. Indemnification. Lessee will defend, protect, indemnify and
save harmless Lessor, its agents and employees and the Fee Mortgagee, from and
against any and all liabilities, obligations, damages, losses, penalties,
claims, causes of action, costs, charges and/or expenses, including reasonable
attorneys' fees and expenses, which may be imposed upon or incurred by or
asserted against Lessor, its agents or employees or the Fee Mortgagee by reason
of (a) any accident, injury to any person (including death) or damage to
property occurring on or about the Premises from all causes whatsoever (except
to the extent caused by any act of sole negligence or willful misconduct of
Lessor or Fee Mortgagee), (b) any loss arising out of any work performed on
Premises by Lessee or any agent, employee or contractor of Lessee or by any
assignee or sublessee of Lessee or any agent, employee or contractor of any such
assignee or sublessee, (c) any default on the part of Lessee to perform or
comply with any term of this Lease, (d) any claim for the performance of labor
or the furnishing of materials or other property at Lessee's request or at the
request of anyone claiming under Lessee or performed by Lessor in respect of the
Premises or any part thereof, (e) any action or proceeding pertaining to the
Premises to which Lessor, its agents or employees or the Fee Mortgagee is made a
party and arising out of or in connection with this Lease and (f) any acts,
omissions, or negligence of Lessee or the sublessees, contractors, agents,
employees, invitees, customers, concessionaires or licensees of Lessee (except
to the extent caused by any act of sole negligence or willful misconduct of
Lessor or Fee Mortgagee).
Section 5.08. Environmental Compliance.
(a) Lessee's Representations. As a material inducement for Lessor to
enter into this Lease, Lessee represents and warrants that (i) except as
may be permitted by applicable law, throughout the Lease Term (A) all parts
of the Premises will be kept free (by Lessee and others) of Hazardous
Materials (as defined below) and (B) no part of the Premises will be used
by Lessee or others to generate, manufacture, refine, transport, treat,
store, handle, dispose of, transfer, produce or process Hazardous Materials
and (ii) Lessee will not suffer or permit any activity in, at or from all
or any part of the Premises that will cause or contribute to pollution (by
petroleum or petroleum products, or otherwise) of the Premises in whole or
in part or any other property. "Hazardous Materials" shall mean all
materials which because of their quantity, concentration or physical,
chemical or infectious characteristics may cause or pose a present or
potential hazard to human health or the environment when improperly
handled, treated, stored, transported, disposed of or otherwise managed.
The term shall include (without limitation) all petroleum, petroleum
products, explosives, radioactive materials, hazardous wastes, hazardous or
toxic substances, any material containing 1% or more asbestos by weight or
any other substance or material now or hereafter defined as a "hazardous"
or "toxic" substance, material or product by the U.S. Environmental
Protection Agency or the state in which the Premises is located under the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA), the Resource Conservation and Recovery Act (RCRA), the Toxic
Substances Control Act (TSCA), the Federal Water Pollution Control Act
(FWPCA) or comparable state statutes and other Environmental Requirements
(as defined below). Lessee shall comply fully with all Environmental
Requirements. "Environmental Requirements" shall mean all applicable laws
pertaining to the protection of human health and the environment, including
(without limitation) employee and community right-to-know laws and all laws
regarding the use, generation, storage, transportation, treatment, disposal
or other handling of Hazardous Materials. The only Hazardous Materials
permitted on the Premises are cleaning products and other materials in
ordinary quantities which are used in the ordinary course of business and
necessary for the conduct of the Permitted Uses and which Lessee uses in
strict compliance with all applicable Environmental Requirements.
(b) Lessee's Remediation. If during the Lease Term any Hazardous
Materials are dumped, released, discharged, spilled or leaked onto or into
the Premises or found to be contaminating the Premises (or if a party has
reasonable cause to believe that such dumping, releasing, discharge,
spilling or leak may have occurred or that such Hazardous Materials may be
contaminating the Premises), the party will notify the other party in
writing (except in cases of an emergency as described in Section 5.05 in
which event the party shall have the right to take action without such
notice as provided therein) as to the matter in question. In such event or
at any other time as may be requested by Lessor, the parties will cooperate
in having reasonable examinations, tests or investigations performed at
Lessee's expense to determine the extent of the problem and nature of
appropriate corrective action (or if Lessee fails to cause such
examinations or investigations to be performed after notice of the required
action Lessor will have the right to perform them on Lessee's behalf and at
Lessee's expense). If such examinations demonstrate that the Premises is
contaminated by Hazardous Materials at levels requiring remedial action
under applicable laws, Lessee will have 30 days (or such longer time as may
be reasonably necessary under the circumstances or such lesser time as may
be required by emergency conditions, by law, regulation or judicial order,
or by any governmental entity, whichever is sooner) after written notice
from Lessor to eliminate same and (to the extent necessary) to restore the
Premises to prior condition but with new non-Hazardous Materials, failing
which Lessor may either terminate this Lease on written notice to Lessee or
take all action deemed desirable by Lessor to effect such elimination and
(to the extent necessary) restoration. If Lessor elects the latter, upon
request and as Additional Rent, Lessor will be entitled to receive from
Lessee all reasonable costs and expenses in any way associated therewith,
plus interest at the rate provided in Section 7.02(k) hereof.
(c) Lessee's Indemnity. Lessee, for itself, its successors and
assigns, hereby agrees to defend, indemnify, hold harmless and reimburse
Lessor, its successors and assigns, and any Fee Mortgagee from, against and
for any and all damages, claims, demands, liabilities, losses, penalties
and expenses (including, without limitation, court costs and reasonable
attorneys' fees), including, without limitation, any diminution in the
value of the Premises, which are in any manner caused in whole or in part
by the presence of any Hazardous Materials on or about the Premises or the
failure of Lessee or any subtenant, agent, employee or contractor of Lessee
or the Premises to comply with any Environmental Requirements, whether or
not the same are known to or caused by Lessee and whether the same occur
during the term of this Lease, any time prior to the term of this Lease or,
with respect to any occurrence or condition on or about the Premises which
is caused by any condition, act or omission prior to the expiration of this
Lease, which is discovered after the term of the Lease. This indemnity
shall survive the termination, expiration or forfeiture of this Lease.
(d) Lessor's Cooperation. Unless an Event of Default shall exist
hereunder or Lessee shall not be diligently performing its obligations
under subsections (b) and (c) above, Lessor agrees to cooperate with Lessee
in connection with (i) any claim Lessor and/or Lessee may have against any
third party for the cost of any remediation conducted or to be conducted
on, in and under the Premises or with respect to any damage caused to the
Premises, and (ii) any insurance covering such remediation and/or damage to
the Premises. Lessor hereby assigns to Lessee any and all rights, claims or
causes of action Lessor may have with against such third party or in
connection with such insurance to the extent of any sums paid by Lessee in
fulfillment of its obligations under subsections (b) and (c) above except
to the extent that such rights, claims, causes of action or insurance
proceeds are necessary to fully compensate Lessor with respect to any such
remediation or damage to the Premises. Lessee agrees to pay all Lessor's
out-of-pocket costs incurred by Lessor in connection with such cooperation.
ARTICLE VI
Section 6.01. Compensation. Except as provided in Subsection 6.02(a)(i),
Lessee hereby irrevocably assigns to Lessor any award, compensation or insurance
payment to which Lessee may become entitled by reason of Lessee's interest in
the Premises (a) if the use, occupancy or title of the Premises or any part
thereof is taken, requisitioned or sold in, by or on account of any actual or
threatened eminent domain proceeding or other action by any person having the
power of eminent domain ("Condemnation") or (b) if the Premises or any part
thereof is damaged or destroyed by fire, flood or other casualty, including
(without limitation) vandalism ("Casualty"). All awards, compensations, damages
and insurance payments on account of any Condemnation or Casualty are herein
collectively called "Compensation." Lessor may appear in any such proceeding or
action to negotiate, prosecute and adjust any claim for any Compensation, and
Lessor shall collect any such Compensation. Lessee shall pay all of Lessor's
reasonable costs and expenses in connection with each such proceeding, action,
negotiation, prosecution and adjustment. Lessee shall be entitled to participate
in any such proceeding, action, negotiation, prosecution, appeal or adjustment
as contemplated herein. Notwithstanding anything to the contrary contained in
this Article VI, if permissible under applicable law, any separate Compensation
made to Lessee for its moving and relocation expenses, anticipated loss of
business profits, loss of goodwill or fixtures and equipment paid for by Lessee
and which are not part of the Premises (including, without limitation, Lessee's
Equipment) shall be paid directly to and shall be retained by Lessee (and shall
not be deemed to be Compensation). All Compensation shall be applied pursuant to
this Article VI, and all such Compensation (less the expense of collecting such
Compensation) may be called the "Net Proceeds."
Section 6.02. Casualty.
(a) Payment of Proceeds.
(i) In case of any Casualty to the Premises or any part thereof
where the insurance proceeds to be collected are less than $75,000,
the proceeds of any such insurance shall be paid to, and may be
adjusted by, Lessee alone.
(ii) In case of any Casualty to the Premises or any part thereof
where the insurance proceeds to be collected are $75,000 or more, the
proceeds of any such insurance shall be paid to a depository (the
"Depository") chosen by Lessor or, if there is a Fee Mortgagee, by the
Fee Mortgagee, to be disbursed in accordance with Section 6.02(e)
below, and will be adjusted by Lessee with the reasonable approval of
Lessor or, if there is a Fee Mortgagee, the Fee Mortgagee. Lessor or
the Fee Mortgagee may be the Depository.
(b) Restoration of Premises. In case of any Casualty to the Premises
or any part thereof, Lessee will, at Lessee's expense, whether or not there
are insurance proceeds available or sufficient for the purpose, promptly
commence and complete with due diligence the restoration of the Premises to
as nearly as possible its value, condition and character immediately prior
to such Casualty.
(c) Prompt Performance. Restoration of the Premises under this Section
6.02 shall be performed in accordance with Section 2.04(b) hereof. If the
work of repairing, replacing or rebuilding said damaged or destroyed
Premises or portion thereof shall not have been commenced promptly
following the receipt of all required approvals of Lessee's plans and
specifications, or having been commenced, shall not be expeditiously
proceeding, Lessor shall have all rights under this Lease in respect of a
default by Lessee.
(d) No Abatement. Regardless of any Casualty to the Premises or any
part thereof, Lessee shall not be entitled to any abatement of Basic Rent,
Additional Rent, or any other payment Lessee is required to make pursuant
to this Lease.
(e) Substantial Casualty; Proceeds Held by Depository. If the
insurance proceeds to be collected following a Casualty are $75,000 or more
(a "Substantial Casualty"), then Lessee shall promptly notify Lessor and
the Fee Mortgagee in writing of such Casualty. In case of any Substantial
Casualty, the proceeds of insurance (excluding, however, proceeds payable
or on account of Lessee's Equipment) will be paid directly to the
Depository and remitted by the Depository to Lessee or to the persons
designated by Lessee for the costs of labor and materials as the work of
repair, replacement and/or restoration progresses upon Lessee's request and
against:
(i) a certificate by Lessee dated not more than 15 days prior to
the request, setting forth the following: (A) that the sum then
requested either has been paid by Lessee or is justly due to
contractors, subcontractors, materialmen, engineers, architects or
other persons who have rendered services or furnished materials for
the work therein specified, and giving a brief description of such
services and materials and the several amounts so paid or due to each
of said persons in respect thereto and (B) that the cost, as estimated
by the person signing such certificate, of the work required to be
done subsequent to the date of such certificate in order to complete
it does not exceed the funds remaining in the hands of the Depository
after payment of the sum requested in such certificate; and
(ii) lien waivers or other evidence reasonably satisfactory to
the Depository and Lessor, to the effect that there has not been or
may not be filed with respect to the Premises or any part thereof any
construction, mechanics', laborers', materialmen's or other like lien
which has not been discharged of record except such as will be
discharged by payment of the amount requested or contested by
appropriate legal action by Lessee in accordance with Section 5.06.
In the event the insurance proceeds exceed the cost of
restoration work, such excess shall be paid equally to the Lessee and
the Lessor or the Fee Mortgagee, as applicable.
Any structural work required to be performed by Lessee under the
provisions of Section 6.02(b) which involves a cost of $50,000 or more
(as estimated by a licensed architect selected by Lessee and
reasonably acceptable to Lessor and the Fee Mortgagee) shall be
performed under the supervision of an architect selected by Lessee and
reasonably satisfactory to Lessor and the holder of the first Fee
Mortgage, and the aforesaid certificate shall also be signed by such
architect as to the matters in paragraph (e)(i) above. Any
nonstructural work required to be performed by Lessee under the
provisions of Section 6.02(b) which involves a cost of $100,000 or
more (as estimated by a licensed architect selected by Lessee and
reasonably acceptable to Lessor and the Fee Mortgagee) shall be
performed under the supervision of an architect selected by Lessee and
reasonably satisfactory to Lessor and the holder of the first Fee
Mortgage, and the aforesaid certificate shall also be signed by such
architect as to the matters in paragraph (e)(i) above.
(f) Requirements of Fee Mortgagee. Subject to Section 9.06 hereof, in
the event the Fee Mortgagee requires changes to this Lease with respect to
the amounts or types of insurance coverages, the duties for repair or
restoration, the handling of proceeds, the application of casualty or
condemnation proceeds to the restoration of the Premises or to the
indebtedness secured by the Fee Mortgage or other matters, Lessee will
cooperate in executing any clarification or amendment of this Lease
reasonably required by the Fee Mortgagee as a condition to providing
financing to Lessor.
Section 6.03. Condemnation.
(a) Notice of Condemnation. In the event of a Condemnation of any or
all of the Premises, Lessee shall provide notice of such Condemnation to
Lessor.
(b) Substantial Condemnation. In the event of any Condemnation of all
of the Premises or so much thereof that the remainder is insufficient to
permit the continued operation of Lessee's business thereon, even if
restored to an architectural unit under the provisions of this Lease (any
such event being a "Substantial Condemnation"), then Lessee may, within 90
days after the Substantial Condemnation, deliver to Lessor a notice (a
"Termination Notice") of its intention to terminate this Lease on the next
date for payment of Basic Rent occurring not less than 120 days after
delivery of the Termination Notice (the "Termination Date"). If the
Termination Date occurs during any Extended Term, then this Lease and the
term hereby granted shall cease and expire on the date when possession of
the Premises or such portion thereof shall be taken, and all rents, taxes
and other charges shall be prorated and paid to such date. If Lessee does
not deliver a Termination Notice pursuant to the foregoing provisions, then
this Lease shall remain in full force and effect and Lessor shall make the
Net Proceeds of the Compensation available to Lessee to repair or restore
the Premises.
(c) Award on Substantial Condemnation. In the event of a termination
of this Lease by reason of a Substantial Condemnation, the whole of any
Compensation shall be paid solely to Lessor, who shall be entitled to keep
said award, including consequential and other damages and compensation of
any sort for such Substantial Condemnation, without deduction therefrom for
any leasehold or other interest in the Premises owned by Lessee, and in no
event (except in the event Lessee shall purchase the Premises pursuant to
subsection (b) above) shall Lessee be entitled to any part of the
Compensation. Lessee agrees to execute any documents that may be required
to facilitate collection by Lessor of any Compensation.
(d) Continuance of Lease on Less Than Substantial Condemnation. In the
event of a Condemnation of any part of the Premises and if the part not
taken is sufficient to permit the reasonable operation of Lessee's business
if restored as an architectural unit, this Lease shall remain in full force
and effect, except:
(i) The annual Basic Rent under this Lease, commencing on the
date that title shall vest by reason of such taking (the "Vesting
Date"), shall be reduced by an amount which bears the same proportion
to the Basic Rent payable immediately prior to such taking as the then
fair market rental value of the part of the Premises so taken shall
bear to the then fair market rental value of the whole of the Premises
immediately prior to such taking.
(ii) Lessor shall be entitled to and shall receive and retain the
Compensation payable in respect of the portion of the Premises so
taken, subject to the provisions of subdivision (iii) below.
(iii) Promptly after such taking Lessee shall at Lessee's
expense, whether or not there are condemnation proceeds available or
sufficient for the purpose, restore that part of the Premises which
remains to as nearly its former condition as circumstances will
permit. The award with respect to any Improvements shall be payable to
the Depository for disbursement subject to the provisions of Section
6.02(e). Subject to the same provisions and limitations set forth for
payments in Section 6.02(e), Lessee shall receive advances from said
award for the payment of the costs of labor and materials as the
restoration and construction progresses. Any balance remaining after
payment of all such costs of labor and materials shall be paid to
Lessor.
(e) Cooperation of Parties. Nothing herein contained shall be
construed or deemed to vest in Lessee any ownership or title of or to the
Premises. Lessor and Lessee shall cooperate with each other, and Lessor
shall have the right to designate counsel to represent Lessor and Lessee to
represent the parties in any proceeding relating to a Condemnation. The
foregoing shall not negate Lessee's right to obtain separate counsel at its
own expense in any such proceeding.
(f) Temporary Condemnation. In the event of a Condemnation of all or
any portion of the Premises for temporary use, the foregoing provisions of
this Section shall be inapplicable thereto, this Lease shall continue in
full force and effect without reduction or abatement of Basic Rent or
Additional Rent. In such event, Lessee alone shall be entitled to make
claim for, recover and retain any Compensation recoverable in respect of
such temporary use whether in the form of rental or otherwise; provided,
that any Compensation paid for any period beyond the term of this Lease
shall be paid to Lessor.
Section 6.04. Required Insurance Coverage. During the Lease Term, Lessee
shall, at Lessee's sole cost and expense, secure and keep the following
insurance (the "Insurance Requirements") in full force and effect:
(a) "All-risk" of physical damage coverage insurance, including
earthquake damage coverage, covering the Improvements, Lessor's Fixtures
and Lessor's Equipment on a replacement cost basis, in an amount sufficient
to avoid application of any co-insurance clause and with an "agreed amount"
endorsement voiding co-insurance, including a full "replacement cost"
endorsement together with appropriate "demolition and increased costs of
construction" endorsements. Lessee shall be responsible for determining the
applicability of "demolition and increased costs of construction"
endorsements. Lessor reserves the right to reasonably disapprove any
exclusions from the "all-risk" coverage furnished hereunder. If Lessee
elects to provide blanket "all-risk" coverage over locations in addition to
the Premises, Lessor reserves the right to require a specific endorsement
or endorsements from the insurance companies affording such coverage
evidencing coverage over the Premises in a sufficient amount to provide
recovery on a replacement cost basis. Lessee's coverage may provide for
reasonable self-insured retentions.
(b) Commercial general liability insurance for the benefit of Lessor,
Lessee and the Fee Mortgagee, fully protecting Lessor, Lessee and the Fee
Mortgagee in respect of personal injuries and death to persons and property
damage, with a combined single limit of not less than $5,000,000 for
personal injuries and death to persons and property damage. In the event
Lessee maintains blanket liability coverage, the total limits of liability
required hereunder must be available to the Premises.
(c) Business interruption/loss of rents insurance covering all risks
referenced in Section 6.04(a) for the benefit of Lessor, Lessee and, if
Lessor so directs, for the benefit of the Fee Mortgagee, as their interests
may appear, covering risk of loss during the lesser of the first 12 months
of reconstruction or the actual reconstruction period necessitated by the
occurrence of any of the covered hazards, in such amounts as may be
customary for comparable properties in the area and in an amount sufficient
to prevent Lessor or Lessee from becoming a co-insurer. Lessee's obligation
for payment of rent shall be reduced dollar for dollar by the amount of
rent insurance received by Lessor or Fee Mortgagee.
(d) Boiler and machinery coverage covering loss or damage, on a
replacement cost basis, from explosion of any steam and pressure boilers,
hot water heaters, and similar apparatus located in, on or about the
Premises with limits of not less than the replacement cost of the
Improvements. In the event coverage hereunder is afforded by more than one
insurance company, all such companies shall furnish a joint loss
endorsement to the policies covering the risk set forth in this Section.
(e) Flood (if the Premises is located in whole or in part within any
flood plain area as designated by any department or agency of the United
States Government having jurisdiction) and such other hazards and in such
amounts as may be customary for comparable properties in the area, provided
the same is available at rates which are economically practical in relation
to the risks covered, as determined by Lessee and reasonably approved by
Lessor.
(f) Workers' compensation insurance coverage for all persons employed
by Lessee on the Premises with statutory limits and otherwise with limits
of and provisions in accordance with the requirements of applicable local,
state and federal law.
(g) During the course of any construction or reconstruction in
connection with any addition, renovation or any Casualty or Condemnation,
"builder's risk" coverage for the Premises written on an "all risk" basis
with privilege granted to occupy in an amount not less than the full amount
of the construction or reconstruction cost, during the period of any Major
Alteration, which shall include the value of building materials on the
Premises, covering loss or damage by fire, lightning, windstorm, hail,
explosion, riot, riot attending a strike, civil commotion, aircraft
vehicles, smoke, earthquakes, vandalism and malicious mischief, and flood
insurance (if the Premises is in a flood hazard area), and such other
hazards as may be included in broad form of extended coverage from time to
time available.
(h) Without limiting the generality of the foregoing, during the Lease
Term, Lessee shall, at Lessee's sole cost and expense, secure and keep the
insurance coverages as required in Schedule D hereto in full force and
effect.
Section 6.05. Separate Insurance Coverages. Without the prior written
consent of Lessor, Lessee shall not obtain or carry separate insurance
concurrent in form or contributing in the event of loss with that required by
Section 6.04 to be furnished by Lessee unless Lessor and Lessee are included
therein as additional named insureds, with loss payable as in this Lease. Lessee
shall immediately notify Lessor whenever any such separate insurance is obtained
and shall deliver to Lessor certificates evidencing the same.
Section 6.06. Compliance With Insurance Requirements. Lessee shall not
violate or permit to be violated any of the conditions or provisions of any of
the insurance policies, and Lessee shall so perform and satisfy the requirements
of the companies writing such policies. Lessee further agrees to reasonably
cooperate with Lessor as and when requested to comply with loss prevention
programs.
Section 6.07. Additional Coverages. On reasonable demand of Lessor or the
Fee Mortgagee, Lessee shall provide such other forms of insurance in such
amounts, and/or the foregoing insurance in such additional amounts as the
parties may from time to time approve, as are customarily furnished by Lessees
under comparable leases in the case of property similar in use to the Premises
and located in the area in which the Premises is situated, provided the same is
available at rates which are economically practical in relation to the risk
covered. Without limiting the generality of the foregoing, if Lessor is or
becomes the Fee Mortgagee with respect to the Premises, then Lessee shall be
required to maintain insurance meeting the requirements specified in Schedule E
hereto and such other requirements as Lessor may specify under its standard
requirements for similar properties and transactions.
Section 6.08. Policy Provisions. All insurance policies maintained by
Lessee pursuant to Section 6.04 shall name Lessee as insured, and Lessor and the
Fee Mortgagee as additional insureds and shall provide (a) that losses shall be
payable notwithstanding any act or negligence of Lessee and (b) that no
cancellation, nonrenewal, or material alteration in the terms and conditions of
coverage thereof shall be effective until at least 30 days after written notice
thereof delivered by certified mail, return-receipt requested, is given to
Lessor and to the Fee Mortgagee.
Section 6.09. Companies and Form of Policies. All policies of insurance
procured by Lessee shall be issued by insurance companies licensed to do
business in the State in which the Premises are located and authorized to issue
such policy or policies. All policies shall be in a form and with companies
reasonably acceptable to Lessor and may be part of blanket coverage relating to
various properties operated by Lessee.
Section 6.10. Handling of Proceeds by Lessee. Insurance proceeds which are
payable to Lessee alone in accordance with the provisions of Section 6.02(a)(i)
shall be held by Lessee and used solely by Lessee to pay for the cost of making
repairs, alterations and improvements to the Premises and doing such work as may
be necessary to protect the Premises against further damage and for no other
purpose. If the proceeds of insurance payable to Lessee alone under Section
6.02(a)(i) shall exceed such costs, one-half of such excess shall be promptly
paid by Lessee to Lessor or to Fee Mortgagee, if applicable.
Section 6.11. Handling of Proceeds by Depository. The Compensation payable
to the Depository in accordance with the provisions of this Lease shall be held
in trust for the purpose of paying for the cost of the work required to be
performed by Lessee under Sections 6.02 and 6.03 and the cost of making repairs,
alterations and improvements to the Premises and doing such work as may be
necessary to protect the Premises against further injury and shall be disbursed
as provided in Section 6.02(e). The Depository shall be entitled to reasonable
compensation payable out of such funds. If the insurance proceeds held by the
Depository shall exceed such cost, such excess shall belong to and be paid over
to the Lessor upon the completion of and payment for such work.
Section 6.12. Certificates of Coverage. Upon the execution of this Lease,
Lessee shall deliver to Lessor and to the Fee Mortgagee a certificate of
insurance coverage as to the policies required by this Lease evidencing
compliance with the terms of this Lease and bearing evidence of payment of all
premiums therefor. Thereafter, as to policy renewals, Lessee will provide Lessor
and the Fee Mortgagee with certificates or assurances of continued coverage
within thirty (30) days prior to expiration of such policies.
Section 6.13. Procurement by Lessor. If premiums on any insurance policy
shall not be paid or if the memoranda of policies or certificates or evidence of
payment of the premiums thereon shall not be so delivered to Lessor as required
herein, or if Lessor learns of any cancellation of any policy required
hereunder, Lessor may procure and/or pay for any such insurance for Lessor's
benefit only and not for the benefit of Lessee, with or without notice to
Lessee. Lessee may restore such coverage effective one year after the effective
date of the insurance procured by Lessor provided Lessee furnishes evidence of
such coverage and payment therefor at least 60 days prior to the expiration of
said one-year policy in the form required by Section 6.04. The amount so paid by
Lessor with interest thereon at the interest rate specified in Section 7.02(k)
hereof from the date of payment shall become due and payable by Lessee as
Additional Rent with the next or any subsequent installment of Basic Rent which
shall become due after such payment by Lessor; it being expressly covenanted
that payment by Lessor of any such premium shall not be deemed to waive or
release the default in the payment thereof by Lessee, or the right of Lessor to
take such action as may be permissible hereunder as in the case of default in
the payment of Basic Rent.
ARTICLE VII
Section 7.01. Events of Default. Lessee shall be in default under this
Lease if any one or more of the following events (referred to herein as "Events
of Default" or "Event of Default") shall occur:
(a) if default shall be made in the procurement or maintenance of any
insurance required under this Lease and such default shall continue for ten
(10) days after written notice is given by Lessor to Lessee of such
default; or
(b) if default shall be made in the payment when due of any Basic Rent
or Additional Rent and such default shall continue for ten (10) days after
Lessor gives Lessee written notice of such nonpayment; or
(c) if default shall be made in the payment of any other sum payable
under this Lease and such default shall continue for ten (10) days after
Lessor gives Lessee written notice of nonpayment; or
(d) if default shall be made by Lessee in the performance of or
compliance with any of the terms of this Lease other than those referred to
in any of the other subparagraphs in this Section, and such default shall
continue for a period of sixty (60) days after Lessor gives Lessee written
notice thereof; or
(e) if Lessee or any guarantor of Lessee's obligations under this
Lease (each, if any, a "Guarantor") shall file a voluntary petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement, composition
or readjustment, or similar relief for itself under any present or future
federal, state or other statute, law or regulation, or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of itself or of all or any substantial part of its or of the
property, or shall take any general assignment for the benefit of creditors
or shall admit in writing its inability to pay debts generally as they
become due; or
(f) if a petition shall be filed against Lessee or any Guarantor
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
federal, state or other statute, law or regulation, and shall remain
undismissed or unstayed for a period of 60 days, or if in connection with
any such event any trustee, receiver or liquidator of Lessee or such
Guarantor, or of all or any substantial part of any of its property, shall
be appointed without its consent or acquiescence and such appointment shall
remain unvacated or unstayed for a period of 30 days; or
(g) if Lessee shall vacate or abandon the Property; or
(h) if this Lease or the estate of Lessee hereunder shall be
transferred to or shall pass to or devolve upon any other person except in
a manner expressly permitted herein.
Section 7.02. Remedies Upon Lessee's Default.
(a) Repossession, Reletting, etc., by Lessor. If an Event of Default
shall have occurred and be continuing, Lessor, without further notice
except as required by applicable law and with no liability to Lessee for
any action in accordance with applicable law, may repossess the Property by
any means provided by law, including (without limitation) summary or
eviction proceedings, ejectment or otherwise, and may remove Lessee and all
other persons and any and all property from the same. At any time or from
time to time thereafter, Lessor may (but shall be under no obligation to)
relet the Property or any part thereof for the account of Lessee, in the
name of Lessee or Lessor or otherwise, without notice to Lessee, for such
term or terms (which may be greater or less than the period which would
otherwise have constituted the balance of the term of this Lease) and on
such conditions (which may include concessions or free rent) and for such
purposes as Lessor in its discretion may determine, and may collect and
receive the rents therefor. Lessor shall not be liable for any failure to
collect any rent due upon any such reletting.
(b) Payment of Damages. No such expiration or sooner termination of
this Lease or of Lessee's right of possession shall relieve Lessee of its
liability and obligations under this Lease, all of which shall survive any
such expiration or sooner termination. In the event of any such expiration
or sooner termination, Lessee will pay to Lessor the Basic Rent and all
Additional Rent and other sums required to be paid by Lessee up to the time
of such expiration or sooner termination, and thereafter Lessee, until the
end of what would have been the term of this Lease in the absence of such
expiration or sooner termination, and whether or not the Property or any
part thereof shall have been relet, shall be liable to Lessor for, and
shall pay to Lessor, as and for liquidated and agreed current damages for
Lessee's default, the Basic Rent and all Additional Rent and other sums
which would be payable thereafter under this Lease by Lessee, less the net
proceeds, if any, of any reletting effected for the account of Lessee
pursuant to Section 7.02(a) during the period which would otherwise have
constituted the balance of the term of this Lease, after deducting all of
Lessor's reasonable expenses in connection with such reletting, including
(without limitation) all repossession costs, brokerage commissions,
attorneys' fees, expenses of employees, costs incurred in alterations to
the Improvements required in connection with the reletting of the Property
for use by another lessee and expenses of preparation for such reletting.
Lessee will pay such amounts to Lessor monthly on the days on which such
Basic Rent, Additional Rent and all other sums would have been payable
under this Lease, and Lessor shall be entitled to recover the same from
Lessee on each such day.
(c) Lump-sum Damage Payment. At any time after such expiration or
sooner termination of this Lease as provided herein or pursuant to law,
whether or not Lessor shall have recovered any amounts under Section
7.02(b), Lessor shall be entitled to recover from Lessee and Lessee shall
pay to Lessor, on demand, as and for liquidated and agreed final damages
for Lessee's default, an amount equal to the sum of the following, as of
the date of such payment by Lessee:
(i) the worth of the unpaid Basic Rent and Additional Rent and
other sums due and payable which had been earned at the time of such
expiration or sooner termination; plus
(ii) the worth of the unpaid Basic Rent and Additional Rent and
other sums due and payable after such expiration or sooner termination
and on or before the time of Lessee's lump-sum payment pursuant
hereto, after deducting from such unpaid amounts any (if any) portion
thereof that Lessee proves could have been reasonably avoided; plus
(iii) the worth of the unpaid Basic Rent and Additional Rent and
other sums due and payable for the balance of the Lease Term or, if
termination occurs during an Extension Period, such Extension Period,
after deducting from such unpaid amounts any (if any) portion thereof
that Lessee proves can be reasonably avoided; plus
(iv) any other amount which is necessary to compensate Lessor for
all the detriment proximately caused by Lessee's failure to perform
Lessee's obligations under this Lease or which would be likely to
result therefrom, including (without limitation) any costs or expense
incurred by Lessor: (A) in retaking possession of the Premises; (B) in
maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or any portion thereof,
including such acts for reletting to a new tenant or tenants; (C) for
leasing commissions; or (D) for any other costs necessary or
appropriate to relet the Premises.
The "worth" of the amounts referred to in subparagraphs (i)
and (ii) of this Section is computed by accruing interest at the
Default Rate on the unpaid rent and other sums due and payable from the
respective due dates for such amounts until Lessee's lump-sum payment
pursuant hereto. The "worth" of the amount referred to in subparagraph
(iii) of this Section is computed by discounting such amount at a rate
equal to the weekly average yield 10-year U.S. Treasury Constant
Maturities (as published in Federal Reserve Statistical Release H-15
[519]) on or nearest to the Friday immediately preceding the date of
Lessee's lump-sum payment pursuant hereto.
(d) Receiver. Lessor may have a receiver appointed for Lessee to take
possession of the Premises and to apply any rent collected from the
Premises and to exercise all other rights and remedies granted to Lessor as
an attorney-in-fact for Lessee.
(e) Lessee's Equipment. At any time after the occurrence of an Event
of Default, Lessor may send written notice to Lessee to remove all of
Lessee's Equipment and property from the Premises. If Lessee shall fail to
remove such Equipment and property within five (5) business days after
receipt of such notice from Lessor, then Lessor may remove such Equipment
and property from the Premises and arrange for storage of such Equipment
and property at another location, all at the sole cost and expense of
Lessee. In the event of any such removal of Lessee's Equipment and other
property from the Premises by Lessor, Lessee waives any and all claims
against Lessor regarding the removal and storage of its Equipment and
property including, without limitation, the manner of removal, cost of
removal, location of storage, cost of storage and damage to or missing
Equipment and property.
(f) Bankruptcy or Insolvency.
(i) If Lessee shall become a debtor in a case filed under Chapter
7 or Chapter 11 of the Bankruptcy Code and Lessee or Lessee's trustee
shall fail to elect to assume this Lease within 60 days after the
filing of such petition or such additional time as provided by the
court, this Lease shall be deemed to have been rejected. Immediately
thereupon, Lessor shall be entitled to possession of the Premises
without further obligation to Lessee or Lessee's trustee, and this
Lease, upon the election of Lessor, shall terminate, but Lessor's
right to be compensated for damages (including, without limitation,
liquidated damages pursuant to any provision hereof) or the exercise
of any other remedies in any such proceeding shall survive, whether or
not this Lease shall be terminated.
(ii) An assumption of this Lease in accordance with Section
7.02(f)(i) shall not limit Lessor's right to declare an Event of
Default hereunder and exercise any and all remedies available to it
if, at any time after such assumption, Lessee is liquidated or files
or has filed against it a subsequent petition under Chapter 7 or
Chapter 11 of the Bankruptcy Code.
(iii) When, pursuant to the Bankruptcy Code, Lessee's trustee or
the debtor-in-possession shall be obligated to pay reasonable use and
occupancy charges for the use of the Premises, such charges shall not
be less than the Basic Rent, Additional Rent and other sums payable by
Lessee under this Lease.
(iv) Neither the whole nor any portion of Lessee's interest in
this Lease or its estate in the Premises shall pass to any trustee,
receiver, assignee for the benefit of creditors or any other person or
entity, by operation of law or otherwise under the laws of any state
having jurisdiction of the person or property of Lessee, unless Lessor
shall have consented to such transfer. No acceptance by Lessor of rent
or any other payments from any such trustee, receiver, assignee,
person or other entity shall be deemed to constitute such consent by
Lessor nor shall it be deemed a waiver of Lessor's right to terminate
this Lease for any transfer of Lessee's interest under this Lease
without such consent.
(v) In the event of an assignment of Lessee's interests pursuant
to this Section, the right of any assignee to extend the Lease Term
shall be extinguished.
(g) Limitation by Law. If any statute or rule of law governing a
proceeding in which liquidated final damages provided for in Section 7.02
are to be proved shall validly limit the amount thereof to an amount less
than the amount above agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law.
(h) Remedies Cumulative, Etc. Each right, power and remedy provided
for in this Lease or now or hereafter existing at law or in equity or by
statute or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power or remedy provided for in this Lease
or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise of any one or more
of the rights, powers or remedies provided for in this Lease or now or
hereafter existing in law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise of any or all other such
rights, powers or remedies. The collection of any late payment charge or
any interest at the Default Rate shall not be deemed an election of
remedies or in lieu of any other remedies or damages. Lessor shall have the
right to specifically enforce this Lease and to enjoin any default or
prospective or anticipated default hereunder.
(i) Statutory Rights. Lessee retains any rights of notice or rights of
redemption, if any, as may be required by applicable State law. "State"
shall mean the State where the Premises are located. However, any such
notice required by law may be given by Lessor in (or, at Lessor's option,
separate from) any notice required to be given by Lessor under this Lease,
and the time periods provided in this Lease and required under applicable
law will not be "tacked" onto each other but will commence running from the
original date of delivery of such notices.
(j) Application of Funds. Any payments received by Lessor under any of
the provisions of this Lease during the existence or continuance of any
Event of Default (and any payment made to Lessor rather than Lessee due to
the existence of an Event of Default) shall be applied to Lessee's
obligations in such order as Lessor may determine or, if prescribed by the
laws of the State, in accordance with such laws.
(k) Late Interest. If Lessee shall fail to make any payment of any
sums required by this Lease within ten days after Lessor gives notice of
nonpayment, Lessee shall pay to Lessor, in addition to such sums, interest
thereon at the rate of 5% per annum higher than and varying daily with the
highest prime rate as published from time to time in the Wall Street
Journal (the "Default Rate"), computed from the date such payment was due
to and including the date of payment in full. If the Wall Street Journal
ceases to quote such rate, Lessor shall have the right to substitute a
reasonably comparable index for such prime rate.
(l) No Usury. The intention of the parties being to conform strictly
to the usury laws now in force, whenever any provision in this Lease
provides for payment by Lessee to Lessor of interest at a rate in excess of
the legal rate permitted to be charged, such rate herein provided to be
paid shall be deemed reduced to such legal rate.
ARTICLE VIII
Section 8.01. Lessee's Notices and Remedies. In the event Lessor fails to
perform its responsibilities pursuant to this Lease, Lessee's notice as to
Lessor's nonperformance will be sent simultaneously to Lessor and the Fee
Mortgagee. Lessor will be in default under this Lease if Lessor fails to cause
such responsibilities to be fully performed within 30 days after written notice
by Lessee to Lessor specifying the nature of the default with reasonable
particularity. If the default is of such a nature that it cannot be remedied
fully within the 30-day period, this requirement shall be satisfied if Lessor
begins correction of the default within the 30-day period and thereafter
proceeds with reasonable diligence and in good faith to effect the remedy as
soon as reasonably practicable. Lessee shall not have the right to terminate
this Lease as a result of Lessor's default. In the event of such default, Lessee
shall have all remedies available under law for breach of contract, including
(without limitation) the right of specific performance. In addition, Lessee may
elect in its discretion to perform the required action or take corrective action
reasonably required to cure the default if it pertains to the Premises, in which
event Lessor shall reimburse Lessee for the reasonable out-of-pocket costs of
such action, together with reasonable and necessary costs and disbursements and
interest, and such amounts may be deducted from the rent thereafter to become
due under this Lease, after at least 20 days' written notice to Lessor (and the
Fee Mortgagee) as to the costs so incurred.
Section 8.02. Fee Mortgagee's Right To Cure. The Fee Mortgagee that has
notified Lessee of its address in the manner provided for notices in this Lease
will have the right to cure any default by Lessor. The cure period will commence
on delivery of notice to such Fee Mortgagee of the default and extend for a
period ending 30 days after the end of the time period for Lessor to cure a
default. In this connection, any representative of the Fee Mortgagee shall have
the right to enter upon the Premises for the purpose of curing Lessor's default.
ARTICLE IX
Section 9.01. Subordination and Nondisturbance. This Lease and all rights
of Lessee under this Lease are, and shall at the option of Lessor remain,
subject and subordinate in all respects to the Fee Mortgage and to all advances
made or hereafter to be made under any such mortgage, and to all renewals,
modifications, consolidations, correlations, replacements and extensions of, and
substitutions for, the Fee Mortgage, provided that the Fee Mortgagee shall
execute and deliver to Lessee a nondisturbance and attornment agreement in form
and substance approved by the Fee Mortgagee and reasonably acceptable to Lessee
which provides in substance (a) that if Lessor defaults under its mortgage, the
Fee Mortgagee will not disturb the occupancy of Lessee and this Lease shall
remain in full force and effect in accordance with its terms, provided that no
Event of Default has occurred and is continuing (in the event of any such Event
of Default, the Fee Mortgagee shall have such rights and remedies with respect
to such default as are provided herein), (b) that Lessee shall, at the Fee
Mortgagee's option, attorn to such Fee Mortgagee and the Lease shall continue as
a direct lease between such Fee Mortgagee and Lessee, and (c) containing such
other provisions as Fee Mortgagee may reasonably require. The provisions of this
Section shall be self-operative. Lessee shall also provide to the Fee Mortgagee
any and all other assurances or instruments the Fee Mortgagee may reasonably
request to evidence and confirm such provisions. All such agreements shall be in
form suitable for recording.
Section 9.02. Election Not To Subordinate. Notwithstanding the provisions
of Section 9.01, the holder of any mortgage to which this Lease is subject and
subordinate, as provided in said Section 9.01, shall have the right, at its sole
option, at any time, to subordinate and subject its mortgage, in whole or in
part, to this Lease by recording a unilateral declaration to such effect.
Section 9.03. Attornment. At any time prior to the expiration of the Lease
Term, Lessee agrees, at the election and upon demand of any owner of the
Premises, or of the Fee Mortgagee, to attorn, from time to time, to any such
owner or holder, upon the then executors' terms and conditions of this Lease,
for the remainder of the term originally demised in this Lease and for any
renewal term, provided that such owner or holder, as the case may be, shall then
be entitled to possession of the Premises subject to the provisions of this
Lease. The provisions of this Section shall inure to the benefit of any such
owner or holder, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the foreclosure of any such mortgage, shall be
self-operative upon any such demand, and no further instrument shall be required
to give effect to said provisions. Lessee, however, upon demand of any such
owner or holder agrees to execute, from time to time, instruments in
confirmation of the foregoing provisions of this Section, satisfactory to any
such owner or holder acknowledging such attornment and setting forth the terms
and conditions of its tenancy. Nothing contained in this Section shall be
construed to impair any right otherwise exercisable by any such owner or holder.
Section 9.04. Limitations on Lessee. Lessee agrees that, if requested by
Lessor or the Fee Mortgagee, Lessee shall enter into an agreement with the Fee
Mortgagee whereby Lessee shall agree for the benefit of such Fee Mortgagee that
Lessee will not, without in each case the prior written consent of such Fee
Mortgagee, (a) amend, modify, cancel or surrender the term of this Lease except
as expressly permitted by the provisions of this Lease, or enter into any
agreement with Lessor so to do or (b) pay any installment of Basic Rent more
than one month in advance of the due date thereof or otherwise than in the
manner provided for in this Lease.
Section 9.05. No Merger of Fee and Leasehold Estates. There shall be no
merger of this Lease nor of the leasehold estate created by this Lease with the
fee estate in the Premises or any part thereof by reason of the fact that the
same person, firm or corporation or other entity may acquire or own such estates
directly or indirectly; and no such merger shall occur until all persons, firms,
corporations and other entitled, including the Fee Mortgagee, having any
interest in this Lease and the leasehold estate created hereby and the fee
estate in the Premises or any party thereof shall join in a written instrument
effecting such merger and shall duly record it.
Section 9.06. Changes to Lease Required by Fee Mortgagee. In the event the
Fee Mortgagee shall require reasonable modifications of this Lease that do not,
in the aggregate, materially increase the obligation of Lessee hereunder or
interfere with or diminish Lessee's rights, Lessee agrees to execute such
modification(s) upon request of Lessor.
ARTICLE X
Section 10.01. Estoppel Certificate. Upon request, either party will,
without charge, execute, acknowledge and deliver to the other party, within 15
days after request therefor, a certificate certifying (a) that this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that this Lease is in full force and effect as modified and stating the
modifications), (b) the date, if any, to which the Basic Rent has been paid, (c)
whether or not there are, to the knowledge of the party, then existing any
defaults under this Lease (if so, specifying the same) and (d) such other
matters as may be reasonably required. Any such certificate may be relied upon
as to the facts stated therein by any actual or prospective mortgagee or
purchaser of the Premises from Lessor or any actual or prospective sublessee or
assignee of Lessee's interest in this Lease in connection with one of the
transactions permitted or approved under Article IV.
Section 10.02. Financial Information. Lessee will deliver to Lessor within
10 days (except as set forth below) of filing, sending or otherwise making
public, copies of all periodic reports filed by with the Securities and Exchange
Commission ("SEC") (including, without limitation, all 8-K, 10-K and 10-Q
reports pursuant to Section 13(a) of the Securities Act of 1934, as amended (the
"1934 Act")), and all proxy statements of Lessee to its stockholders; provided,
however, that, if such statements and reports are not required to be filed or do
not include the following information, Lessee will deliver to Lessor with
respect to Lessee the following:
(a) Within 10 days after filing with the SEC but in no event more than
105 days after the end of each fiscal year of Lessee, (i) a balance sheet
of Lessee and its consolidated subsidiaries as of the end of such year,
(ii) a statement of profits and losses of Lessee and its consolidated
subsidiaries for such year and (iii) a statement of cash flows of Lessee
and its consolidated subsidiaries for such year, setting forth in each of
(i), (ii) and (iii) above, in comparative form, the corresponding figures
for the preceding fiscal year in reasonable detail and scope and prepared
by independent certified public accountants of recognized national standing
or New York City Metro Area regional standing selected by Lessee, and
within 90 days after the end of each fiscal quarter of Lessee a balance
sheet of Lessee and its consolidated subsidiaries as of the end of such
quarter and statements of profits and losses of Lessee and its consolidated
subsidiaries for such quarter, setting forth in each case, in comparative
form, the corresponding figures for the similar quarter of the preceding
year, in reasonable detail and scope, and certified by an officer of
Lessee, all of the foregoing financial statements being prepared in
accordance with generally accepted accounting principles, consistently
applied, except as otherwise indicated in such statements; and
(b) Upon request of Lessor, with reasonable promptness, such
additional, public financial statements and information (including, without
limitation, copies of public reports filed by Lessee or financial
statements and information delivered by Lessee to its shareholders or
lenders and, if Lessee is part of a consolidated group, its financial
statement consolidating entries in reasonable detail) regarding the
business affairs and financial condition of Lessee as Lessor may reasonably
request, for so long as same do not violate any federal or state laws
limiting the dissemination of information by publicly-held companies.
ARTICLE XI
Section 11.01. Quiet Enjoyment. Lessor covenants that Lessee, upon paying
the Basic Rent and all Additional Rent and other sums payable hereunder and
performing and complying with all the terms hereof, shall, subject to the terms
of this Lease, lawfully, peaceably and quietly hold, occupy, possess and enjoy
the Premises during the term of this Lease, without hindrance or molestation by
Lessor or others claiming through Lessor, subject, however, to the terms of this
Lease.
ARTICLE XII
Section 12.01. Lessor's Reversionary Interest; Surrender of Premises. Upon
expiration or termination of this Lease, Lessor shall, at no charge to Lessor,
become the owner of, and have the reversionary interest in, all of the
Improvements. Lessee shall surrender the Premises to Lessor in good repair,
operating condition, working order and appearance, subject to reasonable wear
and tear and (to the extent provided herein for termination after casualty)
damage by fire and other casualty. All repairs for which Lessee is responsible
will be completed to the latest practical date prior to such surrender. If this
Lease is terminated in connection with a Casualty, Lessee will assign to Lessor
the entire insurance proceeds pertaining to the Premises that revert to Lessor.
Lessee shall promptly remove all of its own signs, inventory, Lessee's Equipment
and other personal property that remain the property of Lessee and will restore
any physical damage caused by such removal.
Section 12.02. Delivery of Rents and Records. Upon surrendering the
Premises to Lessor, Lessee will pay to Lessor all deposits or other security and
all prepaid rents received from subtenants and other occupants whose tenancies
may continue beyond the last day of the Lease Term or the sooner termination
thereof and will deliver to Lessor all original subleases and modifications
thereof, lease files, plans, records, registers and all other papers and
documents which may be required for the proper operation and management of the
Premises and are then in Lessee's possession or under its control. Lessee shall
have access to any records, papers and documents so delivered to such extent and
at such times as the same may be reasonably required after the last day of the
term of this Lease Term or such sooner termination thereof. Nothing herein shall
require Lessor to recognize any such existing sublease as continuing in effect
after such last day or sooner termination. The provisions of this Section shall
survive the expiration or sooner termination of this Lease.
Section 12.03. Acceptance of Surrender. No surrender to Lessor of this
Lease or of the Premises or any part thereof, or of any interest therein, prior
to the expiration of the Lease Term, shall be valid or effective unless agreed
to and accepted in writing by Lessor, and no act by Lessor or any representative
or agent of Lessor, other than such a written acceptance by Lessor, shall
constitute an acceptance of any such surrender.
Section 12.04. Holding Over. If Lessee remains in possession of the
Premises or any part thereof after the expiration or sooner termination of the
term of this Lease (or any renewal term hereof) without the execution of a new
lease, such holding over, in the absence of a written agreement to the contrary,
shall be deemed, if Lessor so elects, to have created a tenancy from
month-to-month terminable on 30 days' notice by either party to the other. Such
month-to-month tenancy will be at a monthly rental equal to 125% of the sum of
the monthly installment of Basic Rent payable during the last year of the Lease
Term, and Lessee will otherwise continue to pay Additional Rent as provided in
this Lease and perform its other obligations hereunder.
ARTICLE XIII
Section 13.01. Definition of "Lessor". The term "Lessor," as used in this
Lease so far as covenants or obligations on the part of Lessor are concerned,
shall be limited to mean and include only the owner or owners of the Premises or
holder of the Fee Mortgage in possession at the time in question of the
Premises. In the event of any transfer or transfers of the title of the
Premises, Lessor herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved of its
liabilities accruing from and after the date of such transfer and conveyance of
all liability as respects the performance of any covenants or obligations on the
part of Lessor contained in this Lease thereafter to be performed.
Section 13.02. Exculpation of Lessor. Notwithstanding anything contained in
the preceding paragraph or in any other provision hereof, Lessee shall look
solely to the estate and interest of Lessor, its successors and assigns in the
Premises (and any condemnation, insurance or other proceeds thereof) for the
collection of any judgment recovered against Lessor based upon the breach by
Lessor of any of the terms, conditions or covenants of this Lease on the part of
Lessor to be performed, and no other property or assets of Lessor shall be
subject to levy, execution or other enforcement procedures for the satisfaction
of Lessee's remedies under or with respect to either this Lease, the
relationship of Lessor and Lessee hereunder or Lessee's use and occupancy of the
Premises.
ARTICLE XIV
Section 14.01. No Waiver, etc., by Parties. No failure by a party to insist
upon the strict performance of any term of this Lease or to exercise any right,
power or remedy consequent upon a breach thereof, and no acceptance of full or
partial rent by Lessor during the continuance of any such breach, shall
constitute a waiver of any such breach or of any such term.
Section 14.02. Notices, Etc. All notices and demands which are required or
permitted to be given by either party on the other hereunder shall be in
writing. All notices and demands shall be sent by United States Mail, certified
or registered mail, return-receipt requested, or by recognized overnight courier
service (such as Federal Express), or by facsimile or other telecommunication
device capable of transmitting and creating a written record. Notices shall be
effective five (5) business days following the date they are deposited in the
United States Mail, one (1) business day after delivery to an overnight courier
and on the day they are telefaxed (if a confirmation report results). Unless a
party designates another address for notices (by notice given pursuant to this
Section, notices shall be sent to the following address:
If to Lessor: General Electric Capital Business Asset Funding Corporation
00000 XX 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President/Manager, Real Estate
Facsimile: (000) 000-0000
If to Lessee: Manchester Technologies Inc.
000 Xxxx Xxxxxx
-
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
......... Xxxxxxx Xxxxxxxx Xxxxx & Xxxx LLC
......... 000 Xxxxxxxx
......... Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Any notices to be provided to the Fee Mortgagee shall be to such address as
shall be provided to the parties in writing by the Fee Mortgagee.
Section 14.03. Separability. Each and every covenant and agreement
contained in this Lease is, and shall be construed to be, a separate and
independent covenant and agreement, and the breach of any such covenant or
agreement by Lessor shall not discharge or relieve Lessee from its obligation to
perform the same. If any term or provision of this Lease or the application
thereof to any person or circumstance shall to any extent be invalid and
unenforceable, the remainder of this Lease, or the application of the term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and shall be enforced to the extent permitted by law.
Section 14.04. Headings. The headings to the various Sections of this Lease
have been inserted for convenience of reference only and shall not limit or
otherwise affect the meaning thereof.
Section 14.05. Relationship of Parties; Disclaimer. The relationship of the
parties to this Lease is landlord and tenant. Lessor is not a partner, joint
venturer, joint employer, principal or agent of or with or a lender to Lessee in
any respect or for any purpose in the conduct of Lessee's business or otherwise.
No provision of this Lease or previous (or subsequent) conduct or activities of
Lessee or Lessor will be construed:
(a) as making either party a partner, joint venturer, joint employer,
principal or agent of or with each other or
(b) as making Lessee or Lessor responsible for payment or
reimbursement of any costs incurred by each other (except as may be
expressly set forth herein or as expressly set forth in other written
agreements executed by the parties).
Section 14.06. Operating Lease. This Lease is specifically intended by the
parties to be a true lease. Lessor holds fee simple absolute title to the
Premises, and such title was not acquired or intended to be held as any type of
mortgage or security interest. This Lease is intended by Lessor and Lessee to be
an operating lease under generally accepted accounting principles.
Section 14.07. Joint Obligation. If there be more than one Lessee or
assignee of Lessee, the obligations imposed upon Lessee hereunder shall be joint
and several.
Section 14.08. Prior Agreements. This Lease (including attached Exhibits)
is the entire, final and complete agreement of the parties only with respect to
the specific matters set forth in this Lease and supersedes and replaces all
written and oral agreements previously or contemporaneously made or existing by
and between the parties or their representatives with respect to such specific
matters.
Section 14.09. Recording. This Lease shall not be recorded, but, upon the
request of either party, the parties shall execute and acknowledge a memorandum
of this Lease in recordable form that may be recorded by Lessor or Lessee.
Section 14.10. Proration of Rent. If this Lease starts or ends during a
rental period, Rent and Additional Rent shall be prorated as of such date using
a 30-day month and a 360-day year. Upon termination other than for default,
prepaid rent shall be refunded, if applicable.
Section 14.11. Authorization of Lease. Each of Lessee and Lessor hereby
covenants and warrants to the other that (a) it is duly qualified to do business
in the state in which the Premises is located, (b) it has full right and
authority to enter into this Lease and to perform all of its obligations
hereunder and (c) each person (and all of the persons if more than one signs)
signing this on its behalf is duly and validly authorized to do so.
Section 14.12. Applicable Law. This Lease shall be governed by and
construed and enforced in accordance with the laws of the State (as defined in
Section 7.02(i)).
Xxxxxxx 00.00. Xxxxxx Xxxxxx Funds. All sums herein mentioned shall be
conclusively deemed to refer to and shall be measured by and payable in the
lawful currency of the United States.
Section 14.14. Time of Performance. Time is of the essence of this Lease
and each and all of its provisions in which performance is a factor.
Section 14.15. "Force Majeure" Delays. In the event that either party
hereto shall be delayed or hindered in or prevented from the performance of any
act required hereunder by reason of strikes, lockouts, labor troubles, inability
to procure materials, failure of power, restrictive governmental laws or
regulations, riots, insurrection, war or other reason of like nature not the
fault of the party delayed in performing work of doing acts required under the
terms of this Lease (a delay resulting from financial inability to perform,
excepted) (collectively, "force majeure" events), then performance of such work
or act shall be excused for the period of the delay, and the period for the
performance of any such work or act shall be extended for a period equivalent to
the period of such delay. This provision shall not operate to excuse Lessee from
prompt payment of Basic Rent, Additional Rent or any other payments required by
the terms of this Lease, unless the commencement date or periods permitting
Lessee to abatement of rent are postponed or extended by such delays.
Section 14.16. Waiver of Jury Trial. LESSOR AND LESSEE HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS LEASE, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS AMONG LESSEE OR LESSOR RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED BY THIS LEASE OR ANY RELATED TRANSACTIONS, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG LESSOR AND LESSEE. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS).
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY RELATED DOCUMENTS, OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
LEASE OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS LEASE MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 14.17. Attorneys' Fees. In the event of any action or proceeding by
either party against the other under this Lease, the prevailing party shall be
entitled to recover for the fees of its attorneys in such action or proceeding,
including costs of appeal, if any, in such amount as the court may adjudge
reasonable as attorneys' fees.
Section 14.18. Amendments. Neither this Lease nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom the enforcement of the change, waiver,
discharge or termination is sought.
Section 14.19. Successors and Assigns. This Lease shall bind and inure to
the benefit of Lessor and its successors and assigns and Lessee and its
successors and, without limiting Article IV hereof, its assigns. Any assignment
of this Lease by Lessor shall not terminate such Lessor's rights under the
environmental and other indemnities provided by Lessee in this Lease. In
furtherance of any proposed assignment by Lessor, Lessor may share with the
proposed assignee Lessee's financial information and Property information,
provided such proposed assignee is directed to treat such information
confidentially (Lessor hereby agreeing to be responsible for any failure of any
such proposed assignee to so treat any such information).
Section 14.20. Brokers. Lessee warrants that it has had no dealings with
any real estate broker or agent in connection with the negotiation of this Lease
and it knows of no real estate broker or agent other than Xxxxxxx Xxxxxxx and
AGJR Real Estate who is entitled to a commission in connection with this Lease.
Lessee shall defend and indemnify Lessor against all claims for any broker's or
agent's fees, commissions and expenses, except to the extent Lessor has agreed
to pay the same in writing.
Section 14.21. Construction. Each party to this Lease has had the
opportunity to consult with its legal counsel, and this Lease shall not be
construed against either party. All pronouns or any variation thereof in this
Lease shall be deemed to refer to masculine, feminine, neuter, singular or
plural as the identity of the person or persons may require. All of the
provisions of this Lease shall be deemed and construed to be "conditions" as
well as "covenants" as though the words specifically expressing or importing
covenants and conditions be used in each separate provision hereof.
Section 14.22. Execution in Counterparts. This Lease may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall constitute one and the same instrument.
Section 14.23. Exhibits and Riders. All Exhibits, schedules, plats, riders
and addenda, if any, and other attachments to this Lease are a part hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
EXECUTION PAGE FOLLOWS.]
01-287182.07
01-287182.07
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed as of the date first above written.
Lessor:
GENERAL ELECTRIC CAPITAL BUSINESS
ASSET FUNDING CORPORATION,
a Delaware corporation
By:
-------------------------------------------------
Print:
----------------------------------------------
Its:
------------------------------------------------
Lessee:
MANCHESTER TECHNOLOGIES INC.,
a New York corporation
By:
-------------------------------------------------
Print:
----------------------------------------------
Its:
------------------------------------------------
[EXECUTION PAGE OF LEASE AGREEMENT]
SCHEDULE A
LEGAL DESCRIPTION
01-287182.07
01-287182.07
SCHEDULE B
CONTRACTUAL REQUIREMENTS
000 Xxxx Xxxxxx
1. Island Wide Mechanical Systems Inc. HVAC maintenance agreement dated
10/21/02 for period 09/01/02 -08/31/03.
2. Electronix Systems Central Station Alarms, Inc. security system
contract dated 08/15/02.
01-287182.07
01-287182.07
SCHEDULE C
PERMITTED EXCEPTIONS
000 Xxxx Xxxxxx
1. Covenants, restrictions, easements, agreements, of record, etc. more fully
set forth herein: Covenants and Restrictions Liber 7404 CP 558 Covenants
and Restrictions Liber 7764 CP 407 Sewer Agreement Liber 7461 CP 153 Right
of Way Liber 6082 CP 516 Telephone Agreement Liber 0000 XX 000 (Xxxxxxx
Xxxxxxx) Electric Easement Liber 7440 CP 60 (Affects Streets) Water
Agreement Liber 7584 CP 336 (Affects Streets) Road Dedication Liber 10018
CP 578 (Dedicates all Streets on Map to Town) Telephone Easement Liber 1114
2. Fifty (50) foot setback line as shown on filed map.
2
01-287182.07
01-287182.07
SCHEDULE D
LESSEE INSURANCE REQUIREMENTS
NAME OF INSURED: MANCHESTER TECHNOLOGIES INC.
---------------
INSURED MAILING ADDRESS: 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
-----------------------
PROPERTY ADDRESS(s): 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
-------------------
ADDITIONAL INSURED:
------------------
General Electric Capital Business Asset Funding Corporation ("GE Capital"), a
Delaware corporation, its successors and assigns 00000 XX 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
LEASE NO.: 001- -001
--------- ------
INSURANCE REQUIREMENTS:
----------------------
HAZARD INSURANCE:
----------------
Evidenced on Form Xxxxx 27 - Evidence of Insurance, naming General Electric
Capital Business Asset Funding Corporation, its successors and/or assigns, as
Additional Insured as respects the subject property.
Perils: Fire and Extended coverage, vandalism and malicious mischief,
Boiler and Machinery, and if applicable, Flood and Earthquake Insurance.
Values: 100% Replacement cost value of property/Limit of $5,000 deductible
------
Endorsements Required:
o Inflation Guard, and Agreed Amount and Replacement Cost endorsements
o List of Locations and Schedule of Values, if Blanket Policy
o 30 Days Notice of Cancellation
o Agreed Amount endorsement
Co-insurance should not be a condition of any insurance provided.
Loss of Rents/Business Interruption for 12 months (or in an amount equivalent to
at least 12 months rent) is required.
Boiler and Machinery Coverage will be required.
LIABILITY:
Coverage to be On Occurrence basis only.
Evidence of Insurance, showing comprehensive general liability on an
Occurrence Basis, in an amount not less than $5,000,000 (per occurrence) to
include:
Bodily injury and property damage liability (primary and excess
umbrella acceptable to satisfy limits).
General Electric Capital Business Asset Funding Corporation is to be
named Additional Insured as respects this property and the Additional
Insured endorsement should be attached to the certificate.
SPECIAL INSTRUCTIONS
General Electric Capital Business Asset Funding Corporation is to be
provided with an Evidence of Insurance and a Certificate of Insurance from an
insurance company having a Best's Rating of A/X or better for, respectively,
hazard and liability coverage and must be executed by the insurance company or
its authorized agent. The evidence and certificate must itemize the above
coverage and endorsements. WITHIN 90 DAYS OF ISSUANCE OF THE EVIDENCE OF
INSURANCE, THE INSURANCE COMPANY IS TO PROVIDE A CERTIFIED COPY OF THE INSURANCE
POLICY INCLUDING ALL ENDORSEMENTS AND AMENDMENTS.
2
01-287182.07
01-287182.07
SCHEDULE E
PERMANENT LOAN INSURANCE REQUIREMENTS
NAME OF INSURED: MANCHESTER TECHNOLOGIES INC.
---------------
INSURED MAILING ADDRESS: 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
-----------------------
PROPERTY ADDRESS(s): 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
-------------------
MORTGAGEE/LOSS PAYEE:
--------------------
LOAN NO.:
INSURANCE REQUIREMENTS:
----------------------
HAZARD INSURANCE:
----------------
Evidenced on Form Xxxxx 27 - Evidence of Property Insurance, naming General
Electric Capital Business Asset Funding Corporation, its successors and/or
assigns, as Loss Payee and Mortgagee as respects the subject property. If
the credit tenant is to provide the insurance coverage, the Borrower must
be named as Additional Insured.
Perils: Fire and Extended coverage, vandalism and malicious mischief,
Boiler and Machinery, and if applicable, Flood and Earthquake Insurance.
Values: l00% Replacement cost value of property/Limit of $5,000 deductible
------
Endorsements Required:
o Inflation Guard, and Agreed Amount and Replacement Cost endorsements
o List of Locations and Schedule of Values, if Blanket Policy
o 438BFU (Loss Payee Endorsement - see copy attached, with
enlargement of same for easier reading), in favor of General
Electric Capital Business Asset Funding Corporation amended to 30
days notice of change, cancellation or non-renewal.
o 30 Days Notice of Cancellation
? Waiver of Subrogation endorsement is required, unless property is
owner occupied.
Co-insurance should not be a condition of any insurance provided.
Loss of Rents/Business Interruption for 12 months (or in an amount
equivalent to at least 12 months rent) is required.
Boiler and Machinery coverage is required. If the insurance carrier
for the Boiler & Machinery coverage is different from that of the
Property Coverage, a Joint Loss Agreement endorsement must be
reflected on the evidences of insurance for both Property coverage and
Boiler & Machinery coverage.
If the 438BFU Lender's Loss Payable Endorsement is not available,
please submit another Loss Payable endorsement for review by General
Electric Capital Business Asset Funding Corporation.
LIABILITY:
Evidenced on Form Xxxxx 25 - Certificate of Liability Insurance
Coverage to be On Occurrence basis only.
Evidence of Insurance, showing comprehensive general liability on an
Occurrence Basis, in an amount not less than $2,000,000 (per
occurrence) to include;
Bodily injury and property damage liability (primary and excess
umbrella acceptable to satisfy limits).
General Electric Capital Business Asset Funding Corporation is to be
named Additional Insured as respects this property only and the
Additional Insured endorsement should be attached to the certificate.
If the credit tenant is to provide the insurance coverage, the
Borrower must be named as Additional Insured as well.
SPECIAL INSTRUCTIONS
General Electric Capital Business Asset Funding Corporation is to be provided
with an Evidence of Property Insurance and a Certificate of Liability Insurance
from an insurance company having a Best's Rating of A/X or better for both
hazard and liability coverage and must be executed by the insurance company or
its authorized agent. The evidence and certificate must itemize all the above
endorsements and the evidence must include a copy of the completed and signed
438BFU endorsement (a copy of which is attached). WITHIN 90 DAYS OF ISSUANCE OF
THE EVIDENCE OF INSURANCE, THE INSURANCE COMPANY IS TO PROVIDE A CERTIFIED COPY
OF THE INSURANCE POLICY INCLUDING ALL ENDORSEMENTS AND AMENDMENTS.
2
01-287182.07
01-287182.07
LENDER'S LOSS PAYABLE ENDORSEMENT - 438 BFU
1. Loss or damage, if any, under this policy shall be paid to General Electric
Capital Business Asset Funding Corporation, its successors and assigns,
hereinafter referred to as the "Lender," in whatever form or capacity its
interests may appear and whether said interest be vested in said Lender in
its individual or in its disclosed or undisclosed fiduciary or
representative capacity, or otherwise, or vested in a nominee or trustee of
said Lender.
2. The insurance under this policy, or any rider or endorsement attached
thereto, as to the interest only of the Lender, its successors and assigns,
shall not be invalidated nor suspended: (a) by any error, omission or
change respecting the ownership, description, possession or location of the
subject of the insurance or the interest therein, or the title thereto; (b)
by the commencement of foreclosure proceedings or the giving of notice of
sale of any of the property covered by this policy by virtue of any
mortgage or trust deed; (c) by any breach of warranty, act, omission,
neglect or noncompliance with any of the provisions of this policy,
including any and all riders now or hereafter attached thereto, by the
named insured, the borrower, mortgagor, trustor, vendee, owner, tenant,
warehouseman, custodian, occupant, or by the agents of either of any of
them or by the happening of any event permitted by them or either of them,
or their agents, or which they failed to prevent, whether occurring before
or after the attachment of this endorsement, or whether before or after a
loss, which under the provisions of this policy of insurance or of any
rider or endorsement attached thereto would invalidate or suspend the
insurance as to the named insured, excluding herefrom, however, any acts or
omissions of the Lender while exercising active control and management of
the property.
3. In the event of failure of the insured to pay any premium or additional
premium which shall be or become due under the terms of this policy or on
account of any change in occupancy or increase in hazard not permitted by
this policy, this Company agrees to give written notice to the Lender of
such nonpayment of premium after sixty (60) days from and within one
hundred and twenty (120) days after due date of such premium and it is a
condition of the continuance of the rights of the Lender hereunder that the
Lender when so notified in writing by this Company of failure of the
insured to pay such premium shall pay or cause to be paid the premium due
within ten (10) days following receipt of the Company's demand in writing
therefor. If the Lender shall decline to pay said premium or additional
premium, the rights of the Lender under this Lender's Loss Payable
Endorsement shall not be terminated before ten (10) days after receipt of
said written notice by the Lender.
4. Whenever this Company shall pay to the Lender any sum for loss or damage
under this policy and shall claim that as to the insured no liability
therefor exists, this Company, at its option, may pay to the Lender the
whole principal sum and interest and other indebtedness due or to become
due from the insured, whether secured or unsecured (with refund of all
interest not accrued), and this Company, to the extent of such payment,
shall thereupon receive a full assignment and transfer, without recourse,
of the debt and all rights and securities held as collateral thereto.
5. If there be any other insurance upon the within described property, this
Company shall be liable under this policy as to the Lender for the
proportion of such loss or damage that the sum hereby insured bears to the
entire insurance of similar character on said property under policies held
by, payable to and expressly consented to by the Lender. Any Contribution
Clause included in any Fallen Building Clause Waiver or any Extended
Coverage Endorsement attached to this contract of insurance is hereby
nullified, and also any Contribution Clause in any other endorsement or
rider attached to this contract of insurance is hereby nullified except
Contribution Clauses for the compliance with which the insured has received
reduction in the rate charged or has received extension of the coverage to
include hazards other than fire and compliance with such Contribution
Clause is made a part of the consideration for insuring such other hazards.
The Lender upon the payment to if of the full amount of its claim will
subrogate this Company (pro rata with all other insurers contributing to
said payment) to all of the Lender's rights of contribution under said
other insurance.
6. This Company reserves the right to cancel this policy at any time, as
provided by its terms, but in such case this policy shall continue in force
for the benefit of the Lender for thirty (30) days after written notice of
such cancellation is received by the Lender and shall then cease.
7. This policy shall remain in full force and effect as to the interest of the
Lender for a period of ten (10) days after its expiration unless an
acceptable policy in renewal therefor with loss thereunder payable to the
Lender in accordance with the terms of this Lender's Loss Payable
Endorsement shall have been issued by some insurance company accepted by
the Lender.
8. Should legal title to and beneficial ownership of any of the property
covered under this policy become vested in the Lender or its agents,
insurance under this policy shall continue for the term thereof for the
benefit of the Lender, but, in such event, any privileges granted by this
Lender's Loss Payable Endorsement which are not also granted the insured
under the terms and conditions of this policy and/or under other riders or
endorsements attached thereto shall not apply to the insurance hereunder as
respects such property.
9. All notices herein provided to be given by the Company to the Lender in
connection with this policy and this Lender's Loss Payable Endorsement
shall be mailed to or be delivered to the Lender at its office or branch
at: Xxxxx 000, 00000 XX 0xx Xxxxxx, Xxxxxxxx, XX 00000.
Attached to Policy No.
---------------------------------
Of:
----------------------------------------------------
Issued to:
---------------------------------------------
Agency at:
---------------------------------------------
Date:
--------------------------------------
2
01-287182.07
01-287182.07
