EXHIBIT 10.1
LEASE AGREEMENT
by and between
PRINT (WI) QRS 12-40, INC.,
a Wisconsin corporation
as LANDLORD
and
PERRY GRAPHIC COMMUNICATIONS, INC.,
a Delaware corporation, and
XXXX'X, INCORPORATED,
a Maryland, corporation, jointly
as TENANT
Premises: 0000 Xxxx Xxxxxx, Xxxxxxx, XX
000 X. Xxxxxxx Xx., Xxxxxxxx, XX
000 X. Xxxxxxx Xx., Xxxxxxxx, XX
000 X. Xxxxxxx Xx., Xxxxxxxx, XX
000 X. Xxxxxxx Xx., Xxxxxxxx, XX
000 X. Xxxxxxx Xx., Xxxxxxxx, XX
Dated as of: December , 1997
TABLE OF CONTENTS
-----------------
PAGE
----
Parties............................................... 1
1. Demise of Premises.................................... 1
2. Certain Definitions................................... 1
3. Title and Condition................................... 7
4. Use of Leased Premises; Quiet Enjoyment............... 8
5. Term.................................................. 9
6. Basic Rent............................................ 9
7. Additional Rent....................................... 10
8. Net Lease; Non-Terminability.......................... 11
9. Payment of Impositions................................ 12
10. Compliance with Law; Environmental Matters............ 13
11. Liens; Recording and Title............................ 14
12. Maintenance and Repair................................ 15
13. Alterations and Improvements.......................... 15
14. Permitted Contests.................................... 16
15. Indemnification....................................... 16
16. Insurance............................................. 17
17. Casualty and Condemnation............................. 20
18. Termination Events.................................... 21
19. Restoration........................................... 22
20. Procedures Upon Purchase.............................. 23
21. Assignment and Subletting; Prohibition
against Leasehold Financing........................... 24
22. Events of Default..................................... 27
23. Remedies and Damages Upon Default..................... 28
24. Notices............................................... 31
25. Estoppel Certificate.................................. 31
26. Surrender............................................. 32
27. No Merger of Title.................................... 32
28. Books and Records..................................... 32
29. Determination of Value................................ 33
30. Non-Recourse as to Landlord........................... 34
31. Financing............................................. 34
32. Subordination......................................... 35
33. Financial Covenants................................... 35
34. Tax Treatment; Reporting.............................. 35
35. Right of First Refusal................................ 36
36. Baraboo Premises Expansion............................ 37
37. Economic Abandonment.................................. 35
38. Miscellaneous......................................... 36
EXHIBITS
--------
-i-
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Acquisition Costs
Exhibit "F" - Percentage Allocation of Basic Rent
Exhibit "G" - Financial Covenants
Exhibit "H" - Form of Memorandum of Lease
-ii-
LEASE AGREEMENT, made as of this day of December, 1997, between
PRINT (WI) QRS 12-40, INC., a Wisconsin corporation, as landlord
("LANDLORD"), with an address c/o W. P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and PERRY GRAPHIC COMMUNICATIONS,
INC., a Delaware corporation and XXXX'X, INCORPORATED, a Maryland
corporation, as tenants in common (collectively, "TENANT"), each with an
address at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx 00000.
In consideration of the rents and provisions herein stipulated to be paid
and performed, Landlord and Tenant hereby covenant and agree as follows:
1. DEMISE OF PREMISES. Landlord hereby demises and lets to Tenant, and
Tenant hereby takes and leases from Landlord, for the term and upon the
provisions hereinafter specified, the following described property
(hereinafter referred to collectively as the "LEASED PREMISES" and
individually as the "Baraboo Premises" "161 X. Xxxxxxx St. Premises" "200 X.
Xxxxxxx St. Premises" "275 X. Xxxxxxx St. Premises" "207 X. Xxxxxxx St.
Premises" and "575 X. Xxxxxxx St. Premises" each of which premises is more
particularly described in the applicable description in Exhibit "A" attached
hereto and made a part hereof and shall include the portions of items (a),
(b) and (c) of this Paragraph 1 located thereon or therein and appertaining
thereto): (a) the premises described in EXHIBIT "A" hereto, together with
the Appurtenances (collectively, the "LAND"); (b) the buildings, structures
and other improvements now or hereafter constructed on the Land
(collectively, the "IMPROVEMENTS"); and (c) the fixtures, machinery,
equipment and other property described in EXHIBIT "B" hereto (collectively,
the "EQUIPMENT") which shall not include Tenant's printing equipment or other
trade fixtures or equipment.
2. CERTAIN DEFINITIONS.
"Acquisition Cost" of each of the Related Premises shall mean the
amount set forth opposite such premises on EXHIBIT "E" hereto.
"Additional Rent" shall mean Additional Rent as defined in Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways, curbs, gores
and vault spaces adjoining any of the Leased Premises.
"Affected Premises" shall mean the Affected Premises as defined in
Paragraph 18.
"Alterations" shall mean all changes, additions, improvements or
repairs to, all alterations, reconstructions, renewals, replacements or
removals of and all substitutions or replacements for any of the Improvements
or Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments, easements,
rights-of-way, rights, privileges in and to the Land, including (a) easements
over other lands granted by any Easement Agreement and (b) any streets, ways,
alleys, vaults, gores or strips of land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases from
Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Payment Dates" shall mean the Basic Rent Payment Dates as
defined in Paragraph 6.
"Casualty" shall mean any injury to or death of any person or any loss
of or damage to any property (including the Leased Premises) included within
or related to the Leased Premises or arising from the Adjoining Property.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Costs" of a Person or associated with a specified transaction shall
mean all actual and reasonable out-of-pocket costs and expenses incurred by
such Person or associated with such transaction, including without
limitation, reasonable attorneys' fees and expenses, court costs, brokerage
fees, escrow fees, title insurance premiums, mortgage commitment fees,
mortgage points, recording fees and transfer taxes, as the circumstances
require.
"Covenants" shall mean the covenants and agreements described on
EXHIBIT "G" hereto.
"Default Rate" shall mean the Default Rate as defined in Paragraph
7(a)(iv).
"Default Termination Amount" shall mean the Default Termination Amount
as defined in Paragraph 23(a)(iii).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements (i)
listed as Permitted Encumbrances or (ii) as may, with the consent of Tenant,
hereafter affect any Leased Premises.
"Environmental Law" shall mean (i) whenever enacted or promulgated,
any applicable federal, state, foreign and local law, statute, ordinance,
rule, regulation, license, permit, authorization, approval, consent, court
order, judgment, decree, injunction, code, requirement or agreement with any
governmental entity, (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking
water supply, land (including land surface or subsurface), plant, aquatic and
animal life from injury caused by a Hazardous Substance or (y) concerning
exposure to, or the use, containment, storage, recycling, reclamation, reuse,
treatment, generation, discharge, transportation, processing, handling,
labeling, production, disposal or remediation of Hazardous Substances,
Hazardous Condition or Hazardous Activity, in each case as amended and as now
or hereafter in effect, and (ii) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose
liability or obligations or injuries or damages due to or threatened as a
result of the presence of, exposure to, or ingestion of, any Hazardous
Substance. The term Environmental Law includes, without limitation, the
federal Comprehensive Environmental Response Compensation and Liability Act
of 1980, the Superfund Amendments and Reauthorization Act, the federal Water
Pollution Control Act, the federal Clean Air Act, the federal Clean Water
Act, the federal Resources Conservation and Recovery Act of 1976 (including
the Hazardous and Solid Waste Amendments
-2-
to RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance
Control Act, the federal Insecticide, Fungicide and Rodenticide Act, the
federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act and the federal Hazardous Materials Transportation
Act, each as amended and as now or hereafter in effect and any similar state
or local Law.
"Environmental Violation" shall mean (a) any direct or indirect
discharge, disposal, spillage, emission, escape, pumping, pouring, injection,
leaching, release, seepage, filtration or transporting of any Hazardous
Substance at, upon, under, onto or within the Leased Premises, or from the
Leased Premises to the environment, in violation of any Environmental Law or
in excess of any reportable quantity established under any Environmental Law
or which could result in any liability to Landlord (including any Lender
succeeding to Landlord's interest hereunder) or Tenant, any Federal, state or
local government or any other Person for the costs of any removal or remedial
action or natural resources damage or for bodily injury or property damage,
(b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within the Leased Premises or which extends to
any Adjoining Property in violation of any Environmental Law or in excess of
any reportable quantity established under any Environmental Law or which
could result in any liability to any Federal, state or local government or to
any other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (c) the abandonment
or discarding of any barrels, containers or other receptacles containing any
Hazardous Substances in violation of any Environmental Laws, (d) any
activity, occurrence or condition which could result in any liability, cost
or expense to Landlord or any other owner or occupier of the Leased Premises,
or which could result in a creation of a lien on any Related Premises under
any Environmental Law or (e) any violation of or noncompliance with any
Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph 1.
"Event of Default" shall mean an Event of Default as defined in
Paragraph 22(a).
"Fair Market Value" of either the Leased Premises or any Related
Premises, as the case may be, and the context may require, shall mean the
higher of (a) the fair market value of the Leased Premises or any Related
Premises, as the case may be, as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased
Premises or Related Premises, as the case may be, as of the Relevant Date as
affected and encumbered by this Lease; provided that, with respect to a
determination of Fair Market Value in connection with an Intended Assignment
Offer, the Fair Market Value of the Leased Premises for the Term shall not be
assumed to have been extended for any unexercised extension period. For all
purposes of this Lease, Fair Market Value shall be determined in accordance
with the procedure specified in Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair Market
Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately available
funds which at the time of payment are legal tender for the payment of public
and private debts in the United States of America.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates
any Hazardous Substance; (ii) causes or results in (or threatens to cause or
result in) the release, seepage, spill, leak, flow, discharge or emission of
any Hazardous Substance into the environment (including the air, ground
water, watercourses or water systems), (iii) involves the containment or
storage of
-3-
any Hazardous Substance; or (iv) would cause any of the Leased Premises or
any portion thereof to become a hazardous waste treatment, recycling,
reclamation, processing, storage or disposal facility within the meaning of
any Environmental Law.
"Hazardous Condition" means any condition which would support any
claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material, product,
petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in
each case whether naturally occurring, man-made or the by-product of any
process, that is toxic, harmful or hazardous or acutely hazardous to the
environment or public health or safety or (ii) any substance supporting a
claim under any Environmental Law, whether or not defined as hazardous as
such under any Environmental Law. Hazardous Substances include, without
limitation, any toxic or hazardous waste, pollutant, contaminant, industrial
waste, petroleum or petroleum-derived substances or waste, radon, radioactive
materials, asbestos, asbestos containing materials, urea formaldehyde foam
insulation, lead, polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Insurance Requirements" shall mean the requirements of all insurance
policies maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, requirement
or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year, the
period commencing on the Commencement Date and ending at midnight on the last
day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all present and
future Laws (including but not limited to Environmental Laws) and all
Easement Agreements now or hereafter of record which may be applicable to
Tenant or to any of the Leased Premises or Related Premises, or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration,
repair or restoration of any of the Leased Premises or Related Premises, even
if compliance therewith necessitates structural changes or improvements or
results in interference with the use or enjoyment of any of the Leased
Premises or Related Premises.
-4-
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note.
"Loan" shall mean any loan made by one or more Lenders to Landlord,
which loan is secured by a Mortgage and an Assignment and evidenced by a Note.
"Monetary Obligations" shall mean Rent and all other sums payable by
Tenant under this Lease to Landlord, to any third party on behalf of Landlord
or to any Indemnitee.
"Mortgage" shall mean any mortgage or deed of trust from Landlord to a
Lender which (a) encumbers any of the Leased Premises and (b) secures
Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable pursuant to the
terms of this Lease to Landlord or Lender by reason of a Condemnation whether
pursuant to a judgment or by agreement or otherwise, or (b) the entire
proceeds of any insurance required under clauses (i), (ii) (to the extent
payable to Landlord or Lender), (iv), (v) or (vi) of Paragraph 16(a), as the
case may be, less any reasonable expenses incurred by Landlord, Lender and
Tenant in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's obligation
to repay a Loan, as the same may be amended, supplemented or modified.
"Offer Amount" shall mean the greater of (a) Fair Market Value or (b)
the sum of the Acquisition Cost and any Prepayment Premium which Landlord
will be required to pay in prepaying any Loan in connection with the payment
of such Acquisition Cost.
"Partial Casualty" shall mean any Casualty which does not constitute a
Termination Event.
"Partial Condemnation" shall mean any Condemnation which does not
constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions and easements and other encumbrances, other
than any Mortgage or Assignment, listed on EXHIBIT "C" hereto (but such
listing shall not be deemed to revive any such encumbrances that have expired
or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Prepayment Premium" shall mean any payment (other than a payment of
principal and/or interest which Landlord is required to make under a Note or
a Mortgage) by reason of any prepayment by Landlord of any principal due
under a Note or Mortgage, and which may be (in lieu of such prepayment
premium or prepayment penalty) a "make whole" clause requiring a prepayment
premium or other charges in an amount sufficient to compensate the Lender for
the loss of the benefit of the Loan due to prepayment; provided any such
Prepayment Premium is not materially at variance with then prevailing
prepayment premiums or prepayment penalties in the market for similar loans
at the time of placement.
-5-
"Present Value" of any amount shall mean such amount discounted by a
rate per annum which is the lower of (a) the Prime Rate at the time such
present value is determined or (b) seven percent (7%) per annum.
"Prime Rate" shall mean the interest rate per annum as published, from
time to time, in THE WALL STREET JOURNAL as the "Prime Rate" in its column
entitled "Money Rate". The Prime Rate may not be the lowest rate of interest
charged by any "large U. S. money center commercial banks" and Landlord makes
no representations or warranties to that effect. In the event THE WALL
STREET JOURNAL ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate
(the "DISCOUNT RATE") on ninety-one (91) day bills ("TREASURY BILLS") issued
from time to time by the United States Treasury at its most recent auction,
plus three hundred (300) basis points. If no such 91-day Treasury Bills are
then being issued, the Discount Rate shall be the discount rate on Treasury
Bills then being issued for the period of time closest to ninety-one (91)
days.
"Related Premises" shall mean any one of the "Baraboo Premises" "161
X. Xxxxxxx St. Premises" "200 X. Xxxxxxx St. Premises" "275 X. Xxxxxxx St.
Premises" "207 X. Xxxxxxx St. Premises" and "575 X. Xxxxxxx St. Premises".
"Relevant Amount" shall mean the Termination Amount or the Default
Termination Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to the date
on which the applicable Condemnation Notice is received, in the event of a
Termination Notice under Paragraph 18 which is occasioned by a Taking, (b)
the date immediately prior to the date on which the applicable Casualty
occurs, in the event of a Termination Notice under Paragraph 18 which is
occasioned by a Casualty, (c) the date when Fair Market Value is
redetermined, in the event of a redetermination of Fair Market Value pursuant
to Paragraph 20(c), (d) the date immediately prior to the Event of Default
giving rise to the need to determine Fair Market Value in the event Landlord
provides Tenant with notice of its intention to require Tenant to make a
Termination Offer under Paragraph 23(a)(iii)), (e) the Intended Assignment
Purchase Date, in the event Landlord receives an Intended Assignment Offer to
purchase the Leased Premises pursuant to Paragraph 21(c) or (f) the date
immediately prior to the date on which Tenant vacates the Related Premises in
the event Tenant exercises its rights under Paragraph 37(a) or Landlord
elects to treat an Event of Default under subparagraph 22(a)(ix) as an
exercise by Tenant of its rights under Paragraph 37.
"Remaining Premises" shall mean the Related Premises which are not
Affected Premises under Paragraph 18.
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Site Assessment" shall mean a Site Assessment as defined in Paragraph
10(c).
"State" shall mean the State of Wisconsin.
"Surviving Obligations" shall mean any obligations of Tenant under
this Lease, actual or contingent, which arise on or prior to the expiration
or prior termination of this Lease or which survive such expiration or
termination by their own terms.
"Taking" shall mean any taking of all or a portion of any of the
Leased Premises (i) in or by condemnation or other eminent domain proceedings
pursuant to any Law, general or special, or (ii) by reason of any agreement
with any condemnor in settlement of or
-6-
under threat of any such condemnation or other eminent domain proceeding, or
(iii) by any other means. The Taking shall be considered to have taken place
as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the law applicable to the Related Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean (i) the sum of the Acquisition Cost
and any Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Termination Amount or (ii) if an
Event of Default shall have occurred and then be continuing, the greater of
(a) Fair Market Value or (b) the sum of the Acquisition Cost and any
Prepayment Premium which Landlord will be required to pay in prepaying any
Loan with proceeds of the Termination Amount.
"Termination Date" shall mean the Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined in
Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party Purchaser as
defined in Paragraph 21(f).
"Treasury Rate" shall mean the rate per annum as conclusively
determined by Landlord (absent manifest error). The Treasury Rate will be
based upon the weekly average Treasury Constant Maturity yields reported in
the most recently available Federal Reserve Statistical Release H.15 -
Selected Interest Rates (or its successor publication). The Treasury Rate
will be the yield implied by the Treasury Constant Maturity series for a U. S.
Treasury obligation having a maturity date of ten (10) years. In the
event that Release H.15 is no longer published, Landlord may select a
comparable publication to determine the Treasury Rate.
3. TITLE AND CONDITION.
(a) The Leased Premises are demised and let subject to (i) the
rights of any Persons in possession of the Leased Premises, (ii) the existing
state of title of any of the Leased Premises, including any Permitted
Encumbrances, but excluding any liens or encumbrances resulting solely from
the acts of Landlord without the consent of Tenant (other than any lien of
any Lender as contemplated by this Lease), (iii) any state of facts which an
accurate survey or physical inspection of the Leased Premises might show,
(iv) all Legal Requirements, including any existing violation of any thereof,
and (v) the condition of the Leased Premises as of the commencement of the
Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises are in good
condition and repair at the inception of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY
OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED
TO HAVE MADE, ANY WARRANTY OR
-7-
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE
WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x)
MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv)
OPERATION OR (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE; AND ALL RISKS
INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE
LEASED PREMISES ARE OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE
LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN
THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY
NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY
OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS
PARAGRAPH 3(b) HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE
EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED,
WITH RESPECT TO ANY OF THE LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING
OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the title
to the Leased Premises prior to the execution and delivery of this Lease and
has found the same to be satisfactory for the purposes contemplated hereby.
Tenant acknowledges that (i) fee simple title (both legal and equitable) to
the Leased Premises is in Landlord and except, as provided in Paragraph 35
hereof with respect to certain rights of refusal to purchase the Leased
Premises that Tenant has only the leasehold right of possession and use of
the Leased Premises as provided herein, (ii) this Lease is a single Lease for
multiple properties and shall not be terminable with respect to less than all
of the Leased Premises or severable with respect to any one or more Related
Premises except as specifically provided herein, (iii) the Improvements
conform to all material Legal Requirements and all Insurance Requirements,
(iv) all easements necessary or appropriate for the use or operation of the
Leased Premises have been obtained, (v) all contractors and subcontractors
who have performed work on or supplied materials to the Leased Premises have
been fully paid, and all materials and supplies have been fully paid for,
(vi) the Improvements have been fully completed in all material respects in a
good and workmanlike manner, and (vii) all Equipment necessary or appropriate
for the use or operation of the Leased Premises has been installed and is
presently fully operative in all material respects.
(d) Landlord hereby assigns to Tenant, without recourse or warranty
whatsoever, all assignable warranties, guaranties, indemnities and similar
rights which Landlord may have against any manufacturer, seller, engineer,
contractor or builder in respect of any of the Leased Premises. Such
assignment shall remain in effect until an Event of Default occurs or until
the expiration or earlier termination of this Lease, whereupon such
assignment shall cease and all of said warranties, guaranties, indemnities
and other rights shall automatically revert to Landlord.
4. USE OF LEASED PREMISES; QUIET ENJOYMENT.
(a) Tenant may occupy and use the Leased Premises for the operation
of Tenant's printing business and for uses incidental thereto, and for no
other purpose. In the event that Tenant desires to use and occupy the Leased
Premises or any portion thereof for a use unrelated to Tenant's printing
business, Tenant shall first obtain the written consent of Landlord
-8-
to such change in use, which consent shall not be unreasonably withheld,
delayed or conditioned by Landlord. Notwithstanding the foregoing, Tenant
shall not, in any event, use or occupy or permit any of the Leased Premises
to be used or occupied, nor do or permit anything to be done in or on any of
the Leased Premises, in a manner which would or might (i) violate any Law or
Legal Requirement, (ii) make void or voidable or cause any insurer to cancel
any insurance required by this Lease, or make it impracticable to obtain any
such insurance at commercially reasonable rates, (iii) cause structural
injury to any of the Improvements or (iv) constitute a public or private
nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of Default
has occurred and is continuing, Tenant shall quietly hold, occupy and enjoy
the Leased Premises throughout the Term, without any hindrance, ejection or
molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may enter upon and examine any
of the Leased Premises at such reasonable times as Landlord may select and
upon reasonable prior notice to Tenant (except in the case of any emergency,
in which event no notice shall be required) for the purpose of inspecting the
Leased Premises, verifying compliance or non-compliance by Tenant with its
obligations hereunder and the existence or non-existence of an Event of
Default or event which with the passage of time and/or notice would
constitute an Event of Default, showing the Leased Premises to prospective
Lenders and purchasers and taking such other action with respect to the
Leased Premises as is permitted by any provision hereof; provided that,
Landlord shall exercise its rights of entry hereunder in a manner reasonably
designed to minimize interference with the normal operation of Tenant's
business at the Leased Premises.
5. TERM.
(a) Subject to the provisions hereof, Tenant shall have and hold the
Leased Premises for an initial term (such term, as extended or renewed in
accordance with the provisions hereof, being called the "TERM") commencing on
the date hereof (the "COMMENCEMENT DATE") and ending on the last day of the
two hundred fortieth (240th) calendar month next following the date hereof
(the "EXPIRATION DATE").
(b) Provided that if, on or prior to the Expiration Date or any
other Renewal Date (as hereinafter defined) this Lease shall not have been
terminated pursuant to any provision hereof, then on the Expiration Date and
on the fifth (5th) and tenth (10th) anniversaries of the Expiration Date (the
Expiration Date and each such anniversary being a "RENEWAL DATE"), the Term
shall have the option, at its election, to extend the Term for an additional
period of five (5) years, by giving notice of such election to Landlord in
writing in recordable form at least eighteen (18) months prior to the
expiration of the initial Term or the applicable Renewal Term, as the case
may be. Any such extension of the Term shall be subject to all of the
provisions of this Lease, as the same may be amended, supplemented or
modified.
(c) If (i) Tenant fails to timely exercise its option pursuant to
Paragraph 5(b) or (ii) an Event of Default shall occur and then be
continuing, then Landlord shall have the right during the remainder of the
Term then in effect (and at any time during the last year of the Term),
Landlord shall have the right to (i) advertise the availability of any of the
Leased Premises for sale or reletting and to erect upon any of the Leased
Premises signs indicating such availability and (ii) show any of the Leased
Premises to prospective purchasers or tenants or their agents at such
reasonable times as Landlord may select; provided that, Landlord shall use
reasonable efforts to exercise its rights hereunder in a manner reasonably
designed to minimize interference with the normal operation of Tenant's
business at the Leased Premises.
6. BASIC RENT. Tenant shall pay to Landlord, as annual rent for the
Leased Premises during the Term, the amounts determined in accordance with
EXHIBIT "D" hereto
-9-
("BASIC RENT"), commencing on the first day of January, 1998, and continuing
on the first day of each April, July, October and January thereafter during
the Term (each such day being a "BASIC RENT PAYMENT DATE"). Each such rental
payment shall be made, at Landlord's sole discretion, (a) to Landlord at its
address set forth above and/or to such one or two other Persons, at such
addresses and in such proportions as Landlord may direct by fifteen (15)
days' prior written notice to Tenant (in which event Tenant shall give
Landlord notice of each such payment concurrent with the making thereof), and
(b) by a check hand delivered or mailed and received on or before the
applicable Basic Rent Payment Date, or by wire transfer of immediately
available Federal Funds. Pro rata Basic Rent for the period from the date
hereof through the last day of the initial calendar quarter (or portion
thereof) shall be paid on the date hereof.
7. ADDITIONAL RENT.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "ADDITIONAL RENT"):
(i) except as otherwise specifically provided herein, all costs
and expenses of Tenant, and all actual and reasonable costs and expenses
incurred, payable or reimbursable by Landlord in connection with (A) the
ownership, use, non-use, occupancy, possession, operation, condition, design,
construction, maintenance, alteration, repair or restoration of any of the
Leased Premises, (B) the performance of any of Tenant's obligations under
this Lease, (C) any sale or other transfer of any of the Leased Premises to
Tenant under this Lease (except that in the case of Tenant's exercise of its
rights pursuant to Paragraph 35 hereof, only to the extent such third party
would be obligated to pay such costs or expenses), (D) to the extent same are
not paid from any Net Award, any Condemnation proceedings, (E) to the extent
same are not paid from any Net Award, the adjustment, settlement or
compromise of any insurance claims involving or arising from any of the
Leased Premises, (F) other than a suit by Tenant against Landlord in which
Tenant is the prevailing party, the prosecution, defense or settlement of any
litigation involving or arising from any of the Leased Premises, this Lease,
or the sale of the Leased Premises to Landlord, (G) the exercise or
enforcement by Landlord, its successors and assigns, of any of its rights
under this Lease, (H) any amendment to or modification or termination of this
Lease made at the request of Tenant, (I) Costs of Landlord's counsel in
connection with the preparation, negotiation and execution of this Lease or
Costs incurred in connection with any act undertaken by Landlord (or its
counsel) at the request of Tenant, or incurred in connection with any act of
Landlord performed on behalf of Tenant, and (J) the reasonable Costs of
Landlord incurred in connection with any act undertaken by Landlord at the
request of Tenant or Tenant's failure to act promptly in an emergency
situation, and (K) any other items specifically required to be paid by Tenant
under this Lease;
(ii) after the date all or any portion of any installment of
Basic Rent is due and not paid, an amount equal to four percent (4%) of the
amount of such unpaid installment or portion thereof, provided, however, that
with respect to the first two late payments of all or any portion of any
installment of Basic Rent in any consecutive twelve (12) month period, the
Late Charge shall not be due and payable unless the Basic Rent has not been
paid within five (5) business days' following the due date thereof;
(iii) a sum equal to any additional sums (including any late
charges, default penalties and interest, and Landlord's and Lender's
reasonable attorneys' fees) which are actually incurred and paid by Landlord
under any Note, by reason of Tenant's late payment or non-payment of Basic
Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "Default Rate") of five percent
(5%) over the Prime Rate per annum on the following sums until paid in full:
(A) all overdue installments of Basic Rent from the respective due dates
thereof, (B) all overdue amounts of
-10-
Additional Rent relating to obligations which Landlord shall have paid on
behalf of Tenant, from the date of payment thereof by Landlord, and (C) all
other overdue amounts of Additional Rent, from the date when any such amount
becomes overdue.
(b) Tenant shall pay and discharge (i) any Additional Rent referred
to in Paragraph 7(a)(i) when the same shall become due, provided that amounts
which are billed to Landlord or any third party, but not to Tenant, shall be
paid within thirty (30) days after Landlord's demand for payment thereof, and
(ii) any other Additional Rent, within thirty (30) days after Landlord's
demand for payment thereof.
(c) In no event shall amounts payable under Paragraph 7(a)(ii),
(iii) and (iv) exceed the maximum amount permitted by applicable Law.
8. NET LEASE; NON-TERMINABILITY.
(a) This is a net lease and all Monetary Obligations shall be paid
without notice or demand (except as otherwise expressly provided herein to
the contrary), and without set-off, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense
(collectively, a "SET-OFF"). Notwithstanding anything to the contrary
contained this Lease, Perry Graphic Communications, Inc. and Xxxx'x,
Incorporated each acknowledge and agree that each of them shall be jointly
and severally liable for the payment, performance and observance of all
Monetary Obligations and all non-monetary obligations of Tenant under this
Lease.
(b) Except as otherwise expressly provided herein, this Lease and
the rights of Landlord and the obligations of Tenant hereunder shall not be
affected by any event or for any reason, including the following: (i) any
damage to or theft, loss or destruction of any of the Leased Premises, (ii)
any Condemnation, (iii) Tenant's acquisition of ownership of any of the
Leased Premises other than pursuant to an express provision of this Lease or
any subsequent written agreement executed by and between Landlord and Tenant,
(iv) subject to the terms of any non-disturbance subordination and attornment
agreement between Tenant and Lender, any default on the part of Landlord
hereunder or under any Note, Mortgage, Assignment or any other agreement, (v)
any latent or other defect in any of the Leased Premises, (vi) the breach of
any warranty of any seller or manufacturer of any of the Equipment, (vii) any
violation of Paragraph 4(b) or any other provision of this Lease by Landlord,
(viii) the bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution or winding-up of, or other proceeding affecting
Landlord, (ix) subject to the provisions of Paragraph 32 hereof, the exercise
of any remedy, including foreclosure, under any Mortgage or Assignment, (x)
any action with respect to this Lease (including the disaffirmance hereof)
which may be taken by any trustee, receiver or liquidator of Landlord or any
court under the Federal Bankruptcy Code or other similar proceeding, (xi)
subject to the provisions of Paragraph 32 hereof, any interference with
Tenant's use of the Leased Premises, (xii) market or economic changes or
(xiii) any other cause, whether similar or dissimilar to the foregoing, any
present or future Law to the contrary notwithstanding.
(c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue
to be payable in all events (or, in lieu thereof, Tenant shall pay amounts
equal thereto), and the obligations of Tenant hereunder shall continue
unaffected unless the requirement to pay or perform the same shall have been
terminated pursuant to an express provision of this Lease. All Rent payable
by Tenant hereunder shall constitute "rent" for all purposes (including
Section 502(b)(6) of the Bankruptcy Code).
-11-
(d) Except as otherwise expressly provided herein, Tenant shall have
no right and hereby waives all rights which it may have under any Law (i) to
quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
9. PAYMENT OF IMPOSITIONS.
(a) Tenant shall, before interest or penalties are due thereon, pay
and discharge all taxes (including real and personal property, franchise,
sales, gross receipts and rent taxes), all charges for any easement or
agreement maintained for the benefit of any of the Leased Premises, all
assessments and levies, all permit, inspection and license fees, all rents
and charges for water, sewer, utility and communication services relating to
any of the Leased Premises, all ground rents (other than any ground rent
payable under any ground lease executed after the date hereof) and all other
public charges whether of a like or different nature, even if unforeseen or
extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant's
possessory interest in the Leased Premises, (iii) any of the Leased Premises,
(iv) Landlord as a result of or arising in respect of the acquisition,
ownership, occupancy, leasing, use, possession or sale of any of the Leased
Premises, any activity conducted on any of the Leased Premises, or the Rent,
or (v) any Lender by reason of any Note, Mortgage, Assignment or other
document evidencing or securing a Loan and which (as to this clause (v))
Landlord is obligated to pay (collectively, the "IMPOSITIONS"); provided,
that nothing herein shall obligate Tenant to pay (A) income, excess profits
or other taxes of Landlord (or Lender) which are determined on the basis of
Landlord's (or Lender's) net income or net worth (unless such taxes are in
lieu of or a substitute for any other tax, assessment or other charge upon or
with respect to the Leased Premises which, if it were in effect, would be
payable by Tenant under the provisions hereof or by the terms of such tax,
assessment or other charge), (B) any estate, inheritance, succession, gift or
similar tax imposed on Landlord or (C) any capital gains tax imposed on
Landlord in connection with the sale of the Leased Premises to any Person or
otherwise. If any Imposition may be paid in installments without interest or
penalty, Tenant shall have the option to pay such Imposition in installments;
in such event, Tenant shall be liable only for those installments which
accrue or become due and payable during the Term. Tenant shall prepare and
file all tax reports required by governmental authorities which relate to the
Impositions. Tenant shall deliver to Landlord (1) copies of all settlements
and notices pertaining to the Impositions which may be issued by any
governmental authority within ten (10) days after Tenant's receipt thereof,
(2) receipts for payment of all taxes required to be paid by Tenant hereunder
within thirty (30) days after the due date thereof and (3) receipts for
payment of all other Impositions within thirty (30) days after Landlord's
request therefor.
(b) Landlord shall have the right at any time after occurrence and
during the continuance of an Event of Default to require Tenant to pay to
Landlord an additional monthly sum (each an "ESCROW PAYMENT") sufficient to
pay the Escrow Charges (as hereinafter defined) as they become due. As used
herein, "ESCROW CHARGES" shall mean real estate taxes on the Leased Premises
or payments in lieu thereof and premiums on any insurance required by this
Lease. Landlord shall in good faith determine the amount of the Escrow
Charges and of each Escrow Payment. The Escrow Payments may be commingled
with other funds of Landlord or other Persons and no interest thereon shall
be due or payable to Tenant. Landlord shall apply the Escrow Payments to the
payment of the Escrow Charges in such order or priority as Landlord shall
determine or as required by law. If at any time the Escrow Payments
theretofore paid to Landlord shall be insufficient for the payment of the
Escrow Charges, Tenant, within ten (10) days after Landlord's demand
therefor, shall pay the amount of the deficiency to Landlord.
-12-
10. COMPLIANCE WITH LAWS AND EASEMENT AGREEMENTS; ENVIRONMENTAL MATTERS.
(a) Tenant shall, at its expense, comply with and conform to, and
cause any other Person occupying any part of the Leased Premises to comply
with and conform to, all Insurance Requirements and Legal Requirements
(including all applicable Environmental Laws). Tenant shall not at any time
(i) cause, permit or suffer to occur any Environmental Violation or (ii)
permit any sublessee, assignee or other Person occupying the Leased Premises
under or through Tenant to cause, permit or suffer to occur any Environmental
Violation.
(b) Tenant, at its sole cost and expense, will at all times promptly
and faithfully abide by, discharge and perform all of the covenants,
conditions and agreements contained in any Easement Agreement on the part of
Landlord or the occupier to be kept and performed thereunder. Neither
Landlord nor Tenant shall alter, modify, amend or terminate any Easement
Agreement, give any consent or approval thereunder, or enter into any new
Easement Agreement without, in each case, the prior written consent of the
other party, which consent shall not be unreasonably withheld, delayed or
conditioned. In the event that Tenant desires to alter, modify, amend or
terminate any Easement Agreement or enter into any new Easement Agreement
which, in each case, Tenant believes in good faith to be beneficial to the
continued use and/or operation of Leased Premises, Tenant shall give Landlord
written notice thereof and, in connection therewith, Landlord agrees to
reasonably cooperate with Tenant (including execution of any such agreement,
if required), at no cost to Landlord.
(c) If (i) at any time, in the opinion of Landlord or Lender, a
reasonable basis exists to believe that an Environmental Violation exists,
(ii) this Lease shall be terminated or canceled or otherwise expire pursuant
to the terms hereof (including, without limitation, pursuant to the
provisions of Article 18 or 23 hereof) and Tenant shall not acquire the
Leased Premises upon the occurrence of any such event, (iii) any Lender shall
so require (pursuant to the terms of the applicable Loan documents), (iv)
Landlord shall sell or transfer its interest in the Leased Premises pursuant
to Section 21(g) hereof or (v) Tenant shall exercise its rights under
Paragraph 37 hereof, then upon prior written notice from Landlord, Tenant
shall permit such persons as Landlord may designate ("SITE REVIEWERS") to
visit the Leased Premises (or the Abandonment Premises, as applicable) and
perform, as agents of Tenant, environmental site investigations and
assessments ("SITE ASSESSMENTS") on the Leased Premises (or the Abandonment
Premises, as applicable) for the purpose of determining whether there exists
on the Leased Premises (or the Abandonment Premises, as applicable) any
Environmental Violation or any condition which could result in any
Environmental Violation. Such Site Assessments may include both above and
below the ground testing for Environmental Violations and such other tests as
may be necessary, in the opinion of the Site Reviewers, to conduct the Site
Assessments. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Leased Premises (or the Abandonment
Premises, as applicable) as may be reasonably requested by the Site Reviewers
to facilitate the Site Assessments, and shall make available for meetings
with the Site Reviewers appropriate personnel having knowledge of such
matters. The cost of performing and reporting Site Assessments shall be paid
by Tenant, except that with respect to clauses (i) and (iii) above, if no
Environmental Violation is discovered at the Leased Premises, then the cost
of performing and reporting such Site Assessments shall be paid by Landlord
and with respect to clause (iv) above, the cost of performing and reporting
such Site Assessments shall be paid by Landlord.
(d) If an Environmental Violation occurs or is found to exist and,
in Landlord's reasonable judgment, the cost of remediation of the same is
likely to exceed $50,000, Tenant shall provide to Landlord, within thirty
(30) days after Landlord's request therefor, adequate financial assurances
that Tenant will effect such remediation in accordance with applicable
Environmental Laws.
-13-
(e) Notwithstanding any other provision of this Lease, if an
Environmental Violation occurs or is found to exist and the Term would
otherwise terminate or expire, then, at the option of Landlord, the Term
shall be automatically extended beyond the date of termination or expiration
and this Lease shall remain in full force and effect beyond such date until
the earlier to occur of (i) the completion of all remedial action in
accordance with applicable Environmental Laws or (ii) the date specified in a
written notice from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation which occurs
or is found to exist within thirty (30) days of Tenant's notice thereof or
fails to commence to cure any such non-compliance within such thirty (30) day
period (or, in each case, within such shorter period as may be required under
applicable Law) and thereafter diligently pursue such cure to completion,
Landlord shall have the right (but no obligation) to take any and all actions
as Landlord shall deem necessary or advisable in order to cure such
Environmental Violation.
(g) Tenant shall notify Landlord promptly after becoming aware of
any Environmental Violation (or alleged Environmental Violation) or
noncompliance with any of the covenants contained in this Paragraph 10 and
shall forward to Landlord promptly upon receipt thereof copies of all orders,
reports, notices, permits, applications or other communications relating to
any such violation or noncompliance.
(h) [Intentionally deleted].
11. LIENS; RECORDING.
(a) Tenant shall not, directly or indirectly, create or permit to be
created or to remain and shall promptly discharge or remove any lien, levy or
encumbrance on any of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Lease, other than any Mortgage or Assignment,
the Permitted Encumbrances and any mortgage, lien, encumbrance or other
charge created by or resulting solely from any act or omission of Landlord.
NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE
LEASED PREMISES. LANDLORD MAY AT ANY REASONABLE TIME POST ANY NOTICES ON THE
LEASED PREMISES REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "RECORD") all such instruments as may be required or permitted
by any present or future Law in order to evidence the respective interests of
Landlord and Tenant in any of the Leased Premises, and shall cause a
memorandum of this Lease substantially in the form of EXHIBIT H annexed
hereto (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such
places as may be required or permitted by any present or future Law in order
to protect the validity and priority of this Lease.
12. MAINTENANCE AND REPAIR.
(a) Tenant shall at all times maintain each Related Premises and the
Adjoining Property in as good repair and appearance as each is in on the date
hereof, reasonable wear and tear excepted, and fit to be used for their
intended use in accordance with the better of
-14-
the practices generally recognized as then acceptable by other companies in
its industry or observed by Tenant with respect to the other real properties
owned or operated by it, and, in the case of the Equipment, in as good
mechanical condition as it was on the later of the date hereof or the date of
its installation, except for ordinary wear and tear. Tenant shall take every
other action necessary or appropriate for the preservation and safety of each
Related Premises. Tenant shall promptly make all Alterations of every kind
and nature, whether foreseen or unforeseen, which may be required to comply
with the foregoing requirements of this Paragraph 12(a). Landlord shall not
be required to make any Alteration, whether foreseen or unforeseen, or to
maintain any of the Related Premises or Adjoining Property in any way, and
Tenant hereby expressly waives any right which may be provided for in any Law
now or hereafter in effect to make Alterations at the expense of Landlord or
to require Landlord to make Alterations. Any Alteration made by Tenant
pursuant to this Paragraph 12 shall be made in conformity with the provisions
of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall (i)
encroach upon any setback or any property, street or right-of-way adjoining
any of the Leased Premises, (ii) violate the provisions of any restrictive
covenant affecting any of the Leased Premises, (iii) hinder or obstruct any
easement or right-of-way to which any of the Leased Premises is subject or
(iv) impair the rights of others in, to or under any of the foregoing, Tenant
shall, promptly after receiving notice or otherwise acquiring knowledge
thereof, either (A) obtain from all necessary parties waivers or settlements
of all claims, liabilities and damages resulting from each such encroachment,
violation, hindrance, obstruction or impairment, whether the same shall
affect Landlord, Tenant or both, or (B) take such action as shall be
necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
13. ALTERATIONS AND IMPROVEMENTS.
(a) Tenant shall have the right, without having obtained the prior
written consent of Landlord and Lender, to make (i) Alterations or a series
of related Alterations that, as to any such Alterations or series of related
Alterations, do not cost in excess of $250,000 for any one Related Premises
(or $1,500,000 in the aggregate) and (ii) to install Equipment in the
Improvements or accessions to the Equipment that, as to such Equipment or
accessions, do not cost in excess of $250,000 for any one Related Premises
(or $1,500,000 in the aggregate), so long as at the time of construction or
installation of any such Equipment or Alterations no Event of Default exists
and the value and utility of the Leased Premises is not diminished thereby.
If the cost of any Alterations, series of related Alterations, Equipment or
accessions thereto is in excess of $250,000 for any one Related Premises (or
$1,500,000 in the aggregate), the prior written approval of Landlord and
Lender shall be required, such approval not to be unreasonably withheld,
delayed or conditioned. Tenant shall not construct upon the Land any
additional buildings without having first obtained the prior written consent
of Landlord and Lender, which consent shall not be unreasonably withheld,
delayed or conditioned.
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or
Paragraph 36 hereof or as required by Paragraph 12 or 17 hereof (such
Alterations and actions being hereinafter collectively referred to as
"WORK"), then (i) the market value of the Leased Premises or any Related
Premises shall not be materially lessened by any such Work or its usefulness
impaired, (ii) all such Work shall be performed by Tenant in a good and
workmanlike manner, (iii) all such Work shall be expeditiously completed in
compliance with all Legal Requirements, (iv) all such Work shall comply with
the requirements of all insurance policies required to be maintained by
Tenant hereunder, (v) if any such Work involves the replacement of Equipment
or parts thereto, all replacement Equipment or parts shall have a value and
useful life equal to the greater of (A) the value and useful life on the date
hereof of the Equipment being replaced or (B) the value and useful life of
the Equipment being replaced immediately prior to
-15-
the occurrence of the event which required its replacement (assuming such
Replaced Equipment was then in the condition required by this Lease), (vi)
Tenant shall promptly discharge or remove all liens filed against any of the
Leased Premises arising out of such Work, (vii) Tenant shall procure and pay
for all permits and licenses required in connection with any such Work,
(viii) all such Work shall be the property of Landlord and shall be subject
to this Lease, and Tenant shall execute and deliver to Landlord any document
requested by Landlord evidencing the assignment to Landlord of all estate,
right, title and interest (other than the leasehold estate created hereby) of
Tenant or any other Person thereto or therein, and (ix) Tenant shall comply,
to the extent requested by Landlord or required by this Lease, with the
provisions of Paragraphs 12(a) and 19(a), whether or not such Work involves
restoration of the Leased Premises.
14. PERMITTED CONTESTS. Notwithstanding any other provision of this
Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge
or remove any lien referred to in Paragraph 11 or 13 or (c) take any action
with respect to any encroachment, violation, hindrance, obstruction or
impairment referred to in Paragraph 12(b) (such non-compliance with the terms
hereof being hereinafter referred to collectively as "PERMITTED VIOLATIONS"),
so long as at the time of such non-compliance no Event of Default exists and
so long as Tenant shall contest, in good faith, the existence, amount or
validity thereof, the amount of the damages caused thereby, or the extent of
its or Landlord's liability therefor by appropriate proceedings which shall
operate during the pendency thereof to prevent or stay (i) the collection of,
or other realization upon, the Permitted Violation so contested, (ii) the
sale, forfeiture or loss of any of the Leased Premises or any Rent to satisfy
or to pay any damages caused by any Permitted Violation, (iii) any
interference with the use or occupancy of any of the Leased Premises, (iv)
any interference with the payment of any Rent, or (v) the cancellation or
increase in the rate of any insurance policy or a statement by the carrier
that coverage will be denied. Tenant shall provide Landlord security which
is satisfactory, in Landlord's reasonable judgment, to assure that such
Permitted Violation is corrected, including all Costs, interest and penalties
that may be incurred or become due in connection therewith. While any
proceedings which comply with the requirements of this Paragraph 14 are
pending and the required security is held by Landlord, Landlord shall not
have the right to correct any Permitted Violation thereby being contested
unless Landlord is required by law to correct such Permitted Violation and
Tenant's contest does not prevent or stay such requirement as to Landlord.
Each such contest shall be promptly and diligently prosecuted by Tenant to a
final conclusion, except that Tenant, so long as the conditions of this
Paragraph 14 are at all times complied with, has the right to attempt to
settle or compromise such contest through negotiations. Tenant shall pay any
and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest,
fully pay and discharge the amounts which shall be levied, assessed, charged
or imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in
connection therewith, and perform all acts the performance of which shall be
ordered or decreed as a result thereof. No such contest shall subject
Landlord to the risk of any civil or criminal liability.
15. INDEMNIFICATION.
(a) Tenant shall pay, protect, indemnify, defend, save and hold
harmless Landlord, Lender and all other Persons described in Paragraph 30
(a), (b) and (c) and the Persons identified parenthetically in Xxxxxxxxx 00
(x) (each of the foregoing, an "INDEMNITEE") from and against any and all
liabilities, losses, damages, penalties, Costs (including reasonable
attorneys' fees and costs), causes of action, suits, claims, demands or
judgments of any nature whatsoever, howsoever caused, without regard to the
form of action and whether based on strict liability, negligence or any other
theory of recovery at law or in equity, arising from (i) any matter
pertaining to the acquisition (or the negotiations leading thereto),
ownership, leasing, use, non-use, occupancy, operation, management,
condition, design, construction, maintenance, repair or restoration of any
of the Leased Premises or Adjoining
-16-
Property, except to the extent caused by the gross negligence or willful
misconduct of Landlord, (ii) any casualty in any manner arising from any of
the Leased Premises or Adjoining Property, whether or not Indemnitee has or
should have knowledge or notice of any defect or condition causing or
contributing to said casualty, (iii) any violation by Tenant of any provision
of this Lease or the Mortgage or Assignment, or any contract or agreement to
which Tenant is a party, any Legal Requirement, or any Permitted Encumbrance,
or any encumbrance consented to by Tenant, (iv) any alleged, threatened or
actual Environmental Violation, including (A) liability for response costs
and for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit or any other Person, or
damages from injury to or destruction or loss of natural resources, including
the reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to Section 107 of CERCLA, or any successor section or act or
provision of any similar state or local Law, (B) liability for costs and
expenses of abatement, correction or clean-up, fines, damages, response costs
or penalties which arise from the provisions of any of the other
Environmental Laws and (C) liability for personal injury or property damage
arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying
on of a dangerous activity, except to the extent caused by the gross
negligence or willful misconduct of Landlord.
(b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in the event
of a conflict of interest between Tenant and any such Indemnitee or during
the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its
choice to monitor the defense of any such action) and (ii) such Indemnitee
shall notify Tenant to resist or defend such action or proceeding by
retaining counsel reasonably satisfactory to such Indemnitee, and such
Indemnitee will cooperate and assist in the defense of such action or
proceeding if reasonably requested to do so by Tenant. In the event of a
conflict of interest or dispute or during the continuance of an Event of
Default, Landlord shall have the right to select counsel, and the reasonable
cost of such counsel shall be paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall survive
any termination, expiration or rejection in bankruptcy of this Lease.
16. INSURANCE.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (to the extent that a Related
Premises is in a flood zone) and earthquake coverage (to the extent a Related
Premises is in an earthquake zone) in amounts not less than the actual
replacement cost of the Improvements and Equipment. Such policies shall
contain "Replacement Cost" and "Agreed Amount" endorsements and shall contain
deductibles not more than $50,000 per occurrence.
(ii) Commercial General Liability Insurance (including but not
limited to Incidental Medical Malpractice and Host Liquor Liability) and
Business Automobile Liability Insurance (including Non-Owned and Hired
Automobile Liability) against claims for personal and bodily injury, death or
property damage occurring on, in or as a result of the use of the Leased
Premises, in an amount not less than $15,000,000 per occurrence/annual
aggregate and all other coverage extensions that are usual and customary for
properties of this size and type provided, however, that the Landlord shall
have the right to require such higher limits as may be reasonable and
customary for properties of this size and type.
-17-
(iii) Worker's compensation insurance covering all persons
employed by Tenant in connection with any work done on or about any of the
Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu
of such Worker's Compensation Insurance, a program of self-insurance
complying with the rules, regulations and requirements of the appropriate
agency of the State or States in which the Leased Premises are located.
(iv) Comprehensive Boiler and Machinery Insurance on any of the
Equipment or any other equipment on or in the Leased Premises in an amount
not less than $15,000,000 per accident for damage to property. Such policies
shall include at least $2,500,000 per incidence for Off-Premises Service
Interruption, Expediting Expenses, Ammonia Contamination, and Hazardous
Materials Clean-up Expense and may contain a deductible not to exceed $50,000.
(v) Business Interruption and Extra Expense Insurance at limits
to cover 100% of losses and/or expenses incurred over the period of indemnity
not less than one year from time of loss. Such insurance shall name Landlord
as loss payee solely with respect to Rent payable to or for the benefit of
the Landlord under this Lease.
(vi) During any period in which substantial Alterations at any
Related Premises are being undertaken, builder's risk insurance covering the
total completed value including any "soft costs" with respect to the
Improvements being altered or repaired (on a completed value, non-reporting
basis), replacement cost of work performed and equipment, supplies and
materials furnished in connection with such construction or repair of
Improvements or Equipment, together with such "soft cost" endorsements and
such other endorsements as Landlord may reasonably require and general
liability, worker's compensation and automobile liability insurance with
respect to the Improvements being constructed, altered or repaired.
(vii) Such other insurance (or other terms with respect to any
insurance required pursuant to this Paragraph 16, including without
limitation amounts of coverage, deductibles, form of mortgagee clause) on or
in connection with any of the Leased Premises as Landlord or Lender may
reasonably require, which at the time is usual and commonly obtained in
connection with properties similar in type of building size, use and location
to the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be written by
companies which have a Best's rating of A:X or above and are admitted in, and
approved to write insurance policies by, the State Insurance Department for
the states in which the Leased Premises are located. The insurance policies
(i) shall be for such terms as Landlord may reasonably approve and (ii) shall
be in amounts sufficient at all times to satisfy any coinsurance requirements
thereof. The insurance referred to in Paragraphs 16(a)(i), 16(a)(iv) and
16(a)(vi) shall name Landlord as Owner and Lender as loss payee and Tenant as
its interest may appear. The insurance referred to in Paragraph 16(a)(ii)
shall name Landlord and Lender as additional insureds, and the insurance
referred to in Paragraph 16(a)(v) shall name Landlord as insured and Lender
and Landlord as loss payee. If said insurance or any part thereof shall
expire, be withdrawn, become void, voidable, unreliable or unsafe for any
reason, including a breach of any condition thereof by Tenant or the failure
or impairment of the capital of any insurer, or if for any other reason
whatsoever said insurance shall become reasonably unsatisfactory to Landlord,
Tenant shall immediately obtain new or additional insurance reasonably
satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i), (iv), (v) and
(vi) of Paragraph 16(a) shall contain standard non-contributory mortgagee
clauses in favor of and reasonably acceptable to Lender. Each policy
required by any provision of Paragraph 16(a), except clause (iii) thereof,
shall provide that it may not be canceled except after sixty (60) days'
-18-
prior notice to Landlord and Lender. Each such policy shall also provide
that any loss otherwise payable thereunder shall be payable notwithstanding
(i) any act or omission of Landlord or Tenant which might, absent such
provision, result in a forfeiture of all or a part of such insurance payment,
(ii) the occupation or use of any of the Leased Premises for purposes more
hazardous than those permitted by the provisions of such policy, (iii) any
foreclosure or other action or proceeding taken by Lender pursuant to any
provision of the Mortgage, Note, Assignment or other document evidencing or
securing the Loan upon the happening of an event of default therein or (iv)
any change in title to or ownership of any of the Leased Premises.
(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least thirty (30) days prior to the expiration date
of such policy, and shall promptly deliver to Landlord all original
certificates of insurance.
(e) Anything in this Paragraph 16 to the contrary notwithstanding,
any insurance which Tenant is required to obtain pursuant to Paragraph 16(a)
may be carried under a "blanket" or umbrella policy or policies covering
other properties or liabilities of Tenant, provided that such "blanket" or
umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16 and provided further that Tenant shall provide to Landlord a
"Statement of Values" which shall be reviewed annually and amended as
necessary based on "Replacement Cost Valuations". The original or a
certified copy of each such "blanket" or umbrella policy shall promptly be
delivered to Landlord.
(f) Tenant shall have the replacement cost and insurable value of
the Improvements and Equipment determined from time to time as required by
the replacement cost and agreed amount endorsements and shall deliver to
Landlord the new replacement cost and agreed amount endorsement or
certificate evidencing such endorsement promptly upon Tenant's receipt
thereof.
(g) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii)
all requirements of the insurers thereunder applicable to Landlord, Tenant or
any of the Leased Premises or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration or repair of any of the Leased
Premises, even if such compliance necessitates Alterations or results in
interference with the use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent in form or
contributing in the event of a Casualty with that required in this Paragraph
16 unless (i) Landlord and Lender are included therein as named insureds,
with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies therefor.
(i) All policies shall contain effective waivers by the carrier
against all claims for insurance premiums against Landlord and shall contain
full waivers of subrogation against the Landlord and Tenant.
(j) All proceeds of any insurance required under Paragraph 16(a)
shall be payable as follows:
(i) Except for proceeds payable to a Person other than
Landlord, Tenant or Lender, all proceeds of insurance required under clauses
(ii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds attributable to the
general liability coverage provisions of Builder's
-19-
Risk insurance under clause (vi) of Paragraph 16(a) shall be payable to
Landlord or, if required by the Mortgage, to Lender.
(ii) Proceeds of insurance required under clause (i) of
Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of
Paragraph 16(a) shall be payable by Landlord (or Lender) and applied as set
forth in Paragraph 17. Tenant shall apply the Net Award to restoration of
the Leased Premises in accordance with the applicable provisions of this
Lease.
17. CASUALTY AND CONDEMNATION.
(a) If any Casualty to any of the Related Premises occurs, Tenant
shall give Landlord and Lender immediate notice thereof. So long as no Event
of Default shall have occurred and be continuing, Tenant is hereby authorized
to adjust, collect and compromise all claims under any of the insurance
policies required by Paragraph 16(a) (except public liability insurance
claims payable to a Person other than Tenant, Landlord or Lender) and to
execute and deliver on behalf of Landlord all necessary proofs of loss,
receipts, vouchers and releases required by the insurers and Landlord shall
have the right to join with Tenant therein. Any final adjustment, settlement
or compromise of any such claim shall be subject to the prior written
approval of Landlord (not to be unreasonably withheld, delayed or
conditioned) and Landlord shall have the right to prosecute or contest, or to
require Tenant to prosecute or contest, any such claim, adjustment,
settlement or compromise. If an Event of Default shall have occurred and be
continuing, Tenant shall not be entitled to adjust, collect or compromise any
such claim or to participate with Landlord in any adjustment, collection and
compromise of the Net Award payable in connection with a Casualty. Tenant
agrees to sign, upon the request of Landlord, all such proofs of loss,
receipts, vouchers and releases reasonably requested by Landlord. Each
insurer is hereby authorized and directed to make payment under said policies
(subject to the provisions of Paragraph 17(c) and Paragraph 19 hereof)
directly to Landlord or, if required by the Mortgage, to Lender instead of to
Landlord and Tenant jointly. The rights of Landlord under this Paragraph
17(a) shall be extended to Lender if and to the extent that any Mortgage so
provides.
(b) Tenant, immediately upon receiving a Condemnation Notice, shall
notify Landlord and Lender thereof. So long as no Event of Default shall
have occurred and be continuing, Tenant is authorized to collect, settle and
compromise the amount of any Net Award and Landlord shall have the right to
join with Tenant herein. If an Event of Default exists, Landlord shall be
authorized to collect, settle and compromise the amount of any Net Award and
Tenant shall not be entitled to participate with Landlord in any Condemnation
proceeding or negotiations under threat thereof or to contest the
Condemnation or the amount of the Net Award therefor. No agreement with any
condemnor in settlement or under threat of any Condemnation shall be made by
Tenant without the written consent of Landlord (not to be unreasonably
withheld, delayed or conditioned). Subject to the provisions of this
Paragraph 17(b), Tenant hereby irrevocably assigns to Landlord any award or
payment to which Tenant is or may be entitled by reason of any Condemnation,
whether the same shall be paid or payable for Tenant's leasehold interest
hereunder or otherwise; but nothing in this Lease shall impair Tenant's right
to any award or payment on account of Tenant's trade fixtures, equipment or
other tangible property which is not part of the Equipment, moving expenses
or loss of business, if available, to the extent that and so long as (i)
Tenant shall have the right to make, and does make, a separate claim therefor
against the condemnor and (ii) such claim does not in any way reduce either
the amount of the award otherwise payable to Landlord for the Condemnation of
Landlord's fee interest in the Leased Premises or the amount of the award (if
any) otherwise payable for the Condemnation of Tenant's leasehold interest
hereunder. The rights of Landlord under this Paragraph 17(b) shall also be
extended to Lender if and to the extent that any Mortgage so provides.
-20-
(c) If any Partial Casualty (whether or not insured against) or
Partial Condemnation shall occur to any Related Premises, this Lease shall
continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary Obligations; provided that, to the extent Landlord
receives the proceeds of any business interruption insurance, Tenant shall be
entitled to an appropriate reduction or total abatement of Basic Rent, as
applicable. Promptly after such Partial Casualty or Partial Condemnation,
Tenant, as required in Paragraph 12(a), shall commence and diligently
continue to restore the Leased Premises as nearly as possible to their value,
condition and character immediately prior to such event (assuming the Leased
Premises to have been in the condition required by this Lease). So long as
no Event of Default shall have occurred and be continuing, any Net Award up
to and including $250,000 per Related Premises shall be paid by Landlord to
Tenant and Tenant shall restore the Leased Premises in accordance with the
requirements of Paragraph 13(b) of this Lease. Any Net Award in excess of
$250,000 per Related Premises shall (unless such Casualty resulting in the
Net Award is a Termination Event) be made available by Landlord (or Lender if
the terms of the Mortgage require disbursement to Lender, to be held and
disbursed in accordance with the provisions of Paragraph 19 hereof) to Tenant
for the restoration of any of the Leased Premises pursuant to and in
accordance with and subject to the provisions of Paragraph 19 hereof. If any
Casualty or Condemnation which is not a Partial Casualty or Partial
Condemnation shall occur, Tenant shall comply with the terms and conditions
of Paragraph 18.
18. TERMINATION EVENTS.
(a) If (i) all of any Related Premises shall be taken by a
Taking or (ii) any substantial portion of any Related Premises shall be taken by
a Taking or all or any substantial portion of any Related Premises shall be
totally damaged or destroyed by a Casualty and, in any such case, Tenant elects
(instead of restoring the Related Premises) to send a notice to Landlord that
certifies and covenants to Landlord that it will forever abandon operations at
the Related Premises, (any one or all of the Related Premises described in the
above clauses (i) and (ii) above being hereinafter referred to as the "AFFECTED
PREMISES" and each of the events described in the above clauses (i) and (ii)
shall hereinafter be referred to as a "TERMINATION EVENT"), then (x) in the case
of (i) above, Tenant shall be obligated, within thirty (30) days after Tenant
receives a Condemnation Notice and (y) in the case of (ii) above, Tenant shall
have the option, within thirty (30) days after Tenant receives a Condemnation
Notice or thirty (30) days after the Casualty, as the case may be, to give to
Landlord written notice (a "TERMINATION NOTICE") of the Tenant's option to
terminate this Lease as to the Affected Premises in the form described in
Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease as to the Affected Premises on the first Basic
Rent Payment Date which occurs at least thirty (30) days after the date of the
Termination Notice (the "TERMINATION DATE"), (ii) a binding and irrevocable
offer of Tenant to pay the Termination Amount and (iii) if the Termination Event
is an event described in Paragraph 18(a)(ii), the certification and covenant
described therein and a certified resolution of the Board of Directors of Tenant
authorizing the same.
(c) If Landlord shall reject such offer to terminate this Lease
as to the Affected Premises by written notice to Tenant (a "REJECTION"), which
Rejection must contain the written consent of Lender if a Lender exists, not
later than thirty (30) days following the date Landlord receives the Termination
Notice, then this Lease shall terminate as to the Affected Premises on the
Termination Date; provided that, if Tenant has not satisfied all Monetary
Obligations and all other obligations and liabilities under this Lease which
have arisen as to the Affected Premises (collectively, "REMAINING OBLIGATIONS")
on or prior to the Termination Date, then Landlord may, at its option, extend
the date on which this Lease may terminate as to the Affected Premises to a date
which is no later than the date on which Tenant has satisfied all
-21-
Remaining Obligations. Upon such termination (i) all obligations of Tenant
hereunder as to the Affected Premises shall terminate except for any Surviving
Obligations, (ii) Tenant shall immediately vacate and shall have no further
right, title or interest in or to any of the Affected Premises and (iii) the
Net Award shall be retained by Landlord. Notwithstanding anything to the
contrary hereinabove contained, if Tenant shall have received a Rejection and,
on the date when this Lease would otherwise terminate as provided above,
Landlord, through no fault of its own, shall not have received the full amount
of the Net Award payable by reason of the applicable Termination Event, then
the date on which this Lease is to terminate automatically shall be extended to
date of the receipt by Landlord of the full amount of the Net Award provided
that, if Tenant has not satisfied all Remaining Obligations on such date, then
Landlord may, at its option, extend the date on which this Lease may terminate
to a date which is no later than the date on which Tenant has satisfied all
such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not later than
the thirtieth (30th) day following the date Landlord receives the Termination
Notice, Landlord shall be conclusively presumed to have accepted such offer. If
such offer is accepted by Landlord then, on the Termination Date, Tenant shall
pay to Landlord the Termination Amount and all Remaining Obligations and, if
requested by Tenant, Landlord shall convey to Tenant or its designee, together
with the Net Award, the Affected Premises or the remaining portion thereof, if
any, all in accordance with Paragraph 20.
(e) In the event of the termination of this Lease as to the
Affected Premises as hereinabove provided, this Lease shall remain in full force
and effect as to the Remaining Premises; provided, that the Basic Rent for the
Remaining Premises to be paid after such termination shall be the Basic Rent
otherwise payable hereunder with respect to the Leased Premises multiplied by a
percentage equal to the sum of the percentages set forth on EXHIBIT "F" for the
Remaining Premises.
19. RESTORATION.
(a) Landlord (or Lender if required by any Mortgage) shall hold
any Net Award in excess of $250,000 in a fund (the "RESTORATION FUND") and
disburse amounts from the Restoration Fund only in accordance with the following
conditions:
(i) prior to commencement of restoration, (A) the architects,
contracts, contractors, plans and specifications for the restoration shall have
been approved by Landlord, which approval shall not be unreasonably withheld,
delayed or conditioned, (B) Landlord and Lender shall be provided with
mechanics' lien insurance (if available) and (C) if permitted by applicable Law,
appropriate waivers of mechanics' and materialmen's liens shall have been filed;
(ii) at the time of any disbursement, no Event of Default shall
exist and no mechanics' or materialmen's liens shall have been filed against any
of the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last disbursement,
upon receipt of (A) reasonably satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested, (D) a reasonably satisfactory
bring down of title insurance and (E) other reasonably satisfactory evidence of
cost and payment so that Landlord
-22-
and Lender can verify that the amounts disbursed from time to time are
represented by work that is completed, in place and free and clear of
mechanics' and materialmen's lien claims;
(iv) each request for disbursement shall be accompanied by a
certificate of Tenant, signed by the president or a vice president of Tenant,
describing the work for which payment is requested, stating the cost incurred
in connection therewith, stating that Tenant has not previously received
payment for such work and, upon completion of the work, also stating that the
work has been fully completed and complies with the applicable requirements
of this Lease;
(v) Landlord may retain ten percent (10%) of the Restoration
Fund until the restoration is fully completed;
(vi) the Restoration Fund shall not be commingled with
Landlord's other funds and shall bear interest at a rate agreed to by
Landlord and Tenant; and
(vii) such other reasonable conditions as Landlord or Lender
may impose provided same are consistent with prudent commercial lending
practices in the area where the Affected Premises are located.
(b) Prior to commencement of restoration and at any time during
restoration, if the estimated cost of completing the restoration work free and
clear of all liens, as determined by Landlord, exceeds the amount of the Net
Award available for such restoration, the amount of such excess shall, upon
demand by Landlord, be paid by Tenant to Landlord to be added to the Restoration
Fund; provided, that if (i) Tenant shall provide evidence reasonably
satisfactory to Landlord as to the availability and earmarking of funds equal to
the amount of such excess for the purpose of completing such restoration and
(ii) Tenant's creditworthiness at the time in question is reasonably acceptable
to Landlord, then Tenant shall be permitted to hold such funds in its own
account for such purpose and to draw upon such funds as and when needed. Any
sum so added by Tenant which remains in the Restoration Fund upon completion of
restoration shall be refunded to Tenant. For purposes of determining the source
of funds with respect to the disposition of funds remaining after the completion
of restoration, the Net Award shall be deemed to be disbursed prior to any
amount added by Tenant. If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to this
subparagraph (b), such remaining sum shall be paid to Tenant or, if required by
a Note or Mortgage, paid by Landlord to the Lender and, if so paid to the
Lender, Basic Rent hereunder shall be equitably adjusted to the extent of (and
to reflect any reduction in debt service as a result of) the reamortization, if
any, of the Loan.
20. PROCEDURES UPON PURCHASE.
(a) If the Leased Premises or any of the Related Premises are
purchased by Tenant pursuant to any provision of this Lease, Landlord need not
convey any better title thereto than that which was conveyed to Landlord, and
Tenant or its designee shall accept such title, subject, however, to the
Permitted Encumbrances and to all other liens, exceptions and restrictions on,
against or relating to any of the Leased Premises or the applicable Related
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises or the applicable
Related Premises which have been created by or resulted solely from acts of
Landlord after the date of this Lease, unless the same are Permitted
Encumbrances or customary utility easements benefiting the Leased Premises or
were created with the concurrence of Tenant.
-23-
(b) Upon the date fixed for any such purchase of the Leased
Premises or any of the Related Premises pursuant to any provision of this
Lease (any such date the "PURCHASE DATE"), Tenant shall pay to Landlord, or
to any Person to whom Landlord directs payment, the Relevant Amount therefor
specified herein, in Federal Funds, less any credit of the Net Award received
and retained by Landlord or a Lender allowed against the Relevant Amount, and
Landlord shall deliver to Tenant (i) a special warranty deed which describes
the premises being conveyed and conveys the title thereto as provided in
Paragraph 20(a), (ii) such other instruments as shall be necessary to
transfer to Tenant or its designee any other property (or rights to any Net
Award not yet received by Landlord or a Lender) then required to be sold by
Landlord to Tenant pursuant to this Lease and (iii) any Net Award received by
Landlord, not credited to Tenant against the Relevant Amount and required to
be delivered by Landlord to Tenant pursuant to this Lease; provided, that if
any Monetary Obligations remain outstanding on such date, then Landlord may
deduct from the Net Award the amount of such Monetary Obligations. If on the
Purchase Date any Monetary Obligations remain outstanding and no Net Award is
payable to Tenant by Landlord or the amount of such Net Award is less than
the amount of the Monetary Obligations, then Tenant shall pay to Landlord on
the Purchase Date the amount of such Monetary Obligations. Upon the
completion of such purchase, this Lease and all obligations and liabilities
of Tenant hereunder with respect to the applicable Related Premises (but not
with respect to the Remaining Premises) shall terminate, except any Surviving
Obligations.
(c) If the completion of such purchase shall be delayed after
(i) the Termination Date or (ii) such other date scheduled for such purchase,
then (x) Rent shall continue to be due and payable until completion of such
purchase and (y) with respect to a purchase resulting from the occurrence of
an Event of Default, at Landlord's sole option, Fair Market Value shall be
redetermined and the Relevant Amount payable by Tenant pursuant to the
applicable provision of this Lease shall be adjusted to reflect such
redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord shall be
prorated as of the Purchase Date, and the prorated unapplied balance shall be
deducted from the Relevant Amount due to Landlord; provided, that no
apportionment of any Impositions shall be made upon any such purchase.
21. ASSIGNMENT AND SUBLETTING; PROHIBITION AGAINST LEASEHOLD
FINANCING.
(a) Tenant shall have the right, upon thirty (30) days prior
written notice to Landlord and Lender, with no consent of Landlord or Lender
being required or necessary ("Preapproved Assignment") to assign this Lease,
whether by operation of law of otherwise, to any Person ("Preapproved
Assignee") that immediately following such assignment will have a publicly
traded unsecured senior debt rating of Baa2 or better from Xxxxx'x Investors
Services, Inc. or a rating of "BBB" or better from Standard & Poor's
Corporation and in the event all of such rating agencies cease to furnish
such ratings, then a comparable rating by any rating agency reasonably
acceptable to Landlord and Lender. Upon any assignment to a Preapproved
Assignee and compliance by the Preapproved Assignee with the provisions of
Paragraph 21(c), the Tenant shall be released from all of its rights
obligations and liabilities hereunder except for Surviving Obligations.
(b) If Tenant (or either of them) desires to assign this Lease
or its interest hereunder, whether by operation of law of otherwise (a
"Non-approved Assignment") to a Person who would not be a Preapproved
Assignee (a "Non-Preapproved Assignee"), then Tenant shall, not less than
thirty (30) days prior to the date on which it desires to make a
Non-Preapproved Assignment, submit to Landlord and Lender information
regarding the following with respect to the Non-Preapproved Assignee
(collectively, the "Review Criteria"): (A) credit; (B) capital structure
(e.g., debt to equity ratio and fixed charges coverage ratio), (C)
-24-
management, (D) operating history, (E) proposed use of the Leased Premises
and (F) risk factors associated with the proposed use of the Leased Premises by
the Non-Preapproved Assignee, taking into account factors such as environmental
concerns, product liability and the like. Landlord (and Lender to the extent
required under the applicable Loan documents) shall review such information and
shall approve or disapprove the Non-Preapproved Assignee no later than the
fifteenth (15) day following receipt of all such information, and Landlord and
Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based on their review of the Review
Criteria applying prudent business judgment.
(c) If Landlord or Lender withhold consent to the
Non-Preapproved Assignment in accordance with the provisions of Paragraph 21
(b) above and Tenant desires to complete the Non-Preapproved Assignment,
Tenant shall make a rejectable offer (the "Intended Assignment Offer") to
purchase the Leased Premises for a purchase price equal to the Offer Amount
and to consummate the purchase on the first Basic Rent Payment Date occurring
after the determination of Fair Market Value (the "Intended Assignment
Purchase Date"). Notwithstanding the foregoing, if the Intended Assignment
Offer is accepted by Landlord and the Non-Preapproved Assignment occurs on a
date (the "Assignment Date") that is prior to the Intended Assignment
Purchase Date, then, no later than the Assignment Date, Tenant shall deposit
in escrow with Landlord an amount (the "Deposit Amount") equal to one hundred
percent (100%) of the sum of the Acquisition Cost and any Prepayment Premium
in the form of cash or an irrevocable letter or credit issued by a bank, and
in form and substance, acceptable to Landlord. The Deposit Amount shall be
held by and invested by Landlord and the Deposit Amount, together with any
interest earned thereon, shall be applied on the Intended Assignment Purchase
Date to payment of the Offer Amount.
(d) If Landlord shall reject the Intended Assignment Offer by
notice to Tenant, such notice to contain the written consent of Lender to
such rejection, no later than the thirtieth (30th) day following receipt of
the Intended Assignment Offer by Landlord, then this Lease shall remain in
full force and effect and Landlord and Lender shall be deemed to have
consented to the Non-Preapproved Assignment. Nothing provided herein shall
constitute a waiver by Landlord of the obligation of Tenant to comply with
the requirements of this Paragraph 21 if a subsequent Non-Preapproved
Assignment arises. No rejection of the Intended Assignment Offer shall be
effective for any purpose unless consented to in writing by Lender.
(e) Unless Landlord shall have rejected the Intended Assignment
Offer by the foregoing notice to Tenant not later than the thirtieth (30th)
day following receipt of information described in the foregoing Paragraph
21(b), Landlord shall be conclusively presumed to have accepted the Intended
Assignment Offer. If the Intended Assignment Offer is accepted by Landlord,
Tenant shall pay to Landlord the Offer Amount (less the Deposit Amount and
interest thereon paid to Landlord) on the Intended Assignment Purchase Date
and, provided that no Rent or any other charge is due and unpaid under this
Lease as of the Intended Assignment Purchase Date and Tenant is otherwise in
compliance with the terms of this Lease, Landlord shall convey to Tenant the
Leased Premises in accordance with the provisions of Paragraph 20 of this
Lease.
(f) Tenant shall have the right, upon not less than thirty (30)
days prior written notice to Landlord and Lender, to enter into one or more
subleases that demise, in the aggregate, up to but not in excess of
twenty-five percent (25%) of the gross space in the Improvements with no
consent or approval of Landlord being required or necessary ("Preapproved
Sublet"). Other than pursuant to a Preapproved Sublet, no portion of the
Leased Premises shall be subleased during the Term to any other Person
without prior written consent of Landlord and Lender, which consent shall not
be unreasonably withheld or delayed, and which consent shall be granted or
withheld based on a review of the Review Criteria. Landlord and
-25-
Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based on their reasonable review of
the Review Criteria.
(g) If Tenant (or either of them) assigns all its rights and
interest under this Lease, the assignee under such assignment shall expressly
assume all the obligations of Tenant hereunder, actual or contingent,
including obligations of Tenant which may have arisen on or prior to the date
of such assignment, by a written instrument delivered to Landlord at the time
of such assignment. Each sublease of any of the Related Premises shall be
subject and subordinate to the provisions of this Lease. Except as provided
in Paragraph 21(a) above, no assignment or sublease shall affect or reduce
any of the obligations of Tenant hereunder, and all such obligations shall
continue in full force and effect as obligations of a principal and not as
obligations of a guarantor, as if no assignment or sublease had been made.
No assignment or sublease shall impose any additional obligations on Landlord
under this Lease.
(h) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease consented to by Landlord, deliver a
duplicate original copy thereof to Landlord which, in the event of an
assignment, shall be in recordable form.
(i) As security for performance of its obligations under this
Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title
and interest of Tenant in and to all subleases now in existence or hereafter
entered into for any or all of the Leased Premises, any and all extensions,
modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and enjoy
all rents and other sums of money payable under any sublease of any of the
Leased Premises, provided, however, that Landlord shall have the absolute
right at any time upon notice to Tenant and any subtenants or at any time
following the occurrence of an Event of Default to revoke said license and to
collect such rents and sums of money and to retain the same. Tenant shall
not consent to, cause or allow any modification or alteration of any of the
terms, conditions or covenants of any of the subleases or the termination
thereof, without the prior written approval of Landlord which consent shall
not be unreasonably withheld, conditioned or delayed except that any
modification, alteration, addition or termination shall be permitted without
the written approval of Landlord with respect to any Pre-Approved Sublet, so
long as the Review Criteria have not changed (and will not be changed, as a
result of any such modification, alteration, addition or termination) in any
material respect as to such Pre-Approved Sublet. Tenant shall not accept any
rents more than thirty (30) days in advance of the accrual thereof nor do nor
permit anything to be done, the doing of which, nor omit or refrain from
doing anything, the omission of which, will or could be a breach of or
default in the terms of any of the subleases.
(j) Tenant (or either of them) shall not have the power to
mortgage, pledge or otherwise encumber its interest under this Lease or any
sublease of any of the Related Premises, and any such mortgage, pledge or
encumbrance made in violation of this Paragraph 21 shall be void and of no
force and effect.
(k) Subject to the provisions of Paragraph 36 hereof, Landlord
may sell or transfer the Leased Premises at any time without Tenant's consent
to any third party (each a "THIRD PARTY PURCHASER"). In the event of any
such transfer, Tenant shall attorn to any Third Party Purchaser so long as
such Third Party Purchaser assumes Landlord's obligations under this Lease in
writing and provided that such Third Party Purchaser and Landlord notify
Tenant in writing of such transfer. At the request of Landlord, Tenant will
execute such documents confirming the agreement referred to above and such
other agreements as Landlord may reasonably request, provided that such
agreements do not increase the liabilities and obligations of Tenant
hereunder.
-26-
22. EVENTS OF DEFAULT.
(a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph 22(b))
shall, at the sole option of Landlord, constitute an "EVENT OF DEFAULT"
under this Lease:
(i) a failure by Tenant (or either of them) to make any
payment of any Monetary Obligation, regardless of the reason for such
failure;
(ii) a failure by Tenant (or either of them) duly to
perform and observe, or a violation or breach of, any other provision hereof
not otherwise specifically mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant (or
either of them) herein or in any certificate, demand or request made pursuant
hereto proves to be incorrect, now or hereafter, in any material respect;
(iv) a default beyond any applicable cure period or at
maturity by Tenant (or either of them) in any payment of principal or
interest on any obligations for borrowed money having an original principal
balance of $10,000,000 or more in the aggregate, or in the performance of any
other provision contained in any instrument under which any such obligation
is created or secured (including the breach of any covenant thereunder), (x)
if such payment is a payment at maturity or a final payment, or (y) if an
effect of such default is to cause such obligation to be declared due prior
to its stated maturity; provided that the foregoing shall not constitute an
Event of Default unless and until such obligee shall commence the exercise of
its remedies in connection therewith and Tenant shall not have, within thirty
(30) days thereafter (a) caused such obligation to be paid in full or (b)
cured such default or caused the original maturity date to be otherwise
reinstated;
(v) a default by Tenant (or either of them) beyond any
applicable cure period in the payment of rent under, or in the performance of
any other material provision of, any other lease or leases that have, in the
aggregate, rental obligations over the terms thereof of $10,000,000 or more
if the Landlord under any such lease or leases successfully completes the
exercise of any of its remedies thereunder;
(vi) [intentionally omitted],
(vii) Tenant (or either of them) shall (A) voluntarily be
adjudicated a bankrupt or insolvent, (B) seek or consent to the appointment
of a receiver or trustee for itself or for any of the Related Premises, (C)
file a petition seeking relief under the bankruptcy or other similar laws of
the United States, any state or any jurisdiction, (D) make a general
assignment for the benefit of creditors, or (E) be unable to pay its debts as
they mature;
(viii) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant (or either of them), a receiver or
trustee for it or for any of the Related Premises or approving a petition
filed against Tenant (or either of them) which seeks relief under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, and such order, judgment or decree shall remain undischarged or
unstayed sixty (60) days after it is entered;
(ix) Except as provided under Paragraph 37 hereof, any of
the Related Premises (a) shall have been abandoned or (b) shall have been
vacated; provided that, with respect to the 000 X. Xxxxxxx Xx. Premises, the
000 X. Xxxxxxx Xx. Premises or the 000 X. Xxxxxxx Xx. Premises, the foregoing
clause (b) shall not constitute an Event of Default if Tenant
-27-
shall have given Landlord thirty (30) days prior notice of Tenant's intent to
vacate and shall have instituted appropriate security measures designed to
protect the applicable above Related Premises from theft and/or vandalism;
(x) Tenant (or either of them) shall be liquidated or
dissolved or shall begin proceedings towards its liquidation or dissolution;
(xi) the estate or interest of Tenant (or either of them)
in any of the Related Premises shall be levied upon or attached in any
proceeding and such estate or interest is about to be sold or transferred or
such process shall not be vacated or discharged within sixty (60) days after
it is made;
(xii) a failure by Tenant (or either of them) to perform or
observe, or a violation or breach of, or a misrepresentation by Tenant (or
either of them) under, any provision of any Assignment or any other document
between Tenant and Lender, if such failure, violation, breach or
misrepresentation gives rise to a default beyond any applicable cure period
with respect to any Loan; or
(xiii) Tenant shall fail to be in compliance with the
provisions of Exhibit G annexed hereto if an effect of such default is to
cause such underlying obligation to be declared due prior to its stated
maturity; provided that the foregoing shall not constitute an Event of
Default unless and until such obligee shall commence the exercise of its
remedies in connection therewith and Tenant shall not have, within thirty
(30) days thereafter (a) caused such underlying obligation to be paid in full
or (b) cured such default or caused the original maturity date to be
otherwise reinstated.
(b) No notice or cure period shall be required in any one or more
of the following events: (A) the occurrence of an Event of Default under
clause (i) (except as otherwise set forth below), (iii), (iv), (v), (vi),
(vii), (viii), (ix), (x), (xi), (xii) or (xiii) of Paragraph 22(a); (B) the
default consists of a failure to pay Basic Rent, a failure to provide any
insurance required by Paragraph 16 or an assignment or sublease entered into
in violation of Paragraph 21; or (C) the default is such that any delay in
the exercise of a remedy by Landlord could reasonably be expected to cause
irreparable harm to Landlord. If the default consists of the failure to pay
any Monetary Obligation under clause (i) of Paragraph 22(a), the applicable
cure period shall be three (3) days from the date on which notice is given,
but Landlord shall not be obligated to give notice of, or allow any cure
period for, any such default more than twice within any consecutive twelve
(12) month period. If the default consists of a default under clause (ii) of
Paragraph 22(a), other than the events specified in clauses (B) and (C) of
the first sentence of this Paragraph 22(b), the applicable cure period shall
be thirty (30) days from the date on which notice is given or, if the default
cannot be cured within such thirty (30) day period and delay in the exercise
of a remedy would not (in Landlord's reasonable judgment) cause any
irreparable harm to Landlord or any of the Leased Premises, the cure period
shall be extended for the period required to cure the default; provided that
Tenant shall commence to cure the default within the said thirty-day period
and shall actively, diligently and in good faith proceed with and continue
the curing of the default until it shall be fully cured.
-28-
23. REMEDIES AND DAMAGES UPON DEFAULT.
(a) If an Event of Default shall have occurred and is continuing,
Landlord shall have the right, at its sole option, then or at any time
thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's intention
to terminate this Lease on a date specified in such notice. Upon such date,
this Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire and terminate. Upon such termination, Tenant shall immediately
surrender and deliver possession of the Leased Premises to Landlord in
accordance with Paragraph 26. If Tenant does not so surrender and deliver
possession of all of the Leased Premises, Landlord may re-enter and repossess
any of the Leased Premises not surrendered, with or without legal process, by
peaceably entering any of the Leased Premises and changing locks or by
summary proceedings, ejectment or any other lawful means or procedure. Upon
or at any time after taking possession of any of the Leased Premises,
Landlord may, by peaceable means or legal process, remove any Persons or
property therefrom. Landlord shall be under no liability for or by reason of
any such entry, repossession or removal. Notwithstanding such entry or
repossession, Landlord may (A) exercise the remedy set forth in and collect
the damages permitted by Paragraph 23(a)(iii) or (B) collect the damages set
forth in Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of any of the Leased Premises
pursuant to clause (i) above, Landlord shall have the right to relet any of
the Leased Premises to such tenant or tenants, for such term or terms, for
such rent, on such conditions and for such uses as Landlord in its sole
discretion may determine, and collect and receive any rents payable by reason
of such reletting. Landlord may make such Alterations in connection with
such reletting as it may deem advisable in its sole discretion.
Notwithstanding any such reletting, Landlord may collect the damages set
forth in Paragraph 23(b)(ii).
(iii) Landlord may, upon notice to Tenant, require Tenant to
make an irrevocable offer to terminate this Lease in its entirety for an
amount (the "DEFAULT TERMINATION AMOUNT") specified in the next sentence.
The "Default Termination Amount" shall be the greatest of (A) the Fair Market
Value of the Leased Premises or (B) the sum of the Acquisition Cost and
Prepayment Premium which Landlord will be required to pay in prepaying any
Loan with proceeds of the Default Termination Amount or (C) an amount equal
to the Present Value of the entire Basic Rent from the date of such purchase
to the date on which the then Term would expire, assuming that the Term has
been extended for all extension periods, if any, provided for in this Lease.
Upon such notice to Tenant, Tenant shall be deemed to have made such offer
and shall, if requested by Landlord, within ten (10) days following such
request, deposit with Landlord as payment against the Default Termination
Amount the amount described in (B) above, Landlord and Tenant shall promptly
commence to determine Fair Market Value. Within thirty (30) days after the
Fair Market Value Date, Landlord shall accept or reject such offer. If
Landlord accepts such offer then, on the tenth (10th) business day after such
acceptance, Tenant shall pay to Landlord the Default Termination Amount and,
at the request of Tenant, Landlord will convey the Leased Premises to Tenant
or its designee in accordance with Paragraph 20. Any rejection by Landlord of
such offer shall have no effect on any other remedy Landlord may have under
this Lease.
(iv) Landlord may declare by notice to Tenant the entire
Basic Rent (in the amount of Basic Rent then in effect) for the remainder of
the then current Term to be immediately due and payable. Tenant shall
immediately pay to Landlord all such Basic Rent discounted to its Present
Value, all accrued Rent then due and unpaid, all other Monetary
-29-
Obligations which are then due and unpaid and all Monetary Obligations which
arise or become due by reason of such Event of Default (including any Costs
of Landlord). Upon receipt by Landlord of all such accelerated Basic Rent
and Monetary Obligations, this Lease shall remain in full force and effect
and Tenant shall have the right to possession of the Leased Premises from the
date of such receipt by Landlord to the end of the Term, and subject to all
the provisions of this Lease, including the obligation to pay all increases
in Basic Rent and all Monetary Obligations that subsequently become due,
except that (A) no Basic Rent which has been prepaid hereunder shall be due
thereafter during the said Term, (B) Tenant shall have no option to extend or
renew the Term.
(b) The following constitute damages to which Landlord shall be
entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph
23(a)(i) but not its remedy under Paragraph 23(a)(ii) (or attempts to
exercise such remedy and is unsuccessful in reletting the Leased Premises)
then, upon written demand from Landlord, Tenant shall pay to Landlord, as
liquidated and agreed final damages for Tenant's default and in lieu of all
current damages beyond the date of such demand (it being agreed that it would
be impracticable or extremely difficult to fix the actual damages), an amount
equal to the Present Value of the excess, if any, of (A) all Basic Rent from
the date of such demand to the date on which the Term is scheduled to expire
hereunder in the absence of any earlier termination, re-entry or repossession
over (B) the then fair market rental value of the Leased Premises for the
same period. Tenant shall also pay to Landlord all of Landlord's Costs in
connection with the repossession of the Leased Premises and any attempted
reletting thereof, including all customary brokerage commissions, ,
reasonable attorneys' fees and expenses, reasonable employees' expenses, and
reasonable costs of Alterations and expenses in preparation for reletting.
(ii) If Landlord exercises its remedy under Paragraph
23(a)(i) or its remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant
shall, until the end of what would have been the Term in the absence of the
termination of the Lease, and whether or not any of the Leased Premises shall
have been relet, be liable to Landlord for, and shall pay to Landlord, as
liquidated and agreed current damages on the date on which the same are due
and payable under the terms of this Lease all Monetary Obligations which
would be payable under this Lease by Tenant in the absence of such
termination less the net proceeds, if any, of any reletting pursuant to
Paragraph 23(a)(ii), after deducting from such proceeds all of Landlord's
Costs (including the items listed in the last sentence of Paragraph 23(b)(i)
hereof) incurred in connection with such repossessing and reletting;
provided, that if Landlord has not relet the Leased Premises, such Costs of
Landlord shall be considered to be Monetary Obligations payable by Tenant.
Tenant shall be and remain liable for all sums aforesaid, and Landlord may
recover such damages from Tenant and institute and maintain successive
actions or legal proceedings against Tenant for the recovery of such damages.
Nothing herein contained shall be deemed to require Landlord to wait to
begin such action or other legal proceedings until the date when the Term
would have expired by its own terms had there been no such Event of Default.
(c) Notwithstanding anything to the contrary herein contained, in
lieu of or in addition to any of the foregoing remedies and damages, Landlord
may exercise any remedies and collect any damages available to it at law or
in equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder
or at law or in equity.
(d) Landlord shall not be required to mitigate any of its damages
hereunder unless required to by applicable Laws of the State. If any Law
shall limit the amount of any damages provided for herein to an amount which
is less than the amount agreed to herein, Landlord shall be entitled to the
maximum amount available under such Laws.
-30-
(e) No termination of this Lease, repossession or reletting of any
of the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, TENANT, TO THE FULLEST EXTENT PERMITTED BY THE LAWS OF THE STATE,
(i) WAIVES THE SERVICE OF ANY ADDITIONAL NOTICE WHICH MAY BE REQUIRED BY ANY
APPLICABLE LAW AND (ii) WAIVES ANY RIGHT TO A TRIAL BY JURY.
(g) Upon the occurrence and during the continuance of any Event of
Default, Landlord shall have the right (but no obligation) to perform any act
required of Tenant hereunder and, if performance of such act requires that
Landlord enter the Leased Premises, Landlord may enter the Leased Premises
for such purpose.
(h) No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as
a waiver, modification or relinquishment thereof. A receipt by Landlord of
any sum in satisfaction of any Monetary Obligation with knowledge of the
breach of any provision hereof shall not be deemed a waiver of such breach,
and no waiver by Landlord of any provision hereof shall be deemed to have
been made unless expressed in a writing signed by Landlord.
(i) Tenant hereby waives and surrenders, for itself and all those
claiming under it, including creditors of all kinds, (i) any right and
privilege which it or any of them may have under any present or future Law to
redeem any of the Leased Premises or to have a continuance of this Lease
after termination of this Lease or of Tenant's right of occupancy or
possession pursuant to any court order or any provision hereof, and (ii) the
benefits of any present or future Law which exempts property from liability
for debt or for distress for rent, except to the extent Landlord shall have
executed a landlord's waiver with respect to such property.
(j) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy.
Each remedy may be exercised at any time an Event of Default has occurred and
is continuing and may be exercised from time to time. No remedy shall be
exhausted by any exercise thereof.
24. NOTICES. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or
permitted to be given pursuant to the provisions of this Lease shall be in
writing and shall be deemed to have been given and received for all purposes
when delivered in person or by Federal Express or other reliable 24-hour
delivery service or five (5) business days after being deposited in the
United States mail, by registered or certified mail, return receipt
requested, postage prepaid, addressed to the other party at its address
stated above or when delivery is refused. A copy of any notice given by
Landlord to Tenant shall simultaneously be given by Landlord to Liner
Yankelevitz Sunshine Xxxxxxxx Xxxxx & Xxxxxxxxxxx LLP, Attention: Xxxxxxxx X.
Xxxxxxxxxxx, Esq. A copy of any notice given by Tenant to Landlord shall
simultaneously be given by Tenant to Xxxx Xxxxx Xxxx & XxXxxx LLP, 0000 Xxx
Xxxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Chairman, Real Estate
Department. For the purposes of this Paragraph, any party may substitute
another address stated above (or substituted by a previous notice) for its
address by giving fifteen (15) days' notice of the new address to the other
party, in the manner provided above.
25. ESTOPPEL CERTIFICATE. At any time upon not less than ten (10)
days' prior written request by either Landlord or Tenant (the "REQUESTING
PARTY") to the other party (the
-31-
"RESPONDING PARTY"), the Responding Party shall deliver to the Requesting
Party a statement in writing, executed by an authorized officer of the
Responding Party having sufficient knowledge of this Lease and the Leased
Premises, certifying (a) that, except as otherwise specified, this Lease is
unmodified and in full force and effect, (b) the dates to which Basic Rent,
Additional Rent and all other Monetary Obligations have been paid, (c) that,
to the knowledge of the signer of such certificate and except as otherwise
specified, no default by either Landlord or Tenant exists hereunder, (d) such
other matters as the Requesting Party may reasonably request, and (e) if
Tenant is the Responding Party that, except as otherwise specified, there
are no proceedings pending or, to the knowledge of the signer, threatened,
against Tenant before or by an court or administrative agency which, if
adversely decided, would materially and adversely affect the financial
condition and operations of Tenant. Any such statements by the Responding
Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of
any of the Leased Premises.
26. SURRENDER. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear. Upon such surrender, Tenant shall (a)
remove from the Leased Premises all property which is owned by Tenant or
third parties other than Landlord and (b) repair any damage caused by such
removal. Property not so removed shall become the property of Landlord, and
Landlord may thereafter cause such property to be removed from the Leased
Premises. The cost of removing and disposing of such property and repairing
any damage to any of the Leased Premises caused by such removal shall be paid
by Tenant to Landlord upon demand. Landlord shall not in any manner or to
any extent be obligated to reimburse Tenant for any such property which
becomes the property of Landlord pursuant to this Paragraph 26.
27. NO MERGER OF TITLE. There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased
Premises by reason of the fact that the same Person may acquire or hold or
own, directly or indirectly, (a) the leasehold estate created hereby or any
part thereof or interest therein and (b) the fee estate in any of the Leased
Premises or any part thereof or interest therein, unless and until all
Persons having any interest in the interests described in (a) and (b) above
which are sought to be merged shall join in a written instrument effecting
such merger and shall duly record the same.
28. BOOKS AND RECORDS.
(a) Tenant shall keep adequate records and books of account with
respect to the finances and business of Tenant generally and with respect to
the Leased Premises, in accordance with generally accepted accounting
principles ("GAAP") consistently applied, and shall permit Landlord and
Lender by their respective agents, accountants and attorneys, upon reasonable
prior written notice to Tenant, to visit and inspect the Leased Premises and
examine (and make copies of) the records and books of account and to discuss
the finances and business with the officers of Tenant, at such reasonable
times as may be requested by Landlord. Upon the request of Lender or
Landlord (either telephonically or in writing), Tenant shall provide the
requesting party with copies of any information to which such party would be
entitled in the course of a personal visit.
(b) Tenant shall deliver to Landlord and to Lender within ninety
(90) days of the close of each fiscal year, annual audited "consolidating"
financial statements of Tenant prepared by nationally recognized independent
certified public accountants. Tenant shall
-32-
also furnish to Landlord within forty-five (45) days after the end of each of
the three remaining quarters unaudited financial statements and all other
quarterly reports of Tenant, certified by Tenant's chief financial officer,
and all filings, if any, of Form 10-K, Form 10-Q and other required filings
with the Securities and Exchange Commission pursuant to the provisions of the
Securities Exchange Act of 1934, as amended, or any other Law. All financial
statements of Tenant shall be prepared in accordance with GAAP consistently
applied. All annual financial statements shall be accompanied (i) by an
opinion of said accountants stating that (A) there are no qualifications as
to the scope of the audit and (B) the audit was performed in accordance with
GAAP and (ii) by the affidavit of the president or a vice president of
Tenant, dated within five (5) days of the delivery of such statement, stating
that (C) the affiant knows of no Event of Default, or event which, upon
notice or the passage of time or both, would become an Event of Default which
has occurred and is continuing hereunder or, if any such event has occurred
and is continuing, specifying the nature and period of existence thereof and
what action Tenant has taken or proposes to take with respect thereto and (D)
except as otherwise specified in such affidavit, that Tenant has fulfilled
all of its obligations under this Lease which are required to be fulfilled on
or prior to the date of such affidavit.
29. DETERMINATION OF VALUE.
(a) Whenever a determination of Fair Market Value is required
pursuant to any provision of this Lease, such Fair Market Value shall be
determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon such
Fair Market Value within thirty (30) days after the date (the "APPLICABLE
INITIAL DATE") on which (A) Tenant provides Landlord with notice of its
intention to terminate this Lease and purchase the Leased Premises under
Paragraph 21(c), (B) Landlord provides Tenant with notice of its intention
to redetermine Fair Market Value pursuant to Paragraph 20(c) or (C) Landlord
provides Tenant with notice of Landlord's intention to require Tenant to make
an offer to purchase the Leased Premises pursuant to Paragraph 23(a)(iii) or
the Abandonment Premises under Paragraph 37(g). Upon reaching such
agreement, the parties shall execute an agreement setting forth the amount of
such Fair Market Value.
(ii) If the parties shall not have signed such agreement
within twenty (20) days after the Applicable Initial Date, Tenant shall
within forty (40) days after the Applicable Initial Date select an appraiser
and notify Landlord in writing of the name, address and qualifications of
such appraiser. Within ten (10) days following Landlord's receipt of Tenant's
notice of the appraiser selected by Tenant, Landlord shall select an
appraiser and notify Tenant of the name, address and qualifications of such
appraiser. Such two appraisers shall endeavor to agree upon Fair Market
Value based on a written appraisal made by each of them as of the Relevant
Date (and given to Landlord by Tenant). If such two appraisers shall agree
upon a Fair Market Value, the amount of such Fair Market Value as so agreed
shall be binding and conclusive upon Landlord and Tenant.
(iii) If such two appraisers shall be unable to agree upon a
Fair Market Value within fifteen (15) days after the selection of an
appraiser by Landlord, then such appraisers shall advise Landlord and Tenant
of their respective determination of Fair Market Value and shall select a
third appraiser to make the determination of Fair Market Value. The
selection of the third appraiser shall be binding and conclusive upon
Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree upon the
designation of a third appraiser within ten (10) days after the expiration of
the fifteen (15) day period referred to in clause (iii) above, or if such
third appraiser does not make a determination of Fair Market Value within
fifteen (15) days after his selection, then such third appraiser or a
-33-
substituted third appraiser, as applicable, shall, at the request of either
party hereto, be appointed by the President or Chairman of the American
Arbitration Association in Chicago, Illinois. The determination of Fair
Market Value made by the third appraiser appointed pursuant hereto shall be
made within fifteen (15) days after such appointment.
(v) If a third appraiser is selected, Fair Market Value
shall be the average of the determination of Fair Market Value made by the
third appraiser and the determination of Fair Market Value made by the
appraiser (selected pursuant to Paragraph 29(a)(ii) hereof) whose
determination of Fair Market Value is nearest to that of the third appraiser.
Such average shall be binding and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to this
Paragraph 29(a) shall (A) be independent qualified MAI appraisers (B) have no
right, power or authority to alter or modify the provisions of this Lease,
(C) utilize the definition of Fair Market Value hereinabove set forth above,
and (D) be registered in the State if the State provides for or requires such
registration.
(vii) The Cost of the procedure described in this Paragraph
29(a) above shall be borne by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then
the date on which the Term would otherwise expire or terminate shall be
extended with respect to the Leased Premises or the Affected Premises, as
applicable, to the date specified for termination in the particular provision
of this Lease pursuant to which the determination of Fair Market Value is
being made.
(c) In determining Fair Market Value as defined in clause (b) of
the definition of Fair Market Value, the appraisers shall add (i) the present
value of the Rent for the remaining Term (assuming the Term has been extended
only for any exercised extension periods) using a discount rate (which may be
determined by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and (ii) the present value of the Leased Premises
as of the end of such Term (having assumed the Term has been extended for all
extension periods provided herein). The appraisers shall further assume that
no default then exists under the Lease, that Tenant has complied (and will
comply) with all provisions of the Lease, and that Tenant has not violated
(and will not violate) any of the Covenants.
30. NON-RECOURSE AS TO LANDLORD. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability
of Landlord under this Lease shall be enforced only against the Leased
Premises and the rents, issues and profits derived therefrom, and not against
any other assets, properties or funds of (a) Landlord, (b) any director,
officer, general partner, limited partner, employee or agent of Landlord, or
any general partner of Landlord, any of its general partners or shareholders
(or any legal representative, heir, estate, successor or assign of any
thereof), (c) any predecessor or successor partnership or corporation (or
other entity) of Landlord, or any of its general partners, either directly or
through Landlord or its general partners or any predecessor or successor
partnership or corporation or their shareholders, officers, directors,
employees or agents (or other entity), or (d) any other Person (including
Xxxxx Property Advisors, Xxxxx Fiduciary Advisors, Inc., W. P. Xxxxx & Co.,
Inc., W. P. Xxxxx Incorporated and any Person affiliated with any of the
foregoing, or any director, officer, employee or agent of any thereof).
31. FINANCING.
(a) Tenant agrees to pay, within ten (10) days following written
request from Landlord, all reasonable costs and expenses incurred by Landlord
in connection
-34-
with the purchase and leasing of the Leased Premises and the financing of the
initial Loan (excluding "points" or commitment fees), including, without
limitation, expenses of Landlord's and Lender's counsel, the cost of
appraisals, environmental reports, title insurance, premiums and costs, and
survey costs and expenses (not to exceed, with respect to Lender's legal fees
and expenses, $25,000 in the aggregate).
(b) Tenant agrees to pay, within three (3) business days of
written demand thereof, any cost, charge or expense (other than the principal
of the Note and interest thereon at the contract rate of interest specified
therein) imposed upon Landlord by Lender pursuant to the Note, the Mortgage
or the Assignment which caused by any act or omission of Tenant and which is
not otherwise reimbursed by Tenant to Landlord pursuant to any other
provision of this Lease.
(c) If Landlord desires to obtain or refinance any Loan, Tenant
shall negotiate in good faith with Landlord concerning any request made by
any Lender or proposed Lender for changes or modifications in this Lease so
long as the same do not materially adversely affect any right, benefit or
privilege of Tenant under this Lease or materially increase Tenant's
obligations under this Lease. In particular, Tenant shall agree, upon
request of Landlord, to supply any such Lender with such notices and
information as Tenant is required to give to Landlord hereunder and to impart
the rights of Landlord hereunder to any such Lender and to consent to such
financing if such consent is requested by such Lender. Tenant shall provide
any other consent or statement and shall execute any and all other documents
that such Lender reasonably requires in connection with such financing,
including any environmental indemnity agreement and subordination,
non-disturbance and attornment agreement, so long as the same (i) with
respect to any financing other than the with the initial Lender, are at no
cost to Tenant, (ii) do not materially adversely affect any right, benefit
or privilege of Tenant under this Lease and (iii) do not increase any of
Tenant's monetary obligations or materially increase any of Tenant's
non-monetary obligations under this Lease. Such subordination,
nondisturbance and attornment agreement shall be in form and substance
reasonably satisfactory to Tenant and Lender and may require Tenant to
confirm that (a) Lender and its assigns will not be liable for any
misrepresentation, act or omission of Landlord and (b) Lender and its assigns
will not be subject to any counterclaim, demand or offsets which Tenant may
have against Landlord.
32. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. This Lease and
Tenant's interest hereunder shall be subordinate to any Mortgage or other
security instrument hereafter placed upon the Leased Premises by Landlord,
and to any and all advances made or to be made thereunder, to the interest
thereon, and all renewals, replacements and extensions thereof, provided that
any such Mortgage or other security instrument (or a separate instrument of
subordination, non-disturbance and attornment in recordable form duly
executed by the holder of any such Mortgage or other security instrument
executed and delivered to Tenant) shall provide for the recognition of this
Lease and all Tenant's rights hereunder unless and until an Event of Default
exists beyond any applicable notice and cure period and Landlord shall have
the right to terminate this Lease pursuant to any applicable provision
hereof. Landlord covenants that so long as Tenant shall have paid all Basic
Rent then due and payable and no other Event of Default shall have occurred
and then be continuing hereunder, Landlord shall timely pay the debt service
payments due Lender in connection with the Loan; provided that, the foregoing
shall not obligate Landlord to make any payment to Lender during the pendency
of any good faith dispute between Landlord and Lender.
33. FINANCIAL COVENANTS. Tenants hereby covenants and agrees to comply
with all the covenants and agreements described in EXHIBIT "G" hereto.
34. TAX TREATMENT; REPORTING. Landlord and Tenant each acknowledge
that each shall treat this transaction as a true lease for state law purposes
and shall report this
-35-
transaction as a Lease for Federal income tax purposes. For Federal income
tax purposes each shall report this Lease as a true lease with Landlord as
the owner of the Leased Premises and Equipment and Tenant as the lessee of
such Leased Premises and Equipment including: (1) treating Landlord as the
owner of the property eligible to claim depreciation deductions under Section
167 or 168 of the Internal Revenue Code of 1986 (the "CODE") with respect to
the Leased Premises and Equipment, (2) Tenant reporting its Rent payments as
rent expense under Section 162 of the Code, and (3) Landlord reporting the
Rent payments as rental income.
35. RIGHT OF FIRST REFUSAL.
(a) Except as otherwise provided in Paragraph 35(g), and provided
an Event of Default does not then exist, if Landlord shall enter into a
contract (the "SALE CONTRACT") for the sale of the entire Leased Premises
with a Third Party Purchaser, such Sale Contract shall be conditioned upon
Tenant's failure to exercise its right under this Paragraph 35(a), then
promptly following the execution thereof, Landlord shall give written notice
to Tenant, together with a copy of the executed Sale Contract.
(b) For a period of thirty (30) days following receipt of such
notice, Tenant shall have the right and option, exercisable by written notice
to Landlord given within said thirty (30) day period, to elect to purchase
the Leased Premises at the purchase price and upon all the terms and
conditions set forth in the Sale Contract, except that no contingencies
contained in such Sale Contract as to environmental assessments, engineering
studies, inspection of the Leased Premises, sale of other property, state of
the title to or encumbrances on the Leased Premises, or any other condition
or contingency to the Third Party Purchaser's obligation to purchase the
Leased Premises which pertains to the condition of the Leased Premises (other
than any such condition caused or permitted by Landlord in violation of this
Lease), the Third Party Purchaser's ability to take certain action or any
other factor beyond the control of Landlord, shall apply to Tenant's
obligation to purchase the Leased Premises under this Paragraph 35, and
Tenant shall be obligated to purchase the Leased Premises without any such
condition or contingency.
(c) If at the expiration of the aforesaid thirty (30) day period
Tenant shall have failed to exercise the aforesaid option, Landlord may sell
the Leased Premises to such Third Party Purchaser upon the terms set forth in
such contract.
(d) Except as otherwise specifically provided herein, the closing
date for any purchase of the Leased Premises by Tenant pursuant to this
Paragraph 35 shall be the later to occur of (i) ninety (90) days after the
date of Tenant's notice to Landlord of its intention to purchase the Leased
Premises upon the terms of a Sale Contract with a Third Party Purchaser but
no later than the expiration date of the date of this Lease or (ii) the
closing date provided in such Sale Contract. At such closing Landlord shall
convey the Leased Premises to Tenant in accordance with, and Tenant shall pay
to Landlord the purchase price and other consideration set forth in, the
applicable Sale Contract.
(e) Tenant shall have the right to exercise the foregoing right of
first refusal upon each proposed sale of the Leased Premises prior to the
expiration of this Lease. IF THE TERM OF THIS LEASE SHALL TERMINATE OR
EXPIRE, SUCH RIGHTS OF FIRST REFUSAL GRANTED PURSUANT TO THIS PARAGRAPH 35
SHALL TERMINATE AND BE NULL AND VOID AND OF NO FURTHER FORCE AND EFFECT. IN
SUCH EVENT TENANT SHALL EXECUTE A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS
LANDLORD SHALL REASONABLY REQUEST EVIDENCING THE TERMINATION OF ITS RIGHT OF
FIRST REFUSAL.
-36-
(f) If Tenant does not exercise its right of first refusal to
purchase the Leased Premises and the Leased Premises are transferred to a
Third Party Purchaser, Tenant will attorn to any Third Party Purchaser as
Landlord hereunder so long as such Third Party Purchaser assumes in writing
the obligations of Landlord under this Lease and such Third Party Purchaser
and Landlord notify Tenant in writing of such transfer. At the request of
Landlord, Tenant will execute such documents confirming the agreement
referred to above and such other agreements as Landlord may reasonably
request, provided that such agreements do not increase the liabilities and
obligations of Tenant hereunder.
(g) Tenant's right of first refusal set forth in the provisions of
this Paragraph 35 shall not be exercisable upon the occurrence of, or
prohibit (but shall continue in effect after), (i) any mortgaging, subjection
to deed of trust or other hypothecation of Landlord's interest in the Leased
Premises, (ii) any sale of the Leased Premises pursuant to a private power of
sale under or judicial foreclosure of any Mortgage or other security
instrument or device to which Landlord's interest in the Leased Premises is
now or hereafter subject, (iii) any transfer of Landlord's interest in the
Leased Premises to a Lender, beneficiary under deed of trust or other holder
of a security interest therein or their designees by deed in lieu of
foreclosure, (iv) any transfer of the Leased Premises to any governmental or
quasi-governmental agency with power of condemnation, (v) any transfer of the
Leased Premises to any affiliate of Landlord, Corporate Property Associates
12, W. P. Xxxxx & Co., Inc. or Xxxxx Diversified L. L. C. or (vi) any sale of
all or substantially all of Landlord's assets.
36. BARABOO PREMISES EXPANSION.
(a) Should Tenant, at any time during the period prior to the
tenth (10th) anniversary of the Commencement Date, desire to expand the
Baraboo Premises (an "EXPANSION"), which Expansion shall consist of the
construction of permanent improvements not readily removable from the Baraboo
Premises without causing material damage to the Baraboo Premises, then,
provided that (i) no Event of Default shall have occurred and be continuing,
(ii) there shall have been no adverse change in the financial condition of
Tenant and (iii) Basic Rent is increased by an amount provided for in
subparagraph (d)(i) below, Landlord shall (A) pay the cost of such Expansion
if the cost thereof is $2,500,000 or less and (B) not unreasonably withhold
its consent to pay the cost of such Expansion to the extent the cost thereof
is in excess of $2,500,000 if Landlord is satisfied with the creditworthiness
and management of Tenant.
(b) To the extent that the terms of the Mortgage or any other
document encumbering any of the Leased Premises shall require the consent of
Lender and/or the holder or holders of any encumbrance on any of the Leased
Premises (the "ENCUMBRANCERS") to the Expansion or to the financing thereof
by Landlord, the rights and obligations of Landlord and Tenant under
Paragraph 12 and this Paragraph 36 are expressly conditioned upon Tenant's
obtaining, prior to the commencement of any construction, the Encumbrancers'
written consent to such construction and to such financing. Landlord agrees
to reasonably cooperate with Tenant, at Tenant's sole cost and expense, with
respect to obtaining such consent.
(c) Should Landlord not agree to finance or otherwise reimburse
Tenant for the costs of the Expansion, or should Landlord and Tenant be
unable in good faith to agree upon the terms of the modification of this
Lease, Tenant shall, subject to the provisions of Paragraph 13 of this Lease
and any required Lender consent, have the right to construct the Expansion at
Tenant's sole cost and expense. In any event, the construction of the
Expansion shall be performed in accordance with the provisions of Paragraph
12 hereof and the Expansion shall be the property of Landlord and part of the
Leased Premises subject to all of the terms and conditions of this Lease.
-37-
(d) Should Landlord agree to finance or otherwise reimburse Tenant
for the costs of such Expansion, Landlord and Tenant shall enter into good
faith negotiations regarding the execution and delivery of a written
agreement of modification of this Lease, which agreement shall provide for
the following:
(i) an increase in the annual Basic Rent payable during the
Amortization Period (as hereinafter defined) equal to the greater of (A) an
amount sufficient to amortize the cost of such Expansion over a period (the
"AMORTIZATION PERIOD") which shall be equal to the remainder of the then
current Term (exclusive of any Renewal Term not yet exercised) at a rate of
interest equal to the ten (10) year Treasury Rate plus 300 basis points, and
(B) a rate of return to Landlord on Landlord's equity investment in the
Leased Premises equal to that enjoyed by Landlord hereunder immediately prior
to such proposed increase in Basic Rent and upon such other terms as shall be
agreed upon between Landlord and Tenant, but which other terms shall be no
less favorable to Landlord than the prevailing terms for first unsecured
loans for borrowers with credit ratings equivalent to that of Tenant's at
that time; and
(ii) such other changes and amendments to this Lease as may
be necessary and appropriate in view of such payment of the costs of such
Expansion by Landlord to Tenant.
(e) Tenant shall pay all Costs incurred by Landlord in connection
with any such modification to this Lease and such financing, including
closing costs, brokerage fees, taxes, recording charges and legal fees and
expenses.
(f) Nothing contained in this Paragraph 36 shall be construed to
modify Paragraphs 11 and 12 hereof and the provisions of Paragraph 11 and 12
shall apply to all Alterations made or constructed hereunder, including the
requirement for Landlord's consent to Alterations.
37. ECONOMIC ABANDONMENT.
(a) Provided that an Event of Default shall not have occurred and then
be continuing, Tenant shall have the right at any time after the fifth (5)
year of the Term (but in no event earlier than January 1, 2003) to terminate
this Lease with respect to one of the Related Premises that Tenant shall have
determined shall not be used for at least seven (7) years in its business
operations (such Related Premises, an "ABANDONMENT PREMISES"). In the event
Tenant elects to exercise such right, Tenant shall give notice (the
"ABANDONMENT NOTICE") to Landlord (with a copy to Lender) of its intention so
to terminate this Lease as to the Abandonment Premises, no later than three
(3) months prior to the date (the "ABANDONMENT DATE") of such intended
termination, which notice shall specify the Abandonment Date and shall
contain (a) an irrevocable offer of Tenant to terminate this Lease as to the
Abandonment Premises on the Abandonment Date for the Abandonment Offer Amount
(as defined below) and (b) a certificate of Tenant (i) stating that the
Abandonment Premises are no longer economic for Tenant's continued use and
occupancy in its business operations, (ii) specifying in reasonable detail
the reasons therefor and (iii) certifying that Tenant then intends to abandon
its operations at the Abandonment Premises for at least seven (7) years,
which certificate shall be conclusively binding upon Landlord and Tenant, and
(c) a resolution of the Board of Directors of Tenant (and each of them)
authorizing such notice.
(b) Tenant may exercise its rights under this Paragraph 37 only one
time and only with respect to one of the Related Premises.
(c) The "Abandonment Offer Amount" shall be the sum of (A) 110% of
the Acquisition Costs with respect to the Abandonment Premises determined in
accordance with the
-38-
percentage allocations specified in Exhibit "F" attached hereto and made a
part hereof and (B) any Prepayment Premium which Landlord will be required to
pay in prepayment of any Loan with proceeds of the Abandonment Offer Amount.
(d) Landlord shall accept or reject such offer by notice to Tenant
given not later than ninety (90) days prior to the Abandonment Date. If
Landlord shall reject such offer, which rejection shall not be valid unless
accompanied by the written consent thereto by Lender, if any, then upon (i)
payment of all Rent and any other sums due and unpaid hereunder as of the
Abandonment Date and (ii) compliance by Tenant with all other obligations and
liabilities under the Lease which have arisen on or prior to the Abandonment
Date, this Lease shall terminate as to the Abandonment Premises on the
Abandonment Date and Tenant shall immediately vacate and have no further
rights, title or interest in or to any of the Abandonment Premises.
(e) After the Abandonment Date, whether or not Landlord shall have
accepted or rejected Tenant's offer, the terms of this Lease will remain in
full force and effect with respect to the remaining Related Premises except
that the Basic Rent will be that percentage of the then Basic Rent which is
allocated to the remaining Related Premises as set forth in EXHIBIT "F"
attached hereto and made a part hereof.
(f) Unless Landlord shall have rejected such offer by the foregoing
notice to Tenant not later than the thirtieth (30th) day prior to the
Abandonment Date, Landlord shall be conclusively presumed to have accepted
such offer. If such offer is accepted by Landlord, Tenant shall pay to
Landlord the Abandonment Offer Amount on the Abandonment Date and, provided
an Event of Default does not exist hereunder, at the request of Tenant,
Landlord shall convey to Tenant the Abandonment Premises in accordance with
the provisions of Paragraph 20.
(g) Landlord shall have the right, at Landlord's sole option, to treat
any vacating or abandonment of the Abandonment Premises which is prohibited
pursuant to Paragraph 22 (a) hereof as constituting an election by Tenant of
its rights under this Paragraph 37 and as a irrevocable offer of Tenant to
purchase the Abandonment Premises at the price and upon the terms hereinabove
more specifically provided.
38. MISCELLANEOUS.
(a) The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or
to be used in determining the intent of the parties or otherwise interpreting
this Lease.
(b) As used in this Lease, the singular shall include the plural
and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i)
"including" shall mean "including without limitation"; (ii) "provisions"
shall mean "provisions, terms, agreements, covenants and/or conditions";
(iii) "lien" shall mean "lien, charge, encumbrance, title retention
agreement, pledge, security interest, mortgage and/or deed of trust"; (iv)
"obligation" shall mean "obligation, duty, agreement, liability, covenant
and/or condition"; (v) "any of the Leased Premises" shall mean "the Leased
Premises or any part thereof or interest therein"; (vi) "any of the Land"
shall mean "the Land or any part thereof or interest therein"; (vii) "any of
the Improvements" shall mean "the Improvements or any part thereof or
interest therein"; (viii) "any of the Equipment" shall mean "the Equipment or
any part thereof or interest therein"; and (ix) "any of the Adjoining
Property" shall mean "the Adjoining Property or any part thereof or interest
therein".
(c) Any act which Landlord is permitted to perform under this
Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Except as otherwise specifically
provided herein, Landlord shall have
-39-
the right, at its sole option, to withhold its consent whenever such consent
is required under this Lease for any reason or no reason. Time is of the
essence with respect to the performance by Tenant of its obligations under
this Lease.
(d) Landlord shall in no event be construed for any purpose to be
a partner, joint venturer or associate of Tenant or of any subtenant,
operator, concessionaire or licensee of Tenant with respect to any of the
Leased Premises or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by Tenant
on or about the effective date hereof at Landlord's request constitute the
entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating
to the Leased Premises and the transactions provided for herein. Landlord
and Tenant are business entities having substantial experience with the
subject matter of this Lease and have each fully participated in the
negotiation and drafting of this Lease. Accordingly, this Lease shall be
construed without regard to the rule that ambiguities in a document are to be
construed against the drafter.
(f) This Lease may be modified, amended, discharged or waived only
by an agreement in writing signed by the party against whom enforcement of
any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land and shall
be binding upon, and shall inure to the benefit of, Landlord and Tenant and
their respective successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises. If there is more
than one Tenant, the obligations of each shall be joint and several.
(h) Notwithstanding any provision in this Lease to the contrary,
all Surviving Obligations of Tenant shall survive the expiration or
termination of this Lease with respect to any Related Premises.
(i) If any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal or unenforceable in any
respect under the Laws of the State, then such provisions shall be given no
force or effect and shall be severed from the remaining terms and provisions
of this Lease, and such invalidity, illegality or unenforceability shall not
affect any other provision of this Lease, but this Lease shall be construed
as if such invalid, illegal or unenforceable provision had never been
contained herein.
(j) All exhibits attached hereto are incorporated herein as if
fully set forth.
(k) This Lease shall be governed by and construed and enforced in
accordance with the Laws of the State.
-40-
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
PRINT (WI) QRS 12-40, INC.,
a Wisconsin corporation
By: /s/ Xxxx Xxxxxxxx
---------------------------
Title: Second Vice President
------------------------
ATTEST: TENANT:
PERRY GRAPHIC COMMUNICATIONS,
INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxx
-------------------------- ---------------------------
Title: Assistant Secretary Title: Secretary
----------------------- ------------------------
XXXX'X, INCORPORATED,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxx
-------------------------- ---------------------------
Title: Assistant Secretary Title: Secretary
----------------------- ------------------------
-41-
Lease Agreement by and between Print (WI) QRS 12-40, Inc., Perry Graphic
Communications, Inc. and Xxxx'x Incorporated dated as of December 16, 1997.
------------------------------------------------------------------------------
EXHIBITS A-C, F and G OMITTED IN ACCORDANCE WITH
ITEM 601(b)(2) OF REGULATION X-X
Xxxxx-Xxxx'x Incorporated will furnish supplementally a copy of any
omitted schedule or exhibit to the Securities and Exchange Commission upon
request, provided however that Xxxxx-Xxxx'x Incorporated may request
confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any
schedule or exhibit so furnished.
EXHIBIT D
BASIC RENT PAYMENTS
1. BASIC RENT. Subject to the adjustments provided for in Paragraph 2
below, Basic Rent payable in respect of the Term shall be $1,888,875 per
annum, payable quarterly in advance on each Basic Rent Payment Date, in equal
installments of $472,218.75 each.
2. EFFECTIVE DATES OF RENT INCREASES.
(a) Basic Rent shall be increased as set forth in the succeeding
sentence, commencing on the fifth (5th) anniversary of the date (the "FIRST
FULL BASIC RENT PAYMENT DATE"), on which the first full quarterly installment
of Basic Rent shall be due and payable. As of the fifth (5th) anniversary of
the First Full Basic Rent Payment Date and thereafter on the tenth (10th) on
the fifteenth (15th), and, if the initial Term is extended, twentieth (20th),
twenty-fifth (25th) and thirtieth (30th) anniversaries of the First Full
Basic Rent Payment Date, Basic Rent shall be increased by ten percent (10%)
over the Basic Rent in effect immediately preceding each of the foregoing
dates (each such date being hereinafter referred to as the "BASIC RENT
ADJUSTMENT DATE").
(a) Effective as of a given Basic Rent Adjustment Date, Basic Rent
payable under this Lease until the next succeeding Basic Rent Adjustment Date
shall be the Basic Rent in effect after the adjustment provided for as of
such Basic Rent Adjustment Date.
(b) Notice of the new annual Basic Rent shall be delivered to
Tenant on or before the tenth (10th) day preceding each Basic Rent Adjustment
Date, but any failure to do so by Landlord shall not be or be deemed to be a
waiver by Landlord of Landlord's rights to collect such sums. Tenant shall
pay to Landlord, within ten (10) days after a notice of the new annual Basic
Rent is delivered to Tenant, all amounts due from Tenant, but unpaid,
because notice of the stated amount as set forth above was not delivered to
Tenant at least ten (10) days preceding the Basic Rent Adjustment Date in
question.
EXHIBIT E
ACQUISITION COST
Baraboo Premises $ 9,787,267
000 X. Xxxxxxx Xx. Premises $ 4,831,689
000 X. Xxxxxxx Xx. Premises $ 2,849,457
000 X. Xxxxxxx Xx. Premises;
000 X. Xxxxxxx Xx. Premises; and
000 X. Xxxxxxx Xx. Premises $ 1,641,535
TOTAL $19,109,948
-----------
EXHIBIT H
MEMORANDUM OF LEASE
RECORDED AT THE REQUEST OF
AND WHEN RECORDED MAIL TO:
Xxxx X. Xxxxxxx, Esq.
Xxxx Xxxxx Xxxx & XxXxxx
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE, made as of December __, 1997, between PRINT
(WI) QRS 12-40, INC., a Wisconsin corporation ("Landlord") having an
address c/o W.P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxx
Xxxx,Xxx Xxxx 00000, and PERRY GRAPHIC COMMUNICATIONS, INC., a Delaware
corporation and XXXX'X INCORPORATED, a Maryland corporation (collectively,
"Tenant"), each having an address at 000 X. Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxx 00000.
1. LEASE. Landlord has demised and let to Tenant pursuant to the terms
and conditions of a Lease Agreement dated as of the date hereof (the "Lease"),
the terms and conditions of which are incorporated herein as though set forth
in full, certain real property located in the County of Sauk, State of
Wisconsin, described in Exhibit "A-1" attached hereto and certain real
property located in the County of Jefferson, State of Wisconsin, described in
Exhibit "A-2" attached hereto (collectively, the "Leased Premises").
2. ORIGINAL TERM. Under the terms of the Lease, Tenant shall have and
hold the Leased Premises, together with the tenements, hereditaments,
appurtenances and easements thereunto belonging, at the rental and upon the
terms and conditions therein stated, for an original term (the "Term")
commencing as of December __, 1997 and ending on November 30, 2017.
3. RENEWAL TERM(S). Under the terms of the Lease, the Term may be
extended, at Tenant's option, for three (3) separate and additional periods
of five (5) years each after the expiration of the initial Term (each such
additional five-year period is hereinafter referred to as "Renewal Term");
provided that Tenant notifies Landlord in writing, at least eighteen (18)
months prior to expiration of the initial Term and each Renewal Term, as
applicable, that Tenant elects to exercise its renewal option as of the end
of such then current Term. Each Renewal Term shall be subject to all the terms
and conditions of the Lease as if the Term originally included the Renewal
Term.
4. TENANT'S RIGHT OF FIRST REFUSAL TO PURCHASE. Tenant has a right of
first refusal to purchase the Leased Premises, upon and subject to the terms
and conditions more particularly set forth in Paragraph 35 of the Lease.
5. NO RESPONSIBILITY FOR LIENS. NOTICE IS HEREBY GIVEN THAT LANDLORD
SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO TENANT, OR TO ANYONE HOLDING ANY OF THE LEASED PREMISES THROUGH
OR UNDER TENANT, AND THAT NO
MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL
ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES.
6. PURPOSE AND INTENTION. This Memorandum of Lease is executed for the
purpose of recordation in the Office of the Registrar of Deeds in Sauk
County, Wisconsin and in Jefferson County, Wisconsin, in order to give notice
of all of the terms, provisions and conditions of the Lease and is not
intended, and shall not be construed, to define, limit or modify the Lease.
The leasehold estate created and conveyed hereby with respect to the Leased
Premises is intended to be one of the same estate as was created with respect
to the Leased Premises by the Lease and is further intended to be governed in
all respects solely by the Lease and all of the provisions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of
Lease as of the day and year first above written.
LANDLORD:
PRINT (WI) QRS 12-40, INC.
a Wisconsin corporation
By:
--------------------------
Its:
--------------------------
TENANT:
PERRY GRAPHIC COMMUNICATIONS, INC.
a Delaware corporation
By:
--------------------------
Its:
--------------------------
XXXX'X INCORPORATED,
a Maryland corporation
By:
--------------------------
Its:
--------------------------
-2-
