COMMUNITY REUSE ORGANIZATION OF EAST TENNESSEE
SUBLEASE
THIS SUBLEASE, entered into this 25 day of March, 1999 between
COMMUNITY REUSE ORGANIZATION OF EAST TENNESSEE, a Tennessee nonprofit
corporation hereinafter referred to as "CROET," and THERAGENICS CORPORATION, a
Delaware corporation, hereinafter referred to as the "Sublessee," provides for
the use and development by the Sublessee of Government-owned real and personal
property held by CROET pursuant to two Leases from the United States of America
acting by and through the Department of Energy, hereinafter referred to as
"DOE." The DOE-CROET leases are (1) a lease entered into January 16, 1996, as
amended by Supplemental Agreement of Outgrant No. 1 effective April 28, 1998,
and Supplemental Agreement of Outgrant No. 2 effective January 13, 1999,
Supplemental Agreement of Outgrant No. 3 effective February 23, 1999, and
Supplemental Agreement of Outgrant No. 4 effective February 25, 1999 for a DOE
owned track of undeveloped land near DOE's East Tennessee Technology Park
("ETTP") to be developed by CROET through arrangements with commercial firms or
public entities, said lease being hereinafter referred to as the "Land Lease"
and, (2) Department of Energy Lease entered into March 22, 1999, for the lease
of DOE owned equipment consisting of the Plasma Separation Process ("PSP") to be
used for producing isotopes, said lease hereinafter referred to as the
"Equipment Lease." The Land Lease and the Equipment Lease are collectively
hereinafter referred to as "Leases." The parcel of land subleased to the
Sublessee under this Sublease consists of approximately 21 acres, is identified
as parcel HOC-001 on the drawing attached hereto as Appendix "A," and will be
referred to throughout this Sublease as the "Premises." In the event Sublessee,
at its expense, obtains a current survey of the Premises, a legal description of
the Premises prepared from such survey may, by amendment executed by CROET and
Sublessee, be incorporated herein.
CROET does hereby sublease to Sublessee, and Sublessee does hereby
sublease from CROET, the Premises and the PSP.
This Sublease is granted subject to the following terms and conditions:
1. CROET AUTHORITY TO SUBLEASE. This Sublease is made by CROET pursuant to
Condition No. 7 of the Land Lease and Condition No. 6 of the Equipment
Lease. So long as Sublessee makes payments and performs and complies
with the other covenants, terms, and conditions set forth herein to be
performed or complied with by Sublessee, CROET does hereby covenant and
agree that Sublessee may peacefully hold, enjoy and use the Premises
and the PSP during the term hereof without any hindrance or
interference.
2. TERM.
The term of this Sublease shall be May 1, 1999, and ending April 30,
2029; provided, however, that Sublessee acknowledges that the Leases
and this Sublease are terminable by DOE under the provisions contained
in Condition No. 4 of the Land Lease and Condition No. 3 of the
Equipment Lease.
3. TERMINATION BY DOE OR CROET.
(a) The Sublessee acknowledges that DOE may terminate the Leases
and this Sublease at any time as provided in Condition No. 4
of the Land Lease and Condition No. 3 of the Equipment Lease;
provided however, in the event of such termination by DOE,
the Sublessee shall be entitled to a refund of any rent paid
under paragraph 4(a) below for any period after the date of
termination. Additionally, in the event DOE terminates the
Land Lease and this Sublease due to national emergency or in
the interest of national defense, CROET acknowledges
and agrees that Sublessee shall be entitled to the
compensation set forth in Condition No. 41 of the Land Lease
and CROET will assist Sublessee in obtaining such
compensation; provided that this shall not
be construed as imposing liability on CROET to pay such
compensation if DOE does not do so.
(b) CROET may terminate this Sublease at any time by giving
ninety (90) days written notice by the authorized
representative to the Sublessee under any of the following
circumstances: If the Sublessee fails to substantially
perform or comply with any of the terms and conditions
of this Sublease and continues and persists therein for
ten (10) days after notice thereof in writing by CROET;
provided, however, if such default is not reasonably capable
of cure within such ten (10) day period, CROET shall not be
entitled to terminate this Sublease if Sublessee promptly
undertakes to cure such default and diligently pursues such
cure. In the event of such termination, CROET shall be
entitled to recover from the Sublessee the costs incurred by
CROET in performing any obligation on the part of the
Sublessee to be performed under the terms of this Sublease
for any period prior to the date of termination or for costs
incurred by CROET as a result of matters arising after the
date of termination but which resulted from Sublessee's
actions prior to the date of termination.
(c) The Sublessee agrees to engage an architectural and
engineering firm to design the improvements Sublessee desires
to construct on the Premises (the "Facility") within ninety
(90) days from the date of this Sublease. In the event
Sublessee does not use reasonable efforts to complete the
Facility on or before the later of (i) one (1) year after the
date of this Sublease, or (ii) the date upon which the PSP and
all necessary component parts (including any new parts that
need to be ordered or fabricated) are ready to be installed in
the Facility, CROET shall have the right to terminate the
Sublease on not less than thirty (30) days written notice to
Sublessee unless Sublessee promptly commences to attempt to
develop the Premises on or before thirty (30) days after
receipt of such notice of default.
(d) CROET may terminate this Sublease in the event that Sublessee
fails to obtain all the required governmental and regulatory
authority, licenses, permits, approval and consents for the
development, use and operation of the Facility, the PSP and
any other equipment required for use in connection with
Sublessee's business operations on the Premises, provided,
that this shall not be construed as requiring the Sublessee to
operate the PSP on the Premises or to engage in activity
requiring any particular license.
(e) The Sublessee shall also pay to CROET on demand any sum which
CROET is obligated to pay to DOE by reason of expenditures
after the expiration, revocation, or termination of this
Sublease in restoring the Premises to the condition required
by Condition No. 33 of the Land Lease and Condition No. 23 of
the Equipment Lease; provided, however, this shall not in any
manner relieve CROET or DOE from any of their respective
liabilities, to the extent the cause of such restoration
resulted, in whole or in part, from their acts or omissions.
In any of the above events, the provisions of Condition No. 33 of the Land Lease
and Condition and 23 of the Equipment Lease shall apply to the Premises.
4. RENT.
(a) Land Rent. The Sublessee shall pay to CROET land rental for the
premises according to the following terms:
(1) $ [Confidential Treatment Requested] per month until
January 1, 2000.
(2) $ [Confidential Treatment Requested] per annum
[Confidential Treatment Requested] after January 1,
2000, and every year thereafter, to be paid in equal
monthly amounts on the first day of each calendar month;
[Confidential Treatment Requested]. The land rental
shall be adjusted as set forth in this paragraph 4(a).
Such rent shall be prorated for any portion of the term
which is not a full calendar month.
On January 1, 2005 and each fifth (5th) anniversary thereafter
during the term of this Sublease, the land rental shall be
increased by an amount equal to the product of: (i) the amount
of land rental set forth in paragraph 4(a)(2) of this
Sublease, multiplied by (ii) the fraction whose numerator is
the Consumer Price Index (as hereinafter defined) for the
calendar month just ended and whose denominator is the
Consumer Price Index for the calendar month January, 2000. The
term "Consumer Price Index" as used herein shall mean the
Consumer Price Index for All Urban Consumer (1982-84=100)
specified for All Items, U.S. City Average and issued by the
Bureau of Labor Statistics of the United States Department of
Labor. In the event the Consumer Price Index shall hereafter
be converted to a different standard reference base or
otherwise revised, CROET shall designate a comparable
procedure for adjustment of land rent.
(b) Equipment Rent. The Sublessee shall pay to CROET equipment
rental, for the PSP, according to the following terms:
(1) $ [Confidential Treatment Requested] per month until the
equipment becomes operational.
(2) $ [Confidential Treatment Requested] per month
after the equipment becomes operational, whether or not
it continues in operation.
(c) Utilities and Services. The Sublessee shall be responsible for
paying the charges for utilities and services DOE may provide
to the Premises under Condition No. 5(b) of the Land Lease, as
such charges are determined and charged by DOE; provided,
however, Sublessee shall only be required to pay for utilities
and services actually being used or consumed by Sublessee. The
method of payment to DOE shall be determined by CROET and the
Sublessee. Sublessee shall be responsible for paying for all
utilities and services actually being used or consumed by
Sublessee which are provided by any entity other than DOE
under terms and conditions to be arranged by Sublessee with
that entity.
(d) Additional Consideration. The Sublessee shall be responsible
for the expense of maintenance, operations, alterations and
repairs to the Premises for the entire term of the Sublease,
and shall pay to the taxing authority any taxes levied as a
result of this Sublease excluding any taxes levied on CROET
because of its separate status as a corporation. CROET agrees
to reasonably cooperate with Sublessee in seeking tax
relief/abatement measures with applicable city and county
governmental authorities with respect to the Premises, the PSP
and the Sublease.
5. IMPROVEMENTS TO THE PREMISES.
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Consistent with various requirements contained in the Land Lease, and
accepted by the Sublessee under Condition No. 9 below, the Sublessee
may, at its expense, make such improvements on the Premises, including
erecting structures and making tie-ins to utilities, as are necessary
to conduct Sublessee's business. Title to all such improvements shall
be vested in the Sublessee until the Sublease is terminated or expires
of its own terms, at which time the status of such improvements will be
controlled by Condition No. 17 of the Land Lease. The foregoing shall
not in any manner restrict or impair the right of Sublessee, if it
elects, to remove its trade fixtures and personal property from the
Premises at the end of the term of this Sublease, but Sublessee shall
be responsible for any damage to the Premises caused by such removal.
6. EMPLOYMENT.
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Consistent with applicable laws, rules, regulations and ordinances, and
the various requirements contained in the Land Lease, the Sublessee, in
hiring workers for work on the Premises, shall give preference to
workers formerly employed at DOE installations on the Oak Ridge
reservation, all other things being equal among prospective employees.
The Sublessee shall report to CROET in writing annually or upon demand
by CROET the number of employees working on the premises and, to the
extent the Sublessee has actual knowledge based on information
furnished to it by CROET or through arrangements made by CROET, the
number among them who are workers formerly employed at DOE
installations on the Oak Ridge reservations. The Sublessee commits to
use its best efforts to employ for work on the premises the following
numbers of full-time employees ("FTEs"):
Year 1 * FTEs
Year 2 * FTEs
Year 3 * FTEs
Year 4 * FTEs
Year 5 * FTEs
Years Beyond 5 * FTEs
[*Confidential Treatment Requested]
The sole remedy for failure to achieve, or use Sublessee's best efforts
to achieve, these employment levels on the premises shall result in the
Sublessee paying an additional [Confidential Treatment Requested] in
land rent and equipment rent for the year involved, unless Sublessee
can demonstrate that business factors beyond its control were the cause
for not meeting the employment level. Should the Sublessee exceed those
employment levels by [Confidential Treatment Requested] or more the
sublessee shall pay [Confidential Treatment Requested] less in land
rent and equipment rent for the years involved.
7. AUTHORIZED REPRESENTATIVES. CROET'S representative concerning the
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provisions of this Sublease shall be Xxxxxxxx Xxxxx, Community Reuse
Organization of East Tennessee, 000 Xxx Xxx, X.X. Xxx 0000, Xxx
Xxxxx, Xxxxxxxxx, 00000, Tel. No. (000) 000-0000. The Sublessee's
representative shall be Xxxxxxxxx Xxxxxx, Theragenics Corporation, 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx, 00000, Tel. No. (000)-000-0000.
Any changes in the designated representative or their respective
addresses shall be given in writing to the other.
8. NOTICE. No notice, order, direction, determination, requirement,
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consent, or approval under this Sublease shall be of any effect, within
the restrictions of this Sublease, unless provided in writing to the
authorized representative at the address set forth in paragraph 7 above
by personal delivery (or reputable overnight courier service) or by
certified mail, return receipt requested, postage prepaid. All notices
shall be effective upon receipt at the proper address. Refusal to
accept delivery shall be deemed receipt.
9. OBLIGATIONS OF THE SUBLESSEE. The Land Lease and Equipment Lease
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retain for DOE certain rights and imposes various obligations on CROET.
Sublessee's obligations under this Sublease shall be subject to the
terms and conditions imposed on CROET under the Leases during the term
of this Sublease, and for any period beyond the term, during which the
rights of DOE and obligations of CROET are affected by the failure of
the Sublessee to recognize, abide by, or fulfill obligations of
Sublessee under this Sublease. Sublease assumes the obligations of
CROET under the Land Lease but only with respect to the Premises (and
not with respect to any other premises included in the Land Lease) and
only as to such obligations arising during the term of this Sublease or
as a result of the performance of the Sublessee. The Sublessee agrees
to hold CROET harmless for any failure on its part, or those acting
through it, to recognize, abide by, or fulfill the obligations assumed
by Sublessee under this Sublease. The assumption by Sublessee of
obligations under this Sublease is not intended to, nor does it
constitute, an assignment by CROET to the Sublessee of the Leases or
any portion thereof. CROET does hereby indemnify and hold Sublessee
harmless as a result of CROET's failure to recognize, abide by or
fulfill the obligations of CROET under the Leases, to the extent such
obligations are not obligations in the Leases which the Sublessee has
assumed under this Sublease.
CROET acknowledges that Sublesse's sole obligations and liabilities
with respect to loss, damage or destruction of the PSP are as set forth
in Condition No. 10 of the Equipment Lease.
In addition, and without regard to the obligations contained in the
Leases to which the Sublessee is obligated, the Sublessee agrees to
hold CROET harmless against any liabilities of CROET which may arise
during the term of this Sublease arising out of Sublessee's negligence
or wilful misconduct. Nothing in this Sublease shall in any manner be
construed to relieve or release CROET from any liability for its own
negligence or wilful misconduct.
10. INSURANCE. In addition to the requirements of the Leases, all insurance
required of the Sublessee shall be for the protection of CROET, DOE,
and the Sublessee against their respective risks and liabilities and
shall be in such form, for such period of time, and with such insurers
as CROET and DOE may reasonably require. Insurance of the types, and in
the amounts, shall include at least the following:
General Liability $*
Automobile, if applicable to Sublessee $*
Xxxxxxx'x Compensation (statutory amount)
[*Confidential Treatment Requested]
A certificate of insurance or a certified copy of each policy of
insurance shall be furnished to CROET and DOE's Realty Officer and
DOE's Account Executive prior to use of the Premises or the PSP. The
Sublessee agrees that not less than thirty (30) days prior to the
expiration of any insurance required by this Sublease, it will furnish
to CROET and DOE's Realty Officer and DOE's Account Executive a
certificate of insurance or a certified copy of each renewal policy to
cover the same risks. The Sublessee shall provide evidence of adequate
insurance coverage for Bodily Injury and Property Damage. Each policy
of insurance against loss or damage to DOE's property shall name the
Sublessee, CROET, and DOE as the insured and shall contain a loss
payable clause reading substantially as follows:
"Loss, if any, under this policy shall be adjusted with (name
of Sublessee) and the proceeds, at the direction of DOE, shall
be payable to (name of Sublessee), and proceeds not paid to
(name of Sublessee) shall be payable to the Treasurer of the
United States of America."
Additionally, each policy of insurance shall contain an endorsement
reading substantially as follows:
"The insurer waives any right of subrogation against the
United States of America which might arise by reason of any
payment made under this policy."
The Sublessee is encouraged to carry business disruption insurance
sufficient to cover losses due to interruption of business activities
under this Sublease caused by events of every kind. CROET will not be
liable for any such losses, whether or not the Sublessee carries such
insurance, and the Sublessee agrees to waive any claims it might
otherwise have against CROET for such losses; provided, however, this
shall not in any manner relieve CROET from and liabilities or
obligations arising out of CROET's negligence or wilful misconduct.
11. DOE - CROET LAND LEASE OBLIGATIONS. CROET hereby covenants and agrees
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to comply with all obligations of the tenant under the Land Lease and
the Equipment Lease; provided, however, to the extent that Sublessee is
obligated under this Sublease for any such obligations, CROET shall
have no responsibility therefor. In the event CROET receives any notice
of any default, event of default, or non-compliance with the terms and
conditions of the Land Lease or the Equipment Lease, and in DOE's
judgment CROET is not taking adequate steps to cure the default, CROET
shall promptly advise Sublessee of such matters. CROET hereby grants to
Sublessee the right (but not the obligation, unless otherwise set forth
in this Sublease) to cure any default, event of default or
non-compliance with the Land Lease or the Equipment Lease. Any amounts
expended by Sublessee in a successful cure may be offset against any
amounts due under this Sublessee, but only to the extent that Sublessee
is not obligated under the terms of this Sublease for such performance
under the Land Lease or the Equipment Lease.
12. EMINENT DOMAIN. If all or any part of the Premises shall be
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appropriated or condemned by any public or quasi-public authority in
the exercise of its right of condemnation or eminent domain, both CROET
and Sublessee shall have the right to prosecute a claim for an award
and to share in the proceeds of any and all awards based upon their
respective interests as hereafter set forth. If all the Premises shall
be appropriated or condemned, or so much thereof that Sublessee cannot
reasonably continue the operation of its business thereon, this
Sublease shall terminate as of the time when possession shall be
required by such public or quasi-public authority. In the event that
this Subleases shall not terminate after any part of the Premises is
taken or condemned, there shall be a reduction in rental equal to the
percentage to the ground area of the Premises which is taken or
condemned. CROET shall be entitled to receive that portion of any and
all awards necessary to compensate it for the present value of the
rents which it would have received in the future and for the present
value of its reversionary interest, and notwithstanding the termination
of this Sublease, Sublessee shall be entitled to that portion of any
and all awards necessary to compensate it for the value of its
improvements to the Premises, the value of its leasehold estate and the
damages which it may sustain as a result of termination of this
Sublease prior to the end of the Sublease term, including any renewal
terms.
13. LANDLORD'S ACCESS TO PREMISES. Notwithstanding anything to the
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contrary in this Sublease, entry to the Premises by CROET will only be
permitted when accompanied by Sublessee's authorized escort, except as
hereinafter provided. It is recognized by both CROET and Sublessee that
Sublessee will be performing research on, and manufacturing, drugs for
human consumption under regulations and licenses from various
governmental agencies, including, without limitation, the Federal Drug
Administration ("FDA"). Sublessee is responsible to such governmental
agencies, including, without limitation, the FDA, for compliance with
all applicable laws, rules, regulations and ordinances (including
protection of materials in work areas from unauthorized alterations or
access), whose object it is to protect the public from adulterated
contaminated or otherwise uncontrolled and potentially harmful
products. CROET acknowledges it is not competent to judge the impact of
its entry of the Premises on the relationship between Sublessee and the
applicable regulatory authorities and potential impact on public health
and safety.
CROET hereby agrees, except as hereinafter expressly provided, that
CROET shall provide Sublessee with one (1) business day advance notice
of any desire by CROET, or its authorized agents or representative to
enter the Premises. All entries on the Premises must comply with
applicable laws, rules, regulations and ordinances (collectively called
the "Regulations"). Upon request, Sublessee will provide CROET with
necessary information concerning the Regulations. Except as expressly
hereinafter provided, all entries shall be with an escort from
Sublessee or its representatives and shall be subject to all reasonable
safety procedures and guidelines as may be prescribed by Sublessee.
In the case of emergencies, CROET may enter the Premises unannounced
and unescorted; provided, however, CROET agrees to cooperate with
Sublessee in complying with all reporting requirements pursuant to
applicable Regulations.
It is further recognized by CROET and Sublessee that Sublessee is
engaged in commerce utilizing proprietary and confidential information,
processes and procedures. CROET agrees that any written materials
located on or in the Premises obtained during any inspection or access
to the Premises by CROET (or its agents or employees) shall be
confidential except for written materials delivered to CROET, or its
agents or employees, by Sublessee or its employees; provided, however,
this shall not affect CROET's ability to obtain information to assess
Sublessee's compliance with the terms and conditions of this Sublease
with respect to Sublessee's use, operation and maintenance of the
Premises, and further provided that CROET may divulge such information
to its agents, employees, contractors, attorneys, prospective lenders
and purchasers and to DOE.
14. OPTION TO SUBLEASE ADJOINING LAND AND RIGHT OF FIRST REFUSAL.
(a) During the Option Period (as defined in paragraph 14(b)),
CROET hereby grants unto Sublessee the non-exclusive right
and option to sublease the remainder of Site 3 of Parcel
ED-1 (containing approximately [Confidential Treatment
Requested] acres) and identified as the "Adjoining Property"
on Appendix "A" attached hereto (the "Adjoining Property"),
on the same terms and conditions as contained in this
Sublease (with the land rental being $ [Confidential
Treatment Requested] per acre per year, as adjusted by the
Consumer Price Index every five (5) years from the date of
this Sublease) for the remaining term set forth in this
Sublease. Sublessee shall give CROET no less than thirty
(30) days advance written notice of the exercise of this
option. This option shall terminate simultaneously with
the right of first refusal set forth below. If said first
refusal right is triggered, the terms of the first refusal
right shall control in lieu of the non-exclusive option terms
hereinbefore set forth provided a sublease of the Adjoining
Property is consummated to the third-party offeree or to
Sublessee under the following paragraph.
In the event CROET receives a bona fide written offer from any
third party to sublet the Adjoining Property (or any portion
thereof or any tract of which the Adjoining Property is a
part) during the Option Period, CROET has granted and does
hereby grant the right, on a right of first refusal basis
described hereinafter, to Sublessee, its successors and
assigns, at the election of Sublessee or its successors or
assigns, to sublet the Adjoining Property at the price and on
the terms and conditions contained in the written offer except
the term of any sublease shall not extend beyond the term of
this Sublease and further except for the time within which to
close the transaction. CROET shall give notice to Sublessee of
the written offer, including delivery to Sublessee of a true
and exact copy of the written offer, and allow Sublessee
thirty (30) calendar days subsequent to the notice within
which Sublessee may elect to sublet from CROET. In the event
Sublessee so elects to sublet by giving notice of such
election to CROET within the thirty (30) day period, CROET
shall sublet the Adjoining Property to Sublessee at the price
and on the same terms and conditions as are contained in the
written offer, except that (i) Sublessee shall also reimburse
CROET for its reasonable marketing expenses incurred in its
effort to sublease the Premises to the third party offeree
which triggered this right of first refusal, and (ii) the
closing of the transaction shall be held within sixty (60)
calendar days following the expiration of the aforesaid 30-day
period. Should Sublessee by written notice to CROET elect not
to exercise the right to sublet or should Sublessee fail to
notify CROET of its election to sublet within the aforesaid
30-day period, then in either of such events CROET shall be
free to consummate the sublease of the Adjoining Property to
the third party submitting the written offer, provided that
the sublease is closed and on the same material terms and
conditions as are contained in the written offer, without any
substantive modification thereto, except that the closing
thereof may occur on or before the thirtieth (30th) day
subsequent to the closing deadline set forth in the written
offer. Should any such sublease not be consummated as
aforesaid, CROET shall, in the event CROET subsequently
receives any modified or new bona fide written offer from any
third party to sublet the Adjoining Property, again follow the
provisions of this paragraph 14 requiring notice to Sublessee
and opportunity for Sublessee to sublet the Adjoining
Property. No restriction on CROET's ability to sublease the
Adjoining Property shall apply to any period subsequent to the
Option Period. CROET shall not be obligated to offer to sublet
the Adjoining Property, and CROET shall not be obligated to
disclose to Sublessee any offer to sublet the Adjoining
Property which CROET receives which CROET, in its discretion,
does not intend to accept. The aforesaid right of first
refusal in favor of Sublessee is a material part of the
consideration for this Sublease and shall and does hereby vest
in Sublessee, its successors and assigns, immediately.
Sublessee may not exercise its right to sublet pursuant to
this paragraph 14 if at the time of the attempted exercise
Sublessee is in default (for which any applicable cure period
has expired without cure) under the terms of this Sublease.
(b) The non-exclusive option and right of first refusal set forth
in paragraph 14(a) shall be in effect, at no additional cost
or charge to Sublessee, from the date of this Sublease until
January 1, 2002, as may be extended by mutual agreement of
CROET and Sublessee for such consideration as mutually agreed
by said parties. This three-year period, as may be extended as
aforesaid, is herein called the "Option Period."
(c) In the event the Sublessee exercises the option granted
herein, or successfully invokes its right of first refusal
granted herein, CROET may terminate the rights so granted or
invoked and all rights with respect to the Adjoining Property
shall revert to CROET and this Sublease shall be terminated
solely as to the Adjoining Property unless (i) within
ninety (90) days from the date of the exercise of the option
or successful invoking of the right of first refusal
the Sublessee agrees to engage an architectural and
engineering firm to design a facility to be constructed on the
Adjoining Property that is consistent with the permitted uses
of the Adjoining Property, and (ii) the employment on
the Premises and the Adjoining Property, in the aggregate,
\shall be at least [Confidential Treatment Requested] of
the employment figures described in paragraph 6 herein, and
(iii) the Sublessee uses reasonable efforts to complete
the facility on the Adjoining Property on or before one year
after the exercising of the option or successfully
invoking its right of first refusal. This right of CROET to
terminate the Sublessee's rights and interest in the
Adjoining Property shall be given to the Sublessee by written
notice thirty (30) days prior to termination, and the
termination shall not take effect if the Sublessee promptly
commences to develop the Adjoining Property within
thirty (30) days of receiving this notice.
15. LEASEHOLD MORTGAGES/DEEDS OF TRUST. Sublessee is hereby given the
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right by CROET in addition to any other rights herein granted, without
CROET's prior written consent, to mortgage, or to grant deeds of trust
in and to (collectively "mortgage"), Sublessee's interests in this
Sublease, and assign this Sublease as security for a Mortgage (as
hereinafter defined) upon the condition that all rights acquired under
such Mortgage shall be subject to all of the terms, covenants and
conditions of this Sublease, and to all rights and interests of CROET
herein, none of which terms, covenants or conditions is or shall be
waived by CROET by reason of the right given so to mortgage such
interest in this Sublease, except as expressly provided herein. If
Sublessee (including, but not limited to, any sublessee of Sublessee,
but only with Sublessee's prior consent) shall mortgage this leasehold,
or any part or parts thereof, and if the Mortgagee (as hereinafter
defined) shall send to CROET a true copy thereof, together with a
notice specifying the name and address of the Mortgagee and the
pertinent recording date with respect to such Mortgage, CROET agrees
that as long as any such Mortgage shall remain unsatisfied of record or
until a notice of satisfaction is given by the Mortgagee to CROET, the
following provisions shall apply:
(i) There shall be no cancellation, surrender or modification of
this Sublease by joint action of CROET and Sublessee without
the prior consent of the Mortgagee;
(ii) CROET shall, upon serving Sublessee with any notice of
default, simultaneously serve a copy of such notice upon the
Mortgagee. The Mortgagee shall thereupon have the same period,
after service of such notice upon it, to remedy or cause to be
remedied the defaults complained of, and CROET shall accept
such performance by or at the instigation of such Mortgagee as
if the same had been done by Sublessee. Mortgagee shall give
notice to CROET in the event Mortgagee elects to undertake
remedial action which involves Mortgagee taking possession and
control of the Premises and/or the PSP to cure any default by
Sublessee under this Sublease.
(iii) CROET agrees that in the event of the termination of this
Sublease by reason of any default by Sublessee other than for
nonpayment of basic rent, CROET will, upon written request of
Mortgagee, enter into a new sublease of the Premises with the
Mortgagee or its nominee(s), for the remainder of the term,
effective as of the date of such termination, at the same
basic rent and upon the terms, covenants and conditions as
herein contained and subject only to the same conditions of
title as this Sublease is subject to on the date of the
execution hereof, and to the rights, if any, of any parties
then in possession of any part of the Premises, provided:
(A) The Mortgagee or its nominee shall give notice to
CROET for such new sublease within thirty (30) days
after the date of such termination and such notice
shall be accompanied by payment to CROET of all sums
then due to CROET and not paid by Sublessee pursuant
to this Sublease;
(B) The Mortgagee or its nominee shall pay to CROET at
the time of the execution and delivery of such new
sublease, any expenses, including reasonable
attorneys' fees, to which CROET shall have been
subjected by reason of such default;
(C) The Mortgagee or its nominee shall perform and
observe all covenants herein contained on Sublessee's
part to be performed and shall further remedy any
other conditions which Sublessee pursuant to the
terminated Sublease was obligated to perform under
the terms of this Sublease; and upon execution and
delivery of such new sublease, any subleases which
may have theretofore been assigned and transferred by
Sublessee to CROET, as security under this Sublease,
shall thereupon be deemed to be held by CROET as
security for the performance of all of the
obligations of Sublessee pursuant to the new lease;
(D) Such new sublease shall be expressly made subject to
the rights, if any, of Sublessee pursuant to the
terminated sublease;
(E) The Sublessee under such new sublease shall have the
same right, title and interest in and to the
buildings and improvements on the Premises as
Sublessee had under the terminated sublease;
(iv) The Mortgagee shall be given notice of any judicial or
administrative proceedings by the parties hereto regarding a
default of this Sublease, and shall have the right to
intervene therein and be made party to such proceedings, and
the parties hereto do hereby consent to such intervention. In
the event that the Mortgagee shall not elect to intervene or
become a party to such proceedings, the Mortgagee shall
receive notice of, and a copy of any award or decision made in
said proceedings; and
(v) CROET shall, upon request, execute, acknowledge and deliver to
each Mortgagee, an agreement prepared at the sole cost and
expense of Sublessee, in form reasonably satisfactory to such
Mortgagee, between CROET, Sublessee and Mortgagee, agreeing to
all of the provisions of this section. The term "Mortgage,"
whenever used herein, shall include whatever security
instruments are used in the locale of the Premises, such as,
without limitation, deeds of trust, security deeds and
conditional deeds, as well as financing statements, security
agreements and other documentation required pursuant to the
Uniform Commercial Code. The term "Mortgagee" shall mean the
holder or beneficiary of any Mortgage. The provisions of this
section shall survive any termination of this Sublease.
16. TERMINATION RIGHTS OF SUBLESSEE. The Sublessee shall have the right to
terminate this Sublease in the event any of the following conditions
occurs, in Sublessee's sole discretion:
(i) The physical condition of Property not satisfactory to
Sublessee, or the lenders which Sublessee selects to extend
financing of the Facility or equipment to be used on the
Premises ("Sublessee's Lender"). The physical condition
of the Premises shall include, without limitation, the status
of title and any industrial park covenants, restrictions,
conditions and easements to be hereafter placed upon Parcel
ED-1, geological, archeological, environmental, survey
and other developmental matters, federally-designated
wetlands areas, federally-designated flood plain areas. In
the event Sublessee does not notify CROET of its intention
to terminate this Sublease for failure of this condition
to be satisfied on or before one (1) year from the date of
this Sublease, this condition shall be deemed to be
waived or satisfied by Sublessee.
(ii) The Lease and the Sublease are not approved by Sublessee's
Lender. In the event Sublessee does not notify CROET of its
intention to terminate this Sublease for failure of this
condition to be satisfied on or before one (1) year from the
date of this Sublease, this condition shall be deemed to be
waived or satisfied by Sublessee.
(iii) Sublessee fails to obtain all the required governmental and
regulatory authority, licenses, permits, approval and consents
for the development, use and operation of the Facility, the
PSP and any other equipment required for use in connection
with Sublessee's business operations on the Premises.
(iv) Sublessee fails to receive state and local governmental
incentives and inducements satisfactory to Sublessee in
connection with the development, use and operation of the
Facility, including the PSP and any other equipment to be used
on the Premises (including, without limitation, ad valorem tax
relief/abatement from county and city governmental
authorities). Sublessee agrees to use reasonable diligence in
the filing and pursuit of all governmental incentives and
inducements required or desired by Sublessee. In the event
that Sublessee does not notify CROET of its intention to
terminate this Sublease for failure of this condition to be
satisfied on or before January 1, 2000, this condition shall
be deemed to be waived or satisfied by Sublessee.
(v) DOE or CROET fails to grant any consents or approval to
Sublease to Sublessee, required to be obtained by Sublessee
pursuant to the Land Lease or this Sublease, which is
reasonably necessary for Sublessee's enjoyment, use and
operation of the Facility, the PSP, and any other equipment to
be utilized by Sublessee on the Premises.
(vi) DOE fails to enter into a written agreement satisfactory to
Sublessee and Sublessee's Lender on or before April 30, 1999,
which provide that in the event there is a default under the
Land Lease not resulting from Sublessee's default under this
Sublease, in the event the Land Lease is terminated, the
Sublease shall become a direct lease between DOE and Sublessee
subject to all terms of this Sublease and the provisions of
the Land Lease applicable to the Premises and DOE shall not
disturb any rights, interests or privileges of Sublessee under
the Sublease provided Sublessee is in compliance with the
terms thereof.
(vii) DOE terminates the Equipment Lease pursuant to Section 3
thereof in the event of a national emergency or in the
interest of national defense, or if the PSP is taken by power
of eminent domain.
(viii) Sublessee determines, as a result of a detailed inventory of
the PSP components after the date hereof, that critical
components of the PSP are missing, damaged or inoperable to an
extent that, in Sublessee's business judgment, it would be
impractical to repair or replace them.
(ix) The DOE does not release all existing components of the PSP
for delivery to Sublessee within thirty (30) days after the
Facility is ready to receive the same, provided that Sublessee
shall have used reasonable efforts to agree with DOE on, and
to implement, an appropriate security plan so that DOE can
release the PSP for delivery.
(x) DOE's M&O contractor fails to deliver the same to Sublessee's
facility within thirty (30) days after the Facility is ready
to receive the same; provided, that Sublessee shall not be in
breach of the Work for Others Agreement between Sublessee and
the M&O contractor ("the WFO Agreement"), and provided
Sublessee shall have given the M&O contractor adequate advance
notice (at least thirty [30] days) of the proposed delivery
date.
(xi) The PSP or critical components thereof fail operational
testing and, in Sublessee's business judgment, it would be
impractical to repair or replace them.
(xii) Sublessee determines that production of enriched palladium
isotopes using the PSP is not, or is no longer, economically
feasible in light of then-current market conditions.
(xiii) The DOE's High Flux Isotope Reactor is shut down permanently
or indefinitely, or Sublessee is not permitted [Confidential
Treatment Requested] as presently contemplated by the WFO
Agreement, or if Sublessee is no longer given access to the
HFIR for isotope irradiation as presently contemplated by the
WFO Agreement.
In the event Sublessee elects to terminate this Sublease for failure of
any of the foregoing conditions to be satisfied, Sublessee shall notify
CROET in writing of such election, in which event this Sublease shall
terminate on the date designated by Sublessee, but in no event more
than thirty (30) days from the date of such notice.
Furthermore, Sublessee shall have the right to terminate by giving
ninety (90) days' notice to CROET if CROET fails to substantially
perform or comply with any of its obligations under the terms and
conditions of this Sublease and continues and persists therein for ten
(10) days after notice thereof in writing by Sublessee; provided,
however, if such default is not reasonably capable of cure within such
ten (10) day period, Sublessee shall not be entitled to terminate this
Sublease if CROET promptly undertakes to cure such default and
diligently pursues such cure.
In addition, Sublessee shall have the right to terminate this Sublease
only as it relates to the PSP and the Equipment Lease, with or without
cause, on ninety (90) days' prior written notice to CROET.
In the event of the termination of this Sublease (or the portion hereof
relating to the PSP) as aforesaid, this Sublease (or such portion
relating to the PSP) shall be of no further force and effect, and the
parties hereto shall have no further rights, obligations and duties
hereunder except that nothing provided herein shall relieve Sublessee
of the restoration obligations set forth paragraph 3(d) of the
Sublease.
17. SUBLESSEE'S ENTRY ON PREMISES. From and after the date of Sublease and
------------------------------
prior to the commencement of the term of this Sublease as set forth in
Paragraph 2(a), CROET grants to Sublessee and its authorized agents and
representatives, the right to enter onto the Premises to conduct any
surveys, tests, analyses, investigations, inspections and studies as
Sublessee may elect to determine the feasibility of the development
contemplated by Sublessee upon the Premises. Sublessee shall indemnify,
and hold CROET harmless from any losses, costs, damages, expenses and
actions arising out of said activities of Sublessee.
18. CROET'S OBLIGATIONS FOR COMMON AREA FACILITIES; EASEMENTS. CROET
----------------------------------------------------------
intends to develop the approximately 957.16 acres which it leases from
DOE pursuant to Land Lease (the "Industrial Park Property") as an
integrated industrial park. In connection therewith, CROET hereby
covenants and agrees to construct and maintain, or cause to be
constructed and maintained, all facilities commonly-used by the
occupants of the Industrial Park Property (collectively, the "Common
Area Facilities"), including, without limitation, all roads and streets
(which are not publicly dedicated), all commonly used utility lines
(which are not public lines or lines of other privately-owned utility
companies) and detention/retention areas. CROET agrees to complete
construction of all Common Area Facilities necessary for Sublessee's
use of the Facility on or before one (1) year from the date of this
Sublease. In the event CROET fails to construct or maintain the Common
Area Facilities as aforesaid, thirty (30) days after notice from
Sublessee (except for emergency repairs), Sublessee may (but shall not
be obligated to) undertake such construction and/or maintenance. Any
amounts expended by Sublessee shall be immediately due and payable to
Sublessee and shall bear interest from the date advanced at the lesser
of twelve percent (12%) per annum or the maximum amount permitted by
law. Sublessee shall also have the right to offset rents due under this
Sublease for any such amounts owed Sublessee
CROET hereby grants unto Sublessee, during the term of this Sublease,
the following non-exclusive easements:
(i) an ingress-egress easement 60-feet in width for purposes of
ingress and egress from State Route 95 (bordering the eastern
side of the Industrial Park Property) over such private road
as shall border the northern boundary of the Premises;
(ii) an easement for utilities (including, without limitation, gas,
water, electricity, sanitary, sewer and telephone) across the
Industrial Park Property to the boundary of the Premises at
such locations as may be mutually approved by CROET and
Sublessee, such approval not to be unreasonably withheld; and
(iii) an easement for drainage of surface storm water across the
Industrial Park Property from the Premises at such locations
as may be mutually approved by CROET and Sublessee, such
approval not to be unreasonably withheld.
19. PARAMETERS OF LAND USE. In accordance with Condition No. 7 of the
------------------------
Land Lease, the Sublessee shall be subject to the following parameters
addressed within the approved environmental documentation or subsequent
documentation which expands those parameters:
The Environmental Assessment (DOE/EA-113) ("EA") issued in April 1996
by the U.S. Department of Energy's Oak Ridge Operations Office for the
lease of parcel ED-1 of the Oak Ridge Reservation by the East Tennessee
Economic Council, now CROET, provides in subsection 2.1.3, Industrial
Development, that industrial use of the parcel will conform to the City
of Oak Ridge Zoning Ordinance (Chapter 0, Xxxx. 0-000 XXX-0, Xxxxxxxxxx
Xxxxxxxx), except for certain uses not relevant to this Sublease. The
ordinance referenced is included as Appendix C to the EA, and it
provides in subsection 6-713(a)(l) that permitted principal uses of
industrial districts include, among other things, "light and heavy
manufacturing and processing plants, research and development
facilities, and facilities such as processing of radioisotopes."
20. PSP USAGE FOR NON-MEDICAL ISOTOPES. If the Sublessee desires to use the
----------------------------------
PSP to produce isotopes which are not either [Confidential Treatment
Requested] notify DOE in writing so that DOE can determine whether
those isotopes are recognized by the EA covering the Premises and, if
not so recognized, so that DOE can process an appropriate addendum to
the EA, the cost of such addendum to the EA being borne by Sublessee.
21. AMENDMENTS TO LEASES. CROET covenants and agrees that it shall not
----------------------
consent not to be unreasonably withheld (i) the Equipment Lease, or
(ii) the Land Lease as it affects the Premises or the use, enjoyment
and operation thereof.
22. MISCELLANEOUS.
-------------
(a) CROET and Sublessee each warrant and represent to the other
that such party has not engaged services of any real estate
broker, agent or finder which would entitle any person or
entity to any fee, commission, or other compensation in
connection with this Sublease. CROET and Sublessee hereby
agree to indemnify and hold the other harmless from and
against any and all claims, fees, commissions, or other
compensation of any real estate broker, agent, or finder
claiming services to have been rendered for or on behalf of
such party in connection with the execution of this Sublease.
(b) At any time and from time to time upon the request of either
of the parties hereto or any mortgage lender of Sublessee,
CROET and Sublessee, as the case may be, shall deliver to the
party requesting the same a certificate stating (i)
whether or not this Sublease is in full force and effect,
(ii) whether or not any rights to renew the term of this
Sublease have been exercised and the date on which this
Sublease will terminate, (iii) whether or not this Sublease
has been modified or amended in any way and attach any copy of
such modification or amendment, (iv) whether or not
there are any existing defaults under this Sublease to the
knowledge of the party executing the certificate, and
specifying the nature of such defaults, if any, (v) the status
of rent payments, and (vi) any of the facts regarding
the Sublease which any mortgage lender of Sublessee may
reasonably request.
(c) This Sublease shall be governed by, and construed in
accordance with, the laws of the State of Tennessee, except
that if interpretation or application of provisions of the
Leases are involved, the provisions of the Leases shall
control.
(d) This Sublease shall be binding upon and shall inure to the
benefit of CROET and Sublessee and their respective successors
and assigns.
23. ENTIRE LEASE. This Sublease contains the entire understanding of CROET
and the Sublessee with respect to its subject matter. This Sublease
reflects all agreements and commitments made prior to the date hereof
with respect to this Sublease by CROET and the Sublessee. There are no
other oral or written understandings, terms, or conditions, and neither
CROET nor the Lessee has relied upon any representation or statement,
express or implied, which is not contained in this Sublease.
IN WITNESS WHEREOF, the parties have caused this Sublease to be
executed on their behalf by their duly authorized representatives as of the date
first written above.
CROET:
COMMUNITY REUSE ORGANIZATION
OF EAST TENNESSEE
BY:/s/ Xxxxxxxx X. Xxxxx
-----------------------------
Print Name: Xxxxxxxx X. Xxxxx
-----------------------------
Title: President and CEO
-----------------------------
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
SUBLESSEE:
THERAGENICS CORPORATION
ATTEST:
/s/ Xxxxxxxx X. Xxxxxx BY: /s/ Xxxxx X. Xxxxx
------------------------------ --------------------------
Print Name:Xxxxxxxxx X. Xxxxxx Print Name: Xxxxx X. Xxxxx
Title: Corporate Librarian Title: Executive V. P. and CFO
APPENDIX A
DRAWING OF PREMISES AND ADJOINING PROPERTY
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