Exhibit 10.1
ABSOLUTE NET
LEASE
(One Far Mill Crossing,
Shelton, Connecticut)
THIS ABSOLUTE NET
LEASE (
“Lease ), dated solely for reference purposes as of
the 29 th
day of
March 2007, is entered into by and between HN PROPERTY OWNER
LLC , a Delaware limited liability company (the
“Landlord” ) and HEALTH NET OF THE NORTHEAST,
INC., a Delaware corporation (the “Tenant”
).
Recitals:
A. DACOURT GROUP, INC. , a
North Carolina corporation ( “Buyer” ) is the
buyer under that certain Purchase and Sale Agreement, dated as the
21st day of February, 2007, under which Health Net of California
Real Estate Holdings, Inc., a California corporation (the
“Seller” ), is the “ Seller
” (the “Sale Contract”
);
B. Pursuant to the Sale Contract,
Buyer assigned its rights thereunder to Landlord, and Landlord has
purchased the following property from Seller:
(i) that certain real property
located in the City of Shelton, County of Fairfield, State of
Connecticut, commonly known as One Far Mill Crossing, and more
particularly described in Exhibit A attached hereto
and made part hereof (the “Land” );
(ii) the building comprised of
approximately three hundred twenty-seven thousand three hundred
twenty-seven (327,327) square feet of gross leasable area (the
“Building” ), plus the structures, improvements
and fixtures erected now or hereafter located on the Land
(collectively, the “Improvements,” ) and
together with the Land, collectively, the
“Property” ;
(iii) all of Seller’s right,
title and interest, if any, in and to any rights and appurtenances
pertaining to the Land, including minerals, oil and gas rights,
air, water and development rights, roads, alleys, hereditaments,
benefits, privileges, tenements easements, streets and ways
adjacent to the Land, rights of ingress and egress thereto, any
strips, gaps and gores within or bounding the Land and in profits
or rights or appurtenances pertaining to the Land, and any
insurance proceeds owing to Seller for the loss of such rights or
appurtenances;
(iv) all of Seller’s right,
title and interest, if any, in the land laying in the bed of any
street, highway, road or avenue, opened or proposed, public or
private, in front of or adjoining the Land, to the center line
thereof; and
(v) all of Seller’s right,
title and interest, if any, in any award or payment made or to be
made in lieu of any of the foregoing or any portion thereof and any
unpaid award for damage to the Land or any of the Improvements by
reason of change of grade or closing of any street, road or avenue
(the property described in this clause (v), together with the
property described in clauses (iii) and (iv) above, are
collectively referred to in this Lease as the “
Appurtenant Rights ”).
(The Property and the Appurtenant
Rights so acquired by Landlord from Seller are hereinafter
collectively referred to as the “Premises”
.)
C. Landlord and Tenant desire to set
forth their understanding with respect to the use and operation of
the Premises, and their respective rights, duties and obligations
pertaining thereto, all upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of
the foregoing, and other good and valuable consideration paid by
each of the parties hereto to the other, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby covenant and agree as
follows:
Landlord hereby leases to Tenant,
and Tenant hereby leases from Landlord, the Premises in accordance
with the provisions of this Lease; and
SUBJECT ONLY TO all those certain
conditions and other matters affecting the title of the Premises as
set forth in Exhibit B attached hereto and made part
hereof (the “Permitted Encumbrances” )
(provided, however, that nothing in this paragraph shall
(i) be deemed to constitute a covenant or representation by
Landlord with respect to the condition of title, or
(ii) modify the terms of Section 7.3 below or
(iii) affect Tenant’s or Landlord’s rights and
obligations hereunder).
IT IS MUTUALLY COVENANTED AND AGREED
between Landlord and Tenant as follows:
ARTICLE 1
Term
1.1 Primary Term . The term
of this Lease (the “Primary Term”) shall commence on
March 29, 2007 (the “ Commencement Date ”), and
shall expire at 11:59 PM on the date (the “ Expiration
Date ”) which is the day immediately preceding the date
that is ten (10) years after the termination of the Stub
Period (defined below), unless extended or earlier terminated
pursuant to the terms of this Lease. The date that is the eleventh
(11th) day of a calendar month first occurring after the
Commencement Date is hereinafter referred to as the “Start
Date,” and the period of time commencing on the Commencement
Date and ending at 11:59 PM on the day immediately preceding the
Start Date is hereinafter referred to as the “ Stub
Period .” (By way of example only, if the Commencement
Date were to occur on March 25, 2007, as contemplated by the
Sale Contract, the Start Date would be April 11, 2007, the
Stub Period would be March 25, 2007 through April 10,
2007 (inclusive of both dates), and the Expiration Date would be
April 10, 2017.) Tenant acknowledges that except as
specifically set forth in this Lease, no work was or is required to
be performed by Landlord, no contributions were or are required to
be made by Landlord to Tenant and all conditions precedant to
Tenant’s obligations hereunder have been
satisfied.
1.2 Extended Terms. Tenant
shall have the right to extend this Lease for two
(2) consecutive extended terms of ten (10) years each
(collectively, the “Extended Terms” and
individually, an “Extended Term” , and together
with the Primary Term, called the “Term” ) upon
the expiration of the Primary Term or the preceding Extended Term,
as the case may be, unless this Lease shall be sooner terminated
pursuant to the terms of this Lease. If no Event of Default shall
exist on such commencement date, each Extended Term shall commence
on the day immediately succeeding the expiration date of the
Primary Term or the preceding Extended Term, as the case may be,
and shall end at midnight Eastern Time on the day immediately
preceding the tenth (10th) anniversary of the first day of
such Extended Term. Provided there is no Event of Default at the
time of exercise of such option, Tenant may exercise each said
option to extend this Lease for an Extended Term by giving written
notice to that effect at least eighteen (18) months prior to
the expiration of the then-existing Term. If Tenant does not
exercise any such option in a timely manner, then all rights to
extend the Lease automatically shall terminate, Landlord shall have
the right during the remainder of the Term of this Lease to
advertise the availability of the Premises for sale or reletting
and to erect upon the Premises signs appropriate for the purpose of
indicating such availability. The phrase “Term of this
Lease” or “ term hereof” means the Primary
Term, plus any Extended Term with respect to which the right has
been exercised. Except as otherwise expressly provided herein, all
of the provisions of this Lease shall be applicable during each
Extended Term.
1.3 Base Rent During Extended
Terms .
(a) If Tenant’s option to
extend the term of this Lease is exercised, the Base Rent for each
Extended Term shall be equal to the ninety-five percent
(95%) of the Fair Market Rent for the Premises, as determined
pursuant to this Section 1.3.
(b) Within thirty (30) days
after Tenant exercises its option to extend, Landlord will advise
Tenant of its determination of Fair Market Rent for the Extended
Term in question. If Landlord and Tenant agree on the Fair Market
Value for the Extended Term, they shall execute a written
confirmation of such extension reflecting thereon the agreed upon
Base Rent. If Landlord and Tenant cannot agree on the Base Rent for
the Extended Term within thirty (30) days of the date that
Landlord provides Tenant with Landlord’s determination of the
new rent, then within thirty (30) days after such failure to
reach agreement, Landlord shall furnish to
Tenant a notice in writing (the
“Landlord’s Notice” ) stating what
Landlord perceives to be the Fair Market Rent projected to the
commencement date of the Extended Term. Landlord’s Notice
shall be accompanied by a statement from a qualified real estate
appraiser stating the appraiser’s opinion of Fair Market and
that it has been determined in accordance with this
Section 1.3. If Tenant disagrees with the estimate of Fair
Market Rent submitted by Landlord with Landlord’s Notice,
then within thirty (30) days after receipt of Landlord’s
Notice, Tenant shall have the right to submit to Landlord an
appraisal by a qualified real estate appraiser of Fair Market Rent
effective as of the commencement date of the Extended Term. If the
higher estimate is not more than one hundred five percent
(105%) of the lower estimate, the new Base Rent shall be
established as the average of the two appraisals. If not, the two
appraisers acting on behalf of Landlord and Tenant, shall, within
fifteen (15) days after Tenant’s appraisal has been
submitted, jointly appoint a third qualified real estate appraiser
(the “Referee” ). If the two appraisers are
unable to agree upon the selection of a Referee, then the Referee
shall be selected within fifteen (15) days thereafter by an
arbitrator pursuant to the rules of the American Arbitration
Association. The Referee shall, within thirty (30) days after
appointment, render his or her decision which decision shall be
strictly limited to choosing one of the two determinations made by
the two appraisers chosen by Landlord and Tenant with respect to
Fair Market Rent. The decision of the Referee shall be binding upon
Landlord and Tenant and shall constitute the Base Rent for the
applicable Extended Term. Landlord and Tenant shall each pay for
their own appraisal, and the cost of the Referee shall be shared
equally by Landlord and Tenant.
(c) In determining the
“Fair Market Rent,” the highest and best use for
the Premises, the Improvements, or the Land, will not be
considered, but rather only the then-prevailing rent for premises
comparable in size and use to the Premises, leased for a period
equal to the Extended Term by a major creditworthy tenant occupying
more than 100,000 rentable square feet of comparable space in
similar commercial buildings located within five (5) miles of
the Premises, taking into consideration the lease term, age of the
Premises, all allowances for tenant improvements (including
architectural and engineering fees), moving allowances, landlord
expenses, operating expense pass throughs, rent abatement,
brokerage expenses, tenant benefits or any other market concessions
which may be commonly available at the commencement of such
Extended Term. Under no circumstances shall this determination take
into account any value attributable to the rental value of the
Parking Structure, the use of which shall be free to Tenant during
any Extended Term hereunder. All such relevant inducements
available in the market shall be credited against Fair Market Rent
to the extent not received by Tenant. In no event shall Tenant, or
its employees or visitors, be charged for parking. Notwithstanding
any contrary provision of this Section 1.3 :
(i) in no event shall the Base Rent,
for the first twelve months of the first Extended Term, be less
than $8,114,436.00 per year, nor shall it be more than
$8,510,502.00 per year;
(ii) in no event shall the Base
Rent, for the first twelve months of the second Extended Term, be
less than the Base Rent in effect as of the last day of the first
Extended Term, nor shall it be more than an amount that is equal to
one hundred and four and 88/100ths percent (104.88%) of the
Base Rent in effect as of the last day of the first Extended Term;
and
(iii) as of the first anniversary of
the beginning of each Extended Term, and each anniversary
thereafter during such Extended Term, the Base Rent shall be
increased by three percent (3%).
(d) Notwithstanding anything in this
Section 1.3 to the contrary, if the Referee selects
Landlord’s appraisal, Tenant may rescind the exercise of its
option to extend by so notifying Landlord within ten (10) days
after Tenant’s receipt of the Referee’s determination
(the notice so given is hereinafter referred to as a
“Rescission Notice” ); in such event,
(i) Tenant shall promptly reimburse Landlord for the cost of
Landlord’s appraisal and shall pay for the full cost of the
Referee, and (ii) the Term of the Lease shall, at
Landlord’s option (which option must be exercised by a notice
given to Tenant within ten (10) days after receipt of the
Rescission Notice), be extended for six (6) months past the
Expiration Date, on all the same terms and conditions as the Term
then in effect, except Tenant shall have no further option to
extend the Term.
(e) The Premises shall be leased
during the Extended Terms “AS-IS” in their then-current
condition, and in no event shall Landlord have any obligation to
pay to Tenant any refurbishing or tenant improvement allowance, or
any obligation to pay any leasing commissions to any broker
representing Tenant in connection therewith.
ARTICLE 2
Rent
2.1 Base Rent; No Offset.
Tenant covenants and agrees to pay to Landlord, promptly when due,
without notice or demand and without deduction or set-off of any
amount for any reason whatsoever, annual rent base rent (the
“Base Rent” ) for the Premises during the Term
according to the following schedule:
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Annual Base Rent*
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Monthly Base Rent*
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Stub Period
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$
|
18,639.21 per day
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N/A
|
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Start Date through Month 12
thereafter
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$
|
6,803,313.00
|
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$
|
566,942.75
|
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Months 13-24
|
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$
|
6,989,889.00
|
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$
|
582,490.75
|
|
Months 25-36
|
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$
|
7,809,839.00
|
|
$
|
650,819.92
|
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Months 37-48
|
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$
|
8,007,778.00
|
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$
|
667,314.83
|
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Months 49-60
|
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$
|
8,211,655.00
|
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$
|
684,304.58
|
|
Months 61-72
|
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$
|
8,421,648.00
|
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$
|
701,804.00
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Months 73-84
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$
|
8,637,942.00
|
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$
|
719,828.50
|
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Months 85-96
|
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$
|
8,860,724.00
|
|
$
|
738,393.67
|
|
Months 97-108
|
|
$
|
9,090,189.00
|
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$
|
757,515.75
|
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Months 109-120
|
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$
|
9,326,538.00
|
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$
|
777,211.50
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*
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The periods
(other than the Stub Period) refer to the time commencing on and
after the Start Date. The parties acknowledge that any statement of
gross leasable area of the Building, or of the square footage of
the Land, set forth in this Lease or in any materials provided by
any representative of Tenant or Tenant’s affiliated
companies, or by any brokers or other parties, is merely an
approximation, and if it is ultimately determined that the actual
gross leasable area of the Building, or the actual area of the
Land, is more or less than as stated in this Lease or in other
materials, such discrepancy shall not result in any modification in
the monthly and annual Base Rent amounts to be paid under this
Lease.
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2.2 Partial Months; Due Date.
Notwithstanding the foregoing, i) the Base Rent payable for Stub
Period shall be payable in advance on the Commencement Date, and
ii) once the Commencement Date has occurred, the parties shall
enter into a written amendment to this Lease that memorializes the
parties’ agreement on the Start Date, the Stub Period, the
Expiration Date, and the calendar dates for each increase in Base
Rent pursuant to Section 2.1 above. Base Rent shall be payable
in installments, in advance, on the tenth (10th) day of each
month during the Term (“ Due Dates
”).
2.3 Good Funds. The Base Rent
shall be paid monthly, in advance, in good United States funds on
the Due Dates. The Base Rent must be paid by wire transfer of
funds, per instructions to be provided by Landlord prior to the
Commencement Date.
2.4 Full Net Lease . It is
intended that the Base Rent shall be an absolutely net return to
Landlord throughout the Term of this Lease, free of any expense,
charge, or other deduction whatsoever with respect to the Premises
or Landlord’s interest therein, or the ownership, leasing,
operation, management, maintenance, repair, use or occupation
thereof. This Lease is an “absolute lease” and
Tenant’s obligations arising or accruing during the Term to
pay
all Base Rent, additional rent and all other
payments hereunder required to be made by Tenant shall be absolute
and unconditional and Tenant shall pay all such amounts without
notice, demand, counterclaim, set-off, deduction or defense and
without abatement, suspension, deferment, diminution or reduction
(except as otherwise expressly provided in this Lease), free from
any charges, assessments, impositions, expenses or deductions of
any and every kind or nature whatsoever. All costs, expenses and
obligations of every kind and nature whatsoever relating to the
Property and the appurtenances thereto and the use, maintenance and
occupancy thereof which may arise or become due and payable with
respect to the Term (whether or not the same shall become payable
during such Term or thereafter) or for any period prior to the
expiration of the Term shall be paid by Tenant (except as otherwise
expressly provided in this Lease). Tenant assumes the sole
responsibility for the condition, use, operation, maintenance,
underletting and management of the Premises, and Landlord shall
have no responsibility in respect thereof and shall have no
liability for damage to Tenant’s personality or any subtenant
of Tenant on any account or for any reason whatsoever. Except as
otherwise expressly provided in Article 10 or Article 11,
this Lease shall not terminate, nor shall Tenant have any right to
terminate, rescind or void this Lease or to be released or
discharged from any obligations or liabilities hereunder for any
reason, including, without limitation: (i) any damage to or
destruction of the Premises; (ii) any restriction, deprivation
(including eviction) or prevention of, or any interference with,
any use or the occupancy of the Premises; (iii) any
condemnation, requisition or other taking or sale of the use,
occupancy or title of or to the Premises; (iv) any action,
omission or breach on the part of Landlord under this Lease or
under any other agreement between Landlord and Tenant; or
(v) the inadequacy or failure of the description of the
Premises to demise and let to Tenant the property intended to be
leased hereby. Tenant will remain obligated under this Lease in
accordance with its terms, and will not take any action to
terminate, rescind or void this Lease as a result of any
bankruptcy, insolvency, reorganization, liquidation, dissolution or
other proceeding affecting Landlord or any assignee of Landlord, or
any action with respect to this Lease which may be taken by any
receiver, trustee or liquidator or by any court.
2.5 Interest on Delinquent
Rent. Any Base Rent or other sums due to Landlord under this
Lease and not paid on or before the due date therefor shall bear
interest at the Interest Rate from the due date until paid. The
“Interest Rate” shall equal the lesser of
(i) the highest rate allowable by law, or (ii) the
greater of (a) the rate publicly announced from time to time,
by Citibank N.A. or its successor as its Prime Rate or its
Reference Rate or other similar benchmark, plus five percent (5%),
and (b) thirteen percent (13%) per annum, or
(iii) the default rate charged by the Mortgagee (as defined
below) on delinquent loan payments (and taking into account any
grace or cure periods permitted by such Mortgagee). Payment of such
interest shall not excuse or cure any default by Tenant under this
Lease. As used in this Lease, the term
“Mortgagee” shall mean any lender whose loan
constitutes a first lien on the Premises and mezzanine debt lender
which acquired a lien on the membership interests in Landlord in
connection with Landlord’s acquisition of the Premises and
the foregoing entities’ successors and assigns.
2.6 Late Charge. Tenant
hereby acknowledges that late payment by Tenant of Base Rent, and
other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges
which may be imposed on Landlord by the terms of any mortgage or
trust deed covering the Premises. Accordingly, if any installment
of Base Rent or any other sum due from Tenant shall not be received
by Landlord on or before the due date thereof, Tenant shall pay to
Landlord a late charge equal to five percent (5%) of such
overdue amount or such lesser amount charged by the Mortgagee on
delinquent loan payments (taking into account any grace or cure
periods permitted by such Mortgagee). It is agreed that such late
charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant. Acceptance
of such late charge by Landlord shall in no event constitute a
waiver of any Tenant default with respect to such overdue amount,
nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder, including but not limited to the
collection of interest on such late payment.
ARTICLE 3
Expenses,
Taxes
3.1 Tenant to Pay All Expenses
and Taxes. Tenant shall pay and discharge, punctually as and
when the same shall become due and payable, each and every item of
expense,
of every kind and nature whatsoever relating to
the ownership, use, maintenance, operation, or occupancy of the
Property, or for the payment of which Landlord is, or shall or may
be or become, liable by reason of any rights or interest of
Landlord in or under this Lease, including all real estate taxes,
personal property taxes, privilege taxes, excise taxes, business
and occupation taxes, gross sales taxes, including any sales tax
imposed on the rental payments hereunder or under a sublease,
occupational license taxes, water charges, sewer charges,
assessments of any nature and all other governmental impositions
and charges of every kind and nature whatsoever (collectively, the
“Taxes,” and individually, a
“Tax” ), when the same shall be due and payable
without penalty or interest. It is the intention of the parties
hereto that, insofar as the same may lawfully be done, Landlord
shall be, except as specifically provided for herein, free from all
expenses in any way related to the Premises and the use,
maintenance, or occupancy thereof.
3.2 Proration. Any Tax
relating to a fiscal period of any taxing authority falling
partially within and partially outside the Term of this Lease,
shall be apportioned and adjusted between Landlord and
Tenant.
3.3 Proof of Payment. Tenant
shall furnish to Landlord, not later than fifteen (15) days
prior to the last date when any Tax must be paid by Tenant as
provided in this Article without premium, interest or penalty,
official receipts of the appropriate taxing authority or if not
available, a copy of Tenant’s cancelled check for payment
with receipts to follow evidencing the payment thereof.
3.4 Right to Contest.
Provided that an Event of Default has not occurred and is then
continuing, Tenant may defer payment of a Tax so long as the
validity or the amount thereof is contested by Tenant with
diligence and in good faith, provided, however, that
(a) Landlord determines that such contest suspends the
obligation to pay the tax or assessment and such nonpayment will
not permit or result in the sale, loss or forfeiture of any part of
the Property and (b) Tenant shall furnish to Landlord cash or
a bond in an amount and on terms satisfactory to Landlord and shall
pay the Tax and a reasonable additional sum to cover possible
interest, costs and penalties in sufficient time to such that
nonpayment will not subject the Premises or any part thereof to
sale, loss, forfeiture or other liability by reason of such
nonpayment nor subject any party to any potential criminal
liability. Such contest shall be at Tenant’s sole cost and
expense. Tenant covenants to indemnify and save harmless Landlord
from any costs or expenses incurred by Landlord as a result of such
contest and, in all events pay such taxes and other amount prior to
the issuance of an order under which the Property may be
sold.
3.5 Exclusions.
Notwithstanding anything to the contrary in this Article 3 ,
“Taxes” shall not include, and in no event shall
Tenant be required to pay i) any inheritance, estate, succession,
partnership, corporate, capital stock, gift, income or profits tax
imposed upon Landlord, provided that such exclusion shall not apply
to any such tax based on Landlord’s gross receipts or does
not provide an expense for Landlord’s interest costs or a
depreciation allowance, or ii) any penalties resulting from
Landlord’s failure to timely file any tax or informational
returns when due (unless Tenant, and not Landlord, is expressly
required by law to pay such tax), or iii) any cost directly
attributable to Landlord’s transfer of its interest in the
Premises or any portion thereof (including, without limitation, any
transfer or conveyance taxes).
3.6 Impounds. In the event
that (i) Lease Guarantor is not liable under the Guaranty of
Lease, (ii) insurance premiums have not been paid when due or
Taxes have not been paid at least 15 days prior to the due date
therefore, (iii) Tenant failed to provide proof to Landlord
and Mortgagee of such payment as required by the terms of
Section 3.3 above, or (iv) Lease Guarantor is
downgraded to a rating below BB- (by S&P) or below Ba3 (by
Moody’s) or (v) there has been an Event of Default under
this Lease or the Guaranty of Lease, then upon demand therefore, in
addition to monthly Base Rent payments, as such payments are due,
Landlord shall have the right to require Tenant to thereafter make
monthly payments to Landlord (or at Landlord’s direction) in
amounts sufficient to pay, in advance, one-twelfth (1/12th) of
the amount reasonably estimated by Landlord to equal annual Taxes
and insurance premiums (the “Impound Funds” )
each as reasonably determined by Landlord. So long as no Event of
Default hereunder has occurred and is continuing, all Impound Funds
shall be held by Landlord’s Mortgagee in an account (the
“ Impound Account ”) to pay said taxes,
assessments and insurance premiums in one installment before the
same become delinquent. Tenant shall be responsible for ensuring
the receipt by Landlord and Mortgagee, at least thirty
(30) days prior to the respective due date for payment
thereof, of all bills, invoices and statements for all taxes,
assessments and insurance premiums to be paid from the Impound
Account, and so long as no Event of Default
hereunder or under this Lease has occurred and
is continuing, Landlord shall cause Mortgagee to pay the
governmental authority or other party entitled thereto directly to
the extent funds are available for such purpose in the Impound
Account. In making any payment from the Impound Account, Landlord
and its Mortgagee shall be entitled to rely on any bill, statement
or estimate procured from the appropriate public office or
insurance company or agent without any inquiry into the accuracy of
such bill, statement or estimate and without any inquiry into the
accuracy, validity, enforceability or contestability of any tax,
assessment, valuation, sale, forfeiture, tax lien or title or claim
thereof. No interest on funds contained in the Impound Account
shall be paid. If the total funds in the Impound Account shall
exceed the amount of payments actually applied by Landlord for the
purposes of the Impound Account, such excess may be credited by
Landlord on subsequent payments to be made hereunder or, at the
option of Landlord, refunded to Tenant. If however, the Impound
Account shall not contain sufficient funds to pay the sums required
when the same shall become due and payable, Tenant shall, within
five (5) days after receipt of written notice thereof, deposit
the full amount of any such deficiency.
ARTICLE 4
Use and Compliance with Laws,
Etc.; Tenant’s Environmental Covenants
4.1 Use. Tenant agrees that,
unless and to the extent that it shall obtain Landlord’s
prior approval (which may be withheld in Landlord’s absolute
discretion), it will not use the Premises, nor will it suffer or
permit the same to be used, for any purpose that (i) is not
permitted under applicable zoning regulations, or (ii) would
void insurance policies required to be carried by Tenant pursuant
to the terms of this Lease, or (iii) would cause material,
permanent damage to the structural components of the Building, or
(iv) would violate the Permitted Encumbrances, or
(v) would violate Tenant’s obligations regarding the
storage of Hazardous Materials pursuant to Section 4.3
below, or (vi) would involve the storage or sale of gasoline
(in no event, however, shall the terms of this
Section 4.1 or any other provision of this Lease
prohibit Tenant from installing, maintaining, or operating one or
more stand-by emergency generators or gas-operated maintenance
equipment on the Property, provided that such activities are
conducted in compliance with all applicable Legal Requirements, as
defined below, Hazardous Materials Laws (as defined in
Section 4.2 below) and only reasonably necessary
amounts of fuel are stored at the Property). Tenant shall not seek,
make, consent to or acquiesce in any change in the zoning of the
Property.
4.2 Compliance with Laws.
Tenant shall, throughout the Term hereof, promptly comply or cause
compliance with all laws and ordinances and the orders, rules,
regulations, and requirements (“ Legal Requirements
”) of all federal, state, county and municipal governments
which may be applicable to the Premises, foreseen or unforeseen,
ordinary as well as extraordinary, even if the same shall require
structural or extraordinary repairs, alterations or additions.
Tenant accepts the Premises in the actual condition in which the
same are as of the Commencement Date. If the use of the Property
becomes a non-conforming use, Tenant shall not permit such use to
be discontinued or abandoned. Tenant shall comply and have sole
responsibility for complying with the provisions of the Americans
with Disabilities Act as now promulgated or as amended after the
date hereof and any similar type of legislation, federal, state or
local or other legislation hereinafter promulgated or hereinafter
amended by any governmental authority applicable to the Premises.
Tenant and Guarantor each is (i) not currently identified on
the Specially Designated Nationals and Blocked Persons List
maintained by the Office of Foreign Assets Control, Department of
the Treasury (“OFAC”) and/or on any other similar list
and is in compliance with OFAC, (ii) not an entity with whom a
citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other
prohibition of United States law, regulation, or Executive Order of
the President of the United States, (iii) not an
“Embargoed Person”, (iv) in compliance with the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 and the
rules and regulations promulgated thereunder. None of the funds or
assets of Tenant or Guarantor constitute property of, or are
beneficially owned, directly or indirectly, by any person, entity
or government that is an Embargoed Person and no Embargoed Person
has any interest in Tenant.
4.3 Tenant’s Environmental
Covenants .
(a) Tenant shall not use or permit
the use of the Premises in any manner which would permit or cause
any Hazardous Materials (as defined below) to be stored upon or
used in connection with the Premises in violation of applicable
Hazardous Material Laws (as
defined below). Tenant shall not permit any
condition to exist in violation of applicable law which is or may
be categorized by any federal, state or local government or agency
having jurisdiction over the Premises as an actual or potential
threat or danger to the environment.
(b) Landlord shall have no
obligation whatsoever, and Tenant shall be obligated, to keep the
Premises in compliance with the Hazardous Material Laws, it being
agreed that such and, obligation (including the obligation to cure
any violation of Hazardous Material Laws that occurred as a result
of any act or omission arising prior to, after the Commencement
Date or which violation occurred prior to, after or is ongoing as
of, the Commencement Date) shall be entirely
Tenant’s.
(c) Tenant shall protect, indemnify
and hold harmless Landlord, Mortgagee, and all Landlord-Related
Parties (as defined in Section 6.1 below) from and
against any and all claim, loss, damage, cost, expense, liability,
fines, penalties, charges, administrative and judicial proceedings
and orders, judgments, remedial action requirements, enforcement
actions of any kind (including, without limitation, reasonable
attorneys’ fees and disbursements of any indemnified party)
to the extent directly or indirectly arising out of or attributable
to the breach of any of the covenants, representations and
warranties of this Article 4 or the presence, use,
generation, manufacture, production, handling, treatment, removal,
storage, release, threatened release, discharge, disposal,
decontamination, clean-up or transport of Hazardous Materials on,
under, from or about the Premises, or any other activity carried on
or undertaken on the Premises, whether prior to or during the Term
(but in no event shall Tenant have any liability as to any of the
foregoing events that arise solely as a result of an act or
omission occurring after the later to occur of the expiration of
the Term and Tenant’s vacation of the Property) and whether
by Tenant or any predecessor in title or any employees, agents,
contractors or subcontractors of Tenant or any predecessor in
title, or any third persons at any time, whether occupying or
present on the Premises or any other premises, whether contiguous,
adjacent or located proximate to the Premises, including, without
limitation: (a) the costs of any required or necessary repair,
cleanup or detoxification of the Premises and the preparation and
implementation of any closure, remedial or other required plans
including, without limitation, (i) the costs of removal or
remedial action incurred by the United States Government or the
state in which the Premises is located, or response costs incurred
by any other person, or damages from injury to, destruction of, or
loss of natural resources, including the costs of assessing such
injury, destruction on loss, incurred pursuant to any Hazardous
Materials Laws; (ii) the clean-up costs, fines, damages or
penalties incurred pursuant to the provisions of applicable state
law; and (iii) the cost and expenses of abatement, correction
or clean-up, fines, damages, response costs or penalties which
arise from the provisions of any other statute, state or federal;
and (b) liability for personal injury or premises damage,
including damages assessed for the maintenance of the public or
private nuisance, response costs or for the carrying on of an
abnormally dangerous activity.
(d) As used herein,
“Hazardous Materials” means any material,
substance or waste designated as hazardous, toxic, radioactive,
injurious or potentially injurious to human health or the
environment, or as a pollutant or contaminant, or words of similar
import, under any Hazardous Materials Law (as defined below),
including, but not limited to, petroleum and petroleum products,
asbestos, polychlorinated biphenyls, urea formaldehyde, radon gas,
radioactive matter, medical waste, and chemicals which may cause
cancer or reproductive toxicity. As used herein,
“Hazardous Materials Law” means any federal,
state or local law, statute, regulation or ordinance now or
hereafter in force, as amended from time to time, pertaining to
materials, substances or wastes which are injurious or potentially
injurious to human health or the environment or the release,
disposal or transportation of which is otherwise regulated by any
agency of the federal, state or any local government with
jurisdiction over the Premises or any such material, substance or
waste removed therefrom, or in any way pertaining to pollution or
contamination of the air, soil, surface water or groundwater,
including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.), the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Safe
Drinking Water Act (42 U.S.C. Section 300f et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801
et seq.), the Toxic Substance Control Act (15 U.S.C.
Section 2601 et seq.).
(e) Tenant shall not install or use
any underground storage tanks and shall prohibit the use,
generation, handling, storage and disposal of Hazardous Substance
by all
parties, including invitees and trespasses, and
without limiting the generality of the foregoing, during the term
of this Lease, shall not install on the Property or permit to be
installed in the Improvements asbestos or any substance containing
asbestos. If required by Landlord (including if recommended in any
third-party environmental report delivered to Landlord) or under
any Environmental Law, Tenant shall maintain an Operations and
Maintenance Program (“ O&M Program ”) for
the management of asbestos, lead-based paint, radon or any other
Hazardous Substances at the Property.
(f) Tenant shall promptly notify
Landlord if Tenant shall become aware of (i) any Hazardous
Substances at, on, under, affecting or threatening to affect the
Property, (ii) any lien, action or notice affecting or
threatening to affect the Property or Tenant resulting from any
violation or alleged violation of Environmental Law, (iii) any
investigation, inquiry or proceeding concerning Tenant or the
Property pursuant to any Environmental Law or otherwise relating to
Hazardous Substances, or (iv) any occurrence, condition or
state of facts which would render any representation or warranty in
this Section incorrect in any respect if mad at the time of such
discovery. Further, immediately upon receipt of the same, Tenant
shall deliver to Landlord copies of any and all orders, notices,
permits, applications, reports, potential non-compliance with any
Environmental Laws in connection with the Property or presence or
existence of any Hazardous Substances at, on, about, under, within,
near or in connection with the Property. Tenant shall, promptly and
when and as required, at Tenant’s sole cost and expense, take
all actions as shall be necessary or advisable for compliance with
the terms of this Section or for the remediation of any and all
portions of the Property or other affected property, including,
without limitation, all investigative, monitoring, removal,
containment, remedial and response actions in accordance with all
applicable Environmental Laws (and in all events in a manner
satisfactory to Landlord), and shall further pay or cause to be
paid, at no expense to Landlord, all remediation, response,
administrative and enforcement costs of applicable governmental
agencies which may be asserted against the Property. In the event
Tenant fails to do so (i) Landlord may, but shall not be
obligated to undertake remediation at the Property or other
affected property necessary to bring the Property into conformance
with the terms of Environmental Laws and (ii) Tenant hereby
grants to Landlord and its agents and employees access to the
Property and a license to do all things Landlord shall deem
necessary to bring the Property into conformance with Environmental
Laws. Any and all out-of-pocket costs and reasonable expenses
reasonably incurred by Landlord in connection therewith, together
with interest thereon at the Interest Rate, shall be immediately
paid on demand. Tenant covenants and agrees, at Tenant’s sole
cost and expense, to indemnify, defend (at trial and appellate
levels, and with attorneys, consultants and experts acceptable to
Landlord and hold Landlord harmless from and against any and all
liens, damages, losses, liabilities, obligations, settlement
payments, penalties, assessments, citations, directives, claims,
litigation, demands, defenses, judgments, suits, proceedings,
costs, disbursements or expenses of any kind or of any nature
whatsoever (including, without limitation, reasonable
attorneys’ consultants’ and experts’ fees and
disbursements actually incurred in investigation, defending,
settling or prosecuting any action, litigation or proceeding) which
may at any time be imposed upon, incurred by or asserted or awarded
against Landlord or the Property, and arising directly or
indirectly from or out of: (i) the presence, release or threat
of release of any Hazardous Substances on, in, under, affecting or
threatening to affect all or any portion of the Property or any
surrounding areas, regardless of whether or not caused by or within
the control of Tenant, (ii) the violation of any Environmental
Laws related to, affecting or threatening to affect the Property,
whether or not caused by or within the control of Tenant,
(iii) the failure by Tenant to comply fully with the terms and
conditions of this Section (iv) the breach of any
representation or warranty contained in this Section or
(v) the enforcement of this Section including, without
limitation, the cost of assessment, containment and/or removal of
any and all Hazardous Substances on and /or from all or any portion
of the Property or any surrounding areas, the cost of any actions
taken in response to the presence, release or threat of release of
any Hazardous Substances on, in, under or affecting any portion of
the Property or any surrounding areas to prevent or minimize such
release or threat of release so that it does not migrate or
otherwise cause or threaten danger to present or future public
health, safety, welfare or the environment, and costs incurred to
comply with the Environmental Laws in connection with all or any
portion of the Property or any surrounding areas. This indemnity
shall also include any of Landlord’s diminution in the value
of the Property or any future Landlord’s reduction in the
sales price of the Property by reason of any matter set forth in
this Section. Landlord’s rights under this Section shall
survive the Lease.
(g) Upon Landlord’s request,
at any time after the occurrence and continuance of an Event of
Default under the Lease or at such other time as Landlord has
reasonable grounds to believe that Hazardous Substances are or have
been handled, generated, stored, processed, transported to or from,
or released or discharged from or disposed of on or around the
Property, Tenant shall provide, at Tenant’s sole cost and
expense, an inspection or audit of the Property prepared by a
hydrogeologist or environmental engineer or other appropriate
consultant approved by Landlord indicating the presence or absence
of Hazardous Substances on the Property (including
asbestos-containing material or lead-based paint). If Tenant fails
to provide such inspection or audit within twenty (20) days
after such request, Landlord may order the same, and Tenant hereby
grants to Landlord and its employees and agents access to the
Property and a license thereon to undertake such inspection or
audit. The cost of such inspection or audit, together with interest
thereon at the Interest Rate from the date paid by Landlord until
actually paid by Tenant, shall be immediately paid by Tenant on
demand and shall constitute additional rent hereunder.
(h) Without limiting the foregoing,
Landlord, its Mortgagee and their authorized representatives may,
during normal business hours and at their own expense, inspect the
Property and Tenant’s records related thereto for the purpose
of determining compliance with Environmental Laws and the terms and
conditions of this Section.
(i) As used herein, the term
“release” shall include, without limitation, any
intentional or unintentional placing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing, discarding or abandoning of any
Hazardous Substance, other than in the normal course of business or
activities or its tenants, and in compliance with all Environmental
Laws.
(j) Tenant represents and warrants
that, from and after the commencement of this Lease, Tenant
covenants and agrees that it shall provide all legally required
notices with respect to the discovery or release of any Hazardous
Substances at the Property and shall perform each of the continuing
obligations of a bona fide prospective purchase pursuant to 42U.S.C
9601(4). Tenant shall inform Landlord by notice given or action
taken pursuant to this Section 4.3.
ARTICLE 5
Utility
Charges
Tenant shall pay or cause to be
paid, as and when the same are due and payable, all charges for
gas, water, sewer, electricity, lights, heat, power, telephone or
other communication service and all other utility services used,
rendered or supplied to, upon or in connection with the
Premises.
ARTICLE 6
Indemnification and
Non-Liability of Landlord
6.1 Indemnification. Tenant
covenants and agrees, at its sole cost and expense, to indemnify
and save harmless the Landlord-Related Parties (as defined in this
Section 6.1 below) and Mortgagee against and from any
and all loss, cost, damage, or claims by or on behalf of any
person, firm, or corporation (a) from the conduct or from
management of or from any work or thing whatsoever done in or about
the Premises during the Term hereof, (b) from the operation,
management, maintenance, repair, use, or occupation of the
Premises, and the condition of any building or other Improvements
on the Premises, (c) from any breach or default on the part of
Tenant in the performance of any covenant or agreement on the part
of Tenant to be performed, pursuant to the terms of this Lease, and
(d) from any act, whether or not negligent, by Tenant, or any
of its agents, contractors, servants, employees or licensees, or
arising from any accident, injury or damage whatsoever occurring
during the Term hereof in or about the Premises. In case any action
or proceeding be brought against the Landlord-Related Parties by
reason of any such claim Tenant, upon notice from the
Landlord-Related Parties, covenants to resist or defend such action
or proceedings by counsel chosen by Tenant, but reasonably
satisfactory to Landlord. As used in this Lease, the term
“Landlord-Related Parties” shall mean,
collectively, Landlord and the Landlord’s shareholders,
directors, officers, partners, members, employees, representatives,
agents, and their successors and assigns.
6.2 Attorneys’ Fees. In
the event of any arbitration, administrative or judicial proceeding
commenced by Landlord or Tenant against the other under this Lease,
the reasonable costs and expenses (including reasonable
attorneys’ fees at trial and on appeal) of the prevailing
party shall be paid by the other party.
6.3 Waiver of Claims for
Defects. Tenant further covenants and agrees that Landlord
shall not be liable to Tenant, or any one claiming by, through or
under Tenant, for any defect in the Premises, or any buildings,
building components, fixtures, apparatuses and personal property
located thereon latent or otherwise for any injury, loss or damage
to any persons or to the Premises, or to any property of Tenant, or
of any other person, contained in or upon the Premises, caused by
or arising or resulting from such defect.
ARTICLE 7
Maintenance and Repairs,
Covenant Against Waste and Right of Inspection
7.1 Maintenance and Repair.
Tenant shall, throughout the Term hereof and at no expense
whatsoever to Landlord, take good care of the Premises and the
Building and other Improvements and structural components thereof
now or hereafter erected thereon and shall not do or suffer any
waste with respect thereto, and Tenant shall promptly make all
repairs, interior and exterior, structural and non-structural,
ordinary as well as extraordinary, foreseen as well as unforeseen,
necessary to keep the Building and other Improvements (including,
without limitation, the roof, mechanical, plumbing, electrical, and
other Building systems) in good and lawful order and in at least as
good condition as such premises are in on the Commencement Date but
subject to reasonable wear and tear. When used in this Article, the
term “repairs” shall include replacements,
capital improvements or renewals when necessary. Tenant shall keep
and maintain all portions of the Premises, in a clean and orderly
condition, free of accumulation of water, dirt, rubbish, snow and
ice, and Tenant shall not permit or suffer any overloading of the
floors of the Building. Landlord shall not be responsible for the
cost of any alterations of or repairs to the Premises of any nature
whatsoever, structural or otherwise, whether or not now in the
contemplation of the parties. To the extent not prohibited by law,
Tenant hereby waives and releases all rights now or hereinafter
conferred by statute or otherwise which would have the effect of
limiting or modifying any of the provisions of this
Section 7.1 . In addition, the provisions of this
Section 7.1 are subject to the limitations imposed by
Articles 8 and 9 below.
7.2 Landlord’s Inspection
Rights. Tenant shall permit Landlord and the authorized
representatives of Landlord, after reasonable written notice, to
enter the Premises during Tenant’s usual business hours for
the purpose of inspecting the same and of making any necessary
repair to the Premises and performing any work therein that may be
necessary to comply with any laws, ordinances, rules, regulations
or requirements of any public authority, or that may be necessary
to prevent waste or deterioration in connection with the Premises,
which Tenant is obligated, but has failed, to make, perform, or
prevent, as the case may be. Nothing in this Lease shall impose any
duty upon the part of Landlord to do any such work or to make any
alterations, repairs (including, but not limited to, repairs and
other restoration work made necessary due to any fire or other
casualty and irrespective of the sufficiency or availability of any
fire or other insurance proceeds which may be payable in respect
thereof), additions or improvements to the Premises, of any kind
whatsoever. The performance thereof by Landlord shall not
constitute a waiver of Tenant’s default in failing to perform
the same and the reasonable cos