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EXHIBIT 10.3
LEASE AGREEMENT
by and between
CASH (MA) QRS 12-41, INC.,
a Massachusetts corporation
as LANDLORD
and
THE SANDWICH CO-OPERATIVE BANK,
a Massachusetts co-operative bank,
as TENANT
Premises: Bourne (Buzzards Bay), MA
Sandwich, MA
Wareham, MA
Dated as of: December 30, 1997
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TABLE OF CONTENTS
Page
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Parties............................................................. 1
1. Demise of Premises.................................................. 1
2. Certain Definitions................................................. 1
3. Title and Condition................................................. 7
4. Use of Leased Premises; Quiet Enjoyment............................. 8
5. Term ............................................................... 9
6. Basic Rent.......................................................... 9
7. Additional Rent..................................................... 10
8. Net Lease; Non-Terminability........................................ 11
9. Payment of Impositions ............................................. 11
10. Compliance with Law; Environmental Matters.......................... 12
11. Liens; Recording and Title.......................................... 14
12. Maintenance and Repair.............................................. 14
13. Alterations and Improvements........................................ 14
14. Permitted Contests.................................................. 15
15. Indemnification..................................................... 15
16. Insurance........................................................... 16
17. Casualty and Condemnation........................................... 19
18. Termination Events.................................................. 20
19. Restoration......................................................... 21
20. Procedures Upon Purchase............................................ 22
21. Assignment and Subletting; Prohibition against Leasehold Financing.. 23
22. Events of Default................................................... 24
23. Remedies and Damages Upon Default................................... 26
24. Notices............................................................. 28
25. Estoppel Certificate................................................ 28
26. Surrender........................................................... 29
27. No Merger of Title.................................................. 29
28. Books and Records................................................... 29
29. Determination of Value.............................................. 30
30. Non-Recourse as to Landlord......................................... 31
31. Financing........................................................... 32
32. Subordination....................................................... 32
33. Tax Treatment; Reporting............................................ 32
35. Option to Purchase.................................................. 32
36. Miscellaneous....................................................... 33
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EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Acquisition Costs
Exhibit "F" - Percentage Allocation of Basic Rent
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LEASE AGREEMENT, made as of this 30th day of December, 1997, between
CASH (MA) QRS 12-41, INC., a Massachusetts corporation ("Landlord"), with an
address c/o W.P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and THE SANDWICH CO-OPERATIVE BANK, a Massachusetts co-operative
bank ("Tenant"), with an address at 000 Xxx Xxxxx Xxxxxxx, Xxxxxxxx,
Xxxxxxxxxxxxx 00000.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets to
Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon
the provisions hereinafter specified, the following described property
(hereinafter referred to collectively as the "Leased Premises" and individually
as the "Bourne Premises" "Sandwich Premises" and "Wareham Premises" each of
which premises is more particularly described in the applicable description in
Exhibit "A" attached hereto and made a part hereof and shall include the
portions of items (a), (b) and (c) of this Paragraph 1 located thereon or
therein and appertaining thereto): (a) the premises described in Exhibit "A"
hereto, together with the Appurtenances (collectively, the "Land"); (b) the
buildings, structures and other improvements now or hereafter constructed on the
Land (collectively, the "Improvements"); and (c) the fixtures, machinery,
equipment and other property described in Exhibit "B" hereto (collectively, the
"Equipment").
2. Certain Definitions.
"Acquisition Cost" of each of the Related Premises shall mean
the amount set forth opposite such premises on Exhibit "E" hereto.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways,
curbs, gores and vault spaces adjoining any of the Leased Premises.
"Affected Premises" shall mean the Affected Premises as
defined in Paragraph 18.
"Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations, reconstructions, renewals, replacements or
removals of and all substitutions or replacements for any of the Improvements or
Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary and shall include any Major Alterations.
"Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land, including (a)
easements over other lands granted by any Easement Agreement and (b) any
streets, ways, alleys, vaults, gores or strips of land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases
from Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
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"Basic Rent Payment Dates" shall mean the Basic Rent Payment
Dates as defined in Paragraph 6.
"Casualty" shall mean any injury to or death of any person or
any loss of or damage to any property (including the Leased Premises) included
within or related to the Leased Premises or arising from the Adjoining Property.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Costs" of a Person or associated with a specified transaction
shall mean all reasonable costs and expenses incurred by such Person or
associated with such transaction, including without limitation, attorneys' fees
and expenses, court costs, brokerage fees, escrow fees, title insurance
premiums, mortgage commitment fees, mortgage points, recording fees and transfer
taxes, as the circumstances require.
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Default Termination Amount" shall mean the Default
Termination Amount as defined in Paragraph 23(a)(iii).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect any Leased Premises.
"Environmental Law" shall mean (i) whenever enacted or
promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity, (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous Condition
or Hazardous Activity, in each case as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations or
injuries or damages due to or threatened as a result of the presence of,
exposure to, or ingestion of, any Hazardous Substance. The term Environmental
Law includes, without limitation, the federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act, the federal Clean
Air Act, the federal Clean Water Act, the federal Resources Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to
RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance Control
Act, the federal Insecticide, Fungicide and Rodenticide Act, the federal
Occupational Safety and Health Act of 1970, the federal National Environmental
Policy Act and the federal Hazardous Materials
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Transportation Act, each as amended and as now or hereafter in effect and any
similar state or local Law.
"Environmental Violation" shall mean (a) any direct or
indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or within the Leased Premises, or from
the Leased Premises to the environment, in violation of any Environmental Law or
in excess of any reportable quantity established under any Environmental Law or
which could result in any liability to Landlord, Tenant or Lender, any Federal,
state or local government or any other Person for the costs of any removal or
remedial action or natural resources damage or for bodily injury or property
damage, (b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within the Leased Premises or which extends to any
Adjoining Property in violation of any Environmental Law or in excess of any
reportable quantity established under any Environmental Law or which could
result in any liability to any Federal, state or local government or to any
other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (c) the abandonment or
discarding of any barrels, containers or other receptacles containing any
Hazardous Substances in violation of any Environmental Laws, (d) any activity,
occurrence or condition which could result in any liability, cost or expense to
Landlord or Lender or any other owner or occupier of the Leased Premises, or
which could result in a creation of a lien on any Related Premises under any
Environmental Law or (e) any violation of or noncompliance with any
Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph
1.
"Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).
"Fair Market Value" of either the Leased Premises or any
Related Premises, as the case may be, and the context may require, shall mean
the higher of (a) the fair market value of the Leased Premises or any Related
Premises, as the case may be, as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased Premises
or Related Premises, as the case may be, as of the Relevant Date as affected and
encumbered by this Lease and assuming that the Term has been extended for all
extension periods provided for herein. For all purposes of this Lease, Fair
Market Value shall be determined in accordance with the procedure specified in
Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair
Market Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately
available funds which at the time of payment are legal tender for the payment of
public and private debts in the United States of America.
"Guarantor" shall mean Sandwich Bancorp, Inc., a Massachusetts
corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement of
even date from Guarantor to Landlord.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release, seepage, spill, leak, flow, discharge or emission of any
Hazardous Substance into the environment (including the air, ground water,
watercourses or water systems), (iii) involves the containment or storage of
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any Hazardous Substance; or (iv) would cause any of the Leased Premises or any
portion thereof to become a hazardous waste treatment, recycling, reclamation,
processing, storage or disposal facility within the meaning of any Environmental
Law.
"Hazardous Condition" means any condition which would support
any claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance supporting a claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead,
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph
15.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at midnight on the
last day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental Laws) and
all covenants, restrictions and conditions now or hereafter of record which may
be applicable to Tenant or to any of the Leased Premises or Related Premises, or
to the use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair or restoration of any of the Leased Premises or Related
Premises, even if compliance therewith necessitates structural changes or
improvements or results in interference with the use or enjoyment of any of the
Leased Premises or Related Premises.
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"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note.
"Loan" shall mean any loan made by one or more Lenders to
Landlord, which loan is secured by a Mortgage and an Assignment and evidenced by
a Note.
"Major Alterations" shall mean Major Alterations as defined in
Paragraph 35.
"Monetary Obligations" shall mean Rent and all other sums
payable by Tenant under this Lease to Landlord, to any third party on behalf of
Landlord or to any Indemnitee.
"Mortgage" shall mean any mortgage or deed of trust from
Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable to
Landlord or Lender by reason of a Condemnation whether pursuant to a judgment or
by agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i), (ii) (to the extent payable to Landlord or Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any expenses incurred by
Landlord and Lender in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Offer Amount" shall mean the greater of (a) the Fair Market
Value of the Leased Premises as of the Relevant Date as Fair Market Value is
defined in clause (b) of the definition of Fair Market Value and (b) the sum of
the Acquisition Cost and the applicable Prepayment Premium which Landlord will
be required to pay in prepaying any Loan with proceeds of any such Offer Amount.
"Option Notice" shall mean Option Notice as defined in
Paragraph 36.
"Partial Casualty" shall mean any Casualty which does not
constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does
not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on Exhibit "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Prepayment Premium" shall mean any payment (other than a
payment of principal and/or interest which Landlord is required to make under a
Note or a Mortgage) by reason of any prepayment by Landlord of any principal due
under a Note or Mortgage, and which may be (in lieu of such prepayment premium
or prepayment penalty) a "make whole"
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clause requiring a prepayment premium in an amount sufficient to compensate the
Lender for the loss of the benefit of the Loan due to prepayment.
"Present Value" of any amount shall mean such amount
discounted by a rate per annum which is the lower of (a) the Prime Rate at the
time such present value is determined or (b) six percent (6%) per annum.
"Prime Rate" shall mean the interest rate per annum as
published, from time to time, in The Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the lowest rate of
interest charged by any "large U.S. money center commercial banks" and Landlord
makes no representations or warranties to that effect. In the event The Wall
Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate
(the "Discount Rate") on ninety-one (91) day bills ("Treasury Bills") issued
from time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Related Premises" shall mean any one of the Bourne Premises,
Sandwich Premises and Wareham Premises.
"Relevant Amount" shall mean the Termination Amount, the
Default Termination Amount or the Offer Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to
the date on which the applicable Condemnation Notice is received, in the event
of a Termination Notice under Paragraph 18 which is occasioned by a Taking, (b)
the date immediately prior to the date on which the applicable Casualty occurs,
in the event of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c), (d) the date
immediately prior to the Event of Default giving rise to the need to determine
Fair Market Value in the event Landlord provides Tenant with notice of its
intention to require Tenant to make a Termination Offer under Paragraph
23(a)(iii) or (e) the date immediately prior to the date on which Tenant
exercises its option to purchase the Leased Premises pursuant to Paragraph 34.
"Remaining Premises" shall mean the Related Premises which are
not Affected Premises under Paragraph 18.
"Rent" shall mean, collectively, Basic Rent and Additional
Rent.
"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased Premises by any
governmental authority, civil or military, whether pursuant to an agreement with
such governmental authority in settlement of or under threat of any such
requisition or confiscation, or otherwise.
"Retention Date" shall mean the later of the date on which the
amount of the Remaining Sum is finally determined or the date on which
Landlord's right to the Remaining Sum is finally determined.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the State of Massachusetts.
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"Surviving Obligations" shall mean any obligations of Tenant
under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a
portion of any of the Leased Premises (i) in or by condemnation or other eminent
domain proceedings pursuant to any Law, general or special, or (ii) by reason of
any agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means, or
(b) any de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the law applicable to the Related Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of (a) Fair Market
Value or (b) the sum of the Acquisition Cost and any Prepayment Premium which
Landlord will be required to pay in prepaying any Loan with proceeds of the
Termination Amount.
"Termination Date" shall mean the Termination Date as defined
in Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party Purchaser
as defined in Paragraph 21(f).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to
(i) the Mortgage and Assignment presently in effect, (ii) the rights of any
Persons in possession of the Leased Premises, (iii) the existing state of title
of any of the Leased Premises, including any Permitted Encumbrances, (iv) any
state of facts which an accurate survey or physical inspection of the Leased
Premises might show, (v) all Legal Requirements, including any existing
violation of any thereof, and (vi) the condition of the Leased Premises as of
the commencement of the Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises are in
good condition and repair at the inception of this Lease. LANDLORD LEASES AND
WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS
FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (xii)
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DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION OR (xv) THE EXISTENCE OF ANY
HAZARDOUS SUBSTANCE; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT.
TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS
SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND
ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE
LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE
ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF
THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE
EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING
OTHERWISE.
(c) Tenant represents to Landlord that Tenant has
examined the title to the Leased Premises prior to the execution and delivery of
this Lease and has found the same to be satisfactory for the purposes
contemplated hereby. Tenant acknowledges that (i) fee simple title (both legal
and equitable) to the Leased Premises is in Landlord and except, as provided in
Paragraph 36 hereof with respect to certain options to purchase the Leased
Premises that Tenant has only the leasehold right of possession and use of the
Leased Premises as provided herein, (ii) this Lease is a single Lease for
multiple properties and shall not be terminable with respect to less than all of
the Leased Premises or severable with respect to any one or more Related
Premises except as specifically provided herein, (iii) the Improvements conform
to all material Legal Requirements and all Insurance Requirements, (iv) all
easements necessary or appropriate for the use or operation of the Leased
Premises have been obtained, (v) all contractors and subcontractors who have
performed work on or supplied materials to the Leased Premises have been fully
paid, and all materials and supplies have been fully paid for, (vi) the
Improvements have been fully completed in all material respects in a workmanlike
manner of first class quality, and (vii) all Equipment necessary or appropriate
for the use or operation of the Leased Premises has been installed and is
presently fully operative in all material respects.
(d) Landlord hereby assigns to Tenant, without recourse
or warranty whatsoever, all assignable warranties, guaranties, indemnities and
similar rights which Landlord may have against any manufacturer, seller,
engineer, contractor or builder in respect of any of the Leased Premises. Such
assignment shall remain in effect until an Event of Default occurs or until the
expiration or earlier termination of this Lease, whereupon such assignment shall
cease and all of said warranties, guaranties, indemnities and other rights shall
automatically revert to Landlord.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for
banking offices and banking facilities and for no other purpose. Tenant shall
not use or occupy or permit any of the Leased Premises to be used or occupied,
nor do or permit anything to be done in or on any of the Leased Premises, in a
manner which would or might (i) violate any Law or Legal Requirement, (ii) make
void or voidable or cause any insurer to cancel any insurance required by this
Lease, or make it difficult or impossible to obtain any such insurance at
commercially reasonable rates, (iii) cause structural injury to any of the
Improvements or (iv) constitute a public or private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event
of Default has occurred and is continuing, Tenant shall quietly hold, occupy and
enjoy the Leased Premises
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throughout the Term, without any hindrance, ejection or molestation by Landlord
with respect to matters that arise after the date hereof, provided that Landlord
or its agents may enter upon and examine any of the Leased Premises at such
reasonable times as Landlord may select and upon reasonable notice to Tenant
(except in the case of any emergency, in which event no notice shall be
required) for the purpose of inspecting the Leased Premises, verifying
compliance or non-compliance by Tenant with its obligations hereunder and the
existence or non-existence of an Event of Default or event which with the
passage of time and/or notice would constitute an Event of Default, showing the
Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have
and hold the Leased Premises for an initial term (such term, as extended or
renewed in accordance with the provisions hereof, being called the "Term")
commencing on the date hereof (the "Commencement Date") and ending on the last
day of the two hundred fortieth (240th) calendar month next following the date
hereof (the "Expiration Date"). If all Rent and all other sums due hereunder
shall not have been fully paid by the end of the Term, Landlord may, at its
option, extend the Term until all said sums shall have been fully paid.
(b) Provided that if, on or prior to the Expiration Date
or any other Renewal Date (as hereinafter defined) this Lease shall not have
been terminated pursuant to any provision hereof, then on the Expiration Date
and on the fifth (5th), tenth (10th) and fifteenth (15th) anniversaries of the
Expiration Date (the Expiration Date and each such anniversary being a "Renewal
Date"), the Term shall be deemed to have been automatically extended for an
additional period of five (5) years, unless Tenant shall notify Landlord in
writing in recordable form at least two (2) years prior to the next Renewal Date
that Tenant is terminating this Lease as of the next Renewal Date. Any such
extension of the Term shall be subject to all of the provisions of this Lease,
as the same may be amended, supplemented or modified.
(c) If Tenant exercises its option pursuant to Paragraph
5(b) not to have the Term automatically extended, or if an Event of Default
occurs, then Landlord shall have the right during the remainder of the Term then
in effect and, in any event, Landlord shall have the right during the last year
of the Term, to (i) advertise the availability of any of the Leased Premises for
sale or reletting and to erect upon any of the Leased Premises signs indicating
such availability and (ii) show any of the Leased Premises to prospective
purchasers or tenants or their agents at such reasonable times as Landlord may
select.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for
the Leased Premises during the Term, the amounts determined in accordance with
Exhibit "D" hereto ("Basic Rent"), commencing on the first day of the first
month following the date hereof and continuing on the same day of each month
thereafter during the Term (each such day being a "Basic Rent Payment Date").
Each such rental payment shall be made, at Landlord's sole discretion, (a) to
Landlord at its address set forth above and/or to such one or more other
Persons, at such addresses and in such proportions as Landlord may direct by
fifteen (15) days' prior written notice to Tenant (in which event Tenant shall
give Landlord notice of each such payment concurrent with the making thereof),
and (b) by a check hand delivered at least five (5) business days before or
mailed at least ten (10) days before the applicable Basic Rent Payment Date, or
in Federal Funds. Pro rata Basic Rent for the period from the date hereof
through the last day of the month hereof shall be paid on the date hereof.
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7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided herein,
all costs and expenses of Tenant, Landlord and any other Persons specifically
referenced herein which are incurred in connection or associated with (A) the
ownership, use, non-use, occupancy, possession, operation, condition, design,
construction, maintenance, alteration, repair or restoration of any of the
Leased Premises, (B) the performance of any of Tenant's obligations under this
Lease, (C) any sale or other transfer of any of the Leased Premises to Tenant
under this Lease, (D) any Condemnation proceedings, (E) the adjustment,
settlement or compromise of any insurance claims involving or arising from any
of the Leased Premises, (F) the prosecution, defense or settlement of any
litigation involving or arising from any of the Leased Premises, this Lease, or
the sale of the Leased Premises to Landlord, (G) the exercise or enforcement by
Landlord, its successors and assigns, of any of its rights under this Lease, (H)
any amendment to or modification or termination of this Lease made at the
request of Tenant, (I) Costs of Landlord's counsel and reasonable internal Costs
of Landlord incurred in connection with the preparation, negotiation and
execution of this Lease, or incurred in connection with any act undertaken by
Landlord (or its counsel) at the request of Tenant, or incurred in connection
with any act of Landlord performed on behalf of Tenant, and (J) the reasonable
internal Costs of Landlord incurred in connection with any act undertaken by
Landlord at the request of Tenant or Tenant's failure to act promptly in an
emergency situation, and (K) any other items specifically required to be paid by
Tenant under this Lease;
(ii) after the date all or any portion of any
installment of Basic Rent is due and not paid, an amount equal to five percent
(5%) of the amount of such unpaid installment or portion thereof, provided,
however, that with respect to the first late payment of all or any portion of
any installment of Basic Rent in any consecutive twelve (12) month period, the
Late Charge shall not be due and payable unless the Basic Rent has not been paid
within five (5) days' following the due date thereof;
(iii) a sum equal to any additional sums (including
any late charge, default penalties, interest and fees of Lender's counsel) which
are payable by Landlord to any Lender under any Note by reason of Tenant's late
payment or non-payment of Basic Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "Default Rate") of
five percent (5%) over the Prime Rate per annum on the following sums until paid
in full: (A) all overdue installments of Basic Rent from the respective due
dates thereof, (B) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant, from the date of
payment thereof by Landlord, and (C) all other overdue amounts of Additional
Rent, from the date when any such amount becomes overdue.
(b) Tenant shall pay and discharge (i) any Additional
Rent referred to in Paragraph 7(a)(i) when the same shall become due, provided
that amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within five (5) days after Landlord's demand for payment thereof,
and (ii) any other Additional Rent, within five (5) days after Landlord's demand
for payment thereof.
(c) In no event shall amounts payable under Paragraph
7(a)(ii), (iii) and (iv) exceed the maximum amount permitted by applicable Law.
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8. Net Lease; Non-Terminability.
(a) This is a net lease and all Monetary Obligations
shall be paid without notice or demand and without set-off, counterclaim,
recoupment, abatement, suspension, deferment, diminution, deduction, reduction
or defense (collectively, a "Set-Off").
(b) Except as otherwise expressly provided herein, this
Lease and the rights of Landlord and the obligations of Tenant hereunder shall
not be affected by any event or for any reason, including the following: (i) any
damage to or theft, loss or destruction of any of the Leased Premises, (ii) any
Condemnation, (iii) Tenant's acquisition of ownership of any of the Leased
Premises other than pursuant to an express provision of this Lease, (iv) any
default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement, (v) any latent or other defect in any of the
Leased Premises, (vi) the breach of any warranty of any seller or manufacturer
of any of the Equipment, (vii) any violation of Paragraph 4(b) or any other
provision of this Lease by Landlord, (viii) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up of, or other proceeding affecting Landlord, (ix) the exercise of any
remedy, including foreclosure, under any Mortgage or Assignment, (x) any action
with respect to this Lease (including the disaffirmance hereof) which may be
taken by Landlord, any trustee, receiver or liquidator of Landlord or any court
under the Federal Bankruptcy Code or otherwise, (xi) any interference with
Tenant's use of the Leased Premises, (xii) market or economic changes or (xiii)
any other cause, whether similar or dissimilar to the foregoing, any present or
future Law to the contrary notwithstanding.
(c) The obligations of Tenant hereunder shall be separate
and independent covenants and agreements, all Monetary Obligations shall
continue to be payable in all events (or, in lieu thereof, Tenant shall pay
amounts equal thereto), and the obligations of Tenant hereunder shall continue
unaffected unless the requirement to pay or perform the same shall have been
terminated pursuant to an express provision of this Lease. The obligation to pay
Rent or amounts equal thereto shall not be affected by any collection of rents
by any governmental body pursuant to a tax lien or otherwise, even though such
obligation results in a double payment of Rent. All Rent payable by Tenant
hereunder shall constitute "rent" for all purposes (including Section 502(b)(6)
of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal property,
franchise, sales, gross receipts and rent taxes), all charges for any easement
or agreement maintained for the benefit of any of the Leased Premises, all
assessments and levies, all permit, inspection and license fees, all rents and
charges for water, sewer, utility and communication services relating to any of
the Leased Premises, all ground rents and all other public charges whether of a
like or different nature, even if unforeseen or extraordinary, imposed upon or
assessed against (i) Tenant, (ii) Tenant's possessory interest in the Leased
Premises, (iii) any of the Leased Premises, (iv) Landlord as a result of or
arising in respect of the acquisition, ownership, occupancy, leasing, use,
possession or sale of any of the Leased Premises, any activity conducted on any
of the Leased Premises, or the Rent, or (v) any Lender by reason of any Note,
Mortgage, Assignment or other document evidencing or securing a Loan and which
(as to this clause (v)) Landlord has agreed to pay (collectively, the
"Impositions"); provided, that nothing herein shall obligate Tenant to pay (A)
income, excess profits or other taxes of Landlord (or Lender) which are
determined on the basis of Landlord's (or
15
Lender's) net income or net worth (unless such taxes are in lieu of or a
substitute for any other tax, assessment or other charge upon or with respect to
the Leased Premises which, if it were in effect, would be payable by Tenant
under the provisions hereof or by the terms of such tax, assessment or other
charge), (B) any estate, inheritance, succession, gift or similar tax imposed on
Landlord or (C) any capital gains tax imposed on Landlord in connection with the
sale of the Leased Premises to any Person. If any Imposition may be paid in
installments without interest or penalty, Tenant shall have the option to pay
such Imposition in installments; in such event, Tenant shall be liable only for
those installments which accrue or become due and payable during the Term.
Tenant shall prepare and file all tax reports required by governmental
authorities which relate to the Impositions. Tenant shall deliver to Landlord
(1) copies of all settlements and notices pertaining to the Impositions which
may be issued by any governmental authority within ten (10) days after Tenant's
receipt thereof, (2) receipts for payment of all taxes required to be paid by
Tenant hereunder within thirty (30) days after the due date thereof and (3)
receipts for payment of all other Impositions within ten (10) days after
Landlord's request therefor.
(b) Landlord shall have the right at any time to require
Tenant to pay to Landlord an additional monthly sum (each an "Escrow Payment")
sufficient to pay the Escrow Charges (as hereinafter defined) as they become
due. As used herein, "Escrow Charges" shall mean real estate taxes on the Leased
Premises or payments in lieu thereof and premiums on any insurance required by
this Lease. Landlord shall determine the amount of the Escrow Charges and of
each Escrow Payment. The Escrow Payments may be commingled with other funds of
Landlord or other Persons and no interest thereon shall be due or payable to
Tenant. Landlord shall apply the Escrow Payments to the payment of the Escrow
Charges in such order or priority as Landlord shall determine or as required by
law. If at any time the Escrow Payments theretofore paid to Landlord shall be
insufficient for the payment of the Escrow Charges, Tenant, within ten (10) days
after Landlord's demand therefor, shall pay the amount of the deficiency to
Landlord.
10. Compliance with Laws and Easement Agreements; Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform
to, and cause any other Person occupying any part of the Leased Premises to
comply with and conform to, all Insurance Requirements and Legal Requirements
(including all applicable Environmental Laws). Tenant shall not at any time (i)
cause, permit or suffer to occur any Environmental Violation or (ii) permit any
sublessee, assignee or other Person occupying the Leased Premises under or
through Tenant to cause, permit or suffer to occur any Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all
times promptly and faithfully abide by, discharge and perform all of the
covenants, conditions and agreements contained in any Easement Agreement on the
part of Landlord or the occupier to be kept and performed thereunder. Tenant
will not alter, modify, amend or terminate any Easement Agreement, give any
consent or approval thereunder, or enter into any new Easement Agreement
without, in each case, prior written consent of Landlord.
(c) Upon prior written notice from Landlord, Tenant shall
permit such persons as Landlord may designate ("Site Reviewers") to visit the
Leased Premises and perform, as agents of Tenant, environmental site
investigations and assessments ("Site Assessments") on the Leased Premises for
the purpose of determining whether there exists on the Leased Premises any
Environmental Violation or any condition which could result in any Environmental
Violation. Such Site Assessments may include both above and below the ground
testing for Environmental Violations and such other tests as may be necessary,
in the opinion of the Site Reviewers, to conduct the Site Assessments. Tenant
shall supply to the Site Reviewers such
16
historical and operational information regarding the Leased Premises as may be
reasonably requested by the Site Reviewers to facilitate the Site Assessments,
and shall make available for meetings with the Site Reviewers appropriate
personnel having knowledge of such matters. The cost of performing and reporting
Site Assessments shall be paid by Tenant.
(d) If an Environmental Violation occurs or is found to
exist and, in Landlord's reasonable judgment, the cost of remediation of the
same is likely to exceed $50,000, Tenant shall provide to Landlord, within ten
(10) days after Landlord's request therefor, adequate financial assurances that
Tenant will effect such remediation in accordance with applicable Environmental
Laws. Such financial assurances shall be a bond or letter of credit satisfactory
to Landlord in form and substance and in an amount equal to or greater than
Landlord's reasonable estimate, based upon a Site Assessment performed pursuant
to Paragraph 10(c), of the anticipated cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if
an Environmental Violation occurs or is found to exist and the Term would
otherwise terminate or expire, then, at the option of Landlord, the Term shall
be automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation which occurs or
is found to exist, Landlord shall have the right (but no obligation) to take any
and all actions as Landlord shall deem necessary or advisable in order to cure
such Environmental Violation.
(g) Tenant shall notify Landlord immediately after
becoming aware of any Environmental Violation (or alleged Environmental
Violation) or noncompliance with any of the covenants contained in this
Paragraph 10 and shall forward to Landlord immediately upon receipt thereof
copies of all orders, reports, notices, permits, applications or other
communications relating to any such violation or noncompliance.
(h) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall contain covenants
of the other party thereto which are identical to the covenants contained in
this Paragraph 10.
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11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or
permit to be created or to remain and shall promptly discharge or remove any
lien, levy or encumbrance on any of the Leased Premises or on any Rent or any
other sums payable by Tenant under this Lease, other than any Mortgage or
Assignment, the Permitted Encumbrances and any mortgage, lien, encumbrance or
other charge created by or resulting solely from any act or omission of
Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES. LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES
REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or
register (collectively, "record") all such instruments as may be required or
permitted by any present or future Law in order to evidence the respective
interests of Landlord and Tenant in any of the Leased Premises, and shall cause
a memorandum of this Lease (or, if such a memorandum cannot be recorded, this
Lease), and any supplement hereto or thereto, to be recorded in such manner and
in such places as may be required or permitted by any present or future Law in
order to protect the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain each Related
Premises and the Adjoining Property in as good repair and appearance as each is
in on the date hereof and fit to be used for their intended use in accordance
with the better of the practices generally recognized as then acceptable by
other companies in its industry or observed by Tenant with respect to the other
real properties owned or operated by it, and, in the case of the Equipment, in
as good mechanical condition as it was on the later of the date hereof or the
date of its installation, except for ordinary wear and tear. Tenant shall take
every other action necessary or appropriate for the preservation and safety of
each Related Premises. Tenant shall promptly make all Alterations of every kind
and nature, whether foreseen or unforeseen, which may be required to comply with
the foregoing requirements of this Paragraph 12(a). Landlord shall not be
required to make any Alteration, whether foreseen or unforeseen, or to maintain
any of the Related Premises or Adjoining Property in any way, and Tenant hereby
expressly waives any right which may be provided for in any Law now or hereafter
in effect to make Alterations at the expense of Landlord or to require Landlord
to make Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12
shall be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed,
shall (i) encroach upon any setback or any property, street or right-of-way
adjoining any of the Leased Premises, (ii) violate the provisions of any
restrictive covenant affecting any of the Leased Premises, (iii) hinder or
obstruct any easement or right-of-way to which any of the Leased Premises is
subject or (iv) impair the rights of others in, to or under any of the
foregoing, Tenant shall, promptly after receiving notice or otherwise acquiring
knowledge thereof, either (A) obtain from all necessary parties waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, hindrance, obstruction or impairment, whether the same
shall affect Landlord, Tenant or both, or (B) take such action as shall be
necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
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13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained
the prior written consent of Landlord and Lender, to make (i) Alterations or a
series of related Alterations that, as to any such Alterations or series of
related Alterations, do not cost in excess of $50,000 with respect to any
Related Premises and (ii) to install Equipment in the Improvements or accessions
to the Equipment that, as to such Equipment or accessions, do not cost in excess
of $50,000, so long as at the time of construction or installation of any such
Equipment or Alterations no Event of Default exists and the value and utility of
the Leased Premises is not diminished thereby. If the cost of any Alterations,
series of related Alterations, Equipment or accessions thereto is in excess of
$50,000, the prior written approval of Landlord and Lender shall be required,
such approval not to be unreasonably withheld, delayed or conditioned. Tenant
shall not construct upon the Land any additional buildings without having first
obtained the prior written consent of Landlord and Lender.
(b) If Tenant makes any Alterations pursuant to this
Paragraph 13 or as required by Paragraph 12 or 17 (such Alterations and actions
being hereinafter collectively referred to as "Work"), then (i) the market value
of the Leased Premises shall not be lessened by any such Work or its usefulness
impaired, (ii) all such Work shall be performed by Tenant in a good and
workmanlike manner, (iii) all such Work shall be expeditiously completed in
compliance with all Legal Requirements, (iv) all such Work shall comply with the
requirements of all insurance policies required to be maintained by Tenant
hereunder, (v) if any such Work involves the replacement of Equipment or parts
thereto, all replacement Equipment or parts shall have a value and useful life
equal to the greater of (A) the value and useful life on the date hereof of the
Equipment being replaced or (B) the value and useful life of the Equipment being
replaced immediately prior to the occurrence of the event which required its
replacement (assuming such Replaced Equipment was then in the condition required
by this Lease), (vi) Tenant shall promptly discharge or remove all liens filed
against any of the Leased Premises arising out of such Work, (vii) Tenant shall
procure and pay for all permits and licenses required in connection with any
such Work, (viii) all such Work shall be the property of Landlord and shall be
subject to this Lease, and Tenant shall execute and deliver to Landlord any
document requested by Landlord evidencing the assignment to Landlord of all
estate, right, title and interest (other than the leasehold estate created
hereby) of Tenant or any other Person thereto or therein, and (ix) Tenant shall
comply, to the extent requested by Landlord or required by this Lease, with the
provisions of Paragraphs 12(a) and 19(a), whether or not such Work involves
restoration of the Leased Premises.
14. Permitted Contests. Notwithstanding any other provision of
this Lease, Tenant shall not be required to (a) pay any Imposition, (b)
discharge or remove any lien referred to in Paragraph 11 or 13 or (c) take any
action with respect to any encroachment, violation, hindrance, obstruction or
impairment referred to in Paragraph 12(b) (such non-compliance with the terms
hereof being hereinafter referred to collectively as "Permitted Violations"), so
long as at the time of such non-compliance no Event of Default exists and so
long as Tenant shall contest, in good faith, the existence, amount or validity
thereof, the amount of the damages caused thereby, or the extent of its or
Landlord's liability therefor by appropriate proceedings which shall operate
during the pendency thereof to prevent or stay (i) the collection of, or other
realization upon, the Permitted Violation so contested, (ii) the sale,
forfeiture or loss of any of the Leased Premises or any Rent to satisfy or to
pay any damages caused by any Permitted Violation, (iii) any interference with
the use or occupancy of any of the Leased Premises, (iv) any interference with
the payment of any Rent, (v) the cancellation or increase in the rate of any
insurance policy or a statement by the carrier that coverage will be denied.
Tenant shall provide Landlord security which is satisfactory, in Landlord's
reasonable judgment, to assure that such Permitted Violation is corrected,
including all Costs, interest and penalties that may be incurred or become due
in connection therewith. While any proceedings which comply with the
19
requirements of this Paragraph 14 are pending and the required security is held
by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by law to correct
such Permitted Violation and Tenant's contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject Landlord to the risk
of any civil or criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save
and hold harmless Landlord, Lender and all other Persons described in Paragraph
30 (each an "Indemnitee") from and against any and all liabilities, losses,
damages (including punitive damages), penalties, Costs (including attorneys'
fees and costs), causes of action, suits, claims, demands or judgments of any
nature whatsoever, howsoever caused, without regard to the form of action and
whether based on strict liability, gross negligence, negligence or any other
theory of recovery at law or in equity, arising from (i) any matter pertaining
to the acquisition (or the negotiations leading thereto), ownership, leasing,
use, non-use, occupancy, operation, management, condition, design, construction,
maintenance, repair or restoration of any of the Leased Premises or Adjoining
Property, (ii) any casualty in any manner arising from any of the Leased
Premises or Adjoining Property, whether or not Indemnitee has or should have
knowledge or notice of any defect or condition causing or contributing to said
casualty, (iii) any violation by Tenant of any provision of this Lease, any
contract or agreement to which Tenant is a party, any Legal Requirement or any
Permitted Encumbrance or any encumbrance Tenant consented to or the Mortgage or
Assignment or (iv) any alleged, threatened or actual Environmental Violation,
including (A) liability for response costs and for costs of removal and remedial
action incurred by the United States Government, any state or local governmental
unit or any other Person, or damages from injury to or destruction or loss of
natural resources, including the reasonable costs of assessing such injury,
destruction or loss, incurred pursuant to Section 107 of CERCLA, or any
successor section or act or provision of any similar state or local Law, (B)
liability for costs and expenses of abatement, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any of
the other Environmental Laws and (C) liability for personal injury or property
damage arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying on
of a dangerous activity.
(b) In case any action or proceeding is brought against
any Indemnitee by reason of any such claim, (i) Tenant may, except in the event
of a conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its choice
to monitor the defense of any such action) and (ii) such Indemnitee shall notify
Tenant to resist or defend such action or proceeding by retaining counsel
reasonably satisfactory to such Indemnitee, and such Indemnitee will cooperate
and assist in the defense of such action or proceeding if reasonably requested
to do so by Tenant. In the event of a conflict of interest or dispute or during
the continuance of an Event of Default, Landlord shall have the right to select
counsel, and the cost of such counsel shall be paid by Tenant.
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(c) The obligations of Tenant under this Paragraph 15
shall survive any termination, expiration or rejection in bankruptcy of this
Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or
in connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (to the extent that a Related Premises
is in a flood zone) and earthquake coverage in amounts not less than the actual
replacement cost of the Improvements and Equipment. Such policies shall contain
Replacement Cost and Agreed Amount Endorsements and shall contain deductibles
not more than $25,000 per occurrence.
(ii) Commercial General Liability Insurance
(including but not limited to Incidental Medical Malpractice and Host Liquor
Liability) and Business Automobile Liability Insurance (including Non-Owned and
Hired Automobile Liability) against claims for personal and bodily injury, death
or property damage occurring on, in or as a result of the use of the Leased
Premises, in an amount not less than $2,000,000 per occurrence/annual aggregate
and all other coverage extensions that are usual and customary for properties of
this size and type provided, however, that the Landlord shall have the right to
require such higher limits as may be reasonable and customary for properties of
this size and type.
(iii) Worker's compensation insurance covering all
persons employed by Tenant in connection with any work done on or about any of
the Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such Worker's Compensation Insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State
or States in which the Leased Premises are located.
(iv) Comprehensive Boiler and Machinery Insurance on
any of the Equipment or any other equipment on or in the Leased Premises in an
amount not less than $5,000,000 per accident for damage to property. Such
policies shall include at least $5,000,000 per incidence for Off-Premises
Service Interruption, Expediting Expenses, Ammonia Contamination, and Hazardous
Materials Clean-up Expense and may contain a deductible not to exceed $25,000.
(v) Business Interruption and Extra Expense Insurance
at limits to cover 100% of losses and/or expenses incurred over the period of
indemnity not less than one year from time of loss. Such insurance shall name
Landlord as loss payee solely with respect to Rent payable to or for the benefit
of the Landlord under this Lease.
(vi) During any period in which substantial
Alterations at any Related Premises are being undertaken, builder's risk
insurance covering the total completed value including any "soft costs" with
respect to the Improvements being altered or repaired (on a completed value,
non-reporting basis), replacement cost of work performed and equipment, supplies
and materials furnished in connection with such construction or repair of
Improvements or Equipment, together with such "soft cost" endorsements and such
other endorsements as Landlord may reasonably require and general liability,
worker's compensation and automobile liability insurance with respect to the
Improvements being constructed, altered or repaired.
(vii) Such other insurance (or other terms with
respect to any insurance required pursuant to this Paragraph 16, including
without limitation amounts of
21
coverage, deductibles, form of mortgagee clause) on or in connection with any of
the Leased Premises as Landlord or Lender may reasonably require, which at the
time is usual and commonly obtained in connection with properties similar in
type of building size, use and location to the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be
written by companies which have a Best's rating of A:X or above and are admitted
in, and approved to write insurance policies by, the State Insurance Department
for the states in which the Leased Premises are located. The insurance policies
(i) shall be for such terms as Landlord may reasonably approve and (ii) shall be
in amounts sufficient at all times to satisfy any coinsurance requirements
thereof. The insurance referred to in Paragraphs 16(a)(i), 16(a)(iv) and
16(a)(vi) shall name Landlord as Owner and Lender as loss payee and Tenant as
its interest may appear. The insurance referred to in Paragraph 16(a)(ii) shall
name Landlord and Lender as additional insureds, and the insurance referred to
in Paragraph 16(a)(v) shall name Landlord as insured and Lender and Landlord as
loss payee. If said insurance or any part thereof shall expire, be withdrawn,
become void, voidable, unreliable or unsafe for any reason, including a breach
of any condition thereof by Tenant or the failure or impairment of the capital
of any insurer, or if for any other reason whatsoever said insurance shall
become reasonably unsatisfactory to Landlord, Tenant shall immediately obtain
new or additional insurance reasonably satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i),
(iv), (v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender. Each policy required by
any provision of Paragraph 16(a), except clause (iii) thereof, shall provide
that it may not be cancelled except after sixty (60) days' prior notice to
Landlord and Lender. Each such policy shall also provide that any loss otherwise
payable thereunder shall be payable notwithstanding (i) any act or omission of
Landlord or Tenant which might, absent such provision, result in a forfeiture of
all or a part of such insurance payment, (ii) the occupation or use of any of
the Leased Premises for purposes more hazardous than those permitted by the
provisions of such policy, (iii) any foreclosure or other action or proceeding
taken by Lender pursuant to any provision of the Mortgage, Note, Assignment or
other document evidencing or securing the Loan upon the happening of an event of
default therein or (iv) any change in title to or ownership of any of the Leased
Premises.
(d) Tenant shall pay as they become due all premiums for
the insurance required by Paragraph 16(a), shall renew or replace each policy
and deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least thirty (30) days prior to the expiration date of
such policy, and shall promptly deliver to Landlord all original certificates of
insurance.
(e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant, provided that such "blanket"
or umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16 and provided further that Tenant shall provide to Landlord a
Statement of Values which shall be reviewed annually and amended as necessary
based on Replacement Cost Valuations. The original or a certified copy of each
such "blanket" or umbrella policy shall promptly be delivered to Landlord.
(f) Tenant shall have the replacement cost and insurable
value of the Improvements and Equipment determined from time to time as required
by the replacement cost and agreed amount endorsements and shall deliver to
Landlord the new replacement cost and agreed amount endorsement or certificate
evidencing such endorsement promptly upon Tenant's receipt thereof.
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(g) Tenant shall promptly comply with and conform to (i)
all provisions of each insurance policy required by this Paragraph 16 and (ii)
all requirements of the insurers thereunder applicable to Landlord, Tenant or
any of the Leased Premises or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Leased Premises, even
if such compliance necessitates Alterations or results in interference with the
use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent
in form or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as named
insureds, with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies therefor.
(i) All policies shall contain effective waivers by the
carrier against all claims for insurance premiums against Landlord and shall
contain full waivers of subrogation against the Landlord.
(j) All proceeds of any insurance required under
Paragraph 16(a) shall be payable as follows:
(i) Except for proceeds payable to a Person other
than Landlord, Tenant or Lender, all proceeds of insurance required under
clauses (ii), (iii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds
attributable to the general liability coverage provisions of Builder's Risk
insurance under clause (vi) of Paragraph 16(a) shall be payable to Landlord or,
if required by the Mortgage, to Lender.
(ii) Proceeds of insurance required under clause (i)
of Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16(a) shall be payable by Landlord (or Lender) and applied as set forth in
Paragraph 17. Tenant shall apply the Net Award to restoration of the Leased
Premises in accordance with the applicable provisions of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty occurs to any of the Related
Premises, Tenant shall give Landlord and Lender immediate notice thereof.
Landlord and Lender are hereby authorized to adjust, collect and compromise, in
their discretion and upon notice to Tenant (except that no notice to Tenant
shall be required if an Event of Default has occurred and is continuing), all
claims under any of the insurance policies required by Paragraph 16(a) (except
public liability insurance claims payable to a Person other than Tenant,
Landlord or Lender) and to execute and deliver on behalf of Tenant all necessary
proofs of loss, receipts, vouchers and releases required by the insurers.
Provided that no Event of Default has occurred and is continuing, Tenant shall
be entitled to participate with Landlord and Lender in any adjustment,
collection and compromise of the Net Award payable in connection with a
Casualty. Tenant agrees to sign, upon the request of Landlord or Lender, all
such proofs of loss, receipts, vouchers and releases. Each insurer is hereby
authorized and directed to make payment under said policies, including return of
unearned premiums, directly to Landlord or, if required by the Mortgage, to
Lender instead of to Landlord and Tenant jointly, and Tenant hereby appoints
each of Landlord and Lender as Tenant's attorneys-in-fact to endorse any draft
therefor. The rights of Landlord under this Paragraph 17(a) shall be extended to
Lender if and to the extent that any Mortgage so provides.
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(b) Tenant, immediately upon receiving a Condemnation
Notice, shall notify Landlord and Lender thereof. Landlord and Lender are
authorized to collect, settle and compromise, in their discretion (and, if no
Event of Default exists, upon notice to Tenant), the amount of any Net Award.
Provided that no Event of Default has occurred and is continuing, Tenant shall
be entitled to participate with Landlord and Lender in any Condemnation
proceeding or negotiations under threat thereof and to contest the Condemnation
or the amount of the Net Award therefor. No agreement with any condemnor in
settlement or under threat of any Condemnation shall be made by Tenant without
the written consent of Landlord and Lender. Subject to the provisions of this
Paragraph 17(b), Tenant hereby irrevocably assigns to Landlord any award or
payment to which Tenant is or may be entitled by reason of any Condemnation,
whether the same shall be paid or payable for Tenant's leasehold interest
hereunder or otherwise; but nothing in this Lease shall impair Tenant's right to
any award or payment on account of Tenant's trade fixtures, equipment or other
tangible property which is not part of the Equipment, moving expenses or loss of
business, if available, to the extent that and so long as (i) Tenant shall have
the right to make, and does make, a separate claim therefor against the
condemnor and (ii) such claim does not in any way reduce either the amount of
the award otherwise payable to Landlord for the Condemnation of Landlord's fee
interest in the Leased Premises or the amount of the award (if any) otherwise
payable for the Condemnation of Tenant's leasehold interest hereunder. The
rights of Landlord under this Paragraph 17(b) shall also be extended to Lender
if and to the extent that any Mortgage so provides.
(c) If any Partial Casualty (whether or not insured
against) or Partial Condemnation shall occur to any Related Premises, this Lease
shall continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary Obligations. Promptly after such Partial Casualty or
Partial Condemnation, Tenant, as required in Paragraph 12(a), shall commence and
diligently continue to restore the Leased Premises as nearly as possible to
their value, condition and character immediately prior to such event (assuming
the Leased Premises to have been in the condition required by this Lease). Upon
the receipt by Landlord of the entire Net Award of such Partial Casualty or
Partial Condemnation, Landlord shall make such Net Award available to Tenant for
restoration in accordance with and subject to the provisions of Paragraph 19(a).
If any Casualty or Condemnation which is not a Partial Casualty or Partial
Condemnation shall occur, Tenant shall comply with the terms and conditions of
Paragraph 18.
(d) In the event of a Requisition of any of the Leased
Premises, if any Net Award payable by reason of such Requisition is (i) retained
by Landlord, each installment of Basic Rent payable on or after the date on
which the Net Award is paid to Landlord shall be reduced by a fraction, the
denominator of which shall be the total amount of all Basic Rent due from such
date to and including the last Basic Rent Payment Date for the then existing
Term and the numerator of which shall be the amount of such Net Award retained
by Landlord, or (ii) paid to Lender, then each installment of Basic Rent
thereafter payable shall be reduced in the same amount and for the same period
as payments are reduced under the Note until such Net Award has been applied in
full or until the Term has expired, whichever occurs first. Upon the expiration
of the Term, any portion of such Net Award which shall not have been previously
credited to Tenant shall be retained by Landlord.
18. Termination Events.
(a) If (i) all of any Related Premises shall be taken by
a Taking or (ii) any substantial portion of any Related Premises shall be taken
by a Taking or all or any substantial portion of any Related Premises shall be
totally damaged or destroyed by a Casualty and, in any such case, Tenant
certifies and covenants to Landlord that it will forever abandon operations at
the Related Premises, (any one or all of the Related Premises described in the
above clauses (i) and (ii) above being hereinafter referred to as the "Affected
Premises" and each of the events described in the above clauses (i) and (ii)
shall hereinafter be referred to as a "Termination
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Event"), then (x) in the case of (i) above, Tenant shall be obligated, within
thirty (30) days after Tenant receives a Condemnation Notice and (y) in the case
of (ii) above, Tenant shall have the option, within thirty (30) days after
Tenant receives a Condemnation Notice or thirty (30) days after the Casualty, as
the case may be, to give to Landlord written notice (a "Termination Notice") of
the Tenant's option (A) to terminate this Lease as to the Affected Premises in
the form described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of
Tenant's intention to terminate this Lease as to the Affected Premises on the
first Basic Rent Payment Date which occurs at least ninety (90) days after the
Fair Market Value Date (the "Termination Date"), (ii) a binding and irrevocable
offer of Tenant to pay the Termination Amount and (iii) if the Termination Event
is an event described in Paragraph 18(a)(ii), the certification and covenant
described therein and a certified resolution of the Board of Directors of Tenant
authorizing the same. Promptly upon the delivery to Landlord of a Termination
Notice, Landlord and Tenant shall commence to determine Fair Market Value.
(c) If Landlord shall reject such offer to terminate this
Lease as to the Affected Premises by written notice to Tenant (a "Rejection"),
which Rejection shall contain the written consent of Lender, not later than
thirty (30) days following the Fair Market Value Date, then this Lease shall
terminate as to the Affected Premises on the Termination Date; provided that, if
Tenant has not satisfied all Monetary Obligations and all other obligations and
liabilities under this Lease which have arisen as to the Affected Premises
(collectively, "Remaining Obligations") on or prior to the Termination Date,
then Landlord may, at its option, extend the date on which this Lease may
terminate as to the Affected Premises to a date which is no later than the first
Basic Rent Payment Date after the Termination Date on which Tenant has satisfied
all Remaining Obligations. Upon such termination (i) all obligations of Tenant
hereunder as to the Affected Premises shall terminate except for any Surviving
Obligations, (ii) Tenant shall immediately vacate and shall have no further
right, title or interest in or to any of the Affected Premises and (iii) the Net
Award shall be retained by Landlord. Notwithstanding anything to the contrary
hereinabove contained, if Tenant shall have received a Rejection and, on the
date when this Lease would otherwise terminate as provided above, Landlord shall
not have received the full amount of the Net Award payable by reason of the
applicable Termination Event, then the date on which this Lease is to terminate
automatically shall be extended to the first Basic Rent Payment Date after the
receipt by Landlord of the full amount of the Net Award provided that, if Tenant
has not satisfied all Remaining Obligations on such date, then Landlord may, at
its option, extend the date on which this Lease may terminate to a date which is
no later than the first Basic Rent Payment Date after such date on which Tenant
has satisfied all such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not
later than the thirtieth (30th) day following the Fair Market Value Date,
Landlord shall be conclusively presumed to have accepted such offer. If such
offer is accepted by Landlord then, on the Termination Date, Tenant shall pay to
Landlord the Termination Amount and all Remaining Obligations and, if requested
by Tenant, Landlord shall convey to Tenant or its designee the Affected Premises
or the remaining portion thereof, if any, all in accordance with Paragraph 20.
(e) In the event of the termination of this Lease as to
the Affected Premises as hereinabove provided, this Lease shall remain in full
force and effect as to the Remaining Premises; provided, that the Basic Rent for
the Remaining Premises to be paid after such termination shall be the Basic Rent
otherwise payable hereunder with respect to the Leased Premises multiplied by a
percentage equal to the sum of the percentages set forth on Exhibit "F" for the
Remaining Premises.
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19. Restoration.
(a) Landlord (or Lender if required by any Mortgage)
shall hold any Net Award in excess of $50,000 in a fund (the "Restoration Fund")
and disburse amounts from the Restoration Fund only in accordance with the
following conditions:
(i) prior to commencement of restoration, (A) the
architects, contracts, contractors, plans and specifications for the restoration
shall have been approved by Landlord, (B) Landlord and Lender shall be provided
with mechanics' lien insurance (if available) and acceptable performance and
payment bonds which insure satisfactory completion of and payment for the
restoration, are in an amount and form and have a surety acceptable to Landlord,
and name Landlord and Lender as additional dual obligees, and (C) appropriate
waivers of mechanics' and materialmen's liens shall have been filed;
(ii) at the time of any disbursement, no Event of
Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested, (D) a satisfactory bringdown of
title insurance and (E) other evidence of cost and payment so that Landlord and
Lender can verify that the amounts disbursed from time to time are represented
by work that is completed, in place and free and clear of mechanics' and
materialmen's lien claims;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the applicable
requirements of this Lease;
(v) Landlord may retain ten percent (10%) of the
Restoration Fund until the restoration is fully completed;
(vi) the Restoration Fund shall not be commingled
with Landlord's other funds and shall bear interest at a rate agreed to by
Landlord and Tenant; and
(vii) such other reasonable conditions as Landlord or
Lender may impose.
(b) Prior to commencement of restoration and at any time
during restoration, if the estimated cost of completing the restoration work
free and clear of all liens, as determined by Landlord, exceeds the amount of
the Net Award available for such restoration, the amount of such excess shall,
upon demand by Landlord, be paid by Tenant to Landlord to be added to the
Restoration Fund. Any sum so added by Tenant which remains in the Restoration
Fund upon completion of restoration shall be refunded to Tenant. For purposes of
determining the source of funds with respect to the disposition of funds
remaining after the completion of restoration, the Net Award shall be deemed to
be disbursed prior to any amount added by Tenant.
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(c) If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum shall be retained by Landlord or, if required by a Note or
Mortgage, paid by Landlord to a Lender.
20. Procedures Upon Purchase.
(a) If the Leased Premises or any of the Related Premises
are purchased by Tenant pursuant to any provision of this Lease, Landlord need
not convey any better title thereto than that which was conveyed to Landlord,
and Tenant or its designee shall accept such title, subject, however, to the
Permitted Encumbrances and to all other liens, exceptions and restrictions on,
against or relating to any of the Leased Premises or the applicable Related
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises or the applicable
Related Premises which have been created by or resulted solely from acts of
Landlord after the date of this Lease, unless the same are Permitted
Encumbrances or customary utility easements benefiting the Leased Premises or
were created with the concurrence of Tenant or as a result of a default by
Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the
Leased Premises or any of the Related Premises pursuant to any provision of this
Lease (any such date the "Purchase Date"), Tenant shall pay to Landlord, or to
any Person to whom Landlord directs payment, the Relevant Amount therefor
specified herein, in Federal Funds, less any credit of the Net Award received
and retained by Landlord or a Lender allowed against the Relevant Amount, and
Landlord shall deliver to Tenant (i) a special warranty deed which describes the
premises being conveyed and conveys the title thereto as provided in Paragraph
20(a), (ii) such other instruments as shall be necessary to transfer to Tenant
or its designee any other property (or rights to any Net Award not yet received
by Landlord or a Lender) then required to be sold by Landlord to Tenant pursuant
to this Lease and (iii) any Net Award received by Landlord, not credited to
Tenant against the Relevant Amount and required to be delivered by Landlord to
Tenant pursuant to this Lease; provided, that if any Monetary Obligations remain
outstanding on such date, then Landlord may deduct from the Net Award the amount
of such Monetary Obligations; and further provided, that if any event has
occurred which, in Landlord's reasonable judgment, is likely to subject any
Indemnitee to any liability which Tenant is required to indemnify against
pursuant to Paragraph 15, then an amount shall be deducted from the Net Award
which, in Landlord's reasonable judgment, is sufficient to satisfy such
liability, which amount shall be deposited in an escrow account with a financial
institution reasonably satisfactory to Landlord and Tenant pending resolution of
such matter. If on the Purchase Date any Monetary Obligations remain outstanding
and no Net Award is payable to Tenant by Landlord or the amount of such Net
Award is less than the amount of the Monetary Obligations, then Tenant shall pay
to Landlord on the Purchase Date the amount of such Monetary Obligations. Upon
the completion of such purchase, this Lease and all obligations and liabilities
of Tenant hereunder with respect to the applicable Related Premises (but not
with respect to the Remaining Premises) shall terminate, except any Surviving
Obligations.
(c) If the completion of such purchase shall be delayed
after (i) the Termination Date, in the event of a purchase pursuant to Paragraph
18 or, (ii) the date scheduled for such purchase, in the event of a purchase
under any other provision of this Lease then (x) Rent shall continue to be due
and payable until completion of such purchase and (y) at Landlord's sole option,
Fair Market Value shall be redetermined and the Relevant Amount payable by
Tenant pursuant to the applicable provision of this Lease shall be adjusted to
reflect such redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord
shall be prorated as of the Purchase Date, and the prorated unapplied balance
shall be deducted from the
27
Relevant Amount due to Landlord; provided, that no apportionment of any
Impositions shall be made upon any such purchase.
21. Assignment and Subletting; Prohibition against Leasehold
Financing.
(a) Tenant may not assign this Lease, voluntarily or
involuntarily, whether by operation of law or otherwise, or sublet any of the
Related Premises at any time to any other Person without the prior written
consent of Landlord, which consent, in the event of an assignment, may be
withheld by Landlord for any or no reason, and any such purported assignment or
sublease shall be null and void.
(b) If Tenant assigns all its rights and interest under
this Lease, the assignee under such assignment shall expressly assume all the
obligations of Tenant hereunder, actual or contingent, including obligations of
Tenant which may have arisen on or prior to the date of such assignment, by a
written instrument delivered to Landlord at the time of such assignment. Each
sublease of any of the Related Premises shall be subject and subordinate to the
provisions of this Lease. No assignment or sublease shall affect or reduce any
of the obligations of Tenant hereunder, and all such obligations shall continue
in full force and effect as obligations of a principal and not as obligations of
a guarantor, as if no assignment or sublease had been made. No assignment or
sublease shall impose any additional obligations on Landlord under this Lease.
(c) Tenant shall, within ten (10) days after the
execution and delivery of any assignment or sublease consented to by Landlord,
deliver a duplicate original copy thereof to Landlord which, in the event of an
assignment, shall be in recordable form.
(d) As security for performance of its obligations under
this Lease, Tenant hereby grants, conveys and assigns to Landlord all right,
title and interest of Tenant in and to all subleases now in existence or
hereafter entered into for any or all of the Leased Premises, any and all
extensions, modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all
rents and other sums of money payable under any sublease of any of the Leased
Premises, provided, however, that Landlord shall have the absolute right at any
time upon notice to Tenant and any subtenants to revoke said license and to
collect such rents and sums of money and to retain the same. Tenant shall not
consent to, cause or allow any modification or alteration of any of the terms,
conditions or covenants of any of the subleases or the termination thereof,
without the prior written approval of Landlord which consent shall not be
unreasonably withheld nor shall Tenant accept any rents more than thirty (30)
days in advance of the accrual thereof nor do nor permit anything to be done,
the doing of which, nor omit or refrain from doing anything, the omission of
which, will or could be a breach of or default in the terms of any of the
subleases.
(e) Tenant shall not have the power to mortgage, pledge
or otherwise encumber its interest under this Lease or any sublease of any of
the Related Premises, and any such mortgage, pledge or encumbrance made in
violation of this Paragraph 21 shall be void and of no force and effect.
(f) Subject to the provisions of Paragraph 36 hereof,
Landlord may sell or transfer the Leased Premises at any time without Tenant's
consent to any third party (each a "Third Party Purchaser"). In the event of any
such transfer, Tenant shall attorn to any Third Party Purchaser as Landlord so
long as such Third Party Purchaser and Landlord notify Tenant in writing of such
transfer. At the request of Landlord, Tenant will execute such documents
confirming the agreement referred to above and such other agreements as Landlord
may reasonably request, provided that such agreements do not increase the
liabilities and obligations of Tenant hereunder.
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22. Events of Default.
(a) The occurrence of any one or more of the following
(after expiration of any applicable cure period as provided in Paragraph 22(b))
shall, at the sole option of Landlord, constitute an "Event of Default" under
this Lease:
(i) a failure by Tenant to make any payment of any
Monetary Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and observe,
or a violation or breach of, any other provision hereof not otherwise
specifically mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant
herein or in any certificate, demand or request made pursuant hereto proves to
be incorrect, now or hereafter, in any material respect;
(iv) a final, non-appealable judgment or judgments
for the payment of money in excess of $1,000,000 in the aggregate shall be
rendered against Tenant and the same shall remain undischarged for a period of
sixty (60) consecutive days;
(v) Tenant shall (A) voluntarily be adjudicated a
bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for any of the Related Premises, (C) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(vi) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for
any of the Related Premises or approving a petition filed against Tenant which
seeks relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, and such order, judgment or decree shall remain
undischarged or unstayed sixty (60) days after it is entered;
(vii) any of the Related Premises shall have been
vacated or abandoned;
(viii) Tenant shall be liquidated or dissolved or
shall begin proceedings towards its liquidation or dissolution;
(ix) the estate or interest of Tenant in any of the
Related Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within sixty (60) days after it is made;
(x) a failure by Tenant to perform or observe, or a
violation or breach of, or a misrepresentation by Tenant under, any provision of
any Assignment or any other document between Tenant and Lender, if such failure,
violation, breach or misrepresentation gives rise to a default beyond any
applicable cure period with respect to any Loan;
(xi) a failure by Tenant to maintain in effect any
license or permit necessary for the use, occupancy or operation of any of the
Related Premises;
(xii) Tenant shall sell or transfer or enter into an
agreement to sell or transfer all or substantially all of its assets; or
29
(xiii) an Event of Default under the Guaranty shall
exist.
(b) No notice or cure period shall be required in any one
or more of the following events: (A) the occurrence of an Event of Default under
clause (i) (except as otherwise set forth below), (iii), (iv), (v), (vi), (vii),
(viii), (ix), (x), (xi), (xii) or (xiii) of Paragraph 22(a); (B) the default
consists of a failure to pay Basic Rent, a failure to provide any insurance
required by Paragraph 16 or an assignment or sublease entered into in violation
of Paragraph 21; or (C) the default is such that any delay in the exercise of a
remedy by Landlord could reasonably be expected to cause irreparable harm to
Landlord. If the default consists of the failure to pay any Monetary Obligation
under clause (i) of Paragraph 22(a) the applicable cure period shall be three
(3) days from the date on which notice is given, but Landlord shall not be
obligated to give notice of, or allow any cure period for, any such default more
than two times within any consecutive twelve (12) month period. If the default
consists of a default under clause (ii) of Paragraph 22(a), other than the
events specified in clauses (B) and (C) of the first sentence of this Paragraph
22(b), the applicable cure period shall be twenty (20) days from the date on
which notice is given or, if the default cannot be cured within such twenty (20)
day period and delay in the exercise of a remedy would not (in Landlord's
reasonable judgment) cause any material adverse harm to Landlord or any of the
Leased Premises, the cure period shall be extended for the period required to
cure the default (but such cure period, including any extension, shall not in
the aggregate exceed sixty (60) days), provided that Tenant shall commence to
cure the default within the said twenty-day period and shall actively,
diligently and in good faith proceed with and continue the curing of the default
until it shall be fully cured.
23. Remedies and Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's
intention to terminate this Lease on a date specified in such notice. Upon such
date, this Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire and terminate. Upon such termination, Tenant shall immediately
surrender and deliver possession of the Leased Premises to Landlord in
accordance with Paragraph 26. If Tenant does not so surrender and deliver
possession of all of the Leased Premises, Landlord may re-enter and repossess
any of the Leased Premises not surrendered, with or without legal process, by
peaceably entering any of the Leased Premises and changing locks or by summary
proceedings, ejectment or any other lawful means or procedure. Upon or at any
time after taking possession of any of the Leased Premises, Landlord may, by
peaceable means or legal process, remove any Persons or property therefrom.
Landlord shall be under no liability for or by reason of any such entry,
repossession or removal. Notwithstanding such entry or repossession, Landlord
may (A) exercise the remedy set forth in and collect the damages permitted by
Paragraph 23(a)(iii) or (B) collect the damages set forth in Paragraph 23(b)(i)
or 23(b)(ii).
(ii) After repossession of any of the Leased Premises
pursuant to clause (i) above, Landlord shall have the right to relet any of the
Leased Premises to such tenant or tenants, for such term or terms, for such
rent, on such conditions and for such uses as Landlord in its sole discretion
may determine, and collect and receive any rents payable by reason of such
reletting. Landlord may make such Alterations in connection with such reletting
as it may deem advisable in its sole discretion. Notwithstanding any such
reletting, Landlord may collect the damages set forth in Paragraph 23(b)(ii).
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(iii) Landlord may, upon notice to Tenant, require
Tenant to make an irrevocable offer to terminate this Lease in its entirety for
an amount (the "Default Termination Amount") specified in the next sentence. The
"Default Termination Amount" shall be the greatest of (A) the Fair Market Value
of the Leased Premises or (B) the sum of the Acquisition Cost and Prepayment
Premium which Landlord will be required to pay in prepaying any Loan with
proceeds of the Default Termination Amount or (C) an amount equal to the Present
Value of the entire Basic Rent from the date of such purchase to the date on
which the then Term would expire, assuming that the Term has been extended for
all extension periods, if any, provided for in this Lease. Upon such notice to
Tenant, Tenant shall be deemed to have made such offer and shall, if requested
by Landlord, within ten (10) days following such request, deposit with Landlord
as payment against the Default Termination Amount the amount described in (B)
above, Landlord and Tenant shall promptly commence to determine Fair Market
Value. Within thirty (30) days after the Fair Market Value Date, Landlord shall
accept or reject such offer. If Landlord accepts such offer then, on the tenth
(10th) business day after such acceptance, Tenant shall pay to Landlord the
Default Termination Amount and, at the request of Tenant, Landlord will convey
the Leased Premises to Tenant or its designee in accordance with Paragraph 20.
Any rejection by Landlord of such offer shall have no effect on any other remedy
Landlord may have under this Lease.
(iv) Landlord may declare by notice to Tenant the
entire Basic Rent (in the amount of Basic Rent then in effect) for the remainder
of the then current Term to be immediately due and payable. Tenant shall
immediately pay to Landlord all such Basic Rent discounted to its Present Value,
all accrued Rent then due and unpaid, all other Monetary Obligations which are
then due and unpaid and all Monetary Obligations which arise or become due by
reason of such Event of Default (including any Costs of Landlord). Upon receipt
by Landlord of all such accelerated Basic Rent and Monetary Obligations, this
Lease shall remain in full force and effect and Tenant shall have the right to
possession of the Leased Premises from the date of such receipt by Landlord to
the end of the Term, and subject to all the provisions of this Lease, including
the obligation to pay all increases in Basic Rent and all Monetary Obligations
that subsequently become due, except that (A) no Basic Rent which has been
prepaid hereunder shall be due thereafter during the said Term, (B) Tenant shall
have no option to extend or renew the Term.
(b) The following constitute damages to which Landlord
shall be entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph
23(a)(i) but not its remedy under Paragraph 23(a)(ii) (or attempts to exercise
such remedy and is unsuccessful in reletting the Leased Premises) then, upon
written demand from Landlord, Tenant shall pay to Landlord, as liquidated and
agreed final damages for Tenant's default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of (A) all Basic Rent from the date of such
demand to the date on which the Term is scheduled to expire hereunder in the
absence of any earlier termination, re-entry or repossession over (B) the then
fair market rental value of the Leased Premises for the same period. Tenant
shall also pay to Landlord all of Landlord's Costs in connection with the
repossession of the Leased Premises and any attempted reletting thereof,
including all brokerage commissions, legal expenses, reasonable attorneys' fees,
employees' expenses, costs of Alterations and expenses and preparation for
reletting.
(ii) If Landlord exercises its remedy under Paragraph
23(a)(i) or its remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant
shall, until the end of what would have been the Term in the absence of the
termination of the Lease, and whether or not any of the Leased Premises shall
have been relet, be liable to Landlord for, and shall pay to Landlord,
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as liquidated and agreed current damages on the date on which the same are due
and payable under the terms of this Lease all Monetary Obligations which would
be payable under this Lease by Tenant in the absence of such termination less
the net proceeds, if any, of any reletting pursuant to Paragraph 23(a)(ii),
after deducting from such proceeds all of Landlord's Costs (including the items
listed in the last sentence of Paragraph 23(b)(i) hereof) incurred in connection
with such repossessing and reletting; provided, that if Landlord has not relet
the Leased Premises, such Costs of Landlord shall be considered to be Monetary
Obligations payable by Tenant. Tenant shall be and remain liable for all sums
aforesaid, and Landlord may recover such damages from Tenant and institute and
maintain successive actions or legal proceedings against Tenant for the recovery
of such damages. Nothing herein contained shall be deemed to require Landlord to
wait to begin such action or other legal proceedings until the date when the
Term would have expired by its own terms had there been no such Event of
Default.
(c) Notwithstanding anything to the contrary herein
contained, in lieu of or in addition to any of the foregoing remedies and
damages, Landlord may exercise any remedies and collect any damages available to
it at law or in equity. If Landlord is unable to obtain full satisfaction
pursuant to the exercise of any remedy, it may pursue any other remedy which it
has hereunder or at law or in equity.
(d) Landlord shall not be required to mitigate any of its
damages hereunder unless required to by applicable Law. If any Law shall validly
limit the amount of any damages provided for herein to an amount which is less
than the amount agreed to herein, Landlord shall be entitled to the maximum
amount available under such Law.
(e) No termination of this Lease, repossession or
reletting of any of the Leased Premises, exercise of any remedy or collection of
any damages pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, TENANT WAIVES THE SERVICE OF NOTICE WHICH MAY BE REQUIRED BY ANY
APPLICABLE LAW AND ANY RIGHT TO A TRIAL BY JURY.
(g) Upon the occurrence of any Event of Default, Landlord
shall have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose.
(h) No failure of Landlord (i) to insist at any time upon
the strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(i) Tenant hereby waives and surrenders, for itself and
all those claiming under it, including creditors of all kinds, (i) any right and
privilege which it or any of them may have under any present or future Law to
redeem any of the Leased Premises or to have a continuance of this Lease after
termination of this Lease or of Tenant's right of occupancy or possession
pursuant to any court order or any provision hereof, and (ii) the benefits of
any present or future Law which exempts property from liability for debt or for
distress for rent.
(j) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised
32
at any time an Event of Default has occurred and is continuing and may be
exercised from time to time. No remedy shall be exhausted by any exercise
thereof.
24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated above or when delivery is
refused. A copy of any notice given by Tenant to Landlord shall simultaneously
be given by Tenant to Xxxx Xxxxx Xxxx & XxXxxx, 0000 Xxx Xxxxxxx Xxxxx,
Xxxxxxxxxxxx, XX 00000, Attention: Chairman, Real Estate Department. For the
purposes of this Paragraph, any party may substitute another address stated
above (or substituted by a previous notice) for its address by giving fifteen
(15) days' notice of the new address to the other party, in the manner provided
above.
25. Estoppel Certificate. At any time upon not less than ten (10)
days' prior written request by either Landlord or Tenant (the "Requesting
Party") to the other party (the "Responding Party"), the Responding Party shall
deliver to the Requesting Party a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by an court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation.
26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear. Upon such surrender, Tenant shall (a)
remove from the Leased Premises all property which is owned by Tenant or third
parties other than Landlord and (b) repair any damage caused by such removal.
Property not so removed shall become the property of Landlord, and Landlord may
thereafter cause such property to be removed from the Leased Premises. The cost
of removing and disposing of such property and repairing any damage to any of
the Leased Premises caused by such removal shall be paid by Tenant to Landlord
upon demand. Landlord shall not in any manner or to any extent be obligated to
reimburse Tenant for any such property which becomes the property of Landlord
pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased Premises
by reason of the fact that the same Person may acquire or hold or own, directly
or indirectly, (a) the leasehold estate
33
created hereby or any part thereof or interest therein and (b) the fee estate in
any of the Leased Premises or any part thereof or interest therein, unless and
until all Persons having any interest in the interests described in (a) and (b)
above which are sought to be merged shall join in a written instrument effecting
such merger and shall duly record the same.
28. Books and Records.
(a) Tenant shall keep adequate records and books of
account with respect to the finances and business of Tenant generally and with
respect to the Leased Premises, in accordance with generally accepted accounting
principles ("GAAP") consistently applied, and shall permit Landlord and Lender
by their respective agents, accountants and attorneys, upon reasonable notice to
Tenant, to visit and inspect the Leased Premises and examine (and make copies
of) the records and books of account and to discuss the finances and business
with the officers of Tenant, at such reasonable times as may be requested by
Landlord. Upon the request of Lender or Landlord (either telephonically or in
writing), Tenant shall provide the requesting party with copies of any
information to which such party would be entitled in the course of a personal
visit.
(b) Tenant shall deliver to Landlord and to Lender within
ninety (90) days of the close of each fiscal year, annual audited financial
statements of Tenant prepared by nationally recognized independent certified
public accountants. Tenant shall also furnish to Landlord within forty-five (45)
days after the end of each of the three remaining quarters unaudited financial
statements and all other quarterly reports of Tenant, certified by Tenant's
chief financial officer, and all filings, if any, of Form 10-K, Form 10-Q and
other required filings with the Securities and Exchange Commission pursuant to
the provisions of the Securities Exchange Act of 1934, as amended, or any other
Law. All financial statements of Tenant shall be prepared in accordance with
GAAP consistently applied. All financial statements of Tenant shall be prepared
in accordance with GAAP consistently applied. All annual financial statements
shall be accompanied (i) by an opinion of said accountants stating that (A)
there are no qualifications as to the scope of the audit and (B) the audit was
performed in accordance with GAAP and (ii) by the affidavit of the president or
a vice president of Tenant, dated within five (5) days of the delivery of such
statement, stating that (C) the affiant knows of no Event of Default, or event
which, upon notice or the passage of time or both, would become an Event of
Default which has occurred and is continuing hereunder or, if any such event has
occurred and is continuing, specifying the nature and period of existence
thereof and what action Tenant has taken or proposes to take with respect
thereto and (D) except as otherwise specified in such affidavit, that Tenant has
fulfilled all of its obligations under this Lease which are required to be
fulfilled on or prior to the date of such affidavit.
29. Determination of Value.
(a) Whenever a determination of Fair Market Value is
required pursuant to any provision of this Lease, such Fair Market Value shall
be determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon
such Fair Market Value within thirty (30) days after the date (the "Applicable
Initial Date") on which (A) Tenant provides Landlord with notice of its
intention to terminate this Lease and purchase the Affected Premises pursuant to
Paragraph 18, (B) Landlord provides Tenant with notice of its intention to
redetermine Fair Market Value pursuant to Paragraph 20(c), (C) Landlord provides
Tenant with notice of Landlord's intention to require Tenant to make an offer to
purchase the Leased Premises pursuant to Paragraph 23(a)(iii) or (D) Landlord
receives Tenant's Option Notice. Upon reaching such agreement, the parties shall
execute an agreement setting forth the amount of such Fair Market Value.
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(ii) If the parties shall not have signed such
agreement within thirty (30) days after the Applicable Initial Date, Tenant
shall within fifty (50) days after the Applicable Initial Date select an
appraiser and notify Landlord in writing of the name, address and qualifications
of such appraiser. Within twenty (20) days following Landlord's receipt of
Tenant's notice of the appraiser selected by Tenant, Landlord shall select an
appraiser and notify Tenant of the name, address and qualifications of such
appraiser. Such two appraisers shall endeavor to agree upon Fair Market Value
based on a written appraisal made by each of them as of the Relevant Date (and
given to Landlord by Tenant). If such two appraisers shall agree upon a Fair
Market Value, the amount of such Fair Market Value as so agreed shall be binding
and conclusive upon Landlord and Tenant.
(iii) If such two appraisers shall be unable to agree
upon a Fair Market Value within twenty (20) days after the selection of an
appraiser by Landlord, then such appraisers shall advise Landlord and Tenant of
their respective determination of Fair Market Value and shall select a third
appraiser to make the determination of Fair Market Value. The selection of the
third appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree
upon the designation of a third appraiser within ten (10) days after the
expiration of the twenty (20) day period referred to in clause (iii) above, or
if such third appraiser does not make a determination of Fair Market Value
within twenty (20) days after his selection, then such third appraiser or a
substituted third appraiser, as applicable, shall, at the request of either
party hereto (with respect to the other party), be appointed by the President or
Chairman of the American Arbitration Association in New York, New York. The
determination of Fair Market Value made by the third appraiser appointed
pursuant hereto shall be made within twenty (20) days after such appointment.
(v) If a third appraiser is selected, Fair Market
Value shall be the average of the determination of Fair Market Value made by the
third appraiser and the determination of Fair Market Value made by the appraiser
(selected pursuant to Paragraph 29(a)(ii) hereof) whose determination of Fair
Market Value is nearest to that of the third appraiser. Such average shall be
binding and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to
this Paragraph 29(a) shall (A) be independent qualified MAI appraisers (B) have
no right, power or authority to alter or modify the provisions of this Lease,
(C) utilize the definition of Fair Market Value hereinabove set forth above, and
(D) be registered in the State if the State provides for or requires such
registration.
(vii) The Cost of the procedure described in this
Paragraph 29(a) above shall be borne entirely by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended
with respect to the Leased Premises or the Affected Premises, as applicable, to
the date specified for termination in the particular provision of this Lease
pursuant to which the determination of Fair Market Value is being made.
(c) In determining Fair Market Value as defined in clause
(b) of the definition of Fair Market Value, the appraisers shall add (a) the
present value of the Rent for the remaining Term, assuming the Term has been
extended for all extension periods provided herein (with assumed increases in
the CPI to be determined by the appraisers) using a discount rate (which may be
determined by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and (b) the present value of the Leased Premises as
of the end of such
35
Term (having assumed the Term has been extended for all extension periods
provided herein). The appraisers shall further assume that no default then
exists under the Lease, that Tenant has complied (and will comply) with all
provisions of the Lease, and that Tenant has not violated (and will not violate)
any of the Covenants.
30. Non-Recourse as to Landlord. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against the Leased Premises and
not against any other assets, properties or funds of (a) Landlord, (b) any
director, officer, general partner, limited partner, employee or agent of
Landlord, or any general partner of Landlord, any of its general partners or
shareholders (or any legal representative, heir, estate, successor or assign of
any thereof), (c) any predecessor or successor partnership or corporation (or
other entity) of Landlord, or any of its general partners, either directly or
through Landlord or its general partners or any predecessor or successor
partnership or corporation or their shareholders, officers, directors, employees
or agents (or other entity), or (d) any other Person (including Xxxxx Property
Advisors, Xxxxx Fiduciary Advisors, Inc., W.P. Xxxxx & Co., Inc., W.P. Xxxxx
Incorporated and any Person affiliated with any of the foregoing, or any
director, officer, employee or agent of any thereof).
31. Financing.
(a) Tenant agrees to pay, within three (3) business days
of written demand thereof, any cost, charge or expense (other than the principal
of the Note and interest thereon at the contract rate of interest specified
therein) imposed upon Landlord by Lender pursuant to the Note, the Mortgage or
the Assignment which is not caused solely by the gross negligence or willful
misconduct of Landlord and which is not otherwise reimbursed by Tenant to
Landlord pursuant to any other provision of this Lease.
(b) If Landlord desires to obtain or refinance any Loan,
Tenant shall negotiate in good faith with Landlord concerning any request made
by any Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant shall agree, upon request of Landlord, to supply any such
Lender with such notices and information as Tenant is required to give to
Landlord hereunder and to extend the rights of Landlord hereunder to any such
Lender and to consent to such financing if such consent is requested by such
Lender. Tenant shall provide any other consent or statement and shall execute
any and all other documents that such Lender requires in connection with such
financing, including any environmental indemnity agreement and subordination,
non-disturbance and attornment agreement, so long as the same do not materially
adversely affect any right, benefit or privilege of Tenant under this Lease or
materially increase Tenant's obligations under this Lease. Such subordination,
nondisturbance and attornment agreement may require Tenant to confirm that (a)
Lender and its assigns will not be liable for any misrepresentation, act or
omission of Landlord and (b) Lender and its assigns will not be subject to any
counterclaim, demand or offsets which Tenant may have against Landlord.
32. Subordination, Non-Disturbance and Attornment. This Lease and
Tenant's interest hereunder shall be subordinate to any Mortgage or other
security instrument hereafter placed upon the Leased Premises by Landlord, and
to any and all advances made or to be made thereunder, to the interest thereon,
and all renewals, replacements and extensions thereof, provided that any such
Mortgage or other security instrument (or a separate instrument in recordable
form duly executed by the holder of any such Mortgage or other security
instrument and delivered to Tenant) shall provide for the recognition of this
Lease and all Tenant's rights hereunder unless and until an Event of Default
exists or Landlord shall have the right to terminate this Lease pursuant to any
applicable provision hereof.
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33. Tax Treatment; Reporting. Landlord and Tenant each acknowledge
that each shall treat this transaction as a true lease for state law purposes
and shall report this transaction as a Lease for Federal income tax purposes.
For Federal income tax purposes each shall report this Lease as a true lease
with Landlord as the owner of the Leased Premises and Equipment and Tenant as
the lessee of such Leased Premises and Equipment including: (1) treating
Landlord as the owner of the property eligible to claim depreciation deductions
under Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
34. Option to Purchase. Landlord does hereby give and grant to
Tenant the following options upon written notice to Landlord (any such notice,
an "Option Notice") to purchase the Leased Premises on the terms and conditions
set forth in this Paragraph 34:
(a) Tenant shall have an option (the "First Option") to
purchase the Leased Premises (i) for a purchase price equal to the Offer Amount
and (ii) on any date (the "First Option Purchase Date") during the later to
occur of (A) the thirty (30) day period immediately following the expiration of
the eighth (8th) Lease Year or (B) if Fair Market Value is not determined by the
expiration of such thirty (30) day period, the thirty (30) days after the Fair
Market Value Date. If Tenant intends to exercise the First Option, Tenant shall
an Option Notice to Landlord not earlier than twelve (12) months nor later than
six (6) months prior to the end of the eighth (8th) Lease Year. Promptly upon
receipt of the Option Notice by Landlord, the parties shall commence to
determine Fair Market Value.
(b) If Tenant shall not have purchased the Leased
Premises in accordance with the provisions of Paragraph 34(a) above or
otherwise, Tenant shall have an option to purchase (the "Second Option") to
purchase the Leased Premises (i) for a purchase price equal to the Offer Amount
and (ii) on any date (the "Second Option Purchase Date") during the later to
occur of (A) the thirty (30) day period immediately following the expiration of
the fifteenth (15th) Lease Year, or (B) if Fair Market Value is not determined
by the expiration of such thirty (30) day period, the first business day
occurring thirty (30) days after the Fair Market Value Date. If Tenant intends
to exercise the Second Option, Tenant shall give an Option Notice to Landlord
not earlier than twelve (12) months nor later than six (6) months prior to the
expiration of the fifteenth (15th) Lease Year. Promptly upon receipt of the
Option Notice by Landlord, the parties shall commence to determine Fair Market
Value.
(c) If Tenant shall not have purchased the Leased
Premises in accordance with the provisions of Paragraph 34(a) or 34(b) above or
otherwise, Tenant shall have an option to purchase (the "Third Option") to
purchase the Leased Premises (i) for a purchase price equal to the Offer Amount
and (ii) on any date (the "Third Option Purchase Date") occurring during the
later to occur of (A) the thirty (30) day period immediately following the
expiration of the twentieth (20th) Lease Year or (B) if Fair Market Value is not
determined by the expiration of such thirty (30) day period, the first business
day occurring thirty (30) days after the Fair Market Value Date. If Tenant
intends to exercise the Third Option, Tenant shall give written notice to
Landlord not earlier than twelve (12) months nor later than six (6) months prior
to the expiration of the twentieth (20th) Lease Year. Promptly upon receipt of
such notice by Landlord, the parties shall commence to determine Fair Market
Value.
(d) If Tenant shall exercise any of the foregoing options
to purchase the Leased Premises, on the later to occur of (i) the First Option
Purchase Date, the Second Option Purchase Date or the Third Option Purchase
Date, as applicable or (ii) the date when Tenant has paid the Offer Amount
(including assumption of the Assumable Loan with respect to the First Option)
and has satisfied all other Monetary Obligations, Landlord shall convey the
Leased Premises to Tenant in accordance with Paragraph 20 hereof and Tenant
shall, if requested
37
by Landlord and if reasonably feasible, cooperate with Landlord with respect to
documentation required in order to effect a "like-kind" exchange pursuant to
Section 1031 of the Internal Revenue Code of 1986, as amended; provided, that if
an Event of Default has occurred and is continuing on the First Option Purchase
Date, Second Option Purchase Date or Third Option Purchase Date, as applicable,
Landlord, at its sole option, may terminate Tenant's option to purchase
hereunder.
IF THIS LEASE SHALL TERMINATE FOR ANY REASON PRIOR TO THE DATE
ORIGINALLY FIXED HEREIN FOR THE EXPIRATION OF THE TERM, THE FIRST OPTION, THE
SECOND OPTION AND THE THIRD OPTION AND ANY EXERCISE THEREOF BY TENANT SHALL
CEASE AND TERMINATE AND SHALL BE NULL AND VOID. TIME IS OF THE ESSENCE WITH
RESPECT TO TENANT'S OBLIGATIONS UNDER THIS PARAGRAPH 34.
35. Miscellaneous.
(a) The paragraph headings in this Lease are used only
for convenience in finding the subject matters and are not part of this Lease or
to be used in determining the intent of the parties or otherwise interpreting
this Lease.
(b) As used in this Lease, the singular shall include the
plural and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien" shall
mean "lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform under
this Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except as otherwise specifically provided herein, Landlord shall have
the right, at its sole option, to withhold or delay its consent whenever such
consent is required under this Lease for any reason or no reason. Time is of the
essence with respect to the performance by Tenant of its obligations under this
Lease.
(d) Landlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or licensee of Tenant with respect to any of
the Leased Premises or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by
Tenant on or about the effective date hereof at Landlord's request constitute
the entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating to
the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject
matter of this Lease and have each fully participated in the negotiation and
drafting of this Lease. Accordingly, this Lease shall be construed without
regard to the rule that ambiguities in a document are to be construed against
the drafter.
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(f) This Lease may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land
and bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of Landlord, its successors and assigns. If there is more than one
Tenant, the obligations of each shall be joint and several.
(h) Notwithstanding any provision in this Lease to the
contrary, all Surviving Obligations of Tenant shall survive the expiration or
termination of this Lease with respect to any Related Premises.
(i) If any one or more of the provisions contained in
this Lease shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(j) All exhibits attached hereto are incorporated herein
as if fully set forth.
(k) This Lease shall be governed by and construed and
enforced in accordance with the Laws of the State.
39
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
CASH (MA) QRS 12-41, INC.,
a Massachusetts corporation
By:_____________________________________
Xxxxxx X. XxXxxx
Vice President
TENANT:
THE SANDWICH CO-OPERATIVE BANK,
a Massachusetts co-operative bank
By:_____________________________________
Xxxxxxxx X. Xxxxxx
President
[Corporate Seal]
40
EXHIBIT A
PREMISES
41
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances of every
kind and nature whatsoever now or hereafter affixed or attached to or installed
in any of the Leased Premises (except as hereafter provided), including all
electrical, anti-pollution, heating, lighting (including hanging fluorescent
lighting), incinerating, power, air cooling, air conditioning, humidification,
sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and
ventilating systems, devices and machinery and all engines, pipes, pumps, tanks
(including exchange tanks and fuel storage tanks), motors, conduits, ducts,
steam circulation coils, blowers, steam lines, compressors, oil burners,
boilers, doors, windows, loading platforms, lavatory facilities, stairwells,
fencing (including cyclone fencing), passenger and freight elevators, overhead
cranes and garage units, together with all additions thereto, substitutions
therefor and replacements thereof required or permitted by this Lease, but
excluding all personal property and all trade fixtures, machinery, office,
manufacturing and warehouse equipment which are not necessary to the operation,
as buildings, of the buildings which constitute part of the Leased Premises.
42
EXHIBIT C
PERMITTED ENCUMBRANCES
Leased Premises
- Real Estate Taxes and Assessments
- Mechanics' or materialmen's liens
- Matters disclosed on current lien certificates
- Rights of parties in possession
Bourne Premises
- Order of Taking and Award for Damages recorded in Book 743, Page
538, affected by Amended Order of Taking and Award of Damages
recorded in Book 747, Page 476
Sandwich Premises
- Taking of the County Commissioners dated November 21, 1947 and
recorded in Book 695, Page 405
- Notices of Variances dated February 22, 1973 and recorded in Book
1813, Page 257 and in Book 1872, Page 90
43
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent. Subject to the adjustments provided for in
Paragraphs 2, 3 and 4 below, Basic Rent payable in respect of the Term shall be
$182,490 per annum, payable monthly, in advance on each Basic Rent Payment Date,
in equal installments of $15,207.50 each.
2. CPI Adjustments to Basic Rent. The Basic Rent shall be subject
to adjustment, in the manner hereinafter set forth, for increases in the index
known as United States Department of Labor, Bureau of Labor Statistics, Consumer
Price Index, All Urban Consumers, United States City Average, All Items,
(1982-84=100) ("CPI") or the successor index that most closely approximates the
CPI. If the CPI shall be discontinued with no successor or comparable successor
index, Landlord and Tenant shall attempt to agree upon a substitute index or
formula, but if they are unable to so agree, then the matter shall be determined
by arbitration in accordance with the rules of the American Arbitration
Association then prevailing in New York City. Any decision or award resulting
from such arbitration shall be final and binding upon Landlord and Tenant and
judgment thereon may be entered in any court of competent jurisdiction. In no
event will the Basic Rent as adjusted by the CPI adjustment be less than the
Basic Rent in effect for the one (1) year period immediately preceding such
adjustment.
3. Effective Dates of CPI Adjustments. Basic Rent shall not be
adjusted to reflect changes in the CPI until the first (1st) anniversary of the
Basic Rent Payment Date on which the first full monthly installment of Basic
Rent shall be due and payable (the "First Full Basic Rent Payment Date"). As of
the first (1st) anniversary of the First Full Basic Rent Payment Date and
thereafter on each annuity of the First Full Basic Rent Payment Date occurring
during the Term, including any extensions thereof, Basic Rent shall be adjusted
to reflect increases in the CPI during the most recent one (1) year period
immediately preceding each of the foregoing dates (each such date being
hereinafter referred to as the "Basic Rent Adjustment Date").
4. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date when the
average CPI determined in clause (i) below exceeds the Beginning CPI (as defined
in this Paragraph 4(a)), the Basic Rent in effect immediately prior to the
applicable Basic Rent Adjustment Date shall be multiplied by a fraction, the
numerator of which shall be the difference between (i) the average CPI for the
three (3) most recent calendar months (the "Prior Months") ending prior to such
Basic Rent Adjustment Date for which the CPI has been published on or before the
forty-fifth (45th) day preceding such Basic Rent Adjustment Date and (ii) the
Beginning CPI, and the denominator of which shall be the Beginning CPI. The
product of such multiplication shall be added to the Basic Rent in effect
immediately prior to such Basic Rent Adjustment Date. As used herein, "Beginning
CPI" shall mean the average CPI for the three (3) calendar months corresponding
to the Prior Months, but occurring one (1) year earlier. If the average CPI
determined in clause (i) is the same or less than the Beginning CPI, the Basic
Rent will remain the same for the ensuing one (1) year period.
(b) Effective as of a given Basic Rent Adjustment Date,
Basic Rent payable under this Lease until the next succeeding Basic Rent
Adjustment Date shall be the Basic Rent in effect after the adjustment provided
for as of such Basic Rent Adjustment Date.
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(c) Notice of the new annual Basic Rent shall be
delivered to Tenant on or before the tenth (10th) day preceding each Basic Rent
Adjustment Date, but any failure to do so by Landlord shall not be or be deemed
to be a waiver by Landlord of Landlord's rights to collect such sums. Tenant
shall pay to Landlord, within ten (10) days after a notice of the new annual
Basic Rent is delivered to Tenant, all amounts due from Tenant, but unpaid,
because the stated amount as set forth above was not delivered to Tenant at
least ten (10) days preceding the Basic Rent Adjustment Date in question.
45
EXHIBIT E
ACQUISITION COST
Bourne Premises $ 314,510.00
Sandwich Premises $1,127,890.00
Wareham Premises $ 377,600.00
-------------
$1,820,000.00
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EXHIBIT F
PERCENTAGE ALLOCATION OF BASIC RENT
Bourne Premises 17.28%
Sandwich Premises 61.97%
Wareham Premises 20.75%
------
100%
If any of the Related Premises ceases to be subject to this Lease, the
percentage shown on this Exhibit F for each of the Related Premises which
remains subject to this Lease shall be adjusted proportionately so that the
total of such percentages shall be 100%.
