Exhibit
10.22
[Cooper
Cameron Building]
LEASE
AGREEMENT
between
BELTWAY
ASSETS LLC,
a
Delaware limited liability company,
as
Lessor,
and
COOPER
CAMERON CORPORATION,
a
Delaware corporation,
as
Lessee
Dated
as of
November
19, 2002
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SCHEDULE
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A
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Desription
of Land
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SCHEDULE
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C
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Certain
Definitions
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SCHEDULE
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D
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Permitted
Encumbrances
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SCHEDULE
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E
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Trade
Fixtures
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SCHEDULE
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F
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Subordination,
Non-Disturbance and Attornment Agreement
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SCHEDULE
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G
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Estoppel
Letter
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SCHEDULE
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H
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Description
of Excess Land
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THIS
LEASE, dated as of the date specified in Item 1 of Schedule
B (as amended from time to time this "Lease"), between
the Lessor specified in Item 2 of Schedule
B ("Lessor"), having
an office at the address set forth in Item 2 of Schedule
B and the Lessee specified in Item 3 of Schedule
B (herein, together with any Person succeeding thereto
by consolidation, merger or acquisition of its assets
substantially as an entirety, called "Lessee"), having
an address at the address set forth in Item 3 of Schedule
B,, both parties intending to be legally
bound.
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Capitalized
terms not otherwise defined when they first appear are defined in
Appendix
I.
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1.
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Demise; Title; Condition.
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(a) Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor,
subject to the terms hereof, all of Lessor's right, title and
interest in the Leased Property.
(b) Lessee
has examined the Leased Property and Lessor's title thereto,
and has found the same to be satisfactory. Lessee shall in no
event have any recourse against Lessor for any defect in
Lessor's title to the Leased Property or any interest of
Lessee therein.
(c) LESSOR
LEASES THE LEASED PROPERTY TO LESSEE IN ITS PRESENT CONDITION,
AND LESSEE ACCEPTS THE LEASED PROPERTY "AS IS" AND "WHERE IS",
AND LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE LEASED PROPERTY OR THE LOCATION,
USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR
A PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS
TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN OR
ENVIRONMENTAL CONDITION THEREOF; AND ALL RISKS INCIDENTAL TO
THE LEASED PROPERTY SHALL BE BORNE BY LESSEE. LESSOR SHALL NOT
HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT TO ANY
DEFECT OR DEFICIENCY OF ANY NATURE IN THE LEASED PROPERTY OR
ANY PORTION THEREOF, WHETHER PATENT OR LATENT AND LESSOR SHALL
NOT HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY DIRECT OR
INDIRECT DAMAGE TO PERSONS OR PROPERTY RESULTING THEREFROM OR
FOR LESSEE'S LOSS OF USE OF THE LEASED PROPERTY OR ANY PORTION
THEREOF OR ANY INTERRUPTION IN LESSEE'S BUSINESS CAUSED BY
LESSEE'S INABILITY TO USE THE LEASED PROPERTY OR ANY PORTION
THEREOF FOR ANY REASON WHATSOEVER. THE PROVISIONS OF THIS
PARAGRAPH HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION BY LESSOR OF, AND LESSOR DOES
HEREBY DISCLAIM AND LESSEE DOES HEREBY WAIVE, ANY AND ALL
WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LEASED PROPERTY OR ANY PORTION THEREOF, WHETHER ARISING
PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LEGAL
REQUIREMENT NOW OR HEREAFTER IN EFFECT OR
OTHERWISE.
(d) Subject
to the provisions of this paragraph (d), Lessor hereby
assigns, without recourse or warranty whatsoever, to Lessee,
all Warranties and Permits. Such assignment shall remain in
effect until the expiration or termination of this Lease and
thereafter shall be null and void. Lessee shall notify in
writing each Governmental Authority that has issued any Permit
in the manner required by each such Governmental Authority of
Lessee's occupancy of the Leased Property. Lessor shall also
retain the right to enforce any Warranties assigned in the
name of Lessee if an Event of Default exists. Lessor hereby
agrees to execute and deliver, at Lessee's sole expense, such
further documents, including powers of attorney, as Lessee may
reasonably request in order that Lessee may have the full
benefit of the assignment effected or intended to be effected
by this paragraph (d). Upon the termination of this Lease, to
the extent, if any, still in effect, the Warranties and
Permits shall automatically revert to Lessor. The foregoing
provision of reversion shall be self-operative and no further
instrument of reassignment shall be required. In confirmation
of such reassignment, Lessee shall, at its sole expense,
execute and deliver promptly any certificate or other
instrument which Lessor may reasonably request. Any monies
collected by Lessee under any of the Warranties if an Event of
Default exists shall be held in trust by Lessee and promptly
paid over to Lessor. If and when such Event of Default is
cured, Lessor shall promptly pay over said monies to
Lessee.
2.
Term.
(a) Subject
to the provisions hereof, Lessee shall have and hold the
Leased Property for a term (the "Basic Term")
which shall begin on the Commencement Date and end at midnight
on the Basic Term Expiration Date unless sooner terminated or
extended as hereinafter expressly provided.
(b) So
long as no Event of Default exists on the last day of the
Basic Term or any Renewal Term, Lessee, at Lessee's option,
may elect to renew the Term for one (1) or two (2) or three
(3) additional terms of five (5) years (each a "Renewal Term",
and collectively the "Renewal Terms");
provided however, Lessee may not elect to renew the Term for
any given Renewal Term unless it. has renewed the Term for all
prior Renewal Terms. Each such election, if exercised by.
Lessee, shall be.exercised by Lessee not less than three
hundred sixty-five (365) days before the expiration of the
then current Term, by written notice to Lessor. Either party,
upon request of the other, will execute and acknowledge, in
form suitable for recording, a reasonable instrument
confirming any such renewal. Prior to the exercise of any such
option by Lessee, Lessee shall have the right to waive its
right to elect to renew the Term by giving written notice
thereof to Lessor.
3. Rent.
(a) During
the Term, Lessee shall pay the rent provided in Item 6 of
Schedule
B ("Basic Rent") to
Lessor (or to such other party as Lessor may from time to time
specify in writing) in lawful money of the United States by
electronic transfer of immediately available funds before 1:00
P.M., Eastern Time, at such place, within the continental
United States, as Lessor may from time to time designate to
Lessee in writing. Basic Rent shall be payable by Lessee in
installments in the amounts set forth in Item 6 of Schedule
B and (except for the first payment of Basic Rent which
shall be due and payable on, or no more than thirty (30) days
prior to, the date of commencement of the Basic Term) shall be
due and payable on, or no more than thirty (30) days prior to,
the dates specified in Item 6 of Schedule
B ("Installment
Payment Dates") and shall
constitute Basic Rent for the periods specified in said Item
6. If any Installment Payment Date falls on a day which is not
a Business Day, Basic Rent shall be due and payable on, or no
more than thirty (30) days prior to, the immediately prior
Business Day.
(b) All
amounts which Lesseeds required to pay or discharge pursuant
to this Lease in addition to Basic Rent (including, without
limitation, if otherwise due and payable under this Lease, (i)
amounts payable as the purchase price for the Leased Property,
(ii) any amounts payable as liquidated damages hereunder, and
(iii) amounts representing costs, expenses, liabilities and
obligations due to or incurred by or on behalf of Lessor as a
result of or in connection with the enforcement of any remedy
or the exercise of any right by or on behalf of Lessor), and
all amounts representing all other expressly stated
obligations of Lessee under this Lease and the other Lease
Documents which could be discharged by Lessee with the payment
of money (including, by way of example, pursuant to a contract
for performance of such obligation with a third party) as
reasonably determined by or on behalf of Lessor, and after any
applicable notice and/or cure periods whether or not Lessor or
any other person has incurred any expense in connection
therewith in the exercise of any right by or on behalf of
Lessor, together with every penalty, overdue interest and cost
which may be added for nonpayment or late payment of any of
the foregoing, shall constitute additional rent hereunder
("Additional
Rent"). If Lessee fails to perform any expressly stated
obligation of Lessee under this Lease or any of the other
Lease Documents within the time required hereunder or
thereunder which could be discharged by Lessee by the payment
of money (including, by way of example, pursuant to a contract
for performance of such obligation with a third party) as
reasonably determined by or on behalf of Lessor, and after any
applicable notice and/or cure periods then, whether or not
Lessor or any other person has incurred any expense in
connection therewith in the exercise of any right by or on
behalf of Lessee, immediately upon demand by Lessor, Lessee
shall owe, as Additional Rent hereunder, the amount required
to discharge such obligation as reasonably determined by or on
behalf of Lessor, which amount shall be immediately due and
payable. If Lessee fails to pay or discharge any Additional
Rent and such failure constitutes an Event of Default, Lessor
shall have all rights, powers and remedies provided for herein
or by law or otherwise in the case of nonpayment of Basic
Rent. Lessee shall, unless otherwise requested by Lessor, pay
Additional Rent directly to the Person entitled thereto.
Lessee also covenants to pay to Lessor on demand as.
Additional Rent, interest at a rate (the "Overdue Rate"),
calculated on the basis of a 360-day year of twelve (12) equal
months, equal to the greater of (a) 8.25% per annum or (b)
3.5% per annum over the then current prime rate of interest
publicly announced by Citibank, N.A. (or its successor) as its
"base" or "prime" rate of interest effective in New York, New
York, as such rate of interest may change from time to time
and if Citibank, N.A. (or its successor) ceases to announce a
prime rate, then the current prime rate of interest published
by the Wall
Street Journal
or its successor from time to time, but in no event greater
than the maximum rate permitted by applicable Legal
Requirements, on (i) all overdue installments of Basic Rent
from the due date thereof until paid in full, (ii) all overdue
amounts of Additional Rent, arising out of obligations which
Lessor shall have paid on behalf of Lessee pursuant hereto
from the date of such payment by Lessor until paid in full,
and (iii) each other sum required to be paid by Lessee
hereunder which is overdue, from the date such sum was due
until the date received by the Person entitled thereto. Lessee
also covenants to pay to Lessor on demand as Additional Rent,
a late fee equal to five percent (5%) of any Basic Rent or
Additional Rent which has not been paid within five (5) days
after the same is due. If any Basic Rent or Additional Rent is
collected by or through an attorney, as Additional Rent,
Lessee agrees to pay all reasonable costs of collection,
including, but not limited to reasonable attorney's fees and
to reimburse Lessor for any reasonable costs of collection,
including without limitation, reasonable attorney's fees and
expenses, incurred by Lessor's Mortgagee.
4.
Use.
Lessee
(and its permitted assignees and subtenants) may use and
occupy the Leased Property solely for the purposes of general
office space and for such other purposes as are incidental or
related thereto, including without limitation, to the extent
consistent with an office building, food and beverage service,
sales and retail services, athletic facilities and health
facilities. Lessee may maintain in the Leased Property, for
use by Lessee and its employees and, to the extent permitted
under this Lease, licensees, sublessees and assignees, and
incidental use by their invitees, contractors and visitors,
employee lunch rooms (including kitchens), employee coffee
bars, printing and copying facilities, storage,
telecommunications equipment, satellite dishes, antennas,
computer equipment, data and word processing equipment, and
any other facility or equipment utilized in the normal conduct
of Lessee's business and not inconsistent with the primary use
of the Leased Property as a business office complex.
Additionally, Lessee may, at its sole cost and expense,
maintain showers and an exercise room in the Leased
Property.
Any other use will be subject to the approval of Lessor, such
approval shall not be unreasonably withheld, delayed or
conditioned, provided that such other use (i) is consistent
with the business uses of other properties located in the same
general area as the Leased Property, (ii) does not result in,
or increase the likelihood of, a decline in the value of the
Leased Property or increase the risk of loss to Lessor (such
as by an increase in the potential exposure to hazardous waste
issues), and (iii) does not impair Lessee's ability to obtain
the Policies required to be maintained by Lessee hereunder.
Notwithstanding the foregoing, in no event may Lessee occupy
or use the Leased Property in a manner which violates any
Legal Requirement or Permitted Encumbrance.
5.
Net
Lease; No Termination.
(a) Lessee
expressly acknowledges that this Lease is an absolutely
"bondable net lease and Lessee must pay all Basic Rent and
Additional Rent without notice, demand, counterclaim, set-off,
deduction, or defense, and without abatement, suspension,
deferment, diminution or reduction, 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 Leased Property and the appurtenances thereto and the use
and occupancy thereof by Lessee or anyone claiming by, through
or under Lessee as Lessee hereunder which may arise or become
due during or with respect to the Term shall be paid by
Lessee. Lessee assumes the sole responsibility for the
condition, use, operation, maintenance and management of the
Leased Property and Lessor shall have no responsibility in
respect thereof and shall have no liability for damage to the
property of Lessee or any sublessee of Lessee or anyone
claiming by, through or under Lessee for any reason
whatsoever, unless such damage is caused by the negligence or
willful misconduct of Lessor or Lessor's agents, contractors
(or any such contractor's subcontractors, laborers, suppliers
or materialmen), invitees, licensees or employees, provided,
that such negligence or willful misconduct shall not entitle
Lessee to abate, suspend, defer, diminish or reduce the
payment of Basic Rent and Additional Rent.
(b) Lessee
acknowledges and agrees that its obligations hereunder,
including, without limitation, its obligations to pay Basic
Rent and Additional Rent, are unconditional and irrevocable
under any and all circumstances and are not subject to
cancellation, termination, modification or repudiation by
Lessee. Except as expressly provided in paragraph (c) of
Article 12, Article 15, or Article 20, this Lease shall not
terminate. Lessee has no right to terminate this Lease, and
Lessee shall perform all obligations hereunder, including the
payment of all Basic Rent and Additional Rent, without notice,
demand, counterclaim, set-off, deduction, defense or
recoupment, and without abatement, suspension, deferment,
diminution or reduction for any reason, including, without
limitation, any past, present or future claims which Lessee
may have against the Lessor, Lessor's Mortgagee, their
respective successors and assigns or any other Person for any
reason whatsoever; any defect in the Leased Property or any
portion thereof, or in the title, condition, design,
construction, durability or fitness for a particular use
thereof; any Casualty to all or part of the Leased Property;
any restriction, deprivation (including eviction) or
prevention of, or any interference with or interruption of,
any use or occupancy of the Leased Property (whether due to
any defect in or failure of Lessor's title to the Leased
Property, any Lien or otherwise); any Taking of the Leased
Property or interest therein; any action, omission or breach
on the part of Lessor under this Lease or under any other
agreement between Lessor and Lessee, or any other indebtedness
or liability, howsoever and whenever arising, of Lessor, any
assignee of Lessor, or Lessee to any other Person, or by
reason of insolvency, bankruptcy or similar proceedings by or
against Lessor, or any assignee of Lessor, or Lessee; the
inadequacy or inaccuracy of the description of the Leased
Property or the failure to demise and let to Lessee the
property intended to be leased hereby; Lessee's acquisition of
ownership of the Leased Property (as to any obligation arising
before or incident to such acquisition and any obligation
intended to survive such acquisition including, without
limitation, the payment of the full purchase price in strict
accordance with the terms hereof); any sale or other
disposition of the Leased Property; the impossibility or
illegality of performance by Lessor or Lessee or both; the
failure of Lessor to deliver possession of the Leased
Property; any action of any Governmental Authority; or any
other cause or circumstance, whether similar or dissimilar to
the foregoing, any present or future Legal Requirements
notwithstanding and whether or not Lessee may have notice or
knowledge of any of the foregoing. The parties hereto intend
that all Basic Rent and Additional Rent payable by Lessee
hereunder shall continue to be payable in all events and in
the manner and at the times herein provided, without notice or
demand, unless the obligation to pay the same shall be
terminated pursuant to the express provisions of this
Lease.
(c) Lessee
will remain obligated under this Lease in accordance with its
terms, and will not take any action to terminate (except as
expressly provided in paragraph (c) of Article 12, Article 15
or Article 20 of this Lease), rescind or avoid this Lease for
any reason, notwithstanding any action for bankruptcy,
insolvency, reorganization, liquidation, dissolution or other
proceeding affecting Lessor or any other Person, or any action
with respect to this Lease which may be taken by any receiver,
trustee or liquidator, or any assignee of Lessor or any other
Person or by any court or other Governmental Authority in any
such action or proceeding. Lessee waives all rights at any
time conferred by statute, to extent that such rights are
waivable, or otherwise to quit, terminate or surrender this
Lease or the Leased Property or to avail itself of any
abatement, reduction, deferment or set-off of any Basic Rent,
Additional Rent or other sum payable hereunder, or for damage,
loss or expense suffered by Lessee on account of any cause
referred to in this Article 5 or otherwise.
6.
Taxes and
Impositions; Law and Agreements.
(a) Lessee
shall pay and discharge, on or before the applicable
delinquency date therefor, all taxes, including any tax based
upon or measured by gross rentals or receipts from the Leased
Property, assessments, special assessments, maintenance
assessments, property owners' association assessments, other
assessments, levies, fees, water and sewer rents, utility
charges, and other governmental and similar charges,
including, without limitation, any payments in lieu of taxes,
maintenance charges, vault charges, and license fees for the
use of the vaults, chutes and similar areas adjoining the
Land, and, except as otherwise provided in this paragraph (a),
other governmental impositions and charges, general and
special, ordinary or extraordinary, foreseen and unforeseen,
of any kind or nature whatsoever, and whether or not the same
shall have been within the express contemplation of the
parties hereto, and any interest and penalties thereon, which
are levied or assessed or are otherwise due during the Term
(all such charges referred to in this subparagraph (a) being
"Taxes" and
"Impositions")
against (i) Lessor and which relate to Lessor's ownership of
the Leased Property, the use, occupancy, operation or
possession of the Leased Property or any part thereof or the
transactions contemplated by this Lease, including, if
applicable, (A) state franchise or doing business taxes or the
like but only those relating to or resulting solely from
Lessor's ownership of the Leased Property and not any other
property or any other activity of Lessor, and only to the
extent described in the second succeeding sentence, and (B)
transfer taxes relating solely to the conveyance of the Leased
Property to or from Lessee or its affiliates or in connection
with the exercise of Lessor's or Lessor's Mortgagee's remedies
after an Event of Default occurs hereunder (to the extent
described in the second succeeding sentence), (ii) the Leased
Property or this Lease or the interest of Lessee or Lessor
therein or herein, (iii) Basic Rent or Additional Rent or
other sums payable by Lessee hereunder, (iv) the use,
occupancy, construction, repair or Restoration of the Leased
Property or any portion thereof, (v) gross receipts from the
Leased Property or (vi) any property (such as the Excess Land)
which is included within the same tax parcel in which all or
any portion of the Leased Property is situated. If any Taxes
and Impositions levied or assessed against the Leased Property
may legally be paid in installments, Lessee may pay such Taxes
and Impositions in installments; provided,
however,
that upon the termination of the Term Lessee shall pay any
such Taxes and Impositions which it has been paying in
installments in full, on or before such termination date.
Nothing in this Lease shall require Lessee to pay any
franchise, estate, inheritance, succession, transfer (other
than as set forth above), net income or profits taxes of
Lessor (other than any gross receipts or similar taxes imposed
or levied upon, assessed against or measured only by the Basic
Rent or Additional Rent payable by Lessee hereunder or levied
upon or assessed against the Leased Property), any taxes
imposed by any Governmental Authority on, or measured by, the
net income of Lessor, unless any such tax is in lieu of or a
substitute for any other tax or assessment upon or with
respect to the Leased Property, in which case such tax would
be payable by Lessee hereunder. Lessee shall furnish Lessor
and Lessor's Mortgagee with receipts (or if receipts are not
available, with copies of cancelled checks evidencing payment
with receipts to follow promptly after they become available)
showing payment of Taxes and Impositions before the applicable
delinquency date therefor. Except for Taxes and Impositions
paid by Lessee in installments as set forth above, Taxes and
Impositions which are payable by Lessee shall be apportioned
between Lessor and Lessee as of the date on which this Lease
terminates. Lessee shall establish and maintain the Tax and
Insurance Reserve Fund at the times required by and pursuant
to the terms of Article 13. On or prior to July 1, 2003,
Lessee, at its sole cost and expense, shall cause each of the
Land and Excess Land to be separate tax parcels for ad valorem
tax purposes. Additionally, if required by applicable law, on
or prior to July 1, 2003, Lessee, at its sole cost and
expense, shall cause the Land and the Excess Land to be
subdivided, in accordance with all applicable Legal
Requirements, into separate subdivision lots or reserves. If
Lessee fails to complete either or both of the actions
described in the immediately preceding two sentences within
the time period provided, then Lessor shall have the right
(but not the obligation) to take such action at the sole
reasonable cost and reasonable expense of Lessee.
(b) Lessee
shall pay all charges for utility, communication and other
services to the extent rendered or used during the Term
relating to the Leased Property or the Excess Land, whether or
not payment therefor shall become due after the
Term.
(c) Subject
to the terms of paragraph (d) of this Article 6, at Lessee's
cost and expense, Lessee shall (i) perform and comply and
cause the Leased Property to comply (A) with all Legal
Requirements, whether or not such Legal Requirements
necessitate structural changes or improvements, interfere with
Lessee's use and enjoyment of the Leased Property, or require
replacements or repairs, extraordinary as well as ordinary,
(B) with the terms of any easement granted or released
pursuant to Article 21, (C) with the provisions of all
agreements and restrictions affecting the Leased Property or
any part thereof or its ownership, occupancy, use, operation
or possession (but expressly excluding the Loan Documents,
except to the extent, and only to the extent, that Lessee, in
the Lease Documents, expressly agrees to perform any of the
obligations under the Loan Documents), and (D) with the terms
and obligations under any consent of Lessee to any assignment
of Lessor's interest in this Lease to Lessor's Mortgagee; and
(ii) procure, maintain and comply with all Permits relating to
the Leased Property.
(d) If
no Default exists, and following written notice to Lessor and
Lessor's Mortgagee, Lessee may contest (including through
abatement proceedings), in good faith and at, its sole
expense, by appropriate legal proceedings, any Taxes or
Impositions, and/or any Legal Requirement affecting the Leased
Property, and postpone payment of or compliance with the•
same during the pendency of such contest, provided that (i)
the commencement and continuation of such proceedings shall
suspend the collection thereof from, and suspend the
enforcement thereof against, Lessor and the Leased Property,
(ii) no part of the Leased Property nor any Basic Rent or
Additional Rent or this Lease shall be interfered with or
shall be in imminent danger of being sold, forfeited,
attached, terminated, cancelled or lost, (iii) Lessee shall
promptly and diligently prosecute such contest to a final
settlement or conclusion, (iv) at no time during the permitted
contest shall there be a risk of the imposition of civil or
criminal liability or penalty on Lessor or Lessor's Mortgagee
for failure to comply therewith, (v) Lessee shall satisfy any
Legal Requirements, including, if required, that the Taxes and
Impositions be paid in full before being contested, and (vi)
the residual value insurance policy applicable to the Leased
Property will not be cancelled or reduced in amount as a
result of the contest, and (vii) at Lessor's option, Lessee
shall have furnished Lessor or Lessor's Mortgagee with such
security as Lessor or Lessor's Mortgagee shall reasonably
request to insure payment of Taxes and Impositions and
compliance with Legal Requirements, and any interest and
penalties thereon. Lessee shall pay any and all judgments,
decrees and costs (including all reasonable attorneys' fees
and reasonable expenses incurred by Lessor or Lessor's
Mortgagee) 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, costs and expenses thereof or in connection
therewith, if any, and perform all acts the performance of
which shall be ordered or decreed as a result
thereof.
(e) (1) Lessee
may, on one or more occasions, render the Leased Property to
all taxing and assessing authorities having jurisdiction of
the Leased Property and may, if Lessee shall so desire,
endeavor at any time or times during the Term to obtain a
lowering of the assessed valuation of the Leased Property for
any year or years of the Term for the purpose of reducing
Taxes and Impositions on the Leased Property. In such event,
Lessor will offer no objection and, at the request of Lessee,
will cooperate with Lessee, at Lessee's sole expense, in
reasonably attempting to effect such a reduction. Lessee shall
be bound by and shall comply with the provisions of preceding
paragraph (d) of this Article 6 which Lessor and Lessee agree
shall also be applicable to exercise by Lessee of Lessee's
rights under this paragraph (e) of this Article
6.
(2) Lessee
shall have the authority to collect the Tax or Imposition
refund, if any, payable as a result of any such proceeding
Lessee may institute or action Lessee may take for that
purpose, and any such Tax refund or Imposition refund shall be
the property of Lessee to the extent to which it may be based
on a payment made by Lessee, subject, however, to an
apportionment between Lessor and Lessee with respect to Taxes
or Impositions paid by Lessee for the year in which the Term
of this Lease ends, whether by expiration or
termination.
(3) In
rendering the Leased Property and taking the other action
referred to in this paragraph (e) of this Article 6, Lessee
shall not enter into any agreement or stipulation with any
taxing authority for the purpose of facilitating higher Taxes
or Impositions subsequent to the Term in consideration of
lower Taxes or Impositions during the Term.
7.
Liens;
Subordination.
(a) Subject
to the terms of paragraph (d) of Article 6, Lessee will
promptly and no later than thirty (30) days after its Actual
Knowledge of the filing thereof but in any event before. the
enforcement of the same, at its own expense remove and
discharge of record, by bond or otherwise, any Lien in or upon
the Leased Property, upon any Basic Rent, or upon, any
Additional Rent which arises for any reason (except for Liens
arising out of the act or omission of Lessor without the
consent of Lessee), including all Liens which arise out of
Lessee's possession, use, operation and occupancy of the
Leased Property, but not including any Permitted Encumbrances.
Without any portion of this sentence altering or affecting any
of the obligations or rights of Lessee under Section 10(c) of
this Lease, nothing contained in this Lease shall be construed
as constituting the consent or request of Lessor, express or
implied, to or for the performance by any contractor, laborer,
materialman, or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration,
addition, repair or demolition of or to the Leased Property or
any part thereof nor does Lessee constitute the agent of
Lessor except as provided in Article 21 hereof. Notice is
hereby given that Lessor will not be liable for any labor,
services or materials furnished or to be furnished to Lessee,
or to anyone holding an interest in the Leased Property or any
part thereof through or under Lessee, and that no mechanic's
or other Liens for any such labor, services or materials shall
attach to or affect the interest of Lessor in and to the
Leased Property. If Lessee shall fail to discharge any Lien
required under this Lease to be discharged by Lessee within
the time period permitted by this Lease, Lessor may discharge
the same by payment or bond or both, and Lessee will repay to
Lessor, upon demand, any and all reasonable amounts paid
therefor, or by reason of any liability on such bond, and also
any and all reasonable incidental expenses, including
reasonable attorneys' fees, incurred by Lessor in connection
therewith together with interest on all such amounts
calculated at the Overdue Rate.
(b) This
Lease shall be subject and subordinate to all present and
future mortgages, deeds of trust, or other similar Lien
instruments, and as the same be renewed, amended, modified,
consolidated, replaced or extended (individually, a
"Mortgage" ) on
the fee interest in the Leased Property and to all advances
made upon the security thereof, provided that the holder of
the Mortgage shall execute and deliver to Lessee a
subordination, attornment and non-disturbance agreement (
"SNDA"
), in form substantially similar to Schedule
F hereto, providing that if a foreclosure or a deed in
lieu of foreclosure occurs such new owner will recognize this
Lease and not disturb Lessee's possession of the Leased
Property if no Event of Default exists; and concurrently
therewith Lessee shall execute and deliver an estoppel
certificate in form substantially similar to Schedule
G hereto. Lessee agrees, upon receipt of such SNDA, to
execute such further reasonable instrument(s) as may be
necessary to subordinate this Lease to the Lien of any such
Mortgage, and also to execute such instrument(s) recognizing
the assignment of this Lease or the Basic Rent, Additional
Rent and other sums payable by Lessee hereunder to the holder
of any such Mortgage; provided however, no such instrument
shall contain terms which are materially inconsistent with
this Lease or the other Lease Documents.
(c) Lessee
agrees to attorn, from time to time, to the holder of each
Mortgage and/or the holder of such subsequent mortgage,
provided that such holder, in each case, is the purchaser or
transferee of the Leased Property (including, without
limitation, a transferee in foreclosure or pursuant to a deed
in lieu of foreclosure), for the remainder of the Term,
provided that such holder or such purchaser or transferee,
shall then be entitled to possession of the Leased Property
subject to the provisions of this Lease. The provisions of
this subsection shall inure to the benefit of such holder or
such purchaser or transferee, shall apply notwithstanding
that, as a matter of law, this Lease may terminate upon the
foreclosure of the Mortgage (in which event the parties shall
execute a new lease for the remainder of the Term on the same
terms set forth herein), shall be self-operative upon any such
demand, and no further instrument shall be required to give
effect to said provisions. Each such party, however, upon
demand of the other, hereby agrees to execute, from time to
time, instruments in confirmation of the foregoing provisions
hereof, reasonably satisfactory to the requesting party and
the requested party acknowledging such subordination,
non-disturbance and attomment as are provided herein and
setting forth the terms and ,
conditions of its tenancy.
8.
Indemnification;
Fees and Expenses.
(a) Lessee
shall protect, defend (through counsel selected by Lessee and
approved by the applicable Indemnified Party, such approval
shall not be unreasonably withheld) and indemnify Lessor,
Lessor's Mortgagee, each Certificate Holder and the Indenture
Trustee, their respective successors and assigns, the
beneficial owners of any of the foregoing and the trustees,
beneficiaries, partners, shareholders, officers, directors,
agents or employees of Lessor, Lessor's Mortgagee, each
Certificate Holder and the Indenture Trustee, or any such
successor or assign or beneficial owner (each an "Indemnified
Party" and collectively, the "Indemnified
Parties"), from and against and hold the Indemnified
Parties harmless from all Liens (including, without limitation
.
Lien removal and bonding costs), liabilities, losses, damages,
demands, claims, obligations, suits or other proceedings
(including, by way of example, causes of action, litigation
and defenses), settlement proceeds, fines, penalties,
assessments, citations, directives, judgments, fees, costs,
disbursements or other expenses of any kind or of any nature
whatsoever (including, without limitation, reasonable
attorneys', reasonable consultants', and reasonable experts'
fees and disbursements actually incurred in investigating,
defending, settling or prosecuting any claim, obligation, suit
or other similar proceeding) which may be imposed on, incurred
by or, asserted or awarded against such Indemnified Party
("Indemnified
Liabilities") (i) arising or alleged to arise from or
in connection with the condition, use, operation, maintenance,
Restoration, subletting and management of the Leased Property;
(ii) relating to the Leased Property and the appurtenances
thereto and the use and occupancy thereof by Lessee or anyone
claiming by, through or under Lessee; or (iii) arising or
alleged to arise from or in connection with any of the
following events: (A) any accident, injury to, or death of,
any person or any damage to or loss of property on or adjacent
to the Leased Property or growing out of or directly or
indirectly connected with, ownership, use, nonuse, occupancy,
operation, possession, condition, construction, repair or
Restoration of the Leased Property or adjoining property,
sidewalks, streets or ways or resulting from the condition of
any thereof; (B) any claims by third parties resulting from
any violation or alleged violation by Lessee of (1) any
provision of this Lease, or (2) any Legal Requirement, or (3)
any sublease, rental or license agreement or other agreement
relating to the Leased Property, or (4) any contract or
agreement to which Lessee is a party affecting the Leased
Property or the ownership, use, nonuse, occupancy, condition,
operation, . possession, construction, repair or rebuilding
thereof or of adjoining property, sidewalks, streets or ways;
(C) any contest permitted by Article 6; (D) Lessee's failure
to pay in accordance with the terms and provisions hereof
,
any item of Additional Rent or other sums payable by Lessee
hereunder; (E) the exercise or attempted exercise by Lessee of
any of its rights under this Lease; (F) any Specified Activity
or any exercise (whether proper or improper) of any of
Lessee's rights (including its rights as attorney-in-fact) set
forth in Section 21 hereof; (G) the Leased Property, Lessee,
any sublessee, any assignee or any other party claiming by,
through or under Lessee not being in compliance with any
applicable Environmental Law; or (H) Lessee, any sublessee,
any assignee or any other party claiming by, through, or under
Lessee not having obtained any Permit required to conduct its
or their operations at the Leased Property that is required
under any applicable Environmental Law or other Legal
Requirement. Lessee shall not be liable in any case to any
Indemnified Party for any Indemnified Liabilities to the
extent that they result from the gross negligence or willful
misconduct of such Indemnified Party. If any Indemnified
Party, shall be made a party to any such litigation commenced
against Lessee, and if Lessee, at its expense, shall fail to
provide Lessor or Lessor's Mortgagee or its agent or other
Indemnified Party with counsel reasonably approved by such
party, Lessee shall pay all reasonable costs and reasonable
attorney's fees and reasonable expenses incurred or paid by
Lessor or Lessor's Mortgagee or its agent or other Indemnified
Party in connection with such litigation. So long as no Event
of Default has occurred and is continuing hereunder, Lessee
shall control any such litigation and settlement discussions
relating thereto. Notwithstanding anything in this Article 8,
so long as (v) no Event of Default has occurred and is
continuing hereunder, (w) neither Lessor nor Lessor's
Mortgagee would be subject to any risk of criminal or material
civil liability, (x) there is no risk of Lessor losing the
Leased Property or Lessor's Mortgagee losing the priority of
its Lien, (y) no Credit Rating Downgrade exists, and (z) the
residual value insurance policy applicable to the Leased
Property will not be cancelled or reduced in amount as a
result thereof, Lessor will not agree to any settlement of any
claim covered by this Article 8 without Lessee's prior written
consent.
(b) An
Indemnified Party shall promptly notify Lessee of any
Indemnified Liabilities as to which indemnification is sought;
provided,
however,
the failure to give such notice shall not release Lessee from
any of its obligations under this Article 8 except to the
extent, if any, that (y) such Indemnified Party receives
timely notice of such Indemnified Liability so that it could
have timely given notice thereof to Lessee such that Lessee
could effectively defend against such Indemnified Liability
and (z) Lessee (i) did not have timely knowledge of such
Indemnified Liability so that it could effectively defend
against such Indemnified Liability and (ii) was thereby
damaged. Subject to the rights of insurers under the Policies
maintained by Lessee, Lessee may, at Lessee's sole expense,
investigate, defend or compromise, any Indemnified Liabilities
for which indemnification is sought under this Article 8 and
the Indemnified Party shall cooperate at Lessee's expense with
all reasonable requests of Lessee in connection therewith;
provided, however, Lessee may not defend or compromise such
Indemnified Liabilities if (1) an Event of Default exists, or
(2) such Indemnified Liabilities would entail a risk to the
Indemnified Party of any criminal liability or civil
sanctions; provided, further, Lessee may not compromise or
settle any such Indemnified Liabilities unless Lessee agrees
in advance in writing to pay the amount of such settlement or
compromise and such settlement or compromise includes a full
release of all Indemnified Parties satisfactory to each
Indemnified Party in its reasonable discretion. In any case in
which any action, suit or proceeding is brought against any
Indemnified Party in connection with any Indemnified
Liabilities, Lessee may, and upon such Indemnified Party's
request will, at Lessee's sole expense defend the Indemnified
Party against such Indemnified Liabilities, or cause the same
to be defended by counsel selected by Lessee and reasonably
acceptable to such Indemnified Party. If Lessee fails to do
so, Lessee shall pay all reasonable costs and reasonable
expenses (including, without limitation, reasonable attorneys'
fees and reasonable expenses) incurred by such Indemnified
Party in connection with such Indemnified Liabilities. Nothing
contained in this subparagraph (b) of this Article 8 shall be
deemed to require an Indemnified Party to contest any
Indemnified Liabilities or to assume responsibility for or
control of any judicial proceeding with respect
thereto.
(c) The
obligations of Lessee, and the rights and remedies of each
Indemnified Party under this Article 8, are in addition to and
not in limitation of any other representations, warranties,
obligations, rights and remedies provided in this Lease or
otherwise at law or in equity, and shall survive the
expiration or termination of this Lease.
9.
Environmental
Matters.
(a) Lessee
represents, warrants and covenants to the Indemnified Parties
that:
(i) At
all times during the Term of this Lease, (A) the Leased
Property and Lessee shall comply, and Lessee shall cause all
sublessees and any assignees of Lessee and all other parties
claiming by, through, or under Lessee to be contractually
obligated to comply, with all applicable Environmental Laws;
(B) Lessee shall have obtained, and Lessee shall cause, all
sublessees and any assignees of Lessee and all other parties
claiming by, through, or under Lessee, to have obtained, all
Permits required to conduct its or their operations at the
Leased Property that are required under all applicable
Environmental Laws and Lessee shall be in compliance, and
shall, in good faith and diligently, seek to have, all
sublessees and any assignees of Lessee and all other parties
claiming by, through, or under Lessee, to be in compliance
with, the same; and (C) Lessee shall remove and dispose of any
Hazardous Substances present on the Leased Property not in
compliance with applicable Environmental Laws;
(ii) To
the best of Lessee's Actual Knowledge, and except as disclosed
in the Environmental Site Assessment, (A) the Leased Property
complies with applicable Environmental Laws; (B) no Release of
Hazardous Substances has occurred on, from or affecting the
Leased Property in violation of the Environmental Laws; and
(C) no Hazardous Substances have been, generated, handled,
treated, stored on, incorporated in, or removed or transported
from the Leased Property (including underground contamination)
except in compliance with applicable Environmental Laws. No
notices, complaints or orders of violation or non-compliance
of any nature whatsoever regarding alleged violations of, or
strict liability under, Environmental Laws have been received
by Lessee or, to Lessee's Actual Knowledge, by any Person
regarding the Leased Property, and Lessee has no Actual
Knowledge that any environmental investigation by any
Governmental Authority, or any legal action by a private
party, is pending or threatened, in each case with regard to
the Leased Property or any use thereof or any alleged
violation of Environmental Laws with regard to the Leased
Property; and to Lessee's Actual Knowledge, and except as
disclosed in the Environmental Site Assessment, no Liens have
been placed upon the Leased Property in connection with any
actual or alleged liability under any Environmental
Laws;
(iii) The
Leased Property has not been used by Lessee, and, to Lessee's
Actual Knowledge, has not been used by Lessee's predecessors
or Affiliates, or, to Lessee's Actual Knowledge, except as
disclosed in the Environmental Site Assessment, by any other
Person, and will not be used by Lessee or by any Person under
Lessee's control during the Term of this Lease to generate,
manufacture, refine, produce or process any Hazardous
Substance or to store, handle, treat, dispose, transfer or
transport any Hazardous Substance other than normal and lawful
uses of such Hazardous Substances in compliance with
Environmental Laws which activities have not had and will not
have any material adverse effect upon the Leased
Property;
(iv) To
Lessee's Actual Knowledge, and except as disclosed in the
Environmental Site Assessment, no pits, lagoons, ponds, or
other surface impoundments, above ground tanks or other
containment structures have been or will be constructed,
operated or maintained in or on the Leased Property in
violation of applicable Environmental Laws and no underground
storage tanks are or will be constructed, operated or
maintained in or on the Leased Property; to Lessee's Actual
Knowledge, except as disclosed in the Environmental Site
Assessment, there is presently no asbestos nor
asbestos-containing material (except commercially produced
product in non-friable bonded form in floor, ceiling or wall
materials which is in good condition, the presence of which
complies with all Environmental Laws) nor any PCB-containing
equipment, including PCB-containing transformers, located in,
on, at or under the Leased Property nor will any of the
foregoing be located in, on, at or under the Leased Property
at any time during the Term of this Lease. Lessee shall
maintain and implement a written asbestos-containing material
operations and maintenance program for any identified or
presumed asbestos-containing materials, such written program
to be in form and content reasonably acceptable to
Lessor;
(v) To
Lessee's Actual Knowledge, and except as disclosed in the
Environmental Site Assessment, other than lawful quantities in
connection with Lessee's use of the Leased Property in
compliance with Environmental Laws, the Leased Property is
free of Hazardous Substances at, in, on, over or under the
Leased Property, regardless of the source of any such
Hazardous Substances; and
(vi) To
Lessee's Actual Knowledge, the Environmental Site Assessment is
true, correct and complete, and contains no misstatement of fact or
omission of any fact which would make the statements contained
therein untrue, incomplete or misleading in any material
respect.
(b) Promptly
upon obtaining Actual Knowledge thereof, Lessee shall notify
Lessor and Lessor's Mortgagee if any of the following occur,
in each case relating to the Leased Property or the use,
occupancy or operation thereof: (i) the Leased Property,
Lessee, any sublessee or assignee of Lessee or invitee of
Lessee, or any other party claiming by, through, or under
Lessee, fails to comply with any Environmental Law in any
manner whatsoever; (ii) any notice, complaint or order of
violation or non-compliance with any Environmental Law of any
nature whatsoever is issued to Lessee, or any sublessee of any
portion of the Leased Property or any assignee of Lessee, or
any other party claiming by, through, or under Lessee; (iii)
any notice of a pending or threatened investigation under any
Environmental Law is issued; (iv) any notice from any
Governmental Authority requiring any corrective action under
any Environmental Law is issued; or (v) any Permit,
application, report, document or other communication with
respect to a pending or, threatened action by any Governmental
Authority or other Person relating to a violation of the
Environmental Laws, or the actual, alleged or potential
Release of Hazardous Substances or presence or existence of
any Hazardous Substances at, on, adjacent to or upon the
Leased Property is issued.
(c) At
any time (i) if a Release of Hazardous Substances has occurred
on, from or affecting the Leased Property in violation of
Environmental Laws or an adverse change in the environmental
condition of the Leased Property has occurred, and if Lessee
fails (A) diligently to. commence to remediate or cure such
condition, to - the extent necessary to meet Legal
Requirements, to comply fully with applicable Environmental
Laws, and to prevent a material diminution in the fair market
value of the Leased Property related to the environmental
condition, within thirty (30) days after Lessee obtains Actual
Knowledge of such adverse change (or such shorter period as
may be required by law or if an emergency exists) and (B)
thereafter diligently prosecute to completion such cure, or
(ii) if an Event of Default exists under this Lease, or (iii)
if Lessor or Lessor's Mortgagee has reasonable cause to
believe that Lessee is in Default or has permitted a Default
under this Article 9, Lessor or Lessor's Mortgagee may cause
to be performed or direct Lessee to cause to be performed an
environmental audit or site assessment of the Leased Property
and the then uses thereof reasonable in scope under the
circumstances, and may take such actions as it may deem
necessary to remediate or cure such condition or to cause the
Leased Property to comply with any Legal Requirement. Such
environmental audit or site assessment shall be performed by
an engineer qualified by law and experience to perform the
same and satisfactory to Lessor and Lessor's Mortgagee, shall
include a review of the uses of the Leased Property and
compliance of the same with all Environmental Laws, and shall
include an estimate of the cost to cure any Default in
Lessee's covenants hereunder. All reasonable costs and
expenses actually incurred by Lessor or Lessor's Mortgagee in
connection with such environmental audit or assessment and any
remediation required shall constitute Additional Rent and
shall be immediately due and payable by Lessee upon demand,
and shall bear interest at the Overdue Rate from the date such
cost or expense is incurred until it is paid. Such audit or
assessment shall be addressed to Lessor and Lessor's Mortgagee
and shall provide expressly that they can rely on its
findings.
(d) Subject
to the provisions of paragraph (d) of Article 6 hereof,
inclusive of the right of Lessee to contest and postpone
compliance and exercise Lessee's other rights thereunder (in
accordance with the provisions thereof), in the event of a
violation of or the discovery of a violation of any
Environmental Law, Lessee shall promptly perform all remedial
actions as shall be necessary or desirable to clean up,
contain, or remove any Hazardous Substances on, under or in
the Leased Property in accordance with, and as required by,
applicable Environmental Laws and Permitted Encumbrances to
restore the Leased Property to its pre-contamination condition
and otherwise to cure any such violation of any Environmental
Law, all at Lessee's sole cost and expense, including, without
limitation, all investigative, monitoring, removal,
containment and remedial actions in accordance with applicable
Environmental Laws (and in all events in a manner reasonably
satisfactory to Lessor and Lessor's Mortgagee). Lessee (i)
shall use good faith efforts to determine the nature and scope
of all such required remedial actions within thirty (30) days
after the date ("Remedial Date")
which is the first to occur of (A) Lessee's obtaining Actual
Knowledge of any such violation or (B) the date on which
Lessee has exhausted its rights under paragraph (d) of Article
6 with respect to such violation (if Lessee exercises its
rights under such paragraph (d)) and (ii) shall complete all
such actions within one hundred twenty (120) days following
the Remedial Date, provided that if such remedial actions
cannot be completed with diligence within such one hundred
twenty (120) day period, and so long as Lessee is performing
such remedial actions with due diligence, the time within
which such remedial actions may be completed shall be extended
for such period as may be reasonably necessary to complete
such remedial action with diligence, provided the same shall
be subject to Lessor's approval and consistent with the
requirements of applicable Legal Requirements. If Lessee fails
to perform the necessary remedial actions as required hereby
within the time periods set forth herein, Lessor or Lessor's
Mortgagee may, but shall not be obligated to, cause the Leased
Property to be freed from Hazardous Substances or otherwise
brought into compliance with Environmental Laws, and any
reasonable costs and expenses actually incurred by Lessor or
Lessor's Mortgagee in connection therewith, together with
interest at the Overdue Rate from the date incurred until
actually paid by Lessee, shall constitute Additional Rent and
shall be immediately due and payable on demand. Lessee grants
to Lessor and Lessor's Mortgagee access to the Leased Property
and a license to remove any Hazardous Substances and to do all
things Lessor or Lessor's Mortgagee deems necessary to bring
the Leased Property into compliance with the Environmental
Laws. If, as a result of a violation of any Environmental
Laws, a Lien attaches to the Leased Property that takes
priority over the Lien of the Mortgage, Lessee shall promptly,
and in any event within thirty (30) days after notice of the
attachment of any such Lien, discharge or contest such Lien in
accordance with the provisions of paragraph (d) of Article 6
and, if contested rather than discharged, post a bond or
deposit an irrevocable letter of credit with Lessor's
Mortgagee, in either event satisfactory in form and substance,
with a surety or obligor satisfactory to Lessor's Mortgagee
and in an amount sufficient to discharge such
Lien.
(e) In
addition to, and not in limitation of, any indemnity contained
in Article 8, Lessee agrees to indemnify, defend (at trial and
appellate levels, and with attorneys, consultants and experts
acceptable to Lessor and Lessor's Mortgagee) and hold harmless
each Indemnified Party from and against any and all
Indemnified Liabilities which may be imposed upon, suffered or
incurred by, or asserted or awarded against such Indemnified
Party to the extent arising directly or indirectly from or out
of: (i) the presence, use, storage, transportation, or Release
of Hazardous Substances at, from, on, over, under or in the
Leased Property, or any Release of Hazardous Substances
emanating from the Leased Property onto any contiguous
property, regardless of whether occurring before or during the
Term of this Lease (or occurring after the Term of this Lease
so long as Lessee or any of its Affiliates either is in
possession of all or any portion of the Leased Property or
owns all or any portion of the Leased Property) and regardless
of the source of any such Hazardous Substances, (ii) the
breach of any representation or warranty contained in this
Article 9, (iii) any Default in the performance of any
obligation under this Article 9, (iv) any violation of any
Environmental Law with respect to the Leased Property or by
Lessee or any Person, or resulting from Lessee's failure to
comply with this Article 9, or (v) the enforcement of this
Article 9.
(f) The
representations, warranties and obligations of Lessee, and the
rights and remedies of each Indemnified Party under this
Article 9, are in addition to and not in limitation of any
other representations, warranties, obligations, rights and
remedies provided in this Lease or otherwise at law or in
equity.
(g) Lessee's
obligations and liabilities with respect to each Indemnified
Party, actual or contingent, under this Article 9 and relating
to the period through the end of the Term, whether arising
before, during or after the Term, shall survive the
termination of this Lease or the abandonment of the Leased
Property by Lessee, or any acquisition or disposition of the
Leased Property, except for events and circumstances resulting
solely from the acts of any Person other than Lessee, any
Affiliate of Lessee, or any Person claiming by or through
Lessee or any such Affiliate and occurring after the
foreclosure of the lien of the Mortgage and the sale of the
Leased Property pursuant to such foreclosure.
10.
Maintenance and
Repair; Additions.
(a) Lessee
will, at its sole cost and expense, keep and maintain the
Leased Property, including the Improvements and any altered,
Restored, additional or substituted buildings and other
improvements, in good order and safe condition, ordinary wear
and tear excepted (subject to Lessee's continuing obligation
to maintain the Leased Property in accordance with the
maintenance of other Class A suburban office buildings in the
West Sam Houston Parkway/Interstate 10 (Katy Freeway) area,
and (except as otherwise provided in paragraph (c) of Article
12) will make all structural and non-structural, and ordinary
and extraordinary changes, repairs and replacements, foreseen
or unforeseen, which may be required, whether or not caused by
its act or omission, to be made upon or in connection with the
improvements to the Leased Property in order to keep the same
in such condition, including taking action necessary to
maintain the Leased Property in compliance with all Legal
Requirements; subject,
however,
to any contest of applicable Legal Requirements conducted in
accordance with the provisions of paragraph (d) of Article 6.
Lessee shall keep the Leased Property orderly and free and
clear of rubbish, and shall not commit or suffer any waste of
the Leased Property. Lessor shall not be required to maintain,
alter, repair, rebuild or replace any improvements on the
Leased Property or to maintain the Leased Property, and Lessee
expressly waives the right to make repairs at the expense of
Lessor or to terminate this Lease because of Lessor's failure
to so maintain or repair pursuant to any Legal Requirements at
any time in effect. Lessor shall have no obligation to incur
any expense of any kind or character in connection with the
management, operation or maintenance of the Leased Property
during the Term of the Lease. Lessee shall use and operate the
Leased Property or cause it to be used and operated only by
personnel authorized by Lessee and Lessee shall use reasonable
precautions to prevent loss or damage to the Leased Property
from Casualty.
(b) If
any Improvements encroach upon any property, street or
right-of-way adjoining or adjacent to the Leased Property, or
violate any restrictive covenant affecting the Leased Property
or any part thereof, or impairs the rights of others under or
obstructs any easement or right-of-way to which the Leased
Property is subject (excluding, however, covenants, easements
or rights-of-way granted by Lessor after commencement of the
Term without the consent of Lessee all of which shall be null
and void), then, promptly after the written request of Lessor
or any Person affected by any such encroachment, violation,
impairment or obstruction, Lessee shall, at its expense,
either (i) obtain effective waivers or settlements of all
claims, liabilities and damages resulting from each such
encroachment, violation, impairment or obstruction or (ii)
make such changes in the Improvements and take such other
action as shall be necessary to remove such encroachments or
obstructions and to end such violations or impairments,
including, if necessary, the alteration or removal of any
Improvement. Any such alteration or removal shall be made to
the same extent as if such alteration or removal were an
Alteration under the provisions of paragraphs (c) or (d) of
this Article 10 and there shall be no abatement of rent by
reason of such alteration or removal.
(c) Lessee
may, at its sole expense, make Alterations (y) which satisfy
all of the following conditions ("Minimum Alterations
Conditions"): (i) are consistent with Lessee's use of
the Leased Property, (ii) do not adversely affect the
structural elements of the Improvements, or Building Systems,
(iii) do not adversely affect the utility, useful life or fair
market value of the Leased Property and (iv) are not otherwise
prohibited by this Lease and (z) with respect to which. Lessee
has furnished to Lessor evidence reasonably satisfactory to
Lessor that all of the Minimum Alterations Conditions will be
satisfied for such Alterations. Lessee may desire to construct
additional covered parking space by building onto (vertically
and/or horizontally) the existing parking garage ("Garage")
situated on the Land. Alterations which consist of additional
covered parking spaces which are consistent with the existing
Garage shall be deemed to satisfy subparts (i) and (iii) of
the Minimum Alterations Conditions. In constructing any
additional covered parking space by building onto (vertically
and/or horizontally) the Garage, Lessee, so long as it
complies with the provisions of this Section 10(c) and other
applicable provisions of this Lease with respect to such
construction, need not comply with any of the provisions of
Section 4.2 of the REA other than subpart (a) of such Section
4.2. All Alterations other than the Alterations contemplated
in the first sentence of this subpart (c) are herein called
the "Other
Alterations" . Lessee may, at its sole expense, make
Other Alterations only if consented to in writing by Lessor.
In connection with Lessee's request for such consent of
Lessor, Lessor shall act with good faith and reasonable
diligence in complying with the applicable provisions of this
Lease. Lessor may withhold its consent to any Other Alteration
(1) if such Other Alterations will not satisfy all of the
Minimum Alterations Conditions, (2) if the plans and
specifications for such Other Alterations are not reasonably
acceptable to Lessor or (3) if at the time such consent is
requested either (a) Lessee does not have a Minimum Credit
Rating or (b) a Default or an Event of Default exists
hereunder. Additionally, it will be reasonable for Lessor to
condition its consent on Lessee being obligated to deliver to
Lessor a certificate of a structural engineer or qualified
architect licensed in the state in which the Leased Property
is located certifying that if the Other Alteration is
constructed in accordance with the proposed plans and
specifications, it will not adversely affect the structural
integrity of the Improvements or adversely affect the Building
Systems and it will conform with all Legal Requirements.
Lessee shall construct all Alterations (including Other
Alterations) in a good and workmanlike manner using a quality
of material and workmanship at least as good as the original
work or installation of the Improvements and in compliance
with all applicable Legal Requirements, including those
relating to parking, and will complete the Alterations
(including Other Alterations) in a commercially reasonable
time period. Each Alteration (including Other Alterations)
shall be made at the sole cost and expense of Lessee, may not
be encumbered by Lessee and (other than Trade Fixtures) shall
become the property of Lessor and subject to this
Lease.
(d) All
work done in accordance with this Article 10 shall comply with
the requirements of all Policies required to be maintained by
Lessee hereunder and with the residual value insurance policy
applicable to the Leased Property.
(e) Lessee
agrees that all of the Improvements shall be deemed real
property and fixtures owned by Lessor. In furtherance of the
foregoing, Lessee hereby grants, conveys and transfers to
Lessor any and all of Lessee's right, title and interest in
and to the Improvements (other than Trade Fixtures) (whether
now existing or hereafter constructed). Lessee agrees that any
and all Improvements of whatever nature at any time
constructed, placed or maintained upon any part of the Land
shall be and remain the property of Lessor, subject to
Lessee's rights under this Lease. Lessee agrees to execute,
acknowledge, deliver, and file all documents reasonably
necessary or appropriate to effect the purpose of this
paragraph 10(e).
11.
Trade
Fixtures.
Lessor
acknowledges and agrees that the items of trade fixtures,
machinery and equipment described in Schedule E (but
specifically excluding Improvements, Building Systems and
other replacements of fixtures, machinery and equipment which
are the property of Lessor), together with other personal
property of Lessee that is as easily removable as the personal
property described on Schedule E, are and shall remain the
property of Lessee ("Trade Fixtures") and be treated as "trade
fixtures" for the purposes of this Lease and Lessee may remove
the same from the Leased
Property at any. time before the termination of this Lease,
provided that Lessee shall repair any damage to the Leased
Property resulting from such removal. Lessee may, at its own
cost and expense, install or place or reinstall or replace
upon or remove from the Leased Property any such Trade
Fixtures. Any such Trade Fixtures shall not become the
property of Lessor. Replacements of Building Systems,
fixtures, machinery and equipment that are property of the
Lessor shall be of at least equal quality to the replaced
Building Systems, fixtures, machinery and equipment when the
replaced items were new.
12.
Condemnation and
Casualty.
(a) Lessee
hereby assumes all risk of loss, damage or destruction,
whether (i) by fire or hazard or other casualty, or the theft
of all or any portion of the Leased Property (a "Casualty" ) or
(ii) by condemnation, seizure, confiscation, requisition or
other taking or sale of the use, access, occupancy, easement,
rights to or title of all or any portion of the Leased
Property, whether permanent or temporary, by or on account of
any actual or threatened eminent domain proceeding or other
action by any Governmental Authority or any transfer in lieu
or in anticipation thereof (a "Taking" ; a
Taking and a Casualty are each sometimes called a "Destruction").
Lessee hereby assigns to Lessor's Mortgagee, if any, and
otherwise to Lessor any award or insurance proceeds or other
payment to which Lessee may become entitled by reason of its
interest in the Leased Property (other than any award or
insurance proceeds or other payment made to Lessee
specifically made for interruption of business, moving
expenses or Trade Fixtures; hereinafter called "Lessee's Loss")
if the Leased Property, or any portion thereof, is damaged,
destroyed, lost or taken in a Taking or a Casualty. If a
Destruction occurs, the Lessee shall give Lessor and Lessor's
Mortgagee prompt written notice thereof, and describe in
reasonable detail in each case the facts or circumstances of
the Destruction and the damage to or loss or destruction of
the Leased Property. So long as no Event of Default exists,
Lessee shall at its cost and expense, in the name and on
behalf of the Lessor, Lessee, Lessor's Mortgagee or otherwise,
appear in any such proceeding or other action, negotiate,
accept and prosecute any claim for any award, compensation,
insurance proceeds or other payment on account of any such
Destruction and, subject to paragraph (b) below, cause each
such award, compensation, insurance proceeds or other payment
to be paid to Lessor's Mortgagee, if any, and otherwise, to
Lessor. Lessee shall use commercially reasonable efforts to
achieve the maximum award or other recoveries obtainable under
the circumstances. Any negotiated awards, settlement or
recoveries shall be subject to Lessor's and Lessor's
Mortgagee's prior written approval (and if approved, Lessee
shall be deemed to have used commercially reasonable efforts
to achieve the maximum award or other recoveries obtainable
under the circumstances). Lessee shall promptly inform Lessor
of all settlement offers. Lessor and Lessor's Mortgagee may
appear in any such proceeding or other action in a manner
consistent with the foregoing and the costs and expenses of
any such appearance shall be borne by Lessee and payable to
Lessor as Additional Rent. If an Event of Default exists,
Lessor's Mortgagee (or if there be none, Lessor) shall have
the exclusive right at Lessee's cost to negotiate, adjust and
settle awards, settlements and recoveries without Lessee's
approval.
(b) After
giving notice of a Destruction under the provisions of
paragraph (a) of this Article 12, Lessee shall, at Lessee's
own cost and expense, proceed with diligence and promptness
(i) to carry out any work necessary to make the Leased
Property safe and secure, and (ii) to Restore the Leased
Property. All Restoration shall be undertaken and completed in
the same manner as if the same were undertaken pursuant to
paragraphs (c) and (d) of Article 10, and shall be subject to
the reasonable requirements of Lessor and Lessor's Mortgagee
as provided for in clause (ii) below. All Restoration shall be
completed by the Outside Restoration Date, The foregoing
obligations of Lessee so to Restore the Leased Property shall
not be applicable (but the obligation of Lessee to make the
Leased Property safe and secure shall be applicable) if Lessee
has made (or has been deemed to have made) an offer to
purchase the Leased Property pursuant to paragraph (c) below.
If during the pendency of such Restoration the term of this
Lease expires or otherwise terminates, then, at Lessor's
option, such term shall be extended until completion of such
Restoration on the same terms and conditions (including Basic
Rent, Additional Rent and other rent) which were in effect
immediately prior to such extension. The "Outside Restoration
Date" shall mean (a) with respect to a Casualty,
eighteen (18) months after the Destruction occurs, or (b) with
respect to a Taking, twelve (12) months after the Destruction
occurs, in each case subject to extension by Lessor of not
more than eighteen (18) months to the extent that Restoration
is delayed due to acts of God, strikes, unavailability of
materials, or further Destruction.
Except
upon completion of Lessee's purchase of the Leased Property
pursuant to Article 15 hereof (including payment by Lessee of
all amounts Lessee is to pay pursuant to such Article 15),
Basic Rent and Additional Rent shall not abate hereunder by
reason of any Destruction affecting the Leased Property, and
this Lease shall continue in full force and effect and Lessee
shall continue to perform and fulfill all of Lessee's
obligations, covenants and agreements hereunder
notwithstanding such Destruction.
The
Net Award shall be applied to effect compliance with Lessee's
obligations hereunder. Before commencement of any Restoration
and at all times during Restoration, if the undisbursed
portion of the Net Award is less than the reasonably estimated
hard and soft costs to Restore the Improvements to the
condition required in this paragraph (b), as reasonably
determined by Lessor, at Lessee's expense, then, unless such
estimated cost is less than the Restoration Threshold Amount,
Lessee shall deposit the amount by which such estimated cost
to Restore exceeds the Net Award with the Depositary (as
defined below) or shall post an equivalent bond or other
security reasonably satisfactory in form and substance to
Lessor and Lessor's Mortgagee issued by a surety, bank or
other Person satisfactory to Lessor and Lessor's Mortgagee,
whereupon such deposit or bonded amount shall be part of the
Net Award for purposes of paragraph (c) of this Article 12. If
the Net Award does not exceed the then Specified Amount (the
"Restoration
Threshold Amount"), then provided no Event of Default
exists, the Net Award shall be promptly paid to Lessee to be
applied to the Restoration required by this paragraph (b). If
the Net Award exceeds the Restoration Threshold Amount then
provided no Event of Default exists:
(i) The
full amount thereof shall be paid to a depositary (the
"Depositary"). The
Depositary shall be Lessor's Mortgagee or a servicer of the
loan held thereby, or a bank or trust company, selected by
Lessor and approved by Lessor's Mortgagee, the long-term
unsecured debt obligations of which are rated at least "A" and
"A2", respectively, by S&P or Moody's (or any successor to
either entity). The Depositary shall have no affirmative
obligation to prosecute a determination of the amount of, or
to effect the collection of, any insurance proceeds or
condemnation award or awards. Moneys so received by the
Depositary shall be held by the Depositary in trust separately
for the uses and purposes provided in this Lease. To the
extent not available to be paid from the Net Award, fees and
expenses payable to the Depositary shall be paid by Lessee as
Additional Rent.
(ii) Payments
of the Net Award for the actual costs and expenses incurred by
Lessee in connection with such Restoration shall be made
periodically (but not less frequently than once each calendar
month and not more frequently than twice each calendar month)
to Lessee from time to time as work progresses by the
Depositary after written notice to the Depositary, with a copy
to Lessor, setting forth in reasonable detail and with
reasonable supporting materials all of such costs and expenses
actually incurred by Lessee. Lessee shall comply with the
reasonable requirements of Lessor and Lessor's Mortgagee, if
any, with respect to the distribution of any Net Award by the
Depositary, including without limitation that no Event of
Default exists hereunder, that Lessee proceeds promptly after
the Net Award is delivered to the Depositary to Restore the
Leased Property in accordance with the requirements of this
Article 12 and paragraphs (c) and (d) of Article 10, that all
plans and specifications for the Restoration shall have been
reviewed and approved by Lessor and Lessor's Mortgagee, and
that disbursements by the Depositary shall be not more
frequently than monthly in an amount not exceeding the hard
and soft costs of the Restoration incurred since the previous
disbursement and shall be conditioned upon, the delivery to
the Depositary of appropriate lien waivers, architect's
certificates, title insurance endorsements and other
certificates and information that would typically be delivered
to a construction lender in a construction loan context. The
Depositary shall retain ten percent (10%) of the Net Award
until Restoration is substantially complete at which time the
undisbursed
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