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LEASE AGREEMENT
by and between
CEL (IN) QRS 12-17, INC.,
an Indiana corporation
as LANDLORD
and
CELADON TRUCKING SERVICES, INC.,
a New Jersey corporation,
as TENANT
Premises: Indianapolis, Indiana
Dated as of: September 19, 1996
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TABLE OF CONTENTS
Page
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Parties 1
1. Demise of Premises 1
2. Certain Definitions 1
3. Title and Condition 9
4. Use of Leased Premises; Quiet Enjoyment 11
5. Term 12
6. Basic Rent 12
7. Additional Rent 13
8. Net Lease; Non-Terminability 14
9. Payment of Impositions 15
10. Compliance with Laws and Easement Agreements;
Environmental Matters 17
11. Liens; Recording 18
12. Maintenance and Repair 19
13. Alterations and Improvements 20
14. Permitted Contests 21
15. Indemnification 22
16. Insurance 23
17. Casualty and Condemnation 26
18. Termination Events 28
19. Restoration 30
20. Procedures Upon Xxxxxxxx 00
00. Assignment and Subletting; Prohibition
against Leasehold Financing 33
22. Events of Xxxxxxx 00
00. Remedies and Damages Upon Default 37
24. Notices 41
25. Estoppel Certificate 42
26. Surrender 42
27. No Merger of Title 43
28. Books and Records 43
29. Determination of Value 43
30. Non-Recourse as to Landlord 45
31. Financing 45
32. Subordination 46
33. Financial Covenants 46
34. Tax Treatment; Reporting 46
35. Option to Xxxxxxxx 00
00. Miscellaneous 47
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Financial Covenants
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LEASE AGREEMENT, made as of this 19th day of September, 1996, between
CEL (IN) QRS 12-17, INC., an Indiana corporation ("Landlord"), with an address
c/o W. P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and CELADON TRUCKING SERVICES, INC., a New Jersey corporation ("Tenant"),
with an address at One Celadon Drive, 0000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxx 00000.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets to Tenant, and
Tenant hereby takes and leases from Landlord, for the term and upon the
provisions hereinafter specified, the following described property
(collectively, the "Leased Premises"): (a) the premises described in Exhibit "A"
hereto, together with the Appurtenances (collectively, the "Land"); (b) the
buildings, structures and other improvements now or hereafter constructed on the
Land, including without limitation, the office building containing approximately
21,866 square feet, the driver center containing approximately 6,336 square
feet, the maintenance building containing approximately 21,533 square feet and
the dormitory containing approximately 11,436 square feet that are currently
located thereon (collectively, the "Improvements"); and (c) the fixtures,
machinery, equipment and other property described in Exhibit "B" hereto
(collectively, the "Equipment").
2. Certain Definitions.
"Acquisition Cost" shall mean $6,807,000.
"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.
"Alterations" shall mean all changes, additions, improvements or
repairs to, all alterations, reconstructions, renewals, replacements or removals
of and all substitutions or replacements for any of the Improvements or
Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments, easements,
rights-of-way, rights, privileges in and to the Land, including (a) easements
over other lands granted by any Easement Agreement, (b) any streets, ways,
alleys, vaults,
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gores or strips of land adjoining the Land, and (c) any access to or from any
public streets, roads, ditches and other means of access and drainage.
"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.
"Condemnation" shall mean a Taking.
"Condemnation Notice" shall mean notice or actual knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Costs" of a Person or associated with a specified transaction shall
mean all reasonable costs and expenses incurred by such Person or associated
with such transaction, including without limitation, attorneys' fees and
expenses, court costs, brokerage fees, escrow fees, title insurance premiums,
mortgage commitment fees, mortgage points, recording fees and transfer taxes, as
the circumstances require.
"Covenants" shall mean the covenants and agreements described on
Exhibit "E".
"CPI" shall mean CPI as defined in Exhibit "D" hereto.
"Default Termination Amount" shall mean the Default Termination
Amount as defined in Paragraph 23(a)(iii).
"Default Rate" shall mean the Default Rate as defined in Paragraph
7(a)(iv).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and
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other agreements listed as Permitted Encumbrances or as may hereafter affect the
Leased Premises.
"Environmental Law" shall mean (i) whenever enacted or promulgated,
any applicable federal, state, foreign and local law, statute, ordinance, rule,
regulation, license, permit, authorization, approval, consent, court order,
judgment, decree, injunction, code, requirement or agreement with any
governmental entity, (x) relating to pollution (or the cleanup thereof), or the
protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous
Conditions or Hazardous Activities, in each case as amended and as now or
hereafter in effect, and (ii) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations or injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Hazardous Substance. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act, the
federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic
Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act and the federal Hazardous Materials Transportation Act,
each as amended and as now or hereafter in effect and any similar state or local
Law.
"Environmental Violation" shall mean (a) any direct or indirect
discharge, disposal, spillage, emission, escape, pumping, pouring, injection,
leaching, release, seepage, filtration or transporting of any Hazardous
Substance at, upon, under, onto or within the Leased Premises, or from the
Leased Premises to the environment, in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which could result in any liability to Landlord, Tenant or Lender, any Federal,
state or local government or any other Person for the costs of any removal or
remedial action or natural resources damage or for bodily injury or property
damage, (b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within the Leased Premises or which extends to any
Adjoining Property in violation of any Environmental Law or in excess of any
reportable
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quantity established under any Environmental Law or which could result in any
liability to any Federal, state or local government or to any other Person for
the costs of any removal or remedial action or natural resources damage or for
bodily injury or property damage, (c) the abandonment or discarding of any
barrels, containers or other receptacles containing any Hazardous Substances in
violation of any Environmental Laws, (d) any activity, occurrence or condition
which could result in any liability, cost or expense to Landlord or Lender or
any other owner or occupier of the Leased Premises, or which could result in a
creation of a lien on the Leased Premises under any Environmental Law, or (e)
any violation of or noncompliance with any Environmental Law.
"Equipment" shall mean the Equipment as defined in Paragraph 1.
"Event of Default" shall mean an Event of Default as defined in
Paragraph 22(a).
"Fair Market Value" shall mean the higher of (a) the fair market
value of the Leased Premises as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased Premises
as of the Relevant Date as affected and encumbered by this Lease and, except as
such term is used in the definition of Default Termination Amount, assuming that
the Term has been extended for all extension periods provided for herein, and
except in connection with a determination of Fair Market Value in connection
with a Termination Notice that is occasioned by a Taking in which event the
value shall be determined without regard to any assumption that the Term will be
extended. For all purposes of this Lease, Fair Market Value shall be determined
in accordance with the procedure specified in Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair Market
Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately available
funds which at the time of payment are legal tender for the payment of public
and private debts in the United States of America.
"Guarantor" shall mean Celadon Group, Inc., a Delaware corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement of even
date herewith from Guarantor to Landlord guaranteeing the payment and
performance by Tenant of all of Tenant's obligations under the Lease.
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"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance in violation of Environmental Laws; (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) in violation of
Environmental Laws, (iii) involves the containment or storage of any Hazardous
Substance in violation of Environmental Laws; or (iv) would cause the Leased
Premises or any portion thereof to become a hazardous waste treatment,
recycling, reclamation, processing, storage or disposal facility within the
meaning of any Environmental Law; provided that the existence, use and operation
of above ground and underground storage tanks and truck washes and the
generation, storage and use of those chemicals, materials, substances or other
items commonly generated, stored or used by motor carriers in compliance with
Environmental Laws shall not be deemed to be a Hazardous Activity.
"Hazardous Condition" means any condition which would support any
claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material, product,
petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance supporting a claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in Paragraph
9(a).
"Improvements" shall mean the Improvements as defined in Paragraph
1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Insurance Requirements" shall mean the requirements of all
insurance policies required to be maintained in accordance with this Lease.
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"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year, the
period commencing on the Commencement Date and ending at midnight on the last
day of the twelfth (12th) consecutive calendar 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 Laws relating
to accessibility to, usability by, and discrimination against, disabled
individuals) and all covenants, restrictions and conditions now or hereafter of
record which may be applicable to Tenant or to any of the Leased Premises, or to
the use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair or restoration of any of the Leased Premises, even if
compliance therewith necessitates structural changes or improvements or results
in interference with the use or enjoyment of any of the Leased Premises.
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note.
"Loan" shall mean any loan made by one or more Lenders to Landlord,
which loan is secured by a Mortgage and an Assignment and evidenced by a Note.
"Monetary Obligations" shall mean Rent and all other sums payable by
Tenant under this Lease to Landlord, to any third party on behalf of Landlord or
to any Indemnitee.
"Mortgage" shall mean any mortgage or deed of trust from Landlord to
a Lender which (a) encumbers any of the Leased Premises and (b) secures
Landlord's obligation to repay a Loan, as the same may be amended, supplemented
or modified.
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"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), (vi) or (vii) of Paragraph 16(a), as the case may be, less any expenses
incurred by Landlord and Lender in collecting such award or proceeds.
Notwithstanding anything to the contrary contained in this Lease, Net Award
shall not include the proceeds of any blanket policy of insurance, except to the
extent that such proceeds relate to the Leased Premises.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Offer Amount" shall mean the greater of (a) Fair Market Value or
(b) the sum of the Acquisition Cost and any Prepayment Premium which Landlord
will be required to pay in prepaying any Loan with proceeds of the Offer Amount.
"Partial Casualty" shall mean any Casualty which does not constitute
a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does not
constitute a Termination Event.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions and easements and other encumbrances, other than
any Mortgage or Assignment, listed on Exhibit "C" hereto (but such listing shall
not be deemed to revive any such encumbrances that have expired or terminated or
are otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Prepayment Premium" shall mean any payment (other than a payment of
principal and/or interest which Landlord is required to make under a Note or a
Mortgage) by reason of any prepayment by Landlord of any principal due under a
Note or Mortgage, and which may be (in lieu of such prepayment premium or
prepayment penalty) a "make whole" clause requiring a prepayment premium in an
amount sufficient to compensate the Lender for the loss of the benefit of the
Loan due to a prepayment.
"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) eight percent (8%) per annum.
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"Prime Rate" shall mean the annual interest rate as published, from
time to time, in the Wall Street Journal as the "Prime Rate" in its column
entitled "Money Rate". The Prime Rate may not be the lowest rate of interest
charged by any "large U.S. money center commercial banks" and Landlord makes no
representations or warranties to that effect. In the event the Wall Street
Journal ceases publication or ceases to publish the "Prime Rate" as described
above, the Prime Rate shall be the average per annum discount rate (the
"Discount Rate") on ninety-one (91) day bills ("Treasury Bills") issued from
time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Relevant Amount" shall mean the Termination Amount, the Default
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 the applicable Condemnation Notice is received, in the event of a
Termination Notice under Paragraph 18 which is occasioned by a Taking, (b) the
date immediately prior to the date on which the applicable Casualty occurs, in
the event of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c), (d) the date
immediately prior to the Event of Default giving rise to the need to determine
Fair Market Value in the event Landlord provides Tenant with notice of its
intention to require Tenant to make a termination offer under Paragraph
23(a)(iii) or (e) the date on which Landlord receives Tenant's notice that it is
exercising its option to purchase the Leased Premises pursuant to Paragraph 35
hereof.
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Senior Credit Agreement" shall mean Senior Credit Agreement as
defined in Exhibit "E".
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the State of Indiana.
"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.
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"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
permitted by Law, or (b) any de facto condemnation. The Taking shall be
considered to have taken place as of the later of the date actual physical
possession is taken by the condemnor, or the date on which the right to
compensation and damages accrues under the law applicable to the Leased
Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Amount" shall mean the greater of (a) Fair Market Value
or (b) the sum of the Acquisition Cost and any Prepayment Premium which Landlord
will be required to pay in prepaying any Loan with proceeds of the Termination
Amount.
"Termination Date" shall mean Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined in
Paragraph 18(a).
3. Title and Condition.
(a) The Leased Premises are demised and let subject to (i) the
Mortgage and Assignment presently in effect, (ii) the rights of any Persons in
possession of the Leased Premises, excepting only the rights of Persons, if any,
created by Landlord prior to the date hereof, (iii) the existing state of title
of any of the Leased Premises, including any Permitted Encumbrances, (iv) any
state of facts which an accurate survey or physical inspection of the Leased
Premises might show, (v) all Legal Requirements, including any existing
violation of any thereof, and (vi) the condition of the Leased Premises as of
the commencement of the Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises is in good
condition and repair at the inception of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
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WITH RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY WARRANTY OR
REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE
OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE
EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v)
VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix)
CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii)
DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE,
HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE LEASED
PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL RISKS INCIDENT THERETO ARE
TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES IS OF ITS
SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAS BEEN
INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR
PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the title
to the Leased Premises prior to the execution and delivery of this Lease and has
found the same to be satisfactory for the purposes contemplated hereby. Tenant
acknowledges that (i) fee simple title (both legal and equitable) is in Landlord
and that Tenant has only the leasehold right of possession and use of the Leased
Premises as provided herein, (ii) the Improvements conform to all material Legal
Requirements and all Insurance Requirements, (iii) all easements necessary or
appropriate for the use or operation of the Leased Premises for Tenant's
intended use have been obtained, (iv) all contractors and subcontractors who
have performed work on or supplied materials to the Leased Premises have been
fully paid, and all materials and supplies have been fully paid for, except for
United Construction Enterprises Company, which is completing certain "punch
list" items, the aggregate cost of which is less than $75,000, and Xxxxxx Awning
Company, which is completing the installation of awnings at the Property, the
aggregate cost of which is less than $10,000, (v) the Improvements have been
fully completed in all material respects in a workmanlike manner of first class
quality, and (vi) all Equipment reasonably 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
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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. At such
time as no Event of Default exists, all of said warranties, guaranties,
indemnities and other rights shall automatically be assigned to Tenant, without
recourse or warranty whatsoever.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for motor carrier
terminal purposes, including, without limitation, office, maintenance (for
Tenant and other persons), dormitory, parking and driver training and for no
other purpose without the prior written consent of Landlord which shall not be
unreasonably withheld or delayed. Tenant shall not use or occupy or permit any
of the Leased Premises to be used or occupied, nor do or permit anything to be
done in or on any of the Leased Premises, in a manner which would (i) violate
any Law or Legal Requirement, (ii) make void or voidable or cause any insurer to
validly 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 or anyone by, through or under Landlord with respect to
matters that arise after the date hereof, provided that Landlord or its agents
may enter upon and examine any of the Leased Premises at such reasonable times
as Landlord may select and upon reasonable notice to Tenant (except in the case
of an emergency, in which no notice shall be required) for the purpose of
inspecting the Leased Premises, verifying compliance or non-compliance by Tenant
with its obligations hereunder and the existence or non-existence of an Event of
Default or event which with the passage of time and/or notice would constitute
an Event of Default, showing the Leased Premises to prospective Lenders and
purchasers and taking such other action with respect to the Leased Premises as
is permitted by any provision hereof. Tenant may require any prospective
purchaser, tenant or lender to sign a confidentiality agreement (which shall be
reasonably acceptable to such Person) prior to inspecting the Leased Premises.
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5. Term.
(a) Subject to the provisions hereof, Tenant shall have and hold the
Leased Premises for an initial term (such term, as extended or renewed in
accordance with the provisions hereof, being called the "Term") commencing on
the date hereof (the "Commencement Date") and ending on the last day of the two
hundred fortieth 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 tenth (10th) anniversary of the Expiration Date (the Expiration Date and
such anniversary being a "Renewal Date"), the Term shall be deemed to have been
automatically extended for an additional period of ten (10) years, unless Tenant
shall notify Landlord in writing in recordable form at least two (2) years prior
to the next Renewal Date that Tenant is terminating this Lease as of the next
Renewal Date. Any such extension of the Term shall be subject to all of the
provisions of this Lease, as the same may be amended, supplemented or modified.
(c) If Tenant exercises its option not to extend or further extend
the Term, 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 the Leased Premises for sale or reletting and to erect upon the
Leased Premises signs indicating such availability and (ii) show the Leased
Premises to prospective purchasers or tenants or their agents at such reasonable
times as Landlord may select with reasonable notice to Tenant. Tenant may
require any prospective purchaser, tenant or lender to sign a confidentiality
agreement (which shall be reasonably acceptable to such Person) prior to
inspecting the Leased Premises.
6. Basic Rent. Tenant shall pay to Landlord, without relief from
valuation and appraisement laws, as annual rent for the Leased Premises during
the Term, the amounts determined in accordance with Exhibit "D" hereto ("Basic
Rent"), commencing on the first day of October, 1996 and continuing on the first
day of each January, April, July and October thereafter during the Term (each
such day being a "Basic Rent Payment Date"). Each such rental payment shall be
made, at Landlord's sole discretion, (a) to Landlord at its address set forth
above and/or to such one or more other Persons, at such addresses and in such
proportions as Landlord may direct by fifteen (15) days' prior written notice to
Tenant (in which event Tenant shall give Landlord notice of each such payment
concurrent with the making thereof), and (b) by a check dated as of the relevant
Basic Rent Payment Date hand delivered at least five (5) business days before or
mailed at
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least ten (10) days before the applicable Basic Rent Payment Date, or in Federal
Funds on the relevant Basic Rent Payment Date. The form of payment shall be at
Tenant's discretion unless a particular form is required by a Lender. 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
reasonable costs and expenses of Tenant, Landlord and any other Persons
specifically referenced herein (including support staff costs and litigation
preparation costs in connection with any litigation for which costs are payable
by Tenant hereunder) 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 to Landlord, except any litigation or dispute
between Landlord and Lender or any purchaser that is unrelated to Tenant or
Tenant's obligations, representations or warranties under this Lease or any
document executed by Tenant in connection with this Lease, (G) the exercise or
enforcement by Landlord, its successors and assigns, of any of its rights under
this Lease, (H) any amendment to or modification or termination of this Lease
made at the request of Tenant, (I) reasonable Costs of Landlord's counsel
incurred in connection with any act undertaken by Landlord (or its counsel) at
the request of Tenant, or incurred in connection with any act of Landlord
performed on behalf of Tenant as permitted herein, 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 installment or portion thereof, provided, however, that
with respect to the first late payment of all or any portion of any installment
of Basic Rent in any consecutive twelve (12) month period, the Late Charge shall
not be due and payable unless the Basic Rent has not been paid within five (5)
days' following the due date thereof;
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(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
excluding any grace periods, (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 excluding any grace
periods.
(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, (v) any latent or other defect in any of the
Leased Premises, (vi) the breach of any warranty of any seller or manufacturer
of any of the Equipment, (vii) any violation of any provision of this Lease by
Landlord, (viii) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or winding-up of, or other proceeding
affecting Landlord, (ix) the exercise of any remedy, including foreclosure,
under any Mortgage or Assignment, (x) any action with respect to
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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. The obligation to pay Rent or
amounts equal thereto shall not be affected by any collection of rents by any
governmental body pursuant to a tax lien or otherwise, even though such
obligation results in a double payment of Rent. All Rent payable by Tenant
hereunder shall constitute "rent" for all purposes (including Section 502(b)(6)
of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant shall have
no right and hereby waives all rights which it may have under any Law (i) to
quit, terminate or surrender this Lease or any of the Leased Premises, or (ii)
to any Set-Off of any Monetary Obligations.
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, provided that with respect to any such
easement or agreement entered into after the date hereof, Tenant has agreed to
such charges, all assessments and levies, all permit, inspection and license
fees, all rents and charges for water, sewer, utility and communication services
relating to the any of 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
leasehold interest in the Leased Premises, (iii) any of the Leased Premises,
(iv) Landlord as a result of or arising in respect of the acquisition,
ownership, occupancy, leasing, use, possession or sale of any of the Leased
Premises, any activity conducted on any of the Leased Premises, or the Rent,
including any tax payable pursuant to IND. Code Section 6-2.1-1-2(a) (1993) as
the same shall be amended, 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)) Landlord has agreed to pay (collectively, the "Impositions");
provided, that nothing herein shall obligate
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Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender)
which are determined on the basis of Landlord's (or Lender's) net income or net
worth (unless such taxes are in lieu of or a substitute for any other tax,
assessment or other charge upon or with respect to the Leased Premises which, if
it were in effect, would be payable by Tenant under the provisions hereof or by
the terms of such tax, assessment or other charge), (B) any estate, inheritance,
succession, gift or similar tax imposed on Landlord, (C) any capital gains tax
imposed on Landlord in connection with the sale of the Leased Premises to any
Person or (D) any gross receipts tax imposed on Landlord in connection with the
sale of the Leased Premises to any Person other than Tenant. 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
(1) copies of all settlements and notices pertaining to the Impositions which
may be issued by any governmental authority within ten (10) days after Tenant's
receipt thereof, (2) receipts for payment of all taxes required to be paid by
Tenant hereunder within thirty (30) days after the due date thereof and (3)
receipts for payment of all other Impositions within ten (10) days after
Landlord's request therefor.
(b) Landlord shall have the right at any time following the
occurrence of an Event of Default or at any time that a Lender shall request to
require Tenant to pay to Landlord an additional monthly sum (each an "Escrow
Payment") sufficient to pay the Escrow Charges (as hereinafter defined) as they
become due. As used herein, "Escrow Charges" shall mean real estate taxes on the
Leased Premises or payments in lieu thereof and premiums on any insurance
required by this Lease. Landlord shall determine the amount of the Escrow
Charges and of each Escrow Payment. As long as the Escrow Payments are being
held by Landlord the Escrow Payments shall not be commingled with other funds of
Landlord or other Persons and interest thereon shall accrue for the benefit of
Tenant from the date such monies are received and invested until the date such
monies are disbursed to pay Escrow Charges. Landlord shall apply the Escrow
Payments in a timely fashion to the payment of the Escrow Charges in such order
or priority as Landlord shall determine or as required by law. If at any time
the Escrow Payments theretofore paid to Landlord shall be insufficient for the
payment of the Escrow Charges, Tenant, within ten (10) days after Landlord's
demand therefor, shall pay the amount of the deficiency to Landlord.
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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 the Leased Premises and any other Person occupying any part of the Leased
Premises to comply with and conform to, all Insurance Requirements and Legal
Requirements (including all applicable Environmental Laws). Tenant shall not at
any time (i) cause, permit or suffer to occur any Environmental Violation or
(ii) permit any sublessee, assignee or other Person occupying the Leased
Premises under or through Tenant to cause, permit or suffer to occur any
Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all times promptly
and faithfully abide by, discharge and perform all of the covenants, conditions
and agreements contained in any Easement Agreement on the part of Landlord or
the occupier to be kept and performed thereunder. Tenant will not alter, modify,
amend or terminate any Easement Agreement, give any consent or approval
thereunder, or enter into any new Easement Agreement without, in each case, the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.
(c) At any time requested by a Lender or in connection with a sale
or financing of the Leased Premises or if an Event of Default exists and, in any
event, once every three (3) years during the Term, upon prior written notice
from Landlord, Tenant shall permit such persons as Landlord may designate ("Site
Reviewers") to visit the Leased Premises and perform, as agents of Tenant,
environmental site investigations and assessments ("Site Assessments") on the
Leased Premises for the purpose of determining whether there exists on the
Leased Premises any Environmental Violation or any condition which could result
in any Environmental Violation. Such Site Assessments may include both above and
below the ground testing for Environmental Violations and such other tests as
may be necessary, in the opinion of the Site Reviewers, to conduct the Site
Assessments. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Leased Premises as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments, and shall
make available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. In connection with the initial Loan and at any time
that an Environmental Violation is determined to exist, the cost of performing
and reporting the Site Assessment shall be paid by Tenant. In all other cases
the cost shall be paid by Landlord.
(d) If an Environmental Violation occurs or is found to exist and,
in Landlord's reasonable judgment, the cost of remediation of the same is likely
to exceed $100,000, Tenant shall provide to Landlord, within ten (10) days after
Landlord's request therefor, adequate financial assurances that Tenant will
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effect such remediation in accordance with applicable Environmental Laws. Such
financial assurances shall be a bond or letter of credit reasonably satisfactory
to Landlord in form and substance and in an amount equal to or greater than
Landlord's reasonable estimate, based upon a Site Assessment performed pursuant
to Paragraph 10(c), of the anticipated cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if an
Environmental Violation occurs or is found to exist and the Term would otherwise
terminate or expire, then, at the option of Landlord, the Term shall be
automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) If Tenant fails to correct any Environmental Violation which
occurs or is found to exist, Landlord shall have the right (but no obligation)
to take any and all actions as Landlord shall deem reasonably 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 Leased Premises entered into by Tenant shall contain covenants of the
other party to not at any time (i) cause any Environmental Violation to occur or
(ii) permit any Person occupying the Leased Premises through said subtenant or
concessionaire to cause any Environmental Violation to occur.
11. Liens; Recording.
(a) Tenant shall not suffer the filing of any lien or security
interest against the Leased Premises. In the event any such lien is filed for
work claimed to have been done for, or material claimed to have been furnished
to Tenant, Tenant shall cause such lien to be discharged of record within forty
(40) days after filing or, alternatively, Tenant shall furnish to Landlord (or
any other entity designated by Landlord) within such forty (40) day period a
bond or other assurances reasonably acceptable to Landlord that such claimed
indebtedness as finally determined will be paid by Tenant. Tenant shall
indemnify and
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save harmless Landlord from all costs, losses, expenses and attorneys' fees in
connection with any such lien.
(b) Tenant shall execute, deliver and record, file or register
(collectively, "record") all such instruments as may be required or permitted by
any present or future Law in order to evidence the respective interests of
Landlord and Tenant in the Leased Premises, and shall cause a memorandum of this
Lease (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such places
as may be required or permitted by any present or future Law in order to protect
the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain the Leased Premises and the
Adjoining Property in as good repair and appearance as they are in on the date
hereof and fit to be used for their intended use in accordance with the better
of the practices generally recognized as then acceptable by other companies in
its industry or observed by Tenant with respect to the other real properties
owned or operated by it, and, in the case of the Equipment, in as good
mechanical condition as it was on the later of the date hereof or the date of
its installation, except for ordinary wear and tear. Tenant shall take every
other action reasonably necessary or appropriate for the preservation and safety
of the Leased Premises. Tenant shall promptly make all Alterations of every kind
and nature, whether foreseen or unforeseen, which may be required to comply with
the foregoing requirements of this Paragraph 12(a). Landlord shall not be
required to make any Alteration, whether foreseen or unforeseen, or to maintain
any of the Leased Premises or Adjoining Property in any way, and Tenant hereby
expressly waives any right which may be provided for in any Law now or hereafter
in effect to make Alterations at the expense of Landlord or to require Landlord
to make Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12
shall be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall (i)
encroach upon any setback or any property, street or right-of-way adjoining the
Leased Premises, (ii) violate the provisions of any restrictive covenant
affecting the Leased Premises, (iii) hinder or obstruct any easement or
right-of-way to which any of the Leased Premises is subject or (iv) impair the
rights of others in, to or under any of the foregoing, Tenant shall, promptly
after receiving notice or otherwise acquiring knowledge thereof, either (A)
obtain from all necessary parties waivers or settlements of all proper 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
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shall be necessary to remove all such encroachments, hindrances or obstructions
and to end all such violations or impairments, including, if necessary, making
Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained the prior
written consent of Landlord and Lender, (i) to make non-structural Alterations
to the Leased Premises, (ii) to make structural Alterations or a series of
structural Alterations to the Leased Premises that, as to such Alterations, or
series thereof does not cost in excess of $500,000 and (iii) to install
Equipment in the Improvements or accessions to the Equipment that, as to such
Equipment or accessions, do not cost in excess of $200,000, so long as at the
time of construction or installation of any such Equipment or Alterations no
Event of Default exists and the value and utility of the Leased Premises is not
diminished thereby. If the cost of any structural Alterations or series of
structural Alterations is in excess of $500,000 or if the cost of any Equipment
or accessions thereto is in excess of $200,000, the prior written approval of
Landlord and Lender shall be required, such approval not to be unreasonably
withheld or delayed. Tenant shall not construct upon the Land any additional
buildings without having first obtained the prior written consent of Landlord
and Lender and Landlord shall not unreasonably withhold or delay such consent.
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or
as required by Paragraph 12 or 17 (such Alterations and actions being
hereinafter collectively referred to as "Work"), whether or not Landlord's
consent is required, then (i) the market value of the Leased Premises shall not
be lessened by any such Work or its usefulness impaired, (ii) all such Work
shall be performed by Tenant in a good and workmanlike manner, (iii) all such
Work shall be expeditiously completed in compliance with all Legal Requirements,
(iv) all such Work shall comply with the Insurance Requirements, (v) if any such
Work involves the replacement of Equipment or parts thereto, all replacement
Equipment or parts shall have a value and useful life equal to the greater of
(A) the value and useful life on the date hereof of the Equipment being replaced
or (B) the value and useful life of the Equipment being replaced immediately
prior to the occurrence of the event which required its replacement, (vi) Tenant
shall promptly discharge or remove all liens filed against any of the Leased
Premises arising out of such Work, (vii) Tenant shall procure and pay for all
permits and licenses required in connection with any such Work, (viii) all such
Work shall be the property of Landlord and shall be subject to this Lease, and
Tenant shall execute and deliver to Landlord any document 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
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requested by Landlord or required by this Lease, with the provisions of
Paragraph 19(a), whether or not such Work involves restoration of the Leased
Premises.
14. Permitted Contests. Notwithstanding any other provision of this
Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge or
remove any lien referred to in Paragraph 11 or 13 or (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b) (such non-compliance with the terms hereof being
hereinafter referred to collectively as "Permitted Violations"), so long as at
the time of such contest no Event of Default exists and so long as Tenant shall
contest, in good faith, the existence, amount or validity thereof, the amount of
the damages caused thereby, or the extent of its or Landlord's liability
therefor by appropriate proceedings which shall operate during the pendency
thereof to prevent or stay (i) the collection of, or other realization upon, the
Permitted Violation so contested, (ii) the sale, forfeiture or loss of any of
the Leased Premises or any Rent to satisfy or to pay any damages caused by any
Permitted Violation, (iii) any interference with the use or occupancy of any of
the Leased Premises, (iv) any interference with the payment of any Rent, (v) the
cancellation or increase in the rate of any insurance policy or a statement by
the carrier that coverage will be denied or (vi) the enforcement or execution of
any injunction, order or Legal Requirement with respect to the Permitted
Violation. Tenant shall provide Landlord security which is 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 criminal liability.
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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, negligence or any other theory of recovery at law or
in equity, arising from (i) any matter pertaining to the acquisition (or the
negotiations leading thereto), ownership, use, non-use, occupancy, operation,
condition, design, construction, maintenance, repair or restoration of the
Leased Premises or Adjoining Property, (ii) any casualty in any manner arising
from the Leased Premises or Adjoining Property, whether or not Indemnitee has or
should have knowledge or notice of any defect or condition causing or
contributing to said casualty, (iii) any violation by Tenant of any provision of
this Lease, any contract or agreement to which Tenant is a party, any Legal
Requirement or any Permitted Encumbrance or (iv) any alleged, threatened or
actual Environmental Violation, including (A) liability for response costs and
for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit or any other Person, or damages
from injury to or destruction or loss of natural resources, including the
reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to Section 107 of CERCLA, or any successor section or act or provision
of any similar state or local Law, (B) liability for costs and expenses of
abatement, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any of the other Environmental Laws including
costs associated with environmental testing, audits, reviews, inspections,
remediation and clean-up, and (C) liability for personal injury or property
damage arising under any statutory or common-law tort theory, including damages
assessed for the maintenance of a public or private nuisance or for carrying on
of a dangerous activity.
(b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in the event of a
conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its choice
to monitor the defense of any such action) and (ii) such Indemnitee shall notify
Tenant to resist or defend such action or proceeding by retaining counsel
reasonably satisfactory to such Indemnitee, and such Indemnitee will cooperate
and assist in the defense of such action or proceeding if reasonably requested
so to do by Tenant.
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(c) The obligations of Tenant under this Paragraph 15 shall
survive any termination, expiration or rejection in bankruptcy of this Lease.
(d) The obligations of Tenant under this Paragraph 15 shall
not apply to any action or proceeding brought by Tenant against any Indemnitee
to enforce any provision of this Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (if the Leased Premises is in a flood
zone) and earthquake coverage 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
$10,000 per occurrence except that the deductible with respect to earthquake
coverage shall be not more than $25,000 per occurrence.
(ii) Commercial general liability insurance (including
but not limited to Incidental Medical Malpractice and Host Liquor Liability) and
Business Automobile Liability Insurance (including Non-Owned and Hired
Automobile Liability) against claims for personal and bodily injury, death or
property damage occurring on, in or as a result of the use of the Leased
Premises, in an amount not less than $15,000,000 per occurrence/annual
aggregate; provided, however, that the Landlord shall have the right to require
such higher limits as may be reasonable and customary for properties of this
size and type.
(iii) Worker's compensation insurance covering all
persons employed by Tenant in connection with any work done on or about any of
the Leased Premises for which claims for death, disease or bodily injury may be
asserted against Landlord, Tenant or any of the Leased Premises or, in lieu of
such Worker's Compensation Insurance, a program of self-insurance complying with
the rules, regulations and requirements of the appropriate agency of the State.
(iv) Comprehensive Boiler and Machinery Insurance on
any of the Equipment or any other equipment on or in the Leased Premises, in an
amount not less than $5,000,000 for damage to property. Such policies shall
include at least $5,000,000 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 $10,000.
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(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 and loss payee 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
the Leased Premises are being undertaken, builder's risk insurance covering the
total completed value including any "soft costs" with respect to the
Improvements being altered or repaired (on a completed value, non-reporting
basis), replacement cost of work performed and equipment, supplies and materials
furnished in connection with such construction or repair of Improvements or
Equipment, together with such "soft cost" endorsements and such other
endorsements as Landlord may reasonably require and general liability, worker's
compensation and automobile liability insurance with respect to the Improvements
being constructed, altered or repaired.
(vii) Such other insurance (or other terms with respect to
any insurance required pursuant to this Paragraph 16, including without
limitation amounts of coverage, deductibles, form of mortgagee clause) on or in
connection with any of the Leased Premises as Landlord or Lender may reasonably
require in writing, which at the time is usual and commonly obtained in
connection with properties similar in type of building size, use and location to
the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be written by
companies which have a Best's rating of A:X or above and are admitted in, and
approved to write insurance policies by, the State Insurance Department for the
State. The insurance policies (i) shall be for such terms as Landlord may
reasonably approve and (ii) shall be in amounts sufficient at all times to
satisfy any coinsurance requirements thereof. The insurance referred to in
Paragraphs 16(a)(i), 16(a)(iv) and 16(a)(vi) shall name Landlord as owner and
Lender as loss payee and Tenant as its interest may appear. The insurance
referred to in Paragraph 16(a)(ii) shall name Landlord and Lender as additional
insureds, and the insurance referred to in Paragraph 16(a)(v) shall name
Landlord as insured and Lender and Landlord as loss payee. If said insurance or
any part thereof shall expire, be withdrawn, become void, voidable, unreliable
or unsafe for any reason, including a breach of any condition thereof by Tenant
or the failure or impairment of the capital of any insurer, or if for any other
reason whatsoever said insurance shall become reasonably unsatisfactory to
Landlord, Tenant shall immediately obtain new or additional insurance reasonably
satisfactory to Landlord.
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(c) Each insurance policy referred to in clauses (i), (iv), (v)
and (vi) of Paragraph 16(a) shall contain standard non-contributory mortgagee
clauses in favor of and acceptable to Lender. Each policy required by any
provision of Paragraph 16(a), except clause (iii) thereof, shall provide that it
may not be cancelled except after thirty (30) days' prior notice to Landlord and
Lender. Each such policy shall also provide that any loss otherwise payable
thereunder shall be payable notwithstanding (i) any act or omission of Landlord
or Tenant which might, absent such provision, result in a forfeiture of all or a
part of such insurance payment, (ii) the occupation or use of any of the Leased
Premises for purposes more hazardous than those permitted by the provisions of
such policy, (iii) any foreclosure or other action or proceeding taken by Lender
pursuant to any provision of the Mortgage, Note, Assignment or other document
evidencing or securing the Loan upon the happening of an event of default
therein or (iv) any change in title to or ownership of any of the Leased
Premises.
(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least three (3) days prior to the expiration date of
such policy, and shall promptly deliver to Landlord all original policies or
certified copies thereof.
(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" policy(s), provided that such policy(s) otherwise
comply with the provisions of this Paragraph 16 and provided that the Tenant
shall provide to Landlord a Statement of Values which shall be reviewed annually
and amended as necessary based on current Replacement Cost Valuations. The
original or a certified copy of each such "blanket" policy shall promptly be
delivered to Landlord.
(f) Tenant shall have the replacement cost and insurable value of
the Improvements and Equipment determined from time to time as required by the
replacement cost and agreed amount endorsements and shall deliver to Landlord
the new replacement cost and agreed amount endorsement or certificate evidencing
such endorsement promptly upon Tenant's receipt thereof.
(g) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii) all
requirements of the insurers thereunder applicable to Landlord, Tenant or any of
the Leased Premises or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Leased Premises, even
if such compliance necessitates Alterations or results in
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interference with the use or enjoyment of any of the Leased Premises.
(h) Tenant shall not carry separate insurance concurrent in
form or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as named
insureds, with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies thereof.
(i) All policies shall contain effective waivers by the
carrier against all claims for insurance premiums against Landlord and 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), (iii), (iv), (v) (subject to the limitation set forth therein) and
(vii) of Paragraph 16(a) and proceeds attributable to the general liability
coverage provisions of Builder's Risk insurance under clause (vi) of Paragraph
16(a) shall be payable to Landlord or, if required by the Mortgage, to Lender.
(ii) Proceeds of insurance required under clause (i)
of Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16(a) shall be payable to Landlord (or Lender) and applied as set forth in
Paragraphs 17 or 18, as the case may be. Tenant shall apply the Net Award either
to restoration of the Leased Premises in accordance with the applicable
provisions of this Lease or as provided in Paragraph 18(d).
(iii) Each insurer is hereby authorized and directed to
make payment under said policies directly to Landlord or, if required by the
Mortgage, to Lender instead of to Landlord and Tenant jointly, and Tenant hereby
appoints each of Landlord and Lender as Tenant's attorneys-in-fact to endorse
any draft therefor.
17. Casualty and Condemnation.
(a) If any Casualty to the Leased Premises occurs, Tenant
shall give Landlord and Lender immediate notice thereof. So long as no Event of
Default exists Tenant is hereby
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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 reasonably 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 required by the insurers. Each insurer
is hereby authorized and directed to make payment under said policies directly
to Landlord or, if required by the Mortgage, to Lender instead of to Landlord
and Tenant jointly, and Tenant hereby appoints each of Landlord and Lender as
Tenant's attorneys-in-fact to endorse any draft therefor. 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 herein. 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 Condemnation proceeding or negotiations under
threat thereof or to contest the Condemnation or the amount of the Net Award
therefor. No agreement with any condemnor in settlement or under threat of any
Condemnation shall be made by Tenant without the written consent of Landlord
which shall not be unreasonably withheld, conditioned or delayed. 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
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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, 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 $200,000 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 $200,000 shall (unless such Casualty resulting in the Net Award is a
Termination Event) be made available by Landlord (or Lender, if required by the
terms of any Mortgage) to Tenant for the restoration of any of the Leased
Premises pursuant to and in accordance with the provisions of Paragraph 19
hereof. If any Casualty or Condemnation which is not a Partial Casualty or
Partial Condemnation shall occur, Tenant shall comply with the terms and
conditions of Paragraph 18.
18. Termination Events.
(a) If (i) the entire Leased Premises shall be taken by a
Taking or (ii) any substantial portion of the Leased Premises shall be taken by
a Taking or all or any substantial portion of the Leased Premises shall be
damaged or destroyed by a Casualty and, in such case, Tenant certifies and
covenants to Landlord that it will forever abandon operations at the Leased
Premises (each of the events described in the above clauses (i) and (ii) shall
hereinafter be referred to as a "Termination Event"), then (x) in the case of
(i) above, Tenant shall be obligated, within thirty (30) days after Tenant
receives a Condemnation Notice and (y) in the case of (ii) above, Tenant shall
have the option, within thirty (30) days after Tenant receives a Condemnation
Notice or thirty (30) days after the Casualty, as the case may be, to give to
Landlord written notice of the Tenant's option to terminate this Lease (a
"Termination Notice") in the form described in Paragraph 18(b).
(b) A Termination Notice shall contain (i) notice of Tenant's
intention to terminate this Lease on the first Basic Rent Payment Date which
occurs after the Fair Market Value Date (the "Termination Date"), (ii) a binding
and irrevocable offer of
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Tenant to pay to Landlord the Termination Amount and (iii) if the Termination
Event is an event described in Paragraph 18(a)(ii), the certification and
covenants described therein and a certified resolution of the Board of Directors
of Tenant authorizing the same. Promptly upon the delivery to Landlord of a
Termination Notice, Landlord and Tenant shall commence to determine the Fair
Market Value.
(c) If Landlord shall reject such offer to terminate this Lease by
written notice to Tenant (a "Rejection"), which Rejection shall contain the
written consent of Lender, not later than thirty (30) days following the Fair
Market Value Date, then this Lease shall terminate on the Termination Date;
provided that, if Tenant has not satisfied all Monetary Obligations and all
other obligations and liabilities under this Lease which have arisen on or prior
to the Termination Date (collectively, "Remaining Obligations") on the
Termination 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 Rent
Payment Date after the Termination Date on which Tenant has satisfied all
Remaining Obligations. Upon such termination (i) all obligations of Tenant
hereunder shall terminate except for any Surviving Obligations, (ii) Tenant
shall immediately vacate and shall have no further right, title or interest in
or to any of the Leased Premises and (iii) the Net Award shall be retained by
Landlord. Notwithstanding anything to the contrary hereinabove contained, if
Tenant shall have received a Rejection and, on the date when this Lease would
otherwise terminate as provided above, Landlord shall not have received the full
amount of the Net Award payable by reason of the applicable Termination Event,
then the date on which this Lease is to terminate automatically shall be
extended to the first Basic Rent Payment Date after the receipt by Landlord of
the full amount of the Net Award provided that, if Tenant has not satisfied all
Remaining Obligations on such date, then Landlord may, at its option, extend the
date on which this Lease may terminate to a date which is no later than the
first Basic Rent Payment Date after such date on which Tenant has satisfied all
such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not later than
the thirtieth (30th) day following the Fair Market Value Date, Landlord shall be
conclusively presumed to have accepted such offer. If such offer is accepted by
Landlord then, on the Termination Date, Tenant shall pay to Landlord the
Termination Amount and all Remaining Obligations and, if requested by Tenant,
Landlord shall (i) convey to Tenant the Leased Premises or the remaining portion
thereof, if any, and (ii) pay to or assign to Tenant Landlord's entire interest
in and to the Net Award, all in accordance with Paragraph 20, and cause Lender
to assign to Tenant Lender's entire interest, if any, in and to the Net Award.
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19. Restoration.
(a) Landlord (or Lender if required by any Mortgage) shall
hold Net Award in excess of $200,000 in a fund (the "Restoration Fund") and
disburse amounts from the Restoration Fund only in accordance with the following
conditions:
(i) prior to commencement of restoration, (A) the
architects, contracts, contractors, plans and specifications for the restoration
shall have been approved by Landlord, which approval shall not be unreasonably
withheld or delayed, and (B) Landlord and Lender shall be provided with
mechanics' lien insurance (if available) and acceptable performance and payment
bonds which insure satisfactory completion of and payment for the restoration,
are in an amount and form and have a surety acceptable to Landlord, and name
Landlord and Lender as additional dual obligees;
(ii) at the time of any disbursement, no Event of
Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged 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 performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (B) waivers of liens,
(C) contractors' and subcontractors' sworn statements as to completed work and
the cost thereof for which payment is requested, (D) a satisfactory bringdown of
title insurance and (E) other evidence of cost and payment so that Landlord can
verify that the amounts disbursed from time to time are represented by work that
is completed, in place and free and clear of mechanics' and materialmen's lien
claims;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work, also
stating that the work has been fully completed and complies with the applicable
requirements of this Lease;
(v) Landlord may retain ten percent (10%) of the
Restoration Fund until the restoration is fully completed;
(vi) if the Restoration Fund is held by Landlord the
Restoration Fund shall not be commingled with
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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 reasonably determined by Landlord, exceeds the
amount of the Net Award available for such restoration, the amount of such
excess shall, upon demand by Landlord, be paid by Tenant to Landlord to be added
to the Restoration Fund. Any sum so added by Tenant which remains in the
Restoration Fund upon completion of restoration shall be refunded to Tenant. For
purposes of determining the source of funds with respect to the disposition of
funds remaining after the completion of restoration, the Net Award shall be
deemed to be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum shall be retained by Landlord or, if required by a Note or
Mortgage, paid by Landlord to a Lender.
20. Procedures Upon Purchase.
(a) If the Leased Premises is purchased by Tenant pursuant to
any provision of this Lease, Landlord need not convey any better title thereto
than that which was conveyed to Landlord, and Tenant shall accept such title,
subject, however, to the Permitted Encumbrances and to all other liens,
exceptions and restrictions on, against or relating to any of the Leased
Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and
restrictions on, against or relating to the Leased Premises which have been
created by or resulted from acts of or by or through Landlord (but not Tenant)
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 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
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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, (iii) any Net Award received by
Landlord or Lender, not credited to Tenant against the Relevant Amount and
required to be delivered by Landlord to Tenant pursuant to this Lease, (iv) a
xxxx of sale conveying the Equipment, and (v) an assignment assigning all
warranties, guaranties, indemnities and similar rights relating to the Leased
Premises; provided, that if any Monetary Obligations remain outstanding on such
date, then Landlord may deduct from the Net Award the amount of such Monetary
Obligations; and further provided, that if any event has occurred which, in
Landlord's reasonable judgment, is likely to subject any Indemnitee to any
liability which Tenant is required to indemnify against pursuant to Paragraph
15, then an amount shall be deducted from the Net Award which, in Landlord's
reasonable judgment, is sufficient to satisfy such liability, which amount shall
be deposited in an escrow account with a financial institution reasonably
satisfactory to Landlord and Tenant pending resolution of such matter, shall
bear interest and such interest shall be paid to Tenant or Landlord in
proportion to the amount paid out of the escrow account to each party. 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 shall terminate, except any Surviving Obligations.
(c) If the completion of such purchase shall be delayed after (i)
the Termination Date, in the event of a purchase pursuant to Paragraph 18 or,
(ii) the date scheduled for such purchase, in the event of a purchase under any
other provision of this Lease then (x) Rent shall continue to be due and payable
until completion of such purchase and (y) if the delay shall be greater than
ninety (90) days 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.
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21. Assignment and Subletting; Prohibition against Leasehold Financing.
(a) Tenant may not assign this Lease, voluntarily or involuntarily,
whether by operation of law or otherwise, or sublet any of the Leased Premises
at any time to any other Person without the prior written consent of Landlord,
which consent, in the event of an assignment, may be withheld by Landlord for
any or no reason and any such purported sublease or assignment shall be null and
void, except Tenant may sublet or license the Leased Premises or any portion
thereof to any Person included in Guarantor's consolidated Federal income tax
return and may license portions of the Leased Premises to other motor carriers
for the parking of vehicles on a short-term basis, as is customary in the motor
carrier industry.
(b) If Tenant assigns all its rights and interest under this Lease,
the assignee under such assignment shall expressly assume all the obligations of
Tenant hereunder, actual or contingent, including obligations of Tenant which
may have arisen on or prior to the date of such assignment, by a written
instrument delivered to Landlord at the time of such assignment. Each sublease
of any of the Leased Premises shall be subject and subordinate to the provisions
of this Lease. No assignment or sublease made as permitted by this Paragraph 21
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.
(c) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease consented to by Landlord, deliver a
duplicate original copy thereof to Landlord which, in the event of an
assignment, shall be in recordable form.
(d) As security for performance of its obligations under this
Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title
and interest of Tenant in and to all subleases now in existence or hereafter
entered into for any or all of the Leased Premises, any and all extensions,
modifications and renewals thereof and all rents, issues and profits therefrom.
Landlord hereby grants to Tenant a license to collect and enjoy all rents and
other sums of money payable under any sublease of any of the Leased Premises,
provided, however, that Landlord shall have the absolute right to revoke said
license and to collect such rents and sums of money and to retain the same in
which event Landlord shall credit Tenant for Rent not yet payable as the same
shall become due and payable. Tenant shall not consent to, cause or allow any
modification or alteration of any of the terms, conditions or covenants of any
of
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the subleases or the termination thereof, without the prior written approval
of Landlord, which consent shall not be unreasonably withheld or delayed, nor
shall Tenant accept any rents more than thirty (30) days in advance of the
accrual thereof nor do nor permit anything to be done, the doing of which, nor
omit or refrain from doing anything, the omission of which, will or could be a
breach of or default in the terms of any of the subleases.
(e) Tenant shall not have the power to mortgage, pledge or
otherwise encumber its interest under this Lease or any sublease of the Leased
Premises, and any such mortgage, pledge or encumbrance made in violation of this
Paragraph 21 shall be void.
(f) Landlord may sell or transfer the Leased Premises at any time
without Tenant's consent to any third party (each a "Third Party Purchaser");
provided, however, that without the consent of Tenant, Landlord may not sell or
transfer the Leased Premises to a Third Party Purchaser, the primary business of
which is the full-truckload carrier business. In the event of any such transfer,
Tenant shall attorn to any Third Party Purchaser as Landlord so long as such
Third Party Purchaser and Landlord notify Tenant in writing of such transfer. At
the request of Landlord, Tenant will execute such documents confirming the
agreement referred to above and such other agreements as Landlord may reasonably
request, provided that such agreements do not increase the liabilities and
obligations of Tenant hereunder.
22. Events of Default.
(a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph 22(b)) shall,
at the sole option of Landlord, constitute an "Event of Default" under this
Lease:
(i) a failure by Tenant to make any payment of any
Monetary Obligation, regardless of the reason for such failure;
(ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise specifically
mentioned in this Paragraph 22(a);
(iii) any representation or warranty made by Tenant herein
or in any certificate, demand or request made pursuant hereto proves to be
incorrect, now or hereafter, in any material respect;
(iv) a default beyond any applicable cure period or at
maturity by Tenant or Guarantor in any payment of principal or interest on any
obligations for borrowed money
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having a current outstanding principal balance of $2,000,000 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 such
obligation to become due prior to its stated maturity; provided, however, that
if such default shall be a default under Section 5.1(a) or Section 5.2(e), (g),
(h) or (j) of the Credit Agreement or the comparable provisions of the Senior
Credit Agreement then it shall not be a default under this clause (iv) if Tenant
or Guarantor, as the case may be, shall have obtained a waiver, amendment or
modification in accordance with and subject to the terms of Exhibit "E" hereto
and that if such default shall be a default under any other provision of the
Credit Agreement or Senior Credit Agreement then it shall not be a default under
this clause (iv) unless and until the Senior Lender causes the obligations of
Tenant and/or Guarantor under the Credit Agreement or the Senior Credit
Agreement, as the case may be, to become due prior to their stated maturity;
(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 current remaining terms thereof of
$2,000,000 or more if the Landlord under any such lease or leases commences to
exercise its remedies thereunder; provided, however, that if such default shall
be a default under Section 5.1(a) or Section 5.2(e), (g), (h) or (j) of the
Credit Agreement or the comparable provisions of the Senior Credit Agreement
then it shall not be a default under this clause (v) if Tenant or Guarantor, as
the case may be, shall have obtained a waiver, amendment or modification in
accordance with and subject to the terms of Exhibit "E" hereto and that if such
default shall be a default under any other provision of the Credit Agreement or
Senior Credit Agreement then it shall not be a default under this clause (v)
unless and until the Senior Lender causes the obligations of Tenant and/or
Guarantor under the Credit Agreement or the Senior Credit Agreement, as the case
may be, to become due prior to their stated maturity;
(vi) a default by Tenant or Guarantor under the Credit
Agreement or the Senior Credit Agreement, as the case may be, if an effect of
such default is to cause the obligations of Tenant and/or Guarantor under the
Credit Agreement or the Senior Credit Agreement, as the case may be, to become
due prior to their stated maturity;
(vii) a final, non-appealable judgment or judgments for the
payment of money in excess of $500,000 in the aggregate shall be rendered
against Tenant or Guarantor and the
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same shall remain undischarged for a period of sixty (60) consecutive days;
(viii) the breach of any Covenant shall occur;
(ix) Tenant shall (A) voluntarily be adjudicated a
bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for the Leased Premises, (C) file a petition seeking
relief under the bankruptcy or other similar laws of the United States, any
state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(x) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for
any of the Leased Premises or approving a petition filed against Tenant which
seeks relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, and such order, judgment or decree shall remain
undischarged or unstayed sixty (60) days after it is entered;
(xi) the Leased Premises shall have been vacated or
abandoned;
(xii) Tenant shall be liquidated or dissolved or shall
begin proceedings towards its liquidation or dissolution except a technical
dissolution that is cured within any cure periods permitted by Law;
(xiii) the estate or interest of Tenant in any of the Leased
Premises shall be levied upon or attached in any proceeding and such estate or
interest is about to be sold or transferred or such process shall not be vacated
or discharged within sixty (60) days after it is made;
(xiv) a failure by Tenant to perform or observe, or a
violation or breach of, or a misrepresentation by Tenant under any provision of
any Assignment or any other document between Tenant and Lender, if such failure,
violation, breach or misrepresentation gives rise to a default beyond any
applicable cure period with respect to any Loan;
(xv) a failure by Tenant to maintain in effect any other
material license or permit necessary for the use, occupancy or operation of the
Leased Premises;
(xvi) Tenant shall sell or transfer or enter into an
agreement to sell or transfer all or substantially all of its assets; or
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(xvii) 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) (except as otherwise set forth
below), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv),
(xvi) or (xvii) 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 Lease Year. If the default
consists of a default under clause (ii) of Paragraph 22(a), other than the
events specified in clauses (B) and (C) of the first sentence of this Paragraph
22(b), the applicable cure period shall be thirty (30) days from the date on
which notice is given or, if the default cannot be cured within such thirty (30)
day period and delay in the exercise of a remedy would not (in Landlord's
reasonable judgment) cause any material adverse harm to Landlord or any of the
Leased Premises, the cure period shall be extended for the period required to
cure the default (but such cure period, including any extension, shall not in
the aggregate exceed ninety (90) days), provided that Tenant shall commence to
cure the default within the said thirty-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. If the default consists of a default under Clause
(iii) of Paragraph 22(a) and if such misrepresentation is capable of being cured
by Tenant the applicable cure period shall be thirty (30) days from the date
from which notice is given. If the default consists of a default under Clause
(xv) of Paragraph 22(a) the applicable cure period shall be ten (10) days from
the date from which notice is given, within which Tenant shall make all filings
and pay all fees that are necessary in connection with any such license or
permit and thereafter Tenant 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
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demand upon or notice to Tenant except as otherwise provided in Paragraph 22(b)
and this Paragraph 23.
(i) Landlord may give Tenant notice of
Landlord's intention to terminate this Lease on a date specified in such notice.
Upon such date, this Lease, the estate hereby granted and all rights of Tenant
hereunder shall expire and terminate. Upon such termination, Tenant shall
immediately surrender and deliver possession of the Leased Premises to Landlord
in accordance with Paragraph 26. If Tenant does not so surrender and deliver
possession of the Leased Premises, Landlord may re-enter and repossess the
Leased Premises, with or without legal process, by peaceably entering the Leased
Premises and changing locks or by summary proceedings, ejectment or any other
lawful means or procedure. Upon or at any time after taking possession of the
Leased Premises, Landlord may, by peaceable means or legal process, remove any
Persons or property therefrom. Landlord shall be under no liability for or by
reason of any such entry, repossession or removal done in compliance with Law.
Notwithstanding such entry or repossession, Landlord may (A) exercise the remedy
set forth in and collect the damages permitted by Paragraph 23(a)(iii) or (B)
collect the damages set forth in Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of the Leased Premises
pursuant to clause (i) above, Landlord shall have the right to relet any of the
Leased Premises to such tenant or tenants, for such term or terms, for such
rent, on such conditions and for such uses as Landlord in its sole discretion
may determine, and collect and receive any rents payable by reason of such
reletting. Landlord may make such Alterations in connection with such reletting
as it may deem advisable in its sole discretion. Notwithstanding any such
reletting, Landlord may collect the damages set forth in Paragraph 23(b)(ii).
(iii) Landlord may, upon notice to Tenant, require
Tenant to make an irrevocable offer to terminate this Lease upon payment to
Landlord of an amount (the "Default Termination Amount") specified in the next
sentence. The "Default Termination Amount" shall be the greatest of (A) the Fair
Market Value of the Leased Premises, (B) the sum of the Acquisition Cost and
Prepayment Premium which Landlord will be required to pay in prepaying any Loan
with proceeds of the Default Termination Amount or (C) an amount equal to the
Present Value of the entire Basic Rent from the date of such purchase to the
date on which the Term would expire. Upon such notice to Tenant, Tenant shall be
deemed to have made such offer and shall, if requested by Landlord, within
thirty (30) days following such request deposit with Landlord as payment against
the Default Termination Amount the amount described in (B) above (the
"Deposit"), and Landlord and Tenant shall promptly commence to determine Fair
Market Value. Within thirty (30) days after the Fair Market Value Date, Landlord
shall accept or reject such
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offer. If Landlord accepts such offer then, on the tenth (10th) business day
after such acceptance, Tenant shall pay to Landlord the Default Termination
Amount and, at the request of Tenant, Landlord will convey the Leased Premises
to Tenant or its designee in accordance with Paragraph 20. Any rejection by
Landlord of such offer shall have no effect on any other remedy Landlord may
have under this Lease, and Landlord shall immediately return the Deposit to
Tenant.
(iv) Landlord may declare by notice to Tenant the entire
Basic Rent (in the amount of Basic Rent then in effect) for the remainder of the
then current Term to be immediately due and payable, without relief from
valuation and appraisement laws. 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, without relief from
valuation and appraisement laws, as liquidated and agreed final damages for
Tenant's default and in lieu of all current damages beyond the date of such
demand (it being agreed that it would be impracticable or extremely difficult to
fix the actual damages), an amount equal to the Present Value of the excess, if
any, of (A) all Basic Rent from the date of such demand to the date on which the
Term is scheduled to expire hereunder in the absence of any earlier termination,
re-entry or repossession over (B) the then fair market rental value of the
Leased Premises for the same period. Tenant shall also pay to Landlord all of
Landlord's costs in connection with the repossession of the Leased Premises and
any attempted reletting thereof, including all brokerage commissions, legal
expenses attorneys' fees, costs of Alterations and expenses and preparation for
reletting.
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(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, without
relief from valuation and appraisement laws, as liquidated and agreed current
damages all Monetary Obligations which would be payable under this Lease by
Tenant in the absence of such termination less the net proceeds, if any, of any
reletting pursuant to Paragraph 23(a)(ii), after deducting from such proceeds
all of Landlord's costs (including the items listed in the last sentence of
Paragraph 23(b)(i) hereof and costs described in Paragraph 7(a)(i) and Paragraph
15(a)(iv)(B)) incurred in connection with such repossessing and reletting;
provided, that if Landlord has not relet the Leased Premises, such Costs of
Landlord shall be considered to be Monetary Obligations payable by Tenant.
Tenant shall be and remain liable for all sums aforesaid, and Landlord may
recover such damages from Tenant and institute and maintain successive actions
or legal proceedings against Tenant for the recovery of such damages. Nothing
herein contained shall be deemed to require Landlord to wait to begin such
action or other legal proceedings until the date when the Term would have
expired by its own terms had there been no such Event of Default.
(c) Notwithstanding anything to the contrary herein contained, in
lieu of or in addition to any of the foregoing remedies and damages, Landlord
may exercise any remedies and collect any damages available to it at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder or
at law or in equity.
(d) Landlord shall not be required to mitigate any of its damages
hereunder unless required to by applicable Law. If any Law shall validly limit
the amount of any damages provided for herein to an amount which is less than
the amount agreed to herein, Landlord shall be entitled to the maximum amount
available under such Law.
(e) No termination of this Lease, repossession or reletting of the
Leased Premises, exercise of any remedy or collection of any damages pursuant to
this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
(f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, LANDLORD AND 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
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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 and recover all costs incurred by Landlord in connection therewith,
together with interest thereon at the Default Rate.
(h) No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(i) Tenant hereby waives and surrenders, for itself and all
those claiming under it, including creditors of all kinds, (i) any right and
privilege which it or any of them may have under any present or future Law to
redeem any of the Leased Premises or to have a continuance of this Lease after
termination of this Lease or of Tenant's right of occupancy or possession
pursuant to any court order or any provision hereof, and (ii) the benefits of
any present or future Law which exempts property from liability for debt or for
distress for rent, provided, however, that no such waiver shall constitute a
waiver under I.C. 32-8-16-1.5.
(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 for all purposes when delivered in person or
by Federal Express or other reliable 24-hour delivery service or five (5)
business days after being deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed to the
other party at its address stated above. A copy of any notice given by Tenant to
Landlord shall simultaneously be given by Tenant to Xxxx Xxxxx Xxxx & XxXxxx,
0000 Xxx Xxxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Chairman, Real Estate
Department. A copy of any notice given by Landlord to Tenant shall
simultaneously be given by Landlord to Scopelitis, Garvin, Light & Xxxxxx, 00
Xxxx Xxxxxx Xxxxxx, 0000 Xxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000-0000. For the
purposes of this Paragraph, any party may substitute another
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address stated above (or substituted by a previous notice) for its address by
giving fifteen (15) days' notice of the new address to the other party, in the
manner provided above.
25. Estoppel Certificate. At any time upon not less than ten (10) days'
prior written request by either Landlord or Tenant (the "Requesting Party") to
the other party (the "Responding Party"), the Responding Party shall deliver to
the Requesting Party a statement in writing, executed by an authorized officer
of the Responding Party, certifying (a) that, except as otherwise specified,
this Lease is unmodified and in full force and effect, (b) the dates to which
Basic Rent, Additional Rent and all other Monetary Obligations have been paid,
(c) that, to the knowledge of the signer of such certificate and except as
otherwise specified, no default by either Landlord or Tenant exists hereunder,
(d) such other matters as the Requesting Party may reasonably request, and (e)
if Tenant is the Responding Party that, except as otherwise specified, there are
no proceedings pending or, to the knowledge of the signer, threatened, against
Tenant before or by any court or administrative agency which, if adversely
decided, would materially and adversely affect the financial condition and
operations of Tenant and which would be required to be disclosed pursuant to the
disclosure standards and requirements of Federal securities laws. Any such
statements by the Responding Party may be relied upon by the Requesting Party,
any Person whom the Requesting Party notifies the Responding Party in its
request for the Certificate is an intended recipient or beneficiary of the
Certificate, any Lender or their assignees and by any prospective purchaser or
mortgagee of any of the Leased Premises. Any certificate required under this
Paragraph 25 and delivered by Tenant shall state that, in the opinion of each
person signing the same, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to the subject matter
of such certificate, and shall briefly state the nature of such examination or
investigation.
26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear. Upon such surrender, Tenant shall (a)
remove from the Leased Premises all property which is owned by Tenant or third
parties other than Landlord, including, without limitation, trade fixtures, 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.
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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. Tenant shall cause Guarantor to keep the records
and books and deliver to Landlord the financial statements that Guarantor is
required to keep and deliver pursuant to Section 2.02 of the Guaranty.
29. Determination of Value.
(a) Whenever a determination of Fair Market Value is required
pursuant to any provision of this Lease, such Fair Market Value shall be
determined in accordance with the following procedure:
(i) Landlord and Tenant shall endeavor to agree upon such
Fair Market Value within thirty (30) days after the date (the "Applicable
Initial Date") on which (A) Tenant provides Landlord with notice of its
intention to terminate this Lease and purchase the Leased Premises pursuant to
Paragraph 18, (B) Landlord provides Tenant with notice of its intention to
redetermine Fair Market Value pursuant to Paragraph 20(c), (C) Landlord provides
Tenant with notice of Landlord's intention to require Tenant to make an offer to
terminate this Lease pursuant to Paragraph 23(a)(iii) or (D) Tenant provides
Landlord with notice of Tenant's exercise of its option to purchase the Leased
Premises pursuant to Paragraph 35. Upon reaching such agreement, the parties
shall execute an agreement setting forth the amount of such Fair Market Value.
(ii) If the parties shall not have signed such agreement
within thirty (30) days after the Applicable Initial Date, Tenant shall within
fifty (50) days after the Applicable Initial Date select an appraiser and notify
Landlord in writing of the name, address and qualifications of such appraiser.
Within twenty (20) days following Landlord's receipt of Tenant's notice of the
appraiser selected by Tenant, Landlord shall select an appraiser and notify
Tenant of the name, address and qualifications of such appraiser. Such two
appraisers shall endeavor to agree upon Fair Market Value based on a written
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appraisal made by each of them (and given to Landlord by Tenant) as of the
Relevant Date. If such two appraisers shall agree upon a Fair Market Value, 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, 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, and (D) be
registered in the State if the State provides for or requires such registration.
The Cost of the procedure described in this Paragraph 29(a) above shall be borne
entirely by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not
determined by the expiration or termination of the then current Term, then the
date on which the Term would otherwise expire or terminate shall be extended to
the date specified for termination in the particular provision of this Lease
pursuant to which the determination of Fair Market Value is being made.
(c) In determining Fair Market Value as defined in clause (b) of
the definition of Fair Market Value, the
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appraisers shall add (a) the present value of the Rent for the remaining Term,
and, if applicable, assuming the Term has been extended for all extension
periods provided herein (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
(b) 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 Tenant has not violated (and will not violate) any of the Covenants.
30. Non-Recourse as to Landlord.
(a) Anything contained herein to the contrary notwithstanding, any
claim based on or in respect of any liability of Landlord under this Lease shall
be enforced only against the Leased Premises and not against any other assets,
properties or funds of (i) Landlord, (ii) any director, officer, general
partner, shareholder, limited partner, beneficiary, employee or agent of
Landlord or any general partner of Landlord or any of its general partners (or
any legal representative, heir, estate, successor or assign of any thereof),
(iii) any predecessor or successor partnership or corporation (or other entity)
of Landlord or any of its general partners, shareholders, officers, directors,
employees or agents, either directly or through Landlord or its general
partners, shareholders, officers, directors, employees or agents or any
predecessor or successor partnership or corporation (or other entity), or (iv)
any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof.
(b) Notwithstanding anything to the contrary contained herein,
Tenant shall not be precluded from instituting legal proceedings for the purpose
of making a claim against Landlord on account of an alleged violation of
Landlord's obligations under this Lease and exercising its rights under any
judgment rendered in favor of Tenant with respect to such proceedings, subject,
however, to Paragraph 30(a) above.
31. Financing.
(a) Tenant agrees to pay at the funding of the initial Loan any
cost, charge and expense incurred by Landlord in obtaining and closing such
Loan, including commitment fees or points, title insurance, mortgage tax,
recording costs and legal fees and expenses of Landlord and Lender.
(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, so long as
Tenant's
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rights hereunder are not adversely affected. 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 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 offset which Tenant may have against Landlord.
32. Subordination. This Lease and Tenant's interest hereunder shall be
subordinate to any Mortgage or other security instrument 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 and agreements described in Exhibit "E" hereto.
34. Tax Treatment; Reporting. Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and
shall report this transaction as a Lease for Federal income tax purposes. For
Federal income tax purposes each shall report this Lease as a true lease with
Landlord as the owner of the Leased Premises and Equipment and Tenant as the
lessee of such Leased Premises and Equipment including: (1) treating Landlord as
the owner of the property eligible to claim depreciation deductions under
Section 167 or 168 of the Internal Revenue Code of 1986 (the "Code") with
respect to the Leased Premises and Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
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35. Option to Purchase.
(a) Landlord does hereby give and grant Tenant an option (the
"Option") to purchase the Leased Premises (i) for the Offer Amount and (ii) on
any one of the following dates set forth below that is selected by Tenant (the
closing to occur no later than fifteen (15) days following any such date as is
selected by Tenant) and reasonably satisfactory to Landlord (any such date, the
"Option Purchase Date"): October 15, 2016 (the "First Option"); if the Term is
extended in accordance with Paragraph 5(b), October 15, 2026 (the "Second
Option"); and if the Term is further extended in accordance with Paragraph 5(b),
October 15, 2036 (the "Third Option"). If Tenant intends to exercise the Option,
Tenant shall give an irrevocable written notice to Landlord and Lender to such
effect not later than six (6) months prior to the expiration of the First
Option, the Second Option or the Third Option, as the case may be (each such
date an "Exercise Date") and Landlord and Tenant shall commence to determine the
Fair Market Value pursuant to Paragraph 29.
(b) If Tenant shall exercise the Option to purchase the Leased
Premises, on the applicable Option Purchase Date and provided that Tenant has
paid the Offer Amount and has satisfied all other Monetary Obligations, Landlord
shall convey the Leased Premises to Tenant in accordance with Paragraph 20
hereof. If, however, an Event of Default has occurred and is continuing on the
Option Purchase Date, Landlord shall have no obligation to convey the Leased
Premises to Tenant unless such Event of Default is cured and the exercise of the
Option in question shall terminate and be of no further force and effect. If
Tenant shall fail to give any of the aforesaid notices by the expiration of the
relevant Exercise Date, time being of the essence, then the Option with respect
to such Exercise Date and any exercise thereof by Tenant shall cease and
terminate and shall be null and void, provided that the Option with respect to
any future Option Purchase Date shall remain in full force and effect, subject
to the terms of this Paragraph 35. If this Lease shall terminate for any reason
prior to the date originally fixed herein for the expiration of the Term, time
being of the essence, or if with respect to the Second Option and the Third
Option, the Term shall not be extended in accordance with the provisions of
Paragraph 5 hereof, the Option and any exercise thereof by Tenant shall cease
and terminate and shall be null and void upon the effective date of such
termination.
36. Miscellaneous.
(a) The paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
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(b) As used in this Lease, the singular shall include the plural
and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien" shall
mean "lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any of
the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform under this
Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except as otherwise specifically provided herein, Landlord shall have
the right, at its sole option, to withhold or delay its consent whenever such
consent is required under this Lease for any reason. 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.
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(g) The covenants of this Lease shall run with the land and bind
Tenant, its successors and assigns and all present and subsequent encumbrancers
and subtenants of any of the Leased Premises, and shall inure to the benefit of
Landlord, its successors and assigns. If there is more than one Tenant, the
obligations of each shall be joint and several.
(h) If any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(i) This Lease shall be governed by and construed and enforced in
accordance with the Laws of the State.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
CEL (IN) QRS 12-17, INC.
By:___________________________
Title:________________________
ATTEST: TENANT:
CELADON TRUCKING SERVICES, INC.,
a New Jersey corporation
By:____________________________ By:____________________________
Title:_________________________ Title:_________________________
[Corporate Seal]
[SIGNATURES TO LEASE AGREEMENT]
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EXHIBIT A
PREMISES
PARCEL I
A part of the Southwest Quarter of Section 20, Township 16 North, Range 5 East
and a part of the Southeast Quarter of Section 20, Township 16 North, Range 5
East located in Xxxxxx Township, Xxxxxx County, Indiana being bounded as
follows:
Commencing at the Northwest Corner of the Southwest Quarter of Section 20,
Township 16 North, Range 5 East; thence South 00 degrees 46 minutes 35 seconds
West (assumed bearing) 1,339.38 feet along the West line of said Southwest
Quarter to the Southwest Corner of the North Half of said Southwest Quarter,
said corner being the midpoint of the West line of said Southwest Quarter;
thence South 89 degrees 26 minutes 38 seconds East 2,459.85 feet along the South
line of the North Half of said Southwest Quarter to the POINT OF BEGINNING of
this description; thence North 00 degrees 52 minutes 19 seconds East 451.69
feet; thence North 06 degrees 51 minutes 58 seconds East 53.83 feet; thence
North 69 degrees 13 minutes 35 seconds East 125.05 feet to the point of
curvature of a curve to the left, said point of curvature being South 20 degrees
46 minutes 25 seconds East 425.14 feet from the radius point of said curve;
thence Easterly and Northeasterly 68.41 feet along said curve to a point of
reverse curvature, said point of reverse curvature being South 29 degrees 59
minutes 33 seconds East 425.14 feet from the radius point of said curve and
being North 29 degrees 59 minutes 33 seconds West 365.14 feet from the radius
point of a reverse curve; thence Northeasterly and Easterly 194.96 feet along
said reverse curve to its point of tangency, said point of tangency being North
00 degrees 35 minutes 59 seconds East 365.14 feet from the radius point of said
curve; thence South 89 degrees 24 minutes 01 seconds East 158.32 feet; thence
North 00 degrees 54 minutes 45 seconds East 60.00 feet parallel with the Eastern
boundary of the 96.920 acre tract of land described in the DEED recorded as
instrument No. 88-100604 in the Office of the Recorder of Xxxxxx County,
Indiana; thence South 89 degrees 24 minutes 01 second East 230.00 feet; thence
North 27 degrees 24 minutes 53 seconds East 44.82 feet to the Eastern boundary
of said 96.920 acre tract of land, the next three (3) courses are along the
boundary of said 96.920 acre tract of land: 1) thence South 00 degrees 54
minutes 45 seconds West 589.77 feet; 2) thence South 77 degrees 57 minutes 40
seconds West 647.45 feet to the South line of the North Half of said Southwest
Quarter; 3) thence North 89 degrees 26 minutes 38 seconds West 145.61 feet along
the South line of the North Half of said Southwest Quarter to the POINT OF
BEGINNING.
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PARCEL II
A part of the Southeast Quarter of Section 20, Township 16 North, Range 5 East
located in Xxxxxx Township, Xxxxxx County, Indiana being bounded as follows:
Commencing at the Northeast Corner of the Northeast Quarter of Section 20,
Township 16 North, Range 5 East; thence South 00 degrees 51 minutes 36 seconds
West (assumed bearing) 2,677.26 feet along the East line of said Northeast
Quarter to the Southeast Corner of said Northeast Quarter and to the Northeast
Corner of the Southeast Quarter of said Section 20; thence North 89 degrees 21
minutes 45 seconds West 1,130.63 feet along the North line of said Southeast
Quarter to its point of intersection with the Northerly extension of the Western
boundary of the 2.276 acre tract of land described in the WARRANTY DEED recorded
as Instrument No. 94-119823 in the Office of the Recorder of Xxxxxx County,
Indiana and to the POINT OF BEGINNING of this description; thence North 89
degrees 21 minutes 45 seconds West 931.37 feet along the North line of said
Southeast Quarter to a point being South 89 degrees 21 minutes 45 seconds East
570.57 feet from the Northwest Corner of said Southeast Quarter, said point also
being on the boundary of "Parcel III" as described in Exhibit "A" of the
TRUSTEE'S DEED recorded as Instrument No. 90-10709 in said Recorder's Office,
the next four (4) courses are along the boundary of said "Parcel III"; 1) thence
South 00 degrees 54 minutes 24 seconds West 1,195.54 feet; 2) thence North 77
degrees 57 minutes 40 seconds East 769.19 feet; 3) thence North 00 degrees 44
minutes 16 seconds East 706.73 feet to a point being 320.00 feet (measured
Southerly in a perpendicular direction) from the North line of said Southeast
Quarter; 4) thence South 89 degrees 21 minutes 45 seconds East 184.10 feet
parallel with the North line of said Southwest Quarter to the Southwestern
Corner of said 2.275 acre tract of land; thence North 00 degrees 51 minutes 08
seconds East 320.00 feet along the Western boundary of said 2.275 acre tract of
land and along the Northerly extension of the Western boundary of said 2.275
acre tract of land to the POINT OF BEGINNING.
PARCEL III
A part of the Southeast Quarter of Section 20, Township 16 North, Range 5 East
located in Xxxxxx Township, Xxxxxx County, Indiana being bounded as follows:
Commencing at the Northeast Corner of the Northeast Quarter of Section 20,
Township 16 North, Range 5 East; thence South 00 degrees 51 minutes 36 seconds
West (assumed bearing) 2,677.26 feet along the East line of said Northeast
Quarter to the Southeast Corner of said Northeast Quarter and to the Northeast
Corner of the Southeast Quarter of said Section 20; thence North 89 degrees 21
minutes 45 seconds West 2,062.00 feet along the North line of said Southeast
Quarter to a point being South 89 degrees 21 minutes 45 seconds East 570.57 feet
from the Northwest
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Corner of said Southeast Quarter said point being on the boundary of "Parcel
III" as described in Exhibit "A" of the TRUSTEE'S DEED recorded as Instrument
No. 90-10709 in said Recorder's Office and being the Northeastern Corner of the
96.920 acre tract of land described in the DEED recorded as Instrument No.
88-100604 in said Recorder's Office; thence South 00 degrees 54 minutes 24
seconds West 605.80 feet along the boundary of said "Parcel III" to the POINT OF
BEGINNING of this description; thence South 00 degrees 54 minutes 24 seconds
West 589.74 feet along the boundary of said "Parcel III" to a Southwestern
Corner of said "Parcel III" on the former Northern right of way line of the Penn
Central Railroad (reference Instrument No. 90-10709); thence South 77 degrees 57
minutes 40 seconds West 0.12 feet along the former Northern right of way line of
the Penn Central Railroad and along the former Northern right of way line of the
"Old" C.C.C. and St. Louis Railroad (reference Instrument No. 88-100604) to the
Southeastern Corner of said 96.920 acre tract of land; thence North 00 degrees
54 minutes 45 seconds East 589.77 feet along the Eastern boundary of said 96.920
acre tract of land; thence South 89 degrees 05 minutes 25 seconds East 0.06 feet
to the POINT OF BEGINNING.
PARCEL IV
Non-Exclusive Easement for ingress and egress of pedestrian and vehicular
traffic and to include utility service as set out in a certain Declaration of
Access and Utility Easement dated June 22, 1989 and recorded June 27, 1989 as
Instrument No. 89-61752 and as amended by First Amendment to Declaration of
Access and Utility Easement dated August 18, 1995 and recorded August 31, 1995
as Instrument No. 95-108216.
PARCEL V
Non-Exclusive easement for storm water drainage in, under, upon, over and across
the easement area as granted in a Drainage Easement dated August 18, 1995 and
recorded August 31, 1995 as Instrument No. 95-108212.
PARCEL VI
Non-Exclusive easement for sanitary sewer in, under, upon, over and across the
easement area as granted in a Sanitary Sewer Easement dated August 18, 1995 and
recorded August 31, 1995 as Instrument No. 95-108213.
