EXHIBIT 10.12
LEASE AGREEMENT
by and between
XXXXX (PA) QRS 11-36
and
XXXXX (PA) QRS 12-10
each a Pennsylvania business trust
collectively, as LANDLORD
and
DEL MONTE CORPORATION,
a New York corporation,
as TENANT
Premises: Mendota, Illinois
Toppenish, Washington
Yakima, Washington
Plover, Wisconsin
Dated as of: October 31, 1995
TABLE OF CONTENTS
Page
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1. Demise of Premises ......................................... 1
2. Certain Definitions ........................................ 1
3. Title and Condition ........................................ 12
4. Use of Leased Premises; Quiet Enjoyment .................... 14
5. Term ....................................................... 14
6. Basic Rent ................................................. 15
7. Additional Rent ............................................ 16
8. Net Lease; Non-Terminability ............................... 17
9. Payment of Impositions ..................................... 18
10. Compliance with Laws and Easement Agreements;
Environmental Matters ...................................... 20
11. Liens; Recording ........................................... 22
12. Maintenance and Repair ..................................... 22
13. Alterations and Improvements ............................... 23
14. Permitted Contests ......................................... 24
15. Indemnification ............................................ 25
16. Insurance .................................................. 26
17. Casualty and Condemnation .................................. 30
18. Termination Events ......................................... 31
19. Restoration; Reduction of Rent ............................. 33
20. Procedures Upon Purchase ................................... 35
21. Assignment and Subletting .................................. 36
22. Events of Default .......................................... 40
23. Remedies and Damages Upon Default .......................... 43
24. Notices .................................................... 47
25. Estoppel Certificate ....................................... 48
26. Surrender .................................................. 48
27. No Merger of Title ......................................... 48
28. Books and Records .......................................... 49
29. Determination of Value ..................................... 51
30. Non-Recourse as to Landlord ................................ 54
31. Financing .................................................. 54
32. Subordination .............................................. 54
33. Tax Treatment; Reporting ................................... 55
34. Financing Major Alterations ................................ 55
35. Security Deposit ........................................... 57
36. Economic Abandonment ....................................... 59
37. Option to Purchase ......................................... 61
38. Right of First Refusal ..................................... 62
39. Miscellaneous .............................................. 64
EXHIBITS
--------
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Landlord's Share of Project Costs
Exhibit "F" - Percentage Allocation of Basic Rent
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LEASE AGREEMENT, made as of this 31st day of October, 1995, between
XXXXXXX X. XXXXX III, TRUSTEE OF XXXXX (PA) QRS 11-36 under a certain Trust
Agreement dated as of October 11, 1995, and XXXXXXX X. XXXXX III, TRUSTEE OF
XXXXX (PA) QRS 12-10 under a certain Trust Agreement dated as of October 11,
1995, each a Pennsylvania business trust (collectively, "Landlord"), with its
principal place of business c/o W.P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and DEL MONTE CORPORATION, a New York
corporation ("Tenant"), with an address at Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. The Leased Premises shall be comprised of four
(4) parcels of Land, Improvements to be constructed thereon by Landlord and
Equipment to be installed therein by Landlord, all as set forth in this Lease
and the Construction Agency Agreement. Landlord hereby demises and lets to
Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon
the provisions hereinafter specified, the following described property
(hereinafter referred to collectively as the "Leased Premises" and individually
as the "Mendota Premises" "Toppenish Premises" "Yakima Premises" and "Plover
Premises" each of which premises is more particularly described in the
applicable description in Exhibit "A" attached hereto and made a part hereof
and shall include the portions of items (a), (b) and (c) of this Paragraph 1
located thereon or therein and appertaining thereto): (a) the premises described
in Exhibit "A" hereto, together with the Appurtenances (collectively, the
"Land"); (b) the buildings, structures and other improvements constructed or to
be constructed on the Land by Landlord (collectively, the "Improvements"); and
(c) the fixtures, machinery, equipment, including conveyor equipment, and other
property to be installed in the Improvements by Landlord described in Exhibit
"B" hereto (collectively, the "Equipment").
2. Certain Definitions.
"Abandonment Date" shall mean the Abandonment Date as defined in
Paragraph 36.
"Abandonment Notice" shall mean Abandonment Notice as defined in
Paragraph 36.
"Abandonment Offer Amount" shall mean the Abandonment Offer Amount
as defined in Paragraph 36.
"Abandonment Premises" shall mean one of the Related Premises so
designated by Tenant.
"Acquisition Fee" shall mean $990,000 and shall be payable by
Landlord to W.P. Xxxxx & Co., Inc. and/or Xxxxx Institutional Properties
Incorporated and/or Corporate Property Associates 12 Incorporated.
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"Additional Rent" shall mean Additional Rent as defined in Paragraph
7.
"Adjoining Property" shall mean all sidewalks, driveways, curbs,
gores and vault spaces adjoining each Related Premises and which Tenant has the
legal obligation to maintain.
"Affected Premises" shall mean the Affected Premises as defined in
Paragraph 18.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition and otherwise in
this Lease, a Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person only
through the ownership of voting securities (but not by contract or otherwise).
"Alterations" shall mean all changes, additions, improvements or
repairs to, all alterations, reconstructions, renewals, replacements or removals
of and all substitutions or replacements for any of the Improvements or
Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary and shall include any Major Alterations.
"Appurtenances" shall mean all tenements, hereditaments, easements,
rights-of-way, rights, privileges in and to the Land, including (a) easements
over other lands granted by any Easement Agreement and (b) any streets, ways,
alleys, vaults, gores or strips of land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases from
Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified from time to time.
"Assumable Loan" shall mean Assumable Loan as defined in Paragraph
38.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Payment Dates" shall mean the Basic Rent Payment Dates
as defined in Paragraph 6.
"Cash Security" shall mean Cash Security as defined in Paragraph 35.
"Casualty" shall mean any injury to or death of any person or any
loss of or damage to any property (including the
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Leased Premises) included within or related to the Leased Premises or arising
from the Adjoining Property.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean written notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Construction Agency Agreement" shall mean that certain Construction
Agency Agreement of even date between Landlord, as owner, and Tenant, as agent
for Landlord in connection with the construction of the Improvements.
"Construction Contingency" shall mean the Construction Contingency
as defined in the Construction Agency Agreement.
"Costs" of a Person or associated with a specified transaction shall
mean all reasonable costs and expenses incurred by such Person or associated
with such transaction, including without limitation, attorneys' fees and
expenses, court costs, brokerage fees, escrow fees, title insurance premiums,
mortgage commitment fees, mortgage points, recording fees and transfer taxes, as
the circumstances require.
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"Default Rate" shall mean the Default Rate as defined in Paragraph
7(a)(iv).
"Default Termination Amount" shall mean the Default Termination
Amount as defined in Paragraph 23(a)(iii).
"Direct Costs" shall mean Direct Costs as defined in Section 1.01 of
the Construction Agency Agreement.
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect any Leased Premises.
"Environmental Law" shall mean (i) whenever enacted or promulgated,
any applicable federal, state, foreign or local law, statute, ordinance, rule,
regulation, license, permit, authorization, approval, consent, court order,
judgment, decree, injunction, code, requirement or agreement with any
governmental entity, (x) relating to pollution (or the cleanup thereof), or the
protection of air, water vapor, surface water, groundwater,
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drinking water supply, land (including land surface or subsurface), plant,
aquatic and animal life from injury or damage caused by a Hazardous Substance or
(y) concerning exposure to, or the use, containment, storage, recycling,
reclamation, reuse, treatment, generation, discharge, transportation,
processing, handling, labeling, production, disposal or remediation of Hazardous
Substances, Hazardous Condition or Hazardous Activity, in each case as amended
and as now or hereafter in effect, and (ii) any common law or equitable doctrine
(including, without limitation, injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Hazardous Substance. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act, the
federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic
Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act and the federal Hazardous Materials Transportation Act,
each as amended and as now or hereafter in effect and any similar state or local
Law.
"Environmental Violation" shall mean (a) any direct or indirect
discharge, disposal, spillage, emission, escape, pumping, pouring, injection,
leaching, release, seepage, filtration or transporting of any Hazardous
Substance at, upon, under, onto or within the Leased Premises, or from the
Leased Premises to the environment, in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which results, or could reasonably be expected to result, in any material
liability to Landlord, Tenant or Lender, any Federal, state or local government
or any other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (b) any deposit,
storage, dumping, placement or use of any Hazardous Substance at, upon, under or
within the Leased Premises or which extends to any Adjoining Property in
violation of any Environmental Law or in excess of any reportable quantity
established under any Environmental Law or which results, or could reasonably be
expected to result, in any material liability to any Federal, state or local
government or to any other Person for the costs of any removal or remedial
action or natural resources damage or for bodily injury or property damage, (c)
the abandonment or discarding on or from the Leased Premises of any barrels,
drums, containers or other receptacles containing any Hazardous Substances in
violation of any Environmental Laws, (d) any activity, occurrence or condition
under any Environmental Law which results, or could reasonably be expected to
result, in any
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material liability, cost or expense to Landlord or Lender or any other owner or
occupier of the Leased Premises, or which results, or could result, in a
creation of a lien on any Related Premises under any Environmental Law or (e)
any violation of or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph 1.
"Event of Default" shall mean an Event of Default as defined in
Paragraph 22(a).
"Expiration Date" shall mean Expiration Date as defined in
Paragraph 5.
"Fair Market Value" shall be as defined in Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair Market
Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately available
funds which at the time of payment are legal tender for the payment of public
and private debts in the United States of America.
"Final Completion Date" shall mean Final Completion Date as defined
in Section 1.01 of the Construction Agency Agreement.
"Guarantor" shall mean Del Monte Foods Company, a Maryland
corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement dated as
of the date hereof from Guarantor to Landlord guaranteeing the payment and
performance by Tenant of all of Tenant's obligations under the Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance in violation of any Environmental Law; (ii) causes or
results in (or threatens to cause or result in) the release, seepage, spill,
leak, flow, discharge or emission of any Hazardous Substance into the
environment (including the air, ground water, watercourses or water systems) in
violation of any Environmental Law or in excess of any reportable quantity;
(iii) involves the containment or storage of any Hazardous Substance; or (iv)
would cause any of the Leased Premises or any portion thereof to become a
hazardous waste treatment, recycling, reclamation, processing, storage or
disposal facility within the meaning of any Environmental Law.
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"Hazardous Condition" means any condition which could reasonably be
expected to give rise to any claim or liability under any Environmental Law,
including the presence of underground storage tanks.
"Hazardous Substance" means (i) any substance, material, product,
petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance subject to regulations under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead,
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in Paragraph
9(a).
"Improvements" shall mean the Improvements as defined in Paragraph 1
and shall include any Major Alterations.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Indirect Costs" shall mean Indirect Costs as defined in Section
1.01 of the Construction Agency Agreement.
"Initial Lender" shall mean Creditanstalt Corporate Finance, Inc. or
any other Lender who makes the Initial Loan.
"Initial Loan" shall mean the initial permanent Loan following
completion of construction of the Improvements.
"Initial Loan Commitment" shall mean the commitment of Creditanstalt
Corporate Finance, Inc., to make the Initial Loan pursuant to that certain
Application and Commitment dated November 7, 1995 by and between Creditanstalt
Corporate Finance, Inc., and Landlord.
"Initial Term" shall mean Initial Term as defined in Paragraph 5.
"Initial Term Commencement Date" shall mean Initial Term
Commencement Date as defined in Paragraph 5.
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
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"Land" shall mean the Land as defined in Paragraph 1.
"Landlord Encumbrances" shall mean any defects in title or matters
affecting title to the Leased Premises created by Landlord, except for the
Mortgage and Assignment and defects or matters created at the request of, with
the concurrence of or as a result of any act of Tenant.
"Landlord's Share of Project Costs" shall mean with respect to each
Related Premises the sum of (i) actual Direct Costs expended by Landlord with
respect to such Related Premises, including amounts charged against the
Construction Contingency for such Related Premises, plus (ii) Indirect Costs
(exclusive of the Construction Contingency) expended by Landlord, allocated to
such Related Premises based on the percentages set forth in Exhibit F hereto.
Landlord's Share of Project Costs for the Leased Premises shall refer to the
total of Landlord's Share of Project Costs for all of the Related Premises,
which shall in no event exceed $21,990,000.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year, the
period commencing on the Commencement Date and ending at midnight on the last
day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all present and
future Laws (including but not limited to Environmental Laws) and all covenants,
restrictions and conditions now or hereafter of record which may be applicable
to any of the Leased Premises, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or restoration of any of
the Leased Premises, even if compliance therewith necessitates structural
changes or improvements or results in interference with the use or enjoyment of
any of the Leased Premises.
"Lender" shall mean (a) Initial Lender, its successors and assigns,
and (b) any person or entity (and their
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respective successors and assigns) which may, after the date hereof, make a Loan
to Landlord or is the holder of any Note.
"Letter of Credit" shall mean the Letter of Credit as defined in
Paragraph 35.
"Loan" shall mean any loan made by one or more Lenders to Landlord,
which loan is secured by a Mortgage and an Assignment and evidenced by a Note.
"Major Alterations" shall mean Major Alterations as defined in
Paragraph 34.
"Monetary Obligations" shall mean Rent and all other sums payable by
Tenant under this Lease to Landlord, to any third party on behalf of Landlord or
to any Indemnitee.
"Mortgage" shall mean, singly or collectively, any one or more
mortgages or deeds of trust from Landlord to a Lender or a trustee for the
benefit of a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable to Landlord or
Lender by reason of a Condemnation whether pursuant to a judgment or by
agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i), (ii) (to the extent payable to Landlord or Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any reasonable expenses
incurred by Landlord and Lender in collecting such award or proceeds.
"Non-Preapproved Assignment" shall have the meaning set forth in
Paragraph 21.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Occupancy Date" shall mean with respect to each Related Premises
the date on which all of the following events have occurred: (i) the
Improvements have been substantially completed in accordance with the Plans, as
certified to by the General Contractor and Construction Manager (as such terms
are defined in the Construction Agency Agreement), and (ii) a temporary or
permanent permit required for the occupancy of the Improvements has been
obtained, but in no event shall the Occupancy Date occur later than 60 days
following the Completion Date (as defined in the Construction Agency Agreement)
for such Related Premises.
"Offer Amount" shall mean the greater of (a) Fair Market Value or
(b) the sum of the Landlord's Share of Project
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Costs for the Leased Premises and any Prepayment Premium which Landlord will be
required to pay in prepaying the Loan with proceeds of the Offer Amount.
"Outside Date" shall mean July 1, 1996.
"Partial Casualty" shall mean any Casualty which does not constitute
a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does not
constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions and easements and other encumbrances, other than
any Mortgage or Assignment, listed on Exhibit "C" hereto (but such listing shall
not be deemed to revive any such encumbrances that have expired or terminated or
are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Plans" shall mean Plans as defined in the Construction Agency
Agreement.
"Prepayment Premium" shall mean any payment (other than a payment of
principal and/or interest which Landlord is required to make under a Note or a
Mortgage) by reason of any prepayment by Landlord of any principal due under a
Note or Mortgage, and which may be (in lieu of such prepayment premium or
prepayment penalty) a "make whole" clause requiring a prepayment premium in an
amount sufficient to compensate the Lender for the loss of the benefit of the
Loan due to prepayment; provided, however, that Tenant shall not be required to
pay the Prepayment Premium on any amount in excess of $13,000,000.
"Present Value" of any amount shall mean such amount discounted by a
rate per annum which is the lower of (a) the Prime Rate at the time such present
value is determined or (b) eight percent (8%) per annum.
"Primary Term" shall mean Primary Term as defined in Paragraph 5(a).
"Primary Term Commencement Date" shall mean the date of this Lease.
"Prime Rate" shall mean the interest rate per annum as published,
from time to time, in the Wall Street Journal as the "Prime Rate" in its column
entitled "Money Rate". The Prime Rate may not be the lowest rate of interest
charged by any "large U.S. money center commercial banks" and Landlord makes no
representations or warranties to that effect. In the event the Wall Street
Journal ceases publication or ceases to publish the
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"Prime Rate" as described above, the Prime Rate shall be the average per annum
discount rate (the "Discount Rate") on ninety-one (91) day bills ("Treasury
Bills") issued from time to time by the United States Treasury at its most
recent auction, plus three hundred (300) basis points. If no such 91-day
Treasury Bills are then being issued, the Discount Rate shall be the discount
rate on Treasury Bills then being issued for the period of time closest to
ninety-one (91) days.
"Related Premises" shall mean any one of the Mendota Premises,
Toppenish Premises, Yakima Premises and Plover Premises.
"Relevant Amount" shall mean the Abandonment 0ffer Amount, the Offer
Amount, the Termination Amount or the Default Termination Amount, as the case
may be.
"Relevant Date" shall mean (a) the date immediately prior to the
date on which the applicable Condemnation Notice is received, in the event of a
Termination Notice under Paragraph 18 which is occasioned by a Taking, (b) the
date immediately prior to the date on which the applicable Casualty occurs, in
the event of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c), (d) the date
immediately prior to the Event of Default giving rise to the need to determine
Fair Market Value in the event Landlord provides Tenant with notice of its
intention to require Tenant to make a Termination Offer under Paragraph
23(a)(iii), (e) the Fair Market Value Date in the event Tenant exercises its
option to purchase the Leased Premises pursuant to Paragraph 37, or (f) with
respect to a Non-Preapproved Assignment, the earlier of the date on which
Landlord issues notice of the Non-Preapproved Assignment to Tenant or the date
that is immediately prior to the date on which the Non-Preapproved Assignment
occurs.
"Remaining Premises" shall mean the Related Premises which are not
Abandonment Premises or Affected Premises under Paragraph 18.
"Remaining Sum" shall mean Remaining Sum as defined in Paragraph
19(c).
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Requisition" shall mean any temporary requisition or confiscation
of the use or occupancy of any of the Leased Premises by any governmental
authority, civil or military, whether pursuant to an agreement with such
governmental authority in settlement of or under threat of any such requisition
or confiscation, or otherwise.
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"Retention Date" shall mean the later of the date on which the
amount of the Remaining Sum is finally determined or the date on which
Landlord's right to the Remaining Sum is finally determined.
"Security Deposit" shall mean Security Deposit as defined in
Paragraph 35.
"Silgan" shall mean Silgan Containers Corporation.
"Silgan Subleases" shall mean the sublease agreements for 30,000
square feet of space in the Plover Premises and 35,000 square feet in space in
the Toppenish Premises between Tenant, as landlord, and Silgan (or a subsidiary
of Silgan, so long as Silgan guarantees the obligations of such subsidiary under
such sublease), as tenant, which shall be satisfactory in form and substance to
Landlord and Initial Lender and which shall require, among other things, that
Silgan shall execute such documents as Landlord or Lender shall reasonably
request in connection with the disbursement of the Loan from Initial Lender to
Landlord, including an estoppel certificate and a consent to assignment of
leases, rents and any applicable guaranties.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the States of Illinois, Washington and Wisconsin.
..
"Surviving Obligations" shall mean any obligations of Tenant under
this Lease, actual or contingent, which arise on or prior to the expiration or
prior termination of this Lease or which survive such expiration or termination
by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a portion
of any of the Leased Premises (i) in or by condemnation or other eminent domain
proceedings pursuant to any Law, general or special, or (ii) by reason of any
agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means, or
(b) any de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the law applicable to the Related Premises.
"Term" shall mean the Primary Term and Initial Term and any
extensions thereof.
"Termination Amount" shall mean the greater of (a) Fair Market Value
or (b) the sum of the Landlord's Share of Project Costs for the applicable
Related Premises or the Leased Premises, as the case may be, and any Prepayment
Premium which
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Landlord will be required to pay in prepaying any Loan with proceeds of the
Termination Amount.
"Termination Date" shall mean the Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined in
Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party Purchaser as
defined in Paragraph 21(h).
"Yakima Funding Deadline" shall mean August 31, 1996.
3. Title and Condition.
(a) The Leased Premises are demised and let subject to (i) the
rights of any Persons in possession of the Leased Premises, (ii) the existing
state of title of any of the Leased Premises, including any Permitted
Encumbrances, (iii) any state of facts which an accurate survey or physical
inspection of the Leased Premises might show, (iv) all Legal Requirements,
including any existing violation of any thereof, and (v) the condition of the
Leased Premises as of the commencement of the Term, without representation or
warranty by Landlord except as to Landlord Encumbrances.
(b) LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE
THE LEASED PREMISES AS IS. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS
LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR
SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS
OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY WARRANTY
OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR
USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii)
THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO
(EXCEPT THAT LANDLORD REPRESENTS AND WARRANTS THAT THERE ARE NO LANDLORD
ENCUMBRANCES), (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION,
(viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii)
DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION OR (xv) THE EXISTENCE OF ANY
HAZARDOUS SUBSTANCE; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT.
TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS
SPECIFICATIONS AND THAT LANDLORD HAS NO OBLIGATION WITH RESPECT TO CONSTRUCTION
OF THE IMPROVEMENTS. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE
LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD AND LENDER
SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN
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TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED, AND ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD
OR LENDER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE. TENANT DOES NOT WAIVE ANY CLAIM
AGAINST ANY PARTY EXCEPT LANDLORD AND LENDER UNDER THE FOREGOING LANGUAGE.
(c) Tenant represents to Landlord that Tenant has examined the title
to the Leased Premises prior to the execution and delivery of this Lease and has
found the same to be satisfactory for the purposes contemplated hereby. Tenant
acknowledges that (i) fee simple title (both legal and equitable) to the Leased
Premises is in Landlord and that Tenant has only the leasehold right of
possession and use of the Leased Premises as provided herein, (ii) on the
Occupancy Date for each Related Premises the Improvements shall conform to all
material Legal Requirements and all Insurance Requirements, (iii) all easements
necessary for Tenant's use or operation of each Related Premises have been or by
the relevant Occupancy Date shall have been obtained, (iv) subject to Tenant's
rights under Paragraph 14 no later than the Final Completion Date for each
Related Premises all contractors and subcontractors who have performed work on
or supplied materials to such Related Premises shall have been fully paid, and
all materials and supplies have been fully paid for, and (v) no later than the
Final Completion Date for each Related Premises all Equipment necessary or
appropriate for Tenant's use or operation of the Leased Premises shall have been
installed and shall be operational.
(d) Landlord hereby assigns to Tenant, without recourse or warranty
whatsoever, all warranties, guaranties, indemnities and similar rights which
Landlord may have against any manufacturer, seller, engineer, contractor or
builder in respect of any of the Leased Premises. Such assignment shall remain
in effect until an Event of Default occurs or until the expiration or earlier
termination of this Lease, whereupon such assignment shall cease and all of said
warranties, guaranties, indemnities and other rights shall automatically revert
to Landlord.
(e) Pursuant to the Construction Agency Agreement, Tenant will cause
the Improvements to be constructed and the Equipment to be acquired and
installed with funds more particularly described in the Construction Agency
Agreement. The Improvements and Equipment will be owned by Landlord and are
included within the Leased Premises. Tenant acknowledges that the Improvements
have not yet been constructed and the Equipment has not yet been acquired and
installed and that, pursuant to the Construction Agency Agreement entered into
by Landlord and Tenant, Tenant has the responsibility for causing the
Improvements and Equipment to be completed in accordance with the terms of the
Construction Agency Agreement. Landlord will not make any representations or
warranties with respect to the Improvements and
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Equipment. Tenant further acknowledges that, upon occurrence of an Event of
Default, Landlord may terminate the Construction Agency Agreement, and in
addition to all other remedies of Landlord under this Lease, Landlord shall have
the right but not the obligation to complete construction of the Improvements
and installation of the Equipment in accordance with the Plans. If Landlord so
completes construction of the Improvements and installation of the Equipment,
Tenant will not be excused from paying all Rent due pursuant to the terms of
this Lease as long as this Lease is not terminated, and Landlord shall have the
right to exercise any or all of its remedies hereunder following an Event of
Default. All acknowledgments of Tenant regarding each Related Premises contained
in Paragraph 3(b) shall be deemed to have been made again as of the Final
Completion Date for such Related Premises.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for commercial or
industrial uses and for no other purpose without the prior written consent of
Landlord. Tenant shall not use or occupy or permit any of the Leased Premises to
be used or occupied, nor do or permit anything to be done in or on any of the
Leased Premises, in a manner which would or be reasonably likely to (i) violate
any Law or Legal Requirement, (ii) make void or voidable or cause any insurer to
cancel any insurance required by this Lease, or make it difficult or impossible
to obtain any such insurance at commercially reasonable rates, (iii) cause
structural injury to any of the Improvements or (iv) constitute a public or
private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of Default
has occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the
Leased Premises throughout the Term, without any hindrance, ejection or
molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may enter upon and examine any of
the Leased Premises at such reasonable times as Landlord may select and upon
reasonable notice to Tenant (except in the case of any emergency, in which event
no notice shall be required) for the purpose of inspecting the Leased Premises,
verifying compliance or non-compliance by Tenant with its obligations hereunder
and the existence or non-existence of an Event of Default or event which with
the passage of time and/or notice would constitute an Event of Default, showing
the Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have and hold the
Leased Premises for a primary term ("Primary Term") commencing on November __,
1995 ("Commencement Date") and
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terminating at midnight on the last day of the calendar month in which the Final
Completion Date for the final Related Premises occurs which shall not, in any
event, occur later than October 1, 1996 ("Primary Term Expiration Date") and for
an initial term (such initial term as extended or renewed in accordance with the
provisions hereof being called herein the "Initial Term") commencing on the day
("Initial Term Commencement Date") immediately following the Primary Term
Expiration Date. The Initial Term shall expire on the last day of the two
hundred fortieth (240th) calendar month following the Initial Term Commencement
Date ("Expiration Date"). Immediately following the Primary Term Expiration
Date, Landlord and Tenant shall execute an addendum to this Lease and an
amendment to each memorandum of lease setting forth the Initial Term
Commencement Date and the Expiration Date.
(b) Provided that if, on or prior to the Expiration Date or any
other Renewal Date (as hereinafter defined), this Lease shall not have been
terminated pursuant to any provision hereof, then Tenant shall have the right on
the Expiration Date and on the tenth (10th), twentieth (20th) and thirtieth
(30th) anniversaries of the Expiration Date (the Expiration Date and each such
anniversary being a "Renewal Date"), to extend the Term for an additional period
of ten (10) years (each such period being referred to herein as "Renewal Term"),
upon written notice to Landlord in recordable form at least one (1) year prior
to the next Renewal Date (each such notice, a "Renewal Notice") that Tenant is
extending this Lease as of the next Renewal Date for the next Renewal Term. If
Tenant fails to provide any Renewal Notice, Landlord shall provide to Tenant a
reminder notice that Tenant has failed to provide the required Renewal
Notice, and Tenant shall have thirty (30) days after receipt of such reminder
notice to give the required Renewal Notice, time being of the essence. Any such
extension of the Term shall be subject to all of the provisions of this Lease,
as the same may be amended, supplemented or modified.
(c) If Tenant does not exercise its option pursuant to Paragraph
5(b) to extend the Term, or if an Event of Default occurs, then Landlord shall
have the right during the remainder of the Term then in effect and, in any
event, Landlord shall have the right during the last year of the Term, to (i)
advertise the availability of any of the Leased Premises for sale or reletting
and to erect upon any of the Leased Premises signs indicating such availability
and (ii) upon reasonable prior notice to Tenant show any of the Leased Premises
to prospective purchasers or tenants or their agents at such reasonable times
during business hours as Landlord may select.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for the
Leased Premises during the Term, the amounts determined in accordance with
Exhibit "D" hereto ("Basic Rent") and on the dates described in Paragraphs 1 and
2 of Exhibit "D" (each such date being a "Basic Rent Payment Date"). Basic Rent
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shall be paid to Landlord at its address set forth above and/or to such one
other Person, at such addresses and in such proportions as Landlord may direct
by fifteen (15) days' prior written notice to Tenant (in which event Tenant
shall give Landlord notice of each such payment concurrent with the making
thereof) in funds available to Landlord or such other Person on each Basic Rent
Payment Date.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided herein, all
costs and expenses of Tenant, and all reasonable costs and expenses of Landlord
and any other Persons specifically referenced herein which are incurred in
connection or associated with (A) the ownership, use, non-use, occupancy,
possession, operation, condition, design, construction, maintenance, alteration,
repair or restoration of any of the Leased Premises, (B) the performance of any
of Tenant's obligations under this Lease, (C) any sale or other transfer of any
of the Leased Premises to Tenant under this Lease, (D) any Condemnation
proceedings, (E) the adjustment, settlement or compromise of any insurance
claims (including any contest or prosecution in connection therewith) under
insurance covering any of the Leased Premises, (F) the prosecution or defense of
any litigation related to the Leased Premises, this Lease, or the sale of the
Leased Premises to Landlord and arising from an act or omission of Tenant
provided, however, that in the event of legal action between Landlord and Tenant
where Tenant is the prevailing party, Landlord shall pay Tenant's reasonable
costs and attorneys' fees, (G) the exercise or enforcement by Landlord, its
successors and assigns, of any of its rights under this Lease, (H) any amendment
to or modification or termination of this Lease made at the request of Tenant,
(I) Costs of Landlord's counsel and reasonable internal Costs of Landlord
incurred in connection with the preparation, negotiation and execution of this
Lease, or incurred in connection with any act undertaken by Landlord (or its
counsel) at the written request of Tenant, or incurred in connection with any
act of Landlord performed on behalf of Tenant if Tenant is obligated to take
such action under this Lease and has refused to do so within the period required
herein or if no such period is specified, within a reasonable time following
notice from Landlord, (J) the commitment for and the financing of the Initial
Loan pursuant to the Initial Loan Commitment, including commitment fees, net
interest cost to Landlord from July 1, 1996 to the closing of the Initial Loan
(if the Initial Loan does not close on or before July 1, 1996), a "funding
failure" fee equal to $62,540 if the Initial Loan fails to close, title
premiums, inspection costs, and mortgage and recording taxes and costs
(provided, however, that Tenant shall not be obligated to pay any such costs and
expenses which result from the failure of the Initial Loan to close by July 1,
1996, or the failure of the Initial Loan to close
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at all, if Tenant has performed its obligations under Article VI of the
Construction Agency Agreement, and Tenant and Guarantor are otherwise prepared
to satisfy the conditions of the Initial Loan Application that pertain to them,
and the Initial Loan Application has not been terminated by reason of any act by
or circumstance relating to Tenant or Guarantor), and (K) any other items
specifically required to be paid by Tenant under this Lease;
(ii) after the date all or any portion of any installment of
Basic Rent is due and not paid, an amount ("Late Charge") equal to five percent
(5%) of the amount of such unpaid installment or portion thereof, provided,
however, that with respect to the first late payment in any Lease Year the Late
Charge shall not be due and payable unless two (2) days have elapsed elapsed
following telephonic notice followed by facsimile notice that such payment has
not been received;
(iii) a sum equal to any additional sums (including any late
charge, default penalties, interest and fees of Lender's counsel) which are
payable by Landlord to any Lender under any Note by reason of Tenant's late
payment or nonpayment of Basic Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "Default Rate") of three
percent (3%) over the Prime Rate per annum on the following sums until paid in
full: (A) all overdue installments of Basic Rent from the respective due dates
thereof, (B) all overdue amounts of Additional Rent relating to obligations
which Landlord shall have paid on behalf of Tenant, from the date of payment
thereof by Landlord, and (C) all other overdue amounts of Additional Rent, from
the date when Tenant has received notice that any such amount has become
overdue.
(b) Tenant shall pay and discharge (i) any Additional Rent referred
to in Paragraph 7(a)(i) when the same shall become due, provided that amounts
which are billed to Landlord or any third party, but not to Tenant, shall be
paid within thirty (30) days after Landlord's demand for payment thereof, and
(ii) any other Additional Rent, within thirty (30) days after Landlord's demand
for payment thereof.
(c) In no event shall amounts payable under Paragraph 7(a)(ii),
(iii) and (iv) exceed the maximum amount permitted by applicable Law.
8. Net Lease; Non-Terminality.
(a) This is a net lease and all Monetary Obligations shall be paid
without notice or demand and without set-off, counterclaim, recoupment,
abatement, suspension, deferment, diminution, deduction, reduction or defense
(collectively, a "Set-Off").
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(b) Except as otherwise expressly provided herein, this Lease and
the rights of Landlord and the obligations of Tenant hereunder shall not be
affected by any event or for any reason, including the following: (i) any damage
to or theft, loss or destruction of any of the Leased Premises, (ii) any
Condemnation, (iii) Tenant's acquisition of ownership of any of the Leased
Premises other than pursuant to an express provision of this Lease, (iv) any
default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement, including the Construction Agency Agreement,
(v) any latent or other defect in any of the Leased Premises, (vi) the breach of
any warranty of any seller or manufacturer of any of the Equipment, (vii) any
violation of Paragraph 4(b) or any other provision of reorganization,
composition, readjustment, liquidation, dissolution or winding-up of, or other
proceeding affecting Landlord, (ix) the exercise of any remedy, including
foreclosure, under any Mortgage or Assignment, (x) any action with respect to
this Lease (including the disaffirmance hereof) which may be taken by Landlord,
any trustee, receiver or liquidator of Landlord or any court under the Federal
Bankruptcy Code or otherwise, (xi) any interference with Tenant's use of the
Leased Premises, (xii) market or economic changes or (xiii) any other cause,
whether similar or dissimilar to the foregoing, any present or future Law to the
contrary notwithstanding.
(c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and the obligations of Tenant hereunder shall continue unaffected
unless the requirement to pay or perform the same shall have been terminated
pursuant to an express provision of this Lease. All Rent payable by Tenant
hereunder shall constitute "rent" for all purposes (including Section 502(b)(6)
of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant shall have
no right and hereby waives all rights which it may have under any Law (i) to
quit, terminate or surrender this Lease or any of the Leased Premises, or (ii)
to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due thereon, pay
and discharge all taxes (including real and personal property, franchise, sales
and rent taxes), all charges for any easement or agreement maintained for the
benefit of any of the Leased Premises, all assessments and levies, all permit,
inspection and license fees, all rents and charges for water, sewer, utility and
communication services relating to the any of Leased Premises, all ground rents
and all other public charges whether of a like or different nature, even if
unforeseen, or extraordinary, imposed upon or assessed against (i) Tenant's
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possessory interest in the Leased Premises, (ii) any of the Leased Premises,
(iii) Landlord as a result of or arising in respect of the acquisition,
ownership, occupancy, leasing, use, possession or sale of any of the Leased
Premises, any activity conducted on any of the Leased Premises, or the Rent, or
(iv) any Lender by reason of any Note, Mortgage, Assignment or other document
evidencing or securing a Loan and which (as to this clause (iv)) Landlord has
agreed to pay and that is normal and customary for similar financings
(collectively, the "Impositions"); provided, that nothing herein shall obligate
Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender)
which are determined on the basis of Landlord's (or Lender's) net income or
net worth (unless such taxes are in lieu of or a substitute for respect to the
Leased Premises which, if it were in effect, would be payable by Tenant under
the provisions hereof or by the terms of such tax, assessment or other charge),
(B) any estate, inheritance, succession, gift or similar tax imposed on Landlord
or Lender or (C) any capital gains or other tax imposed on Landlord in
connection with the sale of the Leased Premises to any Person, except for any
transfer or recording tax payable in connection with a sale to Tenant or its
designee. If any Imposition may be paid in installments without interest or
penalty, Tenant shall have the option to pay such Imposition in installments; in
such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall prepare and file all tax
reports required by governmental authorities which relate to the Impositions.
Tenant shall deliver to Landlord, (1) receipts for payment of all taxes required
to be paid by Tenant hereunder within thirty (30) days after the due date
thereof and (2) within thirty (30) days following Landlord's request, (A) copies
of all settlements and notices pertaining to the Impositions which may be issued
by any governmental authority and (B) receipts for payment of all other
Impositions.
(b) Landlord shall have the right during the existence of an Event
of Default to require Tenant to pay to Landlord or Lender, if required by the
terms of any Mortgage, an additional monthly sum (each an "Escrow Payment")
sufficient to pay the Escrow Charges (as hereinafter defined) as they become
due. As used herein, "Escrow Charges" shall mean real estate taxes on the Leased
Premises or payments in lieu thereof and premiums on any insurance required by
this Lease. Landlord shall determine the amount of the Escrow Charges and of
each Escrow Payment. As long as the Escrow Payments are being held by Landlord
and not Lender, the Escrow Payments shall not be commingled with other funds of
Landlord or other Persons and interest shall accrue thereon for the benefit of
Tenant and which shall serve as additional security for the obligations of
Tenant hereunder from the date such monies are received by or on behalf of
Landlord to the date such monies are disbursed to pay Escrow Charges in such
order or priority as Landlord shall determine or as required by law. If at any
time the Escrow Payments theretofore paid to Landlord shall be insufficient for
the
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payment of the Escrow Charges, Tenant, within ten (10) days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord or Lender,
as the case may be.
10. Compliance with Laws and Easement Agreements; Environmental Matters.
(a) Tenant shall, at its expense, be in material compliance with and
conform to, and cause the Leased Premises and any other Person occupying any
part of the Leased Premises to be in material compliance with and conform to,
all Insurance Requirements and Legal Requirements (except that Tenant and the
Leased Premises shall be in absolute compliance with all applicable
Environmental Laws pertaining to the Leased Premises). Tenant shall not at any
time (i) cause, permit or suffer to occur any Environmental Violation or (ii)
permit any sublessee, assignee or other Person occupying the Leased Premises
under or through Tenant to cause, permit or suffer to occur any Environmental
Violation.
(b) Tenant, at its sole cost and expense, will at all times promptly
and faithfully abide by, discharge and perform all of the covenants, conditions
and agreements contained in any Easement Agreement on the part of Landlord or
the occupier to be kept and performed thereunder. Tenant will not alter, modify,
amend or terminate any Easement Agreement, give any consent or approval
thereunder, or enter into any new Easement Agreement without, in each case,
prior written consent of Landlord, which consent shall not be unreasonably
conditioned. If Landlord fails to respond to any request for consent to any such
alteration, modification, amendment or termination of an existing Easement
Agreement, or for consent to any new Easement agreement, in any case within ten
(10) days after receipt of Tenant's request therefor, Landlord shall be deemed
to have given such consent. Any such Easement Agreement, as altered, modified or
amended, or any such new Easement Agreement, shall automatically be a Permitted
Encumbrance.
(c) Not more frequently than once every three (3) years and at any
other time required by a Lender or if in the opinion of Landlord or Lender, a
reasonable basis exists to believe that an Environmental Violation exists, upon
prior written notice from Landlord, Tenant shall permit such professional
environmental consultants as Landlord may designate ("Site Reviewers") to visit
the Leased Premises at reasonable times and upon reasonable prior notice to
Tenant and perform environmental site investigations and assessments ("Site
Assessments") on the Leased Premises for the purpose of determining whether
there exists on the Leased Premises any Environmental Violation or any condition
which could reasonably be expected to result in any Environmental Violation.
Such Site Assessments may include both above and, if a reasonable basis exists
to believe that an Environmental Violation exists or if reasonably recommended
by a Site Reviewer, below the ground testing for Environmental
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Violations and such other tests (other than below the ground or groundwater
testing except as permitted above) as may be necessary, in the opinion of the
Site Reviewers, to conduct the Site Assessments. Tenant shall supply to the Site
Reviewers such historical and operational information regarding the Leased
Premises as may be reasonably requested by the Site Reviewers to facilitate the
Site Assessments, and shall make available for meetings with the Site Reviewers
appropriate personnel having knowledge of such matters. Not more frequently than
once every three (3) years during the Term Tenant shall pay up to $7,000 of the
Cost of a Phase I Site Assessment for each Related Premises except that, if an
Environmental Violation is found to exist, Tenant shall pay all of the costs of
performing and reporting any Site Assessments required by Landlord or Lender
with respect to such Environmental Violation.
(d) If an Environmental Violation occurs or is found to exist and,
in Landlord's reasonable judgment, the cost of remediation of the same is likely
to exceed $500,000, Tenant shall provide to Landlord, within ten (10) days after
Landlord's request therefor, reasonable financial assurances that Tenant will
effect such remediation in accordance with applicable Environmental Laws.
(e) Notwithstanding any other provision of this Lease, if an
Environmental Violation occurs or is found to exist with respect to any Related
Premises that in the reasonable opinion of Landlord causes the fair market
rental value of such Related Premises to be less than would otherwise be the
case and the Term would otherwise terminate or expire, then, at the option of
Landlord, the Term shall be automatically extended beyond the date of
termination or expiration and this Lease shall remain in full force and effect
with respect to such Related Premises but at a monthly rent equal to the fair
market rental value of such Related Premises absent such Environmental Violation
beyond such date until the earlier to occur of (i) the completion of all
remedial action in accordance with applicable Environmental Laws or (ii) the
date specified in a written notice from Landlord to Tenant terminating this
Lease.
(f) If, in Landlord's reasonable discretion, Tenant fails to
promptly commence to comply and diligently pursue compliance with any
requirement of any Environmental Law in connection with any Environmental
Violation which occurs or is found to exist, Landlord shall have the right, at
Tenant's expense (but no obligation), to take any and all actions as Landlord
shall deem reasonably necessary or advisable in order to cure such Environmental
Violation.
(g) Tenant shall notify Landlord immediately after becoming aware of
any violation of any Environmental Law or other material Environmental Violation
(or alleged violation of any Environmental Law or other material Environmental
Violation) and upon the request of Landlord shall forward to Landlord
immediately upon receipt thereof copies of all orders, reports, notices,
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permits, applications or other communications relating to any such violation.
(h) All future leases, subleases or concession agreements relating
to the Leased Premises entered into by Tenant shall contain covenants of the
other party; thereto which are comparable to the covenants contained in this
Paragraph 10(b), (c), (f) and (g).
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or permit to be
created or to remain and shall promptly discharge or remove any lien, levy or
encumbrance on and of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Lease, other than any Mortgage or Assignment, the
Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord. NOTICE IS
HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR
OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND THAT NO
MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED PREMISES.
LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH
NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "record") all such instruments as may be required or permitted by
any present or future Law in order to evidence the respective interests of
Landlord and Tenant in any of the Leased Premises, and shall cause a memorandum
of this Lease (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such places
as may be required or permitted by any present or future Law in order to protect
the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain each Related Premises and the
Adjoining Property in as good repair and appearance as each is in on the Final
Completion Date and fit to be used for their intended use in accordance with
recognized industry standards and, in the case of the Equipment, in good
mechanical condition, in all cases except for ordinary wear and tear. Tenant
shall take every other reasonable action necessary or appropriate for the
preservation and safety of each Related Premises. Tenant shall promptly make all
Alterations of every kind and nature, whether foreseen or unforeseen, which may
be required to comply with the foregoing requirements of this Paragraph 12(a).
Landlord shall not be required to make any Alteration, whether foreseen or
unforeseen, or to maintain any of
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the Related Premises or Adjoining Property in any way, and Tenant hereby
expressly waives any right which may be provided for in any Law now or hereafter
in effect to make Alterations at the expense of Landlord or to require Landlord
to make Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12
shall be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall (i)
encroach upon any setback or any property, street or right-of-way adjoining any
of the Leased Premises, (ii) violate the provisions of any restrictive covenant
affecting any of the Leased Premises, (iii) hinder or obstruct any easement or
right-of-way to which any of the Leased Premises is subject or (iv) impair the
rights of others in, to or under any of the foregoing, Tenant shall, promptly
after receiving a demand to remove or correct such condition from a Person
entitled to make such demand, either (A) obtain from all necessary parties
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation, hindrance, obstruction or impairment, whether
the same shall affect Landlord, Tenant or both, or (B) take such action as shall
be necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained the prior
written consent of Landlord and Lender, to make Alterations or a series of
related Alterations that, as to any such Alterations or series of related
Alterations, do not cost in excess of $1,000,000 with respect to any Related
Premises and to install Equipment in the Improvements or accessions to the
Equipment that, as to such Equipment or accessions, do not cost in excess of
$1,000,000, so long as at the time of construction or installation of any such
Equipment or Alterations no Event of Default exists and the value and utility of
the Leased Premises is not diminished thereby. If the cost of any Alterations,
series of related Alterations or Equipment or accessions thereto is in excess of
the amounts specified above, the prior written approval of Landlord and Lender
shall be required, such approval not to be unreasonably withheld, delayed or
conditioned. Tenant shall not construct upon the Land any additional buildings
costing in excess of $1,000,000 without having first obtained the prior written
consent of Landlord and Lender, such consent not to be unreasonably withheld,
conditioned or delayed. If Landlord or Lender fails to respond to any written
request for consent within thirty (30) days after receipt of such consent, such
consent shall be deemed given.
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or
Paragraph 34 or as required by Paragraph 12 or 17 (such Alterations and actions
being hereinafter collectively referred to as "Work"), then (i) as to Work other
than Work done
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pursuant to a Legal Requirement, the market value of the Leased Premises shall
not be lessened by any such Work or its usefulness impaired, (ii) all such Work
shall be performed by Tenant in a good and workmanlike manner, (iii) all such
Work shall be expeditiously completed in compliance with all Legal Requirements,
(iv) all such Work shall comply with the requirements of all insurance policies
required to be maintained by Tenant hereunder, (v) if any such Work involves the
replacement of Equipment or parts thereto, all replacement Equipment or parts
shall function in a manner that is the better of (A) the functioning of the
Equipment or parts being replaced or (B) the functioning of similar Equipment or
parts in other warehouses owned or used by Tenant, (vi) subject to Tenant's
rights under Paragraph 14, Tenant shall promptly discharge or remove all liens
filed against any of the Leased Premises arising out of such Work, (vii) Tenant
shall procure and pay for all permits and licenses required in connection with
any such Work, (viii) all such Work (except for additions that are paid for by
Tenant and can be readily removed without substantial damage to the Improvements
and are not a replacement for any of the Improvements or Equipment) shall be the
property of Landlord and shall be subject to this Lease, and Tenant shall
execute and deliver to Landlord any document requested by Landlord evidencing
the assignment to Landlord of all estate, right, title and interest (other than
the leasehold estate created hereby) of Tenant or any other Person thereto or
therein, and (ix) Tenant shall comply, to the extent reasonably requested by
Landlord or required by this Lease, with the provisions of Paragraph 19(a),
whether or not such Work involves restoration of the Leased Premises.
14. Permitted Contests. Notwithstanding any other provision of this
Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge or
remove any lien referred to in Paragraph 11 or 13, (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b) or (d) comply with any Legal Requirements (such
non-compliance with the terms hereof being hereinafter referred to collectively
as "Permitted Violations"), so long as at the time of such non-compliance no
Event of Default exists and so long as Tenant shall contest, in good faith, the
existence, amount, validity or interpretation thereof, the amount of the damages
caused thereby, or the extent of its or Landlord's liability therefore by
appropriate proceedings which shall operate during the pendency thereof to
prevent or stay (i) the collection of, or other realization upon, the Permitted
Violation so contested, (ii) the sale, forfeiture or loss of any of the Leased
Premises or any Rent to satisfy or to pay any damages caused by any Permitted
Violation, (iii) any material interference with the use or occupancy of any of
the Leased Premises, (iv) any interference with the payment of any Rent, (v) the
cancellation or increase in the rate of any insurance policy or a statement by
the carrier that coverage will be denied or (vi) the enforcement or execution of
any injunction, order or Legal Requirement with respect to the Permitted
Violation. If the amount being contested
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is reasonably estimated by Landlord to be in excess of Two Hundred Fifty
Thousand Dollars ($250,000) or if otherwise required by the terms of the
Mortgage, Tenant shall provide Landlord security which is satisfactory in
Landlord's reasonable judgment, to assure that such Permitted Violation is
corrected if Tenant's contest is unsuccessful, including all Costs, interest and
penalties that may reasonably be expected to be incurred or become due in
connection therewith. While any proceedings which comply with the requirements
of this Paragraph 14 are pending and the required security is held by Landlord,
Landlord shall not have the right to correct any Permitted Violation thereby
being contested unless a Landlord is required by law to correct such Permitted
Violation and Tenant's contest does not prevent or stay such requirement as to
Landlord. Each such contest shall be promptly and diligently prosecuted by
Tenant to a final conclusion, except that Tenant, so long as the conditions of
this Paragraph 14 are at all times complied with, has the right to attempt to
settle or compromise such contest through negotiations. Tenant shall pay any and
all losses, judgments, decrees and Costs in connection with any such contest and
shall, promptly after the final determination of such contest, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith, together with all
penalties, fines, interest and Costs thereof or in connection therewith, and
perform all acts the performance of which shall be ordered or decreed as a
result thereof. No such contest shall subject Landlord to the risk of any civil
or criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save and hold
harmless Landlord, Lender and all other Persons described in Paragraph 30 (each
an "Indemnitee") for, from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs (including attorneys' fees and
costs), causes of action, suits, claims, demands or judgments of any nature
whatsoever, howsoever caused, without regard to the form of action and whether
based on strict liability, gross negligence, negligence or any other theory of
recovery at law or in equity (other than those based on the gross negligence or
willful misconduct of such Indemnitee or based on activities by such Indemnitee
in connection with the sale or reletting of the Leased Premises to any Person
except a sale to Tenant or its designee and except for activities that are based
on representations by or obligations and liabilities of Tenant or Guarantor),
arising from (i) any matter pertaining to the acquisition (or the negotiations
leading thereto), ownership, leasing, use, non-use, occupancy, operation,
management, condition, design, construction, maintenance, repair or restoration
of any of the Leased Premises or Adjoining Property, (ii) any casualty in any
manner arising from any of the Leased Premises or Adjoining Property, whether
or not Indemnitee has or should have knowledge or notice of any defect or
condition causing or contributing to said casualty, (iii) any violation by
Tenant of
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any provision of this Lease, any contract or agreement to which Tenant is a
party and which relates to the Leased Premises, any Legal Requirement or any
Permitted Encumbrance or (iv) any alleged, threatened or actual Environmental
Violation, including (A) liability for response costs and for costs of removal
and remedial action incurred by the United States Government, any state or local
governmental unit or any other Person, or damages from injury to or destruction
or loss of natural resources, including the reasonable costs of assessing such
injury, destruction or loss, incurred pursuant to Section 107 of CERCLA, or any
successor section or act or provision of any similar state or local Law, (B)
liability for costs and expenses of abatement, correction or clean-up, fines,
damages, response costs or penalties which arise from the provisions of any of
the other Environmental Laws and (C) liability for personal injury or property
damage arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying on
of a dangerous activity.
(b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in the event of a
conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel at its
expense and defend such action (it being understood that Landlord may employ
counsel of its choice to monitor the defense of any such action) and (ii) such
Indemnitee shall notify Tenant to resist or defend such action or proceeding by
retaining counsel reasonably satisfactory to such Indemnitee, and such
Indemnitee will cooperate and assist in the defense of such action or proceeding
if reasonably requested to do so by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall survive
any termination, expiration or rejection in bankruptcy of this Lease.
(d) For the sole purpose of effecting the indemnification
obligations under this Lease and not for the benefit of any employees of Tenant
or Guarantor or any third parties unrelated to the parties indemnified under
this Lease Tenant specifically and expressly waives any immunity that may be
granted it under the Washington State Industrial Insurance Act, Title 51 RCW.
(Tenant's Initials: WRS). Further the indemnification obligations under this
Lease shall not be limited in any way by any limitation on the amount or type of
damages, compensation or benefits payable to or for any third party under Worker
Compensation Acts, Disability Benefit Acts or other employee benefit acts.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
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(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (to the extent that a Related Premises
is in a flood zone) and earthquake coverage (to the extent any Related Premises
is in a critical earthquake zone) in amounts not less than the actual
replacement cost of the Improvements and Equipment, subject to a deductible or
self-insurance retention not to exceed $500,000 except that with respect to
earthquake coverage, the deductible or self-insurance retention shall not exceed
5% of replacement cost as long as such insurance is available. Such policies
shall contain Replacement Cost and Agreed Amount Endorsements.
(ii) Commercial general liability and automobile liability
insurance against claims for personal and bodily injury, death or property
damage occurring on, in or as a result of the use of the Leased Premises, in an
amount not less than $15,000,000 per occurrence/annual aggregate, subject to a
deductible or self-insurance retention not to exceed $500,000 including but not
limited to garagekeepers liability, non-owned and hired automobile liability and
all other coverage extensions that are usual and customary for properties of
this size and type provided, however, that the Landlord shall have the right to
require such higher limits, up to a maximum of $50 million, as may be reasonable
and customary for properties of this size and type.
(iii) Worker's compensation insurance covering all persons
employed by Tenant in connection with any work done on or about any of the
Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such Worker's Compensation Insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State
or States in which the Leased Premises are located.
(iv) Comprehensive boiler and machinery insurance on any of
the Equipment or any other equipment on or in the Leased Premises including but
not limited to service interruption, expediting expenses, ammonia
contamination, hazardous clean-up and comprehensive object definition, in an
amount not less than $15,000,000, subject to a deductible or self-insurance
retention not to exceed $500,000 for damage to property resulting from such
covered perils as found in a standard comprehensive boiler & machinery policy.
(v) Business income/interruption insurance to include loss of
rents at limits sufficient to cover 100% of the annual rental income on an
actual loss sustained basis with a period of indemnity not less than one year
from the time of loss, subject to deductible or self-insurance retention not to
exceed $500,000.
(vi) During any period in which substantial Alterations at any
Related Premises are being undertaken,
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builder's risk insurance covering the total completed value including any "soft
costs" with respect to the Improvements being altered or repaired (on a
completed value, non-reporting basis), replacement cost of work performed and
equipment, supplies and materials furnished in connection with such construction
or repair of Improvements or Equipment, together with such "soft cost"
endorsements and such other endorsements as Landlord may reasonably require.
(vii) Such other insurance which at the time is usual and
commonly obtained in connection with properties similar in type of building
size, use and location to the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be written by
companies which have a Best's rating of A:VIII or above (provided that any
carrier providing such insurance which is not rated by Best shall also be deemed
acceptable unless Landlord objects to such carrier within ten (10) days of
receipt of notice by Landlord that such carrier is providing coverage). The
insurance policies shall be in amounts sufficient at all times to satisfy any
coinsurance requirements thereof, unless such coinsurance requirements are
waived in writing by the insurer. The insurance referred to in Paragraphs
16(a)(i), 16(a)(iv) and 16(a)(vi) shall name Landlord, Lender and Tenant as loss
payees and as their interests may appear. If said insurance or any part thereof
shall expire, be withdrawn, become void, voidable, unreliable or unsafe for any
reason, including a breach of any condition thereof by Tenant or the failure or
impairment of the capital of any insurer, Tenant shall immediately obtain new or
additional insurance in compliance with Paragraph 16(a).
(c) Each insurance policy referred to in clauses (i), (iv), (v) and
(vi) of Paragraph 16(a) shall contain standard non-contributory mortgagee
clauses in favor of and acceptable to Lender. Each policy required by any
provision of Paragraph 16(a), except clause (iii) thereof, shall provide that it
may not be cancelled except after thirty (30) days' prior written notice to
Landlord and Lender. Each such policy shall also provide that any loss otherwise
payable thereunder with respect to the Leased Premises shall be payable
notwithstanding (i) any act or omission of Landlord or Tenant which might,
absent such provision, result in a forfeiture of all or a part of such insurance
payment, (ii) the occupation or use of any of the Leased Premises for purposes
more hazardous than those permitted by the provisions of such policy, (iii) any
foreclosure or other action or proceeding taken by Lender pursuant to any
provision of the Mortgage, Note, Assignment or other document evidencing or
securing the Loan upon the happening of an event of default therein or (iv) any
change in title to or ownership of Landlord's fee simple interest in any of the
Leased Premises.
(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence
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thereof prior to the expiration date of such policy, and shall promptly deliver
to Landlord copies of all such insurance certified by a senior officer of Tenant
to be true and correct.
(e) Anything in this Paragraph 16 to the contrary notwithstanding,
any insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may
be carried under a "blanket" or umbrella policy or policies covering other
properties or liabilities of Tenant, provided that such "blanket" or umbrella
policy or policies otherwise comply with the provisions of this Paragraph 16. A
copy of each such "blanket" or umbrella policy certified by a senior officer of
Tenant to be true and correct shall promptly be delivered to Landlord.
(f) Replacement costs of Improvements and Equipment may be
redetermined not more frequently than once every twelve (12) months at the
Landlord's request and shall be determined based on insurance carrier trends for
corporations of established reputation engaged in the same or similar business
of the Tenant.
(g) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii) all
reasonable requirements of the insurers thereunder applicable to Landlord,
Tenant (in connection with the Leased Premises) or any of the Leased Premises or
to the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of any of the Leased Premises, even if such compliance
necessitates Alterations or results in interference with the use or enjoyment of
any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent in form or
contributing in the event of a Casualty with that required in this Paragraph 16
unless (i) Landlord and Lender are included therein as named insureds, with loss
payable as provided herein, and (ii) such separate insurance complies with the
other provisions of this Paragraph 16. Tenant shall immediately notify Landlord
of such separate insurance and shall deliver to Landlord copies thereof
certified by a senior officer of Tenant.
(i) All policies shall contain effective waivers by the carrier
against all claims for insurance premiums against Landlord and shall contain
full waivers of subrogation against the Landlord.
(j) All proceeds of any insurance required under Paragraph 16(a)
shall be payable as follows:
(i) The insurance referred to in Paragraphs 16(a)(i), 16(a)(iv)
and 16(a)(vi) shall name Landlord, Lender and Tenant as loss payees, as their
interests may appear. The insurance referred to in Paragraph 16(a)(ii) shall
name Landlord and Lender as additional insureds, and the insurance referred to
in Paragraph 16(a)(v) shall name Tenant as insured and Lender and
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Landlord as loss payees to the extent of amounts payable by Tenant under the
Lease.
(ii) Each insurer is hereby authorized and directed to make
payment of insurance proceeds in excess of $500,000, or if an Event of Default
exists, in any amount directly to Landlord or, if required by the Mortgage or
requested by Lender pursuant to the Mortgage, to Lender instead of to Landlord
and Tenant jointly, and Tenant hereby appoints each of Landlord and Lender as
Tenant's attorneys-in-fact to endorse any draft therefor. If no Event of Default
exists, proceeds up to and including $500,000 shall be paid directly to Tenant.
17. Casualty and Condemnation
(a) If any Casualty occurs the insurance proceeds for which is
reasonably estimated by Tenant to be equal to or in excess of One Hundred
Thousand Dollars ($100,000), Tenant shall give Landlord and Lender immediate
notice thereof. So long as no Event of Default exists Tenant is hereby
authorized to adjust, collect and compromise all claims under any of the
insurance policies required by Paragraph 16(a) and to execute and deliver on
behalf of Landlord all necessary proofs of loss, receipts, vouchers and releases
required by the insurers, and Landlord shall have the right to join with Tenant
if the amount of any such claim is in excess of Five Hundred Thousand Dollars
($500,000). Any adjustment, settlement or compromise of any such claim in excess
of $500,000 shall be subject to the prior written approval of Landlord, which
shall not be unreasonably withheld, conditioned or delayed. Landlord shall have
the right to prosecute or contest any such claim, adjustment, settlement or
compromise and, in connection therewith, Tenant hereby irrevocably assigns to
Landlord any and all interest it has or may have in such claim. If an Event of
Default exists, Tenant shall not be entitled to adjust, collect or compromise
any such claim or to participate with Landlord in any adjustment, collection or
compromise of the Net Award payable in connection with a Casualty. Tenant agrees
to sign, upon the request of Landlord, all such proofs of loss, receipts,
vouchers and releases. Each insurer is hereby authorized and directed to make
payment under said policies in excess of $500,000 directly to Landlord or, if
required by the Mortgage or requested by Landlord or Lender pursuant to the
Mortgage, to Lender instead of to Landlord and Tenant jointly, and Tenant hereby
appoints each of Landlord and Lender as Tenant's attorneys-in-fact to endorse
any draft therefor. The rights of Landlord under this Paragraph 17(a) shall be
extended to Lender if and to the extent that any Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation Notice, shall
notify Landlord and Lender thereof. Landlord and Lender are authorized to
collect, settle and compromise, in their discretion (and, if no Event of Default
exists, upon notice to Tenant), the amount of any Net Award. Provided that no
Event of Default has occurred and is continuing,
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Tenant shall be entitled to participate with Landlord and Lender in any
Condemnation proceeding or negotiations under threat thereof and to contest the
Condemnation or the amount of the Net Award therefor. No agreement with any
condemnor in settlement or under threat of any Condemnation shall be made by
Tenant without the written consent of Landlord and Lender, which shall not be
unreasonably withheld, conditioned or delayed. Subject to the provisions of this
Paragraph 17(b), Tenant hereby irrevocably assigns to Landlord any award or
payment to which Tenant is or may be entitled by reason of any Condemnation,
whether the same shall be paid or payable for Tenant's leasehold interest
hereunder or otherwise; but nothing in this Lease shall impair Tenant's right to
any award or payment on account of Tenant's trade fixtures, equipment or other
tangible property which is not part of the Equipment, moving expenses or loss of
business, if available, to the extent that and so long as (i) Tenant shall have
the right to make, and does make, a separate claim therefor against the
condemnor and (ii) such claim does not in any way reduce either the amount of
the award otherwise payable to Landlord for the Condemnation of Landlord's fee
interest in the Leased Premises or the amount of the award (if any) otherwise
payable for the Condemnation of Tenant's leasehold interest hereunder.
(c) If any Partial Casualty (whether or not insured against) or
Partial Condemnation shall occur to any Related Premises, this Lease shall
continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary Obligations, except as provided in Paragraph 19(c).
Promptly after such Partial Casualty or Partial Condemnation, Tenant, as
required in Paragraph 12(a), shall commence and diligently continue to restore
the Leased Premises as nearly as practicable to their value, condition and
character immediately prior to such event (assuming the Leased Premises to have
been in the condition required by this Lease). Upon the receipt by Landlord of
the entire Net Award of such Partial Casualty or Partial Condemnation, Landlord
shall make such Net Award Available to Tenant for restoration in accordance with
and subject to the provisions of Paragraph 19(a). If any Casualty or
Condemnation which is not a Partial Casualty or Partial Condemnation shall
occur, Tenant shall comply with the terms and conditions of Paragraph 18.
18. Termination Events.
(a) If (i) all of any Related Premises shall be taken by a Taking or
(ii) any substantial portion of any Related Premises shall be taken by a Taking
or all or any substantial portion of any Related Premises shall be totally
damaged or destroyed by a Casualty and, in any such case, Tenant certifies and
covenants to Landlord that it will forever abandon operations at the Related
Premises, (any one or all of the Related Premises described in the above clauses
(i) and (ii) above being hereinafter referred to as the "Affected Premises" and
each of the events described in the above clauses (i) and (ii) shall hereinafter
be referred to as a "Termination Event"), then (x) in
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the case of (i) above, Tenant shall be obligated, within thirty (30) days after
Tenant receives a Condemnation Notice and (y) in the case of (ii) above, Tenant
shall have the option, within thirty (30) days after Tenant receives a
Condemnation Notice or thirty (30) days after the Casualty, as the case may be,
to give to Landlord written notice (a "Termination Notice") of the Tenant's
option to terminate this Lease as to the Affected Premises in the form described
in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease as to the Affected Premises on the first Basic
Rent Payment Date which occurs at least ninety (90) days after the Fair Market
Value Date (the "Termination Date"), (ii) a binding and irrevocable offer of
Tenant to purchase the Leased Premises for a price equal to the Termination
Amount and (iii) if the Termination Event is an event described in Paragraph
18(a)(ii), the certification and covenant described therein and a certified
resolution of the Board of Directors of Tenant authorizing the same. Promptly
upon the delivery to Landlord of a Termination Notice, Landlord and Tenant shall
commence to determine Fair Market Value.
(c) If Landlord shall reject such offer to terminate this Lease as
to the Affected Premises by written notice to Tenant (a "Rejection"), which
Rejection shall contain the written consent of Lender, not later than thirty
(30) days following the Fair Market Value Date, then this Lease shall terminate
as to the Affected Premises on the Termination Date; provided that, if Tenant
has not satisfied all Monetary Obligations and all other obligations and
liabilities under this Lease which have arisen as to the Affected Property
(collectively, "Remaining Obligations") on or prior to the Termination Date,
then Landlord may, at its option, extend the date on which this Lease may
terminate as to the Affected Premises to a date which is no later than the first
Basic Rent Payment Date after the Termination Date on which Tenant has satisfied
all Remaining Obligations. Upon such termination (i) all obligations of Tenant
hereunder as to the Affected Premises shall terminate except for any Surviving
Obligations, (ii) Tenant shall promptly vacate and shall have no further right,
title or interest in or to any of the Affected Premises and (iii) the Net Award
shall be retained by Landlord. Notwithstanding anything to the contrary
hereinabove contained, if Tenant shall have received a Rejection and, on the
date when this Lease would otherwise terminate as provided above, Landlord shall
not have received the full amount of the Net Award payable by reason of the
applicable Termination Event, then on the Termination Date Tenant shall assign
to Landlord all of its right, title and interest, if any, in and to the Net
Award.
(d) Unless Tenant shall have received a Rejection not later than the
thirtieth (30th) day following the Fair Market Value Date, Landlord shall be
conclusively presumed to have accepted such offer. If such offer is accepted by
Landlord then, on the Termination Date, Tenant shall pay to Landlord or Lender,
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if the Mortgage requires or permits Lender to so require, the Termination Amount
and all Remaining obligations and, if requested by Tenant, Landlord shall convey
to Tenant or its designee the Affected Premises or the remaining portion
thereof, if any, all in accordance with Paragraph 20.
(e) In the event of the termination of this Lease as to the Affected
Premises as hereinabove provided, this Lease shall remain in full force and
effect as to the Remaining Premises; provided, that the Basic Rent for the
Remaining Premises to be paid after such termination shall be the Basic Rent
otherwise payable hereunder with respect to the Leased Premises multiplied by a
percentage equal to the sum of the percentages set forth on Exhibit "F" for the
Remaining Premises.
19. Restoration; Reduction of Rent.
(a) If (on the basis of a cost breakdown provided by Tenant) the
cost of restoration in the event of a Casualty is reasonably estimated by
Landlord and Lender to be Five Hundred Thousand ($500,000) or less, then, so
long as an Event of Default has not occurred and is continuing, such amount
shall be paid to and retained by Tenant, and Tenant shall promptly restore the
Related Premises in accordance with and subject to Paragraph 12 and Paragraph 13
hereof. As long as an Event of Default has not occurred and is continuing, any
Net Award in excess of Five Hundred Thousand ($500,000) that is paid to Landlord
or Lender shall be made available to Tenant for restoration of the Leased
Premises and Landlord (or Lender if required by any Mortgage) shall hold such
Net Award in a separate trust fund not commingled with any other funds (the
"Restoration Fund") and disburse amounts from the Restoration Fund only in
accordance with the following conditions:
(i) prior to commencement of restoration, (A) the architects,
contracts, contractors, plans and specifications for the restoration shall have
been approved by Landlord, which approval shall not be unreasonably withheld,
delayed or conditioned, (B) Landlord and Lender shall be provided with
mechanics' lien insurance or an acceptable payment bond which insures
satisfactory payment for the restoration, is in an amount and form and have a
surety reasonably acceptable to Landlord, and name Landlord and Lender as
additional dual obligees;
(ii) at the time of any disbursement, no Event of Default shall
exist and no mechanics' or materialmen's liens shall have been filed against any
of the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time to time in an amount
not exceeding the cost of the work completed since the last disbursement, upon
receipt of (A) satisfactory evidence, including architects' certificates, of the
stage of completion, the estimated total cost of completion and performance
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of the work to date in a good and workmanlike manner in accordance with the
contracts, plans and specifications, (B) conditional waivers of liens, (C) a
satisfactory bringdown of title insurance and (D) other evidence of cost and
payment so that Landlord and Lender can verify that the amounts disbursed from
time to time are represented by work that is completed, in place and free and
clear of mechanics' and materialmen's lien claims;
(iv) each request for disbursement shall be accompanied by a
certificate of Tenant, signed by the president or a vice president or the
Director of Property Management of Tenant, describing the work for which payment
is requested, stating the cost incurred in connection therewith, stating that
Tenant has not previously received payment for such work and, upon completion of
the work, also stating that the work has been fully completed and complies with
the applicable requirements of this Lease;
(v) Landlord may retain ten percent (10$) of the restoration
fund until 50% of the restoration is fully completed;
(vi) the Restoration Fund shall not be commingled with
Landlord's other funds and shall bear interest at a commercially available rate;
and
(vii) such other reasonable conditions consistent with customary
construction loan disbursement practices as Landlord or Lender may impose.
(b) Prior to commencement of restoration and at any time during
restoration, if the estimated cost of completing the restoration work free and
clear of all liens, as reasonably determined by Landlord or Lender, exceeds the
amount of the Net Award available for such restoration, the amount of such
excess shall, upon demand by Landlord, be paid by Tenant to Landlord or Lender,
if so required or permitted by the terms of the Mortgage, to be added to the
Restoration Fund. Any sum so added by Tenant which remains in the Restoration
Fund upon completion of restoration shall be refunded to Tenant. For purposes of
determining the source of funds with respect to the disposition of funds
remaining after the completion of restoration, the Net Award shall be deemed to
be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after completion of
the restoration and any refund to Tenant pursuant to Paragraph 19(b), such sum
(the "Remaining Sum") shall be retained by Landlord or Lender, each installment
of Basic Rent payable on or after the date on which the Net Award is paid to
Landlord shall be reduced by a fraction, the denominator of which shall be the
total amount of all Basic Rent due from such date to and including the last day
of the Term and the numerator of which shall be the amount of such Net Award
retained by Landlord and/or Lender.
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20. Procedures Upon Purchase.
(a) If the Leased Premises or any of the Related Premises are
purchased by Tenant pursuant to any provision of this Lease, Landlord need not
convey any better title thereto than that which was conveyed to Landlord, and
Tenant or its designee shall accept such title, subject, however, to the
Permitted Encumbrances and to all other liens, exceptions and restrictions on,
against or relating to any of the Leased Premises or the applicable Related
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises or the applicable
Related Premises which have been created by or resulted solely from acts of
Landlord after the date of this Lease, unless the same are Permitted
Encumbrances or customary utility easements benefiting the Leased Premises or
were created with the concurrence of Tenant or as a result of a default by
Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the Leased Premises
or any of the Related Premises pursuant to any provision of this Lease (any such
date the "Purchase Date"), Tenant shall pay to Landlord, or to any Person to
whom Landlord directs payment, the Relevant Amount therefor specified herein, in
Federal Funds, less any credit of the Net Award received and retained by
Landlord or a Lender and allowed against the Relevant Amount, and Landlord shall
deliver to Tenant (i) a special warranty deed which describes the premises being
conveyed and conveys the title thereto as provided in Paragraph 20(a), (ii) such
other instruments as shall be necessary to transfer to Tenant or its designee
any other property (or rights to any Net Award not yet received by Landlord or a
Lender) then required to be sold by Landlord to Tenant pursuant to this Lease
and (iii) any Net Award received by Landlord, not credited to Tenant against the
Relevant Amount and required to be delivered by Landlord to Tenant pursuant to
this Lease; provided, that if any Monetary Obligations remain outstanding on
such date, then Landlord may deduct from the Net Award the amount of such
Monetary Obligations; and further provided, that if any event has occurred
which, in Landlord's reasonable judgment, is likely to subject any Indemnitee to
any liability which Tenant is required to indemnify against pursuant to
Paragraph 15, then an amount shall be deducted from the Net Award which, in
Landlord's reasonable judgment, is sufficient to satisfy such liability, which
amount shall be deposited in an escrow account with a financial institution
reasonably satisfactory to Landlord and Tenant on terms and conditions
reasonably satisfactory to Landlord and Tenant, pending resolution of such
matter. If on the Purchase Date any Monetary Obligations remain outstanding and
no Net Award is payable to Tenant by Landlord or the amount of such Net Award is
less than the amount of the Monetary Obligations, then Tenant shall pay to
Landlord on the Purchase Date the amount of such Monetary Obligations. Upon the
completion of such purchase, this Lease and all obligations and liabilities of
Tenant hereunder with respect to the applicable
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Related Premises (but not with respect to the Remaining Premises) shall
terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be delayed after (i)
the Termination Date, in the event of a purchase pursuant to Paragraph 18 or,
(ii) the date scheduled for such purchase, in the event of a purchase under any
other provision of this Lease then, except as specifically provided in the
following sentence, (x) Rent shall continue to be due and payable until
completion of such purchase and (y) at Landlord's sole option, Fair Market value
shall be redetermined and the Relevant Amount payable by Tenant pursuant to the
applicable provision of this Lease shall be adjusted to reflect such
redetermination. If, however, the delay for completion of such purchase is
caused solely by an act of or failure to act by Landlord, Tenant's obligation to
pay Rent until completion of the purchase shall be limited to that portion of
Basic Rent equal to the payments of principal and interest payable on the Loan,
and such payments shall be payable directly to the Lender and shall be credited
against the purchase price payable by Tenant to Landlord.
(d) Any prepaid Monetary Obligations paid to Landlord shall be
prorated as of the Purchase Date, and the prorated unapplied balance shall be
deducted from the Relevant Amount due to Landlord.
21. Assignment and Subletting.
(a) (i) Tenant shall have the right, upon thirty (30) days prior
written notice to Landlord and Lender, with no consent of Landlord or Lender
being required or necessary ("Preapproved Assignment") to assign this Lease by
operation of law or otherwise to any Person ("Preapproved Assignee") (A) that is
an Affiliate of Tenant or (B) which immediately following such assignment has,
or is a direct or indirect subsidiary of a parent corporation that has executed
(or will, as a condition to such assignment, execute) a guaranty of the
obligations of Tenant hereunder substantially in the form of the Guaranty and
has, a publicly traded unsecured senior debt rating that is the higher of (1)
the then publicly traded unsecured senior debt rating of Guarantor or (2) a
rating of "A" or better from Xxxxx'x Investors Services, Inc. or a rating of "A"
or better from Standard & Poor's Corporation (or in the event both of such
rating agencies cease to furnish such ratings, then a comparable rating by any
rating agency reasonably acceptable to Landlord and Lender).
(ii) If Tenant desires to assign this Lease to a Person
("Non-Preapproved Assignee") who would not be a Preapproved Assignee
("Non-Preapproved Assignment") then Tenant shall, not less than forty-five (45)
days prior to the date on which it desires to make a Non-Preapproved Assignment
submit to Landlord and Lender information regarding the following with respect
to the Non-Preapproved Assignee: (A) credit, (B) capital structure, (C)
management, (D) operating history, (E) proposed use
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of the Leased Premises and (F) risk factors associated with the proposed use of
the Leased Premises by the Non-Preapproved Assignee, taking into account factors
such as environmental concerns, product liability and the like. Landlord and
Lender shall review such information and shall approve or disapprove the
Non-Preapproved Assignee no later than the twentieth (20th) day following
receipt of all such information, and Landlord and Lender shall be deemed to have
acted reasonably in granting or withholding consent if such grant or disapproval
is based on a review of the above-described criteria applying such review
standards as are customary in private placement transactions.
(iii) If Landlord or Lender withhold consent to the
Non-Preapproved Assignment and Tenant desires to complete the Non-Preapproved
Assignment, Tenant shall make a rejectable offer (the "Intended Assignment
Offer") to purchase the Leased Premises for a purchase price equal to the Offer
Amount and to consummate the purchase on the first Basic Rent Payment Date
occurring thirty (30) days after the determination of Fair Market Value (the
"Intended Assignment Purchase Date"). Notwithstanding the foregoing, if the
Intended Assignment Offer is accepted by Landlord and Lender and the
Non-Preapproved Assignment occurs on a date (the "Assignment Date") that is
prior to the Intended Assignment Purchase Date, then, no later than the
Assignment Date, Tenant shall deposit in escrow with Lender an amount (the
"Deposit Amount") equal to one hundred percent (100%) of the sum of the Project
Cost and any Prepayment Premium. The Deposit Amount shall be held by and
invested by Landlord and the Deposit Amount, together with any interest earned
thereon, shall be applied on the Intended Assignment Purchase Date to payment of
the Offer Amount.
(iv) If Landlord shall reject the Intended Assignment Offer by
notice to Tenant, such notice to contain the written consent of Lender to such
rejection, no later than the thirtieth (30th) day following receipt of the
Intended Assignment Offer by Landlord, then this Lease shall remain in full
force and effect and Landlord and Lender shall be deemed to have consented to
the Non-Preapproved Assignment. Nothing provided herein-shall constitute a
waiver by Landlord of the obligation of Tenant to comply with the requirements
of this Paragraph 21(a)(iv) if a subsequent Non-Preapproved Assignment arises.
No rejection of the Intended Assignment Offer shall be effective for any purpose
unless consented to in writing by Lender.
(v) Unless Landlord shall have rejected the Intended Assignment
Offer by the foregoing notice to Tenant not later than the thirtieth (30th) day
following receipt of information described in the foregoing Paragraph 21(a)(iv),
Landlord shall be conclusively presumed to have accepted the Intended Assignment
Offer. If the Intended Assignment Offer is accepted by Landlord, Tenant shall
pay to Landlord the Offer Amount (less the Deposit Amount and interest thereon
paid to Landlord) on the Intended Assignment Purchase Date and, provided
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that no Rent or any other charge is due and unpaid under this Lease as of the
Intended Assignment Purchase Date and Tenant is otherwise in compliance with the
terms of this Lease, Landlord shall convey to Tenant the Leased Premises in
accordance with the provisions of Paragraph 20 of this Lease.
(b) (i) In addition to the Silgan Subleases Tenant shall have the
right, upon thirty (30) days prior written notice to Landlord and Lender, to
enter into one or more subleases that demise, in the aggregate, up to but not in
excess at any time of thirty-three and one-third percent (33 1/3%) of the gross
space in the Improvements for a term of up to ten (10) years (but not extending
beyond the Expiration Date) with no consent or approval of Landlord being
required or necessary ("Preapproved Sublet"). Other than pursuant to a
Preapproved Sublet, no portion of the Leased Premises shall be subleased during
the Term to any other Person without the prior written consent of Landlord and
Lender, which consent shall not be unreasonably withheld or delayed, and which
consent shall be granted or withheld based on a review of the following criteria
as they relate to the proposed sublessee: (1) credit, (2) capital structure, (3)
management, (4) operating history and (5) the proposed use of the sublet portion
of the Improvements, taking in account factors related to the proposed
subtenant's use of the Leased Premises such as environmental concerns. Landlord
and Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based on their reasonable review of the
above-described criteria.
(c) If Tenant assigns all its rights and interest under this Lease,
the assignee under such assignment shall expressly assume all the obligations of
Tenant hereunder, actual or contingent, including obligations of Tenant which
may have arisen on or prior to the date of such assignment, by a written
instrument delivered to Landlord at the time of such assignment. Each sublease
of any of the Leased Premises shall be subject and subordinate to the provisions
of this Lease. Following any assignment (i) to a Person that satisfies the test
for a Preapproved Assignee under clause (B) of Paragraph 21(a)(i) or (ii) to a
Non-Preapproved Assignee that is approved by Lender and that immediately
following the Non-Preapproved Assignment has a publicly traded unsecured senior
debt rating of not less than "Baal" from Xxxxx'x Investors Services, Inc. or a
rating of not less than "BBB" from Standard & Poor's Corporation (or in the
event both of such rating agencies cease to furnish such ratings, then a
comparable rating by a rating agency reasonably acceptable to Landlord and
Lender), Tenant and Guarantor shall be deemed released from their respective
obligations and liabilities under this Lease and the Guaranty that arise after
the date of such Preapproved Assignment or Non-Preapproved Assignment described
in clause (ii) above, as the case may be, and do not relate to any act or
failure to act by Guarantor or Tenant that occurred prior to the date of such
assignment. Except as specifically provided in the foregoing sentence, no
assignment or sublease made as
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permitted by this Paragraph 21 shall affect or reduce any of the obligations of
Tenant hereunder or of Guarantor under the Guaranty, and all such obligations
shall continue in full force and effect as obligations of a principal and not as
obligations of a guarantor, as if no assignment or sublease had been made. No
assignment or sublease shall impose any additional obligations on Landlord under
this Lease.
(d) With respect to any Preapproved Assignment or Preapproved
Sublet, Tenant shall provide to Landlord information reasonably required by
Landlord to establish that any proposed Preapproved Assignment or Preapproved
Sublet satisfies the criteria set forth above.
(e) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease, deliver a duplicate original copy
thereof to Landlord which, in the event of an assignment, shall be in recordable
form.
(f) As security for performance of its obligations under this Lease,
Tenant hereby grants, conveys and assigns to Landlord all right, title and
interest of Tenant in and to all subleases, including the Silgan Subleases and
any guaranty executed in connection therewith, now in existence or hereafter
entered into for any or all of the Leased Premises, any and all extensions,
modifications and renewals thereof and all rents, issues and profits therefrom.
Landlord hereby grants to Tenant a license to collect and enjoy all rents and
other sums of money payable under any sublease of any the Leased Premises,
provided, however, that Landlord shall have the absolute right at any time
during the existence of an Event of Default, upon notice to Tenant and any
subtenants, to revoke said license and to collect such rents and sums of money
and to retain the same as a credit against Rent. Tenant shall not (i) consent
to, cause or allow any material modification or alteration of any of the terms,
conditions or covenants of the subleases or any guaranty thereof or the
termination or surrender of any sublease or guaranty thereof, (ii) anticipate
Rents prior to the accrual thereof, or (iii) waive or release any tenant or
guarantor thereunder from any material obligation or performance, without the
prior written approval of Landlord, which consent shall not be unreasonably
withheld (provided, however, that Landlord in its sole and absolute discretion
may give or withhold its consent to any proposed modification to the term or
rent provisions of either of the Silgan Subleases), nor shall Tenant do or
permit anything to be done, the doing of which, nor omit or refrain from doing
anything, the omission of which, will or could be a breach of or default in the
terms of the Silgan Subleases or a material breach of or material default in the
terms of any of the other subleases. Tenant shall, with respect to each
sublease, observe and perform each and every condition to be performed by Tenant
thereunder, give prompt notice to Landlord and Lender of any notice given or
received under any sublease or guaranty thereof, enforce, short of termination,
each sublease and guaranty thereof and appear in and
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defend any action growing out of or in any manner connected with any sublease or
guaranty thereof, provided, that, if Tenant shall fail or refuse to so enforce
or defend Landlord or Lender shall have such right which shall be exercisable at
the sole cost and expense of Tenant.
(g) Tenant shall have the right to grant a first lien leasehold
mortgage on, or to pledge its leasehold interest in, the Leased Premises to its
senior lender, and a second and a third lien leasehold mortgage on the Leased
Premises to its other lenders but shall not have the power to otherwise
mortgage, pledge or otherwise encumber its interest under this Lease or any
sublease of the Leased Premises, and any other such mortgage, pledge or
encumbrance made in violation of this Paragraph 21 shall be void. Landlord and
Lender shall execute such documents as may be reasonably requested by Tenant's
lender who holds a first lien leasehold mortgage and are customarily acceptable
to Landlord and Lender in order to afford to such leasehold mortgagee rights of
notice and an opportunity to cure an Event of Default and the benefits of any
non-disturbance and attornment agreement in favor of Tenant, provided, however,
that any entity that becomes a successor tenant under this Paragraph 21(g) shall
be required to be in compliance with all of the terms of this Lease.
(h) No later than April 1, 1996 Tenant shall, and shall cause Silgan
to execute the Silgan Subleases and a non-disturbance and attornment agreement
in form and substance reasonably satisfactory to Landlord.
(i) Subject to Tenant's rights under Paragraphs 38 and 39, Landlord
may sell or transfer the Leased Premises (but not any Related Premises
separately) at any time without Tenant's consent to any third party (a "Third
Party Purchaser"). In the event of any such transfer, Tenant shall attorn to any
Third Party Purchaser as Landlord so long as such Third Party Purchaser and
Landlord notify Tenant in writing of such transfer and such Third Party
Purchaser assumes in writing the obligations of Landlord under this Lease. At
the request of Landlord, Tenant, at no cost or expense to Tenant, will execute
such documents confirming the agreement referred to above and such other
agreements as Landlord may reasonably request, provided that such agreements do
not increase the liabilities and obligations of Tenant hereunder. In no event
shall Tenant have any obligation to attorn to, or recognize more than one Person
at one time as, Landlord.
22. Events of Default.
(a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph 22(b)) shall,
at the sole option of Landlord, constitute an "Event of Default" under this
Lease:
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(i) a failure by Tenant to make any payment of any Monetary
Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise specifically
mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant herein or by
Guarantor under the Guaranty or by Tenant or Guarantor in any certificate,
demand or request made pursuant hereto proves to be incorrect in any material
respect when made;
(iv) a default beyond any applicable cure period or at maturity
by Tenant or Guarantor in any payment of principal or interest on any
obligations for borrowed money having an outstanding principal balance of
$10,000,000 or more in the aggregate, or in the performance of any other
provision contained in any instrument under which any such obligation is created
or secured (including the breach of any covenant thereunder);
(v) a final, non-appealable judgment or judgments for the
payment of money in excess of $15,000,000 in the aggregate shall be rendered
against Tenant or Guarantor and the same shall remain undischarged for a period
of sixty (60) consecutive days;
(vi) Tenant or Guarantor shall (A) voluntarily be adjudicated a
bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for any of the Related Premises, (C) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(vii) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant and Guarantor, a receiver or trustee
for it or for any of the Related Premises or approving a petition filed against
Tenant or Guarantor, as the case may be, which seeks relief under the bankruptcy
or other similar laws of the United States, any state or any jurisdiction, and
such order, judgment or decree shall remain undischarged or unstayed ninety (90)
days after it is entered;
(viii) any of the Related Premises shall have been vacated or
abandoned except as specifically permitted by the terms of Paragraph 36;
(ix) Tenant or Guarantor shall be liquidated or dissolved or
shall begin proceedings towards its liquidation or dissolution;
(x) the estate or interest of Tenant in any of the Related
Premises shall be levied upon or attached in any
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proceeding and such estate or interest is about to be sold or transferred or
such process shall not be vacated or discharged within ninety (94) days after it
is made;
(xi) a failure by Tenant to perform or observe, or a violation
or breach of, or a misrepresentation by Tenant under, any provision of any
Assignment or any other document executed by Tenant and Lender with respect to
this Lease or the Loan, if such failure, violation, breach or misrepresentation
gives rise to a default beyond any applicable cure period with respect to any
Loan, giving the Lender the right to accelerate the Loan and such default has
not been cured;
(xii) a failure by Tenant to maintain in effect any license or
permit necessary for the use, occupancy or operation of any of the Related
Premises;
(xiii) A Non-Preapproved Assignment shall occur and Tenant shall
have failed to comply with the provisions of Paragraph 21(a)(iii) through (v);
(xiv) an Event of Default (as defined in the Construction Agency
Agreement) beyond any applicable cure period shall occur under the Construction
Agency Agreement;
(xv) Tenant shall fail to commence to occupy and operate any
Related Premises by the forty-fifth (45th) day following the occupancy Date with
respect to such Related Premises;
(xvi) A default shall occur under Paragraph 35;
(xvii) Guarantor shall have failed to comply with or a breach
shall occur with respect to any of the representations, warranties or covenants
set forth in the Guaranty;
(xviii) Fully executed Silgan Subleases and a non-disturbance
and attornment reasonably satisfactory to Landlord shall not have been delivered
to Landlord by April 1, 1996; or
(xix) Tenant shall sell or transfer or enter into an agreement
to sell or transfer all or substantially all of its assets unless such sale
shall include an assignment of this Lease in compliance with Paragraph 21.
(b) No notice or cure period shall be required in any one or more of
the following events: (A) the occurrence of an Event of Default under clause
(iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv),
(xvi), or (xix) of Paragraph 22(a); (B) the default consists of a failure to
provide insurance with the types of coverage and in the amounts referred to in
clauses (i), (ii), (iv), (v) and (vi) of Paragraph 16(a) (but excluding a
default consisting of a failure to provide
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insurance which meets any of the other specific requirements in clauses (i),
(ii), (iv), (v) and (vi) of Paragraph 16(a)) or an assignment or sublease
entered into in violation of Paragraph 21; or (C) the default is such that any
delay in the exercise of a remedy by Landlord could reasonably be expected to
cause irreparable harm to Landlord. If the default consists of the failure to
pay any Monetary Obligation under clause (i) of Paragraph 22(a), the applicable
cure period shall be five (5) days from the date on which notice is given, but
Landlord shall not be obligated to give notice of, or allow any cure period for,
any such default more than one (1) time within any Lease Year. If the default
consists of a default under clause (ii) of Paragraph 22(a), other than the
events specified in clauses (B) and (C) of the first sentence of this Paragraph
22(b) the applicable cure period shall be twenty (20) days from the date on
which notice is given or, if the default cannot with reasonable diligence be
cured within such twenty (20) day period and delay in the exercise of a remedy
would not (in Landlord's reasonable judgment) cause any material adverse harm to
Landlord or any of the Leased Premises, the cure period shall be extended for
the period required to cure the default (but such cure period, including any
extension, shall not in the aggregate exceed ninety (90) days), provided that
Tenant shall commence to cure the default within the said twenty-day period and
shall actively, diligently and in good faith proceed with and continue the
curing of the default until it shall be fully cured. If the default consists of
a default under clause (ii) with respect to the failure to provide insurance
which meets all of the requirements in clauses (i), (ii), (iv), (v) and (vi) of
Paragraph 16(a), or clauses (iii), (xvii) or (xviii) of Paragraph 22(a), the
applicable cure period shall be twenty (20) days from the date on which notice
is given provided that the default or the granting of a cure period does not
directly or indirectly cause the Lender to declare Landlord in default of the
Loan.
23. Remedies and Damages Upon Default. If an Event of Default shall have
occurred and is continuing:
(a) Landlord shall have the right, at its sole option, then or at
any time thereafter, to exercise its remedies and to collect damages from Tenant
in accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's intention to
terminate this Lease on a date specified in such notice. Upon such date, this
Lease, the estate hereby granted and all rights of Tenant hereunder shall expire
and terminate. Upon such termination, Tenant shall immediately surrender and
deliver possession of the Leased Premises to Landlord in accordance with
Paragraph 26. If Tenant does not so surrender and deliver possession of all of
the Leased Premises, Landlord may re-enter and repossess any of the Leased
Premises
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not surrendered, with or without legal process, by peaceably entering any of the
Leased Premises and changing locks or by summary proceedings, ejectment or any
other lawful means or procedure. Upon or at any time after taking possession of
any of the Leased Premises and whether or not the Lease has been terminated,
Landlord may, by peaceable means or legal process, remove any Persons or
property therefrom. Landlord shall be under no liability for or by reason of any
such entry, repossession or removal. Notwithstanding such entry or repossession,
Landlord may (A) exercise the remedy set forth in and collect the damages
permitted by Paragraph 23(a)(iii) or (B) collect the damages set forth in
Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of any of the Leased Premises pursuant
to clause (i) above, Landlord shall have the right with or without terminating
this Lease and as agent of Tenant, if appropriate, to relet any of the Leased
Premises to such tenant or tenants, for such term or terms, for such rent, on
such conditions and for such uses as Landlord in its sole discretion may
determine, and collect and receive any rents payable by reason of such
reletting. Landlord may make such Alterations in connection with such reletting
as it may deem advisable in its sole discretion. Notwithstanding any such
reletting, Landlord may collect the damages set forth in Paragraph 23(b)(ii).
(iii) Landlord may, upon notice to Tenant, require Tenant to
make an irrevocable offer to terminate this Lease in its entirety for an amount
(the "Default Termination Amount") specified in the next sentence. The "Default
Termination Amount" shall be the greater of (A) the Fair Market Value of the
Leased Premises or (B) the sum of the Project Cost and Prepayment Premium which
Landlord will be required to pay in prepaying any Loan with proceeds of the
Default Termination Amount. Upon such notice to Tenant, Tenant shall be deemed
to have made such offer and shall, if requested by Landlord, within ten (10)
days following such request, deposit with Landlord as payment against the
Default Termination Amount the amount described in (B) above, Landlord and
Tenant shall promptly commence to determine Fair Market Value. Within thirty
(30) days after the Fair Market Value Date, Landlord shall accept or reject such
offer. If Landlord accepts such offer then, on the tenth (10th) business day
after such acceptance, Tenant shall pay to Landlord the Default Termination
Amount and, at the request of Tenant, Landlord will convey the Leased Premises
to Tenant or its designee "as is," with all faults and without warranty in
accordance with Paragraph 20. Any rejection by Landlord of such offer shall have
no effect on any other remedy Landlord may have under this Lease.
(iv) Landlord may declare by notice to Tenant the entire Basic
Rent (in the amount of Basic Rent then in effect) for the remainder of the then
current Term to be
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immediately due and payable. Tenant shall immediately pay to Landlord all such
Basic Rent discounted to its Present Value, all accrued Rent then due and
unpaid, all other Monetary Obligations which are then due and unpaid and all
Monetary Obligations which arise or become due by reason of such Event of
Default (including any Costs of Landlord). Upon receipt by Landlord of all such
accelerated Basic Rent and Monetary obligations, this Lease shall remain in full
force and effect and Tenant shall have the right to possession of the Leased
Premises from the date of such receipt by Landlord to the end of the Term, and
subject to all the provisions of this Lease, including the obligation to pay all
increases in Basic Rent and all Monetary Obligations that subsequently become
due, except that (A) no Basic Rent which has been prepaid hereunder shall be due
thereafter during the said Term and (B) Tenant shall have no option to extend or
renew the Term.
(b) The following constitute damages to which Landlord shall be
entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph 23(a)(i)
but not its remedy under Paragraph 23(a)(ii) (or attempts to exercise such
remedy and is unsuccessful in reletting the Leased Premises) then, upon written
demand from Landlord, Tenant shall pay to Landlord, as liquidated and agreed
final damages for Tenant's default and in lieu of all current damages beyond the
date of such demand (it being agreed that it would be impracticable or extremely
difficult to fix the actual damages), an amount equal to the Present Value of
the excess, if any, of (A) all Basic Rent from the date of such demand to the
date on which the Term is scheduled to expire hereunder in the absence of any
earlier termination, re-entry or repossession over (B) the then fair market
rental value of the Leased Premises for the same period. Tenant shall also pay
to Landlord all of Landlord's Costs in connection with the repossession of the
Leased Premises and any attempted reletting thereof, including all brokerage
commissions, legal expenses attorneys' fees, employees' expenses, costs of
Alterations and expenses and preparation for reletting.
(ii) If Landlord exercises its remedy under Paragraph 23(a)(i)
or its remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant shall, until
the end of what would have been the Term in the absence of the termination of
the Lease, and whether or not any of the Leased Premises shall have been relet,
be liable to Landlord for, and shall pay to Landlord, as liquidated and agreed
current damages on the date on which the same are due and payable under the
terms of this Lease all Monetary Obligations which would be payable under this
Lease by Tenant in the absence of such termination less the net proceeds, if
any, of any reletting pursuant to Paragraph 23(a)(ii), after deducting from such
proceeds all of Landlord's Costs (including the items listed in the last
sentence of Paragraph 23(b)(i)
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hereof) incurred in connection with such repossessing and reletting; provided,
that if Landlord has not relet the Leased Premises, such Costs of Landlord shall
be considered to be Monetary Obligations payable by Tenant. Tenant shall be and
remain liable for all sums aforesaid, and Landlord may recover such damages from
Tenant and institute and maintain successive actions or legal proceedings
against Tenant for the recovery of such damages. Nothing herein contained shall
be deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when the Term would have expired by its own terms had
there been no such Event of Default.
(c) Landlord shall be entitled to apply the Security Deposit to any
amounts due under Paragraph 23(a) if this Lease shall be terminated, or, if this
Lease shall remain in full force and effect, to any amounts due under Paragraph
23(b) or in the following order (i) to past due Basic Rent, (ii) to cure any
other monetary Event of Default and (iii) to installments of Basic Rent in
inverse order of maturity commencing with the last installment of the Term.
(d) Notwithstanding anything to the contrary herein contained, in
lieu of or in addition to any of the foregoing remedies and damages, Landlord
may exercise any remedies and collect any damages available to it at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder or
at law or in equity.
(e) Notwithstanding anything to the contrary herein contained, if
the Event of Default is solely an Event of Default under Paragraph 22(a)(iv)
hereof, and such Event of Default ceases to exist prior to the date that
Landlord commences a judicial action to exercise a remedy hereunder, then
Landlord shall discontinue the exercise of remedies under this Paragraph 23(b)
with respect to such Event of Default but not with respect to any other Event of
Default.
(f) Landlord shall not be required to mitigate any of its damages
hereunder unless required to by applicable Law. If any Law shall validly limit
the amount of any damages provided for herein to an amount which is less than
the amount agreed to herein, Landlord shall be entitled to the maximum amount
available under such Law.
(g) No termination of this Lease, repossession or reletting of any
of the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(h) WITH RESPECT TO ANY REMEDY OR PROCEEDING HEREUNDER, LANDLORD AND
TENANT WAIVE ANY RIGHT TO A TRIAL BY JURY.
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(i) During the existence of any Event of Default, Landlord shall
have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose.
(j) No failure of Landlord (i) to insist at any time upon the strict
performance of any provision of this Lease or (ii) to exercise any option,
right, power or remedy contained in this Lease shall be construed as a waiver,
modification or relinquishment thereof. A receipt by Landlord of any sum in
satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(k) Tenant hereby waives and surrenders, for itself and all those
claiming under it, including creditors of all kinds, (i) any right and privilege
which it or any of them may have under any present or future Law to redeem any
of the Leased Premises or to have a continuance of this Lease after termination
of this Lease or of Tenant's right of occupancy or possession pursuant to any
court order or any provision hereof, and (ii) the benefits of any present or
future Law which exempts property from liability for debt or for distress for
rent.
(1) Except as otherwise provided herein, all remedies are cumulative
and concurrent and no remedy is exclusive of any other remedy. Each remedy may
be exercised at any time an Event of Default has occurred and is continuing and
may be exercised from time to time. No remedy shall be exhausted by any exercise
thereof.
24. Notices. All notices, demands, requests, consents, approvals, offers,
statements and other instruments or communications required or permitted to be
given pursuant to the provisions of this Lease shall be in writing and shall be
deemed to have been given for all purposes when delivered in person or by
Federal Express or other reliable 24-hour delivery service or facsimile followed
by Federal Express or other reliable delivery service or by five (5) business
days after being deposited in the United States mail, by registered or certified
mail, return receipt requested, postage prepaid, addressed to the other party at
its address stated above. A copy of any notice given by Tenant to Landlord shall
simultaneously be given by Tenant to Xxxx Xxxxx Xxxx & XxXxxx, 0000 Xxx Xxxxxxx
Xxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Chairman, Real Estate Department. For
the purposes of this Paragraph, any party may substitute another address stated
above (or substituted by a previous notice) for its address by giving fifteen
(15) days' notice of the new address to the other party, in the manner provided
above.
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25. Estoppel Certificate. At any time upon not less than ten (10) days'
prior written request by Landlord Lender, or Tenant (the "Requesting Party") to
Landlord or Tenant (the "Responding Party"), the Responding Party shall deliver
to the Requesting Party or its designee a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by an court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchase or mortgagee of any of
the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation.
26. Surrender. Upon the expiration or earlier termination of this Lease,
Tenant shall peaceably leave and surrender the Leased Premises to Landlord in
the same condition in which the Leased Premises was at the commencement of this
Lease, except as repaired, rebuilt, restored, altered, replaced or added to as
permitted or required by any provision of this Lease, and except for ordinary
wear and tear. Upon such surrender, Tenant shall (a) remove from the Leased
Premises all property which is owned by Tenant or third parties other than
Landlord and (b) repair any damage caused by such removal. Property not so
removed shall become the property of Landlord, and Landlord may thereafter cause
such property to be removed from the Leased Premises. The cost of removing and
disposing of such property and repairing any damage to any of the Leased
Premises caused by such removal shall be paid by Tenant to Landlord upon demand.
Landlord shall not in any manner or to any extent be obligated to reimburse
Tenant for any such property which becomes the property of Landlord pursuant to
this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold estate
created by this Lease with the fee estate
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in any of the Leased Premises by reason of the fact that the same Person may
acquire or hold or own, directly or indirectly, (a) the leasehold estate created
hereby or any part thereof or interest therein and (b) the fee estate in any of
the Leased Premises or any part thereof or interest therein, unless and until
all Persons having any interest in the interests described in (a) and (b) above
which are sought to be merged shall join in a written instrument effecting such
merger and shall duly record the same.
28. Books and Records.
(a) Tenant shall keep or shall cause Guarantor to keep adequate
records with respect to the Leased Premises and books of account with respect to
the finances and business of Tenant generally and in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and shall permit
Landlord and Lender by their respective agents, accountants and attorneys, upon
reasonable notice to Tenant, to visit and inspect the Leased Premises and
examine (and make copies of) the records and books of account and to discuss the
finances and business with the officers of Tenant, at such reasonable times as
may be requested by Landlord. Upon the request of Lender or Landlord (either
telephonically or in writing), Tenant shall provide and shall cause Guarantor to
provide the requesting party with copies of any information to which such party
would be entitled in the course of a personal visit.
(b) Tenant shall deliver to Landlord and to Lender within
ninety-five (95) days of the close of each fiscal year, annual audited financial
statements of Tenant or Guarantor prepared by nationally recognized independent
certified public accountants. Tenant shall also furnish to Landlord (i) within
fifty (50) days after the end of each of the three remaining quarters unaudited
financial statements, certified by Tenant's chief financial officer or a
financial vice president together with a copy of any compliance certificate
furnished by Tenant to its senior lender or lenders, (ii) as and when provided
to Tenant's senior lender or lenders (A) Tenant's annual operating plan and (B)
until the funding of the Initial Loan, Tenant's monthly management reporting
package and (iii) all filings, if any, of Form 10-K, Form 10-Q and other
required filings with the Securities and Exchange Commission pursuant to the
provisions of the Securities Exchange Act of 1934, as amended, or any other Law.
All financial statements of Tenant shall be prepared in accordance with GAAP
consistently applied, except that quarterly statements shall be subject to
year-end adjustments and to the absence of footnotes. All annual financial
statements shall be accompanied by an opinion of said accountants stating that
(C) there are no qualifications as to the scope of the audit and (D) the audit
was performed in accordance with GAAP, and the certificate of the chief
financial officer or a financial vice president of Tenant, dated within five (5)
days of the delivery
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of such statement, stating that (E) such Person knows of no Event of Default, or
event which, upon notice or the passage of time or both, would become an Event
of Default which has occurred and is continuing hereunder or, if any such event
has occurred and is continuing, specifying the nature and period of existence
thereof and what action Tenant has taken or proposes to take with respect
thereto and (F) except as otherwise specified in such affidavit, that such
Person has no knowledge if any respect in which Tenant has not fulfilled all of
its obligations under this Lease which are required to be fulfilled on or prior
to the date of such affidavit.
(c) Landlord and its agents, accountants and attorneys, shall
consider and treat on a strictly confidential basis (i) any information
contained in the books and records of Tenant, (ii) any copies of any books and
records of Tenant, and any financial statements of Tenant pursuant to Paragraph
28(b) which are delivered to or received by them. Neither Landlord nor its
agents, accountants and attorneys, shall disclose any information contained in
Tenant's books and records nor distribute copies of any of such books and
records nor Tenant's financial statements to any other Persons without the prior
written consent of the chief operating officer or the financial vice president
of Tenant.
The restrictions contained in this Paragraph 28(c) shall not prevent
disclosure by Landlord any information that is generally available to the public
or in any of the following circumstances:
(i) Upon the order of any court or administrative agency to
the extent required by such order and not effectively stayed or by appeal or
otherwise;
(ii) Upon the request, demand or requirement of the Securities
and Exchange Commission (the "SEC") or otherwise upon the request, demand or
requirement of any other regulatory agent or authority having jurisdiction over
such party, but subject to the consent of Tenant, which shall not be
unreasonably withheld and shall be deemed given if required by law;
(iii) That has been publicly disclosed by Tenant in a press
release or other public announcement of general circulation;
(iv) To counsel or accountants for Landlord who has agreed to
abide by the provisions of this Paragraph 28(c);
(v) While an Event of Default exists, in connection with the
exercise of any right or remedy under this Lease or any other related document;
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(vi) Independently developed by Landlord to the extent that
confidential information provided by Tenant is not used to develop such
information;
(vii) With respect to financial information and information
that Landlord, the SEC or its attorneys deem to be material, in any reporting to
the shareholders of Landlord or the shareholders or prospective shareholders
(whether through a registered public offering or otherwise) of Landlord's parent
company;
(viii) In connection with any sale, financing or refinancing
of the Leased Premises, provided that any recipient of such information shall
agree to be bound by the terms of this Paragraph 28(c);
(ix) From Landlord to Lender; or
(x) As otherwise required by Law.
29. Determination of Value.
(a) Whenever a determination of Fair Market Value is required
pursuant to any provision of this Lease, such Fair Market Value shall be
determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon such Fair
Market Value within thirty (30) days after the date (the "Applicable Initial
Date") on which (A) Tenant provides Landlord with notice of its intention to
terminate this Lease and purchase the Affected Premises pursuant to Paragraph
18, (B) Landlord provides Tenant with notice of its intention to redetermine
Fair Market Value pursuant to Paragraph 20(c), (C) Tenant provides Landlord with
an Intended Assignment Notice pursuant to Paragraph 21(a)(iii), (D) Landlord
provides Tenant with notice of Landlord's intention to require Tenant to make an
offer to purchase the Leased Premises pursuant to Paragraph 23(a)(iii), or (E)
Tenant provides Landlord with notice pursuant to Paragraph 38(a) of its
intention to exercise its option to purchase the Leased Premises. Upon reaching
such agreement, the parties shall execute an agreement setting forth the amount
of such Fair Market Value.
(ii) If the parties shall not have signed such agreement
within thirty (30) days after the Applicable Initial Date, Tenant shall within
fifty (50) days after the Applicable Initial Date select an appraiser and notify
Landlord in writing of the name, address and qualifications of such appraiser.
Within twenty (20) days following Landlord's receipt of Tenant's notice of the
appraiser selected by Tenant, Landlord shall select an appraiser and notify
Tenant of the name, address and qualifications of such appraiser. Such two
appraisers shall endeavor to agree upon Fair Market Value based on a written
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appraisal made by each of them as of the Relevant Date (and given to Landlord by
Tenant). If such two appraisers shall agree upon a Fair Market Value, the amount
of such Fair Market Value as so agreed shall be binding and conclusive.
(iii) If such two appraisers shall be unable to agree upon a
Fair Market Value within twenty (20) days after the selection of an appraiser by
Landlord, then such appraisers shall advise Landlord and Tenant of their
respective determination of Fair Market Value and shall select a third appraiser
to make the determination of Fair Market Value. The selection of the third
appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree upon the
designation of a third appraiser within ten (10) days after the expiration of
the twenty (20) day period referred to in clause (iii) above, or if such third
appraiser does not make a determination of Fair Market Value within twenty (20)
days after his selection, then such third appraiser or a substituted third
appraiser, as applicable, shall, at the request of either party hereto (with
respect to the other party), be appointed by the President or Chairman of the
American Arbitration Association in New York, New York. The determination of
Fair Market Value made by the third appraiser appointed pursuant hereto shall be
made within twenty (20) days after such appointment.
(v) If a third appraiser is selected, Fair Market Value shall
be the average of the determination of Fair Market Value made by the third
appraiser and the determination of Fair Market Value made by the appraiser
(selected pursuant to Paragraph 29(a)(ii) hereof) whose determination of Fair
Market Value is nearest to that of the third appraiser. Such average shall be
binding and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to this
Paragraph 29(a) shall (A) be independent qualified MAI appraisers (B) have no
right, power or authority to alter or modify the provisions of this Lease, (C)
utilize the definition of Fair Market Value hereinabove set forth above, and (D)
be registered in the State if the State provides for or requires such
registration.
(vii) The Cost of the procedure described in this Paragraph
29(a) above shall be borne entirely by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not determined
by the expiration or termination of the then current Term, then the date on
which the Term would otherwise expire or terminate shall be extended with
respect to the Leased Premises or the Affected Premises, as applicable, to the
date specified for termination in the particular provision of this
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Lease pursuant to which the determination of Fair Market Value is being made.
(c) "Fair Market Value" of the Leased Premises or any Related
Premises, as the case may be, and the context may require, shall mean (i) for
all purposes except for the determination of the Default Termination Amount, the
fair market value of the Leased Premises or Related Premises, as the case may be
as of the Relevant Date as affected and encumbered by this Lease, without any
assumption that the Term will or will not be extended for any of the extension
periods provided for herein, or (ii) for the purpose of a determination of the
Default Termination Amount, the fair market value of the Leased Premises as of
the Relevant Date as affected and encumbered by this Lease and assuming that the
Term has been extended for all extension periods provided for herein. For
purposes of determining Fair Market Value under clause (i) of the foregoing
sentence, the appraisers shall:
(I) determine the Basic Rent payable hereunder during the remainder
of the Initial Term or then effective Renewal Term, assuming that CPI
increases during the remainder of the Initial Term will occur at the same
average rate of increase as during the portion of the Term already then
past; and then
(II) discount such Basic Rent so as to represent a present value,
using a discount rate intended to represent the market capitalization rate
applicable to long-term lease obligations of the Tenant (based on the
credit standing of the Tenant), as affected by the location (or locations)
of the Related Premises; and then
(III) determine the assumed future replacement cost of the
Improvements at the end of the Initial Term, using Landlord's Share of
Project Costs and assuming increases therein using the Means Construction
Cost Index (the "Means Index") for the portion of the Term already past
and increases in the Means Index which occur at the same average rate of
increase thereafter until the end of the Term; and then
(IV) subtract from such assumed future replacement cost physical
depreciation and functional obsolescence (but not external obsolescence)
applicable to the Improvements as of the end of the Term; and then
(V) discount the result obtained under the foregoing clause (IV) so
as to represent a present value, using a discount rate based on the market
capitalization rate for properties similar to the Related Premises in the
location or respective locations of the Related Premises; and then
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(VI) add together the present values determined under the foregoing
clause (II) and (V).
30. Non-Recourse as to Landlord. Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Lease shall be enforced only against the Leased Premises and not
against any other assets, properties or funds of (a) Landlord, (b) any director,
officer, general partner, limited partner, employee or agent of Landlord, or any
general partner of Landlord, any of its general partners or shareholders (or any
legal representative, heir, estate, successor or assign of any thereof), (c) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, or any of its general partners, either directly or through Landlord or
its general partners or any predecessor or successor partnership or corporation
or their shareholders, officers, directors, employees or agents (or other
entity), or (d) any other Person (including Xxxxx Property Advisors, Xxxxx
Fiduciary Advisors, Inc., W.P. Xxxxx & Co., Inc., W.P. Xxxxx Incorporated and
any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof).
31. Financing. If Landlord desires to obtain or refinance any Loan,
Tenant, except as otherwise provided in Paragraph 7(a)(i), shall, at no cost to
Tenant, negotiate in good faith with Landlord concerning any request made by any
Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant agrees, upon request of Landlord, to supply any such Lender
with such notices and information as Tenant is required to give to Landlord
hereunder and to extend the rights of Landlord hereunder to any such Lender and
to consent to such financing if such consent is requested by such Lender. Tenant
shall provide any other consent or statement and shall execute any and all other
documents that such Lender reasonably requires in connection with such
financing, including a Certificate of No Default with respect to its then
existing credit agreements, any environmental indemnity agreement which shall
contain substantially similar provisions to the applicable provisions in this
Lease and any subordination, non-disturbance and attornment agreement, so long
as in any such case the same do not materially adversely affect any right,
benefit or privilege of Tenant under this Lease or materially increase Tenant's
obligations under this Lease. Such subordination, nondisturbance and attornment
agreement may require Tenant to confirm that (a) Lender and its assigns will not
be liable for any misrepresentation, act or omission of Landlord and (b) Lender
and its assigns will not be subject to any counterclaim, demand or offsets which
Tenant may have against Landlord.
32. Subordination. This Lease and Tenant's interest hereunder shall
be subordinate to any Mortgage or other security instrument hereafter placed
upon the Leased Premises by Landlord, and to any and all advances made or to be
made
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thereunder, to the interest thereon, and all renewals, replacements and
extensions thereof, provided that any such Mortgage or other security instrument
(or a separate instrument in recordable form duly executed by the holder of any
such Mortgage or other security instrument and delivered to Tenant) shall
provide, in form and substance reasonably satisfactory to Tenant, for the
recognition of this Lease and all Tenant's rights hereunder by any purchaser at
foreclosure or acceptance of a deed in lieu thereof unless and until an Event of
Default exists, that the Lender recognizes and agrees to be bound by the
provisions of Paragraphs 16, 17 and 19 of this Lease, and, with respect to any
Loan after the Initial Loan, that the Lender agrees to release the Mortgage
insofar as it encumbers Abandonment Premises under Paragraph 36 hereof upon such
terms and conditions as may be agreed to between Lender and Landlord, but which
shall not require a payment to Lender in excess of the Abandonment Offer Amount
or otherwise impose conditions upon such release not within the control of
Landlord.
33. Tax Treatment; Reporting. Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and
shall report this transaction as a Lease for Federal income tax purposes. For
Federal income tax purposes each shall report this Lease as a true lease with
Landlord as the owner of the Leased Premises and Equipment and Tenant as the
lessee of such Leased Premises and Equipment including: (1) treating Landlord as
the owner of the property eligible to claim depreciation deductions under
Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as business expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
34. Financing Major Alterations.
(a) Should Tenant, during the Term of this Lease, desire to make
Alterations to any of the Leased Premises which are not readily removable
without causing material damage to the Leased Premises and which will cost in
excess of $500,000 as to any one of the Related Premises or $500,000 in the
aggregate as to the Leased Premises ("Major Alterations"), Tenant shall, prior
to the commencement of construction of such Major Alterations, offer by written
notice to Landlord (a "Payment Offer") to accept payment from Landlord for the
costs (the "Alteration Cost") thereof, to wit: cost of labor and materials,
financing fees, legal fees, survey, title insurance and other normal and
customary loan or construction costs.
(b) Should Landlord accept Tenant's offer, which acceptance shall be
made in writing within sixty (60) days after receipt by Landlord of such offer,
Landlord and Tenant shall enter into good faith negotiations regarding the
execution and
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delivery of a written agreement of modification of this Lease, which agreement
shall provide for the following:
(i) payment by Landlord to Tenant of the Alteration Cost
within one hundred twenty (120) days of the date of Landlord's acceptance of
such Payment Offer, or in installment payments as agreed, or on the date of
completion of the Major Alterations, whichever shall be the later;
(ii) an increase in the annual Basic Rent payable during the
Amortization Period (as hereinafter defined) to an amount sufficient to amortize
the Alteration Cost ("Total Financing") over a period (the "Amortization
Period") which shall be the remainder of the then current Term and, if Tenant so
elects, any additional extension periods provided for herein (so long as Tenant
shall confirm any such extension periods included in the Amortization Period by
a written waiver of its right to give notice of its intention not to renew this
Lease prior to the expiration of such extension periods), at such rate of
interest and upon such other terms as shall be agreed upon between Landlord and
Tenant, but which shall be no less favorable than the prevailing interest rate
and terms for unsecured loans in a principal amount equal to the Total Financing
for borrowers with credit ratings equivalent to that of Tenant's at that time;
(iii) provide a rate of return to Landlord on Landlord's
equity investment in the Leased Premises equal to that enjoyed by Landlord
hereunder immediately prior to such proposed increase in Basic Rent; and
(iv) such other changes and amendments to this Lease as may be
necessary and appropriate in view of such payment of the Alteration Cost by
Landlord to Tenant.
Tenant shall pay all Costs incurred by Landlord in connection with any such
modification to this Lease and such financing, including closing costs,
brokerage fees, taxes, recording charges and legal fees and expenses.
(c) To the extent that the terms of the Mortgage or any other
document encumbering any of the Leased Premises shall require the consent of
Lender and/or the holder or holders of any encumbrance on any of the Leased
Premises (the "Encumbrancers") to the addition or construction of any Major
Alterations or to the financing thereof by Landlord, the rights and obligations
of Landlord and Tenant under Paragraph 12 and this Paragraph 35 are expressly
conditioned upon Tenant's obtaining, prior to the commencement of any
construction, the Encumbrancers' written consent to such construction and to
Landlords obtaining, in the event Landlord has accepted Tenant's offer to accept
payment for the Major Alterations, the Encumbrancers' written consent to such
financing.
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(d) Should Tenant's offer to accept payment for the Major
Alterations not be accepted by Landlord within said sixty (60) day period, or
should Landlord and Tenant be unable in good faith to agree upon the terms of
the modification of this Lease, Tenant shall, subject to the provisions of
Paragraph 13 of this Lease, have the right to construct the Major Alterations at
Tenant's sole cost and expense. In any event, the construction of the Major
Alterations shall be performed in accordance with the provisions of Paragraph 12
hereof and the Major Alterations shall be the property of Landlord and part of
the Leased Premises subject to this Lease.
(e) Nothing contained in this Paragraph 34 shall be construed to
modify Paragraph 13 hereof, and the provisions of Paragraph 12 and Paragraph 13
shall apply to all Major Alterations made or constructed hereunder provided,
however, that Landlord's consent shall be required for all Major Alterations.
35. Security Deposit.
(a) Concurrently with the execution of this Lease, Tenant shall
deliver to Landlord an irrevocable Letter of Credit (the "Letter of Credit") in
the original face amount of one Million Three Hundred Thousand and No/100
Dollars ($1,300,000) (as increased pursuant to the following sentence, the
"Security Deposit") issued by Bank of America or another bank selected y Tenant
and reasonably acceptable to Landlord and in form and substance satisfactory to
Landlord. The Security Deposit shall be increased to $2,600,000 on January 1,
1996, to $3,900,000 on April 1, 1996, and on the later of July 1, 1996 or the
Yakima Funding Deadline the Security Deposit shall be in the amount of and shall
be maintained at an amount equal to two times the annual Basic Rent for the
first year of the Initial Term, and on the earlier of the closing of the Initial
Loan or the date the Tenant has performed or is prepared to perform its
obligations under Article VI of the Construction Agency Agreement in order to
close the Initial Loan and provided that at such time the Initial Loan
Application has not been terminated by reason of any act by or circumstance
relating to Tenant or Guarantor, the amount of the Security Deposit shall be
reduced so as to be equal to the annual Basic Rent for the first year of the
Initial Term, and in each such instance the Letter of Credit shall be reissued
or amended accordingly. The Letter of Credit shall remain in full force and
effect until satisfaction of one of the conditions set forth in the following
subparagraph (b) provided, however, that all or any portion of the Security
Deposit may be in cash (U.S. dollars) ("Cash Security"), in which event the
required amount of the Letter of Credit shall be reduced by the amount of the
Cash Security. The Cash Security shall not be commingled with other funds of
Landlord or other Persons and interest shall accrue thereon for the benefit of
Tenant from the date the Cash Security is withdrawn and applied or released in
accordance with the terms
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of this Lease. The Security Deposit shall be security for the payment by Tenant
of the Rent and all other charges or payments to be paid hereunder and the
performance of the covenants and obligations contained herein and during the
existence of an Event of Default may be applied as provided in Paragraph 23(c)
hereof. The Letter of Credit shall be renewed at least thirty (30) days prior to
any expiration thereof, unless Cash Security is substituted therefor. If Tenant
fails to renew the Letter of Credit by such date, time being of the essence,
Landlord shall have the right at any time after the thirtieth (30th) day before
such expiration date to draw on the Letter of Credit and to deposit the Security
Deposit in any account for the benefit of Landlord or to declare an Event of
Default. If at any time Rent is not paid as and when due, Landlord shall have
the right to draw on the Letter of Credit or withdraw Cash Security to make such
payment, and within twenty-four (24) hours of such draw or withdrawal Tenant
shall replenish the Security Deposit.
(b) On the earliest to occur of any of the following conditions and
provided that an Event of Default does not then exist, the Letter of Credit or
Cash Security and interest earned thereon, as the case may be, shall be released
to Tenant and thereafter no Security Deposit shall be required:
(i) If Tenant or Guarantor has received with respect to its
senior unsecured debt a credit rating of Baa from Xxxxx'x Investors Services,
Inc. or a credit rating of BBB from Standard and Poor's Corporation; or
(ii) If at any time after the first day of the fifth year of
the Initial Term (but in no event earlier than November 30, 2000) the
Consolidated Fixed Charge Coverage Ratio of Guarantor and its Consolidated
Subsidiaries is not less than 2:1 and the Indebtedness to EBITDA Ratio of
Guarantor and its Consolidated Subsidiaries is not greater than 4:1 as of the
last day of the most recently completed four (4) fiscal quarters of Guarantor;
or
(iii) The Initial Term shall have expired on the Expiration
Date.
(c) For the purpose of this Paragraph 35, the following terms shall
have the following meanings:
"Consolidated Fixed Charge Coverage Ratio" shall mean the ratio of EBITDA
to Consolidated Interest Expense.
"Consolidated Interest Expense" shall mean the total interest expense of
Guarantor and its Consolidated Subsidiaries, determined in accordance with GAAP.
"Consolidated Net Income" means the aggregate of the net income (or loss)
of Guarantor and its Consolidated Subsidiaries, determined in accordance with
GAAP.
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"Consolidated Subsidiaries" means, at any particular time, Tenant and
those other subsidiaries of Guarantor whose accounts either (i) are consolidated
with those of Guarantor or (ii) should be consolidated with those of Guarantor
in accordance with GAAP.
"EBITDA" means (i) Consolidated Net Income (excluding items considered
extraordinary items under GAAP), plus (ii) all Consolidated Interest Expense,
income tax expense, depreciation and amortization (including amortization of any
goodwill or other intangibles), minus (iii) gains (plus losses) attributable to
any asset sales otherwise included in clause (j) above and plus (iv) any other
non-cash charges which have been subtracted in calculating Consolidated Net
Income.
"Fiscal quarter of Guarantor" means each of the four quarter periods
within the fiscal year of Guarantor and its Consolidated Subsidiaries which
commences on July 1st.
"GAAP" means generally accepted accounting principles in effect from time
to time.
"Indebtedness" means at any date, without duplication, (a) any liability
to the extent it would appear as a liability upon obligor's balance sheet
prepared on a consolidated basis in accordance with GAAP, (i) for borrowed money
evidenced by a bond, note, debenture or similar instrument (other than a letter
of credit or a trade payable or a current liability arising in the ordinary
course of business) and (ii) for the monetary obligation regarding a lease of
property that, in accordance with GAAP, should be reflected as a capital lease
on obligor's balance sheet and (b) any liability of others that obligor has
guaranteed or that is otherwise its legal liability, except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the normal course of business and except guaranties of
obligations of any subsidiary of Guarantor.
(d) Landlord shall have the right to designate Lender or any other
holder of a Mortgage as the beneficiary of the Letter of Credit (or as the
holder of the Cash Security Account) during the term of the applicable Loan and,
upon such designation, such designated Lender shall have all of the rights and
obligations of Landlord under this Paragraph 35. Tenant covenants and agrees to
execute such agreements, consents and acknowledgments as may be requested by
Landlord from time to time to change the beneficiary of the Letter of Credit (or
the holder of Cash Security Account) as hereinabove provided.
36. Economic Abandonment. Provided that an Event of Default does not
exist, Tenant shall have the right at any time after the fifth (5th) year of the
Initial Term (but, in no event earlier than November 30, 2000) to terminate this
Lease with respect to one of the Related Premises (such Related Premises,
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an "Abandonment Premises") that Tenant shall have determined that the
Abandonment Premises shall not be used for at least seven (7) years in its
business operations. In the event Tenant elects to exercise such right, Tenant
shall give notice (the "Abandonment Notice") to Landlord (with a copy to Lender)
of its intention so to terminate this Lease as to the Abandonment Premises, no
later than nine (9) months prior to the date (the "Abandonment Date") of such
intended termination, which notice shall specify the Abandonment Date and shall
contain (a) an irrevocable offer of Tenant to terminate this Lease as to the
Abandonment Premises on the Abandonment Date for the Abandonment Offer Amount
and (b) a certificate of Tenant (i) stating that the Abandonment Premises are no
longer economic for Tenant's continued use and occupancy in its business
operations, (ii) specifying in reasonable detail the reasons therefor and (iii)
certifying that Tenant then intends forever to abandon its operations at the
Abandonment Premises, which certificate shall be conclusively binding upon
Landlord and Tenant, and (c) a resolution of the Board of Directors of Tenant
authorizing such notice.
Tenant may exercise its rights under this Paragraph 36 only one time and
only with respect to one of the Related Premises.
The Abandonment Offer Amount shall be the sum of (A) (i) 110% of (ii)
Landlord's Share of Project Costs with respect to the Abandonment Premises,
reduced by the portion of the Acquisition Fee allocated to the Abandonment
Premises according to the percentages specified in Exhibit "F" attached hereto
and made a part hereof, and (B) any Prepayment Premium which Landlord will be
required to pay in prepayment of any Loan with proceeds of the Abandonment Offer
Amount. Promptly upon the delivery of such notice from Tenant to Landlord,
Landlord and Tenant shall commence to determine such Fair Market Value in
accordance with the procedure specified in Paragraph 29.
Landlord shall accept or reject such offer by notice to Tenant given not
later than ninety (90) days prior to the Abandonment Date. If Landlord shall
reject such offer, which rejection shall not be valid unless accompanied by the
written consent of Lender thereto, then upon (i) payment of all Rent and any
other sums due and unpaid hereunder as of the Abandonment Date and (ii)
compliance by Tenant with all other obligations and liabilities under this Lease
which have arisen on or prior to the Abandonment Date, this Lease shall
terminate as to the Abandonment Premises on the Abandonment Date and Tenant
shall immediately vacate and have no further right, title or interest in or to
any of the Abandonment Premises.
After the Abandonment Date, whether or not Landlord shall have accepted or
rejected Tenant's offer, the terms of this Lease will remain in full force and
effect with respect to the remaining Related Premises except that the Basic Rent
will be that percentage of the then Basic Rent which is allocated to the
remaining Related Premises as set forth on Exhibit "F" attached hereto and made
a part hereof.
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Unless Landlord shall have rejected such offer by the foregoing notice to
Tenant not later than the ninetieth (90th) day prior to the Abandonment Date,
Landlord shall be conclusively presumed to have accepted such offer. If such
offer is accepted by Landlord, Tenant shall pay to Landlord the Abandonment
Offer Amount on the Abandonment Date and, provided an Event of Default does not
then exist hereunder, at the request of Tenant, Landlord shall convey to Tenant
the Abandonment Premises in accordance with the provisions of Paragraph 20.
Landlord shall have the right, at Landlord's sole option, to treat any
vacating or abandonment of the Abandonment Premises which is prohibited pursuant
to Paragraph 22(a) hereof as constituting an election by Tenant of its rights
under this Paragraph 36 and as an irrevocable offer of Tenant to purchase the
Abandonment Premises at the price and upon the terms hereinabove more
specifically provided.
37. Option to Purchase.
(a) Landlord does hereby give and grant to Tenant the option to
purchase the entire Leased Premises (i) for a Purchase Price (the "Purchase
Price") equal to the Offer Amount and (ii) on any date (the "Option Purchase
Date") during the one year period that commences on the tenth (10th) anniversary
of the Initial Term Commencement Date (the "Option Period") which is mutually
agreeable to Landlord and Tenant, but in any event not sooner than thirty (30)
days after the Fair Market Value Date. If Tenant intends to exercise such
option, Tenant shall give written notice to Landlord to such effect not later
than six (6) months prior to the tenth (10th) Lease Year. Promptly upon receipt
of such notice by Landlord, the parties shall commence to determine Fair Market
Value.
(b) If Tenant shall exercise the foregoing option to purchase the
Leased Premises, on the later to occur of (i) the Option Purchase Date or (ii)
the date when Tenant has paid the Offer Amount and has satisfied all other
Monetary Obligations, Landlord shall convey the Leased Premises to Tenant in
accordance with Paragraph 20 hereof; provided, that if an Event of Default has
occurred and is continuing on the Option Purchase Date, Landlord, at its sole
option, may terminate Tenant's option to purchase hereunder. If this Lease shall
terminate for any reason prior to the date originally fixed herein for the
expiration of the Term, or if Tenant shall fail to give the aforesaid notice of
intention to purchase, time being of the essence, the option provided in this
Paragraph 38 and any exercise thereof by Tenant shall cease and terminate and
shall be null and void.
(c) Landlord shall use all reasonable efforts to obtain the
agreement of the Lender that the Loan that shall encumber the Leased Premises
during the Option Period (the
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"Assumable Loan") may be assumed by the Tenant as partial payment of the Offer
Amount; provided that (i) Landlord shall have no obligation to make or to be
obligated to make any payment to Lender as a condition to requesting or
obtaining such consent and (ii) Tenant shall agree (A) to be personally liable
and, if requested by Lender, that Guarantor will be personally liable for
repayment and performance of the Assumable Loan and (B) that the Lease and
Guaranty shall remain in full force and effect during the term of the Assumable
Loan.
38. Right of First Refusal.
(a) Except as otherwise provided in Paragraph 38(e), and provided an
Event of Default does not then exist, if Landlord shall enter into a contract
(the "Sale Contract") for the sale of the Leased Premises with a Third Party
Purchaser, which Sale Contract shall be conditioned upon Tenant's failure to
exercise its right under this Paragraph 38(a), then promptly following the
execution thereof, Landlord shall give written notice to Tenant, together with a
copy of the executed Sale Contract.
For a period of fifteen (15) days following receipt of such
notice, Tenant shall have the right and option, exercisable by written notice to
Landlord given within said fifteen (15) day period, to elect to purchase the
Leased Premises at the purchase price and upon all the terms and conditions set
forth in the Sale Contract except that no contingencies contained in such Sale
Contract as to environmental assessments, engineering studies, inspection of the
Leased Premises, sale of other property, state of the title to or encumbrances
on the Leased Premises, or any other condition or contingency to the Third Party
Purchaser's obligation to purchase the Leased Premises which pertains to the
condition of the Leased Premises, shall apply to Tenant's obligation to purchase
the Leased Premises under this Paragraph 38, and Tenant shall be obligated to
purchase the Leased Premises without any such condition or contingency.
If at the expiration of the aforesaid fifteen (15) day period
Tenant shall have failed to exercise the aforesaid option, Landlord may sell the
Leased Premises to such Third Party Purchaser upon the terms set forth in such
contract.
(b) Except as otherwise specifically provided herein, the closing
date for any purchase of the Leased Premises by Tenant pursuant to this
Paragraph 38 shall be the earlier to occur of (i) ninety (90) days after the
date of Tenant's notice to Landlord of its intention to purchase the Leased
Premises upon the terms of the Sale Contract or (ii) the closing date provided
in such Sale Contract. At such closing Landlord shall convey the Leased Premises
to Tenant in accordance with, and Tenant shall pay to Landlord the purchase
price and other consideration set forth in, the applicable Sale Contract.
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(c) Tenant shall have the right to exercise the foregoing right of
first refusal upon (i) each proposed sale of the Leased Premises prior to the
tenth (10th) anniversary of the Initial Term Commencement Date and (ii)
notwithstanding the lack of exercise by Tenant in (i) above, one (1) time after
the tenth (10th) anniversary of the Initial Term Commencement Date; provided,
that if, following compliance with the procedure described in Paragraph 38(a), a
Third Party Purchaser does not purchase the Leased Premises, such event shall
not count as an exercise of Tenant's right of first refusal. Notwithstanding
anything to the contrary, if Tenant fails to exercise the right of first refusal
granted pursuant to this Paragraph (c), subsection (ii), after the first day of
the tenth (10th) anniversary of the Initial Term Commencement Date and the sale
to the Third Party Purchaser is consummated, or if the Term of this Lease shall
terminate or expire, such rights of first refusal granted pursuant to this
Paragraph 38 shall terminate and be null and void and of no further force and
effect.
(d) If Tenant does not exercise its right of first refusal to
purchase the Leased Premises and the Leased Premises are transferred to a Third
Party Purchaser, Tenant will attorn to any Third Party Purchaser as Landlord so
long as such Third Party Purchaser and Landlord notify Tenant in writing of such
transfer. At the request of Landlord and at not cost or expense to Tenant,
Tenant will execute such documents confirming the agreement referred to above
and such other agreements as Landlord may reasonably request, provided that such
agreements do not increase the liabilities and obligations of Tenant hereunder.
(e) The provisions of Paragraph 38 shall not apply to or prohibit
(i) any mortgaging, subjection to deed of trust or other hypothecation of
Landlord's interest in the Leased Premises, (ii) any sale of the Leased Premises
pursuant to a private power of sale under or judicial foreclosure of any
Mortgage or other security instrument or device to which Landlord's interest in
the Leased Premises is now or hereafter subject, (iii) any transfer of
Landlord's interest in the Leased Premises to a Lender, beneficiary under deed
of trust or other holder of a security interest therein by deed in lieu of
foreclosure, (iv) any transfer of the Leased Premises to any governmental or
quasi-governmental agency with power of condemnation, (v) any transfer of the
Leased Premises to any affiliate of Landlord or to any entity sponsored by W.P.
Xxxxx & Co., Inc., W.P. Xxxxx Incorporated or either of their successors, (vi)
any transfer of the interest of one of the Persons that comprise Landlord to the
other Person that comprises Landlord, (vii) any sale to any Person to whom
either of the parents of the Landlord sells all or substantially all of its
assets, or (viii) any transfer of the Leased Premises to any of the successors
or assigns of any of the Persons referred to in the foregoing clauses (ii) and
(iii).
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39. Miscellaneous.
(a) The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
(b) As used in this Lease, the singular shall include the plural and
any gender shall include all genders as the context requires and the following
words and phrases shall have the following meanings: (i) "including" shall mean
"including without limitation"; (ii) "provisions" shall mean "provisions, terms,
agreements, covenants and/or conditions"; (iii) "lien" shall mean "lien, charge,
encumbrance, title retention agreement, pledge, security interest, mortgage
and/or deed of trust"; (iv) "obligation" shall mean "obligation, duty,
agreement, liability, covenant and/or condition"; (v) "any of the Leased
Premises" shall mean "the Leased Premises or any part thereof or interest
therein"; (vi) "any of the Land" shall mean "the Land or any part thereof or
interest therein"; (vii) "any of the Improvements" shall mean "the Improvements
or any part thereof or interest therein"; (viii) "any of the Equipment" shall
mean "the Equipment or any part thereof or interest therein"; and (ix) "any of
the Adjoining Property" shall mean "the Adjoining Property or any part thereof
or interest therein".
(c) Any act which Landlord is permitted to perform under this Lease
may be performed at any time and from time to time by Landlord or any person or
entity designated by Landlord. Each appointment of Landlord as attorney-in-fact
for Tenant hereunder is irrevocable and coupled with an interest. Except as
otherwise specifically provided herein, Landlord shall have the right, at its
sole option, to withhold or delay its consent whenever such consent is required
under this Lease for any reason or no reason. Time is of the essence with
respect to the performance by Tenant of its obligations under this Lease.
(d) Landlord shall in no event be construed for any purpose to be a
partner, joint venturer or associate of Tenant or of any subtenant, operator,
concessionaire or licensee of Tenant with respect to any of the Leased Premises
or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by Tenant on
or about the effective date hereof at Landlord's request constitute the entire
agreement between the parties and supersede all prior understandings and
agreements, whether written or oral, between the parties hereto relating to the
Leased Premises and the transactions provided for herein. Landlord and Tenant
are business entities having substantial experience with the subject matter of
this Lease and have each fully participated in the negotiation and drafting of
this Lease. Accordingly, this Lease shall be construed without
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regard to the rule and ambiguities in a document are to be construed against the
drafter.
(f) This Lease may be modified, amended, discharged or waived only
by an agreement in writing signed by the party against whom enforcement of any
such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land and bind
Tenant, its successors and assigns and all present and subsequent encumbrances
and subtenants of any of the Leased Premises, and shall inure to the benefit of
Landlord, its successors and assigns. If there is more than one Tenant, the
obligations of each shall be joint and several.
(h) Notwithstanding any provision in this Lease to the contrary, all
Surviving Obligations of Tenant shall survive the expiration or termination of
this Lease with respect to any Related Premises.
(i) If any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(j) All exhibits attached hereto are incorporated herein as if fully
set forth.
(k) This Lease shall be governed by and construed and enforced in
accordance with the Laws of the State.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed under seal as of the day and year first above written.
LANDLORD:
XXXXX (PA) QRS 11-36
By: /s/ XXXXXXX X. XXXXX III
-------------------------------------
Xxxxxxx X. Xxxxx III
A Trustee under a certain Trust
Agreement dated as of
October 11, 1995
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XXXXX (PA) QRS 12-10
By: /s/ XXXXXXX X. XXXXX III
-------------------------------------
Title:
----------------------------------
Xxxxxxx X. Xxxxx III
A Trustee under a certain Trust
Agreement dated as of
October 11, 1995
TENANT:
DEL MONTE CORPORATION,
a New York corporation
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxx
Senior Vice President
and
Treasurer
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