EXHIBIT 10.2
EXECUTION COPY
DEED OF GROUND LEASE
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THIS DEED OF GROUND LEASE ("Lease") is made as of May 31, 2001, by and
between HERCULES INCORPORATED, a Delaware corporation ("Landlord") and GEO
SPECIALTY CHEMICALS, INC., an Ohio corporation ("Tenant").
RECITALS
A. Landlord is the owner of those certain tracts or parcels of land
situated in Southampton County, Commonwealth of Virginia, commonly known as the
Hercules Franklin Facility, and being more particularly bounded and described on
Exhibit A attached hereto and made a part hereof (the "Facility Site").
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B. Landlord, as seller, and Tenant, as buyer, entered into that certain
Sale and Purchase Agreement dated as of March 27, 2001 (the "Purchase
Agreement") pursuant to which Landlord has agreed to sell to Tenant, and Tenant
has agreed to purchase from Landlord, all the assets and improvements pertaining
to the peroxide manufacturing facility located on a certain portion of the
Facility Site (the "Peroxides Business"). Those portions of the Facility Site on
which the Peroxides Business is located are more particularly bounded and
described on Exhibit B attached hereto (the "Premises"), which Premises are to
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be leased to Tenant in accordance with the terms of this Ground Lease.
C. That portion of the Facility Site not leased to Tenant hereunder is
herein referred to as the Retained Land.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties, Landlord and Tenant agree as
follows:
1. Demise. (a) Landlord hereby demises and lets the Premises unto Tenant,
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and Tenant hereby leases and takes the Premises from Landlord, upon the
covenants, terms and conditions hereinafter set forth.
(b) In addition, Landlord hereby grants and conveys to Tenant the
following non-exclusive easements pertaining to the right and use (in common
with others entitled to the use thereof) of certain improvements and utilities
within the Facility Site which are appurtenant to and an integral part of the
use and operation of the Peroxy Business at the Premises:
(i) Shared Facilities Easement. Tenant shall have the non-
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exclusive right (in common with others entitled to the use thereof) to use the
following assets and improvements owned by Landlord:
. 8100 Main Office Building
. 8101 Laboratory
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. 8202 Storeroom and Maintenance Shop
. 8104 Lunch Room/Change House
. 8203 Change House
. New Office Building (Near 9301 Rosin Drum Pad)
. 9304 Warehouse
. 9305 Pamolyn Warehouse
. Warehouse (Near H-22 Platform Salt Tank)
. T-900-2 Spent Fire Water Tank
. Railroad and Truck Loading and Unloading Station
as generally depicted and shown on Exhibit C attached hereto and made a part
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hereof (the "Shared Facilities").
(ii) Common Areas Easement. Tenant shall have the non-exclusive
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right (in common with others entitled to the use thereof) to use those roads,
parking areas, railroad spur tracks, truck turnarounds, adjoining parking,
loading and unloading facilities and other common areas within the Facility Site
which are appurtenant to and necessary for the continued use and operation of
the Peroxy Business at the Premises in substantially the same manner as
currently operated and used by Landlord as of the effective date of the Purchase
Agreement, which areas are generally depicted and shown on Exhibit D attached
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hereto and made a part hereof (the "Common Areas").
(iii) Shared Utilities Easement. Tenant shall have the non-
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exclusive right (in common with others entitled to the use thereof) to use the
utility corridors, ducts, conduits and lines located within the Facility Site
which now or may, subsequent to the commencement date of this Lease, serve the
Premises in connection with the operation of the Peroxy Business, including
water and sewer, non-contact cooling water, electricity, steam, compressed air,
inert gas and potable water (collectively the "Shared Utilities"), and all
related or appurtenant equipment or improvements required for the delivery or
distribution of such Shared Utilities for the Peroxy Business at the Premises.
(iv) The Shared Facilities, Common Areas and the Shared
Utilities are sometimes hereinafter collectively referred to as the "Appurtenant
Facilities". The Appurtenant Facilities may be used by Tenant and its officers,
directors, employers, agents, servants, employees, agents, visitors and invitees
(collectively, "Permittees") and the rights, duties and obligations of Landlord
and Tenant with respect to such Appurtenant Facilities shall be governed by the
Master Declaration of Easements, Covenants and Restrictions (the "Master
Declaration"). Except as set forth in this Lease or in any separate instrument,
Tenant shall have no other right, privilege, license, easement or other interest
in the Retained Land.
(c) Exclusions from the Premises. Landlord and Tenant acknowledge and
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agree that the real property leased to Tenant hereunder excludes all those
certain buildings, facilities, structures and other improvements located on the
Premises (the "Improvements"), which have been conveyed by Landlord to Tenant by
delivery of a special warranty deed of even date herewith, or any personal
property, equipment, inventory or other assets purchased
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pursuant to the Purchase Agreement which have been conveyed to Tenant by xxxx of
sale or other instrument pursuant to the Purchase Agreement (such excluded
assets conveyed to Tenant under the Purchase Agreement are collectively referred
to as the "Tenant Purchased Assets").
2. Lease Term. (a) The initial term of this Lease (the "Initial Term")
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shall be for a period of twenty (20) years, commencing on the date hereof (the
"Commencement Date") and automatically terminating without further notice or
demand on the expiration of the twentieth (20th) anniversary of the Commencement
Date.
(b) Provided that no Event of Default has occurred which remains
uncured by Tenant, Tenant shall have the right and option to extend the Term of
this Lease for four (4) successive terms of twenty (20) years each (each an
"Extension Term") (the Initial Term and any Extension Term, as applicable, are
collectively referred to as the "Term"), upon the same terms and conditions
applying to the Initial Term. Tenant shall have the right to exercise such
option to extend the Term by providing written notice to Landlord no less than
one (1) year prior to the expiration of the Initial Term or the then current
Extension Term, as applicable. Notwithstanding the foregoing, the parties desire
to avoid the inadvertent failure of Tenant of exercising the option to extend
the Term. Accordingly, Landlord agrees that, if Tenant does not give written
notice to Landlord of its election to exercise the extension option prior to the
notice deadline set forth above, such option to extend shall remain in effect
until the later of one year prior to the expiration of the Initial Term or the
then current Extension Term, as applicable, or the expiration of thirty (30)
days following Tenant's receipt of written notice from Landlord stating that
Tenant's option to extend must be exercised or will lapse; provided, further,
that Landlord may provide such reminder notice at any time within three (3)
years prior to the scheduled expiration of the Initial Term or the then current
Extension Term, as the case may be.
3. Rent. (a) The base rent for the Premises during the Term (the "Base
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Rent") shall be the sum of One Dollar ($1.00) per annum, payable in advance on
the Commencement Date of this Lease. Landlord acknowledges receipt of the sum
of Twenty Dollars ($20.00), representing payment of Base Rent for the entire
Initial Term.
(b) This is a "triple net" lease. Therefore, the payment of the Base
Rent shall be net to the Landlord and shall be in addition to and over and above
all other sums, charges or amounts of whatever nature to be paid by Tenant to
Landlord pursuant to this Lease (the "Additional Rent"), and all sums payable by
Tenant under any plant operating agreement, utility supply agreement or other
agreements to which Tenant is bound with respect to the Facility Site
(collectively, the "Collateral Agreements"). Additional Rent shall include and
encompass all costs, expenses and obligations of every kind and nature
whatsoever, other than sums due under the Collateral Agreements, relating to the
use and occupancy of the Premises by Tenant and the conduct of the Peroxides
Business by Tenant, together with any and all actual costs and expenses incurred
by or imposed upon Landlord for real and personal property taxes assessed
against the Premises and/or the Tenant Assets (as defined below) or this Lease
(including penalties for late payment). All real estate taxes imposed upon the
Premises and the improvements thereon constituting real property shall, if the
same are not separately assessed
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for real property tax purposes, be prorated as follows: (i) real estate taxes
imposed upon the land value of the Premises shall be determined by multiplying
the total tax on the land by a fraction, the numerator of which is the area of
land included in the Premises, and the denominator of which is the total land
area covered by the applicable tax xxxx, and (ii) real estate taxes imposed upon
the improvements situated on the Premises shall be determined by multiplying the
total tax on the improvements by a fraction, the numerator of which is the value
of the improvements on the Premises, and the denominator of which is the total
value of the improvements covered by the applicable tax xxxx, as determined by
reference to the assessed value of improvements as established by the applicable
taxing authority, or, if such separate assessment is not made by such taxing
authority, as determined by the mutual agreement of the parties. In the event of
any dispute concerning the allocation and proration of real property taxes that
is not resolved in accordance with the foregoing, then the parties agree that
such dispute shall be determined by arbitration at a mutually agreeable location
in the Commonwealth of Virginia in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA"), and each party shall
pay one half of any fees of the AAA in connection therewith. Any determination
by the AAA shall be final and shall be binding and enforceable in any court of
law.
(c) The Base Rent and any Additional Rent shall be considered and
characterized as "Rent" for purposes of this Lease. Tenant shall pay all Rent to
the Landlord without notice, demand, setoff, deduction, counterclaim or
abatement, except as specifically and expressly (and not impliedly) provided in
this Lease, in lawful money to Landlord at the notice address stated herein.
Tenant covenants and agrees to pay to Landlord all Additional Rent within thirty
(30) days after the issuance of a written statement from Landlord, documenting
the amounts properly due, directed to Tenant at the notice address states
herein.
(d) Tenant shall be liable for all taxes levied against the Tenant
Assets (as defined below) as well as any other personal property and trade
fixtures owned by and placed by Tenant in, on or about the Premises.
Notwithstanding the foregoing, Tenant reserves the right to contest any and all
such assessments, either in its own name or that of Landlord, at its own cost
and expense, and Landlord will reasonable cooperate with Tenant in connection
therewith, and will execute and deliver all documents reasonably requested by
Tenant in connection therewith. Tenant covenants and agrees to timely file all
personal property returns in its own name with all applicable taxing and
governmental authorities having jurisdiction thereof. Tenant further agrees to
make all such tax payments required directly to the appropriate taxing
authority.
4. Condition of Premises. (a) Subject to all other terms and provisions
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of this Lease and the Collateral Agreements, including the performance of all
obligations of Landlord under the Purchase Agreement, and the Environmental
Annex attached thereto, the Premises are leased to Tenant and possession is
tendered and accepted by Tenant in its current "as is, where is" condition as of
the date of this Lease, and with no other representations and/or warranties,
express or implied, including those of merchantabililty or fitness for a
particular purpose or of any future benefit.
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(b) All rights, duties, obligations and responsibilities of the
parties hereto with respect to any environmental conditions or matters
pertaining to the Premises, including remediation of contamination and
compliance with environmental laws, shall be governed by the Environmental Annex
which is incorporated herein by reference. Each party agrees to perform its
respective obligations under the Environmental Annex. Notwithstanding any
contrary provision in this Lease, at its expense, Landlord shall comply with,
and Landlord retain all liability arising under all applicable environmental of
the Commonwealth of Virginia arising with respect to the Premises, including,
without limitation, any obligations under such environmental laws to be complied
with by a lessee or lessor of real property or improvements upon the expiration
or earlier termination of the lease demising such real property or improvements,
as required in the Environmental Annex.
5. Title to Tenant Assets. At all times during the Term, title to the
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Tenant Purchased Assets, together with all other buildings, facilities,
fixtures, equipment, inventory and all other improvements and personal property
now or hereafter located, installed or erected on the Premises Agreement
(collectively, the "Tenant Assets") shall be and remain vested in Tenant. It is
the intention of Tenant and Landlord that the retention by Landlord of fee
simple title to the Premises, and the conveyance to Tenant of title to the
Tenant Purchased Assets, shall not change the character of any Tenant Assets as
real property to the extent that any of the Tenant Assets constitute real
property under applicable law.
6. Use of Premises. Tenant shall have the right to use and occupy the
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Premises for the purpose of manufacturing, distribution and related office uses
and other purposes related to the Peroxides Business and any other business
operations conducted on the Premises (the "Permitted Use"); provided that any
use of the Premises shall (a) be in compliance with all applicable zoning,
subdivision, health and other governmental regulations, ordinances, laws and
similar enactments, and (b) not materially adversely affect Landlord's
environmental remediation activities and responsibilities pursuant to the
Environmental Annex on either the Premises or the Retained Land, and (c) not
violate the terms of the Master Declaration encumbering the Facility Site.
7. Quiet Enjoyment. If and so long as Tenant shall keep, observe and
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perform all covenants, conditions and terms requested to be kept, observed or
performed by it hereunder, taking into account all applicable cure or grace
periods permitted hereunder, then Landlord warrants that it will not take or
permit any action which results in the disturbance of the peaceful and quiet
occupation and enjoyment of the Premises by Tenant; provided, however, Landlord
and its agents may enter upon and inspect the Premises upon twenty-four (24)
hours' prior written notice, except in the event of an Emergency (defined below)
in the exercise of its rights or the performance of its obligations reserved,
granted or imposed under this Lease. For the purpose of this Lease, the term
"Emergency" means an event, circumstance or condition created or arising out of
the use or occupancy of the Premises by Tenant or its Permittees which may, in
the absence of immediate action by Landlord, pose an immediate threat to
Landlord or to Landlord's property.
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8. Maintenance, Repairs and Replacements. (a) Subject to the terms and
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conditions of the Collateral Agreements, Tenant shall immediately upon
possession of the Premises and throughout the Term, assume sole responsibility
for all costs and expenses relative to the use, operation, maintenance, repair
and replacement of all or any part of the Premises, together with the Tenant
Assets, including necessary or appropriate replacements, renewals, upgrades, and
repairs (structural as well as non-structural) required to keep and maintain the
Premises and the Tenant Assets in good order and condition.
(b) Notwithstanding anything contained in this Lease to the contrary,
in the event Landlord reasonably determines that a condition or circumstance
exists on, in, under or above the Premises with respect to the maintenance,
repair and or replacement obligations of Tenant, which condition or circumstance
constitutes an Emergency, then Landlord shall have the right, but not the
obligation, to take whatever action may be reasonably necessary to address the
risk posed by such emergency.
9. Casualty. (a) In the event the Premises or the Tenant Assets situated
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thereon are partially or totally destroyed by fire or other casualty or damage
(a "Casualty"), Tenant shall have the right, but not the obligation, to cause
such damage to be repaired and restored at Tenant's sole cost and expense. There
shall be no abatement of any Rent or any other payments due Landlord hereunder
on account of any such Casualty, except to the extent of any Additional Rent
which Landlord is able to economically xxxxx without (i) incurring any
unreimbursed costs or expenses to the Landlord (which shall be prepaid by Tenant
to Landlord as a condition precedent to any such abatement, together with such
other assurances of performance if such costs and expenses cannot be precisely
and definitively ascertained at the time) or (ii) causing a material adverse
impact on the operations of the Landlord or other parties, if applicable, within
the Premises or the Retained Land in connection with the Environmental Annex
(the "Casualty Loss Abatement"). Landlord shall have no obligation or
responsibility to repair, maintain or replace any part or all of the Premises or
the Tenant Assets as a result of any such Casualty, except to the extent caused
by the negligence or willful misconduct of Landlord or its Related Parties
(defined below).
(b) Subject in all respects to the terms of the Collateral
Agreements, the Environmental Annex, and the Master Declaration in the event all
or any portion of the Appurtenant Facilities are partially or totally destroyed
by casualty or damage, Landlord shall cause such damage to be repaired and
restored at Landlord's sole cost and expense, except to the extent that any such
casualty or damage was caused by the negligent acts or omissions of Tenant or
its Permittees, in which event Tenant shall be solely responsible and liable for
any such costs and expenses; in such case, Tenant's liability for the payment of
the Rent and the performance of all the covenants, conditions and terms hereof
on Tenant's part to be performed shall continue unabated.
10. Compliance with Laws. Tenant shall not cause or allow any waste on the
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Premises or the Appurtenant Facilities or any other portion of the Retained
Land, and shall at Tenant's expense comply with all applicable laws, rules,
ordinances, orders and regulations of any federal, state and local authority,
now or hereafter applicable to Tenant's use and
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occupancy thereof, subject, however, to the covenants and obligations of
Landlord under the Collateral Agreements, the Master Declaration, and the
Environmental Annex.
11. Utilities. Tenant shall pay the cost of all utilities and utility
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services furnished to the Premises throughout the Term in accordance with the
terms of the Collateral Agreements and the Master Declaration. Landlord shall
pay all charges incurred with respect to the period prior to the Commencement
Date.
12. Alterations and Improvements. Tenant shall have the right to make any
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alterations, additions or improvements to the Premises (the "Additions"),
provided any such Additions (a) are done at Tenant's sole cost and expense; (b)
comply with and are performed and completed in accordance with all applicable
laws and ordinances of all public authorities having jurisdiction over the
Premises and in accordance with the building, zoning and related codes, rules
and regulations of any such authority; (c) do not materially adversely affect
Landlord's environmental remediation activities and responsibilities pursuant to
the Environmental Annex at both the Premises and the Facility Site; and (d)
comply with the Master Declaration. Unless otherwise provided herein, or agreed
to in writing between Landlord and Tenant, all Additions, when made, installed
in or attached to the Premises, shall, become part of the Tenant Assets and
shall be disposed of as set forth in Section 20 of this Lease, captioned
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"Surrender of Premises".
13. Signs. Tenant shall comply with all local, state and federal
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ordinances, laws or regulations and the terms of the Master Declaration
concerning signage on or about the Premises.
14. Indemnity and Waiver. (a) Except as otherwise provided in the
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Collateral Agreements, Tenant agrees to defend, indemnify and save harmless
Landlord, its officers, directors, employees, agents and servants (collectively,
"Related Parties") from and against all liability, loss or expenses (including,
but not limited to penalties, costs and attorneys' fees) for any suit, cause of
action, claim, demand, settlement, award or judgment (hereinafter referred to
singly or collectively as "Claim") to the extent arising out of (i) default by
Tenant in the performance of any of its covenants or obligations hereunder; or
(ii) the incorrectness or incompleteness of any representation or warranty of
Tenant made herein; or (iii) any personal injury, loss or damage to property,
including loss of use thereof, or involving damage to the environment (including
(A) releases of contaminants into or onto the air, water or land, (B) violation
of any federal, state or other environmental statute, law, regulation or other
legal requirement or duty, (C) penalties for such violations and (D) natural
resource damages), sustained by any person or persons (including third parties
or contractors or subcontractors employees, agents or servants), arising out of,
resulting from or in consequence of Tenant's occupancy and use of the Premises
or the Appurtenant Facilities, except to the extent caused by the negligence or
willful misconduct of Landlord or its Related Parties; provided, however, with
respect to any such claim brought against Landlord, Tenant shall, upon
Landlord's request, permit Landlord to participate in the defense or negotiate
settlement thereof. This indemnification shall survive the expiration or earlier
termination of this Lease.
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(b) Except as otherwise provided in the Collateral Agreements,
Landlord agrees to defend, indemnify and save harmless Tenant and its Related
Parties from and against all liability, loss or expenses (including, but not
limited to penalties, costs and attorneys' fees) for any suit, causes of action,
claim, demand, settlement, award or judgment (hereinafter referred to singly or
collectively as "claim") to the extent arising out of (i) default by Landlord in
the performance of any of its covenants or obligations hereunder; or (ii) the
incorrectness or incompleteness of any representation or warranty of Landlord
made herein; or (iii) any personal injury, loss or damage to property, including
loss of use thereof, or involving damage to the environment (including (A)
releases of contaminants into or onto the air, water or land, (B) violation of
any federal, state or other environmental statute, law, regulation or other
legal requirement or duty, (C) penalties for such violations and (D) natural
resource damages), sustained by any person or persons (including third parties
or contractors or subcontractors employees, agents or servants), arising out of,
resulting from or in consequence of Landlord's occupancy and use of the Retained
Land, except to the extent caused by the negligence or willful misconduct of
Tenant; provided, however, with respect to any such claim brought against
Tenant, Landlord shall, upon Tenant's request, permit Tenant to participate in
the defense or negotiate settlement thereof. This indemnification shall survive
the expiration or earlier termination of this Lease.
(c) Notwithstanding any provision of this Lease to the contrary, but
subject to the terms and provisions of the Collateral Agreements, Landlord and
Tenant hereby waive any and all right of recovery, claim, action or cause of
action by the waiving party, or anyone claiming through or under the waiving
party by way of subrogation or otherwise, against the other party, its agents or
employees, or any person or party to which or to whom coverage is afforded under
any policy required to be maintained under Section 15 of this Lease, for any
loss or damage to the Premises or to the Facility Site or any improvements
thereon, as a result of fire or other cause which could be insured against under
the terms of a standard fire, vandalism, malicious mischief and extended
coverage insurance policy or policies, building contents and business
interruption insurance policies, or for which the waiving party may be
reimbursed as a result of insurance coverage affecting any loss suffered by
either party to this Lease, regardless of cause or origin, even if the fire or
other cause shall have been the result of negligent conduct of the other party.
15. Insurance. (a) Tenant shall during the Term at its cost and expense,
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maintain valid and enforceable insurance of the following character:
(i) commercial general liability insurance with minimum
limits of $2,000,000 per occurrence and $5,000,000 annual aggregate, covering
the legal liability of Tenant against claims for bodily injury, personal injury
or property damage, occurring on, in or about the Premises or as a result of
products or materials manufactured, processed, constructed or sold, or services
rendered, on the Premises. Coverage shall include "premises and operations",
"products and completed operations", "contractual liability", "explosion,
collapse and underground hazards", "personal injury liability" and "independent
contractors";
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(ii) "all risks" or "special causes of loss" property insurance, or
their equivalent in such amount as Tenant may elect;
(iii) business automotive liability insurance (covering owned and
leased vehicles) with minimum limits of $2,000,000 combined single limit or
$2,000,000 per occurrence and $2,000,000 annual aggregate; and
(iv) workers' compensation insurance in accordance with applicable
laws, unless Tenant is authorized by the appropriate regulatory agency to self-
insure workers' compensation claims in the state where the Premises is located.
(b) Landlord shall during the Term at its cost and expense, maintain valid
and enforceable insurance of the following character:
(i) commercial general liability insurance with minimum limits of
$2,000,000 per occurrence and $5,000,000 annual aggregate, covering the legal
liability of Landlord against claims for bodily injury, personal injury or
property damage, occurring on, in or about the Facility Site or as a result of
the use of products or materials manufactured, processed, constructed or sold,
or services rendered, on the Facility Site. Coverage shall include "premises and
operations", "products and completed operations", "contractual liability",
"explosion, collapse and underground hazards", "personal injury liability" and
"independent contractors";
(ii) business automotive liability insurance (covering owned and
leased vehicles) with minimum limits of $2,000,000 combined single limit or
$2,000,000 per occurrence and $2,000,000 annual aggregate; and
(iii) workers' compensation insurance in accordance with applicable
laws unless Landlord is authorized by the appropriate regulatory agency to self-
insure workers' compensation claims in the state where the Premises is located.
(c) The insurance required by Sections 15(a) and (b) of this Lease shall
be written by companies of recognized financial standing which are rated at
least "A" by A.M. Best Rating services. Such insurance may be obtained by Tenant
or Landlord by endorsement on their respective blanket insurance policies which
cover risks at the subject property and other properties of such party. Tenant
and Landlord may maintain self-insurance programs sufficient to provide the
amounts and types of coverage required to be maintained by such party under this
Section 15, provided such party has a net worth equal or greater than
$50,000,000.
(d) Landlord and Tenant shall deliver to the other party, upon the
execution and delivery of this Lease, letters of self insurance or certificates
of insurance, reasonably satisfactory to Landlord and Tenant, as the case may
be, evidencing all the insurance which is then required to be maintained by
Tenant and Landlord, and each party shall, upon written notice, deliver
certificates of insurance evidencing the renewal of such insurance.
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16. Assignment and Subletting. Each of Landlord and Tenant shall be
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entitled to assign all or any part of its respective rights and obligations
under this Lease to any other party without the consent of the other. Upon an
assignment of this Lease by either Landlord or Tenant, the assignor shall be
released from all liability hereunder arising following the date of such
assignment. Tenant shall also have the right to sublease the Premises or any
part thereof to any other party without the consent of Landlord.
17. Condemnation. If the whole or part of the Premises shall be taken or
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condemned by any competent authority for any public use or purpose during the
Term, or any extension or renewal, or if such authority shall take title to the
Premises in lieu of condemnation, Tenant reserves the right to claim and
prosecute its claim at its own cost and expense in all appropriate courts and
agencies for an award or damages for the taking, based upon its leasehold
interest and ownership of all improvements on the Premises, including the Tenant
Assets, interruption of business, moving expenses and other damages available
under applicable law, without impairing any rights of Landlord for the taking of
or injury to the reversion. Landlord shall assign to Tenant all rights of
Landlord in and to any awards or other proceeds payable by reason of any taking.
Tenant shall have the sole right (in the name of Tenant and Landlord or both) to
negotiate for, to agree to and to contest all offers and awards.
In the event of the taking by eminent domain of the whole or any part of
the Premises to such an extent as to render the remainder of the Premises
untenantable and Tenant is unable to conduct its business thereon, in Tenant's
judgment, then this Lease shall terminate as of the date of the final,
nonappealable award of possession to the condemning authority for the portion of
the Premises so condemned. In any such event, all Rent and other charges payable
hereunder as rent shall be apportioned to the date of termination of this Lease,
and Tenant waives all claims against Landlord for or on account of or incident
to such taking. In the event of a partial taking which does not render the
remainder of the Premises untenantable, then Base Rent and Additional Rent shall
be equitably adjusted as a result of such condemnation.
18. Leasehold Mortgages. (a) Tenant shall have the right, without
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Landlord's prior consent, to mortgage all or any part or part of the leasehold
interest created by this Lease, and to refinance the same, at any time and from
time to time, under a leasehold mortgage or deed of trust on Tenant's leasehold
estate (herein referred to as a "Leasehold Mortgage"; the holder of any such
Leasehold Mortgage is referred to herein as a "Leasehold Mortgagee"), provided
that all rights acquired under such Leasehold Mortgage shall be subject to each
of the covenants, conditions and restrictions set forth in this Lease.
(b) Landlord agrees that, after its receipt of notice of the
existence of a Leasehold Mortgage and the name and address of the holder
thereof, and thereafter for so long as any such Leasehold Mortgage remains
unsatisfied of record, the following provisions shall apply:
(i) There shall be no cancellation, surrender or modification of
this Lease by joint action of Landlord and Tenant without the prior written
consent of the
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Leasehold Mortgagee, except as the Leasehold Mortgage or any other agreement
between Tenant and the Leasehold Mortgagee may provide or permit.
(ii) Any notice given to Tenant by Landlord shall simultaneously be
given to the Leasehold Mortgagee at the address furnished to the Landlord. If
such notice pertains to a default or defaults by Tenant, then any Leasehold
Mortgagee shall have the right to cure the default complained of within the same
period from the date of notice to the Leasehold Mortgagee as is given Tenant
pursuant to the applicable provisions of this Lease, and Landlord agrees to
accept the Leasehold Mortgagee's performance in curing the default as fully as
if Tenant had cured the default. If a notice advises that Landlord had attempted
to terminate this Lease because of the default or defaults of Tenant, then,
notwithstanding any provision of this Lease to the contrary, any Leasehold
Mortgagee shall have, at its election, the right:
(1) provided that the default or defaults of Tenant can be
cured by the payment of money, to nullify any attempted termination as fully as
if no default had ever occurred by paying all Rent and other monetary amounts
then in default to Landlord within thirty (30) days after the Leasehold
Mortgagee's receipt of Landlord's notice of termination; or
(2) to postpone indefinitely any attempted termination of this
Lease by giving Landlord, within thirty (30) days after the Leasehold
Mortgagee's receipt of Landlord's notice, notice of its intention to foreclose
its Leasehold Mortgage, accompanied by its payment of all Rent and other sums
payable hereunder then in default, and thereafter, commencing and proceeding
with reasonable diligence, to cure any defaults reasonably susceptible of being
cured without actual possession of the Premises and to foreclose its Leasehold
Mortgage, meanwhile paying all amounts due Landlord under this Lease; such
postponement shall continue until confirmation of the foreclosure sale,
whereupon such notice of termination shall be deemed nullified as fully as if no
default had occurred.
(iii) Landlord agrees that in the event of any termination of this
Lease not approved by Leasehold Mortgagee and upon notice from the Leasehold
Mortgagee given within sixty (60) days after the date upon which Leasehold
Mortgagee receives written notice of any such termination from Landlord,
Landlord will enter into a new Lease for the Premises with the Leasehold
Mortgagee holding the highest priority, or its designee, for the remainder of
the Term, commencing as of the date this Lease is terminated as to Tenant but
effective as of the date of this Lease and in any event prior to the interest of
any subsequent transferee of Landlord's interest in the Premises, at the Rent
and otherwise upon the same terms and provisions as are herein contained.
Notwithstanding the foregoing, it shall be a condition to Landlord's obligation
to enter into such new Lease that the Leasehold Mortgagee, or its designee, pay
to Landlord, at the time of execution of such new Lease, all sums due Landlord
by reason of Tenant's default hereunder and perform all other obligations which
reasonably can be performed without being in possession, together with
Landlord's reasonable costs and expenses in terminating this Lease, including
reasonable attorneys' fees.
11
(iv) The Leasehold Mortgagee shall be given notice of any actions
or proceedings in bankruptcy or under the United States Bankruptcy Code by the
parties hereto as required by law, and shall have the right to intervene therein
and be made a party to such proceedings at its sole cost and expense. Any
Leasehold Mortgagee which elects not to intervene or become a party to such
proceeding shall have the right to receive from Tenant a copy of any award or
decision made therein.
19. Estoppel Certificate. (a) Tenant agrees at any time and from time to
--------------------
time, within fifteen (15) days after Landlord's written request, to execute,
acknowledge and deliver to Landlord a written instrument in recordable form
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that it is in full force and effect as modified
and stating the modifications), and the dates to which rent and any other
charges have been paid in advance, if any, and stating whether or not to the
best knowledge of the signer of such certificate the Landlord is in default in
the performance of any covenant, agreement or condition contained in this Lease
and, if so, specifying each such default of which the signer may have knowledge
and the date the Landlord was notified of such default, it being intended that
any such statement delivered pursuant to this section may be relied upon by any
prospective purchaser of the fee or any assignee of Landlord's interest in this
Lease.
(b) Landlord agrees at any time and from time to time, within fifteen
(15) days after Tenant's written request, to execute, acknowledge and deliver to
Tenant a written instrument in recordable form certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that it is in full force and effect as modified and stating the modifications),
and the dates to which rent and any other charges have been paid in advance, if
any, and stating whether or not to the best knowledge of the signer of such
certificate the Tenant is in default in the performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which the signer may have knowledge and the date the Tenant was
notified of such default, it being intended that any such statement delivered
pursuant to this section may be relied upon by any prospective purchaser of
Tenant's interest in this Lease or any Leasehold Mortgagee.
20. Surrender of Premises/Removal of Property. (a) Upon the expiration or
-----------------------------------------
sooner termination of the Term, Tenant shall quit and surrender to Landlord
possession of the Premises and, unless otherwise provided herein, all rights of
the Tenant under this Lease shall terminate. In addition, Tenant shall tender
possession of the Premises to Landlord free and clear of all liens and
encumbrances created by or through Tenant.
(b) Upon the expiration or sooner termination of the Term and subject
to the Master Declaration, Landlord shall have the following options with
respect to the physical improvements and structures (excluding all personal
property and removal trade fixtures belonging to Tenant) on the Premises:
(i) Tenant, at its sole cost and expense, shall convey to
Landlord all buildings and other improvements on the Premises by deed and xxxx
of sale free and clear of all liens and security interests securing Tenant's
obligations; or
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(ii) Within twelve (12) months of any such expiration or
termination, Tenant shall, at its sole cost and expense raze and remove all
buildings and other above grade structures and improvements, leaving the
Premises completely in an unimproved and level ground surface condition, clear
of all debris (the "Land Only Condition"). In the event possession of the
Premises is not delivered to Landlord as provided above, then Tenant shall be
liable for all costs and expenses incurred by Landlord to bring the Premises to
the Land Only Condition. The foregoing obligations of Tenant with respect to the
Land Only Condition shall survive the expiration of earlier termination of the
Term.
(c) Tenant shall, within sixty (60) days following the termination of
this Lease, remove all equipment, inventory and other personal property from the
Premises unless otherwise approved by Landlord. If Tenant shall fail to remove
any such personal property which Tenant is required to remove as set forth
above, Landlord may remove same without any liability to Tenant. In addition,
any of such personal property which is required to be removed from the Premises
by Tenant but which is not so removed shall be conclusively presumed to have
been abandoned by Tenant and title to such property shall pass to Landlord
without any payment or credit, and Landlord may, at its option and at Tenant's
expense, store, keep and/or dispose of such property.
21. Events of Default by Tenant and Remedies of Landlord. (a) It shall be
----------------------------------------------------
an event of default under this Lease ("Event of Default") if Tenant:
(i) does not pay in full when due and without demand any and
all installments of Rent or any other charges or payments whether or not herein
included as rent and fails to cure such default within sixty (60) days following
the receipt of written notice by Tenant from Landlord thereof; or
(ii) violates or fails to perform or otherwise breaches any
agreement, term, covenant or condition herein contained or any other obligation
herein imposed upon Tenant and fails to cure such default within one hundred
twenty (120) days following the receipt of written notice by Tenant from
Landlord thereof (provided, that if such default cannot reasonably be cured
within such time period, and if Tenant commences the cure of such default within
such time period, then the time period for cure shall be extended so long as
Tenant diligently prosecutes the cure of same); or
(iii) becomes insolvent or bankrupt or makes an assignment for
the benefit of creditors, or offers a composition or settlement to creditors, or
calls a meeting of creditors for any such purpose, or files a petition in
bankruptcy or for reorganization or for an arrangement with creditors under any
federal or state act, or files a xxxx in equity or otherwise initiates
proceedings in any court for the appointment of a receiver, trustee, liquidator,
custodian, conservator or similar official for any of Tenant's assets, or if any
of the real or personal property of Tenant shall be levied upon by any sheriff,
marshal or constable; or
(iv) A petition in bankruptcy or for reorganization or for an
arrangement with creditors under any federal or state act is filed against
Tenant, or if a xxxx in equity or other proceeding is filed in any court by any
creditor of Tenant for the appointment
13
of a receiver, trustee, liquidator, custodian, conservator or similar official
for any of Tenant's assets.
(b) In the event of a breach or threatened breach by Tenant of any of
the covenants or provisions hereof, Landlord may recover from Tenant all damages
it may incur by reason of such breach, and shall have the right of injunction
and the right to invoke any remedy allowed at law or in equity, except that
Landlord shall have no right to terminate this Lease or Tenant's possession of
the Leased Premises, unless Tenant ceases operations of all manufacturing
facilities at the Leased Premises for a period in excess of five (5) consecutive
years (the "Abandonment"). Tenant acknowledges that the remedy of injunction is
an essential remedy in instances in which Tenant's acts or failure to act may
cause damage to Landlord or its property and specifically agrees not to
interpose any objections to Landlord's motions for injunction in such instances.
Mention in this Lease of any particular remedy shall not preclude Landlord from
any other remedies under this Lease, or now or hereafter existing at law or in
equity or by statute.
(c) If Tenant is in default hereunder, Landlord, after the lapse of
any time period and notice as may be applicable thereto, shall also have the
right, without prejudice to any other right or remedy provided for hereunder or
otherwise available, to cure the default; and in such case, all of Landlord's
cost and expenses in so doing, plus interest thereon at a rate of 8% per annum,
shall be due and payable to Landlord, upon written demand, as Additional Rent
hereunder.
(d) In the event of an Abandonment, then Landlord shall have the
right, but not the obligation to terminate this Lease and Tenant's right of
possession, provided, however, upon such termination, Tenant shall be fully
released of all further liability under this Lease, except that Tenant shall not
thereby be relieved of its liabilities and obligations under this Lease with
respect to the period prior to the date of termination as well as the
obligations and duties under Paragraph 20.
(e) Except as provided above, each right and remedy provided for in
this Lease shall be cumulative and shall be in addition to every other right or
remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise by either party of any one
or more of the rights or remedies provided for in this Lease or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by such party of any or all other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise. Nor shall this Lease abrogate or diminish
Tenant's responsibilities to Landlord under any other agreement, nor Landlord's
responsibilities to Tenant, under any other agreement.
22. Events of Default by Landlord and Remedies of Tenant. (a) It shall be
----------------------------------------------------
an event of default under this Lease if Landlord:
(i) does not pay in full when due and without demand any
payments or sums due Tenant and fails to cure such default within sixty (60)
days following the receipt of written notice by Landlord from Tenant thereof; or
14
(ii) violates or fails to perform or otherwise breaches any
agreement, term, covenant or condition herein contained or any other obligation
herein imposed upon Landlord and fails to cure such default within one hundred
twenty (120) days following the receipt of written notice by Landlord from
Tenant thereof (provided, that if such default cannot reasonably be cured within
such time period, and if Landlord commences the cure of such default within such
time period, then the time period for cure shall be extended so long as Landlord
diligently prosecutes the cure of same).
(b) In the event of a breach or threatened breach by Landlord of any
of the covenants or provisions hereof, Tenant shall have the right of injunction
and the right to invoke any remedy allowed at law or in equity. Landlord
acknowledges that the remedy of injunction is an essential remedy in instances
in which Landlord's acts or failure to act may cause a default and specifically
agrees not to interpose any objections to Tenant's motions for injunction in
such instances. Mention in this Lease of any particular remedy shall not
preclude Tenant from any other remedies under this Lease, or now or hereafter
existing at law or in equity or by statute.
(c) Notwithstanding the foregoing, if Landlord is in default
hereunder, Tenant, after the lapse of any time period and notice as may be
applicable thereto, shall have the right, without prejudice to any other right
or remedy provided for hereunder or otherwise available, to cure the default;
and in such case, all of Tenant's cost and expenses in so doing, plus interest
thereon at a rate of 8% per annum shall be due and payable to Tenant, upon
written demand.
23. Non-Liability. (a) Landlord shall not be liable for any damage or
-------------
injury which may be sustained by Tenant or any third party, as a consequence of
the failure, breakage, leakage or obstruction of any utility lines or
facilities, or consequence thereof, except to the extent resulting from the
gross negligence or willful misconduct of Landlord or Landlord's agents or
employees.
(b) Tenant shall not be liable for any damage or injury which may be
sustained by Landlord or any third party, as a consequence of the failure,
breakage, leakage or obstruction of any utility lines or facilities, or
consequence thereof, except to the extent resulting from the gross negligence or
willful misconduct of Tenant or Tenant's agents or employees.
24. Non-Waiver. The various rights, remedies, options and elections of
----------
the parties, expressed herein, are cumulative. The failure or either party to
enforce strict performance by the other of the conditions and covenants of this
Lease, or to exercise any election or option, or to resort to or have recourse
to any remedy herein conferred, shall not be construed or deemed to be a waiver
or a relinquishment for the future by the non-breaching party of any such
conditions and covenants, options, elections or remedies, but such conditions
and covenants shall continue in full force and effect.
25. Validity and Interpretation of Lease. The terms, conditions,
------------------------------------
covenants and provisions of this Lease shall be deemed to be severable. If any
clause, provision of section
15
herein contained shall be adjudged to be invalid or unenforceable by a court of
competent jurisdiction or by operation of any applicable law, it shall not
affect the validity of any other clause, provision or section herein, but such
other clauses, provisions or sections shall remain in full force and effect.
Each party accepts equal responsibility for the preparation of this Lease so
there shall be no presumption against either party as the sole drafter of this
Lease.
26. Attorneys' Fees. (a) Each party shall pay upon demand all of the
---------------
other party's costs, charges and expenses including the reasonable fees and out-
of-pocket expenses of counsel, agents and others retained by the other party
incurred in enforcing the party's obligations hereunder, if the other party
obtains an enforceable judgment against the party.
(b) Should Landlord be named as a defendant or other party in any
suit brought against Tenant in connection with or arising out of Tenant's
occupancy or use hereunder, Tenant shall pay, except to the extent of Landlord's
fault found in such suit, to Landlord, as Additional Rent hereunder, Landlord's
costs and expenses incurred in such suit, including a reasonable attorney's fee.
27. Mechanics' Liens. If any mechanics' or other liens shall be created
----------------
or filed against the Premises or any other portion of the Facility Site by
reason of labor performed or materials furnished for Tenant in the erection,
construction, completion, alteration, repair or addition of any existing
improvement, or Additions or other improvements, Tenant shall, within twenty-one
(21) days thereafter, at Tenant's own cost and expense, cause such lien or liens
to be satisfied and discharged of record, together with any notices of intention
that may have been filed. Failure to do so shall entitle Landlord to such
remedies as are provided herein in the case of any default of this Lease, in
addition to such as are permitted by law or equity.
28. Entire Contract; Superseding Effect. This Lease, the Purchase
-----------------------------------
Agreement, the Annex, the Master Declaration and the Collateral Agreements and
all other instruments referenced herein cover the entire agreement between the
parties with respect to the Premises. No representative, agent or employee of
Landlord has been authorized to make any representations or promises with
reference to the within letting or to vary, alter or modify the terms hereof.
No additions, changes or modification, renewals or extensions of this Lease
shall be binding unless reduced to writing and signed by Landlord and Tenant. In
the event of any conflict between the terms of this Lease and the terms of the
Purchase Agreement, the Annex, the Master Declaration or any Collateral
Agreement, the terms of the latter shall govern and control.
29. Force Majeure. (a) In the event that Landlord shall be delayed, or
-------------
hindered or prevented from the performance of any act required hereunder, by
reason of a force majeure, including an act of God, fire, casualty, action of
the elements, strikes, lockouts, other labor troubles, inability to procure, or
general shortage of labor, equipment, facilities, materials or supplies, failure
of transportation or of power, restrictive governmental laws or regulations,
riots, insurrection, war or any other cause beyond the control of Landlord (a
"Force Majeure Event") the time for performance of such act shall be extended
for a reasonable period of time not to exceed sixty (60) days following
cessation of the Force Majeure Event.
16
(b) In the event that Tenant shall be delayed, or hindered or
prevented from the performance of any act required hereunder, by reason of a
Force Majeure Event, the time for performance of such act shall be extended for
a reasonable period of time not to exceed sixty (60) days following cessation of
the Force Majeure Event.
30. No Merger. The leasehold created hereby shall not merge with the fee
---------
notwithstanding the fact that such interests may be held by the same person,
unless the holder of such interests and all holders of mortgages upon such
interest shall consent to the merger.
31. Landlord's Access. Tenant shall permit Landlord or its authorized
-----------------
representatives to enter upon the Premises during regular business hours of
Tenant or subtenant, as the case may be, and upon reasonable notice for the
purposes of: (a) performing engineering and scientific testing and inspections
required for Landlord to comply with any environmental laws, regulations or
orders applicable to the Premises as provided under this Lease; and (b) making
any necessary repairs to the Premises and performing any work thereon that may
be necessary to comply with any laws or orders and to prevent waste or
deterioration and as required under the Collateral Agreements, the Master
Declaration or the Annex (collectively, the "Access Activities"). Only such
notice as is reasonable under the circumstances shall be required for the Access
Activities in case of an Emergency (defined above).
32. Successors and Assigns. All the terms, covenants and conditions
----------------------
herein contained shall inure to the benefit of and shall bind the respective
parties hereto and their successors and assigns.
33. Subdivision Rights. Any rights of Tenant to subdivide the Premises
------------------
are more fully set forth in the Declaration.
34. Miscellaneous Provisions. (a) Construction. In all references herein
------------------------ ------------
to any parties, persons, entities or corporations, the use of any particular
gender or the plural or singular number is intended to include the appropriate
gender or number as the text of this Lease may require. The term "including,"
when used in this Lease, shall mean "including, without limitation" and shall be
construed as a term of illustration and not a term of limitation.
(b) Headings. The Section headings shall not be a substantive part
--------
of this Lease and shall not be used to interpret the meaning hereof. The
headings are for convenience in reference only.
(c) Recording. This Lease shall be recorded in the appropriate land
---------
records in Southampton County, Virginia.
(d) Notices. Any notice, request, instruction or other document to
-------
be given hereunder by any party to any other party shall be in writing and
delivered personally, by telecopy and confirmed by mail, or sent by registered
or certified mail, postage prepaid, or sent by overnight courier (e.g., Federal
Express, Airborne or UPS) (a "Notice"):
17
(i) if to Hercules to:
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000X0000
Telecopier: (302) 594B7252
Attention: Xxxxxx X. Xxxxx,
Executive Vice President,
Secretary and General Counsel
with copies to:
Hercules Incorporated
Hercules Plaza
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Director of Corporate Real Estate
Hercules Incorporated
00000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Plant Manager
(ii) if to Tenant to:
GEO Specialty Chemicals, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxx
and with a copy to:
Xxxxxxxx Xxxx LLP
0000 Xxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
18
or at such other address for a party as shall be specified by like Notice. Any
Notice which is delivered in the manner provided herein shall be deemed to have
been duly given to the party to whom it is directed upon actual receipt by such
party (evidenced, in the case of a telecopy, by the receipt of the correct
telecopier confirmation).
(e) Holding Over. Any holding over after the expiration or earlier
------------
termination of the Lease, or of any extension or renewal thereof, without the
written consent of Landlord shall, at Landlord's option, be construed to be a
tenancy from month to month and shall otherwise be on the same terms and
conditions hereinbefore specified.
(f) Further Documentation. Landlord and Tenant shall each execute
---------------------
and deliver any and all documents, in recordable form if required, as may be
reasonably necessary for either party hereto to carry out the intent and purpose
of this Lease.
(g) Governing Law. This Lease and all covenants contained herein
-------------
shall be construed in accordance with the laws of the Commonwealth of Virginia.
(h) Counterparts. This Lease may be executed in two counterparts,
------------
which together shall constitute one and the same instrument.
[Signature Page Follows]
19
IN WITNESS WHEREOF, this instrument has been duly executed by the parties
as of the date first set forth above.
TENANT:
GEO SPECIALTY CHEMICALS, INC.,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
LANDLORD:
HERCULES INCORPORATED, a
Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
20
COMMONWEALTH OF _______________________ )
) SS
COUNTY OF _____________________________ )
BEFORE ME. a Notary Public in and for said County an State, personally
appeared HERCULES INCORPORATED, a Delaware corporation, by ___________________,
its ____________, who acknowledged that he did sign the foregoing instrument and
that the same is his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
___________, ________, this ____ day of May, 2001.
_________________________________
Notary Public
STATE OF ______________________ )
) SS
COUNTY OF ______________________ )
BEFORE ME. a Notary Public in and for said County an State, personally
appeared GEO SPECIALTY CHEMICALS, INC., an Ohio corporation by
_______________________, its ____________, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
___________, ________, this ____ day of May, 2001.
_________________________________
Notary Public
