LEASE AGREEMENT
by and between
ENERGY (NJ) QRS 15-10, INC.,
a Delaware corporation
as LANDLORD
and
XXXXXX XXXXXXX REALTY SERVICES, INC.,
a Delaware corporation,
as TENANT
Premises: Perryville I
Clinton, New Jersey
Dated as of: August _____, 2002
TABLE OF CONTENTS
PAGE
1. Demise of Premises................................................ 1
2. Certain Definitions............................................... 1
3. Title and Condition............................................... 9
4. Use of Leased Premises; Quiet Enjoyment........................... 10
5. Term.............................................................. 11
6. Basic Rent........................................................ 12
7. Additional Rent................................................... 12
8. Net Lease; Non-Terminability...................................... 13
9. Payment of Impositions............................................ 14
10. Compliance with Laws and Easement Agreements;
Environmental Matters......................................... 15
11. Liens; Recording.................................................. 17
12. Maintenance and Repair............................................ 17
13. Alterations and Improvements...................................... 18
14. Permitted Contests................................................ 19
15. Indemnification................................................... 20
16. Insurance......................................................... 21
17. Casualty and Condemnation......................................... 24
18. Termination Events................................................ 25
19. Restoration....................................................... 26
20. Procedures Upon Purchase.......................................... 28
21. Assignment and Subletting, Prohibition Against
Leasehold Financing........................................... 29
22. Events of Default................................................. 31
23. Remedies and Damages upon Default................................. 33
24. Notices........................................................... 36
25. Estoppel Certificate.............................................. 37
26. Surrender......................................................... 37
27. No Merger of Title................................................ 37
28. Books and Records................................................. 38
29. Determination of Value............................................ 39
30. Non-Recourse as to Landlord....................................... 40
31. Financing......................................................... 40
32. Subordination, Non-Disturbance and Attornment..................... 41
i
33. Tax Treatment; Reporting.......................................... 41
34. Operating Covenants............................................... 41
35. Option to Purchase................................................ 41
36. Security Deposit.................................................. 42
37. Permitted Leasehold Mortgage...................................... 44
38. Rights of Permitted Leasehold Mortgagees.......................... 44
39. Miscellaneous..................................................... 46
EXHIBITS
Exhibit "A" - Premises
Exhibit "B" - Machinery and Equipment
Exhibit "C" - Schedule of Permitted Encumbrances
Exhibit "D" - Rent Schedule
Exhibit "E" - Operating Covenants
ii
LEASE AGREEMENT, made as of this _____ day of August, 2002, between
ENERGY (NJ) QRS 15-10, INC., a Delaware corporation ("LANDLORD"), with an
address c/o W.P. Xxxxx & Co. LLC, 00 Xxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, and XXXXXX XXXXXXX REALTY SERVICES, INC., a Delaware corporation
("TENANT"), with an address at Xxxxxxxxxx Xxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx
00000-0000.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. DEMISE OF PREMISES. Landlord hereby demises and lets to Tenant, and Tenant
hereby takes and leases from Landlord, for the term and upon the provisions
hereinafter specified, the following described property (collectively, the
"LEASED PREMISES"): (a) the leasehold interest of Landlord in land described in
Exhibit "A" hereto together with the Appurtenances (collectively, the "LAND");
(b) the building containing approximately 292,000 square feet, structures and
other improvements now or hereafter constructed on the Land (collectively, the
"IMPROVEMENTS"); and (c) the fixtures, machinery, equipment and other property
described in Exhibit "B" hereto (collectively, the "EQUIPMENT").
2. CERTAIN DEFINITIONS.
"Acquisition Cost" shall mean $47,015,706.81.
Additional Rent" shall mean Additional Rent as
defined in Paragraph 7.
"Adjoining Property" shall mean all sidewalks, driveways, curbs,
gores and vault spaces which adjoin the Leased Premises and for which Landlord
has any obligation to maintain, repair, restore or insure under any (a) contract
that was binding on Tenant when it conveyed the Land to Landlord or that was
entered into by Landlord with the written consent of Tenant, (b) Permitted
Encumbrance or (c) Legal Requirement.
"Affiliate" shall mean any Person controlled by, in control of or
under common control with Tenant. For the purposes of this definition,
"control", as applied to any Person, means the possession of the power to direct
or cause the direction of the management and policies of that Person through the
ownership of voting rights or otherwise.
"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.
"Association" means Perryville Corporate Park Association, Inc., a
New Jersey non-profit corporation organized for the sole purpose of
administering, implementing and enforcing the provisions of the CC&R.
"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 damage to or destruction of or which
affects the Leased Premises or Adjoining Property or which arises from the
Adjoining Property.
"CC&R" shall mean that certain Declaration Of Covenants and
Restrictions dated as of August 15, 2002 among Xxxxxx Xxxxxxx LLC, a Delaware
limited liability company, Tenant, and Landlord.
"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 a Person or associated with a specified transaction shall
mean all reasonable costs and expenses incurred by such Person or associated
with such transaction, including without limitation, attorneys' fees and
expenses, court costs, brokerage fees, escrow fees, title insurance premiums,
mortgage commitment fees, mortgage points, recording fees and transfer taxes, as
the circumstances require.
"Covenants" shall mean the covenants and agreements described on
EXHIBIT "E".
"Credit Agreement" shall mean the Credit Agreement as defined in
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).
"Default Termination Amount" shall mean the Default Termination
Amount as defined in Paragraph 23(a)(iii).
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"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 and local law, statute, ordinance, rule,
regulation, license, permit, authorization, approval, consent, court order,
judgment, decree, injunction, code, requirement or agreement with any
governmental entity, (x) relating to pollution (or the cleanup thereof), or the
protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous
Conditions or Hazardous Activities, in each case as amended and as now or
hereafter in effect, and (ii) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations or injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Hazardous Substance. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act, the
federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic
Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act, the federal Hazardous Materials Transportation Act,
the New Jersey Industrial Site Recovery Act (formerly known as the Environmental
Cleanup Responsibility Act), as amended (N.J.S.A. ss.13:1K et seq.), and the New
Jersey Spill Compensation Act and Control Act, N.J.S.A. ss.58:10.23.11b et seq.,
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 in Landlord's opinion 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 (including any such activity that extends from the Leased
Premises to any Adjoining Property) in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which 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 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
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Lender or any other 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.
"Escrow Payments" shall mean Escrow Payments as defined in Paragraph
9(b).
"Event of Default" shall mean an Event of Default as defined in
Paragraph 22(a).
"Fair Market Value" shall mean the higher of (a) the fair market
value of the Leased Premises as of the Relevant Date as if unaffected and
unencumbered by this Lease or (b) the fair market value of the Leased Premises
as of the Relevant Date as affected and encumbered by this Lease and assuming
that the Term has been extended for all extension periods provided for herein.
For all purposes of this Lease, Fair Market Value shall be determined in
accordance with the procedure specified in Paragraph 29.
"Fair Market Value Date" shall mean the date when the Fair Market
Value is determined in accordance with Paragraph 29.
"Federal Funds" shall mean federal or other immediately available
funds which at the time of payment are legal tender for the payment of public
and private debts in the United States of America.
"Ground Lease" shall mean that certain ground lease dated as of
August___, 2002 between Xxxxxx Xxxxxxx LLC and Tenant, collectively as ground
lessor, and Landlord, as ground lessee.
"Guarantors" shall mean Xxxxxx Xxxxxxx LLC, a Delaware limited
liability company, and Xxxxxx Xxxxxxx Ltd., a Bermuda corporation, Xxxxxx
Xxxxxxx, Inc., a Delaware corporation, and Xxxxxx Xxxxxxx International
Holdings, Inc., a Delaware corporation.
"Guaranty" shall mean the Guaranty and Suretyship Agreement dated as
of the date hereof from Guarantors to Landlord guaranteeing the payment and
performance by Tenant of all of Tenant's obligations under the Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking which directly or indirectly (i) procures, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release, seepage, spill, leak, flow, discharge or emission of any
Hazardous Substance into the environment (including the air, ground water,
watercourses or water systems), (iii) involves the containment or storage of any
Hazardous Substance, other than the containment or storage of Hazardous
Substances in compliance with Environmental Law and in amounts customarily used
or stored in connection with the operation and maintenance of an office building
such as the Leased Premises; or (iv) would cause the Leased Premises or any
portion thereof to become a hazardous waste treatment,
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recycling, reclamation, processing, storage or disposal facility within the
meaning of any Environmental Law.
"Hazardous Condition" means any condition which would support any
claim or liability under any Environmental Law, including the presence of
underground storage tanks.
"Hazardous Substance" means (i) any substance, material, product,
petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos), chemical, gas, medical waste, or other pollutant, in each
case whether naturally occurring, man-made or the by-product of any process,
that is toxic, harmful or hazardous or acutely hazardous to the environment or
public health or safety or (ii) any substance supporting a claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law. Hazardous Substances include, without limitation, any toxic
or hazardous waste, pollutant, contaminant, industrial waste, petroleum or
petroleum-derived substances or waste, radon, radioactive materials, asbestos,
asbestos containing materials, urea formaldehyde foam insulation, lead and
polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined in Paragraph
9(a).
"Improvements" shall mean the Improvements as defined in Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in Paragraph 15.
"Insurance Requirements" shall mean the requirements of all insurance
policies required to be maintained in accordance with this Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of law, code,
ordinance, order, judgment, decree, injunction, rule, regulation, policy,
requirement or administrative or judicial determination, even if unforeseen or
extraordinary, of every duly constituted governmental authority, court or
agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first Lease Year, the
period commencing on the Commencement Date and ending at midnight on the last
day of the twelfth (12th) consecutive calendar month following the month in
which the Commencement Date occurred, and each succeeding twelve (12) month
period during the Term.
"Leased Premises" shall mean the Leased Premises as defined in
Paragraph 1.
"Legal Requirements" shall mean the requirements of all present and
future Laws (including but not limited to Environmental Laws and Laws relating
to accessibility to, usability by, and discrimination against, disabled
individuals) and all covenants, restrictions and conditions now or hereafter of
record which may be applicable to Tenant or to any of the
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Leased Premises, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or restoration of any of the Leased Premises,
even if compliance therewith necessitates structural changes or improvements or
results in interference with the use or enjoyment of any of the Leased Premises
or requires Tenant to carry insurance other than as required by this Lease.
"Lender" shall mean any person or entity (and its respective
successors and assigns) which may, on or after the date hereof, make a Loan to
Landlord or be the holder of a Note.
"Loan" shall mean any loan made by one or more Lenders to Landlord,
which loan is secured by a Mortgage and an Assignment and evidenced by a Note.
"Member" shall mean a Member as defined in the CC&R.
"Monetary Obligations" shall mean Rent and all other sums payable by
Tenant under this Lease to Landlord, to any third party on behalf of Landlord or
to any Indemnitee.
"Moody's" shall mean Xxxxx'x Investor Services, Inc. or its
successor.
"Mortgage" shall mean any mortgage or deed of trust from Landlord to
a Lender which (a) encumbers any of the Leased Premises and (b) secures
Landlord's obligation to repay a Loan, as the same may be amended, supplemented
or modified.
"Net Award" shall mean (a) the entire award payable to Landlord or
Lender by reason of a Condemnation whether pursuant to a judgment or by
agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i), (ii) (to the extent payable to Landlord or Lender), (iv), (v)
or (vi) of Paragraph 16(a), as the case may be, less any expenses incurred by
Landlord and Lender in collecting such award or proceeds.
"Note" shall mean any promissory note evidencing Landlord's
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
"Offer Amount" shall mean the greater of (a) 110% of the Fair Market
Value of the Leased Premises as of the Relevant Date, minus $6,600,000, or (b)
the Acquisition Cost.
"Option Exercise Notice" shall mean Option Exercise Notice as defined
in Paragraph 35.
"Partial Casualty" shall mean any Casualty which does not constitute
a Termination Event.
"Partial Condemnation" shall mean any Condemnation which does not
constitute a Termination Event.
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"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).
"Permitted Leasehold Mortgage" shall mean any first lien leasehold
mortgage, deed of trust, pledge or similar security device in favor of a
Permitted Leasehold Mortgagee covering all of Tenant's leasehold estate in the
Leased Premises and which is specifically subject to the terms of this Lease and
the rights and remedies of Landlord hereunder.
"Permitted Leasehold Mortgagee" shall mean a national banking
association, state chartered bank, savings and loan association, insurance
company, savings bank, foreign bank authorized to do business in the United
States, trust company, real estate investment trust or pension fund, each of
which shall have gross assets in excess of $250,000,000.
"Person" shall mean an individual, partnership, association,
corporation or other entity.
"Prepayment Premium" shall mean any payment required to be made by
Landlord to a Lender under a Note or any other document evidencing or securing a
Loan (other than payments of principal and/or interest which Landlord is
required to make under a Note or a Mortgage) solely by reason of any prepayment
or defeasance by Landlord of any principal due under a Note or Mortgage, and
which may, without limitation, take the form of (i) a "make whole" or yield
maintenance clause requiring a prepayment premium or (ii) a defeasance payment
(such defeasance payment to be an amount equal to the positive difference
between (a) the total amount required to defease a Loan and (b) the outstanding
principal balance of the Loan as of the date of such defeasance) plus, in any
case, reasonable Costs of Landlord and Lender.
"Present Value" of any amount shall mean such amount discounted by a
rate per annum which is the lower of (a) the Prime Rate at the time such present
value is determined or (b) six percent (6%) per annum.
"Prime Rate" shall mean the annual interest rate as published, from
time to time, in THE WALL STREET JOURNAL as the "Prime Rate" in its column
entitled "Money Rate". The Prime Rate may not be the lowest rate of interest
charged by any "large U.S. money center commercial banks" and Landlord makes no
representations or warranties to that effect. In the event THE WALL STREET
JOURNAL ceases publication or ceases to publish the "Prime Rate" as described
above, the Prime Rate shall be the average per annum discount rate (the
"DISCOUNT RATE") on ninety-one (91) day bills ("TREASURY BILLS") issued from
time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
"Quarterly Assessments" shall mean Quarterly Assessments as defined
in the CC&R.
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"Rating Agency" shall mean Moody's and S&P, as the context shall
require, or if either rating agency shall cease to furnish such rating, then a
rating agency reasonably acceptable to Landlord and Lender.
"Relevant Amount" shall mean the Termination Amount, the Default
Termination Amount or the Offer Amount, as the case may be.
"Relevant Date" shall mean (a) the date immediately prior to the date
on which the applicable Condemnation Notice is received, in the event of a
Termination Notice under Paragraph 18 which is occasioned by a Taking, (b) the
date immediately prior to the date on which the applicable Casualty occurs, in
the event of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the event of a
redetermination of Fair Market Value pursuant to Paragraph 20(c), (d) the date
immediately prior to the Event of Default giving rise to the need to determine
Fair Market Value in the event Landlord provides Tenant with notice of its
intention to require Tenant to make a termination offer under Paragraph
23(a)(iii) or (e) the date on which Landlord receives the Option Exercise
Notice.
"Renewal Term" shall mean Renewal Term as defined in Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and Additional Rent.
"S&P" shall mean Standard & Poor's Corporation or its successor.
"Security Deposit" shall mean Security Deposit as defined in
Paragraph 36.
"Senior Credit Agreement" shall mean the Senior Credit Agreement as
defined in EXHIBIT "E".
"Site Assessment" shall mean a Site Assessment as defined in
Paragraph 10(c).
"SNDA" shall mean a Subordination, Non-Disturbance and Attornment
Agreement as defined in Paragraph 31.
"Special Assessments" shall mean Special Assessments as defined in
the CC&R.
"State" shall mean the State of New Jersey.
"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
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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.
"Termination Amount" shall mean the greater of (a) the sum of the
Fair Market Value and the applicable Prepayment Premium which Landlord will be
required to pay in prepaying or defeasing, as applicable, any Loan with proceeds
of the Termination Amount or (b) the sum of the Acquisition Cost and the
applicable Prepayment Premium which Landlord will be required to pay in
prepaying or defeasing in whole or in part, as applicable, any Loan with
proceeds of the Termination Amount.
"Termination Date" shall mean Termination Date as defined in
Paragraph 18.
"Termination Event" shall mean a Termination Event as defined in
Paragraph 18.
"Termination Notice" shall mean Termination Notice as defined in
Paragraph 18(a).
"Warranties" shall mean Warranties as defined in Paragraph 3(d).
3. TITLE AND CONDITION.
(a) The Leased Premises are demised and let subject to (i) the terms of the
Ground Lease, (ii) the Mortgage and Assignment presently in effect, (iii) the
rights of any Persons in possession of the Leased Premises, (iv) the existing
state of title of any of the Leased Premises, including any Permitted
Encumbrances, (v) any state of facts which an accurate survey or physical
inspection of the Leased Premises might show, (vi) all Legal Requirements,
including any existing violation of any thereof, and (vii) the condition of the
Leased Premises as of the commencement of the Term, without representation or
warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises is in good condition and
repair at the inception of this Lease. LANDLORD LEASES AND WILL LEASE AND TENANT
TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT ACKNOWLEDGES THAT LANDLORD
(WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND
WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES,
INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv)
LANDLORD'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii)
LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii)
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DESCRIPTION, (xiii) DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY
HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi)
COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL
RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE
LEASED PREMISES IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE
LEASED PREMISES HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE
EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE,
WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW
OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has examined the title to the
Leased Premises prior to the execution and delivery of this Lease and has found
the same to be satisfactory for the purposes contemplated hereby. Tenant
acknowledges that (i) leasehold title to the Land and the fee simple title to
the Improvements and Equipment (both legal and equitable) is in Landlord and,
except as provided in Paragraph 35 hereof with respect to an option to purchase
the Leased Premises that Tenant has only a leasehold right of possession and use
of the Leased Premises, as provided herein, (ii) the Improvements conform to all
material Legal Requirements and all Insurance Requirements, (iii) all easements
necessary or appropriate for the use or operation of the Leased Premises have
been obtained, (iv) all contractors and subcontractors who have performed work
on or supplied materials to the Leased Premises have been fully paid, and all
materials and supplies have been fully paid for, (v) the Improvements have been
fully completed in all material respects in a workmanlike manner of first class
quality, and (vi) all Equipment necessary or appropriate for the use or
operation of the Leased Premises has been installed and is presently fully
operative in all material respects.
(d) Landlord hereby assigns to Tenant, without recourse or warranty
whatsoever, all assignable warranties, guaranties, indemnities and similar
rights (collectively, "WARRANTIES") 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 the Warranties, guaranties, indemnities and other rights shall automatically
revert to Landlord. In confirmation of such reversion Tenant shall execute and
deliver promptly any certificate or other document reasonably required by
Landlord. Landlord shall also retain the right to enforce any guaranties upon
the occurrence of an Event of Default. Tenant shall enforce the Warranties in
accordance with their respective terms.
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4. USE OF LEASED PREMISES; QUIET ENJOYMENT.
(a) Tenant may occupy and use the Leased Premises for office facilities and
uses ancillary thereto and for no other purpose without the prior written
consent of Landlord. 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 would be reasonably
likely to (i) violate any Law, Legal Requirement or Permitted Encumbrance, (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) make void or voidable, cancel or cause to
be cancelled or release any of the Warranties, (iv) cause structural injury to
any of the Improvements or (v) constitute a public or private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event of Default has
occurred and is continuing, Tenant shall quietly hold, occupy and enjoy the
Leased Premises throughout the Term, without any hindrance, ejection or
molestation by Landlord with respect to matters that arise after the date
hereof, provided that Landlord or its agents may enter upon and examine any of
the Leased Premises at such reasonable times as Landlord may select and upon
reasonable prior notice to Tenant (except in the case of an emergency, in which
no notice shall be required) for the purpose of inspecting the Leased Premises,
verifying compliance or non-compliance by Tenant with its obligations hereunder
and the existence or non-existence of an Event of Default or event which with
the passage of time and/or notice would constitute an Event of Default, showing
the Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof, provided that no such entry by Landlord or such other Persons shall
interfere in any material respect with the operations of Tenant at the Leased
Premises.
5. TERM.
(a) Subject to the provisions hereof, Tenant shall have and hold the Leased
Premises for an initial term (such term, as extended or renewed in accordance
with the provisions hereof, being called the "TERM") commencing on the date
hereof (the "COMMENCEMENT DATE") and ending on the last day of the two hundred
fortieth (240th) calendar month next following the date hereof (the "EXPIRATION
DATE").
(b) Provided that this Lease shall not have been terminated pursuant to any
provision hereof, Tenant shall have the right to extend the Term for two
additional periods of ten (10) years each, effective as of the Expiration Date
and on the tenth (10th) anniversary of the Expiration Date (each such ten (10)
year extension, a "RENEWAL TERM"), upon written notice to Landlord at least one
(1) year prior to the first day of the applicable Renewal Term that Tenant is
extending the Term for such Renewal Term. 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 (except that after the second Renewal Term Tenant shall
not have the right to any further Renewal Terms).
(c) If Tenant does not exercise any option to extend the Term, or if an
Event of Default occurs and is continuing, then Landlord shall have the right
during the
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remainder of the Term then in effect and, in any event, Landlord shall have the
right during the last year of the Term, upon reasonable prior notice to Tenant,
to (i) advertise the availability of the Leased Premises for sale or reletting
and to erect upon the Leased Premises signs indicating such availability and
(ii) show the Leased Premises to prospective purchasers or tenants or their
agents at such reasonable times as Landlord may select, provided that no such
entry by Landlord or such other Persons shall interfere in any material respect
with the operations of Tenant at the Leased Premises.
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 twenty-fifth day of August,
2002, and thereafter on the same day of each February, May, August and November
during the Term (each such day being a "BASIC RENT PAYMENT DATE"). Each such
rental payment shall be made by wire transfer in Federal Funds no later than the
applicable Basic Rent Payment Date and at Landlord's sole discretion (a) to
Landlord pursuant to wire transfer instructions provided to Tenant from time to
time and/or (b) to such one other Person, pursuant to wire transfer instructions
provided to Tenant from time to time and in such proportions as Landlord may
direct by fifteen (15) days' prior written notice to Tenant (in which event
Tenant shall give Landlord notice of each such payment concurrent with the
making thereof).
7. ADDITIONAL RENT.
(a) Tenant shall pay and discharge, as additional rent (collectively,
"ADDITIONAL RENT"):
(i) except as otherwise specifically provided herein, all costs and
expenses of Tenant, Landlord and any other Persons specifically referenced
herein which are incurred in connection or associated with (A) the ownership,
use, non-use, occupancy, monitoring, possession, operation, condition, design,
construction, maintenance, alteration, repair or restoration of any of the
Leased Premises, (B) the performance of any of Tenant's obligations under this
Lease, (C) any sale or other transfer of any of the Leased Premises to Tenant
under this Lease, (D) any Condemnation proceedings, (E) the adjustment,
settlement or compromise of any insurance claims involving or arising from any
of the Leased Premises, (F) the prosecution, defense or settlement of any
litigation involving or arising from any of the Leased Premises, this Lease, or
the ground leasing of the Land or sale of the Improvements and Equipment to
Landlord (it being understood and agreed, however, that in the event of any
litigation involving only Landlord and Tenant, Tenant shall be responsible for
such costs and expenses only if and to the extent that Tenant is not the
prevailing party in such litigation), (G) the exercise or enforcement by
Landlord or its successors and assigns, of any of its rights under this Lease,
except to the extent that Tenant is the prevailing party in any resulting
litigation, (H) any amendment to or modification or termination of this Lease
made at the request of Tenant, (I) Costs of Landlord's counsel and reasonable
internal Costs of Landlord incurred in connection with any act undertaken by
Landlord (or its counsel) at the request of Tenant, or incurred in connection
with any act of Landlord performed on behalf of Tenant and (J) any other items
specifically required to be paid by Tenant under this Lease (other than Basic
Rent);
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(ii) after the date all or any portion of any installment of Basic
Rent is due and not paid by the applicable Basic Rent Payment Date, an amount
(the "LATE CHARGE") equal to four percent (4%) 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
Lease Year, the Late Charge shall not be due and payable unless the Basic Rent
has not been paid within five (5) days' following notice of non-payment;
(iii) a sum equal to any additional sums (including any late charge,
default penalties, interest and fees of Lender's counsel) which are payable by
Landlord to any Lender under any Note by reason of Tenant's late payment or
non-payment of Basic Rent or by reason of an Event of Default; and
(iv) interest at the rate (the "DEFAULT RATE") of five percent (5%)
over the Prime Rate per annum on the following sums until paid in full: (A) all
overdue installments of Basic Rent from the respective due dates thereof and (B)
all overdue amounts of Additional Rent relating to obligations which Landlord
shall have paid on behalf of Tenant, from the date of payment thereof by
Landlord.
(b) Tenant shall pay and discharge (i) any Additional Rent referred to in
Paragraph 7(a)(i) when the same shall become due, provided that amounts which
are billed to Landlord or any third party, but not to Tenant, shall be paid
within ten (10) days after Landlord's demand for payment thereof, and (ii) any
other Additional Rent, within ten (10) 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 (except as otherwise specifically provided herein) and without
set-off, counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense (collectively, a "SET-OFF").
(b) This Lease and the rights of Landlord and the obligations of Tenant
hereunder shall not be affected by any event or for any reason or cause
whatsoever foreseen or unforeseen.
(c) The obligations of Tenant hereunder shall be separate and independent
covenants and agreements, all Monetary Obligations shall continue to be payable
in all events (or, in lieu thereof, Tenant shall pay amounts equal thereto), and
the obligations of Tenant hereunder shall continue unaffected unless the
requirement to pay or perform the same shall have been terminated pursuant to an
express provision of this Lease. The obligation to pay Rent or amounts equal
thereto shall not be affected by any collection of rents by any governmental
body pursuant to a tax lien or otherwise, even though such obligation results in
a double payment of Rent. All Rent payable by Tenant hereunder shall constitute
"rent" for all purposes (including Section 502(b)(6) of the Federal Bankruptcy
Code).
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(d) Except as otherwise expressly provided herein, Tenant shall have no
right and hereby waives all rights which it may have under any Law (i) to quit,
terminate or surrender this Lease or any of the Leased Premises, or (ii) to any
Set-Off of any Monetary Obligations.
9. PAYMENT OF IMPOSITIONS.
(a) Tenant shall, before interest or penalties are due thereon, pay and
discharge all taxes (including real and personal property, franchise, sales,
use, gross receipts and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all Quarterly
Assessments, all Special Assessments, 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, (iv) Landlord as a result of or arising in respect of the acquisition,
ownership, occupancy, leasing, use, possession or sale of any of the Leased
Premises, including arising out of Landlord's status as a Member under the CC&R,
any activity conducted on any of the Leased Premises, or the Rent, or (v) any
Lender by reason of any Note, Mortgage, Assignment or other document evidencing
or securing a Loan and which (as to this clause (v)) Landlord has agreed to pay
(collectively, the "IMPOSITIONS"); provided, that nothing herein shall obligate
Tenant to pay (A) income, excess profits or other taxes of Landlord (or Lender)
which are determined on the basis of Landlord's (or Lender's) net income or net
worth (unless such taxes are in lieu of or a substitute for any other tax,
assessment or other charge upon or with respect to the Leased Premises which, if
it were in effect, would be payable by Tenant under the provisions hereof or by
the terms of such tax, assessment or other charge), (B) any estate, inheritance,
succession, gift or similar tax imposed on Landlord or (C) any capital gains tax
imposed on Landlord in connection with the sale of the Leased Premises to any
Person. If any Imposition may be paid in installments without interest or
penalty, Tenant shall have the option to pay such Imposition in installments; in
such event, Tenant shall be liable only for those installments which accrue or
become due and payable during the Term. Tenant shall prepare and file all tax
reports required by governmental authorities which relate to the Impositions.
Tenant shall deliver to Landlord (1) copies of all settlements and notices
pertaining to the Impositions which may be issued by any governmental authority
within ten (10) days after Tenant's receipt thereof, (2) receipts for payment of
all taxes required to be paid by Tenant hereunder within thirty (30) days after
the due date thereof and (3) receipts for payment of all other Impositions
within ten (10) days after Landlord's request therefor.
(b) Following the occurrence and during the continuance of an Event of
Default or if Landlord is required by a Lender to pay into escrow funds
necessary to pay Escrow Charges, Tenant shall pay to Landlord such amounts (each
an "ESCROW PAYMENT") monthly or as required by such Lender (but not more often
than monthly) so that there shall be in an escrow account an amount sufficient
to pay the annual Escrow Charges (as hereinafter defined) as they become due. As
used herein, "ESCROW CHARGES" shall mean real estate taxes and assessments on or
with respect to the Leased Premises or payments in lieu thereof and premiums on
any insurance required by this Lease, Quarterly Assessments and any reasonable
reserves for capital improvements, deferred maintenance repair and/or tenant
improvements and leasing
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commissions required by any Lender. Landlord shall, in its reasonable judgment,
determine the amount of the Escrow Charges (it being agreed that if required by
a Lender, such amounts shall equal any corresponding escrow installments
required to be paid by Landlord, so long as such amounts are consistent with
Tenant's obligations hereunder) and the amount 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 or cause Lender to apply the Escrow Payments to the payment
of the Escrow Charges in such order or priority as Landlord or Lender shall
reasonably determine or as required by Law. If at any time the Escrow Payments
theretofore paid to Landlord shall be insufficient for the payment of the Escrow
Charges, Tenant, within ten (10) days after Landlord's demand therefor, shall
pay the amount of the deficiency to Landlord. In the event Lender no longer
requires Landlord to make Escrow Payments or upon the expiration of the Term
and, provided that no Event of Default shall then exist and be continuing, any
and all Escrow Payments then held by Landlord or Lender and not allocated to the
payment of real estate taxes and/or assessments, Quarterly Assessments or
Special Assessments accruing prior to the date of Lender's waiver of the escrow
requirement or the last day of the Term, as applicable, shall be promptly
returned to Tenant. Any Escrow Payments held by Landlord or Lender upon the
occurrence of an Event of Default shall be applied to fulfill Tenant's
obligations under this Lease, with the balance thereof, if any, being applied to
Landlord's damages under Article 23 hereof.
(c) Provided that no Event of Default shall exist and be continuing,
Landlord hereby grants to Tenant the exclusive right to exercise any right or
power which Landlord shall have or possess by virtue of its status of as a
Member under the CC&R, including the right to vote or otherwise participate in
the management of the Association. Landlord agrees to execute and deliver such
powers of attorney, consents and other instruments as Tenant shall request from
time to time to evidence Tenant's authority under this Section 9(c). It is the
intention of the parties that the other Members shall be entitled to rely upon
the authority hereby granted to Tenant.
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, the terms and conditions of the Ground Lease, the
terms and conditions of the CC&R, all Insurance Requirements and Legal
Requirements (including all applicable Environmental Laws). Tenant shall not at
any time (i) cause, permit or suffer to occur any Environmental Violation or
(ii) permit any sublessee, assignee or other Person occupying the Leased
Premises under or through Tenant to cause, permit or suffer to occur any
Environmental Violation and, at the request of Landlord or Lender, Tenant shall
promptly remediate or undertake any other appropriate response action to correct
any existing Environmental Violation. Any and all reports prepared for or by
Landlord with respect to the Leased Premises shall be for the sole benefit of
Landlord and Lender and no other Person shall have the right to rely on any such
reports, except that Tenant shall have the right to receive copies of any
reports that are
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required or requested by any governmental agency having jurisdiction over the
Leased Premises and to deliver copies of such reports to any such governmental
agency.
(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. Neither Landlord nor Tenant will
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 the other party, which consent shall not be
unreasonably withheld or delayed.
(c) Upon reasonable prior written notice from Landlord, Tenant shall permit
such persons as Landlord may designate ("SITE REVIEWERS") to visit the Leased
Premises and perform environmental site investigations and assessments ("SITE
ASSESSMENTS") on the Leased Premises (i) in connection with any sale, financing
or refinancing of the Leased Premises, (ii) within the six month period prior to
the expiration of the Term, (iii) if required by Lender or the terms of any
credit facility to which Landlord is bound, (iv) if an Event of Default exists,
or (v) at any other time that, in the opinion of Landlord or Lender, a
reasonable basis exists to believe that an Environmental Violation or any
condition that could reasonably be expected to result in any Environmental
Violation exists, provided that so long as no Event of Default exists, no such
entry by Landlord or such other Persons shall interfere in any material respect
with the operations of Tenant at the Leased Premises. 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. The reasonable and actual cost of
performing and reporting Site Assessments shall be paid by Tenant.
(d) If an Environmental Violation occurs or is found to exist and, in
Landlord's reasonable judgment, the cost of remediation of, or other response
action with respect to, the same is likely to exceed $250,000, Tenant shall
provide to Landlord, within ten (10) days after Landlord's request therefor,
adequate financial assurances that Tenant will effect such remediation in
accordance with applicable Environmental Laws. Such financial assurances shall
be a bond or letter of credit reasonably satisfactory to Landlord in form and
substance and in an amount equal to or greater than Landlord's reasonable
estimate, based upon a Site Assessment performed pursuant to Paragraph 10(c), of
the anticipated cost of such remedial action.
(e) Notwithstanding any other provision of this Lease, if an Environmental
Violation occurs or is found to exist, the Term would otherwise terminate or
expire and Landlord after good faith efforts is unable to relet the Leased
Premises at then market rates solely because of such Environmental Violation,
then, at the option of Landlord, the Term shall be automatically extended beyond
the date of termination or expiration and this Lease shall remain in full force
and effect beyond such date until the earlier to occur of (i) the completion of
all remedial action in accordance with applicable Environmental Laws or (ii) the
date specified in a written notice from Landlord to Tenant terminating this
Lease.
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(f) If Tenant fails, within a reasonable period of time after written
notice from Landlord, to take appropriate steps to correct any Environmental
Violation which occurs or is found to exist, Landlord shall have the right (but
no obligation) to take any and all actions as Landlord shall reasonably deem
necessary or advisable in order to cure such Environmental Violation.
(g) Tenant shall notify Landlord promptly after becoming aware of any
Environmental Violation (or alleged Environmental Violation) or noncompliance
with any of the covenants contained in this Paragraph 10 and shall forward to
Landlord promptly upon receipt thereof copies of all orders, reports, notices,
permits, applications or other communications relating to any such violation or
noncompliance.
(h) Tenant shall not use the Leased Premises or any portion thereof as a
"Major Facility" (as such term is defined in the New Jersey Spill Compensation
Act and Control Act, N.J.S.A.ss.58:10.23.11b et seq.).
(i) Tenant shall not conduct or cause or permit to be conducted on the
Leased Premises any activity which constitutes an "Industrial Establishment," as
such term is defined in the New Jersey Industrial Site Recovery Act (formerly
known as the Environmental Cleanup Responsibility Act), as amended (N.J.S.A.
ss.13:1K et seq.) ("ISRA"). In the event that the provisions of ISRA become
applicable to the Leased Premises subsequent to the date hereof, Tenant shall
give prompt written notice thereof to Landlord and shall take immediate
requisite action to insure full compliance therewith. Tenant shall promptly
deliver to Landlord copies of all correspondence, notices and submissions that
it sends to or receives from the New Jersey Department of Environmental
Protection in connection with such ISRA compliance.
(j) All future leases, subleases or concession agreements relating to the
Leased Premises entered into by Tenant shall contain covenants of the other
party not to at any time (i) cause any Environmental Violation to occur or (ii)
permit any Person occupying the Leased Premises through said subtenant or
concessionaire to cause any Environmental Violation to occur.
11. LIENS; RECORDING.
(a) Tenant shall not, directly or indirectly, create or permit to be
created or to remain and shall promptly discharge or remove any lien, levy or
encumbrance on any of the Leased Premises or on any Rent or any other sums
payable by Tenant under this Lease, other than any Mortgage or Assignment, the
Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord. NOTICE IS
HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR
OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR UNDER TENANT, AND THAT NO
MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE LEASED PREMISES.
LANDLORD MAY AT ANY TIME, AND AT LANDLORD'S REQUEST TENANT SHALL
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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 Landlord and Tenant shall
execute and Landlord shall cause a memorandum of this Lease (or, if such a
memorandum cannot be recorded, this Lease), and any supplement hereto or
thereto, to be recorded in such manner and in such places as may be required or
permitted by any present or future Law in order to protect the validity and
priority of this Lease.
12. MAINTENANCE AND REPAIR.
(a) Tenant shall at all times maintain the Leased Premises and the
Adjoining Property in as good repair and appearance as they are in on the date
hereof and fit to be used for their intended use in accordance with the
practices observed by owners or operators of other comparable first class office
buildings in the Central New Jersey area, ordinary wear and tear excepted, and,
in the case of the Equipment, in as good mechanical condition as it was on the
later of the date hereof or the date of its installation, except for ordinary
wear and tear. Tenant shall take every other action reasonably necessary or
appropriate for the preservation and safety of the Leased Premises. Tenant shall
promptly make all Alterations of every kind and nature, whether foreseen or
unforeseen, which may be required to comply with the foregoing requirements of
this Paragraph 12(a). Landlord shall not be required to make any Alteration,
whether foreseen or unforeseen, or to maintain any of the Leased Premises or
Adjoining Property in any way, and Tenant hereby expressly waives any right
which may be provided for in any Law now or hereafter in effect to make
Alterations at the expense of Landlord or to require Landlord to make
Alterations. Any Alteration made by Tenant pursuant to this Paragraph 12 shall
be made in conformity with the provisions of Paragraph 13.
(b) If any Improvement, now or hereafter constructed, shall (i) encroach
upon any setback or any property, street or right-of-way adjoining the Leased
Premises, (ii) violate the provisions of any restrictive covenant affecting the
Leased Premises, (iii) hinder or obstruct any easement or right-of-way to which
any of the Leased Premises is subject or (iv) impair the rights of others in, to
or under any of the foregoing, Tenant shall, promptly after receiving notice or
otherwise acquiring knowledge thereof, either (A) obtain from all necessary
parties waivers or settlements of all claims, liabilities and damages resulting
from each such encroachment, violation, hindrance, obstruction or impairment,
whether the same shall affect Landlord, Tenant or both, or (B) take such action
as shall be necessary to remove all such encroachments, hindrances or
obstructions and to end all such violations or impairments, including, if
necessary, making Alterations.
13. ALTERATIONS AND IMPROVEMENTS.
(a) Tenant shall have the right, without having obtained the prior written
consent of Landlord or Lender and provided that no Event of Default then exists,
(i) to make non-structural Alterations or a series of related non-structural
Alterations that, as to any such Alterations or series of related Alterations,
do not cost in excess of $500,000 and (ii) to
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install Equipment in the Improvements or accessions to the Equipment that, as to
such Equipment or accessions, do not cost in excess of $500,000, so long as at
the time of construction or installation of any such Equipment or Alterations
the value and utility of the Leased Premises is not diminished thereby. If (i)
the cost of any non-structural Alterations or series of related non-structural
Alterations is in excess of $500,000, (ii) the cost of any Equipment or
accessions thereto is in excess of $500,000, or (iii) Tenant desires to make
structural Alterations to the Leased Premises, the prior written approval of
Landlord and Lender shall be required, which approval by Landlord shall not be
unreasonable withheld or delayed. Tenant shall not construct upon the Land any
additional buildings without having first obtained the prior written consent of
Landlord and Lender. Landlord shall have the right to require Tenant to remove
any Alterations except for Alterations required by Law, Alterations made for
office use or uses ancillary there (i.e., cafeteria, health club or retail) so
long as any such Alterations do not lessen the market value of the Leased
Premises, or Alterations for which Landlord has agreed in writing that removal
will not be required. Landlord acknowledges that as of the Commencement Date
certain roofing repair work is being performed at the Leased Premises at the
direction of Tenant (the "Xxxxx Roofing Work"), consents to the Xxxxx Roofing
Work and agrees that the cost of the Xxxxx Roofing Work shall not be counted
towards the $500,000 non-structural Alteration threshold for consent noted
above. Tenant acknowledges that the Xxxxx Roofing Work shall be subject to the
requirements of Paragraph 13(b).
(b) If Tenant makes any Alterations pursuant to this Paragraph 13 or as
required by Paragraph 12 or 17 (such Alterations and actions being hereinafter
collectively referred to as "WORK"), whether or not Landlord's consent is
required, then (i) the market value of the Leased Premises shall not be lessened
by any such Work or its usefulness impaired, (ii) all such Work shall be
performed by Tenant in a good and workmanlike manner, (iii) all such Work shall
be expeditiously completed in compliance with all Legal Requirements, (iv) all
such Work shall comply with the Insurance Requirements, (v) if any such Work
involves the replacement of Equipment or parts thereto, all replacement
Equipment or parts shall have a value and useful life equal to the greater of
(A) the value and useful life on the date hereof of the Equipment being replaced
or (B) the value and useful life of the Equipment being replaced immediately
prior to the occurrence of the event which required its replacement (assuming
such replaced Equipment was then in the condition required by this Lease), (vi)
Tenant shall promptly discharge or remove all liens filed against any of the
Leased Premises arising out of such Work, (vii) Tenant shall procure and pay for
all permits and licenses required in connection with any such Work, (viii) all
such Work shall be the property of Landlord and shall be subject to this Lease,
and Tenant shall execute and deliver to Landlord any document requested by
Landlord evidencing the assignment to Landlord of all estate, right, title and
interest (other than the leasehold estate created hereby) of Tenant or any other
Person thereto or therein, and (ix) if the cost of such Alterations is in excess
of $500,000, Tenant shall comply, to the extent requested by Landlord or
required by this Lease, with the provisions of Paragraph 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") and may
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dispute or contest the same, so long as at the time of such contest no Event of
Default exists and so long as Tenant shall contest, in good faith, the
existence, amount or validity thereof, the amount of the damages caused thereby,
or the extent of its or Landlord's liability therefor by appropriate proceedings
which shall operate during the pendency thereof to prevent or stay (i) the
collection of, or other realization upon, the Permitted Violation so contested,
(ii) the sale, forfeiture or loss of any of the Leased Premises or any Rent to
satisfy or to pay any damages caused by any Permitted Violation, (iii) any
interference with the use or occupancy of any of the Leased Premises, (iv) any
interference with the payment of any Rent, or (v) the cancellation or increase
in the rate of any insurance policy or a statement by the carrier that coverage
will be denied. Tenant shall provide Landlord security which is satisfactory, in
Landlord's reasonable judgment, to assure that such Permitted Violation is
corrected, including all Costs, interest and penalties that may be incurred or
become due in connection therewith. While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by law to correct
such Permitted Violation and Tenant's contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in connection
therewith, and perform all acts the performance of which shall be ordered or
decreed as a result thereof. No such contest shall subject Landlord to the risk
of any criminal liability or subject the Leased Premises to any proceeding in
condemnation.
15. INDEMNIFICATION.
(a) Tenant shall pay, protect, indemnify, defend, save and hold harmless
Landlord, Lender and all other Persons described in Paragraph 30 (each an
"INDEMNITEE") from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs (including 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 Landlord), without regard to the form of action and
whether based on strict liability, negligence or any other theory of recovery at
law or in equity arising from (i) any matter pertaining to the acquisition (or
the negotiations leading thereto), ownership, use, non-use, occupancy,
operation, condition, design, construction, maintenance, repair or restoration
of the Leased Premises or Adjoining Property, (ii) any casualty in any manner
arising from the Leased Premises or Adjoining Property, whether or not
Indemnitee has or should have knowledge or notice of any defect or condition
causing or contributing to said casualty, (iii) any violation by Tenant of any
provision of this Lease, any contract or agreement to which Tenant is a party,
any Legal Requirement or any Permitted Encumbrance or any encumbrance Tenant
consented to or the Mortgage or Assignment or (iv) any alleged, threatened or
actual Environmental Violation, including (A) liability for response costs and
for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit or any other Person, or damages
from injury to or
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destruction or loss of natural resources, including the reasonable costs of
assessing such injury, destruction or loss, incurred pursuant to Section 107 of
CERCLA, or any successor section or act or provision of any similar state or
local Law, (B) liability for costs and expenses of abatement, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any of the other Environmental Laws and (C) liability for personal
injury or property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private nuisance
or for carrying on of a dangerous activity.
(b) In case any action or proceeding is brought against any Indemnitee by
reason of any such claim, (i) Tenant may, except in the event of a conflict of
interest or a dispute between Tenant and any such Indemnitee or during the
continuance of an Event of Default, retain its own counsel and defend such
action (it being understood that Landlord may employ counsel of its choice to
monitor the defense of any such action, the reasonable cost of which (not to
exceed $10,000 per action or proceeding per calendar year unless such costs are
incurred in connection with the deposition(s) of the officers of Landlord or its
Affiliates in which case such cap on costs shall not apply) shall be paid by
Tenant) and (ii) such Indemnitee shall notify Tenant to resist or defend such
action or proceeding by retaining counsel reasonably satisfactory to such
Indemnitee, and such Indemnitee will cooperate and assist in the defense of such
action or proceeding if reasonably requested so to do by Tenant. In the event of
a conflict of interest or dispute or during the continuance of an Event of
Default, Landlord shall have the right to select counsel, and the reasonable
cost of such counsel shall by paid by Tenant.
(c) The obligations of Tenant under this Paragraph 15 shall survive any
termination, expiration or rejection in bankruptcy of this Lease.
16. INSURANCE.
(a) Tenant shall maintain the following insurance on or in connection with
the Leased Premises:
(i) Insurance against risk of physical loss or damage to the
Improvements and Equipment as provided under an "All Risk" form subject to
standard exclusions but not excluding perils of hail, windstorm, flood coverage
(if the Leased Premises is in a flood zone), earthquake and, to the extent
required by Lender, terrorism insurance, in amounts no less than the actual
replacement cost of the Improvements and Equipment; provided that, if Tenant's
insurance company is unable or unwilling to include any of all of such excluded
perils, Tenant shall have the option of purchasing coverage against such perils
from another insurer on a "Difference in Conditions" form or through a
stand-alone policy. Such policies shall contain Replacement Cost and Agreed
Amount Endorsements and shall contain deductibles not more than $100,000 per
occurrence.
(ii) Commercial General Liability Insurance (including but not
limited to Incidental Medical Malpractice 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 and
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all other coverage extensions that are usual and customary for properties of
this size and type provided, however, that the Landlord shall have the right to
require such higher limits as may be reasonable and customary for properties of
this size and type.
(iii) Workers' 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
Workers' Compensation Insurance, a program of self-insurance complying with the
rules, regulations and requirements of the appropriate agency of the State.
(iv) The All-Risk policy required in (i) above shall include Boiler
and Machinery coverage on any of the Equipment or any other equipment on or in
the Leased Premises. The All-Risk policy required in (i) above shall include at
least $3,000,000 per occurrence for Off-Premises Service Interruption, and/or
Expediting Expenses and Decontamination Expense and may contain a deductible not
to exceed $100,000, and a waiting period of 24 hours.
(v) Business Interruption/Extra Expense Insurance at limits
sufficient to cover 100% of the period of indemnity not less than eighteen (18)
months from time of loss. Such insurance shall name Landlord as loss payee
solely with respect to Rent payable to or for the benefit of Landlord as its
interest appears under this Lease.
(vi) During any period in which substantial Alterations at the Leased
Premises are being undertaken, builder's risk insurance covering the total
completed value including "soft costs" (such as the cost of permits,
architectural costs, taxes and the like) with respect to the Improvements being
altered or repaired (on a completed value, non-reporting basis), replacement
cost of work performed and equipment, supplies and materials furnished in
connection with such construction or repair of Improvements or Equipment,
together with such "soft cost" endorsements and such other endorsements as
Landlord may reasonably require and general liability, worker's compensation and
automobile liability insurance with respect to the Improvements being
constructed, altered or repaired.
(vii) Such other insurance (or other terms with respect to any
insurance required pursuant to this Paragraph 16, including without limitation
amounts of coverage, deductibles, form of mortgagee clause) on or in connection
with any of the Leased Premises as Landlord or Lender may reasonably require and
is customary for properties similarly situated to this location, use and
occupancy.
(b) The insurance required by Paragraph 16(a) shall be written by companies
which have a Best's rating of A:VII or above and a claims paying ability rating
of A or better by Standard & Poor's Rating Services, a division of the McGraw
Hill Companies, Inc. or equivalent rating agency approved by Landlord and Lender
in their sole discretion and are admitted in, and approved to write insurance
policies by, the State Insurance Department for the State of New Jersey.
Notwithstanding the foregoing, on the Commencement Date Landlord and Lender
shall accept policies written by companies which have a minimum Best's rating of
A:XV without regard to their Standard & Poors claims paying ability rating,
subject to the condition
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that if Lender shall at anytime in the future require policies written by
companies with a claims paying ability rating of A from Standard & Poor's Rating
Services, Tenant agrees, within fifteen (15) days following notice from
Landlord, either to obtain such replacement policies or, if Lender shall so
require, to deposit with Landlord the sum of $100,000 (or make a corresponding
increase in the Letter of Credit (as hereinafter defined) or provide an
additional Letter of Credit) as additional security for its obligations under
this Lease, and such sums shall be considered part of the Security Deposit, to
be held and applied as provided for in Paragraph 36. If at any time after Tenant
shall have made such additional $100,000 Security Deposit, Tenant obtains
replacement policies with the required rating as set forth above, Landlord shall
promptly return to Tenant the additional $100,000 Security Deposit (or consent
to a reduction or return of the Letter of Credit, as the case may be). The
insurance policies (i) shall be for a term of at least one year and (ii) shall
be in amounts sufficient at all times to satisfy any coinsurance requirements
thereof. The insurance referred to in Paragraphs 16(a)(i), 16(a)(iv) and the
builder risk insurance required in Paragraph 16(a)(vi) shall name Landlord as
additional insured and Landlord and Lender as loss payee and Tenant as its
interest may appear. The insurance referred to in Paragraph 16(a)(ii) shall name
Landlord and Lender as additional insureds, and the insurance referred to in
Paragraph 16(a)(v) shall name Landlord as insured and Lender and Landlord as
loss payee as to rent payable to Landlord. If said insurance or any part thereof
shall expire, be withdrawn, become void, voidable, unreliable or unsafe for any
reason, including a breach of any condition thereof by Tenant or the failure or
impairment of the capital of any insurer, or if for any other reason whatsoever
said insurance shall become reasonably unsatisfactory to Landlord, Tenant shall
immediately obtain new or additional insurance reasonably satisfactory to
Landlord.
(c) Each insurance policy referred to in clauses (i), (iv), (v) and the
builder's risk insurance required in clause (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, substantially
modified or allowed to lapse on any renewal date except after thirty (30) days'
prior notice to Landlord and Lender. Each such policy shall also provide that
any loss otherwise payable thereunder shall be payable notwithstanding (i) any
act or omission of Landlord or Tenant which might, absent such provision, result
in a forfeiture of all or a part of such insurance payment, (ii) the occupation
or use of any of the Leased Premises for purposes more hazardous than those
permitted by the provisions of such policy, (iii) any foreclosure or other
action or proceeding taken by Lender pursuant to any provision of the Mortgage,
Note, Assignment or other document evidencing or securing the Loan upon the
happening of an event of default therein or (iv) any change in title to or
ownership of any of the Leased Premises.
(d) Unless Tenant is making Escrow Payments under Paragraph 9(b), Tenant
shall pay as they become due all premiums for the insurance required by
Paragraph 16(a), and shall deliver to Landlord evidence of the payment of the
full premium therefor or installment then due, which evidence shall be by an
annual certificate of an officer of Tenant delivered to Landlord by January 31
of each Lease Year during the Term. At least thirty (30) days prior to the
expiration date of such policy, Tenant shall renew or replace each policy.
Within sixty (60) days after the renewal or replacement of each policy, Tenant
shall deliver to Landlord an original certificate of insurance for such policy,
which certificate shall bear a notation evidencing payment of applicable premium
for such policy. If required by Lender, Tenant shall deliver to
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Landlord certified copies of the policies reasonably promptly as they become
available, but in no event later than sixty (60) days after the renewal date for
such policy.
(e) Anything in this Paragraph 16 to the contrary notwithstanding, any
insurance which Tenant is required to obtain pursuant to Paragraph 16(a) may be
carried under a "blanket" or umbrella policy or policies covering other
properties or liabilities of Tenant, provided that such "blanket" or umbrella
policy or policies otherwise comply with the provisions of this Paragraph 16 and
provided further that Tenant shall provide to Landlord a Statement of Values
which shall be reviewed annually and amended as necessary based on Replacement
Cost Valuations.
(f) Tenant shall promptly comply with and conform to (i) all provisions of
each insurance policy required by this Paragraph 16 and (ii) all requirements of
the insurers thereunder applicable to Landlord, Tenant or any of the Leased
Premises or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Leased Premises, even if such
compliance necessitates Alterations or results in interference with the use or
enjoyment of any of the Leased Premises.
(g) Except for funding deductible amounts as deemed appropriate by Tenant
(but not in excess of the deductible permitted under Paragraph 16(a)), 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 an insured, with loss payable as provided
herein, and (h) such separate insurance complies with the other provisions of
this Paragraph 16. Tenant shall immediately notify Landlord of such separate
insurance and, if required by Lender, shall deliver to Landlord certified copies
of the policies reasonably promptly as they become available.
(h) All policies shall contain effective waivers by the insurer against all
claims for insurance premiums against Landlord and shall contain full waivers of
subrogation against the Landlord.
(i) All proceeds of any insurance required under Paragraph 16(a) shall be
payable as follows:
(i) Proceeds payable under clauses (ii), (iii) and (iv) of Paragraph
16(a) and proceeds attributable to the general liability coverage of Builder's
Risk insurance under clause (vi) of Paragraph 16(a) shall be payable to the
Person entitled to receive such proceeds.
(ii) Proceeds of insurance required under clause (i) of Paragraph
16(a) and proceeds attributable to Builder's Risk insurance under clause (vi) of
Paragraph 16(a) shall be payable to Landlord or Lender and applied as set forth
in Paragraph 17 or, if applicable, Paragraph 18. Tenant shall apply the Net
Award to restoration of the Leased Premises in accordance with the applicable
provisions of this Lease unless a Termination Event shall have occurred and
Tenant has given a Termination Notice.
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17. CASUALTY AND CONDEMNATION.
(a) If any Casualty to the Leased Premises occurs, Tenant shall give
Landlord and Lender immediate notice thereof. So long as no Event of Default
exists Tenant is hereby authorized to adjust, collect and compromise all claims
under any of the insurance policies required by Paragraph 16(a) (except public
liability insurance claims payable to a Person other than Tenant, Landlord or
Lender) and to execute and deliver on behalf of Landlord all necessary proofs of
loss, receipts, vouchers and releases required by the insurers and Landlord
shall have the right to join with Tenant therein. The final adjustment,
settlement or compromise of any claim in excess of $500,000 shall be subject to
the prior written approval of Landlord, and Landlord shall have the right to
prosecute or contest, or to require Tenant to prosecute or contest, such claim,
adjustment, settlement or compromise. Notwithstanding the foregoing, in the
event that any such adjustment, settlement or compromise shall be for not less
than 100% of the replacement cost of that portion of the Leased Premises damaged
by such Casualty, Landlord's consent to such adjustment, settlement or
compromise shall not be required. If an Event of Default exists, Tenant shall
not be entitled to adjust, collect or compromise any such claim or to
participate with Landlord in any adjustment, collection and compromise of the
Net Award payable in connection with a Casualty. Tenant agrees to sign, upon the
request of Landlord, all such proofs of loss, receipts, vouchers and releases.
Each insurer is hereby authorized and directed to make payment under said
policies, including return of unearned premiums, directly to Landlord or, if
required by the Mortgage, to Lender instead of to Landlord and Tenant jointly,
and Tenant hereby appoints each of Landlord and Lender as Tenant's
attorneys-in-fact to endorse any draft therefor. The rights of Landlord under
this Paragraph 17(a) shall be extended to Lender if and to the extent that any
Mortgage so provides.
(b) Tenant, immediately upon receiving a Condemnation Notice, shall notify
Landlord and Lender thereof. So long as no Event of Default exists, Tenant is
authorized to collect, settle and compromise the amount of any Net Award and
Landlord shall have the right to join with Tenant herein. If an Event of Default
exists, Landlord shall be authorized to collect, settle and compromise the
amount of any Net Award and Tenant shall not be entitled to participate with
Landlord in any Condemnation proceeding or negotiations under threat thereof or
to contest the Condemnation or the amount of the Net Award therefor. No
agreement with any condemnor in settlement or under threat of any Condemnation
shall be made by Tenant without the written consent of Landlord. 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 Improvements and Equipment
and leasehold interest in the Land 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.
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(c) If any Partial Casualty (whether or not insured against) or Partial
Condemnation shall occur, this Lease shall continue, notwithstanding such event,
and there shall be no abatement or reduction of any Monetary Obligations.
Promptly after such Partial Casualty or Partial Condemnation, Tenant, as
required in Paragraph 12(a), shall commence and diligently continue to restore
the Leased Premises as nearly as possible to their value, condition and
character immediately prior to such event (assuming the Leased Premises to have
been in the condition required by this Lease). So long as no Event of Default
exists, any Net Award up to and including $500,000 shall be paid by Landlord to
Tenant and Tenant shall restore the Leased Premises in accordance with the
requirements of Paragraph 13(b) of this Lease. Any Net Award in excess of
$500,000 shall (unless such Casualty resulting in the Net Award is a Termination
Event) be made available by Landlord (or Lender if the terms of the Mortgage so
require) to Tenant for the restoration of any of the Leased Premises pursuant to
and in accordance with and subject to the provisions of Paragraph 19 hereof. If
any Casualty or Condemnation which is not a Partial Casualty or Partial
Condemnation shall occur, Tenant shall comply with the terms and conditions of
Paragraph 18.
18. TERMINATION EVENTS.
(a) If either (i) the entire Leased Premises shall be taken by a Taking or
(ii) any substantial portion of the Leased Premises shall be taken by a Taking
or all or any substantial portion of the Leased Premises shall be damaged or
destroyed by a Casualty and, in such case, Tenant certifies and covenants to
Landlord that it will forever abandon operations at the Leased Premises (each of
the events described in the above clauses (i) and (ii) shall hereinafter be
referred to as a "TERMINATION EVENT"), then (x) in the case of (i) above, Tenant
shall be obligated, within ninety (90) days after Tenant receives a Condemnation
Notice and (y) in the case of (ii) above, Tenant shall have the option, within
ninety (90) days after Tenant receives a Condemnation Notice or ninety (90) days
after the Casualty, as the case may be, to give to Landlord written notice in
the form described in Paragraph 18(b) of the Tenant's election to terminate this
Lease (a "TERMINATION NOTICE"). If Tenant elects under clause (y) above not to
give Landlord a Termination Notice, then Tenant shall rebuild or repair the
Leased Premises in accordance with Paragraphs 17 and 19.
(b) A Termination Notice shall contain (i) notice of Tenant's intention to
terminate this Lease on the first Basic Rent Payment Date which occurs at least
sixty (60) days after the Fair Market Value Date (the "TERMINATION DATE"), (ii)
a binding and irrevocable offer of Tenant to pay to Landlord the Termination
Amount and (iii) if the Termination Event is an event described in Paragraph
18(a)(ii), the certification and covenants described therein and a certified
resolution of the Board of Directors of Tenant authorizing the same. Promptly
upon the delivery to Landlord of a Termination Notice, Landlord and Tenant shall
commence to determine the Fair Market Value.
(c) If Landlord shall reject such offer by Tenant to pay to Landlord the
Termination Amount pursuant to Paragraph 18(b) above by written notice to Tenant
(a "REJECTION"), which Rejection shall contain the written consent of Lender to
Landlord's rejection of Tenant's offer to pay the Termination Amount, not later
than thirty (30) days following the Fair Market Value Date, then this Lease
shall terminate on the Termination Date; provided that, if Tenant has not
satisfied all Monetary Obligations and all other obligations and liabilities
under
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this Lease which have arisen on or prior to the Termination Date (collectively,
"REMAINING OBLIGATIONS") on the Termination Date, then Landlord may, at its
option, extend the date on which this Lease may terminate to a date which is no
later than the first Basic Rent Payment Date after the Termination Date on which
Tenant has satisfied all Remaining Obligations. Upon such termination (i) all
obligations of Tenant hereunder shall terminate except for any Surviving
Obligations, (ii) Tenant shall immediately vacate and shall have no further
right, title or interest in or to any of the Leased Premises and (iii) the Net
Award shall be retained by Landlord. Notwithstanding anything to the contrary
hereinabove contained, if Tenant shall have received a Rejection and, on the
date when this Lease would otherwise terminate, Landlord shall not have received
the full amount of the Net Award payable by reason of the applicable Termination
Event, then the date on which this Lease is to terminate shall be automatically
extended to the first Basic Rent Payment Date after the receipt by Landlord of
the full amount of the Net Award provided that, if Tenant has not satisfied all
Remaining Obligations on such date, then Landlord may, at its option, extend the
date on which this Lease may terminate to a date which is no later than the
first Basic Rent Payment Date after such date on which Tenant has satisfied all
such Remaining Obligations.
(d) Unless Tenant shall have received a Rejection not later than the
thirtieth (30th) day following the Fair Market Value Date, Landlord shall be
conclusively presumed to have accepted such offer from Tenant to pay the
Termination Amount. If such offer from Tenant to pay the Termination Amount is
accepted by Landlord then, on the Termination Date, Tenant shall pay to Landlord
the Termination Amount and all Remaining Obligations and, if requested by
Tenant, Landlord shall (i) convey to Tenant the Leased Premises or the remaining
portion thereof, if any, and (ii) pay to or assign to Tenant Landlord's entire
interest in and to the Net Award, all in accordance with Paragraph 20.
19. RESTORATION.
(a) If any Net Award is in excess of $500,000, Landlord (or Lender if
required by any Mortgage) shall hold the entire Net Award 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 and a budget for the
restoration shall have been approved by Landlord in its reasonable discretion
and (B) Landlord and Lender shall be provided with mechanics' lien insurance (if
available) and reasonably acceptable performance and payment bonds which insure
satisfactory completion of and payment for the restoration, are in an amount and
form and have a surety reasonably acceptable to Landlord, and name Landlord and
Lender as additional dual obligees;
(ii) at the time of any disbursement, no Event of Default shall exist
and no mechanics' or materialmen's liens shall have been filed against any of
the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of
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(A) satisfactory evidence, including architects' certificates, of the stage of
completion, the estimated total cost of completion and performance of the work
to date in a good and workmanlike manner in accordance with the contracts, plans
and specifications, (B) waivers of liens, (C) contractors' and subcontractors'
sworn statements as to completed work and the cost thereof for which payment is
requested, (D) a satisfactory bringdown of title insurance and (E) other
evidence of cost and payment so that Landlord can verify that the amounts
disbursed from time to time are represented by work that is completed, in place
and free and clear of mechanics' and materialmen's lien claims;
(iv) each request for disbursement shall be accompanied by a
certificate of Tenant, signed by the president or a vice president of Tenant,
describing the work for which payment is requested, stating the cost incurred in
connection therewith, stating that Tenant has not previously received payment
for such work and, upon completion of the work, also stating that the work has
been fully completed and complies with the applicable requirements of this
Lease;
(v) Landlord may retain ten percent (10%) of the restoration fund
until the restoration is fully completed;
(vi) if the Restoration Fund is held by Landlord, the Restoration
Fund shall not be commingled with 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, upon demand by Landlord, Tenant shall pay
to Landlord the amount of such excess to be added to the Restoration Fund or
shall provide other evidence satisfactory to Landlord that funds will be
available from Tenant to complete restoration. Any sum so added by Tenant which
remains in the Restoration Fund upon completion of restoration shall be refunded
to Tenant. For purposes of determining the source of funds with respect to the
disposition of funds remaining after the completion of restoration, the Net
Award shall be deemed to be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after completion of the
restoration and any refund to Tenant pursuant to Paragraph 19(b), such sum shall
be retained by Landlord or, if required by a Note or Mortgage, paid by Landlord
to a Lender.
20. PROCEDURES UPON PURCHASE.
(a) If the Leased Premises is purchased by Tenant pursuant to any provision
of this Lease, Landlord need not convey any better title thereto than that which
was conveyed to Landlord, and Tenant shall accept such title, subject, however,
to the Permitted Encumbrances and to all other liens, exceptions and
restrictions on, against or relating to any of the Leased Premises and to all
applicable Laws, but free of the lien of and security interest
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created by any Mortgage or Assignment and liens, exceptions and restrictions on,
against or relating to the Leased Premises which have been created by or
resulted solely from acts of Landlord after the date of this Lease, unless the
same are Permitted Encumbrances or customary utility easements benefiting the
Leased Premises or were created with the written concurrence of Tenant or as a
result of a default by Tenant under this Lease.
(b) Upon the date fixed for any such purchase of the Leased Premises
pursuant to any provision of this Lease (any such date the "PURCHASE DATE"),
Tenant shall pay to Landlord, or to any Person to whom Landlord directs payment,
the Relevant Amount therefor specified herein, in Federal Funds, less any credit
of the Net Award received and retained by Landlord or a Lender allowed against
the Relevant Amount, and Landlord shall deliver to Tenant (i) an assignment of
the Ground Lease and a special warranty deed to the Improvements which describe
the premises being conveyed and conveys the title thereto as provided in
Paragraph 20(a), (ii) such other instruments as shall be necessary to transfer
to Tenant or its designee any other property (or rights to any Net Award not yet
received by Landlord or a Lender) then required to be sold by Landlord to Tenant
pursuant to this Lease and (iii) any Net Award received by Landlord, not
credited to Tenant against the Relevant Amount and required to be delivered by
Landlord to Tenant pursuant to this Lease; provided, that if any Monetary
Obligations remain outstanding on such date, then Landlord may deduct from the
Net Award the amount of such Monetary Obligations. If on the Purchase Date any
Monetary Obligations remain outstanding and no Net Award is payable to Tenant by
Landlord or the amount of such Net Award is less than the amount of the Monetary
Obligations, then Tenant shall pay to Landlord on the Purchase Date the amount
of such Monetary Obligations. Upon the completion of such purchase, this Lease
and all obligations and liabilities of Tenant hereunder shall terminate, except
any Surviving Obligations.
(c) If the completion of such purchase shall be delayed after (i) the
Termination Date, in the event of a purchase pursuant to Paragraph 18 or, (ii)
the date scheduled for such purchase, in the event of a purchase under any other
provision of this Lease then (x) Rent shall continue to be due and payable until
completion of such purchase and (y) at Landlord's sole option, but only if such
delay exceeds sixty (60) days, Fair Market Value shall be redetermined and the
Relevant Amount payable by Tenant pursuant to the applicable provision of this
Lease shall be adjusted to reflect such redetermination.
(d) Any prepaid Monetary Obligations paid to Landlord shall be prorated as
of the Purchase Date, and the prorated unapplied balance shall be deducted from
the Relevant Amount due to Landlord; provided, that no apportionment of any
Impositions shall be made upon any such purchase.
21. ASSIGNMENT AND SUBLETTING, PROHIBITION AGAINST LEASEHOLD FINANCING.
(a)
(i) Tenant shall have the right, upon thirty (30) days prior written
notice to Landlord and Lender, with no consent of Landlord or Lender being
required or necessary ("Preapproved Assignment") to assign this Lease by
operation of law or otherwise to any Person ("Preapproved Assignee") that
immediately following such assignment (A) will have
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a publicly traded unsecured senior debt rating of "Baa1" or better from Xxxxx'x
or a rating of "BBB+" or better from S&P, or, if applicable, another Rating
Agency or (B) is, and at all times while such person shall be a tenant hereunder
continues to be, an Affiliate of Guarantors.
(ii) If Tenant desires to assign this Lease, whether by operation of
law or otherwise, to a Person ("NON-PREAPPROVED ASSIGNEE") who would not be a
Preapproved Assignee ("NON-PREAPPROVED ASSIGNMENT") then Tenant shall, not less
than ninety (90) days prior to the date on which it desires to make a
Non-Preapproved Assignment submit to Landlord and Lender information regarding
the following with respect to the Non-Preapproved Assignee (collectively, the
"REVIEW CRITERIA"): (A) credit, (B) capital structure, (C) management, (D)
operating history, (E) proposed use of the Leased Premises and (F) risk factors
associated with the proposed use of the Leased Premises by the Non-Preapproved
Assignee, taking into account factors such as environmental concerns, product
liability and the like. Landlord and Lender shall review such information and
shall approve or disapprove the Non-Preapproved Assignee no later than the
thirtieth (30th) day following receipt of all such information, and Landlord and
Lender shall be deemed to have acted reasonably in granting or withholding
consent if such grant or disapproval is based on their review of the Review
Criteria applying prudent business judgment. If a response is not received by
Landlord and Lender by the expiration of such thirty (30) day period, such
non-Preapproved Assignee shall be deemed disapproved.
(b) Tenant shall have the right, upon thirty (30) days' prior written
notice to Landlord and Lender, to enter into one or more subleases that demise,
in the aggregate, up to but not in excess of forty percent (40%) 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 exist for more than forty percent
(40%) of the gross space in the Improvements without the prior written consent
of Landlord, which consent shall be granted or withheld based on a review of the
Review Criteria as they relate to the proposed sublessee and the terms of the
proposed sublease. Landlord and Lender shall be deemed to have acted reasonably
in granting or withholding consent if such grant or disapproval is based on
their review of the Review Criteria applying prudent business judgment.
(c) If Tenant assigns all its rights and interest under this Lease, the
assignee under such assignment shall expressly assume all the obligations of
Tenant hereunder, actual or contingent, including obligations of Tenant which
may have arisen on or prior to the date of such assignment, by a written
instrument delivered to Landlord at the time of such assignment. Any approved
sublease of the Leased Premises shall (A) be expressly subject and subordinate
to this Lease and any Mortgage encumbering the Leased Premises; (B) not extend
beyond the then current Term minus one day; (C) terminate upon any termination
of this Lease, unless Landlord elects in writing, to cause the sublessee to
attorn to and recognize Landlord as the lessor under such sublease, whereupon
such sublease shall continue as a direct lease between the sublessee and
Landlord upon all the terms and conditions of such sublease; and (D) bind the
sublessee to all covenants contained in Paragraphs 4(a), 10 and 12 with respect
to subleased premises to the same extent as if the sublessee were the Tenant. No
assignment or sublease shall affect or reduce any of the obligations of Tenant
hereunder or the Guarantor under the Guaranty, and all such obligations of
Tenant and Guarantor 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
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had been made. No assignment or sublease shall impose any additional obligations
on Landlord under this Lease.
(d) With respect to any Preapproved Assignment or Preapproved Sublet,
Tenant shall provide to Landlord information reasonably required by Landlord to
establish that any proposed Preapproved Assignment or Preapproved Sublet
satisfies the criteria set forth above.
(e) 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.
(f) As security for performance of its obligations under this Lease, Tenant
hereby grants, conveys and assigns to Landlord all right, title and interest of
Tenant in and to all subleases now in existence or hereafter entered into for
any or all of the Leased Premises, any and all extensions, modifications and
renewals thereof and all rents, issues and profits therefrom. Landlord hereby
grants to Tenant a license to collect and enjoy all rents and other sums of
money payable under any sublease of any of the Leased Premises, provided,
however, that Landlord shall have the absolute right at any time upon notice to
Tenant and any subtenants to revoke said license and to collect such rents and
sums of money and to retain the same. Any amounts so collected by Landlord shall
be applied to Rent next due and owing. Tenant shall not accept any rents under
any sublease more than thirty (30) days in advance of the accrual thereof.
(g) Except as otherwise specifically permitted under Paragraph 37, 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.
(h) Subject to the provisions of Paragraph 35 hereof, Landlord may sell or
transfer the Leased Premises at any time without Tenant's consent to any third
party (each a "THIRD PARTY PURCHASER"). In the event of any such transfer,
Tenant shall attorn to any Third Party Purchaser as Landlord so long as such
Third Party Purchaser and Landlord notify Tenant in writing of such transfer. At
the request of Landlord, Tenant will execute such documents confirming the
agreement referred to above and such other agreements as Landlord may reasonably
request, provided that such agreements do not increase the liabilities and
obligations of Tenant hereunder.
22. EVENTS OF DEFAULT.
(a) The occurrence of any one or more of the following (after expiration of
any applicable cure period as provided in Paragraph 22(b)) shall, at the sole
option of Landlord, constitute an "EVENT OF DEFAULT" under this Lease:
(i) a failure by Tenant to make any payment of any Monetary
Obligation on or prior to its due date, taking into account any applicable
notice and/or cure period under Paragraph 22(b) with respect to such payment, if
any, regardless of the reason for such failure;
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(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) on or prior to the deadline for such performance under this
Lease, taking into account any applicable notice and/or cure period under
Paragraph 22(b) with respect to such performance, if any;
(iii) any representation or warranty made by Tenant herein or in any
certificate, demand or request made pursuant hereto proves to be incorrect in
any material respect as of the date made;
(iv) a default beyond any applicable notice and/or cure period or at
maturity by Tenant or any of the Guarantors in any payment of principal or
interest on any obligations for borrowed money having at the time of such
default an outstanding principal balance of $10,000,000 (or its equivalent in
any foreign currencies) or more in the aggregate, or in the performance of any
other provision contained in any instrument under which any such obligation is
created or secured (including the breach of any covenant thereunder), (x) if
such payment is a payment at maturity or a final payment, or (y) if an effect of
such default is to cause, or permit any Person to cause, such obligation to
become due prior to its stated maturity;
(v) a default by Tenant beyond any applicable notice and/or cure
period in the payment of rent under, or in the performance of any other material
provision of, any other lease or leases that have, in the aggregate, rental
obligations remaining over the balance of the terms thereof of $7,500,000 or
more, but only if the landlord under any such lease or leases commences to
exercise its remedies thereunder;
(vi) a final, non-appealable judgment or judgments for the payment of
money in excess of $5,000,000 (or its equivalent in any foreign currencies) in
the aggregate shall be rendered against Tenant or any of the Guarantors and the
same shall remain undischarged or unstayed for a period of sixty (60)
consecutive days after it is entered; provided, however, that amounts which are
covered by insurance provided by a reputable insurance company which has not
denied coverage in any way and has agreed in writing to provide Tenant's defense
shall not be included in the foregoing;
(vii) The breach of any Covenant shall occur; provided, however, that
no such breach shall be deemed to have occurred until the expiration of any
applicable notice and/or cure period under the Credit Agreement or Senior Credit
Agreement, as the case may be, with respect to such Covenant;
(viii) Tenant or any of the Guarantors 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) admit in writing its inability to pay its debts as they
mature;
(ix) a court shall enter an order, judgment or decree appointing,
without the consent of Tenant, a receiver or trustee for it or for any of the
Leased Premises or
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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 for a period of sixty (60) consecutive days after it is entered;
(x) the Leased Premises shall have been (a) vacated for more than
ninety (90) consecutive days, unless during such ninety (90) day period Tenant
is restoring or renovating the Leased Premises, or is diligently attempting to
sublet the Leased Premises and is otherwise in compliance with the terms of this
Lease, or (b) abandoned, as evidenced by Tenant's failure to maintain dominion
and control over the Leased Premises;
(xi) Tenant shall be liquidated or dissolved or begin proceedings
towards its liquidation or dissolution unless this Lease shall have been
assigned to an Affiliate as part of a corporate reorganization;
(xii) the estate or interest of Tenant in any of the Leased Premises
shall be levied upon or attached in any proceeding and such estate or interest
is about to be sold or transferred or such process shall not be vacated or
discharged within sixty (60) days after it is made;
(xiii) a failure by Tenant to perform or observe, or a material
violation or breach of, or a material misrepresentation by Tenant under any
provision of any Assignment or any other document between Tenant and Lender or
from Tenant to Lender, if such failure, violation, breach or misrepresentation
gives rise to a default beyond any applicable cure period with respect to any
Loan;
(xiv) a failure by Tenant to maintain in effect any material license
or permit necessary for the use, occupancy or operation of the Leased Premises;
(xv) Tenant shall fail to deliver the estoppel described in Paragraph
25 within the time period specified therein;
(xvi) Tenant shall sell or transfer or enter into an agreement to
sell or transfer all or substantially all of its assets in a single transaction
or a series of related transactions except for a sale or transfer to a Person
permitted under Paragraph 21(a) who assumes all of the obligations of Tenant
under this Lease and only if such sale or transfer is otherwise is compliance
with Paragraph 21(a);
(xvii) an Event of Default (as defined in the Guaranty) shall occur
under the Guaranty;
(xviii) Tenant shall fail to renew the Letter of Credit or replenish
the Security Deposit in accordance with the requirements of Paragraph 36;
(xix) Tenant shall fail to comply with all of the obligations of
Landlord, as tenant, under the Ground Lease and such failure shall continue
beyond the expiration of any notice and cure period, or
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(xx) Tenant shall fail to comply with all of the obligations of
Landlord under the CC&R, including but not limited to the failure of Tenant to
pay any Quarterly Assessments or Special Assessments, and such failure shall
continue beyond the expiration of any notice and cure period set forth in the
CC&R.
(b) No notice or cure period shall be required in any one or more of the
following events: (A) the occurrence of an Event of Default under clause (i)
(except as otherwise set forth below), (iv), (v), (vi), (vii), (viii), (ix),
(x), (xi), (xii), (xiii), (xv), (xvi) (xvii), (xviii), (xix) or (xx) of
Paragraph 22(a); (B) the default consists of a failure to provide any insurance
required by Paragraph 16 or an assignment or sublease entered into in violation
of Paragraph 21; or (C) the default is such that any delay in the exercise of a
remedy by Landlord could reasonably be expected to cause irreparable harm to
Landlord. If the default consists of the failure to pay any Monetary Obligation
under clause (i) of Paragraph 22(a), the applicable cure period shall be five
(5) days from the date on which notice is given, but Landlord shall not be
obligated to give notice of, or allow any cure period for, any such default more
than once within any Lease Year. If the default consists of a default under
clause (ii), clause (iii) (provided that such misrepresentation is reasonably
susceptible of cure) or clause (xiv) of Paragraph 22(a), other than the events
specified in clauses (B) and (C) of the first sentence of this Paragraph 22(b),
the applicable cure period shall be twenty (20) days from the date on which
notice is given or, if the default cannot be cured within such twenty (20) day
period and delay in the exercise of a remedy would not (in Landlord's reasonable
judgment) cause any material adverse harm to Landlord or any of the Leased
Premises, the cure period shall be extended for the period required to cure the
default (but such cure period, including any extension, shall not in the
aggregate exceed sixty (60) days), provided that Tenant shall commence to cure
the default within the said twenty-day period and shall actively, diligently and
in good faith proceed with and continue the curing of the default until it shall
be fully cured.
23. REMEDIES AND DAMAGES UPON DEFAULT.
(a) If an Event of Default shall have occurred and is continuing, Landlord
shall have the right, at its sole option, then or at any time thereafter, to
exercise its remedies and to collect damages from Tenant in accordance with this
Paragraph 23, subject in all events to applicable Law, without demand upon or
notice to Tenant except as otherwise provided in Paragraph 22(b) and this
Paragraph 23. Such remedies upon an Event of Default may include the following:
(i) Landlord may give Tenant notice of Landlord's intention to
terminate this Lease on a date specified in such notice. Upon such date, this
Lease, the estate hereby granted and all rights of Tenant hereunder shall expire
and terminate. Upon such termination, Tenant shall immediately surrender and
deliver possession of the Leased Premises to Landlord in accordance with
Paragraph 26. If Tenant does not so surrender and deliver possession of the
Leased Premises, Landlord may re-enter and repossess the Leased Premises, with
appropriate legal process, by summary proceedings, ejectment or any other lawful
judicial procedure. Upon or at any time after taking possession of the Leased
Premises, Landlord may, by peaceable means or legal process, remove any Persons
or property therefrom. Landlord shall be under no liability for or by reason of
any such entry, repossession or removal. Notwithstanding such entry or
repossession, Landlord may (A) exercise the remedy set forth in
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and collect the damages permitted by Paragraph 23(a)(iii) or (B) collect the
damages set forth in Paragraph 23(b)(i) or 23(b)(ii).
(ii) After repossession of the Leased Premises pursuant to clause (i)
above, Landlord shall have the right to relet any of the Leased Premises to such
tenant or tenants, for such term or terms, for such rent, on such conditions and
for such uses as Landlord in its sole discretion may determine, and collect and
receive any rents payable by reason of such reletting. Landlord may make such
Alterations in connection with such reletting as it may deem advisable in its
sole discretion. Notwithstanding any such reletting, Landlord may collect the
damages set forth in Paragraph 23(b)(ii).
(iii) Landlord may, upon notice to Tenant, require Tenant to make an
irrevocable offer to terminate this Lease upon payment to Landlord of an amount
(the "Default Termination Amount") specified in the next sentence. The "Default
Termination Amount" shall be the greatest of (A) the sum of the Fair Market
Value of the Leased Premises and the applicable Prepayment Premium which
Landlord will be required to pay in prepaying any Loan with proceeds of the
Default Termination Amount, (B) the sum of the Acquisition Cost and the
applicable Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Default Termination Amount or (C) an
amount equal to the Present Value of the entire Basic Rent from the date of such
purchase to the date on which the Term would expire. Upon such notice to Tenant,
Tenant shall be deemed to have made such offer and shall, if requested by
Landlord, within ten (10) days following such request, deposit with Landlord as
payment against the Default Termination Amount the amount described in (B) above
and Landlord and Tenant shall promptly commence to determine Fair Market Value.
Upon such deposit by Tenant, Landlord shall automatically be deemed to have
accepted such offer. On the tenth (10th) business day after such acceptance,
Tenant shall pay to Landlord the Default Termination Amount and, at the request
of Tenant, Landlord will convey the Leased Premises to Tenant or its designee in
accordance with Paragraph 20. The remedy provided by this Paragraph 23(a)(iii)
shall not be available to Landlord if all sums claimed by Landlord under
Paragraph 23(a)(iv) below have been collected by Landlord from or on behalf of
Tenant.
(iv) Landlord may declare by notice to Tenant the entire Basic Rent
(in the amount of Basic Rent then in effect) for the remainder of the then
current Term to be immediately due and payable. Tenant shall immediately pay to
Landlord all such Basic Rent discounted to its Present Value, all accrued Rent
then due and unpaid, all other Monetary Obligations which are then due and
unpaid and all Monetary Obligations which arise or become due by reason of such
Event of Default (including any Costs of Landlord). Upon receipt by Landlord of
all such accelerated Basic Rent and Monetary Obligations, this Lease shall
remain in full force and effect and Tenant shall have the right to possession of
the Leased Premises from the date of such receipt by Landlord to the end of the
Term, and subject to all the provisions of this Lease, including the obligation
to pay all increases in Basic Rent and all Monetary Obligations that
subsequently become due, except that (A) no Basic Rent which has been prepaid
hereunder shall be due thereafter during the said Term, (B) Tenant shall have no
option to extend or renew the Term, [and (C) Tenant shall have no further rights
under Paragraph 35. The remedy provided by this Paragraph 23(a)(iv) shall not be
available to Landlord if all sums claimed by Landlord under Paragraph 23(a)(iii)
above have been collected by Landlord from or on behalf of Tenant.
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(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) (but not
if a Landlord has collected all sums claimed by Landlord under Paragraph
23(a)(iii) or 23(a)(iv) above):
(i) If Landlord exercises its remedy under Paragraph 23(a)(i) but not
its remedy under Paragraph 23(a)(ii) (or attempts to exercise such remedy and is
unsuccessful in reletting the Leased Premises) then, upon written demand from
Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages
for Tenant's default and in lieu of all current damages beyond the date of such
demand (it being agreed that it would be impracticable or extremely difficult to
fix the actual damages), an amount equal to the Present Value of the excess, if
any, of (A) all Basic Rent from the date of such demand to the date on which the
Term is scheduled to expire hereunder in the absence of any earlier termination,
re-entry or repossession over (B) the then fair market rental value of the
Leased Premises for the same period. Tenant shall also pay to Landlord all of
Landlord's Costs in connection with the repossession of the Leased Premises and
any attempted reletting thereof, including all brokerage commissions, legal
expenses attorneys' fees, employees' expenses, costs of Alterations and expenses
and preparation for reletting.
(ii) If Landlord exercises its remedies under Paragraph 23(a)(i) and
23(a)(ii), then Tenant shall, until the end of what would have been the Term in
the absence of the termination of the Lease, and whether or not any of the
Leased Premises shall have been relet, be liable to Landlord for, and shall pay
to Landlord, as liquidated and agreed current damages all Monetary Obligations
which would be payable under this Lease by Tenant in the absence of such
termination less the net proceeds, if any, of any reletting pursuant to
Paragraph 23(a)(ii), after deducting from such proceeds all of Landlord's Costs
(including the items listed in the last sentence of Paragraph 23(b)(i) hereof)
incurred in connection with such repossessing and reletting; provided, that if
Landlord has not relet the Leased Premises, such Costs of Landlord shall be
considered to be Monetary Obligations payable by Tenant. Tenant shall be and
remain liable for all sums aforesaid, and Landlord may recover such damages from
Tenant and institute and maintain successive actions or legal proceedings
against Tenant for the recovery of such damages. Nothing herein contained shall
be deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when the Term would have expired by its own terms had
there been no such Event of Default.
(c) Notwithstanding anything to the contrary herein contained, in lieu of
or in addition to any of the foregoing remedies and damages, Landlord may
exercise any remedies and collect any damages available to it at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder or
at law or in equity.
(d) Landlord shall not be required to mitigate any of its damages hereunder
unless required to by applicable Law. If any Law shall validly limit the amount
of any damages provided for herein to an amount which is less than the amount
agreed to herein, Landlord shall be entitled to the maximum amount available
under such Law.
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(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 OR TENANT
HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY.
(g) Upon the occurrence and during the continuance of any Event of Default,
Landlord shall have the right (but no obligation) to perform any act required of
Tenant hereunder and, if performance of such act requires that Landlord enter
the Leased Premises, Landlord may enter the Leased Premises for such purpose.
(h) No failure of Landlord (i) to insist at any time upon the strict
performance of any provision of this Lease or (ii) to exercise any option,
right, power or remedy contained in this Lease shall be construed as a waiver,
modification or relinquishment thereof. A receipt by Landlord of any sum in
satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(i) Tenant hereby waives and surrenders, for itself and all those claiming
under it, including creditors of all kinds, (i) any right and privilege which it
or any of them may have under any present or future Law to redeem any of the
Leased Premises or to have a continuance of this Lease after termination of this
Lease or of Tenant's right of occupancy or possession pursuant to any court
order or any provision hereof, and (ii) the benefits of any present or future
Law which exempts property from liability for debt or for distress for rent.
(j) Except as otherwise provided herein, all remedies are cumulative and
concurrent and no remedy is exclusive of any other remedy. Each remedy may be
exercised at any time an Event of Default has occurred and is continuing and may
be exercised from time to time. No remedy shall be exhausted by any exercise
thereof.
24. NOTICES. All notices, demands, requests, consents, approvals, offers,
statements and other instruments or communications required or permitted to be
given pursuant to the provisions of this Lease shall be in writing and shall be
deemed to have been given and received for all purposes when delivered in person
or by Federal Express or other reliable 24-hour delivery service or five (5)
business days after being deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed to the
other party at its address stated on page one of this Lease or when delivery is
refused. Notices sent to Landlord shall be to the attention of Director, Asset
Management, and notices to Tenant shall be to the attention of Xxxxxx X. Xxxxxx.
A copy of any notice given by Tenant to Landlord shall simultaneously be given
by Tenant to Xxxx Xxxxx LLP, 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 by Landlord to Xxxxx & Xxxxxx,
0 Xxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx,
Esq. For the purposes of this Paragraph, any party may substitute another
address stated above (or substituted by a
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previous notice) for its address by giving fifteen (15) days' notice of the new
address to the other party, in the manner provided above. Notice of address
change shall be effective only upon receipt.
25. ESTOPPEL CERTIFICATE. At any time upon not less than ten (10) days'
prior written request by either Landlord or Tenant (the "REQUESTING PARTY") to
the other party (the "RESPONDING PARTY"), but not more often than once each
calendar quarter, the Responding Party shall deliver to the Requesting Party a
statement in writing, executed by an authorized officer of the Responding Party,
certifying (a) that, except as otherwise specified, this Lease is unmodified and
in full force and effect, (b) the dates to which Basic Rent, Additional Rent and
all other Monetary Obligations have been paid, (c) that, to the knowledge of the
signer of such certificate and except as otherwise specified, no Event of
Default exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by any court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation.
26. SURRENDER. Upon the expiration or earlier termination of this Lease,
Tenant shall peaceably leave and surrender the Leased Premises to Landlord in
the same condition in which the Leased Premises was at the commencement of this
Lease, except as repaired, rebuilt, restored, altered, replaced or added to as
permitted or required by any provision of this Lease, and except for ordinary
wear and tear. Upon such surrender, Tenant shall (a) remove from the Leased
Premises all property which is owned by Tenant or third parties other than
Landlord and (b) repair any damage caused by such removal. Property not so
removed shall become the property of Landlord, and Landlord may thereafter cause
such property to be removed from the Leased Premises. The cost of removing and
disposing of such property and repairing any damage to any of the Leased
Premises caused by such removal shall be paid by Tenant to Landlord upon demand.
Landlord shall not in any manner or to any extent be obligated to reimburse
Tenant for any such property which becomes the property of Landlord pursuant to
this Paragraph 26.
27. NO MERGER OF TITLE. There shall be no merger of the leasehold estate
created by this Lease with the fee estate in any of the Leased Premises by
reason of the fact that the same Person may acquire or hold or own, directly or
indirectly, (a) the leasehold estate created hereby or any part thereof or
interest therein and (b) the fee estate in any of the Leased Premises or any
part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.
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28. BOOKS AND RECORDS.
(a) Tenant shall keep adequate records and books of account with respect to
the finances and business of Tenant generally and with respect to the Leased
Premises, in accordance with generally accepted accounting principles ("GAAP")
consistently applied, and shall permit Landlord and Lender by their respective
agents, accountants and attorneys, upon reasonable prior notice to Tenant, to
visit and inspect the Leased Premises and examine (and make copies of) the
records and books of account and to discuss the finances and business with the
officers of Tenant, at such reasonable times as may be requested by Landlord.
Upon the request of Lender or Landlord (either telephonically or in writing),
Tenant shall provide the requesting party with copies of any information to
which such party would be entitled in the course of a personal visit.
(b) If, at any time during the Term, Tenant is not a direct or indirect
fully-owned subsidiary of Xxxxxx Xxxxxxx Ltd., 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. 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 by Tenant or any Guarantor pursuant to the
provisions of the Securities Exchange Act of 1934, as amended, or any other Law.
All financial statements shall be prepared in accordance with GAAP consistently
applied. All annual financial statements shall be accompanied (i) by an opinion
of said accountants stating that (A) there are no qualifications as to the scope
of the audit and (B) the audit was performed in accordance with GAAP and (h) by
the affidavit of the president or a vice president of Tenant, dated within five
(5) days of the delivery of such statement, stating that (C) the affiant knows
of no Event of Default, or event which, upon notice or the passage of time or
both, would become an Event of Default which has occurred and is continuing
hereunder or, if any such event has occurred and is continuing, specifying the
nature and period of existence thereof and what action Tenant has taken or
proposes to take with respect thereto and (D) except as otherwise specified in
such affidavit, that Tenant has fulfilled all of its obligations under this
Lease which are required to be fulfilled on or prior to the date of such
affidavit.
(c) All quarterly and annual financial statements shall be accompanied by a
certification ("COVENANT CERTIFICATION") of the chief financial officer of
Xxxxxx Xxxxxxx Ltd. that Tenant and Guarantors, taken as a whole, are in
compliance with the Covenants (except as otherwise specified in the Covenant
Certification), together with a calculation of the Covenants described in
Section 6.01 of Article VI of the Credit Agreement (or comparable Covenants in a
Senior Credit Agreement).
29. DETERMINATION OF VALUE.
(a) Whenever a determination of Fair Market Value is required pursuant to
any provision of this Lease, such Fair Market Value shall be determined in
accordance with the following procedure:
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(i) Landlord and Tenant shall endeavor to agree upon such Fair Market
Value within thirty (30) days after the date (the "APPLICABLE INITIAL DATE") on
which (A) Tenant provides Landlord with notice of its intention to terminate
this Lease and purchase the Leased Premises pursuant to Paragraph 18, (B)
Landlord provides Tenant with notice of its intention to redetermine Fair Market
Value pursuant to Paragraph 20(c), (C) Landlord provides Tenant with notice of
Landlord's intention to require Tenant to make an offer to terminate this Lease
pursuant to Paragraph 23(a)(iii) or (D) Landlord receives an Option Exercise
Notice. Upon reaching such agreement, the parties shall execute an agreement
setting forth the amount of such Fair Market Value.
(ii) If the parties shall not have signed such agreement within
thirty (30) days after the Applicable Initial Date, Tenant shall within fifty
(50) days after the Applicable Initial Date select an appraiser and notify
Landlord in writing of the name, address and qualifications of such appraiser.
Within twenty (20) days following Landlord's receipt of Tenant's notice of the
appraiser selected by Tenant, Landlord shall select an appraiser and notify
Tenant of the name, address and qualifications of such appraiser. Such two
appraisers shall endeavor to agree upon Fair Market Value based on a written
appraisal made by each of them (and given to Landlord by Tenant) as of the
Relevant Date. If such two appraisers shall agree upon a Fair Market Value, the
amount of such Fair Market Value as so agreed shall be binding and conclusive
upon Landlord and Tenant.
(iii) If such two appraisers shall be unable to agree upon a Fair
Market Value within twenty (20) days after the selection of an appraiser by
Landlord, then such appraisers shall advise Landlord and Tenant of their
respective determination of Fair Market Value and shall select a third appraiser
to make the determination of Fair Market Value. The selection of the third
appraiser shall be binding and conclusive upon Landlord and Tenant.
(iv) If such two appraisers shall be unable to agree upon the
designation of a third appraiser within ten (10) days after the expiration of
the twenty (20) day period referred to in clause (iii) above, or if such third
appraiser does not make a determination of Fair Market Value within twenty (20)
days after his selection, then such third appraiser or a substituted third
appraiser, as applicable, shall, at the request of either party hereto, be
appointed by the President or Chairman of the American Arbitration Association
in New York, New York. The determination of Fair Market Value made by the third
appraiser appointed pursuant hereto shall be made within twenty (20) days after
such appointment.
(v) If a third appraiser is selected, Fair Market Value shall be the
average of the determination of Fair Market Value made by the third appraiser
and the determination of Fair Market Value made by the appraiser (selected
pursuant to Paragraph 29(a)(ii) hereof) whose determination of Fair Market Value
is nearest to that of the third appraiser. Such average shall be binding and
conclusive upon Landlord and Tenant.
(vi) All appraisers selected or appointed pursuant to this Paragraph
29(a) shall (A) be independent qualified MAI appraisers having no less than ten
(10) years experience involving properties similar to the Leased Premises, (B)
have no right, power or authority to alter or modify the provisions of this
Lease, (C) utilize the definition of Fair Market Value hereinabove set forth
above, and (D) be registered in the State if the State provides for or requires
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such registration. The Cost of the procedure described in this Paragraph 29(a)
above shall be borne by Tenant.
(b) If, by virtue of any delay, Fair Market Value is not determined by the
expiration or termination of the then current Term, then the date on which the
Term would otherwise expire or terminate shall be extended to the date specified
for termination in the particular provision of this Lease pursuant to which the
determination of Fair Market Value is being made.
(c) In determining Fair Market Value as defined in clause (b) of the
definition of Fair Market Value, the appraisers shall add (i) the present value
of the Rent for the remaining Term using a discount rate (which may be
determined by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and Guarantor and (ii) the present value of the
Leased Premises as of the end of such Term. The appraisers shall further assume
that no default then exists under the Lease, that Tenant has complied (and will
comply) with all provisions of the Lease, and that no Event of Default exists
under the Guaranty.
30. NON-RECOURSE AS TO LANDLORD. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be limited to actual damages and shall be
enforced only against the Leased Premises and not against any other assets,
properties or funds of (i) Landlord, (ii) any director, officer, member, general
partner, shareholder, limited partner, beneficiary, employee or agent of
Landlord or any general partner of Landlord or any of its members or general
partners (or any legal representative, heir, estate, successor or assign of any
thereof), (iii) any predecessor or successor partnership or corporation (or
other entity) of Landlord or any of its general partners, shareholders,
officers, directors, members, employees or agents, either directly or through
Landlord or its general partners, shareholders, officers, directors, employees
or agents or any predecessor or successor partnership or corporation (or other
entity), or (iv) any Person affiliated with any of the foregoing, or any
director, officer, employee or agent of any thereof.
31. FINANCING.
(a) Tenant agrees to pay all costs and expenses incurred by Landlord in
connection with the purchase, leasing and initial financing of the Leased
Premises including, without limitation, the cost of appraisals, environmental
reports, title insurance, surveys, legal fees and expenses and Lender's
commitment fees.
(b) Tenant agrees to pay, within three (3) business days of written demand
therefor, any cost, charge or expense (other than the principal of the Note and
interest thereon at the contract rate of interest specified therein) imposed
upon Landlord by Lender pursuant to the Note, the Mortgage or the Assignment
which is not caused solely by the gross negligence or willful misconduct of
Landlord and which is not otherwise reimbursed by Tenant to Landlord pursuant to
any other provision of this Lease.
(c) If Landlord desires to obtain or refinance any Loan, Tenant shall
negotiate in good faith with Landlord concerning any request made by any Lender
or proposed Lender for changes or modifications in this Lease. In particular,
Tenant shall agree, upon request
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of Landlord, to supply any such Lender with such notices and information as
Tenant is required to give to Landlord hereunder and to extend the rights of
Landlord hereunder to any such Lender and to consent to such financing if such
consent is requested by such Lender. Tenant shall provide any other consent or
statement and shall execute any and all other documents that such Lender
reasonably requires in connection with such financing, including any
environmental indemnity agreement, so long as the same do not materially
adversely affect any right, benefit or privilege of Tenant under this Lease or
materially increase Tenant's obligations under this Lease and a subordination,
non-disturbance and attornment agreement substantially in the form executed by
Tenant for the benefit of Xxxxxx Xxxxxxx Bank on or about the date hereof (the
"SNDA").
32. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. 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 Lender has
entered into the SNDA.
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. OPERATING COVENANTS. Tenant hereby covenants and agrees to comply
with all the covenants and agreements described in Exhibit "E" hereto.
35. OPTION TO PURCHASE.
(a) Landlord does hereby give and grant to Tenant the option to purchase
the Leased Premises (i) for a purchase price (the "PURCHASE PRICE") equal to the
Offer Amount and (ii) on any date (the "OPTION PURCHASE DATE") during the last
thirty (30) days of the tenth (10th) Lease Year (i.e., between August 1, 2012
and August 31, 2012) of the date of this Lease which is mutually agreeable to
Landlord and Tenant, but in any event not sooner than thirty (30) days after the
Fair Market Value Date. If Tenant intends to exercise such option, Tenant shall
give written notice to Landlord to such effect ("OPTION EXERCISE NOTICE") not
later than August 1, 2011 which notice once given shall be irrevocable. Promptly
upon receipt of such notice by Landlord, the parties shall commence to determine
Fair Market Value.
(b) If Tenant shall exercise the foregoing option to purchase the Leased
Premises, on the later to occur of (i) the Option Purchase Date or (ii) the date
when Tenant has paid the Offer Amount and has satisfied all other Monetary
Obligations, Landlord shall convey the Leased Premises to Tenant in accordance
with Paragraph 20 hereof; provided, that if an Event of Default under Paragraph
22(a)(i) has occurred and is continuing on the Option
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Xxxxxxxx Xxxx, Xxxxxxxx, at its sole option, may terminate Tenant's option to
purchase hereunder. IF THIS LEASE SHALL TERMINATE FOR ANY REASON PRIOR TO THE
DATE ORIGINALLY FIXED HEREIN FOR THE EXPIRATION OF THE TERM, OR IF TENANT SHALL
FAIL TO GIVE THE AFORESAID NOTICE OF INTENTION TO PURCHASE, TIME BEING OF THE
ESSENCE, THE OPTION PROVIDED IN THIS PARAGRAPH 35 AND ANY EXERCISE THEREOF BY
TENANT SHALL CEASE AND TERMINATE AND SHALL BE NULL AND VOID. IN SUCH EVENT
TENANT SHALL EXECUTE A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LANDLORD SHALL
REASONABLY REQUEST EVIDENCING THE TERMINATION OF ITS OPTIONS.
36. SECURITY DEPOSIT.
(a) Concurrently with the execution of this Lease, Tenant shall deliver to
Landlord within ten (10) days following receipt of Landlord's written request a
security deposit (the "Security Deposit") in the amount of Ten Million Four
Hundred Sixty-One Thousand Seven Hundred and no/100 Dollars ($10,461,700.00).
The Security Deposit shall, at Tenant's option, be in the form of (i) cash (the
"Cash Security Deposit") or (ii) an irrevocable Letter of Credit (the "Letter of
Credit") issued by a bank reasonably acceptable to Landlord and in form and
substance reasonably satisfactory to Landlord. Provided no Event of Default then
exists, Tenant shall have the right, at any time at its option, to substitute a
Cash Security Deposit for the Letter of Credit or to substitute a Letter of
Credit for the Cash Security Deposit. The Security Deposit shall serve as
security for the payment by Tenant of the Rent and all other charges or payments
to be paid hereunder and the performance of the covenants and obligations
contained herein.
If the Security Deposit is in the form of the Cash Security Deposit, the Cash
Security Deposit shall be deposited in an interest bearing money market account
with a national financial institution of Landlord's choosing and, so long as no
Event of Default shall have occurred and be continuing, upon the annual written
request of Tenant all accrued interest thereon shall be disbursed to Tenant on
an annual basis commencing on or about the first anniversary of the date of the
establishment of such account. So long as no Event of Default shall have
occurred and be continuing, the Cash Security Deposit shall not be commingled
with other funds of Landlord. If the Security Deposit is in the form of the
Letter of Credit, the Letter of Credit shall remain in full force and effect
during the Term, and shall be renewed at least thirty (30) days prior to any
expiration thereof. If Tenant fails to renew the Letter of Credit by such date,
time being of the essence, Landlord shall have the right at any time after the
thirtieth (30th) day before such expiration date to draw on the Letter of Credit
and to deposit the proceeds of the Letter of Credit in any account for the
benefit of Landlord or to declare an Event of Default. The proceeds of any draw
on the Letter of Credit shall be and constitute the Cash Security Deposit
hereunder, and shall be held as such by the Landlord.
(b) Notwithstanding anything to the contrary set forth herein, so long as
no Event of Default has occurred and is then continuing, the Security Deposit
shall be increased or reduced from time to time to reflect the credit rating on
the senior unsecured debt of either Tenant or any Guarantor as follows:
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RATING AMOUNT OF SECURITY DEPOSIT
------ --------------------------
(i) less than BB+ from S&P or less than Ba1 from Xxxxx'x 24 months of Basic Rent
(ii) BB+ from S&P or Ba1 from Xxxxx'x 18 months of Basic Rent
(iii) Between BBB+ and BBB- from S&P or between Baa1 12 months of Basic Rent
and Baa3 from Xxxxx'x
(iv) At least A- from S&P or at least A3 from Xxxxx'x 6 months of Basic Rent
If there is a split credit rating, the lower rating shall apply. At
no time shall the Security Deposit be less than an amount equal to six (6)
months Basic Rent. The principal amount of the Security Deposit required to be
maintained by Tenant at anytime under the terms of this Paragraph 36 is
hereinafter referred to as the "Required Amount".
Notwithstanding the foregoing, if the Security Deposit is in the form
of the Letter of Credit, Landlord shall be under no obligation to release such
Letter of Credit as otherwise required by the Paragraph 35(b) unless and until a
substitute letter of credit in the amount of the Required Amount and in form and
substance required by this Paragraph 35 is delivered to Landlord.
(c) If at any time an Event of Default shall have occurred and be
continuing, Landlord shall be entitled, at its sole discretion, to draw on the
Letter of Credit or to withdraw the Cash Security Deposit from the
above-described account(s) and to apply the proceeds in payment of (i) any Rent
or other charges for the payment of which Tenant shall be in default, (ii)
prepaid Basic Rent, (iii) any expense incurred by Landlord in curing any Event
of Default of Tenant, and/or (iv) any other sums due to Landlord in connection
with any Event of Default or the curing thereof, including, without limitation,
any damages incurred by Landlord by reason of such Event of Default, including
any rights of Landlord under Paragraph 23 or to do any combination of the
foregoing, all in such order or priority as Landlord shall so determine in its
sole discretion and Tenant acknowledges and agrees that such proceeds shall not
constitute assets or funds of Tenant or its estate, or be deemed to be held in
trust for Tenant, but shall be, for all purposes, the property of Landlord (or
Lender, to the extent assigned). Tenant further acknowledges and agrees that (1)
Landlord's application of the proceeds of the Security Deposit towards the
payment of Basic Rent, Additional Rent or the reduction of any damages due
Landlord in accordance with Paragraph 23 of this Lease, constitutes a fair and
reasonable use of such proceeds, and (2) the application of such proceeds by
Landlord towards the payment of Basic Rent, Additional Rent or any other sums
due under this Lease shall not constitute a cure by Tenant of the applicable
Event of Default provided that an Event of Default shall not exist if Tenant
restores the Security Deposit to its original amount within five (5) days after
notice from Landlord and in accordance with the requirements of this Paragraph
36, so that the Required Amount of the Security Deposit shall be again on
deposit with Landlord.
(d) At the expiration of the Term and so long as no Event of Default exists
the Letter of Credit or the Cash Security Deposit, as the case may be, shall be
returned to Tenant, and Landlord shall execute any documents required in order
to release the Letter of Credit or Cash Security Deposit to Tenant.
(e) Landlord shall have the right to designate Lender or any other holder
of a Mortgage as the beneficiary of the Letter of Credit or the Cash Security
Deposit during the term of the applicable Loan, and such Lender or other holder
of a Mortgage shall have
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all of the rights of Landlord under this Paragraph 36. Tenant covenants and
agrees to execute such agreements, consents and acknowledgments as may be
reasonably requested by Landlord from time to time to change the holder of the
Security Deposit as hereinabove provided.
37. PERMITTED LEASEHOLD MORTGAGE. Tenant shall not encumber its leasehold
estate in the Leased Premises, by means of a leasehold mortgage, deed of trust
pledge or similar security device, except by means of a Permitted Leasehold
Mortgage. The Leased Premises shall not be encumbered by more than one Permitted
Leasehold Mortgage at any one time. Tenant shall deliver to Landlord an executed
counterpart of any Permitted Leasehold Mortgage within ten (10) days after its
execution thereof, together with confirmation from the Permitted Leasehold
Mortgagee that it or they are Tenant's senior lenders or agent therefor.
38. RIGHTS OF PERMITTED LEASEHOLD MORTGAGEES. Landlord hereby agrees
that, so long as any Permitted Leasehold Mortgage shall remain unsatisfied of
record, the following provisions shall apply:
(a) Landlord, upon giving Tenant any notice of an Event of Default
hereunder, shall also give such notice to any Permitted Leasehold Mortgagee of
which it has actual notice.
(b) Upon the occurrence of an Event of Default hereunder, the Permitted
Leasehold Mortgagee shall, within thirty (30) days after the period provided for
in Paragraph 22 hereof, have the right to remedy such default, or cause the same
to be remedied, and Landlord shall accept such performance by or at the instance
of the Permitted Leasehold Mortgagee as if the same had been made by Tenant.
(c) Upon the occurrence of an Event of Default hereunder, Landlord shall
not terminate this Lease without first giving the Permitted Leasehold Mortgagee
sixty (60) days after notice thereof within which either (i) to obtain
possession of the Leased Premises (including possession by a receiver) or (ii)
to institute foreclosure proceedings or (iii) otherwise act to acquire Tenant's
interest under this Lease with diligence. The preceding sentence shall not
apply, and Landlord may take terminate this Lease if:
(i) an Event of Default shall have occurred that is then susceptible
of being cured by the Permitted Leasehold Mortgagee without obtaining possession
of the Leased Premises and the Permitted Leasehold Mortgagee (A) shall not have
cured any Event of Default consisting of a failure to pay Basic Rent or
Additional Rent within five (5) days after receipt of written notice from
Landlord of such Event of Default, or (B) shall not, within thirty (30) days
after the applicable cure period specified in Paragraph 22(b), have cured any
Event of Default other than a failure to pay Basic Rent or Additional Rent;
(ii) an Event of Default (other than any Event of Default described
in subparagraph 38(c)(i)(A) above) shall have occurred and either (A) the
Permitted Leasehold Mortgagee, within twenty (20) days after the receipt from
Landlord of written notice of such Event of Default, shall not have given
written notice to Landlord that such Event of Default cannot be remedied without
obtaining possession of the Leased Premises; or (B) the Permitted Leasehold
Mortgagee shall not have paid or caused to be paid all Rent and other sums
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payable under this Lease within the time periods required hereby; or (C) the
Permitted Leasehold Mortgagee shall, within twenty (20) days after receipt of
written notice from Landlord of such Event of Default, fail to give Landlord
reasonable written assurance that it shall, after obtaining possession, and
within thirty (30) days after the applicable cure period provided in Paragraph
22(b), cure any such Event of Default which is susceptible of cure only upon
taking possession; (D) the Permitted Leasehold Mortgagee shall fail to pursue
with diligence the activities specified in (i), (ii), or (iii) of the first
sentence of this Paragraph 38(c); or (5) the Permitted Leasehold Mortgagee
within thirty (30) days after the giving by Landlord of receipt of written
notice from Landlord of such Event of Default shall not have given written
notice to Landlord that such Event of Default is not reasonably susceptible of
being cured by the Permitted Leasehold Mortgagee.
(d) It is expressly understood, without limiting the generality of
the foregoing language, that any failure of Tenant to perform any of its
obligations under Paragraphs 18 or 29 is susceptible of cure by the Permitted
Leasehold Mortgagee without taking possession, and Tenant hereby authorizes the
Permitted Leasehold Mortgagee, on behalf of Tenant, to send any notice, make any
offer, pay any amount, select an appraiser, and perform any other obligation of
Tenant provided in said paragraphs.
(e) In addition to curing any Event of Default which is susceptible
of being cured without taking possession, the Permitted Leasehold Mortgagee
shall, during the period it is taking the action in clauses (i), (ii) or (iii)
of the first sentence of Paragraph 38(c)(i) above, pay Basic Rent and Additional
Rent as the same shall become due and payable and, upon obtaining possession or
acquiring Tenant's interest under this Lease, shall be required to commence to
cure within thirty (30) days of such acquisition or possession all Events of
Default then outstanding and reasonably susceptible of being cured by the
Permitted Leasehold Mortgage, and thereafter diligently prosecute such cure to
completion; provided, that: (i) the Permitted Leasehold Mortgagee shall not be
obligated to continue such possession or to continue such foreclosure
proceedings after such Events of Default shall have been cured; and (ii) the
Permitted Leasehold Mortgagee shall agree with Landlord in writing to comply
during the period of such forbearance with such of the terms, conditions and
covenants of this Lease as are reasonably susceptible of being complied with by
the Permitted Leasehold Mortgagee.
(f) It is understood and agreed that the Permitted Leasehold
Mortgagee or its designees or any purchaser in foreclosure proceedings
(including a corporation formed by any Permitted Leasehold Mortgagee or the
holder or holders of the obligations secured by the Permitted Leasehold
Mortgage) may become the legal owner and holder of this Lease through such
foreclosure proceedings or by assignment of this Lease in lieu of foreclosure
provided, however, that in such event the Permitted Leasehold Mortgagee shall
assure (in form and substance satisfactory to Landlord) all of the obligations
and liabilities of Tenant hereunder (except those which are personal to Tenant),
except that the Permitted Leasehold Mortgagee shall be released from liability
under this Lease if the substitute tenant is approved by Landlord in its
reasonable discretion.
(g) If a termination of this Lease occurs prior to the expiration of
the Term by reason of the rejection of this Lease or other action by a trustee,
court or debtor in possession pursuant to the Federal Bankruptcy Code, as
amended, or any other Federal, state or
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local insolvency laws, Landlord shall give the Permitted Leasehold Mortgagee
written notice that this Lease has been terminated, together with a statement of
any and all sums which would at that time be due under this Lease but for such
termination, and of all other Events of Default, if any, under this Lease then
known to Landlord. The Permitted Leasehold Mortgagee shall thereupon have the
option to obtain a new lease in accordance with and upon the following terms and
conditions: (i) such new lease shall be effective as of the date of termination
of this Lease and shall be for the remainder of the full original term and at
the rent and upon all the agreements, terms, covenants and conditions hereof;
(ii) such new lease shall require the tenant to perform any unfulfilled
obligations of Tenant under this Lease which are reasonably susceptible of being
performed by such tenant; (iii) if the Permitted Leasehold Mortgagee designates
an entity to enter into such new lease, the Permitted Leasehold Mortgagee shall
guaranty all of the obligations and liabilities of such designee hereunder
(except those which are personal to such designee, E.G., the obligations of such
designee to permit Landlord to inspect its books and records or to supply
financial statements to Landlord except that no such guaranty shall be required
if such designee is approved by Landlord in its reasonable discretion; (iv) upon
the execution of such new lease, the tenant named therein shall pay any and all
Rent which would at the time of the execution thereof be due under this Lease
but for such termination, less the net proceeds, if any, of any reletting or
other occupancy, after deducting from such proceeds all of Landlord's expenses
in connection with such reletting (including all reasonable repossession costs,
brokerage commissions, legal expenses, attorneys' fees, employees' expenses,
costs of alterations and expenses of preparation for reletting).
(h) Any notice or other communication which Landlord shall desire or is
required to give to or serve upon any Permitted Leasehold Mortgagee shall be
addressed to such Permitted Leasehold Mortgagee by notice in writing given to
Landlord in accordance with Paragraph 24 hereof. Any notice or other
communication which any Permitted Leasehold Mortgagee shall desire or is
required to give to or serve upon Landlord shall be deemed to have been duly
given or served if sent in accordance with Paragraph 24 hereof.
(i) The provisions of this Paragraph 38 shall be self-operative and shall
benefit any Permitted Leasehold Mortgagee of which Landlord has actual notice.
Notwithstanding the foregoing, Landlord shall, at the request of Tenant of the
Permitted Leasehold Mortgagee, and at the sole cost and expense of Tenant or the
Permitted Leasehold Mortgagee, enter into an agreement directly with the
Permitted Leasehold Mortgagee having terms and provisions identical to the
provisions of this Paragraph 38.
39. POST-CLOSING OBLIGATIONS.
a) On the date hereof, Tenant has deposited with Landlord the amount of
$131,250.00 (the "POST-CLOSING ESCROW") which shall secure the obligation of
Tenant to complete the roof repairs described in EXHIBIT "F" attached hereto
(the "ROOF REPAIRS"). The Post Closing Escrow shall be held and disbursed as set
forth in this Paragraph 39.
b) Tenant covenants and agrees to complete the Roof Repairs by the dates
specified in EXHIBIT "F". The Post-Closing Escrow shall be released to Tenant
within thirty (30) days following the date on which Landlord receives (i) a
report from Professional Service Industries, Inc. ("PSI") that the Roof Repairs
have been completed, and (ii) evidence from Tenant of payment in full for the
Roof Repairs. Landlord will cause PSI to inspect the Roof
-47-
Repairs and to furnish a report to Landlord, at Tenant's sole cost and expense,
within thirty (30) days after request therefor by Tenant.
c) If, at any time prior to the release of the Post-Closing Escrow, an
Event of Default shall have occurred and be continuing, Landlord shall use the
proceeds of the Post-Closing Escrow to the extent required to complete the Roof
Repairs, and be entitled, at its sole discretion, to apply any remaining balance
in payment of any Rent or other charges which have not been made pursuant to
this Lease and any other sums due to Landlord in connection with any default or
the curing thereof, including, without limitation, any damages incurred by
Landlord by reason of such default.
d) Landlord shall have the right to designate Lender or any other holder of
a Mortgage as the holder of the Post-Closing Escrow during the term of the
applicable Loan who shall have all of the rights of Landlord under this
Paragraph 39. Tenant covenants and agrees to execute such agreements, consents
and acknowledgments as may be requested by Landlord from time to time to change
the holder of the Post-Closing Escrow as hereinabove provided.
40) MISCELLANEOUS.
a) The paragraph headings in this Lease are used only for convenience in
finding the subject matters and are not part of this Lease or to be used in
determining the intent of the parties or otherwise interpreting this Lease.
b) As used in this Lease, the singular shall include the plural and any
gender shall include all genders as the context requires and the following words
and phrases shall have the following meanings: (i) "including" shall mean
"including without limitation"; (ii) "provisions" shall mean "provisions, terms,
agreements, covenants and/or conditions"; (iii) "lien" shall mean "lien, charge,
encumbrance, title retention agreement, pledge, security interest, mortgage
and/or deed of trust"; (iv) "obligation" shall mean "obligation, duty,
agreement, liability, covenant and/or condition"; (v) "any of the Leased
Premises" shall mean "the Leased Premises or any part thereof or interest
therein"; (vi) "any of the Land" shall mean "the Land or any part thereof or
interest therein"; (vii) "any of the Improvements" shall mean "the Improvements
or any part thereof or interest therein"; (viii) "any of the Equipment" shall
mean "the Equipment or any part thereof or interest therein"; and "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. Landlord shall not unreasonably withhold or delay its
consent whenever such consent is required under this Lease, except as otherwise
specifically provided herein and except that with respect to any assignment of
this Lease or subletting of the Leased Premises not expressly permitted by the
terms of this Lease, Landlord may withhold its consent for any reason or no
reason. Time is of the essence with respect to the performance by Tenant of its
obligations under this Lease.
d) Landlord shall in no event be construed for any purpose to be a partner,
joint venturer or associate of Tenant or of any subtenant, operator,
concessionaire or
-48-
licensee of Tenant with respect to any of the Leased Premises or otherwise in
the conduct of their respective businesses.
e) This Lease and any documents which may be executed by Tenant in
connection therewith at Landlord's request constitute the entire agreement
between the parties and supersede all prior understandings and agreements,
whether written or oral, between the parties hereto relating to the Leased
Premises and the transactions provided for herein. Landlord and Tenant are
business entities having substantial experience with the subject matter of this
Lease and have each fully participated in the negotiation and drafting of this
Lease. Accordingly, this Lease shall be construed without regard to the rule
that ambiguities in a document are to be construed against the drafter.
f) This Lease may be modified, amended, discharged or waived only by an
agreement in writing signed by the party against whom enforcement of any such
modification, amendment, discharge or waiver is sought.
g) The covenants of this Lease shall run with the land and bind Tenant, its
successors and assigns and all present and subsequent encumbrancers and
subtenants of any of the Leased Premises, and shall inure to the benefit of
Landlord, its successors and assigns. If there is more than one Tenant, the
obligations of each shall be joint and several.
h) If any one or more of the provisions contained in this Lease shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Lease, but this Lease shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
i) All exhibits attached hereto are incorporated herein as if fully set
forth.
j) This Lease shall be governed by and construed and enforced in accordance
with the laws of the State.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed under seal as of the day and year first above written.
LANDLORD:
ENERGY (NJ) QRS 15-10, INC.,
a Delaware corporation
By:
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
TENANT:
XXXXXX XXXXXXX REALTY SERVICES, INC.,
a Delaware corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-50-
EXHIBIT A
PREMISES
PART OF BLOCK 13, LOT 6
UNION TOWNSHIP, HUNTERDON COUNTY, NEW JERSEY
Beginning at a point in the southerly sideline of Frontage Road (50' wide) where
the same is intersected by the line dividing Xxxxx 00 Xxx 0 and lands now or
formerly Xxxxxx Xxxxxxx Corp., Xxxxx 00 Xxx 0, said point being the beginning
point as described in Deed Book 984 Page 431, and from said beginning point
running;
thence (1) along the southerly sideline of Frontage Road, S 61(degree)43'03" E,
1,605.00 feet to a point;
thence (2) along a line passing through Xxxxx 00 Xxx 0, Xxxxx 28(0)16'57" West
811.72' to a point;
thence (3) still along the same, North 61(0)42'00" West 792.68' to a point;
thence (4) still along the same, North 81(0)43'31" West 325.42' to a point in
the line of Block 13 Lot 7;
thence (5) along Lot 7, North 01(0)56'33" West 1,002.34' to an iron pipe found;
thence (6) N 26(degree)18'27" E, 56.77 feet to the point and place of beginning.
Containing a calculated area of 1,155,681 square feet or 26.531 acres of land.
The above description is in accordance with a map entitled "Plan of Proposed
Lease Area for Xxxxxx Xxxxxxx Corporation - Perryville I, Block 13, Xxx 0, Xxxxx
Xxxxxxxx, Xxxxxxxxx Xxxxxx, Xxx Xxxxxx" prepared by Van Cleef Engineering
Associates, Lebanon, New Jersey dated July 19, 2002, revised to August 8, 2002.
A-1
EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances of every
kind and nature whatsoever now or hereafter affixed or attached to or installed
in any of the Leased Premises (except as hereafter provided), including all
electrical, anti-pollution, heating, lighting (including hanging fluorescent
lighting), incinerating, power, air cooling, air conditioning, humidification,
sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and
ventilating systems, devices and machinery and all engines, pipes, pumps, tanks
(including exchange tanks and fuel storage tanks), motors, conduits, ducts,
steam circulation coils, blowers, steam lines, compressors, oil burners,
boilers, doors, windows, loading platforms, lavatory facilities, stairwells,
fencing (including cyclone fencing), passenger and freight elevators, overhead
cranes and garage units, together with all additions thereto, substitutions
therefor and replacements thereof required or permitted by this Lease, but
excluding all personal property and all trade fixtures, machinery, office,
manufacturing and warehouse equipment which are not necessary to the operation
of the buildings which constitute part of the Leased Premises for the uses
permitted under Paragraph 4(a) of this Lease.
B-1
EXHIBIT C
PERMITTED ENCUMBRANCES
C-1
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 $5,230,850 per
annum, payable quarterly in advance on each Basic Rent Payment Date, in equal
installments of $1,307,712.50 each. Pro rata Basic Rent for the period from the
date hereof through the twenty-fourth day of August, 2002 shall be paid on the
date hereof, and pro rata Basic Rent for the period from the twenty-fifth day of
the last month of the Term through the last day of the last month of the Term
shall be paid with the final quarterly installment of Basic Rent.
2. CPI ADJUSTMENTS TO BASIC RENT. The Basic Rent shall be subject to
adjustment, in the manner hereinafter set forth, for increases in the index
known as United States Department of Labor, Bureau of Labor Statistics, Consumer
Price Index, All Urban Consumers, United States City Average, All Items,
(1982-84=100) ("CPI") or the successor index that most closely approximates the
CPI. If the CPI shall be discontinued with no successor or comparable successor
index, Landlord and Tenant shall attempt to agree upon a substitute index or
formula, but if they are unable to so agree, then the matter shall be determined
by arbitration in accordance with the rules of the American Arbitration
Association then prevailing in New York City. Any decision or award resulting
from such arbitration shall be final and binding upon Landlord and Tenant and
judgment thereon may be entered in any court of competent jurisdiction. In no
event will the Basic Rent as adjusted by the CPI adjustment be less than the
Basic Rent in effect for the year period immediately preceding such adjustment.
3. EFFECTIVE DATES OF CPI ADJUSTMENTS. Basic Rent shall not be adjusted
to reflect changes in the CPI until the third (3rd) anniversary of the Basic
Rent Payment Date on which the first full quarterly installment of Basic Rent
shall be due and payable (the "FIRST FULL BASIC RENT PAYMENT DATE"). As of the
third (3rd) anniversary of the First Full Basic Rent Payment Date and thereafter
on the sixth (6th), ninth (9th), twelfth (12th), fifteenth (15th), eighteenth
(18th), and, if the initial Term is extended, on the twenty-first (21st),
twenty-fourth (24th), twenty-seventh (27th), thirtieth (30th), thirty-third
(33rd), thirty-sixth (36th) and thirty-ninth (39th) anniversaries of the First
Full Basic Rent Payment Date, Basic Rent shall be adjusted to reflect increases
in the CPI during the most recent three (3) year period immediately preceding
each of the foregoing dates (each such date being hereinafter referred to as the
"BASIC RENT ADJUSTMENT DATE").
D-1
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 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 10.07% 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 three (3) 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 three (3)
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 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.
D-2
EXHIBIT E
OPERATING COVENANTS
1. Tenant shall, and shall cause Guarantor and its respective
subsidiaries to, comply (A) with the covenants set forth in Article VI of that
certain Third Amended and Restated Term Loan and Revolving Credit Agreement,
dated as of August 2, 2002 among Xxxxxx Xxxxxxx LLC, Xxxxxx Xxxxxxx USA
Corporation, Xxxxxx Xxxxxxx Power Group, Inc. Xxxxxx Xxxxxxx Energy Corporation,
certain guarantors, certain lenders and Bank of America, N.A., as Administrative
Agent and Collateral Agent (the "Lender") (the "CREDIT AGREEMENT"), in the same
manner and to the same effect as if the terms of Article VI of the Credit
Agreement were set forth in full herein and (B) upon refinancing of the debt
described in the Credit Agreement, with the covenants set forth in the credit
agreement that replaces the Credit Agreement (any such replacement credit
agreement, the "SENIOR CREDIT AGREEMENT") pertaining to the matters addressed in
Article VI of the Credit Agreement in the same manner and to the same effect as
if the terms of such covenants of the Senior Credit Agreement were set forth
herein, and subject to the conditions set forth in the following sentence, after
giving effect to any modification, amendment or waiver of the Credit Agreement
or Senior Credit Agreement, as the case may be, a copy of which has been
delivered to Landlord, and for such purpose such terms of Article VI of the
Credit Agreement or Senior Credit Agreement, as the case may be, and such other
relevant provisions and definitions of the Credit Agreement or Senior Credit
Agreement, as the case may be, as are expressly referenced therein and
amendments, modifications, and waivers thereto are incorporated herein by
reference. Notwithstanding, and in limitation of, the foregoing, no amendment or
modification to, or waiver of, Article VI of the Credit Agreement or Senior
Credit Agreement, as the case may be, shall be effective and binding upon
Landlord (a) if the Lender or lender or lenders that replace the Lender (the
Lender or such replacement lender, the "SENIOR LENDER") receives or is entitled
to receive any payment or grant any other consideration ("SENIOR LENDER
CONSIDERATION") as a condition to such amendment, modification or waiver or, if
such consideration is required, unless concurrently with payment to the Senior
Lender Landlord receives Landlord's Consideration and (b) unless such amendment
or modification is executed or waiver granted no later than the earlier to occur
of (x) sixty (60) days following the earlier to occur of the date on which
Tenant notified the Senior Lender or the Senior Lender had actual knowledge of
the breach under the Credit Agreement or Senior Credit Agreement, as the case
may be, that gave rise to the need for an amendment, modification or waiver and
(y) the earlier of the date on which the Senior Lender causes the obligations of
Tenant and/or Guarantor under the Credit Agreement or the Senior Credit
Agreement, as the case may be, to become due prior to their stated maturity, or
sixty (60) days after Landlord notified Tenant of a breach of any covenant. If
at any time Tenant shall not be subject to the Credit Agreement or any Senior
Credit Agreement that contains covenants pertaining to the matters addressed in
Article VI of the Credit Agreement, Tenant shall, and shall cause Guarantor and
each of its subsidiaries to, comply with the covenants set forth in the most
recent Senior Credit Agreement pertaining to the matters addressed in Article VI
of the Credit Agreement in the same manner and to the same effect as if the
terms of the applicable provisions of such Senior Credit Agreement were set
forth in full herein, and giving effect to any modification, amendment or waiver
thereto that complies with the provisions of the foregoing sentence.
E-1
2. A copy of the relevant provisions of Article VI of the Credit
Agreement, and the amendments thereto, as the same are in effect on the date
hereof, are attached hereto.
3. For purposes of this Exhibit "E", (a) "Senior Lender's
Consideration" shall mean any consideration received by the Senior Lender as a
fee for the modification, amendment or waiver, but shall not include any payment
on account or in reduction of the indebtedness described in the Credit Agreement
or the Senior Credit Agreement, and (b) "Landlord's Consideration" shall be an
amount equal to the Senior Lender's Consideration, multiplied by a fraction, the
numerator of which is the Acquisition Cost and the denominator of which is the
amount of the current aggregate loan amount (as defined in the Credit Agreement)
or the maximum amount of credit available under the Senior Credit Agreement, as
the case may be. Landlord's Consideration shall be paid to Landlord upon the
same terms that Senior Lender's Consideration is paid to the Senior Lender;
provided, however, that Landlord's Consideration shall not exceed the lesser of
(x) $350,000 (plus Landlord's reasonable out of pocket costs), and (y) the
Senior Lender's Consideration received by the Senior Lender (plus Landlord's
reasonable out of pocket costs). Notwithstanding that any payment on account or
in reduction of the indebtedness described in the Credit Agreement or the Senior
Credit Agreement shall be made, no payment shall be required to be made to
Landlord as Landlord's consideration unless a Senior Lender Consideration is
paid concurrently with such payment on account or in reduction of the
indebtedness.
E-2
EXHIBIT F
I. ROOF REPAIRS (To be completed by January 31, 2003)
Replacement of the 25% of the roof located in the eastern section of
the building.
Estimated Cost ..................................................$131,250.00
F-1
