Exhibit 10.8
AGREEMENT OF LEASE
BY AND BETWEEN
CATSKILL DEVELOPMENT, L.L.C., AS LANDLORD
AND
MONTICELLO RACEWAY MANAGEMENT, INC., AS TENANT
FOR LEASED PREMISES LOCATED AT:
THE MONTICELLO RACEWAY SITE
MONTICELLO, NEW YORK
AS OF OCTOBER 29, 2003
TABLE OF CONTENTS
Page
DEFINED TERMS .................................................................i
ARTICLE 1 PREMISES AND TERM OF LEASE ..........................................1
ARTICLE 2 DEFINITIONS; INTERPRETATION .........................................1
Section 2.1 Defined Terms ..........................................1
Section 2.2 Interpretation .........................................4
ARTICLE 3 RENT ................................................................5
Section 3.1 Fixed Net Rent .........................................5
Section 3.2 Impositions and Additional Rent ........................6
Section 3.3 Net Obligations.........................................6
ARTICLE 4 TAXES (Impositions)..................................................7
Section 4.1 General ................................................7
Section 4.2 Apportionment of Imposition ............................8
Section 4.3 Contests ...............................................8
Section 4.4 Assessed Valuation .....................................9
Section 4.5 Landlord Joinder........................................9
Section 4.6 Landlord Cooperation ..................................10
Section 4.7 Certificate ...........................................10
Section 4.8 Copies ................................................10
Section 4.9 Deposit ...............................................10
ARTICLE 5 NO PERSONAL LIABILITY OF LANDLORD ..................................11
ARTICLE 6 INSURANCE ..........................................................11
Section 6.1 Coverage ..............................................11
Section 6.2 Insurance Requirements ................................13
Section 6.3 Certificate Requirements...............................14
Section 6.4 Deductible ............................................14
ARTICLE 7 USE OF CASUALTY INSURANCE PROCEEDS .................................14
Section 7.1 Notice ................................................14
Section 7.2 Landlord Obligations ..................................14
Section 7.3 Tenant Adjusted Losses ................................15
Section 7.4 Other Insureds ........................................16
ARTICLE 8 RESTORATION ........................................................16
Section 8.1 Deliveries ............................................16
Section 8.2 Restoration ...........................................17
ARTICLE 9 1NTENTIONALLY DELETED ..............................................17
ARTICLE 10 ASSIGNMENT, SUBLETTING, ETC........................................18
Section 10.1 Restrictions ..........................................18
Section 10.2 No Release of Obligations of Assignor or Sublandlord ..18
Section 10.3 Further Assignment ....................................18
i
Section 10.4 Tenant Indemnification ................................18
Section 10.5 SubTenant's Acts; Tenant Obligation to Cure ...........19
Section 10.6 Subrent ...............................................19
Section 10.7 Assignment of Subleases ...............................19
Section 10.8 No Monetary Damages ...................................19
Section 10.9 Tenant's Option to Acquire the Premises ...............20
ARTICLE 11 LEASEHOLD MORTGAGES................................................20
Section 11.1 Right to Mortgage .....................................20
Section 11.2 Default ...............................................21
Section 11.3 Cure ..................................................21
Section 11.4 New Lease; Rights of Leasehold Mortgagee ..............22
Section 11.5 Right to Perform Covenants and Agreements .............23
Section 11.6 Forbearance by Landlord ...............................23
Section 11.7 Leasehold Mortgagee's Right to Enter Premises .........23
Section 11.8 Interaction Between Lease and Leasehold Mortgage ......23
Section 11.9 Leasehold Mortgagee's Participation Rights.............23
Section 11.10 Confirmation .........................................23
Section 11.11 Costs and Expenses ...................................24
Section 11.12 Assignment ...........................................24
ARTICLE 12 REPAIRS AND MAINTENANCE............................................24
Section 12.1 Maintenance ...........................................24
Section 12.2 No Landlord Obligations................................24
ARTICLE 13 CHANGES, ALTERATIONS AND ADDITIONS ................................25
Section 13.1 Capital Improvements ..................................25
Section 13.2 Significant Capital Improvements ......................26
Section 13.3 Title to Improvements .................................28
ARTICLE 14 REQUIREMENTS OF PUBLIC AUTHORITIES AND OF INSURANCE
UNDERWRITERS AND POLICIES..........................................28
Section 14.1 Tenant Compliance with Requirements ...................28
Section 14.2 Tenant May Contest Validity of Requirements ...........28
ARTICLE 15 EQUIPMENT .........................................................29
Section 15.1 Removal of Equipment ..................................29
Section 15.2 Equipment to be Kept in Good Order ....................29
Section 15.3 Payment Requirements ..................................29
ARTICLE 16 DISCHARGE OF LIENS ................................................29
Section 16.1 Existing Liens.........................................29
Section 16.2 Non-Permitted Liens ...................................29
Section 16.3 Mechanic's Liens ......................................30
Section 16.4 No Landlord Liability..................................30
ARTICLE 17 EXISTING CONDITION OF PREMISES ....................................30
ARTICLE 18 LANDLORD NOT LIABLE FOR INJURY OR DAMAGE ..........................31
Section 18.1 No Liability for Injury or Damage .....................31
Section 18.2 No Liability for Injury or Damage
Caused by Utility or Service ..........................31
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ARTICLE 19 INDEMNIFICATION OF LANDLORD .......................................31
ARTICLE 20 LANDLORD'S RIGHT OF INSPECTION ....................................33
Section 20.1 Landlord Inspection....................................33
Section 20.2 No Landlord Duty ......................................33
Section 20.3 Inspections for Prospective Purchasers and Mortgagees .33
ARTICLE 21 LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.....................34
ARTICLE 22 FEE MORTGAGES .....................................................35
Section 22.1 Right to Mortgage .....................................35
Section 22.2 Notice in Case of Omission ............................35
Section 22.3 Obligations to Successor Landlord .....................35
Section 22.4 Priority of Lease .....................................35
ARTICLE 23 PERMITTED USE; NO UNLAWFUL OCCUPANCY...............................36
Section 23.1 Permitted Use .........................................36
Section 23.2 Hazardous Use..........................................36
Section 23.3 Public Use.............................................36
Section 23.4 No Sublet to Tax Exempt Entity ........................36
ARTICLE 24 ARBITRATION; APPRAISAL ............................................36
Section 24.1 Arbitration Procedure .................................36
Section 24.2 Fees ..................................................37
Section 24.3 Right to Appear .......................................37
Section 24.4 Award Binding .........................................37
Section 24.5 Jurisdiction ..........................................37
Section 24.6 Appraisal..............................................37
ARTICLE 25 LATE CHARGES ......................................................39
ARTICLE 26 DEFAULTS, CONDITIONAL LIMITATIONS, REMEDIES, ETC...................39
Section 26.1 Tenant Default.........................................39
Section 26.2 Notice ................................................41
Section 26.3 Remedies ..............................................41
Section 26.4 Enforcement ...........................................41
Section 26.5 Recovery of Damages ...................................42
Section 26.6 Liquidated Damages.....................................42
Section 26.7 Receipt of Money After Lease Termination ..............42
Section 26.8 Notice of Service .....................................42
Section 26.9 Waiver ................................................43
Section 26.10 Remedies .............................................43
Section 26.11 Remedies are Cumulative ..............................43
Section 26.12 Costs and Expenses ...................................43
Section 26.13 Termination of Lease .................................43
Section 26.14 Calculation of Final Damages..........................44
ARTICLE 27 NOTICES ...........................................................44
ARTICLE 28 CONDEMNATION ......................................................45
Section 28.1 General ...............................................45
Section 28.2 Calculation of Award ..................................45
iii
Section 28.3 Date of Taking ........................................46
Section 28.4 Partial Taking.........................................46
Section 28.5 Temporary Taking.......................................47
Section 28.6 Right to Compensation..................................48
Section 28.7 Tenant Waiver of Rights ...............................48
ARTICLE 29 STREET WIDENING ...................................................48
ARTICLE 30 CERTIFICATES BY LANDLORD AND TENANT ...............................49
Section 30.1 Tenant ................................................49
Section 30.2 Landlord ..............................................49
ARTICLE 31 LANDLORD'S CONSENTS ...............................................49
ARTICLE 32 SURRENDER AT END OF TERM ..........................................50
Section 32.1 Condition of Premises .................................50
Section 32.2 Title to Improvements .................................50
Section 32.3 Delivery of Records ...................................50
Section 32.4 Damage Caused by Equipment Removal ....................51
ARTICLE 33 NO ORAL AGREEMENTS ................................................5l
ARTICLE 34 QUIET ENJOY0MENT ..................................................51
ARIICIE 35 INVALIDITY OF CERTAIN PROVISIONS ..................................5l
ARTICLE 36 FINANCIAL REPORTS .................................................52
ARTICLE 37 [TENANT'S OPTION TO PURCHASES/LANDLORD'S SALE OPTION...............52
Section 37.1 Intentionally Omitted .................................52
Section 37.2 Tenant Purchase Option of Property ....................52
Section 37.3 Adjournment ...........................................52
Section 37.4 Termination ...........................................52
Section 37.5 Conveyance Requirements ...............................53
Section 37.6 Tenant Obligations ....................................53
Section 37.7 Landlord ..............................................53
Section 37.8 Failure to Close ......................................54
Section 37.9 No Closing Adjustments ................................54
Section 37.10 No Cancellation or Rescission ........................54
Section 37.11 Tax Deferred Exchange ................................54
ARNICLE 38 REPRESENTATIONS ...................................................55
Section 38.1 Landlord and Tenant....................................55
ARTICLE 39 BROKER ............................................................55
ARTICLE 4O INTENTIONALLY DELETED .............................................55
ARTICLE 41 ENVIRONMENTAL HAZARDS PROVISION ...................................55
Section 41.1 Tenant Requirements ...................................55
Section 41.2 Landlord Representations and Warranties ...............56
Section 41.3 Notice ................................................56
Section 41.4 Costs and Expenses ....................................57
Section 41.5 Indemnification .......................................57
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Section 41.6 Definition of Hazardous Material ......................58
Section 41.7 Definiton of Hazardous Material Law ...................58
Section 41.8 Representations Not Exclusive .........................58
Section 41.9 Representations to Survive ............................58
ARTICLE 42 MISCELLANEOUS .....................................................58
Section 42.1 Captions ..............................................58
Section 42.2 Table of Contents .....................................59
Section 42.3 Neutral Pronoun .......................................59
Section 42.4 No Oral Amendment; Jurisdiction .......................59
Section 42.5 Succession ............................................59
Section 42.6 No Money Damages.......................................59
Section 42.7 Multi-Tenant Obligations ..............................59
ARTICLE 43 MEMORANDUM OF LEASE ...............................................59
ARTICLE 44 NO MERGER..........................................................60
Exhibits
--------
Exhibit 1 Land
Exhibit 2 Permitted Exceptions
v
DEFINED TERMS
AAA ..........................................................................38
All Risk .....................................................................11
Appraiser Meeting.............................................................38
Attornment Agreement..........................................................35
Basic Carrying Costs ..........................................................1
Berkshire Loan ................................................................1
Berkshire Mortgagee ...........................................................1
Capital Improvement ..........................................................25
Commencement Date .............................................................1
Court.........................................................................37
CPI............................................................................2
CPI Adjustment Factor..........................................................2
Date of Taking................................................................46
Default........................................................................2
Default Rate...................................................................2
Deposited Sums ...............................................................15
Equipment .....................................................................2
Event of Default ..............................................................2
Exceptions ...................................................................53
Existing Structure ............................................................2
Expiration Date................................................................1
Fair Market Property Value....................................................38
Fixed Net Rent.................................................................5
Governmental Actions..........................................................57
Governmental Authority.........................................................2
Hazardous Material(s) ........................................................58
Impositions .................................................................2,7
Improvements ..................................................................2
Indemnitees ..................................................................31
Initial Appraisers ...........................................................38
Initial Construction...........................................................2
Intermediary .................................................................54
Interpretation ................................................................4
Land ..........................................................................3
Landlord.....................................................................1,3
Landlord Adjusted Losses......................................................13
Lease Year.....................................................................3
Leasehold Mortgage.............................................................3
Leasehold Mortgagee ...........................................................3
Lender ........................................................................3
Mortgage ...................................................................3,35
Non-Consent Purchase Price .................................................3,20
Nullification Notice..........................................................21
Option Closing Date...........................................................52
Permitted Exceptions ..........................................................4
Plans and Specifications ......................................................4
Premises ......................................................................4
Prohibited Activities or Conditions ..........................................56
PROHIBITED TRANSFEREE .........................................................4
Purchased Land ................................................................4
Real Estate Property..........................................................54
Related Parties ..............................................................11
Rental ........................................................................4
Requirements ..................................................................4
Special Causes of Loss........................................................11
Successor Landlord............................................................35
Tax Exempt Entity ............................................................36
Tenant ......................................................................1,4
Tenant Adjusted Losses .......................................................13
Tenant's Exercise Notice .....................................................52
Tenant's Option Price ........................................................52
Tenant's Purchase Option .....................................................52
Third Appraiser...............................................................38
Unavoidable Delays ............................................................4
i
AGREEMENT OF LEASE made as of the 29th day of October, 2003, between
Catskill Development, L.L.C., a New York limited liability company, having an
office at Monticello Raceway, Xxxxx 00X, Xxxxxxxxxx, Xxx Xxxx 00000
("LANDLORD"), and Monticello Raceway Management, Inc., a Delaware corporation,
having an office at Monticello Raceway, Xxxxx 00X, Xxxxxxxxxx, Xxx Xxxx 00000
("TENANT").
ARTICLE 1
PREMISES AND TERM OF LEASE
--------------------------
Landlord does hereby demise and lease to Tenant, and Tenant does hereby
hire and take from Landlord, the Premises (hereinafter defined), subject to all
existing liens, charges, encumbrances and matters of record set forth in EXHIBIT
2 annexed hereto and made a part hereof and the terms and conditions hereinafter
provided.
TO HAVE AND TO HOLD said Lease unto Tenant, its permitted successors and
assigns for a term which is to commence on the date hereof ("COMMENCEMENT DATE")
and which shall end on the last day of the month in which the forty-eighth
(48th) anniversary of the Commencement Date occurs (unless such term shall be
extended or sooner terminated as hereinafter provided) ("EXPIRATION DATE").
It is hereby mutually covenanted and agreed by and between the parties
hereto that this Lease is made upon the foregoing and upon the agreements,
covenants and conditions herein set forth.
ARTICLE 2
DEFINITIONS; INTERPRETATION
---------------------------
Section 2.1 Defined Terms. The terms defined in this Article shall, for all
purposes of this Lease and all agreements supplemental hereto, have the meanings
herein specified.
2.1.1 "BASIC CARRYING COSTS" means any and all expenses for the
Premises, such as Impositions and insurance premiums and trade payables incurred
in the ordinary course of business.
2.1.2 "BERKSHIRE LOAN" shall have the meaning provided in SECTION
3.1.3.
2.1.3 "BERKSHIRE MORTGAGEE" shall have the meaning provided in SECTION
3.1.3.
2.1.4 "CPI" means the United States Department of Labor, Bureau of
Labor Statistics "Consumer Price Index" for Urban Wage Earners and Clerical
Workers (CPI-W) published for New York - NY-NJ-CT-PA, with a base of 1982-1984 =
100. If the CPI ceases to
be published, and there is no successor then Landlord shall specify a reasonable
substitute index. The CPI for any date means the CPI last published before the
calendar month that includes such date.
2.1.5 "CPI ADJUSTMENT FACTOR" means, as of any date, the greater of
(a) 1.00 or (b) the CPI for such date divided by the CPI for the Commencement
Date.
2.1.6 "DEFAULT" shall mean any condition or event which constitutes or
would, after notice or lapse of time, or both, constitute an Event of Default.
2.1.7 "DEFAULT RATE" shall mean the greater of (a) 15% per annum, and
(b) 3% over the rate of interest announced publicly by Citibank, N.A. in New
York, New York, or its successor, from time to time, or if no such successor
exists, a comparable bank selected by Landlord, as the "prime" or "base" rate of
Citibank, N.A., or such successor or comparable bank, (but in neither case
greater than the maximum legally collectible interest rate). Landlord and Tenant
acknowledge that the prime rate of Citibank, N.A. may fluctuate during any
period of accrual of interest at the Default Rate under this Lease and that, in
such event, interest during such period may accrue at a fluctuating, rather than
fixed, rate.
2.1.8 "EQUIPMENT" shall mean and include, but shall not be limited to,
machinery, engines, dynamos, boilers, elevators, radiators, air-conditioning
compressors, ducts, pipes, conduits and fittings at any time hereafter erected,
constructed, affixed or attached to or placed in or placed upon the Land or the
Improvements, and any and all alterations, renewals and replacements thereof,
additions thereto and substitutes therefor.
2.1.9 "EVENT OF DEFAULT" shall have the meaning provided in SECTION
26.1.
2.1.10 "EXISTING STRUCTURE" means the building, Equipment and all
other improvements and structures currently on the Land.
2.1.11 "GOVERNMENTAL AUTHORITY" shall mean laws and ordinances of any
or all of the federal, state, city, county and borough governments and rules,
regulations, orders and directives of any and all departments, subdivisions,
bureaus, agencies or offices thereof, and of any other governmental, public or
quasi-public authorities having jurisdiction over the Premises, and the
direction of any public officer pursuant to law, whether now or hereafter in
force.
2.1.12 "IMPOSITIONS" shall have the meaning provided in SECTION 4.1.
2.1.13 "IMPROVEMENTS" shall mean any and all buildings, improvements
and structures now existing or hereafter erected on the Land, and includes the
Equipment.
2.1.14 "INITIAL CONSTRUCTION" shall have the meaning provided in
Article 39.
2.1.15 "LAND" shall mean the parcel of land described in EXHIBIT 1.
2
2.1.16 "LANDLORD" shall mean only the owner or owners at the time in
question of the Land, so that in the event of any sale or sales or transfer or
transfers of the Land, the seller or transferor shall be and hereby is entirely
freed and relieved of all agreements, covenants and obligations of Landlord
hereunder and it shall be deemed and construed without further agreement between
the parties or their successors-in-interest or between the parties and the
purchaser or transferee on any such sale or transfer that such purchaser or
transferee has assumed and agreed to carry out any and all agreements, covenants
and obligations of Landlord hereunder accruing from and after the date of sale
or transfer.
2.1.17 "LEASEHOLD MORTGAGE" shall mean a mortgage made by Tenant to,
and at all times held by, a Lender constituting a lien on the leasehold interest
of Tenant hereunder and not encumbering any other interests or premises.
2.1.18 "LEASEHOLD MORTGAGEE" shall mean the holder of the Leasehold
Mortgage, which holder shall be at all times a Lender.
2.1.19 "LEASE YEAR" shall mean (x) for the first Lease Year, the
twelve (12) month period, plus any partial month, commencing on the Commencement
Date and ending on last day of the calendar month following the first (1st)
anniversary of the Commencement Date and (y) for each Lease Year thereafter,
each twelve (12) month period thereafter.
2.1.20 "LENDER" shall mean (i) a savings bank, a savings and loan
association, a bank (foreign or national) or trust company, an insurance
company, a REMIC, a commercial credit corporation, an investment bank or an
educational institution, (ii) a federal, state, municipal, teachers, or other
public employees' welfare, pension or retirement trust, fund or system, (iii) a
religious, educational or eleemosynary institution, (iv) a commercial bank or
trust company acting as trustee or fiduciary of various pension funds or
tax-exempt funds, or as trustee in connection with the issuance of any bonds or
any other debt financing, or a corporation or other entity which is owned wholly
by any other Lender or a subtrustee of any such commercial bank or trust company
acting as such trustee, or any combination of the foregoing, (v) any other
employees, welfare, pension or retirement trust, fund or system having assets of
at least $350,000,000, (vi) any real estate investment or mortgage trust having
assets of at least $500,000,000, (vii) any corporation, organization or other
entity not referred to in the foregoing provisions of this sentence, and which
is subject to supervision and regulation by the insurance or banking department
of any of the United States, the Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation or by any
successor hereafter exercising similar functions, having a net worth of at least
$500,000,000, or (viii) a Governmental Authority.
2.1.21 "MORTGAGE" shall have the meaning set forth in ARTICLE 22.
2.1.22 "NON-CONSENT PURCHASE PRICE" shall have the meaning set forth
in SECTION 10.9.
2.1.23 "PERMITTED EXCEPTIONS" shall mean those exceptions described in
EXHIBIT 2.
3
2.1.24 "PLANS AND SPECIFICATIONS" shall have the meaning provided for
in SECTION 39.03 hereof.
2.1.25 "PROHIBITED TRANSFEREE" shall mean a person, entity or other
affiliate or subsidiary thereof that is (i) in competition with Landlord, (ii)
in the gaming industry, (iii) currently in litigation with Landlord or any of
its constituent members, (iv) in default under any agreement it may have with
Landlord or any of its constituent members, or (v) listed on the specially
designated Nationals and Blocked Persons List maintained in accordance with the
so-called "Patriot Act."
2.1.26 "PREMISES" shall mean the Land and the Improvements, together
with all of Landlord's right, title and interest in all easements, rights and
other matters appurtenant to the Land or the Improvements and in and to any land
lying in the bed of any roads adjacent to the Land.
2.1.27 "PURCHASED LAND" shall mean the Land.
2.1.28 "RENTAL" shall have the meaning provided in SECTION 3.01.
2.1.29 "REQUIREMENTS" shall mean any and all present and future laws,
rules, orders, ordinances, regulations, statutes and requirements of any
Governmental Authority.
2.1.30 "TENANT" shall mean the Tenant herein named or any assignee or
other successor-in-interest (immediate or remote) of the Tenant herein named,
which at the time in question is the owner of Tenant's estate and interest
granted by this Lease; but the foregoing provisions of this subsection shall not
be construed to relieve Tenant herein named and/or any assignee or other
successor-in-interest (whether immediate or remote) of Tenant herein named from
the full and prompt payment, performance and observance of the covenants,
obligations and conditions to be paid, performed and observed by Tenant under
this Lease.
2.1.31 "UNAVOIDABLE DELAYS" shall mean delays due to fire, casualty,
any strike, lock-out or other labor trouble, governmental preemption of
priorities or other controls in connection with a national or other public
emergency or shortages of fuel, supplies or labor resulting therefrom, or any
other cause, whether similar or dissimilar, beyond Landlord's or Tenant's
reasonable control, as the case may be. The delay in making any payment due to a
party hereunder shall not, in any instance, be deemed to be an Unavoidable
Delay.
Section 2.2 INTERPRETATION. In this Lease Agreement, unless the context
otherwise requires:
(a) the terms "hereby," "hereof," "herein," "hereunder," and any
similar terms as used in this Lease Agreement, refer to this Lease Agreement;
and
(b) words defined in the singular may be used in the plural shall
mean and include the plural and vice versa all in accordance with ordinary
principles of English grammar.
4
ARTICLE 3
RENT
----
Section 3.1 FIXED NET RENT. Tenant shall pay to Landlord, in currency which
at the time of payment is legal tender for public and private debts in the
United States of America, the fixed annual net rental (the "FIXED NET RENT") of
One Million Eight Hundred Thousand Dollars ($1,800,000) per annum, commencing on
the date hereof, subject to annual adjustment equal to increases in the consumer
price index calculated as follows: (x) the amount of the Fixed Net Rent payable
for the preceding period multiplied by (y) the CPI Adjustment Factor. Once the
adjustment is determined "FIXED NET RENT" shall be equal to such adjusted amount
as calculated above for the next succeeding annual period.
3.1.2 Fixed Net Rent shall be payable in advance in equal monthly
installments on the first day of each month. If the Commencement Date or the
Expiration Date occurs other than on the first day of the calendar month, the
Fixed Net Rent for the partial calendar month in which the Commencement Date
and/or Expiration Date occurs shall be prorated according to the number of days
in the calendar month in which the Commencement Date and/or the Expiration Date
occurs. Notwithstanding the above, Tenant has the right at its option, to defer
the monthly payments of Fixed Net Rent due and payable during the period of time
commencing on the date hereof and ending on the day prior to the first
anniversary of the date hereof. If and to the extent that any installments of
Fixed Net Rent are deferred as aforesaid, the amount of any deferral shall be
due and payable in full on the last day of the period that such Rent was
deferred together with accrued interest on any such deferred monthly payments at
an annual interest rate of four and one-half percent (4.5%) from the date of
such deferral until the payment thereof in good and immediately available funds.
3.1.3 Tenant has informed Landlord that Tenant is this day executing
and delivering a Leasehold Mortgage in favor of The Berkshire Bank to secure,
inter alia, a loan evidenced by the Term Loan Note, dated the date hereof, in
the face amount of $3,500,000 (the "BERKSHIRE LOAN") made by Tenant to The
Berkshire Bank (together with its nominees, its successors and/or its assigns,
the "BERKSHIRE MORTGAGEE"). In the event that the Berkshire Mortgagee declares
an "event of default" under the Berkshire Loan, or commences a foreclosure
proceeding with regard to the Berkshire Mortgage, or succeeds to the interests
of Tenant hereunder through foreclosure or otherwise, the Berkshire Mortgagee
shall have the right, at its option, to defer the monthly payments of Fixed Net
Rent due and payable as of the date of its declaration of an "event of default"
under the Berkshire Loan, and thereafter until the date that the Berkshire Loan
is paid in full. The rights afforded the Berkshire Mortgagee pursuant to the
terms hereof shall not apply from and after the date that the Berkshire Mortgage
is refinanced in a transaction in which the Berkshire Mortgage is assigned to a
new lender who pays the full amount outstanding under the Berkshire Mortgage. In
the event that the Berkshire Mortgagee succeeds to the interests of Tenant
hereunder through foreclosure or otherwise, then any revenues received by the
Berkshire Mortgagee or its successor thereafter, net of all expenses incurred by
the Berkshire Mortgagee (and not otherwise reimbursed) in connection with the
Berkshire Loan and/or the operation of the Premises, shall be deemed to be
payments in reduction of the Berkshire Loan until the Berkshire Loan is repaid
in full. If and to the extent that any installments of Fixed Net Rent are
deferred as aforesaid, the amount of any deferral shall be due and payable in
5
full on the last day of the period that such Rent was deferred together with
accrued interest on any such deferred monthly payments at an annual interest
rate of four and one-half percent (4.5%) from the date of such deferral until
the payment thereof in good and immediately available funds.
Section 3.2 IMPOSITIONS AND ADDITIONAL RENT. Tenant shall also pay all (i)
Impositions, (ii) all Basic Carrying Costs accrued but not yet payable by
Landlord with respect to any period prior to the Commencement Date, and (iii)
any additional rent and any other sums which may become due and payable
hereunder. Tenant shall reimburse Landlord upon demand for all costs and
expenses, including reasonable counsel fees, paid or incurred by Landlord in
curing any Default or arising out of any indemnity given herein by Tenant to
Landlord, together with interest at the Default Rate from the date paid by
Landlord. The Fixed Net Rent, Impositions and all other sums, costs, expenses,
charges, payments and deposits which Tenant, pursuant to any provision of this
Lease, assumes or agrees to pay and/or deposit, are collectively referred to as
"RENTAL". All Rental (except for the Impositions, which shall be paid in
accordance with the terms of ARTICLE 4 hereof and except for any other amounts
of Rental which are due and payable to third parties, which shall be paid to
such third parties in accordance with such party's requirements therefor) shall
be paid to Landlord at its office, or such other place, or to Landlord's agent
and at such other place, as Landlord shall designate, from time to time, by
notice to Tenant. At Landlord's option, all Fixed Net Rent shall be paid by
direct deposit or wire transfer of Federal Funds to Landlord's account in
accordance with instructions that Landlord shall from time to time deliver to
Tenant. Landlord shall have (in addition to all other rights and remedies) all
the rights and remedies provided for under the terms of this Lease and
applicable law in respect to the payment of Rental as Landlord possesses in
respect to the payment of the Fixed Net Rent.
Section 3.3 Net Obligations.
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3.3.1 Notwithstanding any other provision of this Lease, this Lease is
a net lease and the Rental shall be paid without notice or demand, and without
counterclaim, setoff, defense, suspension or deferment, of any kind, and without
deduction, abatement or diminution of any kind. This Lease shall not terminate
(except as may be expressly set forth herein), and Tenant shall not have any
right to terminate or avoid this Lease or be entitled to the abatement (in whole
or in part) of any Rental or rents hereunder or any reduction thereof, nor shall
the obligations and liabilities of Tenant hereunder be in any way affected for
any reason, including without limitation: (i) any defect in, damage to,
destruction of, or (subject to the terms of Article 28 hereof) condemnation of
any part of the Premises; (ii) any restriction of or interference with any use
of the Premises or action by Government Authorities or third parties; (iii) any
matter affecting title to, or any eviction by Government Authorities or third
parties from the Premises; (iv) any proceeding relating to Landlord or action
taken with respect to this Lease by any trustee or receiver of any successor to
Landlord or by any court in any proceedings; (v) any failure by Landlord to
perform or comply with this Lease or any other agreement or business dealings
with Tenant; (vi) impossibility or illegality of performance by Tenant; or (vii)
any other similar occurrence whatsoever, whether or not Tenant shall have notice
or knowledge of any of the foregoing. The obligations of Tenant hereunder shall
be separate and independent covenants and agreements. Each payment made by
Tenant to Landlord pursuant to this Lease shall be final and Tenant shall not
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seek to recover all or any part of such payment from Landlord for any reason
whatsoever.
3.3.2 Tenant shall remain obligated under this Lease in accordance
with its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting Landlord or any assignee of Landlord
or any action with respect to this Lease which may be taken by any trustee,
receiver or liquidator or by any court. Tenant waives all rights to terminate or
surrender this Lease, or to any abatement, reduction or deferment of Rental.
ARTICLE 4
TAXES
(Impositions)
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Section 4.1 GENERAL.
4.1.1 Tenant covenants and agrees to pay, as hereinafter provided, all
of the following items (collectively "IMPOSITIONS"): all taxes (including,
without limitation, all ad valorem, real estate, sales and use, value added,
single business, gross receipts, transaction, taxes on rent, privilege, or
similar taxes), all assessments (including, without limitation, all assessments
for public improvements or benefits, whether or not commenced or completed prior
to the date hereof and whether or not to be completed within the term of this
Lease, and any other assessments of whatever name, nature, and kind, and whether
or not now within the contemplation of the parties, including any special
assessments for or imposed by any business improvement district or by any
special assessment district), water, sewer, or other rents and charges, excises,
levies, fees (including, without limitation, license, permit, inspection,
authorization, and similar fees), fines, penalties, and all other governmental
charges and any interest or costs with respect thereto, charges for any easement
or agreement maintained for the benefit of the Premises, in each case whether
general or special, ordinary or extraordinary, or foreseen or unforeseen, of
every character, kind and nature whatsoever which at any time prior to or during
the term of this Lease may be assessed, levied, confirmed, imposed upon, or grow
or become due and payable out of or in respect of, or charged with respect to or
become a lien on, Landlord, the Premises, or the sidewalks or streets in front
of or adjoining the Premises, or any vault, passageway or space in, over or
under such sidewalk or street, or any other appurtenances of the Premises, or
any personal property, Equipment or other facility used in the operation
thereof, or the rent or income received therefrom, or any use, possession or
occupancy thereof, or this transaction or the Rental payable hereunder, or any
document to which Tenant is a party creating or transferring an interest or
estate in the Premises, together with any and all interest, penalties, and costs
resulting from delayed payment of any of the foregoing attributable to an act or
omission of Tenant. Tenant shall, during the term of this Lease, pay and
discharge, as additional rent, all Impositions not later than thirty (30) days
prior to the due date thereof, or thirty (30) days prior to the day any fine,
penalty, interest or cost may be added thereto as imposed by law for the
non-payment thereof, if such day is used to determine the due date of the
respective item; provided, however, that if, by law, any Imposition may at the
option of the taxpayer be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Tenant may exercise the option
to pay the same in such installments, provided such installment payments are not
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prohibited by the terms of any Mortgage and provided further that the amount of
all installments of any such Impositions (other than installments of special
improvement assessments), which are a lien or charge on the Premises during the
term of this Lease and which are to become due and payable after the Expiration
Date, shall (subject to the terms of any Mortgage or Leasehold Mortgage which
requires an amount equal to such Impositions to be deposited with the holder of
such Mortgage or Leasehold Mortgage) be deposited with Landlord for such payment
on the date which shall be one (1) year immediately prior to the Expiration
Date.
4.1.2 The parties agree that nothing herein contained shall require
Tenant to pay municipal, state or federal income, inheritance, estate,
succession, transfer or gift taxes of Landlord, or any corporate franchise taxes
imposed upon Landlord or any successor of Landlord; provided, however, that if
at any time during the term of this Lease the method of real estate taxation
prevailing at the commencement of the term hereof shall be altered so that any
new tax, assessment, levy (including, but not limited to, any municipal, state
or federal levy), imposition or charge, or any part thereof, measured by or
based in whole or in part upon the Premises or the Rental, shall be imposed upon
Landlord, then all such taxes, assessments, levies, impositions or charges, or
the part thereof to the extent that they are so measured or based, shall be
deemed to be included within the term "Impositions" for the purposes hereof, to
the extent that such Impositions would be payable if the Premises were the only
property of Landlord subject to such Impositions, and Tenant shall pay and
discharge the same as herein provided in respect of the payment of Impositions.
Section 4.2 APPORTIONMENT OF IMPOSITION. Any Imposition, other than an
Imposition which has been converted into installment payments as referred to in
SECTION 4.1 hereof, relating to a fiscal period of the taxing authority, a part
of which period is included within the term of this Lease and a part of which is
included in a period of time after the expiration or termination of the term of
this Lease, shall (whether or not such Imposition shall be assessed, levied,
confirmed, imposed upon or in respect of or become a lien upon the Premises, or
shall become payable during the term of this Lease) be apportioned between
Landlord and Tenant as of the expiration or termination of the term of this
Lease, so that Tenant shall pay that portion of such Imposition which that part
of such fiscal period included in the period of time prior to the expiration or
termination of the term of this Lease bears to such fiscal period, and Landlord
shall pay the remainder thereof, provided, however, that Tenant shall not be
entitled to receive any apportionment if there be a Default hereunder.
Section 4.3 CONTESTS. Tenant shall have the right at its own expense to
contest the amount or validity, in whole or in part, of any Imposition by
appropriate proceedings diligently conducted in good faith but only after
payment of such Imposition unless such payment would operate as a bar to such
contest or interfere materially with the prosecution thereof, in which event,
notwithstanding the provisions of SECTION 4.1 hereof, payment of such Imposition
shall be postponed if and only so long as:
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4.3.1 neither the Premises nor any part thereof would by reason of
such postponement or deferment be, in the reasonable judgment of Landlord, in
danger of being forfeited or lost, and
4.3.2 Landlord would not be, by reason of such postponement or
deferment, subject to any actual or threatened criminal sanctions or penalties
or personal liability, as Landlord shall determine in its reasonable judgment,
and
4.3.3 Tenant shall have deposited with the affected governmental unit
or Landlord cash or other security reasonably acceptable to Landlord in the
amount so contested and unpaid, together with all interest and penalties in
connection therewith and all charges that may or might be assessed against or
become a charge on the Premises or any part thereof in such proceedings, and
4.3.4 no Mortgage would by reason of such postponement or deferment
be, in the reasonable judgment of Landlord, in danger of being put in default or
foreclosure.
Upon the termination of such proceedings, it shall be the obligation of Tenant
to pay the amount of such Imposition or part thereof as finally determined in
such proceedings, the payment of which may have been deferred during the
prosecution of such proceedings, together with any costs, fees (including
reasonable counsel fees), interest, penalties or other liabilities in connection
therewith, and upon such payment in full, Landlord shall return to Tenant any
amount deposited with it with respect to such Imposition as aforesaid. If at any
time during the continuance of such proceedings Landlord shall reasonably deem
the amount deposited as aforesaid insufficient, Tenant shall, upon demand, make
an additional deposit of such additional sums or other acceptable security as
Landlord reasonably may request, and upon failure of Tenant so to do, the amount
theretofore deposited may be applied by Landlord to the payment, removal and
discharge of such Imposition and the interest and penalties in connection
therewith and any costs, fees (including reasonable counsel fees) or other
liability accruing against Landlord or the Premises in any such proceedings, and
the balance, if any, shall be returned to Tenant or the deficiency, if any,
shall be paid by Tenant to Landlord on demand.
Section 4.4 ASSESSED VALUATION. Tenant shall have the right to seek a
reduction in the valuation of the Premises assessed for tax purposes and to
prosecute any action or proceeding in connection therewith. Provided Tenant is
not then in Default, Tenant shall be authorized to collect any tax refund
obtained by reason thereof and, to the extent such refund is for Impositions
paid by Tenant, to retain the same, subject to Tenant's obligation to pay to
Landlord Landlord's pro rata share thereof pursuant to the provisions of SECTION
4.2 hereof.
Section 4.5 LANDLORD JOINDER. Landlord shall not be required to join in any
proceedings referred to in SECTIONS 4.3 and 4.4 hereof unless the provisions of
any Requirement at the time in effect shall require that such proceedings be
brought by and/or in the name of Landlord, in which event Landlord shall at the
request and expense of Tenant join in such proceedings or permit the same to be
brought in its name, provided such joinder shall not subject Landlord to any
cost, expense or liability of any nature whatsoever, and Tenant hereby
indemnifies and agrees to defend and save Landlord free and harmless from and
against any such costs, expenses or liability. Notwithstanding the foregoing
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provisions of this Article 4, with respect to the last two years of the Lease
term, Tenant shall notify Landlord whether or not Tenant intends to contest any
Imposition pursuant to SECTION 4.3 and whether Tenant shall seek a reduction in
the valuation of the Premises pursuant to SECTION 4.4. With respect to such
period, Landlord, at its expense, may elect to join with Tenant in any such
contest or proceeding or, if Tenant has not initiated such contest or sought
such reduction, Landlord may initiate such contest or seek such reduction in its
own name. With respect to such two year period, regardless of the party pursuing
such contest or reduction, no settlements with respect thereto shall be made
without the prior written consent of Landlord and Tenant, such consent not to be
unreasonably withheld.
Section 4.6 LANDLORD COOPERATION. Landlord agrees that whenever Landlord's
cooperation is required in any of the proceedings brought by Tenant as
aforesaid, Landlord will reasonably cooperate therein at the request and expense
of Tenant, provided same shall not subject Landlord to any cost, expense or
liability of any nature whatsoever, and Tenant hereby indemnifies and agrees to
defend and save Landlord free and harmless from and any against such costs,
expenses or liability.
Section 4.7 CERTIFICATE. Any certificate, advice or xxxx of the appropriate
official designated by law to make or issue the same or to receive payment of
any Imposition, of nonpayment of such Imposition, shall be prima facie evidence
that such Imposition is due and unpaid at the time of the making or issuance of
such certificate, advice or xxxx, at the time or date stated therein.
Section 4.8 COPIES. In respect of any payments of Impositions made by
Tenant directly to the taxing authority, Tenant shall upon Landlord's request
furnish to Landlord copies of receipted bills or other reasonably satisfactory
evidence of payment thereof.
Section 4.9 DEPOSIT. From and after the occurrence of an Event of Default,
Tenant shall deposit with Landlord, at the time of each payment of Fixed Net
Rent, one-twelfth (12th) of an amount estimated by Landlord, in Landlord's sole
judgment, sufficient to pay all Impositions for the succeeding one (1) year
period. Such amounts shall be held by Landlord in an interest-bearing account in
a savings or commercial bank or in city, state or federal government
obligations. Such amounts and the interest earned thereon shall be applied to
the payment of the Impositions in such order of priority as Landlord shall
determine. If at any time the amounts deposited with Landlord for payment of the
Impositions are, in the opinion of Landlord, insufficient to pay the Impositions
for six (6) months as they become due, Tenant shall pay to Landlord, on demand,
such additional sums as are necessary, in Landlord's judgment, to discharge the
Impositions as they become due. Landlord may, at its sole option, apply all or
any part of the sums held by Landlord pursuant to this Section to the payment of
all sums due by Tenant to Landlord under this Lease. Tenant shall restore all
amounts so applied as a condition to the cure, if any, of the Event of Default
in addition to fulfilling any other required conditions.
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4.9.1 If, pursuant to the terms of any Mortgage or Leasehold Mortgage,
there is a provision for the deposit of any of the foregoing items in
installments in advance with the holder of such Mortgage or Leasehold Mortgage,
as the case may be, no such deposit shall be required under this Section,
provided such holder of any Mortgage or Leasehold Mortgage agrees to apply such
amounts in payment of the Impositions substantially in accordance with the terms
of this Lease.
4.9.2 In the event of a sale or transfer of Landlord's interest in the
Premises, Landlord shall transfer the interests of Landlord in the above
deposits to the grantee or transferee. The seller or transferor shall be deemed
to be released from all liability with respect to said deposits and Tenant
agrees to look solely to the transferee or grantee with respect thereto. The
provisions hereof shall apply to each successive transfer or assignment of such
deposits to a successor Landlord.
ARTICLE 5
NO PERSONAL LIABILITY OF LANDLORD
Notwithstanding anything to the contrary in this Lease, in any action
or proceeding brought to enforce any of the obligations of Landlord (which term
when used only in this Article shall be deemed to include "RELATED PARTIES" of
Landlord, as such term is defined below) hereunder, the judgment or decree shall
be enforceable against Landlord only to the extent of the interest of Landlord
in the Premises, and any such judgment shall not be subject to the execution on,
nor be a lien on, any assets of Landlord other than its interest in the
Premises, it being specifically understood and agreed that Landlord shall have
no other liability, personal or otherwise, hereunder. The term "Related Parties"
shall mean and include: (i) Landlord and any officer, director, or shareholder
of Landlord; (ii) any partner of Landlord or any partner of any partner of
Landlord or any shareholder, officer, or director of any corporate partner of
Landlord; (iii) any legal representative, heir, estate, successor, or assignee
of any of the foregoing; and (iv) any corporation (or any officer, director, or
shareholder thereof), partnership (or any partner thereof), individual, or
entity to which the interest of Landlord in the Premises or part thereof or
interest therein shall have been transferred (or any legal representative, heir,
estate, successor, or assignee of any thereof).
ARTICLE 6
INSURANCE
Section 6.1 COVERAGE. At all times during the term of this Lease Tenant at
its own cost and expense shall:
6.1.1 Maintain insurance on all of the Premises, including personal
property, under an "ALL RISK" policy or its equivalent (e g:, a "SPECIAL CAUSES
OF LOSS" policy), with replacement cost valuation and an agreed value
endorsement (hereinafter referred to as "ALL RISK") in an amount equal to not
less than one hundred percent (100%) of the full replacement cost of the
Improvements (determined without regard to depreciation of the Improvements, but
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exclusive of foundations and footings). If not included within the All Risk
coverage above, Tenant shall also carry or cause to be carried (X) coverage
against damage due to water and sprinkler leakage and collapse and flood (to the
extent such coverage can be obtained at commercially reasonable rates in the
State of New York), which shall be written with limits of coverage of not less
than the then replacement value per occurrence, and (Y) earthquake insurance in
an amount equal to not less than ten percent (10%) of the replacement cost of
the Improvements. Such policy shall be endorsed with (i) replacement coverage,
(ii) an agreed amount clause (waiving applicable co-insurance clause) in
accordance with such determination or appraisal, and (iii) coverage for
demolition costs and increased costs of construction due to changes in
Requirements. During any period where Capital Improvements are being undertaken,
Tenant shall also maintain Builders Risk insurance in accordance with the other
provisions and requirements of this Lease with respect to the work in question.
6.1.2 Provide and keep in force insurance against liability for bodily
injury and death and property damage and boiler and pressure vessel insurance,
all such insurance to be in such amounts as may from time to time be reasonably
required by Landlord. Such liability insurance shall be commercial general
liability insurance, written on an occurrence basis with respect to the Premises
and all operations related thereto, whether conducted on or off the Premises,
and coverage shall include specifically the Premises and all elevators, garages,
parking areas, streets, alleys and sidewalks adjoining or appurtenant to the
Premises. In any event:
(i) the insurance against liability for injury and death shall be no less
than Fifty Million ($50,000,000) Dollars per occurrence, with a
deductible of not more than $50,000;
(ii) boiler and machinery insurance shall be in an amount not less than One
Million ($1,000,000) Dollars; and
(iii)elevator collision insurance shall be in an amount not less than One
Million ($1,000,000) Dollars.
6.1.3 Provide and keep in force rent insurance with all risk coverage
in an amount equal to two (2) years' current annual Fixed Net Rent plus the
aggregate amount of Impositions and insurance premiums for two (2) years.
6.1.4 If, by reason of changed circumstances or economic conditions,
the insurance amounts referred to in this Lease become in Landlord's reasonable
judgment inadequate, increase the amounts of such insurance promptly upon
Landlord's reasonable request.
6.1.5 At the request of Landlord, provide and keep in force such other
insurance in such amounts as may from time to time be required by Landlord
against such other insurable hazards as at the time are commonly insured against
in the case of premises similarly situated, due regard being given to the type
of the improvement, its construction and its use and occupancy.
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Section 6.2 INSURANCE REQUIREMENTS. All insurance provided by Tenant, as
required by this Article, shall be carried in favor of Landlord, Tenant and the
holder of any Mortgage as their respective interests may appear, and shall name
Landlord and the holder of any Mortgage as additional insureds. The loss under
policies insuring against damage to the Premises by fire or other casualty shall
be payable to Landlord and the holder of any Mortgage as their interests may
appear. Rent insurance shall be carried in favor of Landlord and Tenant, as
their respective interests appear, but the proceeds thereof shall be paid to
Landlord and shall be applied to the payment of Rental under this Lease until
restoration of the Premises by Tenant.
6.2.1 All insurance required by any provision of this Lease shall be
issued by such responsible insurance companies licensed or authorized to do
business in the State of New York and having a rating of "A-" or better and a
financial class of "VIII" or better (or the then equivalent of such ratings) as
rated by A.M. Best's Insurance Guide (or any successor publication of comparable
standing). All policies referred to in this Lease shall be in such form
reasonably acceptable to Landlord and shall be obtained by Tenant for periods of
not less than one (1) year.
6.2.2 Tenant and Landlord shall cooperate in connection with the
collection of any insurance moneys that may be due in the event of loss and
Tenant shall execute and deliver to Landlord such proofs of loss and other
instruments which may be required for the purpose of obtaining the recovery of
any such insurance moneys.
6.2.3 Tenant shall not obtain or carry separate insurance concurrent
in form or contributing in the event of loss with that insurance required by
this Lease to be furnished or which may be required to be furnished by Tenant,
unless Landlord and the holders of any Mortgages are included therein as
insureds with loss payable as in this Lease provided. Tenant shall immediately
notify Landlord of the carrying of any such separate insurance and shall cause
the same to be delivered as in this Lease hereinbefore required.
6.2.4 All premiums on policies referred to in this Lease shall be paid
by Tenant. The originals of such policies or certificates evidencing such
policies, together with evidence of the payment of premiums thereon, shall be
delivered to Landlord immediately upon receipt from the insurance company or
companies (and such originals may be delivered by Landlord to the holder of a
Mortgage). New or renewal policies or certificates replacing any policies
expiring during the term hereof shall be delivered to Landlord at least thirty
(30) days before the date of expiration, together with proof satisfactory to
Landlord that the full premiums have been paid by Tenant. Premiums on policies
shall not be financed in any manner whereby the lender, on default or otherwise,
shall have the right or privilege of surrendering or canceling the policies.
6.2.5 Subject to the provisions of SECTION 7.4, hereof, all casualty
insurance policies provided for herein shall provide that all adjustments for
claims with the insurers in excess of $500,000 shall be with Landlord, Tenant
and the holder of any Mortgage ("LANDLORD ADIUSTED LOSSES"). Any adjustments for
claims with the insurers involving sums of less than $500,000 ("TENANT ADIUSTED
LOSSES") maybe made with Tenant except that, in the event there then exists a
Default on the part of Tenant, such adjustments for claims with the insurers
shall be made with Landlord.
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6.2.6 Tenant shall not violate or permit to be violated any of the
conditions or provisions of any such policy, and Tenant shall so perform and
satisfy the requirements of the companies writing such policies such that at all
times companies of good standing reasonably satisfactory to Landlord shall be
willing to write and/or continue such insurance.
Section 6.3 CERTIFICATE REQUIREMENTS. Every policy of insurance referred to
in this Lease and each certificate therefor issued by the insurer shall contain
an agreement by the insurer that (a) no cancellation, non-renewal or reduction
in the coverages afforded under said policies will be effective until at least
thirty (30) days' prior written notice of such cancellation, nonrenewal or
reduction has been given to Landlord in accordance with Article 27 of this Lease
and (b) that the interests of Landlord and Leasehold Mortgagee shall not be
invalidated by any act or negligence of Tenant or Landlord or any person or
entity having an interest in the Premises, by occupancy or use of the Premises
for purposes more hazardous than permitted by such policy, or by any foreclosure
or other proceedings relating to the Premises. Tenant shall promptly advise
Landlord of any policy cancellation, reduction, non-renewal, or amendment which
adversely affects Landlord.
Section 6.4 DEDUCTIBLE. No insurance policy to be maintained by Tenant
hereunder shall provide for a deductible exceeding $50,000.
ARTICLE 7
USE OF CASUALTY INSURANCE PROCEEDS
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Section 7.1 NOTICE. If the Improvements shall be destroyed or damaged in
whole or in part by fire or other casualty (including any casualty for which
insurance was not obtained or obtainable) of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen, Tenant shall give to Landlord immediate
notice thereof, and Tenant, at its own cost and expense, whether or not such
damage or destruction shall have been insured, and whether or not insurance
proceeds, if any, shall be sufficient for the purpose, shall promptly repair,
alter, restore, replace and rebuild the same, at least to the extent of the
value of the Improvements prior to the Commencement Date with respect to the
Improvements which exist on the Commencement Date, and with respect to other
Improvements, prior to such occurrence, and to as nearly as possible to the
character of the Improvements existing immediately prior to such occurrence; and
Landlord shall in no event be called upon to repair, alter, replace, restore or
rebuild such Improvements or any portion thereof, or to pay any of the costs or
expenses thereof. If Tenant shall fail or neglect to restore, repair, replace
and rebuild the Improvements, or the portion thereof so damaged or destroyed,
with reasonable diligence, or having so commenced such restoration, repair,
replacement and rebuilding shall fail to complete the same with reasonable
diligence in accordance with the terms of this Lease, this Lease shall expire or
be terminated for any reason, Landlord may complete the same at Tenant's
expense. All work shall be done in accordance with the provisions of Articles 8
and 13 hereof.
Section 7.2 LANDLORD OBLIGATIONS. Subject to the foregoing and to the
provisions of Article 8 hereof, Landlord agrees to pay over to Tenant from time
to time, upon the following
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terms, any moneys which may be received by Landlord from insurance provided by
Tenant, but in no event to any extent or in any sum exceeding the amount
actually collected by Landlord upon the loss; provided, however, that Landlord
before paying such moneys over to Tenant shall be entitled to reimburse itself
therefrom to the extent, if any, of the necessary and proper, reasonable
expenses paid or incurred by Landlord in the collection of such moneys. Landlord
shall pay to Tenant, as hereinafter provided, the aforesaid insurance proceeds,
for the purpose of repairs or restoration to be made by Tenant to restore the
Improvements to a value in accordance with SECTION 7.1 hereof. Landlord shall
not disburse any insurance proceeds to Tenant for so long as the cost of repair
and restoration (as estimated by Landlord in its reasonable judgment) is in
excess of the net insurance proceeds, unless Tenant has provided to Landlord
cash or other security satisfactory to Landlord in the amount of such excess, to
be held by Landlord as security for the completion of the work, free of
mechanics' and materialmen's liens. Prior to the making of any repair, Tenant
shall furnish Landlord with an estimate of the cost of such repairs, prepared by
a licensed architect, reasonably approved by Landlord, and such insurance moneys
shall be paid to Tenant from time to time thereafter in installments as the
making of such repairs or restoration progresses, upon application to be
submitted by Tenant to Landlord showing the cost of labor and material
incorporated in such repairs or restoration, or incorporated therein since the
last previous application, and paid for by Tenant. If any mechanic's lien is
filed against the Premises or part or parts thereof, Tenant shall not be
entitled to receive any further installment until such lien is satisfied or
otherwise discharged. The amount of any installment to be paid by Landlord to
Tenant shall be such proportion of the total insurance moneys received by
Landlord as the cost of labor and materials theretofore incorporated by Tenant
in such repairs or restoration bears to the total estimated cost of such repairs
or restoration by Tenant, less (a) all payments theretofore made to Tenant out
of said insurance proceeds and (b) commercially reasonable retainage. All of the
insurance proceeds held by Landlord after completion of and payment for such
repairs and restoration by Tenant shall be paid to Tenant. In the event that the
insurance proceeds are insufficient for the purpose of paying for all repairs
and restoration, Tenant shall nevertheless be required to make such repairs and
restoration at its own cost and expense.
Section 7.3 TENANT ADJUSTED LOSSES.
7.3.1 Tenant Adjusted Losses shall be used by it for the purpose of
either (i) restoring or repairing the Improvements, or any portion thereof so
damaged or destroyed, or (ii) demolishing the Improvements and erecting new
Improvements as herein provided. If the proceeds of insurance held by Tenant
shall exceed the cost of doing so, such excess shall belong to, and may be
retained by, Tenant upon completion of and payment for such work.
7.3.2 Landlord Adjusted Losses shall be disbursed by Landlord from
time to time, pursuant to the provisions of this Section and SECTION 7.2 in
reimbursement or payment of the cost of the alterations, the demolition, or the
repair, replacement, rebuilding or restoration of the damage or destruction by
reason of which said moneys were paid to Landlord including, at Tenant's
election, the demolition of the Improvements so damaged and the erection of new
Improvements in replacement thereof. Any moneys so deposited (hereinafter
sometimes referred to as "DEPOSITED SUMS") may be withdrawn and shall be
disbursed by Landlord upon receipt of a request therefor by Tenant, accompanied
by the following:
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(i) A certificate of Tenant (A) requesting payment of a specified amount
of the Deposited Sums to Tenant or to persons whose names and
addresses shall be stated, (B) describing in reasonable detail the
services or materials theretofore applied to the work, (C) stating
that such specified amount does not exceed the cost of the services
and materials, and (D) stating that the cost of the services and
materials has not been previously made the basis of any withdrawal of
money.
(ii) A certificate of an engineer or architect selected and paid by Tenant
who shall be reasonably satisfactory to Landlord, stating (A) that the
services and materials described in the accompanying certificate of
Tenant were necessary or appropriate to the work, (B) that the amount
specified in such certificate of Tenant is not in excess of the cost
of the services and materials, (C) the additional amount, if any,
estimated as being required to complete and pay for the work, and (D)
that the work has been done in accordance with the plans and
specifications submitted or approved, if such plans and specifications
were required to be submitted or approved, as the case may be, by the
provisions of this Lease.
(iii)A certificate of a title company reasonably satisfactory to Landlord
and then doing business in the City of New York showing that there has
not been filed with respect to the Demised Premises a mechanics',
laborer's, materialman's or other similar lien, encumbrance or charge,
except liens, encumbrances or charges which will be discharged
simultaneously with the making of the payment requested.
(iv) If exterior walls have been repaired or erected, a perimeter survey
showing no encroachments upon any real property adjacent to the Land.
Section 7.4 OTHER INSUREDS. Notwithstanding anything to the contrary in
this Lease, if the terms of any Leasehold Mortgage shall require that insurance
proceeds be deposited with Leasehold Mortgagee thereunder, any moneys received
from insurance provided by Tenant shall be deposited in accordance with the
terms of such Leasehold Mortgage, provided that Leasehold Mortgagee agrees to
release such moneys substantially in accordance with SECTIONS 7.2, and 7.3
hereof. In the event that there is no Leasehold Mortgage but there is a
Mortgage, and the terms thereof require that such insurance proceeds be
deposited with the Mortgagee thereunder, any such proceeds shall be deposited
with such Mortgagee provided that such Mortgagee shall release such proceeds
substantially in accordance with SECTIONS 7.2 and 7.3 hereof.
ARTICLE 8
RESTORATION
Section 8.1 DELIVERIES. If in the event of any loss, damage or destruction,
the cost of restoration and repairs of which exceeds $500,000 in the aggregate,
Tenant agrees at least thirty (30) days before the commencement of any work
necessary to repair, alter or renew the
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Premises, or any part thereof to the same condition and value which existed
immediately prior to the happening of the event which caused such loss, damage
or destruction, to furnish to Landlord the following:
(a) complete plans and specifications for the demolition,
construction, repair, replacing, renewing or altering of the Improvements,
prepared by an architect reasonably satisfactory to Landlord and which
plans and specifications shall meet with the reasonable approval of
Landlord, together with the approval thereof by any Governmental Authority
then exercising jurisdiction with regard to such work, plans and
specifications, which plans and specifications shall be and become the sole
and absolute property of Landlord in the event that for any reason this
Lease shall be terminated;
(b) a fixed sum contract or construction management contract with, to
the extent available at a reasonable cost, a guaranteed maximum price in
assignable form made with a reputable and responsible builder, providing
for the completion of all work, labor and materials necessary to repair and
restore the Improvements in accordance with said plans and specifications;
(c) an assignment of the contract so furnished, duly executed and
acknowledged by Tenant, by its terms to be effective upon any termination
of this Lease or upon Landlord's re-entry upon the Premises following a
default by Tenant prior to the complete performance of such contract, such
assignment to also include the benefit of all payments made on account of
said contract including payments made prior to the effective date of such
assignment.
Section 8.2 RESTORATION. If in the event of any loss, damage or
destruction, the cost of restoration and repairs of which is less than $500,000
individually or in the aggregate, Tenant agrees to commence and diligently
prosecute to completion any work necessary to repair, alter or renew the
Premises, or any part thereof to the same condition and value which existed
immediately prior to the happening of the event which caused such loss, damage
or destruction.
ARTICLE 9
INTENTIONALLY DELETED
---------------------
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ARTICLE 10
ASSIGNMENT, SUBLETTING, ETC.
Section 10.1 RESTRICTIONS. Except as specifically set forth in this Lease,
without the prior written consent of Landlord, which consent may be withheld by
Landlord in Landlord's sole discretion, neither this Lease nor the interest of
Tenant in this Lease, nor the interest of Tenant in any sublease, license or
concession or in any rentals under any sublease, license or concession shall be
sold, assigned, or otherwise transferred, whether by operation of law or
otherwise, nor shall Tenant sublet the Premises or any part or parts thereof,
nor shall any transaction or series of transactions be entered into (including,
without limitation, any assignment, transfer, issuance or redemption of any
ownership interest, or any merger, consolidation or dissolution), which,
directly or indirectly, may result in a change of control of Tenant or any
person or entity which, directly or indirectly, controls Tenant. For purposes of
this paragraph, the term "control" shall mean (i) in the case of a corporation,
either (A) ownership or voting control, directly or indirectly, of at least
fifty (50%) percent of all the voting stock, or (B) the power to direct the
management and policies of such corporation, (ii) in case of a partnership or
joint venture, either (x) ownership, directly or indirectly, of at least fifty
(50%) percent of all the general or other partnership (or similar) interests
therein, or (y) the power to direct the management and policies of such
partnership or joint venture, and (iii) in the case of any other entity, either
(x) ownership, directly or indirectly, of at least fifty (50%) percent of all
the equity or other beneficial interest(s) therein, or (y) the power to direct
the management and policies of such entity, without the prior written consent of
Landlord in each case, which may be withheld in Landlord's sole discretion.
Notwithstanding the foregoing provisions of this Section, transfer of stock in a
corporation whose shares are traded in any recognized national securities
exchange or "over-the-counter" shall not constitute an assignment for purposes
of this Lease provided that the principal purpose of such transfer or transfers
is not to avoid the restrictions on assignment otherwise applicable hereunder.
Section 10.2 NO RELEASE OF OBLIGATIONS OF ASSIGNOR OR SUBLANDLORD. No
assignment of this Lease or subletting of the Premises, unless made in
compliance with all of the provisions of this Article, shall have any validity.
An assignment of this Lease or subletting of the Premises shall not relieve or
release the assignor or sublandlord from any obligations of Tenant under this
Lease and the assignor/sublandlord shall remain liable for the performance of
all obligations of Tenant hereunder for the remainder of the term and renewal
terms, if any.
Section 10.3 FURTHER ASSIGNMENT. Any consent by Landlord under Section
10.1, herein shall apply only to the specific transaction thereby authorized and
shall not relieve Tenant from the requirement of obtaining the prior written
consent of Landlord to any further sale or assignment of this Lease or transfer
of stock or subletting of all or any portion of the Premises.
Section 10.4 TENANT INDEMNIFICATION. Tenant shall and does hereby indemnify
and agree to defend and hold Landlord free and harmless from and against any and
all liabilities, claims, causes of action, suit or suits, expenses, penalties,
costs and fees (including, without
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limitation, reasonable counsel fees) arising under or in connection with the
terms, provisions and conditions of each and every sublease, license or
concession agreement.
Section 10.5 SUBTENANT'S ACTS; TENANT OBLIGATION TO CURE. The fact that a
violation or breach of any of the terms, provisions or conditions of this Lease
results from or is caused by an act or omission by any subtenant, licensee or
concessionaire shall not relieve Tenant of Tenant's obligation to cure the same.
Tenant shall take all necessary steps to prevent any such violation or breach.
Section 10.6 SUBRENT. If all or any part of the Premises be sublet or
occupied by anyone other than Tenant, Landlord may, after a Default by Tenant,
collect subrent from any and all subtenants or occupants and apply the net
amount collected to the net annual rent reserved herein, but no such collection
shall be, or be deemed to be, a waiver of any agreement, term, covenant or
condition of this Lease or the acceptance by Landlord of any subtenant or
occupant as Tenant, or a release of Tenant from performance by Tenant of its
obligations under this Lease.
Section 10.7 ASSIGNMENT OF SUBLEASES. To secure the prompt and full payment
by Tenant of the Rental in this Lease reserved and the faithful performance by
Tenant of all the other terms and conditions herein contained on its part to be
kept and performed, Tenant hereby assigns, transfers and sets over unto Landlord
subject to the conditions hereinafter set forth, all of Tenant's right, title
and interest in and to all subleases now or hereafter made and in and to all
concession agreements now or hereafter made affecting any part of the Premises,
and hereby confers upon Landlord, its agents and representatives, a right of
entry in and sufficient possession of the Premises to permit and insure the
collection by Landlord of said rentals and other moneys, and further agrees that
the exercise of said right of entry and qualified possession by Landlord shall
not constitute an eviction of Tenant from the Premises or any portion thereof
and that should said right of entry and possession be denied Landlord, its agent
or representative, Landlord may, in the exercise of said right, use all
requisite force to gain and enjoy the same without responsibility or liability
to Tenant, its servants, employees, guests or invitees, or any person
whomsoever, Tenant hereby agreeing in said contingency to hold Landlord safe and
harmless from any claim of any character by any person arising out of or in
connection with the entry by Landlord and taking possession of the Premises;
provided, however, that such assignment shall become operative and effective
only in the event that this Lease and the term hereof shall be cancelled or
terminated pursuant to the terms, covenants and conditions hereof, or in the
event of repossession under dispossess warrant or other re-entry or repossession
by Landlord under the provisions hereof, or in the event of a Default by Tenant
hereunder, and then only as to such subleases and concession agreements that
Landlord may elect to take over.
Section 10.8 NO MONETARY DAMAGES. In no event shall Tenant be entitled to
make, nor shall Tenant make any claim, and Tenant hereby waives any claim, for
money damages, nor shall Tenant claim any money damages by way of set-off,
counterclaim or defense, based upon any claim or assertion by Tenant that
Landlord has unreasonably withheld or unreasonably delayed any consent or
approval to a proposed assignment or subletting as provided for above, but
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Tenant's sole remedy shall be an action or proceeding to enforce any such
provision, or for specific performance, injunction or declaratory judgment.
Section 10.9 TENANT'S OPTION TO ACQUIRE THE PREMISES. In the event that
Landlord withholds its consent to the assignment of this Lease or the sublet of
all or part of the Premises, Tenant shall have the option to acquire the
Purchased Land for a purchase price (the "NON-CONSENT PURCHASE PRICE") equal to
the sum of (x) an amount equal to the Fixed Net Rent payable for the year in
which Tenant shall consummate such purchase option divided by five percent (5%),
plus an amount equal to all transfer taxes and closing costs (including, without
limitation, reasonable attorneys' fees) incurred by Landlord, as seller. In the
event that Tenant exercises its rights hereunder, the provisions of ARTICLE 37
hereof shall control the exercise of the purchase option herein contained and
the consummation of the acquisition of the Purchased Land by Tenant.
ARTICLE 11
LEASEHOLD MORTGAGES
Section 11.1 RIGHT TO MORTGAGE. Tenant shall have the right, without
Landlord's prior consent, to mortgage its interest in this Lease and any
sublease(s) under one Leasehold Mortgage at any given time, and to assign this
Lease and any sublease(s) as collateral security for such Leasehold Mortgage.
Such Leasehold Mortgage must at all times be held by a Lender. No Leasehold
Mortgage shall extend to or affect the Land or the reversionary interest and
estate of Landlord in and to the Premises or any part thereof. The granting of a
Leasehold Mortgage does not render, and shall not be construed to render, a
Leasehold Mortgagee an assignee for purposes of this Lease. Landlord agrees to
amend this Lease to provide for any reasonable changes that such Lender may
require; provided, that such changes shall be commercially reasonable and in no
event affect the rent payable hereunder, the term hereof, or terms, provisions
and conditions of the Tenant's Purchase Option or any other similar option
hereunder. No Leasehold Mortgage shall be valid or of any force or effect unless
and until (i) Leasehold Mortgagee shall have sent to Landlord written notice
specifying the name and post office address of Leasehold Mortgagee and (ii) the
Leasehold Mortgage shall contain the following provisions:
(a) "This mortgage is executed upon the condition that no purchaser at
any foreclosure sale shall acquire any right, title or interest in or to
the Lease hereby mortgaged, unless the said purchaser, or the person, firm
or corporation to whom or to which such purchaser's right has been
assigned, shall, in the instrument transferring to such purchaser or to
such assignee Tenant's interest under the said Lease, assume and agree to
perform all of the terms, covenants and conditions of said Lease to be
observed or performed on the part of Tenant, and moreover, that no further
or additional mortgage or assignment of said Lease shall be made, except
subject to the provisions contained in Articles 10 and 11 of said Lease,
and that a duplicate original of said assumption agreement, in form
satisfactory to Landlord's counsel and duly executed and acknowledged by
such purchaser or such assignee, is delivered to Landlord immediately
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after the consummation of such sale, or, in any event, prior to taking
possession of the Premises;" and
(b) "The mortgagee waives all right and option to retain and apply the
proceeds of any insurance or the proceeds of any condemnation award toward
payment of the sum secured by the mortgage to the extent such proceeds are
required to be used for the repair or restoration of the mortgaged premises
substantially in accordance with the provisions of the Lease hereby
mortgaged."
Landlord agrees that so long as any such Leasehold Mortgage shall remain
unsatisfied of record or until written notice of satisfaction is given by the
holder thereof to Landlord, the following provisions shall apply:
11.1.1 There shall be no cancellation, surrender or modification of
this Lease by joint action of Landlord and Tenant without the prior consent in
writing of Leasehold Mortgagee (but nothing herein shall prevent Landlord from
terminating this Lease upon an Event of Default as provided herein).
11.1.2 Landlord shall, upon serving Tenant with any notice of default
(which notice shall specify the nature of the default) or termination, serve a
copy of such notice upon Leasehold Mortgagee. Leasehold Mortgagee shall
thereupon have the same period, as provided Tenant, after service of such notice
upon it, to remedy or cause to be remedied the defaults complained of, and
Landlord shall accept such performance by such Leasehold Mortgagee as if the
same had been done by Tenant.
Section 11.2 DEFAULT. Notwithstanding anything to the contrary herein
contained, if any Default shall occur which pursuant to any provision of this
Lease entitles Landlord to terminate this Lease and if, before the expiration of
thirty (30) days from the date of service of a copy of the notice of termination
upon a Leasehold Mortgagee pursuant to ARTICLE 11, Leasehold Mortgagee shall
have notified Landlord of its desire to nullify such notice (such notification
from Leasehold Mortgagee being herein referred to as a "NULLIFICATION NOTICE"),
then in such event Landlord shall not be entitled to terminate this Lease by
reason of the default specified in the Nullification Notice and any notice of
termination theretofore given shall be void and of no effect, provided that
within thirty (30) days after service of the Nullification Notice Leasehold
Mortgagee shall have cured any monetary defaults then existing hereunder
(including, without limitation, any interest, penalties and late charges which
have accrued thereon) and shall have complied or commenced the work of complying
with any non-monetary obligations then in default (and diligently and
continuously prosecutes same to completion).
Section 11.3 CURE. If Landlord's notice of termination shall have been
nullified pursuant to SECTION 11.2, Landlord shall not have the right
subsequently to terminate this Lease so long as Leasehold Mortgagee or its
nominee or successor continues to pay the Rental due hereunder and Leasehold
Mortgagee proceeds with reasonable diligence to complete or cause the completion
of the work of curing non-monetary defaults (and diligently and continuously
prosecutes same to completion). The giving of a notice of default or termination
by Landlord pursuant to the provisions of this Article does not impair
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Landlord's right to give, nor impair Tenant's and Leasehold Mortgagee's right to
receive, such notices for other defaults that may arise hereunder and the giving
of such notices shall be subject to the provisions of this Article.
Section 11.4 NEW LEASE; RIGHTS OF LEASEHOLD MORTGAGEE. Landlord agrees
that, in the event of a termination of this Lease, Landlord shall upon request
of any Leasehold Mortgagee (and whether or not a Nullification Notice may have
been given) enter into a new lease of the Premises with Leasehold Mortgagee or
its designee for a term equal to what would have been the remainder of the term
of this Lease if this Lease had not been terminated, which new lease shall be
effective as of the date of such termination and shall be at the same Rental and
upon the same terms, provisions, covenants and agreements as are herein
contained, subject only (a) to the same conditions of title as this Lease is
subject to on the date of the execution hereof and any liens or encumbrances or
other matters (i) which were caused or created by Tenant, (ii) which are
required by law or (iii) which Tenant was obligated to discharge under the terms
of this Lease and (b) to the rights, if any, of parties then in possession of
any part of the Premises, provided that:
(a) Said Leasehold Mortgagee shall make written request upon Landlord
for such new lease within forty-five (45) days after the termination of
this Lease;
(b) Said Leasehold Mortgagee or its designee executes and delivers
such new lease within forty-five (45) days after the execution and delivery
of the new lease by Landlord to said Leasehold Mortgagee in response to the
request made pursuant to subparagraph (a) above;
(c) Said Leasehold Mortgagee shall pay to Landlord at the time of the
execution and delivery of said new lease any and all sums which would at
the time of the execution and delivery thereof be due pursuant to this
Lease, but for such termination, including, without limitation, any
interest, penalties and late charges which have accrued thereon, together
with any costs and expenses, including reasonable attorneys' fees, which
Landlord shall have incurred by reason of such termination;
(d) Said Leasehold Mortgagee upon the execution of such new lease
cures within thirty (30) days thereof (unless such default requires work to
be performed, acts to be done, or conditions to be removed which cannot by
their nature reasonably be performed, done or removed, as the case may be,
within such thirty (30) day period, in which case no default shall be
deemed to exist so long as Leasehold Mortgagee shall have commenced curing
the same within such thirty (30) day period and shall diligently and
continuously prosecute the same to completion) all non-monetary defaults of
which it has notice (and which are susceptible of cure by Leasehold
Mortgagee) remaining uncured under this Lease as of the date of execution
and delivery of the new lease; and
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(e) Landlord shall not warrant possession of the Premises to the
tenant under the new lease or title thereto, but the tenant under such new
lease shall have the same right, title and interest, in and to the Premises
to the extent, if any, that Tenant had therein and thereto prior to the
termination of this Lease.
Section 11.5 RIGHT TO PERFORM COVENANTS AND AGREEMENTS. A Leasehold
Mortgagee shall have the right, but not the obligation, to perform any
obligation of Tenant under this Lease and to remedy any default by Tenant.
Landlord shall accept performance by or at the instigation of a Leasehold
Mortgagee in fulfillment of Tenant's obligations, for the account of Tenant and
with the same force and effect as if performed by Tenant. No performance by or
on behalf of such Leasehold Mortgagee shall cause it to become a "mortgagee in
possession" or otherwise cause it to be deemed to be in possession of the
Premises or bound by or liable under this Lease.
Section 11.6 FORBEARANCE BY LANDLORD. So long as Leasehold Mortgagee shall
be diligently exercising its cure rights within the applicable cure periods set
forth herein, Landlord shall not (i) re-enter the Premises, (ii) serve the
termination notice described in SECTION 26.2, or (iii) bring a proceeding on
account of such default to (A) dispossess Tenant and/or other occupants of the
Premises, (B) re-enter the Premises, or (C) terminate this Lease or the
Leasehold estate. Upon any cessation of Leasehold Mortgagee so exercising such
rights prior to the completion of such cure, Landlord may exercise any of
Landlord's termination rights contained in this Lease.
Section 11.7 LEASEHOLD MORTGAGEE'S RIGHT TO ENTER PREMISES. Landlord and
Tenant authorize Leasehold Mortgagee to enter upon the Premises as necessary to
cure a Tenant's default hereunder and to take any action(s) reasonably necessary
to effect such cure.
Section 11.8 INTERACTION BETWEEN LEASE AND LEASEHOLD MORTGAGE. Tenant's
default as Mortgagor under a Leasehold Mortgage shall not in and of itself
constitute a default under this Lease.
Section 11.9 LEASEHOLD MORTGAGEE'S PARTICIPATION RIGHTS. Landlord agrees
that Leasehold Mortgagee shall have the right to participate on Tenant's behalf
in any appraisal, arbitration or other similar proceeding required hereunder
and/or any discussions, proceedings or actions relating to any casualty or
condemnation in connection with the Premises, it being understood and agreed
that Leasehold Mortgagee shall have no separate rights thereto.
Section 11.10 CONFIRMATION. Landlord shall upon Tenant's request execute,
acknowledge and deliver to Tenant and/or each Leasehold Mortgagee an agreement
prepared at the cost and expense of Tenant and in form reasonably satisfactory
to such Leasehold Mortgagee and Landlord, confirming all or any of the
provisions of this Article.
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Section 11.11 COSTS AND EXPENSES. Leasehold Mortgagee receiving any new
lease pursuant to the provisions of this Article shall pay all of Landlord's
reasonable costs and expenses (including attorneys' fees) incident to Landlord's
entering into such new lease.
Section 11.12 ASSIGNMENT. Notwithstanding the provisions of ARTICLE 10
hereof, Landlord agrees that for so long as the Berkshire Loan is unpaid, the
Berkshire Mortgagee shall have, from and after the date that the Berkshire
Mortgagee succeeds to the rights and interests of Tenant hereunder, the one-time
right to assign and transfer this Lease without the prior consent of Landlord
provided such assignee or transferee is not a Prohibited Transferee. In the
event that the Berkshire Mortgagee attempts in good faith to assign this Lease
but is unable to do so for a period of 120 days, then, after such period, the
Berkshire Mortgagee shall have the one-time right to assign this Lease subject
only to the restriction set forth in clause (v) of the definition of "Prohibited
Transferee".
ARTICLE 12
REPAIRS AND MAINTENANCE
Section 12.1 MAINTENANCE. Throughout the term of this Lease, Tenant, at its
sole cost and expense, shall take care of the Premises, including, without
limiting the generality of the foregoing, all Equipment and articles of personal
property therein or thereon and all sidewalks, grounds, areas, vaults, chutes,
sidewalk hoists, railings, gutters, alleys and curbs in front of or adjacent to
the Premises and will keep and maintain the same in safe order and the same
condition as exists on the date hereof, reasonable wear and tear excepted, and
make all repairs therein and thereon, interior and exterior, structural and
nonstructural, ordinary and extraordinary, and unforeseen and foreseen,
necessary to keep the same as exists on the date hereof, reasonable wear and
tear excepted. Tenant shall not commit or suffer, and shall use all reasonable
precaution to prevent, waste to the Premises. When used in this Section, the
term "repairs" shall include all necessary replacements, renewal, alterations
and additions. All repairs made by Tenant shall be equal or better in quality
and class to the original work.
Section 12.2 NO LANDLORD OBLIGATIONS. Tenant acknowledges and agrees that
Landlord shall not be required to furnish any services, utilities or facilities
whatsoever to the Premises. In addition, Landlord shall have no duty or
obligation to make any alteration, change, improvement, replacement or repair
to, or to demolish, any Improvements now or hereafter erected or maintained on,
the Land. Tenant assumes the full and sole responsibility for the condition,
operation, repair, alteration, improvement, replacement, maintenance and
management of the Premises.
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ARTICLE 13
CHANGES, ALTERATIONS AND ADDITIONS
Section 13.1 CAPITAL IMPROVEMENTS. Tenant shall not demolish, replace or
alter the Improvements, or any part or parts thereof, or make any addition
thereto or construct any additional building on the Premises, whether
voluntarily or in connection with a repair or restoration required by this Lease
(any such action being herein referred to as a "CAPITAL IMPROVEMENT"), unless
and until Tenant shall comply with the following requirements and, if
applicable, with the additional requirements set forth in SECTION 13.2:
13.1.2 Tenant shall have procured and paid for, so far as the same may be
required from time to time, all permits, certificates and authorizations
required by any Governmental Authority or any officer, department, office,
bureau, agency or instrumentality thereof now existing or hereafter created and
having jurisdiction over the Premises. Landlord shall not unreasonably refuse to
join in the application for such permit or authorization and shall reasonably
cooperate with Tenant, without charge except to the extent Landlord's
participation required is more than de minimis, in which case Tenant agrees to
pay to Landlord, upon demand and as additional rent hereunder, a reasonable fee
and Landlord's costs paid or incurred in connection therewith. Landlord shall
not be subject to any liability for the payment of any costs or expenses in
connection with any such applications and Tenant hereby indemnifies and agrees
to defend and hold Landlord harmless from and against any and all such costs and
expenses. Copies of all required permits and authorizations shall be delivered
to Landlord prior to the commencement of work on any Capital Improvement.
13.1.3 Any Capital Improvement shall, when completed, be of such a
character as not to reduce the value of the Premises below its value immediately
before such Capital Improvement.
13.1.4 Any Capital Improvement shall be made promptly (Unavoidable
Delays excepted) and in a good and workmanlike manner and in compliance with all
applicable permits, certificates and authorizations and building and zoning laws
and with all other Requirements.
13.1.5 The cost of any Capital Improvement shall be paid in cash or
its equivalent, so that the Premises shall at all times be free of liens for
labor and materials supplied or claimed to have been supplied to the Premises.
13.1.6 No Capital Improvement shall be undertaken until Tenant shall
have delivered to Landlord insurance policies or certificates therefor issued by
responsible insurers, bearing notations evidencing the payment of premiums or
accompanied by other evidence satisfactory to Landlordd of such payments, for
Worker's Compensation Insurance covering all persons employed in connection with
the work and with respect to whom death or bodily injury claims could be
asserted against Landlord, Tenant or the Premises, and, unless the liability
insurance then in effect with respect to the Premises shall cover the risk,
owner's protective liability insurance expressly covering the additional hazards
resulting from the Capital Improvement and work thereon with limits not less
than those, and otherwise subject to the same
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conditions and requirements, set forth in Article 6 with respect to the
liability insurance required thereunder. If under the provisions of any fire,
liability or other insurance policy or policies then covering said Premises or
any part thereof any consent to such Capital Improvement by said insurance
company or companies issuing such policy or policies shall be required to
continue and keep such policy or policies in full force and effect, Tenant shall
obtain such consents and pay any additional premiums or charges therefor that
may be imposed by said insurance company or companies.
Section 13.2 SIGNIFICANT CAPITAL IMPROVEMENTS. In the event that except
with respect to decorative items (i) the estimated cost of any Capital
Improvement shall exceed $500,000, or (ii) any Capital Improvement would involve
work of a structural nature, then in addition to complying with the requirements
of the preceding SECTION 13.1, Tenant shall also comply with the following
requirements:
13.2.1 At least 30 days prior to the commencement of any work in
connection with the proposed Capital Improvement, (i) Tenant shall notify
Landlord in writing of the nature of the Capital Improvement and the estimated
cost thereof and (ii) deliver to Landlord a certificate from the architect
described in subparagraph 13.2.3 below certifying that the proposed Capital
Improvement will not (x) reduce or impair the value of the Premises, or (y)
change the use or character of the Premises from that which exists as of the
date hereof or that which is permitted pursuant to SECTION 23.1;
13.2.2 At least 10 days before the commencement of any work in
connection with the proposed Capital Improvement, Tenant shall furnish to
Landlord the following:
(i) security reasonably acceptable to Landlord, guaranteeing completion
thereof within a reasonable time subject to Unavoidable Delays, free
and clear of all liens, encumbrances, chattel mortgages, conditional
bills of sale and other charges;
(ii) complete plans and specifications for the proposed Capital Improvement
satisfying the requirements of subparagraph (a) of SECTION 8.1 hereof;
(iii)a contract for the construction of said Capital Improvement
satisfying the requirements of subparagraph (b) of SECTION 8.1 hereof;
(iv) an assignment of the aforesaid contract satisfying the requirements of
subparagraph (c) of SECTION 8.1, hereof; and
(v) insurance policies or certificates of insurance reflecting the
following:
(a) contractor's comprehensive general and automobile liability
insurance in an amount not less than the amounts set forth in
SECTION 6.1(b) hereof for bodily injury and property damage;
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(b) owner's protective insurance written under a comprehensive
general liability policy or policies form, separate from the
contractor's comprehensive general liability policy required by
subparagraph (i) above, naming Landlord and Tenant, as their
respective interests may appear, in an amount not less than the
amounts set forth in SECTION 6.1(b) hereof for bodily injury and
property damage;
(c) worker's compensation and disability benefits insurance covering
all persons or entities employed in connection with the
construction of the improvement with respect to whom death or
bodily injury claims could be asserted against Landlord;
(d) builder's risk insurance (fire, extended coverage, vandalism,
malicious mischief, burglary and theft) written on a completed
value (non-reporting) basis with limits as provided in Article 6
hereof, naming any general contractor engaged by Tenant, and also
naming Landlord and Tenant, as their respective interests may
appear. In addition, such insurance (x) shall contain a waiver or
subrogation against subcontractors and an endorsement stating
that "permission is granted to complete and occupy"; (y) if any
off-site storage location is used, such insurance shall cover,
for full insurable value, all materials and equipment on or about
any such off-site storage location intended for use with respect
to the improvement;
(e) during the demolition of the Existing Structure, such additional
liability insurance as Landlord reasonably requires to insure the
added risks attendant upon such demolition;
(f) insurance against damage to property adjacent to the Land
insuring against any damage to such property as a result of the
construction, use or maintenance of the improvement, including
without limitation, any excavation of the Land and the
construction of the foundation for the improvement; and
(g) such other insurance in such amounts as may from time to time be
reasonably required by Landlord and similar to that required by
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landlords of property similar to the Land, during the
construction of the improvement, against such other insurable
hazards as are commonly insured against in connection with
construction of improvements similar to the Initial Construction
on premises similarly situated.
13.2.3 Such Capital Improvement shall be carried out under the
supervision of an architect selected by Tenant and approved in writing by
Landlord, which approval shall not be unreasonably withheld or delayed.
13.2.4 Tenant shall pay to Landlord the reasonable fees and expenses
of any architect or engineer selected by Landlord to review the plans and
specifications and inspect the work on behalf of Landlord.
Section 13.3 TITLE TO IMPROVEMENTS. Notwithstanding anything to the
contrary contained in this Lease, all erections, alterations, improvements or
additions (including, without limitation, Capital Improvements) made upon the
Premises by Tenant or any person or entity acting by, under or through Tenant,
shall be and be deemed the property of Tenant.
ARTICLE 14
REQUIREMENTS OF PUBLIC AUTHORITIES AND
OF INSURANCE UNDERWRITERS AND POLICIES
--------------------------------------
Section 1.4.1 TENANT COMPLIANCE WITH REQUIREMENTS. Tenant shall, at its own
cost and expense, during the term of this Lease, promptly comply with any and
all Requirements irrespective of the nature of the work required to be done,
extraordinary as well as ordinary, of federal, state, city, county, borough or
other governmental, public or quasi-public authorities now existing or hereafter
created, and of any and all of their departments and bureaus, and of any
applicable Fire Rating Bureau or other body exercising similar functions,
affecting the Premises or any street, avenue and/or sidewalk in front thereof
and/or any vault in or under the same, or requiring the removal of any
encroachment, or affecting the maintenance, use or occupation of the Premises,
whether or not the same involve or require any structural change or additions in
or to the Premises, and irrespective of whether or not such changes or additions
be required on account of any particular use to which the Premises, or any part
thereof, may be put; and Tenant shall also comply with any and all provisions
and requirements of any fire, liability or other insurance policy required to be
carried by Tenant under the provisions of this Lease.
Section 14.2 TENANT MAY CONTEST VALIDITY OF REQUIREMENTS. Tenant shall have
the right to contest the validity of any such Requirement or the application
thereof at Tenant's own expense. During such contest, compliance with any such
contested Requirement may be deferred by Tenant upon condition that, before
instituting any such proceedings, Tenant shall furnish to Landlord a surety
company bond, a cash deposit, letter of credit or other security satisfactory to
Landlord, securing compliance with the contested Requirements and payment of all
interest, penalties, fines, fees and expenses in connection therewith. Any such
proceeding instituted by Tenant shall be begun as soon as is
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reasonably possible after the issuance of any such contested matters and shall
be prosecuted to final adjudication with reasonable dispatch. Notwithstanding
the furnishing of any bond, deposit or security, Tenant shall promptly comply
with any such Requirements and compliance shall not be deferred if at any time
in connection therewith: (a) the Premises, or any part thereof, shall in the
reasonable judgment of Landlord be in danger of being forfeited or lost or (b)
if Landlord shall be subjected to any actual or threatened criminal sanctions or
penalties or personal liability, as Landlord shall reasonably determine.
Landlord agrees that it will cooperate with Tenant in any such contest to such
extent as Tenant may reasonably request, it being understood, however, that the
same shall not subject Landlord to any cost, expense or liability of any nature
whatsoever and Tenant hereby indemnifies and agrees to defend and save Landlord
free and harmless from and against any such costs, expenses or liability.
ARTICLE 15
EQUIPMENT
Section 15.1 REMOVAL OF EQUIPMENT. Except as set forth in SECTION 12.1
Tenant shall not have the right to remove any Equipment from the Premises except
for repairs, cleaning or other servicing, or to replace Equipment with Equipment
of equal or better quality without first obtaining the prior written consent of
Landlord. All of the foregoing must be done in accordance with the provisions of
Article 13 hereof.
Section 15.2 EQUIPMENT TO BE KEPT IN GOOD ORDER. Tenant shall keep all
Equipment in the same order and repair as exists on the date hereof and shall
replace the same when necessary with items of similar utility.
Section 15.3 PAYMENT REQUIREMENTS. All Equipment shall be fully paid for by
Tenant in cash and shall not be subject to conditional bills of sale, chattel
mortgages or other title retention agreements.
ARTICLE 16
DISCHARGE OF LIENS
Section 16.1 EXISTING LIENS. This Lease and the Leasehold Estate created
hereby are made subject to the exceptions set forth on "EXHIBIT 2" annexed
hereto and made a part hereof.
Section 16.2 NON-PERMITTED LIENS. Tenant shall not create or permit to be
created any, lien, encumbrance or charge upon the Premises or any part or parts
thereof or the income therefrom, and Tenant shall not suffer any other matter or
thing whereby the estate, rights and interest of Landlord in the Premises or any
part thereof might be impaired unless specifically permitted by this Lease.
Tenant shall have no power to do any act or make any contract which may create
29
or be the foundation for any lien, mortgage or other encumbrance upon the
reversion or other estate of Landlord, or of any interest of Landlord in the
Premises.
Section 16.3 MECHANIC'S LIENS. If any mechanic's, laborer's or
materialman's lien shall at any time be filed against the Premises or any part
thereof, Tenant shall, within thirty (30) days after notice of the filing
thereof, cause the same to be discharged of record. If Tenant shall fail to
cause such lien to be discharged within the period aforesaid, then, in addition
to any other right or remedy, Landlord may, but shall not be obligated to,
discharge the same either by paying the amount claimed to be due or by procuring
the discharge of such lien by deposit or by bonding proceedings, and in any such
event Landlord shall be entitled, if Landlord so elects, to compel the
prosecution of an action for the foreclosure of such lien by the lien or and to
pay the amount of judgment in favor of the lien or with interest, costs and
allowances. Any amount so paid by Landlord with all costs and expenses incurred
by Landlord in connection therewith, together with interest thereon at the
Default Rate from the respective dates of Landlord's making of the payment or
incurring of the costs and expense, shall constitute additional rent payable by
Tenant under this Lease and shall be paid by Tenant to Landlord on demand.
Section 16.4 NO LANDLORD LIABILITY. Nothing in this Lease contained shall
be deemed or construed in any way as constituting the consent or request of
Landlord, express or implied by inference or otherwise, to any contractor,
subcontractor, laborer or materialman for the performance of any labor or the
furnishing of any materials for any specific improvement, alteration to or
repair of the Premises or any part thereof, nor as giving Tenant any right,
power or authority to contract for or permit the rendering of any services or
the furnishing of materials that would give rise to the filing of any lien
against the Premises or any part thereof. Notice is hereby given that Landlord
shall not be liable for any work performed or to be performed at the Premises
for Tenant or any subtenant, or for any materials furnished or to be furnished
at the Premises for Tenant or any subtenant, and that no mechanic's or other
lien for such work or materials shall attach to or affect the estate or interest
of Landlord in and to the Premises.
ARTICLE 17
EXISTING CONDITION OF PREMISES
Tenant agrees (i) to accept the Premises in the existing condition and
state of repair as of the date hereof and without recourse to Landlord, (ii) to
take possession of same "as is" and "where is" as of the date hereof, and (iii)
that no representations, statements or warranties, express or implied, have been
made by or on behalf of Landlord in respect thereof or in respect of the
condition thereof or the present or future use or occupation that may be made
thereof, the zoning or other Requirements, transferable development rights,
encumbrances thereon, appurtenances, or title thereto (except as may be
expressly set forth in this Lease or in a separate certificate or agreement
executed simultaneously herewith). Without limiting the generality of the
foregoing, Tenant has not relied on any representations or warranties other than
as expressly set forth herein including, without limitation, express or implied,
as to (1) the current or future real estate tax liability, assessment or
valuation of the Premises, (2) the potential qualification of the Premises for
30
any and all benefits conferred by Federal, state or municipal laws, whether for
subsidies, special real estate tax treatment, insurance, mortgages, or any other
benefits, whether similar or dissimilar to those enumerated, (3) the compliance
of the Premises, in its current or any future state, with applicable zoning
ordinances and the ability to obtain a change in the zoning or a variance with
respect to the Premises' non-compliance, if any, with said zoning ordinances,
(4) the availability of any financing for the purchase, alteration or operation
of the Premises from any source, (5) the current or future use of the Premises,
including but not limited to the Premises' use for residential or commercial
purposes, (6) the present and future condition and operating state of any and
all Equipment on the Premises and the present or future structural and physical
condition of any building, (7) the ownership or state of title of any personal
property on the Premises, (8) the presence or absence of any Requirements and
any violations thereof, (9) the layout, leases, rents, income, expenses,
operation, agreements, licenses, easements, instruments, documents or service
contracts of or in any way affecting the Premises, and (10) the presence or
absence of any Hazardous Materials (as hereinafter defined), and the compliance
or non-compliance with any Hazardous Materials Laws (as hereinafter defined).
Landlord shall in no event whatsoever be liable for any latent or patent defects
in the Premises.
ARTICLE 18
LANDLORD NOT LIABLE FOR INJURY OR DAMAGE
----------------------------------------
Section 18.1 NO LIABILITY FOR INJURY OR DAMAGE. Landlord shall not in any
event whatsoever be liable for any injury or damage to any property or to any
person happening on, in or about the Premises and its appurtenances, nor for any
injury or damage to the Premises or to any property belonging to Tenant or any
other person which may be caused by any fire, breakage, leakage or defect or by
water, rain or snow that may leak into, issue or flow from any part of the
Premises or by the use, misuse or abuse of any of the elevators, hatches,
openings, installations, stairways or hallways, or which may arise from any
other cause whatsoever.
Section 18.2 NO LIABILITY FOR INJURY OR DAMAGE CAUSED BY UTILITY OR
SERVICE. Landlord shall not be liable for any failure of water supply, gas or
electric current or any other utility or service, nor for any injury or damage
to any property or person or to the Premises caused by or resulting from any
such failure, nor for the interference with light or other incorporeal
hereditaments by any person, or caused by any public or quasipublic work.
ARTICLE 19
INDEMNIFICATION OF LANDLORD
---------------------------
In addition to any other indemnities to Landlord specifically provided in
this Lease, Tenant shall indemnify and save harmless Landlord and any holder of
a Mortgage (and any of their principals, partners, officers, directors,
shareholders, employees, agents or servants) (collectively, the "INDEMNITEES")
against and from all liabilities, suits, obligations, fines, damages, penalties,
claims, costs, charges and expenses, including reasonable architects' and
31
attorney's fees, which may be imposed upon or incurred by or asserted against
any of the Indemnitiees by reason of any of the following occurring during the
term of this Lease:
(a) any work or thing done in, on or about the Premises or any
part thereof, including, without limitation, the demolition
of any existing Improvements and/or the construction of any
Improvements or any Capital Improvement thereto;
(b) any use, non-use, possession, occupation, alteration,
repair, condition, operation, maintenance or management of
the Premises or any part thereof or of any street, alley,
sidewalk, curb, vault, passageway or space adjacent thereto;
(c) any negligence or tortious acts on the part of Tenant or any
subtenant or any of its or their agents, contractors,
servants, employees, licensees or invitees;
(d) any accident, injury (including death) or damage to any
person or property occurring in, on or about the Premises or
any part thereof or in, on or about any street, alley,
sidewalk, curb, vault, passageway or space adjacent thereto;
(e) any failure on the part of Tenant to keep, observe, perform
or comply with any of the covenants, agreements, terms or
conditions contained in this Lease or any easements,
sublease, license or concession agreements or other
contracts and agreements affecting the Premises on its part
to be kept, observed, performed or complied with;
(f) any liability which may be asserted against Landlord
relating to the use or occupancy of the Premises or parts
thereof;
(g) any liability which may be asserted against Landlord or any
lien or claim which may be alleged to have arisen against or
on or about the Premises under the laws of the State in
which the Premises are located or of any other Governmental
Authority arising out of or in connection with, directly or
indirectly, this Lease, the leasehold estate created hereby,
the possession of the Premises by Tenant
32
hereunder or any action taken or failed to be taken by
Tenant, including, without limitation, the use, maintenance,
development, construction, repair and/or restoration of the
Premises; or
(h) any contest permitted pursuant to the provisions of Articles
4 and 14 hereof.
The provisions of this Article and all other indemnity provisions elsewhere
contained in this Lease shall survive the expiration or earlier termination of
this Lease. All indemnity provisions provided for in this Lease shall be deemed
to include, even if not so expressly stated, costs and expenses (including,
without limitation, reasonable architects' fees and reasonable attorneys' fees)
incurred by Landlord in connection with the liability, damage, claim or charge
to which the indemnity applies. The obligations of Tenant under this Article 19
shall not in any way be affected by the absence or presence in any case of
covering insurance or by the failure or refusal of any insurance carrier to
perform any obligation on its part under insurance policies affecting the
Premises.
ARTICLE 20
LANDLORD'S RIGHT OF INSPECTION
------------------------------
Section 20.1 LANDLORD INSPECTION. Tenant shall permit Landlord and its
agents or representatives to enter the Premises on business days during business
hours upon reasonable notice to Tenant for the purpose of (i) inspecting the
same and (ii) making any necessary repairs thereto and performing any work
therein that may be necessary by reason of Tenant's failure after the giving of
notice if required hereunder and the expiration of the applicable cure period if
any to make any such repairs or perform any such work. Notwithstanding anything
to the contrary contained in this Article 20, Landlord shall have the right to
enter the Premises at any time in the event of an emergency to make any
necessary repairs at Tenant's cost and expense.
Section 20.2 NO LANDLORD DUTY. Nothing in this Article or elsewhere in this
Lease shall imply any duty upon the part of Landlord to do any work; and
performance thereof by Landlord shall not constitute a waiver of Tenant's
default in failing to perform the same.
Section 20.3 INSPECTIONS FOR PROSPECTIVE PURCHASERS AND MORTGAGEES.
Landlord shall have the right to enter the Premises on business days during
business hours upon reasonable notice to Tenant for the purpose of showing same
to prospective purchasers or mortgagees thereof and, on business days during
business hours upon reasonable notice to Tenant within twenty-four (24) months
prior to the expiration of the term of this Lease, for the purpose of showing
the same to prospective tenants.
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ARTICLE 21
LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
----------------------------------------------
If Tenant shall at any time fail to pay any Imposition in accordance with
the provisions hereof, or to take out, pay for, maintain or deliver any of the
insurance policies (or certificates) provided for herein, or shall fail to make
any other payment or perform any other act on its part to be made or performed
after the giving of notice if required hereunder and the expiration of the
applicable grace period, if any, except in the case of emergency, then Landlord,
without waiving or releasing Tenant from any obligation of Tenant contained in
this Lease, may (but shall be under no obligation to):
(a) pay any Imposition payable by Tenant pursuant to the provisions
hereof, or
(b) take out, pay for and maintain any of the insurance policies
provided for herein, or
(c) make any other payment or perform any other act on Tenant's part
to be made or performed as in this Lease provided, and may enter upon the
Premises for the purpose and take all such action thereon as may be
necessary therefor.
All sums so paid by Landlord and all costs and expenses incurred by Landlord in
connection with the performance of any such act, together with interest thereon
at the Default Rate from the respective dates of Landlord's making of each such
payment or incurring of each such cost and expense shall be paid by Tenant to
Landlord on demand. Any payment or performance by Landlord pursuant to the
foregoing provisions of this Article shall not be nor be deemed to be a waiver
or release of the breach or default of Tenant with respect thereto or of the
right of Landlord to terminate this Lease, institute summary proceedings and/or
take such other action as may be permissible hereunder in the event of breach or
default by Tenant. Landlord shall not be limited, in the proof of any damages
which Landlord may claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid, to the amount of
the insurance premium or premiums not paid, but Landlord shall also be entitled
to recover as damages for such breach, the uninsured amount of any loss and
damages, costs and expenses of suit, including reasonable attorneys' fees,
suffered or incurred by reason of damage to or destruction of the Premises. In
addition, Landlord shall endeavor to give written notice to any Leasehold
Mortgagee promptly after taking any action under this ARTICLE 21.
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ARTICLE 22
FEE MORTGAGES
Section 22.1 RIGHT TO MORTGAGE. Nothing herein contained shall limit
Landlord's right to place any mortgage on the interests of Landlord in the
Premises including, without limitation, any modifications, consolidations,
extensions, renewals and replacements thereof (hereinafter referred to as a
"Mortgage").
Section 22.2 NOTICE IN CASE OF OMISSION. If any act or omission of Landlord
would give Tenant the right, immediately or after lapse of a period of time, to
cancel or terminate this Lease, or to xxxxx the payment of rent or to claim a
partial or total eviction, Tenant shall not exercise such right (a) until it has
given written notice of such act or omission to Landlord and the holder of each
Mortgage; provided the name and address of the holder of any such Mortgage shall
previously have been furnished to Tenant, and (b) until thirty (30) days shall
have elapsed following the giving of such notice if the same can be remedied
within such thirty (30) day period or if the same cannot be remedied within
thirty (30) days until a reasonable period of time has elapsed to cure provided
such cure has commenced within the thirty (30) day period, and, further,
provided the holder of such Mortgage shall with due diligence continue to remedy
such act or omission.
Section 22.3 OBLIGATIONS TO SUCCESSOR LANDLORD. If the holder of any
Mortgage, or any designee of any such holder, shall succeed to the rights of
Landlord under this Lease, whether through possession or foreclosure action or
delivery of a new lease or deed, then at the request of such party so succeeding
to Landlord's rights (herein called "SUCCESSOR LANDLORD"), Tenant shall
automatically attorn to and recognize such Successor Landlord as Tenant's
landlord under this Lease and shall promptly execute and deliver any instrument
(herein called "ATTORNMENT AGREEMENT") that such Successor Landlord may
reasonably request to evidence such attornment. Upon such attornment this Lease
shall continue in full force and effect as a direct lease between the Successor
Landlord and Tenant upon all of the terms, conditions and covenants as are set
forth in this Lease, except that the Successor Landlord shall not (a) be liable
for any previous act or omission of Landlord under this Lease; (b) be subject to
any offset, not expressly provided for in this Lease, which theretofore shall
have accrued to Tenant against Landlord; (c) be bound by any previous
modification of this Lease or by any previous prepayment of more than one
month's Rental, unless such modification or prepayment shall have been expressly
approved in writing by the holder of the Mortgage; or (d) be obligated to make
any improvements to, or perform any work at, or furnish any services to, the
Premises.
Section 22.4 PRIORITY OF LEASE. This Lease and all rights of Tenant
hereunder are and shall have priority over, and shall be senior and superior to,
the lien of any Mortgage hereafter made by Landlord and affecting the Land
and/or the Improvements (e.g., other than the mortgages listed in the Exhibit of
Permitted Exceptions), whether or not such Mortgage shall also cover other lands
and/or buildings, and to each and every advance now or hereafter to be
35
made under such Mortgage, and to all modifications, spreaders and consolidations
of such Mortgage.
ARTICLE 23
PERMITTED USE; NO UNLAWFUL OCCUPANCY
------------------------------------
Section 23.1 PERMITTED USE. Subject to applicable law and the provisions of
this Lease, Tenant shall use the Premises solely as and for racing, gaming,
entertainment, retail, hotel, restaurants, any other use related to so-called
"tourism" and other ancillary and related activities thereto only, and for no
other purpose. Tenant shall not use the Premises for any other purpose without
Landlord's prior written consent.
Section 23.2 HAZARDOUS USE. Tenant will not suffer any act to be done or
any condition to exist on the Premises or any portion thereof which may be
hazardous or which may make void or voidable any insurance then in force on the
Premises.
Section 23.3 PUBLIC USE. Tenant shall not suffer or permit the Premises or
any portion thereof to be used by the public as such, without restriction or in
such manner as might reasonably tend to impair title to the Premises or any
portion thereof, or in such manner as might reasonably make possible a claim or
claims of adverse usage or adverse possession by the public, as such, or of
implied dedication of the Premises or any portion thereof.
Section 23.4 NO SUBLET TO TAX EXEMPT ENTITY. Notwithstanding anything to
the contrary contained in this Lease, Tenant shall not sublet, nor suffer or
permit the sub-subletting of all or any portion of the Premises, or assign this
Lease, to a "TAX EXEMPT ENTITY". Tax Exempt Entity shall mean any tax exempt
entity within the meaning of Section 168(h) of the Internal Revenue Code of 1986
or any successor or substitute statute, rule or regulation applicable thereto,
as same may from time to time be amended.
ARTICLE 24
ARBITRATION, APPRAISAL
----------------------
Section 24.1 ARBITRATION PROCEDURE. Arbitration of any matter or dispute
which under this Lease is specifically to be settled or determined by
arbitration (i.e. SECTION 28.1) shall proceed in the following manner: either
party shall notify the other party of its desire to arbitrate the matter or
dispute and shall state in said notice the name and address of a person to act
as arbitrator hereunder. Within ten (10) business days after the receipt of such
notice, the other party shall give notice to the sender of the first-mentioned
notice, stating the name and address of a person to act as arbitrator hereunder.
The arbitrators so specified in such notices shall be experienced in the field
of the matter in dispute. If within fifteen (15) days following the appointment
of the latter of said arbitrators, said two (2) arbitrators shall be unable to
agree in respect of the matter in dispute, the said arbitrators shall appoint by
36
instrument in writing, as third arbitrator, an impartial person similarly
experienced, who shall proceed with the two (2) arbitrators first appointed to
determine the matter in dispute. The written decision of any two (2) of the
arbitrators so appointed shall be binding and conclusive upon the parties
hereto. If after notice of the appointment of an arbitrator the other party
shall fail within the above-specified period of ten (10) business days to
appoint an arbitrator, such appointment of a similarly experienced arbitrator
may be made, upon application without notice by the person who shall have been
appointed an arbitrator by any court of competent jurisdiction (the "Court"). If
the two (2) arbitrators aforesaid shall be unable to agree within fifteen (15)
days following the appointment of the latter of said arbitrators upon the matter
in dispute and shall fail promptly to appoint in writing a third arbitrator, the
third arbitrator shall be appointed by the Court upon application by either
party. If any arbitrator appointed as aforesaid by either of the parties or by
said Court or by the other two (2) arbitrators so appointed shall die, be
disqualified or incapacitated or shall fail or refuse to act before such matter
shall have been determined, a substitute arbitrator shall promptly be appointed
by the person or persons who appointed the arbitrator who shall have died,
become disqualified or incapacitated or who shall have failed or refused to act
as aforesaid, and if a substitute arbitrator is not so named within ten (10)
business days after such death, disqualification, incapacity or failure or
refusal to act, such substitute arbitrator shall be appointed by the Court upon
application of either party.
Section 24.2 FEES. Landlord shall pay the fees of the arbitrator appointed
by Landlord, and Tenant shall pay the fees of the arbitrator appointed by
Tenant. The fees of the third arbitrator (if any) shall be paid in equal shares
by Landlord and Tenant.
Section 24.3 RIGHT TO APPEAR. Landlord and Tenant shall each have the right
to appear and be represented by counsel before said arbitrators and to submit
such data and memoranda in support of their respective positions in the matter
in dispute as they may deem necessary or appropriate in the circumstances.
Section 24.4 AWARD BINDING. The award of the arbitrators shall be binding
upon the parties and judgment may be entered thereon in any court of competent
jurisdiction. In rendering their decision and award the arbitrators shall have
no power to modify any of the provisions of this lease, and the jurisdiction of
the arbitrators is limited accordingly.
Section 24.5 JURISDICTION. Any arbitration held pursuant to this Article 24
shall be held in the City of New York, State of New York.
Section 24.6 APPRAISAL. Fair Market Value shall be deemed to be and shall
be defined as the price at which Landlord's interest in the Land, unencumbered
by this Lease and any other lease, sublease or occupancy agreement, would then
be sold for cash by a willing seller not compelled to sell to a willing buyer
not compelled to buy, if the Land were vacant, unimproved, and free and clear of
all liens and encumbrances and the Land were to be utilized by such buyer for
its highest and best use, which have been or may be acquired in connection with
the Initial Construction (as defined in SECTION 39.1) (such price, the "FAIR
37
MARKET PROPERTY VALUE"). If, pursuant to the provisions of SECTION 28.2 hereof,
either Landlord or Tenant shall elect, by written notice to the other, to have
any disputed Fair Market Property Value be determined by appraisal in accordance
with the provisions of this Article 24, then each such disputed Fair Market
Property Value shall be determined by appraisal in accordance with the
following:
24.6.1 Within twenty (20) days after the date that such notice is received
by the party to which it was sent, each of Landlord and Tenant, by notice to the
other party, shall appoint an appraiser to act on its behalf in connection with
the appraisal (the two appraisers so appointed being herein collectively called
the "INITIAL APPRAISERS"). If either Landlord or Tenant shall fail to timely
appoint an Initial Appraiser within such 20-day period, then the party which
appointed an Initial Appraiser may notify the other party of such failure, and
if, in such event, the other party does not, within a period of ten (10) days
after its receipt of such notice, appoint the second Initial Appraiser, then the
appointed Initial Appraiser shall independently select and appoint the second
Initial Appraiser, who shall be impartial, within five (5) days after the
expiration of such 10-day period.
24.6.2 The Initial Appraisers, within twenty (20) days after the
appointment of both of them, shall jointly appoint a mutually agreeable third
appraiser who shall be impartial (herein called the "THIRD APPRAISER") and
notify Landlord and Tenant thereof. If the Initial Appraisers fail to agree upon
and appoint the Third Appraiser within such 20-day period, then either Landlord
or Tenant may request that the American Arbitration Association ("AAA") appoint
the Third Appraiser within twenty (20) days after such request, and both parties
shall be bound by any appointment so made within such 20-day period. If the
Third Appraiser shall not have been appointed within such 20-day period, then
either Landlord or Tenant may apply to any court having jurisdiction to make
such appointment. The Third Appraiser shall subscribe and swear to an oath to
fairly and impartially perform his duties hereunder.
24.6.3 After the appointment of the Third Appraiser, (i) the Third
Appraiser shall be given both the Tenant Initial FMV Determination and the
Landlord Initial FMV Determination, and (ii) the Third Appraiser shall arrange a
meeting of all three appraisers (herein called the "APPRAISER MEETING") at the
Premises (or at such other place as is reasonably designated by the Third
Appraiser), which Appraiser Meeting shall be during business hours on a date
which is not less than thirty (30) days, and not more than sixty (60) days,
after the date upon the Third Appraiser was appointed. Prior to the Appraiser
Meeting, each of the Initial Appraisers, Landlord and Tenant shall each have the
right to appear and to submit data and memoranda to the Third Appraiser in
support of either the Tenant Initial FMV Determination or the Tenant Initial FMV
Determination, as the case may be; provided, that such data and memoranda shall
be submitted simultaneously to Initial Appraisers and Landlord and Tenant so
that the same may be rebutted. Landlord and Tenant shall have not less than five
(5) days notice of the date, time and location of the Appraiser Meeting and
shall have the right to have their respective representatives present thereat.
24.6.4 Within fifteen (15) days after the Appraiser Meeting, the Third
Appraiser shall select (to be the Fair Market Property Value in dispute) either
the Tenant Initial FMV Determination or the Landlord Initial FMV Determination,
based upon which such determination, in the Third Appraiser's opinion, more
38
accurately reflects the Fair Market Property Value as of the Appraisal Date, and
shall notify Landlord and Tenant of such selection in writing. The Fair Market
Property Value so selected shall be conclusive and binding upon both Landlord
and Tenant.
24.6.5 The fees and expenses of any such appraisal process shall be borne
by the parties equally, except that each party shall bear the expense of the
Initial Appraiser appointed by it and its attorneys and experts as well as any
expenses of presenting its own proof.
24.6.6 Each appraiser shall be a disinterested person of at least ten (10)
years experience as a real estate broker or appraiser and be familiar with
first-class retail, hotel, and entertainment property in the vicinity of the
Premises.
24.6.7 It is expressly understood, and each appraiser shall acknowledge and
agree, that any determination of the Fair Market Property Value shall be made as
of the Appraisal Date and based solely on the definition above. The appraisers
shall not have the power to add to, modify or change any such definitions or any
other provisions of the Lease, and the jurisdiction of the appraisers is
accordingly limited.
ARTICLE 25
LATE CHARGES
------------
In the event payment of any sums required to be paid by Tenant to Landlord
under this Lease shall become overdue for thirty (30) days beyond the date on
which they are due and payable as in this Lease provided without the benefit of
any grace or notice provision, then sums so overdue shall be payable on demand
with interest at the Default Rate (commencing on such due date and until so
paid), as liquidated damages for Tenant's failure to make prompt payment.
Furthermore, if any installment of Fixed Net Rent or additional rent due
hereunder is not paid on or before the tenth (10th) day of the month during
which such installment is due, Tenant shall pay Landlord, as additional rent, on
or before the first day of the following month, six cents for each dollar so
overdue in order to defray Landlord's administrative and other costs in
connection with such late payment. In the event of nonpayment of any late
charges Landlord shall have, in addition to all other rights and remedies, all
of the rights and remedies provided for herein and by law in the case of
nonpayment of the Fixed Net Rent. No failure by Landlord to insist upon the
strict performance by Tenant of Tenant's obligations to pay late charges shall
constitute a waiver by Landlord of its rights to enforce the provisions of this
Section in any instance thereafter occurring. The provisions of this Article 25
shall not be construed in any way to extend the grace periods or notice periods
provided for in this Lease.
ARTICLE 26
DEFAULTS, CONDITIONAL LIMITATIONS, REMEDIES, ETC.
-------------------------------------------------
Section 26.1 TENANT DEFAULT. Each of the following events shall be an
"Event of Default" hereunder:
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26.1.1 Failure of Tenant to pay or deposit any installment of Fixed
Net Rent, or any part thereof, when due, and the continuance of such failure for
a period of ten (10) days after written notice from Landlord specifying such
failure;
26.1.2 Failure of Tenant to pay or deposit any installment of Rental
other than Fixed Net Rent, or any part thereof, or any other payment of money,
costs or expenses herein agreed to be paid by Tenant other than Fixed Net Rent,
when due, and the continuance of such failure for a period of thirty (30) days
after written notice from Landlord specifying such failure;
26.1.3 Failure of Tenant to observe or perform one or more of the
other terms, conditions, covenants or agreements of this Lease and the
continuance of such failure for a period of thirty (30) days after written
notice by Landlord specifying such failure (unless such failure requires work to
be performed, acts to be done, or conditions to be removed which cannot by their
nature reasonably be performed, done or removed, as the case may be, within such
thirty (30) day period, in which case no default shall be deemed to exist so
long as Tenant shall have commenced curing the same within such thirty (30) day
period and shall diligently and continuously prosecute the same to completion);
26.1.4 (i) the filing of an application by Tenant for a consent to the
appointment of a receiver, trustee or liquidator of itself or of all of its
assets; or (ii) the filing by Tenant of a voluntary petition in bankruptcy or
the filing of a pleading in any court of record admitting in writing its
inability to pay its debts as they become due; or (iii) the making by Tenant of
a general assignment for the benefit of creditors; or (iv) the filing by Tenant
of an answer admitting the material allegations of or consenting to or
defaulting in answering a petition filed against it in any bankruptcy
proceeding;
26.1.5 the entry of an order, judgment or decree by any court of
competent jurisdiction adjudging Tenant a bankrupt or appointing a receiver,
trustee or liquidator for Tenant or its assets, which entry, judgment or decree
has not been overturned within sixty (60) days;
26.1.6 if a levy under execution or attachment shall be made against
Lessee or Guarantor or its or their property for an amount greater than $500,000
and such execution or attachment shall not be vacated or removed by court order,
bonding or otherwise within a period of thirty (30) days;
26.1.7 if Tenant shall be liquidated or dissolved, or shall begin
proceedings toward such liquidation or dissolution, or shall, in any manner,
permit the divestiture of substantially all its assets;
26.1.8 if Tenant shall vacate or abandon the Premises; or
26.1.9 if this Lease or the estate of Tenant hereunder shall be
transferred to or assigned to or subleased to or shall pass to or devolve upon,
any person or party, except in a manner herein permitted.
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Section 26.2 NOTICE. If an Event of Default shall occur, Landlord, at any
time thereafter, may at its option give written notice to Tenant stating that
this Lease and the term hereby demised shall expire and terminate on the date
specified in such notice, and upon the date specified in such notice, this Lease
and the term hereby demised and all rights of Tenant under this Lease shall
expire and terminate as if that date were the date herein definitely fixed for
the termination of the term of this Lease, and Tenant shall quit and surrender
the Premises, but Tenant shall remain liable as hereinafter provided.
Notwithstanding the above, Landlord acknowledges and agrees that in the event
the Event of Default which gave rise to the termination of this Lease occurs
during the period commencing on the Commencement Date and ending on October 31,
2006, Tenant shall nevertheless be entitled to exercise the Tenant Purchase
Option during such period. In the event that Tenant exercises the Tenant
Purchase Option, Landlord agrees that if Tenant cures any monetary defaults then
outstanding, Tenant may consummate the Tenant Purchase Option and the provisions
of Article 37 hereof shall control the exercise thereof and the consummation of
the acquisition of the Purchased Land by Tenant.
Section 26.3 REMEDIES. If any Event of Default shall occur, Landlord may
without notice re-enter and repossess the Premises using such force for that
purpose as may be necessary without being liable to indictment, prosecution or
damages therefor, and Tenant shall nevertheless remain liable as hereinafter
provided for the remainder of the term hereof. If Landlord shall so re-enter,
Landlord may, at its option, repair and alter the Premises in such manner as to
Landlord may seem necessary or advisable, and/or let or relet the Premises or
any parts thereof for the whole or any part of the remainder of the term hereof
or for a longer period, in Landlord's name or as agent of Tenant, and out of any
rent collected or received as a result of such reletting Landlord shall: first,
pay to itself the cost and expense of retaking, repossessing, repairing and/or
altering the Premises, and the cost and expense of removing all persons and
property therefrom; second, pay to itself the cost and expense sustained in
securing any new tenants, and if Landlord shall maintain and operate the
Premises the cost and expense of operating and maintaining the Premises; and,
third, pay to itself any balance remaining on account of the liability of Tenant
to Landlord. No re-entry by Landlord, whether had or taken under summary
proceedings or otherwise, shall absolve or discharge Tenant from liability
hereunder. Landlord shall in no way be responsible or liable for any failure to
relet the Premises or any part therefor, or for any failure to collect any rent
due on any such reletting. Should any rent so collected by Landlord after the
aforementioned payments be insufficient to fully pay to Landlord a sum equal to
all such Rental and other payments and charges reserved herein, the deficiency
shall be paid by Tenant on the rent days herein specified.
Section 26.4 ENFORCEMENT. The Rental payable hereunder and each and every
installment thereof, and all costs, reasonable attorneys' fees and other
expenses which may be incurred by Landlord in enforcing the provisions of this
Lease or on account of any delinquency of Tenant in carrying out the provisions
of this Lease, shall be and they hereby are declared to constitute a valid lien
upon the interest of Tenant in this Lease and in the Premises.
41
Section 26.5 RECOVERY OF DAMAGES. Suit or suits for the recovery of such
deficiency or damages, or for a sum equal to any installment or installments of
Rental, Impositions and other charges hereunder, may be brought by Landlord from
time to time at Landlord's election, and nothing herein contained shall be
deemed to require Landlord to await the date whereon this Lease or the term
hereof would have expired by limitation had there been no such default by Tenant
or termination.
Section 26.6 LIQUIDATED DAMAGES. Nothing in this Article contained shall
limit or prejudice the right of Landlord to prove and obtain as liquidated
damages in any bankruptcy, insolvency, receivership, reorganization or
dissolution proceeding an amount equal to the maximum allowed by a statute or
rule of law governing such proceeding and in effect at the time when such
damages are to be proved, whether or not such amount be greater, equal to or
less than the amount of the damages referred to in any of the preceding
subdivisions.
Section 26.7 RECEIPT OF MONEY AFTER LEASE TERMINATION. No receipt of moneys
by Landlord from Tenant after termination of this Lease, or after the giving of
any notice of termination of this Lease, shall reinstate, continue or extend the
term of this Lease or affect any. notice theretofore given to Tenant, or operate
as a waiver of the right of Landlord to enforce the payment of Rental and any
other sum or sums of money and other charges herein reserved and agreed to be
paid by Tenant then due or thereafter falling due, or operate as a waiver of the
right of Landlord to recover possession of the Premises by proper remedy, except
as herein otherwise expressly provided, it being agreed that after the service
of notice to terminate this Lease or the commencement of suit or summary
proceedings, or after final order or judgment for the possession of said
premises, Landlord may demand, receive and collect any moneys due or thereafter
falling due without in any manner affecting such notice, proceeding, order, suit
or judgment, all such moneys collected being deemed payments on account of the
use and occupation of said Premises or, at the election of Landlord, on account
of Tenant's liability hereunder.
Section 26.8 NOTICE OF SERVICE. Tenant hereby expressly waives the service
of any notice of intention to re-enter provided for in any statute, or of the
institution of legal proceedings to that end, and Tenant, for and on behalf of
itself and all persons claiming through or under Tenant also waives any and all
right of redemption provided by any law or statute now in force or hereafter
enacted or otherwise, or re-entry or repossession or to restore the operation of
this Lease in case Tenant shall be dispossessed by a judgment or by warrant of
any court or judge or in case of re-entry or repossession by Landlord or in case
of any expiration or termination of this Lease, and Landlord and Tenant waive
and will waive trial by jury in any action, proceeding or counterclaim brought
by either of the parties hereto against the other on any matter whatsoever
arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant, Tenant's use or occupancy of said premises, or any claim of
injury or damage. The terms "enter," "re-enter," "entry" or "re-entry," as used
in this Lease are not restricted to their technical legal meaning.
42
Section 26.9 WAIVER. No failure by Landlord to insist upon the strict
performance of any covenant, agreement, term or condition of this Lease or to
exercise any right or remedy consequent upon a breach thereof, and no acceptance
of full or partial rent by Landlord during the continuance of any such breach,
shall constitute a waiver of any such breach or of such covenant, agreement,
term or condition. No covenant, agreement, term or condition of this Lease to be
performed or complied with by Tenant, and no breach thereof, shall be waived,
altered or modified except by a written instrument executed by Landlord. No
waiver of any breach shall affect or alter this Lease, but each and every
covenant, agreement, term and condition of this Lease shall continue in full
force and effect with respect to any other then existing or subsequent breach
thereof.
Section 26.10 REMEDIES. In the event of any breach or threatened breach by
Tenant of any of the covenants, agreements, terms or conditions contained in
this Lease, Landlord shall be entitled to enjoin such breach or threatened
breach and shall have the right to invoke any rights and remedies allowed at law
or in equity or by statute or otherwise as though re-entry, summary proceedings,
and other remedies were not provided for in this Lease.
Section 26.11 REMEDIES ARE CUMULATIVE. Each right and remedy of Landlord
provided for in this Lease shall be cumulative and shall be in addition to every
other right or remedy provided for in this Lease or now or hereafter existing at
law or in equity or by statute or otherwise, and the exercise or beginning of
the exercise by Landlord of any one or more of the rights or remedies provided
for in this Lease or now or hereafter existing at law or in equity or by statute
or otherwise, shall not preclude the simultaneous or later exercise by Landlord
of any or all other rights or remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise.
Section 26.12 COSTS AND EXPENSES. Tenant shall pay to Landlord all costs
and expenses, including reasonable attorneys' fees, paid or incurred by Landlord
in any action or proceeding to which Landlord may be made a party by reason of
any act or omission of Tenant. Tenant shall also pay to Landlord all costs and
expenses, including reasonable attorneys' fees, paid or incurred by Landlord in
enforcing any of the covenants and provisions of this Lease and paid or incurred
in any action brought by Landlord against Tenant on account of the provisions
hereof, and all such costs, expenses, and attorneys' fees may be included in and
form a part of any judgment entered in any proceeding brought by Landlord
against Tenant on or under this Lease. All of the sums paid or obligations
incurred by Landlord as aforesaid with interest (at the Default Rate) and costs
shall be paid by Tenant to Landlord within ten (10) days of the rendition by
Landlord to Tenant of any xxxx or statement therefor.
Section 26.13 TERMINATION OF LEASE. In the event of a termination of this
Lease by reason of default or breach by Tenant hereunder (a) all unexpired
insurance premiums, all deposits theretofore made by Tenant with utility
companies, all rights of Tenant under all insurance policies and all fuel in the
Premises shall be deemed to be assigned to and transferred to Landlord, and (b)
Tenant shall deliver to Landlord all leases of subtenants and all security
deposits and advance rentals then held by Tenant with respect to any and all
subleases.
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Section 26.14 CALCULATION OF FINAL DAMAGES.
26.14.1 At any time after this Lease shall be terminated as aforesaid,
Landlord shall be entitled to recover from Tenant, and Tenant shall pay to
Landlord, on demand, as and for liquidated and agreed final damages for Tenant's
default, an amount equal to (i) any costs and expenses incurred by Landlord in
connection with a reletting of the Premises or any part thereof and (ii) the
difference between the Fixed Net Rent and all other charges payable by Tenant
hereunder for the unexpired portion of the term demised and the then fair and
reasonable rental value of the Premises for the same period. If the Premises or
any part thereof be relet by Landlord for the unexpired term of this Lease, or
any part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent reserved upon such reletting
shall, prima facie, be the fair and reasonable rental value for the part or the
whole of the Premises so relet during the term of the reletting.
26.14.2 Nothing herein contained shall limit or prejudice the right of
Landlord to prove for and obtain as liquidated damages by reason of such
termination, an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater, equal to, or
less than the amount of the difference referred to above.
ARTICLE 27
NOTICES
-------
Whenever it is provided herein that notice, demand, request or other
communication shall or may be given to or served upon either of the parties by
the other, and whenever either of the parties shall desire to give or serve upon
the other any notice, demand, request or other communication with respect hereto
or the Land, each such notice, demand, request or other communication shall be
in writing and, any law or statute to the contrary notwithstanding, shall be
effective for any purpose if given or served as follows:
(a) If by Landlord, by mailing the same to Tenant by registered
or certified mail postage prepaid, return receipt requested or by
nationally recognized overnight delivery, addressed to Tenant at
Monticello Raceway, Xxxxx 00X, Xxxxxxxxxx, Xxx Xxxx 00000.
(b) If by Tenant, by mailing the same to Landlord by registered
or certified mail, postage prepaid, return receipt requested or by
nationally recognized overnight delivery, addressed to Landlord at
Monticello Raceway, Xxxxx 00X, Xxxxxxxxxx, Xxx Xxxx 00000.
Either party may change its address where notices are to be sent as such party
may from time to time designate by notice given to the other in accordance with
the provisions hereof.
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Every notice, demand, request or other communication hereunder shall be deemed
to have been given or served (i) upon the date same shall have been received or
receipt thereof has been refused or rejected; or (ii) twenty-four (24) hours
after the time that same shall have been sent by Express Mail or nationally
recognized overnight delivery service to the addresses as aforesaid.
ARTICLE 28
CONDEMNATION
------------
Section 28.1 GENERAL. If at any time during the term of this Lease, all or
substantially all of the Premises shall be taken for any public or quasi-public
purpose by any lawful power or authority by the exercise of the right of
condemnation or eminent domain or by agreement between Landlord, Tenant and
those authorized to exercise such right, this Lease shall terminate and expire
on the date of such taking and the Rental shall be apportioned and paid to the
date of such taking.
28.1.1 The term "substantially all of the Premises" shall be deemed to
mean such portion of the Premises as, when so taken, would leave remaining a
balance of the Premises which, due either to the area so taken or the location
of the part so taken in relation to the part not so taken, would not under
economic conditions, zoning laws or building regulations then existing or
prevailing, readily accommodate an altered or new building or buildings of a
nature similar to the building or buildings existing upon the Land at the date
of such taking and of floor area sufficient together with buildings not taken in
the condemnation, to reasonably permit a fair and reasonable return, after
payment of all operating expenses thereof, the Rental and after performance of
all covenants, agreements, terms and provisions herein and by law provided or to
be performed and paid by Tenant. If there be any dispute as to whether or not
"substantially all of the Premises" have been taken, such dispute shall be
submitted to and determined by arbitration as provided for in Article 24 herein.
28.1.2 If all or substantially all of the Premises shall be taken or
condemned as provided in this Article, Tenant waives all claims for the value of
the unexpired term of this Lease and Landlord shall be entitled to collect the
entire award from the condemnor, and Tenant agrees to execute any and all
documents that may be required in order to facilitate collection by Landlord of
any and all such awards, but the aforesaid award shall be apportioned between
Landlord and Tenant as provided in SECTION 28.2.
28.1.3 If all or substantially all of the Premises shall be taken or
condemned as provided in this Article, Tenant waives all claims for any value
for its leasehold or its interest in this Lease and all claims for its interest
in the Improvements and all claims for any compensation for the cost of
construction or the value of the Improvements and Tenant shall be entitled
solely to the amounts, if any, payable to it under SECTION 28.2.
Section 28.2 CALCULATION OF AWARD. In the event of taking of all or
substantially all of the Premises, the net award (or settlement in lieu thereof)
shall be payable in the following manner and order of priority:
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28.2.1 To pay any and all reasonable fees and expenses incurred in
collecting the award;
28.2.2 To the Berkshire Mortgagee in an amount equal to the then
outstanding principal balance of the Loan (together with any other sums payable
in connection therewith);
28.2.3 To Landlord in an amount equal to the greater of (i) an amount
equal to the Fixed Net Rent payable for the year in which the condemnation
occurs divided by five percent (5%) or (ii) the Fair Market Property Value (as
defined in SECTION 24.6), such Fair Market Property Value to be determined in
accordance with the terms of Article 24 hereof, except that such valuation shall
be made as of the Date of Taking (as hereinafter defined); and
28.2.4 To Tenant in an amount equal to the balance of the condemnation
award (if any) after deducting the amount due to Landlord as provided above.
Section 28.3 DATE OF TAKING. For the purpose of this Article 28, the
Premises or a part thereof, as the case may be, shall be deemed to have been
taken or condemned on the date on which actual possession of the Premises or a
part thereof, as the case may be, is acquired by any lawful power or authority
or the date on which title vests therein, whichever is earlier (the "Date of
Taking").
Section 28.4 PARTIAL TAKING. If less than substantially all of the Premises
be so taken or condemned, this Lease and the term hereof shall continue without
abatement of the Rental or diminution of any of Tenant's obligations hereunder.
Tenant, at its own cost and expense, whether or not the award or awards, if any,
shall be sufficient for the purpose, shall proceed diligently to repair and
restore any remaining part of the Improvements on the Premises not so taken so
that the latter shall be a complete, rentable, self-contained architectural unit
in good condition and repair and reasonably comparable to the condition as it
existed immediately prior to such condemnation. In the event of any taking or
condemnation as in this Section provided, the entire award or the aggregate of
the separate awards to Landlord and Tenant, as the case may be, shall belong to
and be the sole property of Landlord without any claim on the part of Tenant
(Tenant hereby waiving all claims for any value for its leasehold or its
interest in this Lease or in the Improvements or otherwise). Subject to the
provisions and limitations in this Article, Landlord agrees to make available so
much of that portion of the awards actually received and held by Landlord, if
any, less all necessary and proper expenses paid or incurred by Landlord or the
holder of any Mortgage in the condemnation proceedings, as may be necessary to
pay the cost of repairing and restoring for use and occupancy the part of the
Improvements not so taken. Such repairs and restoration shall be done in
accordance with and subject to the provisions of Articles 7, 8 and 13 hereof.
Payments to Tenant as aforesaid shall be disbursed in the manner set forth in
Articles 7 and 8 hereof. If the portion of the award made available by Landlord,
as aforesaid, is insufficient for the purpose of paying for the repair and
restoration, Tenant shall nevertheless be required to repair and restore as
aforesaid at its own cost and expense without any claim on the part of Tenant.
Any balance of the award remaining after repair and restoration is completed and
paid for shall be paid to Landlord. In no event shall there be any abatement or
46
reduction of Rental by reason of any taking or condemnation of the kind referred
to in this Section.
Section 28.5 TEMPORARY TAKING. If the temporary use of the whole or any
part of the Premises shall be taken at any time during the term of this Lease
for any public or quasi-public purpose by any lawful power or authority, by the
exercise of the right of condemnation or eminent domain, or by agreement between
Tenant and those authorized to exercise such right, Tenant shall give prompt
notice thereof to Landlord and the term of this Lease shall not be reduced or
affected in any way and Tenant shall continue to pay in full the Rental and
other sum or sums of money and charges reserved and provided to be paid by
Tenant, but the following shall be applicable:
(i) If the award or awards shall be in the form of rent
recoverable in respect of such taking and shall be payable
in quarterly or more frequent installments, Tenant shall be
entitled to make claim for and retain such award or awards
in the form of rent so payable, provided this Lease is then
in force and effect and so long as no Default shall have
occurred hereunder; provided, however, that if such taking
shall be for a period extending beyond the expiration of the
then current term of this Lease and any additional terms for
which this Lease shall have been renewed, Landlord shall be
entitled to receive such installments or portions thereof
attributable to the period after such expiration.
(ii) If the award or awards shall be made in a lump sum or in
installments less frequently than quarterly, such award or
awards shall be deposited with Landlord and shall be
disposed of as follows:
(A) If the award or awards shall be made in a lump sum in
advance, each such award shall be divided by the number of months
included in the period of such temporary use or occupancy for
which such lump sum award is paid, and an amount equal to such
quotient shall be applied by Landlord as Fixed Net Rent and other
Rental pursuant to the applicable provisions of Article 3 of this
Lease, and provided that this Lease is then in force and effect
and that no Default shall have occurred hereunder, any balance
remaining from the amount applicable to each such month shall be
paid by Landlord to Tenant monthly; provided, however, that, if
such taking shall be for a period extending beyond the expiration
of the then current term of this Lease and any additional terms
for which this Lease shall have been renewed, Landlord shall be
entitled to receive and retain the remaining balance of the sum
or sums attributable to the period of such temporary use or
occupancy after the Expiration Date.
(B) If the award or awards shall be payable in periodic
installments less frequently than quarterly each such installment
shall be divided by the number of months to which such
installment is attributable, and an amount equal to such quotient
shall be applied by Landlord as Fixed Net Rent and other Rental
pursuant to the
47
applicable provisions of Article 3 of this Lease, and provided
that this Lease is then in force and effect and that no Default
shall have occurred hereunder, any balance remaining from the
amount applicable to each such month shall be paid by Landlord to
Tenant monthly; provided, however, that, if such taking shall be
for a period extending beyond the expiration of the then current
term of this Lease and any additional term for which this Lease
shall have been renewed Landlord shall be entitled to receive and
retain all such installments payable after such expiration or
attributable to the period of such temporary use or occupancy
after the Expiration Date.
Section 28.6 RIGHT TO COMPENSATION. In case of any governmental action, not
resulting in the taking or condemnation of any portion of the Premises but
creating a right to compensation therefor, such as the changing of the grade of
any street upon which the Premises abut, this Lease shall continue in full force
and effect without reduction or abatement of Rental, and the award shall be
retained by Landlord as its sole property.
Section 28.7 TENANT WAIVER OF RIGHTS. In any and all proceedings pursuant
to which the Premises or any part thereof, or the temporary use of the whole or
any part thereof, shall be so taken or condemned, Tenant waives all claims for
any value for Tenant's leasehold estate in the Premises and all claims for any
compensation for the cost of construction or the value of the Improvements, and
Tenant shall be entitled solely to the amounts, if any, payable to it pursuant
to the provisions of this Article 28. In each such proceeding, Landlord and
Tenant agree to execute any and all documents that may be required to facilitate
collection of the award in such proceeding. Landlord hereby acknowledges that
Leasehold Mortgagee shall have the right to participate on behalf of Tenant in
any condemnation proceedings in which Tenant is entitled to participate.
ARTICLE 29
STREET WIDENING
---------------
If at any time during the term of this Lease or of any renewal hereof any
proceedings are instituted or orders made for the widening or other enlargement
of any street contiguous to the Premises, requiring removal of any projection or
encroachment on, under or above any such street, or any changes or alterations
upon the Premises, or in the sidewalks, curbs, gutters, vaults or appurtenances,
Tenant, at Tenant's own cost and expense, will promptly comply with such
requirements, and on Tenant's failure to do so, Landlord may comply with the
same, and the amount expended therefor, and any interest, fines, penalties,
architects' fees, counsel fees, or other expenses incurred by Landlord in
effecting such compliance or by reason of the failure of Tenant so to comply,
shall be additional rent and shall be payable with the installment of Fixed Net
Rent next payable hereunder. Tenant shall be permitted to contest in good faith
any proceeding or order for street widening, provided that during the pendency
of such contest Tenant deposits with Landlord security in amount and form
satisfactory to Landlord for the performance of the work required in the event
that Tenant's contest should fail. In no
48
event shall Tenant permit Landlord to become liable for any criminal violation
as a result of Tenant's failure to promptly comply with any of the foregoing
orders.
ARTICLE 30
CERTIFICATES BY LANDLORD AND TENANT
-----------------------------------
Section 30.1 TENANT. Tenant agrees at any time and from time to time (as
may be reasonable) upon not less than twenty (20) days' prior notice by Landlord
to execute, acknowledge and deliver to Landlord or to a designee of Landlord a
statement in writing certifying that this Lease is unmodified and in full force
and effect (or if there have been modifications, that the same are in full force
and effect as modified and stating the modifications) and the dates to which the
Rental has been-paid in advance, if any, the amount of security, and stating
whether or not to the best knowledge of the signer of such certificate Landlord
is in default in performance of any covenant, agreement or condition contained
in this Lease and, if so, specifying each such default of which the signer may
have knowledge. Such statement may be relied upon by a holder of a Mortgage, a
prospective holder of a prospective Mortgage, prospective purchaser or purchaser
of the Premises or any other party which may have an interest in the Premises or
this Lease.
Section 30.2 LANDLORD. Landlord agrees at any time and from time to time
(as may be reasonable but not more than twice in any given calendar year), upon
not less than twenty (20) days' prior notice by Tenant to execute, acknowledge
and deliver to Tenant a statement in writing certifying that this Lease is
unmodified and in full force and effect (or if there shall have been
modifications that the same is in full force and effect as modified and stating
the modifications) and the dates to which the Rental has been paid in advance,
if any, the amount of security, and stating whether or not to the best knowledge
of the signer of such certificate Tenant is in default in the performance of any
covenant, agreement or condition contained in this Lease, and, if so, specifying
each such default of which the signer may have knowledge. Such statement may be
relied upon by a Leasehold Mortgagee, a prospective Leasehold Mortgagee, an
assignee of this Lease or a subtenant, a prospective assignee or prospective
subtenant, or any other party which may have an interest in the Premises or this
Lease.
ARTICLE 31
LANDLORD'S CONSENTS
-------------------
31.01 NO WAIVER BY LANDLORD OF FUTURE CONSENTS. It is understood and agreed
that the granting of any consent by Landlord to Tenant to perform any act of
Tenant requiring Landlord's consent under the terms of this Lease, or the
failure on the part of Landlord to object to any such action taken by Tenant
without Landlord's consent, shall not be deemed a waiver by Landlord of its
rights to require such consent for any further similar act by Tenant, and Tenant
hereby expressly covenants and warrants that as to all matters requiring
Landlord's consent under the terms of this Lease, Tenant shall secure such
consent for each and every happening of
49
the event requiring such consent, and shall not claim any waiver on the part of
Landlord of the requirement to secure such consent.
31.02 TENANT'S REMEDIES. If Tenant shall request Landlord's consent or
approval and Landlord shall fail or refuse to give such consent or approval,
Tenant shall not be entitled to any damages for any such failure or refusal by
Landlord to grant its consent or approval, and Tenant's sole remedy to dispute
Landlord's failure or refusal to grant its consent or approval shall be an
action for specific performance or injunction and/or damages (provided that
Tenant shall be entitled to damages if and only if a final unappealable judgment
from a court of competent jurisdiction is obtained against Landlord holding that
Landlord acted maliciously and in bad faith in failing or refusing to grant its
consent or approval), and such remedy shall be available only in those cases
where Landlord has expressly agreed in writing not to unreasonably - withhold
its consent or approval or where as a matter of law Landlord may not
unreasonably withhold its consent or approval.
ARTICLE 32
SURRENDER AT END OF TERM
------------------------
Section 32.1 CONDITION OF PREMISES. On the Expiration Date or upon any
earlier termination of this Lease, or upon an re-entry by Landlord upon the
Premises pursuant to Article 27 hereof, Tenant shall well and truly surrender
and deliver up to Landlord the Premises in good order, condition and repair,
reasonable wear and tear excepted, free and clear of all lettings and
occupancies, and free and clear of all liens and encumbrances other than those,
if any, existing at the date hereof or created by Landlord or subsequent owners
of the Premises, without any payment or allowance whatever by Landlord.
Section 32.2 TITLE TO IMPROVEMENTS. Title to the Improvements (and all
interests appurtenant thereto) shall thereupon automatically vest in Landlord
without the payment of any consideration therefor, and without the necessity for
the execution and delivery by Tenant of any instrument transferring title.
Notwithstanding the foregoing, Tenant covenants and agrees that upon the
expiration or any termination of this Lease as aforesaid, Tenant shall upon
Landlord's request execute, acknowledge and deliver to Landlord any instrument
or document reasonably requested by Landlord to confirm title to the
Improvements and Available Development Rights (and appurtenant interests) in
Landlord, and in the event that Tenant shall fail or refuse to execute,
acknowledge or deliver any such instrument or document requested as aforesaid,
Landlord is hereby irrevocably appointed attorney-in-fact for Tenant to execute,
acknowledge and deliver any such instrument or document in the name of Tenant.
Delivery of such instrument by Tenant shall not in any way obligate Tenant to
pay any real estate transfer taxes that may be imposed as a result of Tenant's
delivery of said instrument.
Section 32.3 DELIVERY OF RECORDS. On the Expiration Date or upon any
earlier termination of the Lease, or upon re-entry by Landlord upon the Premises
pursuant to Article 26 hereof, Tenant shall deliver to Landlord Tenant's
executed counterparts of all subleases,
50
occupancy, license and concession agreements, and any service and maintenance
contracts then affecting the Premises, true and complete maintenance records for
the Premises, all original licenses and permits then pertaining to the Premises,
the then existing certificates of occupancy for the Improvements and all
warranties and guarantees then in effect which Tenant has received in connection
with any work or services performed or Equipment installed in the Improvements
together with a duly executed assignment thereof to Landlord, all financial
reports, books and records and any and all other documents of every kind and
nature whatsoever relating to the Premises. Nothing herein contained shall be or
be deemed to be a consent by Landlord to any sublease, occupancy, license or
concession agreement for a term to expire after one day preceding the Expiration
Date.
Section 32.4 DAMAGE CAUSED BY EQUIPMENT REMOVAL. Tenant and any subtenant
may remove its furniture, trade fixtures and business equipment on the
Expiration Date or sooner termination of this Lease but Tenant shall repair all
damage caused in such removal and shall reimburse Landlord for all costs,
expenses and damages incurred by Landlord in repairing such damage consequent on
Tenant's failure to make such repairs whether prior to or after the termination
of this Lease.
ARTICLE 33
NO ORAL AGREEMENTS
------------------
This Lease contains all the promises, agreements, conditions, inducements
and understandings between Landlord and Tenant relative to the Land and there
are no promises, agreements, conditions, understandings, inducements, warranties
or representations, oral or written, expressed or implied, between them other
than as herein set forth.
ARTICLE 34
QUIET ENJOYMENT
---------------
Landlord covenants that, if and so long as Tenant shall faithfully perform
the agreements, terms, covenants and conditions hereof, Tenant shall and may
(subject, however, to the exceptions, reservations, terms and conditions of this
Lease) peaceably and quietly have, hold and enjoy the Land for the term hereby
granted without molestation or disturbance by or from Landlord and free of any
encumbrance created or suffered by Landlord, except those to which this Lease is
subject and subordinate.
ARTICLE 35
INVALIDITY OF CERTAIN PROVISIONS
--------------------------------
If any term or provision of this Lease or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term or provision to persons
or circumstances other than those as to
51
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
ARTICLE 36
FINANCIAL REPORTS
-----------------
Tenant shall deliver to Landlord, as soon as available but not later than
120 days after the end of each fiscal year of Tenant, financial statements of
Tenant as of the end of and for such fiscal year, all in reasonable detail and
setting forth in comparative form the corresponding figures for the preceding
fiscal year and accompanied by a report of independent certified public
accountants of recognized national standing stating that such financial
statements present fairly the financial position of Tenant as of the dates
indicated and the results of its operations and changes in its financial
position for the periods indicated in conformity with generally accepted
accounting principles applied on a basis consistent with prior years (except as
otherwise specified in and concurred with in such report) and that such audit
has been made in accordance with generally accepted auditing standards.
ARTICLE 37
[TENANT'S OPTION TO PURCHASE/LANDLORD'S SALE OPTION]
--------------------------------------------------------
Section 37.1 Intentionally Omitted.
---------------------
Section 37.2 TENANT PURCHASE OPTION OF PROPERTY. Landlord hereby grants to
Tenant the option to purchase the Purchased Land, on not less than ten (10) days
nor more than sixty (60) days prior written notice to Landlord ("TENANT'S
EXERCISE NOTICE") during the period commencing on the date hereof and ending on
October 31, 2006 ("TENANT'S PURCHASE OPTION"). The purchase of the Purchased
Land shall be for a purchase price to Landlord equal to (x) an amount equal to
the Fixed Net Rent payable for the year in which Tenant consummates the Tenant's
Purchase Option divided by five percent (5%), plus (y) an amount equal to all
transfer taxes and other closing costs (including, without limitation,
reasonable attorneys' fees) incurred by Landlord, as seller ("TENANT'S OPTION
PRICE").
Section 37.3 ADJOURNMENT. If Tenant validly exercises Tenant's Purchase
Option, Landlord shall transfer and convey or cause the transfer and conveyance
of the Purchased Land to Tenant in accordance with the provisions of this
ARTICLE 37, on the date set forth in the Tenant's Exercise Notice (the "OPTION
CLOSING DATE"), subject to a reasonable adjournment by either party not to
exceed thirty (30) days.
Section 37.4 TERMINATION. The termination of this Lease prior to exercise
of Tenant's Purchase Option shall terminate all rights and obligations of
Landlord and Tenant under this Article. Tenant's Purchase Option shall not be
assignable except as part of this Lease.
52
Section 37.5 CONVEYANCE REQUIREMENTS. The Purchased Land shall be conveyed
by Landlord and purchased by Tenant subject to: (i) those Permitted Exceptions
set forth on EXHIBIT 2 annexed hereto, (ii) the standard exceptions and
provisions contained in the form of insuring agreement employed by Tenant's
title company, (iii) all matters arising out of this Lease and/or which are the
responsibility of Tenant under this Lease (eg. taxes and assessments) (the
"EXCEPTIONS"). Landlord shall remove liens it places of record or suffers to
exist by its actions. Notwithstanding anything contained in this ARTICLE 37,
Landlord shall not be required to expend more than Fifty Thousand ($50,000)
Dollars to remove any defect in or objection to title therefor, nor shall Tenant
have any right of action against Landlord therefor, at law or in equity, for
damages or specific performance, for Landlord's inability to convey title in
accordance with the terms of this Section. Notwithstanding the foregoing, if
Landlord shall be unable to give title or make conveyance subject only to the
Exceptions, Tenant may accept such title as Landlord is able to deliver, without
abatement of the purchase price, any credit or allowance of any kind or any
claim or right of action against Landlord for damages or otherwise.
Section 37.6 TENANT OBLIGATIONS. Upon the Option Closing Date, Tenant shall
pay to Landlord, in cash, Tenant's Option Price, as the case may be, together
with all Rental and other sums then due and payable hereunder to and including
such date of purchase, and shall deliver to Landlord:
37.6.1 a certified copy of Tenant's organizational documents and such
resolutions authorizing the purchase of the Land and all documents required to
be executed and delivered by Tenant in connection therewith; and
37.6.2 an opinion of Tenant's counsel reasonably satisfactory to
Landlord in form and content and for the benefit of Landlord, its successors and
assigns, stating, among other things that (1) Tenant is duly organized and
authorized to do business in its state of incorporation and has the power to
purchase the Purchased Land and execute any and all documents to effectuate
same, (2) the purchase of the Purchased Land does not violate any applicable
provisions of the charter, by-laws, or any order, judgment or decree to which
Tenant is bound or other documents affecting Tenant and all required consents
have been obtained, (3) all documents executed in connection with the purchase
of the Purchased Land and which are delivered to Landlord, when executed, will
constitute valid and binding obligations of Tenant and will be enforceable in
accordance with their respective terms; and
37.6.3 a mortgagee title policy from a title insurance company
reasonably satisfactory to Landlord.
Section 37.7 LANDLORD OBLIGATIONS. Upon the Option Closing Date, Landlord
shall deliver to Tenant:
(i) an appropriate bargain and sale deed without covenants against
grantor's acts, without recourse or representation, and any assignment
instruments, without recourse or representation, necessary, in
Landlord's reasonable
53
judgment, to convey insurable title to the Purchased Land pursuant
hereto; and
(ii) a certification, pursuant to Section 1445 of the Internal Revenue Code
of 1986, as amended, that Landlord, as seller, is not a "foreign
person" within the meaning of said Section.
Section 37.8 FAILURE TO CLOSE. If Tenant fails to close on the purchase of
the Purchased Land in accordance with this ARTICLE 37 after the exercise by
Tenant of Tenant's Purchase Option, Tenant shall pay Landlord, within ten (10)
days of the Option Closing Date (as same may have been adjourned), the sum of
all costs and expenses, including, without limitation, reasonable attorneys'
fees, that Landlord incurs as a result of Tenant's failure to close on the
purchase and in the event that Tenant, on a later date, exercises the Tenant's
Purchase Option, the Tenant's Option Price shall be increased by $100,000.
Section 37.9 NO CLOSING ADJUSTMENTS. There shall be no closing adjustments,
other - than for the Rental payable by Tenant hereunder for the period in which
the Option Closing Date occurs and other accrued obligations of Tenant under
this Lease. Upon the completion of the purchase pursuant to this ARTICLE 37,
this Lease shall terminate, and neither party shall have any further rights or
obligations to the other hereunder, except with respect to obligations,
indemnities and liabilities of Tenant hereunder, actual or contingent, which
have arisen on or prior to such date of purchase.
Section 37.10 NO CANCELLATION OR RESCISSION. In no event shall Tenant be
entitled to cancel or rescind the exercise of its respective options nor shall
Tenant's obligations be diminished by reason of any damage, destruction or
condemnation affecting the Land and the Improvements thereon prior to the Option
Closing Date with respect thereto. Notwithstanding the foregoing, upon the
Option Closing Date, Landlord shall deliver to Tenant any casualty insurance
proceeds or condemnation awards collected by Landlord on account of said
casualty or condemnation or shall assign its right to receive and settle same.
Section 37.11 TAX DEFERRED EXCHANGE.
37.11.1 Landlord may desire to make a qualified tax deferred exchange
of the Purchased Land (or such appropriate portion qualifying as real estate for
such exchange, which shall be referred to herein as the "REAL ESTATE PROPERTY")
for other property or properties of like kind pursuant to and in accordance with
Section 1031 of the Internal Revenue Code of 1986 as amended, the Treasury
Income Tax Regulations promulgated thereunder and corresponding provisions of
state tax laws. If Landlord elects to effect a qualified tax deferred exchange,
then, and at no cost or expense to Tenant, Tenant agrees to reasonably cooperate
with Landlord, pursuant to the terms as set forth herein, in closing the sale of
the Real Estate Property as a like-kind exchange under Section 1031 of the
Internal Revenue Code of 1986, as amended.
37.11.2 Landlord and Tenant agree that Landlord shall (to effect this
tax deferred exchange) substitute an intermediary ("INTERMEDIARY") to act in
place of
54
Landlord as the seller of the Real Estate Property. The Intermediary shall be
designated in writing by Landlord to Tenant. Upon identification of an
Intermediary and upon Intermediary's written assumption of Landlord's
obligations under this ARTICLE 37 (in form reasonably satisfactory to Tenant),
Intermediary shall be substituted for Landlord as seller upon the sale of the
Land. Tenant agrees to accept the Land in accordance with this ARTICLE 37 from
Intermediary and to render its performance of all of its obligations to
Intermediary, provided that the rendering of such performance to Intermediary in
lieu of Landlord shall not result in any material additional costs or expenses
being incurred by Tenant. Tenant agrees that performance by Intermediary will be
treated as performance by Landlord, and Landlord agrees that Tenant's
performance to Intermediary will be treated as performance to Landlord.
ARTICLE 38
REPRESENTATIONS
---------------
Section 38.1 LANDLORD AND TENANT. Landlord and Tenant represent that
they have the authority to execute this Lease and that the covenants and
obligations shall be binding upon Landlord and Tenant.
ARTICLE 39
BROKER
------
Tenant and Landlord covenants, warrants and represents to the other that no
broker was instrumental in bringing about or consummating this Lease and that
Tenant and Landlord had no conversations or negotiations with any broker
concerning the leasing of the Premises. Tenant and Landlord agree to indemnify
and hold harmless the other against and from any costs, expenses and liabilities
(including reasonable attorneys' fees and expenses) resulting from any breach of
the covenant and warranty contained herein or its misrepresentation of the
matters set forth herein.
ARTICLE 40
INTENTIONALLY DELETED
---------------------
ARTICLE 41
ENVIRONMENTAL HAZARDS PROVISION
-------------------------------
Section 41.1 TENANT REQUIREMENTS. Tenant covenants and agrees that, during
the term of this Lease, Tenant shall not:
55
41.1.1 cause or permit the presence, use, generation, manufacture,
production, processing, installation, release, discharge, storage (including
aboveground and underground storage tanks for petroleum or petroleum products),
treatment, handling, or disposal of any Hazardous Materials (as defined below)
(excluding the safe and lawful use and storage of Hazardous Materials
customarily used in the operation and maintenance of comparable properties or
for normal household purposes) on or under the Premises; or
41.1.2 cause or permit the transportation to, from or across the
Premises of any Hazardous Material (excluding the safe and lawful use and
storage of Hazardous Materials customarily used in the operation and maintenance
of comparable properties or for normal household purposes and the transport of
any contaminated soil on the Premises in compliance with all Hazardous Materials
Laws (as defined below) in connection with the construction of the Initial
Improvements); or
41.1.3 cause or exacerbate any occurrence or condition on the Premises
that is or may be in violation of Hazardous Materials Law.
(The matters described in (a), (b) and (c) above are referred to collectively
below as "PROHIBITED ACTIVITIES OR CONDITIONS.")
Section 41.2 LANDLORD REPRESENTATIONS AND WARRANTIES.
41.2.1 Landlord hereby represents and warrants to Tenant that to its
knowledge and except as set forth in the Site Assessment Report, prepared by
______________, for the Land (i) there are no underground storage tanks
currently located under the Land in violation of Hazardous Materials Laws, and
(ii) there are no pending actions or proceedings to which Landlord is a party
and in respect of which legal papers have been served upon Landlord by any
Governmental Authority or any other litigant in respect of Hazardous Materials
Laws affecting the Land, and (iii) it has not received any notice from any
Governmental Authority of violations of any Hazardous Materials Laws in respect
of the Land. Except as expressly set forth in this Section, Landlord makes no
representation or warranty as to the existence of Prohibited Activities or
Conditions on or under the Land. Furthermore, Landlord hereby notifies Tenant
that it is Landlord's belief that the Existing Structure contains lead paint.
41.2.2 Tenant shall take all reasonable and prudent steps (including
but not limited to reasonable and prudent lease or sublease or occupant
provisions) to prevent its employees, agents and contractors, and all tenants,
subtenants and other occupants on the Premises, from causing, permitting or
exacerbating any Prohibited Activities or Conditions. Tenant shall not lease,
sublease or permit the occupancy or use of the Premises to any tenant, subtenant
or occupant that, in the ordinary course of its business, would cause, permit or
exacerbate any Prohibited Activities or Conditions, and all leases and subleases
shall provide that tenants and subtenants shall not cause, permit or exacerbate
any Prohibited Activities or Conditions.
Section 41.3 NOTICE. Tenant shall promptly notify Landlord in writing of:
(i) the occurrence of any Prohibited Activity or Condition on the Premises of
which Tenant shall have
56
actual knowledge; (ii) Tenant's actual knowledge of the presence on or under any
adjoining property of any Hazardous Materials which can reasonably be expected
to have a material adverse impact on the Premises or the value of the Premises,
discovery of any occurrence or condition on the Premises or any adjoining real
property that could cause any restrictions on the ownership, occupancy,
transferability or use of the Premises under Hazardous Materials Law and Tenant
shall cooperate with any inquiry from a Governmental Authority, and shall comply
with any governmental or judicial order which arises from any alleged Prohibited
Activities or Conditions; (iii) receipt by Tenant of any claim, citation, notice
of any pending or threatened suits, proceedings, orders, inquiries or opinions
involving the Premises from any Governmental Authority which alleges the
violation of any Hazardous Materials Law ("GOVERNMENTAL ACTIONS"); (iv) any
claim made or threatened by any third party against Tenant, Landlord or the
Premises relating to loss or injury resulting from any Hazardous Materials at
the Premises. Any such notice by Tenant shall not relieve Tenant of, or result
in a waiver of, any obligation of Tenant under this ARTICLE 41.
Section 41.4 COSTS AND EXPENSES. Tenant shall (i) pay, as additional rent,
promptly after demand, the costs of any environmental audits, studies or
investigations (including but not limited to advice of legal counsel) which
Landlord incurs with respect to the Premises and (ii) remove and/or remediate in
compliance with all Hazardous Materials Laws any Hazardous Materials from the
Premises in a manner in which a prudent owner of similar properties would so
remove and/or remediate, following a determination in any such environmental
audits, studies or investigations that there exist any Prohibited Activities or
Conditions on or under the Premises. Tenant authorizes Landlord and its
employees, agents and contractors, upon not less than fifteen (15) days' prior
notice to Tenant (except in the case of an emergency as reasonably determined by
Landlord, where no notice shall be required), to enter onto the Premises for the
purpose of conducting such environmental audits, studies and investigations. Any
such costs and expenses incurred by Landlord (including but not limited to
reasonable fees and expenses of attorneys and consultants, whether incurred in
connection with judicial or administrative process or otherwise) which are due
as provided above in this Section and which Tenant fails to pay promptly shall
become immediately due and payable and shall become additional rent. Any costs
which are required to be reimbursed by Landlord to Tenant pursuant to the
provisions of this Article 41 which are not paid within fifteen (15) days after
Landlord's receipt of Tenant's written demand therefor accompanied by any
required statements, information, documents or other back-up materials, shall
bear interest from and after the expiration of such fifteen (15) day period at
the Default Rate.
Section 41.5 INDEMNIFICATION. Tenant shall indemnify, defend and hold
harmless the Indemnitees from and against all proceedings (including but not
limited to Governmental Actions), claims, damages, penalties, costs and expenses
(including without limitation reasonable fees and expenses of attorneys and
expert witnesses, investigatory fees, and cleanup and remediation expenses,
whether or not incurred within the context of the judicial process), arising
directly or indirectly from (i) any breach of any representation, warranty, or
obligation of Tenant contained in this ARTICLE 41, or (ii) the existence of any
Prohibited Activities or Conditions on or under the Premises which shall have
been caused, permitted or suffered by Tenant after the date hereof.
57
Section 41.6 DEFINITION OF HAZARDOUS MATERIAL. The term "HAZARDOUS
MATERIAL(S)," for purposes of this Article 44 shall mean any petroleum and
petroleum products, flammable explosives, radioactive materials (excluding
radioactive materials in smoke detectors), polychlorinated biphenyls, lead,
asbestos in any form that is or could become friable, hazardous waste, toxic or
hazardous substances or other related materials whether in the form of a
chemical, element, compound, solution, mixture or otherwise, including, but not
limited to, those materials defined as "hazardous substances," "extremely
hazardous substances," "hazardous chemicals," "hazardous materials," "toxic
substances," "solid waste," "toxic chemicals," "air pollutants," "toxic
pollutants," "hazardous wastes," "extremely hazardous waste," or "restricted
hazardous waste" by Hazardous Materials Law or regulated by Hazardous Materials
Law in any manner whatsoever.
Section 41.7 DEFINITION OF HAZARDOUS MATERIALS LAW. The term "Hazardous
Materials Law(s)," for the purposes of this ARTICLE 41 means all federal, state,
and local laws, ordinances and regulations and standards, rules, policies and
other binding governmental requirements now or hereafter enacted or in force,
and any court judgments applicable to Tenant or to the Premises relating to
industrial hygiene or to environmental or unsafe conditions or to human health
including, but not limited to, those relating to the generation, manufacture,
storage, handling, transportation, disposal, release, emission or discharge of
Hazardous Materials, those in connection with the construction, fuel supply,
power generation and transmission, waste disposal or any other operations or
processes relating to the Premises, and those relating to the atmosphere, soil,
surface and ground water, wetlands, stream sediments and vegetation on, under,
in or about the Premises.
Section 41.8 REPRESENTATIONS NOT EXCLUSIVE. The representations,
warranties, covenants, agreements, indemnities and undertakings of Landlord and
Tenant contained in this Article 41 shall be in addition to any and all other
obligations and liabilities that Landlord and Tenant may have to each other
under applicable law and elsewhere in this Lease.
Section 41.9 REPRESENTATIONS TO SURVIVE. The representations, warranties,
covenants, agreements, indemnities and undertakings of Tenant contained in this
ARTICLE 41 shall continue and survive notwithstanding the assignment,
termination, or cancellation of this Lease except with respect to any Prohibited
Activities or Conditions or violation of any of the Hazardous Materials Laws
which first commences and occurs after the assignment, termination or
cancellation of this Lease.
ARTICLE 42
MISCELLANEOUS
-------------
Section 42.1 CAPTIONS. The captions of this Lease are for convenience of
reference only and in no way define, limit or describe the scope or intent of
this Lease or in any way affect this Lease.
58
Section 42.2 TABLE OF CONTENTS. The table of contents preceding this Lease
(if any) is for the purpose of convenience of reference only and is not to be
deemed or construed in any way as part of this Lease or as supplemental thereto
or amendatory thereof.
Section 42.3 NEUTRAL PRONOUN. The use herein of the neutral pronoun in any
reference to Landlord or Tenant shall be deemed to include any individual
Landlord or Tenant, and the use herein of the words "successors and assigns" or
"successors or assigns" of Landlord or Tenant shall be deemed to include the
heirs, legal representatives and assigns of any individual Landlord or Tenant.
Section 42.4 NO ORAL AMENDMENT, JURISDICTION. This Lease cannot be changed
or terminated orally, but only by an instrument in writing executed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought. This Lease shall be governed by the laws of the State of New York.
Section 42.5 SUCCESSION. The agreements, terms, covenants and conditions
herein shall bind and inure to the benefit of Landlord and Tenant and their
respective heirs, personal representatives, successors and (except as otherwise
provided herein) assigns.
Section 42.6 NO MONEY DAMAGES. In no event shall Tenant be entitled to
make, nor shall Tenant make any claim, and Tenant hereby waives any claim, for
money damages, nor shall Tenant claim any money damages by way of setoff,
counterclaim or defense, based upon any claim or assertion by Tenant that
Landlord has unreasonably withheld or unreasonably delayed any consent or
approval it is required to give herein, but Tenant's sole remedy shall be an
action or proceeding to enforce any such provision, or for specific performance,
injunction or declaratory judgment.
Section 42.7 MULTI-TENANT OBLIGATIONS. If more than one party is named as
or becomes Tenant hereunder, Landlord may require the signatures of all such
parties in connection with any notice to be given or action to be taken by
Tenant hereunder. Each party named as Tenant shall be fully liable for all of
Tenant's obligations hereunder. Any notice by Landlord to any party named as
Tenant shall be sufficient and shall have the same force and effect as though
given to all parties named as Tenant.
ARTICLE 43
MEMORANDUM OF LEASE
-------------------
On or after the date that Tenant commences to pay rent, Landlord and Tenant
will, upon the written request of the other, join in the execution of a
memorandum of lease in form and substance reasonably satisfactory to each of
them and in proper form for recordation. Tenant shall pay all costs of recording
same.
59
ARTICLE 44
NO MERGER
---------
There shall be no merger of Landlord's estate in the Premises with Tenant's
estate therein by reason of the fact that the same individual, partnership, firm
or corporation or other entity may acquire or own such estates directly or
indirectly. No such merger shall occur until all individuals, partnerships,
firms, corporations and other entities having any interest in such estates,
including any Leasehold Mortgagee and any holder of a Mortgage, join in a
written instrument effecting such merger and duly record such instrument.
60
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
CATSKILL DEVELOPEMENT, L.L.C., Landlord
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: President
MONTICELLO RACEWAY MANAGEMENT,
INC., Tenant
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title:
60
