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Confidential treatment has been requested with respect to
certain portions of this exhibit. Omitted portions have been filed
separately with the Securities and Exchange Commission. |
Exhibit
10.36
LEASE
AGREEMENT
Between
iSTAR SCC DISTRIBUTION
CENTERS LLC,
as Landlord
and
SOLO CUP OPERATING
CORPORATION
and
SF HOLDINGS GROUP,
INC.
and
SOLO CUP
COMPANY,
jointly and
severally
as Tenant
Dated as of June 27,
2007
TABLE OF
CONTENTS
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Page |
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1.
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DEFINITIONS |
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1 |
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2.
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DEMISE
OF PREMISES |
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10 |
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3.
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USE |
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11 |
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4.
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TERM |
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12 |
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5.
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RENTAL |
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13 |
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6.
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TAXES |
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14 |
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7.
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NET
LEASE; NON-TERMINABILITY |
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17 |
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8.
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SERVICES |
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19 |
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9.
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REPAIRS AND MAINTENANCE; REPLACEMENT |
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19 |
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10.
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DESTRUCTION OF OR DAMAGE TO PREMISES |
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21 |
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11.
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INSURANCE, HOLD HARMLESS AND INDEMNIFICATION |
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22 |
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12.
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COMPLIANCE WITH LAWS, COVENANTS |
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25 |
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13.
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NON-SUBSTANTIAL TAKING |
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27 |
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14.
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SUBSTANTIAL TAKING; TOTAL CASUALTY |
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28 |
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15.
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DEFAULT: EVENTS OF DEFAULT |
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29 |
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16.
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REMEDIES |
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31 |
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17.
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SUBORDINATION |
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34 |
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18.
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LANDLORD’S RIGHT OF ENTRY |
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35 |
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19.
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NOTICES |
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36 |
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20.
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ESTOPPEL CERTIFICATE; FINANCIAL DATA |
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38 |
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21.
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MECHANICS’ LIENS |
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40 |
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22.
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END OF
TERM |
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41 |
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23.
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ALTERATIONS |
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42 |
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24.
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MEMORANDUM OF LEASE |
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44 |
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25.
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SUBLETTING/ASSIGNMENT |
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44 |
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26.
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HAZARDOUS MATERIAL |
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48 |
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27.
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FINANCING/LEASEHOLD MORTGAGE/SECURITY INTERESTS IN
TENANT’S PROPERTY |
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51 |
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28.
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MISCELLANEOUS PROVISIONS |
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55 |
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29.
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PURCHASE PROCEDURE |
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57 |
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30.
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ECONOMIC ABANDONMENT |
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58 |
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31.
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CAPITAL EXPENDITURES |
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62 |
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32.
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REFUSAL RIGHT |
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63 |
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33.
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STATE
SPECIFIC PROVISIONS |
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65 |
i
EXHIBITS:
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| A-1 |
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LEGAL
DESCRIPTIONS FOR ALL SITES - REAL ESTATE |
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| A-2 |
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IMPROVEMENTS |
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| B-1 |
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EQUIPMENT
– LANDLORD |
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| B-2 |
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TENANT’S PROPERTY |
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| C |
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CERTAIN
PERMITTED ENCUMBRANCES |
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| D |
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FORM OF
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT |
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| E |
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FAIR MARKET
VALUE DETERMINATION FOR PREMISES OR ANY SITE |
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| F |
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CONDEMNATION/TOTAL CASUALTY SITE PRICES |
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| G |
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FIXED RENT
REDUCTION/CALCULATED SITE PRICE PERCENTAGE FOR EACH
SITE |
ii
THIS LEASE AGREEMENT, is made
and entered into as of the date set forth in the Basic Lease
Information (this lease agreement, together with all amendments and
supplements hereto, this “ Lease ”), by and
between iStar SCC Distribution Centers LLC, a Delaware limited
liability company with offices c/o i Star Financial Inc.,
1114 Avenue of the Americas, 38th Floor, New York, New York 10036
(together with any successor or assigns, hereinafter called the
“ Landlord ”) and Solo Cup Operating
Corporation, a Delaware corporation, SF Holdings Group, Inc., a
Delaware corporation, and Solo Cup Company, a Delaware corporation,
each having an address at 1700 Old Deerfield Road, Highland Park,
Illinois 60035 (together with any successor or assign permitted by
this Lease, hereinafter collectively called the “
Tenant ”).
Capitalized terms used herein
shall have the following meanings for all purposes of this Lease
and shall be equally applicable to both the singular and plural
forms of the terms herein defined.
“ Additional
Rent ” means all amounts, liabilities and obligations
other than Fixed Rent which Tenant assumes or agrees to pay under
this Lease to Landlord or others.
“ Adjustment
Date ” is defined and shall have the meaning
specified in the Basic Lease Information.
“
Affiliates ” means Persons (other than
individuals) Controlled by, Controlling, or under Common Control
with another Person. Unless otherwise specified, all references
herein to an “ Affiliate ” or to “
Affiliates ” shall refer to an Affiliate or Affiliates
of the Tenant. For purposes hereof, an Affiliate of any of the
Persons which then comprise the Tenant hereunder shall be deemed to
be an Affiliate of the Tenant (regardless of whether such Person is
an Affiliate of all of the Persons which then comprise the Tenant
hereunder).
“ Alternative
Credit Rating Agency ” means if either or both of S
& P and Moody’s no longer exist or no longer assign
Credit Ratings, such other nationally recognized statistical credit
rating agency designated by Landlord, acting in its sole
discretion.
“ Appraisal
Report ” is defined in paragraph 30(b) of this
Lease.
“ Basic Lease
Information ” means the page(s) preceding this Lease
which are hereby incorporated by reference.
“ Business
Days ” or “ Business Day ”
means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of Illinois or is a day
on which banking institutions located in such state are
closed.
“ Calculated Site
Price ” means at any time for each Site the product
of (A) such Site’s percentage set forth on Exhibit
G multiplied by (B) the annualized Fixed Rent for the
Premises as of the date of a EAP Notice further multiplied by
(C) 11.12.
“ Calendar
Quarter ” means each 3 month calendar period
commencing on the first day of each of January, April, July and
October.
“ Capital
Expenditures ” is defined in paragraph 31(a) of this
Lease.
“ Capital
Expenditure Waiver Test ” is defined in paragraph
31(c) of this Lease.
“ Casualty
Repair ” is defined in paragraph 10 of this
Lease.
“
Casualty ” means any damage or destruction
caused to any Site by any reason, including fire.
“ Casualty
Threshold ” is defined in paragraph 10 of this
Lease.
“ Claims
” shall mean Liens (including lien removal and bonding
costs), liabilities, obligations, civil or criminal damages,
losses, demands, penalties, assessments, payments, fees of
Mortgagee, fines, penalties, taxes, claims, actions, causes of
action, suits, judgments, settlements, costs, expenses and
disbursements (including legal fees and disbursements incurred and
expenses and costs of investigation and environmental remedial
action) of any kind and nature whatsoever, including interest that
may accrue on any of the foregoing.
“ Commencement
Date ” is defined and shall have the meaning
specified in the Basic Lease Information.
“ Consolidated
EBITDAR ” means, for any period, for the Tenant and
its Subsidiaries on a consolidated basis, an amount equal to
Consolidated Net Income for such period plus (a) the
following to the extent deducted in calculating such Consolidated
Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for federal, state, local and foreign
income taxes payable by the Tenant and its Subsidiaries for such
period, (iii) the amount of depreciation and amortization
expense, (iv) all non cash impairment charges (to the extent
not captured in amortization), (v) all underfunded pension
expenses to the extent constituting non-cash charges,
(vi) other non-cash non recurring expenses of the Tenant and
its Subsidiaries which do not represent a cash item in such period
or any future period, (vii) non cash expenses resulting from
the grant of stock and stock options and other compensation to
management personnel of the Tenant and its Subsidiaries pursuant to
a written plan or agreement or the treatment of such options under
variable plan accounting, (viii) all non–cash expenses
attributable to minority interests in Subsidiaries,
(ix) losses from sales of assets and foreign currency
translations, (x) all of Tenant’s operating rent,
including the annual Fixed Rent then payable under this Lease, and
(xi) other non-recurring and one-time cash items not to exceed
$5 million in any fiscal year of Tenant, and minus (b)(i)
gains from sales of assets and foreign currency translations to the
extent included in calculating such Consolidated Net Income for
such period, (ii) interest income to the extent included in
calculating such Consolidated Net Income for such period and
(iii) all non cash items increasing Consolidated Net Income
for such period. Consolidated EBITDAR shall be calculated on a pro
forma basis for acquisitions and divestitures.
“ Consolidated
Interest Charges ” means, for any period, for the
Tenant and its Subsidiaries on a consolidated basis, the sum of
(a) all interest expense, premium payments, debt discount,
fees, charges and related expenses of the Tenant and its
Subsidiaries in connection with borrowed money or in connection
with the deferred purchase price of property acquired or
2
services rendered, in each case to the
extent treated as interest expense in accordance with GAAP and
(b) the portion of rent expense of the Tenant and its
Subsidiaries with respect to such period under capital lease
obligations that is treated as interest expense in accordance with
GAAP.
“
Consolidated Net Income ” means, for any
period, for the Tenant and its Subsidiaries on a consolidated
basis, the net income of the Tenant and its Subsidiaries (excluding
extraordinary gains but including extraordinary losses) for that
period.
“ Consumer Price
Index ” means the Consumer Price Index-U.S. City
Average for All Urban Consumers (all items)
(1982–84=100) prepared by the Bureau of Labor Statistics
of the United States Department of Labor. If such Consumer Price
Index shall no longer be published with a base year of
1982–84=100, Landlord shall compute, by reference to data
available from such Bureau of Labor Statistics, the actual
percentage increase in consumer prices during the period or periods
in question. If said Consumer Price Index shall cease to be
published, Landlord shall use the most comparable index published
by the United States Government. Where the Consumer Price Index is
required for a given month, and if the Consumer Price Index is not
published for such month, then the Consumer Price Index published
for the month closest and prior to the designated month shall be
used.
“ Control
” (including with correlative meanings, the terms
“Controlling,” “Controlled by” and
“under Common Control with”) means the possession
directly or indirectly of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contracts or
otherwise.
“ Corporate
Capital Expenditures ” is defined in paragraph 31(a)
of this Lease.
“ Corporate
Control Event ” means any of the following:
(i) a merger or consolidation of Tenant with another entity
(other than any merger or consolidation of Tenant with any entity
which then also constitutes a Tenant hereunder or which is a
Subsidiary of Tenant), (ii) the sale of all or substantially
all the assets of Tenant to any party (other than any party which
then also constitutes a Tenant hereunder or which is a Subsidiary
of Tenant), (iii) any one Person (other than an entity which
then constitutes a Tenant hereunder or a Subsidiary of Tenant)
acquiring, directly or indirectly, fifty percent (50%) or more
of publicly traded common stock, voting securities or economic
benefits and burdens (including distributions) of Tenant within any
twelve month period, or (iv) a change in the power to appoint
more than 50% of Tenant’s Board of Directors, or (v) any
other change in Control of Tenant that results in Persons which,
immediately prior to such change, did not have Control of Tenant
obtaining Control of Tenant (unless any such Person(s) so obtaining
Control of Tenant also then constitute a Tenant hereunder or a
Subsidiary of Tenant).
“ Credit
Rating ” means the corporate debt rating issued by
S&P and Moody’s or if either or both no longer exist or
no longer issue ratings then, for either or both as so applicable,
an Alternative Credit Rating Agency. All references to specific
levels of a Credit Rating mean such rating with a
“stable” or “positive” outlook, but in the
event that any such rating is issued with a “negative”
outlook or “on watch” associated with such rating,
then, for purposes hereof, the applicable Credit Rating shall be
the rating that is immediately below the credit rating issued with
such negative outlook or on watch (for example, but not limitation,
if S&P has at any time
3
issued a corporate credit rating for a
Person of BBB- with a negative outlook, then the Credit Rating of
such Person for purposes of this Lease shall be deemed to be BB+ at
such time).
“ Debt
” of any Person shall mean as at the date when any
determination thereof is being made or to be made and in respect of
all: (A) indebtedness of such Person for borrowed money;
(B) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments; (C) obligations, other
than inter-company items, of such Person to pay the deferred
purchase price of property or services under conditional sales or
other similar agreements relating to property purchased by such
Person to the extent of the value of such property (other than
customary retentions or reservations under agreements with
suppliers entered into in the ordinary course of business) which
provide for the deferral of payment of the purchase price for a
period in excess of one year following the date of receipt and
acceptance of the complete delivery of such property and/or
services; (D) obligations of such Person as tenant under
leases which obligations are, in accordance with GAAP, recorded as
capital lease obligations, but excluding all obligations of Tenant
or its Affiliates under or in any manner relating to this Lease,
regardless of their treatment under GAAP; and (E) obligations
of such Persons under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) of such Person to
purchase or otherwise acquire, indebtedness or obligations of
others of the kinds referred to in clauses (A) through
(D) above. Debt shall not, however, include undrawn or
stand-by letters of credit issued on account of any Person.
Whenever any determination of the amount of Debt is required or
permitted to be, or is otherwise being or to be, made for any
purpose under this Lease, the amount of any such Debt denominated
in any currency other than United States dollars shall be
calculated at the US dollar equivalent of such Debt as at the date
when such determination of the amount of debt is being or to be
made, except that, if all or any portion of the principal amount of
any such Debt which is payable in a currency other than United
States dollars is hedged into United States dollars, the principal
amount of such hedged Debt, or the hedged portion thereof, shall be
deemed to be equal to the amount of United States dollars specified
in, or determined pursuant to, the applicable hedging
contract.
“ EAP
” is defined in paragraph 30(a) of this Lease.
“ EAP
Notice ” is defined in paragraph 30(a) of this
Lease.
“ EAP
Sale ” is defined in paragraph 30(a) of this
Lease.
“ EAP
Substitution ” is defined in paragraph 30(a) of this
Lease.
“ EAP
Undertaking ” is defined in paragraph 30(b)(xi) of
this Lease.
“ Eligibility
Requirements ” means with respect to any Person, that
such Person has total assets (in name or under management) in
excess of $600,000,000 and (except with respect to a pension
advisory firm or similar fiduciary) capital/statutory surplus or
shareholder’s equity of $250,000,000.
“ Environmental
Laws ” is defined in paragraph 26(b) of this
Lease.
“ Environmental
Reports ” is defined in paragraph 26(c) of this
Lease.
“ Equipment
– Landlord ” means the equipment described or
listed on Exhibit B-1 .
4
“ Equipment
– Tenant ” means the equipment described or
listed on Exhibit B-2 .
“ Event of
Default ” is defined in paragraph 15 of this
Lease.
“ Excluded
Expenses ” is defined in paragraph 5(b) of this
Lease.
“ Excluded
Taxes ” means any income or franchise taxes based
upon, measured by, or calculated with respect to net income or
profits (but not including any franchise tax based solely upon
gross receipts with respect to the Rent), inheritance, estate,
succession, transfer or any similar taxes, or other taxes which are
applicable to Landlord’s general or net income (as opposed to
taxes specific to rents, receipts or income attributable to
ownership of or operations solely at the Sites), net worth or
capital. Excluded Taxes shall also include fines, penalties and
interest due to the delinquent payment by Landlord of any tax or
assessment (except to the extent such delinquent payment by
Landlord results from Tenant’s failure to pay such tax or
assessment on a timely basis as required under this
Lease).
“ Extension
Terms ” is defined in paragraph 4(b) of this
Lease.
“ Fixed
Rent ” is defined and shall have the meaning
specified in the Basic Lease Information.
“ GAAP
” means generally accepted accounting principles recognized
as such in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and the Financial Accounting Standards
Board.
“ Hazardous
Materials ” is defined in paragraph 26(b) of this
Lease.
“
Imposition ” means the various taxes and other
charges referred to in paragraph 6 of this Lease payable by Tenant
and required by the present and future governmental laws and
regulations more specifically described in paragraph 6(b) of
this Lease.
“
Improvements ” means all of the buildings,
structures, improvements, heating, ventilation, air conditioning,
plumbing, electrical, mechanical, utility and life safety systems
and security systems (including parking areas, and driveways) now
or hereafter located on the Land and generally described on
Exhibit A-2 hereto, other than and specifically excluding
Tenant’s Property.
The words “
include ”, “ includes ”, “
including ” and any other derivation of
“include” means “including but not limited
to” unless specifically set forth to the contrary.
“ Indemnified
Parties ” is defined in paragraph 26(c) of this
Lease.
“
Indenture ” is defined in paragraph 15(p) of
this Lease.
“ Initial
Appraiser ” is defined in Exhibit E of this
Lease.
“ Initial
Period ” is defined in paragraph 31(a) of this
Lease.
“ Initial
Valuation ” is defined in Exhibit E of this
Lease.
5
“ Institutional
Lender ” means
(A) A real estate investment
trust, bank, saving and loan association, investment bank,
insurance company, trust company, commercial credit corporation,
pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan, provided that any such Person referred
to in this clause (A) satisfies the Eligibility
Requirements;
(B) An investment company,
money management firm or “qualified institutional
buyer” within the meaning of rule 144A under the Securities
Act of 1933, as amended, or an institutional “accredited
investor” within the meaning of Regulation D under the
Securities Act of 1933, as amended, provided that any such person
referred to in this clause (B) satisfies the Eligibility
Requirements;
(C) An institution
substantially similar to any of the foregoing entities described in
clause (A) or (B) that satisfies the Eligibility
Requirements.
“ Investment
Grade Criteria ” means a Credit Rating of both
“BBB-” or higher from S&P and “Baa3” or
higher from Moody’s, (or an equivalent Credit Rating from an
Alternative Credit Rating Agency, as applicable).
“ iStar
” means iStar Financial Inc., a Maryland corporation or a
majority owned subsidiary.
“ Land
” means the title and interest of Landlord in and to the six
(6) locations of real estate described on Exhibit A-1
hereto, and any land lying in the bed of any existing dedicated
street, road or alley adjoining thereto, all strips and gores
adjoining thereto, and all rights, ways, easements, privileges and
appurtenances thereunto belonging, including all of
Landlord’s right, title, and interest in and to all other
property rights, tangible or otherwise, arising out of or connected
with Landlord’s ownership thereof, but none of the
Improvements thereon.
“
Landlord ” is defined in the first paragraph of
this Lease.
“ Landlord
Parties ” shall mean, collectively, Landlord and its
Affiliates and their respective agents, invitees, representatives,
employees, directors, officers, shareholders, consultants,
independent contractors, successors and assigns.
“ Landlord
Representative ” is defined in the paragraph 28(f) of
this Lease.
“ Lease
” is defined in the first sentence of this Lease.
“ Lease Adjusted
Debt ” shall mean the sum of (i) all of
Tenant’s Debt plus (ii) the product of (x) all of
Tenant’s operating rent, including the annual Fixed Rent then
payable under this Lease, multiplied by (y) eight
(8).
“ Lease
Expiration Date ” is defined and shall have the
meaning specified in the Basic Lease Information.
6
“ Leasehold
Mortgage ” means any leasehold mortgage, leasehold
deed to secure debt, leasehold deed of trust or other security
instrument of like nature held by a Permitted Leasehold
Mortgagee.
“ Legal
Requirements ” is defined in paragraph 12 of this
Lease.
“ Lien
” shall mean any lien, mortgage, pledge, charge, security
interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating
a security interest, including any arising under any conditional
sale agreement, capital lease or other title retention
agreement.
“ Minimum Capital
Expenditure Requirement ” is defined in paragraph
31(a) of this Lease.
“
Moody’s ” means Moody’s Investors
Services, Inc. and its successors.
“
Mortgage ” shall mean a mortgage, deed to
secure debt, deed of trust or other security instrument of like
nature or any ground or underlying lease or other document of like
nature on all or any portion of the Premises given by Landlord to a
Mortgagee.
“
Mortgagee ” shall mean any holder of a Mortgage
with respect to the Premises or any part thereof.
“ Net Casualty
Proceeds ” shall mean the compensation and/or
insurance payments net of the reasonable expenses of collecting
such amounts incurred by Landlord, any Mortgagee (but only in its
capacity as Proceeds Trustee) and/or Tenant, and received by any
Mortgagee, Landlord or Tenant in respect of any portion of the
Premises by reason of and on account of a Casualty. Net Casualty
Proceeds shall not include any proceeds of any insurance or
compensation payable with respect to any Tenant’s
Property.
“ Other
Taxes ” is defined in paragraph 6(b) of this
Lease.
“ Overdue
Rate ” means the greater of: (x) twelve percent
(12%) per annum or (y) the sum of four percent
(4%) plus the prime interest rate as reported from time to
time in The Wall Street Journal , but in any event, if
lower, the maximum annual interest rate allowed by law for business
loans (not primarily for personal, family or household purposes);
provided , however , if The Wall Street
Journal is no longer in existence or ceases to publish such
information, Landlord shall use the prime interest rate as reported
in a comparable publicly available publication selected by Landlord
in its sole discretion.
“ Person
” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company,
trust, trustee(s) of a trust, unincorporated organization, or
government or governmental authority, agency or political
subdivision thereof.
“ Permitted
Encumbrances ” means for each Site:
(a) Any of the following,
which are not yet due and payable at the time in question:
(i) liens for water, sewer, and other utility services and
(ii) taxes, assessments and other governmental charges
(whether federal, state, local or foreign) and Property
Taxes;
7
(b) The easements,
rights-of-way, encroachments, encumbrances, restrictive covenants
and other matters affecting the title to the Premises or any part
thereof set forth on Exhibit C attached hereto;
(c) Any Subordination,
Non-Disturbance, and Attornment Agreement(s) recorded or otherwise,
which are provided to Tenant pursuant to paragraph 17 of this Lease
or as otherwise entered into by and among Landlord, Tenant, and any
Mortgagee;
(d) Liens for taxes (whether
federal, state, local or foreign) attributable to any taxable
period whether before, on or after the Commencement Date which are
being contested in good faith in accordance with the terms of this
Lease by Tenant and for which Tenant has established adequate
reserves; and
(e) This Lease and the
rights, privileges and entitlements of Tenant hereunder;
and
(f) Any sublease entered into
by Tenant in accordance with the terms of this Lease.
“ Permitted
Leasehold Mortgagee ” means: (a) any
Institutional Lender, (b) any Person with a Credit Rating
which satisfies the Investment Grade Criteria, and/or (c) any
Person which is a lender or agent for the lender(s) (and their
respective successors and/or assigns) under Tenant’s First
Lien Debt or Tenant’s Second Lien Debt (regardless of whether
any such Person satisfies the criteria set forth in clause
(a) or (b)).
“ Permitted
Use ” is defined in paragraph 3(a) of this
Lease.
“
Premises ” is defined in paragraphs 2(a) and
2(b) of this Lease.
“ Primary
Term ” is defined in paragraph 4(a) of this
Lease.
“ Proceeds
Trustee ” shall mean a federally insured bank or
trust company designated by Landlord (which may not be an Affiliate
of Landlord), subject to the prior written approval of Tenant, such
approval not to be unreasonably withheld, delayed, or conditioned;
provided , however , if a Mortgage encumbers the
Premises, the Mortgagee thereunder may, at its option, be appointed
Proceeds Trustee for so long as such Mortgage remains outstanding
and such Mortgagee is not an Affiliate of Landlord.
“ Property
Augusta ” is defined in paragraph 2(b) of this
Lease.
“ Property
Chicago ” is defined in paragraph 2(b) of this
Lease.
“ Property
Conyers ” is defined in paragraph 2(b) of this
Lease.
“ Property
Dallas ” is defined in paragraph 2(b) of this
Lease.
“ Property
Federalsburg ” is defined in paragraph 2(b) of this
Lease.
“ Property
Urbana ” is defined in paragraph 2(b) of this
Lease.
“ Property
Taxes ” is defined in paragraph 6(a) of this
Lease.
8
“ Quarterly
Subtenant Allowance ” is defined in paragraph 25(b)
of this Lease.
“ Rent
” is defined in paragraph 5(a)(ii).
“ Restoration
Fund ” is defined in paragraph 10 of this
Lease.
“ RR Exercise
Notice ” is defined in paragraph 32(c) of this
Lease.
“ RR
Notice ” is defined in paragraph 32(b) of this
Lease.
“ RR Notice
Date ” is defined in paragraph 32(b) of this
Lease.
“ RR
Price ” is defined in paragraph 32(b) of this
Lease.
“ RR
Offer ” is defined in paragraph 32(b) of this
Lease.
“ S&P
” means Standard & Poor’s Rating Service and
its successors or assigns.
“ SCIC
” is defined in paragraph 15(i) of this Lease.
“ Site
” is defined in paragraph 2(b) of this Lease.
“ Site
Assessments ” is defined in paragraph 26(d) of this
Lease.
“ Site
Reviewers ” is defined in paragraph 26(d) of this
Lease.
“ Site
Termination Date ” is defined in paragraph 14 of this
Lease.
“ Subordination,
Non-Disturbance and Attornment Agreement ” is defined
in paragraph 17(a) of this Lease.
“
Subsidiary ” of a Person means a corporation,
partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or
other interests having ordinary voting power for the election of
directors or other governing body (other than securities or
interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management
of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person. Unless
otherwise specified, all references herein to a “
Subsidiary ” or to “ Subsidiaries ”
shall refer to a Subsidiary or Subsidiaries of the Tenant. For
purposes hereof, a Subsidiary of any of the Persons which then
comprise the Tenant hereunder shall be deemed to be a Subsidiary of
the Tenant (regardless of whether such Person is a Subsidiary of
all of the Persons which then comprise the Tenant
hereunder).
“ Substitute
Parcel ” is defined in paragraph 30(b) of this
Lease.
“ Substitution
Deed ” is defined in paragraph 30(b)(ii) of this
Lease.
“ Tenant
” is defined in the first paragraph of this Lease and
includes each of Solo Cup Operating Corporation, SF Holdings Group,
Inc., and Solo Cup Company, and all liabilities, obligations,
covenants and agreements of Tenant under this Lease are and shall
be the joint and
9
several liabilities, obligations,
covenants and agreements of each of Solo Cup Operating Corporation,
SF Holdings Group, Inc., and Solo Cup Company.
“ Tenant’s
First Lien Debt ” shall mean any and all amounts due
and/or payable from time to time under that certain Credit
Agreement dated as of February 27, 2004, among Solo Cup
Company, Solo Cup Investment Corporation, Bank of America, N.A., as
Administrative Agent and Swing Line Lender and as an L/C Issuer,
Banc of America Securities LLC and Citigroup Global Markets Inc.,
as Joint Lead Arrangers and Joint Book Running Managers, Citicorp
North America, Inc., as Syndication Agent, Harris Trust and Savings
Bank, as Documentation Agent and as an L/C Issuer, and various
lending parties named therein, as amended, as the same may be
amended, restated, modified, renewed, extended, increased,
decreased, refinanced and/or replaced from time to time.
“ Tenant’s
Property ” shall mean, collectively, Tenant’s
Trade Fixtures and the Equipment - Tenant.
“ Tenant’s
Second Lien Debt ” shall mean any and all amounts due
and/or payable from time to time under that certain Second Lien
Credit Agreement dated March 31, 2006 among Solo Cup Company,
Solo Cup Investment Corporation, Bank of America, N.A., as
administrative agent for the Lenders, Banc of America Securities
LLC, as Sole Lead Arranger and Sole Bookrunning Manager and various
other lending parties named therein, as amended, as the same may be
amended, restated, modified, renewed, extended, increased,
decreased, refinanced and/or replaced from time to time.
“ Tenant’s
Trade Fixtures ” means all personal property of
Tenant in or on the Premises, affixed or not, which is not
necessary for the operation of the Improvements, including all
items listed or described on Exhibit B-2 and specifically
excludes the Equipment – Landlord.
“ Term
” is defined in paragraph 4(b) of this Lease.
“ Third
Appraiser ” is defined in Exhibit E of this
Lease.
“ Third
Valuation ” is defined in Exhibit E of this
Lease.
“ Treasury
Rate ” means the yield to maturity of a debt
obligation of the United States Treasury having a maturity date
closest to but not earlier than the then-existing remaining Term of
the Lease (excluding any then-unexercised options for any Extension
Terms) and, if more than one have been issued with such maturity
date, then using the debt obligation first issued on or closest to
the date of any termination by Landlord under this
Lease.
“ Valuation
Period ” is defined in Exhibit E of this
Lease.
“ Valuation
Notice ” is defined in Exhibit E of this
Lease.
(a) Landlord hereby demises
and leases to Tenant and Tenant hereby leases and rents from
Landlord the Premises, IN ITS “AS IS” CONDITION,
SUBJECT TO THE EXISTING STATE OF TITLE (WITHOUT EXPRESS OR IMPLIED
WARRANTY OF LANDLORD
10
WITH RESPECT TO THE CONDITION, QUALITY,
REPAIR OR FITNESS OF THE PREMISES FOR A PARTICULAR USE OR TITLE
THERETO, ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED BY LANDLORD
AND WAIVED AND RENOUNCED BY TENANT). The “Premises”
consists of collectively, Landlord’s interest in the Land,
the Equipment – Landlord, the Improvements,
together with any easements, rights, and appurtenances in
connection therewith or belonging to said Land and Improvements. No
easement for light, air or view is included with or appurtenant to
the Premises. The foregoing disclaimer in this paragraph 2(a)
has been negotiated by Landlord and Tenant, each being represented
by independent counsel, and is intended as a complete negation of
any representation or warranty by Landlord, express or implied,
with respect to the condition, quality, repair, or fitness of the
Premises for a particular use, or title thereto.
(b) The Premises includes the
Land and Improvements (a) located at the address commonly
known as 7575 Kostner Avenue, Chicago, Illinois, including
approximately 32 acres of land and 820,000 square feet of space
(“ Property Chicago ”), (b) located at the
address commonly known as 1550 Wrightsboro Road, Augusta, Georgia,
including approximately 17 acres of land and 364,000 square feet of
space (“ Property Augusta ”), (c) located
at the address commonly known as 1455 Highway 138 Northeast,
Conyers, Georgia, including approximately 24 acres of land and
367,000 square feet of space (“ Property Conyers
”), (d) located at the address commonly known as 1000
Industrial Park Drive, Federalsburg, Maryland, including
approximately 50 acres of land and 405,000 square feet of space
(“ Property Federalsburg ”), (e) located at
the address commonly known as 4444 West Ledbetter Drive, Dallas,
Texas, including approximately 47 acres of land and 1,220,000
square feet of space (“ Property Dallas ”),
(f) located at the address commonly known as 1505 East Main
Street, Urbana, Illinois, including approximately 40 acres of land
and 269,000 square feet of space (“ Property Urbana
”). Property Chicago, Property Augusta, Property Conyers,
Property Federalsburg, Property Dallas and Property Urbana together
constitute the Premises and each individually is herein called a
“ Site ,” and together are herein the “
Sites .”
(a) Tenant shall, subject to
applicable zoning restrictions and any recorded covenants or
restrictions in the public records upon the Commencement Date, use
and occupy the Premises , including each Site, only as
general offices, manufacturing and distribution of any products
then used in Tenant’s business, including food service
products, tableware, packaging and other lawful purposes which are
both associated and related thereto (collectively, the “
Permitted Use ”); provided , however ,
except for the recordation of any Mortgage and any replacements,
renewals, amendments, consolidations, modifications, extensions or
refinancing thereof or as otherwise required by governmental order,
from and after the Commencement Date, without first having obtained
Tenant’s prior written consent which may be withheld or
granted in Tenant’s sole and absolute discretion, Landlord
shall not record or otherwise take any voluntary action to subject
the Premises or Land to any additional (or modify or amend any
existing) covenants, restrictions, easements, or other encumbrances
of record or otherwise, or any rezoning of the Premises or any Site
from the zoning classifications presently in existence as of the
Commencement Date. Tenant shall not use, suffer or permit the
Premises, or any portion thereof, to be used by Tenant, any third
party or the public, as such, without restriction or in such manner
as might adversely affect Landlord’s title to or interest in
the Premises, or in such
11
manner as might make possible a Claim or
Claims of adverse possession by the public, as such, or third
Persons, or of implied dedication of the Premises, or any portion
thereof.
(b) So long as no Event of
Default under this Lease shall have occurred and be continuing,
Landlord shall not interfere, in any material respect, with any or
all of (i) Tenant’s rights to occupy and use the
Premises (in the manner and for the purposes contemplated
hereunder), (ii) Tenant’s right to utilize the vehicular
parking areas located on the Premises, and
(iii) Tenant’s right of access, ingress and egress to
and from the Premises.
(c) If no Event of Default
has occurred and is continuing, Landlord shall, promptly upon
request by Tenant, join with Tenant (at Tenant’s cost and
expense), to (i) grant easements, licenses, rights of way and
other rights and privileges in the nature of easements at any Site,
(ii) release, amend or modify existing easements, licenses and
appurtenances at any Site, (iii) take actions with respect to
governmental entities or other third parties to enhance the use and
enjoyment of the Sites and/or the enforcement or exercise of rights
under Legal Requirements, and (iv) execute and deliver any
instrument, in form and substance acceptable to Landlord, necessary
or appropriate to make or confirm such grants, releases or actions
to any Person, with or without consideration; provided that such
grant, release or action does not interfere with and is not
detrimental to the conduct of business on the Site and does not
adversely affect the utility, useful life or fair market value of
the Site.
(a) The primary term of this
Lease (the “ Primary Term ”) shall be for a
period of approximately twenty (20) years, beginning on the
Commencement Date and ending on the Lease Expiration
Date.
(b) Tenant shall have the
right, at its option, to extend the Primary Term of this Lease for
four (4) consecutive extension terms (the “ Extension
Terms ”), each being five (5) years in length. Each
Extension Term shall commence on the day after the expiration of
the preceding term and shall expire on the fifth (5
th ) anniversary of the Lease Expiration Date
in the case of the first (1 st ) Extension Term,
and on the tenth (10 th ), fifteenth, (15 th
), and
twentieth (20th) anniversaries of the Lease Expiration Date in
the case of the second (2 nd ), third (3
rd ) and fourth (4 th
) Extension Terms, respectively. The options to
extend the Term of this Lease as described above shall not be
deemed exercised by Tenant unless at least eighteen
(18) months prior to the Lease Expiration Date for the Primary
Term or at least eighteen (18) months prior to the expiration
of the Extension Term for the first (1 st
), second
(2 nd ) and third (3 rd
) Extension Terms, respectively, Tenant shall have
delivered written notice to Landlord of Tenant’s irrevocable
decision to so extend this Lease at the end of the Primary Term or
any exercised Extension Term, as applicable. Tenant’s failure
to deliver one (1) such timely notice to Landlord shall
terminate all future Extension Terms, if any, following the
Extension Term to which such notice specifically relates. Subject
to the provisions of paragraph 5, the terms and conditions of
this Lease shall apply to each Extension Term with the same force
and effect as if such Extension Term had originally been included
in the Primary Term of the Lease. The right of Tenant to the
Extension Terms shall be conditioned upon this Lease being in full
force and effect, Tenant occupying the Premises, and no Event of
Default then existing as of both the date that Tenant notifies
Landlord of Tenant’s decision to extend the term of this
Lease for any of the Extension Terms, and the Lease Expiration Date
(for the first (1 st ) Extension Term) or expiration of
the first
12
(1 st
), second
(2 nd ) and third (3 rd
) Extension Term, as the case may be for the second
(2 nd ), third (3 rd ) and fourth
(4 th ) Extension Term, respectively. The
Primary Term, together with any Extension Term which Tenant
properly exercises its option with respect to, and for which the
conditions related thereto are satisfied, shall constitute the
“ Term ” of this Lease.
(a) Tenant shall pay to
Landlord the following amounts as Rent for the Premises:
(i) During the Term of this
Lease, Tenant shall pay to Landlord, as fixed quarterly rent, the
amount of quarterly fixed rent specified in the Basic Lease
Information (“ Fixed Rent ”).
(ii) Throughout the Term of
this Lease, Tenant shall pay, as Additional Rent, all other amounts
of money and charges required to be paid by Tenant under this
Lease, whether or not such amounts of money or charges are
designated Additional Rent. As used in this Lease, “
Rent ” shall mean and include all Fixed Rent and
Additional Rent payable by Tenant in accordance with this
Lease.
(b) It is the intention of
Landlord and Tenant that the Fixed Rent payable by Tenant to
Landlord during the entire Term of this Lease shall be absolutely
net of all costs and expenses incurred in connection with the
management, operation, maintenance, repair and replacement of the
Premises in accordance with this Lease. Landlord shall have no
obligations or liabilities whatsoever with respect to the
management, operation, maintenance, repair or replacement of the
Premises during the Term of this Lease, and Tenant shall manage,
operate, maintain and repair and replace the Premises in accordance
with this Lease and shall pay all costs and expenses incurred in
connection therewith before such costs or expenses become
delinquent. Without limiting the generality of the foregoing,
throughout the entire term of this Lease, Tenant shall pay, as
Additional Rent, all premiums for all property and liability
insurance covering the Premises required under this Lease, all
Property Taxes and all Other Taxes that accrue during or are
allocable to the Term of this Lease, and for Property Taxes and
Other Taxes, allocable for any period of time prior to the Term of
this Lease. Notwithstanding the foregoing or anything to the
contrary contained in this Lease, Tenant shall not be responsible
for the following costs or expenses (the “ Excluded
Expenses ”): (i) interest and amortization of funds
borrowed by Landlord or any similar payments made to the holder of
a Mortgage (including the rent under any ground lease which
constitutes a Mortgage for purposes hereof), (ii) costs in the
nature of indemnification obligations of Landlord or any Landlord
Party, (iii) costs and expenses (including court costs,
attorneys’ fees and disbursements) related to or in
connection with disputes with any holder of a Mortgage or by or
among any persons having an interest in the Landlord or the
Premises, (iv) costs incurred in connection with a sale,
lease, Mortgage (except as set forth in the next sentence) or
transfer (including testamentary transfers) of all or any part of
any Site or any interest therein, or of any interest in Landlord,
or in any person comprising, directly or indirectly, Landlord or in
any person having an equity interest, directly or indirectly in
Landlord, (v) costs and expenses incurred by Landlord
associated with the operation of the business of the legal entity
or entities which constitute Landlord (as opposed to operation of
the Sites), and/or (vi) Excluded Taxes. Notwithstanding the
terms of clause (iv) of the preceding sentence, Tenant shall
be responsible for the legal, due diligence, title insurance and
surveying costs and fees incurred by a Mortgagee in connection with
the Initial Mortgage of the Premises
13
entered into by Landlord after the
Commencement Date, as well as any mortgage taxes (or equivalent
taxes) due and payable in connection with such initial Mortgage;
provided that such Mortgage is fully executed, delivered and
recorded not later than sixty (60) calendar days after the
Commencement Date (it being agreed that Tenant shall not be
responsible for any such costs, fees or taxes in connection with
any Mortgage executed, delivered or recorded after such sixty
(60) calendar day period, nor shall Tenant be responsible for
any costs, fees or expenses connected with any Mortgage other than
the initial Mortgage with respect to the Premises entered into by
Landlord after the Commencement Date); and provided further, that
Tenant shall not be responsible for the payment of any mortgage
taxes (or equivalent taxes) in connection with any such Mortgage
executed, delivered and/or recorded with respect to the Property
Federalsburg unless such Mortgage with respect to the Property
Federalsburg is fully executed, delivered and recorded within
thirty (30) days after the Commencement Date. The parties
intend that any such Mortgage with respect to the Property
Federalsburg which is executed, delivered and recorded within the
thirty (30) day period described in the second proviso of the
preceding sentence shall qualify as a “purchase money
mortgage” for purposes of any mortgage taxes (or equivalent
taxes) payable with respect to such Mortgage.
(c) Tenant shall pay all
Fixed Rent to Landlord, in advance, on or before the first Business
Day of each and every Calendar Quarter during the Term of this
Lease (other than the payment due on the Commencement Date which is
due as set forth in the Basic Lease Information) without notice,
demand, deduction or offset, in lawful money of the United States
of America, to the wire transfer address of Landlord specified in
the Basic Lease Information, or to such other accounts and/or
Person or Persons or at such other place or places as Landlord may
from time to time designate in writing at least ten
(10) Business Days in advance to Tenant (or otherwise so there
are collected funds available to Landlord on the due date).
Interest at the Overdue Rate shall accrue on unpaid Fixed Rent from
the due date thereof to the date of actual payment. If the Fixed
Rent is paid more than five (5) Business Days after its due
date, a late charge of five percent (5%) of the delinquent
amount shall be due and payable. Tenant shall pay all Additional
Rent when due. If Additional Rent in the amount of $5,000 or
greater is paid more than five (5) Business Days after its due
date, a late charge of five percent (5%) of the delinquent
amount shall be due and payable. All Additional Rent which is
payable to Landlord pursuant to this Lease shall be paid by Tenant
to Landlord without notice.
(a) Tenant shall pay, as
Additional Rent, directly to the appropriate governmental
authorities, all Property Taxes prior to the assessment of any
interest or penalty for late payment (subject to Tenant’s
rights under this paragraph 6(a) to make payment thereof in
installments or under paragraph 6(e) below or to protest Property
Taxes); provided , however , if and to the extent
Landlord or Mortgagee is holding Tenant’s estimated payments
thereof pursuant to paragraph 6(f) below, Landlord or Mortgagee
shall instead make such payments timely upon Tenant’s behalf;
provided , further , if any such Property Taxes may
legally be paid in installments, Tenant may, at its option, pay
such Property Taxes in such installments together with any interest
due thereon provided that Tenant shall have paid all such
installments, or provided to Landlord or Mortgagee, such amounts as
are necessary for the payment of, all such installments prior to
the expiration or earlier termination of this Lease. “
Property Taxes ” shall mean all taxes, assessments,
excises, levies, fees and charges (and any tax, assessment, excise,
levy, municipal service fee, fee or charge levied wholly or partly
in lieu thereof or as a substitute therefor or as an
14
addition thereto) of every kind and
description, general or special, ordinary or extraordinary,
foreseen or unforeseen, secured or unsecured, whether or not now
customary or within the contemplation of Landlord and Tenant, that
are applicable to the Term (as described below), and are levied,
assessed, charged, confirmed or imposed by any public or government
authority on or against, or otherwise with respect to, the Premises
or any part thereof or any personal property used in connection
with the Premises, including Landlord’s franchise taxes based
upon gross receipts solely with respect to the receipt of Rent (but
not including net income or franchise taxes based upon, measured by
or calculated with respect to net income or profits or derivatives
thereof). The parties intend that, throughout the Term, the
governmental authorities to whom Property Taxes are due shall issue
bills therefor directly to Tenant, and shall reasonably cooperate
to cause such governmental authorities to do so. If, however,
Landlord receives any bills for any Property Taxes notwithstanding
the foregoing efforts, Landlord shall immediately deliver such
bills to Tenant for payment as provided herein. Property Taxes
shall not include any Other Taxes or Excluded Taxes arising out of
or levied in connection with this Lease, unless and only to the
extent levied or assessed against Landlord as a substitute for any
Property Taxes. For purposes hereof, Property Taxes shall be deemed
to be “applicable to the Term” to the extent such
Property Taxes accrue during the Term, regardless of whether such
Property Taxes are due or payable during the Term (i.e., on an
“accrual” basis).
(b) Tenant shall pay, as
Additional Rent, directly to the appropriate governmental
authorities (except as provided below), all Other Taxes prior to
the assessment of any interest or penalty for late payment (subject
to Tenant’s rights under this paragraph 6(b) and paragraph
6(e) below, to make payment in installments or to protest Other
Taxes); provided , however , if Landlord or Mortgagee
is holding Tenant’s estimated payments thereof pursuant to
paragraph 6(f) below, Landlord or Mortgagee shall instead make such
payments timely upon Tenant’s behalf; provided ,
further , if any such Other Taxes may legally be paid in
installments, Tenant may, at its option, pay such Other Taxes in
such installments together with any interest due thereon provided
that Tenant shall have paid, or provided to Landlord or Mortgagee,
such amounts as are necessary for the payment of, all such
installments prior to the expiration or earlier termination of this
Lease. “ Other Taxes ” shall mean all taxes,
assessments, excises, levies, fees and charges, including all
payments related to the cost or occupation of providing facilities
or services, whether or not now customary or within the
contemplation of Landlord and Tenant, that are applicable to the
Term (as described in paragraph 6(a) above) and are levied,
assessed, charged, confirmed or imposed by any public or government
authority upon, or measured by, or reasonably attributable to
(i) the Premises, (ii) the cost or value of
Tenant’s equipment, furniture, fixtures and other personal
property located in the Premises or the cost or value of any
leasehold improvements made in or to the Premises by or for Tenant,
regardless of whether title to such improvements is vested in
Tenant or Landlord, (iii) any Rent payable under this Lease,
including any gross receipts tax or excise tax levied by any public
or government authority with respect to the receipt of any such
Rent but only to the extent that such taxes are in lieu of or a
substitute for any Property Taxes, (iv) the possession,
leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises, or (v) this
transaction or any document pursuant to which Tenant creates or
transfers an interest or an estate in the Premises. Other Taxes
shall not include any Property Taxes or any Excluded Taxes arising
out of or levied in connection with this Lease, unless and only to
the extent levied or assessed against Landlord in whole or in part
in lieu of, as a substitute for, or as an addition to any Other
Taxes.
15
(c) Except for any Excluded
Taxes imposed on or with respect to the Rent, if at any time during
the Term, any method of taxation shall be such that there shall be
levied, assessed or imposed on Landlord, or on the Rent, or on the
Premises, or any portion thereof, a capital levy, gross receipts
tax on the Rent, occupational license tax, or a franchise tax,
based upon (in each case) gross receipts with respect to the Rent,
but not including any income or franchise taxes based upon,
measured by, or calculated with respect to net income or profits,
Tenant, to the extent permitted by law, covenants to pay and
discharge the same, it being the intention of the parties hereto
that the Fixed Rent to be paid hereunder shall be paid to Landlord
absolutely net without deduction or charge of any nature
whatsoever, foreseeable or unforeseeable, ordinary or
extraordinary, or of any nature, kind, or description, except for
Excluded Taxes and as otherwise expressly provided in this Lease.
Any of the taxes which are payable by Tenant pursuant to this
subparagraph (c) shall constitute Other Taxes for purposes
hereof.
(d) Tenant covenants to
furnish Landlord, within thirty (30) calendar days, official
receipts of the appropriate taxing authority, if any, or other
appropriate proof reasonably satisfactory to Landlord, evidencing
the payment of all Impositions.
(e) Tenant shall have the
right to contest the amount or validity, in whole or in part, of
any Property Tax or Other Tax or to seek a reduction in the
valuation of the Premises as assessed for real estate property tax
purposes by appropriate proceedings diligently conducted in good
faith (but only after the deposit or payments (whether under
protest or otherwise) of any amounts required by applicable law to
stay or prevent collection activities). If Tenant desires to
contest the validity of any Property Tax or Other Tax, it shall
(i) on or before thirty (30) calendar days prior to the
due date thereof, notify Landlord, in writing, that Tenant intends
to so contest same; and (ii) on or before the due date
thereof, if such Property Tax or Other Tax involves an amount in
excess of $50,000 or if any Mortgagee so requires, deposit with
Landlord security (in form and content reasonably satisfactory to
Landlord or Mortgagee) for the payment or bonding over of the full
amount of such Property Tax or Other Tax and from time to time
deposit additional security so that, at all times, adequate
security will be available for the payment of the full amount of
the Property Tax or Other Tax together with all interest,
penalties, costs and other charges in respect thereof; provided,
however, that the deposits referenced in this paragraph 6(e)(ii)
shall not be required if and to the extent Tenant is required to
pay the Property Tax or Other Tax, as applicable, in full prior to
initiating such contest. If Tenant initiates any proceeding
referred to in this paragraph 6(e), Landlord shall not be required
to join such proceeding, except to the extent required by law, in
which event Landlord shall, upon written request by Tenant, join in
such proceedings or permit the same to be brought in its name, all
at Tenant’s expense. Landlord agrees to provide, at
Tenant’s expense, whatever assistance Tenant may reasonably
require in connection with any such contest initiated by Tenant.
Tenant covenants that Landlord shall not suffer or sustain any
costs or expenses (including counsel fees) or any liability in
connection with any such proceeding initiated by Tenant (or
initiated by Landlord at Tenant’s request), unless the same
is reimbursed by Tenant. No such contest initiated by Tenant shall
subject Landlord to any civil liability or the risk of any criminal
liability or forfeiture. If Tenant fails or declines to contest any
Property Tax or Other Tax, then Landlord shall have the right (but
not the obligation) to contest the same. Any contest initiated by
Landlord (other than any contest initiated by Landlord at
Tenant’s request) shall be at the sole cost and expense of
the Landlord, provided , however , if Landlord is
successful in reducing the valuation of any Property Tax or Other
Tax on the Premises, and such reduction is greater than the costs
and expenses incurred by Landlord in connection with such contest,
Tenant shall be entitled to the benefit of such reduction and shall
be obligated to reimburse Landlord for any costs or expenses in
connection with such contest.
16
(f) During the continuance of
any Event of Default or as required by a Mortgagee, Tenant shall
pay to Landlord on the first day of each Calendar Quarter an amount
equal to one fourth (1/4) of the Property Taxes and Other
Taxes thereafter due and payable, as reasonably estimated by
Landlord on the basis of assessments and bills and estimates
thereof. Such amounts shall be held by Landlord or Mortgagee,
without interest, and shall not be deemed to be trust funds but, if
held by Landlord, shall not be commingled with the general funds of
Landlord and shall instead be held in a separate escrow account of
Landlord opened and maintained for this Lease alone;
provided , however , to the extent so received, any
Mortgagee which is an entity unaffiliated with Landlord or any
Affiliate of Landlord, may commingle such funds. Landlord shall
apply such amounts paid by Tenant under this paragraph 6(f)
(including any amounts tendered by Tenant which are intended for
interest if Tenant shall have elected to make such payments in
installments) to the payment before delinquency of the Property
Taxes and Other Taxes, subject to any rights of Mortgagee thereto.
Landlord and Mortgagee shall make no charge for holding and
applying such amounts. If at any time the amount on deposit
pursuant to this paragraph 6(f) shall be less than the amount
reasonably deemed necessary by Landlord to pay such Property Taxes
or Other Taxes as they become due, Tenant shall pay to Landlord the
amount necessary to make the deficiency within ten
(10) Business Days after notice from Landlord requesting
payment thereof.
(g) Landlord will, within
thirty (30) calendar days after receipt, reimburse Tenant for
any refund of Property Tax or Other Tax received by Landlord or
Mortgagee as a result of any tax contest relating to the Term.
Further, the parties agree that any credit, reduction or abatement
of Property Taxes or Other Taxes applicable to any period prior to
the Commencement Date shall run to the benefit of, and/or be
payable to and the property of, Tenant.
| 7. |
NET LEASE; NON-TERMINABILITY |
(a) This is an absolutely net
lease and the Fixed Rent, Additional Rent and all other sums
payable hereunder by Tenant shall be paid without notice (except as
expressly provided herein), demand, set-off, counterclaim,
abatement, suspension, deduction or defense. It is the intention of
the parties hereto that the Fixed Rent shall be an absolutely net
return to Landlord throughout the Term of this Lease. In order that
such Rent shall be absolutely net to Landlord, Tenant shall pay
when due, and save Landlord harmless from and against, any and all
costs, charges and expenses attributable to the Premises, including
each fine, fee, penalty, charge (including governmental charges),
assessments, sewer rent, Impositions, insurance premiums as
required herein, utility expenses, carrying charges, costs,
expenses and obligations of every kind and nature whatsoever,
general and special, ordinary and extraordinary, foreseen and
unforeseen, the payment for which Landlord or Tenant is, or shall
become liable by reason of any rights or interest of Landlord or
Tenant in, to or under the Premises or this Lease or in any manner
relating to the ownership, leasing, operation, management,
maintenance, repair, rebuilding use or occupation of the Premises,
or of any portion thereof; provided , however , that
nothing herein contained shall be construed as imposing upon Tenant
any obligation to pay any Excluded Expenses.
17
(b) This Lease shall not
terminate, nor shall Tenant have any right to terminate this Lease,
except as expressly provided in paragraphs 14 and 30 nor shall
Tenant be entitled to any abatement or reduction of Rent hereunder
except as required by paragraphs 14 and 30 nor shall the
obligations of Tenant under this Lease be affected (except as
expressly provided in this Lease), by reason of (i) any damage
to or destruction of all or any part of the Premises from whatever
cause; (ii) subject to paragraph 14, the taking of the
Premises or any portion thereof by condemnation, requisition or
eminent domain proceedings; (iii) the prohibition, limitation
or restriction of Tenant’s use of all or any part of the
Premises, or any interference with such use; (iv) any eviction
by paramount title or otherwise, (v) Tenant’s
acquisition or ownership of all or any part of the Premises
otherwise than as expressly provided herein; (vi) any default
on the part of Landlord under this Lease, or under any other
agreement to which Landlord and Tenant may be parties; or
(vii) any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary
notwithstanding. It is the intention of the parties hereto that the
obligations of Tenant hereunder shall be separate and independent
covenants and agreements, that the Fixed Rent, the Additional Rent
and all other sums payable by Tenant hereunder shall continue to be
payable in all events and that the obligations of Tenant hereunder
shall continue unaffected unless the requirement to pay or perform
the same shall have been terminated pursuant to any express
provision of this Lease. Tenant agrees that Tenant will not be
relieved of the obligations to pay the Fixed Rent or any Additional
Rent in case of damage to or destruction of or condemnation (except
as expressly provided in paragraph 14) of the Premises.
(c) Tenant agrees that it
will remain obligated under this Lease in accordance with its
terms, and that it will not take any action to terminate, rescind
or void this Lease, notwithstanding (i) the bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation,
dissolution or winding-up or other proceeding affecting Landlord or
its successor in interest, or (ii) any action with respect to
this Lease which may be taken by any trustee or receiver of
Landlord or its successor in interest or by any court in any such
proceeding.
(d) TENANT WAIVES ALL RIGHTS
WHICH MAY NOW OR HEREAFTER BE CONFERRED BY LAW (BUT NOT UNDER THIS
LEASE) (I) TO QUIT, TERMINATE OR SURRENDER THIS LEASE OR THE
PREMISES OR ANY PART THEREOF, OR (II) TO ANY ABATEMENT, SUSPENSION,
DEFERMENT OR REDUCTION OF THE FIXED RENT, ADDITIONAL RENT OR ANY
OTHER SUMS PAYABLE UNDER THIS LEASE, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED HEREIN.
(e) Landlord and Tenant
acknowledge and confirm that, pursuant to this Lease, Tenant is
responsible for the routine day-to-day operation and maintenance of
the Premises, upon and subject to the other terms of this Lease.
Accordingly, Landlord and Tenant acknowledge and confirm that each
contemplates that the service contracts, permits, approvals,
guaranties, warranties and similar rights and documents which
pertain to the use, occupancy and operation of the Premises are and
shall remain throughout the Term in the name of Tenant, rather than
Landlord. If the parties hereafter determine that any such
contracts, permits, approvals, guaranties, warranties or similar
rights or documents are required to be held in the name of Landlord
as the fee owner of any of the Premises, then Tenant shall assign
the same to Landlord (without recourse or warranty), to the extent
the same are assignable, pursuant to a mutually satisfactory
instrument, and Landlord shall be deemed to have granted Tenant a
non-exclusive license and authority of Landlord to enforce and
exercise Landlord’s rights under such rights or documents
during the Term of this Lease. Tenant agrees to pay all costs
arising from and
18
indemnify Landlord from all claims
arising or relating to the service contracts, permits, approvals,
guaranties, warranties and similar rights and documents referred to
in this paragraph 7(e).
Tenant shall, at
Tenant’s sole cost and expense, be responsible for supplying
the Premises with electricity, heating, ventilating and air
conditioning, water, natural gas, lighting, replacement for all
lights, restroom supplies, telephone service, window washing,
security service, janitor, pest control and disposal services
(including, if applicable, hazardous and biological waste
disposal), and such other services as Tenant determines to furnish
to the Premises. LANDLORD SHALL NOT BE IN DEFAULT HEREUNDER OR BE
LIABLE FOR ANY DAMAGE OR LOSS DIRECTLY OR INDIRECTLY RESULTING
FROM, NOR SHALL THE FIXED RENT OR ADDITIONAL RENT BE ABATED OR A
CONSTRUCTIVE OR OTHER EVICTION BE DEEMED TO HAVE OCCURRED BY REASON
OF, THE INSTALLATION, USE OR INTERRUPTION OF USE OF ANY EQUIPMENT
IN CONNECTION WITH THE FURNISHING OF ANY OF THE FOREGOING SERVICES,
ANY FAILURE TO FURNISH OR DELAY IN FURNISHING ANY SUCH SERVICES,
WHETHER SUCH FAILURE OR DELAY IS CAUSED BY ACCIDENT OR ANY
CONDITION BEYOND THE CONTROL OF LANDLORD OR TENANT OR BY THE MAKING
OF REPAIRS OR IMPROVEMENTS TO THE PREMISES, OR ANY LIMITATION,
CURTAILMENT, RATIONING OR RESTRICTION ON USE OF WATER, ELECTRICITY,
GAS OR ANY FORM OF ENERGY SERVING THE PREMISES, WHETHER SUCH
RESULTS FROM MANDATORY GOVERNMENTAL RESTRICTION OR VOLUNTARY
COMPLIANCE WITH GOVERNMENTAL GUIDELINES. Tenant shall pay the full
cost of all of the foregoing services and all other utilities and
services supplied to the Premises directly to the Persons to whom
such costs are due as Additional Rent.
| 9. |
REPAIRS AND MAINTENANCE; REPLACEMENT |
(a) Tenant shall, at its own
sole cost and expense, keep the Premises, including each Site
therein, in good order and condition consistent with the Permitted
Uses set forth in this Lease as of the Commencement Date at all
times on and after Commencement Date to and including the date of
the termination of the Term, by lapse of time or otherwise;
provided , however , that during the last eighteen
(18) months of the Term, Tenant shall be permitted to pay
Landlord the cost of any capital improvements required as a result
of normal use and wear and tear at the Premises in lieu of making
any required capital improvements; provided further
that Tenant shall not be required to pay the cost of any such
capital improvements incurred during the last eighteen
(18) months of the Term to the extent that such costs would
exceed the amount required to cause the capital improvement in
question to have a useful life that is longer than five
(5) years beyond the scheduled expiration date of this Lease.
Subject to the foregoing sentence and the requirements of paragraph
23, Tenant shall timely and properly maintain, repair and replace
all of the Premises and all its component parts, including parking
surfaces and stripes, driveways, all landscaping, mechanical
systems, electrical and lighting systems, plumbing and sewage
systems, fixtures and appurtenances, interior and exterior walls,
roof, foundations, floor slabs, columns and structural elements so
as to preserve and protect the useful life, utility and value of
such components, and in all events so as to preserve the
effectiveness of any warranty relating thereto, such repairs and
replacements to be at least in quality and class to the
original
19
work. If any building system or
component shall become obsolete, non-functional, or uneconomic to
repair, Tenant shall remove such item from the Premises and,
promptly replace it with an item of comparable initial value and
function. Promptly upon installation of any equipment which is not
Tenant’s Property, Tenant shall deliver to Landlord the
original warranty relating to such equipment (which shall specify
Landlord as the owner of the equipment and upon Landlord’s
receipt of such original warranty, Landlord shall be deemed to have
granted Tenant a non-exclusive license and authority of Landlord
solely to enforce such warranty during the Term of the Lease).
Tenant shall deliver to Landlord a written statement showing all
removals and replacements of such systems or components (not
including Tenant’s Property) during the preceding calendar
year, including manufacturers, model numbers, and serial numbers.
Landlord may, upon two (2) Business Days’ prior notice
cause independent private inspectors to make inspections of any
building and building systems on the Premises or segments thereof
to determine Tenant’s compliance under this paragraph 9.
Tenant shall pay the cost of (i) one (1) such inspection
at each Site by or on behalf of Landlord in each calendar year and
(ii) the costs of all such inspections during the continuance
of an Event of Default under this Lease. Notwithstanding the
foregoing requirements of this paragraph 9, Tenant shall have no
obligation to deliver any warranties for any Tenant’s
Property at the Premises which may be and which are subsequently
removed by Tenant upon expiration or earlier termination of this
Lease.
Landlord may, but is not
required to, after two (2) Business Days notice to Tenant
(except in the case of emergency, in which case Tenant shall be
given notice contemporaneously with entry), enter the Premises and
make such repairs, alterations, improvements, additions,
replacements or maintenance as Landlord deems necessary to cure any
Event of Default of Tenant hereunder which remains uncured after
the expiration of any notice and cure period provided under this
Lease, as applicable, in a diligent fashion, and Tenant shall pay
Landlord as Additional Rent forthwith (and in any event within
thirty (30) days) after being billed for same by Landlord the
cost thereof plus an administrative fee of four percent
(4%) of such cost, which bill shall be accompanied by
reasonably supporting documentation. Such amounts shall bear
interest at the Overdue Rate from the date of expenditure by
Landlord to the date of repayment by Tenant at the Overdue Rate.
Any entry into the Premises by Landlord pursuant to this paragraph
9(a) shall be conducted subject to and in accordance with the terms
of paragraph 18 below.
(b) It is intended by Tenant
and Landlord that Landlord shall have no obligation, in any manner
whatsoever, to repair or maintain the Premises (or any fixture or
equipment therein), whether structural or nonstructural, all of
which obligations are intended, as between Landlord and Tenant, to
be those of Tenant. TENANT EXPRESSLY WAIVES THE BENEFIT OF ANY
STATUTE NOW OR IN THE FUTURE IN EFFECT WHICH WOULD OTHERWISE AFFORD
TENANT THE RIGHT TO MAKE REPAIRS AT LANDLORD’S EXPENSE OR TO
TERMINATE THIS LEASE BECAUSE OF LANDLORD’S FAILURE TO KEEP
THE PREMISES IN GOOD ORDER, CONDITION AND REPAIR.
(c) Tenant shall turn over to
Landlord upon expiration or termination of this Lease, then current
operating manuals and original warranties (to the extent
applicable) for the Equipment – Landlord then located on such
Site specifically excluding, in all cases, Tenant’s Property
at the Premises.
20
| 10. |
DESTRUCTION OF OR DAMAGE TO PREMISES |
(a) If any Improvements
and/or Equipment – Landlord is damaged by Casualty during the
Term of this Lease, Tenant shall, subject to the terms of this
Lease (including paragraph 14 below), (a) repair such damage
and restore such Improvements and/or Equipment – Landlord to
substantially the same or better condition as existed before the
occurrence of such Casualty using materials of the same or better
grade than that of the materials being replaced (herein, a “
Casualty Repair ”) and (b) this Lease shall
remain in full force and effect. Such repair and replacement by
Tenant shall be done in accordance with paragraph 23 and the
standards of paragraph 9 and Tenant shall, at its expense, obtain
all permits required for such work. An architect or engineer
selected by Landlord shall review, at Tenant’s expense, all
plans and specifications for Casualty Repairs and (if applicable as
provided below) all draw requests hereunder. In no event shall
Fixed Rent or Additional Rent abate, nor shall this Lease terminate
by reason of such damage or destruction, except as expressly
provided in paragraph 14 below. Provided that no Event of Default
by Tenant shall then exist under this Lease, all insurance proceeds
(and other amounts) payable for the performance of Casualty Repairs
shall be paid to Tenant (or to the Proceeds Trustee, as
applicable), and Landlord shall make available to Tenant all
insurance proceeds actually received by Landlord or Mortgagee on
account of such Casualty for application to the costs of such
Casualty Repair. All Casualty Repairs shall be performed in
compliance with the terms of this Lease, including paragraph 23
below. Notwithstanding anything to the contrary contained herein,
Tenant shall have no obligation to perform any Casualty Repairs
with respect to any damage to the Premises resulting from any
Casualty which occurs during the last eighteen (18) months of
the Term, and to the extent that Tenant elects not to make any such
Casualty Repairs during such period, all insurance proceeds payable
with respect to the Improvements and Equipment – Landlord
shall be payable to or at the direction of Landlord (but Tenant
shall be entitled to receive all insurance proceeds payable with
respect to Tenant’s Property).
(b) For all Casualty Repairs,
the following apply:
(i) As used herein the
“ Casualty Threshold ” means $500,000;
provided , however , that if Tenant, at the time of
such Casualty, has a Credit Rating meeting the Investment Grade
Criteria, then the “Casualty Threshold” shall be
$2,000,000. If the Net Casualty Proceeds are less than the Casualty
Threshold at the time of the applicable Casualty, such Net Casualty
Proceeds shall be paid to Tenant to apply to the cost of
restoration. If the Net Casualty Proceeds are equal to or greater
than the Casualty Threshold at the time of the applicable Casualty,
such Net Casualty Proceeds shall be paid to the Proceeds Trustee
(herein called the “ Restoration Fund ”) for
release to Tenant as restoration progresses, subject to and in
accordance with paragraph 23(b). If Landlord mortgages the Premises
with a Mortgage, the Mortgagee thereunder may, at its option be
appointed Proceeds Trustee for so long as such Mortgage remains
outstanding and such Mortgagee does not Control Landlord or is not
Controlled by or under Common Control with Landlord. Insurance
proceeds shall be deposited in an interest bearing account and
interest shall be distributed to Tenant upon completion of said
installation, repair, replacement or rebuilding, provided no
default has occurred and is continuing hereunder. All checks drawn
on said account shall be signed by the Proceeds Trustee. Provided
that no Event of Default by Tenant shall exist under this Lease,
insurance proceeds shall be disbursed to Tenant by the Proceeds
Trustee under the following procedure:
(A) No more frequently than
once per calendar month, Tenant may request that Landlord disburse
to Tenant such insurance proceeds as are requested by Tenant to pay
for all costs incurred by Tenant for repair and restoration work of
the damaged Site that was performed during the immediately
preceding calendar month. Tenant’s request shall certify that
all work for which reimbursement is requested was performed in
compliance with the plans and specifications approved by Landlord
pursuant to paragraph 23 and all applicable laws, and shall
include reasonably satisfactory evidence of the costs incurred by
Tenant and unconditional partial (as to the amount received
compared to percentage completion) or final lien releases, as
applicable, in form and substance required by applicable law
executed by all mechanic’s, materialmen, laborers, suppliers
and contractors who performed any portion of the repair work or
supplied materials; and
21
(B) Within fifteen
(15) Business Days after receiving Tenant’s request,
Landlord shall approve or disapprove Tenant’s request, which
approval shall not be unreasonably withheld, delayed, or
conditioned by written notice to Tenant. If Landlord approves all
or any portion of a request and Landlord has received (and not
previously disbursed) insurance proceeds for such costs, then
Landlord’s approval shall include a check in the amount
approved by Landlord. If Landlord disapproves all or any portion of
a request, then Landlord’s notice shall state the reasons for
that disapproval. Landlord’s failure to deliver a notice
approving or disapproving a request shall be conclusively deemed
Landlord’s disapproval of the request.
(C) If any Tenant’s
Property is damaged by Casualty during the Term, then Tenant may
(in its sole direction) repair and/or replace the same. All
proceeds and other amounts payable with respect to Tenant’s
Property in connection with any damage thereto by any Casualty
shall be the sole and exclusive property of Tenant.
| 11. |
INSURANCE, HOLD HARMLESS AND INDEMNIFICATION |
(a) To the fullest extent
permitted by law, Landlord shall not be liable to Tenant for any
damage to or loss or theft of any property or for any bodily or
personal injury, illness or death of any person in, on or about the
Premises arising at any time and from any cause whatsoever. TENANT
WAIVES ALL CLAIMS AGAINST LANDLORD ARISING FROM ANY LIABILITY
DESCRIBED IN THIS PARAGRAPH 11(A).
(b) TO THE FULLEST EXTENT
PERMITTED BY LAW, TENANT HEREBY AGREES TO INDEMNIFY AND DEFEND
LANDLORD AGAINST AND HOLD LANDLORD HARMLESS FROM ALL CLAIMS ARISING
FROM OR RELATED TO ANY USE OR OCCUPANCY OF THE PREMISES, OR ANY
CONDITION OF THE PREMISES, OR ANY DEFAULT IN THE PERFORMANCE OF
TENANT’S OBLIGATIONS HEREUNDER, OR ANY DAMAGE TO ANY PROPERTY
(INCLUDING PROPERTY OF EMPLOYEES AND INVITEES OF TENANT) OR ANY
BODILY OR PERSONAL INJURY, ILLNESS OR DEATH OF ANY PERSON
(INCLUDING EMPLOYEES AND INVITEES OF TENANT) OCCURRING IN, ON OR
ABOUT THE PREMISES OR ANY PART THEREOF OR ANY PART OF THE BUILDING
OR THE LAND CONSTITUTING A PART OF THE PREMISES ARISING AT ANY TIME
PRIOR TO THE TERMINATION OF THIS LEASE AND FROM ANY CAUSE
WHATSOEVER. THIS PARAGRAPH 11(B) SHALL SURVIVE
22
THE TERMINATION OF THIS LEASE WITH
RESPECT TO ANY DAMAGE, BODILY OR PERSONAL INJURY, ILLNESS OR DEATH
OCCURRING PRIOR TO SUCH TERMINATION.
(c) Tenant shall, at all
times and during the term of this Lease and at Tenant’s sole
cost and expense, obtain and keep in force (i) commercial
general liability insurance and excess/umbrella liability,
including contractual liability, premises liability,
products-completed operations, personal and advertising injury, and
fire legal liability, all on an “occurrence” policy
form, with a minimum combined limit in the amount of Fifty Million
Dollars ($50,000,000) per occurrence for bodily injury to, illness
of, or death of persons and damage to property occurring in, on or
about the Premises; and (ii) Pollution Legal Liability
insurance with limits of Three Million Dollars ($3,000,000) per
occurrence and Ten Million Dollars ($10,000,000) aggregate; and if
the Premises contains an underground storage tank which is in use
or operation (not including any storage tanks which have been
abandoned in place), Storage Tank Liability insurance with a
minimum limit of One Million Dollars ($1,000,000) per claim. Such
insurance shall name the Landlord, any Mortgagee of Landlord of
whom Tenant shall have been provided written notice, and any other
parties designated by Landlord as additional insureds.
(d) Tenant shall, at all
times during the term of this Lease and at Tenant’s sole cost
and expense, obtain and keep in force statutory worker’s
compensation and employer’s liability insurance with limits
of One Million Dollars ($1,000,000) per accident, One Million
Dollars ($1,000,000) per employee, and One Million Dollars
($1,000,000) per policy limit, in all states in which the Premises
and any other operations of the Tenant are located and any other
state in which the Tenant may be subject to any statutory or other
liability arising in any manner whatsoever out of the actual or
alleged employment of others.
(e) Tenant shall, at all
times during the Term of this Lease, at Tenant’s sole cost
and expense, obtain and keep in force:
(i) insurance against loss or
damage to the Premises by fire and all other risks of physical loss
covered by “all-risk” property insurance in an amount
not less than the full replacement cost of the Improvements at the
Premises (without deduction for depreciation) (excluding
foundations and footings), including the cost of debris removal and
such customary endorsements as Landlord may reasonably require,
including “Replacement Cost” and
“Demolition & Increased Cost of Construction”;
the property policy (or a separate policy maintained by Tenant)
should also include:
a) for each Site, flood
insurance for at least the lesser of: (i) $100,000,000, or
(ii) the full replacement cost of the Improvements at such
Site;
b) for each Site, earth
movement insurance for at least the lesser of
(i) $100,000,000, or (ii) the full replacement cost of
the Improvements at such Site; and
c) terrorism insurance for at
least $250,000,000 in the aggregate for all North American sites of
Tenant and its Affiliates; provided, however, that if the federal
backstop provision, Terrorism Risk Insurance Act of 2002 and
extension of 2005 (TRIA) is not extended beyond December 31,
2007, then
23
Tenant shall be required to
obtain terrorism insurance in sufficient amounts as reasonably
determined by Landlord (which shall in no event exceed the
$250,000,000 aggregate limit set forth above for all of
Tenant’s North American sites), but only to the extent that:
(i) such terrorism insurance is then available to Tenant at a
commercially reasonable cost, and (ii) such terrorism
insurance is then customarily maintained by operators of properties
similar to the Premises;
(ii) boiler and machinery
insurance covering pressure vessels, air tanks, boilers, machinery,
pressure piping, heating, ventilation and air conditioning
equipment, and elevator and escalator equipment, provided the
Premises contain equipment of such nature and insurance against
loss of occupancy or use arising from any breakdown of any such
items, in such amounts as Landlord may reasonably
determine;
(iii) business interruption
insurance insuring that the Fixed Rent will be paid to Landlord for
up to one year if the Premises are destroyed or rendered
untenantable by any cause insured against (it being understood that
the existence of such insurance does not reduce Tenant’s
obligation to pay Fixed Rent without diminution), and in the event
of termination of this Lease due to any such insured cause, pay to
Landlord one year’s Fixed Rent; and
(iv) insurance in amounts and
against such other risks as Landlord or Mortgagee may reasonably
require and against such risks as are customarily insured against
by operators of similar properties.
(f) In addition, during any
period of demolition or new construction or improvements, Tenant
shall maintain the following insurance: (i) completed value,
non-reporting builders risk insurance for the Premises, including
all building materials thereon, covering all risk including
collapse during construction, water damage, flood, earthquake and
transit coverage, not less than the cost of the construction of the
Improvements or alterations; and (ii) general liability,
including contractual liability and workers compensation, as
required by statute.
(g) All insurance required to
be maintained by Tenant under this paragraph 11 and all renewals
thereof shall be issued by companies qualified to do business in
the states where the Premises are located and having an A.M. Best
financial rating of “A: X” or better; or S&P claims
paying ability rating of at least “A”. All deductible
amounts shall be in commercially reasonable amounts, it being
agreed that, as of the date hereof, deductibles in the amount of
$250,000 for each policy of insurance required hereunder shall be
deemed to be commercially reasonable. Each policy to be maintained
by Tenant shall expressly provide that the policy shall not be
canceled or adversely altered without thirty (30) days’
prior written notice to Landlord and any Mortgagee of whom Tenant
has been provided written notice and shall remain in effect
notwithstanding any such cancellation or adverse alteration until
such notice shall have been given to Landlord and such period of
thirty (30) days shall have expired. All insurance under this
paragraph 11 to be maintained by Tenant shall designate Landlord,
any Mortgagee of whom Tenant has been provided written notice, and
any other parties designated by Landlord as an additional insured
and/or loss payee (as appropriate given the nature of the policy,
and only if possible given the nature of such policy (for example,
but not limitation, such parties shall not be required to be named
as additional insureds or loss payees under Tenant’s
workers’ compensation and employer’s liability
insurance)), and shall be primary and noncontributing with any
insurance which may be carried by Landlord. Tenant may carry such
insurance under
24
“blanket” policies. Tenant
shall deliver to Landlord a certificate of such insurance in
customary form, together with a copy of the declaration page for
each such policy and all endorsements specifically applicable to
this/these locations, or upon request a copy of each insurance
policy. Renewal certificates should be provided no later than the
expiration date of each policy. If Tenant fails to provide to
Landlord the policies of insurance required by this Section,
Landlord may, but shall not be obligated to, procure such insurance
for such risks covering Landlord’s interest, and Tenant will
pay all premiums thereon within ten (10) Business Days after
demand by Landlord, and until such payment is made by Tenant, the
amount of all such premiums shall bear interest at the Overdue
Rate.
(h) Tenant and Landlord both
mutually agree to waive all rights of subrogation against each
other on insurance required under this paragraph 11. Additionally,
both Landlord and Tenant, as applicable, either prior to or
immediately after the Commencement Date, procure from each of their
respective insurers providing the insurance required by this
paragraph 11, a waiver of all rights of subrogation which such
insurer might otherwise, if at all, have to any claims against
Landlord or Tenant, as applicable. Tenant shall have the right to
control the claims adjustment process for any losses under all
policies of property insurance required by this Lease and Landlord
shall have the right to participate in such process without (so
long as no Event of Default is then continuing) interference to
Tenant. If Tenant fails to manage the claims process losses in a
diligent manner, Landlord may, upon two (2) Business
Days’ notice, assume control of the claims adjustment
process.
(i) Tenant shall provide
Landlord with all Property Loss Control Reports for the leased
Premises completed by Tenant’s property insurance carrier or
any third party consultant. In addition, Tenant will provide
Landlord with all responses to recommendations listed in the Loss
Control Reports.
(j) During the continuance of
any Event of Default, Tenant shall pay to Landlord on the first day
of each Calendar Quarter an amount equal to one fourth
(1/4) of the premiums for the insurance required by this
paragraph 11, as reasonably estimated by Landlord on the basis of
bills and estimates thereof. If such premium payments shall have
been made by Tenant, such amounts shall be held by Landlord or
Mortgagee, without interest, and shall not be deemed to be trust
funds and may be commingled with the general funds of Landlord or
Mortgagee. Landlord shall apply such amounts to the payment of the
insurance premiums with respect to which such amounts were paid,
subject to any rights of Mortgagee thereto. Landlord shall make no
charge for holding and applying such amounts. If at any time the
amount on deposit pursuant to this paragraph 11(j) shall be less
than the amount deemed necessary by Landlord to pay such premiums
as they become due, Tenant shall pay to Landlord the amount
necessary to make the deficiency within fifteen (15) Business
Days after notice from Landlord requesting payment thereof. Upon
the expiration or termination of the term of this Lease (other than
as a result of an Event of Default), Landlord shall promptly
refund, and cause its Mortgagee to refund, to Tenant any amount
held by Landlord or its Mortgagee pursuant to this paragraph
11.
| 12. |
COMPLIANCE WITH LAWS, COVENANTS |
(a) Tenant shall, throughout
the Term, promptly comply or cause the Premises to comply with or
remove or cure any violation of the Premises of, any and all
present and future laws including the Americans with Disabilities
Act of 1990, as the same may be amended from
25
time to time, ordinances (zoning or
otherwise), orders, rules, regulations and requirements of all
Federal, State, municipal and other governmental bodies having
jurisdiction over the Premises and the appropriate departments,
commissions, boards and officers thereof, and the orders, rules and
regulations of the Board of Fire Underwriters where the Premises
are situated, or any other body now or hereafter constituted
exercising lawful or valid authority over the Premises
(collectively, “ Legal Requirements ”), or any
portion thereof, or exercising authority with respect to the use or
manner of use of the Premises, and whether the compliance, curing
or removal of any such violation and the costs and expenses
necessitated thereby shall have been foreseen or unforeseen,
ordinary or extraordinary, and whether or not the same shall be
presently within the contemplation of Landlord or Tenant or shall
involve any change in governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant and
irrespective of the amount of the costs thereof. Throughout the
Term, Tenant, at its sole cost and expense, shall comply with all
agreements, contracts, easements, restrictions, reservations or
covenants, if any, running with the land or hereafter created by
Tenant or consented to, in writing, by Tenant or requested, in
writing, by Tenant (it being agreed that Tenant shall not, for
purposes of this paragraph, be deemed to have consented to any
Mortgage by executing and/or delivering a Subordination,
Non-Disturbance and Attornment Agreement or other documents or
instruments requested or required by any Mortgagee). Throughout the
Term, Tenant shall also comply with, observe and perform all
provisions and requirements of all Permitted Encumbrances
(including performing all of Landlord’s obligations as the
owner of the Premises thereunder, including paying all costs and
expenses and maintaining all insurance coverages required thereby
to be paid, maintained or carried by the owner of each Site
respectively, if any, and Tenant hereby indemnifies and agrees to
defend Landlord from and hold Landlord harmless from any and all
Claims made against Landlord for non-compliance or breach of any
obligation of the owner of Premises each Site respectively under
any Permitted Encumbrances) and all policies of insurance at any
time in force with respect to the Premises and required to be
obtained and maintained by Tenant under the terms of paragraph 11
hereof and shall comply with all development permits issued by
governmental authorities issued in connection with development of
the Premises; provided , however , Landlord agrees,
upon request of Tenant, to sign promptly and without a charge
therefor (except as provided in the final sentence of this
subparagraph) any applications or filings (1) for such
licenses and permits as may be required by Legal Requirements for
the conduct, operation or restoration of the Premises and the
business to be conducted therein in accordance with the terms
hereof, and (2) for the maintenance of the existing zoning for
each Site to continue to permit Tenant’s use thereof, in both
cases where the signature of Landlord is required by Legal
Requirements in force at the time. All costs incurred by Landlord
in connection with obtaining any such licenses and permits and
zoning matters shall be borne by Tenant.
(b) If Tenant shall at any
time fail to pay any Imposition in accordance with the provisions
of paragraphs 6 or 26, or to take out, pay for, maintain and
deliver any of the insurance policies or certificates of insurance
provided for in paragraph 11, or shall fail to make any other
payment or perform any other act on its part to be made or
performed hereunder, then Landlord, after five (5) Business
Days prior written notice to Tenant (or without notice in
situations where Landlord determines that delay is likely to cause
harm to Landlord’s interest in the Premises), and without
waiving or releasing Tenant from any obligation of Tenant contained
in this Lease, may, but shall be under no obligation to do
so,
(i) pay any Imposition
payable by Tenant pursuant to this Lease; or
26
(ii) make any other payment
or perform any other act on Tenant’s part to be paid or
performed hereunder which Tenant shall not have performed within
the time required therefor, except that any time permitted to
Tenant to perform any act required by this paragraph that cannot
reasonably be performed within such time shall be extended for such
reasonable period, not to exceed one year, as may be necessary to
effectuate such performance, provided that throughout such time
Tenant is continuously, diligently and in good faith prosecuting
such performance.
Landlord may enter upon the Premises for
any such cure purpose set forth in this paragraph 12(b) and
take all such action in or on the Premises as may be necessary
therefor pursuant to this paragraph 12(b) (subject in all
events to paragraph 7(e) above and paragraph 18 below). All sums,
reasonable under the circumstances, actually so paid by Landlord
and all costs and expenses, including attorney’s fees,
incurred by Landlord in connection with the performance of any such
act, together with interest thereon at the Overdue Rate and an
administrative fee equal to four percent (4%) of all such
costs and expenses, shall be paid by Tenant to Landlord within ten
(10) days after written demand and submission of reasonable
evidence of such expenditures. Landlord shall not be limited in the
proof of any damages which Landlord may claim against Tenant
arising out of or by reason of Tenant’s failure to provide
and keep in force insurance as aforesaid, to the
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