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EXHIBIT 99.1
LEASE AGREEMENT
by and between
WORLD (DE) QRS 15-65, INC.,
a Delaware corporation,
as LANDLORD,
and
WORLD AIRWAYS, INC.,
a Delaware corporation,
as TENANT
Premises: 101 World Drive
Peachtree City, GA
Dated as of: March 26, 2004
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TABLE OF CONTENTS
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Page
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1.
Demise of
Premises..............................................................
1
2.
Certain
Definitions.............................................................
1
3.
Title and Condition.
...........................................................
7
4. Use
of Leased Premises; Quiet
Enjoyment.........................................
8
5.
Term............................................................................
8
6.
Basic
Rent......................................................................
9
7.
Additional
Rent.................................................................
9
8. Net
Lease;
Non-Terminability....................................................
11
9.
Payment of
Impositions..........................................................
11
10. Compliance
with Laws and Easement Agreements, Environmental
Matters.............
12
11. Liens;
Recording................................................................
14
12.
Maintenance and
Repair..........................................................
14
13.
Alterations and
Improvements....................................................
15
14. Permitted
Contests..............................................................
16
15.
Indemnification.................................................................
16
16.
Insurance.......................................................................
17
17. Casualty
and
Condemnation.......................................................
19
18. Termination
Events..............................................................
20
19.
Intentionally
Deleted...........................................................
21
20. Procedures
Upon
Purchase........................................................
22
21. Assignment
and Subletting, Prohibition Against Leasehold
Financing..............
23
22. Events of
Default...............................................................
25
23. Remedies
and Damages upon
Default...............................................
27
24.
Notices.........................................................................
29
25. Estoppel
Certificate............................................................
30
26.
Surrender.......................................................................
30
27. No Merger
of
Title..............................................................
30
28. Books and
Records...............................................................
30
29.
Determination of
Value..........................................................
32
30.
Non-Recourse....................................................................
33
31.
Financing.......................................................................
34
32.
Subordination, Non-Disturbance and
Attornment...................................
34
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33. Tax
Treatment;
Reporting........................................................
34
34. Financing
the Exchange
Premises.................................................
35
35. Security
Deposit................................................................
36
36. Option to
Purchase..............................................................
37
37.
Authority.......................................................................
38
38.
Non-Foreign
Person..............................................................
38
39.
Brokers.........................................................................
38
40.
Miscellaneous...................................................................
38
41.
Satellites......................................................................
47
42.
Signs...........................................................................
50
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EXHIBITS
Exhibit "A" -
Premises
Exhibit "B" -
Machinery and Equipment
Exhibit "C" -
Schedule of Permitted Encumbrances
Exhibit "D" -
Rent Schedule
Exhibit "E" -
Tenant Estoppel Certificate
Exhibit "F" -
Sample Calculation for Increase of Annual Basic Rent
Exhibit "G" -
Subordination, Non-disturbance and Attornment Agreement
Exhibit "H" -
U.S. Patriot Act Certification
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LEASE AGREEMENT, made as of this 26th day of March, 2004,
between WORLD (DE) QRS 15-65, INC., a
Delaware corporation ("Landlord"), with an
address c/o W.P. Carey & Co. LLC, 50
Rockefeller Plaza, 2nd Floor, New York, New
York 10020, and WORLD AIRWAYS, INC., a
Delaware corporation ("Tenant"), with an
address at 101 World Drive, Peachtree City,
Georgia 30269.
In consideration of the rents and provisions herein stipulated
to be paid and performed, Landlord and
Tenant hereby covenant and agree as
follows:
1. Demise of Premises. Landlord hereby demises and lets to
Tenant, and Tenant hereby takes and leases
from Landlord, for the term and upon
the provisions hereinafter specified, the
following described property
(collectively, the "Leased Premises"): (a)
the land described in Exhibit "A"
attached hereto together with the
Appurtenances (collectively, the "Land"); (b)
the building containing approximately
57,500 square feet, structures and other
improvements now or hereafter constructed
on the Land (collectively, the
"Improvements"); and (c) the fixtures,
machinery, equipment and other property
described in Exhibit "B" hereto
(collectively, the "Equipment").
2. Certain Definitions.
"Acquisition Cost" shall mean $8,865,357.79.
"Additional Rent" shall mean Additional Rent as
defined in Paragraph 7.
"Alterations" shall mean all changes, additions,
improvements or repairs to, all
alterations, reconstructions, restorations,
renewals, replacements or removals of and
all substitutions or replacements for
any of the Improvements or Equipment, both
interior and exterior, structural and
non-structural, and ordinary and
extraordinary.
"Annual Operating Costs" shall mean Annual Operating
Costs as defined in Paragraph 7(a)(v).
"Appurtenances" shall mean all tenements,
hereditaments, easements, rights-of-way,
rights, privileges in and to the Land,
including (a) easements over other lands
granted by any Easement Agreement and
(b) any sidewalks, driveways, curbs,
streets, ways, alleys, vaults, gores or
strips of land adjoining the Land.
"Asset Transfer" shall mean Asset Transfer as defined
in Paragraph 21(h).
"Assignment" shall mean any assignment of rents and
leases from Landlord to a Lender which (a)
encumbers any of the Leased Premises
and (b) secures Landlord's obligation to
repay a Loan, as the same may be
amended, supplemented or modified from time
to time.
"Basic Rent"
shall mean Basic Rent as defined in
Paragraph 6.
"Basic Rent Payment Date" shall mean Basic Rent
Payment Date as defined in Paragraph 6.
"Casualty" shall mean any damage to or destruction of
or which affects the Leased Premises or
which arises from the Leased Premises.
1
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"Commencement Date" shall mean Commencement Date as
defined in Paragraph 5.
"Condemnation" shall mean a Taking.
"Condemnation Notice" shall mean notice or knowledge
of the institution of or intention to
institute any proceeding for Condemnation.
"Costs" of a Person or associated with a specified
transaction shall mean all reasonable costs
and expenses incurred by such Person
or associated with such transaction,
including without limitation, attorneys'
fees and expenses, court costs, brokerage
fees, escrow fees, title insurance
premiums, mortgage commitment fees,
mortgage points, recording fees and transfer
taxes, as the circumstances require.
"CPI" shall mean CPI as defined in Exhibit "D"
hereto.
"Default Rate" shall mean the Default Rate as defined
in Paragraph 7(a)(iv).
"Easement Agreement" shall mean any conditions,
covenants, restrictions, easements,
declarations, licenses and other agreements
listed as Permitted Encumbrances or as may
hereafter affect the Leased Premises.
"Environmental Law" shall mean (a) whenever enacted
or promulgated, any applicable federal,
state and local law, statute, ordinance,
rule, regulation, license, permit,
authorization, approval, consent, court
order, judgment, decree, injunction, code,
requirement or agreement with any
governmental entity, (i) relating to
pollution (or the cleanup thereof), or the
protection of air, water vapor, surface
water, groundwater, drinking water
supply, land (including land surface or
subsurface), plant, aquatic and animal
life from injury caused by a Hazardous
Substance or (ii) concerning exposure to,
or the use, containment, storage,
recycling, reclamation, reuse, treatment,
generation, discharge, transportation,
processing, handling, labeling,
production, disposal or remediation of
Hazardous Substances, Hazardous
Conditions or Hazardous Activities, in each
case as amended and as now or
hereafter in effect, and (b) any common law
or equitable doctrine (including,
without limitation, injunctive relief and
tort doctrines such as negligence,
nuisance, trespass and strict liability)
that may impose liability or
obligations for injuries or damages due to
or threatened as a result of the
presence of, exposure to, or ingestion of,
any Hazardous Substance. The term
Environmental Law includes, without
limitation, the federal Comprehensive
Environmental Response Compensation and
Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the
federal Water Pollution Control Act, the
federal Clean Air Act, the federal Clean
Water Act, the federal Resources
Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid
Waste Disposal Act, the federal Toxic
Substance Control Act, the federal
Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health
Act of 1970, the federal National
Environmental Policy Act and the federal
Hazardous Materials Transportation Act,
each as amended and as now or hereafter in
effect and any similar state or local
Law.
"Environmental Violation" shall mean (a) any direct
or indirect discharge, disposal, spillage,
emission, escape, pumping, pouring,
injection, leaching, release, seepage,
filtration or transporting of any
Hazardous Substance at, upon, under, onto
or within the Leased Premises, or from
the Leased Premises to the environment, in
violation of any Environmental Law or
in excess of any reportable quantity
established under any Environmental Law or
which could result in any liability to
Landlord, Tenant or Lender, any Federal,
state or local government or any other
Person for the costs of any removal or
remedial action or natural resources
damage
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or for bodily injury or property damage,
(b) any deposit, storage, dumping,
placement or use of any Hazardous Substance
at, upon, under or within the Leased
Premises in violation of any Environmental
Law or in excess of any reportable
quantity established under any
Environmental Law or which could result in any
liability to any Federal, state or local
government or to any other Person for
the costs of any removal or remedial action
or natural resources damage or for
bodily injury or property damage, (c) the
abandonment or discarding of any
barrels, containers or other receptacles
containing any Hazardous Substances in
violation of any Environmental Laws, (d)
any activity, occurrence or condition
which could result in any liability, cost
or expense to Landlord or Lender or
any other owner or occupier of the Leased
Premises, or which could result in a
creation of a lien on the Leased Premises
under any Environmental Law, or (e)
any violation of or noncompliance with any
Environmental Law.
"Equipment" shall mean the Equipment as defined in
Paragraph 1.
"Event of Default" shall mean an Event of Default as
defined in Paragraph 22(a).
"Exchange" shall mean the Exchange as defined in
Paragraph 34.
"Exchange Cost" shall mean the Exchange Cost as
defined in Paragraph 34.
"Exchange Date" shall mean the Exchange Date as
defined in Paragraph 34.
"Exchange Offer" shall mean the Exchange Offer as
defined in Paragraph 34.
"Exchange Premises" shall mean the Exchange Premises
as defined in Paragraph 34.
"Fair Market Rental Value" shall mean the fair market
rental value of the Leased Premises for the
relevant Renewal Term determined in
accordance with the procedure specified in
Paragraph 29.
"Fair Market Value Date" shall mean the date when the
Fair Market Rental Value is determined in
accordance with Paragraph 29.
"Federal Funds" shall mean federal or other
immediately available funds which at the
time of payment are legal tender for
the payment of public and private debts in
the United States of America.
"Generator" shall mean the 1,400-gallon diesel fuel,
500 kilowatt generator system manufactured
by Generic Power Systems, together
with all circuits, wires, concrete pads,
transformers, and similar removable
fixtures necessary for operation of said
generator system.
"Hazardous Activity" means any activity, process,
procedure or undertaking which directly or
indirectly (a) procures, generates or
creates any Hazardous Substance; (b) causes
or results in (or threatens to cause
or result in) the release, seepage, spill,
leak, flow, discharge or emission of
any Hazardous Substance into the
environment (including the air, ground water,
watercourses or water systems), (c)
involves the containment or storage of any
Hazardous Substance; or (d) would cause the
Leased Premises or any portion
thereof to
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become a hazardous waste treatment,
recycling, reclamation, processing, storage
or disposal facility within the meaning of
any Environmental Law.
"Hazardous Condition" means any condition which would
support any claim or liability under any
Environmental Law, including the
presence of underground storage tanks.
"Hazardous Substance" means (i) any substance,
material, product, petroleum, petroleum
product, derivative, compound or
mixture, mineral (including asbestos),
chemical, gas, medical waste, or other
pollutant, in each case whether naturally
occurring, man-made or the by-product
of any process, that is toxic, harmful or
hazardous or acutely hazardous to the
environment or public health or safety or
(ii) any substance supporting a claim
under any Environmental Law, whether or not
defined as hazardous as such under
any Environmental Law. Hazardous Substances
include, without limitation, any
toxic or hazardous waste, pollutant,
contaminant, industrial waste, petroleum or
petroleum-derived substances or waste,
radon, radioactive materials, asbestos,
asbestos containing materials, microbial
matter (including but not limited to
mold, mildew and other fungi or bacterial
matter which reproduces through the
release of spores or the splitting of
cells), urea formaldehyde foam insulation,
lead and polychlorinated biphenyls.
"Impositions" shall mean the Impositions as defined
in Paragraph 9(a).
"Improvements" shall mean the Improvements as defined
in Paragraph 1.
"Indemnitee" shall mean an Indemnitee as defined in
Paragraph 15.
"Insurance Requirements" shall mean the requirements
of all insurance policies required to be
maintained in accordance with this
Lease.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any constitution, statute, rule of
law, code, ordinance, order, judgment,
decree, injunction, rule, regulation,
policy, requirement or administrative or
judicial determination, even if
unforeseen or extraordinary, of every duly
constituted governmental authority,
court or agency, now or hereafter enacted
or in effect.
"Lease" shall mean this Lease Agreement.
"Lease Year" shall mean, with respect to the first
Lease Year, the period commencing on the
Commencement Date and ending at
midnight on the last day of the twelfth
(12th) full consecutive calendar month
following the month in which the
Commencement Date occurred, and each succeeding
twelve (12) month period during the
Term.
"Leased Premises" shall mean the Leased Premises as
defined in Paragraph 1.
"Legal Requirements" shall mean the requirements of
all present and future Laws (including but
not limited to Environmental Laws and
Laws relating to accessibility to,
usability by, and discrimination against,
disabled individuals) and all covenants,
restrictions and conditions now or
hereafter of record which may be applicable
to Tenant or to any of the Leased
Premises, or to the use, manner of use,
occupancy, possession, operation,
maintenance, alteration, repair or
restoration of any of the Leased Premises,
even if compliance therewith necessitates
structural changes or improvements or
results in interference with the use or
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enjoyment of any of the Leased Premises or
requires Tenant to carry insurance
other than as required by this Lease.
"Lender" shall mean any Person (and its respective
successors and assigns) which may, on or
after the date hereof, make a Loan to
Landlord or be the holder of a Note.
"Letter of Credit" shall mean Letter of Credit as
defined in Paragraph 35.
"Loan" shall mean any loan made by one or more
Lenders to Landlord, which loan is secured
by a Mortgage and an Assignment and
evidenced by a Note.
"Monetary Obligations" shall mean Rent and all other
sums payable by Tenant under this Lease to
Landlord, to any third party on
behalf of Landlord or to any
Indemnitee.
"Moody's" shall mean Moody's Investor Services, Inc.
"Mortgage" shall mean any mortgage or deed of trust
from Landlord to a Lender which (a)
encumbers any of the Leased Premises and (b)
secures Landlord's obligation to repay a
Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable
to Landlord or Lender by reason of a
Condemnation whether pursuant to a judgment
or by agreement or otherwise, or (b) the
entire proceeds of any insurance
required under clauses (i), (ii), (iii) and
(iv) of Paragraph 16(a), less any
expenses incurred by Landlord and Lender in
collecting such award or proceeds.
"Note" shall mean any promissory note evidencing
Landlord's obligation to repay a Loan, as
the same may be amended, supplemented
or modified.
"Offer Amount" shall mean the sum of the Acquisition
Cost and the applicable Prepayment Premium
which Landlord will be required to
pay in prepaying any Loan with the proceeds
of the Offer Amount.
"Option Exercise Notice" shall mean the Option
Exercise Notice as defined in Paragraph
36.
"Partial Casualty" shall mean any Casualty which does
not constitute a Termination Event.
"Partial Condemnation" shall mean any Condemnation
which does not constitute a Termination
Event.
"Permitted Encumbrances" shall mean those covenants,
restrictions, reservations, liens,
conditions and easements and other
encumbrances, other than any Mortgage or
Assignment, listed on Exhibit "C"
hereto (but such listing shall not be
deemed to revive any such encumbrances
that have expired or terminated or are
otherwise invalid or unenforceable).
"Person" shall mean an individual, partnership,
association, corporation or other
entity.
"Prepayment Premium" shall mean any payment required
to be made by Landlord to a Lender under a
Note or any other document evidencing
or securing a Loan (other
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than payments of principal and/or interest
which Landlord is required to make
under a Note or a Mortgage) solely by
reason of any prepayment or defeasance by
Landlord of any principal due under a Note
or Mortgage, and which may without
limitation take the form of (a) a "make
whole" or yield maintenance clause
requiring a prepayment premium or (b) a
defeasance payment (such defeasance
payment to be an amount equal to the
positive difference between (i) the total
amount required to defease a Loan and (ii)
the outstanding principal balance of
the Loan as of the date of such defeasance
plus reasonable Costs of Landlord and
Lender.
"Present Value" of any amount shall mean such amount
discounted by a rate per annum which is the
lower of (a) the Prime Rate at the
time such present value is determined or
(b) six percent (6%) per annum.
"Prime Rate" shall mean the annual interest rate as
published, from time to time, in The Wall
Street Journal as the "Prime Rate" in
its column entitled "Money Rate". The Prime
Rate may not be the lowest rate of
interest charged by any "large U.S. money
center commercial banks" and Landlord
makes no representations or warranties to
that effect. In the event The Wall
Street Journal ceases publication or ceases
to publish the "Prime Rate" as
described above, the Prime Rate shall be
the average per annum discount rate
(the "Discount Rate") on ninety-one (91)
day bills ("Treasury Bills") issued
from time to time by the United States
Treasury at its most recent auction, plus
three hundred (300) basis points. If no
such 91-day Treasury Bills are then
being issued, the Discount Rate shall be
the discount rate on Treasury Bills
then being issued for the period of time
closest to ninety-one (91) days.
"Relevant Date" shall mean the date on which Fair
Market Rental Value is determined in the
event of any extension of this Lease
pursuant to Paragraph 5(b).
"Renewal Notice" shall mean Renewal Notice as defined
in Paragraph 5.
"Renewal Term" shall mean Renewal Term as defined in
Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and
Additional Rent.
"Security Deposit" shall mean Security Deposit as
defined in Paragraph 35.
"Site Assessment" shall mean a Site Assessment as
defined in Paragraph 10(c).
"State" shall mean the State of Georgia.
"Surviving Obligations" shall mean any obligations of
Tenant under this Lease, actual or
contingent, which arise on or prior to the
expiration or prior termination of this
Lease or which survive such expiration
or termination by their own terms.
"Systems" shall mean those items of the Equipment
which are defined as Systems in Paragraph
12.
"Taking" shall mean (a) any taking or damaging of all
or a portion of any of the Leased Premises
(i) in or by condemnation or other
eminent domain proceedings pursuant to any
Law, general or special, or (ii) by
reason of any agreement with any condemnor
in settlement of or under threat of
any such condemnation or other eminent
domain proceeding, or (iii) by any other
means, or (b) any de facto condemnation.
The Taking shall be considered to have
taken place as of the later of the date
actual physical possession is taken by
the condemnor,
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or the date on which the right to
compensation and damages accrues under the law
applicable to the Leased Premises.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Date" shall mean Termination Date as
defined in Paragraph 18.
"Termination Event" shall mean a Termination Event as
defined in Paragraph 18.
"Termination Notice" shall mean Termination Notice as
defined in Paragraph 18(a).
"Transfer" shall mean Transfer as defined in
Paragraph 21(a)(i).
"UPS System" shall mean the uninterrupted power
source system, together with all circuits,
wires, and similar removable fixtures
necessary for the operation of said power
source system.
"Warranties" shall mean Warranties as defined in
Paragraph 3(d).
"Work" shall mean Work as defined in Paragraph 13(b).
3. Title and Condition.
(a) The Leased Premises are demised and let subject
to (i) the rights of any Persons in
possession of the Leased Premises, (ii) the
existing state of title of any of the
Leased Premises, including any Permitted
Encumbrances, (iii) any state of facts
which an accurate survey or physical
inspection of the Leased Premises might
show, (iv) all Legal Requirements,
including any existing violation of any
thereof, and (v) the condition of the
Leased Premises as of the commencement of
the Term, without representation or
warranty by Landlord, except as otherwise
provided in Paragraph 3(d).
(b) Tenant acknowledges that, to the best of its
knowledge, the Leased Premises is in good
condition and repair at the inception
of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE
LEASED PREMISES AS IS. EXCEPT AS OTHERWISE
PROVIDED HEREIN, TENANT ACKNOWLEDGES
THAT LANDLORD (WHETHER ACTING AS LANDLORD
HEREUNDER OR IN ANY OTHER CAPACITY)
HAS NOT MADE AND WILL NOT MAKE, NOR SHALL
LANDLORD BE DEEMED TO HAVE MADE, ANY
WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE
LEASED PREMISES, INCLUDING ANY WARRANTY OR
REPRESENTATION AS TO (i) ITS FITNESS,
DESIGN OR CONDITION FOR ANY PARTICULAR USE
OR PURPOSE, (ii) THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, (iii) THE
EXISTENCE OF ANY DEFECT, LATENT OR
PATENT, (iv) LANDLORD'S TITLE THERETO, (v)
VALUE, (vi) COMPLIANCE WITH
SPECIFICATIONS, (vii) LOCATION, (viii) USE,
(ix) CONDITION, (x) MERCHANTABILITY,
(xi) QUALITY, (xii) DESCRIPTION, (xiii)
DURABILITY, (xiv) OPERATION OR (xv) THE
EXISTENCE OF ANY HAZARDOUS SUBSTANCE,
HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY
. TENANT ACKNOWLEDGES THAT THE LEASED
PREMISES IS OF ITS SELECTION AND TO ITS
SPECIFICATIONS AND THAT THE LEASED PREMISES
HAS BEEN INSPECTED BY TENANT AND IS
SATISFACTORY TO IT. THE PROVISIONS OF THIS
PARAGRAPH 3(b) HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE
EXCLUSION
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AND NEGATION OF ANY WARRANTIES BY LANDLORD,
EXPRESS OR IMPLIED, WITH RESPECT TO
ANY OF THE LEASED PREMISES, ARISING
PURSUANT TO THE UNIFORM COMMERCIAL CODE OR
ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR
ARISING OTHERWISE.
(c) Tenant acknowledges (i) that Tenant has only the
leasehold right of possession and use of
the Leased Premises, as provided
herein, (ii) to the best of its knowledge
the Improvements conform to all
material Legal Requirements and all
Insurance Requirements, (iii) to the best of
its knowledge, all easements necessary or
appropriate for the use or operation
of the Leased Premises have been obtained,
(iv) all contractors and
subcontractors who have performed work on
or supplied materials to the Leased
Premises on behalf of the Tenant have been
fully paid, and all materials and
supplies related thereto have been fully
paid for, (v) to the best of its
knowledge, the Improvements have been fully
completed in all material respects
in a workmanlike manner of first class
quality, and (vi) all Equipment necessary
or appropriate for the use or operation of
the Leased Premises by Tenant has
been installed and is presently fully
operative in all material respects.
(d) Based exclusively on that certain Seller's
Certificate dated on or about the date
hereof executed by Air Eagle Properties,
LLC in favor of Landlord and without having
undertaken any independent
investigation to determine the existence or
absence of facts with respect to the
representations and warrants contained in
such Seller's Certificate, Landlord
represents and warrants that the
Improvements conform to all material Legal
Requirements and all Insurance Requirements
and can be used for the purposes set
forth in Paragraph 4(a).
4. Use of Leased Premises; Quiet Enjoyment.
(a) The Leased Premises shall be used and occupied by
Tenant solely for general, executive and
administrative office purposes,
including a 24-hour operations center (the
"Operations Control Area") and
related functions, in accordance with, and
as limited by, applicable Laws, and
for no other purpose whatsoever without the
prior written consent of Landlord.
Tenant shall not use or occupy or permit
any of the Leased Premises to be used
or occupied, nor do or permit anything to
be done in or on any of the Leased
Premises, in a manner which would or might
(i) violate any Law, Legal
Requirement or Permitted Encumbrance, (ii)
make void or voidable or cause any
insurer to cancel any insurance required by
this Lease, or make it difficult or
impossible to obtain any such insurance at
commercially reasonable rates, (iii)
make void or voidable, cancel or cause to
be cancelled or release any
warranties, guaranties, indemnities and
similar rights (collectively,
"Warranties") which Landlord may have
against any manufacturer, seller,
engineer, contractor or builder in respect
of any of the Leased Premises, (iv)
cause structural injury to any of the
Improvements or (v) constitute a public or
private nuisance or waste. Tenant shall not
permit any objectionable odors or
noises to emanate from the Leased Premises.
Tenant hereby agrees to defend,
indemnify and hold Landlord harmless from
and against any and all Costs arising
out of or related to any breach of this
Paragraph 4.
(b) Subject to the provisions hereof, so long as no
Event of Default has occurred and is
continuing, Tenant shall quietly hold,
occupy and enjoy the Leased Premises
throughout the Term, without any hindrance,
ejection or molestation by Landlord, or
anyone claiming by, through or under
Landlord, provided that Landlord or its
agents may enter upon and examine any of
the Leased Premises at such reasonable
times during business hours as Landlord
may select and upon reasonable notice to
Tenant (except in the case of an
emergency, in which no notice shall be
required) for the purpose of inspecting
the Leased Premises, verifying compliance
or non-compliance by Tenant with its
obligations hereunder and the existence or
non-existence of an Event of Default
or event which with the passage of time
and/or notice would constitute an Event
of Default, showing the Leased Premises to
prospective Lenders and
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<PAGE>
purchasers, making any repairs and taking
such other action with respect to the
Leased Premises as is permitted by any
provision hereof.
(c) Notwithstanding anything to the contrary, the
roof, exterior faces of all perimeter walls
and the use of the air space above
the Improvements shall be reserved for
Landlord's exclusive use and Tenant shall
have no right of access thereto, except as
provided for in Paragraph 41 and
Paragraph 42.
5. Term.
(a) Subject to the provisions hereof, Tenant shall
have and hold the Leased Premises for an
initial term (such term, as extended or
renewed in accordance with the provisions
hereof, being called the "Term")
commencing on the date hereof (the
"Commencement Date") and ending on the last
day of the one hundred eightieth (180th)
full calendar month next following the
date hereof (the "Expiration Date").
(b) Provided that if,
on or prior to the Expiration
Date or any other Renewal Date (as
hereinafter defined) this Lease shall not
have been terminated pursuant to any
provision hereof, then Tenant shall have
the right to extend the Term on the
Expiration Date and on the tenth (10th)
anniversary of the Expiration Date (the
Expiration Date and each such
anniversary being a referred to herein as a
"Renewal Date") for an additional
period of ten (10) years (each such
extension, a "Renewal Term"), upon written
notice to Landlord (any such notice, a
"Renewal Notice") at least eighteen (18)
months prior to the next Renewal Date that
Tenant is extending the Term of this
Lease as of the next Renewal Date. Any such
extension of the Term shall be
subject to all of the provisions of this
Lease, as the same may be amended,
supplemented or modified (except that
Tenant shall not have the right to any
additional Renewal Terms). If Tenant does
not provide the first Renewal Notice,
then the Term of this Lease shall expire on
the Expiration Date, and if Tenant
has extended the Term for the first Renewal
Term but does not provide a Renewal
Notice for the second Renewal Term, the
Term shall expire, on the tenth (10th)
anniversary of the Expiration Date. In any
event the Term shall expire on the
twentieth (20th) anniversary of the
Expiration Date.
(c) If Tenant does not exercise its option to extend
or further extend the Term, or if an Event
of Default exists, then Landlord
shall have the right during the remainder
of the Term then in effect and, in any
event, Landlord shall have the right during
the last year of the Term, to (i)
advertise the availability of the Leased
Premises for sale or reletting and to
erect upon the Leased Premises signs
indicating such availability and (ii) upon
not less than twenty-four (24) hours prior
notice to Tenant, show the Leased
Premises to prospective purchasers or
tenants or their agents at such reasonable
times during business hours as Landlord may
select.
6. Basic Rent. Tenant shall pay to Landlord, as
annual rent for the Leased Premises during
the Term, the amounts determined in
accordance with Exhibit "D" hereto ("Basic
Rent"), payable quarterly in advance
for the next three (3) calendar months,
commencing on the twenty-fifth day of
April, 2004, and thereafter on the same day
of each July, October, January and
April during the Term which shall be
payable as set forth in said Exhibit "D".
The date that each payment of Basic Rent is
due is hereinafter referred to as a
"Basic Rent Payment Date". Each such
payment of Basic Rent shall be made to
Landlord on each Basic Rent Payment Date in
Federal Funds pursuant to wire
transfer instructions delivered to Tenant
from time to time and/or to such one
or more other Persons, pursuant to wire
transfer instructions delivered to
Tenant from time to time at such addresses
and in such proportions as Landlord
may direct by fifteen (15) days' prior
written notice to Tenant (in which event
Tenant shall give Landlord notice of each
such payment concurrent with the
making thereof).
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<PAGE>
7. Additional Rent.
(a) Tenant shall pay and discharge, as additional
rent (collectively, "Additional Rent"):
(i) except as otherwise specifically
provided herein, all costs and expenses of
Tenant, Landlord and any other
Persons specifically referenced herein
which are incurred in connection or
associated with (A) the use, non-use,
occupancy, possession, operation,
condition, maintenance, alteration, repair
or restoration of any of the Leased
Premises, including, without limitation,
all Annual Operating Costs (as defined
herein) for each Lease Year, (B) the
performance of any of Tenant's obligations
under this Lease, (C) any sale or other
transfer of any of the Leased Premises
to Tenant by Landlord in connection with
the Exchange, (D) the prosecution,
defense or settlement of any litigation
involving or arising from any breach of
the terms of this Lease by Tenant, its
sublessee, assignee or any Person
occupying the Leased Premises under or
through Tenant, (E) the exercise or
enforcement by Landlord, its successors and
assigns, of any of its rights under
this Lease, (F) any amendment to or
modification or termination of this Lease
made at the request of Tenant, (G) Costs of
Landlord's counsel and reasonable
internal Costs of Landlord incurred in
connection with any act undertaken by
Landlord (or its counsel) at the request of
Tenant, any act of Landlord
performed on behalf of Tenant or the review
and monitoring of compliance by
Tenant with the terms of this Lease,
including applicable Law (and Landlord
agrees to provide Tenant with fifteen (15)
days prior written notice of its
estimated internal or counsel Costs in
connection with this Paragraph 7(a)(i)
except that in the case of an emergency no
notice shall be required), (H) all
costs and fees associated with the wire
transfers of Rent payments, (I) an
administrative fee of $10,000 payable to
Landlord in connection with any
Exchange, and (J) any other items
specifically required to be paid by Tenant
under this Lease;
(ii) after the date all or any portion of
any installment of Basic Rent is due and
not paid by the applicable Basic Rent
Payment Date, an amount (the "Late Charge")
equal to five percent (5%) of the
amount of such unpaid installment or
portion thereof to reimburse Landlord for
its cost and inconvenience incurred as a
result of Tenant's delinquency,
provided, however, that with respect to the
first late payment of all or any
portion of any installment of Basic Rent in
any Lease Year, the Late Charge
shall not be due and payable unless the
Basic Rent has not been paid within five
(5) days following the due date
thereof;
(iii) a sum equal to any additional sums
(including any late charge in excess of the
amount payable under clause (ii)
above for that portion of the Basic Rent
paid to the Lender as scheduled
installments of principal and interest,
default penalties, interest in excess of
amounts payable under clause (iv) below for
that portion of the Basic Rent paid
to the Lender as scheduled installments of
principal and interest, and fees of
Lender's counsel) which are payable by
Landlord to any Lender under any Note by
reason of Tenant's late payment or
non-payment of Basic Rent or by reason of the
occurrence and continuance of an Event of
Default;
(iv) interest at the rate (the "Default
Rate") of three percent (3%) over the Prime
Rate per annum on the following sums
until paid in full: (A) all overdue
installments of Basic Rent from the
respective due dates thereof, (B) all
overdue amounts of Additional Rent
relating to obligations which Landlord
shall have paid on behalf of Tenant, from
the date of payment thereof by Landlord,
and (C) all other overdue amounts of
Additional Rent, from the date when any
such amount becomes overdue; and
(v) all Annual Operating Costs. As used
herein, Annual Operating Costs shall
include all expenses incurred by Landlord
in connection with the operation
(including, without limitation, supervision,
administration and management),
maintenance,
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<PAGE>
servicing and/or repair of the Improvements
and/or its appurtenances (including,
without limitation, any parking areas in or
appurtenant to the Improvements)
and/or the Land, and shall include, by way
of illustration but not limitation,
the following: all Impositions, all
maintenance, repair, restoration and
replacement of the Improvements (including
replacement parts and components
necessary to make any such maintenance,
repair, restoration and/or replacements
to any of the Improvements and the
Equipment), all rents, charges and expenses,
salaries, wages and employee benefits
(including, without limitation, medical,
surgical and general welfare benefits,
group life insurance, pension payments,
payroll taxes, workman's compensation
insurance premiums and bond premiums) for
agents or employees of Landlord engaged in
the full time operation, maintenance,
servicing or repair of the Improvements
and/or the Land and/or its
appurtenances, license, permit and
inspection fees and/or charges, repairs and
maintenance, utility and utility
distribution charges, water and sewer charges,
charges for gas, oil and other fuels,
charges for steam, premiums for any
casualty, liability, rental loss and/or
other insurance obtained by Landlord or
on Landlord's behalf with respect to the
Improvements and /or the Land, security
services, char and cleaning services,
cleaning supplies, uniforms and dry
cleaning and laundering for employees who
work at or for the Improvements,
window cleaning, snow removal, repair and
maintenance of the sidewalks,
driveways, roadways (public and private)
and grounds, including plantings and
ground cover and other improvements and
replacements thereto, reasonable
accounting and legal fees, fees and
expenses incurred by Landlord under any
service (including, without limitation,
garbage and waste disposal (including
recycling costs), elevator service, and
plumbing service) or management
contracts, the cost for telephone,
telegraph, stationery, postage and other
materials and supplies used in the
operation of the Improvements and/or the
Land, personal property taxes, advertising
and promotion expenses, all sales
and/or excise taxes imposed on any of the
services provided by Landlord, the
re-paving, seal coating or re-striping of
any parking areas in or appurtenant to
the Improvements, and any other expenses or
charges of any nature whatsoever,
whether or not herein mentioned, which
shall be included in Annual Operating
Costs in accordance with generally accepted
accounting and management principles
with respect to the operation of similar
office buildings in Atlanta, Georgia.
Annual Operating Costs shall include a
management fee equal to five percent (5%)
of the gross revenue from the Improvements.
In determining the amount of Annual
Operating Costs for any Lease Year, if the
Leased Premises are not fully
occupied by Tenant at any time during such
Lease Year, then Annual Operating
Costs shall be computed by Landlord for
such Lease Year to be an amount equal to
the likely Annual Operating Costs which
would normally be expected to be
incurred had the Leased Premises been fully
such occupied for Lease Year.
(b) In no event shall amounts payable under Paragraph
7(a)(ii), (iii) and (iv) or elsewhere in
this Lease exceed the maximum amount
permitted by applicable Law.
(c) Notwithstanding anything herein to the contrary,
the following items shall not constitute
Annual Operating Costs and shall not be
paid by Tenant under any circumstances:
(i) interest and amortization of funds
borrowed by Landlord, whether secured or
unsecured;
(ii) Costs associated with the sale of any
interest in the Improvements, including,
without limitation, advertising,
marketing and commissions;
(iii) amounts paid to any partner,
shareholder, officer or director of
Landlord, for salary or other compensation;
(iv) accounting or legal fees which are not
related to the operation and maintenance of
the Leased Premises;
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<PAGE>
(v) Costs relating to maintaining Landlord's
existence, either as a corporation,
partnership, or other entity, such as
trustee's fees, annual fees, partnership
organization or administration
expenses, deed recordation expenses, legal
and accounting fees (other than with
respect to the operation and maintenance of
the Leased Premises);
(vi) Costs relating to the negligence or
willful misconduct, as determined by a
court of law, of Landlord;
(vii) Costs incurred by Landlord for
trustee's fees, partnership or corporation
organizational expenses and
accounting fees except accounting fees
relating solely to the ownership and
operation of the Leased Premises;
(viii) the cost of any item to the extent
such item is properly classified as a
capital expenditure under generally
accepted accounting principles (except as
provided in Paragraph 7(d) and
Paragraph 12(d)(ii));
(ix) Costs of repairs, restoration or
replacements occasioned by (a) fire,
windstorm or other Casualty of an insurable
nature (whether such destruction be total
or partial) and paid by insurance
obtained by Landlord, and (b) the exercise
by governmental authorities of the
right of eminent domain, whether such
Taking be total or partial; or
(x) depreciation of the Improvements or any
equipment, machinery, fixtures or
improvements therein.
(d) Notwithstanding anything herein to the contrary,
if any capital improvement is made either
(i) in compliance with any Legal
Requirements, or (ii) for the purpose of
saving or reducing Annual Operating
Costs (as, for example, a labor-saving
improvement), then the cost of such
improvement shall be included in Annual
Operating Costs for the Lease Year in
which such improvement was made; provided,
however, to the extent the cost of
such improvement is required to be
capitalized for federal income tax purposes,
such cost shall be amortized over the
shortest useful life of such improvement
permitted pursuant to the Internal Revenue
Code of 1986, as amended, and the
annual amortization, together with interest
thereon, at the then "base" rate
being charged by Citibank, N.A. or its
successor, of such improvement shall be
deemed within the definition of Annual
Operating Costs in each Lease Year during
which such cost of the improvement is
amortized.
(e) Landlord shall furnish to Tenant, within one
hundred fifty (150) days after the
conclusion of each Lease Year, a statement
(each an "Annual Statement") in reasonable
detail showing the actual Annual
Operating Costs for each Lease Year. Tenant
shall, together with the next
occurring installment of Basic Rent, pay to
Landlord the Annual Operating Costs
for the Lease Year covered by such Annual
Statement.
(f) Commencing on the twenty-fifth (25) day of April,
2004, Tenant shall pay to Landlord
quarterly during each Lease Year, as
Additional Rent, without notice or demand
therefor and without any deduction,
abatement or setoff whatsoever, an amount
equal to one-quarter (1/4) of Annual
Operating Costs for such Lease Year as
reasonably estimated by Landlord in
writing (each an "Estimation Statement").
In the event the Estimation Statement
is not given prior to the beginning of any
Lease Year, Tenant shall continue to
pay during the next ensuing Lease Year on
the basis of the amount of Annual
Operating Costs payable during the Lease
Year just ended until the quarter after
the Estimation Statement is delivered to
Tenant.
(g) In the event Annual Operating Costs in the
Estimation Statement exceeds Annual
Operating Costs in the Annual Statement for
such Lease Year, Landlord shall within
thirty (30) days after delivery of the
Annual Statement refund such excess to
Tenant if
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<PAGE>
Tenant is not in default beyond applicable
grace and cure period under this
Lease. In the event Annual Operating Costs
in the Estimation Statement exceeds
Annual Operating Costs in the Estimation
Statement for such Lease Year, Tenant
shall pay Landlord, within thirty (30) days
of receipt of the Annual Statement,
an amount equal to such difference. Failure
by the Landlord to timely provide
any Annual Statement or to prepare and
deliver any statements or bills, or to
make a demand under this Paragraph 7, shall
not constitute a waiver by Landlord
of its rights to payments due pursuant to
this Paragraph 7.
(h) From time to time during each Lease Year (but not
more than once each Lease Year), Landlord
may re-estimate the amount of Annual
Operating Costs for the then remaining
balance of the Lease Year. For any
applicable Lease Year that ends after the
Expiration Date or after any Renewal
Term the Annual Operating Costs for such
Lease Year shall be apportioned on a
per diem basis so that only that portion of
the Annual Operating Costs for such
Lease Year is attributable to the portion
of such Lease Year that occurs during
the Term shall be payable by Tenant. Tenant
may not claim a readjustment of
Annual Operating Costs based on any error
of estimation, determination or
calculation thereof except by written
notice given within six (6) months after
receipt of the Estimation Statement or
Annual Statement (as the case may be) for
the Lease Year to which such estimate or
calculation relates. Each Annual
Statement shall be conclusive and binding
upon Tenant unless within ninety (90)
days after Landlord's delivery of any such
statement Tenant shall notify
Landlord that Tenant disputes the
correctness of said statement. Pending the
determination of any such dispute by
agreement or otherwise, Tenant shall pay
Additional Rent in accordance with the
applicable Annual Statement, and such
payment shall be without prejudice to
Tenant's position. If the dispute shall be
determined in Tenant's favor, Landlord
shall, within thirty (30) days after such
determination, refund to Tenant the amount
of Tenant's overpayment of Additional
Rent resulting from compliance with the
Annual Statement.
(i) Upon the request of Tenant, given within sixty
(60) days of Tenant's receipt of such
Annual Statement and provided that (i) all
Annual Operating Costs then due and payable
have been paid in full prior to such
request, and (ii) no default by Tenant
under the Lease shall have occurred and
then be continuing, Landlord shall promptly
make available to Tenant or its
certified public accountant (at Landlord's
offices during normal business hours)
information relating to the Annual
Statement or the preparation thereof which is
reasonably necessary to enable Tenant to
verify Landlord's calculations with
regard to Tenant's specific objections to
such statement; provided, in no event
shall Landlord be required to make
available any information to any third party
contractor or consultant employed by Tenant
to perform such review on a
contingent-fee basis or other "savings"
based fee structure. Neither Tenant nor
its certified public accountant shall be
permitted to remove such books and
records from Landlord's offices. All such
information shall be made available on
a confidential basis and Tenant shall not
disclose such information to any third
party, except to its certified public
accountant who shall acknowledge in
writing the confidential nature of such
information. If the objections are not
settled by agreement, either party may
refer the decision of the issues raised
to a reputable independent firm of
certified public accountants mutually
acceptable to the parties, and the decision
of such accountants shall be
conclusively binding upon the parties. The
fees and expenses involved in such
decision shall be borne by the unsuccessful
party (and if both parties are
partially unsuccessful, the accountants
shall apportion the fees and expenses
between the parties based on the degree of
success of each party).
Notwithstanding the giving of such notice
by Tenant, and pending the resolution
of any such dispute, Tenant shall pay to
Landlord when due the amount shown on
any such Annual Statement.
(j) Tenant shall pay all telephone bills separately
metered to the Leased Premises, and any
other service or material used by, or
provided to, Tenant in connection
therewith, when due. If Tenant does not pay
the same when due, Landlord may pay the
same
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<PAGE>
and the amount of such payment shall be
deemed Additional Rent which shall be
due upon receipt of Landlord's invoice
therefor.
8. No Set-Off; Non-Terminability. All Monetary Obligations
shall be paid without notice or demand and
without set-off, counterclaim,
recoupment, abatement, suspension,
deferment, diminution, deduction, reduction
or defense (collectively, a "Set-Off").
Tenant shall pay all costs and expenses
relating to the Leased Premises and the
business carried on therein, unless
otherwise expressly provided in this Lease.
Any amount or obligation herein
relating to the Leased Premises which is
not expressly declared to be that of
the Landlord shall be deemed to be an
obligation of the Tenant to be performed
by Tenant at the Tenant's expense.
9. Payment of Impositions.
(a) Tenant shall pay and discharge, as part of Annual
Operating Costs, all taxes (including real
and personal property, franchise,
sales, use, gross receipts and rent taxes),
all charges for any easement or
agreement maintained for the benefit of any
of the Leased Premises, all
assessments and levies, all permit,
inspection and license fees, all rents and
charges for water, sewer, utility and
communication services relating to any of
the Leased Premises, all ground rents and
all other public charges whether of a
like or different nature, even if
unforeseen or extraordinary, imposed upon or
assessed against (i) Tenant, (ii) Tenant's
leasehold interest in the Leased
Premises, (iii) any of the Leased Premises,
or (iv) Landlord as a result of or
arising in respect of the ownership,
occupancy, leasing, use or possession of
any of the Leased Premises, any activity
conducted on any of the Leased
Premises, or the Rent (collectively, the
"Impositions"); provided, that nothing
herein shall obligate Tenant to pay (A)
franchise, corporation, income, excess
profits or other taxes of Landlord (or
Lender) which are determined on the basis
of Landlord's (or Lender's) net income or
net worth (unless such taxes are in
lieu of or a substitute for any other tax,
assessment or other charge upon or
with respect to the Leased Premises which,
if it were in effect, would be
payable by Tenant under the provisions
hereof or by the terms of such tax,
assessment or other charge), (B) any
estate, inheritance, succession, transfer
(except in connection with a transfer of
the Leased Premises to Tenant or its
designee), gift or similar tax imposed on
Landlord, or (C) any capital gains tax
imposed on Landlord in connection with the
sale of the Leased Premises to any
Person. Landlord shall have the right to
require Tenant to pay, together with
scheduled installments of Basic Rent, the
amount of the gross receipts or rent
tax, if any, payable with respect to the
amount of such installment of Basic
Rent.
10. Compliance with Laws and Easement Agreements,
Environmental Matters.
(a) During the Term, Tenant shall, at its expense,
comply with and conform to, and cause any
other Person occupying any part of the
Leased Premises to comply with and conform
to, all Insurance Requirements and
Legal Requirements (including all
applicable Environmental Laws). Tenant shall
not at any time (i) cause, permit or suffer
to occur any Environmental Violation
or (ii) permit any sublessee, assignee or
other Person occupying the Leased
Premises under or through Tenant to cause,
permit or suffer to occur any
Environmental Violation and, at the request
of Landlord or Lender, Tenant shall
promptly remediate or undertake any other
appropriate response action to correct
any Environmental Violation, caused by
Tenant, or by any sublessee, assignee or
other Person occupying the Leased Premises
under or through Tenant and (iii)
without the prior written consent of
Landlord and Lender, permit any drilling or
exploration for or extraction, removal, or
production of any minerals from the
surface or the subsurface of the Land,
regardless of the depth thereof or the
method of mining or extraction thereof. Any
and all reports prepared for or by
Landlord with respect to the Leased
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<PAGE>
Premises shall be for the sole benefit of
Landlord and Lender and no other
Person shall have the right to rely on any
such reports. Without limiting the
foregoing, Tenant shall not keep within or
about the Leased Premises any
dangerous, inflammable, toxic or explosive
material, nor shall Tenant use the
Leased Premises or the Land, nor suffer the
Leased Premises to be used, for the
manufacture, storage, treatment or disposal
of any Hazardous Substance, except
for customary office supplies and cleaning
supplies, which may be stored or used
in the Leased Premises provided the
storage, use, handling, treatment and
disposal thereof complies with all Legal
Requirements.
(b) Upon at least five (5) days' prior written notice
from Landlord, Tenant shall permit such
persons as Landlord may designate ("Site
Reviewers") to visit the Leased Premises
during normal business hours and in a
manner which does not unreasonably
interfere with Tenant's operations and
perform, as agents of Tenant, environmental
site investigations and assessments
("Site Assessments") on the Leased Premises
in any of the following
circumstances: (i) in connection with any
sale, financing or refinancing of the
Leased Premises, (ii) within the six (6)
month period prior to the expiration of
the Term, (iii) if required by Lender or
the terms of any credit facility to
which Landlord is bound, (iv) if an Event
of Default exists, or (v) at any other
time that, in the opinion of Landlord or
Lender, a reasonable basis exists to
believe that an Environmental Violation or
any condition that could reasonably
be expected to result in any Environmental
Violation exists. Such Site
Assessments may include both above and
below the ground testing for
Environmental Violations and such other
tests as may be necessary, in the
opinion of the Site Reviewers, to conduct
the Site Assessments. Tenant shall
supply to the Site Reviewers such
historical and operational information
regarding the Leased Premises as may be
reasonably requested by the Site
Reviewers to facilitate the Site
Assessments, and shall make available for
meetings with the Site Reviewers
appropriate personnel having knowledge of such
matters. The cost of performing and
reporting any Site Assessment shall be paid
by Landlord except that if an Environmental
Violation caused by Tenant, its
sublessee, assignee or any Person occupying
the Leased Premises under or through
Tenant is found to exist, then the cost of
such Site Assessment shall be paid by
Tenant.
(c) If an Environmental Violation caused by Tenant,
its sublessee, assignee or any Person
occupying the Leased Premises under or
through Tenant, occurs or is found to exist
and, in Landlord's reasonable
judgment, the cost of remediation of, or
other response action with respect to,
the same is likely to exceed $50,000,
Tenant shall provide to Landlord, within
ten (10) days after Landlord's request
therefor, adequate financial assurances
that Tenant will effect such remediation in
accordance with applicable
Environmental Laws. Such financial
assurances shall be a bond or letter of
credit reasonably satisfactory to Landlord
in form and substance and in an
amount equal to or greater than Landlord's
reasonable estimate, based upon a
Site Assessment performed pursuant to
Paragraph 10(c), of the anticipated cost
of such remedial action.
(d) If Tenant fails to correct any Environmental
Violation caused by Tenant, its sublessee,
assignee or any Person occupying the
Leased Premises under or through Tenant,
which occurs or is found to exist,
Landlord shall have the right (but no
obligation) to take any and all actions as
Landlord shall deem necessary or advisable
in order to cure such Environmental
Violation.
(e)
Tenant shall notify Landlord immediately after
becoming aware of any Environmental
Violation (or alleged Environmental
Violation) or noncompliance with any of the
covenants contained in this
Paragraph 10 and shall forward to Landlord
immediately upon receipt thereof
copies of all orders, reports, notices,
permits, applications or other
communications relating to any such
violation or noncompliance.
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<PAGE>
(f) All future leases or subleases relating to the
Leased Premises entered into by Tenant
shall contain covenants of the other
party not to at any time (i) cause any
Environmental Violation to occur or (ii)
permit any Person occupying the Leased
Premises through said subtenant to cause
any Environmental Violation to occur.
(g) Notwithstanding anything herein to the contrary,
Tenant's liability to remediate or
undertake any other action to correct any
Environmental Violation in accordance with
applicable Environmental Laws shall
not during the Term exceed $8,000,000 in
the aggregate.
(h) Tenant's liability hereunder for Environmental
Violations shall be limited to those
Environmental Violations which it causes,
permits or suffers to occur or which any
sublessee, assignee or other Person
occupying the Leased Premises under or
through Tenant causes, permits or suffers
to occur; provided, however, that Tenant
shall have no liability for any
Environmental Violation caused, permitted
or suffered to occur by any previous
tenant or other owner or occupant of the
Leased Premises which Environmental
Violation arose prior to the date hereof,
save and except for any such
Environmental Violation that was caused,
permitted or suffered to occur by
Tenant prior to the date hereof.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create
or permit to be created or to remain and
shall promptly discharge or remove any
lien, levy or encumbrance on any of the
Leased Premises or on any Rent or any
other sums payable by Tenant under this
Lease, other than any Mortgage or
Assignment, the Permitted Encumbrances and
any mortgage, lien, encumbrance or
other charge created by or resulting solely
from any act or omission of
Landlord. NOTICE IS HEREBY GIVEN THAT
LANDLORD SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR
TO BE FURNISHED TO TENANT OR TO ANYONE
HOLDING OR OCCUPYING ANY OF THE LEASED
PREMISES THROUGH OR UNDER TENANT, AND
THAT NO MECHANICS' OR OTHER LIENS FOR ANY
SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF
LANDLORD IN AND TO ANY OF THE LEASED
PREMISES. LANDLORD MAY AT ANY TIME, AND AT
LANDLORD'S REQUEST TENANT SHALL
PROMPTLY, POST ANY NOTICES ON THE LEASED
PREMISES REGARDING SUCH NON-LIABILITY
OF LANDLORD.
(b) Tenant shall execute, deliver and record, file or
register (collectively, "record") all such
instruments as may be required or
permitted by any present or future Law in
order to evidence the respective
interests of Landlord and Tenant in the
Leased Premises, and shall cause a
memorandum of this Lease (or, if such a
memorandum cannot be recorded, this
Lease), and any supplement hereto or
thereto, to be recorded in such manner and
in such places as may be required or
permitted by any present or future Law in
order to protect the validity and priority
of this Lease.
12. Maintenance and Repair.
(a) Except as otherwise provided herein, Tenant shall
at all times maintain the Leased Premises
in as good repair and appearance as
they are in on the date hereof, ordinary
wear and tear excepted, and fit to be
used for their intended use, and, in the
case of the Equipment, in as good
mechanical condition as it was on the later
of the date hereof or the date of
its installation, except for ordinary wear
and tear. Except as otherwise
provided herein, Tenant shall promptly make
all Alterations of every kind and
nature, whether foreseen or unforeseen,
which may be required to comply with the
foregoing requirements of this Paragraph
12(a). Except as specifically provided
in Paragraph 12(d), Landlord shall not be
required to make any
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Alteration, whether foreseen or unforeseen,
or to maintain any of the Leased
Premises in any way, and Tenant hereby
expressly waives any right which may be
provided for in any Law now or hereafter in
effect to make Alterations at the
expense of Landlord or to require Landlord
to make Alterations. Any Alteration
made by Tenant pursuant to this Paragraph
12 shall be made in conformity with
the provisions of Paragraph 13.
(b) If any improvement hereafter constructed by
Tenant shall (i) encroach upon any setback
or any property, street or
right-of-way adjoining the Leased Premises,
(ii) violate the provisions of any
restrictive covenant affecting the Leased
Premises, (iii) hinder or obstruct any
easement or right-of-way to which any of
the Leased Premises is subject or (iv)
impair the rights of others in, to or under
any of the foregoing, Tenant shall,
promptly after receiving notice, either (A)
obtain from all necessary parties
waivers or settlements of all claims,
liabilities and damages resulting from
each such encroachment, violation,
hindrance, obstruction or impairment, whether
the same shall affect Landlord, Tenant or
both, or (B) take such action as shall
be necessary to remove all such
encroachments, hindrances or obstructions and to
end all such violations or impairments,
including, if necessary, making
Alterations.
(c) Tenant acknowledges that it is in possession of
the Leased Premises and has inspected the
Leased Premises and that all plumbing,
electrical, water, sewage, heating,
ventilation and air conditioning, security,
life safety, elevator systems and other
utility systems (collectively,
"Systems") which are servicing the Leased
Premises are fully satisfactory to
Tenant and that neither Landlord, nor
Landlord's agent, have made any
representations or promises with regard to
the Leased Premises, including,
without limitation, the Systems, their
fitness for any particular purpose or
their use for the term herein demised. The
taking of possession of the Leased
Premises by Tenant for the term herein
demised shall be conclusive evidence as
against Tenant that Tenant accepts the
Leased Premises, including all Systems,
subject to any and all defects therein,
latent, patent or otherwise, in its
"as-is" condition and that the Leased
Premises, including all Systems, are in
good and satisfactory condition in all
respects at the time such possession is
taken. Notwithstanding anything herein to
the contrary, Landlord and Tenant
agree that the Generator and the UPS System
are not part of the Leased Premises,
including the Systems, and are removable
fixtures owned by the Tenant. Tenant
covenants and agrees that it shall repair,
maintain, replace and insure the
Generator and the UPS System at its sole
cost. Tenant shall be responsible for
any and all damage, injury, or claims
resulting from the moving, removal or
operation of the Generator or the UPS
System and any and all damage or injury to
the Leased Premises caused by such moving,
removal or operation shall promptly
be repaired by Tenant at its sole cost,
unless caused by the negligence or
willful misconduct of Landlord.
(d)
(i) Landlord shall make and pay for, and
Tenant shall reimburse Landlord as part of
Annual Operating Expenses in
accordance with Paragraph 7 for, all
maintenance, repairs, restorations,
replacements, renovations or rebuilding of
any portion of the Leased Premises,
including the Systems, as may be necessary
to keep the Leased Premises in good
condition and repair or which may be
required by any applicable Laws or Legal
Requirements, and then only if the
necessity of such maintenance, repair,
restoration, replacement, renovation or
rebuilding is not brought about, in
whole or part, by any act or neglect of
Tenant, its agents, employees,
contractors, invitees, licensees, or others
for whom Tenant is legally
responsible including, without limitation
any subtenant or concessionaire of
Tenant or agents of any of them.
(ii) Notwithstanding anything in this
Paragraph 12(d) to the contrary, if
commercially reasonable standards dictate
replacement in its entirety of (i) the
roof,
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(ii) the exterior walls and exterior
windows seals of the Improvements, (iii)
the foundation of the Improvements or (iv)
any of the Systems, then Landlord
shall replace the same in its entirety and
Tenant shall reimburse Landlord for
the Costs of such replacement only as a
capital improvement expenditure within
the definition of Annual Operating Costs
pursuant to and as limited by Paragraph
7(d).
(iii) Landlord shall not be liable for any
damage (including any consequential damages
or lost profits) caused to the
person or property of Tenant, its agents,
employees or invitees, due to the
Leased Premises or any part or
appurtenances thereof being improperly
constructed or being or becoming out of
repair, or arising from the leaking of
gas, water, sewer or steam pipes, or from
the Systems or from electricity, or
from any other cause whatsoever. Subject to
the terms hereof, Landlord has
granted Tenant exclusive control of the
Leased Premises for the Term hereof and
Landlord shall be under no obligation to
inspect the Leased Premises. Tenant
agrees to report in writing to Landlord,
immediately upon Tenant's discovery,
any defective condition in or about the
Leased Premises known to Tenant which
Landlord is required to repair hereunder,
and a failure to promptly so report in
writing shall make Tenant liable to
Landlord for any expense, damage or
liability resulting from Tenant's failure
to make such report. In repairing,
maintaining, rebuilding, renovating,
replacing, restoring or altering any
portion of the Leased Premises in
accordance with Landlord's obligations as set
forth in this Paragraph 12(d), the Landlord
may, with Tenant's consent, not to
be unreasonably withheld, delayed or
conditioned, use drawings, designs, plans
and specifications other than those used in
the original construction. Landlord
shall not be required to install additional
units or systems to service any
portion of the Leased Premises beyond the
Systems that exist at the Improvements
as of the date hereof. Tenant, with
Landlord's prior written consent, may make
such installations at Tenant's sole cost
and repair in accordance with Paragraph
13.
(e) Except as expressly provided herein Tenant shall
maintain the Leased Premises and the
fixtures therein in good order and repair
during the Term at Tenant's sole cost and
expense. All injury to the Leased
Premises, the Land or the Improvements and
all breakage done by Tenant, or
Tenant's agents, subtenants, contractors,
directors, employees, invitees,
licensees or officers shall be repaired
immediately by the Tenant at Tenant's
sole expense. In the event that the Tenant
shall fail to make any repairs
required pursuant to this Paragraph 12,
Landlord shall have the right to make
such repairs, alterations and replacements,
and any charge or cost so incurred
by the Landlord shall be paid by Tenant
upon demand. Tenant will indemnify and
hold Landlord harmless from and against any
and all expenses, liens, claims or
damages to person or land which may or
might arise by reason of the making of
any such alterations, installations,
changes, replacements, additions or
improvements. This provision shall be
construed as an additional remedy granted
to the Landlord and not in limitation of
any other rights and remedies which the
Landlord has or may have in said
circumstances.
(f) Except as set forth in this Paragraph 12(f),
Landlord shall be under no obligation to
furnish any services or supplies to the
Leased Premises. Landlord shall furnish
elevator service and water 24-hours a
day, 365 days a year, and lavatory supplies
during normal business hours, except
during periods of repair and maintenance,
and normal and usual cleaning and
janitorial service after 5:00pm, Mondays
through Fridays (exclusive of Federal,
State or local legal holidays); provided
that Tenant shall leave the Leased
Premises in a condition suitable for
performance by the Landlord of its
janitorial services. Landlord further
agrees to furnish reasonably adequate
electric current for normal office uses and
heat and air conditioning
appropriate to the seasons of the year
sufficient to reasonably cool or heat the
Leased Premises, other than the Operations
Control Area, from 8:00 a.m. - 6:00
p.m., Mondays through Fridays, inclusive,
and from 9:00 a.m. to 1:00 p.m.,
Saturdays (said services not being
furnished on Sundays or Federal, state or
local legal holidays), and for the
Operations Control Area of the Leased
Premises, 24 hours a day, 365 days a year,
except during periods of repair and
maintenance, all in accordance with
standards of comparable office buildings in
the Atlanta,
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<PAGE>
Georgia metropolitan area as determined by
Landlord's sole but reasonable
judgment. In the event that the location of
the Operations Control Area changes
to a different part of the Leased Premises
in whole or in part, Landlord agrees
to make electric and HVAC services
available to the Operations Control Areas
provided that Tenant shall pay for the
Costs. If Tenant requires air
conditioning, heat, plumbing, water,
electric or other utilities beyond the
normal hours of operation set forth herein,
Landlord will furnish such at no
additional cost to Tenant (specifically
excluding any increase in Annual
Operating Costs as compensation for such
excess usage), provided Tenant gives
Landlord two (2) prior business days notice
of the days on which it desires such
utilities and the location of the portions
of the Leased Premises which require
such services. Landlord shall only be
required to provide such overtime services
to those portions of the Leased Premises as
may reasonably be needed by Tenant,
as reasonably determined by Landlord.
Tenant shall have access to the Leased
Premises 24 hours a day, seven days per
week, 365 days per year, including
holidays.
(g) No claim for compensation or abatement of Rent
shall be made by the Tenant by reason of
inconvenience, nuisance, loss of
business or discomfort arising from the
interruption or cessation of or failure
in the supply of any utilities, services of
any Systems serving the Leased
Premises or from the maintenance, repair,
restoration, replacement, renovation
or rebuilding or any portion of the Leased
Premises or basic systems thereof nor
shall the same give rise to a claim in
Tenant's favor that such interruption,
cessation, failure, repair, renovation or
rebuilding constitutes actual or
constructive, total or partial eviction
from the Leased Premises.
Notwithstanding the foregoing, if there is
a total cessation of services for a
continuous period of five (5) days and as a
result Tenant is unable to conduct
its business in the Leased Premises, then
beginning on the sixth (6th)
continuous day of such cessation of
services Basic Rent shall abate until such
services are restored or Tenant resumes to
conduct its business in the Leased
Premises.
13. Alterations and Improvements.
(a) Tenant shall have the right at its sole expense,
without having obtained the prior written
consent of Landlord and Lender and
provided that no Event of Default then
exists, to make decorative, cosmetic,
non-structural Alterations to the interior
of the Improvements provided the same
are not visible from the exterior of the
Improvements, including painting,
partitions and carpeting, so long as at the
time of construction or installation
of any such Alterations no Event of Default
exists and the value and utility of
the Leased Premises is not diminished
thereby. Tenant shall have no right to
make any other Alterations to the Leased
Premises without first obtaining the
prior written consent of Landlord and
Lender, except that with respect to
structural Alterations Landlord shall have
the right to withhold its consent in
its sole discretion. Landlord shall have
the right to require Tenant to remove
any Alterations at the expiration of the
Term or the earlier termination thereof
except for those Alterations required by
Law or for which Landlord has agreed in
writing that removal will not be
required.
(b) If Tenant makes any Alterations pursuant to this
Paragraph 13 or constructs the Exchange
Premises pursuant to Paragraph 34 or as
required by Paragraph 12 or 17 (such
Alterations and actions being hereinafter
collectively referred to as "Work") whether
or not Landlord's consent is
required, then (i) the market value of the
Leased Premises shall not be lessened
by any such Work or its usefulness
impaired, (ii) all such Work shall be
performed by Tenant in a good and
workmanlike manner, (iii) all such Work shall
be expeditiously completed in compliance
with all Legal Requirements, (iv) all
such Work shall comply with the Insurance
Requirements, (v) if any such Work
involves the replacement of Equipment or
parts thereto, all replacement
Equipment or parts shall have a value and
useful life equal to the greater of
(A) the value and useful life on the date
hereof of the Equipment being replaced
or (B) the value and useful life of the
Equipment being replaced immediately
prior to the occurrence of the event
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<PAGE>
which required its replacement (assuming
such replaced Equipment was then in the
condition required by this Lease), (vi)
Tenant shall promptly discharge or
remove all liens filed against any of the
Leased Premises arising out of such
Work, (vii) Tenant shall procure and pay
for all permits and licenses required
in connection with any such Work, (viii)
all such Work shall be the property of
Landlord and shall be subject to this
Lease, and Tenant shall execute and
deliver to Landlord any document reasonably
requested by Landlord evidencing the
assignment to Landlord of all estate,
right, title and interest (other than the
leasehold estate created hereby) of Tenant
or any other Person thereto or
therein, and (ix) Tenant shall comply, to
the extent requested by Landlord or
required by this Lease, with the provisions
of Paragraph 12(a), whether or not
such Work involves restoration of the
Leased Premises.
(c) Tenant shall not place a load upon the floor of
the Leased Premises exceeding one hundred
(100) pounds per square foot without
Landlord's prior written consent (which
consent may be withheld or conditioned
in Landlord's sole discretion). Business
machines, or fumes that may be
transmitted to the Improvements or to any
other leased space therein to such a
degree as to be objectionable to the
Landlord shall be placed, maintained,
isolated, stored and/or vented by Tenant at
its sole expense so as to absorb and
prevent such vibration, noise, cold, heat
or fumes. Tenant shall be responsible
for any and all damage, injury, or claims
resulting from moving of Tenant's
equipment, furnishings and/or materials
into or out of the Leased Premises or
from the storage or operation of the same.
Any and all damage or injury to the
Leased Premises, the Improvements or the
Land (or any part thereof) caused by
such moving, storage or operation shall be
repaired by Tenant, at Tenant's sole
cost, to Landlord's reasonable
satisfaction.
(d) Tenant shall have the right to install or operate
in the Leased Premises any small
electrically operated standard office equipment
as is typically used in modern offices.
Tenant shall not install or operate in
the Leased Premises any "non-standard"
equipment without first obtaining the
prior consent in writing of Landlord, which
consent may, in Landlord's sole
discretion, be conditioned on, among other
matters, the payment by Tenant of
Additional Rent in compensation for such
excess consumption of water and/or
electricity as may be occasioned by the
operation of said equipment or
machinery; nor shall Tenant install any
other equipment whatsoever which will or
may necessitate any changes, replacements
or additions to the water system,
plumbing system, heating system, air
conditioning system or the electrical
system of the Leased Premises or the
Improvements without the prior written
consent of Landlord, which consent may be
withheld or conditioned in Landlords
sole discretion; provided that, if Landlord
shall consent to such installations,
all additional utility facilities, changes,
replacements or additions necessary
to handle facilities, changes, replacements
or additions necessary to handle
such equipment shall be performed by Tenant
at its sole expense in accordance
with plans and specifications to be
approved in writing, in advance, by
Landlord.
14. Permitted Contests. Notwithstanding any other provision of
this Lease, Tenant shall not be required to
(a) pay any Imposition or (b)
discharge or remove any lien referred to in
Paragraph 11 or 13 (such
non-compliance with the terms hereof being
hereinafter referred to collectively
as "Permitted Violations") and may dispute
or contest the same, so long as at
the time of such contest no Event of
Default exists and so long as Tenant shall
contest, in good faith, the existence,
amount or validity thereof, the amount of
the damages caused thereby, or the extent
of its or Landlord's liability
therefor by appropriate proceedings which
shall operate during the pendency
thereof to prevent or stay (i) the
collection of, or other realization upon, the
Permitted Violation so contested, (ii) the
sale, forfeiture or loss of any of
the Leased Premises or any Rent to satisfy
or to pay any damages caused by any
Permitted Violation, (iii) any interference
with the use or occupancy of any of
the Leased Premises, (iv) any interference
with the payment of any Rent, or (v)
the cancellation or increase in the rate of
any insurance policy or a statement
by the carrier that coverage will be
denied. Tenant shall provide Landlord
security which is satisfactory, in
Landlord's reasonable judgment, to assure
that such Permitted Violation is corrected,
including all Costs, interest and
penalties that may be incurred or become
due in
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<PAGE>
connection therewith. While any proceedings
which comply with the requirements
of this Paragraph 14 are pending and the
required security is held by Landlord,
Landlord shall not have the right to
correct any Permitted Violation thereby
being contested unless Landlord is required
by law to correct such Permitted
Violation and Tenant's contest does not
prevent or stay such requirement as to
Landlord. Each such contest shall be
promptly and diligently prosecuted by
Tenant to a final conclusion, except that
Tenant, so long as the conditions of
this Paragraph 14 are at all times complied
with, has the right to attempt to
settle or compromise such contest through
negotiations. Tenant shall pay any and
all losses, judgments, decrees and Costs in
connection with any such contest and
shall, promptly after the final
determination of such contest, fully pay and
discharge the amounts which shall be
levied, assessed, charged or imposed or be
determined to be payable therein or in
connection therewith, together with all
penalties, fines, interest and Costs
thereof or in connection therewith, and
perform all acts the performance of which
shall be ordered or decreed as a
result thereof. No such contest shall
subject Landlord to the risk of any civil
or criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, defend,
save and hold harmless Landlord, Lender and
all other Persons described in
Paragraph 30 (each an "Indemnitee") from
and against any and all liabilities,
losses, damages (including punitive
damages), penalties, Costs (including
attorneys' fees and costs), causes of
action, suits, claims, demands or
judgments of any nature whatsoever, without
regard to the form of action and
whether based on strict liability or any
other theory of recovery at law or in
equity arising from (i) any matter
pertaining to the use, non-use, occupancy,
operation, condition, maintenance, repair
or restoration of the Leased Premises
by the Tenant its servants, employees,
agents, subtenants, assignees,
contractors, invitees or licensees or any
Person occupying the Leased Premises
under or through Tenant, (ii) any casualty
arising from the Leased Premises
caused by Tenant, its servants, employees,
agents, subtenants, assignees,
contractors, invitees or licensees or any
Person occupying the Leased Premises
under or through Tenant, whether or not
Indemnitee has or should have knowledge
or notice of any defect or condition
causing or contributing to said casualty,
(iii) any violation by Tenant of any
provision of this Lease, any Legal
Requirement or any Permitted Encumbrance or
any encumbrance Tenant consented to
or (iv) any alleged, threatened or actual
Environmental Violation caused by
Tenant, its sublessee, assignee or any
Person occupying the Leased Premises
under or through Tenant, including (A)
liability for response costs and for
costs of removal and remedial action
incurred by the United States Government,
any state or local governmental unit or any
other Person, or damages from injury
to or destruction or loss of natural
resources, including the reasonable costs
of assessing such injury, destruction or
loss, incurred pursuant to Section 107
of CERCLA, or any successor section or act
or provision of any similar state or
local Law, (B) liability for costs and
expenses of abatement, correction or
clean-up, fines, damages, response costs or
penalties which arise from the
provisions of any of the other
Environmental Laws and (C) liability for personal
injury or property damage arising under any
statutory or common-law tort theory,
including damages assessed for the
maintenance of a public or private nuisance
or for carrying on of a dangerous activity;
provided, however, that Tenant shall
not be required to indemnify, defend, save
and hold harmless Landlord, Lender or
any Indemnitee from and against any
liabilities, obligations, claims, damages,
penalties, causes of action, costs and
expenses (including reasonable attorneys'
fees and expenses) arising out of or solely
in connection with the negligence or
willful misconduct of Landlord, its agents
or any Indemnitee or a breach of the
terms of this Lease by Landlord.
(b) Landlord shall pay, protect, indemnify, defend,
save and hold harmless Tenant from and
against any and all liabilities, losses,
damages (including punitive damages),
penalties, Costs (including attorneys'
fees and costs), causes of action, suits,
claims, demands or judgments of any
nature whatsoever, without regard to the
form of action and
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<PAGE>
whether based on strict liability or any
other theory of recovery at law or in
equity arising from (i) any matter
pertaining to the ownership, operation,
condition, maintenance, repair or
restoration of the Leased Premises by the
Landlord, its agents, contractors and
employees (ii) any casualty caused by
Landlord, its agents, contractors and
employees, (iii) any violation by Landlord
of any provision of this Lease, any Legal
Requirement or any Permitted
Encumbrance or (iv) any alleged, threatened
or actual Environmental Violation
caused by Landlord, its agents, contractors
or employees, including (A)
liability for response costs and for costs
of removal and remedial action
incurred by the United States Government,
any state or local governmental unit
or any other Person, or damages from injury
to or destruction or loss of natural
resources, including the reasonable costs
of assessing such injury, destruction
or loss, incurred pursuant to Section 107
of CERCLA, or any successor section or
act or provision of any similar state or
local Law, (B) liability for costs and
expenses of abatement, correction or
clean-up, fines, damages, response costs or
penalties which arise from the provisions
of any of the other Environmental Laws
and (C) liability for personal injury or
property damage arising under any
statutory or common-law tort theory,
including damages assessed for the
maintenance of a public or private nuisance
or for carrying on of a dangerous
activity; provided, however, that Landlord
shall not be required to indemnify,
defend, save and hold harmless Tenant from
and against any liabilities,
obligations, claims, damages, penalties,
causes of action, costs and expenses
(including reasonable attorneys' fees and
expenses) arising out of or solely in
connection with the negligence or willful
misconduct of Tenant, its sublessee,
assignee or any Person occupying the Leased
Premises under or through Tenant.
(c) In case any action or proceeding is brought
against any Indemnitee or Tenant by reason
of any such claim, (i) Landlord or
Tenant, as the case may be, may retain its
own counsel and defend such action
(it being understood that Landlord or
Tenant, as the case may be, may employ
counsel of its choice to monitor the
defense of any such action, the cost of
which shall be paid by Landlord or Tenant,
as the case may be) and (ii) such
Indemnitee shall notify Landlord or Tenant,
as the case may be, to resist or
defend such action or proceeding by
retaining counsel reasonably satisfactory to
such Indemnitee, and such Indemnitee will
cooperate and assist in the defense of
such action or proceeding if reasonably
requested so to do by Landlord or
Tenant, as the case may be.
(d) The obligations of Landlord and Tenant under this
Paragraph 15 shall survive any termination,
expiration or rejection in
bankruptcy of this Lease. (e) Nothing
contained in this Paragraph 15 shall be
construed as an agreement to indemnify
Landlord, Lender, Tenant or any other
Person identified in Paragraph 30 for their
own negligent acts or omissions or
willful misconduct.
16. Insurance.
(a) Landlord shall obtain and maintain the following
insurance on or in connection with the
Leased Premises, the annual cost of such
insurance and the deductible to be paid in
connection therewith (such deductible
not to exceed $10,000) shall be paid to
Landlord by Tenant in advance within
fifteen (15) days after receipt of an
invoice from Landlord (unless the same has
been paid by Tenant as an Annual Operating
Cost hereunder):
(i) Insurance against all risk of physical
loss or damage to the Improvements and
Equipment as provided under "Special
Causes of Loss" form coverage, and
including customarily excluded perils of
hail, windstorm, flood coverage, earthquake
and, to the extent required by
Lender, terrorism insurance, in amounts no
less than the actual replacement cost
of the Improvements and Equipment; such
policies shall contain Replacement Cost
and Agreed Amount Endorsements and "Law and
Ordinance" coverage (at full
replacement cost).
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<PAGE>
(ii) Commercial General Liability Insurance
against claims for personal and bodily
injury, death or property damage
occurring on, in or as a result of the use
of the Leased Premises, in an amount
not less than $15,000,000 per
occurrence/annual aggregate, on a claims
occurrence basis.
(iii) Comprehensive Boiler and
Machinery/Equipment Breakdown Insurance on
any of the Equipment or any other
equipment on or in the Leased Premises, in
an amount not less than $5,000,000
per accident for damage to property (and
which may be carried as part of the
coverage required under clause (i) above or
pursuant to a separate policy or
endorsement). Either such Boiler and
Machinery policy or the Special Causes of
Loss policy required in clause (i) above
shall include at least $3,000,000 per
incidence for Off-Premises Service
Interruption, Expediting Expenses, Ammonia
Contamination, and Hazardous Materials
Clean-Up Expense and may contain a
deductible not to exceed $25,000.
(iv) Such other insurance (or other or
different terms with respect to any
insurance required pursuant to this
Paragraph 16(a), including without
limitation amounts of coverage, deductibles,
form of mortgagee clause, insurer rating)
on or in connection with any of the
Leased Premises as Landlord or Lender may
reasonably require.
(b) Tenant shall obtain, pay for and maintain the
following insurance on or in connection
with the Leased Premises;
(i) Commercial General Liability Insurance
and Business Automobile Liability Insurance
(including Non-Owned and Hired
Automobile Liability) against claims for
personal and bodily injury, death or
property damage occurring on, in or as a
result of the use of the Leased
Premises, in an amount not less than
$15,000,000 per occurrence/annual
aggregate, on a claims occurrence
basis.
(ii) Workers' compensation insurance in the
amount required by applicable Law and
employers' liability insurance covering
all persons employed by Tenant in
connection with any work done on or about any
of the Leased Premises.
(iii) During any period in which substantial
Alterations at the Leased Premises are
being undertaken, builder's risk
insurance covering the total completed
value, including all hard and soft costs
(which shall include business interruption
coverage) with respect to the
Improvements being constructed, altered or
repaired (on a completed value,
non-reporting basis), replacement cost of
work performed and equipment, supplies
and materials furnished in connection with
such construction, alteration or
repair of Improvements or Equipment,
together with such other endorsements as
Landlord may reasonably require, and
general liability, worker's compensation
and automobile liability insurance with
respect to the Improvements being
constructed, altered or repaired.
(c) Landlord shall obtain and maintain Business
Income/Extra Expense Insurance at limits
sufficient to cover 100% of the period
of indemnity not less than twelve (12)
months from time of loss, including
extended period of indemnity which provides
that after the physical loss to the
Improvements and Equipment has been
repaired, the continued loss of income will
be insured until such income either returns
to the same level it was at prior to
the loss, or the expiration of six (6)
months from the date that the applicable
Leased Premises is repaired or replaced and
operations are resumed, whichever
first occurs. The annual cost of such
insurance shall be paid to Landlord by
Tenant in advance and within fifteen (15)
days after receipt of an invoice from
Landlord.
(d) The insurance required by Paragraph 16(b) shall
be written by companies having a Best's
rating of A:X or above and a claims
paying ability rating of AA or
-23-
<PAGE>
better by Standard & Poor's Rating
Services, a division of the McGraw Hill
Companies, Inc. or equivalent rating agency
approved by Landlord and Lender in
their sole discretion and are authorized to
write insurance policies by, the
State Insurance Department (or its
equivalent) for the State. The insurance
policies (i) shall be for such terms as
Landlord may reasonably approve and (ii)
shall be in amounts sufficient at all times
to satisfy any coinsurance
requirements thereof. If said insurance or
any part thereof shall expire, be
withdrawn, become void, voidable,
unreliable or unsafe for any reason, including
a breach of any condition thereof by Tenant
or the failure or impairment of the
capital of any insurer, or if for any other
reason whatsoever said insurance
shall become reasonably unsatisfactory to
Landlord, Tenant shall immediately
obtain new or additional insurance
reasonably satisfactory to Landlord.
(e) Each insurance policy referred to in clauses (ii)
and (iii) of Paragraph 16(a) shall contain
standard non-contributory mortgagee
clauses in favor of and acceptable to
Lender. Each policy required by any
provision of Paragraph 16(b), except clause
(ii) thereof, shall provide that it
may not be cancelled, substantially
modified or allowed to lapse on any renewal
date except after thirty (30) days' prior
written notice to Landlord and Lender.
(f) Tenant shall pay as they become due all premiums
for the insurance required by Paragraph
16(b), shall renew or replace each
policy and deliver to Landlord evidence of
the payment of the full premium
therefor or installment then due at least
ten (10) days prior to the expiration
date of such policy, and shall promptly
deliver to Landlord all original
certificates of insurance evidencing such
coverages or, if required by Lender,
original or certified policies. All
certificates of insurance (including
liability coverage) provided to Landlord
and Lender shall be on ACORD Form 27
(or its equivalent).
(g) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant
is required to obtain pursuant to
Paragraph 16(b) may be carried under a
"blanket" policy or policies covering
other properties of Tenant or under an
"umbrella" policy or policies covering
other liabilities of Tenant, as applicable;
provided that, such blanket or
umbrella policy or policies otherwise
comply with the provisions of this
Paragraph 16, and upon request, Tenant
shall provide to Landlord a Statement of
Values which may be reviewed annually and
shall be amended to the extent
determined necessary by Landlord based on
revised Replacement Cost Valuations.
The original or a certified copy of each
such blanket or umbrella policy shall
promptly be delivered to Landlord.
(h) Tenant shall not carry separate insurance
concurrent in form or contributing in the
event of a Casualty with that required
in this Paragraph 16 unless (i) Landlord
and Lender are included therein as
named insureds, with loss payable as
provided herein, and (ii) such separate
insurance complies with the other
provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such
separate insurance and shall deliver to
Landlord the original policies or certified
copies thereof.
(i) Each policy (other than workers' compensation
coverage ) shall contain an effective
waiver by the carrier against all claims
for payment of insurance premiums against
Landlord and shall contain a full
waiver of subrogation against the
Landlord.
(j) The proceeds of any insurance required under
Paragraph 16(b) shall be payable as
follows:
(i)
