LEASE AGREEMENT
by and between
WTI (IL) QRS 12-36, INC.,
AN ILLINOIS CORPORATION
as LANDLORD
and
WESTELL, INC.,
AN ILLINOIS CORPORATION,
as TENANT
Premises:750 Xxxxx Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Dated as of: September 29, 1997
TABLE OF CONTENTS
Page
Parties
1. Demise of Premises
2. Certain Definitions
3. Title and Condition
4. Use of Leased Premises; Quiet Enjoyment
5. Term
6. Basic Rent
7. Additional Rent
8. Net Lease; Non-Terminability
9. Payment of Impositions
10. Compliance with Laws and Easement Agreements;
Environmental Matters
11. Liens; Recording and Title
12. Maintenance and Repair
13. Alterations and Improvements
14. Permitted Contests
15. Indemnification
16. Insurance
17. Casualty and Condemnation
18. Termination Events
19. Restoration
20. Procedures Upon Xxxxxxxx
00. Assignment and Subletting; Prohibition against Leasehold Financing
22. Events of Default
23. Remedies and Damages Upon Default
24. Notices
25. Estoppel Certificate
26. Surrender
27. No Merger of Title
28. Books and Records
29. Determination of Value
30. Non-Recourse as to Landlord
31. Financing
32. Subordination
33. Financial Covenants
34. Tax Treatment; Reporting
35. Option to Purchase
36. Miscellaneous
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Financial Covenants
LEASE AGREEMENT, made as of this 29th day of September, 1997, between WTI
(IL) QRS 12-36, INC., an Illinois corporation ("Landlord"), with an address c/o
W. P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and WESTELL, INC., an Illinois corporation ("Tenant"), with an address at
000 Xxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 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
(collectively, the "Leased Premises"): (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.
"Acquisition Cost" shall mean $17,434,555.
"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.
"Affiliate" shall mean with respect to the Person in question, any other
Person which controls in whole, or is controlled by, or is under common control
with, the Person in question, including, without limitation, any subsidiary(ies)
or parent(s) of the Person in question. For purposes of this definition,
"control" shall mean the power to direct the management and policies of such
entity, directly or indirectly, whether through ownership of voting securities,
by contract, veto rights or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"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 Payment Dates" shall mean the Basic Rent Payment Dates as defined in
Paragraph 6.
"Casualty" shall mean (a) any loss of or damage to the Leased Premises or
(b) any injury to or death of person or any property included within or related
to the Leased Premises or arising from the Adjoining Property that is likely to
have a material adverse effect on Landlord, Tenant or the Leased Premises
including the operation thereon by Tenant.
"Commencement Date" shall mean Commencement Date as defined in Paragraph 5.
"Condemnation" shall mean a Taking.
"Condemnation Notice" shall mean notice or actual 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
"E".
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"Default Termination Amount" shall mean the Default Termination Amount as
defined in Paragraph 23(a)(iii).
"Default Rate" shall mean the Default Rate as defined in Paragraph
7(a)(iv).
"Easement Agreement" shall mean any conditions, covenants, restrictions,
easements, declarations, licenses and other agreements listed as Permitted
Encumbrances or, with the prior written approval of Landlord and Tenant, as may
hereafter affect the 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
Conditions or Hazardous Activities, 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 within the Leased Premises, or from the Leased Premises to
the environment, in violation of any Environmental Law or in excess of any
reportable quantity established under any Environmental Law or which could
result in any liability to Landlord, Tenant or Lender, any Federal, state or
local government or any other Person for the costs of any removal or remedial
action or natural resources damage or for bodily injury or property damage,
(b) any deposit, storage, dumping, placement or use of any Hazardous Substance
at, upon, under or within the Leased Premises or which extends to any Adjoining
Property in violation of any Environmental Law or in excess of any reportable
quantity established under any Environmental Law or which could result in any
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 could result in any 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 the Leased Premises under any Environmental Law, or
(e) any violation of or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph 1.
"Event of Default" shall mean an Event of Default as defined in Paragraph
22(a).
"Fair Market Value" shall mean the higher of (a) the fair market value of
the Leased Premises as of the Relevant Date as if unaffected and unencumbered by
this Lease or (b) the fair market value of the Leased Premises as of the
Relevant Date as affected and encumbered by this Lease and assuming that the
Term has been extended for all extension periods provided for herein. For all
purposes of this Lease, Fair Market Value shall be 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 tender for the payment of public and
private debts in the United States of America.
"Guarantor" shall mean Westell Technologies, Inc., a Delaware corporation.
"Guaranty and Suretyship Agreement" shall mean the Guaranty and Suretyship
Agreement of even date from Guarantor to Landlord, pursuant to which Guarantor
has guaranteed all of the obligations and liabilities of Tenant under the Lease.
"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 (or threatens to cause or result in) the
release, seepage, spill, leak, flow, discharge or emission of any Hazardous
Substance into the environment (including the air, ground water, watercourses or
water systems), (iii) involves the containment or storage of any Hazardous
Substance; or (iv) would cause 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.
"Insurance Requirements" shall mean the requirements of all insurance
policies required to be 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, policy, requirement or
administrative or judicial determination, even if unforeseen or extraordinary,
of every duly constituted governmental authority, court or agency, now or
hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year, the period
commencing on the Commencement Date and ending at midnight on the last day of
the twelfth (12th) consecutive calendar full month following the Commencement
Date, 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 Laws relating to
accessibility to, usability by, and discrimination against, disabled
individuals) 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.
"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 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 costs incurred by Landlord and
Lender in collecting such award or proceeds. Net Award shall not include any
separate award payable to Tenant under the terms of Paragraph 17(b).
"Note" shall mean any promissory note evidencing Landlord's obligation to
repay a Loan, as the same may be amended, supplemented or modified.
"Offer Amount" shall mean the greater of (a) the Fair Market Value of the
Leased Premises as of the Relevant Date utilizing clause (b) exclusively in the
definition of Fair Market Value and (b) the sum of the Acquisition Cost and the
applicable Prepayment Premium which Landlord will be require to pay in prepaying
any Loan with the proceeds of the Offer Amount.
"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 due under a
Note or Mortgage, and which may be (in lieu of such prepayment premium or
prepayment penalty) a "make whole" clause requiring a prepayment premium in an
amount sufficient to compensate the Lender for the loss of the benefit of the
Loan due to a prepayment as a result of (a) an Event of Default, (b) any
Termination Event or (c) any purchase of the Leased Premises by Tenant or its
designee pursuant to any provision of this Lease.
"Present Value" of any amount shall mean such amount discounted by a rate
per annum which is the lower of (a) the Prime Rate at the time such present
value is determined or (b) six percent (6%) per annum.
"Prime Rate" shall mean the annual interest rate 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 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.
"Relevant Amount" shall mean the Termination Amount, the Offer Amount or
the Default Termination Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to the date on
which the applicable Condemnation Notice is received, in the event of a
Termination Notice under Paragraph 18 which is occasioned by a Taking, (b) the
date immediately prior to the date on which the applicable Casualty occurs, in
the event of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c), (d) the date
immediately prior to the Event of Default giving rise to the need to determine
Fair Market Value in the event Landlord provides Tenant with notice of its
intention to require Tenant to make a termination offer under
Paragraph 23(a)(iii) and (e) the date immediately prior to the date on which
Tenant exercises its option to purchase the Leased Premises pursuant to
Paragraph 35.
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the State of Illinois.
"Surviving Obligations" shall mean any obligations of Tenant under this
Lease, actual or contingent, which arise on or prior to the expiration or prior
termination of this Lease or which survive such expiration or termination by
their own terms.
"Taking" shall mean (a) any taking or damaging of all or a portion of any
of the Leased Premises (i) in or by condemnation or other eminent domain
proceedings pursuant to any Law, general or special, or (ii) by reason of any
agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means, or
(b) any de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the Law applicable to the Leased Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of (a) Fair Market Value or
(b) the sum of the Acquisition Cost 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 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).
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 is 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, (xv) THE EXISTENCE OF ANY
HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi)
COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL
RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE
LEASED PREMISES IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE
LEASED PREMISES HAS BEEN INSPECTED BY TENANT AND IS 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 fee simple title (both legal and equitable) is in Landlord
and, except as provided in Paragraph 35 hereof, that Tenant has only the
leasehold right of possession and use of the Leased Premises as provided herein
and that, to the best of Tenant's knowledge, (i) the Improvements conform to all
material Legal Requirements and all Insurance Requirements, (ii) all easements
necessary or appropriate for the use or operation of the Leased Premises have
been obtained, (iii) 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 except as otherwise disclosed to
Landlord in the Seller's/Lessee's Certificate of even date, (iv) the
Improvements have been fully completed in all material respects in a workmanlike
manner of first class quality, and (v) 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 assignable 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, light
manufacturing, warehouse, engineering, product development, testing and similar
and related purposes and for no other purpose. 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 difficult
or impossible to obtain any such insurance at commercially reasonable rates,
(iii) cause structural injury to any of the Improvements or (iv) constitute a
public or private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of Default has
occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the
Leased Premises throughout the Term, without any hindrance, ejection or
molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may enter upon and examine any of
the Leased Premises at such reasonable times as Landlord may select and upon
reasonable notice to Tenant (except in the case of an emergency, in which 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. During any such entry, Landlord, its agents, prospective Lenders and/or
purchasers shall interfere as little as reasonably practical with the operations
of Tenant at the Leased Premises and a representative of Tenant shall have the
right to accompany any such Person in order to protect matters of a confidential
nature.
5. Term.
(a) Subject to the provisions hereof, Tenant shall have and hold the
Leased Premises for an initial term (such term, as extended or renewed in
accordance with the provisions hereof, being called the "Term") commencing on
September 30, 1997 (the "Commencement Date") and ending on September 30, 2017
(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) anniversary of the Expiration Date (the Expiration Date and each such
anniversary being a "Renewal Date"), the Tenant shall have the right to extend
the Term for an additional period of five (5) years by written notice to
Landlord in recordable form at least one (1) year prior to 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 fails to exercise its option to extend or further extend the
Term, 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 the Leased Premises for sale or reletting and
to erect upon the Leased Premises signs indicating such availability and
(ii) show the Leased Premises to prospective purchasers or tenants or their
agents at such reasonable times as Landlord may select, subject to the
conditions set forth in the last sentence of Paragraph 4(b).
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 October, 1997,
and continuing on the first day of each January, April, July and October
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 hand delivered at least five (5) days before or sent by
nationally recognized overnight courier at least two (2) days before the
applicable Basic Rent Payment Date, or in Federal Funds on the applicable Basic
Rent Payment Date. 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 costs and
expenses of Tenant, Landlord and any other Persons specifically referenced
herein which are incurred in connection or associated with (A) the use, non-use,
occupancy, possession, operation, condition, design, construction, maintenance,
alteration, repair or restoration of any of the Leased Premises, (B) the
performance of any of Tenant's obligations under this Lease, (C) any sale or
other transfer of any of the Leased Premises to Tenant under this Lease, (D) any
Condemnation proceedings, (E) the adjustment, settlement or compromise of any
insurance claims 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 so long as the Landlord is the prevailing party in any such prosecution
or defense or the settlement requires payment or performance by Tenant, (G) the
exercise or enforcement by Landlord, its successors and assigns, of any of its
rights under this Lease, (H) any amendment to or modification or termination of
this Lease made at the request of Tenant, (I) Costs of Landlord's counsel and
reasonable internal Costs of Landlord incurred in connection with any act
undertaken by Landlord (or its counsel) at the request of Tenant, or incurred in
connection with any act of Landlord performed on behalf of Tenant following
Tenant's failure to perform any such act after receipt of the applicable notice
under Paragraph 22(b), (J) the reasonable internal Costs of Landlord incurred in
connection with any act undertaken by Landlord at the request of Tenant or
Tenant's failure to act promptly in an emergency situation, and (K) any other
items specifically required to be paid by Tenant under this Lease; provided,
however, that Additional Rent shall not include costs related to Landlord's
business such as the cost of preparing Landlord's financial statements, or tax
returns, or the sales costs for selling the Leased Premises except for a sale to
Tenant or a designee of Tenant;
(ii) after the date all or any portion of any installment of Basic Rent
is due and not paid, an amount equal to five percent (5%) of the amount of such
unpaid installment or portion thereof;
(iii) a sum equal to any additional sums (including any late charge,
default penalties, interest and fees of Lender's counsel) which are payable by
Landlord to any Lender under any Note by reason of Tenant's late payment or
non-payment of Basic Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "Default Rate") of five percent (5%) 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 twenty (20) days after Landlord's demand for payment thereof, and
(ii) any other Additional Rent, within twenty (20) days after Landlord's demand
for payment thereof accompanied by an invoice or statement for the amount of the
Additional Rent due and owing.
(c) In no event shall amounts payable under Paragraph 7(a)(ii), (iii) and
(iv) exceed the maximum amount permitted by applicable Law.
8. Net Lease; Non-Terminability.
(a) This is a net lease and all Monetary Obligations shall be paid without
notice or demand and without set-off, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense
(collectively, a "Set-Off").
(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 any 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; provided, that Tenant does not waive any of its rights to bring
an action at law or in equity against Landlord for breach by Landlord of any of
its obligations hereunder.
(c) The obligations of Tenant hereunder shall be separate and independent
covenants and agreements, all Monetary Obligations shall continue to be payable
in all events (or, in lieu thereof, Tenant shall pay amounts equal thereto), and
the obligations of Tenant hereunder shall continue unaffected unless the
requirement to pay or perform the same shall have been terminated pursuant to an
express provision of this Lease. The obligation to pay Rent or amounts equal
thereto shall not be affected by any collection of rents by any governmental
body pursuant to a tax lien or otherwise, even though such obligation results in
a double payment of Rent. 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; provided that Tenant does not waive any of
its rights to bring an action at law or in equity against Landlord for breach by
Landlord of any of its obligations hereunder.
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, 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
leasehold 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 Note, Mortgage, Assignment or other document
evidencing or securing a Loan and which (as to this clause (v)) are reasonable
and customary and which Landlord has agreed to pay (collectively, the
"Impositions"); provided, that nothing herein shall obligate Tenant to pay
(A) income, excess profits or other taxes of Landlord (or Lender) which are
determined on the basis of Landlord's (or Lender's) net income or net worth
(unless such taxes are in lieu of or a substitute for any other tax, assessment
or other charge upon or with respect to the Leased Premises which, if it were in
effect, would be payable by Tenant under the provisions hereof or by the terms
of such tax, assessment or other charge), (B) any estate, inheritance,
succession, gift or similar tax imposed on Landlord, (C) any capital gains tax
imposed on Landlord in connection with the sale of the Leased Premises to any
Person or (D) any transfer taxes payable in connection with the sale of the
Leased Premises by Landlord unless such sale is to Tenant or its designee. 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 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) At any time following the occurrence of an Event of Default and if the
Lender so requires, Landlord shall have the right at any time 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. As long as the Escrow Payments are being
held by Landlord the Escrow Payments shall not be commingled with other funds of
Landlord or other Persons and interest thereon shall accrue for the benefit of
Tenant from the date such monies are received and invested (which Escrow
Payments are to be invested promptly following receipt thereof) until the date
such monies are disbursed to pay Escrow Charges. 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). 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, the
prior written consent of Landlord which shall not be unreasonably withheld,
delayed or conditioned.
(C) If Landlord has reasonable cause to believe that an Environmental
Violation exists or in connection with a financing, refinancing or sale of the
Leased Premises or if an Event of Default exists or if required by the terms of
any Mortgage, then upon prior written notice from Landlord, Tenant shall permit
such persons as Landlord may designate who shall be reasonably acceptable to
Tenant ("Site Reviewers") to visit the Leased Premises and perform, as agents of
Tenant, 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. Prior to the commencement of any Site Assessment the
assessment protocol shall be made available to Tenant for review. 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 required by
the Lender than makes the initial Loan or if an Environmental Violation is found
to exist shall be paid by Tenant. The cost of all other Site Assessments shall
be paid by Landlord.
(d) If an Environmental Violation occurs or is found to exist, Landlord
will consult with Tenant with respect to any remediation plan and the estimated
cost of remediation, provided, however, that the determination of the Landlord
applying prudent business judgment shall be final as to the scope of any
remediation plan. If, in Landlord's reasonable judgment, the cost of
remediation of the same is likely to exceed $100,000, Tenant shall provide to
Landlord, within fifteen (15) days after Landlord's request therefor, adequate
financial assurances that Tenant will effect such remediation in accordance with
applicable Environmental Laws. Such financial assurances shall be a bond or
letter of credit reasonably satisfactory to Landlord in form and substance and
in an amount equal to or greater than Landlord's reasonable estimate, based
upon a Site Assessment performed pursuant to Paragraph 10(c), of the anticipated
cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if an Environmental
Violation occurs or is found to exist and in the professional opinion of the
Site Reviewers and an independent third party real estate broker the existence
of such Environmental Violation is likely to make the Leased Premises
unleaseable and the Term would otherwise terminate or expire, then, at the
option of Landlord, the Term shall be automatically extended beyond the date of
termination or expiration and this Lease shall remain in full force and effect
beyond such date until the earlier to occur of (i) the completion of all
remedial action in accordance with applicable Environmental Laws or (ii) the
date specified in a written notice from Landlord to Tenant terminating this
Lease.
(f) If Tenant fails to correct 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 Landlord, in its reasonable judgment, shall deem necessary or
advisable in order to cure such Environmental Violation.
(g) Tenant shall notify Landlord promptly 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 promptly after receipt thereof copies of all orders, reports, notices,
permits, applications or other communications relating to any such violation or
noncompliance.
(h) All future leases, subleases or concession agreements relating to the
Leased Premises entered into by Tenant shall contain covenants of the other
party not to at any time (i) cause any Environmental Violation to occur or
(ii) permit any Person occupying the Leased Premises through said subtenant or
concessionaire to cause any Environmental Violation to occur.
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, levy, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord, any
Indemnitee, Lender or any Persons claiming under any of them. 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, AND AT LANDLORD'S REQUEST TENANT SHALL PROMPTLY, 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 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 the Leased Premises and the
Adjoining Property in as good repair and appearance as they are 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 reasonably necessary or appropriate for the preservation and safety
of the Leased 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 Leased 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 the Leased
Premises, (ii) violate the provisions of any restrictive covenant affecting 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) Alterations or a series of related
Alterations that, as to any such Alterations or series of related Alterations,
do not cost in excess of $250,000 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
diminished thereby. If the cost of any Alterations, series of related
Alterations, Equipment or accessions thereto 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. Tenant shall not construct
upon the Land any additional buildings without having first obtained the prior
written consent of Landlord and Lender, which shall not be unreasonably
withheld, delayed or conditioned.
(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"), whether or not Landlord's consent is
required, then (i) the market value of the Leased Premises shall not be lessened
by any such Work or its usefulness impaired, (ii) all such Work shall be
performed by Tenant in a good and workmanlike manner, (iii) all such Work shall
be expeditiously completed in compliance with all Legal Requirements, (iv) all
such Work shall comply with the Insurance Requirements, (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, (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 reasonably 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.
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 or (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b) (such non-compliance with the terms hereof being
hereinafter referred to collectively as "Permitted Violations"), so long as at
the time of such contest no Event of Default exists and so long as Tenant shall
contest, in good faith, the existence, amount or validity thereof, 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 interference with the use or occupancy of any of
the Leased Premises, (iv) any interference with the payment of any Rent, or
(v) the cancellation or increase in the rate of any insurance policy or a
statement by the carrier that coverage will be denied. Tenant shall provide
Landlord security which is satisfactory, in Landlord's reasonable judgment, 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 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, unless caused by gross negligence or willful
misconduct of the Indemnitee seeking indemnification without regard to the form
of action and whether based on strict liability, 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, use, non-use,
occupancy, operation, condition, design, construction, maintenance, repair or
restoration of the Leased Premises or Adjoining Property, (ii) any casualty in
any manner arising from 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 any encumbrance Tenant
consented to or the Mortgage or Assignment or (iv) any alleged, threatened or
actual Environmental Violation, including (A) liability for response costs and
for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit or any other Person, or damages
from injury to or destruction or loss of natural resources, including the
reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to Section 107 of CERCLA, or any successor section or act or provision
of any similar state or local Law, (B) liability for costs and expenses of
abatement, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any of the other Environmental Laws and
(C) liability for personal injury or property damage arising under any statutory
or common-law tort theory, including damages assessed for the maintenance of a
public or private nuisance or for carrying on of a dangerous activity.
(b) In case any action or proceeding is brought against any Indemnitee by
reason of any such claim, (i) Tenant may, except in the event of a conflict of
interest or a dispute between Tenant and any such Indemnitee or during the
continuance of an Event of Default, retain its own counsel and defend such
action (it being understood that Landlord may employ counsel of its choice to
monitor the defense of any such action) and (ii) such Indemnitee shall notify
Tenant to resist or defend such action or proceeding by retaining counsel
reasonably satisfactory to such Indemnitee, and such Indemnitee will cooperate
and assist in the defense of such action or proceeding if reasonably requested
so to do 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 by paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall survive any
termination, expiration or rejection in bankruptcy of this Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in connection with
the Leased Premises:
(i) Insurance against physical loss or damage to the Improvements and
Equipment as provided under a standard "All Risk" property policy including but
not limited to flood (if the Leased Premises is in a flood zone) and earthquake
coverage (if the Leased Premises are in an earthquake zone) in amounts not less
than the actual replacement cost of the Improvements and Equipment. Such
policies shall contain Replacement Cost and Agreed Amount Endorsements and shall
contain deductibles not more than $50,000 per occurrence.
(ii) Commercial General Liability Insurance (including but not limited to
Incidental Medical Malpractice and Host Liquor Liability) and Business
Automobile Liability Insurance (including Non-Owned and Hired Automobile
Liability) against claims for personal and bodily injury, death or property
damage occurring on, in or as a result of the use of the Leased Premises, in an
amount not less than $15,000,000 per occurrence/annual aggregate and all other
coverage extensions that are usual and customary for properties of this size and
type provided, however, that the Landlord shall have the right to require such
higher limits 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.
(iv) Comprehensive Boiler and Machinery Insurance on any of the Equipment
or any other equipment on or in the Leased Premises, in an amount not less than
$5,000,000 per accident for damage to property.
(v) Business Income/Extra Expense Insurance at limits sufficient to
cover 100% of the period of indemnity not less than one year from time of loss.
Such insurance shall name Landlord as loss payee solely with respect to Rent
payable to or for the benefit of Landlord as its interest appears under this
Lease.
(vi) During any period in which substantial Alterations at the Leased
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, including without limitation
amounts of coverage, deductibles, 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.
(b) The insurance required by Paragraph 16(a) shall be written by
companies which have a Best's rating of A:X or above and are admitted in, and
approved to write insurance policies by, the State Insurance Department for the
State. The insurance policies (i) shall be for 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 Landlord or, at the request of Landlord, Lender 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 certificates of insurance
and, if requested by any Lender, certified copies of each such policy.
(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 Tenant shall provide to Landlord a Statement of Values
which shall be reviewed annual and amended as necessary based on Replacement
Cost Valuations. The original or a certified copy of each such "blanket" or
umbrella policy shall promptly be delivered to Landlord.
(f) 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.
(g) 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
certificates of insurance therefor.
(h) All policies shall contain effective waivers by the carrier against
all claims for insurance premiums against Landlord and shall contain full
waivers of subrogation against the Landlord.
(i) 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 Landlord or, if required by the Mortgage, to
Lender.
(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 Landlord (or Lender) and applied as set forth in Paragraph 17.
Tenant shall apply the Net Award to restoration of the Leased Premises in
accordance with the applicable provisions of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty occurs to the Leased Premises occurs and Tenant
estimates that the cost of such Casualty is likely to exceed $50,000, Tenant
shall give Landlord and Lender immediate notice thereof. Landlord and Lender
are hereby authorized to adjust, collect and compromise, in their discretion and
upon notice to Tenant (except that no notice to Tenant shall be required if an
Event of Default has occurred and is continuing), 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 Tenant all necessary proofs of loss,
receipts, vouchers and releases required by the insurers. Provided that no
Event of Default has occurred and is continuing, Tenant shall be entitled to
participate with Landlord and Lender 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 and Lender, all such proofs of
loss, receipts, vouchers and releases. If Landlord or Lender so requests,
Tenant shall adjust, collect and compromise any and all such claims, and
Landlord and Lender shall have the right to join with Tenant therein. Any
adjustment, settlement or compromise of any such claim shall be subject to the
prior written approval of Landlord and Lender, which approval shall not be
unreasonably withheld, delayed or conditioned and Landlord and Lender shall have
the right to prosecute or contest, or to require Tenant to prosecute or contest,
any such claim, adjustment, settlement or compromise. Each insurer is hereby
authorized and directed to make payment under said policies directly to Landlord
or, if required by the Mortgage, to Lender instead of to Landlord and Tenant
jointly, and Tenant hereby appoints each of Landlord and Lender as Tenant's
attorneys-in-fact to endorse any draft therefor. Unearned premiums shall be
paid to Tenant. The rights of Landlord under this Paragraph 17(a) shall be
extended to Lender if and to the extent that any Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation Notice, shall notify
Landlord and Lender thereof. Landlord and Lender are authorized to collect,
settle and compromise, in their discretion (and, if no Event of Default exists,
upon notice to Tenant), the amount of any Net Award. Provided that no Event of
Default has occurred and is continuing, Tenant shall be entitled to participate
with Landlord and Lender in any Condemnation proceeding or negotiations under
threat thereof and to contest the Condemnation or the amount of the Net Award
therefor. No agreement with any condemnor in settlement or under threat of any
Condemnation shall be made by Tenant without the written consent of Landlord and
Lender, which consent shall not be unreasonably withheld, delayed or
conditioned. 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 Landlord 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, this Lease shall continue, notwithstanding such event,
and there shall be no abatement or reduction of any Monetary Obligations.
Promptly after such Partial Casualty or Partial Condemnation, Tenant, as
required in Paragraphs 12(a) and 13(b), 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 exists, any Net Award up to and including $250,000 shall be paid by
Landlord to Tenant and Tenant shall restore the Leased Premises in accordance
with the requirements of Paragraphs 12(a) and 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 Landlord (or Lender, if the
Net Award is paid to Lender by the terms of any Mortgage) to Tenant for the
restoration of any of the Leased Premises pursuant to and in accordance with 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) the entire Leased Premises shall be taken by a Taking or (ii)
any substantial portion of the Leased Premises shall be taken by a Taking or all
or any substantial portion of the Leased Premises shall be damaged or destroyed
by a Casualty and, in such case, Tenant certifies and covenants to Landlord that
it will forever abandon operations at the Leased Premises (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 of the
Tenant's intention to terminate this Lease (a "Termination Notice") in the form
described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's intention to
terminate this Lease on the first Basic Rent Payment Date which occurs at least
sixty (60) days after the Fair Market Value Date (the "Termination Date"),
(ii) a binding and irrevocable offer of Tenant to pay to Landlord the
Termination Amount and (iii) if the Termination Event is an event described in
Paragraph 18(a)(ii), the certification and covenants described therein and a
certified resolution of the Board of Directors of Tenant authorizing the same.
Promptly upon the delivery to Landlord of a Termination Notice, Landlord and
Tenant shall commence to determine the Fair Market Value.
(c) If Landlord shall reject such offer to terminate this Lease by written
notice to Tenant (a "Rejection"), which Rejection shall contain the written
consent of Lender, not later than thirty (30) days following the Fair Market
Value Date, then this Lease shall terminate on the Termination Date; provided
that, if any Basic Rent or real estate taxes payable with respect to the Leased
Premises which remain due and unpaid on the Termination Date (collectively,
"Remaining Obligations"), then Landlord may, at its option, extend the date on
which this Lease may terminate to a date which is no later than the first Basic
Rent Payment Date after the Termination Date on which Tenant has satisfied all
Remaining Obligations. Upon such termination (i) all obligations of Tenant
hereunder 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 Leased 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 or Lender, as the case may be,
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 or Lender, as the case may be, of the full amount
of the Net Award provided that, if Tenant has not satisfied all Remaining
Obligations on such date, then Landlord or Lender, as the case may be, may, at
its option, extend the date on which this Lease may 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
thirtieth (30th) day following the Fair Market Value Date, Landlord shall be
conclusively presumed to have accepted such offer. If such offer is accepted by
Landlord then, on the Termination Date, Tenant shall pay to Landlord the
Termination Amount and all Remaining Obligations and, if requested by Tenant,
Landlord shall (i) convey to Tenant or its designee the Leased Premises or the
remaining portion thereof, if any, and (ii) pay to or assign to Tenant or its
designee Landlord's entire interest in and to the Net Award (including any
portion payable to Lender), all in accordance with Paragraph 20.
19. Restoration.
(a) Landlord (or Lender if required by any Mortgage) shall hold 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, contracts,
contractors, plans and specifications for the restoration shall have been
approved by Landlord, which approval shall be unreasonably withheld, delayed or
conditioned and (B) Landlord and Lender shall be provided with mechanics' lien
insurance (if available) and acceptable performance and payment bonds which
insure satisfactory completion of and payment for the restoration, are in an
amount and form and have a surety reasonably acceptable to Landlord, and name
Landlord and Lender as additional dual obligees;
(ii) at the time of any disbursement, no Event of Default shall exist and
no mechanics' or materialmen's liens shall have been filed against any of the
Leased Premises and remain undischarged unless such lien is being properly
contested in accordance with Paragraph 14;
(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) reasonably 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, (D) a reasonably satisfactory
bringdown of title insurance and (E) other evidence of cost and payment so that
Landlord 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
50% of the restoration is fully completed;
(vi) if the Restoration Fund is held by Landlord, the Restoration Fund
shall not be commingled with Landlord's other funds and shall bear interest at a
rate agreed to by Landlord and Tenant and if the Restoration Fund is held by
Lender, Landlord will use reasonable efforts to obtain the agreement of Lender
to hold the Restoration Fund in an interest bearing account; and
(vii) such other reasonable conditions as Landlord or Lender may
impose.
(b) Prior to commencement of restoration and at any time during
restoration, if the estimated cost of completing the restoration work free and
clear of all liens, as reasonably determined by Landlord, exceeds the amount of
the Net Award available for such restoration, the amount of such excess shall,
upon demand by Landlord, be paid by Tenant to Landlord 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 is purchased by Tenant pursuant to any
provision of this Lease, Landlord need not convey any better title thereto than
that which was conveyed to Landlord, and Tenant 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 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 which have been
created by or resulted solely from acts of Landlord, any Indemnitee, Lender or
any Person claiming by, through or under any of them, 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
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 special warranty
deed which describes the premises being conveyed and conveys the title thereto
as provided in Paragraph 20(a), (ii) such other instruments as shall be
necessary to transfer to Tenant or its designee any other property (or rights to
any Net Award not yet received by Landlord or a Lender) then required to be sold
by Landlord to Tenant pursuant to this Lease and (iii) any Net Award received by
Landlord, not credited to Tenant against the Relevant Amount and required to be
delivered by Landlord to Tenant pursuant to this Lease; provided, that if any
Monetary Obligations remain outstanding on such date, then Landlord may deduct
from the Net Award the amount of such Monetary Obligations; and further
provided, that if any event has occurred which, in Landlord's reasonable
judgment, is likely to subject any Indemnitee to any liability which Tenant is
required to indemnify against pursuant to Paragraph 15, then an amount shall be
deducted from the Net Award which, in Landlord's reasonable judgment, is
sufficient to satisfy such liability, which amount shall be deposited in an
escrow account with a financial institution reasonably satisfactory to Landlord
and Tenant pending resolution of such matter. If on the Purchase Date any
Monetary Obligations remain outstanding and no Net Award is payable to Tenant by
Landlord or the amount of such Net Award is less than the amount of the Monetary
Obligations, then Tenant shall pay to Landlord on the Purchase Date the amount
of such then outstanding Monetary Obligations. Upon the completion of such
purchase, this Lease and all obligations and liabilities of Tenant hereunder
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
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) to any
Person ("Preapproved Assignee") that immediately following such assignment will
have a publicly traded unsecured senior debt rating of "A" or better from
Xxxxx'x Investors Services, Inc. or a rating of "A" 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 or (B) to an Affiliate.
(ii) If Tenant desires to assign this Lease ("Non-Preapproved Assignment")
to a Person who would not be a Preapproved Assignee ("Non-Preapproved Assignee")
then Tenant shall, not less than forty-five (45) days prior to the date on which
it desires to make a Non-Preapproved Assignment submit to Landlord and Lender
information regarding the following with respect to the Non-Preapproved Assignee
(collectively, the "Review Criteria"): (A) credit, (B) capital structure, (C)
management, (D) operating history, (E) proposed use of the Leased Premises and
(F) risk factors associated with the proposed use of the Leased Premises by the
NonPreapproved Assignee, taking into account factors such as environmental
concerns, product liability and the like. Landlord and Lender shall review such
information and shall approve or disapprove the Non-Preapproved Assignee no
later than the thirtieth (30th) day following receipt of all such information,
and Landlord and Lender shall be deemed to have acted reasonably in granting or
withholding consent if such grant or disapproval is based on their review of the
Review Criteria applying prudent business judgment.
(b) Tenant shall have the right with no consent or approval of Landlord
being required or necessary upon thirty (30) days prior written notice to
Landlord and Lender, to enter into one or more subleases that demise, in the
aggregate, up to but not in excess of twenty-five percent (25%) of the gross
space in the Improvements ("Preapproved Sublet"). Other than pursuant to
Preapproved Sublets, at no time during the Term shall the Leased Premises be
subject to subleases for more than twenty-five percent (25%) of the gross space
in the Improvements without the prior written approval of Landlord and Lender
which approval shall be granted or withheld based on a review of the Review
Criteria as they relate to the proposed sublessee and the terms of the proposed
sublease. 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 Review Criteria using prudent business judgment.
(c) If Tenant assigns all its rights and interest under this Lease, the
assignee under such assignment shall expressly assume all the obligations of
Tenant hereunder, actual or contingent, including obligations of Tenant which
may have arisen on or prior to the date of such assignment, by a written
instrument delivered to Landlord at the time of such assignment. Each sublease
of any of the Leased Premises shall be subject and subordinate to the provisions
of this Lease. 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 consented to by Landlord, 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 and during the continuance 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, delayed or conditioned, 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 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 the Leased Premises,
and any such mortgage, pledge or encumbrance made in violation of this
Paragraph 21 shall be void and of no force and effect.
(G) Subject to the provisions of Paragraph 35 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"); provided, that so long as no Event of
Default exists either at the time Landlord enters into an Agreement of Sale for
the purchase of the Leased Premises or on the date of conveyance to a Third
Party Purchaser, Landlord shall not sell the Leased Premises to any Person who
is a direct competitor of Tenant. 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. 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) a default beyond any applicable cure period or at maturity by Tenant
in any payment of principal or interest on any obligations for borrowed money
having an original principal balance of $3,000,000 or more in the aggregate, or
in the performance of any other provision contained in any instrument under
which any such obligation is created or secured (including the breach of any
covenant thereunder), (x) if such payment is a payment at maturity or a final
payment and the lender commences to exercise its remedies with respect to such
obligations, or (y) if an effect of such default is to cause such obligation to
become due prior to its stated maturity;
(v) a default by Tenant beyond any applicable cure period in the payment
of rent under, or in the performance of any other material provision of, any
other lease or leases that have, in the aggregate, rental obligations over the
terms thereof of $1,000,000 or more if the Landlord under any such lease or
leases commences to exercise its remedies thereunder;
(vi) a final, non-appealable judgment or judgments for the payment of
money in excess of $1,000,000 in the aggregate shall be rendered against Tenant
and the same shall remain undischarged for a period of sixty (60) consecutive
days;
(vii) Tenant shall fail to comply with the provisions of Paragraph 33
with respect to the Covenants;
(viii) 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 the Leased Premises, (C) file a petition seeking relief under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, (D) make a general assignment for the benefit of creditors, or (E)
be unable to pay its debts as they mature;
(ix) 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 Leased
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;
(x) the Leased Premises shall have been vacated or abandoned;
(xi) Tenant shall be liquidated or dissolved or shall begin proceedings
towards its liquidation or dissolution;
(xii) the estate or interest of Tenant in any of the Leased 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;
(xiii) a failure by Tenant to perform or observe, or a violation or
breach of, or a misrepresentation by Tenant under any provision of any
Assignment or any other document between Tenant and Lender, if such failure,
violation, breach or misrepresentation gives rise to a default beyond any
applicable cure period with respect to any Loan;
(xiv) a failure by Tenant to maintain in effect any other license or
permit necessary for the use, occupancy or operation of the Leased Premises and
such failure shall have a material adverse effect on Tenant or the Leased
Premises; or
(xv) an Event of Default shall exist under the Guaranty and Suretyship
Agreement.
(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), (xi), (xii), (xiii), (xiv) or (xv) of Paragraph 22(a); or (B) the
default consists of a failure to provide any insurance required by Paragraph 16
or an assignment or sublease entered into in violation of Paragraph 21; or (C)
the default is such that any delay in the exercise of a remedy by Landlord could
reasonably be expected to cause irreparable harm to Landlord. If the default
consists of the failure to pay any Monetary Obligation under clause (i) of
Paragraph 22(a), the applicable cure period shall be five (5) days from the date
on which notice is given, but, if the failure is a failure to pay Basic Rent,
Landlord shall not be obligated to give notice of, or allow any cure period for,
any such default more than one (1) time within any Lease Year. If the default
consists of a default under clause (ii) of Paragraph 22(a), other than the
events specified in clauses (B) and (C) of the first sentence of this Paragraph
22(b), the applicable cure period shall be twenty (20) days from the date on
which notice is given or, if the default cannot be cured within such twenty (20)
day period and delay in the exercise of a remedy would not (in Landlord's
reasonable judgment) cause any material adverse harm to Landlord or any of the
Leased Premises, the cure period shall be extended for the period required to
cure the default (but such cure period, including any extension, shall not in
the aggregate exceed sixty (60) 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.
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. Upon such date, this Lease, the
estate hereby granted and all rights of Tenant hereunder shall expire and
terminate. Upon such termination, Tenant shall immediately surrender and
deliver possession of the Leased Premises to Landlord in accordance with
Paragraph 26. If Tenant does not so surrender and deliver possession of the
Leased Premises, Landlord may re-enter and repossess the Leased Premises, with
or without legal process, by peaceably entering the Leased Premises and changing
locks or by summary proceedings, ejectment or any other lawful means or
procedure. Upon or at any time after taking possession of 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 (A) exercise the remedy set forth in and collect the
damages permitted by Paragraph 23(a)(iii) or (B) collect the damages set forth
in Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of 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(b)(ii).
(iii) Landlord may, upon notice to Tenant, require Tenant to make an
irrevocable offer to terminate this Lease upon payment to Landlord of an amount
(the "Default Termination Amount") specified in the next sentence. The "Default
Termination Amount" shall be the greatest of (A) the Fair Market Value of the
Leased Premises, (B) the sum of the Acquisition Cost and Prepayment Premium
which Landlord will be required to pay in prepaying any Loan with proceeds of
the Default Termination Amount or (C) an amount equal to the Present Value of
the entire Basic Rent from the date of such purchase to the date on which the
Term would expire, assuming that the Term has been extended for all extension
periods, if any, provided for in this Lease. Upon such notice to Tenant, Tenant
shall be deemed to have made such offer and shall, if requested by Landlord,
within fifteen (15) days following such request deposit with Landlord as payment
against the Default Termination Amount the amount described in (B) above and
Landlord and Tenant shall promptly commence to determine Fair Market Value.
Within thirty (30) days after the Fair Market Value Date, Landlord shall accept
or reject such offer. If Landlord accepts such offer then, on the fifteenth
(15th) 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 convey the Leased Premises to Tenant or its designee in accordance with
Paragraph 20. Any rejection by Landlord of such offer shall have no effect on
any other remedy Landlord may have under this Lease.
(iv) Landlord may declare by notice to Tenant the entire Basic Rent (in
the amount of Basic Rent then in effect) for the remainder of the then current
Term to be immediately due and payable. Tenant shall immediately pay to
Landlord all such Basic Rent discounted to its Present Value, all accrued Rent
then due and unpaid, all other Monetary Obligations which are then due and
unpaid and all Monetary Obligations which arise or become due by reason of such
Event of Default (including any Costs of Landlord). Upon receipt by Landlord of
all such accelerated Basic Rent and Monetary Obligations, this Lease shall
remain in full force and effect and Tenant shall have the right to possession of
the Leased Premises from the date of such receipt by Landlord to the end of the
Term, and subject to all the provisions of this Lease, including the obligation
to pay all increases in Basic Rent and all Monetary Obligations that
subsequently become due, except that (A) no Basic Rent which has been prepaid
hereunder shall be due thereafter during the said Term, (B) Tenant shall have no
option to extend or renew the Term and (C) Tenant shall have no further rights
under Paragraph 35.
(b) The following constitute damages to which Landlord shall be entitled
if Landlord exercises its remedies under Paragraph 23(a)(i) or 23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph 23(a)(i) but not
its remedy under Paragraph 23(a)(ii) (or attempts to exercise such remedy and is
unsuccessful in reletting the Leased Premises) then, upon written demand from
Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages
for Tenant's default and in lieu of all current damages beyond the date of such
demand (it being agreed that it would be impracticable or extremely difficult to
fix the actual damages), an amount equal to the Present Value of the excess, if
any, of (A) all Basic Rent from the date of such demand to the date on which the
Term is scheduled to expire hereunder in the absence of any earlier termination,
re-entry or repossession over (B) the then fair market rental value of the
Leased Premises for the same period. Tenant shall also pay to Landlord all of
Landlord's Costs in connection with the repossession of the Leased Premises and
any attempted reletting thereof, including all brokerage commissions, legal
expenses attorneys' fees, employees' expenses, costs of Alterations and expenses
and preparation for reletting.
(ii) If Landlord exercises its remedy under Paragraph 23(a)(i) or its
remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant shall, until the
end of what would have been the Term in the absence of the termination of the
Lease, and whether or not any of the Leased Premises shall have been relet, be
liable to Landlord for, and shall pay to Landlord, as liquidated and agreed
current damages all Monetary Obligations which would be payable under this Lease
by Tenant in the absence of such termination less the net proceeds, if any, of
any reletting pursuant to Paragraph 23(a)(ii), after deducting from such
proceeds all of Landlord's Costs (including the items listed in the last
sentence of Paragraph 23(b)(i) hereof) incurred in connection with such
repossessing and reletting; provided, that if Landlord has not relet the Leased
Premises, such Costs of Landlord shall be considered to be Monetary Obligations
payable by Tenant. Tenant shall be and remain liable for all sums aforesaid,
and Landlord may recover such damages from Tenant and institute and maintain
successive actions or legal proceedings against Tenant for the recovery of such
damages. Nothing herein contained shall be deemed to require Landlord to wait
to begin such action or other legal proceedings until the date when the Term
would have expired by its own terms had there been no such Event of Default.
(c) 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.
(d) Landlord shall not be required to mitigate any of its damages
hereunder unless required to by applicable Law. If any Law shall validly limit
the amount of any damages provided for herein to an amount which is less than
the amount agreed to herein, Landlord shall be entitled to the maximum amount
available under such Law.
(e) No termination of this Lease, repossession or reletting 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.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD HEREUNDER, TENANT
WAIVES ANY RIGHT TO A TRIAL BY JURY.
(g) 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.
(h) 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.
(i) Tenant hereby waives and surrenders, for itself and all those claiming
under it, including creditors of all kinds, (i) any right and privilege which it
or any of them may have under any present or future Law to redeem any of the
Leased Premises or to have a continuance of this Lease after termination of this
Lease or of Tenant's right of occupancy or possession pursuant to any court
order or any provision hereof, and (ii) the benefits of any present or future
Law which exempts property from liability for debt or for distress for rent.
(j) Except as otherwise provided herein, all remedies are cumulative and
concurrent and no remedy is exclusive of any other remedy. Each remedy may be
exercised at any time an Event of Default has occurred and is continuing and may
be exercised from time to time. No remedy shall be exhausted by any exercise
thereof.
24. Notices. All notices, demands, requests, consents, approvals, offers,
statements and other instruments or communications required or permitted to be
given pursuant to the provisions of this Lease shall be in writing and shall be
deemed to have been given 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 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. A copy of any notice given by
Landlord to Tenant shall simultaneously be given to Guarantor at 000 Xxxxx
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000. 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 with
respect to the terms of this Lease, 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. Upon such surrender, Tenant shall (a) remove from the Leased
Premises all property which is owned by Tenant or third parties other than
Landlord and (b) repair any damage caused by such removal. Property not so
removed shall become the property of Landlord, and Landlord may thereafter cause
such property to be removed from the Leased Premises. The cost of removing and
disposing of such property and repairing any damage to any of the Leased
Premises caused by such removal shall be paid by Tenant to Landlord upon demand.
Landlord shall not in any manner or to any extent be obligated to reimburse
Tenant for any such property which becomes the property of Landlord pursuant to
this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold estate
created by this Lease with the fee estate 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 meet with
representations of the Tenant to discuss the finances and business with the
officers of Tenant, at such reasonable times as may be requested by Landlord.
(b) Tenant shall deliver to Landlord and to Lender within one hundred
twenty (120) days of the close of each fiscal year, annual audited consolidated
financial statements of Tenant, Guarantor and its subsidiaries prepared by a
nationally recognized firm of 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, Guarantor and its subsidiaries, 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 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) if, at any time the stock of
Guarantor is not publicly traded on a national exchange, 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 (or Third Party Purchaser with respect to a
determination under clause (D) below) shall endeavor to agree upon such Fair
Market Value within thirty (30) days after the date (the "Applicable Initial
Date") on which (A) Tenant provides Landlord with notice of its intention to
terminate this Lease and purchase the Leased Premises pursuant to Paragraph 18,
(B) Landlord provides Tenant with notice of its intention to redetermine Fair
Market Value pursuant to Paragraph 20(c), (C) Landlord provides Tenant with
notice of Landlord's intention to require Tenant to make an offer to terminate
this Lease pursuant to Paragraph 23(a)(iii) or (D) Tenant provides Landlord with
notice of the exercise of its option to purchase the Leased Premises pursuant to
Paragraph 35. Upon reaching such agreement, the parties shall execute an
agreement setting forth the amount of such Fair Market Value.
(ii) If the parties shall not have signed such agreement within thirty
(30) days after the Applicable Initial Date, Tenant shall within fifty (50) days
after the Applicable Initial Date select an appraiser and notify Landlord in
writing of the name, address and qualifications of such appraiser. Within
twenty (20) days following Landlord's receipt of Tenant's notice of the
appraiser selected by Tenant, Landlord shall select an appraiser and notify
Tenant of the name, address and qualifications of such appraiser. Such two
appraisers shall endeavor to agree upon Fair Market Value based on a written
appraisal made by each of them (and given to Landlord by Tenant) as of the
Relevant Date. If such two appraisers shall agree upon a Fair Market Value,
they shall advise Landlord and Tenant of their agreed upon determination of the
Fair Market Value, and the amount of such Fair Market 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 within twenty (20) days after the selection of an appraiser by
Landlord, then such appraisers shall advise Landlord and Tenant of their
respective determination of Fair Market Value and shall select a third appraiser
to make the determination of Fair Market Value. The selection of the third
appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree upon the designation
of a third appraiser within ten (10) days after the expiration of the twenty
(20) day period referred to in clause (iii) above, or if such third appraiser
does not make a determination of Fair Market Value within twenty (20) days after
his selection, then such third appraiser or a substituted third appraiser, as
applicable, shall, at the request of either party hereto, be appointed by the
President or Chairman of the American Arbitration Association in Chicago,
Illinois. The determination of Fair Market Value made by the third appraiser
appointed pursuant hereto shall be made within twenty (20) days after such
appointment.
(v) If a third appraiser is selected, Fair Market Value shall be the
average of the determination of Fair Market Value made by the third appraiser
and the determination of Fair Market Value made by the appraiser (selected
pursuant to Paragraph 29(a)(ii) hereof) whose determination of Fair Market Value
is nearest to that of the third appraiser. Such average shall be binding and
conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to this Paragraph
29(a) shall (A) be independent qualified MAI appraisers (B) have no right, power
or authority to alter or modify the provisions of this Lease, (C) utilize the
definition of Fair Market Value hereinabove set forth above, and (D) be
registered in the State if the State provides for or requires such registration.
The Cost of the procedure described in this Paragraph 29(a) above shall be borne
entirely by Tenant if the appraisals are performed as a result of an Event of
Default or the exercise by Tenant of its option to purchase the Leased Premises
under Paragraph 35. The cost of all other appraisals shall be split equally
between Landlord and 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 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.
(c) In determining Fair Market Value as defined in clause (b) of the
definition of Fair Market Value, the appraisers shall add (i) the present value
of the Rent for the remaining Term, assuming the Term has been extended for all
extension periods provided herein using a discount rate (which may be determined
by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and (ii) the present value of the Leased Premises as
of the end of such Term (having assumed the Term has been extended for all
extension periods provided herein). 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. In determining Fair Market Value as defined in
clause (a) of the definition of Fair Market Value, the appraisers shall not
consider any discrete additional structure that is an addition to the
Improvements if (i) the cost of such addition is not paid for by Landlord and
(ii) such additional structure is not integral to the use and operation of the
Improvements, does not adversely impact the Fair Market Value of the Leased
Premises and can be removed without causing damage to the Leased Premises.
30. Non-Recourse as to Landlord. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against the Leased Premises and
not against any other assets, properties or funds of (i) Landlord, (ii) any
director, officer, general partner, shareholder, limited partner, beneficiary,
employee or agent of Landlord or any general partner of Landlord or any of its
general partners (or any legal representative, heir, estate, successor or assign
of any thereof), (iii) any predecessor or successor partnership or corporation
(or other entity) of Landlord or any of its general partners, shareholders,
officers, directors, employees or agents, either directly or through Landlord or
its general partners, shareholders, officers, directors, employees or agents or
any predecessor or successor partnership or corporation (or other entity), or
(iv) any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof.
31. Financing. If Landlord desires to obtain or refinance any Loan,
Tenant 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. Tenant shall provide any statement and shall execute any and all other
reasonable documents that such Lender reasonably requires in connection with
such financing, including any environmental indemnity agreement and
subordination, non-disturbance and attornment agreement, so long as the same do
not materially adversely affect any right, benefit or privilege of Tenant under
this Lease, increase Tenant's Monetary Obligations, materially increase Tenant's
other obligations under this Lease or unreasonably or materially interfere with
Tenant's use and enjoyment of the Leased Premises or the conduct of Tenant's
business therein. Such subordination, nondisturbance and attornment agreement
(a) may require Tenant to confirm that (i) Lender and its assigns will not be
liable for any prior misrepresentation, act or omission of Landlord and (ii)
Lender and its assigns will not be subject to any counterclaim, demand or offset
which Tenant may have against Landlord and (b) shall not amend the terms of this
Lease except to the extent otherwise provided in the immediately prior sentence.
32. Subordination. This Lease and Tenant's interest hereunder shall be
subordinate to any Mortgage or other security instrument hereafter placed upon
the Leased Premises by Landlord, and to any and all advances made or to be made
thereunder, to the interest thereon, and all renewals, replacements and
extensions thereof, provided that Landlord deliveries to Tenant a subordination,
non-disturbance and attornment agreement executed by the applicable Lender and
in recordable form that provides for the recognition of this Lease and all
Tenant's rights hereunder (subject to the foregoing Paragraph 31) unless and
until an Event of Default exists or Landlord shall have the right to terminate
this Lease pursuant to any applicable provision hereof.
33. Financial Covenants. Tenants hereby covenants and agrees to comply
with all the covenants and agreements described in Exhibit "E" hereto.
34. 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 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, (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.
35. Option to Purchase.
(a) Landlord does hereby give and grant to Tenant the option to purchase
the Leased Premises (i) for a purchase price (the "Purchase Price") equal to the
Offer Amount and (ii) within thirty (30) days following September 30, 2012 (time
being of the essence) (the "Option Purchase Date"); provided that if Fair Market
Value has not been determined by the expiration of such thirty (30) day period
the Option Purchase Date shall be extended to a date which is not sooner than
thirty (30) days nor later than sixty (60) days after the Fair Market Value
Date. If Tenant intends to exercise such option, Tenant shall give written
notice to Landlord to such effect not later than March 31, 2012. Promptly upon
receipt of such notice by Landlord, the parties shall commence to determine Fair
Market Value.
(b) If Tenant shall exercise the foregoing option to purchase the Leased
Premises, on the later to occur of (i) the Option Purchase Date or (ii) the date
when Tenant has paid the Offer Amount and has satisfied all other Monetary
Obligations, Landlord shall convey the Leased Premises to Tenant or its designee
in accordance with Paragraph 20 hereof; provided, that if an Event of Default
has occurred and is continuing on the Option Purchase Date, Landlord, at its
sole option, may terminate Tenant's option to purchase hereunder. IF THIS LEASE
SHALL TERMINATE FOR ANY REASON PRIOR TO THE DATE ORIGINALLY FIXED HEREIN FOR THE
EXPIRATION OF THE TERM, OR IF TENANT SHALL FAIL TO GIVE THE AFORESAID NOTICE OF
INTENTION TO PURCHASE, TIME BEING OF THE ESSENCE, THE OPTION PROVIDED IN THIS
PARAGRAPH 35 AND ANY EXERCISE THEREOF BY TENANT SHALL CEASE AND TERMINATE AND
SHALL BE NULL AND VOID.
36. 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. Except
as otherwise specifically provided herein, Landlord shall have the right, at its
sole option, to withhold or delay its consent whenever such consent is required
under this Lease for any reason or no reason. Time is of the essence with
respect to the performance by Tenant of its obligations under this Lease.
(d) Landlord shall in no event be construed for any purpose to be a
partner, joint venturer or associate of Tenant or of any subtenant, operator,
concessionaire or licensee of Tenant with respect to any of the Leased Premises
or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed by Tenant on or
about the effective date hereof at Landlord's request constitute the entire
agreement between the parties and supersede all prior understandings and
agreements, whether written or oral, between the parties hereto relating to the
Leased Premises and the transactions provided for herein. Landlord and Tenant
are business entities having substantial experience with the subject matter of
this Lease and have each fully participated in the negotiation and drafting of
this Lease. Accordingly, this Lease shall be construed without 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) 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.
(i) This Lease shall be governed by and construed and enforced in
accordance with the Laws of the State.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed under seal as of the day and year first above written.
LANDLORD:
WTI (IL) QRS 12-36, INC.,
an Illinois corporation
By:
Title:
TENANT:
WESTELL, INC.,
an Illinois corporation
By:
Title:
EXHIBIT A
PREMISES
Lots 19, 20 and 21 in Meridian Business Campus Phase 2, Unit 2 being a
subdivision in Section 16, 17 and 21, all in Township 38 North Range 9 East of
the Third Principal Meridian, according to the Plat thereof recorded January 16,
1992 as Document R92-009321, in Du Page County, Illinois.
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 all personal property and all trade fixtures, machinery, office,
manufacturing and warehouse equipment which are not necessary to the operation,
as buildings, of the buildings which constitute part of the Leased Premises.
EXHIBIT C
PERMITTED ENCUMBRANCES
1. General real estate taxes for the year 1997 and subsequent years.
2. Easement as reserved in Special Warranty Deed recorded October 4, 1995 as
Document R95-136327, and re-recorded November 9, 1995 as Document R95-
158339, in favor of MBC Partners, L.P., a limited partnership over the West
20 feet of Lots 19, 20 and 21, as shown on ALTA/ACSM Land Title Survey made
by Hagensee Surveying Group, Inc., dated September 18, 1997 (the "Survey").
3. Declaration of covenants, conditions, restrictions, and easements of the
Meridian Business Campus Phase I, recorded June 13, 1984 as Document R84-
44944, First Amendment recorded June 27, 1985 as Document R85-050450,
Second Amendment recorded June 10, 1988 as Document R88-060530 and Third
Amendment recorded March 17, 1992 as Document R92-045610, made by CMD
Midwest, Inc., relating to the creation of the Meridian Business Campus
Phase I Owner's Association and assessments thereunder and architectural
control, together with such further provisions contained therein.
Assignment recorded March 17, 1992 as Document R92-045609, wherein CMD
Midwest, Inc., assigned all its duties, rights, powers, privileges and
reservations under said Declaration to CMD Aurora Associates Limited
Partnership.
4. Building line as shown on the Plat of Meridian Business Campus Phase 2 Unit
2, as follows:
The Easterly 65.28 feet, measured on the North line thereof and widening to
70 feet, measured on the South line thereof of Lot 19 (see Plat for exact
location).
70 feet along the East line of Xxx 00
00 xxxx xxxxx xxx Xxxx line of Lot 21
All as shown on the Survey.
5. Landscape Easement, as shown on the Plat and set forth in the Certificate
on the Plat of Meridian Business Campus Phase 2 Unit as follows:
The Easterly 65.28 feet, measured on the North line thereof and widening to
70 feet, measured on the South line thereof of Lot 19 (see Plat for exact
location).
70 feet along the East line of Xxx 00
00 xxxx xxxxx xxx Xxxx line of Lot 21
All as shown on the Survey.
6. Utility Easement, as shown on the Plat and set forth in the Certificate on
the Plat of Meridian Business Campus Phase 2 Unit 2, as follows:
10 feet along the Easterly curved line of Xxx 00
00 xxxx xxxxx the Easterly curved line of Xxx 00
00 xxxx xxxxx xxx Xxxxxxxx line of Lot 21
All as shown on the Survey.
7. City of Aurora Resolution No. R96-380 recorded September 26, 1996 as
Document R96-158258 accepting a Water Main Easement Grant from Westell-
Meridian, L.L.C. which affects Xxxx 00, 00 xxx 00 xx Xxxxxxxx Xxxxxxxx
Xxxxxx Xxxxx 0 Unit 2, as shown on Survey.
8 Encroachment of the concrete window well located mainly on the land onto
the 25 foot landscape easement as shown on the Survey.
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent. Subject to the adjustments provided for in Paragraph 2
below, Basic Rent payable in respect of the Term shall be $1,748,250 per annum,
payable quarterly in advance on each Basic Rent Payment Date, in equal
installments of $437,062.50 each.
2. Basic Rent Increases. Basic Rent shall not be adjusted until the
second (2nd) 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 second (2nd) anniversary of the First Full
Basic Rent Payment Date and on each second (2nd) anniversary date thereafter
during the Term and during any extensions thereof, Basic Rent then in effect
shall be increased by two percent (2%).
During the initial Term the Basic Rent shall be adjusted on the following
dates and shall be in the following amounts until the next adjustment date:
October 1, 1999 $1,783,215
October 1, 2001 $1,818,879
October 1, 2003 $1,855,257
October 1, 2005 $1,892,362
October 1, 2007 $1,930,209
October 1, 2009 $1,968,813
October 1, 2011 $2,008,190
October 1, 2013 $2,048,354
October 1, 2015 $2,089,321
EXHIBIT E
COVENANTS
1. Tenant shall, and shall cause Guarantor and its respective
subsidiaries to, comply (A) with the covenants set forth in Sections 4, 5 and 6
of that certain Business Loan Agreement, dated as of March 15, 1995 between
Tenant and Bank One, Chicago, NA (the "Lender") as amended by Amendment to
Business Loan Agreement and Other Loan Documents, dated as of June 7, 1996 (the
"Credit Agreement"), in the same manner and to the same effect as if the terms
of Sections 4, 5 and 6 of the Credit Agreement were set forth in full herein and
(B) upon refinancing of the debt described in the Credit Agreement, with the
covenants set forth in the credit agreement that replaces the Credit Agreement
(any such replacement credit agreement, the "Senior Credit Agreement")
pertaining to the matters addressed in Sections 4, 5 and 6 of the Credit
Agreement in the same manner and to the same effect as if the terms of such
covenants of the Senior Credit Agreement were set forth herein, and subject to
the conditions set forth in the following sentence, after giving effect to any
modification, amendment or waiver of the Credit Agreement or Senior Credit
Agreement, as the case may be, a copy of which has been delivered to Landlord,
and for such purpose such terms of Sections 4, 5 and 6 of the Credit Agreement
or Senior Credit Agreement, as the case may be, and such other relevant
provisions and definitions of the Credit Agreement or Senior Credit Agreement,
as the case may be, as are expressly referenced therein and amendments,
modifications, and waivers thereto are incorporated herein by reference.
Notwithstanding, and in limitation of, the foregoing, no amendment or
modification to, or waiver of, Sections 4, 5 and 6 of the Credit Agreement or
Senior Credit Agreement, as the case may be, shall be effective and binding upon
Landlord (a) unless neither Guarantor nor Tenant is required to make any payment
or grant any other consideration ("Senior Lender Consideration") to the Lender
or lender or lenders that replace the Lender (the Lender or such replacement
lender, the "Senior Lender") as a condition to such amendment, modification or
waiver or, if such consideration is required, unless concurrently with payment
to the Senior Lender Landlord receives Landlord's Consideration and (b) unless
such amendment or modification is executed or waiver granted no later than the
earlier to occur of (x) sixty (60) days following the earlier to occur of the
date on which Tenant notified the Senior Lender or the Senior Lender had actual
knowledge of the breach under the Credit Agreement or Senior Credit Agreement,
as the case may be, that gave rise to the need for an amendment, modification or
waiver and (y) the date on which the Senior Lender causes the obligations of
Tenant and/or Guarantor under the Credit Agreement or the Senior Credit
Agreement, as the case may be, to become due prior to their stated maturity. If
at any time Tenant shall not be subject to the Credit Agreement or any Senior
Credit Agreement that contains covenants pertaining to the matters addressed in
Sections 4, 5 and 6 of the Credit Agreement, Tenant shall, and shall cause
Guarantor and each of its subsidiaries to, comply with the covenants set forth
in the most recent Senior Credit Agreement pertaining to the matters addressed
in Sections 4, 5 and 6 of the Credit Agreement in the same manner and to the
same effect as if the terms of the applicable provisions of such Senior Credit
Agreement were set forth in full herein, and giving effect to any modification,
amendment or waiver thereto that complies with the provisions of the foregoing
sentence.
2. A copy of the relevant provisions of Sections 4, 5 and 6 of the Credit
Agreement, and the amendments thereto, as the same are in effect on the date
hereof, are attached hereto.
3. For purposes of this Exhibit "E", (a) "Senior Lender's Consideration"
shall mean any consideration received by the Senior Lender for the modification,
amendment or waiver except that any paydown or reamortization of the Senior
Lender's debt in consideration for such modification, amendment or waiver shall
not be considered Senior Lender's Consideration, and (b) "Landlord's
Consideration" shall be an amount equal to the total consideration received by
the Senior Lender for the modification, amendment or waiver multiplied by a
fraction, the numerator of which is the Acquisition Cost and the denominator of
which is the amount of the current aggregate loan amount (as defined in the
Credit Agreement) or the maximum amount of credit available under the Senior
Credit Agreement, as the case may be, which shall be paid to Landlord upon the
same terms that consideration is paid to the Senior Lender; provided, however,
that Landlord's Consideration shall not exceed the total consideration received
by the Senior Lender.
