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Title: |
Property Lease |
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2002 |
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192KB total |
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$59 |
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#375264 |
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PROPERTY LEASE
SCHULER INCORPORATED, LANDLORD
QUALITY PRODUCTS, INC., TENANT
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TABLE OF CONTENTS
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1. Basic Definitions.......................................................................................................7
1.1 Premises....................................................................................................7
1.2 Term........................................................................................................7
1.3 Base Rent...................................................................................................7
1.4 Agreed Use..................................................................................................8
1.5 Exhibits....................................................................................................8
2. Grant of Lease..........................................................................................................8
2.1 Letting.....................................................................................................8
2.2 Condition...................................................................................................8
2.3 Environmental Assessments..................................................................................10
2.4 TENANT'S Engineering Inspection............................................................................11
3. Term ...........................................................................................................12
3.1 Term.......................................................................................................12
3.2 Delay In Possession........................................................................................12
3.3 TENANT Compliance..........................................................................................12
3.4 Term Extension or Renewal..................................................................................12
4. Rent ...........................................................................................................12
4.1 Rent Defined...............................................................................................12
4.2 Payment....................................................................................................12
5. (blank) ...........................................................................................................13
6. Use ...........................................................................................................13
6.1 Use........................................................................................................13
6.2 Certain Capital Expenditures...............................................................................14
6.3 Environmental Matters......................................................................................14
6.3.1 Definitions..........................................................................................14
6.3.1.1 Hazardous Material.........................................................................14
6.3.1.2 Environmental Requirements.................................................................15
6.3.1.3 Environmental Damages......................................................................15
6.3.2 TENANT'S Obligation to Indemnify, Defend and Hold Harmless...........................................16
6.3.3 TENANT'S Obligation to Remediate.....................................................................17
6.3.4 Notification.........................................................................................18
6.3.5 Negative Covenants...................................................................................18
6.3.5.1 No Hazardous Material on Premises..........................................................18
6.3.5.2 No Violations of Environmental Requirements................................................18
6.3.5.3 No Environmental or Other Liens............................................................19
6.3.6 LANDLORD'S Right to Inspect and to Audit TENANT'S Records............................................19
{/Table}
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6.3.7 LANDLORD'S Right to Remediate........................................................................19
6.3.8 LANDLORD'S Obligation to Remediate...................................................................19
6.3.9 LANDLORD'S Obligation to Indemnify, Defend and Hold Harmless Concerning Environmental Matters........20
6.3.10 Survival of Environmental Obligations..............................................................20
6.4 TENANT'S Compliance with Applicable Requirements...........................................................20
6.5 Inspection; Compliance.....................................................................................21
7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations............................................21
7.1 TENANT'S Obligations.......................................................................................21
(a) In General.............................................................................................21
(b) Service Contracts......................................................................................22
(c) Failure to Perform.....................................................................................22
7.2 LANDLORD'S Obligations.....................................................................................22
7.3 Utility Installations; Trade Fixtures; Alterations.........................................................22
(a) Definitions............................................................................................22
(b) Consent................................................................................................23
(c) Liens; Bonds...........................................................................................23
7.4 Ownership; Removal; Surrender; and Restoration.............................................................24
(a) Ownership..............................................................................................24
(b) Removal................................................................................................24
(c) Surrender; Restoration.................................................................................24
8. Insurance; Indemnity...................................................................................................25
8.1 Payment For Insurance......................................................................................25
8.2 Liability Insurance........................................................................................25
(a) Carried By TENANT......................................................................................25
(b) Carried By LANDLORD....................................................................................26
8.3 Property Insurance-Building, Improvements and Rental Value.................................................26
(a) Building and Improvements..............................................................................26
(b) Rental Value...........................................................................................26
8.4 TENANT'S Property; Business Interruption Insurance; Other Coverage.........................................27
(a) Property Damage........................................................................................27
(b) Business Interruption..................................................................................27
(c) Worker's Compensation Coverage.........................................................................27
(d) Additional Coverage....................................................................................27
(e) No Representation of Adequate Coverage.................................................................27
8.5 Insurance Policies.........................................................................................27
8.6 Waiver of Subrogation......................................................................................28
8.7 Indemnity..................................................................................................28
8.8 Exemption of LANDLORD from Liability.......................................................................29
9. Damage or Destruction..................................................................................................29
9.1 Definitions................................................................................................29
(a) Premises Partial Damage................................................................................29
{/Table}
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(b) Premises Total Destruction.............................................................................29
(c) Insured Loss...........................................................................................29
(d) Replacement Cost.......................................................................................30
(e) Hazardous Material Condition...........................................................................30
9.2 Partial Damage-Insured Loss................................................................................30
9.3 Partial Damage-Uninsured Loss..............................................................................30
9.4 Total Destruction..........................................................................................31
9.5 Damage Near End of Term....................................................................................31
9.6 Abatement of Rent; TENANT'S Remedies.......................................................................31
(a) Abatement..............................................................................................31
(b) Remedies...............................................................................................32
9.7 Termination; Advance Payments..............................................................................32
9.8 Waive Statutes.............................................................................................32
9.9 Termination of Lease by Mortgage Holder's Election.........................................................32
10. Property Taxes.....................................................................................................32
10.1 Definition.................................................................................................32
10.2 Payment of Taxes...........................................................................................33
10.3 Joint Assessment...........................................................................................34
10.4 Personal Property Taxes Regarding TENANT'S Property........................................................34
10.5 Taxes on LANDLORD'S Personal Property......................................................................34
10.6 Survival of Property Tax Provisions........................................................................34
11. Utilities and Services................................................................................................34
12. Assignment and Subletting.............................................................................................35
12.1 LANDLORD'S Consent Required........................................................................................35
12.2 Terms and Conditions Applicable to Assignment and Subletting...............................................35
12.3 Additional Terms and Conditions Applicable to Subletting...................................................36
13. Default; Remedies.....................................................................................................37
13.1 Default....................................................................................................37
13.2 Remedies...................................................................................................38
13.3 Late Charges...............................................................................................39
13.4 Interest...................................................................................................40
13.5 Breach by LANDLORD.........................................................................................40
(a) Notice of Breach.......................................................................................40
(b) Performance by TENANT on Behalf of LANDLORD............................................................40
14. Condemnation..........................................................................................................40
15. Representations and Indemnities of Broker Relationships...............................................................41
16. Estoppel Certificate..................................................................................................41
{/Table}
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17. Definition of LANDLORD...............................................................................................42
18. Severability.........................................................................................................42
19. Days ...........................................................................................................42
20. Limitation on Liability..............................................................................................42
21. Time of Essence......................................................................................................42
22. No Prior or Other Agreements.........................................................................................42
23. Notices ...........................................................................................................42
23.1 Notice Requirements........................................................................................42
23.2 Date of Notice.............................................................................................43
24. Waivers ...........................................................................................................43
25. Survival of Obligations..............................................................................................43
26. No Right To Holdover.................................................................................................43
27. Cumulative Remedies..................................................................................................44
28. Covenants and Conditions; Construction of Agreement..................................................................44
29. Binding Effect; Choice of Law........................................................................................44
30. Subordination; Attornment; Non-Disturbance...........................................................................44
30.1 Subordination..............................................................................................44
30.2 Attornment.................................................................................................44
30.3 Non-Disturbance............................................................................................45
30.4 Self-Executing.............................................................................................45
31. Attorneys Fees.......................................................................................................45
32. LANDLORD'S Access; Showing Premises; Repairs.........................................................................45
33. Auctions ...........................................................................................................46
34. Signs ...........................................................................................................46
35. Termination; Merger..................................................................................................46
36. Consents ...........................................................................................................46
{/Table}
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37. (blank) ...........................................................................................................46
38. Quiet Possession......................................................................................................47
39. (blank) ...........................................................................................................47
40. (blank) ...........................................................................................................47
41. Security Measures.....................................................................................................47
42. Reservations..........................................................................................................47
43. Performance Under Protest.............................................................................................47
44. Authority; Multiple Parties; Execution................................................................................47
45. Conflict ...........................................................................................................48
46. Not An Offer..........................................................................................................48
47. Amendments............................................................................................................48
48. Waiver of Jury Trial..................................................................................................48
49. (blank) ...........................................................................................................48
50. Americans with Disabilities Act.......................................................................................48
51. TENANT'S Right to Purchase............................................................................................48
51.1 LANDLORD Must Offer Premises to TENANT.....................................................................48
51.2 No Right if Default, Assignment, or Sublet.................................................................49
51.3 TENANT'S Obligation if Right Exercised.....................................................................49
51.4 Certain Transfers Excluded.................................................................................49
51.5 TENANT Reject Rights.......................................................................................49
51.6 TENANT Gets Additional Right of First Offer................................................................50
51.7 Right Terminates After Sale to Third Party.................................................................50
51.8 Definitions................................................................................................50
51.9 Termination of Lease.......................................................................................50
51.10 Termination of Evidence....................................................................................50
52. Net Lease.............................................................................................................50
53. Recording.............................................................................................................50
54. TENANT'S Option to Purchase Certain Personal Property.................................................................51
{/Table}
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55. Security Interest.....................................................................................................51
55.1 Option Personal Property Security Interest.................................................................51
55.2 Other Personal Property Security Interest..................................................................52
56. Power of Attorney.....................................................................................................52
{/Table}
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PROPERTY LEASE
(WITH RIGHT OF REFUSAL TO PURCHASE)
THIS PROPERTY LEASE ("Lease") is entered into this 24th day of May,
2002, by Schuler Incorporated, an Ohio corporation ("LANDLORD") and Quality
Products, Inc., a Delaware corporation ("TENANT"). (LANDLORD and TENANT are
sometimes referred to herein collectively as the "Parties," or individually as a
"Party".)
In consideration of the covenants, terms, conditions, agreements, and
payments as hereinafter set forth, the parties hereto agree as follows:
1. BASIC DEFINITIONS.
The following terms used in this Lease have the indicated meanings:
1.1 PREMISES. That certain real property, including the land and the
building and other improvements, and any fixtures, equipment and facilities
located therein or thereon as of the Commencement Date which are utilized or
necessary in connection with the operation of the building located on said land
including, for example, heating, ventilating and air conditioning systems
("HVAC"), plumbing, electrical, lighting facilities, boilers, pressure vessels,
and fire protection systems, said premises being commonly known as 2222 South
Third Street, Columbus, Ohio 43207, and being located in the County of Franklin
and State of Ohio, and further described in Exhibit 1.1(A) attached hereto and
incorporated herein, plus certain additional property specifically identified in
Exhibit 1.1(B) ("Personal Property"). The Parties acknowledge and agree that the
Premises will not include the equipment and machinery that is being leased by
LANDLORD to TENANT pursuant to that certain separate Lease Agreement between
LANDLORD and TENANT and dated of even date herewith and also will not include
certain property that is specifically marked or designated by LANDLORD as being
excluded.
1.2 TERM. The period of five (5) years commencing August 1, 2002
("Commencement Date") and ending July 31, 2007 ("Expiration Date") unless
postponed, accelerated or extended as hereinafter provided (sometimes referred
to herein as "Term" or "term"). (See also Paragraph 3)
1.3 BASE RENT. The Base Rent for the full initial five (5) year Term
of this Lease shall be $800,000.00 which shall be payable in monthly
installments of $13,333.33 each, without demand, in advance, and due on the 1st
day of each month during the term hereof, commencing August 1, 2002, except that
the monthly installment of Base Rent due July 1, 2007 shall be $13,333.53. (See
also Paragraph 4)
The Parties hereby agree that the portion of the Base Rent that is
allocable to that portion of the Personal Property, the leasing of which under
this Lease is taxable for sales tax purposes,
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is $6,000.00 for the initial five (5) year Term of this Lease, or $100.00 per
month. (TENANT shall provide to LANDLORD not later than when this Lease is
executed by the Parties and at such other times as LANDLORD may require, a duly
completed sales tax unit exemption certificate(s) for any Personal Property, the
rental of which pursuant to this Lease qualifies for exemption from sales tax.)
1.4 AGREED USE: Manufacturing purposes, distribution and related
office uses. (See also Paragraph 6)
1.5 EXHIBITS. The attachments referred to in this Lease, all of
which constitute a part of this Lease, which include the following:
(a) Exhibit 1.1(A)-Premises Legal Description
(b) Exhibit l.1(B)-List of Personal Property
(c) Exhibit 53-Memorandum of Lease
(d) Exhibit 54-Option Personal Property
2. GRANT OF LEASE
2.1 LETTING. LANDLORD hereby leases to TENANT, and TENANT hereby
leases from LANDLORD, the Premises for the Term, at the rental, and upon all the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may have
been used in calculating Rent (hereinafter defined), is an approximation which
the Parties agree is reasonable and any payments based thereon are not subject
to revision whether or not the actual size is more or less.
2.2 CONDITION. Subject to the terms of Section 2.3 and 2.4 below,
TENANT acknowledges and agrees that: (a) it has been advised by LANDLORD to
satisfy itself with respect to the condition of the Premises (including but not
limited to the structure, roof, electrical, HVAC and fire sprinkler systems,
security, and environmental aspects) and compliance by the Premises with the
building codes, applicable law (including, for example, the Americans with
Disabilities Act), covenants, conditions, easements, restrictions and other
matters of record, regulations, and ordinances (collectively, "Applicable
Requirements") and their suitability for TENANT'S intended use, (b) TENANT has
made such investigation as it deems necessary with reference to such matters and
assumes all responsibility therefor as the same relate to its occupancy of the
Premises, except as otherwise provided in this Lease, and (c) neither LANDLORD
nor LANDLORD'S agents have made any oral or written representations or
warranties with respect to said matters other than as set forth in this Lease.
TENANT acknowledges and agrees that except to the extent specifically provided
otherwise in this Lease, TENANT accepts the Premises, including but not limited
to the land, buildings, improvements, fixtures and any other property that
comprises the Premises, in their condition, "AS IS," WITH ALL FAULTS as of the
Commencement Date or the date possession of the Premises is actually delivered
to TENANT, whichever date is later.
8
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IN ADDITION, EXCEPT AS SET FORTH BELOW IN THIS PARAGRAPH 2.2, LANDLORD MAKES NO
WARRANTY OR REPRESENTATION (EITHER EXPRESS OR IMPLIED) TO TENANT AS TO THE
FITNESS FOR A PARTICULAR PURPOSE, QUALITY, DESIGN, CONDITION, CAPACITY, SAFETY,
SUITABILITY, MERCHANTABILITY OR PERFORMANCE OF THE PERSONAL PROPERTY (INCLUDING
ITS CONFORMITY WITH APPLICABLE LAW AND REGULATIONS), TITLE TO THE PERSONAL
PROPERTY, OR ANY OTHER MATTER WHATSOEVER. TENANT AGREES THAT THE PERSONAL
PROPERTY IS LEASED "AS IS" AND "WHERE IS" AND THAT ALL RISKS REGARDING THE
PERSONAL PROPERTY ARE TO BE BORNE SOLELY BY TENANT INCLUDING, WITHOUT
LIMITATION, ANY LOSSES OR DAMAGES DUE TO ACTS OF GOD, STRIKES, GOVERNMENTAL
ACTION OR OBSOLESCENCE. LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER
PARTY FOR ANY CLAIM OR MATTER PERTAINING TO THE PERSONAL PROPERTY WHATSOEVER
INCLUDING, WITHOUT LIMITATION, ANY LOSS OR DAMAGE (DIRECT, INDIRECT OR
CONSEQUENTIAL) FROM BUSINESS INTERRUPTION, LOSS OF PROFITS, NONDELIVERY OR LATE
DELIVERY OF THE PERSONAL PROPERTY, IMPROPER INSTALLATION OR DESIGN OF THE
PERSONAL PROPERTY, FAILURE OR IMPROPER OPERATION OF THE PERSONAL PROPERTY,
BREACH OF ANY WARRANTY OR REPRESENTATION MADE BY THE MANUFACTURER OF THE
PERSONAL PROPERTY, OR ANY INJURY TO PERSONS OR PROPERTY. LANDLORD IS NOT A
MANUFACTURER OR SUPPLIER OF, NOR DOES LANDLORD ENDORSE, ANY ITEM OF THE PROPERTY
INCLUDED IN THE PREMISES, AND LANDLORD IS NOT BOUND BY ANY PROMISES MADE BY ANY
MANUFACTURER, SUPPLIER, OR DISTRIBUTOR OF THE PROPERTY INCLUDED IN THE PREMISES.
LANDLORD IS NOT OBLIGED TO ENFORCE WARRANTIES AND LICENSES MADE BY THE
MANUFACTURER OF THE PROPERTY INCLUDED IN THE PREMISES.
To the extent assignable by LANDLORD, all warranties and licenses made
by the manufacturer of the Personal Property are hereby assigned to TENANT for
the lease term. At TENANT'S sole expense and in TENANT'S own name only, LANDLORD
hereby authorizes TENANT to enforce any such warranties or licenses made with
respect to the Personal Property upon written notice to LANDLORD; and LANDLORD
is under no obligation to enforce any warranties or license regarding the
Personal Property. Notwithstanding the foregoing, TENANT shall not commence any
legal proceedings to enforce any warranty or license except upon the prior
written consent of LANDLORD (which consent shall not be unreasonably withheld).
LANDLORD makes no representations or warranties as to the existence, sufficiency
or enforceability of any warranties or licenses regarding the Personal Property;
and TENANT'S sole remedy for any defect in or nonconformity of the Personal
Property is against the manufacturer thereof.
LANDLORD represents and warrants to TENANT that, as of the date of this
Lease, the Premises are zoned "M-manufacturing", as such term is defined in the
City of Columbus Zoning Code.
9
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2.3 ENVIRONMENTAL ASSESSMENTS.
(a) LANDLORD, at LANDLORD'S expense, will cause to be
conducted before the Commencement Date an environmental site assessment of the
Premises ("Initial Baseline Assessment") by a qualified environmental
engineering consulting firm to test for the presence of such Hazardous Materials
(as defined in Paragraph 6.3.1.1 hereof) as LANDLORD may select in the soil or
groundwater on and under the Premises. A copy of the report setting forth the
results of the Initial Baseline Assessment will be provided to TENANT before the
Commencement Date, and shall name TENANT as a beneficiary thereof. If the
Initial Baseline Assessment reveals the presence of Hazardous Materials,
LANDLORD may conduct such additional testing, studies, and investigations
("Additional Baseline Assessments") as LANDLORD reasonably deems necessary, and
will provide a copy of the report setting forth the results of the Additional
Baseline Assessments to TENANT before the Commencement Date. If the Initial
Baseline Assessment or the Additional Baseline Assessments are unacceptable to
TENANT or LANDLORD, either party may give written notice of termination of this
Lease to the other party before the Commencement Date. If neither party
terminates this Lease under this paragraph, then this Lease shall continue in
force and effect. (The Initial Baseline Assessment and Additional Baseline
Assessments are sometimes collectively referred to herein as the "Baseline
Assessments.")
(b) At such time as LANDLORD directs, but not earlier than
6 months prior to the end of the Term of this Lease and not later than 30 days
after the end of the Term of this Lease, TENANT, at its expense, will cause to
be conducted a final environmental site assessment of the Premises ("Initial
Final Assessment") to determine the environmental condition of the Premises.
Said assessment shall include such investigations as are acceptable to LANDLORD
in the exercise of its commercially reasonable discretion, and shall be
conducted by an environmental consulting firm reasonably acceptable to LANDLORD.
TENANT shall give LANDLORD ten (10) days written notice before performing any
such tests so that LANDLORD may have the opportunity to be present and to split
test samples.
If the Initial Final Assessment reveals the presence of additional
Hazardous Materials or Hazardous Materials in concentrations greater than were
found in the Baseline Assessments, TENANT, at TENANT'S expense, will conduct
such additional testing, studies, and investigations ("Additional Final
Assessments") as LANDLORD reasonably deems necessary, and will provide a copy of
the report setting forth the results of the Additional Final Assessments to
LANDLORD. If the Initial Final Assessment or Additional Final Assessments
disclose any Hazardous Material that was not disclosed by the Baseline
Assessments or if they disclose higher concentrations of Hazardous Materials
than were found in the Baseline Assessments, then TENANT shall remediate the
Premises in accordance with Paragraph 6.3 hereof. (The Initial Final Assessment
and Additional Final Assessments are sometimes collectively referred to herein
as the "Final Assessments".) Any tests by or for TENANT shall be conducted in a
manner so as not to permanently or materially damage the Premises or interfere
with LANDLORD'S use of or operations on the Premises. If any damage is caused to
the Premises, TENANT shall immediately repair and restore the Premises to their
former condition. TENANT shall be responsible to LANDLORD for and, in addition
to and not in limitation of any other
10
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indemnification and other obligations of TENANT under this Lease, shall
indemnify, defend, and hold harmless LANDLORD its successors and assigns, from
and against any and all losses, claims, damages, liabilities and causes of
action for personal injury or property damage or loss to persons or property
(including reasonable attorneys fees) arising from such entry, use, or occupancy
of the Premises. This indemnity shall survive any termination of this Lease.
TENANT shall furnish LANDLORD with a copy of each report setting forth the
results of any test performed by or for TENANT within ten (10) days after
receipt. TENANT shall not submit a copy of any such report to any governmental
agency unless specifically required by applicable law; and if so required,
TENANT shall simultaneously provide to LANDLORD a copy of any information
submitted to such agency.
(c) Unless LANDLORD specifically and expressly otherwise
agrees in writing, TENANT agrees that all information regarding the Premises
made available to it by LANDLORD or LANDLORD'S agents or representatives or
discovered by TENANT in the course of the performance of the inspections and/or
any environmental site assessment referred to in this Lease is confidential and
shall not be disclosed to any other person without LANDLORD'S prior written
consent absent court subpoena to the contrary. The provisions of this Paragraph
2.3 shall survive any termination of the Term of this Lease.
2.4 TENANT'S ENGINEERING INSPECTION. Within thirty (30) days after
the date of this Lease, TENANT, at its own expense and after giving reasonable
notice to LANDLORD, shall have the right to cause an engineering inspection of
the Premises to be conducted by a qualified engineer(s) licensed in Ohio (the
"Engineer"), TENANT shall cause the Engineer to promptly submit a detailed
written report to LANDLORD which shall detail any reasonable repairs which
TENANT believes should be made to the Premises for them to be considered in
condition reasonably satisfactory to TENANT for its Agreed Use of the Premises.
LANDLORD shall have the right, but not the obligation, to repair such defects.
If LANDLORD elects not to perform such repairs, or fails to substantially
complete such repairs to TENANT'S reasonable satisfaction prior to the
Commencement Date, TENANT shall, by the Commencement Date, as its sole remedy,
either elect to (a) terminate this Lease, or (b) accept the Premises in their
existing condition, without any reduction in the Rent, and the Lease shall
continue in force and effect. Such access shall be for the limited purpose of
conducting such inspection and shall be otherwise governed by the terms,
conditions, and requirements of this Lease (including, but not limited to, the
indemnity and insurance requirements of TENANT hereunder), excepting the
obligation to pay Rent until the occurrence of the Commencement Date.
Prior to TENANT obtaining any access to the Premises for purposes of its
inspection under this Paragraph 2.4, TENANT shall have delivered to LANDLORD
certificates of insurance in form and content reasonably acceptable to LANDLORD
or certified copies of policies of such insurance, all in accordance with
Paragraph 8.5 hereof, confirming that TENANT has in force the insurance required
by Paragraph 8.2(a) of this Lease. TENANT'S or its agents' entry into the
Premises prior to the Commencement Date shall be at TENANT'S risk.
TENANT shall use all reasonable efforts to avoid damage to any property.
After all such tests and inspections, TENANT shall promptly restore the Premises
to their condition on the date
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of this Lease including, but not limited to, filling all bored holes, and
TENANT'S agreement to restore the Property shall survive any termination of this
Lease.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Term of this
Lease are as specified in Paragraph 1.2.
3.2 DELAY IN POSSESSION. LANDLORD agrees to use commercially
reasonable efforts to deliver possession of the Premises to TENANT by the
Commencement Date. If, despite said efforts, LANDLORD is unable to deliver
possession by such date, LANDLORD shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease. TENANT shall
not, however, be obligated to pay Rent or perform its other obligations until
LANDLORD delivers possession of the Premises. If possession is not delivered
within 60 days after the Commencement Date, TENANT may, at its option, by notice
in writing within 10 days after the end of such 60 day period, cancel this
Lease, in which event the Parties shall be discharged from all obligations
hereunder, except as otherwise provided herein. If such written notice is not
received by LANDLORD within said 10 day period, TENANT'S right to cancel shall
terminate. If possession of the Premises is not delivered within 120 days after
the Commencement Date, this Lease shall terminate unless other agreements are
reached between LANDLORD and TENANT, in writing.
3.3 TENANT COMPLIANCE. LANDLORD shall not be required to deliver
possession of the Premises to TENANT until TENANT complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such
evidence, TENANT shall be required to perform all of its obligations under this
Lease from and after the Commencement Date, including the payment of Rent.
3.4 TERM EXTENSION OR RENEWAL. Provided TENANT is not in Default
(hereinafter defined) under this Lease, TENANT shall have the right to request,
but not require, the extension or renewal of the Term of this Lease for a period
of five (5) additional years, commencing immediately upon expiration of the
initial Term of this Lease. If TENANT desires to request such extension or
renewal, TENANT shall so notify LANDLORD not later than six (6) months prior to
the end of the initial Term.
4. RENT.
4.1. RENT DEFINED. All monetary obligations of TENANT to LANDLORD
under the terms of this Lease are deemed to be rent ("Rent").
4.2 PAYMENT. TENANT shall cause payment of Rent to be received by
LANDLORD in lawful money of the United States on or before the day on which it
is due, without offset or deduction (except as specifically permitted in this
Lease). TENANT shall pay the Rent to LANDLORD by direct deposit to such account
of LANDLORD as LANDLORD may identify in writing from time to time, or by such
other method or to such other location as LANDLORD
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may from time to time designate in writing. Rent for any period during the Term
hereof which is for less than one full calendar month shall be prorated based
upon the actual number of days of said month. Acceptance of a payment which is
less than the amount then due shall not be a waiver of LANDLORD'S rights to the
balance of such Rent, regardless of LANDLORD'S endorsement of any check so
stating. If any check, draft, or other instrument of payment given by TENANT to
LANDLORD is dishonored for any reason, TENANT agrees to pay to LANDLORD the sum
of $25 in addition to any Late Charge (hereinafter defined) and LANDLORD, at its
option, may require all future payments to be made by TENANT to be by cashier's
check. Payments will be applied first to accrued late charges and attorney's
fees, second to accrued interest, then to Base Rent and any remaining amount to
any other outstanding charges or costs.
5. [Intentionally Left Blank]
6. USE.
6.1 USE. TENANT shall use and occupy the Premises only for the
Agreed Use, and for no other purpose. TENANT shall not use or permit the use of
the Premises in a manner that is unlawful, creates damage, waste or a nuisance,
or that disturbs occupants of or causes damage to neighboring premises or
properties. LANDLORD shall not unreasonably withhold or delay its consent to any
written request for a modification of the Agreed Use, so long as the same will
not impair the structural integrity of the improvements on the Premises or the
mechanical or electrical systems therein, and/or is not significantly burdensome
to the Premises. If LANDLORD elects to withhold consent, LANDLORD shall within 7
days after such request give written notification of same, which notice shall
include an explanation of LANDLORD'S objections to the change in the Agreed Use.
6.1.1 TENANT also agrees as set forth in this Paragraph 6.1.1
regarding the Personal Property and Premises. TENANT shall use the Personal
Property within its recommended capacities and only for the purpose(s) for which
it was designed. TENANT shall comply with all laws, regulations and ordinances
relating to the possession and use of the Personal Property including, without
limitation, job safety, health, fire and environmental laws applicable to the
Personal Property ("Safety Laws"). At TENANT'S expense, TENANT shall maintain
the Personal Property in good repair and working order, and shall promptly
provide all parts, upgrades, modifications, environments and software required
or recommended now and hereafter ("Required Modifications") by the manufacturer
and supplier of the Personal Property ("Manufacturer") at TENANT'S own expense.
LANDLORD shall have no obligation to deliver, install, test, adjust, maintain or
service the Personal Property or provide substitute or replacement Personal
Property; and TENANT shall arrange for and bear the full cost of all such
matters. As used herein, "Manufacturer Requirements" shall include all
servicing, modifications and improvements recommended in any manuals, service
bulletins and other publications from the Manufacturer now or hereafter as
revised or supplemented. During the term hereof, a complete and accurate record
of all maintenance, servicing, Required Modifications and Permitted
Modifications (as defined below) to the Personal Property will be maintained by
TENANT (the "Service Records"), and the originals of such Service Records shall
be LANDLORD'S property.
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Upon request during the term hereof, TENANT shall allow LANDLORD to examine and
copy the Service Records. TENANT shall not move, or permit to be moved, from the
Premises, at time, any of the Personal Property or any other property comprising
the Premises.
Without the prior written consent of LANDLORD and except for Required
Modifications, TENANT shall not make any other modifications, additions or
improvements to the Personal Property unless such modifications do not: (i)
impair the originally intended function, capabilities, specifications and
performance of any unit of Personal Property; (ii) impair any maintenance
agreement(s), warranties or licenses with respect to any unit of Personal
Property; (iii) violate any Manufacturer Requirements; (iv) adversely affect the
Personal Property's resale value; or (v) cause any damage to any unit of
Personal Property upon removal; in each case, as determined by LANDLORD
("Permitted Modifications"). TENANT also grants LANDLORD a right of first
refusal as to the lease of any Permitted Modifications. TENANT shall remove all
Permitted Modifications upon return of the Personal Property without damage to
the Personal Property and so as to cause the Personal Property to comply with
all Safety Laws and with all Manufacturer Requirements then in effect. All
Permitted Modifications and any other accessories attached to the Personal
Property not so removed upon return of the Personal Property shall be deemed the
sole property of LANDLORD.
6.2 CERTAIN CAPITAL EXPENDITURES. If the construction of any
addition to or alteration of the Premises or the remediation of any Hazardous
Material or the reinforcement or other physical modification of any of the
Premises or other capital expenditures ("Capital Expenditure") are triggered by
TENANT as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises, then TENANT shall either: (i)
immediately cease such changed use or intensity of use and/or take such other
steps as may be necessary to eliminate the requirement for such Capital
Expenditure, or (ii) subject to the requirements of Paragraph 7 (Maintenance,
Repairs, Utility Installations; Trade Fixtures and Alterations), complete such
Capital Expenditure at its own expense. TENANT shall not, however, have any
right to terminate this Lease.
6.3 ENVIRONMENTAL MATTERS.
6.3.1 DEFINITIONS.
6.3.1.1 HAZARDOUS MATERIAL. "Hazardous Material" means any
substance:
(a) the presence of which requires investigation, notice or
remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; or
(b) which is or becomes defined as a "hazardous material,"
"hazardous waste," "hazardous substance," "regulated substance,"
"pollutant" or "contaminant" under any federal, state or local
statute, regulation, rule or ordinance or amendments thereto
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. (S)9601 et
seq.), Toxic
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Substances Control Act (15 U.S.C. (S)260l et seq.), and/or the
Resource Conservation and Recovery Act (42 U.S.C. (S)690l et
seq.); or
(c) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and
is or becomes regulated by any governmental authority, agency,
department, commission, board, agency or instrumentality of the
United States, or of the State in which the Premises are located
or any political subdivision thereof; or
(d) the presence of which on the Premises causes or threatens to
cause a nuisance upon the premises or to adjacent properties or
poses or threatens to pose a hazard to the health or safety of
persons on or about the Premises; or
(e) which contains gasoline, diesel fuel or other petroleum
hydrocarbons other than motor vehicle fuel tanks; or
(f) which contains polychlorinated biphenyls (PCBs) in
concentrations above 50 ppm., friable asbestos or unencapsulated
urea formaldehyde foam insulation; or
(g) which contains or is radon gas.
6.3.1.2 ENVIRONMENTAL REQUIREMENTS. "Environmental Requirements"
means all applicable present and future statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises, and similar items of all governmental agencies,
departments, commissions, boards, bureaus, or instrumentalities of the United
States, states and political subdivisions thereof and all applicable judicial,
administrative, and regulatory decrees, judgments, and orders relating to the
protection of human health or the environment, including, without limitation:
(a) All requirements, including but not limited to those
pertaining to reporting, licensing, permitting, investigation,
and remediation of emissions, discharges, releases, or
threatened releases of Hazardous Materials, chemical substances,
pollutants, contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous in nature,
into the air, surface water, groundwater, or land, or relating
to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of chemical
substances, pollutants, contaminants, or hazardous or toxic
substances, materials, or wastes, whether solid, liquid, or
gaseous in nature; and
(b) All requirements pertaining to the protection of the health
and safety of employees or the public.
6.3.1.3 ENVIRONMENTAL DAMAGES. "Environmental Damages" means all
claims, judgments, damages, losses, penalties, fines, liabilities (including
strict liability), encumbrances, liens, costs, and expenses of investigation and
defense of any claim, whether or not such claim is
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ultimately defeated, and of any good faith settlement or judgment, of whatever
kind or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including without limitation reasonable attorneys' fees and
disbursements and consultants' and witnesses' fees, any of which are incurred at
any time as a result of the existence of Hazardous Material upon, about, beneath
the Premises or migrating or threatening to migrate to or from the Premises, or
the existence of a violation of Environmental Requirements pertaining to the
Premises, including without limitation:
(a) Damages for personal injury, or injury to property or
natural resources occurring upon or off of the premises,
foreseeable or unforeseeable, including, without limitation,
lost profits, consequential damages, the cost of demolition and
rebuilding of any improvements on real property, interest and
penalties including but not limited to claims brought by or on
behalf of employees of TENANT;
(b) Fees incurred for the services of attorneys, consultants,
contractors, experts, laboratories and all other costs incurred
in connection with the investigation or remediation of such
Hazardous Materials or violation of Environmental Requirements
including, but not limited to, the preparation of any
feasibility studies or reports or the performance of any
cleanup, remediation, removal, response, abatement, containment,
closure, restoration or monitoring work required by any federal,
state or local governmental agency or political subdivision or
court, or reasonably necessary to make full economic use of the
Premises and any other property in a manner consistent with its
current use or otherwise expended in connection with such
conditions, and including without limitation any attorneys'
fees, costs and expenses incurred in enforcing this agreement or
collecting any sums due hereunder;
(c) Liability to any third person or governmental agency to
indemnify such person or agency for costs expended in connection
with the items referenced herein; and
(d) Diminution in the value of the Premises and adjoining
property, and damages for the loss of business and restriction
on the use of or adverse impact on the marketing of rentable or
usable space or of any amenity of the Premises and adjoining
property.
6.3.2 TENANT'S OBLIGATION TO INDEMNIFY, DEFEND AND HOLD HARMLESS.
TENANT, its successors, and assigns, agree to indemnify, defend, reimburse and
hold harmless the following persons from and against any and all Environmental
Damages arising from activities of TENANT or its employees, agents, contractors,
subcontractors, or guests, licensees, or invitees; or which occurred during the
Term hereof (and were not caused by LANDLORD, its agents, employees,
contractors, subcontractors, guests, licensees, invitees or an Act of God) which
(1) result in the presence of Hazardous Materials upon, about or beneath the
Premises or migrating to or from the Premises, or (2) result in the violation of
any Environmental Requirements pertaining to the Premises and the activities
thereon:
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6.3.2.1 LANDLORD;
6.3.2.2 Any other person who acquires an interest in the
Premises in any manner, including but not limited to purchase at a foreclosure
sale or otherwise; and
6.3.2.3 The directors, officers, shareholders, employees,
partners, agents, contractors, subcontractors, experts, licensees, affiliates,
lessees, mortgagees, trustees, heirs, devisees, successors, assigns, guests and
invitees of such persons. This obligation shall include, but not be limited to,
the burden and expense of the indemnified parties in defending all claims, suits
and administrative proceedings, including attorneys' fees and expert witness and
consulting fees, even if such claims, suits or proceedings are groundless, false
or fraudulent, and conducting all negotiations of any description, and paying
and discharging, when and as they become due, any and all judgments, penalties
or other sums due against such indemnified persons, and all such expenses
incurred in enforcing the obligation to indemnify. TENANT, at its sole expense,
may employ additional counsel of its choice to associate with counsel
representing the indemnified parties.
6.3.3 TENANT'S OBLIGATION TO REMEDIATE. Except as disclosed in the
Baseline Assessments, and notwithstanding the obligation of TENANT to indemnify
LANDLORD pursuant to this agreement, TENANT shall, upon demand of LANDLORD, and
at TENANT'S sole cost and expense, promptly take all reasonable and necessary
actions to remediate the Premises which are reasonably necessary to mitigate
Environmental Damages or to allow full economic use of the Premises, or are
required by Environmental Requirements, which remediation is necessitated by the
(1) introduction of a Hazardous Material upon, about or beneath the premises or
(2) a violation of Environmental Requirements, either of which is caused by the
actions of TENANT, its employees, agents, contractors, subcontractors, guests,
invitees or licensees, or not so caused but arising during the Term hereof and
not caused by LANDLORD, its agents, employees, contractors, subcontractors,
guests, licensees or invitees (unless disclosed in the Baseline Assessments).
Such actions shall include, but not be limited to, the investigation of the
environmental condition of the Premises, the preparation of any feasibility
studies, reports or remedial plans, and the performance of any cleanup,
remediation, containment, operation, maintenance, monitoring or restoration
work, whether on or off of the Premises. Except as disclosed in the Baseline
Assessments, TENANT shall take all actions necessary to restore the Premises in
accordance with applicable environmental regulations and practices to the
condition existing prior to the introduction of Hazardous Material upon, about
or beneath the Premises, or to the standard of remediation allowable under
applicable State and Federal law or governmental policies. All such work shall
be performed by one or more contractors, selected by TENANT and approved in
advance and in writing by LANDLORD in LANDLORD'S reasonable discretion. TENANT
shall proceed continuously and diligently with such investigatory and remedial
actions, provided that in all cases such actions shall be in accordance with all
applicable requirements of governmental entities. Any such actions shall be
performed in a good, safe and workmanlike manner and shall minimize any impact
on the business conducted at the Premises. TENANT shall pay all costs in
connection with such investigatory and remedial activities, including but not
limited to all power and utility costs, and any and all taxes or fees that may
be applicable to such activities. TENANT shall promptly provide to LANDLORD
copies of testing
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results and reports that are generated in connection with the above activities,
and copies of any correspondence with any governmental entity related to such
activities. Unless otherwise required by applicable environmental standards or
governmental authorities, promptly upon completion of such investigation and
remediation, TENANT shall permanently seal or cap all monitoring wells and test
holes to industrial standards in compliance with applicable federal, state and
local laws and regulations, remove all associated equipment, and restore the
Premises to the maximum extent possible, which shall include, without
limitation, the repair of any surface damage, including paving, caused by such
investigation or remediation hereunder. Notwithstanding any of the foregoing or
the provisions of 2.3(b) above, TENANT shall not be obligated to remediate
environmental damages which result from seepage of Hazardous Materials onto the
Premises from adjacent property unless the presence on the adjacent property was
caused by TENANT or its employees, agents, contractors, subcontractors, guests,
invitees or licensees.
6.3.4 NOTIFICATION. If TENANT shall become aware of or receive notice
or other communication concerning any actual, alleged, suspected or threatened
violation of Environmental Requirements, or liability of TENANT for
Environmental Damages in connection with the Premises or past or present
activities of any person thereon, or that any representation set forth in this
agreement is not or is no longer accurate, including but not limited to notice
or other communication concerning any actual or threatened investigation,
inquiry, lawsuit, claim, citation, directive, summons, proceeding, complaint,
notice, order, writ, or injunction, relating thereto, then TENANT shall deliver
to LANDLORD, within ten days of the receipt of such notice or communication by
LANDLORD, a written description of such violation, liability, correcting
information, or actual or threatened event or condition, together with copies of
any such notice or communication. Receipt of such notice shall not be deemed to
create any obligation on the part of LANDLORD to defend or otherwise respond to
any such notification or communication.
6.3.5 NEGATIVE COVENANTS.
6.3.5.1 NO HAZARDOUS MATERIAL ON PREMISES. Except in compliance
with all Environmental Requirements, TENANT shall not cause, permit or suffer
any Hazardous Material to be brought upon, treated, kept, stored, disposed of,
discharged, released, produced, manufactured, generated, refined or used upon,
about or beneath the Premises by TENANT, its agents, employees, contractors,
subcontractors, guests, licensees or invitees, or any other person. TENANT shall
deliver to LANDLORD copies of all documents which TENANT provides to any
governmental body in connection with compliance with Environmental Requirements
with respect to the Premises, such delivery to be contemporaneous with provision
of the documents to the governmental agency.
6.3.5.2 NO VIOLATIONS OF ENVIRONMENTAL REQUIREMENTS. TENANT
shall not knowingly cause, permit or suffer the existence or the commission by
TENANT, its agents, employees, contractors, subcontractors or guests, licensees
or invitees, or by any other person of a violation of any Environmental
Requirements upon, about or beneath the Premises or any portion thereof.
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6.3.5.3 NO ENVIRONMENTAL OR OTHER LIENS. TENANT shall not
create or suffer or permit to exist with respect to the Premises, any lien,
security interest or other charge or encumbrance of any kind, including without
limitation, any lien imposed pursuant to section 107(f) of the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. section 9607(l) or any
similar state statute to the extent that such lien arises out of the actions of
TENANT, its agents, employees, contractors, subcontractors or guests, licensees
or invitees.
6.3.6 LANDLORD'S RIGHT TO INSPECT AND TO AUDIT TENANT'S RECORDS.
LANDLORD, upon notice to TENANT, during normal business hours and in a manner
that does not substantially interfere with TENANT'S ability to operate on the
Premises, shall have the right in its sole and absolute discretion, but not the
duty, to enter and conduct an inspection of the Premises and to inspect and
audit TENANT'S records concerning Hazardous Materials at any reasonable time to
determine whether TENANT is complying with the terms of this Lease, including
but not limited to the compliance of the Premises and the activities thereon
with Environmental Requirements and the existence of Environmental Damages as a
result of the condition of the Premises or surrounding properties and activities
thereon. If LANDLORD has reasonable cause to believe TENANT is in Default with
respect to any of the provisions of this Lease related to Hazardous Materials,
Environmental Requirements or Environmental Damages, then LANDLORD shall have
the right, but not the duty, to retain at the sole expense of TENANT an
independent professional consultant to enter the Premises to conduct such an
inspection and to inspect and audit any public records or reports prepared by or
for TENANT concerning such compliance. TENANT hereby grants to LANDLORD the
right to enter the Premises and to perform such tests on the Premises as are
reasonably necessary in the opinion of LANDLORD to assist in such audits and
investigations. LANDLORD shall use reasonable efforts to minimize interference
with the business of TENANT by such tests inspections and audits, but LANDLORD
shall not be liable for any interference caused thereby.
6.3.7 LANDLORD'S RIGHT TO REMEDIATE. Should TENANT fail to perform or
observe any of its obligations or agreements pertaining to Hazardous Materials
or Environmental Requirements, then LANDLORD shall have the right, but not the
duty, without limitation upon any of the rights of LANDLORD pursuant to this
Lease, upon notice to TENANT, and if reasonably possible, in a manner that does
not substantially interfere with TENANT'S ability to operate on the Premises, to
enter the Premises personally or through its agents, consultants or contractors
and perform the same. TENANT agrees to indemnify LANDLORD for the costs thereof
and liabilities therefrom as set forth in Paragraph 6.3.2. TENANT shall first be
afforded the opportunity to remedy any such default pursuant to the provisions
of Paragraph 13.1 below.
6.3.8 LANDLORD'S OBLIGATION TO REMEDIATE. LANDLORD agrees to remediate
all Environmental Damages (1) caused by LANDLORD, its agents, employees,
contractors, subcontractors, guests, licensees or invitees, or (2) not so caused
but arising prior to the Commencement Date hereof and not caused by TENANT, its
agents, employees, contractors, subcontractors, guests, licensees or invitees.
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6.3.9 LANDLORD'S OBLIGATION TO INDEMNIFY, DEFEND AND HOLD HARMLESS
CONCERNING ENVIRONMENTAL MATTERS. LANDLORD, its successors and assigns, agree to
indemnify, defend, reimburse and hold harmless the following persons from and
against any and all Environmental Damages arising from activities of LANDLORD or
its employees, agents, contractors, subcontractors or guests, licensees,
invitees; or which occurred prior to the Commencement Date (and were not caused
by TENANT, its agents, employees, contractors, subcontractors, guests,
licensees, invitees or an Act of God) which (1) result in the presence of
Hazardous Materials upon, about or beneath the premises or migrating to or from
the Premises, or (2) result in the violation of any Environmental Requirements
pertaining to the Premises and the activities thereon:
6.3.9.1 TENANT;
6.3.9.2 The directors, officers, shareholders, employees,
partners, agents, contractors, subcontractors, experts, licensees, affiliates,
lessees, mortgagees, trustees, heirs, devisees, successors, assigns and invitees
of TENANT.
This obligation shall include, but not be limited to, the burden and
expense of the indemnified parties in defending all claims, suits and
administrative proceedings, including attorneys' fees and expert witness and
consulting fees, even if such claims, suits or proceedings are groundless, false
or fraudulent, and conducting all negotiations of any description, and paying
and discharging, when and as the same become due, any and all judgments,
penalties or other sums due against such indemnified persons, and all such
expenses incurred in enforcing the obligation to indemnify. LANDLORD, at its
sole expense, may employ additional counsel of its choice to associate with
counsel representing TENANT.
6.3.10 SURVIVAL OF ENVIRONMENTAL OBLIGATIONS. The obligations
of LANDLORD and TENANT as set forth in Paragraph 6.3 and all of its
subparagraphs shall survive termination of this Lease, except that if LANDLORD
determines that the Final Assessments do not disclose any Hazardous Materials
that were not disclosed by the Baseline Assessments and do not disclose any
Hazardous Materials that are in concentrations greater than those disclosed by
the Baseline Assessments (after any remediation that LANDLORD may perform prior
to TENANT'S occupancy), then LANDLORD agrees to so notify TENANT and the
obligations of LANDLORD and TENANT set forth in Paragraph 6.3 and all its
subparagraphs shall not survive the termination of the Term of this Lease.
LANDLORD agrees not to unreasonably withhold or delay such determination or
delivery of notification thereof to TENANT. LANDLORD'S failure to notify TENANT
to the contrary within ninety (90) days after receipt of the Final Assessments
shall be deemed a notification that Final Assessments are acceptable and shall
terminate the said environmental obligations.
6.4 TENANT'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, TENANT shall, at TENANT'S sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of LANDLORD'S engineers and/or
consultants to the extent that they relate in any manner to and
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are not inconsistent with such requirements, without regard to whether such
requirements are now in effect or become effective after the Commencement Date.
TENANT shall, within 10 days after receipt of LANDLORD'S written request,
provide LANDLORD with copies of all permits and other documents, and other
information evidencing TENANT'S compliance with any Applicable Requirements
specified by LANDLORD, and shall immediately upon receipt, notify LANDLORD in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
the failure of TENANT or the Premises to comply with any Applicable
Requirements.
6.5 INSPECTION; COMPLIANCE. LANDLORD and LANDLORD'S "Lender" (as
defined in Paragraph 30) and consultants shall have the right to enter into the
Premises at any time, in the case of an emergency, and otherwise at reasonable
times after reasonable notice, for the purpose of inspecting the condition of
the Premises and for verifying compliance by TENANT with this Lease. The cost of
any such inspections shall be paid by LANDLORD, unless a violation of Applicable
Requirements, or a Hazardous Material Condition (see paragraph 9.1) is found to
exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, TENANT shall upon request reimburse
LANDLORD for the reasonable, actual cost of such inspection, so long as such
inspection is reasonably related to the violation or contamination. In addition,
TENANT shall provide copies of all relevant material safety data sheets (MSDS)
to LANDLORD within 10 days of the receipt of a written request therefor.
7. MAINTENANCE; REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1 TENANT'S OBLIGATIONS.
(a) IN GENERAL. Subject to the provisions of Paragraphs 7.2
(LANDLORD'S Obligations), 9 (Damage or Destruction), and 14 (Condemnation),
TENANT shall, at TENANT'S sole expense, keep the Premises, Utility Installations
(intended for TENANT'S exclusive use, no matter where located), and Alterations
(as such terms are hereinafter defined) in good order, condition and repair
(whether or not the portion of the Premises requiring repairs, or the means of
repairing the same, are reasonably or readily accessible to TENANT, and whether
or not the need for such repairs occurs as a result of TENANT'S use, any prior
use, the elements or the age of such portion of the Premises), including, but
not limited to, all equipment or facilities, such as plumbing, HVAC equipment,
electrical, lighting facilities, boilers, pressure vessels, fire protection
system, fixtures, walls (interior and exterior), foundations, ceilings, roofs,
roof drainage systems, floors, windows, doors, plate glass, skylights,
landscaping, irrigation systems, driveways, parking lots, fences, retaining
walls, signs, sidewalks, and parkways located in, on, or adjacent to the
Premises. TENANT, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. TENANT'S obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and state of repair. TENANT shall, during the term of this Lease, keep the
exterior appearance of the building(s) in a good operating condition (including,
e.g. graffiti removal) consistent with the exterior appearance of other similar
facilities of comparable age and size in the vicinity. Without limiting the
foregoing,
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TENANT shall be liable for the cost of any damage to the Premises or the
building(s) or the sidewalks and pavements adjacent thereto which results from
the movement of heavy articles or heavy vehicles or utility cuts made by or on
behalf of TENANT. TENANT shall not overload the floors or any other part of the
Premises.
(b) SERVICE CONTRACTS. Without limiting TENANT'S obligations
under Paragraph 7.1 (a) above, only to the extent required by the Occupational
Heath and Safety Administration (OSHA), TENANT shall, at TENANT'S sole expense,
procure and maintain service contracts, with copies to LANDLORD, in customary
form and substance for, and with contractors specializing and experienced in the
maintenance of, any equipment and improvements installed in the Premises.
(c) FAILURE TO PERFORM. If TENANT fails to perform TENANT'S
obligations under this Paragraph 7.1, LANDLORD may enter upon the Premises after
2 days prior written notice to TENANT (except in the case of an emergency, in
which case no notice shall be required), perform such obligations on TENANT'S
behalf, and put the Premises in good order, condition and repair, and TENANT
shall promptly pay to LANDLORD a sum equal to the actual cost thereof.
7.2 LANDLORD'S OBLIGATIONS. Subject to the provisions of this
Paragraph 7.2 and the provisions of Paragraphs 9 (Damage or Destruction) and 14
(Condemnation), LANDLORD shall have no obligation, in any manner whatsoever, to
repair, replace or maintain the Premises, or the equipment therein or any other
property, all of which obligations are intended to be that of the TENANT. The
Parties intend that the terms of this Lease govern the respective obligations of
the Parties as to repair, replacement and maintenance of the Premises, and they
expressly waive the benefit of any statute now or hereafter in effect to the
extent it is inconsistent with the terms of this Lease.
Except for any repairs of defects disclosed in the Engineering
Inspection that LANDLORD elects to perform as provided in Paragraph 2.4 hereof,
LANDLORD shall only be responsible for the repairs and replacements (but not the
maintenance) of the exterior walls and the roof of the building located on the
Premises, except for repairs or replacements which are necessitated by the acts
or omissions of TENANT or its employees, agents, contractors, sub-contractors,
licensees, invitees or guests which shall be paid for entirely by TENANT upon
demand by LANDLORD, and except for ordinary wear and tear.
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS. The term "Utility Installations" refers to all
floor and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "Trade Fixtures" shall mean TENANT'S machinery and equipment that can
be installed, operated and removed without doing material damage to the
Premises. The term "Alterations" shall mean any modification of the
improvements, other than Utility Installations or Trade Fixtures, whether by
addition or deletion. "TENANT Owned
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Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by TENANT that are not yet owned by LANDLORD pursuant
to Paragraph 7.4(a).
(b) CONSENT. TENANT shall not make any Alterations or Utility
Installations to the Premises without LANDLORD'S prior written reasonable
consent. TENANT may, however, make non-structural Utility Installations to the
interior of the Premises (excluding the roof) without such consent but upon
notice to LANDLORD, as long as they are not visible from the outside, do not
involve puncturing, relocating or removing the roof or any existing walls, will
not affect the electrical, plumbing, HVAC, and/or life safety systems, and the
cumulative cost thereof during the term of this Lease does not exceed a sum
equal to one month of Base Rent in any one calendar year. Notwithstanding the
foregoing, TENANT shall not make or permit any roof penetrations and/or install
anything on the roof without the prior written approval of LANDLORD. LANDLORD
may, as a precondition to granting such approval, require TENANT to utilize a
contractor reasonably approved by LANDLORD. Any Alterations or Utility
Installations that TENANT shall desire to make and which require the consent of
the LANDLORD shall be presented to LANDLORD in written form with detailed plans.
Consent shall be deemed conditioned upon TENANT'S: (i) acquiring all applicable
governmental permits, (ii) furnishing LANDLORD with copies of both the permits
and the plans and specifications prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other Applicable Requirements
in a prompt and expeditious manner. Any Alterations or Utility Installations
shall be performed in a workmanlike manner with good and sufficient materials
and in accordance with all Applicable Requirements. At the time of such consent
or upon the request of TENANT regarding such non-structural Utility
Installations as TENANT is permitted by this paragraph 7.3(b) to make without
LANDLORD'S consent, LANDLORD shall indicate whether it will require (and
LANDLORD shall have the right to require) that any or all TENANT Owned
Alterations or Utility Installations be removed and the Premises repaired and
restored by the expiration or termination of this Lease. TENANT shall promptly
upon completion furnish LANDLORD with as-built plans and specifications. For
work which costs an amount in excess of one month of Base Rent, LANDLORD may
condition its consent upon TENANT providing a lien and completion bond in an
amount equal to 110% of the estimated cost of such Alteration or Utility
Installation and/or upon TENANT'S posting a security deposit with LANDLORD.
Prior to commencement of any work, whether it requires LANDLORD'S consent or
not, at LANDLORD'S request, TENANT shall submit to LANDLORD a set of fully
detailed working drawings and specifications for the proposed work, prepared by
a licensed architect or engineer. If any such work done by TENANT causes damage
to the structural portion, exterior finish or roof of the Premises, then in
addition to any other rights or remedies LANDLORD may have hereunder and any
obligations TENANT may have hereunder, the costs of repair of such damage and of
all further maintenance and repairs to such structural portion, exterior finish
or roof during the term of the Lease shall thereafter be the responsibility of
TENANT. Neither LANDLORD'S right of entry, nor any actual inspection by
LANDLORD, nor LANDLORD'S actual knowledge of any work accomplished or in
progress shall constitute a waiver of LANDLORD'S rights concerning alterations
by TENANT.
(c) LIENS; BONDS. TENANT shall pay, when due, all claims for
labor or materials furnished or alleged to have been furnished to or for TENANT
at or for use on the
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Premises, which claims are or may be secured by any mechanic's or materialmen's
lien against the Premises or any interest therein. TENANT shall give LANDLORD
not less than 10 days notice prior to the commencement of any work in, on or
about the Premises, and LANDLORD shall have the right to post notices of
non-responsibility. If TENANT shall contest the validity of any such lien, claim
or demand, then TENANT shall, at its sole expense defend and protect itself,
LANDLORD and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
LANDLORD shall require, TENANT shall furnish a surety bond in an amount equal to
110% of the amount of such contested lien, claim or demand, indemnifying
LANDLORD against liability for the same. If LANDLORD elects to participate in
any such action, TENANT shall pay LANDLORD'S attorneys' fees and costs.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to LANDLORD'S right to require removal or
elect ownership as provided herein, all Alterations and Utility Installations
made by TENANT shall be the property of TENANT, but considered a part of the
Premises. LANDLORD may, at any time, elect in writing to be the owner of all or
any specified part of the TENANT Owned Alterations and Utility Installations.
Unless otherwise instructed per paragraph 7.3(b) or 7.4(b) hereof, all TENANT
Owned Alterations and Utility Installations shall, at the expiration or
termination of this Lease, become the property of LANDLORD and be surrendered by
TENANT with the Premises.
(b) REMOVAL. LANDLORD may require the removal at any time of all
or any part of any TENANT Owned Alterations or Utility Installations made
without the required consent.
(c) SURRENDER; RESTORATION. TENANT shall surrender the Premises
by the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and in
good operating order, condition and state of repair, ordinary wear and tear and
insured casualty only excepted. "Ordinary wear and tear" shall not include any
damage or deterioration that would have been prevented by good maintenance
practice. Notwithstanding the foregoing, if this Lease is for 12 months or less,
then TENANT shall surrender the Premises in the same condition as delivered to
TENANT on the Commencement Date with no allowance for ordinary wear and tear.
TENANT shall repair any damage occasioned by the installation, maintenance or
removal of Trade Fixtures, TENANT Owned Alterations and/or Utility
Installations, furnishings, and equipment as well as the removal of any storage
tank installed by or for TENANT. TENANT shall completely remove from the
Premises any and all Hazardous Materials brought onto the Premises by or for
TENANT, or any third party (except Hazardous Materials which were deposited via
underground migration from areas outside of the Premises) even if such removal
would require TENANT to perform or pay for work that exceeds statutory
requirements. Trade Fixtures shall remain the property of TENANT. TENANT shall
remove from the Premises any Trade Fixtures and any personal property owned by
TENANT or any third party permitted on the Premises by Tenant, before the
Premises are to be surrendered at the end of the Lease term, including the Mill
(hereinafter
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defined), whether it is a fixture or personal property and whether it is then
owned by TENANT or a third party, except that the Mill shall not be removed
until permitted by the security agreement securing the performance of TENANT
under the Asset Purchase Agreement of even date between LANDLORD, as seller, and
TENANT, as buyer. (The term "Mill" is defined in said Asset Purchase Agreement.)
TENANT shall repair or replace the Premises upon the removal of the Mill as
required by said Asset Purchase Agreement. Any such property not removed on or
before the Expiration Date or any earlier termination date shall be deemed to
have been abandoned by TENANT and may be disposed of or retained by LANDLORD as
LANDLORD may desire, at TENANT'S cost which TENANT shall pay upon demand by
LANDLORD. The failure by TENANT to timely vacate the Premises pursuant to this
Paragraph 7.4(c) without the express written consent of LANDLORD shall
constitute a holdover under the provisions of Paragraph 26 below.
(d) TENANT must, at its sole risk and expense, immediately
return all (but not less than all) of any Personal Property that TENANT does not
elect to purchase pursuant to this Lease, upon expiration of the Term (or any
renewal term) to LANDLORD at such location and at such time as LANDLORD shall
designate. TENANT will ensure that the Personal Property complies with all
Manufacturer's Requirements and is available for examination by prospective
buyers and/or lessees and inspection by LANDLORD. Upon return, the Personal
Property will be in compliance with all Manufacturer's Requirements and Safety
Laws and be in such a mechanical condition that the Personal Property can
immediately be placed into service by an operator without need for modifications
or mechanical repairs, and operate per Manufacturer Requirements. At least
fifteen (15) days prior to the return of the Personal Property, LANDLORD may
elect to have a qualified service technician inspect the Personal Property and
submit a written report as to the Personal Property's condition at TENANT'S
expense. Any items of Personal Property not found to be in compliance with
Manufacturer's Requirements will be brought into compliance by TENANT, at
TENANT'S expense, prior to the return of the Personal Property. TENANT will
return to LANDLORD all originals of operator's manuals, maintenance manuals,
Service Records or other materials regarding the Personal Property.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. TENANT shall pay for all insurance
required under this Paragraph 8 except to the extent of the cost attributable to
liability insurance carried by LANDLORD under Paragraph 8.2(b) in excess of
$5,000,000 per occurrence. Premiums for policy periods commencing prior to or
extending beyond the Lease term shall be prorated to correspond to the Lease
term. Payment shall be made by TENANT to LANDLORD or to the insurer, at
LANDLORD'S option, within 10 days following receipt of an invoice.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY TENANT. TENANT shall obtain and keep in force a
commercial general liability policy of insurance protecting TENANT and LANDLORD
as an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all
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areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $5,000,000 per
occurrence with an annual aggregate of not less than $5,000,000, and such
endorsements as LANDLORD may reasonably require, including, but not limited to,
Per Location Aggregate and Contractual Liability endorsements. The policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of TENANT'S indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of TENANT nor relieve TENANT of any obligation hereunder. All
insurance carried by TENANT shall be primary to and not contributory with any
similar insurance carried by LANDLORD, whose insurance shall be considered
excess insurance only. TENANT shall be responsible for the cost and expense of
such insurance and if it is obtained by LANDLORD, TENANT shall pay the cost
thereof within 10 days following receipt of an invoice.
(b) CARRIED BY LANDLORD. LANDLORD shall have the right to
maintain liability insurance as described in Paragraph 8.2(a), in addition to,
and not in lieu of, the insurance required to be maintained by TENANT. TENANT
shall not be named as an additional insured therein.
8.3 PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. LANDLORD shall obtain and keep in
force a policy or policies in the name of LANDLORD, with loss payable to
LANDLORD, any ground lessor, and to any Lender insuring loss or damage to the
Premises. The amount of such insurance shall be equal to the full replacement
cost of the Premises, as the same shall exist from time to time or the amount
required by any Lender, but in no event more than the commercially reasonable
and available insurable value thereof. If the coverage is available and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and/or earthquake
unless required by a Lender), including coverage for debris removal and the
enforcement of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $1,000 per occurrence, and TENANT shall
be liable for such deductible amount in the event of an Insured Loss. TENANT
shall be responsible for the cost and expense of such insurance and if it is
obtained by LANDLORD, TENANT shall pay the cost thereof within 10 days following
receipt of an invoice.
(b) RENTAL VALUE. TENANT shall obtain and keep in force a policy
or policies in the name of LANDLORD with loss payable to LANDLORD and any
Lender, insuring the loss of the full Rent for one year with an extended period
of indemnity for an additional 180 days
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("Rental Value Insurance"). Said insurance shall contain an agreed valuation
provision in lieu of any coinsurance clause, and the amount of coverage shall be
adjusted annually to reflect the projected Rent otherwise payable by TENANT, for
the next 12 month period. TENANT shall be liable for any deductible amount in
the event of such loss. TENANT shall be responsible for the cost and expense of
such insurance and if it is obtained by LANDLORD, TENANT shall promptly pay the
cost thereof within 10 days following receipt of an invoice.
8.4 TENANT'S PROPERTY; BUSINESS INTERRUPTION INSURANCE; OTHER
COVERAGE.
(a) PROPERTY DAMAGE. TENANT shall obtain insurance coverage on
all of TENANT'S personal property, Trade Fixtures, and TENANT Owned Alterations
and Utility Installations. Such insurance shall be full replacement cost
coverage with a deductible of not to exceed $5,000 per occurrence. The proceeds
from any such insurance shall be used by TENANT for the replacement of personal
property, Trade Fixtures and TENANT Owned Alterations and Utility Installations.
TENANT shall provide LANDLORD with written evidence that such insurance is in
force. TENANT shall be responsible for the cost and expense of such insurance
and if it is obtained by LANDLORD, TENANT shall pay the cost thereof within 10
days following receipt of an invoice.
(b) BUSINESS INTERRUPTION. TENANT shall obtain and maintain loss
of income and extra expense insurance in amounts as will reimburse TENANT for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent tenants in the business of TENANT or attributable to
prevention of access to the Premises as a result of such perils. TENANT shall be
responsible for the cost and expense of such insurance and if it is obtained by
LANDLORD, TENANT shall pay the cost thereof within 10 days following receipt of
an invoice.
(c) WORKER'S COMPENSATION COVERAGE. TENANT shall maintain at all
times at its cost and expense worker's compensation insurance coverage as
required by law.
(d) ADDITIONAL COVERAGE. TENANT shall maintain at its cost and
expense, such additional insurance coverage as LANDLORD may reasonably require.
(e) NO REPRESENTATION OF ADEQUATE COVERAGE. LANDLORD makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover TENANT'S property, business operations or
obligations under this Lease.
8.5 INSURANCE POLICIES. Insurance required herein shall be by
companies duly licensed or admitted to transact business in the state where the
Premises are located, and maintaining during the policy term a "General
Policyholders Rating" of at least A-, VII, as set forth in the most current
issue of "Best's Insurance Guide", or such other rating as may be required by a
Lender. TENANT shall not do or permit to be done anything which invalidates the
required insurance policies. TENANT shall, prior to the Commencement Date,
deliver to LANDLORD certified copies of policies of such insurance or
certificates in form and content acceptable to LANDLORD evidencing the existence
and amounts of the required insurance. No
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such policy shall be cancelable or subject to modification except after 30 days
prior written notice to LANDLORD. TENANT shall, at least 30 days prior to the
expiration of such policies, furnish LANDLORD and LANDLORD'S Lender, if any,
with evidence of renewals or "insurance binders" evidencing renewal thereof, or
LANDLORD may order such insurance and charge the cost thereof to TENANT, which
amount shall be payable by TENANT to LANDLORD upon demand. Such policies shall
be for a term of at least one year, or the length of the remaining term of this
Lease, whichever is less. If either Party shall fail to procure and maintain the
insurance required to be carried by it, the other Party may, but shall not be
required to, procure and maintain the same.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies, TENANT and LANDLORD each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or
damage to its property arising out of or incident to the perils required to be
insured against herein. The effect of such releases and waivers is not limited
by the amount of insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such companies may have against
LANDLORD or TENANT, as the case may be, so long as the insurance is not
invalidated thereby.
8.7 INDEMNITY. Except for LANDLORD'S gross negligence or willful
misconduct, TENANT shall indemnify, protect, defend and hold harmless the
Premises, LANDLORD and its agents, LANDLORD'S master or ground lessor, partners
and Lenders, from and against any and all claims, loss of rents and/or damages,
liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by TENANT or any act, omission, or negligence of
TENANT, its employees, agents, contractors, subcontractors, guests, invitees, or
licensees, or any breach or default under this Lease by TENANT. If any action or
proceeding is brought against LANDLORD by reason of any of the foregoing
matters, TENANT shall upon notice defend the same at TENANT'S expense by counsel
reasonably satisfactory to LANDLORD and LANDLORD shall cooperate with TENANT in
such defense. LANDLORD need not have first paid any such claim in order to be
defended or indemnified.
8.7.1 In addition to any other provisions of this Lease and
notwithstanding the existence of any insurance in favor of LANDLORD, TENANT
shall promptly defend, indemnify and save LANDLORD harmless from and against:
(a) any and all loss of or damage to the Personal Property; and (b) any claim,
action, demand, proceeding, or liability for any damage, loss, injury, cost or
expense (including reasonable attorney's fees) which LANDLORD may be subject to:
(i) relating to the construction, importation, exportation, delivery,
installation, ownership, sale, lease, transfer, storage, nonacceptance,
rejection, return, or repossession of the Personal Property (or any part
thereof); (ii) resulting from the use, maintenance, repair, replacement,
operation or condition of the Personal Property (or any part thereof); (iii)
arising by reason of any act or omission of TENANT or TENANT'S violation of any
law, regulation or ordinance pertaining to the Personal Property; (iv) as a
result of any claim for patent, copyright, trademark or other proprietary right
infringement relating to the Personal Property or the use thereof; (v) as a
result of any tort, negligence or strict liability claim respecting the Personal
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Property and/or the use thereof (including, without limitation, any contribution
and/or subrogation claims relating thereto); or (vi) as a result of any third
party claim to the Personal Property. (The foregoing are collectively called the
"Indemnity Claims".) TENANT agrees to give LANDLORD prompt written notice of any
Indemnity Claims described in this Paragraph. Notwithstanding the foregoing,
TENANT shall not be obligated to indemnify LANDLORD for any Indemnity Claim to
the extent actually and proximately caused by gross negligence or the willful
misconduct of LANDLORD, or if arising out of anything disclosed in the Baseline
Assessments.
8.8 EXEMPTION OF LANDLORD FROM LIABILITY. LANDLORD shall not be
liable for injury or damage to the person or goods, wares, merchandise or other
property of TENANT, TENANT'S employees, contractors, invitees, customers, or any
other person in about the Premises, whether such damage or injury is caused by
or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places. LANDLORD shall not be liable for any
damages arising from any act or neglect of any other tenant of LANDLORD nor from
the failure of LANDLORD to enforce the provisions of any other lease for any of
the Premises, if any. Notwithstanding LANDLORD'S negligence or breach of this
Lease, LANDLORD shall under no circumstances be liable for injury to TENANT'S
business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Partial Damage" shall mean damage or destruction
to the improvements on the Premises, other than TENANT Owned Alterations and
Utility Installations, which can, in LANDLORD'S determination, reasonably be
repaired in 6 months or less from the date of the damage or destruction.
LANDLORD shall notify TENANT in writing within 30 days from the date of
LANDLORD'S receipt of notification from TENANT of the damage or destruction as
to whether or not the damage is Partial or Total.
(b) "Premises Total Destruction" shall mean damage or
destruction to the Premises, other than TENANT Owned Alterations and Utility
Installations and Trade Fixtures, which cannot, in LANDLORD'S determination,
reasonably be repaired in 6 months or less from the date of the damage or
destruction. LANDLORD shall notify TENANT in writing within 30 days from the
date of LANDLORD'S receipt of notification from TENANT of the damage or
destruction as to whether or not the damage is Partial or Total.
(c) "Insured Loss" shall mean damage or destruction to
improvements on the Premises, other than TENANT Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required to be
covered by the insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.
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(d) "Replacement Cost" shall mean the cost to repair, rebuild or
replace the improvements owned by LANDLORD at the time of the occurrence to
their condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of Applicable Requirements, and
without deduction for depreciation.
(e) "Hazardous Material Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Material as defined in Paragraph 6.3.1, in, on, or under the Premises
which requires repair, remediation, or restoration.
9.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that
is an Insured Loss occurs and if there are sufficient insurance proceeds
available to repair such damage, then LANDLORD shall proceed to repair such
damage (but not TENANT'S Trade Fixtures or TENANT Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that TENANT shall, at LANDLORD'S
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, LANDLORD shall make any
applicable insurance proceeds available to TENANT on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
party responsible for obtaining such insurance hereunder shall promptly
contribute the shortage in proceeds (except as to the deductible which is the
responsibility of the party obligated under this Lease to pay for the insurance)
as and when required to complete said repairs. In the event, however, such
shortage was due to the fact that, by reason of the unique nature of the
improvements, full replacement cost insurance coverage was not commercially
reasonable and available, LANDLORD shall have no obligation to pay for the
shortage in insurance proceeds or to fully restore the unique aspects of the
Premises unless TENANT provides LANDLORD with the funds to cover same, or
adequate assurance thereof, within 10 days following receipt of written notice
of such shortage and request therefor. If LANDLORD receives said funds or
adequate assurance thereof within said 10 day period, the party responsible for
making the repair