1
THIS LEASE, made and entered into as of May 15, 1993 (together with all
amendments and supplements hereto, this "Lease"), by and between TRINET
ESSENTIAL FACILITIES VIII R, INC. a Maryland corporation with offices at Four
Xxxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (together, with any
successor or assigns, hereinafter called the "Landlord") and CATERAIR
INTERNATIONAL CORPORATION, a Delaware corporation, with offices at 0000 Xxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxx 00000 (together with any permitted successor or assigns,
hereinafter called the "Tenant"). Capitalized terms used herein not otherwise
defined shall have the meanings specified in Annex I hereto.
WITNESSETH
In consideration of the covenants and agreements herein contained, the
parties hereto mutually agree as follows:
1. DEMISE OF PREMISES: Landlord hereby demises and leases to Tenant and
Tenant hereby leases and rents from Landlord the Premises, in its "as is"
condition, subject to the existing state of title (without express or implied
warranty of Landlord with respect to the condition or fitness of the Premises
for a particular use or title thereto), consisting of the land parcel more
particularly described in Exhibit A attached hereto and incorporated herein by
reference and located at Bloomington, Minnesota and the buildings, structures,
improvements now or hereafter located on said land and fixtures (other than
Tenant's Trade Fixtures) erected thereon, parking areas and driveways, together
with any easements, rights, and appurtenances in connection therewith or
belonging thereto all being collectively hereinafter referred to as "the
Premises". No easement for light, air or view is included with or appurtenant to
the Premises. Any diminution or shutting off of light, air or view by any
structure which may hereafter be erected (whether or not constructed by
Landlord) shall in no way affect this Lease or impose any liability on Landlord.
2. USE: Tenant shall use and occupy the Premises for any lawful
nonresidential purposes so long as such use does not diminish, deteriorate, or
alter (except as permitted by Paragraph 23) the physical structure of the
Premises, normal wear and tear excepted. Tenant shall not use or occupy the
same, or knowingly permit them to be used or occupied, contrary to any statute,
rule, order, ordinance, requirement or regulation applicable thereto, or in any
manner which would violate any certificate of occupancy affecting the same or
which would make void or voidable any insurance then in force with respect
thereto or which would make it impossible to obtain fire or other insurance
thereon required to be furnished hereunder by Tenant, or which would cause
structural injury to the Premises or cause the value or usefulness of the
Premises, or any portion thereof, to substantially diminish (normal wear and
tear excepted), or which would constitute a public or private nuisance or waste,
and
2
Tenant agrees that it will promptly, upon discovery of any such use, take all
necessary steps to compel the discontinuance of such use. Tenant shall not use,
suffer or permit the Premises, or any portion thereof, to be used by Tenant,
third party or the public, as such, without restriction or in such manner as
might reasonably tend to impair Landlord's title to the Premises, or in such
manner as might reasonably make possible a claim or claims of adverse usage or
adverse possession by the public, as such, or third persons, or of implied
dedication of the Premises, or any portion thereof. Nothing contained in this
Lease and no action or inaction by Landlord shall be deemed or construed to mean
that Landlord has granted to Tenant any right, power or permission to do any act
or make any agreement that may create, or give rise to or be the foundation for
any such right, title, interest, lien, charge or other encumbrance upon the
estate of the Landlord in the Premises.
3. TERM:
A. The initial term of this Lease (the "Initial Term") shall be for
a minimum period of twenty-five (25) years, which term shall begin on the
Commencement Date (as that term is hereinafter defined) and shall end on the
last day of the month in which the twenty-fifth anniversary of the Commencement
Date occurs, subject (in the event that the Initiating Date occurs after the
fifth anniversary of the Commencement Date) to automatic extension to the date
that is the 20th anniversary of the Initiating Date and subject to extension
pursuant to Paragraph 26D (the "Lease Expiration Date").
B. The term "Commencement Date" shall mean June 3, 1993 (the
"Closing").
C. Tenant shall have the right, at its option, to renew this Lease,
for four (4) renewal terms (each, a "Renewal Term") of five (5) years each
(individually, the First, Second, Third and Fourth Renewal Terms). The First
Renewal Term shall commence on the day after the Lease Expiration Date and shall
terminate on the fifth (5th) anniversary of the Lease Expiration Date. Each of
the Second, Third and Fourth Renewal Terms shall commence on the day after the
date of expiration of the immediately preceding Renewal Term and shall terminate
on the fifth (5th) anniversary of the termination of the immediately preceding
Renewal Term. (Each such Renewal Term commencement date shall be referred to
herein as the "Renewal Term Commencement Date" with respect to the related
Renewal Term and each such Renewal Term expiration date shall be referred to
herein as the "Renewal Term Expiration Date" with respect to the related Renewal
Term.) The option to renew the Term of this Lease as
-2-
3
described above shall be by written notice to Landlord at least 18 months prior
to the Lease Expiration Date or 12 months prior to the Renewal Term Expiration
Date of the then current term, as the case may be. Subject to the provisions of
Paragraph 4, the terms and conditions of this Lease shall apply to any Renewal
Term with the same force and effect as if such Renewal Term had originally been
included in the term of the Lease. The right of Tenant to have any renewal of
the Term of this Lease shall be conditioned upon Tenant not being then in
default under the Lease beyond the applicable cure periods and upon the Lease
being in full force and effect as of the Renewal Term Commencement Date. All of
the terms, covenants and conditions of this Lease shall continue in full force
and effect during the Renewal Term, except that the minimum rent shall be as
provided for in Paragraph 4. The Initial Term, together with any Renewal Terms,
shall constitute the "Term" of this Lease.
4. RENTAL:
A. Tenant agrees to pay fixed rent ("Fixed Rent") to Landlord without
notice, by check sent to Landlord at such address as shall be provided by
Landlord to Tenant, provided that such check shall be received by Landlord in
sufficient time that the funds will be received by the Fixed Rent due date, or
to such other persons or place as may be provided by written notice from the
person then entitled to receive the Fixed Rent, in equal installments in advance
on or before the first day of each month as specified in the Basic Lease
Information.
If Fixed Rent is not paid when due, interest shall accrue thereon at the
Overdue Rate until payment is made. Tenant hereby acknowledges that late payment
by Tenant to Landlord of Fixed Rent, Additional Rent and other sums due under
this Lease will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by the terms of any mortgage or trust
deed covering the Premises. Accordingly, if any installment of Fixed Rent or any
other sum due to Landlord from Tenant shall not have been received by Landlord
or Landlord's designee within fifteen (15) days after such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay to Landlord
a late charge equal to two percent (2%) of such overdue amount, together with
interest on such overdue amount at the Overdue Rate. The parties agree that
such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant. Acceptance of such late
charge by Landlord shall in no event constitute a waiver of Tenant's
-3-
4
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder; provided that
nothing contained herein shall relieve Landlord of a duty to mitigate damages
under applicable law.
B. The Fixed Rent for each Renewal Term shall be payable in equal monthly
installments in advance on or before the first day of each month as provided in
the Basic Lease Information.
C. If, at any time from the first day of the month following the fourth
anniversary of the Commencement Date through the last day of the month in which
the seventh anniversary of the Commencement Date occurs (the "Initiating Date"),
Tenant obtains a BBB- or better investment grade credit rating from Standard &
Poors Corporation and a Baa3 or better investment grade credit rating from
Xxxxx'x Investors Services, Inc. for its senior debt obligations, and such
investment grade credit ratings are maintained for 12 consecutive months (the
"Lookback Period"), then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.0%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price), and (y) the yield for 10-year
Treasury bills plus 275 basis points. The yield for use in the
foregoing calculation will be as shown in the Treasury Constant
Maturity Series in statistical release H.15(519) of the Federal
Reserve Board; or if that release is unavailable, a comparable
publication.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
D. If at any time from the first day of the month following the Initiating
Date, Tenant obtains an A- or better investment grade credit rating from
Standard & Poors corporation and an A3 or better investment grade credit rating
from Xxxxx'x Investors Services, Inc. for its senior debt obligations, and
-4-
5
such investment grade credit ratings are maintained during the Lookback Period,
then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 2.0%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price) and (y) the yield, determined as
provided above, for 10-year Treasury obligations plus 225 basis
points.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
E. If, at any time from the first day of the month following the
Initiating Date, Tenant obtains either of the required investment grade ratings
indicated in subparagraphs C and D, but not both and such investment grade
credit ratings are maintained during the Lookback Period, then:
(i) on the first day of the month following the Lookback Period, the
annual Fixed Rent shall be reset to equal the Fixed Rent on the
Initiating Date less an amount equal to the Purchase Price
multiplied by the lesser of (a) 1.5%, or (b) the difference between
(x) the Fixed Rent on the Initiating Date (calculated as a
percentage of the Purchase Price) and (y) the yield, determined as
provided above, for 10-year Treasury obligations plus 250 basis
points.
(ii) the annual Fixed Rent specified in the Basic Lease Information shall
be increased at the end of every 30-month period measured from the
Initiating Date by an amount equal to the annual Fixed Rent prior to
such increase multiplied by the greater of 5.72028% or 56.25% of the
increase in the CPI over the prior 30-month period. Such increase in
the Fixed Rent shall not be greater than 11.632519% of the annual
Fixed Rent immediately prior to the increase.
-5-
6
In no event shall the calculation required by subparagraphs C(i), D(i) and
E(i) above result in an increase in Fixed Rent.
5. NET LEASE; NON-TERMINABILITY: (a) This is an absolutely net lease and
the Fixed Rent, Additional Rent and all other sums payable hereunder by Tenant,
whether as the purchase price for the Premises or otherwise, shall be paid
without notice (except as expressly provided herein), demand, setoff,
counterclaim, abatement, suspension, deduction or defense.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease (except as provided in Paragraph 14), nor shall Tenant be
entitled to any abatement or reduction of rent hereunder (except as otherwise
expressly provided herein), nor shall the obligations of Tenant under this Lease
be affected, by reason of (i) any damage to or destruction of all or any part of
the Premises from whatever cause, (ii) subject to Paragraph 14, the taking of
the Premises or any portion thereof by condemnation, requisition or otherwise,
(iii) the prohibition, limitation or restriction of Tenant's use of all or any
part of the Premises, or any interference with such use, (iv) any eviction by
paramount title or otherwise, (v) Tenant's acquisition or ownership of all or
any part of the Premises otherwise than as expressly provided herein, (vi) any
default on the part of Landlord under this Lease, or under any other agreement
to which Landlord and Tenant may be parties, (vii) the failure of Landlord to
deliver possession of the Premises on the commencement of the term hereof or
(viii) any other cause whether similar or dissimilar to the foregoing, any
present or future law to the contrary notwithstanding. It is the intention of
the parties hereto that the obligations of Tenant hereunder shall be separate
and independent covenants and agreements, that the Fixed Rent, the Additional
Rent and all other sums payable by Tenant hereunder shall continue to be payable
in all events and that the obligations of Tenant hereunder shall continue
unaffected unless the requirement to pay or perform the same shall have been
terminated pursuant to any express provision of this Lease.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
rescind or avoid this Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up or other proceeding affecting Landlord or its successor in interest,
or (ii) any action with respect to this Lease which may be taken by any trustee
or receiver of Landlord or its successor in interest or by any court in any such
proceeding.
-6-
7
(d) Tenant waives all rights which may now or hereafter be conferred by
law (i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or reduction of the
Fixed Rent, Additional Rent or any other sums payable under this Lease, except
as otherwise expressly provided herein. It is not the intent of the parties
hereto to restrict in any way Tenant's other remedies, whether at common law or
under statute.
6. QUIET ENJOYMENT; SALE TO COMPETITORS:
(a) Landlord covenants with Tenant, that upon the payment of the Fixed
Rent and Additional Rent and the performance in all material respects of all the
terms of this Lease, Tenant shall at all times during the Term, peaceably and
quietly enjoy the Premises without any disturbance from Landlord or from any
person claiming by, through, or under Landlord.
(b) So long as Tenant is not in any material default under this Lease,
Landlord shall not sell all or any portion of the Premises to any entity
engaged, either directly or indirectly, in the airline food service industry
without Tenant's prior written consent, provided however, that this provision
shall not apply if such entity is a passive owner unable to exercise control
over the operation of the Premises, or during the continuance of an Event of
Default.
7. UTILITY BILLS:
Tenant shall pay as Additional Rent before they become delinquent
any water, sewer, gas, fuel, electricity, light, heat power and all other
utility bills for the Premises and the business conducted thereon.
8. REPAIRS AND MAINTENANCE:
(a) Tenant shall, at its own sole cost and expense, keep the
Premises in good order and condition, normal wear and tear and damage covered by
insurance excepted, at all times on and after commencement of the Term to and
including the date of the termination of the Term, by lapse of time or
otherwise. Tenant shall promptly and adequately repair the Premises and all its
component parts, and replace or repair all landscaping and all damaged or broken
fixtures, other than trade fixtures, and appurtenances.
In addition, Tenant shall timely and properly maintain all of the Premises
including, but not necessarily limited to, mechanical systems, electrical
systems, plumbing and sewage
-7-
8
systems, foundations and floor slabs, glazing systems, structural steel, masonry
walls and wall enclosures, and water tightness of all curtain walls by a
qualified stationary engineer or otherwise, in accordance with the greater
standard of
(i) the customary maintenance by prudent operators in the
industry;
(ii) that which is necessary so as not to void, diminish, or impair
any warranty for such component from time to time in effect;
and
(iii) that which is necessary to preserve and protect the useful
life of such component, ordinary wear and tear excepted.
In addition, Tenant shall maintain and repair, or cause others to maintain and
repair or replace, as the case may be, the roof, and repair any material defect
in materials or workmanship relating to the foundation, columns, and structural
steel which comprise a part of the Premises. Landlord, not more frequently than
annually during the Term (except in the event of an emergency or extraordinary
condition), may cause independent private inspectors, qualified in the specific
discipline, to make inspections of any building and building systems on the
Premises or segments thereof to determine Tenant's compliance under this
Section.
If the Tenant does not timely or properly perform repairs as above
provided, Landlord may, but is not required to, after twenty (20) days' notice
to Tenant, make such repairs, replacements or maintenance in a reasonably
diligent fashion, and Tenant shall pay Landlord forthwith upon being billed for
same by Landlord the cost thereof plus all overhead, general conditions, fees
and other costs or expenses arising from Landlord's involvement with such
repairs, replacements and maintenance.
Landlord may, but shall not be required to, enter the Premises personally
or through independent contractors at all reasonable times upon reasonable
notice (except in the case of an emergency) to inspect the Premises, and to make
such repairs, alterations, improvements and additions to the Premises or to any
equipment or fixtures located on the Premises as Landlord deems reasonably
necessary and which Tenant failed to do as required in this Lease.
(b) It is intended by Tenant and Landlord that Landlord shall have
no obligation, in any manner whatsoever, to repair or maintain the Premises (or
the equipment therein),
-8-
9
whether structural or nonstructural, all of which obligations are intended, as
between Landlord and Tenant, to be those of Tenant. Tenant expressly waives the
benefit of any statute now or in the future in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to terminate
this Lease because of Landlord's failure to keep the Premises in good order,
condition and repair.
(c) Prior to the commencement of the Lease Landlord received an
engineering study of the Premises performed by Xxxxxxx Consultants Inc. Exhibit
E attached hereto shows a list of those matters which must be corrected. Tenant
agrees to correct the matters listed on Exhibit E, at Tenant's sole cost and
expense, to be completed no later than the dates set forth on Exhibit E.
9. IMPOSITIONS: (a) Tenant covenants and agrees to pay, during the
Term, as Additional Rent, before any fine, penalty, interest or cost may be
added thereto for the nonpayment thereof, all real estate taxes, special
assessments, utility bills referred to in Xxxxxxxxx 0, xxxxxx lighting, excise
levies, licenses, permits, inspection fees, other governmental charges, and all
other charges or burdens of whatsoever kind and nature (including costs, fees,
and expenses of complying with any restrictive covenants or similar agreements
to which the Premises are subject incurred in the use, occupancy, operation,
leasing or possession of the Premises (excluding any income taxes on the Fixed
Rent imposed on Landlord, it being the intent of the parties hereto that any tax
on the net income derived from the Fixed Rent payable in respect to the Premises
imposed by any governmental authority shall be paid by Landlord), without
particularizing by any known name or by whatever name hereafter called, and
whether any of the foregoing be general or special, ordinary or extraordinary,
foreseen or unforseen, which at any time during the Term may be payable. Tenant
shall pay all special (or similar) assessments or installments thereof
(including interest thereon) for public improvements or benefits which, during
the Term shall be laid, assessed, levied or imposed upon or become a lien upon
the Premises and which are payable during the Term, or any portion thereof;
provided, however, that if by law any special assessment is payable or, at the
option of the party obligated to make such payment, may be paid in installments
(whether or not interest shall accrue on the unpaid balance of such special
assessment), Tenant may pay the same, together with any interest accrued on the
unpaid balance of such special assessment in installments as the same
respectively become payable and before any fine, penalty, interest or cost may
be added thereto for the nonpayment of any such installment and
-9-
10
the interest thereon. Tenant shall pay all real estate taxes, whether heretofore
or hereafter levied or assessed upon the Premises, or any portion thereof, which
are due and payable during the Term. At the end of the Term of the Lease,
Tenant's obligation to pay such taxes shall be prorated in the event the tax
period and the Term are not coextensive.
(b) Except for any tax on the net income derived from the Fixed Rent, if
at any time during the Term, any method of taxation shall be such that there
shall be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent, or on the Premises, or any portion thereof, a capital levy,
gross receipts tax or other tax on the rents received therefrom, or a franchise
tax, or an assessment, gross levy or charge measured by or based in whole or in
part upon such gross Rents, Tenant, to the extent permitted by law, covenants to
pay and discharge the same, it being the intention of the parties hereto that
the Fixed Rent to be paid hereunder shall be paid to Landlord absolutely net
without deduction or charge of any nature whatsoever, foreseeable or
unforeseeable, ordinary or extraordinary, or of any nature, kind, or
description, except as otherwise expressly provided in this Lease.
(c) Tenant covenants to furnish Landlord, within thirty (30) days after
the date upon which any Imposition or other tax, assessment, levy or charge is
payable by Tenant, official receipts of the appropriate taxing authority, or
other appropriate proof satisfactory to Landlord, evidencing the payment of the
same. The certificate, advice or xxxx of the appropriate official designated by
law to make or issue the same or to receive payment of any Imposition may be
relied upon by Landlord as sufficient evidence that such Imposition, is due and
unpaid at the time of making or issuance of such certificate, advice or xxxx.
(d) Upon the occurrence of an Event of Default and after the conclusion of
any cure period following an Event of Default hereunder, Tenant shall pay to
Landlord, at Landlord's written demand, the known or estimated yearly real
estate taxes and assessments, payable with respect to the Premises in monthly
payments equal to one-twelfth (1/12) of the known or estimated yearly real
estate taxes and assessments, next payable with respect to the Premises. From
time to time, after a default hereunder, Landlord may re-estimate the amount of
real estate taxes and assessments, and in such event Landlord shall notify
Tenant, in writing, of such re-estimate and fix future monthly installments for
the remaining period prior to the next tax and assessment due date in an amount
sufficient to pay the re-
-10-
11
estimated amount over the balance of such period after giving credit for
payments made by Tenant on the previous estimate.
If the total monthly payments made by Tenant pursuant to this Section
shall exceed the amount of payments necessary for said taxes and assessments,
such excess over $1,000.00 shall be promptly paid to the Tenant and the balance
shall be credited on subsequent monthly payments of the same nature. However, if
the total of such monthly payments so made under this paragraph shall be
insufficient to pay such taxes and assessments when due, then Tenant shall pay
to Landlord such amount as may be necessary to make up the deficiency. All such
deposits made by Tenant pursuant to this Paragraph 9(d) shall be deposited in a
federally insured institution reasonably satisfactory to Landlord and Tenant,
and all interest earned thereon shall accrue to the benefit of Tenant. Payment
by Tenant of real estate taxes, assessments, under this Paragraph shall be
considered as performance of such obligation under the provisions of Paragraph
9(a) hereof.
10. DESTRUCTION OF OR DAMAGE TO PREMISES:
(a) Tenant covenants that in case of damage to or destruction of any
or all of the buildings, structures and improvements (collectively, the
"Improvements") upon the Premises by fire or any other cause, insured or
uninsured, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the Improvements so damaged or destroyed as nearly as
practicable to the condition, quality and class thereof immediately prior to
such damage or destruction, or with such changes or alterations as Tenant shall
elect to make in conformity with Paragraph 23 of this Lease. This Lease shall
continue, with Fixed Rent and Additional Rent unabated. In performing its
obligations under this Paragraph 10, Tenant shall be entitled to insurance
proceeds under the terms and conditions set forth in Paragraph 11 hereof.
Landlord shall have the right to approve the plans and specifications for the
work of repair, replacement or rebuilding, such approval not to be unreasonably
withheld or delayed. Tenant shall diligently obtain all necessary permits for
such work or repair and shall maintain builder risk insurance in amounts
reasonably satisfactory to Landlord until completion of such work. Such
restoration, repairs, replacement or rebuilding shall be commenced promptly and
prosecuted with diligence, subject to unavoidable delays and force majeure.
(b) If all or substantially all of the Premises are destroyed as a
result of fire or other casualty, then the provisions of Paragraph 14 shall
apply.
-11-
12
11. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION:
(a) Tenant at its sole cost and expense shall obtain and
continuously maintain in full force and effect during the Term "All-Risk"
policies of property insurance including damage by fire and the perils commonly
covered under the special causes of loss, and also including the perils of
earthquake and flood, covering real and personal property and loss of business
income, including all of the Improvements, alterations, additions and changes on
or at the Premises, which insurance shall be for the benefit of Landlord (as an
additional insured and loss payee) and Tenant, as their interests may appear,
and also protecting the insurable interests of any other entity the Landlord may
designate from time to time, including but not limited to mortgagee(s) or trust
deed holder(s), additional insured(s), loss payee(s), or others (hereinafter
referred to as "Property Insurance").
Such Property Insurance shall:
(i) be written with companies licensed to do business in the State
where the Premises are located, having a current A.M. Best
rating of A- or better and a current A.M. Best Financial Size
Category of VII or better;
(ii) insure the interest of Landlord's mortgagee(s) or trust deed
holder(s) additional insured(s), loss payee(s), or other
entities Landlord may designate from time to time, under
standard mortgagee clauses, lender's loss payable
endorsements, or other prescribed forms, effective as of the
Commencement Date; and
(iii) be maintained continuously throughout the Term hereof; and
(iv) provide for a deductible no greater than $100,000,000 per
occurrence for the peril of flood, and a deductible no greater
than $25,000 per occurrence for all other perils (other than
earthquake). For losses to any unit of insurance caused by
earthquake in Minnesota, a deductible no greater than 2% of
the value of such unit of insurance (subject to a minimum
deductible not exceeding $1000,000 per occurrence) shall
apply. For the purposes of applying the earthquake deductible,
a unit of insurance shall consist of all the
-12-
13
following items taken as a whole: (a) each separate building
or structure, (b) the contents of each separate building or
structure, and (c) 12 months business income (net profit or
loss before income taxes that would have been earned or
incurred, including payroll) attributable to each separate
building. To the extent such coverage is either not
commercially available at logical cost (i.e., in terms of
availability, standard industry practice and cost
effectiveness) or Tenant desires to increase the amount of the
deductible, the deductible pursuant to this Paragraph
11(a)(iv) may be increased subject to Landlord's and Tenant's
mutual agreement, such agreement not to be unreasonably
withheld.
At all times, the Property Insurance coverage shall be in an amount equal
to one hundred percent (100%) of the then "Full Replacement Cost" of the
Improvements, alterations, additions and changes on or at the Premises. Full
Replacement Cost shall be interpreted to mean the cost of repairing or replacing
the improvements, alterations, additions and changes on or at the Premises with
property of like kind and quality, determined at the time of loss, without
deduction for depreciation or wear and tear, and it shall include a reasonable
sum for architectural, engineering, legal, interest charges, permit fees,
administrative and supervisory fees connected with the restoration or
replacement of such Improvements in the event of damage thereto or destruction
thereof. Any co-insurance penalty, deductible, or self-insured retention
applicable shall be the sole responsibility of, and shall be paid by, Tenant.
(b) During the Term, Tenant, at its sole cost and expense, but for the
benefit of Landlord, (as an additional insured) and also protecting the
insurable interests of any other entity the Landlord may designate from time to
time, including but not limited to Landlord's mortgagee(s) or trust deed holder,
additional insured(s), loss payee(s), or other entities Landlord may designate
from time to time, shall obtain and continuously maintain, in full force and
effect, the following insurance coverage written with companies licensed to do
business in the State where the Premises are located, having a current A.M. Best
Rating of A- or better and a current A.M. Best Financial Size Category of VII or
better or, if such companies are not rated by A.M. Best, then companies of
equivalent size and conditions:
(i) Commercial general liability insurance or comprehensive
general liability insurance with broad form comprehensive
-13-
14
liability endorsement, applying to Premises and operations
(including coverage for property damage resulting from the
explosion, collapse, and underground hazards), products and
completed operations, contractual liability, broad form
property damage, and personal injury, all with a minimum
combined single limit of $l,000,000.00 each occurrence and
$2,000,000.00 general aggregate per location.
(ii) Automobile Liability applying to any owned, hired and
non-owned automobiles, with a minimum combined single limit of
$1,000,000.00 each accident.
(iii) umbrella liability with a minimum combined single limit of
$25,000,000.00 each occurrence and a minimum aggregate limit
per location of $25,000,000.00
(iv) Such other insurance which is commercially available at
logical (i.e., in terms of availability, standard industry
practice and cost effectiveness) cost, and in such amounts as
may from time to time be required by Landlord, against other
insurable hazards or occurrences which at the time are
commonly insured against in the case of premises, operations,
and/or buildings or improvements similar in nature,
construction, design, general location, use, and/or occupancy,
to those on the Premises.
(c) Tenant shall maintain a policy or policies of statutory workers'
compensation insurance covering all employees in amounts required by applicable
state law and employers' liability with minimum limits of $100,000.00 each
accident, $100,000.00 disease-each employee, and $100,000.00 disease-policy
limit.
(d) Each policy of insurance required under this Paragraph 11 shall have
attached thereto
(i) an endorsement that such policy shall not be cancelled or
materially changed without at least sixty (60) days prior
written notice to Landlord, except in the case of non-payment
of premium, in
-14-
15
which case there shall be at least ten (10) days prior written
notice; and
(ii) A Lender's Loss Payable Endorsement Form 438BFU (with respect
to insurance described in Paragraph 11(a)).
To the extent the foregoing endorsements are not obtainable in precisely
the form prescribed, Tenant shall obtain reasonably similar endorsements. All
policies of insurance shall be written in such form and shall be distributed in
such companies as shall be satisfactory to Landlord. Certificates of Insurance
(XXXXX 25-S) and Evidence of Property Insurance (XXXXX 27) (collectively, the
"Certificates") shall be delivered to Landlord accompanied by, or Tenant shall
provide, as appropriate, evidence satisfactory to Landlord that the premiums
thereon have been paid currently. Such Certificates and evidence of payment
shall be delivered to Landlord on or before the Commencement Date. Prior to the
expiration of such policies, Certificates of all renewal or replacement
policies, plus evidence of current premium payment, shall be delivered to
Landlord not less than thirty (30) days prior to the expiration of the then
current policy term. Insurance binders evidencing the binding of policies of
insurance or the renewals thereof for the coverage specified shall be accepted
in the event such Certificates are not available at the time in question, for a
temporary duration, pending policy issuance. Within thirty (30) days of written
request, Tenant shall cause Certificates to be delivered to Landlord, or deliver
a letter to Landlord from the underwriter(s) stating the reasons for the delay,
and stipulating when Certificates will be available. In no event shall the
insurance for the coverage specified be allowed to lapse. Copies of Tenant's
insurance policies shall be made available for inspection by Landlord or its
designee or Mortgagee or Mortgagee's designee during normal business hours at
Tenant's address.
Nothing in this Paragraph 11 shall prevent Tenant from taking out
insurance of the kind and in the amount provided for under the preceding
paragraphs under a blanket insurance policy or policies which may cover other
properties owned, operated, leased or occupied by Tenant as well as the
Premises.
Such policy of blanket insurance shall specify the amount exclusively
allocated to the Premises, or in lieu thereof, Tenant shall furnish Landlord and
the holder of any mortgage or trust deed with a written statement from the
insurer's authorized representative or broker specifying the values reported for
the Premises at inception for premium determination purposes.
-15-
16
Further, such policies of blanket insurance shall, as respects the Premises,
contain the various provisions required of such an insurance policy by the
foregoing provisions of this Paragraph 11.
(e) In the event of loss or damage to the Premises or in the event of any
claim in connection with the injury to death of any person or the damage of any
property arising out of or occurring at the Premises or arising out of
operations at the Premises, Tenant shall promptly notify Landlord thereof in
writing, and shall prepare and present timely claims to the appropriate insurers
on behalf of Tenant, Landlord and any assignee or mortgagee of Landlord.
(f) The proceeds of any property claim for damage to the premises, net of
any collection expenses, shall be paid to or deposited with either a bank or
trust company having an office in the State of Minnesota and designated by
Landlord (herein called the "Proceeds Trustee") in the name of the Proceeds
Trustee as trustee for Landlord and Tenant and disbursed in the manner
hereinafter provided. In the event Landlord mortgages the Premises with a first
mortgage, the mortgagee thereunder (regardless of its location) may, at its
option, be appointed Proceeds Trustee for so long as such first mortgage remains
outstanding. Insurance proceeds shall be deposited in an interest bearing
account (if available) and interest shall be distributed to Tenant upon
completion of said installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn on said
account shall be co-signed by the Proceeds Trustee and Tenant. Insurance
proceeds shall be disbursed to Tenant by the Proceeds Trustee upon receipt by
Landlord and Proceeds Trustee of the following:
(i) A certificate signed by a licensed architect or engineer selected by
Tenant, subject to the approval of Landlord (such approval not to be
unreasonably withheld or delayed) and also signed by Tenant, dated
not more than thirty (30) days prior to the application for such
disbursement, setting forth in substance the following:
a. that the sum then requested to be disbursed either has been
paid by Tenant or is justly due to contractors,
subcontractors, materialmen, engineers, architects or other
persons (whose names and addresses shall be stated) who have
rendered and furnished certain labor and materials for the
work; giving a brief description of such services rendered and
materials placed in use on the Premises and the
-16-
17
principal subdivisions or categories thereof and the amounts
so paid or due to each of said persons in respect thereof, and
stating the progress of the work up to the date of said
certificate;
b. that the sum then requested to be disbursed, plus all sums
previously disbursed, does not exceed the cost of the work as
actually accomplished up to the date of such certificate (less
ten percent (10%) of such cost which shall be retained by the
Proceeds Trustee to be disbursed following completion of the
work to be done by the named contractor);
c. that, to the best of their knowledge, except for the amounts,
if any, stated in said certificate pursuant to the foregoing
clause (i) of this paragraph to be due for services or
materials, there is no outstanding indebtedness known to the
person signing the certificate, after due inquiry, which is
then due and payable for work, labor, services and materials
in connection with the work, which, if unpaid, might become
the basis of a vendor's, mechanic's laborer's, materialman's
statutory or similar lien upon Tenant's leasehold estate or
Tenant's or Landlord's interest in the Premises or any part
thereof; and
d. that the amount remaining in the possession of the Proceeds
Trustee after disbursement of the sum then requested at least
equals the estimated unpaid costs to complete the work (and if
insufficient funds remain, Tenant shall deposit additional
funds with the Proceeds Trustee sufficient to enable the
architect or engineer to make the foregoing certification).
(ii) A certificate signed by Tenant, dated not more than thirty (30) days
prior to the application for such disbursement, setting forth in substance that,
to the best knowledge of Tenant, after due inquiry:
a. all materials and all property described in the certificate
are free and clear of all liens and encumbrances, except such
as may secure indebtedness due to persons (whose names and
addresses and the several amounts due them shall
-17-
18
be stated) specified in said certificate, which liens and
encumbrances will be discharged upon payment of such
indebtedness and encumbrances to which this Lease is subject;
and
b. that no default hereunder has occurred which has not been
remedied.
(iii) Evidence reasonably satisfactory to the Proceeds Trustee and
Landlord showing that there has not been filed or recorded with respect to
Tenant's leasehold estate or Tenant's or Landlord's interest in the Premises or
any part thereof any vendor's, mechanic's, design professional's, laborer's or
materialman's statutory or similar lien which has not been discharged of record,
except such as will be discharged upon payment of the amount then requested to
be disbursed.
(iv) Lien waivers from each person entitled to a mechanics' or
materialmen's lien against the Premises by reason of such work.
(v) Upon compliance with the foregoing provisions, the Proceeds Trustee
shall, out of the deposited sums, disburse to the persons named in the
certificate furnished the respective amounts stated in said certificate to be
due to them and/or shall disburse to Tenant the amount stated in said
certificate to have been paid by Tenant.
(vi) At any time after the completion in full of the work, the whole
balance of the deposited sums not theretofore disbursed pursuant to the
foregoing provisions of this paragraph 11(f) shall be disbursed to or upon the
order of Tenant, upon receipt by the Proceeds Trustee of:
a. a certificate signed by Tenant, dated not more than thirty
(30) days prior to the application for such disbursement,
setting forth in substance the following:
(1) that the work has been completed in full;
(2) that all amounts which Tenant is or may be entitled to
have disbursed under the foregoing provisions of this
Paragraph 11(f) on account of services rendered or
materials furnished in connection with the work and
placed in use on the Premises have been disbursed under
said provisions;
-18-
19
(3) that all amounts for whose payment Tenant is or may
become liable in respect of the work have been paid in
full except to the extent, if any, of any retainage and
which retainage shall be applied to the final payments
of the amounts due; and
(4) that no default has occurred hereunder which has not
been remedied;
b. a copy of the final plans and specifications of the
improvements on the Premises, which plans and specifications
shall be delivered to Landlord;
c. an official search or a certificate of a title company
reasonably satisfactory to the Proceeds Trustee showing that
there has not been filed with respect to Tenant's leasehold
estate or Tenant's or Landlord's interest in the Premises or
any part thereof, any vendor's, mechanic's, laborer's or
materialman's statutory or similar lien which has not been
discharged of record;
d. a certificate of completion signed by the supervising
architect or engineer referred to in Paragraph 11(f)(i) above;
and
e. a certificate of occupancy or equivalent governmental
approval.
No such damage or destruction shall release Tenant from any
obligation hereunder for Fixed Rent, Additional Rent or other sums payable under
this Lease.
Any insurance proceeds remaining after completion of the
reconstruction as specified in Paragraph 11(f)(vi) above shall be paid to
Tenant.
(g) To the fullest extent permitted by law, Tenant shall protect, defend,
indemnify and hold Landlord, its direct or indirect partners, and any and all
respective members, partners, executive officers, directors, stockholders,
agents and employees of the aforementioned, any mortgagee and their respective
successors and assigns and any other individual or entity to whom a duty is owed
(collectively, the Landlord Group) harmless from and against any and all claims,
losses, and judgments, liabilities, damages, causes of action, costs and
expenses (including, without limitation, reasonable attorney's fees and
-19-
20
reasonable investigative and discovery costs), arising from Tenant's use of the
Premises (including all common areas) and the ways adjoining the Premises, or
from the conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant in or about the Premises (including all common
areas) and the ways adjoining the Premises, or elsewhere and shall further
protect, defend, indemnify and hold Landlord Group harmless from and against any
and all claims, losses, judgments, liabilities, damages, causes of action, costs
and expenses (including, without limitation, reasonable attorney's fees and
reasonable investigative and discovery costs), arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease, or arising from any negligence (active, passive,
or otherwise), willful misconduct, acts, or omissions of Tenant, or any of
Tenant's agents, contractors or subcontractors, employees, servants, customers,
invitees, subtenants, any other individual or entity, and from and against all
costs and expenses (including, without limitation, reasonable attorney's fees
and reasonable investigative and discovery costs) actually incurred, in the
defense of any such claim or any action or proceeding brought thereon; and in
case any action or proceeding be brought against a member of Landlord Group by
reason of any such claim, Tenant upon notice from any member of Landlord Group
shall defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord Group or selected by the insurance carrier. Tenant, as a material part
of the consideration to Landlord, assumes all risk of damage to property or
injury to or death of persons, in, upon or about the Premises arising from any
cause and Tenant waives all claims in respect thereof against Landlord unless
caused by the willful or sole negligent act of Landlord, its direct or indirect
partners, or the respective members, partners, executive officers, directors,
stockholders, agents and employees of the aforementioned.
12. GOVERNMENTAL ORDERS; COVENANTS; LANDLORD CURE; PERMITTED CONTEST:
A. Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present and future laws,
including, without limitation, the American with Disabilities Act of 1990, as
the same may be amended from time to time, ordinances (zoning or otherwise),
orders, rules, regulations and requirements of all Federal, State, municipal and
other governmental bodies having jurisdiction over the Premises and the
appropriate departments, commissions, boards and officers thereof, and the
orders, rules and regulations of the Board of Fire Underwriters where the
Premises are situated, or any other body now or hereafter
-20-
21
constituted exercising lawful or valid authority over the Premises, or any
portion thereof, or the sidewalks, curbs, roadways, alleys or entrances adjacent
or appurtenant thereto, or exercising authority with respect to the use or
manner of use of the Premises, or such adjacent or appurtenant facilities, and
whether the compliance, curing or removal of any such violation and the costs
and expenses necessitated thereby shall have been foreseen or unforeseen,
ordinary or extraordinary, and whether or not the same shall be presently within
the contemplation of Landlord or Tenant or shall involve any change in
governmental policy, or require structural or extraordinary repairs, alterations
or additions by Tenant and irrespective of the amount of the costs thereof.
Tenant, at its sole cost and expense, shall comply with all agreements,
contracts, easements, restrictions, reservations or covenants, if any, running
with the land, or hereafter created by Tenant or consented to, in writing, by
Tenant or requested, in writing, by Tenant. Tenant shall also comply with,
observe and perform all provisions and requirements of all policies of insurance
at any time in force with respect to the Premises and required to be obtained
and maintained under the terms of Paragraph 11 hereof and shall comply with all
development permits issued by governmental authorities issued in connection with
development of the Premises.
B. If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of Paragraph 9, or to take out, pay for, maintain and
deliver any of the insurance policies or certificates of insurance provided for
in Paragraph 11, or shall fail to make any other payment or perform any other
act on its part to be made or performed, then Landlord, after ten (10) days
prior written notice to Tenant (or without notice in case of emergency), and
without waiving or releasing Tenant from any obligation of Tenant contained in
this Lease, may, but shall be under no obligation to do so,
(i) pay after said ten (10) days' written notice to Tenant, any
Imposition payable by Tenant pursuant to the provisions of
Paragraph 9;
(ii) take out, pay for and maintain any of the insurance policies
provided for in this Lease; or
(iii) make any other payment or perform any other act on Tenant's
part to be paid or performed hereunder, except that any time
permitted to Tenant to perform any act required to be
performed by Tenant
-21-
22
hereunder shall be extended for such period as may be
necessary to effectuate such performance provided Tenant is
continuously, diligently and in good faith prosecuting such
performance.
Landlord may enter upon the Premises for any such purpose and take all such
action therein or thereon as may be necessary therefor and all such action taken
by Landlord shall be in a reasonably diligent fashion. All sums so paid by
Landlord and all costs and expenses, including reasonable attorney's fees,
incurred by Landlord in connection with the performance of any such act,
together with interest thereon at the Overdue Rate, shall be paid by Tenant to
Landlord on demand. Landlord shall not be limited in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid or incurred by Tenant, and which
would have been payable upon such insurance, but Landlord shall also be entitled
to recover, as damages for such breach, the uninsured amount of any loss (to the
extent of any deficiency between the dollar limits of insurance required by the
provisions of this Lease and the dollar limits of the insurance actually carried
by Tenant), damages, costs and expenses of suit, including reasonable attorney's
fees, suffered or incurred by reason of damage to or destruction of the
Premises, or any portion thereof or other damage or loss which Tenant is
required to insure against hereunder, occurring during any period when Tenant
shall have failed or neglected to provide insurance as aforesaid.
C. If Tenant desires to contest the validity, amount, propriety, or
accuracy of any Imposition, Tenant shall notify Landlord of same which notice
shall state the nature of the Imposition being contested and the grounds for
such contest. Within fifteen (15) days of Landlord's receipt of such notice
Landlord will notify Tenant that (i) Landlord will contest the Imposition in
question, or (ii) that Landlord consents to the contest by Tenant. If Landlord
fails to so notify Tenant, it shall be presumed that Landlord has elected (ii).
If Landlord agrees to the contest the Imposition, it may do so on the grounds
described in Tenant's notice, and all the costs, expenses, fees or other
obligations incurred by Landlord in conducting such challenge shall be deemed
Additional Rent hereunder. If Landlord, either actively or by default, elects
(ii) above, Tenant shall have the right, at its own expense, to contest the
amount, propriety, accuracy, or validity, in whole or in part, of any Imposition
by appropriate proceedings diligently conducted in good faith, but only after
payment of such
-22-
23
Imposition, unless non-payment, would not cause a lien to be filed against title
to the Premises or would otherwise jeopardize title to the Premises or Tenant's
leasehold interest therein; in which event, notwithstanding the provisions of
Paragraph 9(a) hereof, Tenant may postpone or defer payment of such Imposition.
However, if Landlord reasonably deems Tenant to be financially unsound, Tenant
shall deposit with Landlord cash or a certificate of deposit payable to Landlord
issued by a national bank or Federal savings and loan association in the amount
of the Impositions so contested and unpaid, together with all interest and
penalties which may accrue, in Landlord's reasonable judgment, in connection
therewith, and all charges that may or might be assessed against or become a
charge on the Premises, or any portion thereof, during the pendency of such
proceedings. If, during the continuance of such proceedings, Landlord shall,
from time to time, reasonably deem the amount deposited, as aforesaid,
insufficient, Tenant shall, upon demand of Landlord, make additional deposits of
such additional sums of money or such additional certificates of deposit as
Landlord may reasonably request. Upon failure of Tenant to make such additional
deposits, the amount theretofore deposited may be applied by Landlord to the
payment, removal and discharge of such Imposition, and the interest, fines and
penalties in connection therewith, and any costs, fees (including reasonable
attorney's fees) and other liability (including reasonable costs incurred by
Landlord) accruing in any such proceedings.
Upon the termination of any such proceedings, Tenant shall pay the amount
of such Imposition or part thereof, if any, as finally determined in such
proceedings, the payment of which may have been deferred during the prosecution
of such proceedings, together with any costs, fees, including attorney's fees,
interest, penalties, fines and other liability in connection therewith. Upon
such payment, Landlord shall return all amounts or certificates of deposit
deposited with it in respect to the contest of such Imposition, as aforesaid
along with any interest earned thereon as a result of an investment thereof, at
Tenant's request and expense, in a Federally insured security or account.
However, at the written direction of Tenant, Landlord shall make such payment
out of the funds on deposit with Landlord and the balance, if any, shall be
returned to Tenant. Tenant shall be entitled to the refund of any Imposition,
penalty, fine and interest thereon received by Landlord which have been paid by
Tenant or which have been paid by Landlord but for which Landlord has been
previously reimbursed in full by Tenant.
Landlord shall not be required to join in any proceedings referred to in
this Paragraph 12(C) unless the provisions of any law, rule or regulations at
the time in effect shall require
-23-
24
that such proceedings be brought by or in the name of Landlord, in which event
Landlord shall join in such proceedings or permit the same to be brought in
Landlord's name upon compliance with such conditions as Landlord may reasonably
require. Landlord shall not ultimately be subject to any liability for the
payment of any fees, including attorney's fees, costs and expenses in connection
with such proceedings and Tenant agrees to bear the entire obligations therefor.
Tenant agrees to pay all such fees (including reasonable attorney's fees), costs
and expenses or, on demand, to make reimbursement to Landlord for such payment.
During the time when any such certificate of deposit is on deposit with
Landlord, and prior to the time when the same is returned to Tenant or applied
against the payment, removal or discharge of Impositions, as above provided,
Tenant shall be entitled to receive all interest paid thereon. Cash deposits
shall bear interest as above provided if the investment thereof is so requested
by Tenant.
13. EMINENT DOMAIN:
(a) If less than substantially all of the Premises shall be taken
for public or quasi-public purposes, having a material impact on Tenant's
operations, Tenant will promptly, at its sole cost and expense, restore, repair,
replace or rebuild the improvements so taken as nearly as practicable to the
condition, quality and class thereof immediately prior to such taking, or with
such changes or alterations as Tenant shall elect to make in conformity with
Paragraph 23 of this Lease. In performing its obligations, Tenant shall be
entitled to condemnation proceeds under the same terms and conditions set forth
for casualty proceeds in Paragraph 11 hereof. Any condemnation proceeds in
excess of the amount claimed by any lender of Landlord, and such amounts as are
made available to Tenant for restoration or repair of the Premises, shall be the
sole and exclusive property of Landlord. Tenant shall have the right to
participate in condemnation proceedings with Landlord, and shall be entitled to
receive any separate award made by the condemning authority in respect of
business interruption or business relocations.
(b) If the Landlord is entitled to condemnation proceeds as
describing the next to last sentence of Paragraph 13(a), each installment of
Fixed Rent thereafter payable hereunder shall be reduced by a fraction thereof,
the numerator of which shall be the proceeds retained by Landlord and the
denominator of which shall be the Purchase Price specified in the Basic Lease
Information.
-24-
25
(c) If all or substantially all of the Premises shall be taken for
public or quasi-public purposes, then the provisions of Paragraph 14 of this
Lease shall apply.
14. TERMINATION OF LEASE:
(a) If all or substantially all of the Premises are either destroyed
as a result of fire or other casualty, or taken for public or quasi-public
purposes, or if the Tenant or Landlord is served an eminent domain petition to
take all or substantially all of the Premises for public or quasi-public
purposes, and the Premises are therefore rendered unsuitable for restoration for
continued use and occupancy in Tenant's business, then Tenant shall, not later
than thirty (30) days after such occurrence, deliver to Landlord (i) notice of
its desire to terminate this Lease with respect to the Premises on the next due
date for the Fixed Rent payment, (the "Termination Date") which occurs not less
than 45 days after the delivery of such notice and (ii) a certificate of the
President or Vice President of Tenant describing the event giving rise to such
termination and stating that Tenant has determined that such event has rendered
the Premises unsuitable for restoration for continued use and occupancy in
Tenant's business, and (iii) a certificate signed by the Tenant to the effect
that termination of this Lease with respect to such Premises will not be in
violation of any operating or similar agreement then in effect. Such notice to
Landlord shall be accompanied by an irrevocable offer by Tenant to purchase on
the Termination Date any remaining portion of the Premises at a price equal to
the greater of (a) the unencumbered fair market value of the Premises determined
by agreement of the parties hereto, or (b) the Purchase Price specified in the
Basic Lease Information. The costs associated with such conveyance, including
transfer taxes and recording fees, shall be paid by Landlord to the extent the
price being paid for the Premises exceeds the Purchase Price specified in the
Basic Lease Information, and by Tenant to the extent such costs would reduce
Landlord's net receipts below such Purchase Price. Landlord may reject such
offer by notice given to Tenant not later than thirty (30) days after receipt of
Tenant's notice (which offer Landlord may not reject without the first
mortgagee's consent if there is a mortgage then on the Premises which is the
subject of such offer to which Landlord is a party). Unless Landlord shall have
rejected such offer in accordance with this paragraph (with the mortgagee's
consent as aforesaid), Landlord shall be conclusively presumed to have accepted
such offer, and, on the Termination Date, shall convey to Tenant the remaining
portion of the Premises free of liens and encumbrances (except those existing on
the Commencement Date or thereafter created with the express
-25-
26
written consent of the Tenant), along with the right to receive any insurance or
condemnation proceeds, as the case may be.
(b) If Tenant does not give notice of its intention to terminate
this Lease as provided herein, then this Lease shall continue in full force and
effect, and Tenant shall, at its expense, rebuild, replace or repair any damage
to the Premises caused by such event in conformity with the requirements of
Paragraph 11 so as to restore the Premises (as nearly as practicable) to the
same condition, size, quality of workmanship, and market value thereof
immediately prior to such occurrence.
15. DEFAULT: Events of Default.
The following events, following the expiration of the applicable
cure periods, in this Paragraph are sometimes referred to as an "Event of
Default":
(a) If default shall be made in the payment of Fixed Rent and such
default shall continue for five (5) business days after notice from
Landlord (provided that after giving one such notice, any such
default occurring within 12 months shall become an Event of Default
without the giving of notice) or if default shall be made in the
payment of Additional Rent or in the payment of any other sum
required to be paid by Tenant under this Lease or the payment to
Landlord of any other sum due under the terms of any other agreement
between Landlord and Tenant;
(b) If default shall be made in the observance or performance of any of
the other covenants in this Lease which Tenant is required to
observe and perform and such default shall continue for thirty (30)
days after written notice to Tenant, or if a default involves a
hazardous condition and is not cured by Tenant immediately;
provided, however, the time allowed Tenant (except in the instance
of hazardous conditions or conditions which expose Landlord to
criminal liability) within which Tenant is permitted to cure the
same shall be extended for such period as may be necessary for the
curing provided Tenant is continuously, diligently and in good faith
prosecuting such cure;
(c) If any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant
hereto proves to be incorrect in any material respect when made;
-26-
27
(d) If the interests of Tenant in this Lease shall be levied on under
execution or other legal process and same is not removed or stayed
within thirty (30) days;
(e) If any voluntary petition of bankruptcy or for corporate
reorganization or for the appointment of a receiver or any similar
relief shall be filed by Tenant;
(f) If any involuntary petition of bankruptcy shall be filed against
tenant under any Federal or State bankruptcy or insolvency act and
shall not have been dismissed within ninety (90) days of the filing
thereof;
(g) If a receiver shall be appointed for Tenant or any of the property
of Tenant by any court and any such receiver shall not have been
discharged within ninety (90) days from the date of his appointment;
(h) If Tenant shall make an assignment for the benefit of creditors;
(i) If Tenant shall admit, in writing, Tenant's inability to meet
Tenant's debts as they mature;
(j) If Tenant shall abandon the Premises;
(k) If the consolidated net worth of Tenant determined in accordance
with generally accepted accounting principles shall be less than
$75,000,000;
(1) If: (i) there are any outstanding obligations under the Amended
and Restated Credit Agreement, dated as of December 20,
1990, by and among Tenant, Caterair Chateau Canada
Limited, Banque Paribas (as Administrative Agent) on
behalf of certain lenders (the "Lenders") (as the same
has been and may hereafter be amended or restated or
otherwise modified from time to time, including any
refinancing thereof, the "Credit Agreement"), and so
long as Banque Paribas or any other person acting on
behalf of the Lenders (an "Agent") has agreed, with
respect to the Credit Agreement, to give Landlord notice
of acceleration of the maturity thereof
contemporaneously with the giving of any such notice to
Tenant, then the acceleration of the maturity of any
amounts
-27-
28
due under the Credit Agreement by the Agent or the
Lenders shall constitute an Event of Default hereunder;
or
(ii) there are no outstanding obligations under the Credit
Agreement, then any default shall occur in the payment of any
outstanding indebtedness of $10,000,000 or more, or such lesser
indebtedness as shall be material to the financial condition of
Tenant;
(m) If a final judgment shall be entered in an amount greater than
$5,000,000 which creates a default under any mortgage, lease or loan
agreement of Tenant, or which affects Landlord's interest in the
Premises; or
(n) If an Event of Default shall occur under any other lease between
Landlord and Tenant dated as of the date hereof.
Landlord may treat the occurrence of any one or more of the
foregoing Events of Default as a breach of this Lease. For so long as such Event
of Default continues the Landlord, at its option and with or without notice or
demand of any kind to Tenant or any other person, but subject to Paragraph 16F
hereof may have any one or more of the remedies provided in this Paragraph 15 or
elsewhere in this lease, in addition to all other remedies and rights provided
at law or in equity.
16. REMEDIES: In the event of any such Event of Default, Landlord may, in
addition to, and not in derogation of any remedies for any preceding breach or
covenant, with or without notice of demand (except as otherwise expressly
provided herein) and without limiting Landlord in the exercise of any right or
remedy which Landlord may have by reason of such default or breach:
A. Immediately or at any time thereafter while such Event of Default
continues, mail a notice of termination addressed to Tenant and proceed pursuant
to and with due process of law, to repossess the same without prejudice to any
remedies which might otherwise be used for arrears of rent or prior to breach of
covenant, and upon such notice as aforesaid this Lease shall terminate, but
Tenant shall remain liable for its default hereunder as hereinafter provided.
Tenant shall have the right to cure any default until the expiration of the
applicable cure period, if any, following notice by Landlord, as specified
above. Where Landlord has given notice as provided for above, no further notice
shall be required to effectuate a termination of the
-28-
29
Lease, which termination shall occur automatically unless the default is cured
within the time periods provided.
B. Terminate Tenant's right to possession of the Premises by court
order or any lawful means, in which case Tenant's right to possession under this
Lease shall terminate, and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event, Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default,
including, but not limited to, the cost of recovering possession of the
Premises; reasonable expenses of reletting, including necessary renovation and
alteration of the Premises (which reletting shall be restricted to operations
similar to Tenant's operations, or to warehouse or distribution center
facilities); reasonable attorney's fees and any real estate commissions actually
paid; the worth at the time of award by the court having jurisdiction thereof of
the amount by which the unpaid rent for the balance of the term after the time
of such award exceeds the amount of such rental loss for the same period that
Tenant proves could be reasonably avoided; and that portion of any leasing
commissions paid by Landlord applicable to the unexpired Term of this Lease.
C. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the Rent as
it becomes due hereunder.
D. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the State of Minnesota, including,
without limitation, unlawful detainer proceedings pursuant to Minnesota Statute
Section 566. Unpaid installments of Rent and other unpaid monetary obligations
of Tenant under the terms of this Lease shall bear interest from the date due
until paid at the Overdue Rate.
E. At any time after any such termination of this Lease or re-entry
or repossession of the Premises or any part thereof by reason of the occurrence
of an Event of Default, whether or not Landlord shall have collected any current
damages pursuant to Xxxxxxxxx 00X, Xxxxxxxx shall have the option to require
payment from Tenant, and Tenant will pay to Landlord on demand, as and for
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), whichever
amount Landlord shall select:
-29-
30
(a) an amount equal to the Fixed Rent reserved in this Lease and/or
covenanted to be paid for the remainder of the Term (excluding unexercised
Renewal Terms), discounted at the rate of 10% per year to present worth;
or
(b) 110% of the Purchase Price specified in the Basic Lease
Information.
Landlord shall at the time of such payment under this Paragraph 16E assign and
convey the Premises to Tenant free of liens and encumbrances (except those
existing on the Commencement Date or thereafter created with the express written
consent of Tenant), without further consideration. The costs of such transfer,
including recording fees and transfer taxes shall be paid by Tenant, except
that, if Landlord receives more than 110% of such Purchase Price, Landlord shall
pay the portion of such costs, if any, which result in Landlord receiving at
least 110% of such Purchase Price.
F. Until such time as the Agent shall otherwise notify Landlord or
until such time as there are no longer any obligations outstanding under the
Credit Agreement;
(i) if default shall occur hereunder at any time, written notice to
that effect shall be sent by Landlord to the Agent,
(ii) if such default shall be a default which can be cured by the
payment of money alone, the Agent may remedy such default not later than 5
business days after the receipt of such notice; or
(iii) if such default shall be a default in observing or performing
any other covenant or condition to be observed or performed by Lessee
hereunder, the Agent may remedy such default not later than 30 days after
receipt of such notice provided that such period may be extended under the
circumstances and to the extent provided in Paragraph 15(b).
In either such event, Landlord or Tenant (as the case may be) shall
provide the Agent with any access to the Premises which may be necessary to
effectuate any such cure. In no event shall the Agent be obligated to effectuate
a cure of any default hereunder.
During the cure periods described in clauses (ii) and (iii),
Landlord shall take no action to terminate this Lease or to interfere with the
occupancy, use or enjoyment of the Premises
-30-
31
or exercise any other remedies to which it may be entitled under the Lease.
17. SUBORDINATION:
(a) Subordination, Non-Disturbance. Tenant agrees at any time hereafter,
and from time to time on demand of Landlord, to promptly execute and deliver to
Landlord any instruments, releases or other documents that may be required for
the purpose of subjecting and subordinating this Lease to the lien of any
mortgage, deed of trust, security instrument, ground or underlying lease or
other document of like nature (hereinafter collectively referred to as
"Mortgage") which at any time may be placed upon the Premises, or any portion
thereof, by Landlord, and to any replacements, renewals, amendments,
modifications, extensions or refinancing thereof, and to each and every advance
made under any Mortgage. It is agreed, nevertheless, that so long as there
exists no Default, such subordination agreement or other instrument, release or
document (herein "Subordination Agreement") shall not interfere with, hinder or
reduce Tenant's right to quiet enjoyment under this Lease, nor the right of
Tenant to continue to occupy the Premises, and all portions thereof, and to
conduct its business thereon in accordance with the covenants, conditions,
provisions, terms and agreements of this Lease. Such Subordination Agreement
shall provide for a nondisturbance of Tenant's rights hereunder provided Tenant
attorns to the holder of such Mortgage. The lien of any such Mortgage shall not
cover Tenant's Trade Fixtures or other personal property located in or on the
Premises.
(b) Mortgagee Protection Clause. In the event of any act or omission of
Landlord constituting a default by Landlord, Tenant shall not exercise any
remedy until Tenant has given Landlord and any mortgagee of the Premises a
thirty (30) day prior written notice of such act or omission, and until a
reasonable period of time to allow Landlord or the mortgagee to remedy such act
or omission shall have elapsed following the giving of such notice. However, if
such act or omission cannot, with due diligence and in good faith, be remedied
within such thirty (30) day period, the Landlord and the mortgagee shall be
allowed such further period of time as may be reasonably necessary provided that
it commences remedying the same with due diligence and in good faith within said
thirty (30) day period. Nothing herein contained shall be construed or
interpreted as requiring any mortgagee to remedy such act or omission.
(c) Attornment. If any mortgagee or other party (a "Purchaser") shall
succeed to the rights of Landlord under this Lease or to ownership of the
Premises, whether through possession
-31-
32
or foreclosure of any such mortgage or deed of trust or of any action or
proceeding for the enforcement thereof or of any sale thereunder or the delivery
of a deed to the Premises in lieu of foreclosure, then, upon the written request
of such Purchaser so succeeding to landlord's rights hereunder, provided such
Purchaser assumes, in writing, the obligations of Landlord hereunder accruing on
and after the date such Purchaser acquired title to the Premises, Tenant shall
attorn to and recognize such Purchaser as Tenant's landlord under this Lease,
and shall promptly execute and deliver any instrument that such Purchaser may
reasonably request to evidence such attornment. In the event of any other
transfer of Landlord's interest hereunder, upon the written request of the
transferee and Landlord, provided such transferee assumes, in writing, the
obligations of Landlord hereunder accruing on and after the date of such
transfer, Tenant shall attorn to and recognize such transferee as Tenant's
landlord under this lease and shall promptly execute and deliver any instrument
that such transferee and Landlord may reasonably request to evidence such
attornment.
(d) Upon ten business days advance written notice, Tenant agrees to
execute, acknowledge and deliver a document substantially in the form of the
Assignment of Lease attached hereto as Exhibit B from Landlord to a mortgagee
and consented to by Tenant, with such changes therein as may be reasonably
requested by an institutional lender, provided no such change alters the rights
of Tenant hereunder.
18. LANDLORD'S RIGHT OF ENTRY: Upon reasonable notice, from time to time
during normal business hours, such persons as Landlord or any assignee of
Landlord shall designate shall have the right to enter upon the Premises and to
inspect same, exhibit the Premises to prospective purchasers and mortgagees, and
examine Tenant's books and records pertaining to the Premises, insurance
policies, certificates of occupancy and other documents, records and permits in
Tenant's possession with respect to the Premises, all of which shall be
customary and adequate and reasonably satisfactory to Landlord, provided,
however, that such activities by Landlord shall be conducted in such a manner as
not to interfere with the conduct of business by Tenant at the Premises. If no
Event of Default exists hereunder, any such inspections shall be at the expense
of Landlord. If an Event of Default exists hereunder, such inspections shall be
at the reasonable expense of Tenant. During the final one (1) year of the Term,
Landlord shall be entitled to place customary "For Rent" or "For Sale" signs on
the Premises. Such persons as Landlord or any assignee of Landlord shall
designate shall also have the right to enter upon the Premises for the purpose
of making repairs which Landlord is authorized to make under the
-32-
33
provisions of this Lease. In the event of an Event of Default under the Credit
Agreement the Agent shall have the right to enter onto the Premises for purposes
of removing collateral in which the Agent holds a perfected first priority
security interest, provided that such removal does not impair the structural
integrity of the Premises, and the Agent shall repair any damage to the Premises
caused by such removal.
19. NOTICES: Notices, statements, demands, or other communications
required or permitted to be given, rendered or made by either party to the other
pursuant to this Lease or pursuant to any applicable law or requirement of
public authority, shall be in writing (whether or not so stated elsewhere in
this Lease) and shall be deemed to have been properly given, rendered or made,
when received by overnight delivery or overnight courier delivery or facsimile
transmission with a confirmation copy sent by overnight delivery or by overnight
courier delivery addressed to the other parties as follows:
To Landlord:
TriNet Essential Facilities VIII R, Inc.
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
With a copy to:
Day, Xxxxx & Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
To Tenant:
Caterair International Corporation
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Law Department
To Agent:
Banque Paribas
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
-33-
34
Any party listed in this paragraph 19 may, by notices as aforesaid, designate a
different address for addresses for notice, statements, demands or other
communications intended for it.
20. STATUS OF LEASE; FINANCIAL DATA:
A. Upon written request of either party, the other party agrees,
within twenty (20) days, to deliver a written status report of this Lease, in
the form provided on attached Exhibit C, provided that neither party shall be
obligated to provide more than four (4) such status reports per year.
B. Tenant agrees to deliver to Landlord and to any lender or
purchaser designated by Landlord the following information: within 120 days
after the end of each fiscal year of Tenant, an audited balance sheet of Tenant
and its consolidated subsidiaries as at the end of such year, an audited
statement of profits and losses of Tenant and its consolidated subsidiaries for
such year, and an audited statement of change in the financial position of
Tenant and its consolidated subsidiaries for such year, setting forth in each
case, in comparative form, the corresponding figures for the preceding fiscal
year in reasonable detail and scope and certified by independent certified
public accountants of recognized national standing selected by Tenant; and
within 60 days after the end of each of the first three fiscal quarters of
Tenant a balance sheet of Tenant and its consolidated subsidiaries as at the end
of such quarter, statements of profits and losses of Tenant and its consolidated
subsidiaries for such quarter and a statement of change in financial position of
Tenant and its consolidated subsidiaries for such quarter, setting forth in each
case, in comparative form, the corresponding figures for the similar quarter of
the preceding year, in reasonable detail and scope, and certified to be true and
complete by a financial officer of Tenant having knowledge thereof; the
foregoing financial statements all being prepared in accordance with generally
accepted accounting principles, consistently applied. So long as Tenant shall
remain a privately-held company, Landlord shall keep any non-public financial
information with respect to Tenant furnished by Tenant confidential and shall
not disclose such information; provided, however, that such information may be
disclosed (i) to its officers, directors, employees, agents, attorneys and
accountants in connection with acting as Landlord under this Lease, (ii) to
lenders or institutional investors in connection with arranging, modifying or
restructuring debt
-34-
35
secured by a mortgage lien on the Premises or an assignment of this Lease, so
long as any such lender shall execute a confidentiality agreement agreeing not
to disclose such financial information, (iii) to potential purchasers in
connection with the sale of any interest in the Premises, so long as any such
purchaser shall execute a confidentiality agreement agreeing not to disclose
such financial information, (iv) in connection with the enforcement of
Landlord's rights and remedies hereunder, and (v) as may be required by any
governmental or other regulatory entity having jurisdiction or authority over
Landlord, or over any lender or investor.
C. Tenant, upon five (5) business days advance notice, will permit
Landlord and its professional representatives to visit Tenant's offices and
discuss Tenant's affairs and finances (insofar as they relate to the Premises or
this Lease) with appropriate officers, and will make available such information
as Landlord may reasonably request bearing on the Tenant, Premises or this
Lease, provided that Landlord agrees to maintain the confidentiality of
information denominated as non-public information provided such information may
be provided as required by governmental regulation or court order, and may be
provided on a confidential basis to Landlord's counsel and accountants.
21. MECHANICS' LIENS:
Liens and Right of Contest. (a) Tenant shall not suffer or permit
any mechanic's lien or other lien to be filed or recorded against the Premises,
equipment or materials supplied or claimed to have been supplied to the Premises
at the request of Tenant, or anyone holding the Premises, or any portion
thereof, through or under Tenant. If any such mechanic's lien or other lien
shall at any time be filed or recorded against the Premises, or any portion
thereof, Tenant shall cause the same to be discharged of record within thirty
(30) days after the date of filing or recording of the same. However, in the
event Tenant desires to contest the validity of any lien it shall (i) on or
before thirty (30) days prior to the due date thereof (but in no event later
than 30 days after the filing or recording thereof), notify Landlord, in
writing, that Tenant intends to so contest same; (ii) on or before the due date
thereof, if Landlord reasonably deems Tenant to be financially insecure or if
any mortgagee or Trust Deed holder of Landlord so requires, deposit with
Landlord security (in form and content reasonably satisfactory to Landlord or
Landlord's mortgagee or trust deed holder) for the payment of the full amount of
such lien and, from time to time, deposit additional security or indemnity so
that,
-35-
36
at all times, adequate security or indemnity will be available for the payment
of the full amount of the lien together with all interest, penalties, costs and
charges accrued or accumulated thereon.
If Tenant complies with the foregoing, and Tenant continues, in good
faith, to contest the validity of such lien by appropriate legal proceedings
which shall operate to prevent the collection thereof and the sale or forfeiture
of the Premises, or any part thereof, to satisfy the same, Tenant shall be under
no obligation to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises. Any surplus deposit retained by
Landlord, after the payment of the lien shall be repaid to Tenant. Provided that
nonpayment of such lien does not cause Landlord to be in violation of any of its
contractual undertakings, Landlord agrees not to pay such lien during the period
of Tenant's contest. However, if Landlord pays for the discharge of a lien or
any part thereof from funds of Landlord, any amount paid by Landlord, together
with all costs, fees and expenses in connection therewith (including reasonable
attorney's fees of Landlord), together with interest thereon at the Overdue
Rate, shall be repaid by Tenant to Landlord on demand by Landlord. Tenant shall
indemnify and defend Landlord against and save Landlord and the Premises, and
any portion thereof, harmless from and against all losses, costs, damages,
expenses, liabilities, suits, penalties, claims, demands and obligations,
including, without limitation, reasonable attorney's fees, resulting from the
assertion, filing, foreclosure or other legal proceedings with respect to any
such mechanic's lien or other lien or the attempt by Tenant to discharge same as
above provided.
(b) All materialmen, contractors, artisans, engineers, mechanics, laborers
and any other person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other lien for any such labor, services,
materials, supplies, machinery, fixtures or equipment shall attach to or affect
the estate or interest of Landlord in and to the Premises, or any portion
thereof.
-36-
37
(c) Tenant shall not create, permit or suffer, and, subject to the
provisions of Section 21(a) hereof, shall promptly discharge and satisfy of
record, any other lien, encumbrance, charge, security interest, or other right
or interest which, as a result of Tenant's action or inaction contrary to the
provisions hereof, shall be or become a lien, encumbrance, charge or security
interest upon the Premises, or any portion thereof, or the income therefrom.
22. END OF TERM: (a) Upon the expiration or earlier termination of the
Term of this Lease, Tenant shall surrender the Premises to Landlord in the same
condition and suitable for the same use in which the Premises was originally
received from Landlord except as repaired, rebuilt or altered as required or
permitted by this Lease (and/or except for such casualty damage as Tenant shall
not be required to repair or restore hereunder), and except for normal wear and
tear, and shall surrender all keys to the Premises to Landlord at the place then
fixed for the payment of Fixed Rent and shall inform Landlord of all
combinations on locks, safes and vaults, if any. Except as otherwise provided
herein, Tenant shall at such time remove all of its property (including Tenant's
Trade Fixtures) therefrom and all alterations and improvements placed thereon by
Tenant and not consented to by Landlord, if so requested by Landlord. Tenant
shall repair any damage to the Premises caused by such removal, and any and all
such property not so removed when required shall, at Landlord's option, become
the exclusive property of Landlord or be disposed of by Landlord, at Tenant's
cost and expense, without further notice to or demand upon Tenant.
(b) If the Premises are not surrendered as above set forth, Tenant
shall indemnify, defend and hold Landlord harmless from and against loss or
liability resulting from the delay by Tenant in so surrendering Premises,
including, without limitation any claim made by any succeeding occupant founded
on such delay. Tenant's obligation to observe or perform this covenant shall
survive the expiration or other termination of this Lease. In addition to the
foregoing, and in addition to the Additional Rent, Tenant shall pay to Landlord
a sum equal to 150% of the Fixed Rent herein provided during each month or
portion thereof for which Tenant shall remain in possession of the Premises or
any part thereof after the termination of the Term or of Tenant's rights of
possession, whether by lapse of time or otherwise. The provisions of this
Paragraph 22(b) shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein at law or at equity.
-37-
38
(c) All property of Tenant not removed on or before the last day of
the term of this Lease shall be deemed abandoned. Tenant hereby appoints
Landlord its agent to remove all property of Tenant, including Tenant's Trade
Fixtures, from the Premises upon termination of this Lease and to cause its
transportation and storage for Tenant's benefit, all at the sole cost and risk
of Tenant and Landlord shall not be liable for damage, theft, misappropriation
or loss thereof and Landlord shall not be liable in any manner in respect
thereto. Tenant shall pay all costs and expenses of such removal, transportation
and storage. Tenant shall reimburse Landlord upon demand for any expenses
incurred by Landlord with respect to removal or storage of abandoned property
and with respect to restoring said Premises to good order, condition and repair.
(d) Except for surrender upon the expiration or earlier termination
of the term hereof, no surrender to Landlord of this Lease or of the Leased
Property shall be valid or effective unless agreed to and accepted in writing by
Landlord.
(e) Notwithstanding the above, upon the expiration or earlier
termination of the Term of this Lease, if there are any outstanding obligations
under the Credit Agreement, Landlord shall, in the case of an early termination,
notify the Agent thereof and within 30 days after such expiration or receipt of
such notice of early termination, as the case may be, the Agent shall have the
right and Landlord shall provide such access as may be necessary for the Agent
to remove from the Premises the collateral upon which it then has a first
priority lien.
23. ALTERATIONS:
A. At any time during the Term of this Lease, Tenant shall have the
right to make alterations in and to the Premises, provided such alterations are
in compliance with all applicable codes, laws, ordinances, rules and
regulations, and do not materially reduce the then unencumbered fair market
value of the Premises or cause the Premises to violate any terms of this Lease
or compromise the structural integrity of the Improvements.
B. Prior to making any structural alteration the cost of which is
estimated to exceed $100,000, Tenant shall submit to Landlord a plan showing the
nature and extent of such alterations and shall not proceed with such
alterations without Landlord's written consent, which shall not be unreasonably
withheld.
-38-
39
24. MEMORANDUM OF LEASE: The parties agree to promptly execute a
Memorandum of Lease in recordable form and either of the parties shall have the
right, without notice to the other party, to record such Memorandum of Lease.
25. SUBLETTING/ASSIGNMENT: Tenant shall have the right to sublease all or
any part of the Premises or assign its interest hereunder, provided that Tenant
shall remain primarily liable under this Lease without regard to any sublease or
assignment, and provided further that any profit realized upon subletting or
assignment shall be the property of Tenant. Tenant shall not mortgage its
interest hereunder and any purported mortgage thereof shall be void.
26. HAZARDOUS MATERIAL:
A. Tenant (i) shall comply, and cause the Premises to comply, with
all Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required by
Environmental Laws and the carrying out of any remediation program specified by
such authority, (ii) shall prohibit the use of the Premises for the generation,
manufacture, refinement, production, or processing of any Hazardous Material (as
hereinafter defined) or for the storage, handling, transfer or transportation of
any Hazardous Material (other than in connection with the operation, business
and maintenance of the Premises and in commercially reasonable quantities as a
consumer thereof and supplier of consumer products and in compliance with
Environmental Laws), (iii) shall not permit to remain, install or permit the
installation on the Premises of any surface impoundments, underground storage
tanks, or asbestos-containing materials, except for such impoundments, tanks and
asbestos containing material as was on the Premises at the Commencement Date as
disclosed to Landlord by an environmental engineer's written report, provided
such pre-existing items continue to be in compliance with applicable laws and,
to the extent required by Paragraph 22, removed at the end of the Term, and (iv)
shall cause any alterations of the Premises to be done in a way so as to not
expose in an unsafe manner the persons working on or visiting the Premises to
Hazardous Materials and in connection with any such alterations shall remove any
Hazardous Materials present upon the Premises which are not in compliance with
Environmental Laws or which present a danger to persons working on or visiting
the Premises.
-39-
40
B. "Environmental Laws" means the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. Sections 6901, et seq. (RCRA), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Sections 9601 et seq. (CERCLA), the Toxic Substance Control Act, as amended, 15
U.S.C. Sections 2601 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, as amended, 7 U.S.C. Sections 136 et seq., and all applicable federal,
state and local environmental laws, ordinances, rules and regulations, as any of
the foregoing may have been or may be from time to time amended, supplemented or
supplanted, and any other federal, state or local laws, ordinances, rules and
regulations, now or hereafter existing relating to regulations or control of
Hazardous Material or materials. The term "Hazardous Materials" as used in this
Lease shall mean substances defined as "hazardous substances", "hazardous
materials", "hazardous wastes" or "toxic substances" in any applicable federal,
state or local statute, rule, regulation or determination, including but not
limited to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource,
Conservation and Recovery Act of l976, 42 U.S.C. Sections 6901, et seq.; and,
asbestos, pcb's, radioactive substances, methane, volatile hydrocarbons,
petroleum or petroleum-derived substances or wastes, radon, industrial solvents
or any other material as may be specified in applicable law or regulations.
C. Except for liability resulting from or arising out of the sole
negligent or willful act of Landlord or its Mortgagee or their agents on or
about the Premises or their successors and assigns, Tenant agrees to protect,
defend, indemnify and hold harmless Landlord, its directors, officers, employees
and agents, and any successors to Landlord's interest in the chain of title to
the Premises, their direct or indirect partners, directors, officers, employees,
and agents, from and against any and all liability, including all foreseeable
and all unforeseeable damages including but not limited to attorney's and
consultant's fees, fines, penalties and civil or criminal damages, directly or
indirectly arising out of the use, generation, storage, treatment, release,
threatened release, presence or disposal of Hazardous Materials from, on, at, to
or under the Premises prior to or during the Term of this Lease, and including,
without limitation, the cost of any required or necessary repair, response
action, remediation, investigation, cleanup or detoxification and the
preparation of any closure or other required plans, whether such action is
required or
-40-
41
necessary prior to or following transfer of title to the Premises. This
agreement to indemnify and hold harmless shall be in addition to any other
obligations or liabilities Tenant may have to Landlord at common law under all
statutes and ordinances or otherwise, and shall survive following the date of
expiration or earlier termination of this Lease for five years, except where the
event giving rise to the liability for which indemnity is sought arises out of
Tenant's acts, in which case the agreement to indemnify shall survive the
expiration or termination of this Lease without limit of time. Tenant expressly
agrees that the representations, warranties and covenants made and the
indemnities stated in this Lease are not personal to Landlord, and the benefits
under this Lease may be assigned to subsequent parties in interest to the chain
of title to the Premises, which subsequent parties in interest may proceed
directly against Tenant to recover pursuant to this Lease. Tenant, at its
expense, may institute appropriate legal proceedings with respect to
environmental matters of the type specified in this Paragraph 26C or lien for
such environmental matters, not involving Landlord or its Mortgagee as a
defendant (unless Landlord or its Mortgagee is the alleged cause of the damage),
conducted in good faith and with due diligence, provided that such proceedings
shall not in any way impair the interests of Landlord or its Mortgagee under
this Lease or contravene the provisions of any First Mortgage. Counsel to Tenant
in such proceedings shall be reasonably approved by Landlord if Landlord is a
defendant in the same proceeding. Landlord shall have the right to appoint
co-counsel, which co-counsel will cooperate with Tenant's counsel in such
proceedings. The fees and expenses of such co-counsel shall be paid by Landlord,
unless such co-counsel are appointed because the interests of Landlord and
Tenant in such proceedings, in such counsel's opinion, are or have become
adverse, or Tenant or Tenant's counsel is not conducting such proceedings in
good faith or with due diligence.
D. Tenant, promptly upon the written request of Landlord from time
to time, but not more than once in any calendar year unless an Event of Default
has occurred and is continuing, shall permit such persons as Landlord or any
assignee of Landlord may designate and (unless an Event of Default has occurred
and is continuing) approved by Tenant, which approval shall not be unreasonably
withheld or delayed ("Site Reviewers") to visit the Premises from time to time
and perform Environmental site investigations and assessments ("Site
Assessments") on the Premises for the purpose of determining whether there
exists on the Premises any environmental condition which may result in any
liability, cost or expense to Landlord or
-41-
42
any other owner or occupier of the Premises relating to Hazardous Material;
provided, however, that any such Site Reviewer in performing any Site Assessment
shall not unreasonably interfere with the operations or business of Tenant on
the Premises. Such Site Assessments may include both above and below the ground
testing for environmental damage or the presence of Hazardous Material on the
Premises and such other tests on the Premises as may be necessary to conduct the
Site Assessments in the opinion of the Site Reviewers. Tenant shall supply to
the Site Reviewers such historical and operational information regarding the
Premises as may be reasonably requested by the Site Reviewers to facilitate the
Site Assessments (other than information previously supplied in writing to
Landlord by Tenant) and shall make available for meetings with the Site
Reviewers appropriate personnel having knowledge of such matters. The cost of
performing and reporting all Site Assessments shall be paid by Landlord unless
an Event of Default has occurred and is continuing or unless the Site Reviewers
discover an environmental condition causing the Premises to be in noncompliance
with applicable Environmental Laws, in either of which events such cost will be
paid by Tenant within thirty (30) days after demand by Landlord with interest to
accrue at the Overdue Rate. Landlord, promptly after written request by Tenant
and payment by Tenant as aforesaid, shall deliver to Tenant copies of reports,
summaries or other compilations of the results of such Site Assessments.
Tenant's sole remedy for Landlord's breach of the preceding sentence shall be a
mandatory injunction, and not a termination of this Lease or a withholding or
reduction of rent. If a Site Assessment conducted under this Paragraph 26D
indicates that the Premises are in violation of Environmental Laws or otherwise
do not conform to the requirements of this Paragraph 26 at the time the Term is
expiring or being terminated, and such violation or nonconformity is
attributable to the Tenant, the term of this Lease shall at the option of
Landlord (exercised by written notice sent thirty (30) days prior to the
expiration or termination of the Term) be extended for the period of remediation
of such violation or nonconformity but in no event more than two (2) years from
the scheduled expiration of the Term. All of the terms, covenants and conditions
of this Lease shall continue in full force and effect during the period of any
such extension, except that the annual Fixed Rent shall be the fair market
rental for the Premises assuming no such violation or nonconformity has
occurred. Such fair market rental shall be mutually agreed upon by the Landlord
and Tenant. In the event that the Landlord and Tenant are unable in good faith
to agree on such fair market rental, the annual Fixed Rent during the period of
any such extension shall be determined by an
-42-
43
independent appraiser without regard to any remaining Renewal Term.
E. Tenant shall notify Landlord in writing, promptly upon Tenant's
learning thereof, of any:
(a) notice or claim to the effect that Tenant is or may be liable to
any person as a result of the release or threatened release of any Hazardous
Material into the environment;
(b) notice that Tenant is subject to investigation by any
governmental authority evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous Material into the
environment;
(c) notice that the Premises is subject to an environmental lien;
and
(d) notice of violation to Tenant or awareness by Tenant of a
condition which might reasonably result in a notice of violation of any
applicable Environmental Law that could have a material adverse effect upon the
Premises.
27. RIGHT OF FIRST REFUSAL:
During the period ending on the tenth (10th) anniversary of the
Commencement Date, Landlord shall not sell or otherwise transfer its interest in
the Premises or any portion thereof to a third party unless Landlord shall first
have offered to sell the same to Tenant at the price and upon the terms which
were offered to Landlord by, or solicited by Landlord from, such third party
(the "Initiating Offer"). After notification by Landlord of a bona fide written
offer to purchase any or all of the Premises, Tenant shall have ten (10)
business days to accept such offer in writing at a price equal to or greater
than the Initiating Offer price (less any fees and commissions saved by Landlord
because of selling to Tenant), whereupon Tenant shall be legally obligated to
purchase the Premises on the terms of such offer. The right of first refusal
shall not apply in the case of any foreclosure sale of Landlord's interest in
the Premises or any transfer of Landlord's interest in the Premises by way of
merger, consolidation or purchase of substantially all of Landlord's assets or
in the case of any such transfer to any entity controlling, controlled by or
under common control of Landlord, except that Tenant's right of first refusal
shall survive any
-43-
44
such transfer, and be binding upon the successor to Landlord's interest.
Upon election by Tenant to exercise its Right of First Refusal:
(a) If the Initiating Offer price for the Premises and other property
leased by Tenant from Landlord is less than $11,200,000, Landlord and Tenant
shall enter into a fully binding contract to purchase the Premises within ten
(10) business days of Tenant's exercise of the right of first refusal. Tenant
shall deposit within five (5) business days of signing such contract an amount
in cash or in an irrevocable standby letter of credit (by a bank acceptable to
Landlord) equal to 2% of the agreed upon purchase price. Closing shall occur
within twenty (20) business days of execution of the purchase contract.
(b) If the Initiating Offer price for the Premises and other property
leased by Tenant from Landlord is greater than or equal to $11,200,000, Tenant
shall obtain a financing commitment from one or more lenders within 45 business
days of Tenant's exercise of its right of first refusal. Landlord and Tenant
shall enter into a fully binding contract subject to the above mentioned
financing commitment, to purchase the Premises within ten (10) business days of
Tenant's receipt of the financing commitment. Within five (5) business days of
signing the Purchase Contract, Tenant shall deposit into escrow an amount in
cash or in an irrevocable standby letter of credit (issued by a bank acceptable
to Landlord) equal to 1% of the agreed upon purchase price. Closing shall occur
within 20 business days of Tenant's receipt of its financing commitment.
The right of first refusal shall terminate (a) at the end of the tenth
year of the Term, or (b) if Tenant exercises its right of first refusal or makes
an unsolicited offer to Landlord to purchase any or all of the properties leased
by Landlord to Tenant and fails to complete such purchase.
The provisions of this paragraph shall not apply to any sale by Landlord
into a net-lease investment fund in which Landlord is a general partner for a
period of three (3) years from the Closing.
28. MISCELLANEOUS PROVISIONS:
A. This Lease and all of the covenants and provisions hereof shall
inure to the benefit of, and be binding upon, the
-44-
45
parties hereto and the heirs, personal representatives, successors and assigns
of the parties.
B. The titles and headings appearing in this Lease are for reference
only and shall not be considered a part of this lease or in any way to modify,
amend or affect the provisions thereof.
C. This Lease contains the complete agreement of the parties with
reference to the leasing of the Premises.
D. Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
E. Whenever Tenant is required to make payments to Landlord other
than Fixed Rent, such payments shall constitute Additional Rent. Whenever Tenant
is required to make payment for insurance or taxes, Landlord shall have the
right after fifteen (15) days notice to Tenant, to make the payment for Tenant
and to recover such sums from Tenant as Additional Rent plus interest on such
sums at the Overdue Rate.
F. This Lease may be executed in one or more counterparts, each of
which shall be an original, and all of which shall constitute one and same
instrument.
G. The term "Landlord" as used in this Lease shall mean only the
owner or owners at the time in question of the fee title, and in the event of
any transfer of such title or interest, Landlord named in this Lease (and in
case of any subsequent transfers then the grantor) shall be relieved from and
after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.
H. This Lease shall be governed by and construed and enforced in
accordance with and subject to the laws of the State where the Premises are
located.
-45-
46
I. Anything contained herein to the contrary notwithstanding, so
long as Landlord has not entered into any loan agreements affecting the Premises
with a cumulative loan-to-value ratio greater than 70%, any claim based on or in
respect of any liability of Landlord under this Lease shall be enforced only
against the Premises and not against any other assets, properties or funds of
(a) Landlord or any director, officer, shareholder, general partner, limited
partner, or direct or indirect partners, employee or agent of Landlord or its
general partners (or any legal representative, heir, estate, successor or assign
of any thereof), (b) any predecessor or successor partnership or corporation (or
other entity) of Landlord or its general partners, either directly or through
Landlord or its predecessor or successor partnership or corporation (or other
entity) of Landlord or its general partners, and (c) any other person or entity.
J. Without the written approval of Landlord and Tenant, no person
other than Landlord (including its direct and indirect partners), Mortgagee,
Tenant and their respective successors and assigns shall have any rights under
this Lease.
K. There shall be no merger of this Lease or the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, and (b) the fee estate in the Premises.
L. Notwithstanding anything contained herein to the contrary, the
interests of Tenant and Landlord under this Lease are expressly intended by the
parties hereto to be construed as a leasehold estate held by Tenant and a fee
simple estate held by Landlord, and not as an estate for years held by Tenant or
a remainder interest held by Landlord.
M. The parties hereby recognize that the Agent, on behalf of the
Lenders is an intended third party beneficiary of paragraphs 15(1), 16F, the
Agent, on behalf of the Lenders of this Lease for so long as there are any
obligations outstanding under the Credit Agreement. The parties shall not amend,
change or modify this provision or, while there are any obligations outstanding
under the Credit Agreement, provisions to which the Agent is an intended third
party beneficiary, without first obtaining the written consent of the Agent.
-46-
47
[Remainder of Page Intentionally Left Blank]
-47-
48
IN WITNESS WHEREOF, the parties have hereunto set their hands under seal
on the day and year first above written.
TRINET ESSENTIAL FACILITIES VIII R, INC.
Landlord
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
CATERAIR INTERNATIONAL CORPORATION
Tenant
By: /s/ Xxxx X. Xxxx
------------------------------
Name: XXXX X. XXXX
Title: Vice President
49
ANNEX I
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Lease and shall be equally applicable to both the singular and plural forms
of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other
than Fixed Rent which Tenant assumes or agrees to pay under this Lease to
Landlord or others.
"Agent" is defined in Paragraph l5 (l) of this Lease.
"Basic Lease Information" means the pages preceding this Lease which are
hereby incorporated by reference.
"Certificates" is defined in Paragraph 11 of this Lease.
"Closing" is defined in Paragraph 3B of this Lease.
"Commencement Date" is defined in Paragraph 3B of this Lease.
"Credit Agreement" is defined in Paragraph 15 (l) of this Lease.
"Environmental Laws" is defined in Paragraph 26B of this Lease.
"Event of Default" is defined in Paragraph 15 of this Lease.
"First Mortgage" or "Mortgage" shall mean a first mortgage on the Premises
given by Landlord to the Mortgagee to secure a loan financing or refinancing the
acquisition of the Premises.
"First Mortgage Note" shall mean a promissory note evidencing a loan
secured by a First Mortgage.
"First Renewal Term" is defined in Xxxxxxxxx 0X of this Lease.
"Fixed Rent" is defined in Paragraph 4 of this Lease.
"Fourth Renewal Term" is defined in Xxxxxxxxx 0X of this Lease.
-1-
50
"Imposition" means the various tax and other charges referred to in
Paragraph 9.
"Improvements" is defined in Paragraph 10 of this Lease.
"Initiating Date" is defined in Xxxxxxxxx 0X of this Lease.
"Initial Term" is defined in Paragraph 3A of this Lease.
"Landlord" is defined in the first Paragraph of this Lease.
"Lease" is defined in the first sentence of this Lease.
"Lease Expiration Date" is defined in Paragraph 3A of this Lease.
"Lenders" is defined in Paragraph 15(l) of this Lease.
"Lookback period" is defined in Xxxxxxxxx 0X of this Lease.
"Mortgagee" shall mean any first mortgagee with respect to the Premises.
"Overdue Rate" means a rate equal to the prevailing prime rate as shown in
the Wall Street Journal or any equivalent publication, plus 400 basis points.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subdivision thereof.
"Permitted Encumbrances" means:
(a) Any liens for taxes, assessments and other governmental charges
and any liens of mechanics, materialmen and laborers for work or
services performed or materials furnished in connection with the
Premises, which are not due and payable;
(b) The easements, rights-of-way, encroachments, encumbrances,
restrictive covenants or other matters in the title set forth in
Schedule B to the policy of owners title insurance (or commitments
therefore) delivered to and accepted by Landlord with respect to
-2-
51
the Premises in connection with the delivery of this Lease as shown
on Exhibit D attached hereto;
(c) The Lease and the rights of Tenant under this Lease;
"Premises" is defined in Paragraph 1 of this Lease.
"Purchase Price" is defined in the Basic Lease Information.
"Rent" means Fixed Rent and Additional Rent.
"Renewal Term" is defined in Xxxxxxxxx 0X of this Lease.
"Renewal Term Commencement Date" is defined in Xxxxxxxxx 0X of this Lease.
"Renewal Term Expiration Date" is defined in Xxxxxxxxx 0X of this Lease.
"Second Renewal Term" is defined in Xxxxxxxxx 0X of this Lease.
"Site Reviewers" is defined in Paragraph 26D of this Lease.
"Site Assessments" is defined in Paragraph 26D of this Lease.
"Tenant's Trade Fixtures" means dishwashers, stoves, sinks, refrigerators,
walk-in coolers (to the extent they do not constitute a part of an exterior
wall), underground storage tanks and other fixtures used in Tenant's business
(as opposed to building fixtures customarily found in commercial buildings
without regard to the particular business conducted therein).
"Term" means the Initial Term, together with any Renewal Terms and any
automatic extension of either thereof pursuant to the terms of this Lease.
"Third Renewal Term" is defined in Xxxxxxxxx 0X of this Lease.
-3-
52
#397Bloomington, MN
Exhibit A
All that certain real property situated in the County of Hennepin, State
of Minnesota, and described as follows:
Xxx 0, Xxxxx 0, Xxxxxx'x Xxxxxxxxxxx Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles in
and for said Hennpin County, Minnesota.
53
EXHIBIT B
ASSIGNMENT OF LEASE AND AGREEMENT
from
XXXXXX/XXXXXXX CORPORATE CAPITAL, INC.
To
___________
Dated as of _________
54
ASSIGNMENT OF LEASE AND AGREEMENT, dated as of _______, (herein, together
with all supplements and amendments hereto, called this Agreement), from
Xxxxxx/Xxxxxxx Corporate Capital, Inc. (herein called Assignor), having an
address at Four Xxxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 to
___________ having an address at ______ (herein, together with its successors
and assigns as assignee, called the Assignee).
To refinance a portion of the cost to Assignor of acquiring a fee simple
interest in the land described in Schedule A hereto and a fee simple interest in
the improvements located thereon (such land together with such improvements
being collectively called the Property), with the execution and delivery hereof,
is borrowing from the Assignee the amount of $_____________ such borrowing being
evidenced by its Note. The Property has been leased by Assignor to Caterair
International Corporation, a Delaware corporation (the Lessee), under a Lease
Agreement, dated as of _________, 1993 (herein, together with all supplements
and amendments thereto, and any memorandum or short form thereof entered into
for the purpose of recording, registration or filing, called the Lease) between
Assignor, as lessor, and Lessee, as lessee.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, Assignor
agrees as follows:
55
-2-
1. Assignor, in furtherance of the covenants of the Mortgage and as
security for the payment of the principal of, premium, if any, and interest and
all other sums payable on the Note and of all other sums payable under the
Mortgage, and the performance and observance of the provisions thereof, has
assigned, transferred, conveyed and set over, and by these presents does assign,
transfer, convey and set over to the Assignee, all of Assignor's estate, right,
title and interest in, to and under the Lease together with all rights, powers,
privileges, options and other benefits of Assignor as lessor under the Lease,
including, but not by way of limitation, (i) the immediate and continuing right
to receive and collect all rents, income, revenues, issues, profits, insurance
proceeds, condemnation awards, moneys and security payable or receivable under
the Lease or pursuant to any of the provisions thereof, whether as rents or as
the purchase price of the Property or otherwise (except sums payable directly to
any person other than the lessor thereunder), (ii) the right to accept any offer
by Lessee to purchase the Property, or part thereof, or any reward payable in
connection with a taking thereof, (iii) the right and power (which right and
power are coupled with an interest) to execute and deliver, as agent and
attorney-in-fact of Assignor, an appropriate deed or other instrument necessary
to convey the Property, any part thereof or any award payable in connection with
a taking thereof to the Lessee if the Lessee becomes
56
-3-
obligated to purchase the Property, any part thereof or any award payable in
connection with a taking thereof, (iv) the right to perform all other necessary
or appropriate acts as said agent and attorney-in-fact with respect to any
purchase and conveyance referred to in clause (iii) above, (v) the right to make
all waivers and agreements, (vi) the right to give all notices, consents and
releases, (vii) the right to take any legal action upon the happening of a
default under the Lease including the commencement, conduct and consummation of
proceedings at law or in equity as shall be permitted under any provision of the
Lease or by law or in equity and (viii) the right to do any and all other things
whatsoever which Assignor or any lessor is or may be entitled to do under the
Lease.
2. The assignment made hereby is executed as collateral security, and the
execution and delivery hereof shall not in any way impair or diminish the
obligations of Assignor under the provisions of Lease nor shall any of the
obligations contained in the Lease be imposed upon the Assignee. Upon the
payment of the principal of and premium, if any, and all accrued interest on the
Note and of all other sums payable on the Note and under the Mortgage and the
performance and observance of the provisions thereof, or upon a release of the
Property from the lien of the Mortgage pursuant to the provisions of the
Mortgage, said assignment and all rights herein assigned to the Assignee shall
cease and terminate and all the estate, right, title and interest
57
-4-
of Assignor in and to the above-described assigned property shall revert to
Assignor, and the Assignee shall, at the request of Assignor, deliver to
Assignor an instrument in recordable form cancelling this Agreement and
reassigning to Assignor the above-described assigned property.
3. Assignor hereby designates the Assignee to receive all payments of
Fixed Rent, Additional Rent, purchase prices and other sums payable to the
lessor under the Lease and to receive duplicate original copies of all notices,
undertakings, demands, statements, documents and other communications which
Lessee is required or permitted to give, make, deliver to or serve upon the
lessor under the Lease. By its acceptance hereof, Assignee agrees that any
moneys received by Assignee hereunder which are in excess of Fixed Rent,
Additional Rent, purchase prices or other amounts payable by the Lessee on or
about the date the same are due and payable, shall be paid to the Assignor or
its order within 10 days of receipt thereof. Assignor hereby directs the Lessee
to deliver to the Assignee, at its address set forth above or at such other
address as the Assignee shall designate, duplicate original copies of all such
notices, undertakings, demands, statements, documents and other communications
and no delivery thereof by the Lessee shall be of any force or effect unless
made to Assignor and also made to the Assignee as herein provided.
58
-5-
4. Assignor represents to the Assignee that Assignor has not executed any
other assignment of the subject matter of this Assignment which has not been
released or assigned to Assignee other than the Mortgage and that the Lease is
in full force and effect and the Lease is not in default.
5. Assignor agrees that said assignment and the designation and direction
to the Lessee hereinabove set forth are irrevocable (except as expressly
provided in Paragraph 2), and that it will not take any action as lessor under
the Lease or otherwise which is inconsistent with said assignment, or make any
other assignment, designation or direction inconsistent therewith, and that any
assignment, designation or direction inconsistent therewith shall be void.
Assignor will, from time to time upon the request of the Assignee execute all
instruments of further assurance and all such supplemental instruments with
respect to this Agreement as the Assignee may specify.
6. Assignor and Assignee hereby agree, and Assignor hereby agrees and
hereby undertakes to obtain the agreement of Lessee, as follows:
(a) That Lessee consents to the provisions of this Assignment, and
agrees to pay and deliver to Assignee or the last person or entity
designated by Assignee (which designation shall be revocable by
Assignee unless by its terms any such revocation would require the
consent of such designee) all rentals and other sums assigned to
Assignee pursuant to this Agreement, in accordance with the terms of
the Lease, and will not assert any offset, counterclaim, deduction
or defense deferment, abatement or diminution (except as is
expressly provided for in the Lease), in any proceeding brought
under this Agreement or otherwise, whether this
59
-6-
Assignment shall have been terminated by operation of law or
otherwise and will not, for any reason whatsoever (except as is
expressly provided for in the Lease), seek to recover from the
Assignee any moneys paid to Assignee by virtue of this Agreement.
That until the termination of this Agreement: (i) all sums payable
by Lessee to Assignee pursuant to the Lease, as provided for in the
preceding sentence, shall be paid in such manner that Assignee shall
have "collected funds" on the date on which such sums are due and
payable, and wired to the account of Assignee at ________ or to such
other address or manner as may be specified by the Assignee by
written notice to Lessee, (ii) Lessee shall deliver to Assignee, at
_____________________ or the person or entity designated by Assignee
duplicate original copies of all notices, undertakings, demands,
statements, documents, other communications, and other instruments
which Lessee may deliver pursuant to the Lease, and no delivery
thereof by Lessee shall be of any force or effect unless also made
to Assignee as herein provided, (iii) any notice given to Lessee by
Assignee or its designee shall be effective as a notice given to
Lessee by Assignor as lessor under the Lease; provided that in the
event Lessee shall receive conflicting notices, Lessee shall be
entitled to rely on any notice received from Assignee (or its
designee), (iv) Assignee shall not by reason of the assignment
hereunder be subject to any liability or obligation under the Lease
prior to foreclosure of the Mortgage and, (v) any waiver, consent or
approval under the Lease shall not be valid unless approved by
Assignee, (vi) no payment of sums or delivery of notices or other
instruments by Lessee shall be of any force or effect under the
Lease (1) unless paid to Assignee or delivered to Assignee and
Assignor, as the case may be, as provided above and (2) until
actually received by Assignee, and Assignor (if applicable).
Payments made to Assignee (or its designee) pursuant to this
Assignment by Lessee in accordance with the Lease shall constitute
payment of Lessee's obligations under the Lease.
(b) Assignor and Lessee will not unilaterally or by agreement,
subordinate, amend, modify, extend, terminate or otherwise change
any term of the Lease (except as expressly permitted by the Lease)
without the prior written consent thereto of Assignee and any such
attempted subordination, amendment, modification, extension,
termination or change without such consent shall be void. If the
Lease shall be amended as
60
-7-
permitted hereby, it shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the
parties hereto. Lessee will remain obligated under the Lease in
accordance with its terms, and without the consent of Assignee,
Lessee will not take any action to terminate (except as expressly
permitted by the Lease), rescind or avoid the Lease, notwithstanding
(i) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or other proceeding affecting
Assignor or any assignee of Assignor, (ii) any action with respect
to the Lease which may be taken by any assignee, trustee, or
receiver of Assignor or of any such assignee or by any court in any
such proceedings or (iii) any right of set-off or counterclaim, or
any defense, or any other right or claim, of any person arising
under this Agreement or the Lease.
(c) Until the termination of this Agreement, notice of rejection by
any person of an offer by Lessee pursuant to the Lease to purchase
interests in the Premises (without the prior written consent of
Assignee) shall be void and ineffective unless accompanied by the
written consent of Assignee; and notice of acceptance of any offer
of Lessee to purchase interests in the Premises pursuant to the
Lease shall be deemed validly given for all purposes if given by
Assignee. In addition, notice of rejection of any offer of Lessee to
purchase interests in the Premises pursuant to the Lease shall be
deemed validly given for all purposes if given by Assignee. If
Lessee shall purchase Assignor's interest in the Premises, Lessee
shall accept a deed and other instruments transferring and conveying
such interests which is executed and delivered by Assignee, which
instrument shall be effective to convey the Premises to Lessee with
title as provided in and otherwise in accordance with the Lease,
pursuant to which such deed or instrument is delivered. If Assignee
shall elect to institute any judicial proceeding before transferring
said interests in the Premises, the Lease shall not terminate, but
shall continue in full force and effect until the transfer and
purchase shall have been consummated.
Lessee shall be entitled to rely upon, and entitled to the benefits
of, the provisions of this Paragraph 6. Lessee shall be entitled to rely upon
any actions taken by Assignee in
61
-8-
accordance with this Agreement and Lessee shall not be required to verify
whether or not Assignee or Assignor has complied with the provisions of this
Agreement. Assignor and Assignee agree, and such consent may provide, that
Lessee shall not be bound by any amendment or modification to this Agreement to
which Lessee shall not have consented in writing. By acceptance of this
Agreement, Assignee agrees that, it shall, upon twenty (20) days notice from
Assignor or from Lessee requesting the same, execute and deliver to the party
requesting the same its certificate stating whether or not, to its actual
knowledge, the Lease and this Agreement are in full force and effect and whether
or not, to its actual knowledge no default has occurred under any thereof.
7. Assignor and Assignee agree that if, on the date of purchase of the
Property by Lessee pursuant to any provision of the Lease, Assignor shall be
unable to convey the Property to Lessee free of all liens, encumbrances,
charges, exceptions and restrictions which (i) have been created by or have
resulted from acts or the failure act of Assignor and not resulting from any
act or failure to act of Lessee and (ii) have not been consented to by Lessee
(except liens and encumbrances required to be discharged by Lessee pursuant to
the Lease), then in any such event, Lessee shall have an option to purchase the
Note. Lessee shall exercise such option by notifying Assignee, in writing, not,
later than sixty (60) days after the date of purchase provided
62
-9-
for under the Lease, of Lessee's intention to purchase the Note on any business
day specified in such notice, at the respective prices equal to the then unpaid
principal amount of the Note, together with the respective interest accrued and
unpaid thereon to the date of such purchase. Lessee shall pay all costs,
expenses and disbursements of Assignor and Assignee in connection with such
purchase and assignment including, but not by way of limitation, the cost of
federal, state and local taxes (except any estate, inheritance, succession or
income taxes of Assignor and Assignee, applicable to the transfer of the Note).
The Note, pursuant to its terms and by virtue of the acceptance hereof by the
Assignee, shall be subject to the provisions of this Paragraph 7. On the date of
purchase of the Note, the holder of the Note shall deliver to Lessee at its
address set forth above, the Note, endorsed (without recourse to such holder) to
Lessee, against receipt by the holder of the Note of the purchase price
therefor. From and after the date of such purchase, the Assignee shall have no
further interest in the Property or the Lease. Lessee, upon such purchase of the
Note, shall be entitled to any and all rights and privileges granted to the
owner of the Note.
8. This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Agreement may
be executed in two or more counterparts and shall be deemed to have become
effective when and only when one or more of such counterparts shall have been
63
-10-
signed by or on behalf of each of the parties hereto, although it shall not be
necessary that any single counterpart be signed by or on behalf of each of the
parties hereto, and all such counterparts shall be deemed to constitute but one
and the same instrument. This Agreement shall be governed by the law of the
state in which the Property is located.
9. The following is Schedule A referred to in this Agreement.
64
IN WITNESS WHEREOF, Assignor has caused this Agreement to be signed as of
the date first above written.
XXXXXX/XXXXXXX CORPORATE CAPITAL, INC.
By:
--------------------------------------
Name:
Title:
CONSENTED TO:
CATERAIR INTERNATIONAL CORPORATION
By:
--------------------------------------
Name:
Title:
65
EXHIBIT C
STATUS REPORT
The undersigned, _________________________, a ____________ corporation is the
______ under a Lease Agreement (the "Lease"), dated as of ________ 1993, between
Caterair International Corporation, a Delaware corporation, (the "Tenant") and
TriNet Essential Facilities VIII R, Inc., a Maryland corporation, as landlord
(the "Landlord") of certain real property located in ________ as described on
attached Exhibit A (the "Premises"). The undersigned hereby represents,
certifies and agrees as follows:
1. The Lease constitutes the entire agreement between the parties with
respect to the Premises and the Improvements and is in full force and effect and
has not been modified, supplemented, canceled or amended in any respect.
2. The term of the Lease commenced on __________ 1993 and continues
through at least ___________, 2018. The Tenant is currently obligated to pay
rent in monthly installments in an amount not less than $_____ per month, which
rent obligation is continuing and is not past due or delinquent in any respect.
No installment of rent has been prepaid more than one month in advance.
3. No event has occurred or is continuing which would constitute a default
by either the Tenant or Landlord under the Lease or would constitute such a
default but for the requirement that notice be given or that a period of time
elapse or both. No offset exists with respect to any rents or other sums payable
or to become payable by the Tenant under the Lease.
66
IN WITNESS WHEREOF, this Certificate has been duly executed and delivered
by the authorized officers of the undersigned as of _______________.
------------------------------------------
By:
--------------------------------------
Name:
Title:
00
#000 Xxxxxxxxxxx, XX
Exhibit D
1. Real estate taxes for and payable in 1993 and thereafter, such taxes not
yet being delinquent.
2. Levied and pending special assessments hereafter levied. Liens for special
assessments not yet due and payable. There are currently no levied or
pending assessments now of record.
3. Easement for street purposes over the North 10 feet of premises from Xxxx
X. Xxxxxx Co., a Minnesota corporation in favor of City of Bloomington,
dated July 26, 1968, recorded July 30, 1968, as Document No. 916177, Files
of Registrar of Titles.
4. Easement from Bloomington Properties, Inc., a Delaware corporation, in
favor of Xxxx X. Xxxxxx Co., a Minnesota corporation, dated July 29, 1968,
recorded July 30, 1968, as evidenced by Document No. 916178, Files of
Registrar of Titles.
5. The following items appear as encroachments on the survey dated November
23, 1992, by BRW, Inc.:
(a) Cyclone fences over Southerly and Easterly boundaries.
(b) Bituminous surface over Southerly boundary.
(c) Railroad spur tracks over Westerly and Southerly boundaries lying
outside of easement described in Number 4.
(d) Parking area into easements, Document No. 961677 and over Northerly
set-back line.
(e) Buried telephone line over Northeasterly corner.
6. Lease between Caterair International Corporation and TriNet Essential
Facilities VIII R, Inc.
68
EXHIBIT E TO LEASE
Per December 5, 1991 Xxxxxxx Reports
Normal Maintenance Normal Maintenance
to be Completed no to be Completed no
Later than 2nd Later than 5th
Anniversary of Anniversary of
Commencement Date Commencement Date
------------------ -------------------
LaGuardia - #351 Roof Repairs and
Installation of
Flood Coat; Install
Sealant and Caulking
to Masonry Walls;
Paint Dock Metal
Ceiling and Truck
Door Stairs
LaGuardia - #375 Install Pipe Masonry Tuckpointing
Bollards at Track at Parapet Walls,
Dock Support Steel & etc.; Repair/Replace
Piers Kitchen and Truck
Dock Ceiling Tiles;
Repair and Paint
Loading Dock Chairs
& Paint Service
Doors; General Roof
Repairs and Repair
Flashings;
Replacement of Terra
Cotta Coping with
Aluminum
Miami - #361 General Roof Repair,
Regraveling, etc.;
Cut and Re-cover
Roofing Ply
Blisters; Replace
Cracked and Broken
Loading Dock
Concrete Slab;
Replace Roof,
Insulation and
Flashing; Replace 5
HVAC Compressors
Miami - #366 2nd Floor Bathroom Replace 5 HVAC
Repairs; Clean, Compressors and 2
Prime and Repaint Air Handlers; Repair
Rust on Roof Exhaust and Retube 2 Hot
Hoods Water Boilers
Miami - #702 Prime and Paint
Exposed Metal
Downspouts and
Scuppers; Repair
Built-up Roof,
Insulation and
Flashing
69
Normal Maintenance Normal Maintenance
to be Completed no to be Completed no
Later than 2nd Later than 5th
Anniversary of Anniversary of
Commencement Date Commencement Date
------------------ -------------------
Seattle - #318 Construction of
Additional Roof
Drains for Perimeter
Drainage;
Replacement of Two
Original Rooftop
Heating units
Orlando - #479 Repair and Fill
Cracks in Asphalt
Pavement, Repair
Apron Cracks, and
Reseal and Restripe
Parking Lot; Clean
and Retube Hot Water
Boilers
Philadelphia - #376 Repair of Masonry
from Truck Impacts
and Dock Repairs;
Application of
Silicone Sealant to
Exterior Wall
Cracks; Roof Repairs
(flood coat,
regravel and
skylight)
Reno - #303 Replace Gas
Connections with
Flexible Connectors;
Clean Kitchen Fan
and Ductwork, Repair
HVAC Corrosion
Minneapolis - #397 Replace/Repair Steel New Roof;
Beams Supporting Woodscreens for
Condensor Units Rooftop Units;
Caulking of Masonry
Wall; Repair of
Downspouts;
Tuckpointing of
Openings and Cracks
in Mortar Joints
Repair Steel Column
Supporting Truck
Dock Roof
Repair of Quarry
Tile Floor; Repair
of Asphalt Pavement;
Sealcoating of
Asphalt Pavement for
Moisture Protection
