1
EXHIBIT 10.6
LEASE AGREEMENT DATED JULY 8, 1997 BY AND BETWEEN CPA:12, INC.
AS LANDLORD, AND PAGG CORPORATION, AS TENANTS
2
LEASE AGREEMENT
by and between
GGAP (MA) QRS 12 - 31, INC.
a Massachusetts corporation
as LANDLORD
and
PAGG CORPORATIONS,
a Massachusetts Corporation,
as TENANT
Premises: 000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx
Dated as of: July 8, 1997
3
TABLE OF CONTENTS
Page
----
Parties ............................................................. 1
1. Demise of Premises .................................................. 1
2. Certain Definitions ................................................. 1
3. Title and Condition ................................................. 7
4. Use of Leased Premises; Quiet Enjoyment ............................. 9
5. Term ................................................................ 9
6. Basic Rent .......................................................... 10
7. Additional Rent ..................................................... 10
8. Net Lease; Non-Terminability ........................................ 12
9. Payment of Impositions .............................................. 13
10. Compliance with Laws and Easement Agreements;
Environmental Matters ............................................... 14
11. Liens; Recording and Title .......................................... 16
12. Maintenance and Repair .............................................. 16
13. Alterations and Improvements ........................................ 17
14. Permitted Contests .................................................. 18
15. Indemnification ..................................................... 19
16. Insurance ........................................................... 20
17. Casualty and Condemnation ........................................... 23
18. [Intentionally Deleted] ............................................. 25
19. Restoration ......................................................... 25
20. [Intentionally Deleted] ............................................. 26
21. Assignment and Subletting; Prohibition
against Leasehold Financing ......................................... 26
22. Events of Default ................................................... 28
23. Remedies and Damages Upon Default ................................... 30
24. Notices ............................................................. 33
25. Estoppel Certificate ................................................ 33
26. Surrender ........................................................... 34
27. No Merger of Title .................................................. 34
28. Books and Records ................................................... 35
29. Non-Recourse as to Landlord ......................................... 35
30. Financing ........................................................... 35
31. Subordination ....................................................... 36
32. Covenants ........................................................... 36
33. Tax Treatment; Reporting ............................................ 36
34. Miscellaneous ....................................................... 36
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Covenants
Exhibit "F" - Related Documents
-i-
4
LEASE AGREEMENT, made as of this 8th day of July, 0000, xxxxxxx XXXX (XX)
QRS 12-31, INC., a Massachusetts corporation ("Landlord"), with an address c/o
W. P. Xxxxx & Co., Inc., 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and PAGG CORPORATION, a Massachusetts corporation ("Tenant"), with an
address at 000 Xxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 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 and subject to the terms of the Ground Lease,
the following described property (collectively, the "Leased Premises"): (a)
Landlord's leasehold interest in the premises described in Exhibit "A" hereto
and created by the Ground Lease (as hereinafter defined), together with the
Appurtenances (collectively, the "Land"); (b) the buildings, structures and
other improvements now or hereafter constructed on the Land (collectively, the
"Improvements"); and (c) the fixtures, machinery, equipment and other property
described in Exhibit "B" hereto (collectively, the "Equipment").
2. Certain Definitions.
"Additional Rent" shall mean Additional Rent as defined in
Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways, curbs,
gores and vault spaces adjoining any of the Leased Premises.
"Alterations" shall mean all changes, additions, improvements or
repairs to, all alterations, reconstructions, renewals, replacements or removals
of and all substitutions or replacements for any of the Improvements or
Equipment, both interior and exterior, structural and non-structural, and
ordinary and extraordinary.
"Appurtenances" shall mean all tenements, hereditaments, easements,
rights-of-way, rights, privileges in and to the Land, including (a) easements
over other lands granted by any Easement Agreement and (b) any streets, ways,
alleys, vaults, gores or strips of land adjoining the Land.
"Assignment" shall mean any assignment of rents and leases from
Landlord to a Lender which (a) encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified from time to time.
5
"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 knowledge of the
institution of or intention to institute any proceeding for Condemnation.
"Costs" of Landlord or Tenant associated with a specified
transaction shall mean all reasonable costs and expenses incurred by Landlord or
Tenant associated with such transaction (but only if appropriate to the
particular transaction), including without limitation, reasonable attorneys'
fees and expenses, court costs, and brokerage fees, 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 Rate" shall mean the Default Rate as defined in Paragraph
7(a)(iv).
"Easement Agreement" shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect 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 or (y) concerning
-2-
6
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 is reasonably likely to 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 Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto) (collectively, "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 is reasonably likely to result in any liability to Landlord, Tenant or
Lender, any Federal, state or local government or any other Person for the costs
of any removal or remedial action or natural resources damage or for bodily
injury or property damage, (b) any deposit, storage, dumping, placement or use
of any Hazardous Substance at, upon, under or within the Leased Premises or
which extends to any Adjoining Property in violation of any Environmental Law or
in excess of any reportable quantity established under any Environmental Law or
which is reasonably likely to 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 at, under, on or from the Leased Premises at any
time prior to the expiration of the Term or earlier termination of this Lease,
of any barrels, containers or other receptacles containing any Hazardous
Substances in violation of any Environmental Laws, (d) any activity, occurrence
or condition which is reasonably likely to result in any liability, cost or
expense to Landlord or Lender or any other
-3-
7
owner or occupier of the Leased Premises, or which is reasonably likely to
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).
"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.
"Ground Lease" shall mean that certain Ground Lease, dated November
1, 1988, between Xxxxxx X. Xxxxxx, as lessor, and Xxxx X. Xxxxxxx, Trustee of
Granite Park Realty Trust, as lessee, as amended by an Amendment to Ground
Lease, dated September 29, 1989, notice of which is recorded in the Worcester
District Registry of Deeds in Book 12391, Page 304, the interests of lessor and
lessee being thereafter assigned of record.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release, seepage, spill, leak, flow, discharge or emission of any
Hazardous Substance into the environment (including the air, ground water,
watercourses or water systems), (iii) involves the containment or storage of any
Hazardous Substance; or (iv) would cause the Leased Premises or any portion
thereof to become a hazardous waste treatment, recycling, reclamation,
processing, storage or disposal facility within the meaning of any Environmental
Law.
"Hazardous Condition" means any condition which would support any
claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material, product,
petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance regulated 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
-4-
8
waste, pollutant, contaminant, industrial waste, petroleum or petroleum-derived
substances or waste, radon, radioactive materials, asbestos, asbestos
containing materials, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in
Paragraph 9(a).
"Improvements" shall mean the Improvements as defined in
Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Insurance Requirements" shall mean the requirements of all
insurance policies required to be maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year, the
period commencing on the Commencement Date and ending at midnight on the last
day of the twelfth (12th) consecutive calendar 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 applicable requirements of all
present and future Laws (including but not limited to Environmental Laws and
Laws relating to accessibility to, useability 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, which relate 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.
-5-
9
"Lender" shall mean any person or entity (and their respective
successors and assigns) which may, on or after the date hereof, make a Loan to
Landlord or is the holder of any Note and gives written notice thereof to
Tenant.
"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 or to any third party on behalf of Landlord.
"Mortgage" shall mean any mortgage or deed of trust from Landlord to
a Lender which (a) encumbers any of the Leased Premises and (b) secures
Landlord's obligation to repay a Loan, as the same may be amended, supplemented
or modified.
"Net Award" shall mean (a) the entire award payable to Landlord or
Lender by reason of a Condemnation whether pursuant to a judgment or by
agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i), (ii) (to the extent payable to Landlord, Lender or Tenant),
(iv), (v) or (vi) of Paragraph 16(a), as the case may be, less any expenses
incurred by Landlord, Lender and Tenant in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"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.
"Present Value" of any amount shall mean such amount discounted by a
rate per annum which is the lower of (a) the Prime Rate at the time such present
value is determined or (b) six percent (6%) per annum.
"Prime Rate" shall mean the annual interest rate as published, from
time to time, in The Wall Street Journal as the "Prime Rate" in its column
entitled "Money Rate". The Prime Rate may not be the lowest rate of interest
charged by any "large U.S. money center commercial banks" and Landlord makes no
-6-
10
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.
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"State" shall mean the Commonwealth of Massachusetts.
"Surviving Obligations" shall mean any obligations of Tenant under
this Lease, actual or contingent, which arise on or prior to the expiration or
prior termination of this Lease or which survive such expiration or termination
by their own terms.
"Taking" shall mean any taking or damaging of all or a portion of
any of the Leased Premises (i) in or by condemnation or other eminent domain
proceedings pursuant to any Law, general or special, or (ii) by reason of any
agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding. 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.
3. Title and Condition.
(a) The Leased Premises are demised and let subject to (i) the terms
of the Ground Lease, (ii) the rights of any Persons in possession of the Leased
Premises, (iii) the existing state of title of any of the Leased Premises,
including any Permitted Encumbrances, (iv) any state of facts which an accurate
survey or physical inspection of the Leased Premises might show, (v) all present
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.
-7-
11
(b) Tenant acknowledges that the Leased Premises is in good
condition and repair at the inception of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER
CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE
MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF
THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS
FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT,
LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (Vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (Viii) USE, (ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (Xii) DESCRIPTION, (xiii) DURABILITY, (xiv) OPERATION, (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY
OR (xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT;
AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES
THAT THE LEASED PREMISES IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT
THE LEASED PREMISES HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN
THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY
NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW
OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has reviewed
Landlord's examination of 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 Tenant has only the
subleasehold right of possession and use of the Leased Premises as to the Land
and a leasehold right as to the Improvements and Equipment as provided herein,
and that, to its knowledge, (i) the Improvements conform to all material Legal
Requirements and all Insurance Requirements, (ii) all easements necessary or
appropriate for the use or operation of the Leased Premises have been obtained,
(iii) all contractors and subcontractors who have performed work on or supplied
materials to the Leased Premises have been fully paid, and all materials and
supplies have been fully paid for, (iv) the Improvements have been fully
completed in all material respects in a workmanlike manner of first class
quality, and (v) all Equipment necessary or appropriate for the use or operation
of the Leased Premises has been installed and is presently fully operative in
all material respects.
-8-
12
(d) Landlord hereby assigns to Tenant, without recourse or warranty
whatsoever, all warranties, guaranties, indemnities and similar rights which
Landlord may have against any manufacturer, seller, engineer, contractor or
builder in respect of any of the Leased Premises. Such assignment shall remain
in effect until the expiration or earlier termination of this Lease, whereupon
such assignment shall cease and all of said warranties, guaranties, indemnities
and other rights shall automatically revert to Landlord.
4. Use of Leased Premises; Quiet Enjoyment
(a) Tenant may occupy and use the Leased Premises for manufacturing,
assembly, research, development, warehouse, office and related or ancillary
uses 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 or might be reasonably likely to (i) violate any Law or Legal
Requirement, (ii) make void or voidable or cause any insurer to cancel any
insurance required by this Lease, or make it difficult or impossible to obtain
any such insurance at commercially reasonable rates, (iii) cause structural
injury to any of the Improvements or (iv) constitute a public or private
nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of Default
has occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the
Leased Premises throughout the Term, without any hindrance, ejection or
molestation by Landlord or any Person claiming 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
(which shall be not less than 2 business days 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,
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. Any such entry shall be done in a manner that does not
interfere with Tenant's operations, with Tenant's representative present, and in
compliance with Tenant's confidentiality procedures and requirements.
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
-9-
13
hereof, being called the "Term") commencing on the date hereof (the
"Commencement Date") and ending on the last day of the one hundred forty-fourth
(144th) full calendar month next following the date hereof (the "Expiration
Date").
(b) Provided that if, on or prior to the Expiration Date or any
other Renewal Date (as hereinafter defined) this Lease shall not have been
terminated pursuant to any provision hereof, then on the Expiration Date and on
the fifth (5th), anniversary of the Expiration Date (the Expiration Date and
such anniversary being a "Renewal Date"), Tenant shall have the right to extend
the Term for an additional period of five (5) years, provided that Tenant shall
have notified Landlord in writing at least one (1) year prior to the next
Renewal Date that Tenant is extending 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 does not exercise its option to extend or further
extend the Term, or if this Lease has been terminated following an Event of
Default, 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 and upon notice and in the
manner specified in Paragraph 4(b) as Landlord may select.
6. Basic Rent. Tenant shall pay to Landlord, as annual rent for the Leased
Premises during the Term, the amounts determined in accordance with Exhibit "D"
hereto ("Basic Rent"), commencing on the first day of August, 1997, and
continuing on the first day of each November, February, May and August
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 one other Person, at such
addresses and in such proportions as Landlord may direct by fifteen (15) days'
prior written notice to Tenant, and (b) by a check delivered on or prior to the
applicable Basic Rent Payment Date, or by wire transfer in Federal Funds. Pro
rata Basic Rent for the period from the date hereof through the last day of the
month hereof shall be paid on the date hereof.
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional rent
(collectively, "Additional Rent"):
-10-
14
(i) except as otherwise specifically provided herein, all
costs and expenses of Tenant and Landlord specifically referenced herein which
are incurred in connection or associated with (A) charges from third parties
that Tenant is obligated to pay hereunder in connection with the 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 Condemnation proceedings, (D)
the adjustment, settlement or compromise of any insurance claims involving or
arising from any of the Leased Premises, (E) the prosecution, defense or
settlement of any litigation involving or arising from Tenant's use, operation,
maintenance and repair of any of the Leased Premises or Tenant's obligations
under this Lease, (F) the proper exercise or enforcement by Landlord, its
successors and assigns, of any of its rights under this Lease, (G) any amendment
to or modification or termination of this Lease made at the request of Tenant,
(H) reasonable fees and expenses 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
pursuant to its rights under this Lease, (I) the Ground Lease 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 ten (10)
days' following notice from Landlord that such installment is overdue;
(iii) interest at the rate (the "Default Rate") of three
percent (3%) over the Prime Rate per annum on the following sums until paid in
full; (A) all overdue installments of Basic Rent after the respective due dates
thereof, (B) all overdue amounts of Additional Rent relating to obligations
which Landlord shall have paid on behalf of Tenant, from the date of payment
thereof by Landlord so long as Landlord shall have notified Tenant of any such
sums at least ten (10) days prior to payment and Tenant shall not have paid the
same prior to expiration of such period, and (C) all other overdue amounts of
Additional Rent, from the date when any such amount becomes overdue.
(b) Tenant shall pay and discharge (i) any Additional Rent referred
to in Paragraph 7(a)(i) when the same shall become due, provided that amounts
which are billed to Landlord or any third party, but not to Tenant, shall be
paid to Landlord or any such third party, as Tenant may elect, within
-11-
15
twenty (20) days after Landlord's demand for payment thereof which shall be
accompanied by a copy of any such xxxx, and (ii) any other Additional Rent which
Tenant is to pay directly to Landlord, within twenty (20) 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 unless caused by
the affirmative actions of Landlord or Lender or any of their agents, employee
or contractors, (ii) any default on the part of Landlord hereunder or under any
Note, Mortgage, Assignment or any other agreement so long as the same does not
cause a termination of this Lease, (iii) any latent or other detect in any of
the Leased Premises, (iv) the breach of any warranty of any seller or
manufacturer of any of the Equipment, (v) any violation of any provision of this
Lease by Landlord, (vi) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution or winding-up of, or other proceeding
affecting Landlord, (vii) the exercise of any remedy, including foreclosure,
under any Mortgage or Assignment so long as the same does not cause a
termination of this Lease, (viii) any action with respect to this Lease
(including the disaffirmance hereof) which may be taken by Landlord, any
trustee, receiver or liquidator of Landlord, the landlord under the Ground Lease
or any court under the Federal Bankruptcy Code or otherwise, (ix) any
interference with Tenant's use of the Leased Premises (unless such interference
is caused by the affirmative actions of Landlord, its agents, employees or
contractors, is material and is not as a result of an Event of Default) or (x)
market or economic changes.
(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 except as otherwise specifically provided herein (or,
in lieu thereof, Tenant shall pay amounts equal thereto), and the obligations of
Tenant hereunder shall continue unaffected except as otherwise specifically
provided herein unless the requirement to pay or
-12-
16
perform the same shall have been terminated pursuant to an express provision of
this Lease. All Rent payable by Tenant hereunder shall constitute "rent" for all
purposes (including Section 502(b)(6) of the Bankruptcy Code).
(d) Except as otherwise expressly provided herein, Tenant shall have
no right and hereby waives all rights which it may have under any Law (i) to
quit, terminate or surrender this Lease or any of the Leased Premises, or (ii)
to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due thereon,
provided that Tenant has timely received the applicable tax bills from the
lessor under the Ground Lease, pay and discharge all taxes (including real and
personal property, franchise, sales and rent taxes), all charges for any
easement or agreement maintained for the benefit of any of the Leased Premises,
all assessments and levies, all permit, inspection and license fees, all rents
and charges for water, sewer, utility and communication services relating to any
of the Leased Premises, all ground rents and all other public charges whether of
a like or different nature, even if unforeseen or extraordinary, imposed upon or
assessed against (i) Tenant, (ii) Tenant's leasehold interest in the Leased
Premises, (iii) any of the Leased Premises, or (iv) Landlord as a result of or
arising in respect of the ownership, occupancy, leasing, use or possession of
any of the Leased Premises, any activity conducted on any of the Leased
Premises, or the Rent (collectively, the "Impositions"); provided, that nothing
herein shall obligate Tenant to pay (A) income, excess profits or other taxes of
Landlord (or Lender) which are determined on the basis of Landlord's (or
Lender's) net income or net worth (unless such taxes are in lieu of or a
substitute for any other tax, assessment or other charge upon or with respect to
the Leased Premises which, if it were in effect, would be payable by Tenant
under the provisions hereof or by the terms of such tax, assessment or other
charge), (B) any estate, inheritance, succession, gift or similar tax imposed on
Landlord, (C) any capital gains tax imposed on Landlord or (D) any amounts
claimed or incurred for any period other than the Term. 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 and which can be filed by it. 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)
-13-
17
receipts for payment of all other Impositions within ten (10) days after
Landlord's request therefor. Landlord shall, promptly upon receipt thereof,
forward copies to Tenant of any notices, bills, demands or the like from any
third parties for any Impositions or other Additional Rent that Tenant is
obligated to pay hereunder.
(b) Landlord shall have the right during the occurrence of an Event
of Default or if required by any Lender 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
reasonably 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 to the payment of the
Escrow Charges in such order or priority as Landlord shall reasonably determine
but in any event not later than as required by law. If at any time the Escrow
Payments theretofore paid to Landlord shall be insufficient for the payment of
the Escrow Charges, Tenant, within ten (10) days after Landlord's demand
therefor, shall pay the amount of the deficiency to Landlord.
10. Compliance with Laws and Easement Agreements; Environmental Matters.
(a) Tenant shall, at its expense, comply with and conform to, and
cause the Leased Premises and any other Person occupying any part of the Leased
Premises to comply with and conform to, all Insurance Requirements, Legal
Requirements (including all applicable Environmental Laws) and the Ground Lease.
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.
-14-
18
(c) In connection with any refinancing or sale of the Leased
Premises (excluding Landlord's initial financing) or if reasonably required by
any Lender and subject to the requirements of Paragraph 4(b), upon prior written
notice from Landlord, Tenant shall permit such persons as Landlord or Lender may
designate ("Site Reviewers") to visit the Leased Premises and perform
environmental site investigations and assessments ("Site Assessments") on the
Leased Premises for the purpose of determining whether there exists on the
Leased Premises. The scope of such Site Assessment(s) shall conform to the
reasonable requirements of such Lender in the case of a refinancing or the
potential buyer in the case of a proposed sale. As reasonably requested, 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. Except as otherwise provided in Paragraph 30(a) the cost of any other
Site Assessment shall be paid by Landlord. Landlord shall promptly provide
Tenant with a copy of each Site Assessment report (including letter reports) and
data provided to Landlord relating thereto. Provided that no monetary Event of
Default then exists and is continuing, the designation of any Site Reviewers
shall be subject to Tenant's approval, which shall not be unreasonably withheld
or delayed.
(d) Tenant shall notify Landlord promptly after becoming aware of
any Environmental Violation which is required to be reported to any governmental
authority under any applicable Environmental Law or of any release of any
Hazardous Substance to the environment in violation of any applicable
Environmental Law 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. If Tenant fails
to promptly commence or thereafter to diligently pursue the correction of any
Environmental Violation (whether or not notice is required to be given to
Landlord) which occurs or is found to exist, Landlord, following fifteen (15)
days written notice to Tenant (except in the event of an emergency, in which
case no notice shall be required) shall have the right to correct such
Environmental Violation.
(e) All future leases, subleases or concession agreements relating
to the Leased Premises entered into by Tenant shall contain covenants of the
other party not to at any time
-15-
19
(i) cause any Environmental Violation to occur or (ii) permit any Person
occupying the Leased Premises through said subtenant or concessionaire to cause
any Environmental violation to occur.
11. Liens; Recording.
(a)Tenant shall not, directly or indirectly, create or permit to be
created or to remain and shall promptly discharge or remove any lien, levy or
encumbrance on any of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Lease, other than any Mortgage or Assignment, the
Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by, resulting solely from any act or omission of, or caused by or
consented to in writing by Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL
NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED
TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH
OR UNDER TENANT, AND THAT NO MECHANICS OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND
TO ANY OF THE LEASED PREMISES UNLESS DISCHARGED OR BONDED OFF. LANDLORD MAY AT
ANY TIME, AND AT LANDLORD'S REQUEST TENANT SHALL PROMPTLY, POST ANY NOTICES ON
THE LEASED PREMISES REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b)Tenant shall execute, deliver and record, file or register
(collectively, "record") all such instruments as may be required or permitted by
any present or future Law in order to evidence the respective interests of
Landlord and Tenant in the Leased Premises, and shall cause a memorandum of
this Lease (or, if such a memorandum cannot be recorded, this Lease), and any
supplement hereto or thereto, to be recorded in such manner and in such places
as may be required or permitted by any present or future Law in order to protect
the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Tenant shall at all times maintain the Leased Premises and shall
maintain or enforce its rights concerning maintenance of 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 (as
to the Leased Premises) for ordinary wear and tear and casualty damage, subject
in such event to Tenant's restoration obligations under Paragraphs 17 and 19.
Tenant shall take every other action necessary or appropriate for the
preservation and safety of the Leased Premises. Tenant shall promptly make all
-16-
20
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, except as otherwise specifically provided under the
terms of Paragraphs 17 and 19.
(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 thereof, either (A) obtain from all necessary parties
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation, hindrance, obstruction or impairment, whether
the same shall affect Landlord, Tenant or both, or (B) take such action as shall
be necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
13. Alterations and Improvements.
(a) Tenant shall have the right, without having obtained the prior
written consent of Landlord and Lender, to make (i) Alterations or a series of
related Alterations that, as to any such Alterations or series of related
Alterations, do not cost in excess of $250,000 and (ii) to install Equipment in
the Improvements or accessions to the Equipment that, as to such Equipment or
accessions, do not cost in excess of $250,000, so long as at the time of
construction or installation of any such Equipment or Alterations no Event of
Default exists and is continuing and the value and utility of the Leased
Premises is not diminished thereby in any material respects. If the cost of any
Alterations, series of related Alterations, Equipment or accessions thereto is
in excess of $250,000, the prior written approval of Landlord shall be required,
such approval not to be unreasonably withheld, delayed or conditioned. Tenant
shall not construct upon the Land any additional buildings without having first
obtained the prior written consent of Landlord, such approval not to be
unreasonably withheld, delayed or conditioned.
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or
as required by Paragraph 12 or 17 (such
- 17 -
21
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 in any material respect or its usefulness
impaired in any material respect by any such Work, (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 then in
effect, (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 be in first class condition, (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 except for items not treated as
Equipment pursuant to Exhibit "B", and, subject to the terms of the Ground
Lease, 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 claiming under Tenant, and
(ix) for Work that will cost in excess of $250,000 Tenant shall comply, to the
extent requested by Landlord or required by this Lease, with the provisions of
Paragraphs 11(a) and 19(a)(i), 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 monetary Event of Default exists and is continuing 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 so long as during the
pendency thereof none of the following shall occur: (i) the realization upon,
the Permitted Violation so contested, (ii) the sale, forfeiture or loss of any
of the Leased Premises or any Rent to satisfy or to pay any damages caused by
any Permitted Violation, (iii) any material interference with the use or
occupancy of any of the Leased Premises, (iv) any interference with the payment
of any Rent, or (v) the cancellation of any insurance policy or a statement by
the carrier that coverage will be denied. Tenant shall provide Landlord security
which is satisfactory, in Landlord's reasonable judgment, to assure that such
Permitted Violation is corrected, including all Costs, interest and penalties
that may be incurred or become due in connection therewith. While any
proceedings
-18-
22
which comply with the requirements of this Paragraph 14 are pending and the
required security is held by Landlord, Landlord shall not have the right to
correct any Permitted Violation thereby being contested unless Landlord is
required by law to correct such Permitted Violation and Tenant's contest does
not prevent or stay such requirement as to Landlord. Each such contest shall be
promptly and diligently prosecuted by Tenant to a final conclusion, except that
Tenant, so long as the conditions of this Paragraph 14 are at all times complied
with, has the right to attempt to settle or compromise such contest through
negotiations. Tenant shall pay any and all losses, judgments, decrees and Costs
in connection with any such contest and shall, promptly after the final
determination of such contest, fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
or in connection therewith, together with all penalties, fines, interest and
Costs thereof or in connection therewith, and perform all acts the performance
of which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any civil or criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend, save and hold
harmless Landlord and all other Persons described in Paragraph 29 (each an
"Indemnitee") from and against any and all liabilities, losses, damages
(excluding punitive and consequential damages, except to the extent payable to a
third Person), penalties, Costs (including reasonable attorneys' fees and
costs), causes of action, suits, claims, demands or judgments of any nature
whatsoever, howsoever caused (unless caused by the gross negligence or willful
misconduct of the Indemnitee seeking indemnification), without regard to the
form of action and whether based on strict liability, negligence or any other
theory of recovery at law or in equity, arising from (i) any matter pertaining
to the 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 Legal Requirement or any
Permitted Encumbrance or any encumbrance Tenant consented to or (iv) any
alleged, threatened or actual Environmental Violation, including (A) liability
for response costs and for costs of 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
-19-
23
expenses of abatement, correction or clean-up, fines, damages, response costs or
penalties which arise from the provisions of any of the other Environmental Laws
and (C) liability for personal injury or property damage arising under any
statutory or common-law tort theory, including damages assessed for the
maintenance of a public or private nuisance or for carrying on of a dangerous
activity.
(b) in case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may 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.
(c) The obligations of Tenant under this Paragraph 15 shall survive
any termination, expiration or rejection in bankruptcy of this Lease.
16. Insurance.
(a) Tenant shall maintain the following insurance on or in
connection with the Leased Premises:
(i) Insurance against physical loss or damage to the
Improvements and Equipment as provided under a standard "All Risk" property
policy including but not limited to flood (if the Leased Premises is in a flood
zone) and earthquake coverage in amounts not less than the actual replacement
cost of the Improvements and Equipment. Such policies shall contain Replacement
Cost and Agreed Amount Endorsements and shall contain deductibles not more than
$50,000 per occurrence.
(ii) Commercial General Liability Insurance (including but not
limited to Incidental Medical Malpractice and Host Liquor Liability) and
Business Automobile Liability Insurance (including Non-Owned and Hired
Automobile Liability) against claims for personal and bodily injury, death or
property damage occurring on, in or as a result of the use of the Leased
Premises, in an amount not less than $10,000,000 per occurrence/annual
aggregate.
(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 insurance
-20-
24
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 $1,000,000 per accident for damage to property. Such policies
shall include at least $1,000,000 per accident for Off-Premises Service
Interruption and may contain a deductible not to exceed $50,000.
(v) Business Interruption Extra Expense Insurance at limits to
cover 100% of losses and expenses incurred over the period of indemnity not less
than one year from time of loss. Such insurance shall name Landlord as loss
payee solely with respect to Rent payable to or for the benefit of Landlord
under this Lease.
(vi) During any period in which substantial Alterations at the
Leased Premises are being undertaken, builder's risk insurance covering the
total completed value including "soft costs" endorsements 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, workers
compensation and automobile liability insurance with respect to the Improvements
being constructed, altered or repaired.
(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 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), 16(a)(v) and 16(a)(vi) shall name Tenant as
insured and Lender and Landlord as loss payee. The insurance referred to in
Paragraph 16(a)(ii) shall name Landlord and Lender as additional insureds. If
said insurance or any part thereof shall expire, be withdrawn or become void,
Tenant shall immediately obtain new or additional insurance reasonably
satisfactory to Landlord.
(c) Each insurance policy referred to in clauses (i), (iv), (v) and
(vi) of Paragraph 16(a) shall contain standard non-contributory mortgagee
clauses in favor of and acceptable to Lender. Each policy required by any
provision of Paragraph 16(a), except clause (iii) thereof, shall provide that it
may not be cancelled except after thirty (30) days' prior notice to Landlord and
Lender. Each such policy shall also provide that any loss otherwise payable
thereunder shall be payable
-21-
25
notwithstanding (i) any act or omission of Landlord or Tenant which might,
absent such provision, result in a forfeiture of all or a part of such insurance
payment, (ii) the occupation or use of any of the Leased Premises for purposes
more hazardous than those permitted by the provisions of such policy, (iii) any
foreclosure or other action or proceeding taken by Lender pursuant to any
provision of the Mortgage, Note, Assignment or other document evidencing or
securing the Loan upon the happening of an event of default therein or (iv) any
change in title to or ownership of any of the Leased Premises.
(d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least thirty (30) days prior to the expiration date of
such policy, and shall promptly deliver to Landlord original certificates.
(e) Anything in this Paragraph 16 to the contrary notwithstanding,
any insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may
be carried under a "blanket" or umbrella policy or policies covering other
properties or liabilities of Tenant, provided that such "blanket" or umbrella
policy or policies otherwise comply with the provisions of this Paragraph 16 and
provided further that Tenant shall provide to Landlord a Statement of Values
which shall be reviewed annual and amended as necessary based on Replacement
Cost Valuations. The original or a certified copy of each such "blanket" or
umbrella policy shall promptly be delivered to Landlord.
(f) Tenant shall promptly comply with and conform to (i) all
provisions of each insurance policy required by this Paragraph 16 and (ii) all
reasonable requirements of the insurers thereunder applicable to Landlord,
Tenant or any of the Leased Premises or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration or repair of any of the Leased
Premises, even if such compliance necessitates Alterations or results in
interference with the use or enjoyment of any of the Leased Premises.
(g) Tenant shall not carry separate insurance concurrent in form or
contributing in the event of a Casualty with that required in this Paragraph 16
unless (i) Landlord and Lender are included therein as named insureds, with loss
payable as provided herein, and (ii) such separate insurance complies with the
other provisions of this Paragraph 16. Tenant shall immediately notify Landlord
of such separate insurance and shall deliver to Landlord the original policies
thereof.
(h) All policies shall contain effective waivers by the carrier
against all claims for insurance premiums against
-22-
26
Landlord and shall contain full waivers of subrogation against the Landlord.
(i) All proceeds of any insurance required under Paragraph
16(a) shall be payable as follows:
(i) Except for proceeds payable to a Person other than
Landlord, Tenant or Lender, all proceeds of insurance required under clauses
(ii), (iii), (iv), (v) and (vii) of Paragraph 16(a) and proceeds attributable to
the general liability coverage provisions of Builder's Risk insurance under
clause (vi) of Paragraph 16(a) shall be payable to Landlord or, if required by
the Mortgage, to Lender.
(ii) Proceeds of insurance required under clause (i) of
Paragraph 16(a) and proceeds attributable to Builder's Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16(a) shall be payable to Landlord (or Lender) and applied as set forth in
Paragraph 17. Tenant shall apply the Net Award to restoration of the Leased
Premises in accordance with the applicable provisions of this Lease.
17. Casualty and Condemnation.
(a) If any Casualty to the Leased Premises occurs Tenant shall give
Landlord and Lender immediate notice thereof. So long as no monetary Event of
Default exists and is continuing, Tenant is hereby authorized to adjust, collect
and compromise all claims under any of the insurance policies required by
Paragraph 16(a) 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 cooperate with Tenant in connection with such claims and shall
have the right to join with Tenant therein. Any final adjustment, settlement or
compromise of any such claim shall be subject to the prior written approval of
Landlord (which shall not be unreasonably withheld or delayed) and Landlord
shall have the right to prosecute or contest, or to require Tenant to prosecute
or contest, any such claim, adjustment, settlement or compromise. If a monetary
Event of Default exists and is continuing, Tenant shall not be entitled to
adjust, collect or compromise any such claim or to participate with Landlord in
any adjustment, collection and compromise of the Net Award payable in connection
with a Casualty and during such period Tenant agrees to sign, upon the request
of Landlord, all such proofs of loss, receipts, vouchers and releases. Each
insurer is hereby authorized and directed to make payment under said policies,
including return of unearned premiums, directly to Landlord or, if required by
the Mortgage, to Lender instead of to Landlord and Tenant jointly, subject to
the terms of Paragraphs 17(c) and 19. The rights of Landlord under this
Paragraph 17(a) shall be extended to Lender if and to the extent that any
Mortgage so provides.
-23-
27
(b) Tenant, immediately Upon receiving a Condemnation Notice, shall
notify Landlord and Lender thereof. So long as no monetary Event of Default
exists and is continuing, Tenant is authorized to collect, settle and compromise
the amount of any Net Award and Landlord shall have the right to Join with
Tenant herein. If a monetary Event of Default exists and is continuing, Landlord
shall be authorized to collect, settle and compromise the amount of any Net
Award and Tenant shall not be entitled to participate with Landlord in any
Condemnation proceeding or negotiations under threat thereof or to contest the
Condemnation or the amount of the Net Award therefor. No agreement with any
condemnor in settlement or under threat of any Condemnation shall be made by
Tenant without the written consent of Landlord. Subject to the provisions of
this Paragraph 17(b), Tenant hereby irrevocably assigns to Landlord any award or
payment to which Tenant is or may be entitled by reason of any Condemnation,
whether the same shall be paid or payable for Tenant's leasehold interest
hereunder or otherwise, but nothing in this Lease shall impair Tenant's right to
any award or payment on account of Tenant's trade fixtures, equipment or other
tangible property which is not part of the Equipment, moving expenses or loss of
business, if available, to the extent that and so long as (i) Tenant shall have
the right to make, and does make a separate claim therefor against the condemnor
and (ii) such claim does not in any way reduce either the amount of the award
otherwise payable to Landlord for the Condemnation of Landlord's fee interest in
the Leased Premises or the amount of the award (if any) otherwise payable for
the Condemnation of Tenant's leasehold interest hereunder. The rights of
Landlord under this Paragraph 17(b) shall also be extended to Lender if and to
the extent that any Mortgage so provides.
(c) if (i) any insured Casualty or Condemnation shall occur and in the
reasonable opinion of Tenant the Leased Premises can be substantially restored
within one hundred eighty (180) days following the date of such Casualty or
Condemnation to a functional unit sufficient for the operation of Tenant's
business or (ii) if any uninsured Casualty shall occur, this Lease shall
continue, notwithstanding such event, and there shall be no abatement or
reduction of any Monetary obligations in excess of amounts paid to Landlord
under the insurance described in Paragraph 16(a)(v). Promptly after such
Casualty or Condemnation and, at Tenant's option, notice of Landlords receipt of
the Net Award, Tenant, as required in Paragraphs 12(a) and 13(b), shall commence
and diligently continue to restore the Leased Premises as nearly as possible to
their value, condition and character immediately prior to such event (assuming
the Leased Premises to have been in the condition required by this Lease). So
long as no monetary Event of Default exists and is continuing, any Net Award up
to and including $250,000 shall be paid by Landlord to Tenant promptly upon
receipt by Landlord and Tenant shall restore the Leased Premises in accordance
with the requirements of Paragraphs 12(a) and 13(b) of this Lease. Any
-24-
28
Net Award in excess of $250,000 shall 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.
(d) If any Casualty or Condemnation shall occur and in the reasonable
opinion of Tenant the Leased Premises cannot be substantially restored within
such one hundred eighty (180) day period then, at Tenant's option, this Lease
shall terminate (except for Surviving Obligations) as of the date Landlord
receives the Net Award.
18. [Intentionally Deleted].
19. Restoration.
(a) Landlord (or Lender if required by any Mortgage) shall hold Net
Award in excess of $250,000 in a fund (the "Restoration Fund") and disburse
amounts from the Restoration Fund only in accordance with the following
conditions:
(i) prior to commencement of restoration, (A) the architects,
contracts, contractors, plans and specifications for the restoration shall have
been approved by Landlord, such approval not to be unreasonably withheld or
delayed, (B) if Tenant shall have obtained the same, Landlord and Lender shall
be provided with mechanics' lien insurance acceptable performance and payment
bonds which insure satisfactory completion of and payment for the restoration,
and (C) if permitted by applicable law, appropriate waivers of mechanics' and
materialmen's liens shall have been filed;
(ii) at the time of any disbursement, no monetary Event of Default
shall exist and be continuing 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 promptly from time to time in an
amount not exceeding the cost of the work completed since the last disbursement
(assuming payment of such disbursement), upon receipt of (A) reasonably
satisfactory evidence, including architects' certificates, of the stage of
completion, the estimated total cost of completion and performance of the work
to date in a good and workmanlike manner in accordance with the contracts, plans
and specifications, (B) waivers of liens in form reasonably satisfactory to
Landlord and (C) a satisfactory bringdown of title insurance;
(iv) each request for disbursement shall be accompanied by a
certificate of Tenant, signed by an authorized representative of Tenant,
describing the work for which payment is requested, stating the cost incurred in
connection therewith,
-25-
29
stating that Tenant has not previously received payment for such work and, upon
full completion of the work, also stating that the work has been fully completed
and, to Tenant's knowledge, complies with the applicable requirements of this
Lease;
(v) Landlord or Lender may retain a portion of the restoration fund
for the retainage established under the Construction Contracts until the
restoration is fully completed;
(vi) if the Restoration Fund is held by Landlord, the Restoration
Fund shall not be commingled with Landlord's other funds and shall bear interest
at a rate agreed to by Landlord and Tenant; and
(vii) such other reasonable conditions as Landlord or Lender may
impose.
(b) Prior to commencement of restoration and at any time during
restoration, if the estimated cost of completing the restoration work free and
clear of all liens, as determined by Landlord, exceeds the amount of the Net
Award available for such restoration, the amount of such excess shall, upon
demand by Landlord, be paid by Tenant to Landlord to be added to the Restoration
Fund. Any sum so added by Tenant which remains in the Restoration Fund upon
completion of restoration shall be refunded to Tenant. For purposes of
determining the source of funds with respect to the disposition of funds
remaining after the completion of restoration, the Net Award shall be deemed to
be disbursed prior to any amount added by Tenant.
(c) if any sum remains in the Restoration Fund after completion of the
restoration and any refund to Tenant pursuant to Paragraph 19(b), such sum shall
be retained by Landlord or, if required by a Note or Mortgage, paid by Landlord
to a Lender.
20. [Intentionally Deleted].
21. Assignment and Subletting; Prohibition against
Leasehold Financing.
(a) (i) Tenant shall have the right upon not less than forty-five (45)
days prior written notice to, but without the approval of, Landlord to assign
this Lease or to sublet the Leased Premises in its entirety ("Preapproved
Transfer") in connection with any transaction described in Sections 2 and 3 of
Exhibit "E".
(ii) If Tenant desires to assign this Lease other than with respect
to a Preapproved Transfer, whether by operation of law or otherwise, then
Tenant shall, not less than forty-five (45) days prior to the date on which it
desires to
-26-
30
make any such assignment submit to Landlord information regarding the following
with respect to the proposed assignee ("Review Criteria): (A) credit, (B)
capital structure, (C) management, (D) operating history, (E) proposed use of
the Leased Premises and (F) risk factors associated with the proposed use of the
Leased Premises by the proposed assignee, taking into account factors such as
environmental concerns and product liability. Landlord shall review such
information and shall approve or disapprove the proposed assignee no later than
the thirtieth (30th) day following receipt of all such information, such
approval not to be unreasonably withheld or delayed, and Landlord shall be
deemed to have acted reasonably in granting or withholding consent if such grant
or disapproval is based solely on its review of the Review Criteria using
prudent business judgment.
(b)(i) Tenant shall have the right, upon thirty (30) days prior written
notice to Landlord and Lender, to enter into one or more subleases that demise,
in the aggregate, up to but not in excess of fifty percent (50%) of the gross
space in the Improvements with no consent or approval of Landlord being required
or necessary ("Preapproved Sublet"). Other than pursuant to Preapproved Sublets
at no time during the Term shall subleases for more than fifty percent (50%) of
the gross space in the Leased Premises be permitted without the prior written
consent of Landlord, which consent shall be reasonably granted or withheld based
on a review of the Review Criteria as they relate to the proposed sublessee if
the proposed sublet is for all or substantially all of the Leased Premises and a
review of the factor described at clause (E) of the Review Criteria if the
proposed sublet is for only a portion of the Leased Premises. Landlord and
Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based solely on their reasonable review
of the Review Criteria applying prudent business judgment (and shall not be
unreasonably delayed).
(C) If Tenant assigns all its rights and interest under this Lease, the
assignee under such assignment shall expressly assume all the obligations of
Tenant hereunder, actual or contingent, including obligations of Tenant which
may have arisen on or prior to the date of such assignment, by a written
instrument delivered to Landlord at the time of such assignment. Each sublease
of any of the Leased Premises shall be subject and subordinate to the provisions
of this Lease. No assignment or sublease shall affect or reduce any of the
obligations of Tenant hereunder, and all such obligations shall continue in full
force and effect as obligations of a principal and not as obligations of a
guarantor, as if no assignment or sublease had been made. No assignment or
sublease shall impose any additional obligations on Landlord under this Lease.
-27-
31
(d) Tenant shall, within ten (10) days after the execution and delivery
of any assignment or sublease, deliver a duplicate original copy thereof to
Landlord which, in the event of an assignment, shall be in recordable form.
(e) As security for performance of its obligations under this Lease,
Tenant hereby grants, conveys and assigns to Landlord all right, title and
interest of Tenant in and to all subleases now in existence or hereafter entered
into for any or all of the Leased Premises, any and all extensions,
modifications and renewals thereof and all rents, issues and profits therefrom.
Landlord shall have the absolute right at any time following the occurrence of
an Event of Default to collect such rents and sums of money and to retain the
same. Tenant shall not consent to, cause or allow any modification or alteration
of any of the terms, conditions or covenants of any of the subleases requiring
Landlord's consent hereunder 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 with respect to any of the Subleases nor do nor
permit anything to be done, the doing of which, nor omit or refrain from doing
anything, the omission of which, will or could be a breach of or default in the
terms of any of the subleases.
(f) Tenant shall not have the power to mortgage, pledge or otherwise
encumber its interest under this Lease or any sublease of the Leased Premises,
and any such mortgage, pledge or encumbrance made in violation of this Paragraph
21 shall be void and of no force and effect.
(g) Landlord may sell or transfer the Leased Premises at any time
without Tenant's consent to any third party (each a "Third Party Purchaser"). In
the event of any such transfer, Tenant shall attorn to any Third Party Purchaser
as Landlord so long as such Third Party Purchaser and Landlord notify Tenant in
writing of such transfer. 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 or decrease the rights 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:
-28-
32
(i) a failure by Tenant to make any payment of any Monetary
Obligation when due, 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) The breach of any Covenant shall occur;
(iv) Tenant shall (A) voluntarily be adjudicated a bankrupt or
insolvent, (B) seek or consent to the appointment of a receiver or trustee for
itself or for 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;
(v) a court shall enter an order, judgment or decree appointing,
without the consent of Tenant, a receiver or trustee for it or for any of the
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 ninety (90) days after it is entered;
(vi) the Leased Premises shall have been vacated or abandoned;
(vii) Tenant shall be liquidated or dissolved or shall begin
proceedings towards its liquidation or dissolution;
(viii) the estate or interest of Tenant in any of the 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; or
(ix) an Event of Default beyond the expiration of any applicable
grace or cure period shall occur under the Ground Lease.
(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
(iii), (iv), (v), (vi), (vii), (viii), or (ix) of Paragraph 22(a); or (B) the
default consists of an assignment entered into in violation of Paragraph 21.
If the default consists of the failure to pay any Monetary Obligation under
clause (i) of Paragraph 22(a), the applicable
-29-
33
cure period shall be ten (10) days from the date on which notice is given. If
the default consists of a default under clause (ii) of Paragraph 22(a), other
than the events specified in clause (B) 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.
23. Remedies and Damages Upon Default.
(a) It an Event of Default shall have occurred and is continuing,
Landlord shall have the right, at its sole option, then or at any time
thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, subject in all events to applicable Law,
without demand upon or notice to Tenant except as otherwise provided in
Paragraph 22(b) and this Paragraph 23.
(i) Landlord may give Tenant notice of Landlord's intention to
terminate this Lease on a date specified in such notice. Upon such date, this
Lease, the estate hereby granted and all rights of Tenant hereunder shall expire
and terminate. Upon such termination, Tenant shall immediately surrender and
deliver possession of the Leased Premises to Landlord in accordance with
Paragraph 26. If Tenant does not so surrender and deliver possession of the
Leased Premises, Landlord may following summary process, re-enter and repossess
the Leased Premises. Upon or at any time after taking possession of the Leased
Premises in accordance with the prior sentence, Landlord may, by legal process,
remove any Persons or property therefrom. Landlord shall be under no liability
for or by reason of any such entry, repossession or removal. Notwithstanding
such entry or repossession, Landlord may collect the damages set forth in
Paragraph 23(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
-30-
34
sole discretion. Notwithstanding any such reletting, Landlord may collect the
damages set forth in Paragraph 23(b)(ii).
(iii) Landlord may declare by notice to Tenant the entire Basic
Rent (in the amount of Basic Rent then in effect) for the remainder of the then
current Term to be immediately due and payable. Tenant shall immediately pay to
Landlord all such Basic Rent discounted to its Present Value, all accrued Rent
then due and unpaid, all other Monetary Obligations which are then due and
unpaid and all Monetary obligations which arise or become due by reason of such
Event of Default (including any customary reletting costs incurred by Landlord).
Upon receipt by Landlord of all such accelerated Basic Rent and Monetary
Obligations, this Lease shall remain in full force and effect and Tenant shall
have the right to possession of the Leased Premises from the date of such
receipt by Landlord to the end of the Term, and subject to all the provisions of
this Lease, including the obligation to pay all increases in Basic Rent and all
Monetary Obligations that subsequently become due, except that (A) no Basic Rent
which has been prepaid hereunder shall be due thereafter during the said Term
and (B) Tenant shall have no option to extend or renew the Term,
(b) The following constitute damages to which Landlord shall be
entitled if Landlord exercises its remedies under Paragraph 23(a)(i) or
23(a)(ii):
(i) If Landlord exercises its remedy under Paragraph 23(a)(i) but
not its remedy under Paragraph 23(a)(ii) (or attempts to exercise such remedy
and is unsuccessful in reletting the Leased Premises) then, upon written demand
from Landlord, Tenant shall pay to Landlord, as liquidated and agreed final
damages for Tenant's default and in lieu of all current damages beyond the date
of such demand (it being agreed that it would be impracticable or extremely
difficult to fix the actual damages), an amount equal to the Present Value of
the excess, if any, of (A) all Basic Rent from the date of such demand to the
date on which the Term is scheduled to expire hereunder in the absence of any
earlier termination, re-entry or repossession over (B) the then fair market
rental value of the Leased Premises for the same period. Tenant shall also pay
to Landlord all of Landlord's costs in connection with the repossession of the
Leased Premises and any attempted reletting thereof, including all brokerage
commissions, legal expenses, reasonable attorneys' fees, employees' expenses,
costs of necessary Alterations and expenses and preparation for reletting.
(ii) If Landlord exercises its remedy under Paragraph 23(a)(i) or
its remedies under Paragraph 23(a)(i) and 23(a)(ii), then Tenant shall, until
the end of what would have been the Term in the absence of the termination of
the Lease, and whether or not any of the Leased Premises shall have been relet,
be liable to Landlord for, and shall pay to Landlord, as
-31-
35
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, it any, of any reletting pursuant to Paragraph 23(a)(ii), after
deducting from such proceeds all of Landlord's costs (including the items listed
in the last sentence of Paragraph 23(b)(i) hereof) incurred in connection with
such repossessing and reletting; provided, that if Landlord has not relet the
Leased Premises, such costs of Landlord shall be considered to be Monetary
obligations payable by Tenant. Tenant shall be and remain liable for all sums
aforesaid, and Landlord may recover such damages from Tenant and institute and
maintain successive actions or legal proceedings against Tenant for the recovery
of such damages. Nothing herein contained shall be deemed to require Landlord to
wait to begin such action or other legal proceedings until the date when the
Term would have expired by its own terms had there been no such Event of
Default.
(c) Notwithstanding anything to the contrary herein contained, in lieu
of or in addition to any of the foregoing remedies and damages, Landlord may
exercise any remedies and collect any damages available to it at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder or
at law or in equity; provided, that Landlord shall not be entitled to obtain
more than full satisfaction notwithstanding the exercise of multiple remedies by
Landlord.
(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 WAIVE ANY RIGHT TO A TRIAL BY JURY.
(q) upon the occurrence of any Event of Default, Landlord shall have
the right (but no obligation) to perform any act required of Tenant hereunder
and, if performance of such act requires that Landlord enter the Leased
Premises, Landlord may enter the Leased Premises for such purpose.
(h) No failure of either party (i) to insist at any time upon the
strict performance of any provision of this
-32-
36
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 a party of any provision hereof shall be deemed to
have been made unless expressed in a writing signed by such party.
(i) Tenant hereby waives and surrenders, for itself and all those
claiming under it, including creditors of all kinds, (i) any right and privilege
which it or any of them may have under any present or future Law to redeem any
of the Leased Premises or to have a continuance of this Lease after termination
of this Lease or of Tenant's right of occupancy or possession pursuant to any
court order or any provision hereof, and (ii) the benefits of any present or
future Law which exempts property from liability for debt or for distress for
rent.
(j) Except as otherwise provided herein, all remedies are cumulative
and concurrent and no remedy is exclusive of any other remedy. Each remedy may
be exercised at any time an Event of Default has occurred and is continuing and
may be exercised from time to time. No remedy shall be exhausted by any exercise
thereof.
24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated above or when delivery is
refused. A copy of any notice given by Tenant to Landlord shall simultaneously
be given by Tenant to Xxxx Xxxxx Xxxx & XxXxxx, 0000 Xxx Xxxxxxx Xxxxx,
Xxxxxxxxxxxx, XX 00000, Attention: Chairman, Real Estate Department and a copy
of any notice given by Landlord to Tenant shall simultaneously be given to
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower, 000 Xxxx Xxxxxx, Xxxxxx, XX
00000, Attn: Xxxxxxxx X. Xxxxx. For the purposes of this Paragraph, any party
may substitute another address stated above (or substituted by a previous
notice) for its address by giving fifteen (15) days' notice of the new address
to the other party, in the manner provided above.
25. Estoppel Certificate. At any time upon not less than twenty (20)
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
-33-
37
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 and Additional Rent 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 and (d) such
other matters as the Requesting Party may reasonably request relating to the
status of the Lease and the Leased Premises. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Lender or their
assignees and by any prospective purchaser or mortgagee of any of the Leased
Premises. Any certificate required under this Paragraph 25 and delivered by
Tenant shall state that, in the opinion of each person signing the same, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to the subject matter of such certificate, and shall
briefly state the nature of such examination or investigation.
26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises to
Landlord in the same condition in which the Leased Premises was at the
commencement of this Lease, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear and Casualty damage that Tenant is not
otherwise required to restore pursuant to the terms of this Lease. Upon such
surrender, Tenant shall (a) remove from the Leased Premises all property which
is owned by Tenant or third parties other than Landlord and (b) repair any
damage caused by such removal. Property not so removed shall become the property
of Landlord, and Landlord may thereafter cause such property to be removed from
the Leased Premises. The cost of removing and disposing of such property and
repairing any damage to any of the Leased Premises caused by such removal shall
be paid by Tenant to Landlord upon demand. Landlord shall not in any manner or
to any extent be obligated to reimburse Tenant for any such property which
becomes the property of Landlord pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Lease with the leasehold estate in the Land and the fee
estate in the remainder 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.
-34-
38
28. Books and Records.
(a) Tenant shall keep adequate records and books of account with
respect to the finances and business of Tenant generally and with respect to the
Leased Premises, in accordance with generally accepted accounting principles
("GAAP") consistently applied.
(b) Tenant shall deliver to Landlord and to Lender within ninety (90)
days of the close of each fiscal year, annual audited financial statements of
Tenant prepared by a nationally recognized firm of independent certified public
accountants containing balance sheets, statements of income and retained
earnings and statements of cash flow. Tenant shall also furnish to Landlord
within forty-five (45) days after the end of each of the three remaining
quarters unaudited financial statements and all other quarterly reports of
Tenant, certified by Tenant's chief financial officer, and all filings, if any,
of Form 10-K, Form 10 Q and other required filings with the Securities and
Exchange Commission pursuant to the provisions of the Securities Exchange Act of
1934, as amended, or any other Law. All financial statements of Tenant shall be
prepared in accordance with GAAP consistently applied.
29. Non-Recourse as to Landlord Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be enforced only against the Leased Premises and
not against any other assets, properties or funds of (i) Landlord, (ii) any
director, officer, general partner, shareholder, limited partner, beneficiary,
employee or agent of Landlord or any general partner of Landlord or any of its
general partners (or any legal representative, heir, estate, successor or assign
of any thereof), (iii) any 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 at any thereof.
30. Financing.
(a) Tenant agrees to pay, within thirty (30) days of written request
therefor, the reasonable balance of Tenant's legal fees and reasonable and
customary costs and expenses such as legal fees, recording fees, title
insurance, survey, mortgage points, if any, incurred by Landlord in financing
the initial Loan, up to a maximum of $14,621.80.
(b) If Landlord desires to obtain or refinance any Loan, Tenant shall
agree, upon request of Landlord, to supply
-35-
39
any such Lender with such notices and information as Tenant is required to give
to Landlord hereunder and to consent to such financing if such consent is
requested by such Lender subject to Tenant's receipt of a satisfactory
recognition, subordination, non-disturbance and attornment agreement. 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.
31. 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, including Tenant's occupancy rights,
and all of Tenant's other rights and Landlord's obligations hereunder and the
agreement not to disturb Tenant's occupancy hereunder unless and until an Event
of Default exists.
32. Covenants. Tenants hereby covenants and agrees to comply with all
the covenants and agreements described in Exhibit "E" hereto.
33. 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.
34. Miscellaneous.
(a) The paragraph headings in this Lease are used only for convenience
in finding the subject matters and are not part of this Lease or to be used in
determining the intent of the parties or otherwise interpreting this Lease.
(b) As used in this Lease, the singular shall include the plural and
any gender shall include all genders as
-36-
40
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. Except as otherwise specifically provided herein,
Landlord shall have the right, at its sole option, to withhold its consent
whenever such consent is required under this Lease for any reason or no reason.
Time is of the essence with respect to the performance by Tenant and Landlord of
their respective 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 the documents listed on Exhibit "F" hereto which
may be executed by Tenant on or about the effective date hereof at Landlord's
request constitute the entire agreement between the parties and supersede all
prior understandings and agreements, whether written or oral, between the
parties hereto relating to the Leased Premises and the transactions provided for
herein. Landlord and Tenant are business entities having substantial experience
with the subject matter of this Lease and have each fully participated in the
negotiation and drafting of this Lease. Accordingly, this Lease shall be
construed without regard to the rule that ambiguities in a document are to be
construed against the drafter.
(f) This Lease may be modified, amended, discharged or waived only by
an agreement in writing signed by the party against whom enforcement of any such
modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land and bind
Landlord and Tenant and their respective
-37-
41
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, Tenant and their respective 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 provision 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 it such invalid,
illegal or unenforceable provision had never been contained herein.
(i) This Lease shall be governed by and construed and enforced in
accordance with the Laws of the State- IN WITNESS WHEREOF, Landlord and Tenant
have caused this Lease to be duly executed under seal as of the day and year
first above written.
LANDLORD:
GAG (MA) QRS 12-31, INC.,
Massachusetts corporation
By:
------------------------------------
Title: Second Vice President
---------------------------------
ATTEST: TENANT:
PAGG CORPORATION,
Massachusetts corporation
By: illegible By: Xxxxxx X. Price
---------------------------------- ------------------------------------
Title: Clerk Title: President
------------------------------- ---------------------------------
[Corporate Seal]
-38-
42
EXHIBIT A
LEGAL DESCRIPTION OF XXX 00X - XXXXX XXXX #0 (XXXX XXXXXXXXXXX)
A CERTAIN PARCEL OF LAND LOCATED ON THE WESTERLY SIDE OF FORTUNE BOULEVARD IN
THE TOWN OF MILFORD, WORCESTER COUNTY, AND THE COMMONWEALTH OF MASSACHUSETTS,
BOUNDED AND DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE WESTERLY SIDE OF FORTUNE BOULEVARD, SAID POINT
BEING THE NORTHEASTERLY CORNER OF SAID PARCEL AND THE SOUTHEASTERLY CORNER
OF LAND OF QUARRYVIEW REALTY TRUST: THENCE
S 20 degrees 51'13" E A DISTANCE OF 20.88 FEET TO A POINT OF CURVATURE, THENCE
SOUTHEASTERLY AND CURVING TO THE RIGHT ALONG THE ARC OF A
CURVE HAVING A RADIUS OF 5970.00 FEET AND A LENGTH OF
180.38 FEET TO A POINT OF TANGENCY: THENCE
S 19 degrees 07'21" E A DISTANCE OF 48.77 FEET TO A POINT AT THE NORTHEASTERLY
CORNER OF LAND OF XXXXXX REAL ESTATE AND DEVELOPMENT
CORPORATION, KNOWN AS LOT 7. SAID POINT BEING 1037 FEET,
MORE OR LESS, NORTHERLY OF EAST MAIN STREET BY THE
WESTERLY SIDE OF FORTUNE BOULEVARD THE PREVIOUS THREE (3)
COURSES BY SAID WESTERLY SIDE OF FORTUNE BOULEVARD: THENCE
S 69 degrees 09'16" W A DISTANCE OF 390.02 FEET TO A POINT: THENCE
S 19 degrees 24'58" W A DISTANCE OF 139.16 FEET TO A POINT AT LAND OF XXXXXXXX
DEVELOPMENT ASSOCIATES. THE PREVIOUS TWO (2) COURSES BY
SAID LAND OF XXXXXX REAL ESTATE AND DEVELOPMENT
CORPORATION KNOWN AS LOT 7: THENCE
N 70 degrees 35'02" W A DISTANCE OF 275.08 FEET TO A POINT: THENCE
S 73 degrees 34'33" W A DISTANCE OF 149.88 FEET TO A POINT AT LEASE AREA #1 AND
THE PREVIOUS TWO (2) COURSES BOUNDED BY LAND OF SAID
XXXXXXXX DEVELOPMENT CORPORATION; THENCE
N 14 degrees 27'44" W A DISTANCE OF 480.87 FEET ALONG SAID LEASE AREA #1 TO A
POINT AT OTHER LAND OF XXXXXX REAL ESTATE AND DEVELOPMENT
CORPORATION KNOWN AS LOT 19: THENCE
N 71 degrees 21'13" E A DISTANCE OF 290.17 FEET BY SAID OTHER LAND OF XXXXXX
REAL ESTATE AND DEVELOPMENT CORPORATION, KNOWN AS LOT 19.
TO A POINT AT THE NORTHWESTERLY CORNER OF SAID LAND OF
OUARRYVIEW REALTY TRUST: THENCE
S 20 degrees 51'13" E A DISTANCE OF 300.00 FEET TO A POINT: THENCE
N 69 degrees 08'47" E A DISTANCE OF 500.00 FEET TO THE POINT OF BEGINNING, THE
PREVIOUS TWO (2) COURSES BY SAID LAND OF QUARRYVIEW REALTY
TRUST.
SAID PARCEL CONTAINS AN AREA OF 299,784 SQUARE FEET OR 6.88 ACRES, MORE OR LESS,
AND IS MORE PARTICULARLY SHOWN AS XXX 00X (XXXXX XXXX #2) ON A PLAN ENTITLED
"EASEMENT AND LEASE AREA. PLAN OF LAND IN MILFORD, MASS., PROPERTY OF: XXXXXX X.
XXXXXX. SCALE: 80 FEET TO AN INCH. DATE: NOVEMBER 22, 1988, GUERRIERE & XXXXXX,
INC., 000 XXXX XXXXXX, XXXXXXX, XXXX." RECORDED AT THE WORCESTER DISTRICT
REGISTRY OF DEEDS IN PLAN BOOK 611 - PLAN 115.
NOTES
43
EXHIBIT B
EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances of every
kind and nature whatsoever now or hereafter affixed or attached to or installed
in any of the Leased Premises (except as hereafter provided), including all
electrical, anti-pollution, heating, lighting (including hanging fluorescent
lighting), incinerating, power, air cooling, air conditioning, humidification,
sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and
ventilating systems, devices and machinery and all engines, pipes, pumps, tanks
(including "exchange tanks and fuel storage tanks), motors, conduits, ducts,
steam circulation coils, blowers, steam lines, compressors, oil burners,
boilers, doors, windows, loading platforms, lavatory facilities, stairwells,
fencing (including cyclone fencing), passenger and freight elevators, overhead
cranes and garage units, together with all additions thereto, substitutions
therefor and replacements thereof required or permitted by this Lease, but
excluding all inventory, personal property and all trade fixtures, machinery,
office, manufacturing and warehouse equipment which are not necessary to the
operation, as buildings, of the buildings which constitute part of the Leased
Premises.
44
EXHIBIT D
BASIC RENT PAYMENTS
1. Basic Rent. Subject to the adjustments provided for in Paragraphs 2,
3 and 4 below, Basic Rent payable in respect of the Term shall be $590,000 per
annum, payable quarterly in advance on each Basic Rent Payment Date, in equal
installments of $147,500 each.
2. CPI Adjustments to Basic Rent. The Basic Rent shall be subject to
adjustment, in the manner hereinafter set forth, for increases in the index
known as United States Department of Labor, Bureau of Labor Statistics, Consumer
Price Index, All Urban Consumers, United States City Average. All Items,
(1982-84=100) ("CPI") or the successor index that most closely approximates the
CPI. If the CPI shall be discontinued with no successor or comparable successor
index, Landlord and Tenant shall attempt to reasonably agree upon a substitute
index or formula, but if they are unable to so agree, then the matter shall be
determined by arbitration in accordance with the rules. of the American
Arbitration Association then prevailing in New York City. Any decision or award
resulting from such arbitration shall be final and binding upon Landlord and
Tenant and judgment thereon may be entered in any court of competent
jurisdiction. In no event will the Basic Rent as adjusted by the CPI adjustment
be less than the Basic Rent in effect for the four (4) year period immediately
preceding such adjustment.
3. Effective Dates of CPI Adjustments. Basic Rent shall not be adjusted
to reflect changes in the CPI until the fourth (4th) anniversary of the Basic
Rent Payment Date on which the first full quarterly installment of Basic Rent
shall be due and payable (the "First Full Basic Rent Payment Date"). As of the
fourth (4th) anniversary of the First Full Basic Rent Payment Date and
thereafter on the eighth (8th) and, if the initial Term is extended, on the
twelfth (12th), sixteenth (16th) and twentieth (20th) anniversaries of the First
Full Basic Rent Payment Date, Basic Rent shall be adjusted to reflect increases
in the CPI during the most recent four (4) year period immediately preceding
each of the foregoing dates (each such date being hereinafter referred to as the
"Basic Rent Adjustment Date").
4. Method of Adjustment for CPI Adjustment.
(a) As of each Basic Rent Adjustment Date when the average CPI
determined in clause (i) below exceeds the Beginning CPI (as defined in this
Paragraph 4(a)), the Basic Rent in effect immediately prior to the applicable
Basic Rent Adjustment Date shall be multiplied by a fraction, the numerator of
which shall be the difference between (i) the average CPI for the three (3) most
recent calendar months (the "Prior Months") ending prior to such Basic Rent
Adjustment Date for which the CPI
45
has been published on or before the forty-fifth (45th) day preceding such Basic
Rent Adjustment Date and (ii) the Beginning CPI, and the denominator of which
shall be the Beginning CPI. An amount equal to the lesser of (x) the product of
such multiplication or 12.55% of the Basic Rent in effect immediately prior to
such Basic Rent Adjustment Date shall be added to the Basic Rent in effect
immediately prior to such Basic Rent Adjustment Date.] As used herein,
"Beginning CPI" shall mean the average CPI for the three (3) calendar months
corresponding to the Prior Months but occurring four (4) years earlier. If the
average CPI determined in clause (i) is the same or less than the Beginning CPI,
the Basic Rent will remain the same for the ensuing four (4) year period.
(b) Effective as of a given Basic Rent Adjustment Date, Basic Rent
payable under this Lease until the next succeeding Basic Rent Adjustment Date
shall be the Basic Rent in effect after the adjustment provided for as of such
Basic Rent Adjustment Date,
(c) Notice of the new annual Basic Rent and a detailed explanation of
the calculation setting forth the new Basic Rent shall be delivered to Tenant on
or before the tenth (10th) day preceding each Basic Rent Adjustment Date, but
any failure to do so by Landlord shall not be or be deemed to be a waiver by
Landlord of Landlord's rights to collect such sums. Tenant shall pay to
Landlord, within ten (10) days after a notice of the new annual Basic Rent is
delivered to Tenant, all amounts due from Tenant, but unpaid, because the stated
amount as set forth above was not delivered to Tenant at least ten (10) days
preceding the basic Rent Adjustment Date in question.
-2-
46
EXHIBIT E
COVENANTS
1. Tenant shall maintain its corporate existence, rights and franchises
in full force and effect in its jurisdiction of incorporation. Tenant shall
qualify and remain qualified as a corporation in each jurisdiction in which
failure to receive or retain such qualification would have a material adverse
effect on the business, operations or financial condition of the enterprise
comprised of the Tenant.
2. The Tenant shall not consolidate with or merge into any other Person
unless, immediately following such consolidation or merger Tenant is the
surviving entity or, if not, the surviving corporation shall have, on a
proforma basis, an Adjusted Consolidated Net Worth of not less than the
Tenant's consolidated Net Worth immediately preceding such consolidation or
merger.
3. The Tenant shall not in a single transaction or series of related
transactions, sell or convey, transfer, abandon or lease all or substantially
all of its assets to any Person unless (i) immediately after such transaction,
on a proforma basis, such Person shall have a Consolidated Net Worth of not less
than the Tenant's Consolidated Net Worth immediately preceding such transaction;
and (ii) this Lease is assigned to such Person, subject to and in accordance
with Paragraph 21 of this Lease.
4. The Tenant shall not without the consent of Landlord, which shall
not be unreasonably withheld, engage, in any substantial manner, in any business
except the electronics business.
5. For the purpose of this Exhibit "E" the following terms shall have
the following meanings;
"Consolidated Net Worth" shall mean, at any date, the net worth of
Tenant and its Subsidiaries on a consolidated basis, determined in accordance
with GAAP.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America, applied on a
consistent basis.
"Person" shall mean an individual, partnership, association,
corporation or other entity.
