'
EXHIBIT 10.11
SUBLEASE
SSP COMPANY, INC.
successor-in-interest to X. X. XXXXXX COMPANY
(Sublessor)
and
FRIENDLY ICE CREAM CORPORATION
(Sublessee)
Dated as of June 9, 1995
================================================================================
TABLE OF CONTENTS TO SUBLEASE
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ARTICLE I Definitions 1
ARTICLE II Representations
Section 2.1. Representations by the Sublessor 5
Section 2.2. Representations by the Sublessee 9
ARTICLE III Demising Clause
Section 3.1 Demise 10
Section 3.2 Consent 10
Section 3.3 Title Insurance 11
ARTICLE IV Sublease Term and Rents
Section 4.1. Sublease Term 11
Section 4.2. Rents 11
Section 4.3. Place of Payments 12
Section 4.4. Net Sublease; Nonterminability 13
Section 4.5. Sublessor's Work 13
Section 4.6. Definition of Substantial Completion 13
Section 4.7. Notice of Substantial Completion 14
Section 4.8. Completion Date 14
Section 4.9. Warranties 14
Section 4.10. Sublessee's Termination and Other Rights 14
Section 4.11. Sublessee's Work 15
ARTICLE V Maintenance, Taxes and Insurance
Section 5.1. Maintenance and Modification of
Project 16
Section 5.2. Removal of Leased Machinery or Excluded
Property 20
Section 5.3. Taxes, Governmental Charges and
Utility Charges 20
Section 5.4. Insurance 21
Section 5.5. Applications of Insurance Proceeds 22
Section 5.6. Additional Insurance Provisions 22
Section 5.7. Advances by Sublessor 22
(i)
TABLE OF CONTENTS TO SUBLEASE (cont'd)
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ARTICLE VI Damage, Destruction and Condemnation
Section 6.1. Damage and Destruction 23
Section 6.2. Condemnation 24
Section 6.3. Condemnation of Excluded Property 25
Section 6.4. Sublessee's Options 25
ARTICLE VII Special Covenants and Other Matters
Section 7.1. Sublessee to Hold Municipality Harmless 26
Section 7.2. Right of Access 27
Section 7.3. Sublessor to Maintain its Corporate
Existence 27
Section 7.4. Release of Certain Land 27
Section 7.5. Granting of Easements 30
Section 7.6. Arbitrage Covenants 30
Section 7.7. Compliance with Laws 31
Section 7.8. Limitation of Obligations of
Municipality 31
Section 7.9. Consent and Other Actions of Sublessor
Under Lease 31
Section 7.10. Hazardous Waste 32
ARTICLE VIII Assignment, Subleasing, Mortgaging, Selling,
Redemption, Prepayment and Abatement
Section 8.1. Assignment and Subleasing 36
Section 8.2. Mortgaging 36
Section 8.3. Redemption of Bonds 36
Section 8.4. Prepayment of Rents 37
Section 8.5. Certain Rent Abatements 37
Section 8.6. Installation of Sublessee's Property 37
Section 8.7. References to Bonds After Bonds Paid 38
ARTICLE IX Default
Section 9.1. Sublessee's Events of Default 38
Section 9.2. Remedies on Sublessee's Default 39
Section 9.3. No Remedy Exclusive 41
Section 9.4. Attorneys' Fees and Expenses 41
Section 9.5. No Waiver Implied 42
Section 9.6. Sublessor's Default 42
(ii)
TABLE OF CONTENTS TO SUBLEASE (cont'd)
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ARTICLE X Options in Favor of Sublessee
Section 10.1. Options to Purchase 43
Section 10.2. Option to Purchase or Right of First
Refusal 44
Section 10.3. Sublease Prior to Indenture 47
ARTICLE XI Miscellaneous
Section 11.1. Surrender of Project 47
Section 11.2. Notices 48
Section 11.3. Binding Effect 48
Section 11.4. Severability 49
Section 11.5. Amounts Remaining in Bond Fund 49
Section 11.6. Consents 49
Section 11.7. Amendments 49
Section 11.8. Recording 49
Section 11.9. Captions 49
Section 11.10. Counterparts 49
Section 11.11. Law Governing 50
EXHIBITS
EXHIBIT A 52
EXHIBIT B 54
EXHIBIT C 55
EXHIBIT C-2 57
EXHIBIT D 58
(iii)
THIS SUBLEASE dated as of June 9, 1995 between SSP COMPANY, INC., a
Massachusetts corporation with its principal place of business located at 0000
Xxxxxxxxx-Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter called
"Sublessor") and FRIENDLY ICE CREAM CORPORATION, a Massachusetts corporation
with its principal place of business located at 0000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (hereinafter called "Sublessee").
W I T N E S S E T H:
In consideration of the mutual covenants of the parties and other good and
valuable consideration, Sublessor and Sublessee agree as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Sublease shall have the followings
meanings:
"Authority" means the Chicopee Industrial Development Financing Authority
duly established by the Municipality pursuant to the Enabling Act.
"Authorized Sublessor Representative" means the person at the time
designated to act on behalf of the Sublessor by written certificate furnished to
the Municipality and the Trustee containing the specimen signature of such
person and signed on behalf of the Sublessor by the president or any vice
president of the Sublessor. Such certificate may designate an alternate or
alternates.
"Authorized Municipal Representative" means the person at the time
designated to act on behalf of the Municipality by written certificate furnished
to the Sublessor and the Trustee containing the specimen signature of such
person and signed by the chairman of its Authority. Such certificate may
designate an alternate or alternates.
"Authorized Sublessee Representative" means the person at the time
designated to act on behalf of the Sublessee by written certificate furnished to
the Sublessor, the Municipality and the Trustee containing the specimen
signature of such person and signed on behalf of the Sublessee by the president
or any vice president of the Sublessee. Such certificate may designate a
alternate or alternates.
"Bonds" means the City of Chicopee, Massachusetts Industrial
Development Revenue Bonds (X. X. Xxxxxx Company Project) of all series from
time to time authenticated and delivered pursuant to the Indenture identified
as such in Sections 202 and 208 of the Indenture.
"Bond Fund" means the fund created by Section 502 of the Indenture.
"Building" means all of the structures constructed or to be constructed
on the Leased Land.
"Commencement Date" means the date which is seven (7) days following the
Completion Date, as hereinafter provided in Section 4.8.
"Construction Fund" means the fund created by Section 602 of the
Indenture.
"Construction Period" means the period between July 10, 1979 and the
Completion Date.
"Enabling Act" means Chapter 40D of the General Laws of The Commonwealth
of Massachusetts, as amended from time to time.
"Excluded Property" means any real or personal property, including,
without limitation, structures, machinery, equipment, furniture and fixtures,
and whether in the nature of additions, modifications or improvements,
previously, now or hereafter constructed upon or installed in the Project by the
Sublessor or Sublessee with its own funds, without expense to the Municipality,
and not out of Bond proceeds. Excluded Property shall not include: property
constructed or acquired by application of any payment by the Sublessor pursuant
to Section 4.6 of the Lease, insurance proceeds pursuant to Section 7.1 of the
Lease or condemnation awards pursuant to Section 7.2 of the Lease; substitutions
for Leased Machinery made pursuant to Section 6.2 of the Lease; repairs,
renewals and replacements required by clause (ii) of Section 6.1 of the Lease;
any addition, modification or improvement which would render the Project less
suitable to its continued operation than if such addition, modification or
improvement had not been made; and any addition, modification or improvement,
the removal of which would impair the effective use of the Project as a
manufacturing facility either (a) comparable to the Project immediately prior to
the making of such addition, modification or improvement, or (b) at least as
valuable as it would have been had such addition, modification or improvement
not been made. All Excluded Property located on the Leased Land shall be and
remain identified as such by a writing affixed thereto. All property located on
the Leased
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Land and not so identified shall be presumed to be the property of the
Municipality and to be part of the Project.
"Friendly Work" means the work described in Exhibit C attached hereto and
made a part hereof, together with such changes and additions as the Sublessor
and Sublessee may mutually agree.
"Indenture" means the Mortgage and Indenture of Trust executed in
connection with the Bonds between the Municipality and the Trustee, recorded
with the Hampden County Registry of Deeds at Book ____, Page ____, and all
amendments and supplements thereto.
"Independent Counsel" means any counsel approved by the Municipality, the
Sublessor and the bondholders but who is not a full-time employee of any of
them.
"Independent Engineer" or "Independent Architect" means an engineer,
architect or engineering or architectural firm registered and qualified to
practice engineering or architecture under the laws of Massachusetts and
approved by the Municipality and Sublessor but who is not a full-time employee
of either of them.
"Industrial Development Facility" shall have the meaning given to it by
the Enabling Act.
"Lease" means that certain Lease dated as of September 1, 1979, by and
between the City of Chicopee, Massachusetts, acting by and through its
Industrial Development Financing Authority as Lessor, and X.X. Xxxxxx Company,
predecessor-in-interest to Sublessor as Lessee, and any amendments and
supplements thereto which have been approved by Sublessee in its sole and
absolute discretion.
"Lease Term" means the duration of the leasehold estate created by the
Lease.
"Leased Land" means the real estate described in Exhibit A hereof,
together with all additions thereto, improvements thereto (other than
structures) and substitutes therefore.
"Leased Machinery" means those items of machinery, equipment and related
property required by the Lease to be acquired with proceeds from the sale of
Bonds or the proceeds of any payment by the Sublessor pursuant to Section 4.6 of
the Lease, which items are described in Exhibit B of the Lease, together with
any item of machinery, equipment and related property acquired or
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installed in substitution therefore pursuant to Sections 4.1, 6.1, 6.2, 7.1 and
7.2 of the Lease.
"Municipality" means The City of Chicopee, Massachusetts. When exercising
authority granted by Massachusetts General Laws, Chapter 40D, the Municipality
shall act or be deemed to have acted by and through its Authority (unless the
context otherwise requires), and its successors and assigns.
"Net Proceeds" when used with respect to any insurance or condemnation
award, means the proceeds from the award for damage to the Project (excluding
the Excluded Property) remaining after payment of all reasonable expenses of the
Trustee and Sublessee (including attorneys' fees and the reasonable fees and
expenses of the Trustee) incurred in the collection of such proceeds.
"Outstanding" when used in connection with the Bonds has the meaning
defined in the Indenture.
"Parent Corporation" means the common parent corporation in any
"parent-subsidiary controlled group" in which the Sublessor or Sublessee is a
"component member" as such terms are used and defined in Section 1563 of the
Internal Revenue Code of 1954 and applicable regulations issued thereunder, as
the same may be amended from time to time.
"Permitted Encumbrances" means:
(a) Easements, rights-of-way, servitudes, zoning laws, use regulations,
other similar reservations, rights and restrictions and other minor defects and
irregularities in title, none of which materially lessens the value of the
Project or materially impairs the use thereof for the purposes held by the
Sublessee or the interest of the Sublessor;
(b) The right reserved to or vested in any municipality or public
authority by the terms of any right, power, franchise, grant, license, permit or
provisions of law to terminate such right, power, franchise, grant, license or
permit or to condemn, appropriate, recapture and designate a purchaser of the
Project;
(c) Any liens for taxes, assessments and other governmental charges and
any liens of mechanics, materialmen and laborers for work or services performed
or materials furnished in connection with the Project which are not due, or are
being contested at the time by appropriate legal proceedings which shall operate
to prevent the collection thereof or other realization thereon and the sale or
forfeiture of the Project or any interest therein to satisfy the same, provided
that the Sublessor or Sublessee, as the case may be, shall have complied
herewith dealing with the
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contest of any tax, assessment, other governmental charge or lien;
(d) The easements, rights-of-way, encroachments, encumbrances, or other
irregularities in the title, if any, set forth in Exhibit B hereto; and
(e) The Lease, the Sublease and the Indenture and any rights granted
thereby.
"Project" means the Leased Land, the Buildings, the Leased Machinery and
the Excluded Property, as they may be from time to time.
"Project Supervisor" means the project supervisor or supervisors who at
the time shall have been designated as such pursuant to Section 4.7 of the
Lease.
"Seneca Work" means that work described in Exhibit C attached hereto and
made a part hereof, together with such changes, additions or deletions as the
Sublessor and Sublessee may mutually agree.
"Specifications" means, collectively, those specifications incorporated
into a construction agreement between the Sublessor and Xxxxxx X'Xxxxx
Construction Company dated July 23, 1979, the "Construction Agreement", and all
contract documents, plans and specifications related to the implementation
thereof, together with such changes and additions as the Sublessor may have
requested and the Municipality approved.
"Sublease" means this Sublease and amendments and supplements thereto.
"Sublessee" means Friendly Ice Cream Corporation, a Massachusetts
corporation, its successors and assigns and any surviving, resulting or
transferee corporation meeting the requirements of Section 8.1 of this Sublease.
"Sublessor" means SSP Company, Inc., a Massachusetts corporation,
successor-in-interest to X. X. Xxxxxx Company, a Massachusetts Corporation,
its successors and assigns and any surviving, resulting or transferee
corporation meeting the requirements of Section 8.3 of the Lease.
"Sublessor Construction Period" means the period between the date of
execution hereof and the Completion Date.
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"Substantial Completion Date" means the date of Substantial Completion of
the Seneca Work as that date shall be certified as provided in Section 4.8
hereof.
"Trustee" means the trustee or the cotrustee or both at the time serving
as such under the Indenture.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. Representations by the Sublessor. The Sublessor
represents that:
(a) To the best of its knowledge and belief, Sublessor has received
no written notice of any pending, threatened or contemplated action by any
government or private authority, agency or entity having the power of
eminent domain, which might result in any part of the Project being taken
by condemnation or conveyed in lieu thereof. Sublessor shall, promptly
upon receiving any such notice of any such contemplated or threatened
action, give Sublessee written notice thereof;
(b) To the best of its knowledge and belief, Sublessor has received
no written notice from any governmental authority, agency, entity or
employee (any or all of the foregoing "Governmental Authority") of any
pending proceedings to (i) change, rezone or down-zone the existing zoning
classification as to any portion of the Project, or (ii) to revoke,
rescind or terminate any existing certificate of occupancy, business
license or other permits required in connection with the use or occupancy
of the Project proposed by Sublessee;
(c) To the best of its knowledge and belief, Sublessor has not
received notice from any Governmental Authority that the Project or any
portion thereof is in violation of any law, ordinance, order, regulation
or governmental requirement (collectively, "Governmental Requirements")
including, without limitation, matters relating to zoning, construction,
fire protection, environmental requirements, building code, health code,
housing code, public accommodations and accessibility codes (including,
without limitation, the Americans With Disabilities Act (the "ADA") and
M.G.L. c. 22, ss. 13A, and regulations promulgated pursuant to each of the
foregoing), subdivision, traffic, flood control, fire safety, or notice
from any insurance company or public authority of the
6
existence of any condition or situation or Governmental Requirements or
violation thereof which requires work to be done to cure an unsatisfactory
condition with respect to the Project or which could result in a
termination of insurance coverage or an increase in its costs. All
licenses, permits, approvals and consents required in connection with the
construction of the Project and the Seneca Work (including without
limitation all Permits described in Section 4.5 hereof) have been duly
issued, or will be issued in due course, by the appropriate Governmental
Authority or private authority and are in full force and effect;
(d) Other than the Lease, there are no leases, occupancy agreements,
service agreements, management agreements, or other agreements, contracts
or understandings relating to the Project to which Sublessor is a party
that will be binding on Sublessee or the Property on or after the date of
this Sublease (The parties acknowledge that the Sublessor is a party to
the so-called "Kraft Termination Agreement" which relates to the
Property);
(e) There are no actions, suits or proceedings pending or, to the
best of its knowledge and belief, threatened in writing before or by any
judicial, administrative or union body or any arbiter or any Governmental
Authority, against the Sublessor or the Project which affect title to the
Project or the Sublessor's leasehold estate, or the right or power of the
Sublessor to enter into or carry out its obligations under this Sublease,
and there are no insurance or condemnation awards or settlements pending
and no proceeds are due from any insurance company or condemnation
authority with respect to the Project;
(f) Sublessor is not a "foreign person" as that term is defined in
the Internal Revenue Code of 1986, as amended, and the Regulations
promulgated pursuant thereto;
(g) Sublessor has not created any liens on the Project during the
Lease Term, except for the Indenture and the Lease and shall not create
any lien on the Project or any right it might have under this Sublease
after the date of this Sublease;
(h) All utility services, including water, sewer, gas, electricity
and telephone, are being supplied to the Project by a public utility and
that there are no unpaid fees or assessments for these services or charges
for making connections. All utility bills and charges are current and have
been and will be paid up to the Commencement Date;
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(i) Sublessor is solvent, has not filed any petitions in bankruptcy,
has not had any petitions in bankruptcy filed against it which have not
been dismissed and has not made an assignment for the benefit of its
creditors;
(j) Sublessor has never made an assignment for the benefit of
creditors, filed a petition in bankruptcy, been adjudicated insolvent or
bankrupt, petitioned a court for the appointment of a receiver of or
trustee for it or any substantial part of its property, commenced any
proceeding under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, and there
is not presently pending against the Sublessor, any proceeding of the
nature described in this sentence. No order for relief has been entered
with respect to Sublessor under the Federal Bankruptcy Code;
(k) Provided that the assent of the Municipality, the holders of the
Bonds and the Trustee is obtained as provided in the Indenture, the
execution, delivery and performance of this Sublease in accordance with
the terms hereof and all other documents executed and delivered by
Sublessor hereunder, compliance with the terms hereof, the occupancy and
operation of the Project by Sublessee for the purposes contemplated by
Sublessee, and the rights and remedies provided herein, do not and will
not conflict with, or cause a violation of the Indenture, the Bonds, or
documents executed in connection therewith, the organizational documents
of Sublessor, or any other agreement binding on Sublessor or the Project;
(l) Sublessor is a corporation duly organized, existing and in good
standing under the laws of The Commonwealth of Massachusetts and has
authority to enter into this Sublease and to carry out its obligations
contemplated herein, and the Sublessor and the person signing this
Sublease on behalf of the Sublessor have, by proper corporate action, been
duly authorized to execute and deliver the same and carry out the
Sublessor's obligations hereunder;
(m) No default, or event which with the giving of notice, passage of
time or otherwise, exists under the Lease, the Bonds, the Indenture, or
the documents executed in connection therewith, and throughout the
Sublease Term Sublessor shall take all action necessary to prevent the
occurrence of any such default or event thereunder;
8
(n) No improvements to the Project have been made or do any
circumstances exist which adversely affect the exemption from federal
income taxes of interest on the Bonds and the Bonds are not "arbitrage"
bonds;
(o) No amounts are due to the Municipality or the Trustee on account
of any matter whatsoever except for basic rent payments due pursuant to
Section 5.2 of the Lease. Without limiting the generality of the
foregoing, all amounts due to the Trustee and any paying agents on the
Bonds pursuant to said Section 5.2 have been paid in due course, and no
tax fund is being collected pursuant to Section 5.2 of the Lease;
(p) Sublessor will provide to the Municipality and Trustee all such
information and notices which it is required to furnish pursuant to the
Lease, and shall provide copies of all of the same to Sublessee
concurrently with furnishing the same to the Municipality or Trustee.
Additionally, Sublessor shall provide within fifteen (15) days of receipt
to Sublessee, copies of documents and notices which it receives from the
Municipality or the Trustee pursuant to the Lease; and
(q) Sublessor has good and marketable title to the leasehold estate
in the Project (excluding the Excluded Property as to which it has good
and marketable title in fee simple) and has good and sufficient rights to
all means of access thereto and egress therefrom, including without
limitation the right to use for all purposes the public ways as are used
in the City of Chicopee;
(r) At all times during the Sublease Term, Sublessor shall comply
promptly and in good faith with all of its obligations under the Lease,
the Bonds, the Indenture and the documents executed in connection with any
of the foregoing, and shall take all action or refrain from taking action
as necessary or appropriate under the foregoing in order to enable
Sublessee to exercise its rights hereunder and to secure to Sublessee the
rights provided to it herein. Without limiting the generality of the
foregoing, Sublessor agrees that it shall not make any modification to the
Lease, the Bonds, the Indenture or the documents executed in connection
therewith at any time during the Sublease Term;
(s) None of the Bonds, the Indenture or the documents executed in
connection therewith contain any limitation or condition to the exercise
by Sublessor of its options provided in Article XI of the Lease, except
for
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payment of the amount due under the Bonds and other amounts to the Trustee
as described in Article X of the Sublease;
(t) Sublessor shall provide to Sublessee notice of all actions it
takes with respect to the Lease, the Bonds, the Indenture or any other
documents executed in connection therewith, including, without limitation,
notice of any prepayments thereunder.
Sublessor hereby acknowledges and agrees that the representations
and warranties contained in this Article II and elsewhere in this Sublease
are true, accurate and complete in all material respects as of the date
hereof and shall be true, accurate and complete in all material respects
as of the Commencement Date, and, to the extent that the same are provided
herein as continuing representations and warranties, shall be true,
accurate and complete in all material respects throughout the Sublease
Term.
SECTION 2.2. Representations by the Sublessee. Sublessee represents that:
(a) The Sublessee is a corporation duly organized, existing and in
good standing under the laws of The Commonwealth of Massachusetts and has
power to enter into this Sublease and by proper corporate action has been
duly authorized to executed and deliver this Sublease.
(b) Neither the execution and delivery of this Sublease, the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Sublease conflicts
with or results in a breach of the terms, conditions or provisions of any
corporate restriction or any agreement or instrument to which the
Sublessee is now a party or by which it is bound, or constitutes a default
under any of the foregoing.
(c) Sublessee is solvent, has not filed any petitions in bankruptcy,
has not had any petitions in bankruptcy filed against it which have not
been dismissed and has not made an assignment for the benefit of its
creditors.
(d) Sublessee has never made an assignment for the benefit of
creditors, filed a petition in bankruptcy, been adjudicated insolvent or
bankrupt, petitioned a court for the appointment of a receiver of or
trustee for it or any substantial part of its property, commenced any
proceeding under any reorganization, arrangement,
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readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, and there is not presently pending against the Sublessee,
any proceeding of the nature described in this sentence. No order for
relief has been entered with respect to Sublessee under the Federal
Bankruptcy Code.
(e) It will use the Project as permitted under the Lease.
Sublessee hereby acknowledges and agrees that the representations and
warranties contained in this Article II and elsewhere in this Sublease are true,
accurate and complete in all material respects as of the date hereof and shall
be true, accurate and complete in all material respects as of the Commencement
Date, and, to the extent that the same are provided herein as continuing
representations and warranties, shall be true, accurate and complete in all
material respects throughout the Sublease Term.
ARTICLE III
DEMISING CLAUSE
SECTION 3.1 Demise. In consideration of the rents and covenants herein
stipulated to be paid and performed and upon the terms contained herein, the
Sublessor leases the Leased Land, commonly known as 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx Industrial Park, Chicopee, Massachusetts, and described in Exhibit A
attached hereto and made a part hereof, the Building, the Leased Machinery and
the Excluded Property (if any), all of which is hereafter referred to as the
"Project" to the Sublessee, and the Sublessee leases the Project from the
Sublessor.
SECTION 3.2. Consent. Notwithstanding anything contained in this Sublease
to the contrary, in the event that the Municipality, the Bondholders or the
Trustee refuses to consent to the Sublease or any of their consents is not
reasonably acceptable to the Sublessor or the Sublessee, then each party shall
have the right to terminate this Sublease by written notice given to the other
no later than thirty (30) days after the Municipality, the Bondholders or the
Trustee refuse to consent or give such consent which is not reasonably
acceptable and in the event Sublessee has incurred any out-of-pocket expenses in
the performance of Friendly's Work, such expenses shall be reimbursed by the
Sublessor within ten (10) days of demand by the Sublessee.
SECTION 3.3. Title Insurance. Sublessee shall have the right to obtain,
review and approve, in its sole and absolute
11
discretion, at its sole cost and expense, an original policy of title
insurance for the Project, together with copies of the encumbrances
reflected thereon (the "Title Policy"). In the event the Title Policy is
not received by Sublessee within thirty (30) days of the date of this
Sublease, then Sublessee shall have the right to terminate this Sublease
upon fifteen (15) days' written notice to Sublessor. If there are title
defects which have occurred since the issuance of Lawyers Title Insurance
Company Policy No. 00-00-000000 to Sublessor that would prevent the
Sublessor from subleasing the Project to Sublessee and which would
materially adversely affect Sublessee's use and occupancy of the Project
and the exercise of Sublessee's rights and obligations under the Sublease,
then Sublessor agrees that it shall cure such defaults, at its sole cost
and expense, by June 30, 1995.
ARTICLE IV
SUBLEASE TERM AND RENTS
SECTION 4.1. Sublease Term. The initial term of this Sublease shall be
approximately nine (9) years and three (3) months commencing on the Commencement
Date and ending on August 31, 2004 (the "Sublease Term").
SECTION 4.2. Rents. The Sublessee agrees to pay as basic rent ("Basic
Rent") for use of the Project the aggregate of the amounts for which provision
is made in this Section:
(a) Sublessee shall pay as Basic Rent the monthly sum of Twenty-Two
Thousand Five Hundred Sixty-Six and 50/100 ($22,566.50) Dollars payable on
the first day of each and every month in advance commencing on the day
which is ninety-one (91) days following the Completion Date and continuing
during the first five years of the Sublease Term. The Sublessee shall pay
Twenty-Six Thousand Nine Hundred Twenty-Five and 94/100 ($26,925.94)
payable on the first day of each and every month in advance during the
remainder of the Sublease Term. Rent for a fractional month at the
beginning or end of the Sublease Term shall be prorated on a per diem
basis. If any part of such Basic Rent is not paid within fifteen (15) days
from the date the same shall be due, Sublessee shall pay a late charge of
three (3%) per cent of such unpaid rent, which late charge shall be deemed
to be additional rent.
(b) The Sublessee agrees to pay to the appropriate party, or
otherwise to Sublessor, when due, or otherwise assume and pay, all other
costs of maintaining and
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operating the Project, including taxes, assessments on the Sublessee's
interest in the Project, real estate taxes, or excises as provided in
Section 8 and 20 of the Enabling Act, but specifically excluding (i) any
costs related to the principal, interest or premium on the Bonds, all
amounts due to the Trustee for its annual fee or for extraordinary
services rendered or extraordinary expenses incurred by it, and all
expenses of the paying agent as required pursuant to the Lease, and (ii)
other expenses or obligations of Sublessor hereunder (including, without
limitation, those set forth in Article V hereof), all of which costs,
expenses and obligations listed in this subsection 4.2(b)(i) and (ii)
Sublessor covenants and agrees to pay.
If the Sublessee should fail to make any of the payments required in this
Section, and such failure shall continue past the period for cure thereof
provided in Article IX hereof, the item or installment so in default shall
continue as an obligation of the Sublessee until the amount in default shall
have been fully paid, and the Sublessee agrees to pay the same with interest
thereon at the rate of ten per cent (10%) per annum commencing with the
expiration of such cure period and continuing until paid. If the Sublessee fails
to pay real estate taxes when due, the Sublessor or the Municipality, at the
direction of the Bondholders, may pay the same and add the cost to rent and may
require the Sublessee thereafter to pay each month an amount equal to
one-twelfth of the annual real estate taxes as reasonably estimated by the
Sublessor.
SECTION 4.3. Place of Payments. The Basic Rent provided for in Section 4.2
shall be paid directly to the Sublessor. In the event Sublessee sends three
notices of default pursuant to this Sublease to Sublessor in any twelve (12)
month time period, or in the event that Sublessor defaults in the payment of any
monetary payment due under the Lease, Sublessee shall have the right, at its
option, to pay Ten Thousand Three Hundred Sixty-Three and 68/100 ($10,363.68)
Dollars of Basic Rent and monthly payments of real estate taxes if required
pursuant to the provisions of the last paragraph of Section 4.2 above on a
monthly basis directly to the Trustee for the account of the Sublessor and
deposited in the Bond Fund (the "Sublease Bond Payment"). The remainder of the
Basic Rent payments (the "Remainder Lease Payment"), e.g. Twelve Thousand Two
Hundred Two and 82/100 ($12,202.82) Dollars per month for the first five years
of the Sublease Term, and Sixteen Thousand Two Hundred Eighty-Nine and 26/100
($16,289.26) Dollars for the remainder of the Sublease Term shall be paid
directly to the Sublessor, as provided in this Sublease. The payments provided
for in
13
Subsection 4.2(b) shall be paid directly to the person entitled to receive the
same.
SECTION 4.4. Net Sublease; Nonterminability. This Sublease is a net
sublease and, except as otherwise expressly provided herein, any present or
future law to the contrary notwithstanding, shall not terminate, nor shall the
Sublessee be entitled to any abatement, reduction, setoff, counterclaim, defense
or deduction with respect to any Basic Rent, additional rent or other sum
payable hereunder. The Sublessee may, at its own cost and expense and in its own
name or in the name of the Municipality or Sublessor, prosecute or defend any
action or proceeding or take any other action involving third persons which the
Sublessee deems reasonably necessary in order to secure or protect its right of
possession, occupancy and use hereunder, and in such event the Sublessor hereby
agrees to cooperate fully with the Sublessee and to use reasonable efforts to
cause the Municipality to cooperate and to take all action necessary to effect
the substitution of the Sublessee for the Municipality or Sublessor in any such
action or proceeding if the Sublessee shall so request.
SECTION 4.5. Sublessor's Work. In addition to the obligation of Sublessor
contained in Article V, as part consideration for entry into this Sublease,
Sublessor shall perform certain work at its expense on behalf of Sublessee which
work and expenses are as more particularly set forth in the Work Letter attached
as Exhibit C (the "Seneca Work"). This Sublease is contingent upon the Sublessee
obtaining the Certificate of Occupancy (the "C.O."). Sublessor agrees to use its
best efforts to cooperate with Sublessee in obtaining its C.O. The Sublessor
agrees that it will cause the Seneca Work to be completed, and the equipment,
fixtures and machinery described therein to be acquired and installed in the
Building, all in accordance with the provisions of Exhibit C attached hereto and
made a part hereof. All costs and expenses of performing the Seneca Work shall
be paid in full by Sublessor.
SECTION 4.6. Definition of Substantial Completion. "Substantial
Completion" of the Seneca Work shall be deemed to occur on the date on which (a)
the Seneca Work has been completed in full, excluding only such items (herein
called "punch list items") which can be performed without causing any material
inconvenience to Sublessee in its relocation to the Project and its proposed use
and occupancy thereof and the conduct of its business therein (Sublessee
recognizes that the failure to remove the storage tanks by the Substantial
Completion Date will not
14
cause a material inconvenience to Sublessee); and (b) all permits have been
issued in connection with such Work.
SECTION 4.7. Notice of Substantial Completion. Sublessor shall give
Sublessee at least seven (7) days' prior written notice of the anticipated date
of Substantial Completion of the Seneca Work.
SECTION 4.8. Completion Date. The Completion Date shall be evidenced to
the Sublessee by a certificate signed by the Sublessee's Authorized
Representative who, for these purposes, will be an engineer stating that, except
for work to be done to complete the Seneca Work and amounts to be paid for the
punch list items which are not then due and payable in accordance with the
contracts therefor; (i) Substantial Completion of the Seneca Work has been
achieved in accordance with Exhibit C; (ii) all other facilities necessary in
connection with the Seneca Work have been constructed, acquired and installed in
accordance with Exhibit C; (iii) the Leased Machinery and the Excluded Property
have been installed and/or repaired as contemplated by Exhibit C, are in good,
sound operating condition and are suitable and sufficient for the efficient
operation of the Project as contemplated by Sublessee; and (iv) all labor,
services, materials and supplies used in connection with the foregoing have been
paid for in full, and all other costs and expenses incurred in connection with
the foregoing have been paid for in full, and containing a list of the punch
list items and certifying that the punch list items comply with the requirements
of Section 4.6 above. Notwithstanding the foregoing, such certificate shall
state that it is given without prejudice to any rights against third parties
which may exist at the date of such certificate or which may subsequently come
into being.
SECTION 4.9. Warranties. Sublessor agrees that it will use its best
efforts to obtain warranties for parts, labor and services to be provided in
connection with the Seneca Work which are assignable to Sublessee, and shall
assign them to Sublessee at the Commencement Date. At the request of the
Sublessee, Sublessor will join as a nominal party in any action or proceeding
relating to default of any contractor, subcontract, supplier or surety under any
contract made in connection with the Seneca Work or the breach of any such
warranty thereunder.
SECTION 4.10. Sublessee's Termination and Other Rights. In the event that
(a) Substantial Completion of the Seneca Work has not been achieved on or before
June 30, 1995 (provided that in the
15
event that Substantial Completion is not achieved on or before such date as a
result of the default of Sublessee, then the same may be extended by the number
of days by which such default of Sublessee actually delays Substantial
Completion; or (b) final completion of the punch list items has not been
achieved on or before thirty (30) days following the date of Substantial
Completion, then in any such event, Sublessee shall have the right at
Sublessee's option, by giving ten (10) days' prior written notice to Sublessor
at any time thereafter, to (i) complete all the Seneca Work, in which case 120%
of the reasonable cost thereof may be deducted by Sublessee from all Basic Rent
and other charges due hereunder; (ii) to terminate this Sublease, in which case
all obligations of the parties hereunder shall cease and this Sublease will be
void and of no further force and effect, and any amounts paid by Sublessee to
Sublessor pursuant to Exhibit C, or in connection with the occupancy of the
Project, shall promptly be refunded to Sublessee; or (iii) in the event of
failure to achieve Substantial Completion as provided herein only, to require
Sublessor to pay to Sublessee the amount set forth below in this Section 4.10.
The parties hereby acknowledge and agree that in the event that the Substantial
Completion Date does not occur on or before June 30, 1995 (as the same may be
extended as provided above), Sublessee will suffer substantial loss, damage and
expense as a result of its inability to consolidate its operations at the
Project, and that such damages, although substantial, are incapable of exact
calculation. In recognition thereof, Sublessor agrees that in the event that
Substantial Completion does not occur on or before such date, Sublessor shall
promptly pay to Sublessee for each day during which such delay in achieving
Substantial Completion continues the sum of One Thousand Two Hundred Fifty
Dollars ($1,250.00) per day. Such amount shall be paid by Sublessor to Sublessee
weekly, and in the event that Sublessor does not make any such payment,
Sublessee shall have all rights and remedies provided hereunder or under
applicable law or in equity, including, without limitation, the right to deduct
all such sums from Basic Rent and other charges due hereunder. Sublessor agrees
that Sublessee may exercise the remedies provided in this Section 4.10
successively and from time to time and that election of one remedy shall not
preclude election of a different remedy or remedies by Sublessee at a later
time.
SECTION 4.11. Sublessee's Work. In addition to the obligations of
Sublessee contained in Article V, Sublessee shall perform work at the expense of
Sublessor on behalf of Sublessor, as more particularly set forth in Exhibit C-1
(the "Friendly Work"). Sublessor and Sublessee have agreed that Sublessor shall
pay to Sublessee the amount of One Hundred Seventeen Thousand Dollars
16
($117,000.00) ("Seneca's Payment") which shall be paid by Sublessor to Sublessee
upon execution of this Sublease by both parties. In the event, during the
performance of the Friendly Work or the Seneca Work, hidden and/or latent
defects are discovered or additional work is required to bring the Project into
compliance with all applicable Governmental Requirements ("Additional Work"),
then Sublessor or Sublessee as the case may be, as provided in Article V of this
Sublease, shall immediately perform such Additional Work at the its own cost and
expense. Sublessor shall evidence its Acceptance of Sublessee's Work by a
certificate signed by the Sublessor's Authorized Representative, who, for these
purposes, will be an engineer stating that Sublessee's Work has been achieved in
accordance with Exhibit C-1. Sublessee's Work shall be completed within one
hundred and eighty (180) days of the execution of this Sublease (provided that
in the event such date is not achieved as a result of the default of Sublessor,
then the same may be extended by the number of days by which such default delays
such Work.
ARTICLE V
MAINTENANCE, TAXES AND INSURANCE
SECTION 5.1. Maintenance and Modification of Project.
(a) The Sublessee agrees that it will at its own expense (i) keep
the Project in a safe condition and (ii) subject to the provisions of
Article V hereof, and reasonable wear and tear, casualty, damage caused by
default of Sublessor hereunder or by act or neglect of Sublessor, the
Municipality, or those claiming by, through or under the Sublessor or the
Municipality, and circumstances beyond Sublessee's reasonable control,
keep the Building and the Leased Machinery in good repair and in good
operating condition, making from time to time all necessary repairs
thereto. Sublessee shall be responsible for performing, at its sole cost
and expense, all ongoing and preventative maintenance of the Project,
including electrical testing and maintenance of all main electrical and
motor controls, testing of all back flow prevention devices, all testing
required by all applicable Governmental Requirements and all maintenance
of all blacktop and concrete surfaces at the Project. Sublessee shall keep
and maintain repair and maintenance records as is customary for such
components of the Project. In the event that any test or the engineer as
provided below indicates that any repair or replacement is necessary,
Sublessor shall immediately perform such work at its sole cost and expense
unless it is reasonably determined that such repair or replacement is
necessary solely due to
17
an act or omission of Sublessee, in which case the repair or replacement
shall be immediately performed by Sublessee at its sole cost and expense.
The Sublessee may, also at its own expense, make from time to time any
additions, modifications, improvements or enlargement to the Project (in
this Section 5.1 termed improvements) which it may deem desirable for its
business purposes, without the consent of the Sublessor, provided that the
costs of any single such addition, modification, improvement or
enlargement does not exceed Fifty Thousand Dollars ($50,000) and they do
not reduce the value, adversely affect the structural integrity or change
the nature of the Project to the extent that it would not constitute an
Industrial Development Facility. Any other addition, modification,
improvement or enlargement may only be made with the consent of the
Sublessor, which consent shall not be unreasonably withheld or delayed.
All improvements shall comply with all applicable Governmental
Requirements. All improvements to the Building or Leased Machinery (other
than Excluded Property or improvements or equipment which is installed by
or at the request of Sublessee collectively, "Sublessee's Property") which
are located within the Leased Land or are attached to the Leased Machinery
shall become a part of the Project. Improvements constituting Sublessee's
Property may be removed by the Sublessee at any time and from time to
time, and any damage to the Project occasioned thereby shall be repaired
by the Sublessee at its expense, provided Sublessor provides written
notice to Sublessee within thirty (30) days of the earlier of (i) any
inspection of the Project which reveals that there is damage that needs to
be repaired and that is Sublessee's responsibility hereunder; or (ii) the
termination of this Sublease. The Sublessee shall not permit any liens
except Permitted Encumbrances to remain against the Project for labor or
materials furnished in connection with any improvements, repairs, renewals
or replacements made by it; but the existence of any lien in respect
thereof shall not constitute a violation of this sentence if payment
therefor is not yet due and payable or if Sublessee posts a bond in
connection with such lien.
The Sublessee shall not be required to pay, discharge or remove any
mechanics', or other lien or encumbrance or any other imposition or charge
against the Project or any part thereof, so long as the Sublessee shall,
after prior written notice to the Sublessor, at the Sublessee's expense,
contest the same in good faith by appropriate proceedings which shall
operate to prevent the enforcement of the contested lien, encumbrance or
other imposition or charge. Such contest may be made in the name of the
Municipality, Sublessor or of the Sublessee or all as
18
the Sublessee shall determine, and the Sublessor agrees that it will, at
the Sublessee's expense, cooperate with the Sublessee to such extent as
the Sublessee may reasonably request. Pending any such proceeding the
Sublessor shall not have the right to pay, remove or cause to be
discharged the tax, lien, assessment, encumbrance, imposition or charge
thereby being contested.
(b) The Sublessor agrees that it will at its own expense promptly
repair any damage to the Project and make any replacements or renewals
thereof which are (i) necessary as a result of any act or neglect of the
Sublessor or the Municipality or any persons claiming by, through or under
them; (ii) required to maintain the Project in a safe and sound condition
and which are not otherwise the responsibility of Sublessee pursuant to
the provisions of Section 5.1(a) above; and/or (iii) necessary to conform
the condition of the Project to the provisions of Article II and Exhibit C
hereof, or to cure any breach of any representations or warranties
contained herein existing as of the Commencement Date, or, as to any
continuing representations or warranties, existing at any time during the
Sublease Term.
(c) Provided that such work is not required as a result of the
negligence or wilful misconduct of Sublessee, Sublessor shall be
responsible for performing, at its sole cost expense, all work required in
connection with any component of the Project which becomes worn out and
needs replacement, including the roof, all exterior and interior walls,
the structural integrity of the facilities at the Project, all equipment
not installed by Sublessee (including the FLEXAIRE heater, the HVAC
equipment and the boiler), the sprinkler system (but not replacement of
heads, which shall be the responsibility of the Sublessee), all
underground and drainage pipes, all blacktop and concrete surfaces (due to
age, weather conditions or circumstances beyond the control of either
party) and all future repairs and replacements dictated by Governmental
Requirements. In the event the Sublessor and Sublessee are unable to reach
agreement within a fifteen (15) day time period from notice of one party
to the other that a certain repair or replacement is necessary (whether
discovered by either party or through testing or any other source), then
each party shall designate an engineer within ten (10) days of the
termination of the fifteen (15) day period. The two engineers shall,
within thirty (30) days after the designation of the second engineer, make
the determination in writing of the necessity of such repair or
replacement and give notice thereof to each other and to the Sublessor and
Sublessee. Such two
19
engineers shall have fifteen (15) days after the receipt of notice of each
other's determination to confer with each other and to attempt to reach
agreement. If such engineers shall concur in such a determination, they
shall give notice thereof to Sublessor and Sublessee that such concurrence
shall be final and binding upon Sublessor and Sublessee. In the event the
two engineers are not able to reach an agreement, they shall designate a
third engineer, who shall make such a determination of the necessity of
such repair and replacement within fifteen (15) days of designation, and
such determination shall be final and binding upon Sublessor and
Sublessee. In the event such work is necessary, Sublessor shall
immediately commence performing such work and shall use due diligence to
complete such work in a timely manner. All fees and expenses charged by
the engineers shall be borne equally by Sublessor and Sublessee.
(d) The Sublessor warrants that (i) the refrigeration equipment will
maintain a temperature of -20(degrees)F at 95 degrees Fahrenheit in the
freezer area at all times, including, but not limited to, if there is a
failure of some of the refrigeration equipment which requires such
equipment to be repaired or replaced and that it will run using a Freon
refrigerant (coolant); (ii) the freezer and cooler areas will accept a
layout in the freezer of two deep storage and single deep storage; product
can be stored four high and two pallets wide, each pallet upright will
carry 20,000 lbs. of weight; the weight of the truck with pallets to be
used in the rack system will be approximately 12,000 lbs., all as shown on
Exhibit D attached hereto and made a part of this Sublease; the cooler and
freezer floors will not be damaged or impacted in any way as a result of
the temperature in the freezer area provided the Sublessee does not exceed
the designed specifications of 5,000 lbs. per square inch; and (iii) as of
the Commencement Date, there is a new roof over the freezer area and all
of the roof leaks have been fixed and there are no leaks; (iv) as of the
Commencement Date, all of the walls are structurally sound; (v) as of the
Commencement Date, the two (2) fuel pumps or the one split fuel pump with
two nozzles (either of which will have a total forty (40) gallon per
minute flow-rate capacity) it is relocating will be capable of pumping
diesel fuel from the new underground diesel fuel tank it is installing and
that such pumps are operational and meet all Governmental Requirements;
(vi) as of the Commencement Date, all the battery charging equipment,
except for the existing disconnects, have been removed; (vii) as of the
Commencement Date, the sprinkler system flow has been checked and put in
certified operation and condition; (viii) as of the Commencement Date, all
of the oil and other materials which
20
have been spilled down the floor drains in the garage has been removed,
and all gas and oil leaks have been repaired; (ix) as of the Commencement
Date, all lighting in the cooler and dry warehouse will be at
specifications of 50 foot candles at 3 feet, which was Sublessor's
original facility design specification; (x) the telephone system hardware
(control box and instruments) has been removed; and (xi) that at the
garage floor and battery charging drain-out areas have been traced and
identified by Sublessor and given to Sublessee or that certified
blueprints showing the completion of such work has been drafted and given
to Sublessee. Sublessee shall have thirty (30) days after the execution of
the Completion Date, to notify Sublessor of any failure of it to fully
perform as to Items (vi), (vii), (ix), (x) and (xi) and if such notice is
not given, Sublessee waives any rights hereunder.
SECTION 5.2. Removal of Leased Machinery or Excluded Property. The
Sublessee shall not be under obligation to renew, repair or replace any
inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary Leased
Machinery or Excluded Property. If the Sublessee in its reasonable discretion
determines that any items of Leased Machinery or Excluded Property have become
inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary, the
Sublessor shall, at it's sole cost and expense, remove such items from the
Leased Land and replace such items by other machinery or related property free
of all liens and encumbrances (other than Permitted Encumbrances) having equal
or greater utility and the same function in the operation of the Project). All
such substituted machinery or related property shall become a part of the Leased
Machinery or Excluded Property, as the case may be.
SECTION 5.3. Taxes, Governmental Charges and Utility Charges. The
Sublessee shall pay, as the same become due, all taxes and governmental charges
of any kind whatsoever that may at any time be lawfully assessed or levied
against or with respect to the Project or any machinery or other property
installed or brought by the Sublessee therein or thereon, all utility and other
charges incurred in the operation, maintenance, use, occupancy and upkeep of the
Project and all assessments and charges lawfully made by governmental body for
public improvements that may be secured by lien on the Project. In no event
shall Sublessee be required to pay any taxes levied upon or with respect to
Sublessor's or the Municipality's receipts, income or profits. Sublessor agrees
that it shall provide promptly to Sublessee any notices of any taxes to be paid
by Sublessee pursuant to this paragraph and, notwithstanding the
21
foregoing provisions of this Section 5.3, Sublessee shall not be deemed to be in
default hereunder if it pays the same within ten (10) business days following
receipt thereof. In the event that Sublessor does not provide the same to
Sublessee at least ten (10) business days before the date on which the same are
due, and provided Sublessee pays the amount thereof as provided herein or
contests the same in the manner provided in the next succeeding paragraph,
Sublessor shall pay all penalties and expenses resulting from such delay in
forwarding the same to Sublessee. Sublessee agrees that it shall provide
promptly to Sublessor any notices it receives of any taxes which are due and
payable.
The Sublessee may, at its expense and in its own name and behalf, in good
faith contest any such taxes, assessments and other charges and, in the event of
any such contest, may permit the taxes, assessments or other charges so
contested to remain unpaid during the period of such contest and any appeal
therefrom, if, during such period, enforcement of such contested item is
effectively stayed. The Sublessor shall cooperate and shall use reasonable
efforts to cause the Municipality to cooperate as a nominal party with the
Sublessee in any such contest if necessary under law. Nevertheless, if the
Sublessee shall fail to pay any of the foregoing items required by this section
to be paid by the Sublessee, the Sublessor shall pay the same. Any amounts so
advanced therefor by the Sublessor shall become an additional obligation of the
Sublessee hereunder, together with interest thereon at the rate of ten per cent
(10%) per annum from the date thereof. Anything to the contrary notwithstanding,
it is agreed that the Sublessee shall not challenge any tax on the ground that
the property so taxed is owned by the Municipality, it being the intent of this
section that the Sublessee shall be taxed on all of the property constituting
the Project as if it were the owner thereof.
SECTION 5.4. Insurance. The Sublessee will maintain the following
insurance on the Project:
(a) Insurance against loss by fire, lightning and other risks from
time to time included under "extended coverage" policies, in amounts not
less than the greater of the amount of the Bonds, or eighty percent of the
actual replacement value of the Building, exclusive of foundations and
excavations, subject to a deductible provision not greater than Two
Hundred and Fifty Thousand Dollars ($250,000).
(b) General public liability insurance against claims for bodily
injury, death or property damage occurring on, in or related to the
occupancy or operation of the
22
Project, in the minimum amounts of $500,000 for bodily injury and death to
any one person, $1,000,000 for any one accident, and $1,000,000 for
property damage. The Sublessee may elect to self-insure any or all of this
exposure provided that excess insurance is purchased in amounts which,
when added to the self-insurance amount, shall be not less than the
minimum required by this Section, should the self-insurance amount be
lower.
(c) Workers' compensation insurance to the extent required by law
and to the extent necessary to protect the Municipality and the Project
against workers' compensation claims.
(d) Such other insurance, in such amounts and against risks, as is
commonly obtained in the case of property similar in use of the Project.
Such insurance shall be written by companies of nationally recognized
financial standing legally qualified to issue such insurance. The policies
described in Sections 5.4(a) and (b) shall name as loss payees or additional
insureds, as appropriate, the Municipality, Sublessee, Sublessor and the Trustee
as their interests appear. Any such insurance may be maintained pursuant to a
blanket policy of insurance, provided that insurance required to be maintained
pursuant to Section 5.4(a) shall allocate to the Project the amount of insurance
required pursuant to such Section.
SECTION 5.5. Applications of Insurance Proceeds. The Net Proceeds of
insurance required by paragraph 5.4(a) hereof shall be applied as provided in
Section 6.1 hereof. The Net Proceeds of the insurance required by paragraphs
5.4(b) and (d) hereof shall be applied toward satisfaction of the liability with
respect to which such proceeds were paid.
SECTION 5.6. Additional Insurance Provisions. Every insurance policy
maintained pursuant to Section 5.4 hereof (other than general public liability
or workmen's compensation policy) shall bear a first mortgagee endorsement in
favor of the Trustee. Every policy referred to in paragraph (a) of Section 5.4
shall provide that it will not be canceled except after twenty (20) days'
written notice to the Municipality and the Trustee and that it shall not be
invalidated by any act or neglect of the Municipality or the Sublessor.
Sublessee shall deliver to Sublessor original or duplicate policies or
certificates of insurers evidencing the existence of
23
all insurance which is required to be maintained by Sublessee hereunder, such
delivery to be made (i) promptly after the execution and delivery hereof and
(ii) within 30 days prior to the expiration of any such insurance. The Sublessee
shall not obtain or carry separate insurance concurrent in form or contributing
in the event of loss with that required by this Section 5.6 unless the
Municipality, Sublessor and Sublessee are named insureds therein, with loss
payable as provided herein. The Sublessee shall immediately notify the
Municipality, Sublessor and the Trustee whenever any such separate insurance is
obtained and shall deliver to the Trustee and Sublessor the policies or
certificates evidencing the same.
SECTION 5.7. Advances by Sublessor. If the Sublessee shall fail to
maintain the insurance coverage required by this Sublease, to keep the Project
in a reasonably safe condition, or to keep the building and the Leased Machinery
in good repair and good operating condition, all as required to be done by
Sublessee herein, Sublessor may (but shall be under no obligation to) take out
the required policies of insurance and pay the premiums on the same or make the
repairs, renewals and replacements. All amounts so advanced by the Sublessor
shall become an additional obligation of the Sublessee, together with interest
thereon at the rate of ten per cent per annum from the date thereof.
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 6.1. Damage and Destruction. If the Project is destroyed or
damaged by fire or other casualty, the Sublessee shall promptly give written
notice thereof to the Sublessor. Unless the Sublessee shall exercise its option
to purchase the Project pursuant to the provisions of Section 10.2 hereof, all
Net Proceeds of insurance resulting from such claims together with the amount of
the deductible (the "Deductible") shall be paid to and held by the Trustee in a
separate trust account, and (i) the Sublessee shall promptly repair, build or
restore the property damaged or destroyed to substantially the same condition as
it existed prior to such damage or destruction, with such changes, alterations
and modifications (including the substitution and addition of other property) as
may be desired by the Sublessee and as will not impair the value, operating
utility or productive capacity or the character of the Project as an Industrial
Development Facility; and (ii) the Trustee shall apply so much as may be
necessary of the Net Proceeds and Deductible of such insurance to payment of the
costs of such repair, rebuilding or restoration as the work progresses. If the
Net Proceeds plus
24
the Deductible are not sufficient to pay in full the estimated costs of such
repair, rebuilding or restoration, and provided that Sublessee has maintained
the insurance required by Section 5.4(a) hereof, the Sublessor shall promptly
deposit with the Sublessee in escrow that portion of the cost thereof in excess
of the amount of the Net Proceeds and Deductible, and the Sublessee shall use
the same to complete such repair, rebuilding or restoration. If the Net Proceeds
and the Deductible are not sufficient to pay in full the cost of such repair,
rebuilding or restoration as a result of a failure of Sublessee to maintain the
insurance required by Section 5.4(a) hereunder, the Sublessee shall nevertheless
complete the work thereof and pay that portion of the costs thereof in excess of
the amount of the Net Proceeds and Deductible. Neither the Sublessee nor the
Sublessor shall, by reason of the payment of such excess costs, be entitled to
any reimbursement from the Municipality, the Trustee or the holders or owners of
the Bonds or any abatement or diminution in Basic Rent hereunder (except as
expressly provided in this Section 6.1 or Section 9.6 hereof) or rent under the
Lease. The balance of the Net Proceeds and the Deductible remaining after
payment of all the costs of such repair, rebuilding or restoration shall be paid
into the Bond Fund. Until Substantial Completion of such repair, rebuilding or
restoration, all Basic Rent and other charges payable by Sublessee hereunder
shall be abated as follows: all proceeds of any rent interruption insurance
shall be applied to the payment of Sublessee's obligations hereunder, first to
the payment of all Basic Rent and other amounts due to the Municipality pursuant
to the Lease and thereafter any amounts remaining shall be allocated to the
payment of the remaining Basic Rent and other charges payable hereunder.
Provided that all amounts due under the Lease have been paid in full, all other
amounts due under this Sublease shall be abated in proportion to the extent of
the damage. If a dispute arises between Sublessor and Sublessee concerning the
amount of damage or destruction and costs associated therewith and Sublessor and
Sublessee cannot agree within fifteen (15) days after notice to Sublessor to
resolve said dispute, Sublessor and Sublessee shall jointly submit their dispute
to binding arbitration before the American Arbitration Association under the
Commercial Rules of Arbitration. This arbitration shall be submitted to a single
arbitrator.
SECTION 6.2. Condemnation. If title to, or the temporary use of, the
Project or any part thereof shall be taken under the exercise of the power of
eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, the Sublessee shall promptly give written
notice thereof to the Sublessor. Unless the Sublessee shall exercise its option
to purchase the Project pursuant to the provisions of
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Section 10.2 or 6.4 hereof, all Net Proceeds of any award resulting from such
taking shall be paid to and held by the Trustee in a separate trust account; and
(i) the Sublessee shall promptly repair, rebuild or restore the remaining
property to substantially the same condition as it existed prior to such taking,
with such changes, alterations and modifications (including the substitution and
addition of other property) as may be desired by the Sublessee and as will not
impair the value, operating utility or productive capacity or the character of
the Project as an Industrial Development Facility; and (ii) the Trustee shall
apply so much as may be necessary of the Net Proceeds of such award of the costs
of such repair, rebuilding or restoration as the work progresses. If the Net
Proceeds are not sufficient to pay in full the costs of such repair, rebuilding
or restoration, Sublessor shall deposit with the Trustee that portion of the
estimated cost thereof in excess of the amount of the Net Proceeds and Sublessee
shall be entitled to use the same to complete such repair, rebuilding or
restoration. Sublessor shall not, by reason of the payment of such excess costs
be entitled to any reimbursement from the Sublessee, Municipality, the Trustee
or the holders or owners of the Bonds. All Basic Rent and other charges due from
Sublessee hereunder shall be abated during such repair, rebuilding or
restoration in an amount which is proportionate to the damage to the Project,
and, upon completion of such repair, rebuilding or restoration shall be
permanently abated in proportion to the impairment to the value, operating
utility or productive capacity or character of the Project. Any balance of such
Net Proceeds remaining after payment of all the costs of such repair, rebuilding
or restoration shall be paid into the Bond Fund. The Sublessor shall cooperate,
and shall cause the Municipality to cooperate fully as a nominal party with the
Sublessee in the handling and conduct of any prospective or pending condemnation
proceeding with respect to the Project or any part thereof and shall, to the
extent it may lawfully do so, permit the Sublessee to litigate any such
proceeding in the name and behalf of the Sublessor and the Municipality. In no
event shall the Municipality or Sublessor voluntarily settle, or consent to the
settlement of, any prospective or pending condemnation proceeding with respect
to the Project or any part thereof without the written consent of the Sublessee.
SECTION 6.3. Condemnation of Excluded Property. Sublessee shall be
entitled to the Net Proceeds for damages to or takings of Excluded Property, for
damage to or interruption of Sublessee's business or operations, moving
expenses, damage to the value of its leasehold or its leasehold improvements, or
Sublessee's Property, and any other amounts specifically awarded to Sublessee by
the taking authority.
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SECTION 6.4. Sublessee's Options. Notwithstanding anything contained in
this Sublease to the contrary, however, in the event of damage or destruction to
the Project which Sublessee reasonably estimates will require more than six (6)
months to repair, or which is not required to be covered by insurance hereunder,
or in the event of a taking of the entire Project or any part of the parking
thereon, access thereto or any part of the freezer or loading components of the
Project, or that materially and adversely affect Sublessee's use, then,
notwithstanding the provisions of this Section, Sublessee shall have the right
to purchase the Project as provided in said Article X or to terminate this
Sublease, by giving written notice to Sublessor no later than thirty (30) days
following the occurrence of the damage, casualty or taking, as the case may be,
specifying the date of purchase or termination. In the event that Sublessee
elects to purchase the Project, the same shall occur as provided in Article X,
provided further that all of the Net Proceeds shall be used to redeem the Bonds
as provided hereunder and any balance remaining thereafter shall be paid to and
be the sole property of Sublessee. In the event that Sublessee elects to
terminate this Sublease, this Sublease and all obligations of the parties
arising after the date of termination shall terminate and shall be void and
without further recourse to the parties hereto, and the Net Proceeds shall be
disbursed as provided in the Lease. Notwithstanding anything else contained to
the contrary in this Sublease, Sublessor acknowledges and agrees that:
(a) Solely in the event of damage, destruction or taking as set forth in
Section 6.4 below, the option rights provided in Section 10.2(a) and this
Section 6.4 (or in any other section hereof which references such Sections),
shall, at Sublessee's option, be superior to the right of first refusal set
forth in Section 10.2(b) hereof, and can be exercised for the price set forth in
said Section 10.2(a) whether or not a Sale Contract then exists and whether or
not Sublessee has exercised its right of first refusal as provided in Section
10.2(b), provided that Sublessee otherwise complies with the terms and
conditions hereof, and
(b) In the event that Sublessee exercises its option or right of first
refusal rights as provided in Section 10.2 hereof and following the giving of
notice but prior to the closing as provided therein, a damage, destruction or
taking as described in this Section 6.4 occurs, Sublessee shall be entitled to
elect to purchase the Project as provided in this Section 6.4 by giving written
notice thereof to Sublessor as provided herein.
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ARTICLE VII
SPECIAL COVENANTS AND OTHER MATTERS
SECTION 7.1. Sublessee to Hold Municipality Harmless. The Sublessee agrees
to indemnify the Municipality and the Sublessor against any and all claims and
expenses as a result of any action or omission of the Sublessee hereunder.
Without limiting the generality of the foregoing, the Sublessee releases the
Municipality from, agrees that the Municipality shall not be liable for, and
agrees to hold the Municipality harmless against, any loss or damage to property
or any injury to or death of any person that may be occasioned by the Sublessee
or anyone acting under the Sublessee pertaining to the Project or the use
thereof. Notwithstanding the foregoing, however, there is expressly excluded
from this indemnity any claims, costs, expenses, liability or damage, including
without limitation any loss or damage to property or any injury to or death of
any person, which is a result of the default of Sublessor hereunder or under the
Lease, or any other act or neglect of the Sublessor or anyone claiming by,
through or under Sublessor, and the Municipality shall look solely to the
Sublessor for indemnification with respect to any of the same.
Sublessor agrees to indemnify Sublessee against any and all claims,
damages, losses, and expenses occurring as a result of any act or omission of
the Sublessor or any default of the Sublessor hereunder. Without limiting the
generality of the foregoing, Sublessor releases Sublessee from, agrees that the
Sublessee shall not be liable for, and agrees to hold the Sublessee harmless
against, any loss or damage to property or any injury to or death of any person
that may be occasioned by the Sublessor or anyone acting under the Sublessor
pertaining to the Project or the use thereof, or any breach by Sublessor of any
of its representations or warranties hereunder.
Sublessee agrees to indemnify Sublessor against any and all claims,
damages, losses, and expenses occurring as a result of any act or omission of
the Sublessee or any default of the Sublessee hereunder. Without limiting the
generality of the foregoing, Sublessee releases Sublessor from and agrees that
the Sublessor shall not be liable for, and agrees to hold the Sublessor harmless
against, any loss or damage to property or any injury to or death of any person
that may be occasioned by the Sublessee or anyone acting under the Sublessee
pertaining to the Project or the use thereof, or any breach by Sublessee of any
of its representations or warranties hereunder.
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SECTION 7.2. Right of Access. Sublessee agrees that the Authorized
Municipal Representative, the Trustee, the Sublessor and their duly authorized
agents shall have the right at all reasonable times to enter upon the Leased
Land and to examine and inspect the Project on at least one (1) day's notice
except in the event of an emergency. During such access to the Project, all
commercially reasonable measures shall be taken to minimize interference with
Sublessee's use of the Project. The Sublessee further agrees that the
Municipality, the Trustee, the Sublessor and their duly authorized agents shall
have such rights of access to the Leased Land as may be reasonably necessary for
the proper maintenance of the Project in the event of failure by the Sublessor
or Sublessee to perform their respective obligations under Article V hereof, and
Sublessor shall have such rights of access to the Leased Land as may be
reasonably necessary for the proper performance for its obligations pursuant to
said Article V.
SECTION 7.3. Sublessor to Maintain its Corporate Existence. Sublessor
agrees that it will maintain its existence as a corporation in good standing
under the laws of the Commonwealth of Massachusetts, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another corporation or permit any other
corporations to consolidate with or merge into it without the consent of the
Bondholders, provided that the Bondholders' consent shall not be required if the
transferee, if a transfer of assets, or the surviving entity, if a consolidation
or merger, becomes fully liable for Sublessor's obligations hereunder, and if
such transferee or surviving entity has a financial strength and net worth
immediately after the transfer or merger which is substantially equal to that of
the Lessee immediately before.
SECTION 7.4. Release of Certain Land.
(a) Notwithstanding any other provision of this Sublease, and
provided that the provisions of Section 7.4(d) hereof are met, the
Sublessee reserves the right, at any time and from time to time, to amend
this Sublease, and the Sublessor agrees to cause the Lease to be
correspondingly amended in accordance with the provisions of Section 8.5
hereof, for the purpose of releasing from this Sublease and the leasehold
estate created hereby and from the Lease and the leasehold estate created
thereby one or more of the following portions of the Leased Land:
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(i) any unimproved part of the Leased Land (on which neither
any Buildings nor Leased Machinery is located but on which roads or
transportation, utility or parking facilities may be located) on
which (1) the Municipality proposes to construct improvements for
lease to the Sublessor which in turn shall be leased by the
Sublessor to the Sublessee or any subsidiary or affiliated
corporation thereof under a different lease or (2) the Sublessee
proposes to construct improvements for use in connection with the
Project but which are or may be separated from the Project; or
(ii) Any part of the Leased Land with respect to which it is
proposed to grant an easement or convey a fee or other title to a
railroad or other public or private carrier or to any public utility
or public body in order that transportation or utility services for
the Project may be provided, increased or improved.
(b) If at the time any such amendment is made any of the Bonds are
Outstanding there shall be deposited with the Trustee by the Sublessor
and/or the Sublessee, as the case may be:
(i) A copy of such amendment to each of the Lease and the
Sublease as executed; and
(ii) A certified resolution of the Authority stating that the
Municipality is not in default under any of the provisions of the
Indenture and the Sublessor is not, to the knowledge of the
Municipality, in default under any of the provisions of the Lease;
giving an adequate legal description of that portion of the Leased
Land to be released; stating the purpose for which the Municipality
desires the release; stating that the improvements which will be
constructed or the facilities and services which will be provided,
increased or improved will be such as will promote the continued use
of the Project as an Industrial Development Facility within the
Municipality and requesting such release;
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(iii) A certified resolution of the Sublessor approving such
amendments to the Lease and the Sublease and a statement by the
president or any vice president of Sublessor that the Sublessor is
not in default under any of the provisions of the Lease;
(iv) A statement by the president or any vice president of
Sublessee that the Sublessee is not in default under any of the
provisions of this Sublease;
(v) A copy of any agreement wherein the Sublessor or Sublessee
(as the case may be) agrees to construct improvements on the portion
of the Leased Land to be released and Sublessor and Sublessee agree
to lease and sublease, respectively, the same and a copy of the
instrument by which the necessary parties convey title to the Leased
Land to be released;
(v) A certificate of an Independent Engineer who is acceptable
to the Trustee and the Bondholders, dated not more than sixty (60)
days prior to the date of the release and stating that, in the
opinion of such Engineer: the portion of the Leased Land so proposed
to be released is necessary or desirable for the purposes specified
in paragraph 7.4(a)(i) or 7.4(a)(ii) hereof; and the proposed
release will not impair the usefulness of the Project, alter the
nature of the Project as an Industrial Development Facility, destroy
the means of ingress thereto and egress therefrom or materially
reduce the value thereof.
(c) No release effected under this Section shall entitle the Lessee
to any abatement or diminution of the rents payable under this Lease.
Provided that the Leased Land so released pursuant to the provisions of
this Section 7.4 is subleased to the Sublessee as contemplated by Section
7.4(a)(i) above, such release effected under this Section shall not
entitle the Sublessee to an abatement or diminution of the amounts payable
hereunder.
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(d) Notwithstanding the foregoing provisions of this Section 7.4,
Sublessee acknowledges and agrees that in the event the proposed release
pursuant to Section 7.4(a)(i) above would materially adversely affect the
utility or value of the Leased Land or the Building, the consent of the
Sublessor to any such release shall be required, which consent shall not
be unreasonably withheld.
SECTION 7.5. Granting of Easements. If no Event of Default shall have
happened and be continuing, and provided that the same will not materially
adversely affect the value of the Leased Land and the Building, and provided
further, subject to the consent of Sublessor, which consent shall be given
provided that the provisions in this Section 7.5 have been met, the Sublessee
may at any time or times grant easements, licenses, rights-of-way (including the
dedication of public highways) and other rights or privileges in the nature of
easements with respect to the Leased Land, free from the lien of the Indenture,
or the Sublessee may release existing easements, licenses, rights-of-way and
other rights or privileges with or without consideration, all at the cost and
expense of Sublessee. The Sublessor agrees that it shall execute and deliver and
will cause and direct the Municipality and the Trustee to execute and deliver
any instrument necessary or appropriate therefor upon receipt of:
(i) A copy of the instrument of grant or release;
(ii) A written application signed by the Sublessee requesting such
instrument; and
(iii) Acertificate executed by the Sublessee, to the effect that
such grant or release is not detrimental to the conduct of the business of
the Sublessee and such grant or release will not impair the effective use
or interfere with the operation of the Project and will not materially
adversely affect the value of the Leased Land or the Building.
SECTION 7.6. Arbitrage Covenants. Each of the Sublessor and Sublessee
covenants that it will not make, or request or permit the Trustee or the
Municipality to make, any use of the proceeds of the Bonds or of any moneys on
deposit to the credit of any of the funds created and established by the
Indenture, which may be deemed to be proceeds of the Bonds pursuant to Section
103(d) of the Internal Revenue Code of 1954 and the applicable regulations
thereunder which, if such use had been reasonably expected on the date of
issuance of the Bonds, would have caused the Bonds to be "arbitrage bonds"
within the meaning
32
of said Section and said regulations. The Sublessor and Sublessee further
covenants that it will comply with the requirements of said Section and said
regulations, as the same may be amended from time to time, so long as any Bonds
remain Outstanding (as defined in the Indenture).
SECTION 7.7. Compliance with Laws. The Sublessor shall comply with all
Governmental Requirements relating to the Project in the performance of its
obligations hereunder, including, without limitation, its obligations described
in Articles IV and V and Exhibit C attached hereto. Sublessee shall comply with
all Governmental Requirements relating to the Project in performing its
obligations hereunder and in using the Project for the purposes intended by
Sublessee, but the foregoing shall in no way lessen, alter or otherwise affect
Sublessor's obligations and liabilities under Sections 4.07(e), 7.01 and 7.02 of
the Asset Purchase Agreement dated April 7, 1986.
SECTION 7.8. Limitation of Obligations of Municipality. The Sublessee
recognizes that nothing contained in this Sublease, the Lease or in the
Indenture shall in any way obligate the Municipality to raise any money by
taxation or use other public funds for any purpose in relation to the Project.
Further, the Sublessee recognizes that neither the Municipality nor the
Authority promise to pay any debt or meet any financial obligation to any person
at any time in relation to the Project except (1) from moneys received or to be
received under the provisions of the Lease or of the Indenture or derived from
the exercise of the Municipality's rights under the Lease or the Indenture,
other than moneys received for its own purposes, or (2) as may be required by
law.
In the exercise of the powers of the Municipality and its officers under
the Lease and the Indenture, including, without limitation, the application of
moneys, the investment of funds, the letting or other disposition of the Project
in the event of default by the Sublessor, or the pursuit of any remedy, the
Municipality shall not be accountable to any holder of any of the Bonds, the
Trustee, the Sublessor or the Sublessee for any error of judgment or for any
action taken, or omitted to be taken, in good faith, by it, or by any person for
whose conduct it is legally responsible. The Municipality and its officers shall
be protected in its or their acting upon any paper or document reasonably
believed by it or them to be genuine, and it and they may conclusively rely upon
the advice of counsel and may, but need not, require further evidence of any
fact or matter before taking any action.
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Section 7.9. Consent and Other Actions of Sublessor Under Lease. Sublessor
expressly acknowledges and agrees that the Lease: (a) provides the Sublessor
with the right to consent to certain acts or other matters; and (b) permits
Sublessor to take or omit to take certain actions or to send certain notices. In
the event that the Sublessee proposes to so consent or take or omit to take
certain action or to send notice as provided in Section 7.9(a); or (b) above in
the name of the Sublessor and the Municipality agrees with or is willing to
permit or consent to the same, and provided further that the value of the
Project and the rights and obligations of the Sublessor under the Lease which
have not been assumed by Sublessee under this Sublease will not be materially
adversely affected thereby, then in any such event Sublessor agrees that
Sublessee shall the right to act in the name and on behalf of Sublessor under
the Lease as provided in Section 7.9(a) and (b) above. Without limiting the
generality of the foregoing, Sublessor agrees that it will consent to any of the
same proposed by Sublessee and will cooperate with Sublessee in effecting the
same. In the event that any such act, omission or other matter would not satisfy
the requirements of this Section 7.9, then Sublessor shall have the right to
approve any of the same, which approval shall not be unreasonably withheld or
delayed.
Section 7.10. Hazardous Waste.
(a) To the best of its knowledge and belief, Sublessor represents
and warrants to Sublessee that as of the Commencement Date:
(i) except for any materials or substances which may be
present as a result of the items as noted in Section 7.10(a)(x), no
"hazardous material", "hazardous substance", "hazardous waste",
"oil", "regulated substance", "toxic substance", "restricted
hazardous waste", "special waste", or words of similar import as
defined under any of the Governmental Requirements relating to
environmental conditions existing on, under or emanating from the
Project, or the generation, storage, transportation, utilization,
disposal, management or release of any of the foregoing
(collectively, "Environmental Requirements"), asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, radon gas,
flammable explosives, radioactive materials,
34
any chemical, contaminant, solvent, material, pollutant or substance
that may be dangerous or detrimental to the Project, the environment
or the health or safety of the owners, lessees or occupants of the
Project or any owners or occupants of any property near the Project,
or any substance, the generation, storage, transportation,
utilization, disposal, management, release or location of which is
prohibited or otherwise regulated pursuant to any of the
Environmental Requirements (collectively, "Hazardous Substances")
has been or is currently generated, transported, utilized, disposed
of, managed, released or located on, under or from the Project
(whether or not in reportable quantities), except for de minimis
releases typically associated with the use of certain portions of
the Project for driving and parking motor vehicles, or has in any
manner been introduced onto the Project, including, without
limitation, the septic, sewage or other waste disposal systems
serving the Project;
(ii) except for the presence of the tanks, as noted in Section
7.10(a)(x), Sublessor does not have any knowledge of any threat of
release of any Hazardous Substance on, under or from the Project;
(iii) Sublessor has not received any notice from any state or
local authority having jurisdiction over the Project, the United
States Environmental Protection Agency or any other Governmental
Authority claiming that (1) the Project's use thereof violates any
of the Environmental Requirements; or (2) the Municipality, the
Trustee, the Sublessor or any of its employees or agents have
violated any of the Environmental Requirements;
(iv) Sublessor has not incurred any liability to the
Municipality, the United States of America or any other Governmental
Authority under any of the Environmental Requirements;
35
(v) no lien against the Project has arisen under or related to
any of the Environmental Requirements;
(vi) there are no actions or orders instituted, threatened,
required or completed by any Governmental Authority or any claim
made or threatened by any person against the Sublessor or the
Project (or to the best of its knowledge and belief, the
Municipality, the Trustee, or any other occupant, prior occupant or
prior owner thereof), arising out of or in connection with any of
the Environmental Requirements, or the assessment, monitoring,
cleanup, containment, remediation or removal of, or damages caused
or alleged to be caused, by any Hazardous Substances located on or
under, or emanating from the Project, or generated, stored,
transported, utilized, disposed of, managed or released by the
Sublessor (whether or not on, under or from the Project) (as to
either party the foregoing collectively, the "Environment
Enforcement Actions");
(vii) Sublessor does not have any knowledge that any Hazardous
Substance has been or is currently generated, stored, transported,
utilized, disposed of, managed, released or located on, under or
from any property located within a one-half mile of the Project
("Surrounding Property") in violation of, or allegedly in violation
of any of, the Environmental Requirements;
(viii) Sublessor does not have any knowledge of any threat of
release of any Hazardous Substance on, under or from any Surrounding
Property;
(ix) Sublessor does not have any knowledge of any action or
order instituted or threatened against any person by any
Governmental Authority arising out of or in connection with the
Environmental Requirements involving the assessment, monitoring,
cleanup, containment, remediation or removal of or damages caused or
alleged to be caused by (1) any Hazardous Substances generated,
stored, transported, utilized,
36
disposed of, managed, released or located on, under or from any
Surrounding Property; or (2) the threat of release of any Hazardous
Substance on, under or from any Surrounding Property; and
(x) there are two (2) underground storage tanks on or under
the Project, one of which stores gasoline fuel, and one of which
stores diesel fuel, both of which will be removed by Sublessor as
part of Seneca's Work. Additionally, as part of Seneca's Work,
Sublessor shall install a ten thousand (10,000) gallon underground
tank which will store diesel fuel. Sublessor shall test the soil at
or about the tank grave sites and if such tests demonstrate that
leaks occurred, Sublessor shall perform necessary and reasonable
remediation, all in compliance with all Governmental Requirements.
Sublessor acknowledges and agrees that the representations and
warranties contained in this Section 7.10(a) shall be true, accurate
and complete in all material respects as of the date hereof, and as
of the Commencement Date, as applicable, and at all times throughout
the Sublease Term.
(b) Until the Sublease Term expires or is earlier terminated,
Sublessee represents and warrants that it shall not (i) generate, store or
utilize (except to the extent, if any, the same are used in the ordinary
course of using the Project as proposed by Sublessee, provided, however,
that all such storage and utilization is done in compliance with all
Environmental Requirements), transport, dispose of, manage, release or
locate, or permit anyone claiming by, through or under Sublessee to
generate, store, transport, utilize, dispose, manage, release or locate
any Hazardous Substances on, under or from the Project, except for de
minimis releases typically associated with the use of certain portions of
the Project for driving and parking motor vehicles; or (ii) permit any
lien arising under or related to any of the Environmental Legal
Requirements to attach to the Project as a result of violation of any of
its covenants provided in this Section 7.10(b)(i) above. Sublessee shall
indemnify and hold Sublessor harmless against any and all costs, damages,
claims, losses, liabilities and expenses arising or resulting from or
occurring in connection therewith.
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(c) In the event of the violation by either Sublessor or Sublessee
of its representations and warranties contained herein, the defaulting
party shall immediately take all actions which are reasonably necessary to
cure the same, including, without limitation, the assessment, monitoring,
cleanup, containment, removal, remediation or restoration of the Project
as may be required by applicable Environmental Requirements, and shall pay
the cost of the same.
(d) Sublessor represents and warrants to Sublessee that, except as
expressly provided in Subsection 7.10(b) above, Sublessor shall be solely
responsible for (i) the assessment, monitoring, cleanup, containment,
remediation, removal or restoration of any Hazardous Substances generated,
stored, transported, utilized, disposed of, managed, released or located
in, on, under or from the Project; (ii) the release or threat of release
of any Hazardous Substances in, on, under, or from the Project, or in, on,
under or from any Surrounding Property which affects the Project; (iii)
compliance with all Environmental Requirements governing the foregoing;
and (iv) all costs, damages, claims, losses, liabilities and expenses
caused or alleged to be caused to any person, property or interest by or
as a result of any of the foregoing, or by a violation of any of its
representations or warranties contained in this Section 7.10. In each such
instance, Sublessor shall indemnify and hold Sublessee harmless against
any and all costs, damages, claims, losses, liabilities and expenses
arising or resulting from or occurring in connection therewith.
ARTICLE VIII
ASSIGNMENT, SUBLEASING, MORTGAGING, SELLING,
REDEMPTION, PREPAYMENT AND ABATEMENT
SECTION 8.1. Assignment and Subleasing. Except as expressly provided in
this Article VIII, this Sublease may not be assigned, and the Project may not be
subleased, as a whole or in part, without the prior written consent of the
Sublessor, which consent shall not be unreasonably withheld but which is subject
to the consent of the Municipality, the Trustee and the Bondholders.
Notwithstanding the foregoing, however, no consent of any party shall be
required in the event there is an assignment or subletting to a wholly-owned
subsidiary or affiliate of Sublessee or to Sublessee's parent corporation or
subsidiary or affiliate.
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SECTION 8.2. Mortgaging. The Municipality may mortgage all or any part of
the Project and may assign its interest in and pledge the Lease and all moneys
receivable under the Lease to the Trustee pursuant to the Indenture as security
for payment of the Bonds. Each such mortgage, assignment or pledge shall be
subject and subordinate to the Lease and this Sublease.
SECTION 8.3. Redemption of Bonds. In connection with the exercise of any
purchase options as provided to Sublessee in this Sublease, the Sublessor shall
cause the Municipality, at the request at any time of the Sublessee and if the
Bonds are by their terms then callable, shall forthwith take all acts required
by the Indenture to effect the prompt redemption of all or such part of the
Bonds, as may be specified by the Sublessee. It is understood that all expenses
of such redemption shall be paid from money in the hands of the Trustee or by
the Sublessee (subject to the Sublessee's right to receive a credit for all such
amounts as provided in Article X hereof) and not by the Sublessor (unless the
Sublessor, and not the Sublessee, has requested the redemption as provided in
Section 9.3 of the Lease) and not by the Municipality from its general funds.
The Sublessor shall cause the Municipality to cooperate with the Sublessee in
effecting any purchase of Bonds or application of funds pursuant to the
provisions of the Indenture pertaining to the redemption of Bonds and to the
application of Bonds to the satisfaction of payments made or to be made into the
Bond Fund. Any pertinent certificate in connection therewith to be executed by
or on behalf of the Municipality under the Indenture will contain such
information as is reasonable required by the Sublessee.
SECTION 8.4. Prepayment of Rents. In connection with the exercise of any
purchase options as provided to Sublessee in this Sublease at any time the
Sublessee (subject to the Sublessee's right to receive a credit for all such
amounts as provided in Article X hereof) may prepay all or any part of the rents
payable hereunder. In the event of any such prepayment, the portion of the
prepayment which Sublessee designates as corresponding to the Sublease Bond
Payments shall be paid by Sublessor (or shall be paid directly by Sublessee) to
the Municipality to be applied as provided in the Indenture. In the event of a
prepayment in full of the rent due under the Lease or a redemption of the Bonds
at Sublessee's request, the rent payable hereunder shall be permanently abated
by the amount of the Sublease Bond Payments.
39
SECTION 8.5. Certain Rent Abatements. If at any time the aggregate moneys
in the Bond Fund shall be sufficient to retire in accordance with the provisions
of the Indenture all of the Bonds at the time Outstanding, and to pay all fees
and charges of the Trustee and the paying agents for the Bonds due or to become
due through the date on which the Bonds are due, under circumstances not
resulting in termination of the Sublease Term, and whether or not the Lessee is
in default under the Lease and whether or not the Sublease is in default
hereunder, if such default will not result in failure to achieve the retirement
of all of the Bonds in accordance with their terms (whether at or before
maturity) or in nonfulfillment of any condition to this obligation, the
Sublessee shall be entitled to use and occupy the Project from the date on which
such aggregate moneys are in the hands of the Trustee, without the payment of
that portion of Basic Rent which corresponds to the Sublease Bond payment
hereunder during that interval (but otherwise on the terms and conditions
hereof). If Bonds are to be retired prior to maturity, this Section is subject
to the condition that such Bonds shall have properly been called for redemption
on a date upon which they may be called for redemption under the Indenture, and
the required notice of redemption shall have been given and the necessary funds
properly deposited.
SECTION 8.6. Installation of Sublessee's Property. The Sublessee may from
time to time in its own discretion and at its own expense, construct, locate or
install Sublessee's Property in or on the Project. All Sublessee's Property
shall remain the sole property of the Sublessee, in which the Sublessor, the
Municipality and the Trustee shall not have any interest, may be modified or
removed at any time while the Sublessee is not in default hereunder after notice
and beyond any applicable grace period and shall not be subject to the lien of
the Indenture, provided, however, that any material damage to the Project
occasioned by such removal shall be repaired at the Sublessee's expense;
provided that Sublessor provides notice of such material damage to Sublessee
within thirty (30) days of the termination of the Sublease; and, provided,
further, that such modification or removal does not adversely affect the
operation of the Project as an Industrial Development Facility.
SECTION 8.7. References to Bonds After Bonds Paid. Upon payment in full of
the Bonds or provision for payment thereof having been made and all fees and
charges of the Trustee and paying agents, all references in this Sublease to the
Bonds and the Trustee shall be ineffective and neither the Trustee nor the
holders of any of the Bonds shall thereafter have any rights
40
hereunder, saving and excepting those that shall have theretofore vested and be
unsatisfied.
ARTICLE IX
DEFAULT
SECTION 9.1. Sublessee's Events of Default. The following shall be "events
of default" of Sublessee under this Sublease:
(i) Failure by the Sublessee to pay the rents within five (5)
days after receipt of written notice from Sublessor that such have
not been paid when due under Section 4 hereof.
(ii) Failure by the Sublessee to observe and perform any
covenant, condition or agreement of this Sublease or under any
amendatory or supplemental subleases on its part to be observed or
performed, other than as referred to in the previous paragraph (i),
for a period of thirty (30) days after receipt of written notice,
specifying such failure and in the event such breach cannot be cured
during such time, then failure to cure the same within such
additional time as may be reasonable to cure or correct such default
with due diligence.
(iii) The dissolution or liquidation of the Sublessee or the
filing by the Sublessee of a voluntary petition in bankruptcy, or
failure by the Sublessee promptly to lift or stay any execution,
garnishment or attachment of such consequence as will prevent it
from carrying on its operations at the Project or adjudication (not
set aside within sixty (60) days) of the Sublessee as a bankrupt, or
assignment by the Sublessee for the benefit of its creditors, or the
entry by the Sublessee into an agreement of composition with its
creditors, or the approval by a court of competent jurisdiction of a
petition applicable to the Sublessee in any proceeding for its
reorganization instituted under the provisions of the general
Bankruptcy Act, as amended, or under any similar act which may
hereafter be enacted.
(iv) If any representation or warranty made by the Sublessee
herein or referenced herein shall fail to be true, accurate and
complete in all material respects when made or at all relevant times
during the
41
Sublease Term, if the same is not cured within the period provided
in Section 9.1 (ii) above.
The foregoing provisions of this Section are subject to the following
limitations: If by reason of force majeure the Sublessee is unable in whole or
in part to carry out its agreements on its part herein contained, other than the
obligations on the part of the Sublessee contained in Article IV (Rent) and
Sections 5.3 (Taxes) and 5.4 (Insurance) hereof, the Sublessee shall not be
deemed in default during the continuance of such inability the period within
which such obligation is required to be performed and the cure period for any
failure to perform the same shall be extended by the period during which the
same continues. The term "force majeure" as used herein shall mean, without
limitation, the following: act or omission of the Sublessor, acts of God;
strikes, lockouts or other industrial disturbances; acts of public enemies;
orders of any kind of the government of the United States, The Commonwealth of
Massachusetts, or the Municipality or of any of their departments, agencies, or
officials, or of any civil or military authority; insurrections; riots;
epidemics; landslides; lightning; earthquake; fire; hurricanes; storms; floods;
washouts; droughts; arrests; restraint of government and people; civil
disturbances; partial or entire failure of utilities; or any other cause or
event not reasonably within the control of the Sublessee. The Sublessee agrees,
however, to remedy with all reasonable dispatch the cause or causes preventing
the Sublessee from carrying out is agreements; except, that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within the
discretion of the Sublessee, and the Sublessee shall not be required to make
settlement of strikes, lockouts and other disturbances by acceding to the
demands of the opposing party or parties when such course is in the judgment of
the Sublessee unfavorable to the Sublessee.
The Sublessor may grant extensions of time for the remedy of a default
with the consent of the Municipality and the Trustee to the extent that the same
is required pursuant to the provisions of the Lease.
SECTION 9.2. Remedies on Sublessee's Default. Whenever any event of
default referred to in Section 9.l hereof shall have happened and be continuing,
the Sublessor may have access to and inspect, examine and make copies of the
books and records and any and all accounts, data and income tax and other tax
returns of the Sublessee only as they relate to the Project. Sublessor shall
also be entitled to take any one or more of the following remedial steps to the
extent necessary or appropriate to recover
42
the rent and other amounts payable to the Sublessor under this Sublease in the
event of any event of default occurring pursuant to the provisions of Section
9.1(i) above, but shall not be entitled to exercise any other rights or remedies
hereunder unless and until the Municipality or the Trustee exercise their
respective rights and remedies under the Lease or the Indenture as a result of
such event of default of Sublessee which causes a default of Sublessor under the
Lease and then only to the extent and in the manner so exercised by the
Municipality or the Trustee:
(i) Provided that Sublessor uses reasonable efforts to re-let
the Project as provided below, collect all installments of rent
payable under Subsections 4.2(a) and 4.2(b) hereof for the remainder
of the Lease Term to be on a monthly basis as the same become due
and payable hereunder, after deducting therefrom the net proceeds of
such reletting without the necessity of bring an action each month,
anything to the contrary contained elsewhere in this Sublease,
notwithstanding, Sublessor may re-enter the Project, including the
Excluded Property, and take possession of the Project without
terminating this Sublease and sublease the Project for the account
of the Sublessee. Under no circumstances shall Sublessor be entitled
to accelerate the Basic Rent or other charges payable by Sublessee
hereunder unless (i) Sublessee files a petition in bankruptcy or
(ii) the Municipality declares all of Sublessor's installments due
and payable under the terms of the Lease due solely to an act or
omission of Sublessee, but only as and to the extent and for so long
as such amounts are accelerated thereunder.
(ii) Sublessor may terminate the Sublease Term, exclude the
Sublessee from possession of the Project and use its best efforts to
sublease the Project to another for the account of the Sublessee,
holding the Sublessee liable for all rent and other payments due up
to the effective date of such subleasing and for the excess, if any,
of the rent and other amounts payable by the Sublessee under this
Sublease, had the Sublease Term not been terminated, over the rents
and other amounts which are paid by such new Sublessee under such
new Sublease as provided in subsection (i) above.
(iii) Sublessor may take whatever action at law or in equity
may appear necessary or desirable to collect rents due, or to become
due, or to enforce performance
43
and observance of any obligation, agreement or covenant of the
Sublessee hereunder including without limitation, if the same has
continued beyond any applicable cure period, the right but not the
obligation, to cure any and all of the same hereunder, and to expend
such moneys and perform such other acts as are in Sublessor's sole
discretion necessary or appropriate to cure the same applicable cure
periods.
Any amounts collected pursuant to action taken under this Section,
including any proceeds from leasing other disposition of all or any part of the
Project, shall be paid into the Bond Fund and applied in accordance with the
provisions of the Indenture, or, if the Bonds have been fully paid (or provision
for payment thereof has been made in accordance with the provisions of the
Indenture), shall be paid to the Sublessor.
While any Bonds are Outstanding and except as provided in Section 1002 of
the Indenture, Sublessor shall not exercise any of the remedies on default
without having first advised the Municipality and the Trustee in writing what
remedy it proposes to exercise. If the Sublessor receives no written objection
from the Trustee or the Municipality as to the prudence of such remedy within
ten days after such advice, it may exercise the remedy indicated therein for
breach of any obligation described in Section 9.1(i) above, but shall not
otherwise proceed to exercise any remedy with respect to any other event of
default without satisfying the provisions of Section 9.2 above.
SECTION 9.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to either party is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Sublease or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient.
SECTION 9.4. Attorneys' Fees and Expenses. If either party should default
under any of the provisions hereof and the nonbreaching party should employ
attorneys or incur other expenses for the collection of rent or the enforcement
or performance or observance of any obligation or agreement on the part of the
defaulting party herein contained, the defaulting party agrees that it will on
demand therefor pay to the nonbreaching party the reasonable fee of such
attorneys and such
44
other expenses so incurred by the nonbreaching party, together with interest
thereon at the rate of ten per cent (10%) per annum from the date incurred until
paid.
SECTION 9.5. No Waiver Implied. If any agreement contained herein should
be breached by either party and thereafter waived by the other party, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder.
SECTION 9.6. Sublessor's Default. The following shall constitute a default
of Sublessor under this Sublease:
(i) Failure by the Sublessor to observe and perform any
covenant, condition or agreement of the Sublessor under the Lease.
(ii) Failure by the Sublessor to observe and perform any
covenant, condition or agreement of the Sublessor under the
Sublease, (x) with respect to any monetary default for a period of
five (5) days following the receipt of written notice specifying
such failure, or (y) for any nonmonetary default, for a period of
thirty (30) days after receipt of written notice specifying such
failure, and in the event such breach cannot be cured during such
time, then such additional time as may be reasonable to cure or
correct such default with due diligence, except that in the event
the default relates to the performance of the freezer, and so long
as the default is not caused by the negligence or wilful misconduct
of Sublessee, it must be cured within three (3) days of receipt of
written notice.
(iii) The dissolution or liquidation of the Sublessor or the
filing of the Sublessor of a voluntary petition or bankruptcy, or
failure by Sublessor promptly to lift or stay any execution,
garnishment or attachment of such consequence as will prevent it
from carrying out its obligations hereunder or adjudication (not set
aside within sixty (60) days of the Sublessor's bankruptcy) or
assignment by the Sublessor for the benefit of its creditors, or the
entry by Sublessor into an agreement or composition with its
creditors, or the approval by a court of competent jurisdiction of a
petition applicable to the Sublessor in any proceeding for its
reorganization instituted under the provisions of the
45
General Bankruptcy Act, as amended, or under any similar act which
may hereafter be enacted.
(iv) Any representation or warranty made by the Sublessor
herein or referenced herein shall fail to be true, accurate and
complete in all material respects when made or at all relevant times
during the Sublease Term, if the same is not cured within the period
provided in Section 9.6(ii) above.
The foregoing provisions of this Section 9.6 are subject to the following
limitations: (a) if by reason of force majeure as defined in Section 9.1 above
(provided that reference to act or omission of Sublessee therein shall for
purposes of this Section 9.6 be deemed to refer to act or omission of
Sublessor), Sublessor is unable in whole or in part to carry out its agreements
on its part herein contained, other than any monetary obligations of Sublessor
contained herein, the Sublessor shall not be deemed in default during the
continuance of such inability and the period within which such obligation is
required to be performed and the cure period for any failure to perform the same
shall be extended by the period during which the same continues; and (b) in the
event that such default of Sublessor is proximately caused in material part by
an Event of Default by Sublessee hereunder, then no such default of Sublessor
shall exist to the extent and only to the extent that the same is proximately
caused by such Event of Default.
Whenever any Sublessor default referred to in this Section 9.6 above has
continued beyond applicable cure periods, Sublessee shall have the right, but
not the obligation to cure any and all of the same hereunder and/or under the
Lease, and shall be entitled to expend such moneys and perform such other acts
as are in Sublessee's sole discretion necessary or appropriate to cure the same,
and Sublessee shall be entitled to deduct the reasonable cost thereof
(including, without limitation, reasonable attorney's fees) from all rents and
other charges payable by Sublessee hereunder. In the event that the Lease is
terminated as a result of any such Sublessor default thereunder which is not so
proximately caused by default of Sublessee hereunder or in the event of a
default of Sublessor thereunder which cannot be reasonably cured by Sublessee,
Sublessee shall be entitled to terminate this Sublease and in the event the
Lease is terminated, enter into a direct lease with the Municipality on all of
the terms and conditions of the Lease and all rights and obligations of the
parties hereunder and of the Sublessor under the Lease shall terminate and be of
no further force and effect. In the event Sublessor fails to cure any default
beyond any applicable cure period, Sublessee shall have the right, but not
46
the obligation, to terminate this Sublease and all of the rights and obligations
of the parties hereunder shall terminate and be of no further force and effect.
ARTICLE X
OPTIONS IN FAVOR OF SUBLESSEE
SECTION 10.1. Options to Purchase. The Sublessee shall have the option to
purchase as provided in Sections 6.2 and 6.4 hereof, or this Article X below.
SECTION 10.2. Option to Purchase or Right of First Refusal.
(a) At any time during the first eighteen (18) months of the
Sublease Term, the Sublessee shall have the option to purchase Sublessor's
rights under Sections 11.2 and 11.3 of the Lease to purchase the Project
and thereupon Sublessor shall cause the Project to be conveyed to
Sublessee simultaneously with the purchase of such rights, either by means
of a direct transaction between the Municipality and the Sublessee or by a
purchase of the Project in which Sublessee is designated as it nominee to
take title, or by other means as Sublessee shall reasonably specify. In
each event, the closing of the transaction shall occur subject to the
conditions and in the manner provided in this Section 10.2. In the event
the option is exercised, Sublessee shall pay Sublessor Two Million Four
Hundred Thousand and 00/100 ($2,400,000.00) Dollars, less any amounts set
forth in this Article X. Said option shall be exercised by Sublessee by
giving written notice to Sublessor on or before the expiration of eighteen
(18) full calendar months following the Commencement Date, and specifying
a date for purchase which shall be not less than sixty (60) days nor more
than one hundred five (105) days from the date such notice is mailed, and
the purchase of the Project shall occur simultaneously with the purchase
of Sublessor's option rights. Sublessor shall promptly give all such
notices, make all such arrangements, and do all such acts, all at such
times, as shall be necessary or appropriate to enable the conveyance of
the Project to occur simultaneously with the purchase of Sublessor's
option rights. In the event that Sublessor does not take or does not
timely take all such action and/or any other impediment to closing at such
time exists under any of the Bond Documents or the Lease, then the date
for closing of the purchase of the option right shall be deemed to be
extended
47
until such time as Sublessor has complied with the provisions hereof
and/or such impediment has been removed, and the conveyance of the Project
can occur as provided herein. In the event that Sublessor does not
accomplish all of the foregoing, as are applicable to its failure to act
and after expiration of any cure period, then Sublessor hereby grants
Sublessee an irrevocable power of attorney, coupled with an interest, as
more fully provided in Section 7.9 above to accomplish any or all of the
same in the name and on behalf of Sublessor and hereby acknowledges and
agrees that the Municipality and the Trustee may conclusively rely
thereon. In the event that Sublessee does not give the notice provided in
this Section 10.2(a), the provisions of this Section 10.2(a) shall be
deemed to have no further force or effect. Notwithstanding any other
provision of this Sublease or the Lease, this option to purchase may not
be assigned to any party which is not a permitted Sublessee or assignee
pursuant to the provisions of Section 8.1 hereof without the prior express
written consent of the Sublessor, which consent may be withheld for any
reason or no reason whatsoever. Additionally, Sublessee shall have the
right to extend the closing if any necessary action under the Bond
Documents or the Lease cannot be accomplished at the scheduled time.
(b) If, at any time after the period provided in Section 10.2(a)
above, Sublessor enters into a bona fide contract to sell the Project
("Sale Contract"), Sublessor shall promptly notify Sublessee thereof (but
in no event shall such notice be delivered more than five (5) business
days following the execution of the Sale Contract nor less than sixty (60)
days prior to the closing thereunder), Sublessee shall have a right of
first refusal to purchase the Project at the purchase price ("Price") and
terms ("Terms") set forth in the Sale Contract. For the purpose hereof,
the Sale Contract shall include all documents forming a part of the
agreement between Sublessor and the other party or parties to the Sale
Contract. Sublessee shall exercise such right by giving written notice to
Sublessor as provided herein no later than twenty (20) days following
receipt of such Sale Contract. Notwithstanding any other provision of this
Sublease or the Lease to the contrary, this right of first refusal may not
be assigned to any party which is not a permitted Sublessee or assignee
pursuant to the provisions of Section 8.1 hereof without the prior express
written consent of the Sublessor, which consent may be withheld for any
reason or no reason whatsoever.
48
(c) If Sublessee elects not to exercise its right of first refusal
set forth in Section 10.2(b) above, Sublessor may sell the Project to the
party, at the price and on the terms specified in the Sale Contract. In
the event of any material change in any of the foregoing, Sublessor shall
promptly notify Sublessee who shall again have a right of first refusal
with respect thereto as provided in Section 10.2(b) above. In the event
that such sale does not occur, and Sublessor later enters into another
Sale Contract, Sublessor shall notify Sublessee, and Sublessee shall have
the rights provided in Section 10.2(b) above.
(d) The transactions provided for in this Section 10.2 and Article
XI of the Lease shall be closed in accordance with the following terms and
conditions:
(i) Sublessor shall take all actions necessary pursuant to
this Section 10.2 and Article XI of the Lease to cause the
Municipality to transfer the Project and/or Sublessor's rights
pursuant to Articles XI or XII thereof (as the case may be) to
Sublessee at or prior to the date of closing hereunder and shall set
aside the amount then due to the Municipality for acquiring title to
the Project and/or redeeming the Bonds in an escrow account held by
Sublessor's designee which shall be reasonably acceptable to
Sublessee.
(ii) When the Municipality conveys the Project, Sublessor
shall deliver the portion of either: (1) Two Million Four Hundred
Thousand and 00/100 ($2,400,000.00) Dollars if Sublessee exercises
its purchase option; or (2) the Price if Sublessee exercises its
right of first refusal, to the Municipality in each case on account
of Sublessee in the amount required to purchase the Project and/or
to redeem the Bonds pursuant to Articles XI or XII of the Lease. The
remainder of the funds, less deductions for (a) costs normally paid
by a seller of commercial real estate (such as documentary stamp tax
fees, recording fees for mortgage discharges and the like; and (b)
any amounts paid by Sublessee pursuant to the provisions of Sections
8.3 or 8.4 hereof, shall be retained by Sublessor. Sublessor shall
also
49
deliver to Sublessee a proper xxxx of sale for the personal property
and fixtures included in the Project and the Excluded Property, an
assignment of its rights under Articles XI and XII of the Lease, and
shall deliver such other documents and information, and shall take
such other action, as reasonably required by Sublessee. In
connection with such conveyance of the Project, Sublessor and
Sublessee shall be required to satisfy such conditions and take all
such action as may be reasonably required by the parties and/or are
typically required of buyers and sellers of commercial property in
Massachusetts. Without limiting the generality of the foregoing,
Sublessor shall be required to deliver title to the Project free and
clear of all defects, liens and encumbrances except those which were
previously accepted by Sublessee, evidenced by a title policy issued
to Sublessee and were not objected to by Sublessee at such time and
each party, for example, shall be required to provide a good
standing certificate and an estoppel certificate to the other and
each party shall be required to deliver to the other party such
information and documents as they may reasonably require (such as a
termination of the Sublease, FIRPTA and mechanic's liens and parties
in possession affidavits and the like).
(iii) If Sublessee does not exercise its option to purchase
the Project or its right of first refusal and the Project is not
otherwise sold by Sublessor to a third party, then Sublessor agrees
to purchase the Project from the Municipality and shall thereafter
lease the Project to Sublessee for one (1) year with four five-year
options to extend said lease under terms and conditions, which will
be substantially identical to this Sublease, except as it relates to
the Bond and the option rights, none of which shall have any further
force or effect when the Sublease is terminated, and except for the
rent and Lease Term provisions which will be as stated in a certain
Letter of Intent dated January 26, 1995 executed by the parties.
50
This provision shall survive the expiration of the Sublease.
(iv) In no event shall Sublessor enter into any easement or
other agreement affecting title to the Project which will be prior
to the Sublessee's option rights.
SECTION 10.3. Sublease Prior to Indenture. This Sublease and all rights of
Sublessee hereunder (including, without limitation, the options respectively
granted to the Sublessee in this Article shall be and remain prior and superior
to the Indenture in all respects. Without limiting the generality of the
foregoing, Sublessee may exercise the rights set forth in this Article X whether
or not the Sublessee is in default hereunder, if such default will not result in
nonfulfillment of any condition to the exercise of any such option and excluding
monetary defaults which will be cured at the Closing.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Surrender of Project. Except as otherwise expressly provided
in this Sublease, at the expiration or sooner termination of the Sublease Term,
the Sublessee agrees to surrender possession of the Project peaceably and
promptly to the Sublessor in as good condition as at the commencement of the
Sublease Term, loss by fire or other casualty covered by insurance and ordinary
wear, tear and obsolescence, and acts of God and matters which are the
responsibility of Sublessor hereunder only excepted.
SECTION 11.2. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when mailed by
registered or certified mail, postage prepaid, or sent by telegram, or by a
reputable overnight carrier service, addressed as follows:
If to the Sublessor:
0000 Xxxxxxxxx-Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Treasurer
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with a duplicate copy addressed to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
If to the Sublessee:
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
President, FoodService Division
with a duplicate copy addressed as above and marked:
Attention: Xxxxx X. Xxxxxx
Senior Vice President, Corporate Finance,
and General Counsel
Either party may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other communications
shall be sent.
SECTION 11.3. Binding Effect. This Sublease shall inure to the benefit of
and shall be binding upon the Sublessor, the Sublessee and their respective
successors and assigns, subject, however, to the limitations contained in
Sections 7.3 and 8.1 hereof.
SECTION 11.4. Severability. If any part of this Sublease shall, for any
reason, be finally adjudged by any court of competent jurisdiction to be
unconstitutional or invalid, such judgment shall not affect, impair or
invalidate the remainder of this Sublease but shall be confined in its operation
to the part thereof as to which such judgment has been rendered.
SECTION 11.5. Amounts Remaining in Bond Fund. Any amounts remaining in the
Bond Funds upon expiration or sooner termination of the Sublease Term, as
provided in this Sublease, after payment in full of the Bonds or provision for
payment thereof having been made and the fees, charges and expenses of the
Trustee and paying agents in accordance with the Indenture and payment of all
sums
52
then due to the Municipality from the Sublessor pursuant to the Lease shall
belong to and be paid to the Sublessor by the Trustee as overpayment of rents
unless Sublessee has exercised its rights pursuant to the provisions of Article
X hereof in which event the same shall be paid to Sublessee and accounted for at
the closing for the purpose of the Project.
SECTION 11.6. Consents. Whenever the consent of either party hereto is
required, such consent shall not be unreasonably withheld or delayed, except as
may otherwise be expressly provided herein.
SECTION 11.7. Amendments. This Sublease may not be amended or modified
except by a writing executed by the party against whom such amendment or
modification is sought to be enforced. Sublessor covenants and agrees that it
will not amend or modify the Lease or fail to exercise its rights thereunder
unless Sublessee has consented thereto, which consent shall not be unreasonably
delayed or withheld.
SECTION 11.8. Recording. This Sublease and every assignment and
modification hereof may not be recorded but in the event not so recorded, a
notice thereof shall be recorded in the Hampden County Registry of Deeds.
SECTION 11.9. Captions. The captions or heading in this Sublease are for
convenience only and in no way define, limit or describe the scope or intent of
any provision of this Sublease.
SECTION 11.10. Counterparts. This Sublease may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same Sublease.
SECTION 11.11. Law Governing. This Lease is entered into with the
intention that the law of The Commonwealth of Massachusetts shall govern its
construction.
EXECUTED as a sealed instrument as of the date first written above, and
delivered on June 9, 1995.
SUBLESSOR:
53
SSP COMPANY, INC.
By_________________________________
Its:____________________________
Attest:_________________________
SUBLESSEE:
FRIENDLY ICE CREAM CORPORATION
By_________________________________
Xxxxxx X. Xxxxxxxxxx, President
FoodService Division
Attest:_________________________
Xxxxx X. Xxxxxxxx,
Assistant Clerk
54
State of New York
County of _______________, ss.
On this day of _______________, 1995, before me appeared _____________
____________________, to me personally known, who, being by me duly sworn, did
say he is the _______________ of SSP COMPANY, INC., a Massachusetts corporation,
and that this instrument was signed and sealed on behalf of such corporation
pursuant to a vote or consent of its board of directors acknowledged such
instrument to be the free act and deed of such corporation.
-----------------------------------
Notary Public
My Commission Expires:
Commonwealth of Massachusetts
County of Hampden, ss.
On this ninth day of June, 1995, before me appeared Xxxxxx X. Xxxxxxxxxx,
to me personally known, who, being by me duly sworn, did say he is the
President, FoodService Division, of FRIENDLY ICE CREAM CORPORATION, a
Massachusetts corporation, and that this instrument was signed and sealed on
behalf of such corporation pursuant to a vote or consent of its board of
directors acknowledged such instrument to be the free act and deed of such
corporation.
-----------------------------------
Notary Public
Xxxxxxx X. Xxxxxxxx
My Commission Expires: March
29, 2002
55
EXHIBIT A
A certain parcel of land situated on Sheridan Street and Xxxxxxxx Street,
in Xxxxxxxx Industrial Air Park in Chicopee, Hampden County, Massachusetts,
being bounded and described as shown on a certain plan entitled "Plan of Land in
Chicopee, Massachusetts, Prepared For: X.X. Xxxxxx Co.," drawn by X.X. Xxxxxxx,
dated October 4, 1978, which plan is recorded herewith, being further bounded
and described as shown on said plan as follows:
Beginning at a concrete bound on the northerly side of Sheridan Street at
the intersection of Sheridan Street and Xxxxxxxx Street, said bound having the
coordinates N: 7,308.316, E: 30,145.740 as established by the New York
Corporation of Engineers in their 19'5 Xxxxxxxx Air Force Base survey; thence
running along a curve concave to the northeast with a radius of thirty (30)
feet, a distance of forty-five and 74/100 (45.74) feet to a concrete bound;
thence running N 31(degrees) 07' 17" W along the easterly side of Xxxxxxxx
Street, a distance of twenty and 49/100 (20.49) feet to a concrete bound;
thence by a curve concave to the southwest with a radius of five hundred five
(505) feet, a distance of three hundred four and 36/100 (304.36) feet to a
concrete bound; thence running N 65(degrees) 3' 12" W, a distance of one
hundred one and 96/100 (101.96) feet to a concrete bound; thence by a curve
concave to the northeast with a radius of one hundred thirty-five (135) feet,
a distance of sixty-eight and 18/100 (68.18) feet to a concrete bound; thence
running N 57(degrees) 41' 50" E, a distance of two hundred twenty-six and
94/100 (226.94) feet to a point; thence running N 73(degrees) 36' 14" E, a
distance of one hundred fifteen and 40/100 (115.40) feet to a point; thence
running N 89(degrees) 30' 29" E, a distance of five hundred fifty-seven and
30/100 (557.30) feet to a point; thence running N 55(degrees) 54' 01" E, a
distance of one hundred thirty-six and 00/100 (136.00) feet to a point; thence
running S 29(degrees) 09' 52" E, a distance of three hundred forty-five and
82/100 (345.82) feet to a point at the northerly side of Sheridan Street;
thence by a curve concave to the north with a radius of nine hundred
seventy-five (975) feet, a distance of two hundred sixty and 00/100 (260.00)
feet to a concrete bound; thence running S 76(degrees) 27' 33" W, a distance
of two hundred thirty-six and 77/100 (236.77) feet to a concrete bound; thence
running by a curve concave to the south with a radius of one thousand
twenty-five (1,025) feet, a distance of two hundred sixty-seven and 36/100
(267.36) feet to a concrete bound at the point of beginning.
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Containing 7.947 acres.
57
So much of the premises as may be within the boundaries of Sheridan Street
and Xxxxxxxx Street are subject to the rights of the grantor, its successors and
assigns, and all others lawfully so entitled to use the same in common with the
grantee, its successors and assigns, for all purposes for which public streets
are commonly used, including, but not by way of limitation, the right to pave,
curb and otherwise improve the same for such purposes, and to install, maintain
and use sidewalks and to install, maintain and use utility systems in, on and
over the same, which easement rights are also reserved hereby.
Subject to and with the benefit of such easements and rights in, over and
under the premises as are of record.
58
EXHIBIT B
All right, title and interest of Sublessor (and to the extent applicable)
Lessee in and to:
(i) all building equipment and building fixtures located or to be
located at Xxxxxxxx and Sheridan Streets, Chicopee, Massachusetts (the
"Project Site").
(ii) all refrigeration machinery and equipment to be acquired and
located in the Project, together with all additions, renewals,
substitutions and replacements thereto and therefore and all property
incorporated or to be incorporated therein.
(iii) all fixtures, machinery and equipment acquired or to be
acquired by the Lessee with the proceeds from the Bonds issued under and
secured by that certain Mortgage and Indenture of Trust, dated as of
September 1, 1979, between the City of Chicopee acting by and through its
Industrial Development Financing Authority and BayBank Valley Trust
Company, Trustee including all additions, renewals, substitutions and
replacement thereto and therefore and all property incorporated or to be
incorporated therein.
(iv) the construction Contract between the Lessee and Xxxxxx X.
X'Xxxxx Company, Inc. dated September 14, 1979 together with all plans,
specifications and general intangibles pertaining to the construction of a
building at the Project Site.
59
EXHIBIT C
WORK LETTER
1. SENECA'S WORK. Sublessor agrees to perform the following at its own
cost and expense ("Seneca's Work"):
(a) Refrigeration Equipment. Put all the refrigeration equipment in
working condition. Sublessor will add refrigeration equipment to the
freezer which will cause the freezer to maintain a temperature of minus 20
degrees Fahrenheit at 95 degrees Fahrenheit ambient in the freezer area at
all times, including, but not limited to, if there is a failure of some of
the refrigeration equipment which requires such equipment to be repaired
or replaced. This equipment to be run using Freon as a refrigerant
(coolant). Sublessor shall pay a total of One Hundred Thousand Dollars
($100,000.00) towards the cost of such Equipment. Sublessee shall have the
right to give its prior approval of the location and specifications of the
refrigeration equipment, which approval it may withhold in its sole
discretion. The specifications shall be as indicated on Exhibit C-2. In no
event shall any of the equipment be floor-mounted. Sublessor shall give
such plans to Sublessee within fifteen (15) days of the execution of this
Sublease and Sublessee shall have ten (10) days to review such plans. If a
dispute arises between Sublessor and Sublessee concerning the plans and
Sublessor and Sublessee cannot agree within fifteen (15) days after the
ten (10) day period to resolve such dispute, Sublessor and Sublessee shall
jointly submit their dispute to binding arbitration before the American
Arbitration Association under the Commercial Rules of Arbitration. This
arbitration shall be submitted to a single arbitrator.
(b) Removal of Underground Tanks. Remove the gasoline fuel tank and
the diesel fuel tanks; it will install a 10,000 gallon underground diesel
fuel tank. Such work shall be in compliance with all Governmental
Requirements. Upon completion of such work, Sublessor shall deliver a
certification from the professional who has performed such work. Upon
execution of the Sublease, Sublessor shall promptly apply for, and
diligently seek to secure all Governmental Requirements in connection with
such removal and installation; Sublessor will complete all testing and
removal within thirty (30) days of receipt of all necessary Governmental
Requirements unless such Governmental Requirements require a different
time period.
60
(c) Equipment. All Equipment will be in working order and needed
certificates will be supplied by Sublessor.
(d) Racks. Will remove all storage racks, including having the floor
bolts from the removed racks flush with the floor and will leave the
Project in broom-clean condition.
(e) Fuel Pumps. Subject to the approval of the Fire Xxxxxxxx for the
Municipality, relocate the fuel pumps's islands from the south side of the
curb cut leading to the garage where they are currently located to the
north side of the driveway and install two fuel pumps, or one split fuel
pump with two (2) nozzles (either of which will have a total forty (40)
gallon per minute flow-rate capacity) at a specific location to be
identified by the Sublessee prior to the commencement of any such work.
Certify that the fuel pumps meet all Governmental Requirements and are
operational.
2. FRIENDLY'S WORK. Friendly's agrees to perform, at the sole cost and
expense of Sublessor, all of the Work identified on Exhibit C-1, attached to and
made a part of this Sublease.
3. GENERAL TERMS AND CONDITIONS. Each party shall obtain all governmental
approvals, permits and licenses necessary for the performance of its obligations
under this Sublease. All Work shall meet the standards and specifications of the
authorities having jurisdiction thereof. Each party shall pay and discharge all
bills duly presented for goods and materials delivered and for all services
performed in connection with its Work. In the event either party fails to make
any such payment and a claim of lien to secure payment thereof is filed against
the Leased Land, the parties who requested such Work shall within thirty (30)
days from the date such claim is filed, (i) pay and discharge such lien, or (ii)
notify the other party that the claim upon which such claim is based has no
validity and is being contested in good faith in which event such party may bond
off such liens with a bond from a good and solvent surety company. In the event
such party fails to make or provide for such payment, the other party may pay
and discharge such lien and withhold sums so paid plus interest at the Prime
Rate, from any money due to such party under the Sublease. Each party covenants
and represents to do all of its Work in compliance with all Governmental
Requirements; to do all such Work in a good and workmanlike
61
manner employing materials of good quality; to employ for such Work responsible
contractors whose labor will work without interference with other labor working
on the Leased Land; to perform such Work with a minimum of interference to any
other contractors or employees at the Leased Land; and to require all
contractors to carry workers' compensation insurance in accordance with
statutory requirements and comprehensive public liability insurance covering
such contractors on or about the Leased Land in amounts that equal the limits
set forth herein and submit certificates evidencing such coverage prior to
commencement of such Work.
62
EXHIBIT C-2
SPECIFICATIONS
Refrigeration Equipment to be added:
Three (3) Xxxxxxx Split Systems Model ULD27L44-UHU4-851. Each system will
provide 84,800 BTUH at -30 degrees F Suction and 95 degrees F ambient for a -20
degrees F room. Each system will use refrigerant R404A and will have hot gas
defrost. Three (3) Systems will include all tubing and fittings for Freon and
condensate drains, pipe covering, Freon, heat tape for drains, sleepers for
condensing units, miscellaneous steel to hang evaporators, power and control
wiring. The power wiring is figured for 460V, 3 phase and will be available
within 300 feet of condensing units and the existing panel can accept two (2) 70
amp breakers. Will add structural steel (with approved drawings) to support the
new condensing units and evaporators. The existing freezer and cooler systems
will be set for -20 degrees F room operation. The suction hold back valves will
be removed from the two (2) systems in the freezer.
The total tonnage for the refrigeration system will be forty-five (45)
tons.
63
EXHIBIT D
All building equipment, building fixtures, refrigeration and freezer
equipment installed or to be installed on the premises described in the attached
Exhibit A.
64
FIRST AMENDMENT TO SUBLEASE
Dated as of June 9, 1995 Between SSP Company, Inc.,
Successor-in-Interest to X.X. Xxxxxx Company, as Sublessor and
Friendly Ice Cream Corporation, as
Sublessee
THIS FIRST AMENDMENT TO SUBLEASE is made and entered into this twentieth
day of October, 1995, by and between SSP COMPANY, INC., a Massachusetts
corporation with a principal place of business at 0000 Xxxxxxxxx-Xxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx 00000, Successor-in-Interest to X.X. Xxxxxx Company
("Sublessor") and FRIENDLY ICE CREAM CORPORATION, a Massachusetts corporation
with a principal place of business at 0000 Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000 ("Sublessee").
WITNESSETH:
WHEREAS, by Sublease dated as of June 9, 1995, between the Sublessor and
the Sublessee (the "Sublease"), the Sublessor subleased to the Sublessee and the
Sublessee subleased and took from the Sublessor, for the term and upon the terms
and conditions therein set forth, the Project as defined in the Sublease; and
WHEREAS, the Sublease contains a number of defined terms establishing
certain dates and periods under the Sublease, which dates and periods are not
specified in the Sublease but are determined with reference to events which were
to occur following the execution thereof;
WHEREAS, the parties agree that it is appropriate to establish such dates
and periods for purposes of avoiding confusion and disagreement concerning them
in the future.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. The term "Commencement Date" shall mean September 8, 1995.
2. The term "Completion Date" shall mean September 1, 1995.
-1-
3. The "Sublease Term" shall mean that period of time commencing on the
Commencement Date of September 8, 1995 and ending on August 31, 2004.
4. The date for commencement of payment of Basic Rent pursuant to Section
4.2 of the Sublease is December 1, 1995.
5. For purposes of Section 10.2(a) of the Sublease, the period within
which the Sublessee shall have the option to purchase Sublessor's rights under
Sections 11.2 and 11.3 of the Lease to purchase the Project shall commence on
September 8, 1995 and continue through (and including) March 7, 1997. The
written notice to Sublessor provided in Section 10.2(a) may be given on or
before the expiration of such period.
6. The period within which Sublessee has a right of first refusal with
respect to the Project as provided in Sections 10.2(b) and (c) of the Sublease
shall commence on March 8, 1997 and continue throughout the Sublease Term.
7. The parties hereto agree that all references in the Sublease to the
defined terms, dates and periods of time described in Paragraphs 1 through 7
above shall be deemed to refer to such terms, dates and periods of time as
defined or established herein.
8. The parties agree that notice of the provisions of this First Amendment
may be recorded in the Hampden County Registry of Deeds.
9. Except as amended by this First Amendment to Sublease, the Sublease
shall remain in full force and effect and is hereby ratified and affirmed.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this First
Amendment to Sublease as a sealed instrument as of the day and year first above
written.
WITNESS: SUBLESSOR
SSP Company, Inc., successor-
in-interest to X. X. Xxxxxx
-2-
Company
By:
-------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
SUBLESSEE
Friendly Ice Cream Corporation
By:
-------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President, FoodService
Division
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