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EXHIBIT 10.3
BT (PA) QRS 12-25, INC.
C/O W.P. XXXXX & CO., INC.
00 XXXXXXXXXXX XXXXX
XXXXXX XXXXX
XXX XXXX, XX 00000
April 10, 1997
The Bon-Ton Department Stores, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxx, XX 00000
Re: Lease Agreement, dated as of April 10, 1997,
between BT (PA) QRS 12-25, Inc. and The
Bon-Ton Department Stores, Inc.(the "Lease")
--------------------------------------------
Gentlemen:
This letter will confirm that under Paragraph 31 of the Lease Agreement
of even date between the undersigned, as landlord, and The Bon-Ton Department
Stores, Inc., as Tenant, Tenant shall not be required to pay a mortgage
commitment fee or "points" in excess of the lesser of 1% of the principal amount
of the loan and $69,000.
Very truly yours,
BT (PA) QRS 12-25, INC.
By: _________________________________
Title: Second Vice President
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LEASE AGREEMENT
by and between
BT (PA) QRS 12-25, INC.,
a Pennsylvania corporation
as LANDLORD
and
THE BON-TON DEPARTMENT STORES, INC.,
a Pennsylvania corporation,
as TENANT
Premises: Allentown, Pennsylvania
Johnstown, Pennsylvania
Dated as of: April 10, 1997
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TABLE OF CONTENTS
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Page
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Parties............................................... 1
1. Demise of Premises.................................... 1
2. Certain Definitions................................... 1
3. Title and Condition................................... 11
4. Use of Leased Premises; Quiet Enjoyment............... 13
5. Term ................................................. 14
6. Basic Rent............................................ 15
7. Additional Rent....................................... 15
8. Net Lease; Non-Terminability.......................... 17
9. Payment of Impositions ............................... 18
10. Compliance with Law; Environmental Matters............ 20
11. Liens; Recording and Title............................ 22
12. Maintenance and Repair................................ 23
13. Alterations and Improvements.......................... 24
14. Permitted Contests.................................... 25
15. Indemnification....................................... 26
16. Insurance............................................. 28
17. Casualty and Condemnation............................. 32
18. Termination Events.................................... 34
19. Restoration; Reduction of Rent........................ 36
20. Procedures Upon Purchase.............................. 38
21. Assignment and Subletting; Prohibition
against Leasehold Financing........................... 39
22. Events of Default..................................... 43
23. Remedies and Damages Upon Default..................... 46
24. Notices............................................... 50
25. Estoppel Certificate.................................. 51
26. Surrender............................................. 52
27. No Merger of Title.................................... 53
28. Books and Records..................................... 53
29. Determination of Value................................ 54
30. Non-Recourse as to Landlord........................... 56
31. Financing............................................. 57
32. Subordination......................................... 57
33. Financial Covenants................................... 58
34. Tax Treatment; Reporting.............................. 58
35. Right of First Refusal................................ 58
36. Sale of Related Premises by Landlord.................. 60
37. Substitution and Exchange of Premises................. 61
38. Release of Excess Land................................ 63
39. Miscellaneous......................................... 63
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EXHIBITS
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Exhibit "A-1" - Premises
Exhibit "A-2" - Excess Land
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Acquisition Costs
Exhibit "F" - Percentage Allocation of Basic Rent
Exhibit "G" - Financial Covenants
Exhibit "H" - Termination Values
Exhibit "I" - Post Closing Environmental and Land Use
Compliance Obligations
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LEASE AGREEMENT, made as of this 10th day of April, 1997, between BT
(PA) QRS 12-25, INC., a Pennsylvania corporation ("Landlord"), with an address
c/o W.P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania corporation
("Tenant"), with an address at 0000 X. Xxxxxx Xxxxxx, Xxxx, Xxxxxxxxxxxx 00000.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets to
Tenant, and Tenant hereby takes and leases from Landlord, for the term and upon
the provisions hereinafter specified, the following described property
(hereinafter referred to collectively as the "Leased Premises" and individually
as the "Allentown Premises", a distribution facility containing approximately
325,000 square feet, and the "Johnstown Premises", a retail facility containing
approximately 80,884 square feet, each of which premises is more particularly
described in the applicable description in Exhibit "A-1" attached hereto and
made a part hereof and shall include the portions of items (a), (b) and (c) of
this Paragraph 1 located thereon or therein and appertaining thereto): (a) the
premises described in Exhibit "A-1" hereto, together with the Appurtenances
(collectively, the "Land"); (b) the buildings, structures and other improvements
now or hereafter constructed on the Land (collectively, the "Improvements"); and
(c) the fixtures, machinery, equipment and other property described in Exhibit
"B" hereto (collectively, the "Equipment").
2. Certain Definitions.
"Acquisition Cost" of each of the Related Premises shall mean
the amount set forth opposite such premises on Exhibit "E" hereto.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways,
curbs, gores and vault spaces adjoining any of the Leased Premises.
"Affected Premises" shall mean the Affected Premises as
defined in Paragraph 18.
"Alterations" shall mean all changes, additions, improvements
or repairs to, all alterations, reconstructions, renewals, replacements or
removals of and all substitutions or
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replacements for any of the Improvements or Equipment, both interior and
exterior, structural and non-structural, and ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land, including (a)
easements over other lands granted by any Easement Agreement and (b) any
streets, ways, alleys, vaults, gores or strips of land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases
from Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Payment Dates" shall mean the Basic Rent Payment
Dates as defined in Paragraph 6.
"Casualty" shall mean any injury to or death of any person or
any loss of or damage to any property (including the Leased Premises) included
within or related to the Leased Premises or arising from the Adjoining Property.
"Commencement Date" shall mean Commencement Date as defined in
Paragraph 5.
"Complete Assignment" shall mean Complete Assignment as
defined in Paragraph 21(a).
"Condemnation" shall mean a Taking and/or a Requisition.
"Condemnation Notice" shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Costs" of a Person or associated with a specified transaction
shall mean all reasonable costs and expenses incurred by such Person or
associated with such transaction (exclusive of any internal costs of such
Person), including without limitation, attorneys' fees and expenses, court
costs, brokerage fees, escrow fees, title insurance premiums, mortgage
commitment fees, mortgage points, recording fees and transfer taxes, as the
circumstances require.
"Covenants" shall mean the covenants and agreements described
on Exhibit "G".
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"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"Default Rate" shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect either of the Related
Premises.
"Environmental Law" shall mean (i) whenever enacted or
promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity, (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous Condition
or Hazardous Activity, in each case as amended and as now or hereafter in
effect, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations or
injuries or damages due to or threatened as a result of the presence of,
exposure to, or ingestion of, any Hazardous Substance. The term Environmental
Law includes, without limitation, the federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act, the federal Clean
Air Act, the federal Clean Water Act, the federal Resources Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to
RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance Control
Act, the federal Insecticide, Fungicide and Rodenticide Act, the federal
Occupational Safety and Health Act of 1970, the federal National Environmental
Policy Act and the federal Hazardous Materials Transportation Act, each as
amended and as now or hereafter in effect and any similar state or local Law.
"Environmental Violation" shall mean (a) any direct or
indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or within either Related Premises, or
from either Related Premises to the environment, in violation of any
Environmental Law or in excess of any reportable quantity
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established under any Environmental Law or which could result in any liability
to Landlord, Tenant or Lender for the costs of any removal or remedial action or
natural resources damage or for bodily injury or property damage, (b) any
deposit, storage, dumping, placement or use of any Hazardous Substance at, upon,
under or within the Leased Premises or which extends from the Leased Premises to
any Adjoining Property in violation of any Environmental Law or in excess of any
reportable quantity established under any Environmental Law or which could
result in any liability to Landlord, Tenant or Lender for the costs of any
removal or remedial action or natural resources damage or for bodily injury or
property damage, (c) the abandonment or discarding of any barrels, containers or
other receptacles containing any Hazardous Substances in violation of any
Environmental Laws, (d) any activity, occurrence or condition which could result
in any liability, cost or expense to Landlord or Lender or any other owner or
occupier of the Leased Premises, or which could result in a creation of a lien
on any Related Premises under any Environmental Law or (e) any violation of or
noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in
Paragraph 1.
"Event of Default" shall mean an Event of Default as defined
in Paragraph 22(a).
"Excess Land" shall mean Excess Land as described in
Exhibit "A-2".
"Exchange Premises" shall mean Exchange Premises as defined in
Paragraph 37.
"Fair Market Value" shall mean (a) with respect to a
determination of Fair Market Value under Paragraph 21(a) the fair market value
of the Leased Premises or either Related Premises, as the case may be, as of the
Relevant Date as affected and encumbered by this Lease and (b) with respect to a
determination of Fair Market Value under Paragraph 37 the fair market value of
the Exchange Premises as of the Relevant Date as if unaffected and unencumbered
by this Lease (value in use and value in exchange). For all purposes of this
Lease, Fair Market Value shall be determined in accordance with the procedure
specified in Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair
Market Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately
available funds which at the time of payment are
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legal tender for the payment of public and private debts in the United States of
America.
"Guarantor" shall mean The Bon-Ton Stores, Inc., a
Pennsylvania corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement
dated as of the date hereof from Guarantor to Landlord guaranteeing the payment
and performance by Tenant of all of Tenant's obligations under the Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release, seepage, spill, leak, flow, discharge or emission of any
Hazardous Substance into the environment (including the air, ground water,
watercourses or water systems), (iii) involves the containment or storage of any
Hazardous Substance; or (iv) would cause any of the Leased Premises or any
portion thereof to become a hazardous waste treatment, recycling, reclamation,
processing, storage or disposal facility within the meaning of any Environmental
Law.
"Hazardous Condition" means any condition which would support
any claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material,
product, petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance supporting a claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead,
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in
Paragraph 15.
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"Initial Term" shall mean the Initial Term as defined in
Paragraph 5(a).
"Insurance Requirements" shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
"Intended Assignment Offer" shall mean Intended Assignment
Offer as defined in Paragraph 21(a).
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Bifurcation" shall mean Lease Bifurcation as defined in
Paragraph 21(a).
"Lease Year" shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at midnight on the
last day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all
present and future Laws (including but not limited to Environmental Laws) and
all covenants, restrictions and conditions now or hereafter of record which may
be applicable to Tenant or to either Related Premises, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
restoration of either Related Premises, even if compliance therewith
necessitates structural changes or improvements or results in interference with
the use or enjoyment of either Related Premises.
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note.
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"Loan" shall mean any loan made by one or more Lenders to
Landlord, which loan is secured by a Mortgage and an Assignment and evidenced by
a Note.
"Monetary Obligations" shall mean Rent and all other sums
payable by Tenant under this Lease to Landlord, to any third party on behalf of
Landlord or to any Indemnitee.
"Mortgage" shall mean any first mortgage or deed of trust from
Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable to
Landlord or Lender by reason of a Condemnation whether pursuant to a judgment or
by agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i), (ii) (to the extent payable to Landlord or Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any expenses incurred by
Landlord and Lender in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Offer Amount" shall mean the greater of Fair Market Value or
the sum of the Acquisition Cost and any applicable Prepayment Premium.
"Partial Assignment" shall mean Partial Assignment as defined
in Paragraph 21(a).
"Partial Casualty" shall mean any Casualty which does not
constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does
not constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment, listed on Exhibit "C"
hereto (but such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Prepayment Premium" shall mean any payment (other than a
payment of principal and/or interest which Landlord is required to make under a
Note or a Mortgage) by reason of any
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prepayment by Landlord of any principal due under a Note or Mortgage, and which
may be (in lieu of such prepayment premium or prepayment penalty) a "make whole"
clause requiring a prepayment premium in an amount sufficient to compensate the
Lender for the loss of the benefit of the Loan due to prepayment.
"Present Value" of any amount shall mean such amount
discounted by a rate per annum which is the lower of (a) the Prime Rate at the
time such present value is determined or (b) seven and one-half percent (7.5%)
per annum.
"Prime Rate" shall mean the interest rate per annum as
published, from time to time, in The Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The Prime Rate may not be the lowest rate of
interest charged by any "large U.S. money center commercial banks" and Landlord
makes no representations or warranties to that effect. In the event The Wall
Street Journal ceases publication or ceases to publish the "Prime Rate" as
described above, the Prime Rate shall be the average per annum discount rate
(the "Discount Rate") on ninety-one (91) day bills ("Treasury Bills") issued
from time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Related Premises" shall mean any one of the Allentown
Premises and Johnstown Premises.
"Relevant Amount" shall mean the Termination Amount or the
Offer Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to
the date on which Tenant makes the Intended Assignment Offer and (b) the date on
which Tenant and Landlord commence to determine the Fair Market Value of the
Exchange Premises under Paragraph 37(a) hereof.
"Remaining Premises" shall mean the Related Premises which are
not Affected Premises under Paragraph 18 or Assignment Premises under
Paragraph 21.
"Renewal Date" shall mean Renewal Date as defined in
Paragraph 5(b).
"Rent" shall mean, collectively, Basic Rent and Additional
Rent.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
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"State" shall mean the Commonwealth of Pennsylvania.
"Surviving Obligations" shall mean any obligations of Tenant
under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all or a
portion of any of the Leased Premises (i) in or by condemnation or other eminent
domain proceedings pursuant to any Law, general or special, or (ii) by reason of
any agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding, or (iii) by any other means, or
(b) any de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the law applicable to the applicable Related Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the sum of the applicable
Termination Value and any Prepayment Premium which Landlord will be required to
pay in prepaying any Loan with proceeds of the Termination Amount.
"Termination Date" shall mean the Termination Date as defined
in Paragraph 18.
"Termination Event" shall mean a Termination Event as defined
in Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined
in Paragraph 18(a).
"Termination Value" shall mean the Termination Value specified
in Exhibit "H" hereto for the applicable Lease Year.
"Third Party Purchaser" shall mean the Third Party Purchaser
as defined in Paragraph 21(f).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to
(i) the rights of any Persons in possession of the Leased Premises, (ii) the
existing state of title of any of the Leased Premises, including any Permitted
Encumbrances, (iii) any state of facts which an accurate survey or physical
inspection of the Leased Premises might show, (iv) all Legal Requirements,
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including any existing violation of any thereof, and (v) the condition of the
Leased Premises as of the commencement of the Term, without representation or
warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises are in
good condition and repair at the inception of this Lease. LANDLORD LEASES AND
WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS
FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION OR (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE; AND ALL RISKS INCIDENT THERETO ARE TO BE
BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS
SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN
INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR
PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has
examined the title to the Leased Premises prior to the execution and delivery of
this Lease and has found the same to be satisfactory for the purposes
contemplated hereby. Tenant acknowledges that (i) fee simple title (both legal
and equitable) to the Leased Premises is in Landlord and, except as provided in
Paragraph 35 hereof with respect to certain rights of refusal to purchase the
Leased Premises, that Tenant has only the leasehold right of possession and use
of the Leased Premises as provided herein, (ii) this Lease is a single Lease for
multiple properties and shall not be terminable with respect to less than all of
the Leased Premises or severable with respect to any one or more Related
Premises except as specifically provided herein, (iii) the Improvements conform
to all material Legal Requirements and all Insurance Requirements, (iv) all
easements necessary or appropriate for the use or operation of the Leased
Premises have been obtained, (v) all contractors and subcontractors who have
performed work on or supplied materials to the Leased Premises have been fully
paid to the extent required by their respective
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contracts, and all materials and supplies have been fully paid for, (vi) the
Improvements have been fully completed in all material respects and are of a
quality equal to comparable properties operated by Tenant, and (vii) all
Equipment necessary or appropriate for the use or operation of the Leased
Premises has been installed and is presently fully operative in all material
respects.
(d) Landlord hereby assigns to Tenant, without recourse
or warranty whatsoever, all warranties, guaranties, indemnities and similar
rights which Landlord may have against any manufacturer, seller, engineer,
contractor or builder in respect of any of the Leased Premises. Such assignment
shall remain in effect until an Event of Default occurs or until the expiration
or earlier termination of this Lease, whereupon such assignment shall cease and
all of said warranties, guaranties, indemnities and other rights shall
automatically revert to Landlord.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Allentown Premises for
distribution, assembly, warehousing, retail and light manufacturing and the
Johnstown Premises for a retail facility and for no other purpose without the
prior written consent of Landlord, which shall not be unreasonably withheld.
Tenant shall not use or occupy or permit any of the Leased Premises to be used
or occupied, nor do or permit anything to be done in or on any of the Leased
Premises, in a manner which would or might (i) violate any Law or Legal
Requirement, (ii) make void or voidable or cause any insurer to cancel any
insurance required by this Lease, or make it difficult or impossible to obtain
any such insurance at commercially reasonable rates, (iii) cause structural
injury to any of the Improvements or (iv) constitute a public or private
nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event
of Default has occurred and is continuing, Tenant shall quietly hold, occupy and
enjoy the Leased Premises throughout the Term, without any hindrance, ejection
or molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may enter upon and examine any of
the Leased Premises at such reasonable times as Landlord may select and upon
reasonable notice to Tenant (except in the case of any emergency, in which event
no notice shall be required) for the purpose of inspecting the Leased Premises,
verifying compliance or non-compliance by Tenant with its obligations hereunder
and the existence or non-existence of an Event of Default or event which with
the passage of time and/or notice would constitute an Event of Default, showing
the Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof.
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5. Term.
(a) Subject to the provisions hereof, Tenant shall have
and hold the Leased Premises for an initial term (the "Initial Term" and the
Initial Term, as extended or renewed in accordance with the provisions hereof,
being called the "Term") commencing on the date hereof (the "Commencement Date")
and ending on the last day of the two hundred fortieth (240th) calendar month
next following the date hereof (the "Expiration Date").
(b) Provided that if, on or prior to the Expiration Date
or any other Renewal Date (as hereinafter defined) this Lease shall not have
been terminated pursuant to any provision hereof, then on the Expiration Date
and on the fifth (5th), tenth (10th), fifteenth (15th), twentieth (20th) and
twenty-fifth (25th) anniversaries of the Expiration Date (the Expiration Date
and each such anniversary being a "Renewal Date"), the Term shall be deemed to
have been automatically extended for an additional period of five (5) years with
respect to both of the Allentown Premises and the Johnstown Premises, unless
Tenant shall notify Landlord in writing at least twelve (12) months prior to the
next Renewal Date that Tenant is terminating this Lease as of the next Renewal
Date with respect to either one or both of the Allentown Premises and the
Johnstown Premises. Unless Landlord receives any such notification Tenant shall,
if requested by Landlord, and upon notice to Tenant, execute a document in
recordable form evidencing the extension of the Term with respect to one or both
of the Allentown Premises or Johnstown Premises, as applicable. Any such
extension of the Term shall be subject to all of the provisions of this Lease,
as the same may be amended, supplemented or modified; provided, however, if the
Term is extended with respect to one but not both Related Premises, the Lease
shall, as of the applicable Renewal Date, terminate as to the Related Premises
for which the Term was not extended, and shall continue in effect only with
respect to the Related Premises for which the Term is extended.
(c) If Tenant exercises its option pursuant to Paragraph
5(b) not to have the Term automatically extended, or if an Event of Default
occurs, then Landlord shall have the right during the remainder of the Term then
in effect and, in any event, Landlord shall have the right during the last year
of the Term, to (i) advertise the availability of any of the Leased Premises for
sale or reletting and to erect upon the Allentown Premises signs indicating such
availability and (ii) show any of the Leased Premises to prospective purchasers
or tenants or their agents at such reasonable times as Landlord may select.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for
the Leased Premises during the Term, the amounts determined in accordance with
Exhibit "D" hereto ("Basic Rent"),
17
commencing on the first day of May, 1997, and continuing on the first day of
each August, November, February and May thereafter during the Term (each such
day being a "Basic Rent Payment Date"). Each such rental payment shall be made,
at Landlord's sole discretion, (a) to Landlord at its address set forth above
and/or to such other Persons, at such addresses and in such proportions as
Landlord may direct by fifteen (15) days' prior written notice to Tenant (in
which event Tenant shall give Landlord notice of each such payment concurrent
with the making thereof and provided Landlord shall not change the address to
which payments shall be sent and/or the payee more than twice in any Lease
Year), and (b) by a check hand delivered at least three (3) business days before
or mailed at least five (5) days before the applicable Basic Rent Payment Date,
or in Federal Funds. Pro rata Basic Rent for the period from the date hereof
through the last day of the month hereof shall be paid on the date hereof.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
(i) except as otherwise specifically provided
herein, all costs and expenses of Tenant, Landlord and any other Persons
specifically referenced herein which are incurred in connection or associated
with (A) the ownership, use, non-use, occupancy, possession, operation,
condition, design, construction, maintenance, alteration, repair or restoration
of any of the Leased Premises, (B) the performance of any of Tenant's
obligations under this Lease, (C) any sale or other transfer of any of the
Leased Premises to Tenant under this Lease, (D) any Condemnation proceedings,
(E) the adjustment, settlement or compromise of any insurance claims involving
or arising from any of the Leased Premises, (F) the prosecution, defense or
settlement of any litigation involving or arising from any of the Leased
Premises, this Lease, or the sale of the Leased Premises by Tenant to Landlord,
(G) the exercise or enforcement by Landlord, its successors and assigns, of any
of its rights under this Lease, (H) any amendment to or modification or
termination of this Lease made at the request of Tenant or any Complete
Assignment or Partial Assignment (and Lease Bifurcation and Loan bifurcation in
connection therewith), (I) Costs of Landlord's counsel incurred in connection
with the preparation, negotiation and execution of this Lease, or incurred in
connection with any act undertaken by Landlord (or its counsel) at the request
of Tenant, or incurred in connection with any act of Landlord performed on
behalf of Tenant, and (J) any other items specifically required to be paid by
Tenant under this Lease;
(ii) after the date all or any portion of any
installment of Basic Rent is due and not paid, an amount equal to five percent
(5%) of the amount of such unpaid
18
installment or portion thereof ("Late Charge"); provided, however, that with
respect to the first late payment of all or any portion of any installment of
Basic Rent in any Lease Year, the Late Charge shall not be due and payable
unless the Basic Rent has not been paid within two (2) days following notice
from Landlord that such payment or portion thereof has not been received;
(iii) a sum equal to any additional sums (including
any late charge, default penalties, interest and fees of Lender's counsel) which
are payable by Landlord to any Lender under any Note by reason of Tenant's late
payment or non-payment of Basic Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "Default Rate") of
five percent (5%) over the Prime Rate per annum on the following sums until paid
in full: (A) all overdue installments of Basic Rent from the respective due
dates thereof, (B) all overdue amounts of Additional Rent relating to
obligations which Landlord shall have paid on behalf of Tenant, from the date of
payment thereof by Landlord, and (C) all other overdue amounts of Additional
Rent, from the date when any such amount becomes overdue.
(b) Tenant shall pay and discharge (i) any Additional
Rent referred to in Paragraph 7(a)(i) when the same shall become due, provided
that amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within five (5) days after Landlord's demand for payment thereof,
and (ii) any other Additional Rent, within five (5) days after Landlord's demand
for payment thereof.
(c) In no event shall amounts payable under Paragraph
7(a)(ii), (iii) and (iv) exceed the maximum amount permitted by applicable Law.
8. Net Lease; Non-Terminability.
(a) This is a net lease and all Monetary Obligations
shall be paid without notice or demand and without set-off, counterclaim,
recoupment, abatement, suspension, deferment, diminution, deduction, reduction
or defense (collectively, a "Set-Off").
(b) Except as otherwise expressly provided herein, this
Lease and the rights of Landlord and the obligations of Tenant hereunder shall
not be affected by any event or for any reason, including the following: (i) any
damage to or theft, loss or destruction of any of the Leased Premises, (ii) any
Condemnation, (iii) Tenant's acquisition of ownership of any of the Leased
Premises other than pursuant to an express provision of this Lease, (iv) any
default on the part of Landlord hereunder or under any Note, Mortgage,
Assignment or any other agreement,
19
(v) any latent or other defect in any of the Leased Premises, (vi) the breach of
any warranty of any seller or manufacturer of any of the Equipment, (vii) any
violation of Paragraph 4(b) or any other provision of this Lease by Landlord,
(viii) the bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution or winding-up of, or other proceeding affecting
Landlord, (ix) the exercise of any remedy, including foreclosure, under any
Mortgage or Assignment, (x) any action with respect to this Lease (including the
disaffirmance hereof) which may be taken by Landlord, any trustee, receiver or
liquidator of Landlord or any court under the Federal Bankruptcy Code or
otherwise, (xi) any interference with Tenant's use of the Leased Premises, (xii)
market or economic changes or (xiii) any other cause, whether similar or
dissimilar to the foregoing, any present or future Law to the contrary
notwithstanding.
(c) The obligations of Tenant hereunder shall be separate
and independent covenants and agreements, all Monetary Obligations shall
continue to be payable in all events (or, in lieu thereof, Tenant shall pay
amounts equal thereto), and the obligations of Tenant hereunder shall continue
unaffected unless the requirement to pay or perform the same shall have been
terminated pursuant to an express provision of this Lease. All Rent payable by
Tenant hereunder shall constitute "rent" for all purposes (including Section
502(b)(6) of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant
shall have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal property,
franchise, sales and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all assessments and
levies, all permit, inspection and license fees, all rents and charges for
water, sewer, utility and communication services relating to any of the Leased
Premises, all ground rents and all other public charges whether of a like or
different nature, even if unforeseen or extraordinary, imposed upon or assessed
against (i) Tenant, (ii) Tenant's possessory interest in the Leased Premises,
(iii) any of the Leased Premises, (iv) Landlord as a result of or arising in
respect of the acquisition, ownership, occupancy, leasing, use, possession or
sale of any of the Leased Premises, any activity conducted on any of the Leased
Premises, or the Rent, or (v) any Lender by reason of any Note, Mortgage,
Assignment or other document evidencing or securing a Loan and which (as to this
clause (v)) are normal and customary and Landlord has agreed to pay
(collectively, the "Impositions"); provided, that nothing
20
herein shall obligate Tenant to pay (A) income, excess profits or other taxes of
Landlord (or Lender) which are determined on the basis of Landlord's (or
Lender's) net income or net worth (unless such taxes are in lieu of or a
substitute for any other tax, assessment or other charge upon or with respect to
the Leased Premises which, if it were in effect, would be payable by Tenant
under the provisions hereof or by the terms of such tax, assessment or other
charge), (B) any estate, inheritance, succession, gift or similar tax imposed on
Landlord, (C) any capital gains tax imposed on Landlord in connection with the
sale of the Leased Premises or either Related Premises to any Person or (D) any
transfer tax imposed on Landlord in connection with the sale of the Leased
Premises or either Related Premises to any Person except for a sale to Tenant or
its assignee or designee. If any Imposition may be paid in installments without
interest or penalty, Tenant shall have the option to pay such Imposition in
installments; in such event, Tenant shall be liable only for those installments
which accrue or become due and payable during the Term. Tenant shall prepare and
file all tax reports required by governmental authorities which relate to the
Impositions. Tenant shall deliver to Landlord receipts for payment of all taxes
required to be paid by Tenant hereunder within forty-five (45) days after the
due date thereof and within ten (10) days after written request from Landlord
copies of all settlements and notices pertaining to the Impositions which may be
issued by any governmental authority and receipts for payment of all other
Impositions. In no event shall Tenant have any obligation to pay Impositions
applicable to a period extending beyond the expiration of the Term.
(b) Landlord shall have the right if required by the
terms of any Mortgage and, in any event, during the occurrence of an Event of
Default to require Tenant to pay to Landlord an additional monthly sum (each an
"Escrow Payment") sufficient to pay the Escrow Charges (as hereinafter defined)
as they become due. As used herein, "Escrow Charges" shall mean real estate
taxes on the Leased Premises or payments in lieu thereof and premiums on any
insurance required by this Lease. Landlord shall determine the amount of the
Escrow Charges and of each Escrow Payment. The Escrow Payments may be commingled
with other funds of Landlord or other Persons and no interest thereon shall be
due or payable to Tenant. Landlord shall apply the Escrow Payments to the
payment of the Escrow Charges in such order or priority as required by law or
any Lender. If at any time the Escrow Payments theretofore paid to Landlord
shall be insufficient for the payment of the Escrow Charges, Tenant, within ten
(10) days after Landlord's demand therefor, shall pay the amount of the
deficiency to Landlord.
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10. Compliance with Laws and Easement Agreements; Environmental
Matters.
(a) Tenant shall, at its expense, comply with and conform
to, and cause any other Person occupying any part of the Leased Premises to
comply with and conform to, all Insurance Requirements and Legal Requirements
(including all applicable Environmental Laws). Tenant shall not at any time (i)
cause, permit or suffer to occur any Environmental Violation or (ii) permit any
sublessee, assignee or other Person occupying the Leased Premises under or
through Tenant to cause, permit or suffer to occur any Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all
times promptly and faithfully (i) abide by, discharge and perform all of the
covenants, conditions and agreements contained in any Easement Agreement on the
part of Landlord or the occupier to be kept and performed thereunder and (ii)
enforce the obligations of any other Persons under any Easement Agreement.
Tenant will not alter, modify, amend or terminate any Easement Agreement, give
any consent or approval thereunder, or enter into any new Easement Agreement
without, in each case, prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed provided, however, as to the Johnstown
Premises no such consent of Landlord shall be required unless the alteration,
modification or amendment shall (i) reduce the required parking ratio at the
Johnstown Premises, (ii) impair vehicular or pedestrian access to or visibility
of the Johnstown Premises, (iii) permit in the shopping center in which the
Johnstown Premises are located construction of additional improvements
containing 75,000 square feet or more of floor area in excess of the floor area
permitted under the Easement Agreement prior to such alteration, modification or
amendment or (iv) otherwise adversely impact the value of the Johnstown Premises
for its intended use. It is further agreed that Landlord's consent shall not be
required to the entry by Tenant into any new Easement Agreement so long as such
Easement Agreement is terminable at any time by Landlord upon not more than
ninety (90) days notice.
(c) Upon prior written notice from Landlord, Tenant shall
permit such persons as Landlord may designate ("Site Reviewers") to visit the
Leased Premises and perform environmental site investigations and assessments
("Site Assessments") on the Leased Premises for the purpose of determining
whether there exists on the Leased Premises any Environmental Violation or any
condition which could result in any Environmental Violation. Such Site
Assessments may include both above and below the ground testing for
Environmental Violations and such other tests as may be necessary, in the
opinion of the Site Reviewers, to conduct the Site Assessments. Tenant shall
supply to the Site Reviewers such historical and operational information
regarding the Leased Premises as may be
22
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
Site Assessments shall be paid by Tenant if such Site Assessment shall disclose
an Environmental Violation; otherwise the cost shall be paid by Landlord and
shall not be Additional Rent.
(d) If an Environmental Violation occurs or is found to
exist and, in Landlord's reasonable judgment, the cost of remediation of the
same is likely to exceed $100,000, Tenant shall provide to Landlord, within
thirty (30) days after Landlord's request therefor, adequate financial
assurances that Tenant will effect such remediation in accordance with
applicable Environmental Laws. Such financial assurances shall be a bond or
letter of credit satisfactory to Landlord in form and substance and in an amount
equal to or greater than Landlord's reasonable estimate, based upon a Site
Assessment performed pursuant to Paragraph 10(c), of the anticipated cost of
such remedial action.
(e) Notwithstanding any other provision of this Lease,
if an Environmental Violation occurs or is found to exist and the Term would
otherwise terminate or expire, then, at the option of Landlord, the Term shall
be automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation which occurs or
is found to exist, Landlord shall have the right (but no obligation) to take any
and all actions as Landlord shall deem necessary or advisable in order to cure
such Environmental Violation.
(g) Tenant shall notify Landlord immediately after
becoming aware of any Environmental Violation (or alleged Environmental
Violation) or noncompliance with any of the covenants contained in this
Paragraph 10 and shall forward to Landlord immediately upon receipt thereof
copies of all orders, reports, notices, permits, applications or other
communications relating to any such violation or noncompliance.
(h) All future leases, subleases or concession agreements
relating to the Allentown Premises entered into by Tenant shall contain
covenants of the other party thereto which are similar to the covenants of
Tenant contained in subparagraphs (a) and (g) of this Paragraph 10.
23
(i) Tenant shall have performed or cause to be performed
the post closing obligations described in Exhibit "I" attached hereto and made a
part hereof.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or
permit to be created or to remain and shall promptly discharge or remove any
lien, levy or encumbrance on any of the Leased Premises or on any Rent or any
other sums payable by Tenant under this Lease, other than any Mortgage or
Assignment, the Permitted Encumbrances and any mortgage, lien, encumbrance or
other charge created by or resulting solely from any act or omission of
Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED
PREMISES. LANDLORD MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES
REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or
register (collectively, "record") all such instruments as may be required or
permitted by any present or future Law in order to evidence the respective
interests of Landlord and Tenant in any of the Leased Premises, and shall cause
a memorandum of this Lease (or, if such a memorandum cannot be recorded, this
Lease), and any supplement hereto or thereto, to be recorded in such manner and
in such places as may be required or permitted by any present or future Law in
order to protect the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain or cause to be
maintained each Related Premises and the Adjoining Property in as good repair
and appearance as each is in on the date hereof and fit to be used for their
intended use in accordance with the better of the practices generally recognized
as then acceptable by other companies in its industry or observed by Tenant with
respect to similar properties in comparable retail environments that are owned
or operated by it, and, in the case of the Equipment, in as good mechanical
condition as it was on the later of the date hereof or the date of its
installation, except for ordinary wear and tear. Tenant shall take every other
action reasonably necessary or appropriate for the preservation and safety of
each Related Premises. Tenant shall promptly make all Alterations of every kind
and nature, whether foreseen or unforeseen, which may be required to comply with
the foregoing requirements of this Paragraph 12(a). Landlord shall not be
required to make any Alteration, whether foreseen or unforeseen,
24
or to maintain any of the Related Premises or Adjoining Property in any way, and
Tenant hereby expressly waives any right which may be provided for in any Law
now or hereafter in effect to make Alterations at the expense of Landlord or to
require Landlord to make Alterations. Any Alteration made by Tenant pursuant to
this Paragraph 12 shall be made in conformity with the provisions of
Paragraph 13.
(b) If any Improvement, now or hereafter constructed,
shall (i) encroach upon any setback or any property, street or right-of-way
adjoining any of the Leased Premises, (ii) violate the provisions of any
restrictive covenant affecting any of the Leased Premises, (iii) hinder or
obstruct any easement or right-of-way to which any of the Leased Premises is
subject or (iv) impair the rights of others in, to or under any of the
foregoing, Tenant shall, promptly after receiving notice or otherwise acquiring
knowledge thereof, either (A) obtain from all necessary parties waivers or
settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, hindrance, obstruction or impairment, whether the same
shall affect Landlord, Tenant or both, or (B) take such action as shall be
reasonably necessary to remove all such encroachments, hindrances or
obstructions and to end all such violations or impairments, including, if
necessary, making Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained
the prior written consent of Landlord and Lender, to make (i) Alterations or a
series of related Alterations that, as to any such Alterations or series of
related Alterations, do not cost in excess of $250,000 in any Lease Year with
respect to either of the Related Premises and (ii) to install Equipment in the
Improvements or accessions to the Equipment that, as to such Equipment or
accessions, do not cost in excess of $250,000 as to either of the Related
Premises in any Lease Year, so long as at the time of construction or
installation of any such Equipment or Alterations no Event of Default exists and
the value and utility of the Leased Premises is not diminished thereby. If the
cost of any Alterations or series of related Alterations as to either of the
Related Premises in any Lease Year or if the Equipment or accessions thereto
installed in either of the Related Premises in any Lease Year is in excess of
$250,000, the prior written approval of Landlord and Lender shall be required,
such approval not to be unreasonably withheld, delayed or conditioned. Tenant
shall not construct upon the Land any additional buildings without having first
obtained the prior written consent of Landlord and Lender, which approval shall
not be unreasonably withheld or delayed.
(b) If Tenant makes any Alterations pursuant to this
Paragraph 13 or as required by Paragraph 12 or 17 (such Alterations and actions
being hereinafter collectively referred
25
to as "Work"), then (i) the market value of the Leased Premises shall not be
lessened by any such Work or its usefulness impaired, (ii) all such Work shall
be performed by Tenant in a good and workmanlike manner, (iii) all such Work
shall be expeditiously completed in compliance with all Legal Requirements, (iv)
all such Work shall comply with the requirements of all insurance policies
required to be maintained by Tenant hereunder, (v) if any such Work involves the
replacement of Equipment or parts thereto, all replacement Equipment or parts
shall have (A) a value in use equivalent to the greater of (1) the value in use
on the date hereof of the Equipment being replaced immediately prior to the
occurrence of the event which required its replacement (assuming such Replaced
Equipment was then in the condition required by this Lease) or (2) the value in
use on the date hereof of the Equipment being replaced and (B) where appropriate
a useful life equal to the greater of the useful life on the date hereof of the
Equipment being replaced or the useful life of the Equipment being replaced
immediately prior to the occurrence of the event which required its replacement
(assuming such Replaced Equipment was then in the condition required by this
Lease), (vi) Tenant shall promptly discharge or remove all liens filed against
any of the Leased Premises arising out of such Work, (vii) Tenant shall procure
and pay for all permits and licenses required in connection with any such Work,
(viii) all such Work shall be the property of Landlord and shall be subject to
this Lease, and Tenant shall execute and deliver to Landlord any document
requested by Landlord evidencing the assignment to Landlord of all estate,
right, title and interest (other than the leasehold estate created hereby) of
Tenant or any other Person thereto or therein, and (ix) Tenant shall comply, to
the extent required by this Lease, with the provisions of Paragraphs 12(a) and
19(a), whether or not such Work involves restoration of the Leased Premises.
14. Permitted Contests. Notwithstanding any other provision of
this Lease, Tenant shall not be required to (a) pay any Imposition, (b)
discharge or remove any lien referred to in Paragraph 11 or 13 or (c) take any
action with respect to any encroachment, violation, hindrance, obstruction or
impairment referred to in Paragraph 12(b) (such non-compliance with the terms
hereof being hereinafter referred to collectively as "Permitted Violations"), so
long as at the time of such non-compliance no Event of Default exists and so
long as Tenant shall contest, in good faith, the existence, amount or validity
thereof, the amount of the damages caused thereby, or the extent of its or
Landlord's liability therefor by appropriate proceedings which shall operate
during the pendency thereof to prevent or stay (i) the collection of, or other
realization upon, the Permitted Violation so contested, (ii) the sale,
forfeiture or loss of any of the Leased Premises or any Rent to satisfy or to
pay any damages caused by any Permitted Violation, (iii) any interference with
the use or occupancy of any of the Leased Premises, (iv) any interference with
the payment of any Rent, or
26
(v) the cancellation or increase in the rate of any insurance policy or a
statement by the carrier that coverage will be denied. Tenant shall provide
Landlord security which is satisfactory, in Landlord's reasonable judgment, to
assure that such Permitted Violation is corrected, including all Costs, interest
and penalties that may be incurred or become due in connection therewith. While
any proceedings which comply with the requirements of this Paragraph 14 are
pending and the required security is held by Landlord, Landlord shall not have
the right to correct any Permitted Violation thereby being contested unless
Landlord is required by law to correct such Permitted Violation and Tenant's
contest does not prevent or stay such requirement as to Landlord. Each such
contest shall be promptly and diligently prosecuted by Tenant to a final
conclusion, except that Tenant, so long as the conditions of this Paragraph 14
are at all times complied with, has the right to attempt to settle or compromise
such contest through negotiations. Tenant shall pay any and all losses,
judgments, decrees and Costs in connection with any such contest and shall,
promptly after the final determination of such contest, fully pay and discharge
the amounts which shall be levied, assessed, charged or imposed or be determined
to be payable therein or in connection therewith, together with all penalties,
fines, interest and Costs thereof or in connection therewith, and perform all
acts the performance of which shall be ordered or decreed as a result thereof.
No such contest shall subject Landlord to the risk of any civil or criminal
liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save
and hold harmless Landlord, Lender and all other Persons described in Paragraph
30 (each an "Indemnitee") from and against any and all liabilities, losses,
damages (including punitive damages), penalties, Costs (including attorneys'
fees and costs), causes of action, suits, claims, demands or judgments of any
nature whatsoever, howsoever caused, without regard to the form of action and
whether based on strict liability, gross negligence, negligence or any other
theory of recovery at law or in equity, arising from (i) any matter pertaining
to the acquisition (or the negotiations leading thereto), ownership, leasing,
use, non-use, occupancy, operation, management, condition, design, construction,
maintenance, repair or restoration of any of the Leased Premises or Adjoining
Property, (ii) any casualty in any manner arising from any of the Leased
Premises or Adjoining Property, whether or not Indemnitee has or should have
knowledge or notice of any defect or condition causing or contributing to said
casualty, (iii) any violation by Tenant of any provision of this Lease, any
contract or agreement to which Tenant is a party, any Legal Requirement or any
Permitted Encumbrance or any encumbrance Tenant consented to or (iv) any
alleged, threatened or actual Environmental Violation, including (A) liability
for response costs and for costs of
27
removal and remedial action incurred by the United States Government, any state
or local governmental unit or any other Person, or damages from injury to or
destruction or loss of natural resources, including the reasonable costs of
assessing such injury, destruction or loss, incurred pursuant to Section 107 of
CERCLA, or any successor section or act or provision of any similar state or
local Law, (B) liability for costs and expenses of abatement, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any of the other Environmental Laws and (C) liability for personal
injury or property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private nuisance
or for carrying on of a dangerous activity.
(b) In case any action or proceeding is brought against
any Indemnitee by reason of any such claim, (i) Tenant may, except in the event
of a conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord, at its sole cost and expense
which shall not be Additional Rent, may employ counsel of its choice to monitor
the defense of any such action) and (ii) such Indemnitee shall notify Tenant to
resist or defend such action or proceeding by retaining counsel reasonably
satisfactory to such Indemnitee, and such Indemnitee will cooperate and assist
in the defense of such action or proceeding if reasonably requested to do so by
Tenant. In the event of a conflict of interest or dispute or during the
continuance of an Event of Default, Landlord shall have the right to select
counsel, and the cost of such counsel shall be paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15
shall survive any termination, expiration or rejection in bankruptcy of this
Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or
in connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (to the extent that a Related Premises
is in a flood zone) and earthquake coverage in amounts not less than the actual
replacement cost of the Improvements and Equipment. Such policies shall contain
Replacement Cost and Agreed Amount Endorsements and shall contain deductibles
not more than $150,000 per occurrence.
(ii) Commercial General Liability Insurance
(including but not limited to Incidental Medical Malpractice and
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Host Liquor Liability if required) against claims for personal and bodily
injury, death or property damage occurring on, in or as a result of the use of
the Leased Premises, in an amount not less than $10,000,000 per
occurrence/annual aggregate and all other coverage extensions that are usual and
customary for properties of this size and type provided, however, that the
Landlord shall have the right to require such higher limits as may be reasonable
and customary for properties of this size and type.
(iii) Worker's compensation insurance covering all
persons employed by Tenant in connection with any work done on or about any of
the Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such Worker's Compensation Insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State
or States in which the Leased Premises are located.
(iv) Comprehensive Boiler and Machinery Insurance on
any of the Equipment or any other equipment on or in the Leased Premises in an
amount not less than $5,000,000 per accident for damage to property. Such
policies shall include at least $250,000 per accident for Off-Premises Service
Interruption, Expediting Expenses, Ammonia Contamination, and Hazardous
Materials Clean-up Expense and may contain a deductible not to exceed $150,000.
(v) Business Income/Extra Expense Insurance to
include loss of rents at limits sufficient to cover 100% of the annual rent
payable to Landlord with a period of indemnity not less than one year from time
of loss. Such insurance shall name Landlord as additional insured solely with
respect to Rent payable to or for the benefit of Landlord under this Lease
Agreement.
(vi) During any period in which substantial
Alterations at any Related Premises are being undertaken, builder's risk
insurance (which may be provided by the contractor performing the work) covering
the total completed value including any "soft costs" with respect to the
Improvements being altered or repaired (on a completed value, non-reporting
basis), replacement cost of work performed and equipment, supplies and materials
furnished in connection with such construction or repair of Improvements or
Equipment, together with such "soft cost" endorsements and such other
endorsements as Landlord may reasonably require and general liability, worker's
compensation and automobile liability insurance with respect to the Improvements
being constructed, altered or repaired.
(vii) Such other insurance (or other terms with
respect to any insurance required pursuant to this Paragraph
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16, including without limitation amounts of coverage, deductibles, form of
mortgagee clause) on or in connection with any of the Leased Premises as
Landlord or Lender may reasonably require, which at the time is usual and
commonly obtained in connection with properties similar in type of building
size, use and location to the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be
written by companies which have a Best's rating of A:X or above and are admitted
in, or approved to write insurance policies by, the State Insurance Department
for the states in which the Leased Premises are located. The insurance policies
shall be in amounts sufficient at all times to satisfy any coinsurance
requirements thereof. The insurance referred to in Paragraphs 16(a)(i),
16(a)(iv) and 16(a)(vi) shall name Tenant as insured and Landlord as Owner and
Lender as loss payee, each as its interest may appear. The insurance referred to
in Paragraph 16(a)(ii) shall name Landlord and Lender as additional insureds,
and the insurance referred to in Paragraph 16(a)(v) shall name Landlord as
additional insured and Lender and Landlord as loss payee, each as its interest
may appear. If said insurance or any part thereof shall expire, be withdrawn,
become void, voidable, unreliable or unsafe for any reason, including a breach
of any condition thereof by Tenant or the failure or impairment of the capital
of any insurer, Tenant shall immediately obtain new or additional insurance
reasonably satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i),
(iv), (v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and reasonably acceptable to Lender. Each policy
required by any provision of Paragraph 16(a), except clause (iii) thereof, shall
provide that it may not be cancelled except after thirty (30) days' prior notice
to Landlord and Lender. Each such policy shall also provide that any loss
otherwise payable thereunder to Landlord, Lender or any third Person shall be
payable notwithstanding (i) any act or omission of Tenant which might, absent
such provision, result in a forfeiture of all or a part of such insurance
payment, (ii) the occupation or use of any of the Leased Premises for purposes
more hazardous than those permitted by the provisions of such policy, (iii) any
foreclosure or other action or proceeding taken by Lender pursuant to any
provision of the Mortgage, Note, Assignment or other document evidencing or
securing the Loan upon the happening of an event of default therein or (iv) any
change in title to or ownership of any of the Leased Premises.
(d) Tenant shall pay as they become due all premiums for
the insurance required by Paragraph 16(a), shall renew or replace each policy
and, upon Landlord's request, deliver to Landlord evidence of the payment of the
full premium therefor or installment then due prior to the expiration date of
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such policy, and shall promptly deliver to Landlord original certificates of
insurance signed by an authorized representative of the applicable insurance
company.
(e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant, provided that such "blanket"
or umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16. Original Certificates of insurance for each such "blanket" or
umbrella policy signed by an authorized representative of the applicable
insurance company shall promptly be delivered to Landlord.
(f) Tenant shall have the replacement cost and insurable
value of the Improvements and Equipment determined from time to time as required
by the replacement cost and agreed amount endorsements and shall deliver to
Landlord the new replacement cost and agreed amount endorsement or certificate
evidencing such endorsement promptly upon Tenant's receipt thereof.
(g) Tenant shall promptly comply with and conform to
(i) all provisions of each insurance policy required by this Paragraph 16 and
(ii) all reasonable requirements of the insurers thereunder applicable to
Landlord, Tenant or any of the Leased Premises or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration or repair of any of
the Leased Premises, even if such compliance necessitates Alterations or results
in interference with the use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent
in form or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as additional
insureds, with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies therefor.
(i) All policies shall contain full waivers of
subrogation against the Landlord.
(j) All proceeds of any insurance required under
Paragraph 16(a) shall be payable as follows:
(i) Except for proceeds payable to a Person other
than Landlord, Tenant or Lender, all proceeds of insurance required under
clauses (ii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds attributable
to the general liability coverage
31
provisions of Builder's Risk insurance under clause (vi) of Paragraph 16(a)
shall be payable to Landlord or, if required by the Mortgage, to Lender, as
their interests may appear.
(ii) Proceeds of insurance required under clause (i)
of Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16(a) shall be payable by Landlord (or Lender) and applied as set forth in
Paragraph 17. Tenant shall apply the Net Award to restoration of the Leased
Premises in accordance with the applicable provisions of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty to either of the Related Premises
occurs, Tenant shall give Landlord and Lender immediate notice thereof. So long
as no Event of Default exists Tenant is hereby authorized to adjust, collect and
compromise all claims under any of the insurance policies required by Paragraph
16(a) (except public liability insurance claims payable to a Person other than
Tenant, Landlord or Lender) and to execute and deliver on behalf of Landlord all
necessary proofs of loss, receipts, vouchers and releases required by the
insurers and Landlord shall have the right to join with Tenant therein. Any
final adjustment, settlement or compromise of any such claim shall be subject to
the prior written approval of Landlord, which shall not be unreasonably withheld
or delayed, and Landlord shall have the right to prosecute or contest, or to
require Tenant to prosecute or contest, any such claim, adjustment, settlement
or compromise. If an Event of Default exists, Tenant shall not be entitled to
adjust, collect or compromise any such claim or to participate with Landlord in
any adjustment, collection and compromise of the Net Award payable in connection
with a Casualty. Tenant agrees to sign, upon the request of Landlord, all such
proofs of loss, receipts, vouchers and releases. Each insurer is hereby
authorized and directed to make payment under said policies, including return of
unearned premiums, directly to Landlord or, if required by the Mortgage, to
Lender instead of to Landlord and Tenant jointly, and Tenant hereby appoints
each of Landlord and Lender as Tenant's attorneys-in-fact to endorse any draft
therefor. The rights of Landlord under this Paragraph 17(a) shall be extended to
Lender if and to the extent that any Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation
Notice, shall notify Landlord and Lender thereof. So long as no Event of Default
exists, Tenant is authorized to collect, settle and compromise the amount of any
Net Award and Landlord shall have the right to join with Tenant therein. If an
Event of Default exists, Landlord shall be authorized to collect, settle and
compromise the amount of any Net Award and Tenant shall not be entitled to
participate with Landlord in any
32
Condemnation proceeding or negotiations under threat thereof or to contest the
Condemnation or the amount of the Net Award therefor. No agreement with any
condemnor in settlement or under threat of any Condemnation shall be made by
Tenant without the written consent of Landlord and Lender. Subject to the
provisions of this Paragraph 17(b), Tenant hereby irrevocably assigns to
Landlord any award or payment to which Tenant is or may be entitled by reason of
any Condemnation, whether the same shall be paid or payable for Tenant's
leasehold interest hereunder or otherwise; but nothing in this Lease shall
impair Tenant's right to any award or payment on account of Tenant's trade
fixtures, equipment or other tangible property which is not part of the
Equipment, moving expenses or loss of business, if available, to the extent that
and so long as (i) Tenant shall have the right to make, and does make, a
separate claim therefor against the condemnor and (ii) such claim does not in
any way reduce either the amount of the award otherwise payable to Landlord for
the Condemnation of Landlord's fee interest in the Leased Premises or the amount
of the award (if any) otherwise payable for the Condemnation of Tenant's
leasehold interest hereunder. The rights of Landlord under this Paragraph 17(b)
shall also be extended to Lender if and to the extent that any Mortgage so
provides.
(c) If any Partial Casualty (whether or not insured
against) or Partial Condemnation shall occur to any Related Premises, this Lease
shall continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary Obligations. Promptly after such Partial Casualty or
Partial Condemnation, Tenant, as required in Paragraph 12(a), shall commence and
diligently continue to restore the Leased Premises as nearly as possible to
their value, condition and character immediately prior to such event (assuming
the Leased Premises to have been in the condition required by this Lease). So
long as no Event of Default exists, any Net Award up to and including $250,000
shall be paid by Landlord to Tenant and Tenant shall restore the Leased Premises
in accordance with the requirements of Paragraph 13(b) of this Lease. Any Net
Award in excess of $250,000 shall (unless such Casualty resulting in the Net
Award is a Termination Event) be made available by Landlord (or Lender if the
terms of the Mortgage so require) to Tenant for the restoration of any of the
Leased Premises pursuant to and in accordance with and subject to the provisions
of Paragraph 19 hereof. If any Casualty or Condemnation which is not a Partial
Casualty or Partial Condemnation shall occur, Tenant shall comply with the terms
and conditions of Paragraph 18.
18. Termination Events.
(a) If (i) all of either Related Premises shall be taken
by a Taking or (ii) any substantial portion of either Related Premises shall be
taken by a Taking or all or any substantial portion of either Related Premises
shall be totally
33
damaged or destroyed by a Casualty and, in any such case, Tenant certifies and
covenants to Landlord that it will forever abandon operations at the Related
Premises, (any one or all of the Related Premises described in the above clauses
(i) and (ii) above being hereinafter referred to as the "Affected Premises" and
each of the events described in the above clauses (i) and (ii) shall hereinafter
be referred to as a "Termination Event"), then (x) in the case of (i) above,
Tenant shall be obligated, within thirty (30) days after Tenant receives a
Condemnation Notice and (y) in the case of (ii) above, Tenant shall have the
option, within sixty (60) days after Tenant receives a Condemnation Notice or
sixty (60) days after the Casualty, as the case may be, to give to Landlord
written notice (a "Termination Notice") of the Tenant's option to terminate this
Lease as to the Affected Premises in the form described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of
Tenant's intention to terminate this Lease as to the Affected Premises on the
first Basic Rent Payment Date which occurs at least ninety (90) days after the
date of the Termination Notice (the "Termination Date"), (ii) a binding and
irrevocable offer of Tenant to pay the Termination Amount and (iii) if the
Termination Event is an event described in Paragraph 18(a)(ii), the
certification and covenant described therein and a certified resolution of the
Board of Directors of Tenant authorizing the same.
(c) If Landlord shall reject such offer to terminate this
Lease as to the Affected Premises by written notice to Tenant (a "Rejection"),
which Rejection shall contain the written consent of Lender, not later than
thirty (30) days following the date on which Landlord receives the Termination
Notice, then this Lease shall terminate as to the Affected Premises on the
Termination Date; provided that, if Tenant has not satisfied all Monetary
Obligations and all other obligations and liabilities under this Lease which
have arisen as to the Affected Premises (collectively, "Remaining Obligations")
on or prior to the Termination Date, then Landlord may, at its option, extend
the date on which this Lease may terminate as to the Affected Premises to a date
which is no later than the first Basic Rent Payment Date after the Termination
Date on which Tenant has satisfied all Remaining Obligations. Upon such
termination (i) all obligations of Tenant hereunder as to the Affected Premises
shall terminate except for any Surviving Obligations, (ii) Tenant shall
immediately vacate and shall have no further right, title or interest in or to
any of the Affected Premises and (iii) the Net Award shall be retained by
Landlord. Notwithstanding anything to the contrary hereinabove contained, if
Tenant shall have received a Rejection and, on the date when this Lease would
otherwise terminate as provided above, if Tenant has not satisfied all Remaining
Obligations on such date, then Landlord may, at its option, extend the date on
which this Lease may terminate to a date which is no later than the first Basic
34
Rent Payment Date after such date on which Tenant has satisfied all such
Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not
later than the thirtieth (30th) day following the date of the Termination
Notice, Landlord shall be conclusively presumed to have accepted such offer. If
such offer is accepted by Landlord then, on the Termination Date, Tenant shall
pay to Landlord the Termination Amount and all Remaining Obligations and
Landlord shall convey to Tenant or its designee the Affected Premises or the
remaining portion thereof, if any, all in accordance with Paragraph 20, and
shall assign to Tenant (or pay over to Tenant) the Net Award.
(e) In the event of the termination of this Lease as to
the Affected Premises as hereinabove provided, this Lease shall remain in full
force and effect as to the Remaining Premises; provided, that the Basic Rent for
the Remaining Premises to be paid after such termination shall be the Basic Rent
otherwise payable hereunder with respect to the Leased Premises multiplied by
the percentage set forth on Exhibit "F" for the Remaining Premises.
19. Restoration.
(a) Landlord (or Lender if required by any Mortgage)
shall hold any Net Award in excess of $250,000 in a fund (the "Restoration
Fund") and disburse amounts from the Restoration Fund only in accordance with
the following conditions:
(i) prior to commencement of restoration, (A) the
architects, contracts, contractors, plans and specifications for the restoration
shall have been approved by Landlord, such approval not to be unreasonably
withheld, (B) Landlord and Lender shall be provided with acceptable performance
and payment bonds which insure satisfactory completion of and payment for the
restoration, are in an amount and form and have a surety acceptable to Landlord,
and name Landlord and Lender as additional dual obligees, and (C) appropriate
waivers of mechanics' and materialmen's liens shall have been filed;
(ii) at the time of any disbursement, no Event of
Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged or unbonded;
(iii) disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of completion
and
35
performance of the work to date in a good and workmanlike manner in accordance
with the contracts, plans and specifications, (B) waivers of liens, (C)
contractors' and subcontractors' sworn statements as to completed work and the
cost thereof for which payment is requested and (D) a satisfactory bringdown of
title insurance;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the applicable
requirements of this Lease;
(v) Landlord may retain ten percent (10%) of the
Restoration Fund until the restoration is fully completed;
(vi) the Restoration Fund shall not be commingled
with Landlord's other funds and shall bear interest at a rate agreed to by
Landlord and Tenant; and
(vii) such other reasonable conditions as Landlord
or Lender may impose.
(b) Prior to commencement of restoration and at any time
during restoration, if the estimated cost of completing the restoration work
free and clear of all liens, as determined by Landlord, exceeds the amount of
the Net Award available for such restoration, the amount of such excess shall,
upon demand by Landlord, be paid by Tenant to Landlord to be added to the
Restoration Fund. Any sum so added by Tenant which remains in the Restoration
Fund upon completion of restoration shall be refunded to Tenant. For purposes of
determining the source of funds with respect to the disposition of funds
remaining after the completion of restoration, the Net Award shall be deemed to
be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum (the "Remaining Sum") shall be retained by Landlord or, if
required by a Note or Mortgage, paid by Landlord to a Lender.
(d) Any Net Award not in excess of $250,000 shall be paid
over to Tenant by Landlord or Lender promptly upon receipt and shall be used by
Tenant to restore the applicable Related Premises in accordance with the
provisions of Paragraph 17(c).
36
20. Procedures Upon Purchase.
(a) If the Leased Premises or any of the Related Premises
are purchased by Tenant pursuant to any provision of this Lease, Landlord need
not convey any better title thereto than that which was conveyed to Landlord,
and Tenant or its designee shall accept such title, subject, however, to the
Permitted Encumbrances and to all other liens, exceptions and restrictions on,
against or relating to any of the Leased Premises or the applicable Related
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises or the applicable
Related Premises which have been created by or resulted solely from acts of
Landlord after the date of this Lease, unless the same are Permitted
Encumbrances or customary utility easements benefiting the Leased Premises or
were created with the concurrence of Tenant or as a result of a default by
Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the
Leased Premises or any of the Related Premises pursuant to any provision of this
Lease (any such date the "Purchase Date"), Tenant shall pay to Landlord, or to
any Person to whom Landlord directs payment, the Relevant Amount therefor
specified herein, in Federal Funds, less any credit of the Net Award received
and retained by Landlord or a Lender allowed against the Relevant Amount, and
Landlord shall deliver to Tenant (i) a special warranty deed which describes the
premises being conveyed and conveys the title thereto as provided in Paragraph
20(a), (ii) such other instruments as shall be necessary to transfer to Tenant
or its designee any other property (or rights to any Net Award not yet received
by Landlord or a Lender) then required to be sold by Landlord to Tenant pursuant
to this Lease and (iii) any Net Award received by Landlord, not credited to
Tenant against the Relevant Amount and required to be delivered by Landlord to
Tenant pursuant to this Lease; provided, that if any Monetary Obligations remain
outstanding on such date, then Landlord may deduct from the Net Award the amount
of such Monetary Obligations. If on the Purchase Date any Monetary Obligations
remain outstanding and no Net Award is payable to Tenant by Landlord or the
amount of such Net Award is less than the amount of the Monetary Obligations,
then Tenant shall pay to Landlord on the Purchase Date the amount of such
Monetary Obligations. Upon the completion of such purchase, this Lease and all
obligations and liabilities of Tenant hereunder with respect to the applicable
Related Premises (but not with respect to the Remaining Premises) shall
terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be delayed
after (i) the Termination Date, in the event of a purchase pursuant to Paragraph
18 or, (ii) the date scheduled for
37
such purchase, in the event of a purchase under any other provision of this
Lease then (x) Rent shall continue to be due and payable until completion of
such purchase and (y) at Landlord's sole option, Fair Market Value shall be
redetermined and the Relevant Amount payable by Tenant pursuant to the
applicable provision of this Lease shall be adjusted to reflect such
redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord
shall be prorated as of the Purchase Date, and the prorated unapplied balance
shall be deducted from the Relevant Amount due to Landlord; provided, that no
apportionment of any Impositions shall be made upon any such purchase.
21. Assignment and Subletting; Prohibition against Leasehold
Financing.
(a)(i) Except as specifically provided in this Paragraph 21
and subject to the terms hereof, Tenant shall not assign this Lease, voluntarily
or involuntarily, whether by operation of law or otherwise. Tenant shall have
the right, upon thirty (30) days prior written notice to Landlord and Lender,
with no consent of Landlord or Lender being required or necessary ("Preapproved
Assignment") (A) to assign this Lease either in its entirety ("Complete
Assignment") or (B) to cause Landlord to bifurcate this Lease into two leases
("Lease Bifurcation"), one for each Related Premises (each, a "Bifurcated
Lease"), provided that the Basic Rent under each such Bifurcated Lease shall be
allocated between each of the Related Premises as provided in Exhibit "F", and
to assign this Lease with respect to either Related Premises ("Partial
Assignment"), provided that any such Complete Assignment or Partial Assignment
is to a Person ("Preapproved Assignee"), that immediately following such
assignment has a publicly traded unsecured senior debt rating of "A" or better
from Xxxxx'x Investors Services, Inc. or a rating of "A" or better from Standard
& Poor's Corporation, and in the event all of such rating agencies cease to
furnish such ratings, then a comparable rating by any rating agency reasonably
acceptable to Landlord and Lender.
(ii) If Tenant desires to assign this Lease through
either a Complete Assignment or a Partial Assignment to a Person
("Non-Preapproved Assignee") who would not be a Preapproved Assignee
("Non-Preapproved Assignment") then Tenant shall, not less than sixty (60) days
prior to the date on which it desires to make a Non-Preapproved Assignment
submit to Landlord and Lender information regarding the following with respect
to the Non-Preapproved Assignee (the "Criteria"): (A) credit, (B) capital
structure, (C) management, (D) operating history, (E) proposed use of the Leased
Premises and (F) risk factors associated with the proposed use of the Leased
Premises by the Non-Preapproved Assignee, taking into account factors such as
environmental concerns, product liability and the like.
38
Landlord and Lender shall review such Criteria and shall approve or disapprove
the Non-Preapproved Assignee no later than the thirtieth (30th) day following
receipt of all such Criteria, and Landlord and Lender shall be deemed to have
acted reasonably in granting or withholding consent if such grant or disapproval
is based on their review of the Criteria.
(iii) If Landlord and Lender withhold consent to the
Non-Preapproved Assignment and Tenant desires to complete the Non-Preapproved
Assignment, Tenant shall make a rejectable offer (the "Intended Assignment
Offer") to purchase the Leased Premises or applicable Related Premises for a
purchase price equal to the Offer Amount and to consummate the purchase on the
first Basic Rent Payment Date occurring thirty (30) days after the determination
of Fair Market Value (the "Intended Assignment Purchase Date"). Notwithstanding
the foregoing, if the Intended Assignment Offer is accepted by Landlord and the
Non-Preapproved Assignment occurs on a date (the "Assignment Date") that is
prior to the Intended Assignment Purchase Date, then no later than the
Assignment Date, Tenant shall deposit in escrow with Lender an amount (the
"Deposit Amount") equal to one hundred ten percent (110%) of the sum of the
applicable Acquisition Cost and any Prepayment Premium. The Deposit Amount shall
be held by and invested by Landlord and the Deposit Amount, together with any
interest earned thereon, shall be applied on the Intended Assignment Purchase
Date to payment of the Assignment Offer Amount. Any part of the Deposit Amount
and interest earned thereon in excess of the Assignment Offer Amount shall be
refunded to Tenant.
(iv) If Landlord shall reject the Intended
Assignment Offer by notice to Tenant, such notice to contain the written consent
of Lender to such rejection, no later than the thirtieth (30th) day following
receipt of the Intended Assignment Offer by Landlord, then this Lease shall
remain in full force and effect and Landlord and Lender shall be deemed to have
consented to the Non-Preapproved Assignment (notwithstanding their original
withholding of consent). Nothing provided herein shall constitute a waiver by
Landlord of the obligation of Tenant to comply with the requirements of this
Paragraph 21(a)(iv) if a subsequent Non-Preapproved Assignment arises. No
rejection of the Intended Assignment Offer shall be effective for any purpose
unless consented to in writing by Lender.
(v) Unless Landlord shall have rejected the Intended
Assignment Offer by the foregoing notice to Tenant not later than the thirtieth
(30th) day following receipt of the information described in the foregoing
Paragraph 21(a)(ii), Landlord shall be conclusively presumed to have accepted
the Intended Assignment Offer. If the Intended Assignment Offer is accepted by
Landlord, Tenant shall pay to Landlord the Offer Amount (less the Deposit Amount
and interest thereon paid to Landlord) on the Intended Assignment Purchase Date
and, provided
39
that no Rent or any other charge is due and unpaid under this Lease as of the
Intended Assignment Purchase Date and Tenant is otherwise in compliance with the
terms of this Lease, Landlord shall convey to Tenant the Leased Premises in
accordance with the provisions of Paragraph 20 of this Lease.
(b) Tenant shall have the right, upon thirty (30) days
prior written notice to Landlord and Lender, to enter into one or more subleases
that demise, in the aggregate, up to but not in excess of thirty-five percent
(35%) of the gross space in the Allentown Premises and to enter into one or more
subleases or license agreements for the Johnstown Premises for customary full
service department store licensed operations with no consent or approval of
Landlord being required or necessary ("Preapproved Sublet"). Other than pursuant
to a Preapproved Sublet, no portion of the Leased Premises shall be subleased
during the Term to any other Person without the prior written consent of
Landlord and Lender, which consent shall be granted or withheld based on a
review of the Criteria. Landlord and Lender shall be deemed to have acted
reasonably in granting or withholding consent if such grant or disapproval is
based on their reasonable review of the Criteria.
(c) If Tenant assigns all its rights and interest under
this Lease either in a Partial Assignment with respect to a Related Premises or
a Complete Assignment with respect to the Leased Premises, the assignee under
any such assignment shall expressly assume all the obligations of Tenant
hereunder, actual or contingent, including obligations of Tenant which may have
arisen on or prior to the date of such assignment, by a written instrument
delivered to Landlord at the time of such assignment. Each sublease or license
agreement of either of the Related Premises shall be subject and subordinate to
the provisions of this Lease. Upon any assignment (i) to a Preapproved Assignee
or (ii) any assignment to a Non-Preapproved Assignee that is consented to by
Landlord and Lender and that, immediately following such assignment has a
publicly traded unsecured senior debt rating of "Baa" or better from Xxxxx'x
Investors Services, Inc. or a rating "BBB" from Standard & Poor's Corporation,
or a Replacement Agency, Tenant shall be released from all of its obligations
hereunder which arise after the date of such assignment, except for Surviving
Obligations. No other assignment and no sublease shall affect or reduce any of
the obligations of Tenant hereunder, and all such obligations shall continue in
full force and effect as obligations of a principal and not as obligations of a
guarantor, as if no assignment or sublease had been made. No assignment or
sublease shall impose any additional obligations on Landlord under this Lease.
(d) Tenant shall, within ten (10) days after the
execution and delivery of any assignment or sublease consented to by Landlord,
deliver a duplicate original copy thereof to
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Landlord which, in the event of an assignment, shall be in recordable form.
(e) As security for performance of its obligations under
this Lease, Tenant hereby grants, conveys and assigns to Landlord all right,
title and interest of Tenant in and to all subleases now in existence or
hereafter entered into for any or all of the Leased Premises, any and all
extensions, modifications and renewals thereof and all rents, issues and profits
therefrom. Landlord hereby grants to Tenant a license to collect and enjoy all
rents and other sums of money payable under any sublease of any of the Leased
Premises, provided, however, that if an Event of Default has occurred and is
continuing, Landlord shall have the absolute right upon notice to Tenant and any
subtenants to revoke said license and to collect such rents and sums of money
and to apply the same against the Rent due under the Lease. Tenant shall not
accept any rents more than thirty (30) days in advance of the accrual thereof.
(f) Tenant shall not have the power to mortgage, pledge
or otherwise encumber its interest under this Lease or any sublease of any of
the Related Premises, and any such mortgage, pledge or encumbrance made in
violation of this Paragraph 21 shall be void and of no force and effect.
(g) If required by any Lender, Landlord may cause a Lease
Bifurcation to occur and subject to the provisions of Xxxxxxxxx 00, Xxxxxxxx may
sell or transfer the Leased Premises at any time without Tenant's consent to any
third party (each a "Third Party Purchaser"). In the event of any such transfer,
Tenant shall attorn to any Third Party Purchaser as Landlord so long as such
Third Party Purchaser and Landlord notify Tenant in writing of such transfer. At
the request of Landlord, Tenant will execute such documents confirming the
agreement referred to above and such other agreements as Landlord may reasonably
request, provided that such agreements do not increase the liabilities and
obligations of Tenant hereunder.
22. Events of Default.
(a) The occurrence of any one or more of the following
(after expiration of any applicable cure period as provided in Paragraph 22(b))
shall, at the sole option of Landlord, constitute an "Event of Default" under
this Lease:
(i) a failure by Tenant to make any payment of any
Monetary Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and
observe, or a violation or breach of, any provision hereof not otherwise
specifically mentioned in this Paragraph 22(a);
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(iii) any representation or warranty made by Tenant
herein or in any certificate, demand or request made pursuant hereto proves to
be incorrect, now or hereafter, in any material respect;
(iv) a default beyond any applicable cure period or
at maturity by Tenant or Guarantor in any payment of principal or interest on
any obligations for borrowed money having an original principal balance of
$10,000,000 or more in the aggregate, or in the performance of any other
provision contained in any instrument under which any such obligation is created
or secured (including the breach of any covenant thereunder), (x) if such
payment is a payment at maturity or a final payment, or (y) if an effect of such
default is to cause, or permit any Person to cause, such obligation to become
due prior to its stated maturity;
(v) a default by Tenant or Guarantor beyond any
applicable cure period in the payment of rent under, or in the performance of
any other material provision of, any other lease or leases that have, in the
aggregate, rental obligations over the terms thereof of $5,000,000 or more (less
any amounts payable from the proceeds of insurance) if the Landlord under any
such lease or leases commences to exercise its remedies thereunder;
(vi) a final, non-appealable judgment or judgments
for the payment of money in excess of $5,000,000 in the aggregate shall be
rendered against Tenant or Guarantor and the same shall remain undischarged for
a period of sixty (60) consecutive days;
(vii) Tenant shall (A) voluntarily be adjudicated a
bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for any of the Related Premises, (C) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(viii) a court shall enter an order, judgment or
decree appointing, without the consent of Tenant, a receiver or trustee for it
or for any of the Related Premises or approving a petition filed against Tenant
which seeks relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, and such order, judgment or decree shall
remain undischarged or unstayed sixty (60) days after it is entered;
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(ix) either of the Related Premises shall remain
vacant for a period that exceeds twelve (12) consecutive months or shall be
abandoned;
(x) Tenant shall be liquidated or dissolved or shall
begin proceedings towards its liquidation or dissolution;
(xi) the estate or interest of Tenant in any of the
Related Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within sixty (60) days after it is made;
(xii) a failure by Tenant to perform or observe, or
a violation or breach of, or a misrepresentation by Tenant under, any provision
of any Assignment or any other document between Tenant and Lender with respect
to a Loan, if such failure, violation, breach or misrepresentation gives rise to
a default beyond any applicable cure period with respect to any Loan;
(xiii) the breach of any Covenant shall occur; or
(xiv) an Event of Default (as defined in the
Guaranty) beyond any applicable cure period shall occur under the Guaranty.
(b) No notice or cure period shall be required in any one
or more of the following events: (A) the occurrence of an Event of Default under
clause (i) (except as otherwise set forth below), (iii), (iv), (v), (vi), (vii),
(viii), (ix), (x), (xi), (xii), (xiii) or (xiv) of Paragraph 22(a); (B) the
default consists of a failure to provide any insurance required by Paragraph 16
or an assignment or sublease entered into in violation of Paragraph 21; or (C)
the default is such that any delay in the exercise of a remedy by Landlord could
reasonably be expected to cause irreparable harm to Landlord. If the default
consists of the failure to pay any Monetary Obligation under clause (i) of
Paragraph 22(a), the applicable cure period shall be three (3) days from the
date on which notice is given, but Landlord shall not be obligated to give
notice of, or allow any cure period for, any such default more than one (1) time
within any consecutive twelve (12) month period. If the default consists of a
default under clause (ii) of Paragraph 22(a), other than the events specified in
clauses (B) and (C) of the first sentence of this Paragraph 22(b), the
applicable cure period shall be twenty (20) days from the date on which notice
is given or, if the default cannot be cured within such twenty (20) day period
and delay in the exercise of a remedy would not (in Landlord's reasonable
judgment) cause any material adverse harm to Landlord or any of the Leased
Premises, the cure period shall
43
be extended for the period required to cure the default (but such cure period,
including any extension, shall not in the aggregate exceed sixty (60) days),
provided that Tenant shall commence to cure the default within the said
twenty-day period and shall actively, diligently and in good faith proceed with
and continue the curing of the default until it shall be fully cured.
23. Remedies and Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's
intention to terminate this Lease on a date specified in such notice. Upon such
date, this Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire and terminate. Upon such termination, Tenant shall immediately
surrender and deliver possession of the Leased Premises to Landlord in
accordance with Paragraph 26. If Tenant does not so surrender and deliver
possession of all of the Leased Premises, Landlord may re-enter and repossess
any of the Leased Premises not surrendered, with or without legal process, by
peaceably entering any of the Leased Premises and changing locks or by summary
proceedings, ejectment or any other lawful means or procedure. Upon or at any
time after taking possession of any of the Leased Premises, Landlord may, by
peaceable means or legal process, remove any Persons or property therefrom.
Landlord shall be under no liability for or by reason of any such entry,
repossession or removal. Notwithstanding such entry or repossession, Landlord
may (A) exercise the remedy set forth in and collect the damages permitted by
Paragraph 23(a)(iii) or (B) collect the damages set forth in Paragraph 23(b)(i)
or 23(b)(ii).
(ii) After repossession of any of the Leased
Premises pursuant to clause (i) above, Landlord shall have the right to relet
any of the Leased Premises to such tenant or tenants, for such term or terms,
for such rent, on such conditions and for such uses as Landlord in its sole
discretion may determine, and collect and receive any rents payable by reason of
such reletting. Landlord may make such Alterations in connection with such
reletting as it may deem advisable in its sole discretion. Notwithstanding any
such reletting, Landlord may collect the damages set forth in Paragraph
23(b)(ii).
(iii) Landlord may declare by notice to Tenant the
entire Basic Rent (in the amount of Basic Rent then in effect) for the remainder
of the then current Term to be
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immediately due and payable. Tenant shall immediately pay to Landlord all such
Basic Rent discounted to its Present Value, all accrued Rent then due and
unpaid, all other Monetary Obligations which are then due and unpaid and all
Monetary Obligations which arise or become due by reason of such Event of
Default (including any Costs of Landlord). Upon receipt by Landlord of all such
accelerated Basic Rent and Monetary Obligations, this Lease shall remain in full
force and effect and Tenant shall have the right to possession of the Leased
Premises from the date of such receipt by Landlord to the end of the Term, and
subject to all the provisions of this Lease, including the obligation to pay all
increases in Basic Rent and all Monetary Obligations that subsequently become
due, except that (A) no Basic Rent which has been prepaid hereunder shall be due
thereafter during the said Term and (B) Tenant shall have no option to extend or
renew the Term.
(b) The following constitute damages to which Landlord
shall be entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph
23(a)(i) but not its remedy under Paragraph 23(a)(ii) (or attempts to exercise
such remedy and is unsuccessful in reletting the Leased Premises) then, upon
written demand from Landlord, Tenant shall pay to Landlord, as liquidated and
agreed final damages for Tenant's default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of (A) all Basic Rent from the date of such
demand to the date on which the Term is scheduled to expire hereunder in the
absence of any earlier termination, re-entry or repossession over (B) the then
fair market rental value of the Leased Premises for the same period. Tenant
shall also pay to Landlord all of Landlord's Costs in connection with the
repossession of the Leased Premises and any attempted reletting thereof,
including all brokerage commissions, legal expenses, reasonable attorneys' fees,
employees' expenses, costs of Alterations and expenses and preparation for
reletting.
(ii) If Landlord exercises its remedy under
Paragraph 23(a)(i) or its remedies under Paragraph 23(a)(i) and 23(a)(ii), then
Tenant shall, until the end of what would have been the Term in the absence of
the termination of the Lease, and whether or not any of the Leased Premises
shall have been relet, be liable to Landlord for, and shall pay to Landlord, as
liquidated and agreed current damages on the date on which the same are due and
payable under the terms of this Lease all Monetary Obligations which would be
payable under this Lease by Tenant in the absence of such termination less the
net proceeds, if any, of any reletting pursuant to Paragraph 23(a)(ii), after
deducting from such proceeds all of Landlord's Costs (including
45
the items listed in the last sentence of Paragraph 23(b)(i) hereof) incurred in
connection with such repossessing and reletting; provided, that if Landlord has
not relet the Leased Premises, such Costs of Landlord shall be considered to be
Monetary Obligations payable by Tenant. Tenant shall be and remain liable for
all sums aforesaid, and Landlord may recover such damages from Tenant and
institute and maintain successive actions or legal proceedings against Tenant
for the recovery of such damages. Nothing herein contained shall be deemed to
require Landlord to wait to begin such action or other legal proceedings until
the date when the Term would have expired by its own terms had there been no
such Event of Default.
(c) Notwithstanding anything to the contrary herein
contained, in lieu of or in addition to any of the foregoing remedies and
damages, Landlord may exercise any remedies and collect any damages available to
it at law or in equity. If Landlord is unable to obtain full satisfaction
pursuant to the exercise of any remedy, it may pursue any other remedy which it
has hereunder or at law or in equity.
(d) Landlord shall not be required to mitigate any of its
damages hereunder unless required to by applicable Law. If any Law shall validly
limit the amount of any damages provided for herein to an amount which is less
than the amount agreed to herein, Landlord shall be entitled to the maximum
amount available under such Law.
(e) No termination of this Lease, repossession or
reletting of any of the Leased Premises, exercise of any remedy or collection of
any damages pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, TENANT WAIVES ANY RIGHT TO A TRIAL BY JURY.
(g) Upon the occurrence of any Event of Default, Landlord
shall have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose.
(h) No failure of Landlord (i) to insist at any time upon
the strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
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(i) Tenant hereby waives and surrenders, for itself
and all those claiming under it, including creditors of all kinds, (i) any right
and privilege which it or any of them may have under any present or future Law
to redeem any of the Leased Premises or to have a continuance of this Lease
after termination of this Lease or of Tenant's right of occupancy or possession
pursuant to any court order or any provision hereof, and (ii) the benefits of
any present or future Law which exempts property from liability for debt or for
distress for rent.
(j) Except as otherwise provided herein, all remedies
are cumulative and concurrent and no remedy is exclusive of any other remedy.
Each remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.
24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address hereinafter provided or when
delivery is refused. Notice shall be sent to:
If to Tenant by certified U.S. Mail:
The Bon-Ton Department Stores, Inc.
X.X. Xxx 0000
Xxxx, Xxxxxxxxxxxx 00000-0000
Attn: Senior Vice President and Real Estate
Legal and Governmental Affairs
If to Tenant by other delivery service:
The Bon-Ton Department Stores, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxx, Xxxxxxxxxxxx 00000-0000
Attn: Senior Vice President and Real Estate
Legal and Governmental Affairs
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With a duplicate copy delivered in
either case, by certified U.S. Mail
to:
The Bon-Ton Department Stores, Inc.
X.X. Xxx 0000
Xxxx, Xxxxxxxxxxxx 00000-0000
Attn: Vice President - Real Estate
and Corporate Counsel
If to Landlord:
BT (PA) QRS 12-25, Inc.
c/o W.P. Xxxxx & Co., Inc.
00 Xxxxxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Property Manager
With a duplicate copy:
Xxxx Xxxxx Xxxx & XxXxxx
0000 Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Chairman, Real Estate Department
For the purposes of this Paragraph, any party may substitute another
address stated above (or substituted by a previous notice) for its address by
giving fifteen (15) days' notice of the new address to the other party, in the
manner provided above.
25. Estoppel Certificate. At any time upon not less than fifteen (15)
days' prior written request by either Landlord or Tenant (the "Requesting
Party") to the other party (the "Responding Party"), the Responding Party shall
deliver to the Requesting Party a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by an court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request
48
for the Certificate is an intended recipient or beneficiary of the Certificate,
any Lender or their assignees and by any prospective purchaser or mortgagee of
any of the Leased Premises.
26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear. Upon such surrender, Tenant shall (a)
remove from the Leased Premises all property which is owned by Tenant or third
parties other than Landlord and (b) repair any damage caused by such removal.
Property not so removed shall become the property of Landlord, and Landlord may
thereafter cause such property to be removed from the Leased Premises. The cost
of removing and disposing of such property and repairing any damage to any of
the Leased Premises caused by such removal shall be paid by Tenant to Landlord
upon demand. Landlord shall not in any manner or to any extent be obligated to
reimburse Tenant for any such property which becomes the property of Landlord
pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased Premises
by reason of the fact that the same Person may acquire or hold or own, directly
or indirectly, (a) the leasehold estate created hereby or any part thereof or
interest therein and (b) the fee estate in any of the Leased Premises or any
part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.
28. Books and Records.
(a) Tenant shall keep adequate records and books of
account with respect to the finances and business of Tenant generally and,
consistent with the operation of its business, with respect to the Leased
Premises in accordance with generally accepted accounting principles ("GAAP")
consistently applied, and shall permit Landlord and Lender by their respective
agents, accountants and attorneys, upon reasonable notice to Tenant, to visit
and inspect the Leased Premises and examine (and make copies of) the records and
books of account and to discuss the finances and business with the officers of
Tenant, at such reasonable times as may be requested by Landlord. Upon the
request of Landlord (either telephonically or in writing), Tenant shall provide
Landlord with copies of any information to which Landlord would be entitled in
the course of a personal visit.
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(b) Tenant shall deliver to Landlord and to Lender within
ninety (90) days of the close of each fiscal year of Tenant, annual audited
financial statements of Tenant prepared by nationally recognized independent
certified public accountants. Tenant shall also furnish to Landlord within
forty-five (45) days after the end of each of the three remaining quarters
unaudited financial statements and all other quarterly reports of Tenant,
certified by Tenant's chief financial officer, and all filings, if any, of Form
10-K, Form 10-Q and other required filings with the Securities and Exchange
Commission pursuant to the provisions of the Securities Exchange Act of 1934, as
amended, or any other Law. All financial statements of Tenant shall be prepared
in accordance with GAAP consistently applied. All annual financial statements
shall be accompanied (i) by an opinion of said accountants stating that (A)
there are no qualifications as to the scope of the audit and (B) the audit was
performed in accordance with GAAP and (ii) by the affidavit of the president or
a vice president of Tenant, dated within five (5) days of the delivery of such
statement, stating that (C) the affiant knows of no Event of Default, or event
which, upon notice or the passage of time or both, would become an Event of
Default which has occurred and is continuing hereunder or, if any such event has
occurred and is continuing, specifying the nature and period of existence
thereof and what action Tenant has taken or proposes to take with respect
thereto and (D) except as otherwise specified in such affidavit, that Tenant has
fulfilled all of its obligations under this Lease which are required to be
fulfilled on or prior to the date of such affidavit. Tenant shall not be
required to comply with the requirements of Paragraph 28(b) for so long as
Tenant's financial statements are consolidated with the financial statement of
Guarantor and Guarantor provides to Landlord the financial statements required
under Section 2.02 of the Guaranty, except that Tenant shall, in all events,
provide to Landlord monthly profit and loss statements for the Leased Premises.
29. Determination of Value.
(a) If a determination of Fair Market Value is required
pursuant to any provision of this Lease, such Fair Market Value shall be
determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon
such Fair Market Value within thirty (30) days after the date (the "Applicable
Initial Date") on which (A) Tenant makes the Intended Assignment Offer under
Paragraph 21(a) or (B) Tenant makes an offer with respect to the Allentown
Premises pursuant to Paragraph 37. Upon reaching such agreement, the parties
shall execute an agreement setting forth the amount of such Fair Market Value.
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(ii) If the parties shall not have signed such
agreement within thirty (30) days after the Applicable Initial Date, Tenant
shall within fifty (50) days after the Applicable Initial Date select an
appraiser and notify Landlord in writing of the name, address and qualifications
of such appraiser. Within twenty (20) days following Landlord's receipt of
Tenant's notice of the appraiser selected by Tenant, Landlord shall select an
appraiser and notify Tenant of the name, address and qualifications of such
appraiser. Such two appraisers shall endeavor to agree upon Fair Market Value
based on a written appraisal made by each of them as of the Relevant Date (and
given to Landlord by Tenant). If such two appraisers shall agree upon a Fair
Market Value, the amount of such Fair Market Value as so agreed shall be binding
and conclusive.
(iii) If such two appraisers shall be unable to agree
upon a Fair Market Value within twenty (20) days after the selection of an
appraiser by Landlord, then such appraisers shall advise Landlord and Tenant of
their respective determination of Fair Market Value and shall select a third
appraiser to make the determination of Fair Market Value. The selection of the
third appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree
upon the designation of a third appraiser within ten (10) days after the
expiration of the twenty (20) day period referred to in clause (iii) above, or
if such third appraiser does not make a determination of Fair Market Value
within twenty (20) days after his selection, then such third appraiser or a
substituted third appraiser, as applicable, shall, at the request of either
party hereto (with respect to the other party), be appointed by the President or
Chairman of the American Arbitration Association in New York, New York. The
determination of Fair Market Value made by the third appraiser appointed
pursuant hereto shall be made within twenty (20) days after such appointment.
(v) If a third appraiser is selected, Fair Market
Value shall be the average of the determination of Fair Market Value made by the
third appraiser and the determination of Fair Market Value made by the appraiser
(selected pursuant to Paragraph 29(a)(ii) hereof) whose determination of Fair
Market Value is nearest to that of the third appraiser. Such average shall be
binding and conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to
this Paragraph 29(a) shall (A) be independent qualified MAI appraisers (B) have
no right, power or authority to alter or modify the provisions of this Lease,
(C) utilize the definition of Fair Market Value hereinabove set forth above, and
(D) be registered in the State if the State provides for or requires such
registration.
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(vii) The Cost of the procedure described in this
Paragraph 29(a) above shall be borne by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended
with respect to the Leased Premises or the Related Premises, as applicable, to
the date specified for termination in the particular provision of this Lease
pursuant to which the determination of Fair Market Value is being made.
(c) In determining Fair Market Value as defined in clause
(a) of the definition of Fair Market Value, the appraisers shall add (i) the
present value of the Rent for the remaining Term (with assumed increases in the
CPI to be determined by the appraisers) using a discount rate (which may be
determined by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and (ii) the present value of the Leased Premises as
of the end of such Term. The appraisers shall further assume that no default
then exists under the Lease, that Tenant has complied (and will comply) with all
provisions of the Lease, and that Guarantor and Tenant have not violated (and
will not violate) any of the Covenants.
30. Non-Recourse as to Landlord. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against the Leased Premises and
not against any other assets, properties or funds of (a) Landlord, (b) any
director, officer, general partner, limited partner, employee or agent of
Landlord, or any general partner of Landlord, any of its general partners or
shareholders (or any legal representative, heir, estate, successor or assign of
any thereof), (c) any predecessor or successor partnership or corporation (or
other entity) of Landlord, or any of its general partners, either directly or
through Landlord or its general partners or any predecessor or successor
partnership or corporation or their shareholders, officers, directors, employees
or agents (or other entity), or (d) any other Person (including Xxxxx Property
Advisors, Xxxxx Fiduciary Advisors, Inc., W.P. Xxxxx & Co., Inc., W.P. Xxxxx
Incorporated and any Person affiliated with any of the foregoing, or any
director, officer, employee or agent of any thereof).
31. Financing.
(a) Tenant agrees to pay all costs and expenses incurred
by Landlord in connection with the purchase, leasing and initial financing of
the Leased Premises including, without limitation, the cost of appraisals,
environmental reports, title
52
insurance, surveys, legal fees and expenses and Lender's commitment fees.
(b) If Landlord desires to obtain or refinance any Loan,
Tenant shall negotiate in good faith with Landlord concerning any request made
by any Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant shall agree, upon request of Landlord, to supply any such
Lender with such notices and information as Tenant is required to give to
Landlord hereunder and to extend the rights of Landlord hereunder to any such
Lender and to consent to such financing if such consent is requested by such
Lender. Tenant shall provide any other consent or statement and shall execute
any and all other documents that such Lender reasonably requires in connection
with such financing, including any environmental indemnity agreement and
subordination, non-disturbance and attornment agreement, so long as the same do
not materially adversely affect any right, benefit or privilege of Tenant under
this Lease or materially increase Tenant's obligations under this Lease. Such
subordination, nondisturbance and attornment agreement may require Tenant to
confirm that (a) Lender and its assigns will not be liable for any
misrepresentation, act or omission of Landlord and (b) Lender and its assigns
will not be subject to any counterclaim, demand or offsets which Tenant may have
against Landlord.
32. Subordination. This Lease and Tenant's interest hereunder shall be
subordinate to any Mortgage or other security instrument hereafter placed upon
the Leased Premises by Landlord, and to any and all advances made or to be made
thereunder, to the interest thereon, and all renewals, replacements and
extensions thereof, provided that any such Mortgage or other security instrument
(or a separate instrument in recordable form duly executed by the holder of any
such Mortgage or other security instrument and delivered to Tenant) shall
provide for the recognition of this Lease and all Tenant's rights hereunder
unless and until an Event of Default exists or Landlord shall have the right to
terminate this Lease pursuant to any applicable provision hereof.
33. Financial Covenants. Tenant hereby covenants and agrees to comply
with all the Covenants to the extent the Covenants are applicable to Tenant.
34. Tax Treatment; Reporting. Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and
shall report this transaction as a Lease for Federal income tax purposes. For
Federal income tax purposes each shall report this Lease as a true lease with
Landlord as the owner of the Leased Premises and Equipment and Tenant as the
lessee of such Leased Premises and Equipment including: (1) treating Landlord as
the owner of the property eligible to claim depreciation deductions under
Section 167 or
53
168 of the Internal Revenue Code of 1986 (the "Code") with respect to the Leased
Premises and Equipment, (2) Tenant reporting its Rent payments as rent expense
under Section 162 of the Code, and (3) Landlord reporting the Rent payments as
rental income.
35. Right of First Refusal.
(a) Landlord shall provide notice ("Market Notice") to
Tenant if Landlord intends to market the Leased Premises or either Related
Premises for sale. Except as otherwise provided in Paragraph 35(e), and provided
an Event of Default does not then exist, if Landlord shall enter into a contract
(the "Sale Contract") for the sale of the entire Leased Premises or for either
of the Related Premises with a Third Party Purchaser, which Sale Contract shall
be conditioned upon Tenant's failure to exercise its right under this Paragraph
35, then promptly following the execution thereof, Landlord shall give written
notice to Tenant, together with a copy of the executed Sale Contract.
(b) For a period equal to the greater of (i) thirty (30)
days following receipt of such executed Sale Contract or (ii) ninety (90) days
following a market receipt of a Market Notice, Tenant shall have the right and
option, exercisable by written notice to Landlord given within said thirty (30)
day period, to elect to purchase the Premises which are the subject of such Sale
Contract (the "Sale Premises") at the purchase price and upon all the terms and
conditions set forth in the Sale Contract except that no contingencies contained
in such Sale Contract as to environmental assessments, engineering studies,
inspection of the Sale Premises, availability of financing, sale of other
property, state of the title to or encumbrances on the Sale Premises, or any
other condition or contingency to the Third Party Purchaser's obligation to
purchase the Sale Premises which pertains to the physical condition of the Sale
Premises, shall apply to Tenant's obligation to purchase the Sale Premises under
this Paragraph 35, and Tenant shall be obligated to purchase the Sale Premises
without any such condition or contingency.
(c) If at the expiration of the aforesaid thirty (30) day
period Tenant shall have failed to exercise the aforesaid option, Landlord may
sell the Sale Premises to such Third Party Purchaser upon the terms set forth in
such contract.
(d) Except as otherwise specifically provided herein, the
closing date for any purchase of the Sale Premises by Tenant pursuant to this
Paragraph 35 shall be the later to occur of (i) ninety (90) days after the date
of Tenant's notice to Landlord of its intention to purchase the Sale Premises
upon the terms of a Sale Contract with a Third Party Purchaser or (ii) the
closing date provided in such Sale Contract. At such closing Landlord shall
convey the Sale Premises to Tenant in accordance
54
with, and Tenant shall pay to Landlord the purchase price and other
consideration set forth in, the applicable Sale Contract.
(e) Tenant shall have the right to exercise the foregoing
right of first refusal upon (i) each proposed sale of the Leased Premises prior
to the fifteenth (15th) anniversary of this Lease and (ii) notwithstanding the
lack of exercise by Tenant in (i) above, one (1) time after the fifteenth (15th)
anniversary of this Lease; provided, that if, following compliance with the
procedure described in this Paragraph 35, a Third Party Purchaser does not
purchase the Leased Premises, such event shall not count as an exercise of
Tenant's right of first refusal. Notwithstanding anything to the contrary, if
Tenant fails to exercise the right of first refusal granted pursuant to this
Paragraph (c), subsection (ii), after the fifteenth (15th) anniversary of this
Lease and the sale to the Third Party Purchaser is consummated, or if the Term
of this Lease shall terminate or expire or a Lease Bifurcation occurs that is
requested by, or a result of Tenant's act, such rights of first refusal granted
pursuant to this Paragraph 36 shall terminate and be null and void and of no
further force and effect. In such event Tenant shall execute a quitclaim deed
and such other documents as Landlord shall reasonably request evidencing the
termination of its right of first refusal.
(f) If Tenant does not exercise its right of first
refusal to purchase the Sale Premises and the Sale Premises are transferred to a
Third Party Purchaser, Tenant will attorn to any Third Party Purchaser as
Landlord so long as such Third Party Purchaser and Landlord notify Tenant in
writing of such transfer. At the request of Landlord, Tenant will execute such
documents confirming the agreement referred to above and such other agreements
as Landlord may reasonably request, provided that such agreements do not
increase the liabilities and obligations of Tenant hereunder.
(g) The provisions of this Paragraph 35 shall not apply
to or prohibit (i) any mortgaging, subjection to deed of trust or other
hypothecation of Landlord's interest in the Leased Premises, (ii) any sale of
the Leased Premises pursuant to a private power of sale under or judicial
foreclosure of any Mortgage or other security instrument or device to which
Landlord's interest in the Leased Premises is now or hereafter subject, (iii)
any transfer of Landlord's interest in the Leased Premises to a Lender,
beneficiary under deed of trust or other holder of a security interest therein
or their designees by deed in lieu of foreclosure, (iv) any transfer of the
Leased Premises to any governmental or quasi-governmental agency with power of
condemnation, (v) any transfer of the Leased Premises to any affiliate of
Landlord or to any entity for whom W.P. Xxxxx & Co., Inc., W.P. Xxxxx
Incorporated or any of their affiliates provides management services or
investment advice, (vi) any Person to whom Landlord sells all or substantially
all of its assets, or
55
(vii) any transfer of the Leased Premises to any of the successors or assigns of
any of the Persons referred to in the foregoing clauses (i) through (vi).
36. Sale of Related Premises by Landlord. If at any time or from time
to time Landlord sells either Related Premises (any such premises, a "Landlord
Sale Premises") either to Tenant or to a Third Party Purchaser, then Landlord
and Tenant agree that (i) the Lease shall be bifurcated with respect to the
remaining Related Premises and the Landlord Sale Premises; (ii) Tenant will
attorn to any purchaser with respect to the Landlord Sale Premises purchased so
long as such purchaser assumes the obligations of Landlord under the Lease with
respect to the Landlord Sale Premises; and (iii) the terms of the Lease will
remain in full force and effect with respect to the Landlord Sale Premises
except that the Basic Rent will be the percentage of the then Basic Rent which
is allocated to the Landlord Sale Premises as set forth on Exhibit "F" attached
hereto and made a part hereof; and (iv) the terms of the Lease will remain in
full force and effect with respect to the remaining Related Premises except that
the Basic Rent will be the percentage of the then Basic Rent which is allocated
to the remaining Related Premises as set forth on Exhibit "F" attached hereto
and made a part hereof. At the request of Landlord, Tenant will execute such
documents confirming the agreements referred to above and such other agreements
as Landlord may reasonably request provided that such agreements will not result
in any cost to Tenant and will not increase the liabilities and obligations of
Tenant hereunder.
37. Substitution and Exchange of Premises.
(a) If at any time after the end of the second (2nd)
Lease Year, Tenant in its reasonable business judgment determines that the
Allentown Premises has become uneconomic for Tenant's continued use and
occupancy in its business operations, then Tenant shall have the right to make a
rejectable offer to convey to Landlord a substitute property (the "Exchange
Premises") and lease the Exchange Premises back from Landlord on the terms and
conditions provided herein in exchange for the conveyance to Tenant of the
Allentown Premises and the termination of the Lease with respect to the
Allentown Premises (the "Exchange"). In the event that Tenant elects to exercise
such right, Tenant shall deliver to Landlord (i) a certificate of Tenant stating
that the Allentown Premises are no longer economic or suitable for Tenant's
continued use and occupancy in its business operations, specifying in reasonable
detail the reasons therefore, and further certifying that Tenant intends forever
to abandon its operations at the Allentown Premises, which certificate shall be
accompanied by a resolution of the board of directors of Tenant authorizing the
delivery of such notice and the Exchange; (ii) a description and an appraisal of
the Exchange Premises by an appraiser and in such form as are satisfactory to
Landlord; (iii) such other relevant data as Landlord may request demonstrating
the economic viability of the Exchange Premises,
56
the marketability of title to the Exchange Premises and the environmental status
of the Exchange Premises; (iv) Tenant's rejectable offer to convey the Exchange
Premises to Landlord and lease back the Exchange Premises in exchange for
Landlord conveying the Allentown Premises to Tenant and terminating the Lease
with respect to the Allentown Premises and (v) a statement of Tenant's intention
to affect the Exchange on the first Basic Rent Payment Date occurring at least
ninety (90) days following determination of Fair Market Value of the Exchange
Premises (the "Exchange Date"). Landlord and Tenant shall promptly commence to
determine the Fair Market Value of the Exchange Premises.
(b) Landlord, with the written consent of Lender, shall
accept or reject such offer not later than sixty (60) days following
determination of Fair Market Value of the Exchange Premises. If Landlord, with
the written consent of Lender, shall reject Tenant's offer then this Lease shall
remain in full force and effect with respect to the Allentown Premises. If
Landlord, with the written consent of Lender, shall accept Tenant's offer and if
on the Exchange Date all conditions and requirements imposed by Landlord and
Lender in connection with the acceptance of Tenant's offer of substitution have
been satisfied, including, but not limited to, (i) the approval of Landlord,
Lender and their respective counsel of all documents relating to the Exchange;
(ii) payment in full by Tenant of all installments of annual Basic Rent,
Additional Rent and all other charges due and unpaid hereunder; (iii) compliance
by Tenant with all other obligations and liabilities, actual or contingent,
under this Lease which have arisen on or prior to the Exchange Date and Tenant
not then being in default hereunder; (iv) delivery to Landlord and Lender,
respectively, of ALTA "owner" and "mortgagee" title insurance policies insuring
Landlord's fee title to the Exchange Premises and Lender's first lien thereon
subject only to such matters as Landlord and Lender shall approve; (v) Tenant's
conveyance of the Exchange Premises to Landlord, the lease back of the Exchange
Premises to Tenant in accordance with and subject to the terms and conditions of
this Lease as the same shall be amended accordingly, and (vi) the mortgaging of
the Exchange Premises in accordance with and subject to the terms of the
Mortgage as the same shall be amended to reflect the substitution of the
Exchange Premises for the Allentown Premises; then the Allentown Premises shall
be conveyed to Tenant in accordance with the provisions of Paragraph 20 and all
obligations hereunder with respect to the Allentown Premises shall terminate,
except for any obligations or liabilities of Tenant, actual or contingent,
arising prior to such conveyance.
Tenant shall pay charges incident to the Exchange, regardless of whether or not
the Exchange occurs, including, but not limited to, Landlord's and Lender's
counsel fees, escrow fees, recording fees, brokerage fees incurred by Tenant,
title insurance and all federal, state and local taxes which may be incurred or
imposed
57
by reason of such conveyance and transfer and/or by delivery of any deed or
other instrument.
38. Release of Excess Land. Landlord acknowledges that Tenant has
committed to convey the Excess Land to the Township of Whitehall, and Landlord
shall, upon Tenant's request, convey the Excess Land to Tenant or Tenant's
designee; provided, that the following conditions are satisfied: the Leased
Premises shall have been subdivided in compliance with all applicable
subdivision laws, Legal Requirements and Easement Agreements so that the Excess
Land and the remainder of the Leased Premises (the "Retained Premises") are
separate tracts, (ii) after such sale both the Excess Land and the Retained
Premises shall comply with all applicable Laws, Legal Requirements and Easement
Agreements, and (iii) all Costs of Landlord, Lender and Tenant in connection
with the transfer of the Excess Land and in complying with the above conditions,
including reasonable attorneys' fees, shall be borne solely by Tenant. If
Landlord conveys the Excess Land, then this Lease and any Mortgage granted by
Landlord shall terminate with respect to the Excess Land, but shall remain in
full force and effect with respect to the Retained Premises, provided, however,
that in no event will the release of the Excess Land from this Lease amend,
reduce or modify any of the obligations and liabilities of Tenant hereunder,
including the obligation to pay Basic Rent in the amount set forth in Exhibit
"D" hereto.
39. Miscellaneous.
(a) The paragraph headings in this Lease are used only
for convenience in finding the subject matters and are not part of this Lease or
to be used in determining the intent of the parties or otherwise interpreting
this Lease.
(b) As used in this Lease, the singular shall include
the plural and any gender shall include all genders as the context requires and
the following words and phrases shall have the following meanings: (i)
"including" shall mean "including without limitation"; (ii) "provisions" shall
mean "provisions, terms, agreements, covenants and/or conditions"; (iii) "lien"
shall mean "lien, charge, encumbrance, title retention agreement, pledge,
security interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
58
59
(c) Any act which Landlord is permitted to perform under
this Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except as otherwise specifically provided herein, Landlord shall have
the right, at its sole option, to withhold or delay its consent whenever such
consent is required under Paragraph 21 of this Lease for any reason or no
reason. In all other cases, Landlord shall not unreasonably withhold its
consent, provided that Lender consents to any such request. Time is of the
essence with respect to the performance by Tenant of its obligations under this
Lease.
(d) Landlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or licensee of Tenant with respect to any of
the Leased Premises or otherwise in the conduct of their respective businesses.
(e) This Lease and any documents which may be executed
by Tenant on or about the effective date hereof at Landlord's request constitute
the entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating to
the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject
matter of this Lease and have each fully participated in the negotiation and
drafting of this Lease. Accordingly, this Lease shall be construed without
regard to the rule that ambiguities in a document are to be construed against
the drafter.
(f) This Lease may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land
and bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of Landlord, its successors and assigns. If there is more than one
Tenant, the obligations of each shall be joint and several.
(h) Notwithstanding any provision in this Lease to the
contrary, all Surviving Obligations of Tenant shall survive the expiration or
termination of this Lease with respect to any Related Premises.
(i) If any one or more of the provisions contained in
this Lease shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such
60
invalidity, illegality or unenforceability shall not affect any other provision
of this Lease, but this Lease shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
(j) All exhibits attached hereto are incorporated herein
as if fully set forth.
(k) This Lease shall be governed by and construed and
enforced in accordance with the Laws of the State.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
BT (PA) QRS 12-25, INC., a
Pennsylvania corporation
By: _________________________________
Title: Second Vice President
ATTEST: TENANT:
THE BON-TON DEPARTMENT STORES,
INC., a Pennsylvania corporation
By: __________________________ By: _________________________________
Title: Secretary Title: Senior Vice President
[Corporate Seal]
61
EXHIBIT A-1
PREMISES
Allentown Premises
ALL THAT CERTAIN tract of land situate along S.R. 1023 (formerly known as L.R.
555 Spur), also known as 0000 Xxxxx Xxxxxx Xxxxxx, in Whitehall Township, Lehigh
County, Pennsylvania, as shown on As-Built Survey Plan titled "Bon-Ton
Department Stores, Inc. Distribution Center" Plan #P-3364 dated February, 1997
as prepared by F & M Associates, Inc., Consulting Civil Engineers, Allentown,
Pennsylvania, bounded and described as follows, to wit:
BEGINNING at a point on the centerline of said S.R. 1023 said point being in
line with land of now or late Xxxxx X. Xxxxxxxx, et al., being Lot A of
Whitehall Business Park, thence (1) from said point of beginning, passing
through aforesaid S.R. 1023 (required right-of-way being 60.00 feet wide) and
along land of now or late Xxxxx X. Xxxxxxxx, et al., being Lot 4 of Whitehall
Business Park, now or late First Lehigh Bank, being Xxx 0X xx Xxxxxxxxx Xxxxxxxx
Xxxx and now or late Xxxxxx'x Enterprises, Inc., North 43 degrees 22 minutes 07
seconds East 948.76 feet (passing though a found concrete monument at 32.70
feet) to an iron pipe found, thence (2) along land of now or late Whitehall
Township, South 41 degrees 50 minutes 24 seconds East, 1,815.19 feet (passing
through a found iron pipe at 1,798.65 feet) to a point; thence (3) in and along
the centerline of Columbia Street, T-925 (required right-of-way being 60.00 feet
wide) South 44 degrees 06 minutes 45 seconds West 618.36 feet to a railroad
spike found; thence (4) continuing in and along the aforesaid centerline of
Columbia Street South 44 degrees 19 minutes 02 seconds West 143.50 feet to a
point at the intersection with the centerline of aforesaid Xxxxx Xxxxxx Xxxxxx
(S.R. 1023); thence in and along the aforementioned centerline of Xxxxx Xxxxxx
Xxxxxx (S.R. 1023) the following five courses and distances: 1) North 57 degrees
33 minutes 58 seconds West 510.78 feet to a point; 2) North 57 degrees 47
minutes 18 seconds West 759.83 feet to a point; 3) North 35 degrees 13 minutes
08 seconds West 167.84 feet to a point; 4) North 24 degrees 21 minutes 28
seconds West 104.10 feet to a point; and 5) North 21 degrees 34 minutes 12
seconds West 320.82 feet to the point or place of beginning.
Containing 40.138 acres.
BEING the same premises which Xxxx'x Department Stores, Inc., by deed dated
9/30/94 and recorded 10/5/94 in the Recorder's Office of the County of Lehigh in
Deed Book Volume 1534 Page 67 conveyed unto The Bon-Ton Stores, Inc., now known
as The Bon-Ton Department Stores, Inc., Grantor herein.
62
Johnstown Premises
ALL THAT CERTAIN parcel of land situate in the Township of Richland, County of
Cambria, State of Pennsylvania and within The Developer Tract of Johnstown
Zamias Limited Partnership, being Department Store Tract 2 as shown on the Plan
of Minor Subdivision for Johnstown Zamias Limited Partnership prepared by L.
Xxxxxx Xxxxxxx and Associates of Ebensburg, Pennsylvania, and recorded May 22,
1991, in Plot Map 311 F, bounded and described as follows:
BEGINNING at a point, said point being radial to and 22.00 feet South of the
centerline point of tangency station of the ring road and also being radial to
and 44.00 feet South of the Northern end point of a 423.78 feet radius arc
described in The Developer Tract, thence through The Developer Tract as follows:
(1) North 65 degrees 48 minutes 45 seconds East, a distance of 424.73 feet to a
point of curvature, (2) Northeast along a curve to the right having a radius of
265.06, a central angle of 23 degrees 54 minutes 44 seconds and an arc distance
of 110.62 feet to a point, (3) South 04 degrees 56 minutes 36 seconds West, a
distance of 613.41 feet, (4) South 64 degrees 56 minutes 20 seconds West, a
distance of 26.34 feet, (5) South 25 degrees 03 minutes 40 seconds East, a
distance of 50.00 feet, (6) South 64 degrees 56 minutes 20 seconds West, a
distance of 236.00 feet, (7) North 25 degrees 03 minutes 40 seconds West a
distance of 50.00 feet, (8) North 70 degrees 03 minutes 40 seconds West, a
distance of 113.73, (9) North 25 degrees 03 minutes 40 seconds West, a distance
of 464.82 feet to a point of curvature, (10) Northeast along a curve to the
right having a radius of 379.78 feet, a central angle of 18 degrees 01 minute 06
seconds and an arc distance of 119.43 feet, to the point of beginning.
CONTAINING 6.63 acres.
THE bearings of the above-described parcel of land are based on the Pennsylvania
State Plan Coordinate System, South Zone.
BEING the same premises which Johnstown Zamias Limited Partnership, by deed
dated 12/18/91 and recorded 12/20/91 in the Recorder's Office of the County of
Cambria in Deed Book 1260 page 918. conveyed to The Bon-Ton Stores, Inc., now
known as The Bon-Ton Department Stores, Inc., Grantor herein.
63
EXHIBIT A-2
EXCESS LAND
All that certain parcel of land situate along Columbia Street (T-925),
in Whitehall Township, Lehigh County, Pennsylvania, bounded and described as
follows, to wit:
Beginning at a point on the centerline of said Columbia Street (T-925)
said point being in line with land of now or late Whitehall Township and being
the easterly most property corner of the Grantor, thence
1. from the said point of beginning in and along the aforesaid
centerline of Columbia Street, T-925 (required right-of-way being 60.00 feet
wide) S 44(degrees) 06' 45" W 100.00 feet to a point, thence
2. passing through the aforesaid Columbia Street (T-925) and
along land of the Grantor herein, N 40(degrees) 21' 36" W 310.00 feet to a
point, thence
3. continuing along land of the Grantor herein, N 1(degree)31'
02" E 133.63 feet to a point, thence
4. along the aforesaid land of now or late Whitehall Township, S
41(degrees) 50' 24" E 400.00 feet (passing through a found iron pipe at 383.46
feet) to the point or place of beginning.
containing 0.775 acres or 33,776 square feet
Subject to all existing and proposed access, drainage and utility
easements.
Being all as shown on a plan titled "Parcel to be Conveyed to Whitehall
Township, Lehigh County - The Bon-Ton Department Stores, Inc., Distribution
Center Property", Plan #P-3365, dated February 20, 1997, last revised March 12,
1997 as prepared by F & M Associates, Inc., Consulting Civil Engineers,
Allentown, Pennsylvania.
64
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances of every
kind and nature whatsoever now or hereafter affixed or attached to or installed
in any of the Leased Premises (except as hereafter provided), including all
electrical, anti-pollution, heating, lighting (including hanging fluorescent
lighting), incinerating, power, air cooling, air conditioning, humidification,
sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and
ventilating systems, devices and machinery and all engines, pipes, pumps, tanks
(including exchange tanks and fuel storage tanks), motors, conduits, ducts,
steam circulation coils, blowers, steam lines, compressors, oil burners,
boilers, doors, windows, loading platforms, lavatory facilities, stairwells,
fencing (including cyclone fencing), passenger and freight elevators, overhead
cranes and garage units, together with all additions thereto, substitutions
therefor and replacements thereof required or permitted by this Lease, but
excluding all personal property and all trade fixtures, machinery, office,
manufacturing and warehouse equipment which are not necessary to the operation,
as buildings, of the buildings which constitute part of the Leased Premises.
65
EXHIBIT C
PERMITTED ENCUMBRANCES
66
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent.
(a) Initial Term.
(i) Subject to the adjustments provided for in
Paragraphs 1(b), 2, 3 and 4 below, Basic Rent payable in respect of the Initial
Term shall be $1,270,750 per annum, payable quarterly in advance on each Basic
Rent Payment Date, in equal installments of $317,687.50 each.
(ii) If the initial Loan obtained by Landlord is at
an interest rate of less than 8.15% per annum (the "Lesser Rate"), then the
annual and quarterly installments of Basic Rent payable under Paragraph 1(a)
above shall be reduced by the difference between the debt service payable on a
loan in the principal amount of $6,900,000 ("Principal Amount") at an interest
rate of 8.15% per annum and an amortization of twenty (20) years ("Amortization
Schedule") and debt service payments on a loan in the Principal Amount at an
interest rate equal to the Lesser Rate and based upon the Amortization Schedule.
If the initial Loan obtained by Landlord is at an interest rate of greater than
8.15% per annum (the "Greater Rate"), then the annual and quarterly installments
of Basic Rent payable under Paragraph 1(a) above shall be increased by the
difference between the debt service payable on a loan in the Principal Amount at
the interest rate of 8.15% per annum and based upon the Amortization Schedule
and the debt service payments on the Principal Amount at an interest rate equal
to the Greater Rate and based upon the Amortization Schedule; provided, however,
that if the Greater Rate is higher than 8.50% per annum, the Greater Rate shall
be deemed to be 8.50% per annum.
(b) Renewal Terms.
(i) The annual Basic Rent for the Allentown Premises
for each Renewal Term will be the Basic Rent in effect immediately prior to the
Renewal Date for the applicable Renewal Term, adjusted as provided for in
Xxxxxxxxxx 0, 0 xxx 0 xxxxx.
(xx) (A) For so long as the Johnstown Premises are
and continue to be used for retail purposes, the annual Basic Rent for the
Johnstown Premises for each Renewal Term shall be the sum of Three Hundred Fifty
Thousand Dollars ($350,000) and 1.5% of annual Gross Sales in excess of
$12,000,000 for the fiscal year of Tenant ending on or immediately prior to the
Renewal Date and for each fiscal year of Tenant thereafter during the applicable
Renewal Term ("Gross Sales Rent"). If there is construction of an Alteration at
the Johnstown Premises so that the Johnstown Premises contain in excess of
80,884 gross square feet of floor area, then, to the extent the Alteration
increases the selling area of the Johnstown Premises, the Gross Sales Rent
Tenant is required to pay Landlord
67
shall be adjusted to reflect such increased floor area. This adjustment shall be
effected by multiplying Gross Sales Rent by a fraction having as a numerator
80,884 and having as a denominator the expanded floor area of the Johnstown
Premises.
(B) If at any time the Johnstown Premises
shall cease to be used for retail purposes the annual Basic Rent for such year
and for all subsequent years shall be the annual Basic Rent in effect
immediately prior to the year in which such retail use was terminated and shall
thereafter be adjusted as provided for in Paragraphs 2, 3 and 4 below.
(C) The term "Gross Sales" as used in this
Lease shall mean the amount of gross retail sales made upon the Premises by
Tenant and the amount of gross retail sales, if any, made upon the Premises by
an departmental lessee, concessionaire, licensee or subtenant of Tenant
occupying space within the Premises, whether such sales be paid in cash or be
evidenced by check, credit card charge, charge account or exchange, including
the amounts received from the sale of goods, wares and merchandise and for
services performed on or at the Premises (including the value of all goods
accepted in lieu of cash payment), together with the amount of all mail or
telephone orders taken or received and filled on the Premises, after deducting
or excluding, as the case may be, the following: (1) the amount of all sales,
use, gross receipts, value added, excise, retailers' occupation or other similar
taxes imposed in a specific amount or percentage upon, or determined by, the
amount of retail sales made upon the Premises, or any such tax separately stated
as comprising a component of the purchase price of an item; (2) amounts in
excess of Tenant's (or any such departmental lessee's, concessionaire's,
licensee's or subtenant's) cash sale price charged on sales made on credit, for
cash on delivery, or under a time payment plan or layaway plan; (3) sales
subject to employee discounts; (4) sales of promotional items (e.g. Christmas
Bears) made at little or no profit; (5) refunds and allowances for merchandise
returned to the Premises made to customers and charged by Tenant to the Premises
regardless of whether the sales out of which such refunds and allowances arose
were ever included in Gross Sales; (6) receipts from snack bars and cafeterias
operated solely for the use of Tenant's employees, weighing machines, vending
machines maintained for the convenience of Tenant's employees and the incidental
convenience of customers, amusement devices, and public telephones; (7) sale of
gift certificates, provided, however, that the cash sale price of any item
purchased with such a certificate shall be included in Gross Sales unless
otherwise excludable under the provisions of this subsection (C); (8) premium,
commissions, payments and other amounts received from or in connection with (i)
the sale of policies of insurance, mutual funds, stocks, bonds and other
securities, travelers' checks, money orders, and similar items, (ii) the sale or
rendition of financial services of all types including without limitation the
operation of checking and saving accounts, the
68
issuance and cashing of checks, the furnishing of xxxx paying, custodial,
investment and fiduciary services, the making of secured and unsecured loans,
the operation of facilities for the electronic transfer of funds and use of
credit cards, the preparation of income tax returns and the operation of a real
estate brokerage business; and (iii) the sale of postage stamps, fishing and
hunting licenses, and tickets (including, but not limited to, those customarily
sold by travel and theater agencies); (9) charges for repairs, alterations, gift
wrapping, monogramming, delivery or installation of merchandise; (10) sales of
offices, departments or divisions not located upon the Premises including, but
not limited to, those resulting from referrals or solicitations made on or from
the Premises such as sales procured through an in-store custom decorating studio
which are filled by a custom decorating service center located outside the
Premises; (11) sales of service contracts and assured performance plans relating
to merchandise sold by Tenant; (12) sales made through the commercial and
industrial sales department of Tenant or through any travel agency operated on
the Premises; (13) proceeds of claims for damage to merchandise; (14) exchanges
of merchandise between stores of Tenant where such exchanges are made solely for
the convenient operation of Tenant's business; (15) returns to shippers or
manufacturers; (16) sales of trade fixtures, machinery and equipment not carried
as stock in trade by Tenant; (17) sales in bulk of damaged or aged merchandise;
(18) sales to bona fide non-profit or charitable institutions below the normal
retail price and sales made for the benefit of bona fide non-profit or
charitable institutions; and (19) deposits in anticipation of sale, provided
same shall be included in Gross Sales upon completion of the sale.
2. CPI Adjustments to Basic Rent. The Basic Rent shall be subject to
adjustment, in the manner hereinafter set forth, for increases in the index
known as United States Department of Labor, Bureau of Labor Statistics, Consumer
Price Index, All Urban Consumers, United States City Average, All Items,
(1982-84=100) ("CPI") or the successor index that most closely approximates the
CPI. If the CPI shall be discontinued with no successor or comparable successor
index, Landlord and Tenant shall attempt to agree upon a substitute index or
formula, but if they are unable to so agree, then the matter shall be determined
by arbitration in accordance with the rules of the American Arbitration
Association then prevailing in New York City. Any decision or award resulting
from such arbitration shall be final and binding upon Landlord and Tenant and
judgment thereon may be entered in any court of competent jurisdiction. In no
event will the Basic Rent as adjusted by the CPI adjustment be less than the
Basic Rent in effect for the three (3) year period immediately preceding such
adjustment.
3. Effective Dates of CPI Adjustments. Basic Rent shall not be adjusted
to reflect changes in the CPI until the third (3rd) anniversary of the Basic
Rent Payment Date on which the first full quarterly installment of Basic Rent
shall be due
69
and payable (the "First Full Basic Rent Payment Date"). As of the third (3rd)
anniversary of the First Full Basic Rent Payment Date and thereafter on the
sixth (6th), ninth (9th), twelfth (12th), fifteenth (15th) and eighteenth (18th)
and, if the Initial Term is extended, on the twenty-first (21st) anniversary and
each third (3rd) anniversary thereafter of the First Full Basic Rent Payment
Date, Basic Rent shall be adjusted to reflect increases in the CPI during the
most recent three (3) year period immediately preceding each of the foregoing
dates (each such date being hereinafter referred to as the "Basic Rent
Adjustment Date").
4. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date, the Basic Rent
in effect immediately prior to such date shall be multiplied by the Aggregate
CPI Increase (as hereinafter defined) and the product of such multiplication
shall be added to the Basic Rent in effect immediately prior to such Basic Rent
Adjustment Date.
"Aggregate CPI Increase" shall mean the product of the sums of one (1)
plus each of the compounded increases (but not decreases) in the Relevant CPI
(as hereinafter defined) for each of the three (3) 12-month periods ending on
the first, second and third anniversaries (each such anniversary being a
"Calculation Date") of the first full Basic Rent Payment Date (in the case of
the First Basic Rent Adjustment Date) or the preceding Basic Rent Adjustment
Date (in the case of each subsequent Basic Rent Adjustment Date) over the
Relevant CPI for the previous 12-month period (each an "Annual Increase") from
which product shall be subtracted one (1); provided, that if the Annual Increase
for any 12-month period is greater than 3%, then the Annual Increase for such
12-month period shall be deemed to be 3%. The Relevant CPI for the 12-month
period ending on any Calculation Date shall be equal to the average CPI for the
three (3) calendar months published on or before the forty-fifth (45) day
preceding such Calculation Date (the "Prior Months"), and the Relevant CPI for
each of the preceding 12-month periods shall be equal to the average CPI for the
three (3) months of such 12-month period which correspond to the Prior Months.
By way of example and not of limitation, if, immediately prior to the
Basic Rent Adjustment Date occurring on the ninth (9th) anniversary of the First
Full Basic Rent Payment Date, Basic Rent is $100 and the increases in the
Relevant CPI for the three (3) preceding years are 2%, 0% and 12%, respectively,
the Aggregate CPI Increase will be as follows: (1.02 x 1.0 x 1.03) = 1.0506 - 1
= 0.0506; then, .0506 x $100 = $5.06; then $100 + $5.06 = $105.06, which is the
new Basic Rent. Said another way, .0506 + 1 = 1.0506; then, $100 x 1.0506 =
$105.06, which is the new Basic Rent.
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(b) Notice of the new annual Basic Rent shall be
delivered to Tenant on or before the tenth (10th) day preceding each Basic Rent
Adjustment Date.
(c) Effective as of a given Basic Rent Adjustment Date,
Basic Rent payable under this Lease until the next succeeding Basic Rent
Adjustment Date shall be the Basic Rent in effect after the adjustment provided
for as of such Basic Rent Adjustment Date.
71
EXHIBIT E
ACQUISITION COST
Allentown Premises $ 8,068,063.00
Johnstown Premises $ 3,973,822.00
--------------
$12,041,885.00
72
EXHIBIT F
PERCENTAGE ALLOCATION OF BASIC RENT
Allentown Premises 67%
Johnstown Premises 33%
100%
In the event of a Lease Bifurcation, the lease for the Allentown Premises shall
provide for Basic Rent equal to 67% of the Basic Rent as of the date immediately
prior to the Lease Bifurcation and the lease for the Johnstown Premises shall
provide for Basic Rent equal to 33% of the Basic Rent as of the date immediately
prior to the Lease Bifurcation.
73
EXHIBIT G
FINANCIAL COVENANTS
1. Corporate Existence; Sale of Assets.
(a) Tenant shall maintain its corporate existence, rights
and franchises in full force and effect in its jurisdiction of incorporation.
Tenant shall, and shall cause of its Subsidiaries to, qualify and remain
qualified as a foreign corporation in each jurisdiction in which failure to
receive or retain such qualification would have a material adverse effect on the
business, operations or financial condition of the enterprise comprised of the
Tenant and its Subsidiaries taken as a whole.
(b) The Tenant shall not in a single transaction or
series of related transactions, sell or convey, transfer, abandon or lease all
or substantially all of its assets to any Person. Notwithstanding the above,
Tenant shall have the right in a single transaction or series of related
transactions to sell or convey all or substantially all of its assets to a
Person if the following conditions are met:
(i) the Lease is assigned to such Person in
compliance with the provisions of Paragraph 21 of this Lease or Tenant
repurchases the Leased Premises in accordance with Paragraph 21 of this Lease;
and
(ii) immediately after such transaction the
purchaser, assignee or transferee is in compliance with the terms and covenants
of this Lease.
2. Consolidated Net Worth. At all times during the Term Consolidated
Net Worth shall not as of the end of each fiscal quarter of Tenant that ends on
and after January 31, 1997 be less than $85,000,000.
3. Definitions. For the purpose of this Exhibit "E" the following terms
shall have the following meanings:
"Closing Date" shall mean April 10, 1997.
"Consolidated Net Worth" shall mean, at any date, the net worth of
Tenant and its consolidated Subsidiaries on a consolidated basis, determined in
accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America, applied on a consistent
basis.
"Person" shall mean an individual, partnership, association,
corporation or other entity.
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"Subsidiary" of any Person means a corporation a majority of the Voting
Stock of which is at the time owned, or the management of which is otherwise
controlled, directly or indirectly, through one or intermediaries, or both, by
such Person.
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EXHIBIT H
TERMINATION VALUES
Lease Year Termination Value
---------- -----------------
1 $12,222,513
2 $12,192,408
3 $10,687,173
4 $10,687,173
5 $10,687,173
6 $10,687,173
7 $12,687,173
8 $ 9,633,508
9 $ 9,633,508
10 $ 9,633,508
11 $ 9,633,508
12 $ 9,633,508
13 $ 8,489,529
14 $ 8,489,529
15 $ 8,489,529
16 $ 8,489,529
17 $ 8,489,529
18 $ 8,308,901
19 $ 8,308,901
20 and thereafter $ 8,308,901
The Termination Value with respect to the Allentown Premises shall be 67% of the
applicable Termination Value specified above and the Termination Value with
respect to the Johnstown Premises shall be 33% of the applicable Termination
Value specified above.
76
EXHIBIT I
POSTCLOSING ENVIRONMENTAL AND LAND USE COMPLIANCE OBLIGATIONS
ALLENTOWN PREMISES
Tenant shall conduct the following actions at the Allentown Premises
and provide Landlord with a written status report, on or before the tenth day of
each month commencing July 10, 1997, until completion of all of the activities
listed below in a manner satisfactory to Landlord. Tenant's failure to timely
comply with any of the obligations hereunder shall constitute an Event of
Default.
A. Closure of Waste Oil Underground Storage Tank. On or before March 1,
1998, Tenant shall have permanently closed the waste oil tank by removing the
tank in accordance with all applicable Pennsylvania Department of Environmental
Protection ("PADEP") regulations; shall have conducted a Site Assessment and any
remediation of contaminated soils and/or groundwater as may be required if a
release from the tank has occurred; and shall have submitted an Underground
Storage Tank System Closure Report Form to PADEP for approval. All tank handling
activities shall be conducted by a PADEP certified tank installer.
B. Connection to Public Sanitary Sewer System. On or before September
12, 1997 or such later date as may be agreed to by the Township of Whitehall,
Tenant shall have completed connection of the property to the public sewer
system in accordance with the letter from Xxxxxx Xxxxxxxxxx of the Township of
Whitehall dated March 10, 1996 (front page).
C. Disconnection of Floor Drain. On or before November 1, 1997, Tenant
shall disconnect the floor trench drains in the garage area at the west end of
the building and fill it in to reduce the potential for releases of hydraulic
oil from the oil reservoir and any chemical spills to the environment.
D. Secondary Containment. On or before November 1, 1997, Tenant shall
install a containment curb around the storage area which shall be sufficient to
contain any spills of chemicals or other materials from the largest storage
container stored in the storage area.
E. Fire Connection/Electrical Work. On or before October 1, 1997 Tenant
shall provide to Landlord evidence that a second fire connection from Columbia
Street to the Improvements has been installed and that all outstanding
electrical permits for electrical work previously performed have been satisfied.
