LEASE AGREEMENT between NL VENTURES V PLANT CITY, L.P. as Lessor and MODTECH HOLDINGS, INC. as Lessee
EXHIBIT
10.43
between
NL
VENTURES V PLANT CITY, L.P.
as
Lessor
and
MODTECH
HOLDINGS, INC.
as
Lessee
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Page
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ARTICLE
I
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||||
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Section
1.01
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Lease
of Premises; Title and Condition
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1
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Section
1.02
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Use
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2
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Section
1.03
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Term
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2
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Section
1.04
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Options
to Extend the Term
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2
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Section
1.05
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Rent
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3
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ARTICLE
II
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||||
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Section
2.01
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Maintenance
and Repair
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3
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Section
2.02
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Alterations,
Replacements and Additions
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4
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ARTICLE
III
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||||
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Section
3.01
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Severable
Property
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5
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Section
3.02
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Removal
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5
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Section
3.03
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License
of Incidental Rights
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5
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ARTICLE
IV
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||||
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Section
4.01
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Lessee’s
Assignment and Subletting
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5
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Section
4.02
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Transfer
by Lessor
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6
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Section
4.03
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Assignment/Subletting
Exceptions
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6
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ARTICLE
V
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||||
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Section
5.01
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Net
Lease
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7
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Section
5.02
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Taxes
and Assessments; Compliance With Law
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8
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Section
5.03
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Liens
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10
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Section
5.04
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Indemnification
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11
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Section
5.05
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Permitted
Contests
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12
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Section
5.06
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Environmental
Compliance
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13
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-i-
TABLE
OF CONTENTS
(continued)
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Page
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ARTICLE
VI
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||||
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Section
6.01
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Intentionally
Deleted
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16
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Section
6.02
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Condemnation
and Casualty
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16
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Section
6.03
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Insurance
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18
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ARTICLE
VII
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Section
7.01
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Conditional
Limitations; Default Provisions
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20
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Section
7.02
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Bankruptcy
or Insolvency
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24
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Section
7.03
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Additional
Rights of Lessor
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24
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ARTICLE
VIII
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Section
8.01
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Notices
and Other Instruments
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25
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Section
8.02
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Estoppel
Certificates; Financial Information
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26
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ARTICLE
IX
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||||
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Section
9.01
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No
Merger
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28
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Section
9.02
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Surrender
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28
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Section
9.03
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Time
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28
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Section
9.04
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Separability;
Binding Effect; Governing Law
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28
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Section
9.05
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Table
of Contents and Headings; Internal References
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28
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Section
9.06
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Counterparts
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28
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Section
9.07
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Lessor’s
Liability
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29
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Section
9.08
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Amendments
and Modifications
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29
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Section
9.09
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Additional
Rent
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29
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Section
9.10
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Consent
of Lessor
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29
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Section
9.11
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Quiet
Enjoyment
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29
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Section
9.12
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Holding
Over
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29
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Section
9.13
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Compliance
with Terrorism Laws
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30
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Section
9.14
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Financing
and Subordination, Non-Disturbance and Attornment
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30
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Section
9.15
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Disclaimer
of Purchase Rights
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31
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-ii-
TABLE
OF CONTENTS
(continued)
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Page
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|
Section
9.16
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Security
Deposit
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31
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Section
9.17
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Intentionally
Deleted
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32
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Section
9.18
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Intentionally
Deleted
|
32
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Section
9.19
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Short
Form Memorandum of Lease
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32
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Section
9.20
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Separation
of Lease
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32
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Section
9.21
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Brokers
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32
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Section
9.22
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Waiver
of Jury Trial
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32
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Section
9.23
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No
Partnership
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32
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Section
9.24
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No
Construction Against Drafter
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33
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Section
9.25
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Security
Interest and Security Agreement
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33
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Section
9.26
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Radon
Gas Disclosure
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33
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EXHIBIT
A
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LEGAL
DESCRIPTION
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EXHIBIT
B
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PERMITTED
EXCEPTIONS
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EXHIBIT
C
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BASIC
RENT SCHEDULE
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EXHIBIT
D
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SEVERABLE
PROPERTY
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EXHIBIT
E
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IMMEDIATE
REPAIRS
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EXHIBIT
F
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LANDLORD’S
WAIVER AND CONSENT
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-iii-
THIS
LEASE AGREEMENT (this “Lease”) dated as of _______________, 2006, is made and
entered into between NL
VENTURES V PLANT CITY, L.P., a
Texas
limited partnership (“Lessor”), and MODTECH
HOLDINGS, INC.,
a
Delaware corporation (“Lessee”).
ARTICLE
I
Section
1.01 Lease
of Premises; Title and Condition.
Upon
and subject to the terms and conditions herein specified, Lessor hereby leases
to Lessee, and Lessee hereby leases from Lessor, the premises (the “Premises”)
consisting of:
(a) those
parcels of land more particularly described in Exhibit
A
attached
hereto and made a part hereof for all purposes having the following address:
0000 Xxxxxxxxxx Xxxx Xx., Xxxxx Xxxx, Xxxxxxx 00000,
together
with all of Lessor’s right, title and interest, if any, in and to all easements,
rights-of-way, appurtenances and other rights and benefits associated with
such
parcel(s) of land and to all public or xxxxxxx xxxxxxx, xxxxx, xxxxxxx, alleys
or passways, open or proposed, on or abutting such parcel(s) of land
(collectively, the “Land”); and
(b) all
of
the buildings, structures, fixtures, facilities, installations and other
improvements of every kind and description now or hereafter in, on, over and
under the Land and all plumbing, gas, electrical, ventilating, lighting and
other utility systems, ducts, hot water heaters, oil burners, domestic water
systems, elevators, escalators, canopies, air conditioning systems and all
other
building systems and fixtures attached to or comprising a part of the buildings,
including, but not limited to, all other building systems and fixtures necessary
to the ownership, use, operation, repair and maintenance of the buildings,
structures, fixtures, facilities, installations and other improvements of every
kind, but excluding all Severable Property (as defined in Section 3.01
hereof) (collectively, the “Improvements”).
The
Premises are leased to Lessee in their present condition without representation
or warranty by Lessor and subject to the rights of parties in possession, to
the
existing state of title, to all applicable Legal Requirements (as defined in
Section 5.02(b)) now or hereafter in effect and to liens and encumbrances
listed in Exhibit
B
attached
hereto and made a part hereof (collectively, “Permitted Exceptions”) for all
purposes. Lessee has examined the Premises and title to the Premises and has
found all of the same satisfactory for all purposes. LESSOR LEASES AND WILL
LEASE AND LESSEE TAKES AND WILL TAKE THE PREMISES “AS
IS”,
“WHERE-IS”
and
“WITH
ALL FAULTS”.
LESSEE
ACKNOWLEDGES THAT LESSOR (WHETHER ACTING AS LESSOR HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE NOR SHALL LESSOR BE DEEMED TO HAVE MADE, ANY WARRANTY
OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE 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)
LESSOR'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 PREMISES WITH ANY LAW; AND ALL RISKS INCIDENT THERETO ARE
TO
BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE PREMISES ARE OF ITS SELECTION
AND TO ITS SPECIFICATIONS AND THAT THE PREMISES HAVE BEEN INSPECTED BY LESSEE
AND ARE SATISFACTORY TO LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN
ANY
OF THE PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LESSOR 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 have been negotiated and are intended to be a complete exclusion
and negation of any warranty by Lessor, express or implied, with respect to
any
of the Premises, arising pursuant to the Uniform Commercial Code or any other
law now or hereafter in effect or arising otherwise.
Section
1.02 Use.
Lessee
may use the Premises for any purpose allowed under current zoning
requirements and
for
no other purpose. Lessee shall not knowingly
use or
occupy or permit any of the Premises to be used or occupied, nor knowingly
do or
permit anything to be done in or on any of the Premises, in a manner which
would
(i) 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, (ii) make void or voidable, cancel or cause
to
be canceled or release any material warranty, guaranty or indemnity running
to
the benefit of the Premises or Lessor, (iii) cause structural injury to any
of
the Improvements, (iv) constitute a public or private nuisance or waste; or
(v)
violate any Legal Requirements (as defined below).
Section
1.03 Term.
This
Lease shall be for a Primary Term of twenty (20) years beginning on November
1,
2006, and ending at 11:59 p.m. on October 31, 2026. The time period during
which
this Lease shall actually be in effect, including the Primary Term and any
Extended Term (as defined hereinbelow), as any of the same may be terminated
prior to their scheduled expiration pursuant to the provisions hereof, is
referred to herein as the “Term.” The term “Lease Year” shall mean, with respect
to the first Lease Year, the period commencing on the date hereof and ending
at
11:59 p.m. on October 31, 2007, and each succeeding twelve (12) month period
during the Term.
Section
1.04 Options
to Extend the Term.
Unless
an Event of Default (as defined herein) has occurred and is continuing at the
time any option is exercised, Lessee shall have the right and option to extend
the Lease Term for two (2) additional periods of five (5) years each, each
commencing immediately after the expiration of the then existing term of this
Lease (an “Extended Term”), unless this Lease shall expire or be terminated
pursuant to any provision hereof. Lessee shall exercise its option to extend
the
Term for each of the Extended Terms by giving written notice of intent to Lessor
at any time not more than 24 or less than 9 months prior to the expiration
of the then existing Term or Extended Term. Upon the request of Lessor or
Lessee, the parties hereto will, at the expense of Lessee, execute and exchange
an instrument
in recordable form setting forth the extension of the Term in accordance with
this Section 1.04. If Lessee timely and properly exercises the foregoing
option(s), the Basic Rent due shall be set forth in Exhibit
C,
and all
other terms and conditions of this Lease shall be applicable.
-2-
Section
1.05 Rent.
In
consideration of this Lease, during the Term, Lessee shall pay to Lessor the
amounts set forth in Exhibit
C
as
annual basic rent for the Premises (“Basic Rent”). Lessee shall pay Basic Rent
and all other sums payable to Lessor hereunder to Lessor (or, upon Lessor’s
request, to any mortgagee(s) or beneficiary(ies) identified by Lessor (whether
one or more, the “Mortgagee”) under any mortgages, deeds of trust or similar
security instruments creating a lien on the interest of Lessor in the Premises
(whether one or more, the “Mortgage”)) by wire transfer, in immediately
available funds, as follows:
Bank:
LaSalle Bank, Chicago, Illinois
ABA
Routing #: 071 000 505
Account
Number: 5201 588 695
Account
Name: NL Ventures V LP Rent Account
Bank
Contact: Xxx Xxxxx @ 000-000-0000,
or
at
such other address or to such other person as Lessor from time to time may
designate. Lessor shall give Lessee not less than fifteen (15) days prior
written notice of any change in the address to which such payments are to be
made. If the party entitled to receive Basic Rent or such party’s address shall
change, Lessee may, until receipt of notice of such change from the party
entitled to receive Basic Rent or other sums payable hereunder immediately
preceding such change, continue to pay Basic Rent and other sums payable
hereunder to the party to which, and in the manner in which, the preceding
installment of Basic Rent or other sums payable hereunder, as the case may
be,
was paid. Such Basic Rent shall be paid in equal monthly installments in advance
on the first day of each month. Any rental payment made in respect of a period
which is less than one month shall be prorated by multiplying the then
applicable monthly Basic Rent by a fraction the numerator of which is the number
of days in such month with respect to which rent is being paid and the
denominator of which is the total number of days in such month. Lessee shall
perform all its obligations under this Lease at its sole cost and expense,
and
shall pay all Basic Rent, and other sums payable hereunder when due and payable,
without notice or demand.
ARTICLE
II
Section
2.01 Maintenance
and Repair.
(a) Lessee
acknowledges that it has received the Premises in the condition disclosed in
the
Property Condition Report (the “Property Condition Report”), prepared by
LandAmerica Assessment Corporation and dated September 12, 2006 (LAC Project
No.: 06-40635.1). Lessee, at its own expense, agrees to repair or cause to
be
repaired all of the necessary repairs not related to the roof as cited in the
Table 1 of the Property Condition Report (a copy of which is attached hereto
as
Exhibit
E)
within
ninety (90) days after the date hereof. Lessee, at its own expense, also agrees
to repair, replace or install a new roof (but not, unless necessary, the
structural elements thereof) before December 31, 2007, in compliance with the
terms of Section 2.02 hereof such that the repaired, replaced or new roof shall
have a minimum remaining useful life equal to the Term. Lessee, at its own
expense, will maintain all parts of the Premises in as good repair, appearance
and condition as when received, reasonable wear and tear excepted, and will
take
all action and will make all structural and nonstructural, foreseen and
unforeseen and ordinary and extraordinary changes and repairs which may be
required to keep all parts of the Premises in as good repair and condition
as
when received, reasonable wear and tear excepted (including, but not limited
to,
all painting, glass, utilities, conduits, fixtures and equipment, foundation,
roof, exterior walls, heating and air conditioning systems, wiring, plumbing,
sprinkler systems and other utilities, and all paving, sidewalks, roads, parking
areas, curbs and gutters and fences). Lessee, at its own expense, will retain
an
independent consultant reasonably approved by Lessor to conduct annual
inspections of the roof and the heating and air conditioning systems of the
Premises and to provide Lessee and Lessor with a written report of its findings.
Lessee shall promptly cause a licensed contractor to perform any recommended
or
necessary repairs or maintenance measures reflected in such report. No more
than
once in any Lease Year (except when Lessor has reasonable cause), Lessor, its
contractors, subcontractors, servants, employees and agents, shall have the
right to enter upon the Premises with prior notice during normal business hours
(except in the event of an emergency, in which case no notice shall be required)
to inspect same to ensure that all parts of the Premises are maintained in
as
good repair and condition as when received, reasonable wear and tear excepted,
and Lessee shall not be entitled to any abatement or reduction in rent by reason
thereof. Lessor shall not be required to maintain, repair or rebuild all or
any
part of the Premises. Lessee waives the right to require Lessor to maintain,
repair or rebuild all or any part of the Premises or make repairs at the expense
of Lessor pursuant to any Legal Requirements, agreement, contract, covenant,
condition or restrictions at any time.
-3-
(b) If
all or
any part of the Improvements shall encroach upon any property, street or
right-of-way adjoining or adjacent to the Premises, or shall violate the
agreements or conditions affecting the Premises or any part thereof, or shall
hinder, obstruct or impair any easement or right-of-way to which the Premises
are subject, or any improvement located on an adjoining or adjacent property
to
the Premises shall encroach onto the Premises, then, if Lessor is not made
whole
by existing insurance policies, promptly after written request of Lessor (unless
such encroachment, violation, hindrance, obstruction or impairment is a
Permitted Exception) or of any person so affected, Lessee shall, at its expense,
either (i) obtain valid and effective waivers or settlements of all claims,
liabilities and damages resulting therefrom or (ii) if Lessor consents
thereto, make such changes, including alteration or removal, to the Improvements
and take such other action as shall be necessary to remove or eliminate such
encroachments, violations, hindrances, obstructions or impairments. To the
extent any easements are, in Lessor’s good faith judgment, necessary for
Lessee’s use and occupancy of the Premises as contemplated by this Lease, upon
Lessee’s written request, Lessor will execute such easements.
Section
2.02 Alterations,
Replacements and Additions.
Lessee
may, at its expense, make additions to and alterations of the Improvements,
and
construct additional Improvements, provided that (i) the fair market value,
the utility, the square footage or the useful life of the Premises shall not
be
lessened thereby, (ii) such work shall be expeditiously completed in a good
and workmanlike manner and in compliance with all applicable Legal Requirements
and the requirements of all insurance policies required to be maintained by
Lessee hereunder, (iii) no structural alterations shall be made to the
Improvements or structural demolitions conducted in connection therewith unless
Lessee shall have obtained Lessor’s consent and furnished Lessor with such
surety bonds or other security acceptable to Lessor as shall be reasonably
acceptable to Lessor (but in no event greater than the cost of such alterations
or demolitions), (iv) no additions, replacements or alterations (other than
cosmetic, interior or nonstructural alterations) which cost in excess of
$100,000 shall be made unless prior written consent from Lessor shall have
been
obtained, and (v) no Event of Default exists. Cosmetic, interior or
nonstructural alterations (including demolition or construction of interior
demising walls that are non-structural and non load-bearing) that cost $100,000
or less shall not require prior written consent from Lessor. All additions
and
alterations of the Premises, without consideration by Lessor, shall be and
remain part of the Premises (not subject to removal upon termination) and the
property of Lessor and shall be subject to this Lease. To
the
extent that Lessor shall fail to respond to any request for consent by Lessee
pursuant to this Section 2.02 within fifteen (15) days after receipt of
such request, Lessor’s consent will be deemed given fifteen (15) days after
Lessor receives such request.
-4-
ARTICLE
III
Section
3.01 Severable
Property.
Lessee
may, at its expense, install, assemble or place on the Premises and remove
and
substitute any severable property used or useful in Lessee’s business, all as
more particularly described in Exhibit
D
attached
hereto and made a part hereof for all purposes (collectively, the “Severable
Property”). Upon the written request of Lessee, Lessor will enter
into an agreement subordinating its rights in the Severable Property on a form
substantially similar to that attached hereto as Exhibit
F.
Section
3.02 Removal.
So long
as no Event of Default exists, Lessee may remove the Severable Property at
any
time during the Term. Any of Lessee’s Severable Property not removed by Lessee
prior to the expiration of this Lease or thirty (30) days after an earlier
termination shall be considered abandoned by Lessee and may be appropriated,
sold, destroyed or otherwise disposed of by Lessor without obligation to account
therefor. Lessee will repair at its expense all damage to the Premises
necessarily caused by the removal of Lessee’s Severable Property, whether
effected by Lessee or by Lessor.
Section
3.03 License
of Incidental Rights. During
the Term, Lessor hereby grants a license to Lessee for the use of the
“Incidental Rights,” “Plans” and “Property Agreements” that were conveyed to
Lessor by and as defined in that certain Xxxx of Sale and Assignment of
Incidental Rights and Plans of even date herewith.
ARTICLE
IV
Section
4.01 Lessee’s
Assignment and Subletting.
Lessee
may, for its own account, assign this Lease or sublet the use of all or any
part
of the Premises for the Term of this Lease so long as no Event of Default shall
exist hereunder and, subject to the provisions of Section 4.03 below, Lessee
shall have obtained Lessor’s and, if Mortgagee shall require, such Mortgagee's
prior written consent to such assignment or sublease. Any transfer of all or
substantially all of the assets or stock of Lessee, any merger of Lessee into
another entity or of another entity into Lessee, or any transfer occurring
by
operation of law shall be deemed to constitute an assignment by Lessee of its
interest hereunder for the purposes hereof. Each such assignment or sublease
shall expressly be made subject to the provisions hereof. No such assignment
or
sublease shall modify or limit any right or power of Lessor hereunder or affect
or reduce any obligation of Lessee hereunder, and all such obligations shall
be
those of Lessee and shall continue in full effect as obligations of a principal
and not of a guarantor or surety, as though no subletting or assignment had
been
made, such liability of the Lessee named herein to continue notwithstanding
any
subsequent modifications or amendments of this Lease; provided, however, that
(other than with respect to any modifications required by law or on account
of
bankruptcy or insolvency) if any modification or amendment is made without
the
consent of Lessee named herein, such modification or amendment shall be
ineffective as against Lessee named herein to the extent, and only to the
extent, that the same shall increase the obligations of Lessee, it being
expressly agreed that Lessee named herein shall remain liable to the full extent
of this Lease as if such modification had not been made. Neither this Lease
nor
the Term hereby demised shall be mortgaged by Lessee, nor shall Lessee mortgage
or pledge its interest in any sublease of the Premises or the rentals payable
thereunder. Any sublease made otherwise than as expressly permitted by this
Section 4.01 and any assignment of Lessee’s interest hereunder made
otherwise than as expressly permitted by this Section 4.01 shall be void.
Lessee shall, within twenty (20) days after the execution of any assignment
or sublease, deliver a conformed copy thereof to Lessor.
-5-
Section
4.02 Transfer
by Lessor.
Lessor
shall be free to transfer its fee interest in the Premises or any part thereof
or interest therein, subject, however, to the terms of this Lease. Any such
transfer shall relieve the transferor of all liability and obligation hereunder
(to the extent of the interest transferred) accruing after the date of the
transfer and any assignee shall be bound by the terms and provisions of this
Lease.
Section
4.03 Assignment/Subletting
Exceptions.
Notwithstanding
the provisions of Section 4.01, Lessee shall have the right to assign or sublet
its interest in this Lease or all or any portion of the Premises at any time
without the consent of Lessor or Mortgagee to (i) the surviving entity of any
merger, reorganization, consolidation or similar transaction with Lessee, (ii)
any Affiliate of Lessee, (iii) any person or entity who purchases substantially
all of the assets of Lessee (whether by means of a stock or asset purchase),
or
(iv) any proposed assignee or sublessee that has a tangible net worth of
$10,000,000.00 or more, as shown on such prospective assignee’s or sublessee’s
most recent balance sheet prepared in accordance with GAAP, which balance sheet
may not have been prepared more than 6 months prior to such assignment or
sublease. In addition, Lessee may sublease up to 20% of the Premises to any
party without Lessor's consent. The exceptions afforded Lessee in this Section
shall be conditioned on the following:
(a) Lessee
is
not then in default beyond applicable notice and cure periods
hereunder;
(b) Lessor
is
provided a copy of such assignment or sublease;
(c) Any
subletting or assignment of the Premises shall be subject to the terms of this
Lease and Lessee shall remain liable hereunder, as same may be amended from
time
to time;
-6-
(d) Each
sublease permitted under this Section shall contain provisions to the effect
that (i) such sublease is only for actual use and occupancy by the sublessee;
(ii) such sublease is subject and subordinate to all of the terms, covenants
and
conditions of this Lease and to all of the rights of Lessor hereunder; (iii)
that any security deposit paid by sublessee shall be pledged to Lessor subject
to the terms of the sublease and subject to Lessee’s right to apply the security
deposit in accordance with the sublease; and (iv) in the event this Lease shall
terminate before the expiration of such sublease, the sublessee thereunder
will,
at Lessor’s option, attorn to Lessor and be entitled to quiet possession of the
Property for the term of the sublease and both Lessor and sublessee waive any
rights they may have to terminate the sublease or possession thereunder, as
a
result of the termination of this Lease;
(e) Lessee
agrees to pay, or to cause the assignee or sublessee, as applicable, to pay,
on
behalf of Lessor any and all reasonable out-of-pocket costs of Lessor, including
reasonable attorneys’ fees paid or payable to outside counsel, occasioned by
such subletting or assignment. Further, Lessee agrees that Lessor shall in
no
event be liable for any leasing commissions, finish-out costs, rent abatements
or other costs, fees or expenses incurred by Lessee in subleasing or assigning
or seeking to sublease or assign its leasehold interest in the Premises, and
Lessee agrees to indemnify, defend and hold harmless Lessor and its partners,
and their respective officers, directors, shareholders, agents, employees and
representatives from, against and with respect to any and all such commissions,
costs, fees and expenses; and
(f) In
the
case of an assignment of the entire Lease, the assignee agrees in writing to
honor and perform all of the obligations of Lessee hereunder from and after
the
date of such assignment.
For
the
purposes of this Section, “Affiliate” shall be defined as with respect to any
Person, any other Person that, directly or indirectly, controls or is controlled
by or is under common control with such Person, and shall include the spouse
of
any natural person, with the term “control” and any derivatives thereof meaning
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract, or otherwise. “Person” shall mean an
individual, partnership, association, corporation or other entity.
ARTICLE
V
Section
5.01 Net
Lease.
(a) It
is
expressly understood and agreed by and between the parties that this Lease
is an
absolute net lease, and the Basic Rent and all other sums payable hereunder
to
or on behalf of Lessor shall be paid without notice or demand and without
setoff, counterclaim, abatement, suspension, deduction or defense.
(b) Except
as
otherwise expressly provided in this Lease, this Lease shall not terminate,
nor
shall Lessee have any right to terminate this Lease or be entitled to the
abatement of any rent or any reduction thereof, nor shall the obligations
hereunder of Lessee be otherwise affected, by reason of any damage to or
destruction of all or any part of the Premises from whatever cause, the taking
of the Premises or any portion thereof by condemnation or otherwise, the
prohibition, limitation or restriction of Lessee’s use of the Premises, any
latent or other defect in any of the Premises, the breach of any warranty of
any
seller or manufacturer of any of the Improvements or Severable Property, the
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution or winding-up of, or other proceeding affecting Lessor, the exercise
of any remedy, including foreclosure, under any mortgage or collateral
assignment, any action with respect to this Lease (including the disaffirmance
hereof) which may be taken by Lessor, any trustee, receiver or liquidator of
Lessor or any court under the Federal Bankruptcy Code or otherwise, and market
or economic changes, or interference with such use by any private person or
corporation, or by reason of any eviction by paramount title resulting by a
claim from Lessor’s predecessor in title, or for any other cause whether similar
or dissimilar to the foregoing, any present or future law to the contrary
notwithstanding, it being the intention of the parties hereto that the rent
and
all other charges payable hereunder to or on behalf of Lessor shall continue
to
be payable in all events and the obligations of Lessee hereunder shall continue
unaffected, unless the requirement to pay or perform the same shall be
terminated pursuant to an express provision of this Lease. Nothing contained
in
this Section 5.01 shall be deemed a waiver by Lessee of any rights that it
may have with respect to any default by Lessor hereunder or under any other
agreement.
-7-
(c) The
obligations of Lessee hereunder shall be separate and independent covenants
and
agreements. Lessee covenants and agrees that it will remain obligated under
this
Lease in accordance with its terms, and that Lessee will not take any action
to
terminate, rescind or avoid this Lease, notwithstanding the bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation, dissolution,
winding-up or other proceeding affecting Lessor or any assignee of Lessor in
any
such proceeding and notwithstanding any action with respect to this Lease which
may be taken by any trustee or receiver of Lessor or of any assignee of Lessor
in any such proceeding or by any court in any such proceeding.
(d) Except
as
otherwise expressly provided in this Lease, Lessee waives all rights now or
hereafter conferred by law (i) to quit, terminate or surrender this Lease
or the Premises or any part thereof or (ii) to any abatement, suspension,
deferment or reduction of the rent, or any other sums payable hereunder to
or on
behalf of Lessor, regardless of whether such rights shall arise from any present
or future constitution, statute or rule of law.
Section
5.02 Taxes
and Assessments; Compliance With Law.
(a) Lessee
shall pay, as additional rent, prior to delinquency, the following
(collectively, “Taxes”): (i) all taxes, assessments, levies,
fees, water and sewer rents and charges and all other governmental charges,
general and special, ordinary and extraordinary, foreseen and unforeseen, which
are, at any time prior to or during the Term imposed or levied upon or assessed
against or which arise with respect to (A) the Premises, (B) any Basic
Rent, additional rent or other sums payable hereunder, (C) this Lease or
the leasehold estate hereby created or (D) the operation, possession or use
of the Premises; (ii) all gross receipts or similar taxes (i.e., taxes
based upon gross income which fail to take into account deductions with respect
to depreciation, interest, taxes or ordinary and necessary business expenses,
in
each case relating to the Premises) imposed or levied upon, assessed against
or
measured by any Basic Rent, additional rent or other sums payable hereunder;
(iii) all sales, value added, ad valorem, use and similar taxes at any time
levied, assessed or payable on account of the leasing, operation, possession
or
use of the Premises; and (iv) all charges of utilities, communications and
similar services serving the Premises. Notwithstanding the foregoing, “Taxes,”
as used herein, shall not include, and Lessee shall not be required to pay
any
franchise, estate, inheritance, transfer, income, capital gains or similar
tax
of or on Lessor unless such tax is imposed, levied or assessed in direct
substitution for any other tax, assessment, charge or levy which Lessee is
required to pay pursuant to this Section 5.02(a); provided, however, that
if, at any time during the Term, the method of taxation shall be such that
there
shall be assessed, levied, charged or imposed on Lessor a capital levy or other
tax directly on the rents received therefrom, or upon the value of the Premises
or any present or future improvement or improvements on the Premises, then
all
such levies and taxes or the part thereof so measured or based shall be included
in the term “Taxes” and payable by Lessee, and Lessee shall pay and discharge
the same as herein provided. Lessee will furnish to Lessor, promptly after
request therefor, proof of payment of all items referred to above which are
payable by Lessee. If any assessment, levy or similar charge may legally be
paid
in installments, Lessee may pay such assessment in installments; in such event,
Lessee shall be liable only for installments which become due and payable with
respect to any tax period occurring in whole or in part during the Term hereof;
provided, however, that all amounts referred to in this Section 5.02(a) for
the fiscal or tax year in which the Term shall expire shall be apportioned
so
that Lessee shall pay only those portions thereof which correspond with the
portion of such year as are within the Term of this Lease. Lessor shall
cooperate with Lessee in any proceeding that may be necessary to cause
assessments or levies to be payable in installments. If an assessment or levy
may not be paid in installments and the useful life of the project or
improvement to which such assessment or levy pertains extends beyond the Term
of
this Lease, Lessee shall only be required to pay that pro rata portion of the
assessment or levy that is attributable to the Term.
-8-
(b) Lessee
shall comply with and cause the Premises to comply with and shall assume all
obligations and liabilities with respect to (i) all laws, ordinances and
regulations and other governmental rules, orders and determinations presently
in
effect or hereafter enacted, made or issued, whether or not presently
contemplated (collectively, “Legal Requirements”), as applied to the Premises or
the ownership, operation, use or possession thereof, including, but not limited
to, maintaining an adequate number of vehicular parking spaces, and
(ii) all contracts, insurance policies (including, without limitation, to
the extent necessary to prevent cancellation thereof and to insure full payment
of any claims made under such policies), agreements, covenants, conditions
and
restrictions now or hereafter applicable to the Premises or the ownership,
operation, use or possession thereof (other than covenants, conditions and
restrictions imposed by Lessor subsequent to the date of this Lease without
the
consent of Lessee), including, but not limited to, all such Legal Requirements,
contracts, agreements, covenants, conditions and restrictions which require
structural, unforeseen or extraordinary changes, except for when such structural
changes are required during the last two (2) years of the Term; provided,
however, that, with respect to any of the obligations of Lessee in
clause (ii) above which are not now in existence, Lessee shall not be
required to so comply unless Lessee is either a party thereto or has given
its
written consent thereto, or unless the same is occasioned by Legal Requirements
or Lessee’s default (including any failure or omission by Lessee) under this
Lease. Nothing in clause (ii) of the immediately preceding sentence or the
following sentence shall modify the obligations of Lessee under
Section 5.04 of this Lease.
-9-
(c) On
the
date hereof and promptly after any future date on which the Taxes are increased
by an applicable taxing authority, Lessee shall pay to Lessor that amount
necessary to ensure there will be on deposit with Lessor an amount which when
added to the Tax Escrow Payments will result in there being an amount on deposit
sufficient to pay the Taxes at least two (2) months prior to the due date
thereof (“Initial Tax Escrow Payment”). Thereafter, Lessee shall, in addition to
and concurrently with the payment of Basic Rent as required in
subsection 1.05 hereof, pay one-twelfth of the amount (as estimated by
Lessor) of the annual Taxes (each such payment, a “Tax Escrow Payment,” and
together with the Initial Tax Escrow Payment, hereinafter collectively referred
to as the “Tax Escrow Payments”) next becoming due and payable with respect to
the Premises. Lessee shall also pay to Lessor on demand therefor the amount
by
which the actual Taxes exceed the payment by Lessee required in this subsection.
Notwithstanding anything to the contrary contained in this Lease, so long as
Lessee shall have complied with its obligations under this Section 5.02(c),
Lessor shall be solely liable for the application of the Tax Escrow Payments
to
the actual payment of Taxes as and when the same become due. Absent an Event
of
Default, any excess Tax Escrow Payments remaining at the expiration of the
Term
shall be refunded to Lessee.
Section
5.03 Liens.
(a) Lessee
will remove and discharge any charge, lien, security interest or encumbrance
upon the Premises or upon any Basic Rent, additional rent or other sums payable
hereunder which arises for any reason, including, without limitation, all liens
which arise out of the possession, use, occupancy, construction, repair or
rebuilding of the Premises or by reason of labor or materials furnished or
claimed to have been furnished to Lessee or for the Premises, but not including
(i) the Permitted Exceptions, (ii) this Lease and any assignment
hereof or any sublease permitted hereunder and (iii) any mortgage, charge,
lien, security interest or encumbrance created or caused by or through Lessor
or
its agents, employees or representatives without the consent of Lessee. Lessee
may contest any charges, liens, security interest or encumbrances on the
Premises in accordance with Section 5.05. Lessee may provide a bond or other
security reasonably acceptable to Lessor (but in no event greater in amount
than
the amount of such encumbrance) to remove or pay all costs associated with
the
removal of any such lien, provided the conditions of Section 5.05 shall be
satisfied. Nothing contained in this Lease shall be construed as constituting
the consent or request of Lessor, express or implied, to or for the performance
(on behalf of or for the benefit of Lessor) by any contractor, laborer,
materialman or vendor, of any labor or services or for the furnishing of any
materials for any construction, alteration, addition, repair or demolition
of or
to the Premises or any part thereof. NOTICE IS HEREBY GIVEN THAT LESSOR WILL
NOT
BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED
TO
LESSEE, OR TO ANYONE HOLDING AN INTEREST IN THE PREMISES OR ANY PART THEREOF
THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH
LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN
AND TO THE PREMISES UNLESS BY OR THROUGH LESSOR OR ITS AGENTS, EMPLOYEES OR
REPRESENTATIVES.
-10-
(b) In
no
event shall the interest of Lessor be subject to the liens for improvements
made
by Lessee, and this Lease expressly prohibits such liability. Pursuant to
Section 713.10 Florida Statutes (“Florida Construction Lien Law”), this
provision specifically provides that no interest of Lessor shall be subject
to
liens for improvements made by Lessee at Lessee’s direction. This provision
shall serve as notice to all potential construction lienors that Lessor shall
not be liable for and the Premises shall not be subject to liens for work
performed or materials supplied at Lessee’s request or at the request of anyone
claiming an interest through Lessee. Lessee shall provide notice to its
contractors doing any work on the Premises of the existence of this provision
in
the Lease.
Section
5.04 Indemnification.
(a) Except
for the gross negligence or willful misconduct of any Indemnified Party (as
defined herein), Lessee shall defend all actions against Lessor and any partner,
officer, director, member, employee or shareholder of the foregoing
(collectively, “Indemnified Parties”), with respect to, and shall pay, protect,
indemnify and save harmless the Indemnified Parties from and against, any and
all liabilities, losses, damages, costs, expenses (including, without
limitation, reasonable attorneys’ fees and expenses), causes of action, suits,
claims, demands or judgments of any nature arising from (i) injury to or
death of any person, or damage to or loss of property, on or about the Premises,
or connected with the use, condition or occupancy of any thereof,
(ii) default by Lessee under this Lease, (iii) use, act or omission of
Lessee or its agents, contractors, licensees, sublessees or invitees,
(iv) contest referred to in Section 5.05 of this Lease, and (v) liens
against the Premises in violation of Section 5.03 of this Lease. LESSEE
UNDERSTANDS AND AGREES THAT THE FOREGOING INDEMNIFICATION OBLIGATIONS OF LESSEE
ARE EXPRESSLY INTENDED TO AND SHALL INURE TO THE BENEFIT OF THE INDEMNIFIED
PARTIES EVEN IF SOME OR ALL OF THE MATTERS FOR WHICH SUCH INDEMNIFICATION IS
PROVIDED ARE CAUSED OR ALLEGED TO HAVE BEEN CAUSED BY THE SOLE, SIMPLE, JOINT
OR
CONCURRENT NEGLIGENCE OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES,
BUT
NOT TO THE EXTENT CAUSED BY THE INDEMNIFIED PARTIES' GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. The obligations of Lessee under this Section 5.04 shall survive
any
termination, expiration, rejection in bankruptcy, or assumption in bankruptcy
of
this Lease.
(b) The
rights and obligations of Lessor and Lessee with respect to claims by Lessor
against Lessee brought pursuant to this Section 5.04 and Section 5.06
shall be subject to the following conditions:
(i) If
Lessor
receives notice of the assertion of any claim in respect of which it intends
to
make an indemnification claim under this Section 5.04 or Section 5.06,
Lessor shall promptly provide written notice of such assertion to Lessee;
provided that failure of Lessor to give Lessee prompt notice as provided herein
shall not relieve Lessee of any of its obligations hereunder, except to the
extent the Lessee is prejudiced by such failure. The notice shall describe
in
reasonable detail the nature of the claim and the basis for an indemnification
claim under Section 5.04 or Section 5.06, and shall be accompanied by
all papers and documents which have been served upon Lessor and such other
documents and information as may be appropriate to an understanding of such
claim and the liability of Lessee to indemnify Lessor hereunder. Except as
required by law, the Lessor shall not answer or otherwise respond to such claim
or take any other action which may prejudice the defense thereof unless and
until Lessee has been given the opportunity to assume the defense thereof as
required by this Section 5.04 and refused to do so.
-11-
(ii) Upon
receipt of an indemnification notice under this Section 5.04, the Lessee
shall have the right, but not the obligation, to promptly assume and take
exclusive control of the defense, negotiation and/or settlement of such claim;
provided, however, that if the representation of both parties by Lessee’s
counsel would be inappropriate due to actual or potential differing interests
between them, then the Lessee shall not be obligated to assume such defense,
but
such conflict shall not lessen Lessee’s indemnity obligation hereunder. In the
event of a conflict of interest or dispute or during the continuance of an
Event
of Default, Lessor shall have the right to select separate counsel, and the
cost
of such counsel shall be paid by Lessee. The parties acknowledge that, with
respect to claims for which insurance is available, the rights of the parties
to
select counsel for the defense of such claims shall be subject to such approval
rights as the insurance company providing coverage may have.
(iii) The
party
controlling the defense of a claim shall keep the other party reasonably
informed at all stages of the defense of such claim. The party not controlling
the defense of any claim shall have the right, at its sole cost and expense,
to
participate in, but not control, the defense of any such claim. Each party
shall
reasonably cooperate with the other in the defense, negotiation and/or
settlement of any such claim. In connection with any defense of a claim
undertaken by Lessee, Lessor shall provide Lessee, and its counsel, accountants
and other representatives, with reasonable access to relevant books and records
and make available such personnel of Lessor as Lessee may reasonably request.
Section
5.05 Permitted
Contests.
(a) Lessee,
at its expense, may contest, by appropriate legal proceedings conducted in
good
faith and with due diligence, any Legal Requirements with which Lessee is
required to comply pursuant to Section 5.02(b) or any Environmental Law
under Section 5.06, or the amount or validity or application, in whole or
in part, of any tax, assessment or charge which Lessee is obligated to pay
or
any lien, encumbrance or charge not permitted by Sections 2.01, 2.02,
5.02(a), 5.03 and 6.02, provided that unless Lessee has already paid such tax,
assessment or charge (i) the commencement of such proceedings shall suspend
the enforcement or collection thereof against or from Lessor and against or
from
the Premises, (ii) neither the Premises nor any rent therefrom nor any part
thereof or interest therein would be in any danger of being sold, forfeited,
attached or lost, (iii) Lessee shall have furnished such security, if any,
as may be required in the proceedings and as may be reasonably required by
Lessor, and (iv) if such contest be finally resolved against Lessee, Lessee
shall promptly pay the amount required to be paid, together with all interest
and penalties accrued thereon. Lessor, at Lessee’s expense, shall execute and
deliver to Lessee such authorizations and other documents as reasonably may
be
required in any such contest. Lessee shall indemnify and save Lessor harmless
against any cost or expense of any kind that may be imposed upon Lessor in
connection with any such contest and any loss resulting therefrom.
Notwithstanding any other provision of this Lease to the contrary, Lessee shall
not be in default hereunder in respect to the compliance with any Legal
Requirements with which Lessee is obligated to comply pursuant to
Section 5.02(b), any Environmental Law under Section 5.06, or in
respect to the payment of any tax, assessment or charge which Lessee is
obligated to pay or any lien, encumbrance or charge not permitted by
Section 2.01, 2.02, 5.02(a), 5.03 and 6.02 which Lessee is in good faith
contesting.
-12-
(b) Without
limiting the provisions of Section 5.05(a), so long as no Event of Default
exists and the conditions set forth in Section 5.05(a) are satisfied,
Lessor hereby irrevocably appoints Lessee as Lessor’s attorney-in-fact solely
for the purpose of prosecuting a contest of any tax, assessment or charge which
Lessee is obligated to pay. Such appointment is coupled with an interest.
Notwithstanding the foregoing appointment, if Lessee determines it to be
preferable in prosecution of a contest of a tax, assessment or charge, upon
Lessee’s prior request, Lessor shall execute the real estate tax complaint
and/or other documents reasonably needed by Lessee to prosecute the complaint
as
to such tax, assessment or charge and return same to Lessee within ten (10)
days. In such event, Lessee shall pay all of Lessor’s costs and expenses in
connection therewith, including, without limitation, reasonable attorneys’ fees
and Lessee shall arrange for preparation of such documentation at Lessee’s sole
cost and expense.
Section
5.06 Environmental
Compliance.
(a) For
purposes of this Lease:
(i) the
term
“Environmental
Laws”
shall
mean and include the Resource Conservation and Recovery Act, as amended by
the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, the Hazardous Materials Transportation
Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act and all applicable federal, state and local environmental laws,
ordinances, rules, requirements, regulations and publications, as any of the
foregoing may have been or may be from time to time amended, supplemented or
supplanted and any and all other federal, state or local laws, ordinances,
rules, requirements, regulations and publications, now or hereafter existing,
relating to (i) the preservation or regulation of the public health, welfare
or
environment, (ii) the regulation or control of toxic or hazardous substances
or
materials, or (iii) any wrongful death, personal injury or property damage
that
is caused by or related to the presence, growth, proliferation, reproduction,
dispersal, or contact with any biological organism or portion thereof (living
or
dead), including molds or other fungi, bacteria or other microorganisms or
any
etiologic agents or materials; and
(ii) the
term
“Regulated
Substance”
shall
mean and include any, each and all substances, biological and etiologic agents
or materials now or hereafter regulated pursuant to any Environmental Laws,
including, but not limited to, any such substance, biological or etiological
agent or material now or hereafter defined as or deemed to be a “regulated
substance,” “pesticide,” “hazardous substance” or “hazardous waste” or included
in any similar or like classification or categorization
thereunder.
-13-
(b) Lessee
shall:
(i) not
cause
or permit any Regulated Substance to be placed, held, located, released,
transported or disposed of on, under, at or from the Premises in violation
of
Environmental Laws;
(ii) contain
at or remove from the Premises, or perform any other necessary remedial action
regarding, any Regulated Substance in any way affecting the Premises if, as
and
when such containment, removal or other remedial action is required under any
Legal Requirements and, whether or not so required, shall perform any
containment, removal or remediation of any kind involving any Regulated
Substance in any way materially adversely affecting the Premises in compliance
with all Legal Requirements and, upon reasonable request of Lessor after
consultation with Lessee (which request may be given only if Lessor has received
information such that it reasonably believes that environmental contamination
exists which may have a material adverse effect on the Premises), shall arrange
a Site Assessment (as such term is defined in Section 5.06(c)), or such other
or
further testing or actions as may be required by Legal Requirements or as may
be
mutually agreed to by Lessor and Lessee, to be conducted at the Premises by
qualified companies retained by Lessee specializing in environmental matters
and
reasonably satisfactory to Lessor in order to ascertain compliance with all
Legal Requirements and the requirements of this Lease, all of the foregoing
to
be at Lessee’s sole cost and expense;
(iii) provide
Lessor with written notice (and a copy as may be applicable) of any of the
following within ten (10) days of receipt thereof: (A) Lessee’s
obtaining knowledge or notice of any kind of the material presence, or any
actual or threatened release, of any Regulated Substance in any way materially
adversely affecting the Premises; (B) Lessee’s receipt or submission, or
Lessee’s obtaining knowledge or notice of any kind, of any report, citation,
notice or other communication from or to any federal, state or local
governmental or quasi-governmental authority regarding any Regulated Substance
in any way materially adversely affecting the Premises; or (C) Lessee’s
obtaining knowledge or notice of any kind of the incurrence of any cost or
expense by any federal, state or local governmental or quasi-governmental
authority or any private party in connection with the assessment, monitoring,
containment, removal or remediation of any kind of any Regulated Substance
in
any way materially adversely affecting the Premises, or of the filing or
recording of any lien on the Premises or any portion thereof in connection
with
any such action or Regulated Substance in any way materially adversely affecting
the Premises; and
(iv) in
addition to the requirements of Section 5.04 hereof, defend all actions
against the Indemnified Parties and Mortgagee and pay, protect, indemnify and
save harmless the Indemnified Parties and Mortgagee from and against any and
all
liabilities, losses, damages, costs, expenses (including, without limitation,
reasonable attorneys’ fees and expenses), causes of action, suits, claims,
demands or judgments of any nature relating to any Environmental Laws, Regulated
Substances or other environmental matters concerning the Premises; except to
the
extent caused by or through Lessor, Mortgagee, or their agents, employees or
representatives. The indemnity contained in this Section 5.06 shall survive
the
expiration or earlier termination of this Lease, unless at such time Lessee
provides Lessor a Site Assessment (as defined below) acceptable to Lessor
showing the Premises to be free of Regulated Substances and not in violation
of
Environmental Laws and that there exists no condition which could result in
any
violations of Environmental Laws.
-14-
(c) Upon
reasonable cause and prior written notice from Lessor, Lessee shall permit
such
reasonably qualified persons as Lessor may designate (“Site Reviewers”) to visit
the Premises and perform environmental site investigations and assessments
(“Site Assessments”) on the Premises for the purpose of determining whether
there exists on the Premises any Regulated Substance or violation of
Environmental Laws or any condition which could result in any violations of
Environmental Laws. Such Site Assessments may include both above and below
the
ground environmental testing for violations of Environmental Laws and such
other
tests as may be necessary, in the reasonable opinion of the Site Reviewers,
to
conduct the Site Assessments. Lessee shall supply to the Site Reviewers such
historical and operational information regarding the 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
a Site Assessment shall be paid by Lessee.
(d) If
any
violation of Environmental Laws occurs or is found to exist and, in Lessor's
reasonable judgment based upon the written bids of reputable environmental
professionals, the cost of remediation of, or other response action with respect
to, the same is likely to exceed $100,000, Lessee shall provide to Lessor,
within ten (10) days after Lessor's request therefor, adequate financial
assurances that Lessee will effect such remediation in accordance with
applicable Environmental Laws. Such financial assurances shall be a bond or
letter of credit reasonably satisfactory to Lessor in form and substance and
in
an amount equal to one hundred and fifty percent (150%) of Lessor’s reasonable
estimate of the anticipated cost of such remedial action, based upon a Site
Assessment performed pursuant to Section 5.06(c). Notwithstanding any other
provision in this Lease, if a violation of Environmental Laws occurs or is
found
to exist and the Term would otherwise terminate or expire, and such violation(s)
of Environmental Laws is proximately caused, in whole or in part, by the actions
and/or omissions of Lessee, and the Premises cannot be rented to another lessee
on commercially reasonable terms during the remedial action, then, at the option
of Lessor, 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 Lessor to Lessee terminating this
Lease.
(e) If
Lessee
fails to correct any violation of Environmental Laws which occurs or is found
to
exist, Lessor shall have the right (but no obligation) to take any and all
actions as Lessor shall reasonably deem necessary or advisable in order to
cure
such violation of Environmental Laws.
(f) All
future leases, subleases or concession agreements permitted by this Lease
relating to the Premises entered into by Lessee shall contain covenants of
the
other party not to knowingly at any time (i) cause any violation of
Environmental Laws to occur or (ii) permit any Person occupying the Premises
through said subtenant or concessionaire to knowingly cause any violation of
Environmental Laws to occur.
-15-
ARTICLE
VI
Section
6.01 Intentionally
Deleted.
Section
6.02 Condemnation
and Casualty.
(a) General
Provisions.
Except
as provided in Section 6.02(b) and (c), Lessee hereby irrevocably assigns
to Lessor any award, compensation or insurance payment to which Lessee may
become entitled by reason of Lessee’s interest in the Premises (i) if the
use, occupancy or title of the Premises or any part thereof is taken,
requisitioned or sold in, by or on account of any actual or threatened eminent
domain proceeding or other action by any person having the power of eminent
domain (“Condemnation”) or (ii) if the Premises or any part thereof is
damaged or destroyed by fire, flood or other casualty (“Casualty”). All awards,
compensations and insurance payments on account of any Condemnation or Casualty
are herein collectively called “Compensation.” Lessee may not unilaterally
negotiate, prosecute or adjust any claim for any Compensation. Lessee must
consult with and obtain Lessor’s consent thereto. If the parties are unable to
so agree, then they shall appoint an entity or individual that specializes
in
such negotiations who shall negotiate, prosecute and adjust a claim for
Compensation. Lessor shall be entitled to participate in any such proceeding,
action, negotiation, prosecution, appeal or adjustment as contemplated herein.
Notwithstanding anything to the contrary contained in this Article VI, if
permissible under applicable law, any separate Compensation made to Lessee
for
its moving and relocation expenses, anticipated loss of business profits, loss
of goodwill or fixtures and equipment paid for by Lessee and which are not
part
of the Premises (including, without limitation, the Severable Property) shall
be
paid directly to and shall be retained by Lessee (and shall not be deemed to
be
“Compensation”). All Compensation shall be applied pursuant to this
Section 6.02, and all such Compensation (less the expense of collecting
such Compensation) is herein called the “Net Proceeds.” Except as specifically
set for herein, all Net Proceeds shall be paid to the Proceeds Trustee (as
defined herein) and applied pursuant to this Section 6.02. If the Premises
or
any part thereof shall be damaged or destroyed by Casualty, and if the estimated
cost of rebuilding, replacing or repairing the same shall exceed $50,000, Lessee
promptly shall notify Lessor thereof.
(b) Substantial
Condemnation During the Term.
If a
Condemnation shall, in Lessee’s good faith judgment, affect all or a substantial
portion of the Premises and shall render the Premises unsuitable for restoration
for continued use and occupancy in Lessee’s business, then Lessee may, not later
than sixty (60) days after a determination has been made as to when
possession of the Premises must be delivered with respect to such Condemnation,
deliver to Lessor (i) notice of its intention (“Notice of Intention”) to
terminate this Lease on the next rental payment date which occurs after the
earlier of (a) ninety (90) days after the delivery of such notice or (b)
delivery of the Premises to the condemning authority (the “Condemnation
Termination Date”), and (ii) a certificate of an authorized officer of
Lessee describing the event giving rise to such termination and stating that
Lessee has determined that such Condemnation has rendered the Premises
unsuitable for restoration for continued use and occupancy in Lessee’s business.
This Lease shall terminate on the Condemnation Termination Date, except with
respect to obligations and liabilities of Lessee hereunder, actual or
contingent, which have accrued on or prior to the Condemnation Termination
Date,
upon payment by Lessee of (1) all Basic Rent, additional rent and other sums
due
and payable hereunder to and including the Condemnation Termination Date, and
(2) an amount equal to the excess, if any, of (a) the aggregate of all
Basic Rent, additional rent and other sums which would be payable under this
Lease, from the Condemnation Termination Date for what would be the then
unexpired Term in the absence of such Condemnation, discounted at the rate
equal
to the then current yield on United States Treasury Notes having a maturity
as
of the stated date for expiration of the then existing Term of this Lease,
plus
2% per annum (the “Reference Rate”), over (b) the Net Proceeds. The Net
Proceeds shall belong to Lessor.
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(c) Substantial
Casualty During the Last Two Years of the Term.
If an
insured Casualty shall, in Lessee’s good-faith judgment, affect all or a
substantial portion of the Premises during the last two (2) years of the Term
and shall render the Premises unsuitable for restoration for continued use
and
occupancy in Lessee’s business, then Lessee may, not later than one hundred and
fifty (150) days after such Casualty, deliver to Lessor (i) notice of its
intention to terminate this Lease on the next rental payment date which occurs
not less than sixty (60) days after the delivery of such notice (the “Casualty
Termination Date”), (ii) a certificate of an authorized officer of Lessee
describing the event giving rise to such termination and stating that Lessee
has
determined that such Casualty has rendered the Premises unsuitable for
restoration for continued use and occupancy in Lessee’s business, and
(iii) documentation to the effect that termination of this Lease will not
be in violation of any agreement then in effect with which Lessee is obligated
to comply pursuant to this Lease. Upon payment by Lessee of all Basic Rent,
additional rent and other sums then due and payable hereunder to and including
the Casualty Termination Date, this Lease shall terminate on the Casualty
Termination Date except with respect to obligations and liabilities of Lessee
hereunder, actual or contingent, which have accrued on or prior to the Casualty
Termination Date, and the Net Proceeds shall belong to Lessor.
(d) Less
Than Substantial Condemnation or Any Casualty Prior to the Last Two Years of
the
Term.
If,
after a Condemnation or Casualty, Lessee does not give or does not have the
right to give notice of its intention to terminate this Lease as provided in
subsection 6.02(b) or (c), then this Lease shall continue in full force and
effect and Lessee shall, at its expense, rebuild, replace or repair the Premises
in conformity with the requirements of subsections 2.01, 2.02 and 5.03 so
as to restore the Premises (in the case of Condemnation, as nearly as
practicable) to the condition, and character thereof immediately prior to such
Casualty or Condemnation; provided that Lessee and Lessor shall use reasonable
efforts to consider modifications which would make the Improvements a more
contemporary design. To the extent the Net Proceeds with respect to any Casualty
are less than $100,000, such amount shall be paid to Lessee to be used to
rebuild, replace or repair the Premises in a lien free and good and workmanlike
manner. To the extent the Net Proceeds from any Casualty are $100,000 or
greater, such amount shall be paid to the Proceeds Trustee and prior to any
such
rebuilding, replacement or repair, Lessee shall determine the maximum cost
thereof (the “Restoration Cost”), which amount shall be reasonably acceptable to
Lessor. The Restoration Cost shall be paid on a pro rata basis out of Lessee’s
own funds and the Net Proceeds to the extent that the Restoration Cost exceeds
the Net Proceeds payable in connection with such occurrence, after which
expenditure Lessee shall be entitled to receive the Net Proceeds from the
Proceeds Trustee, but only against (i) certificates of Lessee delivered to
Lessor and the Proceeds Trustee from time to time but no more often than monthly
as such work of rebuilding, replacement and repair progresses, each such
certificate describing the work for which Lessee is requesting payment and
the
cost incurred by Lessee in connection therewith and stating that Lessee has
not
theretofore received payment for such work and (ii) such additional
documentation or conditions as Lessor or the Proceeds Trustee may reasonably
require, including, but not limited to, copies of all contracts and subcontracts
relating to restoration, architects’ certifications, title policy updates and
lien waivers or releases. Any Net Proceeds remaining after final payment has
been made for such work and after Lessee has been reimbursed for any portions
it
contributed to the Restoration Cost with respect to any Casualty shall be paid
to Lessee and with respect to any Condemnation shall be paid to Lessor. In
the
event of any temporary Condemnation, this Lease shall remain in full effect
and
Lessee shall be entitled to receive the Net Proceeds allocable to such temporary
Condemnation, except that any portion of the Net Proceeds allocable to the
period after the expiration or termination of the Term shall be paid to Lessor.
If the cost of any rebuilding, replacement or repair required to be made by
Lessee pursuant to this subsection 6.02(d) shall exceed the amount of such
Net Proceeds, the deficiency shall be paid by Lessee. Notwithstanding anything
herein to the contrary, in the event of a less than substantial Condemnation,
Lessee and Lessor shall equitably adjust the Basic Rent to take into
consideration any diminished utility of the Premises after completion of any
rebuilding, replacement or repair required to be made by Lessee pursuant to
this
Section 6.02(d).
-17-
Section
6.03 Insurance.
(a) Lessee
will maintain insurance on the Premises of the following character:
(i) Insurance
(on an occurrence basis) against all risks of direct physical loss (“Causes of
Loss - Special Form”), including loss by fire, lightning, flooding (if the
Premises are in a flood zone), earthquakes (if the Premises are in an earthquake
zone), and other risks which at the time are included under “extended coverage”
endorsements, on ISO form CP1030, or its equivalent, in amounts sufficient
to
prevent Lessor and Lessee from becoming a coinsurer of any loss but in any
event
in amounts not less than 100% of the actual replacement value of the
Improvements, exclusive of foundations and excavations, without any exclusions
other than standard printed exclusions and without exclusion for terrorism
and
with deductibles of not more than $25,000 per occurrence (except with respect
to
wind damage, which shall have a deductible of no more than
$250,000);
(ii) Commercial
general liability insurance and/or umbrella liability insurance (on an
occurrence basis), on ISO form CG 0001 0798, or its equivalent, against claims
for bodily injury, death or property damage occurring on, in or about the
Premises in the minimum amounts of $5,000,000 for bodily injury or death to
any
one person, $10,000,000 for any one accident and $5,000,000 for property damage
to others or in such greater amounts as are then customary for property similar
in use to the Premises, with deletions of contractual liability exclusions
with
respect to personal injury and with defense to be provided as an additional
benefit and not within the limits of liability and with deductibles of not
more
than $25,000 per occurrence;
-18-
(iii) Rent
loss
insurance or business interruption insurance in an amount sufficient to cover
loss of rents from the Premises pursuant to this Lease for a period of at least
twelve (12) months, with endorsements to cover interruption of utilities outside
of the Premises;
(iv) Worker’s
compensation insurance to the extent required by the law of the state in which
the Premises are located;
(v) Boiler
and machinery insurance in respect of any boilers and similar apparatus located
on the Premises in the minimum amount of $500,000 or in such greater amounts
as
to adequately insure the Premises;
(vi) During
any period of construction on the Premises, builder’s risk insurance on a
completed value, nonreporting basis for the total cost of such alterations
or
improvements, and workers’ compensation insurance as required by applicable law.
This coverage may be provided by Lessee’s all risk property insurance pursuant
to Section 6.03(a)(i) herein; and
(vii) Such
other insurance in such kinds and amounts, with such deductibles and against
such risks, as Mortgagee may reasonably require or as is commonly obtained
in
the case of property similar in use to the Premises and located in the state
in
which the Premises are located by prudent owners of such property.
Such
insurance shall be written by companies authorized to do business in the state
where the Premises are located and carrying a claims paying ability rating
of at
least A:XII by A.M. Best or A by Standard and Poor's, as applicable, and with
the exception of workers’ compensation insurance, shall name Lessor as an
additional insured as its interest may appear.
(b) Every
such policy provided pursuant to Section 6.03(a)(i), above shall (i) bear a
mortgagee endorsement in favor of Mortgagee under any Mortgage, and any loss
under any such policy shall be payable to the Mortgagee which has a first lien
on such interest (if there is more than one first Mortgagee, then to the trustee
for such Mortgagees) to be held and applied by Mortgagee toward restoration
pursuant to Section 6.02, and (ii) contain an ordinance or law coverage
endorsement. Every such policy with the exception of workers’ compensation
insurance, shall name the Mortgagee as an additional insured as its interest
may
appear. Every policy referred to in subsection 6.03(a) shall provide that
it will not be cancelled or amended except after thirty (30) days written notice
to Lessor and the Mortgagee and that it shall not be invalidated by any act
or
negligence of Lessor, Lessee or any person or entity having an interest in
the
Premises, nor by occupancy or use of the Premises for purposes more hazardous
than permitted by such policy, nor by any foreclosure or other proceedings
relating to the Premises, nor by change in title to or ownership of the
Premises. The “Proceeds Trustee” shall be a financial institution selected by
Lessor and reasonably approved by Lessee and may be the Mortgagee.
(c) Lessee
shall deliver to Lessor (i) upon request copies of the applicable insurance
policies and (ii) original or duplicate certificates of insurance,
reasonably satisfactory to Lessor evidencing the existence of all insurance
which is required to be maintained by Lessee hereunder and payment of all
premiums therefor, such delivery to be made (i) upon the execution and
delivery hereof and (ii) at least ten (10) days prior to the
expiration of any such insurance. Lessee shall not obtain or carry separate
insurance concurrent in form or contributing in the event of loss with that
required by this Section 6.03 unless Lessor is named an additional insured
therein and unless there is a mortgagee endorsement in favor of Mortgagee with
loss payable as provided herein. Lessee shall immediately notify Lessor whenever
any such separate insurance is obtained and shall deliver to Lessor the policies
or certificates evidencing the same. Any insurance required hereunder may be
provided under blanket policies, provided that the Premises are specified
therein.
-19-
(d) If
an
Event of Default shall occur, upon the request of Lessor, Lessee shall, in
addition to and concurrently with the payment of Basic Rent as required in
Section 1.05 hereof, pay one-twelfth of the amount (as estimated by Lessor
or
Mortgagee, as applicable) of the annual premiums for insurance (collectively,
the “Insurance Escrow Payments”) required under this Section 6.03 next becoming
due and payable with respect to the Premises. Notwithstanding the foregoing,
Lessee shall also be required to pay into escrow any other amounts required
by
Mortgagee. Lessee shall also pay to Lessor on demand therefor the amount by
which the actual insurance premiums exceed the payment by Lessee required in
this subsection.
(e) The
requirements of this Section 6.03 shall not be construed to negate or
modify Lessee’s obligations under Section 5.04.
(f) Notwithstanding
anything contained in this Lease to the contrary, each party hereto hereby
waives any and all rights of recovery, claim, action or cause of action, against
the other party and its agents, officers, and employees, for any loss or damage
that may occur to the Premises, including the Improvements, regardless of cause
or origin, including the negligence of the other party and its agents, officers,
and employees, without prejudice to any waiver or indemnity provisions
applicable to Lessee and any limitation of liability provisions applicable
to
Lessor hereunder, of which provisions Lessee shall notify all insurers.
ARTICLE
VII
Section
7.01 Conditional
Limitations; Default Provisions.
(a) Any
of
the following occurrences or acts shall constitute an Event of Default under
this Lease:
(i) If
Lessee
shall (1) fail to pay any Basic Rent, additional rent or other sum when due
(provided that for such failure to pay to constitute an Event of Default such
failure must continue to exist after Lessor has provided Lessee with five
business (5) days written notice of Lessee’s failure to timely pay such sums and
provided that Lessor is obligated to provide such written notice no more than
two times for any consecutive twelve (12) month period) or (2) fail to
observe or perform any other provision hereof and such nonmonetary failure
shall
continue for thirty (30) days after written notice to Lessee of such
failure (provided that, in the case of any such failure which cannot be cured
by
the payment of money and cannot with diligence be cured within such thirty
(30)
day period, if Lessee shall commence promptly to cure the same and thereafter
prosecute the curing thereof with diligence, the time within which such failure
may be cured shall be extended for such period not to exceed one hundred and
eighty (180) days as is necessary to complete the curing thereof with
diligence);
-20-
(ii) If
any
representation or warranty of Lessee set forth in any certificate provided
by
Lessee pursuant to this Lease, shall prove to be incorrect in any material
adverse respect as of the time when the same shall have been made in a way
adverse to Lessor and Lessor shall suffer a loss or detriment as a result
thereof, including, without limitation, the taking of any action (including,
without limitation, the demise of the Premises to Lessee herein) in reliance
upon such representation or warranty and, in each case, the facts shall not
be
conformed to the representation and warranty as soon as practicable in the
circumstances (but in no event to exceed that period of time that in Lessor’s
reasonable judgment is necessary to complete the curing thereof with diligence)
after written notice to Lessee from Lessor of such inaccuracy and Lessor
restored to the position it would have enjoyed had such representation or
warranty been accurate at the time it was made;
(iii) If
Lessee
shall file a petition in bankruptcy or for reorganization or for an arrangement
pursuant to any federal or state law or shall be adjudicated a bankrupt or
become insolvent or shall make an assignment for the benefit of creditors,
or if
a petition proposing the adjudication of Lessee as a bankrupt or its
reorganization pursuant to any federal or state bankruptcy law or any similar
federal or state law shall be filed in any court and Lessee shall consent to
or
acquiesce in the filing thereof or such petition shall not be discharged or
denied within ninety (90) days after the filing thereof;
(iv) If
a
receiver, trustee or conservator of Lessee or of all or substantially all of
the
assets of Lessee or of the Premises or Lessee’s or estate therein shall be
appointed in any proceeding brought by Lessee, or if any such receiver, trustee
or conservator shall be appointed in any proceeding brought against Lessee
and
shall not be discharged within ninety (90) days after such appointment, or
if
Lessee shall consent to or acquiesce in such appointment;
(v) If
the
Premises shall have been abandoned for a period of thirty (30) consecutive
days;
(vi) If
a
Letter of Credit has been posted as the Security Deposit or other security
hereunder, and the issuer of the Letter of Credit cancels, terminates or refuses
to honor it, and Lessee shall fail to renew the Letter of Credit within thirty
(30) days or shall fail to post a cash equivalent amount of the Letter of Credit
or a replacement letter of credit within fifteen (15) days after notice of
such
cancellation, termination or refusal; and
(vii) If
a
monetary Event of Default occurs under this Lease more than three (3) times
within any consecutive twelve (12) month period, irrespective of whether or
not
such Event of Default is cured.
(b) If
an
Event of Default shall have happened and be continuing, Lessor shall have the
right to give Lessee notice of Lessor’s termination of the Term. Upon the giving
of such notice, the Term and the estate hereby granted shall expire and
terminate on such date as fully and completely and with the same effect as
if
such date were the date herein fixed for the expiration of the Term, and all
rights of Lessee hereunder shall expire and terminate, but Lessee shall remain
liable as hereinafter provided.
-21-
(c) If
an
Event of Default shall have happened and be continuing, Lessor shall have the
immediate right, whether or not the Term shall have been terminated pursuant
to
subsection 7.01(b), to reenter and repossess the Premises and the right to
remove all persons and property (subject to Section 3.02) therefrom by
summary proceedings, ejectment or any other legal action or in any lawful manner
Lessor determines to be necessary or desirable. Lessor shall be under no
liability by reason of any such reentry, repossession or removal. No such
reentry, repossession or removal shall be construed as an election by Lessor
to
terminate the Term unless a notice of such termination is given to Lessee
pursuant to subsection 7.01(b) or unless such termination is decreed by a
court.
(d) At
any
time or from time to time after a reentry, repossession or removal pursuant
to
subsection 7.01(c), whether or not the Term shall have been terminated
pursuant to subsection 7.01(b), Lessor may relet the Premises for the
account of Lessee, in the name of Lessee or Lessor or otherwise. Lessor may
collect any rents payable by reason of such reletting. Lessor shall not be
liable for any failure to relet the Premises or for any failure to collect
any
rent due upon any such reletting. Notwithstanding the foregoing, Lessor agrees
to make reasonable efforts to mitigate its damages under this Lease in the
event
Lessee actually vacates or advises Lessor that it is, as of a specified date,
to
vacate the Premises. The phrase “reasonable efforts,” as it relates to Lessor’s
duty to attempt to relet the Premises, shall require Lessor to do only the
following: (i) notify Lessor’s management company, if any, in writing of the
availability of the Premises for reletting and authorize same to advertise
as
appropriate, (ii) post Lessor’s leasing contact telephone number in an
appropriate area of the Premises, and (iii) show the Premises to any prospective
Lessee interested in the Premises and to any prospective Lessee specifically
referred to Lessor by Lessee. Under any requirement of Lessor to use “reasonable
efforts” as described herein, (i) Lessor shall not be required to relet the
Premises ahead of any other properties in the same market not producing any
income to Lessor; (ii) Lessor shall be entitled to consider Lessee quality,
Lessee-mix, the financial condition of any prospective Lessee, the nature of
the
Premises, the proposed use of the Premises by any prospective Lessee, and any
rights of existing sublessees located in the Premises, in making any leasing
decision without being deemed to have violated its mitigation requirement
hereunder; and (iii) under any new lease entered into by Lessor, Lessor may
relet all or any portion of the Premises to create an appropriate block of
space
for a new Lessee, may relet for a greater or lesser term than that remaining
at
that time under this Lease, and may include free rent, concessions, inducements,
alterations and upgrades in the new lease. If a reletting occurs, Lessor shall
recoup all of its expenses of reletting (including, without limitation, all
expenses relating to remodeling, alterations, repairs, capital improvements,
brokerage fees, decorating fees, and fees for architects, designers, space
planners and attorneys) before Lessee is entitled to a credit on the damages
owed by Lessee hereunder. If Lessor shall do all the foregoing then, anything
in
this Lease, or any statute, or common law rule to the contrary notwithstanding,
Lessor shall be deemed to have met its duty (if any) to mitigate its damages
hereunder.
(e) No
expiration or termination of the Term pursuant to subsection 7.01(b), by
operation of law or otherwise, and no reentry, repossession or removal pursuant
to subsection 7.01(c) or otherwise, and no reletting of the Premises
pursuant to subsection 7.01(d) or otherwise, shall relieve Lessee of its
liabilities and obligations hereunder, all of which shall survive such
expiration, termination, reentry, repossession, removal or reletting.
-22-
(f) In
the
event of any expiration or termination of the Term or reentry or repossession
of
the Premises or removal of persons or property therefrom by reason of the
occurrence of an Event of Default, Lessee shall pay to Lessor all Basic Rent,
additional rent and other sums required to be paid by Lessee, in each case
to
and including the date of such expiration, termination, reentry, repossession
or
removal, and, thereafter, Lessee shall, until the end of what would have been
the Term in the absence of such expiration, termination, reentry, repossession
or removal and whether or not the Premises shall have been relet, be liable
to
Lessor for, and shall pay to Lessor, as liquidated and agreed current
damages: (i) all Basic Rent, all additional rent and other sums
which would be payable under this Lease by Lessee in the absence of any such
expiration, termination, reentry, repossession or removal, together with all
expenses of Lessor in connection with such reletting (including, without
limitation, all repossession costs, brokerage commissions, reasonable attorneys’
fees and expenses (including, without limitation, fees and expenses of appellate
proceedings), employee’s expenses, alteration costs and expenses of necessary
preparation for such reletting), less (ii) the net proceeds, if any, of any
reletting effected for the account of Lessee pursuant to
subsection 7.01(d). Lessee shall pay such liquidated and agreed current
damages on the dates on which rent would be payable under this Lease in the
absence of such expiration, termination, reentry, repossession or removal,
and
Lessor shall be entitled to recover the same from Lessee on each such
date.
(g) At
any
time after any such expiration or termination of the Term or reentry or
repossession of the Premises or removal of persons or property therefrom by
reason of the occurrence of an Event of Default, whether or not Lessor shall
have collected any liquidated and agreed current damages pursuant to
subsection 7.01(f), Lessor shall be entitled to recover from Lessee, and
Lessee shall pay to Lessor on demand, as and for liquidated and agreed final
damages for Lessee’s default and in lieu of all liquidated and agreed 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 excess, if any, of (a) the aggregate of all Basic Rent, additional
rent and other sums which would be payable under this Lease, in each case from
the date of such demand (or, if it be earlier, to date to which Lessee shall
have satisfied in full its obligations under subsection 7.01(f) to pay
liquidated and agreed current damages) for what would be the then unexpired
Term
in the absence of such expiration, termination, reentry, repossession or
removal, discounted at the Reference Rate, over (b) the then fair rental
value of the Premises, discounted at the Reference Rate for the same period.
If
any law shall limit the amount of liquidated final damages to less than the
amount above agreed upon, Lessor shall be entitled to the maximum amount
allowable under such law.
(h) To
the
extent the same may lawfully be waived, Lessee expressly, knowingly and
voluntarily waives all constitutional, statutory and common law bonding
requirements, including the requirement under Section 83.12, Florida Statutes
(2006) that Lessor file a bond payable to Lessee in at least double the sum
demanded by Lessor (or double the value of the property sought to be
distrained), it being the intention of the parties that no bond shall be
required to be filed by Lessor in any such distress action.
-23-
Section
7.02 Bankruptcy
or Insolvency.
(a) If
Lessee
shall become a debtor in a case filed under Chapter 7 or Chapter 11 of
the Bankruptcy Code and Lessee or Lessee’s trustee shall fail to elect to assume
this Lease within sixty (60) days after the filing of such petition or such
additional time as provided by the court within such sixty (60) day period,
this
Lease shall be deemed to have been rejected. Immediately thereupon, Lessor
shall
be entitled to possession of the Premises without further obligation to Lessee
or Lessee’s trustee, and this Lease, upon the election of Lessor, shall
terminate, but Lessor’s right to be compensated for damages (including, without
limitation, liquidated damages pursuant to any provision hereof) or the exercise
of any other remedies in any such proceeding shall survive, whether or not
this
Lease shall be terminated.
(b) Neither
the whole nor any portion of Lessee’s interest in this Lease or its estate in
the Premises shall pass to any trustee, receiver, conservator, assignee for
the
benefit of creditors or any other person or entity, by operation of law or
otherwise under the laws of any state having jurisdiction of the person or
property of Lessee, unless Lessor shall have consented to such transfer. No
acceptance by Lessor of rent or any other payments from any such trustee,
receiver, assignee, person or other entity shall be deemed to constitute such
consent by Lessor nor shall it be deemed a waiver of Lessor’s right to terminate
this Lease for any transfer of Lessee’s interest under this Lease without such
consent.
(c) In
the
event of an assignment of Lessee’s interests pursuant to this Section 7.02,
the right of any assignee to extend the Term for an Extended Term beyond the
Primary Term or the then Extended Term of this Lease shall be
extinguished.
Section
7.03 Additional
Rights of Lessor.
(a) Except
as
provided in Section 7.01(g), no right or remedy hereunder shall be
exclusive of any other right or remedy, but shall be cumulative and in addition
to any other right or remedy hereunder or now or hereafter existing. Failure
to
insist upon the strict performance of any provision hereof or to exercise any
option, right, power or remedy contained herein shall not constitute a waiver
or
relinquishment thereof for the future. Receipt by Lessor of any Basic Rent,
additional rent or other sums payable hereunder with knowledge of the breach
of
any provision hereof shall not constitute waiver of such breach, and no waiver
by Lessor of any provision hereof shall be deemed to have been made unless
made
in writing. Lessor shall be entitled to injunctive relief in case of the
violation, or attempted or threatened violation, of any of the provisions
hereof, or to a decree compelling performance of any of the provisions hereof,
or to any other remedy allowed to Lessor by law or equity.
(b) Lessee
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 to redeem the Premises or to have a continuance of this
Lease after termination of Lessee’s right of occupancy by order or judgment of
any court or by any legal process or writ, or under the terms of this Lease,
or
after the termination of the Term as herein provided, (ii) the benefits of
any law which exempts property from liability for debt and (iii) Lessee
specifically waives any rights of redemption or reinstatement available by
law
or any successor law.
-24-
(c) If
an
Event of Default on the part of Lessee shall have occurred hereunder and be
continuing, then, without thereby waiving such default, Lessor may, but shall
be
under no obligation to, take all action, including, without limitation, entry
upon the Premises, to perform the obligation of Lessee hereunder immediately
and
without notice in the case of any emergency as may be reasonably determined
by
Lessor and upon five (5) business days notice to Lessee in other cases. All
reasonable expenses incurred by Lessor in connection therewith, including,
without limitation, attorneys’ fees and expenses (including, without limitation,
those incurred in connection with any appellate proceedings), shall constitute
additional rent under this Lease and shall be paid by Lessee to Lessor upon
demand.
(d) If
Lessee
shall be in default in the performance of any of its obligations under this
Lease beyond any applicable grace or cure period hereunder, Lessee shall pay
to
Lessor, on demand, all expenses incurred by Lessor as a result thereof,
including, without limitation, reasonable attorneys’ fees and expenses
(including, without limitation, those incurred in connection with any appellate
proceedings) and any additional sums (including any late charge, default
penalties, interest and fees of the counsel of Mortgagee) which are payable
by
Lessor to its Mortgagee by reason of Lessee's late payment or non-payment of
Basic Rent. If Lessor shall be made a party to any litigation commenced against
Lessee and Lessee shall fail to provide Lessor with counsel approved by Lessor
and pay the expenses thereof, Lessee shall pay all costs and reasonable
attorneys’ fees and expenses in connection with such litigation (including,
without limitation, fees and expenses incurred in connection with any appellate
proceedings).
(e) If
Lessee
shall fail to pay when due any Basic Rent, additional rent or other sum required
to be paid by Lessee hereunder, Lessor shall be entitled to collect from Lessee
as additional rent and Lessee shall pay to Lessor, in addition to such Basic
Rent, additional rent or other sum, annual interest on the delinquency equal
to
the Late Rate from the date due until paid. The Late Rate shall be the lesser
of
(i) fifteen percent (15%) per annum or (ii) the maximum rate permitted
by applicable law. In addition to all other remedies Lessor has hereunder,
if
Lessee shall fail to pay any Basic Rent, additional rent or other sum, as and
when required to be paid by Lessee hereunder prior to the expiration for the
period of payment pursuant to subsection 7.01(a)(i)(1), Lessor shall be
entitled to collect from Lessee, and Lessee shall pay to Lessor, as additional
rent, a late payment charge in an amount equal to 1% of the amount shown in
the
notice as unpaid.
ARTICLE
VIII
Section
8.01 Notices
and Other Instruments.
All
notices, offers, consents and other instruments given pursuant to this Lease
shall be in writing and shall be validly given when hand delivered or sent
by a
courier or express service guaranteeing overnight delivery or by telecopy,
with
original being promptly sent as otherwise provided above, addressed as
follows:
|
If
to Lessor:
|
NL
Ventures V Plant City, L.P.
|
|
|
c/o
AIC Ventures
|
||
|
0000
Xxxxx Xxxxxxx Xxxxx - Xxxxx 0000
|
||
|
Xxxxxx,
XX 00000
|
||
|
Attention:
Xx. Xxxxx Xxxxxxx
|
||
|
Telephone:
(000) 000-0000
|
||
|
Facsimile:
(000) 000-0000
|
||
|
With
a copy to:
|
AIC
Ventures
|
|
|
000
Xxxxxxxx Xxxxxx, Xxxxx 000
|
||
|
Xxxxxx,
Xxxxx 00000
|
||
|
Attention:
Xx. Xxxxx X. Xxxxxxx, Acquisitions Counsel
|
||
|
Telephone:
(000) 000-0000
|
||
|
Facsimile:
(000) 000-0000
|
||
|
If
to Lessee:
|
Modtech
Holdings, Inc.
|
|
|
0000
Xxxxxxx Xxxxxx
|
||
|
Xxxxxx,
XX 00000
|
||
|
Attn:
Xxxxxx Xxxxxxx
|
||
|
Telephone:
(000) 000-0000
|
||
|
Facsimile:
(000) 000-0000
|
-25-
Lessor
and Lessee each may from time to time specify, by giving fifteen (15) days
notice to each other party, (i) any other address in the United States
as its address for purposes of this Lease and (ii) any other person or
entity in the United States that is to receive copies of notices, offers,
consents and other instruments hereunder. Notice
under the terms of this Lease shall be deemed delivered, whether or not actually
received, upon the earlier of (i) the date of actual receipt by such party,
or
(ii) the day after said notice is either deposited with such overnight delivery
service, transmitted by telecopier, or personally delivered, as applicable,
pursuant to the above provisions.
Section
8.02 Estoppel
Certificates; Financial Information.
(a) Lessee
will, upon ten (10) business days written notice at the request of Lessor,
execute, acknowledge and deliver to Lessor a certificate of Lessee, stating
that
this Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
setting forth such modifications) and stating the dates to which Basic Rent,
additional rent and other sums payable hereunder have been paid and either
stating that to the knowledge of Lessee no default exists hereunder or
specifying each such default of which Lessee has knowledge and whether or not
Lessee is still occupying and operating the Premises and such other information
as Lessor shall reasonably request. Any such certificate may be relied upon
by
any actual or prospective mortgagee or purchaser of the Premises. Lessor will,
upon ten (10) business days written notice at the request of Lessee, execute,
acknowledge and deliver to Lessee a certificate of Lessor, stating that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
setting forth such modifications) and the dates to which Basic Rent, additional
rent and other sums payable hereunder have been paid, and either stating that
to
the knowledge of Lessor no default exists hereunder or specifying each such
default of which Lessor has knowledge. Any such certificate may be relied upon
by Lessee or any actual or prospective assignee or sublessee of the
Premises.
-26-
(b) So
long
as Lessee is a publicly traded company, then Lessee shall deliver to Lessor
within ninety (90) days of the close of each fiscal year Lessee’s Form 10-K, and
within forty-five (45) days after the end of each of the three remaining
quarters Lessee’s Form 10-Q, in each case as filed with the Securities and
Exchange Commission pursuant to the provisions of the Securities Exchange Act
of
1934, as amended, or any other law, unless
such items are available through XXXXX.
If, at
any time, Lessee is no longer a publicly traded company, then Lessee shall
deliver to Lessor within ninety (90) days of the close of each fiscal year,
annual audited financial statements of Lessee (which, at a minimum, shall
include a balance sheet of Lessee and its consolidated subsidiaries, if any,
as
of the end of such year, a statement of profits and losses of Lessee and its
consolidated subsidiaries, if any, for such year and a statement of cash flows
of Lessee and its consolidated subsidiaries, if any, for such year, setting
forth in each case, in comparative form, the corresponding figures for the
preceding fiscal year in reasonable detail and scope) prepared by a firm of
independent certified public accountants approved by Lessor. Lessee shall also
furnish to Lessor within forty five (45) days after the end of each quarter
unaudited internal financial statements and all other quarterly reports of
Lessee (which, at a minimum, shall include a balance sheet of Lessee and its
consolidated subsidiaries, if any, as of the end of such quarter and statements
of profits and losses of Lessee and its consolidated subsidiaries, if any,
for
such quarter, setting forth in each case, in comparative form, the corresponding
figures for the similar quarter of the preceding year in reasonable detail
and
scope) certified by Lessee’s chief financial officer. 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 (or if there
are qualifications, the nature thereof) and (B) the audit was performed in
accordance with GAAP, and (ii) by the affidavit of the president, a vice
president, or chief financial officer of Lessee, dated within five (5) days
of
the delivery of such statement, stating that (1) 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 Lessee has taken or proposes to
take
with respect thereto and (2) except as otherwise specified in such affidavit,
to
the best of such affiant’s knowledge Lessee has fulfilled all of its obligations
under this Lease which are required to be fulfilled on or prior to the date
of
such affidavit.
(c) Lessor
and its agents and designees may enter upon and examine the Premises and examine
the records and books of account and discuss the finances and business with
the
officers of the Lessee at reasonable times during normal business hours and
on
reasonable advance written notice. Lessee shall provide the requesting party
with copies of any information to which such party would be entitled in the
course of a personal visit. Except in the event of emergency, Lessee may
designate an employee to accompany Lessor, its agents and designees on such
examinations. Lessee will provide, upon Lessor’s request, all information
regarding the Premises, including, but not limited to, a current rent roll,
an
operating statement reflecting all income from subleases and all operating
expenses for the Premises. Lessor and its agents and designees may enter upon
and examine the Premises and show the Premises to prospective mortgagees and/or
purchasers at reasonable times during normal business hours and on reasonable
advance written notice.
-27-
ARTICLE
IX
Section
9.01 No
Merger.
There
shall be no merger of this Lease or of the leasehold estate hereby created
with
the fee estate in the Premises by reason of the fact that the same person
acquires or holds, directly or indirectly, this Lease or the leasehold estate
hereby created or any interest herein or in such leasehold estate, as well
as
the fee estate in the Premises or any interest in such fee estate.
Section
9.02 Surrender.
Upon
the expiration or termination of this Lease, Lessee shall surrender the Premises
to Lessor in as good repair and condition as received under Section 2.01(a)
except for any damage resulting from Condemnation or Casualty or normal wear
and
tear not required to be repaired by Lessee.
Section
9.03 Time.
Time is
of the essence with respect to this Lease, and the respective time periods
set
forth herein.
Section
9.04 Separability;
Binding Effect; Governing Law.
Each
provision hereof shall be separate and independent, and the breach of any
provision by Lessor shall not discharge or relieve Lessee from any of its
obligations hereunder. Each provision hereof shall be valid and shall be
enforceable to the extent not prohibited by law. If any provision hereof or
the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby. All provisions contained in
this Lease shall be binding upon, inure to the benefit of and be enforceable
by
the successors and assigns of Lessor to the same extent as if each such
successor and assign were named as a party hereto. All provisions contained
in
this Lease shall be binding upon the successors and assigns of Lessee and shall
inure to the benefit of and be enforceable by the permitted successors and
assigns of Lessee in each case to the same extent as if each successor and
assign were named as a party hereto. This Lease shall be governed by and
interpreted in accordance with the laws of the state in which the Premises
are
located.
Section
9.05 Table
of Contents and Headings; Internal References.
The
table of contents and the headings of the various paragraphs and exhibits of
this Lease have been inserted for reference only and shall not to any extent
have the effect of modifying the express terms and provisions of this Lease.
Unless stated to the contrary, any references to any Section, subsection,
Exhibit and the like contained herein are to the respective Section, subsection,
Exhibit and the like of this Lease.
Section
9.06 Counterparts.
This
Lease may be executed in two or more counterparts and shall be deemed to have
become effective when and only when one or more of such counterparts shall
have
been executed by or on behalf of each of the parties hereto (although it shall
not be necessary that any single counterpart be executed by or on behalf of
each
of the parties hereto, and all such counterparts shall be deemed to constitute
but one and the same instrument) and shall have been delivered by each of the
parties to the other.
-28-
Section
9.07 Lessor’s
Liability.
Notwithstanding anything to the contrary provided in this Lease, it is
specifically understood and agreed, such agreement being a primary consideration
for the execution of this Lease by Lessor, that there shall be absolutely no
personal liability on the part of any partner, director, member, officer or
shareholder of Lessor, its successors or assigns with respect to any of the
terms, covenants and conditions of this Lease, and any liability on the part
of
Lessor shall be limited solely to Lessor’s interest in the Premises, such
exculpation of liability to be absolute and without any exception
whatsoever.
Section
9.08 Amendments
and Modifications.
Except
as expressly provided herein, this Lease may not be modified or terminated
except by a writing signed by Lessor and Lessee.
Section
9.09 Additional
Rent.
All
amounts other than Basic Rent which Lessee is required to pay or discharge
pursuant to this Lease, including the charge provided for by
Section 7.03(e) hereof, shall constitute additional rent which shall
include, but not be limited to all reasonable costs and expenses of Lessee
and
Lessor which are incurred in connection or associated with (A) the use,
occupancy, possession, operation, condition, design, construction, maintenance,
alteration, repair or restoration of any of the Premises, (B) the performance
of
any of Lessee's obligations under this Lease, (C) the prosecution, defense
or
settlement of any litigation involving or arising from any of the Premises
or
this Lease, (D) the enforcement by Lessor, its successors and assigns, of any
of
its rights under this Lease, (E) any amendment to or modification of this Lease
made at the request of Lessee, (F) costs of Lessor's counsel incurred in
connection with any act undertaken by Lessor (or its counsel) at the request
of
Lessee, or incurred in connection with any act of Lessor performed on behalf
of
Lessee pursuant to this Lease.
Section
9.10 Consent
of Lessor.
Except
as specifically set forth in this Lease, all consents and approvals to be
granted by Lessor shall not be unreasonably withheld or delayed, and Lessee’s
sole remedy against Lessor for the failure to grant any consent shall be to
seek
injunctive relief. In no circumstance will Lessee be entitled to damages with
respect to the failure to grant any consent or approval.
Section
9.11 Quiet
Enjoyment.
Lessor
agrees that, subject to the rights of Lessor under this Lease, Lessee shall
hold
and enjoy the Premises during the term of this Lease, free from any hindrance
or
interference from Lessor or any party claiming by, through or under
Lessor.
Section
9.12 Holding
Over.
If
Lessee remains in possession of the Premises, or any part thereof, after the
expiration or other termination of the Term, without Lessor’s express written
consent, Lessee shall be guilty of an unlawful detention of the Premises and
shall be liable to Lessor for damages for use of the Premises during the period
of such unlawful detention at a rate equal to 1.5 times the Basic Rent and
all
other amounts which would be payable during the Term hereof (collectively,
“Holdover Rent”), plus any consequential damages suffered by Lessor. In the
event of such unlawful detention, Lessee shall indemnify and hold Lessor
harmless from and against any and all claims, suits, proceedings, losses,
damages, liabilities, costs and expenses, including, without limitation,
attorneys’ fees and disbursements, asserted against or incurred by Lessor, as a
result of such unlawful detention. Notwithstanding the foregoing, Lessor shall
be entitled to such other remedies and damages provided under this Lease or
at
law or in equity.
-29-
Section
9.13 Compliance
with Terrorism Laws.
Lessee
represents and warrants that to its knowledge, neither Lessee nor any Person
controlling Lessee (i) is included on any Government List (as hereinafter
defined); (ii) has been determined by competent authority to be subject to
the
prohibitions contained in Presidential Executive Order No. 133224 (September
23,
2001) or in any enabling or implementing legislation or other Presidential
Executive Orders in respect thereof; (iii) has been previously indicted for
or
convicted of any felony involving a crime or crimes of moral turpitude or for
any offense under the criminal laws against terrorists, the criminal laws
against money laundering, the Bank Secrecy Act, as amended, the Money Laundering
Control Act of 1986, as amended, or the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorists (USA
PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended;
(iv)
is currently under investigation by any governmental authority for alleged
criminal activity; or (v) has a reputation in the community for criminal or
unethical behavior. For purposes of this Lease, the term “Government List” means
(1) the Specialty Designated Nationals and Blocked Persons Lists maintained
by
the Office of Foreign Assets Control, United States Department of the Treasury
(“OFAC”), (2) the Denied Persons List and the Entity List maintained by the
United States Department of Commerce, (3) the List of Terrorists and List of
Disbarred Parties maintained by the United States Department of State, (4)
any
other list of terrorists, terrorist organizations or narcotics traffickers
maintained pursuant to any of the lists, laws, rules and regulations maintained
by OFAC pursuant to any authorizing statute, Executive Order or regulation,
(5)
any other similar list maintained by the United States Department of State,
the
United States Department of Commerce or any other governmental authority or
pursuant to any Executive Order of the President of the United States of America
and (6) any list or qualification of “Designated Nationals” as defined in the
Cuban Assets Control Regulations, 31 C.F.R. Part 515, as all such Government
Lists may be updated from time to time.
Section
9.14 Financing
and Subordination, Non-Disturbance and Attornment. Notwithstanding
anything to the contrary in this Lease, this Lease and Lessee's interest
hereunder shall be subject, subordinate and inferior to any mortgage or other
security instrument granted or entered into by Lessor in connection with the
loan by which Lessor acquired the Premises from Lessee, and any mortgage or
other security instrument hereafter placed upon the Premises by Lessor, and
to
any and all advances made or to be made thereunder, to the interest thereon,
and
all renewals, replacements and extensions thereof, provided that any such
mortgage (or a separate non-disturbance agreement entered into between Lessee
and the Mortgagee in whose favor such mortgage was granted) shall provide for
the recognition of this Lease and all Lessee's rights hereunder unless and
until
an Event of Default.
If
Lessor desires to obtain or refinance any loan, Lessee shall execute any and
all
documents that such Mortgagee reasonably requires in connection with such
financing, so long as the same do not materially adversely affect any right,
benefit or privilege of Lessee under this Lease or materially increase Lessee's
obligations under this Lease.
-30-
Section
9.15 Disclaimer
of Purchase Rights.
Except
for the limited rights of Lessee to acquire title to the Premises in accordance
with the provisions of Section 6.02(b) hereof, nothing in this Lease is intended
or shall operate to grant to Lessee any right of first refusal, right of first
offer, purchase option, or similar right to elect to purchase or acquire the
Premises or any portion thereof, and Lessee hereby expressly waives any and
all
such rights.
Section
9.16 Security
Deposit.
(a) For
its
full and faithful performance of the terms of this Lease, Lessee will deposit
or
cause to be deposited with Lessor or Mortgagee, as Lessor shall designate,
on or
before the date hereof, Five Hundred Twenty-Eight Thousand Nine Hundred and
00/100 Dollars ($528,900.00) as a "Security Deposit," it being expressly
understood that such Security Deposit shall not be considered an advance payment
of any Basic Rent, additional rent or other sums payable under this Lease or
a
measure of Lessor's damages in case of an Event of Default.
(b) Payment
of said Security Deposit shall be satisfied by Lessee’s deposit of cash or a
Letter of Credit in said amount. Lessee shall have the right to freely
substitute cash for a Letter of Credit or vice versa, and if paid in cash,
any
interest earned shall remain as an additional Security Deposit. If Lessor
transfers its interest in the Premises during the Term to a transferee who
assumes Lessor's obligations hereunder and to whom the Security Deposit is
transferred, Lessor may assign the Security Deposit to the transferee and,
thereafter, Lessor shall have no further liability for the return of such
Security Deposit to Lessee. For the purposes herein, “Letter of Credit” shall
mean an irrevocable standby letter of credit issued to Lessor by a financially
sound national banking association or state chartered bank having assets in
excess of $50,000,000,000 and otherwise reasonably acceptable to Lessor, the
proceeds of which shall be available to Lessor without the need for Lessor
to
satisfy any requirements or conditions whatsoever other than delivery of (a)
the
original Letter of Credit along with Lessor’s sight draft to the issuing
institution with reference to the appropriate letter of credit number for the
Letter of Credit, as set forth therein and (b) (i) a certificate signed by
Lessor certifying that an Event of Default has occurred and is continuing under
the Lease, or (ii) a certificate signed by Lessor certifying that Lessee has
failed to renew the Letter of Credit at least thirty (30) days prior to its
stated expiration date. The Letter of Credit shall be valid for an initial
period of one (1) year from and after the date of its issuance and, by its
express terms, shall provide (i) that its term shall automatically be extended
for successive one (1) year periods unless at least thirty (30) days prior
to
the expiration of the initial one year term or any one year extension (as
applicable) the issuer provides Lessor with written notification that it will
not be extended, and (ii) that Lessor may assign (whether by way of outright
or
collateral assignment) all or any portion of its interest in the Letter of
Credit to Mortgagee or any other person (including, without limitation, any
third party purchaser).
(c) Upon
the
date Lessee files its 10K report for fiscal year 2007, and upon each subsequent
filing of its 10K report thereafter, if according to such 10K report, Lessee
then has (i) a Tangible Net Worth of at least $20 million and (ii) $10 million
of EBITDA, then Lessor shall release $88,500.00 of the Security Deposit each
year Lessee meets such criteria. For the purposes of this Lease, “Tangible Net
Worth” shall mean at any date Lessee's total stockholders' equity as shown on
Lessee’s most recent form 10-K, less any amount reported as goodwill, all as
determined in accordance with GAAP. EBITDA shall mean earnings before the
deduction of interest expenses, taxes, depreciation and amortization. This
potential annual reduction of the Security Deposit will continue so long as
there is no prior uncured Event of Default and until such time that the Security
Deposit is reduced to $264,450. If at any time Lessee is not a publicly traded
company, then Tangible Net Worth and EBITDA shall be determined based on
Lessee’s most recent audited annual financial reports.
-31-
Section
9.17 Intentionally
Deleted.
Section
9.18 Intentionally
Deleted.
Section
9.19 Short
Form Memorandum of Lease.
Upon
Lessor’s or Lessee’s request, the parties shall record a “short form” Memorandum
of Lease identifying the Term granted to Lessee by this Lease, and any other
terms to which the parties may agree. Any recording costs associated with the
memorandum or short form of this Lease shall be borne by Lessee. Upon the
expiration or earlier termination of this Lease, Lessee shall promptly execute
and deliver to Lessor an instrument, in recordable form, wherein Lessee
acknowledges the expiration or earlier termination of this Lease. Upon transfer
or conveyance of the Premises by Lessor, Lessee agrees to execute an amendment
to the memorandum indicating the change of Lessor.
Section
9.20 Intentionally
Deleted.
Section
9.21 Brokers.
Lessor
and Lessee mutually represent and warrant to each other that it dealt with
no
real estate brokers in the transactions contemplated by this Lease, and that
no
brokerage fees, commissions, or other remuneration of any kind are due in
connection herewith. Lessor shall forever indemnify and hold harmless Lessee
against and in respect of any and all claims, losses, liabilities and expenses,
including, without limitation, reasonable attorney’s fees and court costs, which
Lessee may incur on account of any claim by any broker or agent or other person
on the basis of any arrangements or agreements made or alleged to have been
made
by or on behalf of Lessor in respect to the transactions herein contemplated.
Lessee shall forever indemnify and hold harmless Lessor against and in respect
of any and all claims, losses, liabilities and expenses, including, without
limitation, reasonable attorney’s fees and court costs, which Lessor may incur
on account of any claim by any broker or agent or other person on the basis
of
any arrangements or agreements made or alleged to have been made by or on behalf
of Lessee in respect to the transactions herein contemplated. The provisions
of
this Section shall survive expiration or termination of this Lease.
Section
9.22 Waiver
of Jury Trial.
Lessor
and Lessee each hereby expressly, irrevocably, fully and forever release, waive
and relinquish any and all right to trial by jury.
Section
9.23 No
Partnership. Nothing
herein contained shall be deemed or construed either by the parties hereto,
or
by a third party, to create a relationship between the parties of principal
and
agent, partnership, or joint venture. None of computation of rent, or any other
provision contained herein, or any acts of the parties hereto, shall be deemed
to create any relationship between the parties hereto other than the
relationship of landlord and tenant.
-32-
Section
9.24 No
Construction Against Drafter.
Each of
the parties hereto acknowledges that it is sophisticated and experienced in
transactions of the nature contemplated hereby and that it has been represented
by counsel of its choosing in connection herewith; accordingly, each party
hereto waives to the fullest extent permitted by law the application of any
law
or rule of construction requiring that this Lease be construed or interpreted
against the drafting party or in favor of the non-drafting party.
Section
9.25 Security Interest and Security Agreement.
This
Lease shall also create a security interest in, and Lessee hereby grants to
Lessor a security interest in, all sums on deposit with Lessor (or Lessor’s
Mortgagee, as applicable) pursuant to the provisions of this Lease, including,
but not limited to, the Tax Escrow Payments, the Insurance Escrow Payments,
and
the Security Deposit (said funds and accounts are hereinafter referred to
collectively as the “Collateral”).
This
Lease constitutes a security agreement between Lessee and Lessor with respect
to
the Collateral in which Lessor is granted a security interest hereunder, and,
cumulative of all other rights and remedies of Lessor hereunder, Lessor shall
have all of the rights and remedies of a secured party under the Uniform
Commercial Code. “Uniform Commercial Code” means the Uniform Commercial Code as
now or hereafter in effect in the state where the Premises is located; provided
that, in the event that, by reason of mandatory provisions of law, any or all
of
the attachment, perfection or priority of, or remedies with respect to, the
Lessor's security interest in any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than such
state, the term “Uniform Commercial Code” shall mean the Uniform Commercial Code
as enacted and in effect in such other jurisdiction solely for purposes of
the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions. Lessee hereby agrees
to execute and deliver on demand and hereby irrevocably constitutes and appoints
Lessor the attorney-in-fact of Lessee to execute and deliver and, if
appropriate, to file with the appropriate filing officer or office such security
agreements, financing statements, continuation statements or other instruments
as Lessor may request or require in order to impose, perfect or continue the
perfection of the lien or security interest created hereby. Lessee hereby
authorizes Lessor at any time and from time to time to file any initial
financing statements, amendments thereto and continuation statements with or
without the signature of Lessee as authorized by applicable law, as applicable
to all or part of the Collateral. For purposes of such filings, Lessee agrees
to
furnish any information requested by the Lessor promptly upon request therefor
by Lessor. Lessee also ratifies its authorization for the Lessor to have filed
any like initial financing statements, amendments thereto or continuation
statements, if filed prior to the date of this Lease. Lessee agrees to furnish
Lessor with notice of any change in the name, identity, organizational
structure, residence, state of incorporation, state of organization or state
of
formation or principal place of business or mailing address of Lessee within
ten
(10) days of the effective date of any such change. Upon the occurrence of
any
Event of Default, Lessor shall have the rights and remedies as prescribed in
this Lease, or as prescribed by general law, or as prescribed by any applicable
Uniform Commercial Code, all at Lessor’s election.
Section
9.26 Radon
Gas Disclosure.
Florida
Statutes 404.056(5) requires the following statement: Radon is a naturally
occurring radioactive gas that, when it has accumulated in a building in
sufficient quantities, may present health risks to persons who are exposed
to it
over time. Levels of radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional information regarding radon and radon
testing may be obtained from your county health department.
-33-
IN
WITNESS WHEREOF, the parties hereto have caused this Lease to be executed as
of
the date first above written.
| LESSOR: | ||
|
NL
VENTURES V PLANT CITY, L.P.
|
||
| |
|
|
| By: | NL
Ventures V Plant City Management,
L.L.C.,
its
sole General Partner
|
|
| By: | ||
|
Name:
Xxxxx X. Xxxxxxx
|
||
| Title: President | ||
| LESSEE: | ||
|
MODTECH
HOLDINGS, INC., a Delaware corporation |
||
| |
|
|
| By: | ||
|
Name:
|
||
|
Title:
|
||
|
|
||
EXHIBIT
A
LEGAL
DESCRIPTION OF LAND
EXHIBIT
B
PERMITTED
EXCEPTIONS
EXHIBIT
C
BASIC
RENT SCHEDULE
The
annual Basic Rent for the first Lease Year of the Term shall be $491,160.00.
The
Basic
Rent shall increase annually by 3.0% for the second Lease Year through the
twentieth Lease Year. Basic Rent (in U.S. dollars) is payable as shown
below:
|
Lease
Year
|
Dates
|
Annual
Rent
|
Monthly
Rent
|
|||
|
1
|
November
1, 2006 through October 31, 2007
|
491,160.00
|
40,930.00
|
|||
|
2
|
November
1, 2007 through October 31, 2008
|
505,894.80
|
42,157.90
|
|||
|
3
|
November
1, 2008 through October 31, 2009
|
521,071.64
|
43,422.64
|
|||
|
4
|
November
1, 2009 through October 31, 2010
|
536,703.79
|
44,725.32
|
|||
|
5
|
November
1, 2010 through October 31, 2011
|
552,804.91
|
46,067.08
|
|||
|
6
|
November
1, 2011 through October 31, 2012
|
569,389.05
|
47,449.09
|
|||
|
7
|
November
1, 2012 through October 31, 2013
|
586,470.73
|
48,872.56
|
|||
|
8
|
November
1, 2013 through October 31, 2014
|
604,064.85
|
50,338.74
|
|||
|
9
|
November
1, 2014 through October 31, 2015
|
622,186.79
|
51,848.90
|
|||
|
10
|
November
1, 2015 through October 31, 2016
|
640,852.40
|
53,404.37
|
|||
|
11
|
November
1, 2016 through October 31, 2017
|
660,077.97
|
55,006.50
|
|||
|
12
|
November
1, 2017 through October 31, 2018
|
679,880.31
|
56,656.69
|
|||
|
13
|
November
1, 2018 through October 31, 2019
|
700,276.72
|
58,356.39
|
|||
|
14
|
November
1, 2019 through October 31, 2020
|
721,285.02
|
60,107.08
|
|||
|
15
|
November
1, 2020 through October 31, 2021
|
742,923.57
|
61,910.30
|
|||
|
16
|
November
1, 2021 through October 31, 2022
|
765,211.28
|
63,767.61
|
|||
|
17
|
November
1, 2022 through October 31, 2023
|
788,167.61
|
65,680.63
|
|||
|
18
|
November
1, 2023 through October 31, 2024
|
811,812.64
|
67,651.05
|
|||
|
19
|
November
1, 2024 through October 31, 2025
|
836,167.02
|
69,680.59
|
|||
|
20
|
November
1, 2025 through October 31, 2026
|
861,252.03
|
71,771.00
|
The
Basic
Rent shall increase annually by 3.0% for any Extended Term and is payable as
shown below:
|
Lease
Year
|
Dates
|
Annual
Rent
|
Monthly
Rent
|
|||
|
21
|
November
1, 2026 through October 31, 2027
|
887,089.59
|
73,924.13
|
|||
|
22
|
November
1, 2027 through October 31, 2028
|
913,702.28
|
76,141.86
|
|||
|
23
|
November
1, 2028 through October 31, 2029
|
941,113.35
|
78,426.11
|
|||
|
24
|
November
1, 2029 through October 31, 2030
|
969,346.75
|
80,778.90
|
|||
|
25
|
November
1, 2030 through October 31, 2031
|
998,427.15
|
83,202.26
|
|
Lease
Year
|
Dates
|
Annual
Rent
|
Monthly
Rent
|
|||
|
26
|
November
1, 2031 through October 31, 2032
|
1,028,379.97
|
85,698.33
|
|||
|
27
|
November
1, 2032 through October 31, 2033
|
1,059,231.37
|
88,269.28
|
|||
|
28
|
November
1, 2033 through October 31, 2034
|
1,091,008.31
|
90,917.36
|
|||
|
29
|
November
1, 2034 through October 31, 2035
|
1,123,738.56
|
93,644.88
|
|||
|
30
|
November
1, 2035 through October 31, 2036
|
1,157,450.71
|
96,454.23
|
EXHIBIT
D
SEVERABLE
PROPERTY
Severable
Property shall include all apparatus, personal property, trade fixtures,
inventory, equipment, machinery, fittings, furniture, furnishings, chattel,
materials and supplies located on and used in, or related to Lessee’s business,
including, but not limited to, existing cranes, mainframe computers, kitchen
equipment and telephone and similar systems and articles of personal property
of
every kind and nature whatsoever, and any additions, replacements, accessions
and substitutions thereto or therefor, and all proceeds of all of the foregoing,
and all personal property set forth in the table consisting of seven (7) pages
attached to this Exhibit D.
Severable
Property shall not
include
the Improvements.
EXHIBIT
E
IMMEDIATE
REPAIRS
EXHIBIT
F
LANDLORD’S
WAIVER AND CONSENT
THIS
LANDLORD’S WAIVER AND CONSENT
(“Waiver
and Consent”)
is
made and entered into as of this _____ day __________, 2006 by and between
NL
VENTURES V PLANT CITY, L.P., a
Texas
limited partnership (“Landlord”),
and
LAURUS
MASTER FUND, LTD.,
a
Cayman Islands company (“Laurus”).
A. Landlord
is the owner of the real properly commonly known as 0000 Xxxxxxxxxx Xxxx Xx.,
Xxxxx Xxxx, Xxxxxxx 00000, and particularly described in the Lease described
below (the “Premises”).
B. Landlord
has entered into that certain Lease Agreement, attached hereto as Exhibit
A,
dated
of even date herewith (together with all amendments and modifications thereto
and waivers thereof, the “Lease”)
with
Modtech Holdings, Inc., a Delaware corporation (“Company”),
with
respect to the Premises.
C. Laurus
has entered into a Security Agreement (the “Security
Agreement”)
with
Company and certain of Company’s affiliates, and to secure the obligations
arising under such Security Agreement, Company has granted to Laurus a security
interest in and lien upon certain assets of Company, including, without
limitation, all of Company’s cash, cash equivalents, goods, inventory,
machinery, equipment, and furniture and trade fixtures (such as equipment bolted
to floors), together with all additions, substitutions, replacements and
improvements to, and proceeds of, the foregoing, but excluding
any of
the items listed on Exhibit
B
attached
hereto (collectively, the “Collateral”).
NOW,
THEREFORE,
in
consideration of any financial accommodations extended by Laurus to Company
and/or its affiliates at any time, and other good and valuable consideration
the
receipt and sufficiency of which is hereby acknowledged, the parties agree
as
follows:
1. Landlord
acknowledges that (a) the Lease is in full force and effect and (b) Landlord
is
not aware of any existing default under the Lease.
2. Landlord
will use its best efforts to provide Laurus with written notice of any default
by Company under the Lease resulting in termination of the Lease (a
“Default
Notice”).
Laurus shall have at least fifteen (15) days following receipt of such Default
Notice to cure such default, but Laurus shall not be under any obligation to
cure any default by Company under the Lease. No action by Laurus pursuant to
this Waiver and Consent shall be deemed to be an assumption by Laurus of any
obligation under the Lease, and, except as provided in paragraphs 6 and 7 below,
Laurus shall not have any obligation to Landlord.
3. Landlord
acknowledges the validity of Laurus’ lien on the Collateral and, until such time
as the obligations of Company to Laurus are indefeasibly paid in full, Landlord
subordinates to Laurus any interest in the Collateral, and Landlord agrees
not
to distrain or levy upon any Collateral or to assert any landlord lien, right
of
distraint or other claim against the Collateral for any reason.
4. Prior
to
receipt of a Default Notice, Laurus or its representatives or invitees may,
with
reasonable notice to Landlord (provided that such notice shall not be required
in the event Laurus reasonably believes such access is necessary to preserve
or
protect the Collateral), enter upon the Premises at any time without any
interference by Landlord to inspect or remove any or all of the Collateral,
including, without limitation, by public auction or private sale pursuant to
the
provisions of paragraph 7 below.
5. Upon
receipt of a Default Notice, Landlord will permit Laurus and its representatives
and invitees to occupy and remain on the Premises; provided,
that
(a) such period of occupation (the “Disposition
Period”)
shall
not exceed ninety (90) days following receipt by Laurus of a Default Notice
or
if the Lease has expired by its own terms (absent a default thereunder) up
to
thirty (30) days following such expiration; (b) for the actual period of
occupancy by Laurus, Laurus will pay to Landlord the rent, utilities and taxes
due under the Lease, pro-rated on a per diem basis determined on a 30-day month,
and shall provide Landlord with a certificate of insurance naming Landlord
as an
additional insured covering property damage and personal injury arising on
the
Premises from such removals by Laurus of any Collateral therefrom; and (c)
such
amounts paid by Laurus to Landlord shall exclude any rent adjustments, indemnity
payments or similar amounts for which the Company remains liable under the
Lease
for default, holdover status or other similar charges. If any injunction or
stay
is issued that prohibits Laurus from removing the Collateral, the commencement
of the Disposition Period will be deferred (or, if the Disposition Period has
started, it will stop) until such injunction or stay is lifted or removed with
respect to Laurus. Notwithstanding the foregoing sentence, Laurus shall be
obligated to pay the items set forth in (b) above during the Disposition Period
(and any deferment or postponement of same) unless both Laurus is stayed from
removing the Collateral and Landlord is stayed from re-letting the Premises.
If
Laurus fails to remove the Collateral by the end of the Disposition Period,
then
Landlord shall have the right to remove there from any Collateral remaining
on
the Premises at the end of the Disposition Period and to store such Collateral
at Laurus’s cost and expense unless and until Laurus shall notify Landlord in
writing of Laurus’s abandonment of such Collateral. If Laurus delivers such a
written notice of abandonment of such Collateral to Landlord, then such
Collateral shall be deemed abandoned by Laurus and Landlord shall be entitled,
though not obligated, to dispose of the Collateral in any manner it sees fit
with no compensation or liability whatsoever to Laurus or Company.
6. During
any Disposition Period, (a) Laurus and its representatives and invitees may
inspect, repossess, remove and otherwise deal with the Collateral, and Laurus
may advertise and conduct public auctions or private sales of the Collateral
at
the Premises, in each case without interference by Landlord or liability of
Laurus to Landlord, so long as Laurus fulfills its obligations hereunder; and
(b) Laurus shall make the Premises available for inspection by Landlord and
prospective tenants and shall cooperate in Landlord’s reasonable efforts to
re-lease the Premises. If Laurus conducts a public auction or private sale
of
the Collateral at the Premises, Laurus shall use reasonable efforts to notify
Landlord first and to hold such auction or sale in a manner which would not
unduly disrupt Landlord’s or any other tenant’s use of the
Premises.
7. Laurus
shall promptly repair, at Laurus’ expense, or reimburse Landlord for any
physical damage to the Premises actually caused by the conduct of such auction
or sale and any removal of Collateral by or through Laurus (ordinary wear and
tear excluded). Laurus shall not be liable for any diminution in value of the
Premises caused by the absence of Collateral removed, and Laurus shall not
have
any duty or obligation to remove or dispose of any Collateral or any other
property left on the Premises by Company.
8. All
notices hereunder shall be in writing, sent by certified mail, return receipt
requested or by telecopy with verified receipt, to the respective parties at
the
addresses set forth on the signature page hereto or at such other address as
the
receiving party shall designate in writing.
9. This
Waiver and Consent may be executed in any number of several counterparts, shall
be governed and controlled by, and interpreted under, the laws of the State
of
New York, and shall inure to the benefit of Laurus and its successors and
assigns and shall be binding upon Landlord and its successors amid assigns
(including any transferees of the Premises).
[Signature
Page to Follow]
IN
WITNESS WHEREOF, this Landlord’s Waiver and Consent is entered into as of the
date first set forth above.
| “LANDLORD” | ||
|
NL
VENTURES V PLANT CITY, L.P.,
a
Texas limited partnership
|
||
| |
|
|
| By: |
NL
Ventures V Plant City Management,
L.L.C.,
a Texas limited liability company,
its
sole General Partner
|
|
| By: | ||
|
Name: Xxxxx X. Xxxxxxx
Title: President
|
||
| Address: c/o AIC Ventures | ||
|
0000
X. Xxxxxxx Xxxxxxxxxx
Xxxxx
0000
Xxxxxx,
Xxxxx 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
|
||
| “LAURUS” | ||
| LAURUS MASTER FUND, LTD. | ||
| |
|
|
| By: | ||
|
Name: |
||
|
Title:
|
||
|
Address: c/o
Laurus Capital Management, LLC
|
||
|
000
Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxx, Esq.
|
||
|
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
|
||
EXHIBIT
A
LEASE
(see
attached)
EXHIBIT
B
EXCLUDED
PROPERTY
All
of
the following, to the extent situated on the Premises or used (or useful) in
the
operation, maintenance or repair of the Premises: gas and electric fixtures,
appliances and wiring; boilers, water chillers (for heating, ventilating and
air
conditioning), elevators, escalators, incinerators, motors, dynamos, heating
and
air conditioning equipment; mechanical and air handling equipment; lighting
fixtures; doors and door frames; sinks, water closets, basins, pipes, electrical
systems, faucets, fire prevention and extinguishing apparatus; central music
and
public address systems; burglar alarms, security systems and surveillance
equipment; shades, awnings, screens and window blinds; rugs, carpets and other
floor coverings; drapes and curtains; and décor equipment.
