Exhibit 10.1
PURCHASE
AND SALE AGREEMENT
THIS PURCHASE AND SALE
AGREEMENT (this “
Agreement ”) is made and entered into this ____ day of
December, 2006, by and between LENOX INCORPORATED , a New
Jersey corporation (“ Seller ”), and FIRST
INDUSTRIAL ACQUISITIONS, INC., a Maryland corporation (“
Buyer ”).
1. SALE . Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase from Seller, on the terms and conditions
set forth in this Agreement, the Property (as hereinafter defined),
including that certain building (the “ Building
”) commonly known as 16507 Hunters Green Parkway, Hagerstown,
Maryland. For purposes of this Agreement, the term, “
Property ” shall mean collectively:
1.1.
Land . The parcel of land described in Exhibit
A attached hereto (the “ Land ”), together
with all rights, easements and interests appurtenant thereto,
including, but not limited to, any streets or other public ways
adjacent to the Land and any water or mineral rights owned by, or
leased to, Seller.
1.2.
Improvements . All improvements located on the Land,
including, but not limited to, the Building, and all other
structures, systems, and utilities associated with, and utilized by
Seller in, the ownership and operation of the Building (all such
improvements being collectively referred to as the “
Improvements ”), but specifically excluding all
personal property of Seller located on, in or about the
Improvements, including but not limited to business trade fixtures
and equipment (e.g., conveyors and racking).
1.3.
Intangible Property . All, if any, (i) guaranties and
warranties issued to and with respect to the Improvements; and (ii)
copies of any reports, studies, surveys and other comparable
analysis, depictions or examinations of the Land and/or the
Improvements (collectively, the “ Intangibles
”); provided, however, Seller makes no representations as to
the accuracy or validity of such Intangibles and Buyer shall solely
rely on its own information and evaluation of the Property, except
as otherwise expressly provided herein or in any conveyance
documents or certification.
2.1.
Purchase Price . The total purchase price to be paid
to Seller by Buyer for the Property shall be Twenty-Seven Million
and No/100 Dollars ($27,000,000) (the “ Purchase Price
”). Provided that all conditions precedent to Buyer’s
obligations to close as set forth in this Agreement (“
Conditions Precedent ”) have been satisfied and
fulfilled, or waived or deemed waived by Buyer, the Purchase Price
shall be paid to Seller at Closing, plus or minus prorations and
other adjustments hereunder, by federal wire transfer of
immediately available funds.
2.2.
Earnest Money . No later than five (5) business days
after the complete execution and delivery of this Agreement (the
date upon which this Agreement has been fully executed and
delivered to both parties, the “ Effective Date
”), Buyer shall deposit the sum of Five Hundred Thousand and
No/100 Dollars ($500,000) as its earnest money deposit (the “
Earnest Money ”) in an escrow with First American
Title Insurance Company, 801 Nicollet Mall, 1900 Midwest Plaza
West, Minneapolis, MN 55402, Attn: Kristi Broderick, phone:
612-
305-2002, fax: 612-305-2001, e-mail:
kbroderick@firstam.com (“ Escrowee ”). The
Earnest Money, together with all interest earned thereon, is
hereinafter referred to as the “ Deposit .” The
Deposit shall be held pursuant to an escrow agreement (the “
Escrow Agreement ”) between Buyer, Seller and
Escrowee, which Escrow Agreement shall contain terms mutually and
reasonably acceptable to Buyer and Seller. The Deposit shall be
applied against the Purchase Price at Closing.
3.
CLOSING . The purchase and sale contemplated herein
shall be consummated at a closing (“ Closing ”)
to take place by mail through an escrow with the Title Company (as
hereinafter defined) on the basis of a “New York-style”
closing. The Closing shall occur on or before December 29, 2006
(the “ Closing Date ”), which date shall be
subject to extension by up to thirty (30) days as provided in
Section 7.4 below. The Closing shall be effective as of
12:01 A.M. on the Closing Date. Notwithstanding the foregoing,
the risk of loss of all or any portion of the Property shall be
borne by Seller up to and including the actual time of the Closing
and wire transfer of the Purchase Price to Seller, and thereafter
by Buyer, subject, however, to the terms and conditions of
Section 13 below.
4.1.
Basic Property Inspection . Not later than two (2)
days after the Effective Date, Seller shall deliver to Buyer all of
the agreements, documents, contracts, information, records, reports
and other items described in Exhibit B attached hereto (the
“Documents” ) that are in its possession or
reasonable control. At all times prior to Closing, including times
following the “ Review Period Expiration Date ”
(which Review Period Expiration Date is defined to be December 26,
2006), Buyer, its agents and representatives shall be entitled to
conduct a “ Due Diligence Inspection ,” which
includes the rights to: (i) enter upon the Land and Improvements,
on reasonable notice to Seller, to perform inspections and tests of
the Land and the Improvements, including, but not limited to,
inspection, evaluation and testing of the heating, ventilation and
air-conditioning systems and all components thereof and
environmental studies and investigations of the Land and the
Improvements; (ii) examine and copy any and all books,
records, correspondence, financial data, and all other documents
and matters, public or private, maintained by Seller or its agents,
and relating to receipts and expenditures pertaining to the
Property for the three most recent full calendar years and the
current calendar year; (iii) make investigations with regard
to zoning, environmental, building, code and other legal
requirements; and (iv) make or obtain market studies and real
estate tax analyses. Buyer shall conduct all its inspections in a
manner that is not disruptive to the business operations at the
Property. If, at any time prior to the Review Period Expiration
Date, Buyer, in its sole and absolute discretion, determines that
the results of any inspection, test or examination do not meet
Buyer’s criteria for the purchase, financing or operation of
the Property in the manner contemplated by Buyer, or if Buyer, in
its sole discretion, otherwise determines that the Property is
unsatisfactory to it, then Buyer may terminate this Agreement by
written notice to Seller, with a copy to Escrowee, given not later
than 5:00 P.M. (Pacific Standard Time) on the Review Period
Expiration Date, whereupon the provisions of Section 20.8
governing a permitted termination by Buyer shall apply. In the
event Buyer does not elect to terminate this Agreement as provided
in this Section
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4.1, Buyer will accept the Property
in its “As-Is” condition, subject only to the
representations and warranties of Seller contained herein or in any
conveyance documents or certifications.
4.2.
Indemnification . Buyer hereby covenants and agrees
that it shall cause all studies, investigations and inspections
performed at the Property pursuant to this Section
4 to be performed in a manner that does not unreasonably
disturb or disrupt the business operations at the Improvements. In
the event that, as a result of Buyer’s Due Diligence
Inspection, any damage occurs to the Property, then Buyer shall
promptly repair such damage at Buyer’s sole cost and expense.
Buyer hereby indemnifies, protects, defends and holds Seller
harmless from and against any and all losses, damages, claims,
causes of action, judgments, damages, costs and expenses (including
reasonable fees of attorneys) (collectively, “ Losses
”) that Seller actually suffers or incurs as a result of (i)
a breach of Buyer’s agreements set forth in this
Section 4 in connection with the Due Diligence
Inspection or (ii) physical damage to the Property or bodily injury
caused by any negligent act of Buyer or its agents, employees or
contractors in connection with the right of inspection granted
under this Section 4 . The terms of this
Section 4.2 shall survive the termination of this
Agreement.
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5.
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TITLE AND SURVEY
MATTERS .
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5.1.
Conveyance of Title . At Closing, Seller agrees to
deliver to Buyer a special warranty deed (the “ Special
Warranty Deed ”), in recordable form, conveying the Land
and the Improvements to Buyer or Buyer’s permitted assignee
or designee, free and clear of all liens, claims and encumbrances
except for the Permitted Exceptions (as hereinafter defined). On or
prior to December 4, 2006, Seller shall, at Seller’s sole
cost, cause to be delivered to Buyer a commitment (the “
Title Commitment ”) issued by First American Title
Insurance Company, 801 Nicollet Mall, 1900 Midwest Plaza West,
Minneapolis, MN 55402, Attn: Kristi Broderick, phone: 612-305-2002,
fax: 612-305-2001, e-mail: kbroderick@firstam.com, for an
owner’s title insurance policy (the “ Title
Policy ”), ALTA Policy Form B-1992, in the full amount of
the Purchase Price. It shall be a Condition Precedent to
Buyer’s obligation to proceed to Closing that, at Closing,
the Title Company shall issue the Title Policy to Buyer insuring
Buyer as the fee simple owner of the Property for the full amount
of the Purchase Price with all standard and general printed
exceptions deleted so as to afford full “extended form
coverage”.
5.2.
Survey . On or prior to December 15, 2006, Seller
shall, at Seller’s sole cost, deliver to Buyer an ALTA,
as-built survey of the Land and the Improvements located thereon
with a form of certification acceptable to Buyer (the “
Survey ”).
5.3.
Defects and Cure . If the Title Commitment, the
Survey or any update to either of the foregoing, (“ Title
Evidence ”) discloses any claims, liens, exceptions or
conditions that are not acceptable to Buyer (the “
Defects ”), said Defects shall be addressed by Seller
prior to Closing in accordance with this Sections
5.3.1 and 5.3.2 below.
5.3.1. Mandatory Cure
Items . On or prior to Closing, Seller shall be
unconditionally obligated to cure or remove the following Defects
(the “ Liquidated Defects ”), whether described
in the Title Commitment, or first arising or first disclosed by the
Title Company (or otherwise) to Buyer after the date of the Title
Commitment, and whether or not
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raised in a Title Objection Notice
(defined below): (a) liens securing a mortgage, deed of trust or
trust deed; (b) judgment liens against any or all of Seller
and the Seller Parties; (c) tax liens other than property taxes and
assessments not constituting a lien while in contest; (d)
broker’s liens; and (e) any mechanics liens that are based
upon a written agreement between either (x) the claimant (a “
Contract Claimant ”) and any or all of Seller and any
or all of Seller, its shareholders and the officers, directors,
employees, agents or duly authorized managing agent of any or all
of Seller or its shareholders (collectively “ Seller
Parties ”), or (y) the Contract Claimant and any other
contractor, supplier or materialman with which any or all of Seller
and the Seller Parties has a written agreement. Notwithstanding
anything to the contrary set forth herein, if, prior to Closing,
Seller fails to so cure or remove (or insure over, in a form and
substance reasonably acceptable to Buyer) all Liquidated Defects,
then Buyer may either (1) terminate this Agreement by written
notice to Seller, in which event the provisions of Section
20.8 governing a permitted termination by Buyer shall apply; or
(2) proceed to close with title to the Property as it then is, with
the right to deduct from the Purchase Price a sum equal to the
aggregate amount necessary to cure or remove (by endorsement or
otherwise, as reasonably determined in good faith by the parties)
the Liquidated Defects.
5.3.2. Other
Defects . Buyer may deliver one or more notices (each a
“ Title Objection Notice ”) to Seller specifying
any lien, claim, encumbrance, restriction, covenant, condition,
exception to title or other matter disclosed by the Title Evidence,
that is not a Liquidated Defect and that renders title unacceptable
to Buyer (“ Other Defects ”): (aa) that is
evidenced by the Title Evidence, in which case Buyer shall provide
such Title Objection Notice on or prior to the sooner of (i) the
Review Period Expiration Date; and (ii) ten (10) days after the
later of the Effective Date and its receipt of the applicable item
of Title Evidence or (bb) that first arises, or is first disclosed
to Buyer, subsequent to the delivery of the applicable item of
Title Evidence to Buyer, in which case Buyer shall provide such
Title Objection Notice three (3) business days after its receipt of
the applicable item of Title Evidence. Seller shall be obligated to
advise Buyer in writing (“ Seller’s Cure Notice
”) within three (3) business days after Buyer delivers any
Title Objection Notice, which (if any) of the Other Defects
specified in the applicable of Title Objection Notice Seller is
willing to cure (the “ Seller’s Cure Items
”). If Seller delivers a Seller’s Cure Notice, and
identifies any Seller’s Cure Items, Seller shall be
unconditionally obligated to cure or remove the Seller’s Cure
Items prior to the Closing. In the event that Seller fails to
timely deliver a Seller’s Cure Notice, or in the event that
Seller’s Cure Notice (specifying Seller’s Cure Items)
does not include each and every Other Defect specified in each
Title Objection Notice, then Buyer may either (A) elect to
terminate this Agreement by written notice to Seller, in which
event the provisions of Section 20.8 governing a permitted
termination by Buyer shall apply, or (B) proceed to close,
accepting title to the Property subject to those Other Defects not
included in Seller’s Cure Notice. Buyer shall notify Seller
of its election within three (3) business days after receipt of
Seller’s Cure Notice, if delivered, or the last day
Seller’s Cure Notice could have been timely delivered. If
Buyer fails to timely deliver notice of its election, Buyer shall
be deemed to have waived all Other Defects which Seller has elected
not to cure and remove. For purposes of this Agreement, the term,
“ Permitted Exceptions , ” shall mean
both (i) all liens, claims, encumbrances, restrictions, covenants,
conditions, matters or exceptions to title (other than Liquidated
Defects) that are set forth in the Title Evidence, but not objected
to by Buyer in a Title Objection Notice; and (ii) any
Other
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Defects to which Buyer objects by
delivery of a Title Objection Notice, but Seller does not timely
elect to convert such Other Defects to Seller’s Cure Items,
and pursuant to (B) above, Buyer nevertheless elects to close or,
where, pursuant to the terms of this Agreement, Buyer’s
objections have been deemed waived and the parties are to proceed
to Closing, with Buyer accepting title to the Property subject to
such Other Defects.
6.
SELLER’S REPRESENTATIONS AND WARRANTIES .
Seller represents and warrants to Buyer that the following matters
are true as of the Effective Date and shall be true as of the
Closing Date:
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6.1.
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Seller’s
Representations .
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6.1.1. Documents
. To Seller’s actual knowledge, Seller has delivered (or will
deliver in a timely manner) to Buyer true and complete copies of
the Documents in Seller’s possession.
6.1.2. Contracts
. There are no contracts of any kind relating to the management,
leasing, operation, maintenance or repair of the Property that will
survive Closing, except contracts that will be binding on Seller,
as tenant, rather than Buyer, as landlord.
6.1.3. Environmental
Matters . To Seller’s actual knowledge (as opposed to
deemed, imputed or constructive), the Property has been and
continues to be owned and operated in full compliance with all
Environmental Laws (as hereinafter defined). To Seller’s
actual knowledge, there have been no past and Seller has not
received any written notice of any pending or threatened claims,
complaints, notices, correspondence or requests for information
received by Seller with respect to any violation or alleged
violation of any Environmental Law, any releases of Hazardous
Substances (as hereinafter defined) or with respect to any
corrective or remedial action for or cleanup of the Property or any
portion thereof. For purposes of this Agreement, “
Environmental Laws ” shall mean: all federal, state
and local statutes, regulations, directives, ordinances, rules,
policies, guidelines, court orders, decrees, arbitration awards and
the common law, which pertain to environmental matters,
contamination of any type whatsoever or health and safety matters,
as such have been amended, modified or supplemented from time to
time (including all present and future amendments thereto and
re-authorizations thereof). For purposes of this Agreement, “
Hazardous Substances ” shall mean: any chemical,
pollutant, contaminant, pesticide, petroleum or petroleum product
or by product, radioactive substance, solid waste (hazardous or
extremely hazardous), special, dangerous or toxic waste, substance,
chemical or material regulated, listed, limited or prohibited under
any Environmental Law.
6.1.4. Compliance with
Laws and Codes . Seller has not received any written notice
advising or alleging that the entirety of the Property (including
the Improvements), and the use and operation thereof, are not in
compliance with all applicable municipal and other governmental
laws, ordinances, rules, regulations, codes (including
Environmental Laws), licenses, permits and authorizations. To
Seller’s actual knowledge (as opposed to deemed, imputed or
constructive), the Property (and the use and operation thereof) is
in material
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compliance with all applicable laws,
ordinances, rules, regulations, codes, licenses, permits and
authorizations.
6.1.5.
Litigation . There are no pending, or, to
Seller’s actual knowledge, threatened, judicial, municipal or
administrative proceedings affecting the Property, or in which
Seller is or will be a party by reason of Seller’s ownership
or operation of the Property or any portion thereof, including,
without limitation, proceedings for or involving collections,
condemnation, eminent domain, alleged building code or
environmental or zoning violations, or personal injuries or
property damage alleged to have occurred on the Property or by
reason of the condition, use of, or operations on, the Property. No
attachments, execution proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy, reorganization or other
proceedings are pending, or, to Seller’s actual knowledge,
threatened, against Seller, nor are any of such proceedings
contemplated by Seller.
6.1.6. Re-Zoning
. Seller is not a party to, nor does Seller have any actual
knowledge of, any threatened proceeding for the rezoning of the
Property or any portion thereof, or the taking of any other action
by governmental authorities that would have an adverse or material
impact on the value of the Property or use thereof.
6.1.7. Authority
. The execution and delivery of this Agreement by Seller, and the
performance of this Agreement by Seller, have been duly authorized
by Seller, and this Agreement is binding on Seller and enforceable
against Seller in accordance with its terms. No consent of any
creditor, investor, judicial or administrative body, governmental
authority, or other governmental body or agency, or other party to
such execution, delivery and performance by Seller is required,
other than the consent of Seller’s lender, which Seller will
use good faith efforts to obtain on or prior to the Closing Date.
Neither the execution of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in a breach
of, default under, or acceleration of, any agreement to which
Seller is a party or by which Seller or the Property are bound if
the consent of Seller’s lender is obtained; or
(ii) violate any restriction, court order, agreement or other
legal obligation to which Seller and/or the Property is
subject.
6.1.8. Lease
Matters . There are no leases, licenses or occupancy
agreements binding upon or otherwise affecting all or any portion
of the Land or the Improvements.
6.1.9. United States
Person . Seller is a “United States Person”
within the meaning of Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended, and shall execute and
deliver an “Entity Transferor” certification at
Closing.
6.2.
Limitations . The representations and warranties of
Seller to Buyer contained in Section 6.1 hereof (the “
Seller Representations ”) shall survive the Closing
Date and the delivery of the Deed for a period of one (1) year. No
claim for a breach of any Seller Representation shall be actionable
or payable unless (a) the breach in question results from, or is
based on, a condition, state of facts or other matter which was not
actually known by Buyer prior to Closing, (b) the valid claims for
all such breaches collectively aggregate more than Twenty-Five
thousand No/100 Dollars ($25,000), in which event the full amount
of such claims shall be
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actionable, and (c) written notice
containing a description of the specific nature of such breach
shall have been delivered by Buyer to Seller prior to the
expiration of said one (1) year survival period, and an action with
respect to such breach(es) shall have been commenced by Buyer
against Seller within eighteen (18) months after Closing.
Notwithstanding anything to the contrary contained herein, if Buyer
obtains actual (as opposed to deemed, imputed or constructive)
knowledge that any Seller Representation made by Seller is not true
or correct, Buyer shall not be entitled to commence any action
after Closing to recover damages from Seller due to such Seller
Representation(s) failing to be true or correct.
7.
COVENANTS OF SELLER . From and after the Effective
Date, Seller hereby covenants with Buyer as follows:
7.1.
New Lease . At Closing, Buyer (or its successor and
assigns), as landlord, shall execute and enter into the lease in
the form attached hereto as Exhibit C (the “
Lease ”) with Seller, as tenant, pursuant to which
Seller leases the Property from and after Closing. From and after
the Effective Date, other than the Lease, Seller shall not enter
into any new lease, license or occupancy agreement (a “
New Lease ”, which term expressly excludes contracts
Seller is permitted to enter into pursuant to other provisions of
this Agreement) for all or any portion of the Land and the
Improvements without obtaining Buyer’s prior written consent,
which consent may be withheld in Buyer’s sole
discretion.
7.2.
New Contracts . Seller shall not amend any existing
contract or enter into any new contract with respect to the
operation of the Property that will survive the Closing, or that
would otherwise affect the use, operation or enjoyment of the
Property after Closing, without Buyer’s prior written
approval (which approval shall not be unreasonably withheld).
Seller is free to enter into reasonable amendments of any existing
contracts or enter into any new contracts with respect to the
operation and maintenance of the Property. Seller shall, at
Seller’s sole cost, terminate all service and management
contacts binding upon Seller or the Property on or prior to
Closing, except those service and management contracts to which
Seller, as tenant, will be party after Closing rather than Buyer,
as landlord.
7.3.
Operation of Property . Seller shall operate and
manage the Property in the same manner in which it is being
operated as of the Effective Date, maintaining present services,
and shall maintain the Property in its same repair and working
order; shall keep on hand sufficient materials, supplies, equipment
and other personal property for the efficient operation and
management of the Property in the manner in which it is being
operated as of the Effective Date; and shall perform, when due, all
of Seller’s obligations under governmental approvals and
other agreements relating to the Property and otherwise in
accordance with applicable laws, ordinances, rules and regulations
affecting the Property. Except as otherwise specifically provided
herein, at Closing, Seller shall deliver the Property in
substantially the same condition as exists on the Effective Date,
reasonable wear and tear and damage by casualty or condemnation
excepted.
7.4.
Lender Approval . Seller shall use good faith efforts
to obtain the consent of its Term and Revolver lenders to this
transaction (the “ Lender Consent ”) on or
before December 26, 2006. This approval is a condition precedent to
Seller’s obligation to close the
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transaction contemplated by this
Agreement. In the event Seller is unable to obtain the Lender
Consent on or prior to Closing, Seller shall have the right to
extend Closing and the Closing Date for up to thirty (30) days to
obtain the Lender Consent provided Seller pays Buyer’s rate
lock fee for its loan (if any), and, if Seller obtains the Lender
Consent in such thirty (30) day period, the parties shall proceed
to Closing five (5) business days thereafter. In the event Seller
is unable to obtain the Lender Consent, either initially or after
extending Closing for such purposes, Seller shall promptly notify
Buyer, in writing, whereupon (A) this Agreement shall terminate;
(B) the Deposit shall be promptly returned to Buyer; (C) Seller
shall reimburse Buyer for any and all (i) Buyer Legal Fees (as
hereinafter defined) and (ii) third party costs or expenses paid or
incurred by Buyer or its joint venture partner to conduct the Due
Diligence Inspection, negotiate this Agreement and the Lease and
pursue the transactions contemplated hereby, including, but not
limited to, the Buyer Transaction Costs (as hereinafter defined),
promptly, and in any event within ten (10) business days, after the
presentation of invoices therefore.
7.5.
No Assignment . After the Effective Date and prior to
Closing, Seller shall not assign, alienate, lien, encumber or
otherwise transfer all or any part of the Property or any interest
therein. Without limitation of the foregoing, Seller shall not
grant any easement, right of way, restriction, covenant or other
comparable right affecting the Land or the Improvements without
obtaining Buyer’s prior written consent, which consent shall
not be unreasonably withheld.
7.6.
Change in Conditions . Seller shall, to the extent
Seller obtains actual knowledge thereof, promptly notify Buyer of
any material change in any condition with respect to the Property,
or of the occurrence of any event or circumstance, that makes any
representation or warranty of Seller to Buyer under this Agreement
untrue or misleading, or any covenant of Seller under this
Agreement incapable or less likely of being performed, or any
Condition Precedent incapable or less likely of being satisfied.
Seller shall promptly (and in any event within five (5) business
days) deliver any materials, reports, information or other
documents that it obtains or discovers after the Effective Date
that would constitute a Document to the extent Seller did not, for
any reason, deliver such items as part of the Documents.
7.7.
Lease . Seller, as tenant, shall execute and enter
into the Lease.
8.
ADDITIONAL CONDITIONS PRECEDENT TO CLOSING . In
addition to the other conditions enumerated in this Agreement, the
following shall be additional Conditions Precedent to Buyer’s
obligation to close hereunder:
8.1.
Representations and Warranties . As of the Closing
Date, the representations and warranties made by Seller to Buyer as
of the Effective Date shall be true, accurate and correct as if
specifically remade at that time.
8.2.
Lease . Buyer and Seller shall execute and enter into
the Lease on the terms contemplated by Exhibit C
hereto.
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9.
SELLER’S CLOSING DELIVERIES . At Closing,
Seller shall deliver or cause to be delivered to Buyer the
following, in form and substance acceptable to Buyer:
9.1.
Deed . Special Warranty Deed for the Land and the
Improvements, executed by Seller, in recordable form conveying the
Land (and the Improvements) to Buyer free and clear of all liens,
claims and encumbrances except for the Permitted
Exceptions.
9.2.
General Assignment . An assignment, executed by
Seller, to Buyer of all right, title and interest of Seller and its
agents in and to the Intangibles (including, but not limited to,
the governmental approvals, permits and the Plans), to the extent
such Intangibles are assignable. Seller shall also assign, in
accordance with the relevant terms of such guaranties and
warranties and at Seller’s expense (if any cost is imposed),
all guarantees and warranties given to Seller that have not expired
(either on a “claims made” or “occurrences”
basis), in connection with the operation, construction,
improvement, alteration or repair of the Property, to the extent
such guaranties and warranties are assignable.
9.3.
Lease . Originals of the Lease duly executed by
Seller.
9.4.
Keys . Keys to all locks located in the Property, to
the extent in Seller’s possession or control.
9.5.
ALTA Statement . If required by the Title Company, an
ALTA (or comparable) Statement and a “gap” affidavit,
each executed by Seller and in form and substance acceptable to the
Title Company.
9.6.
Documents . To the extent not previously delivered to
Buyer, copies of the assigned Plans and permits or
approvals.
9.7.
Closing Statement . A closing statement conforming to
the proration and other relevant provisions of this
Agreement.
9.8.
Plans and Specifications . Copies of all plans and
specifications relating to the Property in Seller’s
possession and control (collectively, the
“Plans”).
9.9.
Entity Transfer Certificate . Entity Transfer
Certification confirming that Seller is a “United States
Person” within the meaning of Section 1445 of
the Internal Revenue Code of 1986, as amended.
9.10. Certificate
of Occupancy . A currently valid certificate of occupancy
(or comparable permit, letter, license or other document) with
respect to the Land and the Improvements, if required.
9.11. Closing
Certificate . A certificate, signed by Seller, certifying
to the Buyer that the Seller Representations contained in this
Agreement are true and correct as of the Closing Date; and that all
covenants required to be performed by Seller prior to the Closing
Date have been performed, in all material respects.
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9.12.
Other . Such other documents and instruments as may
reasonably be required by Buyer or the Title Company and that may
be reasonably necessary or appropriate to consummate this
transaction and to otherwise effect the agreements of the parties
hereto.
For a period of one year after
Closing, Seller shall execute and deliver to Buyer such further
documents and instruments as Buyer shall reasonably request to
effect this transaction and otherwise effect the agreements of the
parties hereto.
10.
CLOSING DELIVERIES . At Closing Buyer shall cause the
following to be delivered to Seller:
10.1. Purchase
Price . The Purchase Price, plus or minus prorations, shall
be delivered to the Title Company in escrow for disbursement to
Seller.
10.2.
Lease . Originals of the Lease duly executed by
Buyer, as landlord.
10.3.
Other . Such other documents and instruments as may
reasonably be required by Seller or the Title Company and that may
be reasonably necessary or appropriate to consummate this
transaction and to otherwise effect the agreements of the parties
hereto.
11.
PRORATIONS AND ADJUSTMENTS . The following shall be
prorated and adjusted between Seller and Buyer as of the Closing
Date, except as otherwise specified:
11.1. Seller shall
credit to Buyer an amount equal to: (a) any and all reasonable
legal fees paid or incurred by Buyer (or its joint venture partner)
to negotiate this Agreement and the Lease (the “ Buyer
Legal Fees ”) up to a maximum aggregate amount not to
exceed $50,000; and (b) the actual cost of Buyer’s property
appraisal, inspection and environmental reports (“ Buyer
Transaction Costs ”), as evidenced by invoices for such
services. Buyer Legal Fees and Buyer Transaction Costs shall not
include any costs incurred by Buyer related to any financing of the
acquisition hereby contemplated or future financing to be secured
by the Property.
11.2. Water,
electricity, sewer, gas, telephone and other utility charges shall
not be prorated as the same shall be payable by Seller, as tenant,
pursuant to the Lease.
11.3. General real
estate, personal property and ad valorem taxes applicable to the
Property shall not be prorated as the same shall be payable by
Seller, as tenant, under the Lease. Prior to or at Closing, Seller
shall pay or have paid all tax bills that are due and payable prior
to or on the Closing Date (but not any such taxes not yet due and
payable) and shall furnish evidence of such payment to Buyer and
the Title Company.
11.4. All assessments,
general or special, shall not be prorated as the same shall be
payable by Seller, as tenant, under the Lease.
11.5. All base rents and
other charges due and owing from Seller pursuant to the Lease for
the month in which Closing occurs shall be credited to Buyer at
Closing.
10
11.6. Such other items
that are customarily prorated in transactions of this nature shall
be ratably prorated.
For purposes of calculating
prorations, Buyer shall be deemed to be in title to the Property,
and therefore entitled to the income therefrom and responsible for
the expenses thereof, for the entire day upon which the Closing
occurs. All such prorations shall be made on the basis of the
actual number of days of the year and month that shall have elapsed
as of the Closing Date. The amount of such prorations shall be
adjusted in cash after Closing, as and when complete and accurate
information becomes available. Seller and Buyer agree to cooperate
and use their good faith and diligent efforts to make such
adjustments no later than 30 days after the Closing, or as soon as
is reasonably practicable if and to the extent that the required
final proration information is not available within such 30 day
period. Items of income and expense for the period prior to the
Closing Date will be for the account of Seller and items of income
and expense for the period on and after the Closing Date will be
for the account of Buyer, all as determined by the accrual method
of accounting. Bills received after Closing that relate to expenses
incurred, services performed or other amounts allocable to the
period prior to the Closing Date shall be paid by Seller. Any
amounts not so paid by Seller may be set off against amounts (if
any) otherwise due Seller hereunder. The obligations of the parties
pursuant to this Section 11 shall survive the
Closing and shall not merge into any documents of conveyance
delivered at Closing.
12.
CLOSING EXPENSES . Buyer will pay one half the costs
of any escrows hereunder, one half of all documentary and state,
county and municipal transfer taxes and deed recordation fees and
the cost of any endorsements to the Title Policy. Seller shall pay
the entire cost of the basic premium for the Title Policy
(excluding any endorsements), the cost of the Survey, one half of
all documentary and state, county and municipal transfer taxes, the
Buyer Transaction Costs and the Buyer Legal Fees (up to a maximum
amount of $50,000), any pre-payment penalties associated with the
payment of any indebtedness encumbering the Land or the
Improvements, any expenses relating to the assignment of the
existing warranties to Buyer, one half the cost of any deed
recordation fees and one half of the cost of any escrows hereunder.
Buyer shall pay all costs associated with any financing of its
acquisition of the Property.
13.
DESTRUCTION, LOSS OR DIMINUTION OF PROJECT . If,
prior to Closing, all or any portion of the Land or the
Improvements are damaged by fire or other natural casualty
(collectively “ Damage ”), or are taken or made
subject to condemnation, eminent domain or other governmental
acquisition proceedings (collectively “ Eminent Domain
”), then the following procedures shall apply:
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(a)
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If the aggregate cost of repair or
replacement of the Damage (collectively, “ repair and/or
replacement ”) is $250,000.00 or less, in the opinion of
Buyer’s and Seller’s respective engineering
consultants, Buyer shall close and take the Property as diminished
by such events, subject to a reduction in the Purchase Price in the
full amount of the repair and/or replacement. Any proceeds from
casualty insurance shall be the sole property of Seller.
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(b)
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If the aggregate cost of repair
and/or replacement is greater than $250,000.00, in the opinion of
Buyer’s and Seller’s respective engineering
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11
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consultants, or in the event of an
Eminent Domain, then Buyer, within five (5) days after such
determination and at its sole option, may elect either to (i)
terminate this Agreement by written notice to Seller in which event
the provisions of Section 20.8 governing a permitted
termination by Buyer shall apply; or (ii) proceed to close subject
to an assignment of the proceeds of Seller’s casualty
insurance for all Damage (or condemnation awards for any Eminent
Domain). In such event, Seller shall fully cooperate with Buyer in
the adjustment and settlement of the insurance claim. The proceeds
and benefits under any rent loss or business interruption policies
attributable to the period following the Closing shall likewise be
transferred and paid over (and, if applicable, likewise credited on
an interim basis) to Buyer. If Buyer does not elect to terminate
pursuant to this Section 13(b) , Seller may elect to
terminate this Agreement by written notice to Buyer, in which event
(A) the Deposit shall be returned to Buyer, (B) Seller shall
reimburse Buyer for all Buyer Legal Fees up to $50,000 and all
Buyer Transaction Costs promptly, and in any event within ten (10)
business days after, the presentation of invoices therefore, and
(C) the parties shall have no further obligation to each other
except as otherwise expressly set forth herein.
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(c)
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In the event of a dispute between
Seller and Buyer with respect to the cost of repair and/or
replacement with respect to the matters set forth in this
Section 13 , an engineer designated by Seller
and an engineer designated by Buyer shall select an independent
engineer licensed to practice in the jurisdiction where the
Property is located who shall resolve such dispute. All fees, costs
and expenses of such third engineer so selected shall be shared
equally by Buyer and Seller.
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(d)
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In the event that any Damage or
Eminent Domain occurs and the parties proceed to Closing, Article
18 of the Lease shall govern the rights and obligations of Buyer
and Seller as tenant and landlord after the Closing Date, except
that Buyer shall not have the right to terminate the Lease pursuant
to Section 18.3.
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14.1. Default by
Seller . If any of Seller’s Representations contained
herein are not true and correct on the Effective Date and
continuing thereafter through and including the Closing Date, or if
Seller fails to perform any of the covenants and agreements
contained herein to be performed by Seller within the time for
performance as specified herein (including Seller’s
obligation to close), and in either case such failure continues for
five (5) days beyond notice and demand for cure from Buyer, Buyer
may elect either to (i) terminate Buyer’s obligations under
this Agreement by written notice to Seller with a copy to Escrowee,
in which event the Deposit shall be returned immediately to Buyer
and Seller shall reimburse Buyer for any and all Buyer Transaction
Costs and Buyer Legal Fees (up to $50,000 in the aggregate as to
Buyer Legal Fees) promptly, and in any event within ten (10)
business days, after the presentation of invoices
12
therefore; or (ii) file an action
for specific performance. Seller agrees that in the event Buyer
elects (ii) above, Buyer shall not be required to post a bond or
any other collateral with the court or any other party as a
condition to Buyer’s pursuit of an action. Seller hereby
covenants and agrees that in the event that a default on the part
of Seller hereunder is willful in nature, Buyer may (in addition to
any and all other remedies of Buyer hereunder) file an action for
damages actually suffered by Buyer by reason of Seller’s
defaults hereunder (including, but not limited to, attorneys’
fees, engineering fees, fees of environmental consultants,
appraisers’ fees, and accountants’ fees incurred by
Buyer in connection with this Agreement and any action hereunder)
up to a maximum amount of $300,000. The provisions of the
immediately preceding sentence shall survive any termination of
this Agreement. Nothing in this Section
14.1 shall be deemed
to in any way limit or prevent Buyer from exercising any right of
termination provided to Buyer elsewhere in this Agreement.
Notwithstanding the foregoing, in the event Seller defaults in any
of its post-closing obligations, Buyer shall have all of its
remedies at law and in equity on account of such
default.
14.2. Default by
Buyer . IN THE EVENT BUYER DEFAULTS IN ITS OBLIGATIONS TO
CLOSE THE PURCHASE OF THE PROPERTY, SELLER’S SOLE AND
EXCLUSIVE REMEDY SHALL BE TO CAUSE ESCROWEE TO DELIVER TO SELLER
THE DEPOSIT, AS FIXED AND LIQUIDATED DAMAGES, IT BEING UNDERSTOOD
THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF SUCH DEFAULT ARE
DIFFICULT TO ASCERTAIN AND THAT SUCH PROCEEDS REPRESENT THE
PARTIES’ BEST CURRENT ESTIMATE OF SUCH DAMAGES. SELLER SHALL
HAVE NO OTHER REMEDY FOR ANY DEFAULT BY BUYER; PROVIDED, HOWEVER
THAT, NOTWITHSTANDING THE FOREGOING, IN THE EVENT BUYER DEFAULTS IN
ANY OF ITS POST-CLOSING OBLIGATIONS, SELLER SHALL HAVE ALL OF ITS
REMEDIES AT LAW OR IN EQUITY ON ACCOUNT OF SUCH DEFAULT.
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15.
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SUCCESSORS AND ASSIGNS;
TAX-DEFERRED EXCHANGE .
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15.1.
Assignment . The terms, conditions and covenants of
this Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective nominees, successors,
beneficiaries and assigns; provided, however, no conveyance,
assignment or transfer of any interest whatsoever of, in or to the
Property or of this Agreement shall be made by Seller during the
term of this Agreement. Buyer may assign all or any of its right,
title and interest under this Agreement to (i) any third party
intermediary (an “ Intermediary ”) in connection
with a tax-deferred exchange pursuant to Section 1031 of the
Internal Revenue Code (an “ Exchange ”);
(ii) First Industrial, L.P., First Industrial Development
Investment, Inc. or any of their affiliates (collectively, “
First Industrial ”); or (iii) any joint venture
partnership or limited liability company in which First Industrial
has direct or indirect interest. In the event of an assignment of
this Agreement by Buyer, its assignee shall be deemed to be the
Buyer hereunder for all purposes hereof, and shall have all rights
of Buyer hereunder (including, but not limited to, the right of
further assignment), but the assignor shall not be released from
all liability hereunder.
15.2.
Tax-Deferred Exchange . In the event Buyer elects to
assign this Agreement to an Intermediary, Seller shall reasonably
cooperate with Buyer (without incurring any additional liability or
any additional third party expenses or delaying the Closing Date)
in
13
connection with such election and
the consummation of the Exchange, including without limitation, by
executing an acknowledgment of Buyer’s assignment of this
Agreement to the Intermediary.
16.
NOTICES . Any notice, demand or request which may be
permitted, required or desired to be given in connection therewith
shall be given in writing and directed to Seller and Buyer as
follows:
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Seller:
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Lenox Incorporated
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its attorneys:
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Lenox Group, Inc.
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1414 Radcliffe Street
Bristol, PA 19007-5496
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and:
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Dorsey & Whitney LLP
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Buyer:
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First Industrial Acquisitions,
Inc.
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43 Route 46 East, Suite
701
Pine Brook, New Jersey
07058
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its attorneys:
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Barack Ferrazzano Kirschbaum Perlman
&
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Nagelberg LLP
Notices shall be deemed properly
delivered and received: (i) the same day when personally delivered;
or (ii) one day after deposit with Federal Express or other
comparable commercial overnight courier; or (iii) the same day when
sent by confirmed facsimile.
14
17.
BENEFIT . This Agreement is for the benefit only of
the parties hereto and their nominees, successors, beneficiaries
and assignees as permitted in Section 15 and
no other person or entity shall be entitled to rely hereon, receive
any benefit herefrom or enforce against any party hereto any
provision hereof.
18.
LIMITATION OF LIABILITY . Upon the Closing, Buyer
shall neither assume nor undertake to pay, satisfy or discharge any
liabilities, obligations or commitments of Seller other than those
specifically agreed to between the parties and set forth in this
Agreement. Except with respect to the foregoing obligations, Buyer
shall not assume or discharge any debts, obligations, liabilities
or commitments of Seller, whether accrued now or hereafter, fixed
or contingent, known or unknown.
19.
BROKERAGE . Each party hereto represents and warrants
to the other that it has dealt with no brokers or finders in
connection with this transaction other than CRESA Partners (“
Broker ”). Seller shall pay any commission owing to
Broker pursuant to the terms of a separate agreement between Broker
and Seller. Seller and Buyer each hereby indemnify, protect and
defend and hold the other harmless from and against all Losses,
resulting from the claims of any broker, finder, or other such
party claiming by, through or under the acts or agreements of the
indemnifying party. The obligations of the parties pursuant to this
Section 19 shall survive the Closing or any
earlier termination of this Agreement.
20.
MISCELLANEOUS .
20.1. Entire
Agreement . This Agreement constitutes the entire
understanding between the parties with respect to the transaction
contemplated herein, and all prior or contemporaneous oral
agreements, understandings, representations and statements, and all
prior written agreements, understandings, letters of intent and
proposals, in each case with respect to the transaction
contemplated herein, are hereby superseded and rendered null and
void and of no further force and effect and are merged into this
Agreement. Neither this Agreement nor any provisions hereof may be
waived, modified, amended, discharged or terminated except by an
instrument in writing signed by the party against which the
enforcement of such waiver, modification, amendment, discharge or
termination is sought, and then only to the extent set forth in
such instrument.
20.2. Time of the
Essence . Time is of the essence of this
Agreement.
20.3. Legal
Holidays . If any date herein set forth for the performance
of any obligations by Seller or Buyer or for the delivery of any
instrument or notice as herein provided should be on a Saturday,
Sunday or legal holiday, the compliance with such obligations or
delivery shall be deemed acceptable on the next business day
following such Saturday, Sunday or legal holiday. As used herein,
the term “ legal holiday ” means any state or
federal holiday for which financial institutions or post offices
are generally closed for observance thereof in the State of
Maryland.
20.4. Conditions
Precedent . The obligations of Buyer to make the payments
described herein and to close the transaction contemplated herein
are subject to the express
15
Conditions Precedent set forth in
this Agreement, each of which is for the sole benefit of Buyer and
may be waived at any time by written notice thereof from Buyer to
Seller. The waiver of any particular Condition Precedent shall not
constitute the waiver of any other. In the event of the failure of
a Condition Precedent for any reason whatsoever, Buyer may elect,
in its sole discretion, to terminate this Agreement in which event
the provisions of Section 20.8 governing a permitted
termination by Buyer shall apply.
20.5.
Construction . This Agreement shall not be construed
more strictly against one party than against the other merely by
virtue of the fact that it may have been prepared by counsel for
one of the parties, it being recognized that both Seller and Buyer
have contributed substantially and materially to the preparation of
this Agreement. The headings of various sections in this Agreement
are for convenience only, and are not to be utilized in construing
the content or meaning of the substantive provisions
hereof.
20.6. Governing
Law . This Agreement shall be governed by and construed in
accordance with the State of Maryland.
20.7. Partial
Invalidity . The provisions hereof shall be deemed
independent and severable, and the invalidity or partial invalidity
or enforceability of any one provision shall not affect the
validity of enforceability of any other provision
hereof.
20.8. Permitted
Termination . In the event that Buyer exercises any right
it may have hereunder to terminate this Agreement, (A) the Deposit
shall be immediately returned to Buyer and neither party shall have
any further liability under this Agreement except as otherwise
expressly provided hereunder; and (B) Seller shall reimburse Buyer
for (i) any and all Buyer Legal Fees up to a maximum aggregate
amount not to exceed $50,000; and (ii) Buyer Transaction Costs,
promptly, and in any event within ten (10) business days, after the
presentation of invoices therefor.
[Signature Page to
Follow]
16
IN WITNESS WHEREOF
, the parties hereto have executed
this Agreement of Purchase and Sale on the date first above
written.
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SELLER:
LENOX INCORPORATED , a
New Jersey corporation
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By:
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/s/ Timothy J.
Schugel
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Name:
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Timothy J.
Schugel
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Its:
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Chief Financial
Officer and
Chief Operating Officer
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S-1
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BUYER:
FIRST INDUSTRIAL ACQUISITIONS, INC. , a Maryland corporation
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By:
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/s/ Bernard A. Bak
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Name:
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Bernard A.
Bak
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Its:
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Authorized
Signatory
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S-2
SCHEDULE OF
EXHIBITS
S-3
EXHIBIT A
Legal Description of the
Land
All of those lots or parcels of land located in
Washington County, Maryland and more particularly described as
follows:
Beginning at an iron pin and cap along the
existing right of way for the cul-de-sac at Hunter’s-Green
Parkway, said point also
being located S 2326’32” W 64.91
feet form the most southeastern corner of the lands of Lot 1 as
recorded in Washington County
Plat folio 5724, thence running
1. N 6152’12” W 357.43 feet to a
point, thence
2. N 7357’41” W 311.22 feet to a
point, thence with a curve to the left having a radius of 130.00
feet, an arc length of 176.77 feet and a chord bearing and distance
of
3. S 6705’05” W 163.46 feet to a
point; thence
4. S 2807’48” W 294.58 feet to a
point, thence with a curve to the left having a radius of 30 feet,
an arc length of 47.12 feet and a chord bearing and distance
of
5. S 1652’12” E 42.43 feet to a
point, thence
6. S 6152’12” E 45.24 feet to a
point, thence
7. S 2807’48” W 212.00 feet to a
point, thence
8. N 6152’12” W 842.09 feet to a
point, thence
9. N 3341’02” E 554.60 feet to a
point, thence
10. S 6152’12” E 642.53 feet to a
point, thence
11. N 3014’06” E 218.22 feet to a
point, thence
12. N 5944’09” W 677.59 feet to a
point, thence
13. N 2632’54” E 251.87 feet to a
point, thence
14. N 6756’10” W 332.65 feet to a
point, thence
15. S 2203’50” W 300.00 feet to a
point, thence
16. N 5458’15” W 142.05 feet to a
point, thence
17. S 7014’47” W 24.81 feet to a
point, thence
18. S 2056’55” W 118.29 feet to a
point, thence
19. S 0959’56” W 210.79 feet to a
point, thence
20. S 1800’23” W 18.67 feet to a
point, thence
21. S 5619’00” W 287.69 feet to a
point, thence
22. N 3341’04” E 425.87 feet to a
point, thence
23. S 5944’08” W 100.18 feet to a
point, thence
24. S 3341’02” W 185.64 feet to a
point, thence
25. S 8518’25” W 31.89 feet to a
point, thence
26. S 3341’02” W 591.12 feet to a
point along the northern right-of-way line of Interstate 70, thence
with said right-of-way line S 6142’34” E 2724.62 feet
to a point, thence leaving said right of way and running along the
remaining lands of Grace Litton, et al, N 2817’26” E
382.02 feet to a point, thence with said southern right-of-way line
and with a curve to the right having a radius of 530.00 feet, an
arc length of 279.97 feet and a chord bearing and distance
of
27. N 22 34’01” W 276.73 feet to a
point, thence with a curve to the left having a radius of 470.00
feet, an arc length of 400.99 feet and a chord bearing and distance
of
28. N 3152’32” W 388.94 feet to a
point; thence
A-1
29. N 5619’02” W 445.43 feet to a
point, thence running with the cul-de-sac at the end of
Hunter’s Green Parkway and with a curve to the left having a
radius of 50 feet, an arc length of 61.51 feet and a chord bearing
and distance of
30. S 8825’06” W 57.743 feet to a
point, thence running with a curve to the right having a radius of
70 feet, an arc length of 149.87 feet and a chord bearing and
distance of
31. N 6530’43” W 122.84 feet to the
place of beginning.
Containing 40.00 acres of land, more or
less.
Being Lot 5 as shown on a plat entitled
“Final Plat of Subdivision of Lots 5 and 6 and Simplified
Plat of Parcels B and C of Hunter’s Green Business Park for
Tiger Development 11, LP”, said plat being recorded at Plat
folio 6647, et seq, one of the plat records in the office of the
Clerk of the Circuit Court for Washington County,
Maryland.
A-2
EXHIBIT B
Seller’s
Deliveries
To the extent in Seller’s
possession the following shall be delivered to Buyer:
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1.
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Copies of any bills and other notices pertaining to any
real estate taxes or personal property taxes applicable to the
Property for the current year and the three (3) years immediately
preceding the date of the Agreement.
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2.
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Copies of all real estate tax, insurance, common area
maintenance and other operating expense reconciliations prepared by
Seller or Seller’s management agent in connection with the
Property for the current year and the year immediately preceding
the date of the Agreement.
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•
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2005 and 2006 summary of facility
expenses
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3.
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Copies of all maintenance, landscaping repair, pest
control, and other service and/or supply contracts, and any other
contracts or agreements relating to or affecting the
Property.
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•
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Pepco Energy Services contract
summary
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Facility vendor list and contact
information for:
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o
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CCTV system, door
access/fire/burglar alarms,
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o
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firestone roofing system
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o
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lawn care, landscaping, snow removal
and storm water retention maintenance
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•
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Facility Utility Supplies list and
contact information for:
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Electricity
transportation
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4.
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Copies of certificates of insurance for all hazard,
rent loss, liability and other insurance policies currently in
force with respect to the Property and/or Seller’s
business.
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•
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Acordia Certificate of
Liability
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B-1
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5.
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Copies of all final, written, third-party reports
regarding soil conditions, ground water, wetlands, underground
storage tanks, subsurface conditions and/or other environmental or
physical conditions relating to the Property, in Seller’s
possession or control.
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•
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Phase I Environmental Site
Assessment prepared for UBS Securities, LLC, dated June
2005.
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Storm water inspection by Washington
County Engineer for Structure No. DP-01-0322
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6.
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Copies of all engineering and
architectural plans and specifications, drawings, studies and
surveys relating to the Property, in Seller’s possession or
control, and copies of all records pertaining to the repair,
replacement and maintenance of the mechanical systems at the
Property, the roof and the structural components of the
Property.
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PDF version of site plan prepared by
Frederick, Siebert & Associates, including expansion area site
plan
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PDF version of as-built plans for
the building
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Wolff Roofing and Sheet Metal,
Firestone Roofing System 10 Year Warranty No. RB102630
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7.
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A schedule listing all repairs,
replacements or items of maintenance costing in excess of
$10,000.00 per occurrence or per item, performed at the Property,
at any time or from time to time, during the current year and the
year immediately preceding the Contract Date, together with
supporting invoices, purchase orders and billing statements for
each such item of repair, replacement or maintenance.
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None over $10,000. Minor repairs as
follows:
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o
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Otter Creek Custom Landscaping &
Lawn Maintenance (drainage ditch repair)
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o
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Fire-X Sales & Service invoices
for annual maintenance of portable fire extinguishers
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o
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Long Fence guardrail
repair
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8.
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Copies of Seller’s most recent
owner’s title policy issued in connection with the Property
and the most recent survey of the Property.
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Owner’s Policy of Title
Insurance from First American Title Insurance Company N.
NCS-183780-MPLS, dated September 7, 2005.
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Commitment No. NCS-266083 for title
insurance in the amount of $27,000,000.
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All recorded documents affecting the
property listed on the title policy and title
commitment.
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9.
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Copies of all, if any, of the
following in Seller’s possession or control: subdivision
plans or plats, variances, parcel maps or development agreements
relating to the Property; and licenses, permits, certificates,
authorizations, or approvals issued by any governmental authority
in connection with the construction, ownership, use and occupancy
of the Property.
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Copy of Certificate of Occupancy
dated October 14, 2003
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B-2
EXHIBIT C
Lease
C-1
INDUSTRIAL BUILDING
LEASE
(BOND-TYPE)
1. BASIC TERMS . This Section 1 contains the Basic Terms
of this Industrial Building Lease (the “ Lease
”) between Landlord and Tenant, named below. Other Sections
of the Lease referred to in this Section 1 explain and
define the Basic Terms and are to be read in conjunction with the
Basic Terms.
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1.1.
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Effective Date of Lease: December
29, 2006
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1.2.
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Landlord:
[_______________________] , a Delaware limited liability
company
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1.3.
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Tenant: Lenox, Incorporated, a New
Jersey corporation
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1.4.
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Premises: Approximately forty (40)
acres of land on which the Building (the “ Building
”) commonly known as 16507 Hunters Green Parkway, Hagerstown,
Maryland, is located, which Building contains approximately 506,003
rentable square feet, as legally described on Exhibit A
attached hereto.
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1.5.
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Guarantor: Lenox Group
Inc.
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1.6.
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Lease Term: Fifteen (15) years
(“ Term ”), commencing December 29, 2006
(“ Commencement Date ”) and ending, subject to
Section 2.5 below and Rider 1 hereof, on December 31,
2021 (“ Expiration Date ”).
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1.7.
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Permitted Uses: (See Section
4.1 ) Any lawful purposes, subject to applicable zoning
restrictions, provided that Tenant’s use does not otherwise
violate the other terms and conditions of this Lease; provided,
however, that if Tenant desires to use the Premises for any use
other than warehouse, and distribution and ancillary office use,
then Tenant must first obtain Landlord’s consent, which
consent shall not be withheld unless such use creates a nuisance
(e.g., by production or emission of objectionable or unpleasant
odors, smoke, dust, gas, light, noise or vibrations) or materially
increases the risk of environmental contamination.
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1.8.
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Tenant’s Broker: N/A
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1.9.
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Exhibits and Riders to Lease: The
following exhibits and riders are attached to and made a part of
this Lease. Exhibit A (legal description); Exhibit B
(Tenant Operations Inquiry Form); Exhibit C (Broom Clean
Condition and Repair Requirements), Exhibit D (Termination
Fee); Exhibit E (Guaranty); Exhibit F (Right of First
Offer); and Rider No. 1 (Tenant’s Expansion
Option).
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2.
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LEASE OF PREMISES;
RENT .
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2.1.
Lease of Premises for Lease Term . Landlord hereby
leases the Premises to Tenant, and Tenant hereby rents the Premises
from Landlord, for the Term and subject to the conditions of this
Lease.
2.2.
Types of Rental Payments . Tenant shall pay net base
rent to Landlord in monthly installments, in advance, on the first
day of each and every calendar month during the Term of this Lease
(the “ Base Rent ”) in the amounts and for the
periods as set forth below:
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Rental
Payments
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Lease Period
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Annual Base Rent
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Monthly Base Rent
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12/29/06 – 12/31/06
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Per diem
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$ 5,268.00
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1/1/07 – 12/31/07
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$1,922,820.00
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$160,235.00
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1/1/08 – 12/31/08
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$1,961,268.00
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$163,439.00
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1/1/09 – 12/31/09
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$2,000,496.00
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$166,708.00
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1/1/10 – 12/31/10
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$2,040,504.00
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$170,042.00
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1/1/11 – 12/31/11
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$2,081,316.00
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$173,443.00
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1/1/12 – 12/31/12
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$2,122,944.00
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$176,912.00
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1/1/13 – 12/31/13
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$2,165,400.00
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$180,450.00
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1/1/14 – 12/31/14
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$2,208,708.00
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$184,059.00
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1/1/15 – 12/31/15
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$2,252,880.00
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$187,740.00
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1/1/16 – 12/31/16
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$2,297,940.00
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$191,495.00
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1/1/17 – 12/31/17
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$2,343,900.00
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$195,325.00
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1/1/18 – 12/31/18
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$2,390,784.00
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$199,232.00
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1/1/19 – 12/31/19
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$2,438,604.00
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$203,217.00
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1/1/20 – 12/31/20
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$2,487,372.00
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$207,281.00
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1/1/21 – 12/31/21
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$2,537,124.00
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$211,427.00
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Tenant shall also pay all Operating
Expenses (defined below) and any other amounts owed by Tenant
hereunder (collectively, “Additional Rent” ). In
the event any monthly installment of Base Rent or Additional Rent,
or both, is not paid within 5 days of the date when due, a late
charge in an amount equal to 2% of the then delinquent installment
of Base Rent and/or Additional Rent (the “ Late Charge
”; the Late Charge, Default Interest, as defined in
Section 21.3 below, Base Rent and Additional Rent shall
collectively be referred to as “ Rent ”) shall
be paid by Tenant to Landlord. Default Interest shall not be
charged on the Late Charge and the Late Charge shall not be imposed
on accrued Default Interest. Tenant shall deliver all Rent payments
to Landlord at [311 South Wacker Drive, Suite 4000, Chicago, IL,
60606, Attn: Joint Venture Accounting Group] (or to such other
entity designated as Landlord’s management agent, if any, and
if Landlord so appoints such a management agent, the “
Agent ”), or pursuant to such other directions as
Landlord shall designate in this Lease or otherwise in
writing.
2.3.
Covenants Concerning Rental Payments; Initial and Final Rent
Payments . Tenant shall pay the Rent promptly when due,
without notice or demand, and without any abatement, deduction or
setoff. No payment by Tenant, or receipt or acceptance by Agent or
Landlord, of a lesser amount than the correct Rent shall be deemed
to be other than a payment on account, nor shall any endorsement or
statement on any check or letter accompanying any payment be deemed
an accord or satisfaction, and Agent or Landlord may accept such
payment without prejudice to its right to recover the balance due
or to pursue any other remedy available to Landlord.
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2.4.
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Net Lease;
Nonterminability .
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2.4.1. This
Lease is a complete “bond net lease,” and
Tenant’s obligations arising or accruing during the Term of
this Lease to pay all Base Rent, Additional Rent, and all other
payments hereunder required to be made by Tenant shall be absolute
and unconditional, and Tenant shall pay all Base Rent, Additional
Rent and all other payments required to be made by Tenant under
this Lease without notice (except as otherwise expressly and
specifically set forth herein), demand, counterclaim, set-off,
deduction, or defense and without abatement, suspension, deferment,
diminution or reduction, free from any charges, assessments,
impositions, expenses or deductions of any and every kind of and
nature whatsoever. All costs, expenses and obligations of every
kind and nature whatsoever relating to the Premises and the
appurtenances thereto and the use and occupancy thereof that may
arise or become due prior to or during the Term (including
Operating Expenses related to the period prior to the Term and
payable during the Term) shall be paid by Tenant, and Landlord is
not responsible for any costs, charges, expenses or outlays of any
nature whatsoever arising during the Term from or relating to the
Premises or the use or occupancy thereof; and Landlord,
Landlord’s mortgagee or lender and their respective
employees, shareholders, officers, directors, members, managers,
trustees, partners or principals, disclosed or undisclosed, and all
of their respective successors and assigns (hereinafter
collectively referred to as the “ Indemnitees ”
and each individually as an “ Indemnitee ”),
shall be indemnified and saved harmless as provided below. The
willful misconduct or negligence of Landlord and the Indemnitee
parties of Landlord shall not be imputed to Landlord’s
mortgagee or lender and the Indemnitee parties of such mortgagee or
lender. Tenant assumes the sole responsibility during the Term for
the condition, use, operation, repair, maintenance, replacement of
any and all components and systems of, and the underletting and
management of, the Premises. Tenant shall and hereby does
indemnify, defend and hold the Indemnitees harmless from and
against any and all Losses (defined below) actually incurred by any
or all of the Indemnitees with respect to, and to the extent of,
matters that arise or accrue with respect to the Term of this Lease
and in connection with any or all of the maintenance, repair and
operation of the Premises (whether or not the same shall become
payable during the Term); and the Indemnitees shall have no (a)
responsibility in respect thereof and (b) liability for damage to
the property of Tenant or any subtenant of Tenant on any account or
for any reason whatsoever, except in the event of (and then only to
the extent of) such Indemnitee’s respective willful
misconduct or negligence. It is the purpose and intention of the
parties to this Lease that the Base Rent due hereunder shall be
absolutely net to the Landlord and Landlord shall have no
obligation or responsibility, of any nature whatsoever, to perform
any tenant improvements; to provide any services; or to perform any
repairs, maintenance or replacements in, to, at, on or under the
Premises, whether for the benefit of Tenant or any other party, and
that Tenant has the authority to operate, maintain and repair the
Premises as it deems appropriate, in its sole discretion, subject
to the terms of the Lease.
2.4.2. Except
as otherwise expressly provided in Sections 18 and 21
of this Lease, this Lease shall not terminate, nor shall Tenant
have any right to terminate this Lease or to be released or
discharged from any obligations or liabilities hereunder for any
reason, including, without limitation: (i) any damage to or
destruction of the Premises; (ii) any restriction, deprivation
(including eviction) or prevention of, or any interference with,
any use or the occupancy of the Premises (whether due to any
default in, or failure of, Landlord’s title to the Premises
or otherwise); (iii) any condemnation, requisition or other taking
or sale of the use, occupancy or title of or to the Premises; (iv)
any action, omission or breach on the part of Landlord under this
Lease or any other agreement between Landlord and Tenant; (v) the
inadequacy or failure of the description of the Premises
to
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demise and let to Tenant the
property intended to be leased hereby; (vi) any sale or other
disposition of the Premises by Landlord; (vii) the impossibility or
illegality of performance by Landlord or Tenant or both; (viii) any
action of any court, administrative agency or other governmental
authority; or (ix) any other cause, whether similar or dissimilar
to the foregoing, any present or future law notwithstanding.
Nothing in this paragraph shall be construed as an agreement by
Tenant to perform any illegal act or to violate the order of any
court, administrative agency or other governmental
authority.
2.4.3. Tenant
will remain obligated under this Lease in accordance with its
terms, and will not take any action to terminate (except in
accordance with the provisions of Section 18 of this Lease),
rescind or avoid this Lease for any reason, notwithstanding any
bankruptcy, insolvency, reorganization, liquidation, dissolution or
other proceeding affecting Landlord or any assignee of Landlord, or
any action with respect to this Lease that may be taken by any
receiver, trustee or liquidator or by any court. Tenant waives all
rights at any time conferred by statute or otherwise to quit,
terminate or surrender this Lease or the Premises, or to any
abatement or deferment of any amount payable by Tenant hereunder,
or for claims against any Indemnitee for any Losses suffered by
Tenant on account of any cause referred to in this Section
2.4 or otherwise (except claims directly arising out of the
negligence or willful misconduct by such Indemnitee).
2.5.1. Tenant
shall have the option (“ Renewal Option ”) to
renew this Lease for three (3) consecutive terms of five (5) years
each (each, a “ Renewal Term ”), on all the same
terms and conditions set forth in this Lease, except that initial
Base Rent during any Renewal Term shall be equal to Fair Market
Rent (as defined in Section 2.5.2 below), and as of the
first anniversary of the commencement of each Renewal Term and
continuing on each anniversary thereof through the remainder of
that Renewal Term, the Base Rent shall increase at the rate of two
percent (2.0%), per annum, on a compounded basis. Tenant shall
deliver written notice to Landlord of Tenant’s election to
exercise the Renewal Option (“ Renewal Notice ”)
not less than twelve (12) months, nor more than eighteen (18)
months, prior to the expiration date of the original Term or the
then-current Renewal Term, as applicable; and if Tenant fails to
timely deliver a Renewal Notice to Landlord, then Tenant shall
automatically be deemed to have irrevocably waived and relinquished
the Renewal Option.
2.5.2. For
the purposes of this Lease, “ Fair Market Rent ”
shall be determined by Landlord, in good faith, based upon the
annual base rental rates then being charged in the industrial
market sector of the geographic area where the Building is situated
for comparable space and for a lease term commencing on or about
the commencement date of the applicable Renewal Term and equal in
duration to the applicable Renewal Term, taking into consideration:
the geographic location, quality and age of the Building; the
location and configuration of the relevant space within the
Building; the extent of service to be provided to the proposed
tenant thereunder; applicable distinctions between
“gross” and “net” leases; the
creditworthiness and quality of Tenant; leasing commissions; and
any other relevant term or condition in making such evaluation, all
as reasonably determined by Landlord. In no event, however (and
notwithstanding any provision to the contrary in this Section
2.5) , shall the Fair Market Rent be less than an amount equal
to the Base Rent in effect during the one (1) year period
immediately preceding the expiration date of the then-applicable
term (the “ Renewal Rent Floor ”). Landlord
shall notify Tenant of Landlord’s determination of Fair
Market Rent for any Renewal Term, in writing (the “ Base
Rent Notice ”) within sixty (60) days after receiving the
applicable Renewal Notice.
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2.5.3. Tenant
shall then have sixty (60) days after Landlord’s delivery of
the Base Rent Notice in which to advise Landlord, in writing (the
“ Base Rent Response Notice ”), whether Tenant
(i) is prepared to accept the Fair Market Rent established by
Landlord in the Base Rent Notice and proceed to lease the Premises,
during the Renewal Term, at that Fair Market Rent; or (ii) elects
to withdraw and revoke its Renewal Notice, whereupon the Renewal
Option shall automatically be rendered null and void; or (iii)
elects to contest Landlord’s determination of Fair Market
Rent. In the event that Tenant fails to timely deliver the Base
Rent Response Notice, then Tenant shall automatically be deemed to
have elected (i) above. Alternatively, if Tenant timely elects
(ii), then this Lease shall expire on the original expiry date of
the initial Term or the then current Renewal Term, as applicable.
If, however, Tenant timely elects (iii), then the following
provisions shall apply:
2.5.3.1. The
Fair Market Rent shall be determined by either the Independent
Brokers or the Determining Broker, as provided and defined below,
but in no event shall the Fair Market Rent be less than the Renewal
Rent Floor.
2.5.3.2. Within
thirty (30) days after Tenant timely delivers its Base Rent
Response Notice electing to contest Landlord’s determination
of Fair Market Rent, each of Landlord and Tenant shall advise the
other, in writing (the “ Arbitration Notice ”),
of both (i) the identity of the individual that each of Landlord
and Tenant, respectively, is designating to act as Landlord’s
or Tenant’s, as the case may be, duly authorized
representative for purposes of the determination of Fair Market
Rent pursuant to this Section 2.5.3 (the “
Representatives ”); and (ii) a list of three (3)
proposed licensed real estate brokers, any of which may serve as
one of the Independent Brokers (collectively, the “ Broker
Candidates ”). Each Broker Candidate:
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(i)
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shall be duly licensed in the
jurisdiction in which the Premises is located; and
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(ii)
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shall have at least five (5)
years’ experience, on a full-time basis, leasing industrial
space (warehouse/distribution/ancillary office) in the same general
geographic area as that in which the Premises is located, and at
least three (3) of those five (5) years of experience shall have
been consecutive and shall have elapsed immediately preceding the
date on which Tenant delivers the Renewal Notice.
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2.5.3.3. Within
fourteen (14) days after each of Landlord and Tenant delivers its
Arbitration Notice to the other, Landlord and Tenant shall cause
their respective Representatives to conduct a meeting at a mutually
convenient time and location. At that meeting, the two (2)
Representatives shall examine the list of six (6) Broker Candidates
and shall each eliminate two (2) names from the list on a
peremptory basis. In order to eliminate four (4) names, first, the
Tenant’s Representative shall eliminate a name from the list
and then the Landlord’s Representative shall eliminate a name
therefrom. The two (2) Representatives shall alternate in
eliminating names from the list of six (6) Broker Candidates in
this manner until each of them has eliminated two (2) names. The
two (2) Representatives shall immediately contact the remaining two
(2) Broker Candidates (the “ Independent Brokers
”), and engage them, on behalf of Landlord and Tenant, to
determine the Fair Market Rent in accordance with the provisions of
this Section 2.5.3 .
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2.5.3.4. The
Independent Brokers shall determine the Fair Market Rent within
thirty (30) days of their appointment. Within ten (10) days after
appointment of the Independent Brokers, Landlord and Tenant shall
each make a written submission to the Independent Brokers advising
of the rate that the submitting party believes should be the Fair
Market Rate, together with whatever written evidence or supporting
data that the submitting party desires in order to justify its
desired rate of Fair Market Rent; provided, in all events, however,
that the aggregate maximum length of each party’s submission
shall not exceed ten (10) pages (each such submission package, a
“ FMR Submission ”). The Independent Brokers
shall be obligated to choose one (1) of the parties’ specific
proposed rates of Fair Market Rent, without being permitted to
effectuate any compromise position.
2.5.3.5. In
the event, however, that the Independent Brokers fail to reach
agreement, within twenty (20) days after the date on which both
Landlord and Tenant deliver the FMR Submissions to the Independent
Brokers (the “ Decision Period ”), as to which
of the two (2) proposed rates of Fair Market Rent should be
selected, then, within five (5) days after the expiration of the
Decision Period, the Independent Brokers shall jointly select a
real estate broker who (x) meets all of the qualifications of a
Broker Candidate, but was not included in the original list of six
(6) Broker Candidates; and (y) is not affiliated with any or all of
(A) either or both of the Independent Brokers and (B) the real
estate brokerage companies with which either or both of the
Independent Brokers is affiliated (the “ Determining
Broker ”). The Independent Brokers shall engage the
Determining Broker on behalf of Landlord and Tenant (but without
expense to the Independent Brokers), and shall deliver the FMR
Submissions to the Determining Broker within five (5) days after
the date on which the Independent Brokers select the Determining
Broker pursuant to the preceding sentence (the “
Submission Period ”).
2.5.3.6. The
Determining Broker shall make a determination of the Fair Market
Rent within twenty (20) days after the date on which the Submission
Period expires. The Determining Broker shall be required to select
one of the parties’ specific proposed rates of Fair Market
Rent, without being permitted to effectuate any compromise
position.
2.5.3.7. The
decision of the Independent Brokers or the Determining Broker, as
the case may be, shall be conclusive and binding on Landlord and
Tenant, and neither party shall have any right to contest or appeal
such decision, except in case of fraud.
2.5.3.8. In
the event that the initial Term or the then current Renewal Term,
as applicable, expires and the subject Renewal Term commences prior
to the date on which the Independent Brokers or the Determining
Broker, as the case may be, renders their/its decision as to the
Fair Market Rent, then from the commencement date of the subject
Renewal Term through the date on which the Fair Market Rent is
determined under this Section 2.5.3 (the “
Determination Date ”), Tenant shall pay monthly Base
Rent to Landlord at a rate equal to 102% of the most recent rate of
monthly Base Rent in effect on the expiration date of the initial
Term or the immediately preceding Renewal Term, as applicable (the
“ Temporary Base Rent ”). Within ten (10)
business days after the Determination Date, Landlord shall pay to
Tenant, or Tenant shall pay to Landlord, depending on whether the
Fair Market Rent is less than or greater than the Temporary Base
Rent, whatever sum that Landlord or Tenant, as the case may be,
owes the other (the “ Catch-Up Payment ”), based
on the Temporary Base Rent actually paid and the Fair Market Rent
due (as determined by the Independent Brokers or the Determining
Broker, as the case may be) during that
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portion of the Renewal Term that
elapses before the Catch-Up Payment is paid, in full (together with
interest thereon, as provided below). The Catch-Up Payment shall
bear interest at the rate of Prime (defined below), plus two
percent (2.0%) per annum, from the date each monthly component of
the Catch-Up Payment would have been due, had the Fair Market Rent
been determined prior to the commencement of the Renewal Term,
through the date on which the Catch-Up Payment is paid, in full
(inclusive of interest thereon). For purposes hereof, “
Prime ” shall mean the per annum rate of interest
publicly announced by JPMorgan Chase Bank NA (or its successor),
from time to time, as its “ prime ” or “
base ” or “ reference ” rate of
interest.
2.5.3.9. The
party whose proposed rate of Fair Market Rent is not selected by
the Independent Brokers or the Determining Broker, as the case may
be, shall bear all costs of all counsel, experts or other
representatives that are retained by both parties, together with
all other costs of the arbitration proceeding described in this
Section 2.5.3 , including, without limitation, the
fees, costs and expenses imposed or incurred by any or all of the
Independent Brokers and the Determining Broker.
2.5.3.10. Unless
otherwise expressly agreed in writing, during the period of time
that any arbitration proceeding is pending under this
Section 2.5.3 , Landlord and Tenant shall continue to
comply with all those terms and provisions of this Lease that are
not the subject of their dispute and arbitration proceeding under
this Section 2.5.3 , most specifically including, but not
limited to, Tenant’s monetary obligations under this Lease;
and, with respect to the payment of Base Rent during that portion
of the Renewal Term that elapses during the pendency of any
arbitration proceeding under this Section 2.5.3 , the
provisions of Section 2.5.3.8 shall apply.
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2.5.4.
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The Renewal Option is granted
subject to all of the following conditions:
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2.5.4.1. As
of the date on which Tenant delivers any Renewal Notice and
continuing through the commencement date of the applicable Renewal
Term, there shall not exist any uncured Default by Tenant under
this Lease.
2.5.4.2. There
shall be no further right of renewal after the expiration of the
third Renewal Term.
2.5.4.3. The
Renewal Option is personal to Tenant and may only be exercised by
Tenant or any assignee of Tenant (provided such assignment was made
with Landlord’s prior written consent and otherwise in
accordance with the requirements of Section 8 or made
without Landlord’s consent but in accordance with Section
8 ).
2.5.4.4. The
Premises shall be delivered to Tenant during the Renewal Term(s) on
an “as-is” “where-is” basis, with no
obligation on the part of Landlord to perform any tenant
improvements to the Premises.
2.6.
Guaranty . Simultaneously with the execution and
delivery of this Lease, Guarantor has executed and entered into the
Guaranty Agreement in the form attached hereto as Exhibit E
(the “ Guaranty ”), for the benefit of Landlord
pursuant to which Guarantor has absolutely and unconditionally
guaranteed the payment and performance of Tenant’s
obligations hereunder.
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3.1.
Definitional Terms Relating to Additional Rent . For
purposes of this Section and other relevant provisions of the
Lease:
3.1.1.
Operating Expenses . The term “ Operating
Expenses ” shall mean all costs, expenses and charges of
every kind or nature relating to, or incurred in connection with,
the maintenance and operation of the Premises, including, but not
limited to the following: (i) Taxes, as hereinafter defined in
Section 3.1.2 ; (ii) dues, fees or other costs and expenses,
of any nature, due and payable to any association or comparable
entity to which Landlord, as owner of the Premises, is a member or
otherwise belongs and that governs or controls any aspect of the
operation of the Premises; (iii) any so called “rent”
or “revenue” taxes imposed on the Rent payable
hereunder; and (iv) any real estate taxes and common area
maintenance expenses due and payable under any declaration of
covenants, conditions and restrictions, reciprocal easement
agreement or comparable arrangement that encumbers and benefits the
Premises and other real property (e.g. a business park). Under no
circumstances, however, shall Operating Expenses include: (i)
depreciation or amortization on the Premises or any fixtures or
equipment installed therein, (ii) federal, state, or local income,
margin, franchise, gift, transfer, excise, capital stock, estate,
succession, or inheritance taxes, (iii) interest on debt or
amortization payments on mortgages or deeds of trust or any other
debt for borrowed money and costs or any expenses incurred by
Landlord in connection with such debt and liens, (iv) costs
incurred because Landlord violated any governmental rule or
authority or as a result of Landlord’s negligence or willful
misconduct; (v) costs or expenses of a partnership, or other
entity, which constitutes Landlord, which costs or expenses are not
directly related to the Premises (such as accounting fees, tax
returns, and income taxes of such entity), (vi) any sums that
Landlord is required to pay Tenant pursuant to any other written
agreement between Landlord and Tenant, (vii) sums reimbursed to
Landlord by a third party, (viii) remediation of Hazardous
Materials if such remediation is necessitated by Landlord’s
acts or neglect; (ix) expenses for services provided by Landlord to
the extent such expenses exceed those that would be charged by an
unrelated third party charging competitive market rates, and (x)
expenses incurred by Landlord that are not directly related to the
Premises or its operations including, without limitation,
compensation paid to employees of Landlord; however, Operating
Expenses shall include those expenses, if any, incurred by Landlord
in order to perform or provide any services required of Landlord
under this Lease or to provide any services specifically requested
by Tenant (including a portion of the compensation paid to
employees performing or providing such services, pro-rated to
reflect the extent of the employee’s time spent performing or
providing such services), subject to the limitation set forth in
clause (ix) above.
3.1.2.1. The
term “ Taxes ” shall mean (i) all governmental
taxes, assessments, fees and charges of every kind or nature (other
than Landlord’s federal, state, or local income, margin,
franchise, gift, transfer, excise, capital stock, estate,
succession, or inheritance taxes income taxes), whether general,
special, ordinary or extraordinary, due at any time or from time to
time, during the Term and any extensions thereof, in connection
with the ownership, leasing, or operation of the Premises, or of
the personal property and equipment located therein or used in
connection therewith; and (ii) any reasonable expenses incurred by
Landlord in contesting such taxes or assessments and/or the
assessed value of the Premises, if Landlord participates in a tax
contest at Tenant’s request. For purposes hereof, Tenant
shall be responsible for any Taxes that are due and
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payable at any time or from time to
time during the Term (including, but not limited to, those Taxes
that accrued prior to the Commencement Date), and for its pro rata
share of any Taxes that are assessed, become a lien, or accrue
during any Operating Year but are not payable until after the
Expiration Date, which obligation shall survive the termination or
expiration of this Lease. Without in any way limiting
Tenant’s obligation to pay any and all Taxes, Tenant hereby
acknowledges that Tenant shall be solely responsible for any
increase in Taxes which is the result of the loss of any tax
abatement owed to, or expected by, Tenant pursuant to any tax
abatement agreement to which Tenant is a party. To the extent that
any retroactive tax liability arises pursuant to any tax abatement
agreement to which Tenant is a party, Tenant shall be and remain
liable for such retroactive liability, regardless of whether said
liability relates to a period of time or accrued prior to, or
following, the Commencement Date. Notwithstanding the foregoing or
anything to the contrary herein, Tenant shall be entitled to the
benefits of all existing and future reduction or abatement of Taxes
to the extent such reductions and abatements are granted by the
applicable taxing authority and relate to the Term.
3.1.2.2. Tenant
shall have the right to contest the amount or validity, in whole or
in part, of any 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 payment, whether under protest or
otherwise, of any amounts required by applicable law to stay or
prevent collection activities). No additional deposit shall be
payable to Landlord in connection with any contest. If Tenant
elects to initiate any proceeding referred to in this Section
3.1.2.2 , Tenant shall promptly so advise Landlord, but
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 sole 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
attorneys’ fees) or any liability in connection with any such
proceeding initiated by Tenant. No such contest initiated by Tenant
shall subject Landlord to any civil liability or the risk of any
criminal liability or forfeiture.
3.1.3.
Operating Year . The term “ Operating
Year ” shall mean the calendar year commencing January
1st of each year during the Term. The first Operating Year under
this Lease shall begin on January 1, 2007 and end on December 31,
2007.
3.2.
Payment of Operating Expenses . Tenant shall directly
pay, on a timely basis and to the appropriate entity, all Operating
Expenses and Taxes.
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4.
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USE OF PREMISES AND COMMON
AREAS .
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4.1.
Use of Premises . The Premises shall be used by the
Tenant for the purpose(s) set forth in Section 1.7 above and
for no other purpose whatsoever. Tenant shall not, at any time, use
or occupy, or suffer or permit anyone to use or occupy, the
Premises, or do or permit anything to be done in the Premises, in
any manner that may (a) violate any Certificate of Occupancy for
the Premises; (b) cause, or be likely to cause, injury to, or in
any way impair the value or proper utilization of, all or any
portion of the Premises (including, but not limited to, the
structural elements of the Premises); (c) constitute a violation of
the laws and requirements of any public authority or the
requirements of insurance bodies, or any covenant, condition or
restriction affecting the Premises; (d) exceed the load bearing
capacity of the floor of the Premises; (e) materially impair the
appearance of
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the Premises; or (f) have any
detrimental environmental effect on the Premises which (i) arises
out of a violation or violations of Environmental Laws or (ii)
results in any material increased risk of liability to Landlord. On
or prior to the date hereof, Tenant has completed and delivered for
the benefit of Landlord a “Tenant Operations Inquiry
Form” in the form attached hereto as Exhibit B
describing the nature of Tenant’s proposed business
operations at the Premises, which form is intended to, and shall
be, relied upon by Landlord. From time to time during the Term (but
no more often than once in any twelve month period unless Tenant is
in default hereunder beyond applicable notice and cure periods or
unless Tenant assigns this Lease or subleases all or any portion of
the Premises, whether or not in accordance with Section 8) ,
Tenant shall provide an updated and current Tenant Operations
Inquiry Form within twenty (20) days after Landlord’s request
therefor.
4.2.
Signage . Any and all signage must at all times fully
comply with all applicable laws, regulations and ordinances. Tenant
shall remove all signs of Tenant upon the expiration or earlier
termination of this Lease and immediately repair any damage to the
Premises caused by, or resulting from, such removal.
4.3.
Liens . During the Term, Tenant will promptly, but no
later than forty-five (45) days after the date Tenant first has
knowledge of the filing thereof, or such shorter period as shall
prevent the forfeiture of the Premises, remove and discharge of
record, by bond or otherwise, any charge, lien, security interest
or encumbrance upon any of the Premises, Base Rent and Additional
Rent which charge, lien, security interest or encumbrance arises
for any reason (other than a result of Landlord’s act),
including, but not limited to, all liens that arise out of the
possession, use, occupancy, construction, repair or rebuilding of
the Premises or by reason of labor or materials furnished, or
claimed to have been furnished, to Tenant for the Premises, but not
including any encumbrances expressly permitted under this Lease or
any mechanics liens created by Landlord. Nothing contained in this
Lease shall be construed as constituting the consent or request of
Landlord, express or implied, by inference or otherwise, to or for
the performance of any contractor, laborer, materialman, or vendor
of any labor or services or for the furnishing of any materials for
any construction, alteration, addition, repair or demolition of or
to the Premises or any part thereof. Notice is hereby given that,
during the Term, Landlord will not be liable for any labor,
services or materials furnished or to be furnished to Tenant, or to
anyone holding an interest in the Premises or any part thereof
through or under Tenant, and that no mechanics or other liens for
any such labor, services or materials shall attach to or affect the
interest of Landlord in and to the Premises, unless such labor,
services or materials were placed in the Premises pursuant to a
written agreement entered into by Landlord. In the event of the
failure of Tenant to discharge any charge, lien, security interest
or encumbrances as aforesaid, Landlord may, if not discharged by
Tenant within ten (10) business days after written notice to
Tenant, discharge such items by payment or bond or both, and
Section 23.4 hereof shall apply. Provided Tenant is
diligently contesting any such lien or encumbrance in accordance
with applicable law, in lieu of a bond Tenant shall have the option
to deposit cash (or an irrevocable, standby letter of credit in
form reasonably acceptable to Landlord) with Landlord in an amount
sufficient to fully discharge such lien or encumbrance (as
reasonably determined by Landlord, the “ Lien Deposit
”), which Lien Deposit may be used by Landlord to discharge,
settle or otherwise satisfy the applicable lien or encumbrance at
any time after the commencement of foreclosure proceedings or
before forfeiture of the Premises or any portion
thereof.
5.
CONDITION AND DELIVERY OF PREMISES . Tenant agrees
that Tenant (or an affiliate thereof) is the former owner of the
Premises; as a result, Tenant is familiar with the
condition
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of the Premises, and Tenant hereby
accepts the foregoing on an “AS-IS,”
“WHERE-IS” basis. Tenant acknowledges that neither
Landlord nor Agent, nor any representative of Landlord, has made
any representation as to the condition of the foregoing or the
suitability of the foregoing for Tenant’s intended use.
Tenant represents and warrants that Tenant has made its own
inspection of the foregoing. Neither Landlord nor Agent shall be
obligated to make any repairs, replacements or improvements
(whether structural or otherwise) of any kind or nature to the
foregoing in connection with, or in consideration of, this
Lease.
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6.
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SUBORDINATION; ESTOPPEL
CERTIFICATES; ATTORNMENT .
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6.1.
Subordination and Attornment . This Lease is and
shall be subject and subordinate at all times to (a) all ground
leases or underlying leases that may now exist or hereafter be
executed affecting the Premises and (b) any mortgage or deed of
trust that may now exist or hereafter be placed upon, and encumber,
any or all of (x) the Premises; (y) any ground leases or underlying
leases for the benefit of the Premises; and (z) all or any portion
of Landlord’s interest or estate in any of said items;
provided, however, that the foregoing provision shall only be
applicable with respect to those mortgages, deeds of trust, and
leases as to which Tenant has been provided a reasonable, normal
and customary Subordination, Non Disturbance and Attornment
Agreement (the “ SNDA ”). No SNDA shall impose
any economic obligations on Tenant in addition to those economic
obligations imposed under this Lease, nor may any SNDA require any
change in, or modification of, this Lease that shall impose any
obligation or responsibility on Tenant. Tenant shall join with any
such lessor, mortgagee or trustee and execute promptly (and, in any
event, within ten (10) business days after receipt of a written
request therefor) an SNDA.
6.2.
Estoppel Certificate . Tenant agrees, from time to
time and within 10 business days after request by the Landlord, to
deliver to the Landlord, or the Landlord’s designee, an
estoppel certificate in reasonable, normal and customary form, as
requested by Landlord, with such modifications as may be necessary
to make such certificate factually accurate. Failure by Tenant to
timely execute and deliver such certificate shall automatically
constitute an acceptance of the Premises and acknowledgment by
Tenant that the statements included therein are true and correct
without exception.
6.3.
Transfer by Landlord . In the event of a sale or
conveyance by Landlord of the Premises, the same shall operate to
release Landlord from any future liability for any of the covenants
or conditions, express or implied, herein contained in favor of
Tenant, and in such event Tenant agrees to look solely to
Landlord’s successor in interest (“ Successor
Landlord ”) with respect thereto and agrees to attorn to
such successor.
7.
QUIET ENJOYMENT; COVENANTS OF LANDLORD . Subject to
the provisions of this Lease, so long as Tenant pays all of the
Rent and performs all of its other obligations hereunder, subject
to applicable notice and cure periods and the other provisions
hereof, Tenant shall not be disturbed in its possession of the
Premises by Landlord, Agent, Successor Landlord or any other person
lawfully claiming through or under Landlord. Landlord hereby
covenants and agrees not to subdivide the Premises, construct
additional improvements thereon, or add on to the Building without
the prior written consent of Tenant, which may be granted or
withheld in Tenant’s sole discretion.
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8.
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ASSIGNMENT AND SUBLETTING;
LEASEHOLD MORTGAGE .
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8.1.
Prohibition . Tenant acknowledges that this Lease and
the Rent due under this Lease have been agreed to by Landlord in
reliance upon Tenant’s reputation and creditworthiness and
upon the continued operation of the Premises by Tenant for the
particular use set forth in Section 1.7 above; therefore,
Tenant shall not, whether voluntarily, or by operation of law, or
otherwise: (a) assign or otherwise transfer this Lease; (b) sublet
the Premises or any part thereof, other than subleases to any party
controlling, controlled by or under common control with Tenant, or
allow the same to be used or occupied by anyone other than Tenant
(or any other party controlling, controlled by or under common
control with Tenant); or (c) mortgage, pledge, encumber, or
otherwise hypothecate this Lease or the Premises, or any part
thereof, in any manner whatsoever, without in each instance
obtaining the prior written consent of Landlord, which consent as
to assignments and subleases shall not be unreasonably withheld,
conditioned or delayed, and as to mortgages and other matters
described in clause (c) above may be given or withheld in
Landlord’s sole, but reasonable, discretion. Any purported
assignment, mortgage, transfer, pledge or sublease made without the
prior written consent of Landlord shall be absolutely null and
void. No assignment of this Lease shall be effective and valid
unless and until the assignee executes and delivers to Landlord any
and all documentation reasonably required by Landlord in order to
evidence assignee’s assumption of all obligations of Tenant
hereunder. Any consent by Landlord to a particular assignment,
sublease or mortgage shall not constitute consent or approval of
any subsequent assignment, sublease or mortgage, and
Landlord’s written approval shall be required in all such
instances. No consent by Landlord to any assignment or sublease
shall be deemed to release Tenant from its obligations hereunder
and Tenant shall remain fully liable for performance of all
obligations under this Lease.
8.2.
Rights of Landlord . If this Lease is assigned, or if
the Premises (or any part thereof) are sublet or used or occupied
by anyone other than Tenant, whether or not in violation of this
Lease, Landlord or Agent may (without prejudice to, or waiver of
its rights), after default by Tenant under this Lease which
continues beyond applicable notice and cure periods, collect Rent
from the assignee or, from the subtenant or occupant, and all
amounts so collected shall be credited to any amounts due from
Tenant hereunder.
8.3.
Permitted Transfers . Notwithstanding anything in
this Section 8 to the contrary, Tenant shall have the right,
without Landlord’s consent and without causing a default of
Tenant under this Lease, to assign this Lease to any parent entity
or wholly-owned or substantially wholly-owned direct or indirect
subsidiary entity of Tenant or Guarantor, in each of which events
Tenant shall give prompt written notice of such fact to Landlord
and, further, Tenant shall remain fully liable for performance of
all obligations and liabilities under this Lease and the assignee
shall be automatically deemed to have assumed all of Tenant’s
obligations and liabilities under this Lease for the benefit of
Landlord. Tenant may also assign this Lease, without
Landlord’s consent and without causing a default hereunder to
any entity acquiring a majority of the voting stock of Tenant, or
to any other change in voting control of Tenant (if Tenant is a
corporation), or to a transfer of a majority (i.e., greater than
50% interest) of the general partnership or membership interests in
Tenant (if Tenant is a partnership or a limited liability company)
or managerial control of Tenant, or to any comparable transaction
involving any other form of business entity, whether effectuated in
one (1) or more transactions; or to any entity in connection with
the sale of substantially all the Tenant’s assets (where such
sale of assets is for a bona fide business purpose and not
primarily to transfer Tenant’s interest in this Lease), and,
in the case of a sale of all or substantially all of Tenant assets
only, Tenant shall no
12
longer be liable for the obligations
under this Lease arising from and after the date of transfer (such
assigning Tenant remaining liable for all obligations arising prior
to the date of transfer), provided, in any of such events, the
successor to Tenant (or any party remaining liable for the
obligations of
