LEASE AGREEMENT
by and between
SPEC (CA) QRS 12-20, INC.,
a California corporation
as LANDLORD
and
SPECTRIAN CORPORATION,
a California corporation,
as TENANT
Premises: West Java Premises
Gibraltar Premises
Dated as of: November 19, 1996
TABLE OF CONTENTS
(continued)
TABLE OF CONTENTS
Page
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1. Demise of Premises...........................................................................................1
2. Certain Definitions..........................................................................................1
3. Title and Condition.........................................................................................10
4. Use of Leased Premises; Quiet Enjoyment.....................................................................11
5. Term........................................................................................................12
6. Basic Rent..................................................................................................13
7. Additional Rent.............................................................................................13
8. Net Lease; Non-Terminability................................................................................15
9. Payment of Impositions......................................................................................16
10. Compliance with Laws and Easement Agreements; Environmental
Matters.....................................................................................................17
11. Liens; Recording............................................................................................19
12. Maintenance and Repair......................................................................................19
13. Alterations and Improvements................................................................................20
14. Permitted Contests..........................................................................................21
15. Indemnification.............................................................................................22
16. Insurance...................................................................................................24
17. Casualty and Condemnation...................................................................................28
18. Termination Events..........................................................................................30
19. Restoration.................................................................................................32
20. Procedures Upon Purchase....................................................................................33
21. Assignment and Subletting; Prohibition against Leasehold
Financing...................................................................................................35
22. Events of Default...........................................................................................37
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TABLE OF CONTENTS
(continued)
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23. Remedies and Damages Upon Default...........................................................................39
24. Notices.....................................................................................................43
25. Estoppel Certificate........................................................................................44
26. Surrender...................................................................................................44
27. No Merger of Title..........................................................................................45
28. Books and Records...........................................................................................45
29. Determination of Value......................................................................................46
30. Non-Recourse as to Landlord.................................................................................49
31. Financing...................................................................................................49
32. Subordination...............................................................................................50
33. Financial Covenants.........................................................................................50
34. Right to Vacate; Rejectable Offer Upon Vacation.............................................................50
35. Tax Treatment; Reporting....................................................................................51
36. Right of First Refusal......................................................................................52
37. Security Deposit............................................................................................54
38. Miscellaneous...............................................................................................55
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TABLE OF CONTENTS
(continued)
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EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "B-1" - Tenant's Property
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Acquisition Costs
Exhibit "F" - Percentage Allocation of Basic Rent
Exhibit "G" - Covenants
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LEASE AGREEMENT, made as of this 19th day of November, 1996,
between SPEC (CA) QRS 12-20, INC., a California corporation ("Landlord"), with
an address c/o W.P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and SPECTRIAN CORPORATION, a California corporation
("Tenant"), with an address at 000 Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000.
In consideration of the rents and provisions herein stipulated
to be paid and performed, Landlord and Tenant hereby covenant and agree as
follows:
1. Demise of Premises. Landlord hereby demises and lets to
Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon
the provisions hereinafter specified, the following described property
(hereinafter referred to collectively as the "Leased Premises" and individually
as the "West Java Premises" and "Gibraltar Premises" each of which premises is
more particularly described in the applicable description in Exhibit "A"
attached hereto and made a part hereof and shall include the portions of items
(a), (b) and (c) of this Paragraph 1 located thereon or therein and appertaining
thereto): (a) the premises described in Exhibit "A" hereto, together with the
Appurtenances (collectively, the "Land"); (b) the buildings, structures and
other improvements now or hereafter constructed on the Land (collectively, the
"Improvements"); and (c) the fixtures, machinery, equipment and other property
described in Exhibit "B" hereto (collectively, the "Equipment").
2. Certain Definitions.
"Additional Rent" shall mean Additional Rent as
defined in Paragraph 7.
"Adjoining Property" shall mean all sidewalks,
driveways, curbs, gores and vault spaces adjoining any of the Leased Premises.
"Affected Premises" shall mean the Affected Premises
as defined in Paragraph 18.
"Alterations" shall mean all changes, additions,
improvements or repairs to, all alterations, reconstructions, renewals,
replacements or removals of and all substitutions or replacements for any of the
Improvements or Equipment, both interior and exterior, structural and
non-structural, and ordinary and extraordinary.
"Appurtenances" shall mean all tenements,
hereditaments, easements, rights-of-way, rights, privileges in and
to the Land, including (a) easements over other lands granted by any Easement
Agreement and (b) any streets, ways, alleys, vaults, gores or strips of land
adjoining the Land.
"Assignment" shall mean any assignment of rents and
leases from Landlord to a Lender which (a) encumbers any of the Leased Premises
and (b) secures Landlord's obligation to repay a Loan, as the same may be
amended, supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in
Paragraph 6.
"Basic Rent Adjustment Date" shall mean Basic Rent
Adjustment Date as defined in Exhibit "D" hereto.
"Basic Rent Payment Dates" shall mean the Basic Rent
Payment Dates as defined in Paragraph 6.
"Casualty" shall mean any injury to or death of any
person or any loss of or damage to any property (including the Leased Premises)
included within or related to the Leased Premises or arising from the Adjoining
Property.
"Commencement Date" shall mean Commencement Date as
defined in Paragraph 5.
"Condemnation" shall mean a Taking.
"Condemnation Notice" shall mean notice or knowledge
of the institution of or intention to institute any proceeding for Condemnation.
"Costs" of a Person or associated with a specified
transaction shall mean all reasonable costs and expenses incurred by such Person
or associated with such transaction, including without limitation, attorneys'
fees and expenses, court costs, brokerage fees, escrow fees, title insurance
premiums, mortgage commitment fees, mortgage points, recording fees and transfer
taxes, as the circumstances require.
"Covenants" shall mean the covenants and agreements
described on Exhibit "G" hereto.
"CPI" shall mean CPI as defined in Exhibit "D"
hereto.
"Default Rate" shall mean the Default Rate as defined
in Paragraph 7(a)(v).
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"Default Termination Amount" shall mean the greater
of (a) Fair Market Value or (b) the sum of the Floor Amount and any Prepayment
Premium which Landlord will be required to pay in prepaying any Loan with the
proceeds of the Default Termination Amount.
"Easement Agreement" shall mean any conditions,
covenants, restrictions, easements, declarations, licenses and other agreements
listed as Permitted Encumbrances or as may hereafter affect any Leased Premises.
"Environmental Law" shall mean (i) whenever enacted
or promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous Condition
or Hazardous Activity, in each case as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations or
injuries or damages due to or threatened as a result of the presence of,
exposure to, or ingestion of, any Hazardous Substance. The term Environmental
Law includes, without limitation, the federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act, the federal Clean
Air Act, the federal Clean Water Act, the federal Resources Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to
RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance Control
Act, the federal Insecticide, Fungicide and Rodenticide Act, the federal
Occupational Safety and Health Act of 1970, the federal National Environmental
Policy Act and the federal Hazardous Materials Transportation Act, each as
amended and as now or hereafter in effect and any similar state or local Law.
"Environmental Violation" shall mean (a) any direct
or indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or
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within the Leased Premises, or from the Leased Premises to the environment, in
violation of any Environmental Law or which results in any liability to or any
claim against Landlord, Tenant or Lender, any Federal, state or local government
or any other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (b) any deposit,
storage, dumping, placement or use of any Hazardous Substance at, upon, under or
within the Leased Premises or which extends to any Adjoining Property in
violation of any Environmental Law or which results in any claim or liability to
any Federal, state or local government or to any other Person for the costs of
any removal or remedial action or natural resources damage or for bodily injury
or property damage, (c) the abandonment or discarding of any barrels, containers
or other receptacles containing any Hazardous Substances in violation of any
Environmental Laws, (d) any activity, occurrence or condition which results in
any claim, liability, cost or expense to Landlord or Lender or any other owner
or occupier of the Leased Premises, or which could result in a creation of a
lien on any Related Premises under any Environmental Law or (e) any violation of
or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in
Paragraph 1.
"Escrow Holder" shall mean a nationally recognized
title insurance company or any Person that would otherwise qualify as a Lender.
"Event of Default" shall mean an Event of Default as
defined in Paragraph 22(a).
"Fair Market Value" shall mean the fair market value
of the Leased Premises as of the Relevant Date as affected and encumbered by
this Lease. For all purposes of this Lease, Fair Market Value shall be
determined in accordance with the procedure specified in Paragraph 29.
"Fair Market Rental Value" shall mean the fair market
rental value of the Leased Premises as of the Relevant Date for the relevant
Renewal Term determined in accordance with the procedure specified in Paragraph
29.
"Fair Market Value Date" shall mean the date when the
Fair Market Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other
immediately available funds which at the time of payment are legal
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tender for the payment of public and private debts in the United States of
America.
"Floor Amount" for each of the Related Premises shall
mean the amount set forth opposite such premises on Exhibit "E" hereto.
"Hazardous Activity" means any activity, process,
procedure or undertaking which directly or indirectly (i) procures, generates or
creates any Hazardous Substance; (ii) causes or results in the release, seepage,
spill, leak, flow, discharge or emission of any Hazardous Substance into the
environment (including the air, ground water, watercourses or water systems),
(iii) involves the containment or storage of any Hazardous Substance; or (iv)
would cause any of the Leased Premises or any portion thereof to become a
hazardous waste treatment, recycling, reclamation, processing, storage or
disposal facility within the meaning of any Environmental Law.
"Hazardous Condition" means any condition which would
support any claim or liability under any Environmental Law, including the
presence of underground storage tanks.
"Hazardous Substance" means (i) any substance,
material, product, petroleum, petroleum product, derivative, compound or
mixture, mineral (including asbestos), chemical, gas, medical waste, or other
pollutant, in each case whether naturally occurring, man-made or the by-product
of any process, that is toxic, harmful or hazardous or acutely hazardous to the
environment or public health or safety or (ii) any substance supporting a claim
under any Environmental Law, whether or not defined as hazardous as such under
any Environmental Law. Hazardous Substances include, without limitation, any
toxic or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined
in Paragraph 9(a).
"Improvements" shall mean the Improvements as defined
in Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in
Paragraph 15.
"Initial Term" shall mean Initial Term as defined in
Paragraph 5(a).
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"Insurance Requirements" shall mean the requirements
of all insurance policies maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of
law, code, ordinance, order, judgment, decree, injunction, rule, regulation,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first
Lease Year, the period commencing on the Commencement Date and ending at
midnight on the last day of the twelfth (12th) consecutive calendar month
following the month in which the Commencement Date occurred, and each succeeding
twelve (12) month period during the Term.
"Leased Premises" shall mean the Leased Premises as
defined in Paragraph 1.
"Legal Requirements" shall mean the requirements of
all present and future Laws (including but not limited to Environmental Laws)
and all covenants, restrictions and conditions now or hereafter of record which
may be applicable to Tenant or to any of the Leased Premises, or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration, repair
or restoration of any of the Leased Premises, even if compliance therewith
necessitates structural changes or improvements or results in interference with
the use or enjoyment of any of the Leased Premises.
"Lender" shall mean any person or entity (and their
respective successors and assigns) which may, after the date hereof, make a Loan
to Landlord or is the holder of any Note and which is a bank, insurance company,
bank affiliate or wholly-owned subsidiary of any such bank, credit company,
public or private pension plan, investment bank, institutionally managed fund or
any other Person that is in the business of, directly or indirectly, making
commercial mortgage loans and whose Mortgage provides that any Net Award shall
be held and applied in accordance with the terms of this Lease.
"Letter of Credit" shall mean the Letter of Credit as
defined in Paragraph 37 hereof.
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"Loan" shall mean any loan made by one or more
Lenders to Landlord, which loan is secured by a Mortgage and an Assignment and
evidenced by a Note.
"Monetary Obligations" shall mean Rent and all other
sums payable by Tenant under this Lease to Landlord, to any third party on
behalf of Landlord or to any Indemnitee.
"Mortgage" shall mean any first mortgage or deed of
trust from Landlord to a Lender which (a) encumbers any of the Leased Premises
and (b) secures Landlord's obligation to repay a Loan, as the same may be
amended, supplemented or modified.
"Net Award" shall mean (a) the entire award payable
to Landlord or Lender by reason of a Condemnation whether pursuant to a judgment
or by agreement or otherwise, or (b) the entire proceeds of any insurance
required under clauses (i), (ii) (to the extent payable to Landlord or Lender),
(iv), (v) or (vi) of Paragraph 16(a), as the case may be, less any expenses
incurred by Landlord and Lender in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing
Landlord's obligation to repay a Loan, as the same may be amended, supplemented
or modified.
"Partial Casualty" shall mean any Casualty which does
not constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation
which does not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on Exhibit "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership,
association, corporation or other entity.
"Prepayment Premium" shall mean any payment (other
than a payment of principal and/or interest) which Landlord is required to make
under a Note or a Mortgage by reason of any prepayment by Landlord of any
principal up to and including but not in excess of Ten Million Dollars
($10,000,000) due under a Note or Mortgage, and which may be (in lieu of such
prepayment premium or prepayment penalty) a "make whole" clause requiring a
prepayment
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premium in an amount sufficient to compensate the Lender for the loss of the
benefit of the Loan due to prepayment.
"Prime Rate" shall mean the interest rate per annum
as published, from time to time, in the Wall Street Journal as the "Prime Rate"
in its column entitled "Money Rate". The Prime Rate may not be the lowest rate
of interest charged by any "large U.S. money center commercial banks" and
Landlord makes no representations or warranties to that effect. In the event the
Wall Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the "Prime Rate" as published by Bank
of America, or if not published, the "Prime Rate" shall be the average per annum
discount rate (the "Discount Rate") on ninety-one (91) day bills ("Treasury
Bills") issued from time to time by the United States Treasury at its most
recent auction, plus three hundred (300) basis points. If no such 91-day
Treasury Bills are then being issued, the Discount Rate shall be the discount
rate on Treasury Bills then being issued for the period of time closest to
ninety-one (91) days.
"Related Premises" shall mean any one of the West
Java Premises and Gibraltar Premises.
"Relevant Amount" shall mean the Termination Amount
or the Default Termination Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately
prior to the event which gives rise to an Event of Default for the purpose of
determining the Default Termination Amount under Paragraph 23, (b) the date when
Fair Market Value is redetermined, in the event of a redetermination of Fair
Market Value pursuant to Paragraph 20(c), and (c) the first day of the
applicable Renewal Term.
"Remaining Premises" shall mean the Related Premises
which is not Affected Premises under Paragraph 18.
"Renewal Term" shall mean Renewal Term as defined in
Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and
Additional Rent.
"Security Deposit" shall mean Security Deposit as
defined in Paragraph 37.
"Site Assessment" shall mean a Site Assessment as
defined in Paragraph 10(c).
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"State" shall mean the State of California.
"Surviving Obligations" shall mean any obligations of
Tenant under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean any taking or damaging of all or
a portion of any of the Leased Premises (i) in or by condemnation or other
eminent domain proceedings pursuant to any Law, general or special, or (ii) by
reason of any agreement with any condemnor in settlement of or under threat of
any such condemnation or other eminent domain proceeding, or (iii) by any other
means. The Taking shall be considered to have taken place as of the later of the
date actual physical possession is taken by the condemnor, or the date on which
the right to compensation and damages accrues under the law applicable to the
Related Premises.
"Tenant Closing Costs" shall mean Tenant Closing
Costs as defined in Paragraph 31.
"Tenant's Property" shall mean the Tenant's Property
as defined in Exhibit B-1.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the sum of the Floor
Amount and any Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Termination Amount.
"Termination Date" shall mean the Termination Date as
defined in Paragraph 18.
"Termination Event" shall mean a Termination Event as
defined in Paragraph 18.
"Termination Notice" shall mean Termination Notice as
defined in Paragraph 18(a).
"Third Party Purchaser" shall mean the Third Party
Purchaser as defined in Paragraph 21(g).
"Vacation Offer" shall mean Vacation Offer as defined
in Paragraph 34.
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3. Title and Condition.
(a) The Leased Premises are demised and let subject
to (i) the Mortgage and Assignment presently in effect, (ii) the rights of any
Persons in possession of the Leased Premises, (iii) the existing state of title
of any of the Leased Premises, including any Permitted Encumbrances, (iv) any
state of facts which an accurate survey or physical inspection of the Leased
Premises might show, (v) all Legal Requirements, including any existing
violation of any thereof, and (vi) the condition of the Leased Premises as of
the commencement of the Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises
are in good condition and repair at the inception of this Lease. LANDLORD LEASES
AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS
FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION OR (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE; AND ALL RISKS INCIDENT THERETO ARE TO BE
BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS
SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN
INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR
PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has
examined the title to the Leased Premises prior to the execution and delivery of
this Lease and has found the same to be satisfactory for the purposes
contemplated hereby. Tenant acknowledges that (i) fee simple title (both legal
and equitable) to the Leased Premises is in Landlord and except, as provided in
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Paragraph 36 hereof with respect to certain rights of refusal to purchase the
Leased Premises that Tenant has only the leasehold right of possession and use
of the Leased Premises as provided herein, (ii) this is a single lease for
multiple properties and is not terminable or severable with respect to any one
Related Premises except as specifically provided herein, (iii) the Improvements
conform to all material Legal Requirements and all Insurance Requirements, (iv)
all easements necessary or appropriate for the use or operation of the Leased
Premises have been obtained, (v) all contractors and subcontractors who have
performed work on or supplied materials to the Leased Premises have been fully
paid, and all materials and supplies have been fully paid for, (vi) the
Improvements have been fully completed in all material respects in a workmanlike
manner, and (vii) all Equipment necessary or appropriate for the use or
operation of the Leased Premises has been installed and is presently fully
operative in all material respects.
(d) Landlord hereby assigns to Tenant, without
recourse or warranty whatsoever, all warranties, guaranties, indemnities and
similar rights which Landlord may have against any manufacturer, seller,
engineer, contractor or builder in respect of any of the Leased Premises. Such
assignment shall remain in effect until an Event of Default occurs or until the
expiration or earlier termination of this Lease, whereupon such assignment shall
cease and all of said warranties, guaranties, indemnities and other rights shall
automatically revert to Landlord.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for
office, research and development, assembly, manufacturing (including without
limitation semi-conductor wafer fabrication and electronics manufacturing),
storage, warehousing and all related uses, and, subject to Landlord's consent,
which consent shall not be unreasonably withheld, any other use permitted by
Law. Tenant shall not use or occupy or permit any of the Leased Premises to be
used or occupied, nor do or permit anything to be done in or on any of the
Leased Premises, in a manner which would (i) violate any Law or Legal
Requirement, (ii) make void or voidable or cause any insurer to cancel any
insurance required by this Lease, or make it impossible to obtain any such
insurance at commercially reasonable rates, (iii) cause structural injury to any
of the Improvements or (iv) constitute a public or private nuisance or waste.
(b) Subject to the provisions hereof, so long as no
Event of Default has occurred and is continuing, Tenant shall have the right to
quietly hold, occupy and enjoy the Leased Premises throughout the Term, without
any hindrance, ejection or molestation
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by Landlord with respect to matters that arise after the date hereof, provided
that Landlord or its agents may enter upon and examine any of the Leased
Premises at such reasonable times as Landlord may select and upon reasonable
notice to Tenant (except in the case of any emergency, in which event no notice
shall be required) for the purpose of inspecting the Leased Premises, verifying
compliance or non-compliance by Tenant with its obligations hereunder and the
existence or non-existence of an Event of Default or event which with the
passage of time and/or notice would constitute an Event of Default, showing the
Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof.
5. Term.
(a) Subject to the provisions hereof, Tenant shall
have and hold the Leased Premises for an initial term (the "Initial Term") (the
Initial Term, as extended or renewed in accordance with the provisions hereof,
being called the "Term") commencing on the date hereof (the "Commencement Date")
and ending on the last day of the one hundred eightieth (180th) calendar month
next following the date hereof (the "Expiration Date").
(b) Provided that if, on or prior to the Expiration
Date or any other Renewal Date (as hereinafter defined) this Lease shall not
have been terminated pursuant to any provision hereof, then on the Expiration
Date and on the fifth (5th) and tenth (10th) anniversaries of the Expiration
Date (the Expiration Date and each such anniversary being a "Renewal Date"), the
Term shall be deemed to have been automatically extended for an additional
period of five (5) years (a "Renewal Term"), unless Tenant shall notify Landlord
in writing in recordable form at least one (1) year prior to the next Renewal
Date that Tenant is terminating this Lease as of the next Renewal Date. Any such
extension of the Term shall be subject to all of the provisions of this Lease,
as the same may be amended, supplemented or modified.
(c) If Tenant exercises its option pursuant to
Paragraph 5(b) not to have the Term automatically extended, or if an Event of
Default has occurred and is continuing, then Landlord shall have the right
during the remainder of the Term then in effect and, in any event, Landlord
shall have the right during the last year of the Term, to (i) advertise the
availability of any of the Leased Premises for sale or reletting and to erect
upon any of the Leased Premises signs indicating such availability and (ii) show
any of the Leased Premises to prospective purchasers or tenants or their agents
at such reasonable times as Landlord may select.
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6. Basic Rent. Tenant shall pay to Landlord, as annual rent
for the Leased Premises during the Term, the amounts determined in accordance
with Exhibit "D" hereto ("Basic Rent"), commencing on the first day of December,
1996, and continuing on the first day of each March, June, September and
December thereafter during the Term (each such day being a "Basic Rent Payment
Date"). Each such rental payment shall be made, at Landlord's sole discretion,
(a) to Landlord at its address set forth above and/or to such one or more other
Persons, at such addresses and in such proportions as Landlord may direct by
fifteen (15) days' prior written notice to Tenant (in which event Tenant shall
give Landlord notice of each such payment concurrent with the making thereof),
and (b) by a check mailed at least seven (7) days before the applicable Basic
Rent Payment Date, or in Federal Funds. Pro rata Basic Rent for the period from
the date hereof through the last day of the month hereof shall be paid on the
date hereof.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional
rent (collectively, "Additional Rent"):
(i) except as otherwise specifically
provided herein, all out-of-pocket costs and expenses of Tenant and Landlord
which are reasonably incurred by Landlord or Tenant in connection or associated
with (A) the ownership, use, non-use, occupancy, possession, operation,
condition, design, construction, maintenance, alteration, repair or restoration
of any of the Leased Premises (except payments on any Loan, third party
management fees, replacement reserves for the Equipment and Improvements, real
estate commissions, costs related to the sale of the Leased Premises to any
Person unless the sale is to Tenant or its designee and costs related to
obtaining and closing any Loan or any other loan unless such costs are part of
Tenant Closing Costs, any other Cost of Landlord unrelated to the Leased
Premises and Impositions (which are governed by Paragraph 9 hereof)), (B) the
performance of any of Tenant's obligations under this Lease, (C) any sale or
other transfer of any of the Leased Premises to Tenant under this Lease, (D) any
Condemnation proceedings, (E) the adjustment, settlement or compromise of any
insurance claims involving or arising from any of the Leased Premises, (F) the
prosecution, defense or settlement of any litigation involving or arising from
any of the Leased Premises, this Lease, or the sale of the Leased Premises to
Landlord excluding litigation by Tenant against Landlord in which Tenant is the
prevailing party and excluding litigation or any proceeding concerning any Loan
or any other loan secured by the Leased Premises unless such litigation or
proceeding arises out of any action or non-action by Tenant under this Lease,
(G) the exercise or enforcement by Landlord, its successors and assigns, of
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any of its rights under this Lease if Landlord is the prevailing party, (H) any
amendment to or modification or termination of this Lease made at the request of
Tenant, (I) Costs of Landlord's counsel incurred in connection with any act
undertaken by Landlord (or its counsel) at the request of Tenant, or incurred in
connection with any act of Landlord performed at the request of Tenant or if
Tenant fails to perform its obligations under this Lease, and (J) any other
items specifically required to be paid by Tenant under this Lease;
(ii) payments to be made to or on behalf of
any Indemnitee pursuant to Paragraph 15 hereof;
(iii) after the date all or any portion of
any installment of Basic Rent is due and not paid, an amount equal to three
percent (3%) of the amount of such unpaid installment or portion thereof,
provided, however, that with respect to the first late payment of all or any
portion of any installment of Basic Rent in any Lease Year, the Late Charge
shall not be due and payable unless the Basic Rent has not been paid within
seven (7) days following the due date thereof;
(iv) a sum equal to any late charge or
default penalties in excess of the amount of Late Charge and Default Rate paid
by Tenant on that portion of the Basic Rent equal to payments of principal and
interest payable by Landlord on the Note then in effect and legal fees and
expenses of Lender, which are payable by Landlord to any Lender under any Note
by reason of Tenant's late payment or non-payment of Basic Rent or by reason of
an Event of Default; and
(v) interest at the rate (the "Default
Rate") of three percent (3%) over the Prime Rate per annum on the following sums
until paid in full: (A) all overdue installments of Basic Rent from the
respective due dates thereof and (B) all overdue amounts of Additional Rent
relating to obligations which Landlord shall have paid on behalf of Tenant, from
the date of payment thereof by Landlord.
(b) Tenant shall pay and discharge (i) any Additional
Rent referred to in Paragraph 7(a)(i) when the same shall become due, provided
that amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within seven (7) days after Landlord's demand for payment thereof,
and (ii) any other Additional Rent, within seven (7) days after Landlord's
demand for payment thereof.
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(c) In no event shall amounts payable under Paragraph
7(a)(iii), (iv) and (v) exceed the maximum amount permitted by applicable Law.
8. Net Lease; Non-Terminability.
(a) This is a net lease and, except as otherwise
specifically provided herein, all Monetary Obligations shall be paid without
notice or demand (provided that notice of increases in Basic Rent payments shall
be given as required under Exhibit "D" and in accordance with the provisions of
Paragraph 24) and without set-off, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense
(collectively, a "Set-Off").
(b) Except as otherwise expressly provided herein,
this Lease and the rights of Landlord and the obligations of Tenant hereunder
shall not be affected by any event or for any reason, including the following:
(i) any damage to or theft, loss or destruction of any of the Leased Premises,
(ii) any Condemnation, (iii) Tenant's acquisition of ownership of any of the
Leased Premises other than pursuant to an express provision of this Lease, (iv)
any default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement, (v) any latent or other defect in any of the
Leased Premises, (vi) the breach of any warranty of any seller or manufacturer
of any of the Equipment, (vii) any violation of Paragraph 4(b) or any other
provision of this Lease by Landlord, (viii) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up of, or other proceeding affecting Landlord, (ix) the exercise of any
remedy, including foreclosure, under any Mortgage or Assignment, (x) any action
with respect to this Lease (including the disaffirmance hereof) which may be
taken by Landlord, any trustee, receiver or liquidator of Landlord or any court
under the Federal Bankruptcy Code or otherwise, (xi) any interference with
Tenant's use of the Leased Premises, (xii) market or economic changes or (xiii)
any other cause, whether similar or dissimilar to the foregoing, any present or
future Law to the contrary notwithstanding. The foregoing shall not limit
Tenant's right to recover damages or obtain any equitable remedy in the event of
a default by Landlord, subject in any event to the provisions of Paragraph
30(a).
(c) The obligations of Tenant hereunder shall be
separate and independent covenants and agreements, all Monetary Obligations
shall continue to be payable in all events (or, in lieu thereof, Tenant shall
pay amounts equal thereto), and the obligations of Tenant hereunder shall
continue unaffected unless the requirement to pay or perform the same shall have
been
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terminated pursuant to an express provision of this Lease. All Rent payable by
Tenant hereunder shall constitute "rent" for all purposes (including Section
502(b)(6) of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein,
Tenant shall have no right and hereby waives all rights which it may have under
any Law (i) to quit, terminate or surrender this Lease or any of the Leased
Premises, or (ii) to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are
due thereon, pay and discharge all taxes (including real and personal property,
franchise, sales and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all assessments and
levies, all permit, inspection and license fees, all rents and charges for
water, sewer, utility and communication services relating to any of the Leased
Premises, and all other public charges whether of a like or different nature,
even if unforeseen or extraordinary, imposed upon or assessed against (i)
Tenant, (ii) Tenant's possessory interest in the Leased Premises, (iii) any of
the Leased Premises, (iv) Landlord as a result of or arising in respect of the
acquisition, ownership, occupancy, leasing, use, possession or sale of any of
the Leased Premises, any activity conducted on any of the Leased Premises, or
the Rent, or (v) any Lender by reason of any tax or charge payable to or on
behalf of Lender which is not imposed as of the date hereof, is customarily paid
by tenants or by borrowers pursuant to then prevailing mortgage practices and
which is a substitute for any ad valorem tax payable on the Leased Premises or
any portion thereof and (as to this clause (v)) which Landlord has agreed to pay
(collectively, the "Impositions"); provided, that nothing in this Lease shall
obligate Tenant to pay (A) income, excess profits or other taxes of Landlord (or
Lender) which are determined on the basis of Landlord's (or Lender's) net income
or net worth, (B) any estate, inheritance, succession, gift or similar tax
imposed on Landlord or (C) any capital gains or transfer tax imposed on Landlord
in connection with the sale of the Leased Premises to any Person except for a
sale of the Leased Premises or any part thereof to Tenant or to any nominee or
designee of Tenant. If any Imposition may be paid in installments without
penalty, Tenant shall have the option to pay such Imposition in installments; in
such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall prepare and file all tax
reports required by governmental authorities which relate to the Impositions.
Tenant shall deliver to Landlord (1) copies of all settlements and notices
pertaining to the Impositions which may be
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issued by any governmental authority within ten (10) days after Tenant's receipt
thereof, (2) receipts for payment of all taxes required to be paid by Tenant
hereunder within thirty (30) days after the due date thereof and (3) receipts
for payment of all other Impositions within ten (10) days after Landlord's
request therefor.
(b) Landlord shall have the right during the
occurrence of an Event of Default to require Tenant to pay to Landlord an
additional monthly sum (each an "Escrow Payment") sufficient to pay the Escrow
Charges (as hereinafter defined) as they become due. As used herein, "Escrow
Charges" shall mean real estate taxes on the Leased Premises or payments in lieu
thereof and premiums on any insurance required by this Lease. Landlord shall
determine the amount of the Escrow Charges and of each Escrow Payment. The
Escrow Payments may be commingled with other funds of Landlord or other Persons
and no interest thereon shall be due or payable to Tenant. Landlord shall apply
the Escrow Payments to the payment of the Escrow Charges in such order or
priority as Landlord shall determine or as required by law. If at any time the
Escrow Payments theretofore paid to Landlord shall be insufficient for the
payment of the Escrow Charges, Tenant, within ten (10) days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord.
10. Compliance with Laws and Easement Agreements;
Environmental Matters.
(a) Tenant shall, at its expense, comply with and
conform to, and cause the Leased Premises and any other Person occupying any
part of the Leased Premises to comply with and conform to, all Insurance
Requirements and Legal Requirements (including all applicable Environmental
Laws) and shall maintain in full force and effect all permits, licenses and
utility services required for the use and occupancy of the Leased Premises.
Tenant shall not at any time (i) cause, permit or suffer to occur any
Environmental Violation or (ii) permit any sublessee, assignee or other Person
occupying the Leased Premises under or through Tenant to cause, permit or suffer
to occur any Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all
times promptly and faithfully abide by, discharge and perform all of the
covenants, conditions and agreements contained in any Easement Agreement on the
part of Landlord or the occupier to be kept and performed thereunder. Tenant
will not alter, modify, amend or terminate any Easement Agreement, give any
consent or approval thereunder, or enter into any new Easement Agreement
without, in each case, prior written consent of Landlord, which will not be
unreasonably withheld.
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(c) Upon prior written notice from Landlord, Tenant
shall permit such persons as Landlord may designate ("Site Reviewers") to visit
the Leased Premises and perform, environmental site investigations and
assessments ("Site Assessments") on the Leased Premises for the purpose of
determining whether there exists on the Leased Premises any Environmental
Violation or any condition which could result in any Environmental Violation.
Such Site Assessments may include both above and below the ground testing for
Environmental Violations and such other tests as may be necessary, in the
opinion of the Site Reviewers, to conduct the Site Assessments. Tenant shall
supply to the Site Reviewers such historical and operational information
regarding the Leased Premises as may be reasonably requested by the Site
Reviewers to facilitate the Site Assessments, and shall make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. The cost of performing and reporting any Site Assessment that discloses
an Environmental Violation shall be paid by Tenant.
(d) If an Environmental Violation occurs or is found
to exist and, in Landlord's reasonable judgment, the cost of remediation of the
same is likely to exceed $100,000, Tenant shall provide to Landlord, within ten
(10) days after Landlord's request therefor, adequate financial assurances that
Tenant will effect such remediation in accordance with applicable Environmental
Laws.
(e) Notwithstanding any other provision of this
Lease, if an Environmental Violation occurs or is found to exist, the Term would
otherwise terminate or expire and Landlord, after good faith efforts, shall have
been unable to relet the Leased Premises solely because of the existence of such
Environmental Violation, then, at the option of Landlord, the Term shall be
automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earliest
to occur of (i) the completion of remedial action to the extent necessary to
make the Leased Premises relettable, (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease or (iii) the date on which Tenant
obtains a bona-fide replacement tenant for the Leased Premises on terms
reasonably satisfactory to Landlord (and in this regard Landlord and its broker
shall reasonably cooperate with Tenant with respect to Tenant's marketing
efforts).
(f) If Tenant fails to comply with any requirement of
any Environmental Law in connection with any Environmental Violation which
occurs or is found to exist, Landlord shall have the right (but no obligation)
to take any and all actions as the Site Reviewers shall deem necessary in order
to cure such Environmental Violation.
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(g) Tenant shall notify Landlord immediately after
becoming aware of any Environmental Violation (or alleged Environmental
Violation) or noncompliance with any of the covenants contained in this
Paragraph 10 and shall forward to Landlord immediately upon receipt thereof
copies of all orders, reports, notices, permits, applications or other
communications relating to any such violation or noncompliance.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create
or permit to be created or to remain and shall promptly discharge or remove any
lien, levy or encumbrance on any of the Leased Premises or on any Rent or any
other sums payable by Tenant under this Lease, other than any Mortgage or
Assignment, the Permitted Encumbrances and any mortgage, lien, encumbrance or
other charge created by or resulting solely from any act or omission of
Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES. LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES
REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or
register (collectively, "record") all such instruments as may be required or
permitted by any present or future Law in order to evidence the respective
interests of Landlord and Tenant in any of the Leased Premises, and shall cause
a memorandum of this Lease (or, if such a memorandum cannot be recorded, this
Lease), and any supplement hereto or thereto, to be recorded in such manner and
in such places as may be required or permitted by any present or future Law in
order to protect the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain each Related
Premises and the Adjoining Property in as good repair and appearance as each is
in on the date hereof and fit to be used for their intended use in accordance
with the better of the practices generally recognized as then acceptable by
other companies in its industry or observed by Tenant with respect to the other
real properties owned or operated by it, and, in the case of the Equipment, in
as good mechanical condition as it was on the later of the date hereof or the
date of its installation, except for ordinary wear and tear. Tenant shall take
every other action
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necessary or appropriate for the preservation and safety of each Related
Premises. Tenant shall promptly make all Alterations of every kind and nature,
whether foreseen or unforeseen, which may be required to comply with the
foregoing requirements of this Paragraph 12(a). Landlord shall not be required
to make any Alteration, whether foreseen or unforeseen, or to maintain any of
the Related Premises or Adjoining Property in any way, and Tenant hereby
expressly waives any right which may be provided for in any Law now or hereafter
in effect to make Alterations at the expense of Landlord or to require Landlord
to make Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12
shall be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed,
shall (i) encroach upon any setback or any property, street or right-of-way
adjoining any of the Leased Premises, (ii) violate the provisions of any
restrictive covenant affecting any of the Leased Premises, (iii) hinder or
obstruct any easement or right-of-way to which any of the Leased Premises is
subject or (iv) impair the rights of others in, to or under any of the
foregoing, Tenant shall, promptly after receiving notice or otherwise acquiring
knowledge thereof, either (A) obtain from all necessary parties waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, hindrance, obstruction or impairment, whether the same
shall affect Landlord, Tenant or both, or (B) take such action as shall be
necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having
obtained the prior written consent of Landlord and Lender, to make (i)
non-structural Alterations to the Leased Premises, (ii) structural Alterations
or a series of related structural Alterations that, as to any such Alterations
or series of related Alterations, do not cost in excess of $250,000 with respect
to any Related Premises and (iii) to install Equipment in the Improvements or
accessions to the Equipment that, as to such Equipment or accessions, do not
cost in excess of $250,000, so long as at the time of construction or
installation of any such Equipment or Alterations no Event of Default exists and
the value and utility of the Leased Premises is not materially diminished
thereby. For any other Alterations or Equipment or accessions thereto the cost
of which is in excess of $250,000, the prior written approval of Landlord and
Lender shall be required, such approval not to be unreasonably withheld, delayed
or conditioned, and such approval shall not, in any event, include any
requirement that the space to
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be improved must be returned to its original condition at the end of the Term if
the Alterations are of general utility and do not adversely affect the value of
the Leased Premises. Tenant shall not construct upon the Land any additional
buildings without having first obtained the prior written consent of Landlord
and Lender.
(b) If Tenant makes any Alterations pursuant to this
Paragraph 13 or as required by Paragraph 12 or 17 (such Alterations and actions
being hereinafter collectively referred to as "Work"), then (i) the market value
of the Leased Premises shall not be lessened in any material respect by any such
Work or its usefulness impaired, (ii) all such Work shall be performed by Tenant
or its contractors in a good and workmanlike manner, (iii) all such Work shall
be expeditiously completed in compliance with all Legal Requirements, (iv) all
such Work shall comply with the requirements of all insurance policies required
to be maintained by Tenant hereunder, (v) if any such Work involves the
replacement of Equipment or parts thereto, all replacement Equipment or parts
shall have a value and useful life equal to the greater of (A) the value and
useful life on the date hereof of the Equipment being replaced or (B) the value
and useful life of the Equipment being replaced immediately prior to the
occurrence of the event which required its replacement (assuming such Replaced
Equipment was then in the condition required by this Lease), (vi) Tenant shall
promptly discharge or remove all liens filed against any of the Leased Premises
arising out of such Work, (vii) Tenant shall procure and pay for all permits and
licenses required in connection with any such Work, (viii) all such Work shall
be the property of Landlord and shall be subject to this Lease, and Tenant shall
execute and deliver to Landlord any document requested by Landlord evidencing
the assignment to Landlord of all estate, right, title and interest (other than
the leasehold estate created hereby) of Tenant or any other Person thereto or
therein, and (ix) Tenant shall comply, to the extent requested by Landlord or
required by this Lease, with the provisions of Paragraph 19(a), whether or not
such Work involves restoration of the Leased Premises.
(c) Tenant shall have the right at any time during
the Term to install and remove Tenant's Property which shall remain Tenant's
Property (subject to Tenant's obligations to repair and restore).
14. Permitted Contests. Notwithstanding any other provision of
this Lease, Tenant shall not be required to (a) pay any Imposition, (b)
discharge or remove any lien referred to in Paragraph 11 or 13, (c) take any
action with respect to any encroachment, violation, hindrance, obstruction or
impairment referred to in Paragraph 12(b), or (d) comply with any Legal
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Requirements (such non-compliance with the terms hereof being hereinafter
referred to collectively as "Permitted Violations"), so long as at the time of
such non-compliance no Event of Default exists and so long as Tenant shall
contest, in good faith, the existence, amount or validity thereof or the manner
in which compliance with Legal Requirements is to be achieved, the amount of the
damages caused thereby, or the extent of its or Landlord's liability therefor by
appropriate proceedings which shall operate during the pendency thereof to
prevent or stay (i) the collection of, or other realization upon, the Permitted
Violation so contested, (ii) the sale, forfeiture or loss of any of the Leased
Premises or any Rent to satisfy or to pay any damages caused by any Permitted
Violation, (iii) any material interference with the use or occupancy of any of
the Leased Premises, (iv) any interference with the payment of any Rent, (v) the
cancellation or increase in the rate of any insurance policy or a statement by
the carrier that coverage will be denied or (vi) the enforcement or execution of
any injunction, order or Legal Requirement with respect to the Permitted
Violation. Tenant shall provide Landlord security which is required by Law or,
if not required, which is satisfactory, in Landlord's reasonable judgment (which
shall be based, among other things, on an analysis of Tenant's
creditworthiness), to assure that such Permitted Violation is corrected,
including all Costs, interest and penalties that may be incurred or become due
in connection therewith. While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by law to correct
such Permitted Violation and Tenant's contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject Landlord to the risk
of any civil or criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save and
hold harmless Landlord, Lender and all other Persons
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described in Paragraph 30 (each an "Indemnitee") from and against any and all
liabilities, losses, damages (including punitive damages), penalties, Costs
(including attorneys' fees and costs), causes of action, suits, claims, demands
or judgments of any nature whatsoever, howsoever caused, without regard to the
form of action and whether based on strict liability, gross negligence,
negligence or any other theory of recovery at law or in equity, arising from (i)
any matter pertaining to the acquisition (or the negotiations leading thereto),
ownership, leasing, use, non-use, occupancy, operation, management, condition,
design, construction, maintenance, repair or restoration of any of the Leased
Premises or Adjoining Property, (ii) any claim by a third party based on
personal injury or property damage caused by any casualty in any manner arising
from any of the Leased Premises or Adjoining Property, whether or not Indemnitee
has or should have knowledge or notice of any defect or condition causing or
contributing to said casualty, (iii) any violation by Tenant of any provision of
this Lease, any contract or agreement to which Tenant is a party, any Legal
Requirement or any Permitted Encumbrance or (iv) any alleged, threatened or
actual Environmental Violation, including (A) liability for response costs and
for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit or any other Person, or damages
from injury to or destruction or loss of natural resources, including the
reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to Section 107 of CERCLA, or any successor section or act or provision
of any similar state or local Law, (B) liability for costs and expenses of
abatement, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any of the other Environmental Laws and (C)
liability for personal injury or property damage arising under any statutory or
common-law tort theory, including damages assessed for the maintenance of a
public or private nuisance or for carrying on of a dangerous activity.
Notwithstanding the foregoing, Tenant shall not indemnify (i) any Indemnitee due
to the gross negligence or willful misconduct of such Indemnitee or its agents,
employees or contractors, (ii) Landlord for any matter caused solely by
Landlord's breach of this Lease or any document evidencing or securing a Loan
(so long as such breach is not caused by Tenant's breach of this Lease), (iii)
any Indemnitee with respect to any misrepresentation made by such Indemnitee or
(iv) any Lender for non-payment of principal, interest or penalties due on any
Loan.
(b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in the event of a
conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its choice
to
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monitor the defense of any such action at its cost) and (ii) such Indemnitee
shall notify Tenant to resist or defend such action or proceeding by retaining
counsel reasonably satisfactory to such Indemnitee, and such Indemnitee will
cooperate and assist in the defense of such action or proceeding if reasonably
requested to do so by Tenant. In the event of a conflict of interest or dispute
or during the continuance of an Event of Default, Landlord shall have the right
to select counsel, and the cost of such counsel shall be paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall
survive any termination, expiration or rejection in bankruptcy of this Lease
with respect to any indemnified matter, including any condition, that existed,
occurred or arose out of a matter or condition that existed or occurred prior to
the date of such termination, expiration or rejection, whether or not known or
actionable at such date.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) (A) Insurance against physical loss or
damage to the Improvements and Equipment as provided under a standard "All Risk"
property policy (but excluding earthquake and flood coverage) in amounts not
less than the actual replacement cost of the Improvements and Equipment and (B)
subject to the provisions of the last two (2) sentences of this Paragraph
16(a)(i), earthquake and flood coverage in the amount of $5,000,000. The
policies described in clause (A) above shall contain Replacement Cost and Agreed
Amount Endorsements and shall contain deductibles not more than $100,000 per
occurrence and the earthquake and flood policy described in clause (B) shall
contain deductibles of not more than $1,000,000. The amount of such insurance
shall not be reduced and the amount of such deductible shall not be increased as
long as such insurance is available. If such insurance is not available, the
amounts of coverage and deductibles may be reduced or increased, respectively,
as applicable.
(ii) Commercial general liability insurance
against claims for personal and bodily injury, death or property damage
occurring on, in or as a result of the use of the Leased Premises, in an amount
not less than $10,000,000 per occurrence/annual aggregate including but not
limited to incidental medical malpractice, and all other coverage extensions
that are usual and customary for properties of this size and type; provided,
however, that Landlord shall have the right to require such higher
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limits as may be reasonable and customary for properties of this size and type.
(iii) Worker's compensation insurance
covering all persons employed by Tenant in connection with any work done on or
about any of the Leased Premises for which claims for death, disease or bodily
injury may be asserted against Landlord, Tenant or any of the Leased Premises
or, in lieu of such worker's compensation insurance, a program of self-insurance
complying with the rules, regulations and requirements of the appropriate agency
of the State or States in which the Leased Premises are located.
(iv) If applicable, comprehensive boiler and
machinery insurance on any of the Equipment or any other equipment on or in the
Leased Premises, including but not limited to service interruption, expediting
expenses, ammonia contamination, hazardous clean-up and comprehensive object
definition, in an amount not less than $5,000,000 for damage to property, bodily
injury or death resulting from such covered perils as found in a standard
comprehensive boiler & machinery policy. Such policies shall contain a
deductible not to exceed $100,000.
(v) Loss of rents insurance on an actual
loss sustained basis with a period of indemnity not less than one year from the
time of loss.
(vi) During any period in which substantial
Alterations at any Related Premises are being undertaken, builder's risk
insurance covering the total completed value including any "soft costs" with
respect to the Improvements being altered or repaired (on a completed value,
non-reporting basis), replacement cost of work performed and equipment, supplies
and materials furnished in connection with such construction or repair of
Improvements or Equipment, together with such "soft cost" endorsements and such
other endorsements as Landlord may reasonably require and general liability,
worker's compensation and automobile liability insurance with respect to the
Improvements being constructed, altered or repaired.
(vii) Such other insurance (or other terms
with respect to any insurance required pursuant to this Paragraph 16 except for
the earthquake coverage described in Paragraph 16(a)(i), including without
limitation amounts of coverage, deductibles and form of mortgagee clause) on or
in connection with any of the Leased Premises as Landlord or Lender may
reasonably require, which at the time is usual and commonly obtained in
connection with properties similar in type of building size, use and location to
the Leased Premises.
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(b) The insurance required by Paragraph 16(a) shall
be written by companies which have a Best's rating of at least A:X (unless a
lesser rating is approved by Landlord) and are admitted in, and approved to
write insurance policies by, the State Insurance Department for the states in
which the Leased Premises are located. The insurance policies (i) shall be on
such terms as Landlord may reasonably approve and (ii) shall be in amounts
sufficient at all times to satisfy any coinsurance requirements thereof. The
insurance referred to in Paragraphs 16(a)(i), 16(a)(iv) and 16(a)(vi) shall name
Landlord as Owner and Lender as loss payee and Tenant as its interest may
appear. The insurance referred to in Paragraph 16(a)(ii) shall name Landlord and
Lender as additional insureds, and the insurance referred to in Paragraph
16(a)(v) shall name Landlord as insured and Lender and Landlord as loss payee.
If said insurance or any part thereof shall expire, be withdrawn, become void,
voidable, unreliable or unsafe for any reason, including a breach of any
condition thereof by Tenant or the failure or impairment of the capital of any
insurer, or if for any other reason whatsoever said insurance shall become
reasonably unsatisfactory to Landlord, Tenant shall immediately obtain new or
additional insurance reasonably satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i),
(iv), (v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender. Each policy required by
any provision of Paragraph 16(a), except clause (iii) thereof, shall provide
that it may not be cancelled except after thirty (30) days' prior notice to
Landlord and Lender. Each such policy shall also provide that any loss otherwise
payable thereunder shall be payable notwithstanding (i) any act or omission of
Landlord or Tenant which might, absent such provision, result in a forfeiture of
all or a part of such insurance payment, (ii) the occupation or use of any of
the Leased Premises for purposes more hazardous than those permitted by the
provisions of such policy, (iii) any foreclosure or other action or proceeding
taken by Lender pursuant to any provision of the Mortgage, Note, Assignment or
other document evidencing or securing the Loan upon the happening of an event of
default therein or (iv) any change in title to or ownership of any of the Leased
Premises.
(d) Tenant shall pay as they become due all premiums
for the insurance required by Paragraph 16(a), shall renew or replace each
policy and deliver to Landlord evidence of the payment of the full premium
therefor or installment then due at least thirty (30) days prior to the
expiration date of such policy, and shall promptly deliver to Landlord all
original policies or certified copies thereof.
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(e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant, provided that such "blanket"
or umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16 and provided further that such policies shall provide for a
reserved amount thereunder with respect to the Leased Premises so as to assure
that the amount of insurance required by this Paragraph 16 will be available
notwithstanding any losses with respect to other property covered by such
blanket policies. The amount of the total insurance allocated to the Leased
Premises, which amount shall be not less than the amounts required pursuant to
this Paragraph 16, shall be specified either (i) in each such "blanket" or
umbrella policy or (ii) in a written statement, which Tenant shall deliver to
Landlord, from the insurer thereunder. The original or a certified copy of each
such "blanket" or umbrella policy shall promptly be delivered to Landlord.
(f) Tenant shall have the replacement cost and
insurable value of the Improvements and Equipment determined from time to time
as required by the replacement cost and agreed amount endorsements and shall
deliver to Landlord the new replacement cost and agreed amount endorsement or
certificate evidencing such endorsement promptly upon Tenant's receipt thereof.
(g) Tenant shall promptly comply with and conform to
(i) all provisions of each insurance policy required by this Paragraph 16 and
(ii) all requirements of the insurers thereunder applicable to Landlord, Tenant
or any of the Leased Premises or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration or repair of any of the Leased
Premises, even if such compliance necessitates Alterations or results in
interference with the use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance
concurrent in form or contributing in the event of a Casualty with that required
in this Paragraph 16 unless (i) Landlord and Lender are included therein as
named insureds, with loss payable as provided herein, and (ii) such separate
insurance complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies thereof.
(i) All policies shall contain effective waivers by
the carrier against all claims for insurance premiums against
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Landlord and shall contain full waivers of subrogation against Landlord.
(j) All proceeds of any insurance required under
Paragraph 16(a) shall be payable as follows:
(i) Except for proceeds payable to a Person
other than Landlord, Tenant or Lender, all proceeds of insurance required under
clauses (ii), (iii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds
attributable to the general liability coverage provisions of Builder's Risk
insurance under clause (vi) of Paragraph 16(a) shall be payable to Escrow Holder
or, if required by the Mortgage, to Lender who shall apply such proceeds to the
Persons legally entitled thereto for the benefit of the named insureds as their
interests appear.
(ii) Proceeds of insurance required under
clause (i) of Paragraph 16(a) and proceeds attributable to Builder's Risk
insurance (other than its general liability coverage provisions) under clause
(vi) of Paragraph 16(a) shall be payable to Escrow Holder (or Lender) and
applied as set forth in Paragraph 17 or Paragraph 18, as applicable. If Tenant
is obligated to restore the Leased Premises, then Escrow Holder or Lender, as
the case may be, shall make the proceeds available to Tenant in accordance with
the applicable provisions hereof and Tenant shall apply the Net Award to
restoration of the Leased Premises in accordance with the applicable provisions
of this Lease.
(iii) Each insurer is hereby authorized and
directed to make payment under said policies directly to Escrow Holder or, if
required by the Mortgage, to Lender instead of to Landlord and Tenant jointly,
and Tenant hereby appoints each of Escrow Holder and Lender as Tenant's
attorneys-in-fact to endorse any draft therefor.
17. Casualty and Condemnation.
(a) If any Casualty to either Related Premises
occurs, Tenant shall give Landlord and Lender immediate notice thereof. So long
as no Event of Default has occurred and is continuing Tenant is hereby
authorized to adjust, collect and compromise all claims under any of the
insurance policies required by Paragraph 16(a) (except public liability
insurance claims payable to a Person other than Tenant, Landlord or Lender) and
to execute and deliver on behalf of Landlord all necessary proofs of loss,
receipts, vouchers and releases required by the insurers and Landlord shall have
the right to join with Tenant therein. Any final adjustment, settlement or
compromise of any such claim shall
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be subject to the prior written approval of Landlord, which shall not be
unreasonably withheld or delayed, and Landlord shall have the right to prosecute
or contest, or to require Tenant to prosecute or contest, any such claim,
adjustment, settlement or compromise. If an Event of Default has occurred and is
continuing, Tenant shall not be entitled to adjust, collect or compromise any
such claim or to participate with Landlord in any adjustment, collection and
compromise of the Net Award payable in connection with a Casualty. Tenant agrees
to sign, upon the request of Landlord, all such proofs of loss, receipts,
vouchers and releases. The rights of Landlord under this Paragraph 17(a) shall
be extended to Lender if and to the extent that any Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation
Notice, shall notify Landlord and Lender thereof. So long as no Event of Default
has occurred and is continuing, Tenant is authorized to collect, settle and
compromise the amount of any Net Award and Landlord shall have the right to join
with Tenant herein. If an Event of Default has occurred and is continuing,
Landlord shall be authorized to collect, settle and compromise the amount of any
Net Award and Tenant shall not be entitled to participate with Landlord in any
Condemnation proceeding or negotiations under threat thereof or to contest the
Condemnation or the amount of the Net Award therefor. No agreement with any
condemnor in settlement or under threat of any Condemnation shall be made by
Tenant without the written consent of Landlord, which shall not be unreasonably
withheld. Subject to the provisions of this Paragraph 17(b), Tenant hereby
irrevocably assigns to Landlord any award or payment to which Tenant is or may
be entitled by reason of any Condemnation, whether the same shall be paid or
payable for Tenant's leasehold interest hereunder or otherwise; but nothing in
this Lease shall impair Tenant's right to any award or payment on account of
Tenant's trade fixtures, equipment or other tangible property which is not part
of the Equipment, moving expenses or loss of business, if available, to the
extent that and so long as (i) Tenant shall have the right to make, and does
make, a separate claim therefor against the condemnor and (ii) such claim does
not in any way reduce either the amount of the award otherwise payable to
Landlord for the Condemnation of Landlord's fee interest in the Leased Premises
or the amount of the award (if any) otherwise payable for the Condemnation of
Tenant's leasehold interest hereunder. The rights of Landlord under this
Paragraph 17(b) shall also be extended to Lender if and to the extent that any
Mortgage so provides.
(c) If any Partial Casualty (whether or not insured
against) or Partial Condemnation shall occur to any Related Premises, this Lease
shall continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary
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Obligations, except to the extent of proceeds received by Landlord from the
insurance described in Paragraph 16(a)(v) hereof. Promptly after such Partial
Casualty or Partial Condemnation, Tenant, as required in Paragraph 12(a), shall
commence and diligently continue to restore the Leased Premises as nearly as
possible to their value, condition and character immediately prior to such event
(assuming the Leased Premises to have been in the condition required by this
Lease). So long as no Event of Default has occurred and is continuing, any Net
Award up to and including $250,000 shall be paid by Escrow Holder to Tenant and
Tenant shall restore the Leased Premises in accordance with the requirements of
Paragraph 13(b) of this Lease. Any Net Award in excess of $250,000 shall (unless
such Casualty resulting in the Net Award is a Termination Event) be made
available by Escrow Holder (or Lender if the terms of the Mortgage so require)
to Tenant for the restoration of any of the Leased Premises pursuant to and in
accordance with and subject to the provisions of Paragraph 19 hereof. If any
Casualty or Condemnation which is not a Partial Casualty or Partial Condemnation
shall occur, Tenant shall comply with the terms and conditions of Paragraph 18.
18. Termination Events.
(a) If (i) all of either Related Premises shall be
taken by a Taking or (ii)(A) any substantial portion of either Related Premises
shall be taken by a Taking or (B) all or any portion of either Related Premises
shall be damaged or destroyed by a Casualty and (1) as to such Casualty Tenant
shall provide evidence satisfactory to Landlord and Lender that it shall be
unable to rebuild such Related Premises by the beginning of the ninth (9th)
calendar month following the date of such Casualty or (2) the Casualty was an
earthquake or the insurer is insolvent so that proceeds (exclusive of the
required deductible) sufficient to rebuild such Related Premises are not
available and, in any such case, Tenant certifies and covenants to Landlord that
it will forever abandon operations at the Related Premises, (either one or both
of the Related Premises described in the above clauses (i) and (ii) above being
hereinafter referred to as the "Affected Premises" and each of the events
described in the above clauses (i) and (ii) shall hereinafter be referred to as
a "Termination Event"), then (x) in the case of (i) above, Tenant shall be
obligated, within thirty (30) days after Tenant receives a Condemnation Notice
and (y) in the case of (ii) above, Tenant shall have the option, within thirty
(30) days after Tenant receives a Condemnation Notice or thirty (30) days after
the Casualty, as the case may be, to give to Landlord written notice (a
"Termination Notice") of Tenant's election to terminate this Lease as to the
Affected Premises in the form described in Paragraph 18(b).
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(b) A Termination Notice shall contain (i) notice of
Tenant's intention to terminate this Lease as to the Affected Premises on the
first Basic Rent Payment Date which occurs at least sixty (60) days after the
date of the Termination Notice (the "Termination Date"), (ii) a binding and
irrevocable offer of Tenant to pay the Termination Amount and (iii) if the
Termination Event is an event described in Paragraph 18(a)(ii), the
certification and covenant described therein and a certified resolution of the
Board of Directors of Tenant authorizing the same.
(c) If Landlord shall reject such offer to terminate
this Lease as to the Affected Premises by written notice to Tenant (a
"Rejection"), which Rejection shall contain the written consent of Lender, not
later than forty-five (45) days following the receipt of the Termination Notice,
then this Lease shall terminate as to the Affected Premises on the Termination
Date; provided that, if Tenant has not satisfied all Monetary Obligations as to
the Affected Property (collectively, "Remaining Obligations") on or prior to the
Termination Date, then Landlord may, at its option, extend the date on which
this Lease may terminate as to the Affected Premises to a date which is no later
than the first Basic Rent Payment Date after the Termination Date on which
Tenant has satisfied all Remaining Obligations; provided, however, the parties
acknowledge that if the Lease is terminated pursuant to this Paragraph 18(c) the
Tenant has no obligation to repair or restore any damage to the Leased Premises.
Upon such termination (i) all obligations of Tenant hereunder as to the Affected
Premises shall terminate except for any Surviving Obligations, (ii) Tenant shall
immediately vacate and shall have no further right, title or interest in or to
any of the Affected Premises and (iii) the Net Award shall be retained by
Landlord. Notwithstanding anything to the contrary hereinabove contained, if
Tenant shall have received a Rejection and, on the date when this Lease would
otherwise terminate as provided above, Landlord shall not have received the full
amount of the Net Award payable by reason of the applicable Termination Event,
then the date on which this Lease is to terminate automatically shall be
extended to the first Basic Rent Payment Date after the receipt by Landlord of
the full amount of the Net Award; provided that, if Tenant has not satisfied all
Remaining Obligations on such date, then Landlord may, at its option, extend the
date on which this Lease shall terminate to a date which is no later than the
first Basic Rent Payment Date after such date on which Tenant has satisfied all
such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not
later than the forty-fifth (45th) day following the receipt of the Termination
Notice, Landlord shall be conclusively presumed to have accepted such offer. If
such offer is accepted by Landlord
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then, on the Termination Date, Tenant shall pay to Landlord the Termination
Amount and all Remaining Obligations and, if requested by Tenant, Landlord shall
convey to Tenant or its designee the Affected Premises or the remaining portion
thereof, if any, all in accordance with Paragraph 20.
(e) In the event of the termination of this Lease as
to the Affected Premises as hereinabove provided, this Lease shall remain in
full force and effect as to the Remaining Premises; provided, that the Basic
Rent for the Remaining Premises to be paid after such termination shall be the
Basic Rent otherwise payable hereunder with respect to the Leased Premises
multiplied by a percentage equal to the percentage set forth on Exhibit "F" for
the Remaining Premises.
19. Restoration.
(a) Escrow Holder (or Lender if required by any
Mortgage) shall hold any Net Award in excess of $250,000 in a fund (the
"Restoration Fund") and disburse amounts from the Restoration Fund only in
accordance with the following conditions:
(i) prior to commencement of restoration,
(A) the architects, general construction contract, general contractor and plans
and specifications for the restoration shall have been approved by Landlord,
such approval not to be unreasonably withheld, (B) Landlord and Lender shall be
provided with mechanics' lien insurance (if available) and performance and
payment bonds reasonably acceptable to Landlord which insure satisfactory
completion of and payment for the restoration, are in an amount and form and
have a surety acceptable to Landlord, and name Landlord and Lender as additional
dual obligees, and (C) appropriate waivers of mechanics' and materialmen's liens
shall have been filed;
(ii) at the time of any disbursement, no
Event of Default shall exist and no mechanics' or materialmen's liens shall have
been filed against any of the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time
to time in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested,
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(D) a satisfactory bringdown of title insurance and (E) other evidence of cost
and payment so that Landlord and Lender can verify that the amounts disbursed
from time to time are represented by work that is completed, in place and free
and clear of mechanics' and materialmen's lien claims;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the applicable
requirements of this Lease;
(v) Landlord may retain ten percent (10%) of
the Restoration Fund until the restoration is fully completed;
(vi) the Restoration Fund shall not be
commingled with other funds and shall bear interest at the short term rate of
interest then generally available from Lender or through Escrow Agent for such
escrow arrangements; and
(vii) such other reasonable conditions as
Lender may impose.
(b) Prior to commencement of restoration and at any
time during restoration, if the estimated cost of completing the restoration
work free and clear of all liens, as determined by Landlord, exceeds the amount
of the Net Award available for such restoration, the amount of such excess
shall, upon demand by Landlord, be paid by Tenant to Escrow Holder to be added
to the Restoration Fund. Any sum so added by Tenant which remains in the
Restoration Fund upon completion of restoration shall be refunded to Tenant. For
purposes of determining the source of funds with respect to the disposition of
funds remaining after the completion of restoration, the Net Award shall be
deemed to be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum shall be retained by Landlord or, if required by a Note or
Mortgage, paid by Landlord to a Lender.
20. Procedures Upon Purchase.
(a) If the Leased Premises or any of the Related
Premises are purchased by Tenant pursuant to any provision of this
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Lease, Landlord need not convey any better title thereto than that which was
conveyed to Landlord, and Tenant or its designee shall accept such title,
subject, however, to the Permitted Encumbrances and to all other liens,
exceptions and restrictions on, against or relating to any of the Leased
Premises or the applicable Related Premises and to all applicable Laws, but free
of the lien of and security interest created by any Mortgage or Assignment and
liens, exceptions and restrictions on, against or relating to the Leased
Premises or the applicable Related Premises which have been created by or
resulted solely from acts of Landlord after the date of this Lease, unless the
same are Permitted Encumbrances or customary utility easements benefiting the
Leased Premises or were created with the concurrence of Tenant or as a result of
a default by Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the
Leased Premises or any of the Related Premises pursuant to any provision of this
Lease (any such date the "Purchase Date"), Tenant shall pay to Landlord, or to
any Person to whom Landlord directs payment, the Relevant Amount therefor
specified herein, in Federal Funds, less any credit of the Net Award received
and retained by Landlord or a Lender allowed against the Relevant Amount, and
Landlord shall deliver to Tenant (i) a Grant Deed which describes the premises
being conveyed and conveys the title thereto as provided in Paragraph 20(a),
(ii) such other instruments as shall be necessary to transfer to Tenant or its
designee any other property (or rights to any Net Award not yet received by
Landlord or a Lender) then required to be sold by Landlord to Tenant pursuant to
this Lease and (iii) any Net Award received by Landlord, not credited to Tenant
against the Relevant Amount and required to be delivered by Landlord to Tenant
pursuant to this Lease; provided, that if any Monetary Obligations remain
outstanding on such date, then Landlord may deduct from the Net Award the amount
of such Monetary Obligations. If on the Purchase Date any Monetary Obligations
remain outstanding and no Net Award is payable to Tenant by Landlord or the
amount of such Net Award is less than the amount of the Monetary Obligations,
then Tenant shall pay to Landlord on the Purchase Date the amount of such
Monetary Obligations. Upon the completion of such purchase, this Lease and all
obligations and liabilities of Tenant hereunder with respect to the applicable
Related Premises (but not with respect to the Remaining Premises) shall
terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be
delayed after (i) the Termination Date, in the event of a purchase pursuant to
Paragraph 18, or (ii) the date scheduled for such purchase, in the event of a
purchase under any other provision of this Lease, then (x) Rent shall continue
to be due and payable
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until completion of such purchase and (y) at Landlord's sole option, Fair Market
Value shall be redetermined and the Relevant Amount payable by Tenant pursuant
to the applicable provision of this Lease shall be adjusted to reflect such
redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord
shall be prorated as of the Purchase Date, and the prorated unapplied balance
shall be deducted from the Relevant Amount due to Landlord; provided, that no
apportionment of any Impositions shall be made upon any such purchase.
21. Assignment and Subletting; Prohibition against Leasehold
Financing.
(a) (i) Tenant shall have the right, upon thirty (30)
days prior written notice to Landlord and Lender, with no consent of Landlord or
Lender being required or necessary ("Preapproved Assignment") to assign this
Lease (A) as specifically permitted in Section 1 of Exhibit "G" or (B) to any
Person that, immediately following such assignment has a publicly traded
unsecured senior debt rating of "BBB" or better from Xxxxx'x Investors Services,
Inc. or a rating of "Baa" or better from Standard & Poor's Corporation, and in
the event all of such rating agencies cease to furnish such ratings, then a
comparable rating by any rating agency reasonably acceptable to Landlord and
Lender.
(ii) Any assignment of this Lease except for a
Preapproved Assignment shall require the prior written consent of Landlord and
Lender. Tenant shall, not less than ninety (90) days prior to the date on which
it desires to make an assignment, submit to Landlord and Lender information
regarding the following with respect to the assignee (the "Criteria"): (i)
credit, (ii) capital structure, (iii) management, (iv) operating history, (v)
proposed use of the Leased Premises and (vi) risk factors associated with the
proposed use of the Leased Premises by the proposed assignee, taking into
account factors such as environmental concerns, product liability and the like.
Landlord and Lender shall review the Criteria, advise Tenant no later than the
fifteenth (15th) day following receipt of the Criteria if additional information
is required and shall approve or disapprove the assignee no later than the
thirtieth (30th) day following receipt of all required information, and Landlord
and Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based on their review of the Criteria.
Any purported assignment that is not a Preapproved Assignment or otherwise
consented to under this Paragraph 21(a) shall be null and void.
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(b) Tenant shall have the right, without obtaining
the consent of Landlord, to have under sublease at any time up to and including
but not in excess of twenty-five percent (25%) of the net leaseable space in the
Leased Premises. Any sublease that, when added to all other subleases then in
effect, would result in more than twenty-five percent (25%) of the leaseable
area of the Leased Premises being under sublease at any one time shall require
the prior written approval of Landlord and Lender which shall not be
unreasonably withheld.
(c) If Tenant assigns all its rights and interest
under this Lease, the assignee under such assignment shall expressly assume all
the obligations of Tenant hereunder, actual or contingent, including obligations
of Tenant which may have arisen on or prior to the date of such assignment, by a
written instrument delivered to Landlord at the time of such assignment. Each
sublease of any of the Related Premises shall be subject and subordinate to the
provisions of this Lease and shall be for a term that expires no later than one
(1) day prior to the expiration of the Term. No assignment or sublease shall
affect or reduce any of the obligations of Tenant hereunder, and all such
obligations shall continue in full force and effect as obligations of a
principal and not as obligations of a guarantor, as if no assignment or sublease
had been made. No assignment or sublease shall impose any additional obligations
on Landlord under this Lease.
(d) Tenant shall, within ten (10) days after the
execution and delivery of any assignment or sublease, deliver a duplicate
original copy thereof to Landlord which, in the event of an assignment, shall be
in recordable form.
(e) As security for performance of its obligations
under this Lease, Tenant hereby grants, conveys and assigns to Landlord all
right, title and interest of Tenant in and to all subleases now in existence or
hereafter entered into for any or all of the Leased Premises, any and all
extensions, modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all
rents and other sums of money payable under any sublease of any of the Leased
Premises, provided, however, that Landlord shall have the absolute right at any
time following the occurrence of an Event of Default to revoke said license and
to collect such rents and sums of money and to retain the same. Tenant shall not
consent to, cause or allow any modification or alteration of any of the terms,
conditions or covenants of any of the subleases or the termination thereof,
without the prior written approval of Landlord, which approval shall not be
unreasonably withheld, nor shall Tenant accept any rents more than thirty (30)
days in advance of the accrual thereof nor do nor permit anything to be done,
the doing of
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which, nor omit or refrain from doing anything, the omission of which, will or
could be a breach of or default in the terms of any of the subleases.
(f) Tenant shall not have the power to mortgage,
pledge or otherwise encumber its interest under this Lease or any sublease of
any of the Related Premises, and any such mortgage, pledge or encumbrance made
in violation of this Paragraph 21 shall be void.
(g) Subject to the provisions of Paragraph 36 hereof,
Landlord may sell or transfer the Leased Premises at any time without Tenant's
consent to any third party (each a "Third Party Purchaser"). In the event of any
such transfer, Tenant shall attorn to any Third Party Purchaser as Landlord so
long as such Third Party Purchaser and Landlord notify Tenant in writing of such
transfer and the Third Party Purchaser agrees to be bound by the terms of this
Lease applicable to Landlord. At the request of Landlord, Tenant will execute
such documents confirming the agreement referred to above and such other
agreements as Landlord may reasonably request, provided that such agreements do
not increase the liabilities and obligations of Tenant hereunder.
22. Events of Default.
(a) The occurrence of any one or more of the
following (after expiration of any applicable cure period as provided in
Paragraph 22(b)) shall, at the sole option of Landlord, constitute an "Event of
Default" under this Lease:
(i) a failure by Tenant to make any payment
of any Monetary Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and
observe, or a violation or breach of, any other provision hereof not otherwise
specifically mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by
Tenant herein or in any certificate, demand or request made pursuant hereto
proves to be incorrect, now or hereafter, in any material respect;
(iv) Tenant shall (A) voluntarily be
adjudicated a bankrupt or insolvent, (B) seek or consent to the appointment of a
receiver or trustee for itself or for any of the Related Premises, (C) file a
petition seeking relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, (D) make a general assignment for the
benefit of
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creditors, or (E) admit in writing its inability to pay its debts as they
mature;
(v) a court shall enter an order, judgment
or decree appointing, without the consent of Tenant, a receiver or trustee for
it or for any of the Related Premises or approving a petition filed against
Tenant which seeks relief under the bankruptcy or other similar laws of the
United States, any state or any jurisdiction, and such order, judgment or decree
shall remain undischarged or unstayed sixty (60) days after it is entered;
(vi) either or both of the Related Premises
shall have been vacated for a period of more than one (1) year and Tenant shall
fail to make the Vacation Offer or either or both of the Related Premises shall
have been abandoned;
(vii) Tenant shall be liquidated or
dissolved or shall begin proceedings towards its liquidation or dissolution;
(viii) the estate or interest of Tenant in
any of the Related Premises shall be levied upon or attached in any proceeding
and such estate or interest is about to be sold or transferred or such process
shall not be vacated or discharged within sixty (60) days after it is made;
(ix) a failure by Tenant to perform or
observe, or a violation or breach of, or a misrepresentation by Tenant under,
any provision of any Assignment or any other written document between Tenant and
Lender or specifically for the benefit of Lender that is executed by Tenant, if
such failure, violation, breach or misrepresentation gives rise to a default
beyond any applicable cure period with respect to any Loan and the Lender
commences to exercise its remedies under the documents evidencing and securing
such Loan;
(x) a failure by Tenant to maintain in
effect any license or permit necessary for the use, occupancy or operation of
either of the Related Premises; or
(xi) The breach of any Covenant shall occur.
(b) No notice or cure period shall be required in any
one or more of the following events: (A) the occurrence of an Event of Default
under clause (i) (except as otherwise set forth below), (iii), (iv), (v), (vi),
(vii), (viii), (ix), (x) or (xi) of Paragraph 22(a); (B) the default consists of
a failure to provide any insurance required by Paragraph 16(a)(i) or (a)(iv)
that does not substantially comply with the requirements thereof or an
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assignment or sublease entered into in violation of Paragraph 21; or (C) the
default is such that any delay in the exercise of a remedy by Landlord could
reasonably be expected to cause material and irreparable harm to Landlord. If
the default consists of the failure to pay any Monetary Obligation under clause
(i) of Paragraph 22(a), the applicable cure period shall be three (3) days from
the date on which notice is given, but Landlord shall not be obligated to give
notice of, or allow any cure period for, any default in the payment of Basic
Rent more than one (1) time within any consecutive twelve (12) month period. If
the default consists of a default under clause (ii) or (x) of Paragraph 22(a),
other than the events specified in clauses (B) and (C) of the first sentence of
this Paragraph 22(b), the applicable cure period shall be twenty (20) days from
the date on which notice is given or, if the default cannot be cured within such
twenty (20) day period and delay in the exercise of a remedy would not cause any
material adverse harm to Landlord or any of the Leased Premises, the cure period
shall be extended for the period required to cure the default (but such cure
period, including any extension, shall not in the aggregate exceed one hundred
twenty (120) days), provided that Tenant shall commence to cure the default
within the said twenty-day period and shall actively, diligently and in good
faith proceed with and continue the curing of the default until it shall be
fully cured. The notices described in this Paragraph 22(b) are in lieu of and
not in addition to the notice under California Civil Code 1161.
23. Remedies and Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of
Landlord's intention to terminate this Lease on a date specified in such notice
and upon such date, this Lease, the estate hereby granted and all rights of
Tenant hereunder shall expire and terminate, provided, that if and only if the
Event of Default that gave rise to such notice is the failure to pay Rent as and
when due such termination shall be of no force and effect if Tenant cures such
Event of Default within three (3) days after receipt of such notice from
Landlord. Upon such termination, Tenant shall immediately surrender and deliver
possession of the Leased Premises to Landlord in accordance with Paragraph 26.
If Tenant does not so surrender and deliver possession of all of the Leased
Premises,
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Landlord may repossess any of the Leased Premises not surrendered, with legal
process, by summary proceedings, ejectment or any other lawful means or
procedure. Upon or at any time after taking possession of any of the Leased
Premises, Landlord may, by peaceable means or legal process, remove any Persons
or property therefrom. Landlord shall be under no liability for or by reason of
any such entry, repossession or removal. Notwithstanding such entry or
repossession, Landlord may collect the damages set forth in Paragraph 23(c).
(ii) After repossession of any of the Leased
Premises pursuant to clause (i) above, Landlord shall have the right to relet
any of the Leased Premises to such tenant or tenants, for such term or terms,
for such rent, on such conditions and for such uses as Landlord in its sole
discretion may determine, and collect and receive any rents payable by reason of
such reletting. Landlord may make such Alterations in connection with such
reletting as it may deem advisable in its sole discretion. Notwithstanding any
such reletting, Landlord may collect the damages set forth in Paragraph 23(c).
(b) In addition to its other rights under this Lease,
Landlord has the remedy described in California Civil Code Section 1951.4 which
provides substantially as follows: Landlord may continue the Lease in effect
after Tenant's breach and abandonment and recover the Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations. In accordance with California Civil Code Section 1951.4 (or any
successor statute), Tenant acknowledges that in the event Tenant breaches this
Lease and abandons the Leased Premises, this Lease shall continue in effect for
so long as Landlord does not terminate Tenant's right to possession, and
Landlord may enforce all of its rights and remedies under this Lease, including
the right to recover the Rent as it becomes due under this Lease. Tenant
acknowledges that the limitations on subletting and assignment set forth in
Paragraph 21 are reasonable. Acts of maintenance or preservation or efforts to
relet the Leased Premises or the appointment of a receiver upon initiative of
Landlord to protect Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession.
(c) If Landlord elects to terminate this Lease upon
the occurrence of an Event of Default, Landlord may collect from Tenant damages
computed in accordance with the following provisions in addition to Landlord's
other remedies under this Lease:
(i) the worth at the time of award of any
unpaid Rent which has been earned at the time of such termination; plus
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(ii) the worth at the time of the award of
the amount by which any unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus
(iii) the worth at the time of award of the
amount by which the unpaid Rent for the balance of the Term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus
(iv) any other reasonable cost necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom including, without limitation,
brokerage commissions, the cost of repairing and reletting the Leased Premises
and reasonable attorneys' fees; plus
(v) at Landlord's election, such other
amounts in addition to or in lieu of the foregoing as may be permitted from time
to time by applicable state law. Damages shall be due and payable from the date
of termination.
For purposes of clauses (i) and (ii) of this Paragraph, the
"worth at the time of award" shall be computed by adding interest at the Default
Rate to the past due Rent. For the purposes of clause (iii) of this Paragraph
23(c), the "worth at the time of award" shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award, plus one percent (1%).
(d) Landlord shall be entitled to apply the Security
Deposit to any amounts due under Paragraph 23(a) or 23(c) if this Lease shall be
terminated, or, if this Lease shall remain in full force and effect, to any
amounts due under Paragraph 23(b) and in either event in the following order (i)
to past due Basic Rent and (ii) to cure any other monetary Event of Default.
(e) Notwithstanding anything to the contrary herein
contained, in lieu of or in addition to any of the foregoing remedies and
damages, Landlord may exercise any remedies and collect any damages available to
it at law or in equity. If Landlord is unable to obtain full satisfaction
pursuant to the exercise of any remedy, it may pursue any other remedy which it
has hereunder or at law or in equity.
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(f) If any Law shall validly limit the amount of any
damages provided for herein to an amount which is less than the amount agreed to
herein, Landlord shall be entitled to the maximum amount available under such
Law.
(g) No termination of this Lease, repossession or
reletting of any of the Leased Premises, exercise of any remedy or collection of
any damages pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.
(h) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF
LANDLORD HEREUNDER, LANDLORD AND TENANT WAIVE ANY RIGHT TO A TRIAL BY JURY.
Landlord and Tenant agree that this Lease constitutes a written consent to
waiver of trial by jury pursuant to the provisions of California Code of Civil
Procedure Section 631, and each of Landlord and Tenant does appoint the other
Person as its true and lawful attorney-in-fact, which appointment is coupled
with an interest, and does hereby authorize and empower the other Person, in its
name, place and stead, to file this Lease with the clerk of any court of
competent jurisdiction as statutory written consent to waiver of trial by jury.
(i) Upon the occurrence of any Event of Default,
Landlord shall have the right (but no obligation) to perform any act required of
Tenant hereunder and, if performance of such act requires that Landlord enter
the Leased Premises, Landlord may enter the Leased Premises for such purpose.
(j) No failure of Landlord (i) to insist at any time
upon the strict performance of any provision of this Lease or (ii) to exercise
any option, right, power or remedy contained in this Lease shall be construed as
a waiver, modification or relinquishment thereof. A receipt by Landlord of any
sum in satisfaction of any Monetary Obligation with knowledge of the breach of
any provision hereof shall not be deemed a waiver of such breach, and no waiver
by Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(k) Tenant hereby waives and surrenders, for itself
and all those claiming under it, including creditors of all kinds, (i) any right
and privilege which it or any of them may have under any present or future Law
to redeem any of the Leased Premises or to have a continuance of this Lease
after termination of this Lease or of Tenant's right of occupancy or possession
pursuant to any court order or any provision hereof if the Event of Default is
an Event of Default under Paragraph 22(a)(iv) or 22(a)(xi), and (ii) the
benefits of any present or future Law which exempts property from liability for
debt or for distress for rent.
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(l) Except as otherwise provided herein, all remedies
are cumulative and concurrent and no remedy is exclusive of any other remedy.
Each remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.
(m) If an Event of Default exists, then within ten
(10) days following the notice from Landlord that Landlord is exercising any one
or more remedies under this Paragraph 23, Tenant shall have the right, but not
the obligation, to make an offer (the "Default Offer"), which if made, shall be
irrevocable, to terminate this Lease upon payment to Landlord of the Default
Termination Amount; provided, however, that unless and until the Floor Amount is
deposited in a third party escrow in accordance with the procedures set forth in
Xxxxxxxxx 00, Xxxxxxxx shall have the right to proceed to exercise any one or
more of its remedies under this Paragraph 23. Within ten (10) days following the
Default Offer Tenant shall deposit in a third party escrow in accordance with
the procedures set forth in Paragraph 20 as payment against the Default
Termination Amount, the sum of the Floor Amount and the applicable Prepayment
Premium and Landlord and Tenant shall promptly commence to determine Fair Market
Value. Within fifteen (15) days after the determination of Fair Market Value,
Landlord shall accept or reject the Default Offer. If Landlord accepts the
Default Offer then, no later than the tenth (10th) day after such acceptance,
Tenant shall pay to Landlord the balance, if any, of the Default Termination
Amount and, at the request of Tenant, Landlord will concurrently convey the
Leased Premises to Tenant or its designee in accordance with Paragraph 20. If
Landlord shall reject the Default Offer, which rejection must be accompanied by
the written consent of Lender, the Lease shall remain in full force and effect
and the specific Event of Default that gave rise to the Default Offer shall be
deemed waived by Landlord and Lender, unless the Event of Default that gave rise
to the Default Offer is the failure to pay any Monetary Obligation, in which
event if Landlord rejects the Default Offer Landlord shall have the right to
pursue its remedies under this Paragraph 23 except for the remedy of
termination.
24. Notices. All notices, demands, requests, consents,
approvals, offers, statements and other instruments or communications required
or permitted to be given pursuant to the provisions of this Lease shall be in
writing and shall be deemed to have been given and received for all purposes
when delivered in person or by Federal Express or other reliable 24-hour
delivery service or five (5) business days after being deposited in the United
States mail, by registered or certified mail, return receipt requested, postage
prepaid, addressed to the other party at its
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address stated above or when delivery is refused. A copy of any notice given by
Tenant to Landlord shall simultaneously be given by Tenant to Xxxx Xxxxx Xxxx &
XxXxxx, 0000 Xxx Xxxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Chairman,
Real Estate Department. For the purposes of this Paragraph, any party may
substitute another address stated above (or substituted by a previous notice)
for its address by giving fifteen (15) days' notice of the new address to the
other party, in the manner provided above.
25. Estoppel Certificate. At any time upon not less than ten
(10) days' prior written request by either Landlord or Tenant (the "Requesting
Party") to the other party (the "Responding Party"), the Responding Party shall
deliver to the Requesting Party a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party, that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by any court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
certificate is an intended recipient or beneficiary of the certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation.
26. Surrender. Upon the expiration or earlier termination of
this Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear and damage by Casualty or a Taking if
Landlord rejects Tenant's offer under Paragraph 18 hereof. Upon such surrender,
Tenant shall (a) remove from the
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Leased Premises all property which is owned by Tenant or third parties other
than Landlord and (b) repair any damage caused by such removal. Property not so
removed shall become the property of Landlord, and Landlord may thereafter cause
such property to be removed from the Leased Premises. The cost of removing and
disposing of such property and repairing any damage to any of the Leased
Premises caused by such removal shall be paid by Tenant to Landlord upon demand.
Landlord shall not in any manner or to any extent be obligated to reimburse
Tenant for any such property which becomes the property of Landlord pursuant to
this Paragraph 26.
27. No Merger of Title. There shall be no merger of the
leasehold estate created by this Lease with the fee estate in any of the Leased
Premises by reason of the fact that the same Person may acquire or hold or own,
directly or indirectly, (a) the leasehold estate created hereby or any part
thereof or interest therein and (b) the fee estate in any of the Leased Premises
or any part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.
28. Books and Records.
(a) Tenant shall keep adequate records and books of
account with respect to the finances and business of Tenant generally and with
respect to the Leased Premises, in accordance with generally accepted accounting
principles ("GAAP") consistently applied, and shall permit Landlord and Lender
by their respective agents, accountants and attorneys, upon reasonable notice to
Tenant, to visit and inspect the Leased Premises and examine (and make copies
of) the records and books of account and to discuss the finances and business
with the officers of Tenant, at such reasonable times as may be requested by
Landlord. Upon the request of Lender or Landlord (either telephonically or in
writing), Tenant shall provide the requesting party with copies of any
information to which such party would be entitled in the course of a personal
visit.
(b) Tenant shall deliver to Landlord and to Lender,
within ninety (90) days of the close of each fiscal year, annual audited
financial statements of Tenant prepared by a firm of nationally recognized
independent certified public accountants. Tenant shall also furnish to Landlord
within forty-five (45) days after the end of each of the three remaining
quarters unaudited financial statements and all other quarterly reports of
Tenant, certified by Tenant's chief financial officer, and all filings, if any,
of Form 10-K, Form 10-Q and other required filings with the Securities and
Exchange Commission pursuant to the provisions of
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the Securities Exchange Act of 1934, as amended, or any other Law. All financial
statements of Tenant shall be prepared in accordance with GAAP consistently
applied. All annual financial statements shall be accompanied (i) by an opinion
of said accountants stating that (A) there are no qualifications as to the scope
of the audit and (B) the audit was performed in accordance with GAAP and (ii) by
the affidavit of the president or a vice president of Tenant, dated within five
(5) days of the delivery of such statement, stating that (C) the affiant knows
of no Event of Default, or event which, upon notice or the passage of time or
both, would become an Event of Default which has occurred and is continuing
hereunder or, if any such event has occurred and is continuing, specifying the
nature and period of existence thereof and what action Tenant has taken or
proposes to take with respect thereto and (D) except as otherwise specified in
such affidavit, that Tenant has fulfilled all of its obligations under this
Lease which are required to be fulfilled on or prior to the date of such
affidavit.
29. Determination of Value.
(a) Whenever a determination of Fair Market Value is
required pursuant to any provision of this Lease, such Fair Market Value shall
be determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to
agree upon such Fair Market Value within thirty (30) days after the date (the
"Applicable Initial Date") on which (A) Landlord provides Tenant with notice of
its intention to redetermine Fair Market Value pursuant to Paragraph 20(c) or
(B) Tenant provides notice to Landlord of Tenant's intention to make an offer to
purchase the Leased Premises pursuant to Paragraph 23(m). Landlord and Tenant
shall endeavor to agree on Fair Market Rental Value on the date (also, an
"Applicable Initial Date") which is six (6) calendar months prior to the
expiration of the then current Term unless Tenant has previously exercised its
option pursuant to Paragraph 5(b) not to have the Term automatically extended.
Upon reaching such agreement, the parties shall execute an agreement setting
forth the amount of such Fair Market Value or Fair Market Rental Value.
(ii) If the parties shall not have signed
such agreement within thirty (30) days after the Applicable Initial Date, Tenant
shall within fifty (50) days after the Applicable Initial Date select an
appraiser and notify Landlord in writing of the name, address and qualifications
of such appraiser. Within twenty (20) days following Landlord's receipt of
Tenant's notice of the appraiser selected by Tenant, Landlord shall select an
appraiser and notify Tenant of the name, address and qualifications
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of such appraiser. Such two appraisers shall endeavor to agree upon Fair Market
Value or Fair Market Rental Value based on a written appraisal made by each of
them as of the Relevant Date (and given to Landlord by Tenant). If such two
appraisers shall agree upon a Fair Market Value or Fair Market Rental Value, the
amount of such Fair Market Value or Fair Market Rental Value as so agreed shall
be binding and conclusive upon Landlord and Tenant.
(iii) If such two appraisers shall be unable
to agree upon a Fair Market Value or Fair Market Rental Value within twenty (20)
days after the selection of an appraiser by Landlord, then such appraisers shall
advise Landlord and Tenant of their respective determinations of Fair Market
Value or Fair Market Rental Value and shall select a third appraiser to make the
determination of Fair Market Value or Fair Market Rental Value. The selection of
the third appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable
to agree upon the designation of a third appraiser within ten (10) days after
the expiration of the twenty (20) day period referred to in clause (iii) above,
or if such third appraiser does not make a determination of Fair Market Value or
Fair Market Rental Value within twenty (20) days after his selection, then such
third appraiser or a substituted third appraiser, as applicable, shall, at the
request of either party hereto (with respect to the other party), be appointed
by the President or Chairman of the American Arbitration Association in New
York, New York. The determination of Fair Market Value or Fair Market Rental
Value made by the third appraiser appointed pursuant hereto shall be made within
twenty (20) days after such appointment.
(v) If a third appraiser is selected, Fair
Market Value or Fair Market Rental Value shall be the average of the
determination of Fair Market Value or Fair Market Rental Value made by the third
appraiser and the determination of Fair Market Value or Fair Market Rental Value
made by the appraiser (selected pursuant to Paragraph 29(a)(ii) hereof) whose
determination of Fair Market Value or Fair Market Rental Value is closest to the
total dollar value to that of the third appraiser. Such average shall be binding
and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed
pursuant to this Paragraph 29(a) shall (A) be independent qualified MAI
appraisers, (B) have no right, power or authority to alter or modify the
provisions of this Lease, (C) utilize the definition of Fair Market Value or
Fair Market Rental Value hereinabove set forth, and (D) be licensed in the State
if the State provides for or requires such registration.
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(vii) The Cost of the procedure described in
this Paragraph 29(a) above shall be borne by Tenant.
(b) If, by virtue of any delay, Fair Market Value is
not determined by the expiration or termination of the then current Term, then
the date on which the Term would otherwise expire or terminate shall be extended
with respect to the Leased Premises or the Affected Premises, as applicable, to
the date specified for termination in the particular provision of this Lease
pursuant to which the determination of Fair Market Value is being made. If, by
virtue of any delay, Fair Market Rental Value is not determined by the
expiration or termination of the then current Term, then until Fair Market
Rental Value is determined, Tenant shall continue to pay Basic Rent during the
succeeding Renewal Term in the same amount which it was obligated under this
Lease to pay prior to the commencement of the Renewal Term. When Fair Market
Rental Value is determined, the appropriate Basic Rent shall be calculated
retroactive to the commencement of the Renewal Term and Tenant shall either
receive a refund from Landlord (in the case of an overpayment) or shall pay any
deficiency to Landlord (in the case of an underpayment).
(c) In determining Fair Market Value as defined in
clause (b) of the definition of Fair Market Value, the appraisers shall add (a)
the present value of the Basic Rent for the remaining Term then in effect (with
assumed increases in the CPI to be determined by the appraisers) using a
discount rate (which may be, but shall not be required to be, determined by an
investment banker retained by any appraiser electing to seek such opinion) based
on the creditworthiness of Tenant and (b) the present value of the Leased
Premises as of the end of such Term (without assuming the Term has been
extended). The appraisers shall further assume that no default then exists under
the Lease, that Tenant has complied (and will comply) with all provisions of the
Lease, and that Tenant has not violated (and will not violate) any of the
Covenants.
(d) In determining Fair Market Rental Value, the
appraisers shall determine with respect to each Related Premises the amount that
a willing tenant would pay for, and a willing landlord of the Leased Premises
would accept, at arm's length for the Leased Premises, taking into account
comparable buildings and also taking into account: (a) the age, quality and
condition (as required by the Lease) of the Improvements; (b) that the Leased
Premises will be leased as a whole or substantially as a whole to a single user;
(c) a lease term of five (5) years; (d) an absolute triple net lease; and (e)
such other items that professional real estate appraisers customarily consider.
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30. Non-Recourse as to Landlord.
(a) Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Lease shall be enforced only against the Leased Premises and not
against any other assets, properties or funds of (a) Landlord, (b) any director,
officer, general partner, limited partner, employee or agent of Landlord, or any
general partner of Landlord, any of its general partners or shareholders (or any
legal representative, heir, estate, successor or assign of any thereof), (c) any
predecessor or successor partnership or corporation (or other entity) of
Landlord, or any of its general partners, either directly or through Landlord or
its general partners or any predecessor or successor partnership or corporation
or their shareholders, officers, directors, employees or agents (or other
entity), or (d) any other Person (including Xxxxx Property Advisors, Xxxxx
Fiduciary Advisors, Inc., W.P. Xxxxx & Co., Inc., W.P. Xxxxx Incorporated and
any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof).
(b) Notwithstanding the foregoing, Tenant shall not
be precluded from instituting legal proceedings for the purpose of making a
claim against Landlord on account of an alleged violation of Landlord's
obligation under this Lease, subject, however, to Paragraph 30(a) above.
31. Financing.
(a) Tenant agrees to pay up to and including $250,000
in out-of-pocket Costs incurred by Landlord in connection with the initial
purchase, leasing and financing of the Leased Premises (the "Tenant Closing
Costs"), including, without limitation, the cost of appraisals, environmental
reports, title insurance, surveys, legal fees and expenses and Lender's
commitment fees.
(b) If Landlord desires to obtain or refinance any
Loan, Tenant shall negotiate in good faith with Landlord concerning any request
made by any Lender or proposed Lender for changes or modifications in this
Lease. In particular, Tenant shall agree, upon request of Landlord, to supply
any such Lender with such notices and information as Tenant is required to give
to Landlord hereunder and to extend the rights of Landlord hereunder to any such
Lender and to consent to such financing if such consent is requested by such
Lender. Tenant shall provide any other reasonable consent or statement and shall
execute any and all other reasonable documents that such Lender requires in
connection with such financing, including any environmental indemnity agreement
(so
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long as it is not more burdensome than the provisions relating to environmental
matters set forth in this Lease and in the Seller's/Lessee's Certificate of even
date herewith) and subordination, non-disturbance and attornment agreement, so
long as the same do not adversely affect any right, benefit or privilege of
Tenant under this Lease or increase Tenant's obligations under this Lease. Such
subordination, non-disturbance and attornment agreement may require Tenant to
confirm that (a) Lender and its assigns will not be liable for any
misrepresentation, act or omission of Landlord and (b) Lender and its assigns
will not be subject to any counterclaim, demand or offset which Tenant may have
against Landlord.
32. Subordination. This Lease and Tenant's interest hereunder
shall be subordinate to any Mortgage or other security instrument securing a
Loan hereafter placed upon the Leased Premises by Landlord, and to any and all
advances made or to be made thereunder, to the interest thereon, and all
renewals, replacements and extensions thereof, provided that any such Mortgage
or other security instrument (or a separate instrument in recordable form duly
executed by the holder of any such Mortgage or other security instrument and
delivered to Tenant) shall provide for the recognition of this Lease and all of
Tenant's rights hereunder, including, without limitation, application of the Net
Award in accordance with the terms of this Lease unless and until an Event of
Default has occurred and is continuing or Landlord shall have the right to
terminate this Lease pursuant to any applicable provision hereof.
33. Financial Covenants. Tenant hereby covenants and agrees to
comply with the Covenants.
34. Right to Vacate; Rejectable Offer Upon Vacation.
(a) Tenant shall have the right to vacate the Leased
Premises or either Related Premises; provided that (i) Tenant shall notify
Landlord and Lender within ten (10) days after vacation of the Leased Premises
or either Related Premises by Tenant, (ii) Tenant shall make reasonable good
faith efforts to sublet the Leased Premises or such Related Premises, which
sublease or subleases shall be subject to the provisions of Paragraph 21(b)
hereof, and (iii) Tenant shall continue to perform all of its obligations under
this Lease, including its obligation to maintain the Leased Premises or such
Related Premises and to pay all Rent as and when due hereunder.
(b) If, at any time during the Term, the Leased
Premises or either Related Premises shall be vacant for twelve (12)
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consecutive months, then on the first day of the thirteenth (13th) month that
Leased Premises or either Related Premises is vacant, Tenant shall cause the
Leased Premises or such Related Premises to cease to be vacant or shall make an
irrevocable offer (the "Vacation Offer") to purchase the Leased Premises or such
Related Premises that has been so vacated no later than the first day of the
fifteenth (15th) month following the date that the Leased Premises or such
Related Premises shall have been vacant (the "Vacation Purchase Date") for a
purchase price equal to the Termination Amount.
(c) No rejection of the Vacation Offer shall be
effective for any purpose unless consented to in writing by Lender. If Landlord
shall reject the Vacation Offer by notice to Tenant, containing the written
consent of Lender to such rejection, no later than the thirtieth (30th) day
following receipt of the Vacation Offer by Landlord, then this Lease shall
remain in full force and effect and Landlord and Lender shall be deemed to have
waived the Event of Default described in Paragraph 22(a)(vi) but only with
respect to the specific vacation of the Leased Premises or Related Premises that
gave rise to such Vacation Offer.
(d) Unless Landlord shall have rejected the Vacation
Offer by the foregoing notice to Tenant not later than the thirtieth (30th) day
following receipt of the Vacation Offer by Landlord, Landlord shall be
conclusively presumed to have accepted the Vacation Offer. If the Vacation Offer
is accepted by Landlord, then (i) Tenant shall pay to Landlord the Offer Amount
on the Vacation Purchase Date and, (ii) provided that no Rent or any other
charge is due and unpaid under this Lease as of the Vacation Purchase Date and
Tenant is otherwise in compliance with the terms hereof, Landlord shall convey
to Tenant the Leased Premises in accordance with the provisions of Paragraph 20.
35. Tax Treatment; Reporting. Landlord and Tenant each
acknowledge that each shall treat this transaction as a true lease for state law
purposes and shall report this transaction as a lease for Federal income tax
purposes. For Federal income tax purposes each shall report this Lease as a true
lease with Landlord as the owner of the Leased Premises and Equipment and Tenant
as the lessee of such Leased Premises and Equipment including: (1) treating
Landlord as the owner of the property eligible to claim depreciation deductions
under Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
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36. Right of First Refusal.
(a) Except as otherwise provided in Paragraph 36(e),
and provided an Event of Default does not then exist, if Landlord shall enter
into a contract (the "Sale Contract") for the sale of the entire Leased Premises
with a Third Party Purchaser, which Sale Contract shall be conditioned upon
Tenant's failure to exercise its right under this Paragraph 36, then promptly
following the execution thereof, Landlord shall give written notice to Tenant,
together with a copy of the executed Sale Contract.
(b) For a period of fifteen (15) days following
receipt of such notice, Tenant shall have the right and option, exercisable by
written notice to Landlord given within said fifteen (15) day period, to elect
to purchase the Leased Premises at the purchase price and upon all the terms and
conditions set forth in the Sale Contract except that no contingencies contained
in such Sale Contract as to environmental assessments, engineering studies,
inspection of the Leased Premises, availability of financing, sale of other
property, state of the title to or encumbrances on the Leased Premises, or any
other condition or contingency to the Third Party Purchaser's obligation to
purchase the Leased Premises which pertains to the condition of the Leased
Premises, the Third Party Purchaser's ability to take certain action or any
other factor beyond the control of Landlord, shall apply to Tenant's obligation
to purchase the Leased Premises under this Paragraph 36, and Tenant shall be
obligated to purchase the Leased Premises without any such condition or
contingency.
(c) If at the expiration of the aforesaid fifteen
(15) day period Tenant shall have failed to exercise the aforesaid option,
Landlord may sell the Leased Premises to such Third Party Purchaser upon the
terms set forth in such contract.
(d) Except as otherwise specifically provided herein,
the closing date for any purchase of the Leased Premises by Tenant pursuant to
this Paragraph 36 shall be the later to occur of (i) ninety (90) days after the
date of Tenant's notice to Landlord of its intention to purchase the Leased
Premises upon the terms of a Sale Contract with a Third Party Purchaser or (ii)
the closing date provided in such Sale Contract. At such closing Landlord shall
convey the Leased Premises to Tenant in accordance with, and Tenant shall pay to
Landlord the purchase price and other consideration set forth in, the applicable
Sale Contract.
(e) Tenant shall have the right to exercise the
foregoing right of first refusal (i) upon each proposed sale of the Leased
Premises prior to the tenth (10th) anniversary of the
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Commencement Date and (ii) notwithstanding the lack of exercise by Tenant in (i)
above, one (1) time after the tenth (10th) anniversary of the Commencement Date;
provided, that, if following compliance with the procedure described in this
Paragraph 36, a Third Party Purchaser does not purchase the Leased Premises,
such event shall not count as an exercise of Tenant's right of first refusal.
Notwithstanding anything to the contrary, if Tenant fails to exercise the right
of first refusal granted pursuant to this Paragraph 36(e), subsection (ii),
after the tenth (10th) anniversary of the Commencement Date and the sale to the
Third Party Purchaser is consummated, or if the Term of this Lease shall
terminate or expire, such rights of first refusal granted pursuant to this
Paragraph 36 shall terminate and be null and void and of no further force and
effect.
(f) If Tenant does not exercise its right of first
refusal to purchase the Leased Premises and the Leased Premises are transferred
to a Third Party Purchaser, Tenant will attorn to such Third Party Purchaser as
Landlord so long as such Third Party Purchaser and Landlord notify Tenant in
writing of such transfer and the Third Party Purchaser assumes the obligations
of Landlord under this Lease. At the request of Landlord, Tenant will execute
such documents confirming the agreement referred to above and such other
agreements as Landlord may reasonably request, provided that such agreements do
not increase the liabilities and obligations of Tenant hereunder.
(g) The provisions of this Paragraph 36 shall not
apply to or prohibit (i) any mortgaging, subjection to deed of trust or other
hypothecation of Landlord's interest in the Leased Premises, (ii) any sale of
the Leased Premises pursuant to a private power of sale under or judicial
foreclosure of any Mortgage or other security instrument or device to which
Landlord's interest in the Leased Premises is now or hereafter subject, (iii)
any transfer of Landlord's interest in the Leased Premises to a Lender,
beneficiary under deed of trust or other holder of a security interest therein
by deed in lieu of foreclosure, (iv) any transfer of the Leased Premises to any
governmental or quasi-governmental agency with power of condemnation, (v) any
transfer of the Leased Premises to any affiliate of Landlord or to any entity
for whom W.P. Xxxxx & Co., Inc., W.P. Xxxxx Incorporated or any of their
affiliates provides management services or investment advice, (vi) any Person to
whom Landlord sells all or substantially all of its assets, or (vii) any
transfer of the Leased Premises to any of the successors or assigns of any of
the Persons referred to in the foregoing clauses (i) through (vi).
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37. Security Deposit.
(a) Concurrently with the execution of this Lease,
Tenant shall deliver to Landlord either an irrevocable letter of credit (the
"Letter of Credit") or cash (U.S. dollars) ("Cash Security") in the amount of
Nine Hundred Sixty-two Thousand and Five Hundred Dollars ($962,500) (the
"Security Deposit") and, if such Security Deposit is a Letter of Credit, such
Letter of Credit shall be in form and substance and issued by an institution
satisfactory to Landlord. The Security Deposit shall (subject to a reduction in
the amount of the Security Deposit as set forth in Paragraph 37(b)) remain in
full force and effect until satisfaction of the conditions described in the
following Paragraph 37(c). The Letter of Credit or the Cash Security, as
applicable shall be security for the payment by Tenant of the Rent and all other
charges or payments to be paid hereunder and the performance of the covenants
and obligations contained herein, and, if applicable, the Letter of Credit shall
be renewed at least twenty-one (21) days prior to any expiration thereof or
Landlord shall draw the Letter of Credit and, provided a Event of Default has
not occurred and is continuing, shall hold the Cash Security in an account for
the benefit of Landlord and its Lender as security for Tenant's obligations
under this Lease. At any time thereafter, Tenant shall have the right to
exchange the Cash Security for a Letter of Credit, subject to the terms of this
Paragraph 37.
(b) Provided that no Event of Default exists and is
continuing, at such time as Tenant's Adjusted Consolidated Tangible Net Worth
(as defined in Exhibit "G") as of the date of the most recently completed fiscal
quarter shall be at least Fifty Million Dollars ($50,000,000), Tenant shall be
entitled to reduce the face amount of the Letter of Credit to Four Hundred
Eighty-one Thousand Two Hundred Fifty and No/100 Dollars ($481,250) or to
receive a portion of the Cash Security equal to such amount, as applicable.
(c) Provided that no Event of Default exists and is
continuing, at such time as Tenant's Adjusted Consolidated Tangible Net Worth as
of the last day of the most recently completed fiscal quarter shall be at least
Sixty Million Dollars ($60,000,000), Tenant shall be entitled to the release of
the Letter of Credit or any balance of the Security Deposit then held as Cash
Security.
(d) Landlord shall have the right to assign the
Security Deposit to Lender or any other holder of a Mortgage during the term of
the applicable Loan, so long as the Lender or such other holder of a Mortgage
agrees in writing that it shall have all of the rights and obligations of
Landlord with respect to the Security Deposit, provided that any portion of the
Security Deposit applied by Lender shall, with respect to Tenant, be deemed
applied
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as provided in Paragraph 23(d) hereof. Tenant covenants and agrees to execute
such agreements, consents and acknowledgments as may be reasonably requested by
Landlord and Lender from time to time to acknowledge and perfect such
assignment.
38. Miscellaneous.
(a) The paragraph headings in this Lease are used
only for convenience in finding the subject matters and are not part of this
Lease or to be used in determining the intent of the parties or otherwise
interpreting this Lease.
(b) As used in this Lease, the singular shall include
the plural and any gender shall include all genders as the context requires and
the following words and phrases shall have the following meanings: (i)
"including" shall mean "including without limitation"; (ii) "provisions" shall
mean "provisions, terms, agreements, covenants and/or conditions"; (iii) "lien"
shall mean "lien, charge, encumbrance, title retention agreement, pledge,
security interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform
under this Lease may be performed at any time and from time to time by Landlord
or any person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except with respect to any assignment of this Lease or sublet that is
not otherwise specifically permitted hereunder or for which a reasonableness
standard is not specifically required for Landlord's consent, Landlord shall not
unreasonably withhold or delay its consent whenever such consent is required
under this Lease. Time is of the essence with respect to the performance by
Tenant of its obligations under this Lease.
(d) Landlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or licensee of Tenant with respect to any of
the Leased Premises or otherwise in the conduct of their respective businesses.
-55-
(e) This Lease and any documents which may be
executed by Tenant on or about the effective date hereof at Landlord's request
constitute the entire agreement between the parties and supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto relating to the Leased Premises and the transactions provided for herein.
Landlord and Tenant are business entities having substantial experience with the
subject matter of this Lease and have each fully participated in the negotiation
and drafting of this Lease. Accordingly, this Lease shall be construed without
regard to the rule that ambiguities in a document are to be construed against
the drafter.
(f) This Lease may be modified, amended, discharged
or waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the
land and bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of Landlord, its successors and assigns. If there is more than one
Tenant, the obligations of each shall be joint and several.
(h) Notwithstanding any provision in this Lease to
the contrary, all Surviving Obligations of Tenant shall survive the expiration
or termination of this Lease with respect to any Related Premises.
(i) If any one or more of the provisions contained in
this Lease shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(j) All exhibits attached hereto are incorporated
herein as if fully set forth.
(k) This Lease shall be governed by and construed and
enforced in accordance with the Laws of the State.
(l) Tenant hereby waives the provisions of California
Civil Code Sections 1941 and 1942. Landlord and Tenant waive the provisions of
California Civil Code Sections 1932 and 1933, and California Code of Civil
Procedure Section 1265.130.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease
to be duly executed under seal as of the day and year first above written.
LANDLORD:
SPEC (CA) QRS 12-20, INC.,
a California corporation
By: /s/ W. Xxxx Xxxxx
-----------------------------------
Title: Second Vice President
--------------------------------
TENANT:
SPECTRIAN CORPORATION
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------
Title: Executive Vice President
--------------------------------
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EXHIBIT A
PREMISES
All that certain real property situate in the City of Sunnyvale, County
of Santa Xxxxx, State of California, described as follows:
PARCEL ONE
Parcel B, as shown on that Parcel Map filed for record in the office of
the Recorder of the County of Santa Xxxxx, State of California on January 31,
1977, in Book 388 of Maps, page(s) 32.
PARCEL TWO
Parcel One, as shown on that Parcel Map filed for record in the office
of the Recorder of the County of Santa Xxxxx, State of California on May 25,
1984, in Book 529 of Maps, page(s) 34.
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances
of every kind and nature whatsoever now or hereafter affixed or attached to or
installed in any of the Leased Premises (except as hereafter provided),
including all electrical, anti-pollution, heating, lighting (including hanging
fluorescent lighting), incinerating, power, air cooling, air conditioning,
humidification, sprinkling, plumbing, lifting, cleaning, fire prevention, fire
extinguishing and ventilating systems, devices and machinery and all engines,
pipes, pumps, tanks (including exchange tanks and fuel storage tanks), motors,
conduits, ducts, steam circulation coils, blowers, steam lines, compressors, oil
burners, boilers, doors, windows, loading platforms, lavatory facilities,
stairwells, fencing (including cyclone fencing), passenger and freight
elevators, overhead cranes and garage units, together with all additions
thereto, substitutions therefor and replacements thereof required or permitted
by this Lease, but excluding Tenant's Property.
EXHIBIT B-1
TENANT'S PROPERTY
All personal property and all trade fixtures, machinery, office,
manufacturing and warehouse equipment (including water fab processing and other
processing equipment) which are not necessary to the operation, as buildings, of
the buildings which constitute part of the Leased Premises and the following
items:
(a) Nortel phone system, including phones, switch component and network
lines;
(b) Computer network equipment and associated wiring;
(c) Chemical/gas supply lines and equipment used specifically for
manufacturing and testing;
(d) Security system, including badge readers; and
(e) Wafer fab facility support equipment including the following items
used exclusively by wafer fab facility:
(i) Mechanical/HVAC equipment including Scrubber, Acid
Neutralization System, Water Deionization System, Chiller, Emergency Generator
and CO2 tank;
(ii) Fabrication facility electronics & monitoring equipment;
and
(iii) Fabrication facility fire protection equipment.
EXHIBIT C
PERMITTED ENCUMBRANCES
1. Matters shown on the ALTA/ACSM Land Title Survey prepared by Xxxx &
Xxxxxx Civil Engineers & Surveyors, Inc., dated November, 1996 and bearing Job
No. 85020-3.
2. General and Special City and/or County taxes for the fiscal year
1996-1997, payable but not yet due.
3. The lien of supplemental taxes, if any, assessed pursuant to the
provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California.
4. Easement Deed to the City of Sunnyvale, dated September 8, 1964 and
recorded in Book 6695, page 415.
5. Easement Deed to the City of Sunnyvale, dated September 8, 1964 and
recorded in Book 6695, page 437.
6. Easement Deed to the City of Sunnyvale, dated August 17, 1966 and
recorded in Book 7494, page 638, as modified by Quitclaim Deed from the City of
Sunnyvale to Xxxxxxx Park Associates dated October 13, 1967 and recorded in Book
7903, page 280.
7. Agreement between the City of Sunnyvale and Xxxxxxx Park Associates,
dated October 25, 1966 and recorded in Book 7552, page 688, as amended in Book
7700, page 638 and in Book 8034, page 631.
8. Declaration of Protective Covenants Xxxxxxx Industrial Park No. 1,
dated January 4, 1968 and recorded in Book 7985, page 605, as amended in Book
8277, page 704 and as assigned in Book C541, page 367.
9. Easement to Pacific Gas and Electric Company, dated January 10, 1973
and recorded in Book O217, page 330.
10. Notice Affecting Real Property - Waiver of Construction Credits
dated September 22, 1976 and recorded in Book C307, page 346.
11. Easement Deed to the City of Sunnyvale, dated January 25, 1977 and
recorded in Book C565, page 679.
12. Access easement shown on plat recorded in Maps 388, page 32.
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent.
(a) Initial Term. Subject to the adjustments provided for in
Paragraphs 2, 3 and 4 below, Basic Rent payable in respect of the Term shall be
$1,925,000 per annum, payable quarterly in advance on each Basic Rent Payment
Date, in equal installments of $481,250 each.
(b) Renewal Term. Subject to the adjustments provided for in
Paragraphs 2, 3 and 4 below, Basic Rent for each Renewal Term shall be an amount
equal to the greater of $1.10 sq. ft. triple-net (which shall be not less than
50,311 square feet for the Gibraltar Premises and 91,476 square feet for the
West Java Premises) or the Fair Market Rental Value as of the first day of the
applicable Renewal Term, as determined in accordance with Paragraph 29 of the
Lease.
2. CPI Adjustments to Basic Rent; Arbitration of Disputes. The Basic
Rent shall be subject to adjustment, in the manner hereinafter set forth, for
increases in the index known as United States Department of Labor, Bureau of
Labor Statistics, Consumer Price Index, All Urban Consumers, United States City
Average, All Items (1982-84=100) ("CPI") or the successor index that most
closely approximates the CPI. If the CPI shall be discontinued with no successor
or comparable successor index, Landlord and Tenant shall attempt to agree upon a
substitute index or formula, but if they are unable to so agree, then the matter
shall be determined by arbitration in accordance with the rules of the American
Arbitration Association then prevailing in New York City. Any decision or award
resulting from such arbitration shall be final and binding upon Landlord and
Tenant and judgment thereon may be entered in any court of competent
jurisdiction. In no event will the Basic Rent as adjusted by the CPI adjustment
be less than the Basic Rent in effect for the three (3) year period immediately
preceding such adjustment or, with respect to each Renewal Term, be less than
the Basic Rent determined for such Renewal Term (as described in Paragraph 1(b)
above).
3. Arbitration of Disputes. NOTICE: BY INITIALLING IN THE SPACE BELOW
YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN
PARAGRAPH 2 ABOVE DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW
AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW YOU ARE GIVING UP
YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL UNLESS THOSE RIGHTS
ARE SPECIFICALLY INCLUDED IN PARAGRAPH 2 ABOVE. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE
FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN
PARAGRAPH 2 ABOVE TO NEUTRAL ARBITRATION."
/s/ WSS /s/ EAS
-------------------------- ----------------------
LANDLORD TENANT
4. Effective Dates of CPI Adjustments. Basic Rent shall not be adjusted
to reflect changes in the CPI until the third (3rd) anniversary of the Basic
Rent Payment Date on which the first full quarterly installment of Basic Rent
shall be due and payable (the "First Full Basic Rent Payment Date"). As of the
third (3rd) anniversary of the First Full Basic Rent Payment Date and thereafter
on the sixth (6th), ninth (9th) and twelfth (12th) anniversaries of the First
Full Basic Rent Payment Date, Basic Rent shall be adjusted to reflect increases
in the CPI during the most recent three (3) year period immediately preceding
each of the foregoing dates (each such date being hereinafter referred to as a
"Basic Rent Adjustment Date"). If the Initial Term is renewed, then as of the
third (3rd) anniversary of the date on which the first full quarterly
installment of Basic Rent shall be due and payable for such Renewal Term (each
such date also a "First Full Basic Rent Payment Date"), Basic Rent shall be
adjusted to reflect increases in the CPI during the first three (3) years of
such Renewal Term (each such date also a "Basic Rent Adjustment Date").
5. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date, the Basic Rent in
effect immediately prior to such date shall be multiplied by seventy-five
percent (75%) of the Aggregate CPI Increase (as hereinafter defined) and the
product of such multiplication shall be added to the Basic Rent in effect
immediately prior to such Basic Rent Adjustment Date.
"Aggregate CPI Increase" shall mean the product of the sums of one (1)
plus each of the compounded increases (but not decreases) in the Relevant CPI
(as hereinafter defined) for each of the three (3) 12-month periods ending on
the first, second and third anniversaries (each such anniversary being a
"Calculation Date") of the first full Basic Rent Payment Date (in the case of
the First Basic Rent Adjustment Date) or the preceding Basic Rent Adjustment
Date (in the case of each subsequent Basic Rent Adjustment Date) over the
Relevant CPI for the previous 12-month period (each an "Annual Increase") from
which product shall be subtracted one (1);
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provided, that if the Annual Increase for any 12-month period is greater than
4.5%, then the Annual Increase for such 12-month period shall be deemed to be
4.5%. The Relevant CPI for the 12-month period ending on any Calculation Date
shall be equal to the average CPI for the three (3) calendar months published on
or before the forty-fifth day preceding such Calculation Date (the "Prior
Months"), and the Relevant CPI for each of the preceding 12-month periods shall
be equal to the average CPI for the three (3) months of such 12-month period
which correspond to the Prior Months.
By way of example and not of limitation, if, immediately prior to the
Basic Rent Adjustment Date occurring on the ninth (9th) anniversary of the First
Full Basic Rent Payment Date, Basic Rent is $100 and the increases in the
Relevant CPI for the three (3) preceding years are 2%, 0% and 12%, respectively,
the Aggregate CPI Increase will be as follows: (1.02 x 1.0 x 1.045) = 1.0659 - 1
= .0659 x .75 or .0494; then, .0494 x $100 = $4.94; then $100 + $4.94 = $104.94,
which is the new Basic Rent. Said another way, .0494 + 1 = 1.0494; then, $100 x
1.0494 = $104.94, which is the new Basic Rent.
(b) Notice of the new annual Basic Rent shall be delivered to
Tenant on or before the tenth (10th) day preceding each Basic Rent Adjustment
Date.
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EXHIBIT E
FLOOR AMOUNT
Prior to From and after
12/1/2001 12/1/2001
West Java Premises $ 9,704,188 $ 8,937,500
Gibraltar Premises $ 7,939,791 $ 7,312,500
----------- -----------
$17,643,979 $16,250,000
=========== ===========
EXHIBIT F
PERCENTAGE ALLOCATION OF BASIC RENT
West Java Premises 55%
Gibraltar Premises 45%
---
100%
If either Related Premises ceases to be subject to this Lease, the percentage
shown on this Exhibit F for the Related Premises which remains subject to this
Lease shall be 100%.
EXHIBIT G
FINANCIAL COVENANTS
1. Mergers and Sale of Assets.
(a) Tenant shall not consolidate with or merge with any other
corporation unless, immediately following such consolidation or merger, the
surviving corporation shall have, on a pro-forma basis and, after giving effect
thereto, an Adjusted Consolidated Tangible Net Worth of not less than the
Adjusted Consolidated Tangible Net Worth of Tenant and its Consolidated
Subsidiaries immediately prior to such merger or consolidation.
(b) Tenant shall not, in a single transaction or a series of
related transactions, sell, convey, transfer, abandon or lease all or
substantially all of its assets to any Person except for a sale, transfer,
conveyance, lease or other disposition to a Person that shall assume the
obligations and liabilities of Tenant under this Lease and that, immediately
following such sale, transfer or conveyance, and after given effect thereto, has
an Adjusted Consolidated Tangible Net Worth of not less than Thirty Million
Dollars ($30,000,000).
2. Restricted Payments. Tenant will not, directly or indirectly make,
or cause or permit any Subsidiary of Tenant to make, any Restricted Payment,
unless at the time thereof, and after giving effect thereto:
(a) no Event of Default shall have occurred and be continuing;
and
(b) Tenant's Adjusted Consolidated Tangible Net Worth equals
or exceeds $40,150,000 at the end of the month preceding such payment.
3. Definitions. For the purpose of this Exhibit "G" the following terms
shall have the following meanings:
"Adjusted Consolidated Tangible Net Worth" shall mean, at any
date, the tangible net worth of any Person and its consolidated Subsidiaries on
a consolidated basis, determined in accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States of America, applied on a
consistent basis.
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Restricted Payment" shall mean and include (a) any direct or
indirect purchase, redemption or other acquisition or retirement for value of
any equity security of Tenant or any option, warrant or right to acquire any
such equity security, or any security convertible into or exchangeable for any
such equity security, and (b) any dividend, distribution, whether in cash or
property and whether direct or indirect, to or for the benefit any Person
holding an equity interest in the Tenant or any affiliate of any such Person.
"Subsidiary" of any Person means a corporation a majority of
the capital stock of which is at the time owned, or the management of which is
otherwise controlled, directly or indirectly, through one or intermediaries, or
both, by such Person.
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