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Exhibit 10.40
ASSIGNMENT AND ASSUMPTION -
FACILITY LEASE
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Recording requested by, and
when recorded, return to:
Xxxxxxx Technologies Systems Division, Inc.
0000 Xxx Xxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
ASSIGNMENT AND ASSUMPTION AGREEMENT
(FACILITY LEASE)
This Assignment and Assumption Agreement (the "Agreement") is made and
entered into this 15th day of April, 1998, by and between PRIMEX PHYSICS
INTERNATIONAL COMPANY, a California corporation (formerly known as Physics
International Company), hereinafter referred to as "Assignor," and XXXXXXX
TECHNOLOGIES SYSTEMS DIVISION, INC., a California corporation, hereinafter
referred to as "Assignee," with reference to the following recitals of fact:
R E C I T A L S
WHEREAS, THE CONNECTICUT NATIONAL BANK, NOT INDIVIDUALLY BUT SOLELY AS
TRUSTEE UNDER THAT CERTAIN TRUST AGREEMENT DATED AS OF DECEMBER 29, 1986, AMONG
THE TRUSTEE AND MERCED ASSOCIATES, A MARYLAND GENERAL PARTNERSHIP, collectively
are the Lessee (the "Lessee"), and X. XXXXXX XXXXXXX, XXXXX X. XXXX, XXXX X.
XXXXXXX AND XXXX XXXXXX XXXXXX, TRUSTEES UNDER THE WILL AND OF THE ESTATE OF
XXXXXX XXXXX DAMON, DECEASED, collectively are the Lessor (the "Lessor"), under
the certain Ground Lease dated December 29, 1986 (the "Ground Lease"), as the
same may have been amended, for the that certain real property located in San
Leandro, California (the "Premises"), and more particularly described in
Exhibit A hereto; and
WHEREAS, Lessee subleased the Premises to Assignor, under that certain
Ground Sublease dated December 29, 1986 (the "Ground Sublease"), as the same
may have been amended; and
WHEREAS, Lessee leased the improvements situated on the Premises (the
"Building") to Assignor, under that certain Facility Lease dated December 29,
1986 and Amendment No. 1 dated as of March 9, 1997 (the "Facility Lease"), as
the same may have been amended; and
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WHEREAS, Assignee has entered into an agreement to acquire
simultaneously from Assignor the entirety of its interests in both the Ground
Sublease and the Facility Lease; and
WHEREAS, Assignee has entered into that certain Sublease Agreement
dated April 15, 1998 ("Sublease") with Assignor, by which it has agreed to
sublease a portion of the Premises to Assignor and to construct tenant
improvements thereon; and
WHEREAS, effective as of the date on which Assignee acquires the
Facility Lease from Assignor (the "Transfer Date"), Assignor desires to assign
to Assignee, and Assignee desires to assume from Assignor, all of the rights and
obligations of Assignor under the Facility Lease; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Assignment. Effective as of the Transfer Date, except as provided
herein, Assignor hereby sells, assigns, transfers and conveys to Assignee all of
Assignor's right, title and interest in and to the Facility Lease, including,
without limitation, any extension and renewal options.
2. Assumption. Effective as of the Transfer Date, except as provided
herein, Assignee hereby assumes and agrees to perform all of the obligations of
Assignor under the Facility Lease.
3. Notices of Default. Assignee agrees to promptly deliver to
Assignor a copy of any notice of default given by Lessee under the Facility
Lease.
4. Assignor Estoppel. Assignor is the holder of lessor's interests
under the Facility Lease. Assignor confirms that the documents described above
constitute the entire Facility Lease for the Premises, including any and all
amendments and modifications, and that the Facility Lease is in full force and
effect and is the valid legal and binding obligation of Assignor. To the actual
knowledge of Assignor, no defaults or potential defaults exist with respect to
the Facility Lease.
5. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which, together, shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of
the day and year first above written.
ASSIGNOR:
PRIMEX PHYSICS INTERNATIONAL
COMPANY, a California corporation
By: [SIG]
------------------------------------
Name: [ILLEGIBLE]
Its: Treasurer
By:
------------------------------------
Name:
Its:
ASSIGNEE:
XXXXXXX TECHNOLOGIES SYSTEMS
DIVISION, INC., a California corporation
By: /s/ XXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Its: President
By:
------------------------------------
Name:
Its:
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EXHIBIT A
All buildings and improvements situated on the hereinafter described lands
situated in the City of San Leandro, County of Alameda, State of California
which are and shall remain real property.
PARCEL 1:
Beginning at a point on the northwestern line of the 66.29 acre tract of land
fifthly described in the Decree of Distribution in the Matter of the Estate of
Xxxxxxx XxXxx, deceased, in the Superior Court, Contra Costa County, Probate
No. 11478, certified copy of which decree was recorded November 22, 1948, in
Book 5660 OR, page 403 (AC/88342), distant thereon north 62 degrees 30' east
631.30 feet from the northeastern line of Merced Street; thence along said line
of said 66.92 acre tract, north 62 degrees 30' east 315.65 feet; thence south
27 degrees 30' east 690 feet to the direct extension northeasterly of the
northwestern line of the land described as Parcel III in the deed from Oakland
Title Insurance Company to Southern Pacific Company, recorded March 23, 1954,
in Book 7278 OR, page 297, (AJ/23953); thence along said direct extension south
62 degrees 30' west 315.65 feet to the most northern corner of said Parcel III
in the last mentioned deed; and thence north 27 degrees 30' west 690 feet to
the point of beginning.
PARCEL 2:
Portion of the 66.92 acre tract of land fifthly described in the Decree of
Distribution in the Matter of the Estate of Xxxxxxx XxXxx, deceased, in the
Superior Court of Xxxxxx Xxxxx Xxxxxx, Xxxxxxx Xx. 00000, a certified copy of
which decree was recorded November 22, 1948, in Book 5660 OR, page 403
(AC/88342), described as follows:
Beginning at the intersection of the northeastern line of Merced Street, 60
feet wide, with the northwestern line of said 66.92 acre tract, thence along the
northwestern line of said 66.92 acre tract north 62 degrees 30' east 631.30
feet; thence south 27 degrees 30' east 690 feet; thence south 62 degrees 30'
west 631.30 feet to said line of Merced Street; thence along the last named line
north 27 degrees 30' west 690 feet to the point of beginning.
Excepting therefrom that portion quitclaimed to the City of San Leandro by
instrument recorded October 10, 1957, Book 8490 OR, page 595, (AM/100857).
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STATE OF CALIFORNIA)
) SS.
COUNTY OF SAN DIEGO)
On this 15th day of April 1998, before me a Notary Public in and for
---- -----
said County and State, personally appeared Xxxxxxx X. Xxxxxx who being duly
-----------------
sworn, deposes and says that he is Vice President & Treasurer of PRIMEX
--------------------------
TECHNOLOGIES, INC. the corporation described in the above ASSIGNMENT and that
he executed the above ASSIGNMENT as a free act on behalf of PRIMEX
TECHNOLOGIES, INC.
/s/ XXXXX X. XXXX
-------------------------------
Notary Public
SEAL:
XXXXX X. XXXX
Comm. #1141819
NOTARY PUBLIC-CALIFORNIA
San Diego County
My Comm. Expires June 18, 2001
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STATE OF CALIFORNIA)
) SS.
COUNTY OF SAN DIEGO)
On this 15th day of April 1998, before me a Notary Public in and for
---- -----
said County and State, personally appeared Xxxxxx X. Xxxxxxxxx who being duly
-------------------
sworn, deposes and says that he is President of XXXXXXX TECHNOLOGIES SYSTEM
---------
DIVISION, INC. the corporation described in the above ASSIGNMENT and that he
executed the above ASSIGNMENT as a free act on behalf of XXXXXXX TECHNOLOGIES
SYSTEM DIVISION, INC.
/s/ XXXXX X. XXXX
-------------------------------
Notary Public
SEAL:
XXXXX X. XXXX
Comm. #1141819
NOTARY PUBLIC - CALIFORNIA
San Diego County
My Comm. Expires June 18, 2001
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FACILITY LEASE
THIS FACILITY LEASE is made as of the 29th day of December, 1986, by and
between THE CONNECTICUT NATIONAL BANK, not individually but solely in its
capacity as Trustee (the "Landlord"), under that certain Trust Agreement dated
as of December 29, 1986 (the "Trust Agreement"), between Merced Associates, a
Maryland general partnership (the "Partnership"), and Connecticut National Bank
(the "Trustee"), and PHYSICS INTERNATIONAL COMPANY, a California corporation
(the "Tenant").
RECITALS
A. Landlord is the owner of certain real property as hereafter set forth
constituting the Premises as hereafter defined.
B. Tenant desires to lease the Premises from the Landlord in accordance
with the terms and conditions hereinafter set forth.
WITNESSETH
NOW, THEREFORE in consideration of the rental hereinafter agreed upon and
the performance of all the conditions and covenants hereinafter set forth on the
part of Tenant to be performed, Landlord does hereby lease unto Tenant, and the
latter does lease from the former the existing structure containing
approximately two hundred forty thousand 240,000 square feet known as 0000
Xxxxxx Xxxxxx in San Leandro, California, together with improvements to the
structure to be constructed in accordance with the provisions of Paragraph 20
below (the existing structure together with the contemplated improvements are
referred to herein as the "Premises"). The lease of the Premises is subject to
the state of Landlord's title existing as of the date of the commencement of the
term hereof, including but not limited to, (i) those matters referred to in the
preliminary title report dated September 30, 1986, Order No. 106576 by Western
Title Insurance Company; (ii) any state of facts which an accurate survey or
physical inspection of the Premises might show; (iii) the Indenture (the "Ground
Lease") of even date herewith by and between Landlord and the Trustees under the
Will and of the Estate of Xxxxxx X. Xxxxx (the "Damon Estate"); and (iv) the
Ground Sublease (the "Ground Sublease") dated of even date herewith between
Landlord and Tenant. This Lease specifically excludes the ground beneath and
around the Premises.
EXHIBIT X-0
0
0. Xxxx. The term of this Lease shall be as follows:
1.1 Original Term. The original term of this Lease shall be for a
period of twenty (20) years commencing on December 30, 1986 and ending on
December 31, 2006.
1.2 Renewal Term. Tenant shall have the option to extend the
original term of this lease for two (2) consecutive renewal terms of ten (10)
years each on the same terms and conditions contained herein, except that the
Annual Net Rent (defined below) will be as described in Paragraph 3 below.
Tenant shall exercise each such option by providing written notice of its
exercise of such option to Landlord not less than one hundred eighty (180) days
prior to the expiration of the original term or the renewal term then in
effect; provided, however, that the exercise of each such option shall be
subject to the conditions that: (i) Tenant is not in Default under any
provisions of this Lease (including the cross default provision contained in
Paragraph 17.9 below) on the date of exercise of such option or on the date of
commencement of the renewal term; (ii) Tenant shall be and shall have been in
possession and occupancy of the Premises at all times since the effective date
of this Lease; and (iii) Tenant simultaneously exercises its option to renew
the Ground Sublease.
2. Annual Net Rent - Original Term. Tenant covenants and agrees to pay
Landlord during each year of the original term of this Lease net rental (the
"Annual Net Rent") in the amounts and on the dates as set forth on Exhibit A,
attached hereto. Unless otherwise provided on Exhibit A, Annual Net Rental
shall be due and payable in arrears on the last day of each June and December
in equal semi-annual installments.
3. Annual Net Rent - Renewal Term. Annual Net Rent for each renewal term
will be the annual fair market rental value of the Premises during each renewal
term. In the event the Landlord and the Tenant cannot agree upon the annual
fair market rental value of the Premises within ninety (90) days prior to the
expiration of the original term or of any renewal term, as the case may be,
then the Annual Net Rent for such renewal term shall be determined by three
impartial real estate appraisers, one to be appointed by each of the parties
hereto, and Landlord and Tenant shall each promptly name one such appraiser and
give written notice thereof to the other party, and in case either party shall
fail so to do within ten (10) days after appointment of the first appraiser,
the appraiser already appointed shall name a second appraiser, and the two
appraisers thus appointed in either manner shall appoint a third appraiser, and
in case of their failure so to do within ten (10) days after appointment of
the second appraiser, either party may have such third appraiser (who shall in
this case be a member of the American Institute of Real Estate Appraisers or
other similar organization, who maintains an office in the County of Alameda,
Contra Costa, Santa Xxxxx or the city or county of San Francisco) appointed by
any
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person then sitting as Judge of the Superior Court of the State of California
in and for the County of Alameda and the three appraisers so appointed shall
thereupon proceed to determine the matter in question, and the decision of said
appraisers or a majority of them shall be final, conclusive and binding upon
both parties. The cost of such appraisal other than attorneys' fees shall be
shared equally by the parties hereto. Until determination of such rent by
agreement or appraisal as herein provided, semi-annual installments at the same
rate payable for the preceding year shall be paid on account thereof.
4. Net Lease; Additional Rent. It is intended by Landlord and Tenant
that this Lease be a net, net, net lease and that the Annual Net Rent payable by
Tenant shall be absolutely net to the Landlord. The Tenant agrees to pay
directly any and all costs and expenses in connection with the ownership or
leasing of the Premises. The Tenant covenants and agrees to pay to Landlord as
additional rent (the "Additional Rent"), promptly after Landlord's demand, any
such costs and expenses which cannot be paid directly by Tenant, but which are
paid by Landlord. The costs and expenses for which Tenant is responsible shall
include, but not be limited to, the following:
4.1. Utilities. All costs of water rent and sewer service charges
assessed against the Premises and all costs of electricity, gas, telephone and
other utilities used or consumed in the Premises, together with all taxes,
levies or other charges with respect to any such utilities.
4.2. Real Estate Taxes. All real property taxes, water, rents,
footage assessments, excise taxes, general and special assessments,
supplemental taxes and other governmental charges and impositions of every kind
to whomsoever assessed and whether now in being or not which may be assessed
upon, or payable for, or in respect of, the Premises or any part thereof for any
period wholly or partly within the term of this Lease, or with respect to the
use, occupancy or possession of the Premises at any time during the term hereof;
provided that any imposition relating to the fiscal period of the imposing
authority falling partly within and partly without the term hereof shall be
apportioned from the beginning or to the end of the term, as the case may be.
4.3. Personal Property Taxes. All taxes or assessments levied or
assessed during the term of this Lease against any leasehold interest of Tenant
or any personal property or trade fixtures of Tenant of any kind owned by Tenant
or placed in, upon or about the Premises by Tenant.
4.4. Fees, Charges and Expenses. Any and all fees, charges and
expenses of every kind and nature which Tenant shall incur or Landlord shall pay
or become obligated to pay because of or in connection with owning, operating,
leasing, managing and maintaining of the Premises including, without limitation,
the following: (i) all supplies and materials used, and labor charges
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incurred, in the operation, maintenance, decoration, repairing and cleaning of
the Premises; (ii) the cost of all equipment purchased or rented which is
utilized in the performance of Landlord's obligations hereunder, and the cost
of maintenance and operation of any such equipment; (iii) the cost of all
management, maintenance and service agreements for the Premises and the
equipment therein, including, without limitation, alarm service, security
service, window cleaning, and elevator maintenance; (iv) accounting costs,
including the cost of audits by certified public accountants, and legal and
engineering fees and expenses incurred in connection with the operation and
management of the Premises; (v) wages, salaries, commissions, and related
expenses of all on-site and off-site agents or employees engaged in the
operation, maintenance and security in the Premises; (vi) the cost of all
reasonable and necessary insurance coverage for the Premises; (vii) the cost of
repairs, replacements and general maintenance to the Premises, structural or
non-structural, including without limitation the mechanical, electrical and
heating ventilating and air-conditioning equipment and/or systems; (viii) any
and all exterior landscaping; (ix) cost of removal of trash, rubbish, garbage
and other refuse from the Premises as well as removal of ice and snow from the
sidewalks on or adjacent to the Premises; and (x) every other expense which
would be considered as an expense of maintaining, operating, leasing, insuring,
managing or repairing the Premises.
4.5 Fees and Expenses of the Trustee. All fees and expenses paid or
payable to the Trustee by the Partnership (including, without limitation, all
costs and expenses relating to indemnification of the Trustee) which are related
to any of the transactions or matters referred to in any of the Operative
Documents (defined below), but excluding, however, any such fees or expenses
incurred as a result of the wrong doing or gross negligence of the Partnership.
4.6 Interpretation. Nothing contained in this Paragraph 4 shall be
construed to impose any duty or obligation upon Landlord to provide any service
or benefit referred to this Paragraph. Landlord is under no duty or obligation
to provide any service or benefit other than as expressly required by the terms
of this Lease.
5. Payment of Rental. Tenant covenants and agrees to pay the rental
herein reserved and each installment thereof promptly when and as due. All
rentals shall be paid to Landlord at the address specified in Paragraph 30
hereof, or at such other place or to such appointee of Landlord, as Landlord
may from time to time designate in writing. All monies to be paid by Tenant to
Landlord hereunder, whether or not designated as rent shall be deemed to be
Additional Rent and shall be collectible as rent upon Landlord's demand.
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6. Default Charges. In the event Tenant fails to pay Landlord when due any
rental payment or other charge or sum due hereunder, Landlord may at its option
charge Tenant a late charge equal to eighteen percent (18%) per annum (or such
lesser amount as may be permitted by law) of the payment or other charge or sum
for the period the payment or other charge or sum is overdue, which late charge
shall be collectible and shall be payable by Tenant to Landlord upon demand.
7. Advancements. If Tenant should fail to perform any of the obligations
imposed upon it under this Lease, Landlord may, but shall not be obligated to,
make advances to perform the same on behalf of Tenant and all sums so advanced
shall immediately upon demand become due and payable under this Lease. Tenant
will repay on demand all sums so advanced on Tenant's behalf, plus any expenses
or costs incurred by Landlord, including reasonable attorneys' fees, with
interest thereon at the rate of eighteen percent (18%) per annum (or such
lesser amount as may be permitted by law), accruing from the date of demand.
8. Use. Tenant covenants and agrees to use and occupy the Premises solely
for industrial and mercantile purposes. Tenant agrees to comply with all
applicable zoning, use and other laws and regulations, and provide and install
at its own expense any additional equipment or alterations required to comply
with all such laws and regulations as required from time to time.
9. Compliance with Laws. Tenant covenants and agrees that it will, at its
own expense, observe, comply with and execute all laws, orders, rules,
directions, requirements and regulations of any and all governmental
departments, bodies, bureaus, agencies and officers, and all rules, directions,
requirements and recommendations of the local board of fire underwriters and
the fire insurance rating organizations having jurisdiction over the area in
which the Premises are situated, or other bodies or agencies now or hereafter
exercising similar functions in the area in which the Premises are situated, in
any way pertaining to the Premises or the use and occupancy thereof. In the
event Tenant shall fail or neglect to comply with any of the aforesaid laws,
orders, rules, directions, requirements or recommendations, Landlord or its
agents may enter the Premises and take all such action and do all such work in
or to the Premises as may be necessary in order to cause compliance with such
laws, orders, rules, directions, requirements or recommendations.
10. Representations and Warranties of Tenant. Tenant represents and
warrants that: (a) Tenant is a corporation duly organized and validly existing
in good standing under the laws of the state of its incorporation. (b) The
execution, delivery and performance of this Lease and all related instruments
and documents: (i) have been duly authorized by all necessary corporate action
on the part of Tenant; (ii) do not require the approval of any stockholder,
trustee or holder of any obligations of Tenant except such as have been duly
obtained; and (iii) do not and will
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not contravene any law, governmental rule, regulation or order now binding on
Tenant, or the charter or by-laws of Tenant, or contravene the provisions of, or
constitute a default under, or result in the creation of any lien or encumbrance
upon the property of Tenant under any indenture, mortgage, contract or other
agreement to which Tenant is a party or by which it or its property is bound;
provided, however, Tenant makes no such warranty or representation as to any
state or federal securities laws. (c) This Lease and all related instruments and
documents, when entered into, will constitute legal, valid and binding
obligations of Tenant enforceable against Tenant in accordance with the terms
thereof, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or others laws or equitable principals relating to or
limiting creditors rights generally, and except that the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought. (d) Tenant is not in default under
any material obligation for the payment of borrowed money, for the deferred
purchase price of property or for the payment of any rent under any lease
agreement which, either individually or in the aggregate, would materially
adversely affect the financial condition of Tenant or the ability of Tenant to
perform its obligations hereunder. (e) All of the information contained in the
schedules now or hereafter attached hereto as Exhibit B is true and correct. (f)
All of the representations and warranties made by Tenant in the Purchase and
Assignment Agreement of even date herewith (the "Purchase and Assignment
Agreement") between Landlord and Tenant were true and correct when made.
11. Assignment and Subletting. Tenant shall have the right, upon sixty (60)
days prior written notice to Landlord, to assign this Lease and to sublet the
Premises, for a period not to exceed the original term of this Lease, provided,
however, at the time of any such assignment or subletting (1) Tenant is not in
Default hereof; and (2) Tenant simultaneously assigns the Ground Sublease or
subleases the property let thereunder, as the case may be, to the same person or
entity as is assigned this Lease or sublet these Premises. Notwithstanding any
such assignment or subletting Tenant shall not be relieved of any liability
under this Lease. Additionally, no party other than Tenant may exercise the
renewal options set forth in Paragraph 1.2 above, unless Xxxx Corporation
("Guarantor") provides Landlord with a Guaranty Agreement satisfactory to
Landlord, guarantying payment and performance of such parties' obligations to
Landlord during any renewal term.
12. Insurance. Tenant shall during the entire term of this Lease, and any
extensions and renewals thereof, obtain and maintain at its sole cost and
expense, and keep in full force and effect, with Tenant, Landlord and all
mortgagees, holders of
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deeds of trust or assignees of Landlord named as insureds thereon, as their
respective interests may appear, the following insurance coverages:
12.1 Casualty Insurance. Tenant will insure the Premises against loss
by earthquake (if such insurance is commercially available at reasonably
economical premiums determined by Tenant in good faith) theft, fire, casualty
and extended coverage under insurance policies which shall be written in forms,
amounts and by companies satisfactory to the Landlord, provided, however, that
the amount of such insurance shall not be less than the full insurable value of
the Premises (and in all events not less than the amount necessary to avoid
co-insurance restrictions) as the same may increase but not decrease from time
to time. All insurance proceeds shall be payable to Landlord or Landlord's
designee.
12.2 Liability Insurance. Tenant shall obtain and maintain in full
force and effect public liability and property damage insurance in such amounts,
with such insurance companies, and upon policy forms acceptable to and approved
by Landlord, but in any event in an amount of not less than Ten Million Dollars
($10,000,000) per occurrence; provided, however, that Tenant may self-insure
not more than Eight Million Dollars ($8,000,000.00) of such required coverage
for so long as Guarantor's tangible net worth is not less than Three Hundred
Million Dollars ($300,000,000.00). As used herein, "tangible net worth" shall
mean the sum of the par or stated value of all outstanding capital stock,
additional paid in capital, surplus and undivided profits, less any amounts
attributable to good will, patents, copyrights, mailing lists, catalogs,
trademarks, bond discount and underwriting expenses, organizational expenses and
other intangibles, all as determined in accordance with generally accepted
accounting principles consistently applied.
13. Indemnification. Landlord shall not be liable to Tenant for any loss or
damage to Tenant or to any other person or to the property of Tenant
or of any other person unless such loss or damage shall be caused by
or result from the willful misconduct or gross negligence of Landlord.
Tenant shall defend and does hereby agree to indemnify and save
harmless Landlord and the Partnership, and their successors or
assigns, from all expenses, claims and demands of every kind, that may
be brought against it, them or any of them for or on account of any
damage, loss or injury to persons or property in or about the Premises
or the land on which the Premises are situated, or on account of any
damage, loss or injury resulting from or claimed to result from the
presence on the Premises of any hazardous chemical, toxic waste or
radioactive material, or arising from or out of Tenant's use or
occupancy thereof, or occasioned wholly or in part by any act or
omission of Tenant, its agents, servants, contractors, employees or
invitees, and from any and all costs and expenses, counsel fees, and
other charges which may be imposed upon
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Landlord and/or the Partnership, and their successors and assigns, or which it
or they may be obligated to incur in consequence thereof (including, without
limitation, indemnification of the Trustee pursuant to Sections 5.03 and 7.01
of the Trust Agreement).
14. Alterations. Tenant shall not make any alterations to the Premises,
the total cost of which for any one project exceeds Fifty Thousand Dollars,
($50,000), without the prior written consent of Landlord, which shall not be
unreasonably withheld. If Tenant shall desire to make such alterations, plans
for the same shall first be submitted to and approved by Landlord, and all work
and installations shall be performed by Tenant at its own expense in accordance
with approved plans. Tenant agrees that all such work shall be done in a good
and workmanlike manner, that the structural integrity of the Premises shall not
be impaired, and that no liens shall attach to the Premises by reason thereof.
Tenant agrees to obtain at Tenant's expense, all permits required for such
alterations. If requested by Landlord, Tenant shall, prior to commencing
construction, deposit with Landlord a completion bond in at least the estimated
cost of the proposed alteration in such form and with such surety as is
satisfactory to Landlord. Landlord may also make approval contingent upon
compliance with such other reasonable conditions as Landlord may stipulate.
15. Ownership of Alterations. Unless Landlord shall elect that all or
part or any alteration made by Tenant to the Premises shall remain on the
Premises after the termination of this Lease, the Premises shall be restored to
their original condition by Tenant before the expiration of this Lease at
Tenant's sole expense. Upon such election by Landlord, any such alterations,
improvements, betterments or mechanical equipment, including but not limited
to, heating and air conditioning systems, shall become the property of Landlord
as soon as they are affixed to the Premises, and all right, title and interest
thereof of Tenant shall immediately cease, unless otherwise agreed to in
writing by Landlord. Landlord shall have the sole right to collect any
insurance for any damage of any kind to any of the improvements placed upon the
Premises by Tenant. Tenant shall promptly pay any franchise, minor privilege or
other tax or assessment resulting directly or indirectly from any alterations
or improvements made by Tenant to the Premises. Tenant shall repair promptly,
at its own expense, any damage to the Premises caused by bringing into the
Premises any property for Tenant's use, or by the installation or removal of
such property, regardless of fault or by whom such damage shall be caused.
16. Repairs and Maintenance. The Premises hereby leased are leased to
Tenant "AS IS." Landlord shall be under no liability, nor (except as provided
in Paragraph 20 below) have any obligation to do any work or make any repairs
in or to the Premises, an any work which may be necessary to outfit the
Premises for Tenant's occupancy or for the operation of Tenant's business
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therein is the sole responsibility of Tenant and shall be performed by Tenant
at its own cost and expense. Tenant acknowledges that it has fully inspected
the Premises prior to the execution of this Lease, and Tenant further
acknowledges that Landlord has made no warranties or representations with
respect to the condition or state of repairs of the Premises. Tenant will,
during the term of this Lease, keep the Premises and appurtenances (including
windows, doors, plumbing, heating and electrical facilities and installations)
in good order and repair and will make all necessary repairs thereof at its own
expense, including all necessary repairs to the exterior walls and roof of the
Premises. Tenant shall also maintain any driveways and parking areas designated
for its exclusive use. Tenant will, at the expiration of the term of this
Lease, or at the sooner termination thereof by forfeiture or otherwise, deliver
the Premises in good order and condition, reasonable wear and tear excepted. In
the event Tenant shall not proceed promptly and diligently to make any repairs
to perform any obligations imposed upon it within forty-eight (48) hours after
receiving written notice from Landlord to make such repairs or perform such
obligation, then and in such event, Landlord may, at its option, enter the
Premises and do and perform the things specified in said notice, without
liability on the part of Landlord for any loss or damage resulting from any
such action by Landlord and Tenant agrees to pay promptly upon demand any cost
or expense incurred by Landlord in taking such action.
17. Default. Any of the following events shall constitute default (a
"Default") by Tenant:
17.1 Payment. If the rent (Annual Net Rent, or Additional Rent)
shall not be paid when and as due and shall be in arrears, in whole or in part
for a period of five (5) days after written notice from Landlord; or
17.2 Performance. If Tenant shall have failed to perform any
other term, condition, or covenant of this Lease on its part to be performed
for a period of thirty (30) days after written notice of such failure from
Landlord provided, however, if such failure cannot reasonably be remedied
within thirty (30) days then Tenant shall not be in default hereunder if Tenant
commences cure within thirty (30) days after notice and thereafter diligently
and continuously pursues cure; or
17.3 Abandonment. If the Premises are vacant, unoccupied or
deserted for a continuous period of sixty (60) days or more at any time during
the term of this Lease; or
17.4 Involuntary Bankruptcy. The entry of a decree or order for
relief by a court having jurisdiction against or with respect to Tenant in an
involuntary case under the federal bankruptcy laws or any state insolvency or
similar laws ordering the liquidation of Tenant or reorganization of Tenant or
of Tenant's business and affairs, or the appointment of a receiver,
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liquidator, assignee, custodian, trustee, or similar official for Tenant or any
of Tenant's property, including but not limited to the Premises, and the
failure to have such decree, order or appointment discharged or dismissed
within a period of ninety (90) days from the date of entry; or
17.5 Voluntary Bankruptcy. The commencement by Tenant of a
voluntary case under the Federal bankruptcy laws or any state insolvency or
similar laws or the consent by Tenant to the appointment or taking possession
by a receiver, liquidator, assignee, trustee, custodian or similar official for
Tenant or any of Tenant's property, including but not limited to the Premises,
or the making by Tenant of an assignment for the benefit of, creditors, or the
failure by Tenant generally to pay Tenant's debts as and when they become due;
17.6 Sale or Encumbrance. If Tenant's leasehold interest under
this Lease is sold under execution, attachment or decree of court to satisfy
any debt of Tenant, or if any lien (including a mechanic's lien) is filed
against Tenant's leasehold interest and is not discharged within ten (10) days
thereafter.
17.7 Failure to Maintain Insurance. If the Tenant fails to
maintain continuously in force the insurance coverages required by Paragraph 12
above, in strict conformity with the requirements of that Paragraph.
17.8 Breach of Warranty or Representation. If any warranty or
representation made by Tenant herein shall have been materially false or
misleading when made provided; however, that in the event that any of the
warranties or representations contained in Paragraph 10(e) shall have been
materially false or misleading when made, Landlord's sole remedy shall be
pursuant to Paragraph 38 below.
17.9 Cross Default. If the Tenant or Guarantor is in default
under the terms of any document, paper or agreement with Landlord or to which
Landlord is a party, including but not limited to the following documents
executed of even date herewith: the Purchase and Ground Lease Agreement among
the Damon Estate, Landlord and Tenant; the Purchase and Assignment Agreement;
the Agreement of Guaranty Nos. 1 and 2 between Guarantor and Landlord; and the
Ground Sublease (together with the Ground Lease collectively referred to as the
"Operative Documents").
18. Remedies Upon Default. In the event of the occurrence of any Default
as defined in Paragraph 17 hereof, Landlord, in addition to any and all legal
and equitable remedies it may have, shall have the following remedies:
18.1 Distrain. To distrain for any rent or additional rent in
default.
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18.2 Termination; Possession of Premises. At any time after
Default, without notice, to declare this Lease terminated and enter the
Premises with or without legal process; and in such event Landlord shall have
the benefit of all provisions of law now or hereafter in force respecting the
speedy recovery of possession from Tenant's holding over or proceedings in
forcible entry and detainer, and Tenant waives any and all provisions for
notice under such laws.
18.3 Damages. Notwithstanding such reentry and/or termination,
Tenant shall immediately be liable to Landlord for the sum of the following:
(i) all rent (whether Annual Net Rent or Additional Rent) then in arrears; (ii)
all other liabilities of Tenant and damages sustained by Landlord as a result
of Tenant's Default, including but not limited to, the reasonable costs of
reletting the Premises and any broker's commissions payable as a result
thereof; (iii) all of Landlord's costs and expenses (including reasonable
counsel fees) in connection with such Default and recovery of possession; (iv)
the difference between the rent reserved under this Lease (Net Annual Rent and
Additional Rent) for the balance of the term and the fair rental value of the
Premises for the balance of the term to be determined as of the date of
reentry; or at Landlord's option in lieu thereof, Tenant shall pay the amount
of the rent (Net Annual Rent or Additional Rent) reserved under this Lease at
the times herein stipulated for payment of such rent for the balance of the
term, less any amount received by Landlord during such period from others to
whom the Premises may be rented on such terms and conditions and at such
rentals as Landlord, in its sole discretion, shall deem proper; and (v) any
other damages recoverable by law. In the event Landlord brings any action
against Tenant to enforce compliance by Tenant with any covenant or condition
of this Lease, including the covenant to pay rent (Net Annual Rent or
Additional Rent), and it is judicially determined that Tenant has defaulted
in performing or complying with any such covenant or condition, then and in
such event, Tenant shall pay to Landlord all costs and expenses incurred by
Landlord in bringing and prosecuting such action against Tenant, including a
reasonable attorney's fee.
18.4 Liquidated Damages. In the event Landlord elects to sell
the Premises then, in lieu of Landlord's damages as set forth in Paragraph 18.3
above, Landlord shall be entitled to liquidated damages as follows: Landlord
may require Tenant to pay the Stipulated Loss Value determined as specified
below (the "Stipulated Loss Value") plus an amount equal to all rent (whether
Annual Net Rent or Additional Rent) apportioned through the date upon which the
Stipulated Loss Value is paid and all of Landlord's costs and expenses
(including reasonable attorney's fees) incurred by reason of Tenant's default.
The Stipulated Loss Value shall be calculated as the product of (a) the Total
Project Costs (defined to be the sum of all unreimbursed expenditures or
obligations made or incurred by Landlord, the Partnership or Maryland National
Leasing Corporation ("MNLC") in
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connection with the acquisition, financing, improvement, ownership or leasing of
the Premises, all personal property or fixtures therein or thereon and the real
property subject to the Ground Lease) and (b) the applicable percentage factor
set forth on the Schedule of Stipulated Loss Values on Exhibit "C" attached
hereto. The Stipulated Loss Value shall be payable on and determined as of the
next scheduled rent payment date after the date upon which Landlord gives
written notice of its election to require payment thereof. Upon payment of the
liquidated damages this Lease shall terminate.
At such time as Landlord closes on a sale of the Premises, Landlord
shall repay to Tenant so much of the amount Landlord received from Tenant on
account of the Stipulated Loss Value, pursuant to this Paragraph 18.4, as is
equal to the net proceeds of sale of the Premises less any costs or expenses
(including reasonable attorneys fees) Landlord incurred in connection with
reacquiring possession of, holding and selling the Premises. Landlord shall use
good faith efforts to maximize the net profit upon the sale of the Premises.
19. Damage or Destruction. If during the Lease term the Premises are
damaged or destroyed by fire or other casualty, Tenant shall promptly cause such
damage to be repaired or the Premises to be rebuilt. The Premises shall be
repaired or rebuilt to its condition immediately prior to the casualty. To the
extent insurance proceeds on account of such damage are made available to
Landlord and are free from the superior claim of any mortgagee or holder of any
deed of trust, Landlord shall, provided the tenant is not in Default hereof,
make such insurance proceeds available to Tenant, as reimbursement for Tenant's
expenses in connection with the repair or rebuilding. To the extent such
proceeds are insufficient to pay for the repairs or rebuilding required of
Tenant pursuant to this Paragraph 19, Tenant shall supply any and all additional
funds necessary to complete the required work. There shall be no abatement of
rent whether or not such fire or other casualty makes any portion or all of the
Premises untenantable. In the event such fire or other casualty damages or
destroys any of Tenant's leasehold improvements, alterations, betterments,
fixtures or equipment, Tenant shall cause the same to be repaired or restored at
Tenant's sole cost and expense.
20. Improvements to Premises. Landlord shall improve the Premises by the
construction of an approximately fifteen thousand (15,000) square foot
building. Tenant shall cause the construction of the building, as construction
manager for Landlord, in strict conformity with the terms and provisions of the
Purchase and Assignment Agreement. The building to be constructed shall at all
times be deemed to be part of the Premises and shall be subject to all terms
and conditions of this Lease. The building shall at all times be the property
of Landlord subject to the Tenant's rights under this Lease.
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21. Right of Entry. Landlord and its agents, servants, employees,
including any builder or contractor employed by Landlord, shall have the
absolute and unconditional right, license and permission, at any and all
reasonable times, to enter and inspect the Premises or any part thereof, and at
the option of Landlord, to make such reasonable repairs and/or changes in the
Premises as Landlord may deem necessary or proper and/or to enforce and carry
out any provision of this Lease.
22. Expiration of Term. It is agreed that the term of this Lease shall
expire and terminate at the end of the original term hereof or at the end of
any renewal term, as the case may be, without the necessity of any notice by or
to any of the parties hereto, unless otherwise provided herein. If Tenant fails
to vacate the Premises when required, Tenant shall hold the Premises as a
tenant from month to month, subject to all the other terms and conditions of
this Lease, but shall pay rent at an amount equal to double the Annual Net Rent
in effect just prior to such expiration or termination. Landlord shall, upon
such expiration or termination of this Lease, be entitled to the benefit of all
laws relating to the speedy recovery of possession of lands and tenements held
over by tenants that may be now in force or may hereafter be enacted.
23.1 Taking of a Material Part. If during the term of this Lease all
or any material part or the Premises shall be taken by or under power of
eminent domain then, at Landlords option, either (1) this Lease shall terminate
as of, and the rent (Annual Net Rent and Additional Rent) shall be apportioned
to and xxxxx from and after, the next rent payment date following the date of
taking and the Tenant shall pay to the Landlord, on such date the Stipulated
Loss Value together with rent (Annual Net Rent and Additional Rent) accrued
until and including such date plus any other monies due Landlord and any monies
referred to in this Paragraph 23, Tenant shall be entitled to receive any award
from the condemning authority up to the amount of the Stipulated Loss Value
payment, and Landlord shall use reasonable efforts to maximize any condemnation
award; or (2) this Lease shall terminate and the rent (Annual Net Rent and
Additional Rent) shall be apportioned to and xxxxx from and after the date
title vests in the condemning authority, and Tenant shall have no right to
participate in any award or damages for such taking and hereby assigns all of
its right, title and interest therein to Landlord.
23.2 Taking of Less than a Material Part. In the event less than a
material part of the Premises is taken, Landlord shall receive any condemnation
award and Tenant shall, at its expense, promptly make such repairs and
improvements as shall be
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necessary to make the remainder of the Premises adequate to permit Tenant to
carry on its business to substantially the same extent and with substantially
the same efficiency as before the taking. Landlord shall make available to
Tenant such condemnation proceeds as are available to Landlord and free from
the superior claim of any mortgagee or holder of any deed of trust, to defray
the cost of reconstruction or repair actually incurred by Tenant. In no event
shall Landlord be required to expend an amount in excess of the award received
by Landlord for such taking. In no event shall there be any abatement of the
rent hereunder (Annual Net Rent and Additional Rent).
23.3 Definitions. For purposes of this Paragraph, "taking" shall
include a negotiated sale or lease or transfer of possession of the Premises to
a condemning authority under bona fide threat of condemnation for public use.
For purposes of this Paragraph, "a material part of the Premises" shall mean
such part that the remainder thereof is, in Landlord's sole discretion, rendered
inadequate to be attractive to prospective tenants and support a rental stream
sufficient to provide Landlord with its required after tax return.
23.4 Tenant's Participation in Award. Nothing herein shall be deemed
to prevent Tenant from claiming and receiving from the condemning authority if
legally payable, compensation for the taking of Tenant's own tangible property
and such amount as may be payable by statute or ordinance toward Tenant's
damages for Tenant's loss of business and relocation expenses.
24. Subordination. This Lease shall be subject and subordinate to the
lien of any ground lease, mortgages and/or deeds of trust now or hereafter
placed or imposed upon the Premises, unless the ground lessor, the mortgagee of
such mortgage or the holder of such deed of trust elects to have Tenant's
interest hereunder superior to the interest of the ground lessor, mortgagee of
such mortgage or the holder of such deed of trust. This subordination provision
shall be self-operative and no further instrument of subordination shall be
required. Tenant agrees to execute any documents which are required to effect
such subordination. Tenant further hereby constitutes and appoints Landlord as
Tenant's attorney-in-fact to execute any such instrument for and on behalf of
Tenant. Upon Tenant's written request, Landlord will use reasonable efforts to
obtain from the holders of any mortgage or deed of Trust a non-disturbance
agreement, which would provide that in the event of any foreclosure sale
Tenant's possession of the Premises shall not be disturbed provided Tenant is
not in Default of this Lease.
25. Certification. Tenant shall, without charge and from time to time,
within ten (10) days following the written request of the Landlord, execute,
acknowledge and deliver a written certificate affirming, that to the best
knowledge, information and belief of the Tenant:
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(a) This Lease is unmodified and in full force and effect, or if there
have been any modifications, that the Lease is in full force and effect as
modified and stating the modifications.
(b) Whether or not there then exists any set-offs or defenses against
the enforcement of any of the agreements, terms, covenants or conditions of this
Lease and any modifications thereto upon the part of the Landlord (as
applicable) to be performed or complied with, and if so, specifying the same.
(c) The date, if any, to which the Annual Net Rent, Additional Rent
and any other charges payable hereunder has been paid in advance.
(d) The amount of the Total Project Costs through a certain date are
as set forth on Landlord's certificate.
(e) Any such other matters and facts as are reasonably requested by
Landlord.
2.6 Advertise For Rent or For Sale. During the last one hundred eighty
(180) days of the final term of this Lease (being that term following which no
renewal term exists or has been exercised by the Tenant), the Landlord may
maintain "to rent" or "for sale" signs at reasonable locations upon the exterior
of the Premises and may exhibit the Premises to any prospective tenants and
purchasers following reasonable advance notice to tenant.
27. Attornment. If Landlord assigns this Lease or the rents hereunder to
a creditor as security for a debt, Tenant shall, after notice of such assignment
and upon demand by Landlord or the assignee, pay all sums thereafter becoming
due Landlord hereunder to such assignee. Tenant shall also, upon receipt of such
notice, have all policies of insurance required hereunder endorsed so as to
protect the assignee's interest as it may appear and shall deliver such
policies, or certificates thereof, to the assignee. In the event the Premises
are sold at any foreclosure sale or sales, by virtue of any judicial proceedings
or otherwise, this Lease shall continue in full force and effect and Tenant
agrees, upon request, to attorn to and acknowledge the foreclosure purchaser or
purchasers at such sale as the Landlord hereunder.
28. Non-Waiver of Future Enforcement. The receipt of rent by Landlord with
knowledge of any breach of this Lease by Tenant, or of any default on the part
of Tenant in the observance or performance of any of the conditions or covenants
of this Lease, shall not be deemed to be a waiver of any provisions of this
Lease. No failure on the part of Landlord to enforce any covenant or provision
herein contained nor any waiver of any right hereunder by Landlord, shall
discharge or invalidate such covenant or provision or affect the right of
Landlord to enforce the same in the event of any subsequent default. The receipt
by
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Landlord of any rent or any sum of money or any other consideration hereunder
paid by Tenant after the termination, in any manner, of the term herein
demised, will not destroy, or in any manner impair the efficacy of any such
notice of termination as may have been given hereunder by Landlord to Tenant
prior to the receipt of any such sum of money or other consideration, unless so
agreed to in writing and signed by Landlord. Neither acceptance of the keys
nor any other act or thing done by Landlord or any agent or employee during the
term herein demised shall be deemed to be an acceptance of a surrender of said
Premises, excepting only an agreement in writing signed by Landlord accepting
or agreeing to accept such surrender.
29. Recordation of Lease. Tenant agrees that it will, upon Landlord's
request, execute a Memorandum of this Lease in a form suitable for recording
under applicable law. The parties shall divide equally all costs of recordation.
30. Notice. Any notice required or permitted by or in connection with
this Lease shall be in writing and made by hand delivery or by over night
delivery service or by certified mail, return receipt requested, postage
prepaid, addressed to the respective parties at the appropriate address set
forth below or to such other address as may be hereafter specified by written
notice by any party, and shall be considered given as of the date of hand
delivery or as of one (1) day after sending overnight delivery service or three
(3) days after the date of mailing, independent of the date of delivery, as the
case may be:
If to Tenant: Physics International Company
0000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxx Xxxxxxx, XX 00000
Attn: X.X. Xxxxxxxx, Xx.
Copy to:
Xxxx Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Secretary
If to Landlord: The Connecticut National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Bond and Trustee Administration
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Copy to:
Maryland National Leasing Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Vice President-Operations
Copy to:
Xxxx Financial Services, Inc.
000 Xxxx Xxxxx Xxxx
P.O. Box 1355
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Corporate Secretary
Copy to:
Xxxx X. Xxxxx, Esquire
Ober, Kaler, Xxxxxx & Xxxxxxx
1600 Maryland National Bank Building
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
31. Severability. It is agreed that, for the purpose of any suit brought
or based on this Lease, this Lease shall be construed to be a divisible
contract, to the end that successive actions may be maintained thereon as
successive periodic sums shall mature or be due hereunder, and it is further
agreed that failure to include in any suit or action any sum or sums then
matured or due shall not be a bar to the maintenance of any suit or action for
the recovery of said sum or sums so omitted; and Tenant agrees that it will not
in any suit or suits brought or arising under this Lease for a matured sum for
which judgment has not previously been obtained or entered, plead, rely on or
interpose the defenses of res judicata, former recovery, extinguishment,
merger, election of remedies or other similar defense as a defense to said suit
or suits. If any term, clause or provision of this Lease is declared invalid by
a court of competent jurisdiction, the validity of the remainder of this Lease
shall not be affected thereby but shall remain in full force and effect.
32. Non-Waiver. It is understood and agreed that nothing herein shall be
construed to be a waiver of any of the terms, covenants or conditions herein
contained, unless the same shall be in writing, signed by the party to be
charged with such waiver and no waiver of the breach of any covenant herein
shall be construed as a waiver of such covenant or any subsequent breach
thereof. No mention in this Lease of any specific right or remedy shall
preclude Landlord from exercising any other right or from having any other
remedy or from maintaining any action to which it may be otherwise entitled
either at law or in equity.
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33. Successors and Assigns. Except as otherwise herein provided, this
Lease and the covenants and conditions herein contained shall inure to the
benefit of and be binding upon Landlord and Tenant and their respective,
successors and assigns. In the event Landlord's interest under this Lease is
assigns. In the event Landlord's interest under this Lease is transferred or
assigned and written notice thereof is given to Tenant, Landlord, or any
subsequent assignee or transferee of Landlord's interest under this Lease who
gives such notice to Tenant shall automatically be relieved and released from
and after the date of such transfer or conveyance from all liability hereunder.
The liability of Landlord, its successors and assigns, under this Lease shall at
all times be limited solely to Landlord's interest in the land and improvements
comprising the Premises and in the event the owner of Landlord's interest in
this Lease is at any time an individual, partnership, joint venture or
unincorporated association, Tenant agrees that such individual or the members or
partners of such partnership, joint venture or unincorporated association shall
not be personally or individually liable or responsible for the performance of
any of Landlord's obligation hereunder.
34. Captions. The captions of the various sections of this Lease are for
convenience only and are not a part of this Lease. Such captions shall not be
construed to define or limit any of the provisions of this lease.
35. Final and Entire Agreement. This Lease contains the final and entire
agreement between the parties hereto, and neither they nor their agents shall be
bound by any terms, conditions or representations not herein written.
36. Purchase and Assignment Agreement and Ground Sublease. The covenants,
duties and obligations of Tenant hereunder shall be supplemental to the
covenants, duties and obligations of the Tenant under the Purchase and
Assignment Agreement and Ground Sublease. No provision of this Lease shall ever
be construed to restrict, limit or modify any covenant, duty or obligation of
the Tenant under the Purchase and Assignment Agreement and Ground Sublease. All
of Landlord's rights and remedies hereunder shall be cumulative and supplemental
to Landlord's rights and remedies under the Ground Sublease and the Purchase and
Assignment Agreement. In the event the Landlord's rights under the Ground Lease
are terminated for any reason, then Landlord may elect to terminate this Lease
simultaneously with the termination of Landlord's rights under the Ground Lease.
37. Governing Law. The laws of the State of California shall govern the
rights and obligations of the parties to this Lease and the interpretation,
construction and enforceability thereof and any and all issues relating to the
transactions contemplated in this Lease. Tenant consents to the jurisdiction of
the courts of State of Maryland, including the jurisdiction of the United States
District Court for the District of Maryland to the extent a jurisdictional basis
exists, and agrees that venue
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shall be proper in any county in the State of Maryland, in the City of Baltimore
or in the United States District Court for the District of Maryland if suit is
filed to enforce, interpret or construe this Lease.
38. Tax Indemnification.
38.1 General. Tenant's indemnification obligations hereunder shall
not extend to changes in applicable corporate income tax rates. If by reason of
the misrepresentation of or breach by Tenant, of the warranty and representation
set forth in Section 10 (e) hereof, Landlord in computing its taxable income or
liability for tax, shall either lose, or shall not have, or shall lose the right
to claim, or there shall be disallowed or recaptured, for Federal and/or state
income tax purposes, in whole or in part, the benefit of ACRS Deductions;
hereinafter referred to as a "Loss"; then Tenant shall pay Landlord the Tax
Indemnification Payment as additional rent. As used herein, "ACRS Deductions"
shall mean the deductions under the Accelerated Cost Recovery System with
respect to the acquisition cost of any item of the Premises in accordance with
the accelerated method set forth in Section 168 (as in effect on the date such
item of the Premises is first placed in service) of the Internal Revenue Code of
1986, as now or hereafter amended, for property assigned to the depreciation
categories specified in Exhibit B attached hereto; and "Tax Indemnification
Payment" shall mean such amount as, after consideration of (i) all taxes
required to be paid by Landlord in respect of the receipt thereof under the laws
of any governmental or taxing authority in the United States, and (ii) the
amount of any interest or penalties which may be payable by Landlord in
connection with the Loss or contesting the Loss pursuant to Paragraph 38.2
hereof, shall be required to cause Landlord's after-tax net return (the "Net
Return") to be equal to, but no greater than, the Net Return contemplated
consistently with current tax laws as of the date of this Lease.
Landlord promptly shall notify Tenant in writing of such Loss and
Tenant shall pay to Landlord the Tax Indemnification Payment within thirty (30)
days of such notice unless such Loss is contested pursuant to Paragraph 38.2
hereof. For these purposes, a Loss shall occur upon the earliest of (i) the
happening of any event (such as disposition or change in use of the Premises)
which will cause such Loss; (ii) the payment by Landlord to the Internal Revenue
Service or State taxing authority of the tax increase resulting from such Loss;
(iii) the date on which the Loss is realized by Landlord; or (iv) the adjustment
of the tax return of Landlord to reflect such Loss.
The tax indemnification provided in this Section 38 is for the benefit
of the Trustee, the Partnership, Xxxx Financial Services, Inc. ("OFS") and MNLC.
As used in this Section 38, the
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term "Landlord" shall mean and include the Trustee, the Partnership, OFS and
MNLC, and the consolidated Federal taxpayer group of which each is a member (as
applicable).
38.2 Contest. If the Internal Revenue Service makes a claim against
Landlord which, if successful, would require Tenant to make a Tax
Indemnification Payment, Landlord agrees to contest the claim on request of
Tenant subject to the following conditions:
(a) Landlord agrees promptly after becoming aware thereof to
notify Tenant of any such claim. Tenant agrees that, in the event it desires the
claim to be contested, it shall request Landlord to contest the claim within
thirty (30) days after such notice from Landlord. Landlord agrees not to make
any payment of any tax which is the subject of the claim before it gives the
notice and during the thirty (30) day period after it gives the notice.
(b) Landlord shall consult with Tenant regarding the
commencement and prosecution of any and all administrative proceedings with the
Internal Revenue Service in contesting the claim. Landlord reserves the right to
decline to pursue administrative proceedings. If administrative proceedings are
not pursued or are not successful, Landlord shall, at the request of Tenant,
contest the claim by either paying the tax claimed and suing for a refund in the
appropriate court or contesting the claim in the United States Tax Court and, if
necessary, bring appropriate appeals.
(c) Prior to taking any such action and prior to each appeal
from any adverse determination, Landlord shall have received from Tenant an
opinion of outside tax counsel of recognized standing, which counsel is
reasonably acceptable to Landlord, to the effect that on the basis of law and
fact a meritorious defense exists to such claim or that there is a meritorious
basis for such refund claim, identifying such defense or basis, as the case may
be. Subject to the foregoing, in no event will Landlord compromise or settle the
claim or cease to contest the claim without the written consent of Tenant
(provided, however, that Landlord may so compromise, settle or cease to contest
if it waives in writing its right to an indemnity for any Loss resulting from
such claim). Tenant agrees to reimburse Landlord for all reasonable costs
incurred by Landlord as a result of contesting the claim and to pay all
reasonable costs and expenses which Landlord may incur in contesting the claim.
These costs and expenses shall include, without limitation, reasonable
attorneys' and accountants' fees and disbursements. If Tenant elects to pay the
tax claimed and xxx for a refund, Tenant shall provide Landlord with sufficient
funds (as an interest free loan) to pay the tax.
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(d) If any such claim referred to above shall be made by the Internal
Revenue Service and Tenant shall have requested Landlord to contest such claim
and otherwise has complied with its obligations under this sub-part, Tenant's
liability for indemnification hereunder shall become fixed upon final
determination of the liability of Landlord. At such time, Tenant shall become
obligated for the payment of any indemnification hereunder resulting from the
outcome of such contest. If Tenant has provided funds to Landlord (as an
interest free loan) to pay the tax pursuant to the foregoing paragraph) and
Landlord subsequently receives a refund of tax in connection with such final
determination (or would have received a refund had any payment made from funds
provided by Tenant not been applied in payment of a tax liability determined to
be owing by Landlord for which Tenant is not required to make a Tax
Indemnification Payment), such refund or an amount equal to such amount so
applied, together with any interest also received (or which would have been
received) by Landlord and fairly attributable to such refund of tax or amount so
applied, will be paid over to Tenant, to the extent of Tenant's payment to
Landlord.
39. Tenant's Option to Terminate.
39.1 Exercise. So long as Tenant is not in default hereof, then in
the event Tenant in good faith determines that it is uneconomic for Tenant to
continue leasing the Premises, Tenant may terminate this Lease effective upon
any date on which the next installment of Annual Net Rent is due after December
31, 1988 (the "Tenant's Termination Date"), provided (i) Tenant gives Landlord
at least one hundred eighty (180) days' prior written notice, and (ii) Tenant
pays Landlord the Stipulated Loss Value calculated pursuant to Paragraph 39.2
hereof), plus all rent (Annual Net Rent and Additional Rent) due as of that
date and any other monies then owed Landlord by Tenant. Landlord may (at its
sole discretion) elect to sell the Premises to a third party or to determine
the fair value of the Premises and notify Tenant thereof in writing.
39.2 Adjustment for Fair Market Value. If Landlord elects to
determine the fair market value of the Premises and notify Tenant thereof in
writing and (a) if Tenant accepts Landlord's determination of fair market
value, on the Tenant's Termination Date, Tenant shall pay Landlord the amount
(if any) by which the Stipulated Loss Value exceeds the agreed fair market
value, or (b) if Tenant does not accept Landlord's determination of fair market
value, on the Tenant's Termination Date, Landlord shall convey to Tenant all
right, title and interest of Landlord in and to the Premises by grant deed upon
receipt by Landlord from Tenant of all sums due pursuant to Paragraph 39.1
hereof.
39.3 Subsequent Sale. If Landlord does not elect to determine the
fair market value and Landlord sells the Premises within two (2) years after
the Tenant's Termination Date, then at
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29
such time as Landlord closes on a sale of the Premises, Landlord shall apply
the net proceeds of sale of the Premises (less any costs or expenses, including
reasonable attorneys' fees, incurred by Landlord in connection with reacquiring
possession, holding and selling the Premises) to reimburse Tenant for the
amount paid by Tenant to Landlord as Stipulated Loss Value under Paragraph
39.1; solely to the extent of such Stipulated Loss Value actually received by
Landlord from Tenant. Landlord shall use its good faith efforts to maximize the
net proceeds upon any sale of the Premises.
40. Landlord's Option to Terminate.
40.1 Exercise. In the event there shall be any change in the
ownership of the capital stock or voting power of Guarantor and as a result
thereof any one or more of Guarantor's senior lenders shall call any senior
loan indebtedness, then Landlord may, upon thirty (30) days' prior written
notice, terminate this Lease and cause Tenant to pay to Landlord the Stipulated
Loss Value (or the alternative amount required pursuant to Paragraph 40.2
hereof), determined and payable as of the date upon which the next installment
of Annual Net Rent is due, plus all rent (Annual Net Rent and Additional Rent)
prorated through the date of termination (the "Landlord's Termination Date")
and any other monies then due Landlord from Tenant. Notwithstanding the payment
of the Stipulated Loss Value, Tenant shall be permitted to remain in possession
of the Premises for up to one hundred fifty (150) days from Landlord's notice,
subject to all the terms and conditions of this Lease but Tenant shall continue
to pay Annual Net Rent in the amount last due prior to Landlord's notice.
Landlord may (at its sole discretion) elect to sell the Premises to a third
party or to determine the fair market value of the Premises and notify Tenant
thereof in writing.
40.2 Adjustment for Fair Market Value. If Landlord elects to
determine the fair market value of the Premises and notify Tenant thereof in
writing and (a) if Tenant accepts Landlord's determination of fair market
value, on the Landlord's Termination Date, Tenant shall pay Landlord the amount
(if any) by which the Stipulated Loss Value exceeds the agreed fair market
value, or (b) if Tenant does not accept Landlord's determination of fair market
value, on the Landlord's Termination Date, Landlord shall convey to Tenant all
right, title and interest of Landlord in and to the Premises by grant deed upon
receipt by Landlord from Tenant of all sums due pursuant to Paragraph 40.1
hereof.
40.3 Subsequent Sale. If Landlord does not elect to determine the
fair market value and Landlord sells the Premises within two (2) years after
the Landlord's Termination Date, then at such time as Landlord closes on a sale
of the Premises, Landlord shall apply the net proceeds of sale of the Premises
(less any costs or expenses, including reasonable attorneys'
-22-
30
fees, incurred by Landlord in connection with reacquiring possession, holding
and selling the Premises) to reimburse Tenant for the amount paid by Tenant to
Landlord as Stipulated Loss Value under Paragraph 40.1, solely to the extent of
such Stipulated Loss Value actually received by Landlord from Tenant. Landlord
shall use its good faith efforts to maximize the net proceeds upon any sale of
the Premises.
41. Quiet Enjoyment. Landlord covenants that, upon the payment of the
rent (Annual Net Rent and Additional Rent) herein, Tenant shall have and hold
the Premises, free from any interference from the Landlord, but subject to the
terms of this Lease, of any mortgage, deed of trust, or other security
instrument now existing or hereafter placed on the Premises or any portion
thereof.
42. Survival of Obligations. All of Tenant's duties and obligations
which accrue during the term of this Lease shall survive the expiration of
earlier termination of this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal
as of the day and year above written with the specific intention that this
Lease constitute an instrument under seal.
WITNESS/ATTEST: LANDLORD:
THE CONNECTICUT NATIONAL BANK,
not individually but solely in its
capacity as Trustee
By: [SEAL]
------------------------------- --------------------------
TENANT:
PHYSICS INTERNATIONAL COMPANY
[SIG] By: [SIG] [SEAL]
------------------------------- --------------------------
-23-
31
ACKNOWLEDGMENTS
STATE OF ______________, CITY OF ________________, TO WIT:
I HEREBY CERTIFY that on this ___________ day of December, 1986, before me
the subscriber, a Notary Public of the State and subdivision aforesaid,
personally appeared _________________________, who acknowledged ______self to
be the _______________________ of THE CONNECTICUT NATIONAL BANK, not
individually but solely in its capacity as trustee, and that __he as such
____________________________, being so authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
Trustee by _____self as __________________________ in my presence.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
-------------------------------------
NOTARY PUBLIC
My Commission Expires:
STATE OF CALIF., COUNTY OF ALAMEDA TO WIT:
I HEREBY CERTIFY that on this 29th day of December, 1986, before me the
subscriber, a Notary Public of the State and subdivision aforesaid, personally
appeared XXXXX XXXXXXXX, XX., who acknowledged himself to be the Senior Vice
President of PHYSICS' INTERNATIONAL COMPANY, a California corporation and that
he as such Senior Vice President, being so authorized to do, executed the
foregoing instrument for the purpose therein contained by signing in my
presence the name of the corporation by himself as Senior Vice President.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ XXXXXXXX XXXXXXXX
-------------------------------------
NOTARY PUBLIC
My Commission Expires: April 7, 1987
[NOTARY PUBLIC SEAL]
-24-
32
EXHIBIT "A" TO FACILITY LEASE
I. GENERAL NARRATIVE
As a condition of entering into this Facility Lease, Landlord and Tenant
have agreed that Landlord will acquire the Facility and make certain
improvements to the Facility which are required by the Tenant.
Landlord and Tenant have further agreed that the rentals to be charged for
the Facility will be established at a reasonable level at the commencement of
the Facility Lease and will be increased on a periodic basis to reflect the
increased investment in the Facility by the Landlord as the improvements are
being completed.
For portions of the facility purchased and leased in 1987, the Initial
Rentals described below will be increased based upon the cost of 1987
improvements to the Facility as described in the table below.
Base Lease Term Construction Period
---------------------------------------------- --------------------------------
Daily Rent Payment
as a Percentage of
Year Property Semi-Annual Rent Payment Acquisition Cost
is Placed Type of as a Percentage of (Due on 6/30/87 & Construction
in Service Property Acquisition Cost Base Lease Period 12/31/87) Period
-------------- -------- --------------------------- ----------------- ------------------ ------------
Payments Lease Rate Factor
-------- -----------------
1987 Land Improve- 1 - 19 5.991629% December 31, 1987 0.036111% Date of Acquisition
ments 20 - 38 7.323102 through December 31, 2006 through December 31, 1987
1987 Real Estate 1 - 19 6.602842% December 31, 1987 0.036111% Date of Acquisition
70 - 38 8.070140 through December 31, 2006 through December 31, 1987
Landlord and Tenant have further agreed that additional rental adjustments
will be made in order to minimize Tenant's rents. Landlord in good faith will
calculate rental adjustments periodically and in calculating this adjustment
Landlord will consider:
1. The cost or projected costs of improvements to the Facility.
2. The dates that improvements are paid for or anticipated to be paid
for and placed in service.
3. The tax benefits to be realized by the Landlord on the Facility and
on the improvements.
4. Actual rates of return available in the market to Landlord on similar
investments.
5. Transaction expenses incurred by Landlord related to the ownership or
leasing of the property.
Xxxxx Xxxxxx will in good faith review the calculations performed by the
Landlord, and will certify to the Tenant that the adjusted rent is a "fair
market rent" based upon the costs, dates, tax benefits and market rates of
return available to Landlords on similar investments.
II. INITIAL RENTALS
The Facility rents to be paid by Tenant, prior to the adjustments referred
to above are:
For the first ten years: 20 semi-annual payments each at $240,432.73
For the second ten years: 20 semi-annual payments each at $293,862.22
III. LIMITATION OF RENTS
Landlord and Tenant further agree that in no event will net present value
of the Annual Net Rents for the Facility be greater than $10 million,
discounting the Annual Net Rents at an annual discount factor of 10%.
33
EXHIBIT "B" TO FACILITY LEASE
DEPRECIATION
ACQUISITION CATEGORY AND DATE PLACED
DESCRIPTION COST ACRS CLASS LIFE IN SERVICE
-----------------------------------------------------------------------------------------------------
1. All buildings and improvements $1,850,000 "Real Estate" 12/29/86
situated on lands hereinafter 19 Years
described in Exhibit B-1 attached
hereto, which lands are situated in
the City of San Leandro, County
of Alameda, State of California
which are and shall remain real
property.
2. Improvements made to the buildings $2,078,300 "Real Estate" 12/29/86
referred to above, described more 19 Years
completely in Exhibit B-2, attached
hereto.
3. Improvements made to the buildings To be determined "Real Estate" To be determined
referred to above, to be made after and reported in 31.5 Years and reported in
1986. Such improvements are generally later attachments later attachments
described in Exhibit B-3, attached. to this Exhibit B. to this Exhibit B.
4. Improvements made to the land To be determined "Land To be determined
referred to above, to be made after and reported in Improvements" and reported in
1986. Such improvements are generally later attachments 15 Years later attachments
described in Exhibit B-3, attached. to this Exhibit B. to this Exhibit B.
34
EXHIBIT B-1 (Page 1 of 3)
All buildings and improvements situated on the hereinafter described lands
situated in the City of San Leandro, County of Alameda, State of California
which are and shall remain real property.
PARCEL 1:
Beginning at a point on the northwestern line of the 66.29 acre tract of land
fifthly described in the Decree of Distribution in the Matter of the Estate of
Xxxxxxx XxXxx, deceased, in the Superior Court, Contra Costa County, Probate
No. 11478, certified copy of which decree was recorded November 22, 1948, in
Book 5660 OR, page 403 (AC/88342), distant thereon north 62 degrees 30' east
631.30 feet from the northeastern line of Merced Street; thence along said line
of said 66.92 acre tract, north 62 degrees 30' east 315.65 feet; thence south
27 degrees 30' east 690 feet to the direct extension northeasterly of the
northwestern line of the land described as Parcel III in the deed from Oakland
Title Insurance Company to Southern Pacific Company, recorded March 23, 1954,
in Book 7278 OR, page 297, (AJ/23953); thence along said direct extension south
62 degrees 30' west 315.65 feet to the most northern corner of said Parcel III
in the last mentioned deed; and thence north 27 degrees 30' west 690 feet to
the point of beginning.
PARCEL 2:
Portion of the 66.92 acre tract of land fifthly described in the Decree of
Distribution in the Matter of the Estate of Xxxxxxx XxXxx, deceased, in the
Superior Court of Xxxxxx Xxxxx Xxxxxx, Xxxxxxx Xx. 00000, a certified copy of
which decree was recorded November 22, 1948, in Book 5660 OR, page 403
(AC/88342), described as follows:
Beginning at the intersection of the northeastern line of Merced Street, 60
feet wide, with the northwestern line of said 66.92 acre tract, thence along
the northwestern line of said 66.92 acre tract north 62 degrees 30' east 631.30
feet; thence south 27 degrees 30' east 690 feet; thence south 62 degrees 30'
west 631.30 feet to said line of Merced Street; thence along the last named
line north 27 degrees 30' west 690 feet to the point of beginning.
Excepting therefrom that portion quitclaimed to the City of San Leandro by
instrument recorded October 10, 1957, Book 8490 OR, page 595, (AM/100857).
35
EXHIBIT B-1 (Page 2 of 3)
[EXISTING SITE PLAN AND ANALYSIS]
36
EXHIBIT B-1 (Page 3 of 3)
STRUCTURAL PLAN - MAIN BUILDING
37
EXHIBIT B-3
FACILITY RENOVATION PLAN
MAJOR COST CONSTRUCTION ELEMENTS
ELEMENT COST
1. Roofing Repair/Replacement $ 40,700
2. Seismic/Structural Improvements $ 71,500
3. HVAC System Repairs/Replacements $1,500,000
4. Interior Remodeling & Renovation $1,820,000
5. Exterior Bldg. Repairs/Modifications $ 213,500
6. Site Preparation, Landscaping
Paving, Utilities $ 710,700
7. New Building (Complete) $ 975,000
8. "Soft Costs" incl., A&E, Project
Management, Fees/Permits, etc. $ 740,300
----------
TOTAL $6,071,700
38
FACILITY LEASE
SCHEDULE OF STIPULATED LOSS VALUES
Stipulated Loss Value
as a Percentage of
Original Acquisition Cost
-------------------------------------------
Rental Payment 1986 Real 1987 Land 1987 Real
Date Estate Improvements Estate
-------------- --------- ------------ ---------
Prior to First Payment 105.73% 106.02% 106.02%
June 30, 1987 109.96 106.02 106.02
December 31, 1987 110.48 106.02 106.02
June 30, 1988 109.58 106.20 105.83
December 31, 1988 109.89 106.74 105.75
June 30, 1989 110.13 107.20 105.64
December 31, 1989 110.28 107.57 105.49
June 30, 1990 110.37 107.85 105.31
December 31, 1990 110.38 108.05 105.09
June 30, 1991 110.32 108.17 104.84
December 31, 1991 110.18 108.22 104.84
June 30, 1992 109.98 108.19 104.23
December 31, 1992 109.71 108.09 103.86
June 30, 1993 109.38 107.92 103.46
December 31, 1993 108.98 107.67 103.02
June 30, 1994 108.53 107.37 102.53
December 31, 1994 108.00 106.97 102.01
June 30, 1995 107.42 106.51 101.44
December 31, 1995 106.78 105.96 100.83
June 30, 1996 106.08 105.33 100.17
December 31, 1996 105.32 104.62 99.48
June 30, 1997 103.38 103.82 98.75
December 31, 1997 101.35 101.85 96.73
June 30, 1998 99.24 99.75 94.63
December 31, 1998 97.03 97.53 92.45
June 30, 1999 94.73 95.19 90.20
December 31, 1999 92.34 92.74 87.89
June 30, 2000 89.86 90.16 85.50
December 31, 2000 87.28 87.46 83.06
June 30, 2001 84.63 84.63 80.55
December 31, 2001 81.85 81.69 77.99
June 30, 2002 79.00 78.62 75.37
December 31, 2002 76.06 75.47 72.70
June 30, 2003 73.02 72.25 69.98
December 31, 2003 69.91 69.01 67.22
June 30, 2004 66.69 65.73 64.42
December 31, 2004 63.40 62.46 61.60
June 30, 2005 60.01 59.17 58.75
December 31, 2005 56.56 55.90 55.90
June 30, 2006 53.09 52.70 53.01
December 31, 2006 50.00 50.00 50.00
If renewed, any Payment
period after December 31,
2006 50.00 50.00 50.00
If, as contemplated in Exhibit A to the Lease, the Annual Net Rents are
adjusted, then Landlord may adjust the above stipulated loss values to reflect
such adjustments. In addition, any prepayment fees required on any debt used to
finance the facility shall be added to the stated stipulated loss values.
(Assuming Tenant is not in default. It is understood that Tenant has no
liability for the Stipulated Loss Values after expiration of
39
FACILITY LEASE
Amendment No. 3
40
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3
to Facility Lease under seal as of the day and year first above written with
specific intention that this Amendment No. 3 to Facility Lease constitute an
instrument under seal.
WITNESS/ATTEST: LANDLORD:
THE CONNECTICUT NATIONAL BANK,
not individually but solely
in its capacity as Trustee
________________________ By:__________ _____________ (SEAL)
TENANT:
PHYSICS INTERNATIONAL COMPANY
________________________ By:__________ _____________ (SEAL)
Pursuant to Section 6(b) of that certain Assignment of Lease and Agreements
from The Connecticut National Bank, not individually but solely as trustee
under the Trust Agreement with Merced Associates, to the undersigned, dated as
of March 9, 1987, the undersigned consent to the foregoing amendment to the
Facility Lease.
WITNESS/ATTEST: THE FIRST NATIONAL BANK OF
BOSTON, not individually but
solely as Trustee
________________________ By:__________ _____________ (SEAL)
________________________ ____________________________
Xxxxxx X. Xxxx, Xx., not
individually but solely as
Trustee
41
TABLE TO EXHIBIT A
Page One
1987
1986 Real Estate ---------------------------------------------------
--------------------------- Land Improvements Real Estate
% of ----------------------- ----------------------
Capitalized % of % of
Date Cost Amount Cap. Cost Amount Cap. Cost Amount
----------------- ----------- ----------- --------- ---------- --------- ---------
June 30, 1987 5.47000 $214,878.01 Interim rent at .028305% per day
December 31, 1987 4.18500 $164,399.35 Interim rent at 0.28305% per day
June 30, 1988 5.47000 $214,878.01 4.384820% $24,360.44 7.291380% $111,074.72
December 31, 1988 4.18500 164,399.35 7.245606 40,253.90 5.512579 83,976.98
June 30, 1989 5.47000 214,878.01 5.143938 28,577.81 7.764448 118,281.29
December 31, 1989 4.18500 164,399.35 6.486488 36,036.53 5.039511 76,770.41
June 30, 1990 5.47000 214,878.01 5.081503 28,230.95 7.764448 118,281.29
December 31, 1990 4.18500 164,399.35 6.548910 36,383.32 5.039511 76,770.41
June 30, 1991 4.26393 167,499.96 5.013276 27,851.91 7.764448 118,281.29
December 31, 1991 5.39107 211,777.40 6.617150 36,762.43 5.039511 76,770.41
June 30, 1992 4.12892 162,196.36 4.938699 27,437.58 7.764448 118,281.29
December 31, 1992 5.52609 217,081.39 6.691727 37,176.76 5.039511 76,770.41
June 30, 1993 4.06395 159,644.15 4.857176 26,948.67 7.764448 118,281.29
December 31, 1993 5.59105 219,633.22 6.773237 37,629.60 5.039511 76,770.41
June 30, 1994 3.99294 156,854.66 4.768076 26,489.66 5.039511 76,770.41
December 31, 1994 5.66207 222,423.10 6.862338 38,124.61 7.764448 118,281.29
June 30, 1995 3.91532 153,805.52 7.887850 43,821.97 4.912807 74,840.24
December 31, 1995 6.81246 267,613.87 3.742576 20,792.37 7.891164 120,211.65
June 30, 1996 8.22670 323,169.46 8.750517 48,614.64 4.774314 72,730.47
December 31, 1996 3.57386 140,391.94 4.172178 23,179.07 8.029657 122,321.41
June 30, 1997 8.45360 332,082.77 10.329078 57,384.53 4.622936 70,424.43
December 31, 1997 3.34696 131,478.63 3.885875 21,588.48 9.603689 146,299.74
June 30, 1998 8.70264 341,865.81 10.643299 59,130.23 11.540986 175,811.95
December 31, 1998 3.09792 121,695.59 3.571654 19,842.79 4.108291 62,584.49
June 30, 1999 8.97597 352,603.03 10.988167 61,046.19 11.903470 181,333.92
December 31, 1999 2.82459 110,958.37 3.226786 17,926.83 3.745820 57,062.71
June 30, 2000 9.27596 364,387.54 11.366671 63,149.02 12.301296 187,394.29
December 31, 2000 2.52460 99,173.86 2.848281 15,824.00 3.347993 51,002.34
June 30, 2001 9.60521 377,321.46 11.782098 65,456.97 12.737933 194.045.89
December 31, 2001 2.19535 86,239.93 2.432855 13,516.04 2.911356 44,350.74
June 30, 2002 9.96657 391,516.77 12.238044 67,990.04 13.217151 201,346.14
December 31, 2002 1.83399 72,044.63 1.976921 10,983.04 2.432139 37,050.48
June 30, 2003 10.36318 407,096.80 12.738454 70,770.13 13.743102 209,358.33
December 31, 2003 1.34738 56,464.60 1.476511 8,202.95 1.906176 29,038.11
June 30, 2004 10.79847 424,196.30 13.287668 73,821.37 14.320364 218,152.17
December 31, 2004 1.00209 39,365.10 0.927284 5,151.65 1.328926 20,244.46
June 30, 2005 11.27622 442,963.75 13.890437 77,170.13 14.953933 227,803.78
December 31, 2005 0.52434 20,597.65 0.324503 1,802.82 0.695356 10,592.85
June 30, 2006 11.80056 463,561.40 7.303004 40,572.79 15.649290 238,396.63
December 31, 2006 0.00000 .00 6.911948 38,400.23 0.000000 0.00
42
TABLE TO EXHIBIT A
Page Two
1988
----------------------------------------------------------
Land Real
Improvements Estate
-------------------------- -------------------------- Total
% of % of Rent
Date Cap. Cost. Amount Cap. Cost Amount Payments
------------- ---------- ---------- --------- ---------- -----------
June 30, 1988 Interim Rent at .028305% per day
December 31, 1988 4.185000 $29,984.73 4.185000 $132,928.42 $451,543.38
June 30, 1989 4.860804 34,826,73 5.663903 179,902.92 576,466.76
December 31, 1989 4.185000 29,984.73 4.467571 141,903.76 449,094.78
June 30, 1990 5.547380 39,745.92 5.663903 179,902.92 581,039.09
December 31, 1990 4.142180 29,677.93 4.485429 142,470.98 449,701.99
June 30, 1991 5.590200 40,052.71 5.663903 179,902.92 533,588.79
December 31, 1991 4.074850 29,195,52 4.501168 142,970.88 497,476.64
June 30, 1992 5.657530 40,535.12 5.663903 179,902.92 528,353.27
December 31, 1992 4.001250 28,668.19 4.562589 144,921.80 504,618.55
June 30, 1993 5.731130 41,062.45 5.663903 179,902.92 525,875.48
December 31, 1993 3.920810 28,091.85 4.562589 144,921.80 507,046.88
June 30, 1994 5.811570 41,638.79 5.663903 179,902.92 481,656.44
December 31, 1994 3.832890 27,461.92 6.293226 199,892.14 606,183.06
June 30, 1995 5.899490 42,268.72 5.506573 174,905.62 489,642.07
December 31, 1995 3.736790 26,773.39 5.821234 184,900.23 620,291.51
June 30, 1996 8.158340 58,452.95 5.349242 169,908.32 672,875.84
December 31, 1996 3.531190 25,300.30 5.821234 184,900.23 496,092.95
June 30, 1997 8.363940 59,926.03 5.663903 179,902.92 699,720.68
December 31, 1997 3.306470 23,690.23 5.917619 187,961.71 511,018.79
June 30, 1998 8.588660 61,536.11 9.754500 309,832.81 948,176.91
December 31, 1998 3.060850 21,930.41 3.618605 114,937.98 340,991.26
June 30, 1999 8.834280 63,295.93 10.226492 324,824.72 983,103.79
December 31, 1999 2.792380 20,006.87 3.261680 103,600.95 309,555.73
June 30, 2000 9.102750 65,219.46 10.478221 332,820.41 1,012,970.72
December 31, 2000 2.498950 17,904.50 2.942442 93,460.98 277,365.68
June 30, 2001 9.396180 67,321.83 10.855814 344,813.93 1,048,960.08
December 31, 2001 2.178230 15,606.60 2.593521 82,378.16 242,091.47
June 30, 2002 9.716900 69,619.73 11.233408 356,807.46 1,087,280.14
December 31, 2002 1.827680 13,094.98 2.139697 67,963.33 201,136.46
June 30, 2003 10.067450 72,131.36 11.705400 371,799.37 1,131,155.99
December 31, 2003 1.444530 10,349.78 1.730637 54,970.34 159,025.78
June 30, 2004 10.450600 74,876.55 12.208858 387,790.74 1,178,837.13
December 31, 2004 1.025750 7,349.30 1.258645 39,978.43 112,088.94
June 30, 2005 10.869380 77,877.03 12.680850 402,782.65 1,228,597.34
December 31, 2005 0.568020 4,069.75 0.692255 21,988.13 59,051.20
June 30, 2006 11.327110 81,156.58 12.429121 394,786.97 1,218,474.37
December 31, 2006 1.563316 11,200.86 2.045298 64,964.94 114,566.03
