SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) : August 8, 1996
RTI INC.
(Exact name of registrant as specified in its charter)
NEW YORK 0-5887 11-2163152
(State or other jurisdiction (Commission (I.R.S.Employer
of incorporation) file number) Identification No.)
108 Lake Denmark Road, Rockaway, New Jersey, 07866
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 625-8400
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On August 8, 1996 (the "Closing Date"), RTI Inc. ("RTI")
consummated the transactions (the "SGI Transaction") contemplated by
the terms of the previously disclosed Asset Acquisition Agreement
(the "Acquisition Agreement"), dated as of February 26, 1996,
between RTI and SteriGenics International ("SGI"), information with respect
to which was previously reported by RTI in its definitive proxy
statement (the "Proxy Statement") for its Annual Meeting held on
August 6, 1996, which was filed with the Securities and Exchange
Commission on June 28, 1996.
As previously disclosed in the Proxy Statement, on the Closing
Date and as part of the SGI Transaction, RTI and SGI entered into a
lease (the "Lease") for a portion of RTI's property in Rockaway, New
Jersey (the "Leased Property"). In order to obtain certain
assurances from the New Jersey Department of Environmental
Protection (the "NJDEP"), SGI provided the NJDEP with a $500,000 letter of
credit (the "L/C") to secure certain obligations of RTI to complete
the environmental remediation on the Leased Property. In connection
therewith, RTI has agreed that if the NJDEP has not voluntarily
reduced the L/C by at least $40,000 by August 1, 1998, and by at
least such amount by each anniversary thereafter through the end of
the initial term of the Lease, RTI will provide a letter of credit
to the NJDEP in the amount of such deficiency. RTI also has granted
SGI a right to set off the rental payments on the Lease in the event
that the NJDEP draws down on the L/C and RTI fails to reimburse SGI
therefor or if RTI otherwise commits certain defaults on its
obligations to complete the environmental remediation on the site.
In the event that SGI elects not to renew the Lease, SGI has agreed
to continue to provide to the NJDEP a letter of credit in an amount
of up to $300,000 and RTI has agreed to keep in effect its letter of
credit for up to the lesser of $200,000 or the amount then required
by the NJDEP. The foregoing information with respect to the Lease
is qualified in its entirety by the complete text of the Lease, a copy
of which is filed as an exhibit hereto and is incorporated herein by
reference.
Item 5. Other Events
On August 6, 1996, RTI held its 1996 Annual Meeting of
Shareholders, at which time each of the four incumbent directors of
the Company who had been nominated by the Board of Directors for
reelection as a director of RTI was re-elected as a director. The
votes cast were as follows:
FOR AGAINST WITHHELD
Sanders Davies 1,111,545 17,754 51
C. W. McMillan 1,111,582 17,717 51
Theo W. Muller 1,115,692 13,607 51
George M. Whitmore, Jr. 1,111,619 17,680 51
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At the Annual meeting, two additional proposals were voted upon
as follows:
(i) Proposal to sell substantially all of RTI's assets to SGI
and to take such further action in connection therewith as
necessary or desirable:
FOR AGAINST ABSTAIN
905,050 23,722 8,613
(ii) Proposal to ratify BDO Seidman, LLP as the independent
auditors for the fiscal year ending December 31, 1996:
FOR AGAINST ABSTAIN
1,098,291 1,956 9,053
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired - not applicable
(b) Pro Forma Financial Information
It is impracticable to provide the information required
by this item 7(b) at this time. Such pro forma financial
information will be filed under cover of a Form 8-K/A as soon
as practicable, but not later than 60 days from August 23, 1996,
the last date on which this report on Form 8-K was required to
have been filed.
(c) Exhibits
1. Asset Acquisition Agreement, dated as of February 26,
1996, between SteriGenics International and RTI Inc.
(incorporated by reference; filed as an exhibit to RTI's Annual
Report on Form l0-KSB for its fiscal year ended December 31,
1995).
2. Lease Agreement, dated as of August 8, 1996, between
SteriGenics East Corporation, a wholly-owned subsidiary of
SteriGenics International, and RTI Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
RTI INC.
By: /s/ Theo Muller
Theo Muller
President and Chief
Executive Officer
Date: August 23, 1996
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EXHIBIT 2
LEASE AGREEMENT
THIS AGREEMENT, dated the 8th day of August, 1996,
BETWEEN RTI INC., a New York corporation having a mailing address c/o
Theo Muller, 20 Peach Hill Road, Darien, Connecticut 06820
("Landlord");
AND
STERIGENICS EAST CORPORATION, a wholly owned subsidiary of
STERIGENICS INTERNATIONAL, a California corporation having a
place of business at 4020 Clipper Court, Fremont, California
94538-6540 ("Tenant");
CONTENTS
Section Topic Page
1 Basic Terms 1
2 Leasing Provisions 3
3 Rent Provisions 6
4 Tenant and Landlord Work Provisions 9
5 Insurance Provisions 15
6 Condemnation Provisions 17
7 Default and Remedies 18
8 Environmental Provisions 21
9 Miscellaneous 23
10 Defined Terms: Interpretations 27
W I T N E S S E T H :
1. BASIC TERMS. The following terms are the basic business
terms and conditions of this lease. The capitalized terms used in this lease
shall have the meanings set forth below in this and the following sections of
this lease, including section 10. See section 10 for definitions and rules
of interpretation. The provisions of this section 1 are subject to the more
detailed, specific provisions contained elsewhere in this lease.
1.1 Premises. That certain tract of land of approximately 62
acres and the improvements located thereon in the Township of Rockaway,
County of Morris, State of New Jersey, as more particularly described in the
attached Exhibit A. The Premises includes all trade and other fixtures
located at the Premises.
(1)
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1.2 Term. The Term of this lease is for a period of 6 years
(plus any fractional month at the beginning of the Term). The "Commencement
Date" is August 8, 1996, and the "Termination Date" is August 31, 2002, or
the last day of the month in which the 6th anniversary of the Commencement
Date occurs, or upon such earlier date as may be provided in this lease
whether following an extension or renewal hereof or otherwise. The lease is
subject to extension as provided in the annexed extension rider for one (1)
five (5) year term.
1.3 Base Rent. The Annual Base Rent for the Term is $77,386.00
per year, payable in monthly installments of $6,486.00. Base Rent shall be
absolutely net and Tenant shall be responsible for all normal and
extraordinary costs arising out of or in connection with the use and
operation of the Premises.
1.4 Permitted Use. Tenant may use the Premises for contract
irradiation services and other related businesses, and for any other lawfully
permitted use.
1.5 Security Deposit. None.
1.6 Landlord Notices Address:
RTI Inc.
c/o Theo Muller
20 Peach Hill Road
Darien, CT 06820
Telecopier No.: (203) 655-0381
With Courtesy Copy to Counsel:
Warshaw Burstein Cohen Schlesinger & Kuh, LLP
555 Fifth Avenue
New York, New York 10017
Attention: Arthur A. Katz
Telecopier No.: (212) 972-9150
1.7 Tenant Notices Address:
Sterigenics International
4020 Clipper Court
Fremont, CA 94538-6540
Attention: James F. Clouser
Telecopier No.: (510)770-9000
(2)
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With Courtesy Copy to Counsel:
Gunderson, Dettmer, Stough, Villeneuve, Franklin & Hachigian
600 Hansen Way
Palo Alto, California 94304
Attention: Carla S. Newell
Telecopier No. (415) 843-0314
2. LEASING PROVISIONS.
2.1 Leasing. For and in consideration of the Rents, covenants
and agreements hereinafter mentioned, reserved and contained, to be paid,
kept and performed by Tenant, Landlord does hereby demise and lease unto
Tenant, and Tenant does hereby lease and hire from Landlord, the Premises
more particularly described on Exhibit A annexed hereto subject to the
matters disclosed by Exhibit 6.5(a) of the Agreement ("Title Report") and the
ALTA survey contemplated by section 6.5 of the Agreement ("Survey"). Tenant
shall be responsible for obtaining any certificate of occupancy or other
permits, agreements and approvals in connection with its use or occupancy of
the Premises. From and after the date hereof, Tenant shall have the right
and obligation to maintain and care of Premises in order to preserve,
maintain and prevent any waste or deterioration thereof. The parties shall
not record this lease, but at the expense of Tenant shall cause a memorandum
of this lease to be recorded in the form of Exhibit 2.1 hereto.
2.2 Subordination. Tenant's rights under this lease shall have
the priority set forth in the Title Report. Landlord shall discharge (a)
exceptions 5(a) through and including 5(f) in Schedule B Section 2 of the
Title Report, along with any encumbrances not disclosed in the Title Report,
on or before one year from the date hereof, and (b) any lien under the Spill
Act, any lien, restriction or encumbrance in connection with the
Administrative Consent Order dated December 7, 1992, as amended, and any
listing as a "Superfund Site" under CERCLA prior to any closing pursuant to
section 9.7 hereof.
2.3 Term. The Term of this lease shall commence on the
Commencement Date and end on the Termination Date without the necessity of
any notice from either Landlord or Tenant to terminate the same. Tenant
hereby waives notice to vacate the Premises and agrees that Landlord shall be
entitled to the benefit of all provisions of law respecting the summary
recovery of possession from a tenant holding over to the same extent as if
statutory notice had been given. For the period of 12 months prior to the
expiration of the Term, Landlord shall have the right to show the Premises
and all parts thereof to prospective tenants and purchasers during normal
business hours, provided Landlord shall comply with Tenant's security
requirements, not unreasonably interfere with Tenant's business and furnish
at least 24 hours advance written notice to Tenant before showing the
Premises.
2.4 Use. Tenant shall use the Premises solely for the Permitted
Use and for no other purpose whatsoever. Tenant shall not use the Premises or
permit anything to be done in or about the Premises which will in any way
materially conflict with any law, statute, ordinance or governmental rule or
(3)
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regulation now in force or which may hereafter be enacted or promulgated.
2.5 Tenant's Operation.
2.5.1 General Conduct. In regard to its use and occupancy
of the Premises, Tenant will at its expense: (a) comply in all
material respects with all laws, ordinances, rules and regulations of
governmental authorities and all recommendations of the Fire
Underwriters Rating Bureau and insurers now or hereafter in effect and,
in no event fail to comply with any laws which impose any civil or
criminal liability on Landlord; (b) conduct its business in all
respects in a dignified manner in accordance with high standards of
operation consistent with the quality of operation of similar
properties within Northern New Jersey; (c) not use or permit the use of
any portion of the Premises for any unlawful purpose; and (d) not place
a load upon any floor which exceeds the floor load which the floor was
designed to carry or which is allowed by law.
2.5.2 Utility Services. Tenant shall, at its own cost and
expense, arrange for or provide utility connections and service to the
Premises and shall pay all utility meter, connection and service
charges allocable to the Term, including those for gas, sewer,
electricity, water and standby sprinkler and any deposits required by
utility suppliers. Tenant's use of electric energy in the Premises
shall not at any time exceed the capacity of any of the electrical
conductors and equipment serving the Premises. It is the intention of
the parties that Tenant will pay in full the costs and charges of all
utilities and services directly or indirectly charged or billed in
connection with the Premises during the Term so that the Base Rent
provided herein shall be absolutely net to Landlord, except as
expressly provided herein or in the Agreement.
2.6 Right of Entry.
2.6.1 Inspection. Landlord, its employees and agents
shall have the right to enter the Premises at all reasonable times
during normal business hours upon at least 24 hours advance written
notice, and at any time without notice in case of an emergency, for the
purpose of examining or inspecting the same, showing the same to
prospective mortgagees, making such alterations, repairs, improvements
or additions to the Premises as Landlord may deem necessary or
desirable.
2.6.2 Remediation. Landlord and its agents, contractors
and sub- contractors shall be entitled to enter the Premises from time
to time for the purpose of effecting any remediation required to comply
with the Administrative Consent Order or other Remedial Orders.
Landlord shall provide reasonable advance notice to Tenant each time it
or any of its agents, contractors or sub-contractors proposes to enter
the Premises to conduct remediation activities. Landlord and Tenant
shall cooperate in the scheduling of all remediation activities to
avoid undue interference with access by Tenant to the Premises or
disruption to Tenant's business. If any remediation activities are
(4)
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expected to substantially interfere with all access to the Premises or
prevent Tenant from conducting substantially all of its business for a
period in excess of seven consecutive days in any calendar year,
Landlord shall provide not less than 90 days advance written notice to
Tenant. If any interference or disruption exceeds seven consecutive
days, Landlord shall be liable to Tenant for all damages suffered after
such seven consecutive day period in consequence of the disruption.
2.7 Sublease and Assignment. Tenant may not sublet all or any
part of the Premises or assign its interest in this lease without Landlord's
consent. Upon Tenant's notice to Landlord of any such proposed subletting or
assignment, Landlord shall not unreasonably withhold, delay or condition its
consent to such sublease or assignment if Tenant's business will continue to
be conducted at the Premises after such sublease or assignment. If this
lease be assigned or if the Premises or any part thereof be sublet to or
occupied by anybody other than Tenant, Landlord may collect rent from the
assignee, sublessee or occupant and apply the net amount collected to the
Rent payable hereunder. Notwithstanding any such assignment or subletting,
the Tenant named herein shall remain primarily liable for the payment of Rent
reserved hereunder and for the performance of all obligations imposed upon
Tenant by this lease with respect to the Term.
2.8 Surrender. Tenant will surrender possession of the Premises
and remove all goods and chattels and other personal property in the
possession of Tenant, by whomsoever owned, at the end of the Term or at such
other time as Landlord may be entitled to re-enter and take possession of the
Premises pursuant to any provision of this lease, and shall leave the
Premises in as good order and condition as they were at the beginning of the
Term, ordinary wear and tear and damage by the elements and by casualty
excepted. In default of such surrender of possession and removal of goods
and chattels, Tenant will pay to Landlord 150% of the monthly installments of
Annual Base Rent together with any Additional Rent reserved by the terms of
this lease for such period as Tenant holds over in possession of the
Premises. If Tenant fails to remove all goods and chattels and other
personal property, by whomsoever owned, at the end of the Term or at such
other time as Landlord may be entitled to re-enter and take possession of the
Premises pursuant to any provision of this lease, Tenant hereby irrevocably
makes, constitutes and appoints Landlord as the agent and attorney-in-fact of
Tenant to remove all goods and chattels and other personal property, by
whomsoever owned, from the Premises to a place of storage, such moving and
storage to be at the sole cost and expense of Tenant. Tenant covenants and
agrees to pay to Landlord all reasonable expenses which Landlord incurs for
the removal and storage of all such goods and chattels. Alternatively or
additionally, at the option of Landlord, Tenant shall be deemed to have
abandoned any or all of such goods, chattels and other personal property and
all or any portion thereof may be disposed of at Tenant's sole cost and
expense, in any manner selected by Landlord. No act or thing done by
Landlord shall be deemed an acceptance of the surrender of the Premises
unless Landlord shall execute a written release of Tenant. Tenant's liability
hereunder shall not be terminated by the execution by Landlord of a new lease
of the Premises.
2.9 Quiet Enjoyment. Landlord covenants that Tenant, on paying
the Rent and performing its obligations under this lease, shall and may
peaceably and quietly have, hold and enjoy the Premises for the Term, subject
to the provisions of this lease.
(5)
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2.10 Performance of Tenant's Obligations. Tenant covenants and
agrees to perform all obligations herein expressed on its part to be
performed, and to promptly, upon receipt of written notice specifying the
action desired by Landlord in connection with any such obligation (excluding
the covenant to pay Rent which shall be complied with without prior notice),
comply with such notice. If Tenant shall not commence and proceed diligently
to comply with such notice to the reasonable satisfaction of Landlord within
30 days after delivery thereof, except in the event of an emergency, in which
event compliance shall commence forthwith, Landlord may (but shall have no
obligation to do so) enter upon the Premises and do the things specified in
said notice. Landlord shall have no liability to Tenant for any loss or
damages resulting in any way from such action by Landlord, and Tenant agrees
to pay promptly upon demand any reasonable expense incurred by Landlord in
taking such action.
3. RENT PROVISIONS.
3.1 Rent. Tenant covenants and agrees to pay to Landlord, as
rental for the Premises, the Base Rent and any and all Additional Rent not
otherwise payable directly to third parties in accordance with the various
sections of this lease. Annual Base Rent shall be payable in equal monthly
installments in advance on the Commencement Date and on the first day of each
calendar month thereafter during the Term. Additional Rent payable by Tenant
shall include the following charges allocable to the Term:
(a) all Taxes and all utility charges, costs and fees; and
(b) all premiums on insurance policies required to be
maintained by Tenant on, or in connection with the use of,
the Premises pursuant to this lease; and
(c) all costs and expenses of maintaining, repairing and
operating the Premises; and
(d) except as expressly provided herein or in the Agreement,
all other expenses and charges which, from the Commencement
Date until the end of the Term, shall arise, be levied,
assessed or imposed upon or against the Premises as an
incident of the ownership thereof and which are the kind
customarily paid by owners of land and buildings by reason
of such ownership, including the full cost of complying
with all laws and regulations, and the cost of all repairs
required to maintain the Premises in good repair and
condition and to comply with all applicable provisions of
law, it being the intention hereof that, from the date
hereof until the end of the Term of this lease, Tenant
shall be chargeable with and shall pay all such above sums
which an owner of the Premises would pay.
3.2 Apportionment of Taxes and Other Additional Rent. All
Taxes, sewer and water charges and other governmental charges imposed against
or levied upon the Premises shall be apportioned as between Landlord and
(6)
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Tenant at the Commencement Date and the Termination Date. If single Tax
bills attributable to a larger lot of which the Premises are only a part are
submitted during the Term by the municipal or other authorities having
jurisdiction, Landlord shall remit payments to such authorities and Tenant
shall be responsible for (a) that part of the land portion of such Tax bills
determined by multiplying such land portion by a fraction, the numerator
being the total square footage of the land comprising the Premises and the
denominator being the total square footage of the land comprising the entire
lot, plus (b) the amount of Taxes attributable on such Tax bills to the
buildings and improvements located within the entire lot multiplied by the
percentage ratio of building floor space in the Premises to the total
building floor space in the entire lot, which ratio the parties agree for the
purpose of this lease is 100% ("Tenant's Percentage Share"), plus (c)
Tenant's Percentage Share of any bills for general or special assessments.
In the event of a dispute regarding the amount of Taxes attributable to
buildings and improvements, the parties agree that the attribution contained
in the records of the municipal tax assessor shall control. The allocation
of Taxes hereunder shall be done on a tax lot by tax lot basis. Each of the
items payable as Additional Rent to third persons shall be paid by Tenant on
or before the date when each becomes due. If the Landlord collects
governmental charges hereunder, Landlord shall pay the charges to the
applicable entity and, at Tenant's request, it shall provide Tenant with
proof of payment to the taxing or other governmental authority as the case
may be. Landlord agrees to elect to pay any future assessments which may be
levied against the Premises in the maximum number of installments permitted
by law. Tenant shall furnish to Landlord, within 30 days after the date upon
which any charge is payable by Tenant as hereinabove provided, copies of
official receipts of the appropriate taxing or governmental authority, or
other proofs satisfactory to Landlord, evidencing the payment of any Taxes or
such other payment obligations of Tenant hereunder. If Tenant shall fail to
make any payment or do any act required of it by any provision of this lease,
Landlord may make such payment or do such act and the amount of such payment,
or the cost of doing such act, together with interest thereon at an annual
rate equal to the Default Rate shall be Additional Rent payable by Tenant
upon demand by Landlord. The making of any such payment or the doing of any
such act by Landlord shall not constitute a waiver by Landlord of any right
or remedy provided by this lease upon Tenant's default in the making of such
payment or the doing of such act. Tenant shall have the right to contest or
review by appropriate proceedings or in any other manner permitted by law, at
Tenant's sole cost and expense, in Tenant's name and/or in Landlord's name
(whenever necessary), any Taxes (including the lowering of any assessed
valuation) or any legal requirements relating to the Premises, and Landlord
shall, without expense or charge to it, cooperate with Tenant and execute any
documents or pleadings required for such purposes. If required by Landlord,
Tenant shall furnish a surety company bond or other security reasonably
satisfactory to Landlord, against any liens by reason of such contest. The
aforesaid contest by Tenant may include appeals from any judgments, decrees
or orders until a final, nonappealable determination shall be made by a court
or governmental department or authority having jurisdiction in the matter.
3.3 Setoff. Tenant covenants to pay all Rent when due and
payable, without any setoff, recoupment, deduction or demand whatsoever,
except as hereinafter provided. Any monies paid or expenses incurred by
Landlord to correct defaults in any of Tenant's obligations hereunder shall
be payable to Landlord as Additional Rent. Any Additional Rent payable to
(7)
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Landlord as provided for in this lease shall become due with the next
installment of Annual Base Rent due after Tenant's receipt of notice of the
Additional Rent from Landlord, or on demand if so stated in Landlord's
notice. Rent shall be paid or delivered to Landlord at Landlord's Notice
Address unless otherwise directed by Landlord. Neither the receipt and
acceptance by Landlord of any Annual Base Rent or Additional Rent with
knowledge of Tenant's default under any covenant or condition of this lease,
nor the acceptance of any such payment made subject to conditions imposed by
Tenant, whether under a restrictive endorsement, tendered as payment in full
or otherwise, shall be deemed a waiver of such default.
Tenant has provided to NJDEP one or more irrevocable letters of
credit, or any substitute or replacement thereof, in the aggregate amount of
$500,000 ("Tenant's L/C") to secure certain obligations of Landlord in
connection with an Administrative Consent Order dated December 7, 1992, as
amended ("In the Matter of RTI Inc. Site and RTI Inc. and THIOKOL
CORPORATION") ("Landlord's Environmental Obligations"). Tenant agrees to
maintain Tenant's L/C in the maximum aggregate amount of $500,000, subject to
reductions permitted by the NJDEP and reductions as contemplated by this
section 3.3. Landlord agrees to use its reasonable efforts and to diligently
proceed with and complete Landlord's Environmental Obligations and to apply
from time to time to the NJDEP for permission to reduce the aggregate amount
of Tenant's L/C. Tenant's obligation to maintain Tenant's L/C shall be
reduced by $40,000 (per year) commencing on August 1, 1998 and on August 1 of
each year of the lease Term thereafter. The parties agree to negotiate in
good faith with respect to their obligations to maintain letters of credit
during the lease extension, if any, PROVIDED, HOWEVER, that if the parties
are unable to agree, Landlord and Tenant shall be obligated to maintain
letters of credit in the amount of Tenant's L/C and Landlord's L/C then in
effect. Simultaneously with the reduction of $40,000 (per year) in Tenant's
L/C, Landlord agrees that on August 1, 1998 and on August 1 of each year of
the lease Term thereafter, Landlord shall provide to the NJDEP one or more
irrevocable letters of credit in the amount of $40,000 (per year) in form and
substance satisfactory to the NJDEP, PROVIDED, HOWEVER, that if the NJDEP
reduces the aggregate amount of Tenant's L/C required to secure Landlord's
Environmental Obligations, Landlord's L/C shall be equal to an amount, not to
exceed $40,000 (per year), which when added to Tenant's L/C will fully secure
Landlord's Environmental Obligations ("Landlord's L/C"). Upon Landlord's
default under this section 3.3, Tenant shall have a right to offset against
any Base Rent and Additional Rent then or thereafter coming due under this
lease the amount of any outstanding Tenant's L/C or Landlord's Substitute L/C
(as hereafter defined) at the time of Landlord's default, up to the amount
drawn upon by the NJDEP. In the event of Landlord's default through
Landlord's failure to provide Landlord's L/C as required in this section 3.3,
Tenant shall undertake to perform Landlord's L/C obligation, in any manner
and at the sole discretion of Tenant ("Landlord's Substitute L/C"), and set
off against Base Rent and Additional Rent the reasonable costs, including
attorney's fees, if any, of undertaking to provide Landlord's Substitute L/C,
as well as the full amount of Landlord's Substitute L/C as calculated
hereunder, whether or not the NJDEP has drawn upon Landlord's Substitute
L/C. If Landlord provides Landlord's L/C subsequent to Landlord's default
through its failure to provide Landlord's L/C and Tenant providing Landlord's
Substitute L/C, Landlord shall have the right to regain the amount offset by
Tenant, minus the reasonable costs incurred by Tenant in providing Landlord's
Substitute L/C, PROVIDED, HOWEVER, that no provision in this section 3.3
shall be construed to require Tenant to return to Landlord any offset by
(8)
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Tenant for any amount drawn upon by the NJDEP (for example, if on August 1,
1998, the NJDEP has not reduced the amount of Tenant's L/C from $500,000, and
Landlord fails to provide Landlord's L/C, instead of replacing its $500,000
Tenant's L/C with one $460,000 letter of credit and one $40,000 letter of
credit, Tenant may opt to retain it's $500,000 Tenant's L/C, with $40,000 of
Tenant's L/C becoming Landlord's Substitute L/C. Tenant may then set off
$40,000 from Base Rent and Additional Rent. If Landlord later fulfills its
obligation to provide Landlord's L/C, Landlord is entitled to receive the
amount set off from Landlord's Substitute L/C, minus any costs, including
attorney fees, and minus any amount drawn upon any letter of credit in
place). Landlord's default under section 3.3 shall mean and consist of (a)
any draw upon Tenant's L/C, (b) Landlord's failure to comply with Landlord's
Environmental Obligations, reflected by a written notice from the NJDEP, and
Landlord's failure to diligently contest in good faith or comply with
Landlord's Environmental Obligations, or (c) Landlord's failure to provide
Landlord's L/C hereunder, TIME BEING OF THE ESSENCE. If the NJDEP refuses to
accept any Landlord's L/C in partial substitution for Tenant's L/C, then
Landlord shall be obligated to provide cash collateral or make other
arrangements satisfactory to NJDEP so that NJDEP does permit the annual
reduction in the aggregate amount of Tenant's L/C contemplated by this
section 3.3. Landlord's obligations under this section 3.3 shall continue
through any lease extension. In the event of a default under section 3.3(b)
above, Tenant's setoff shall be limited to a period of six (6) months of Base
Rent and Additional Rent, after which time Tenant's right to set off under
section 3.3(b) shall cease, PROVIDED, HOWEVER, that a default under any other
provision of this section 3.3 has not occurred. On the date twelve (12)
months after Tenant commences setoff under section 3.3(b), if Landlord is not
otherwise in default under section 3.3(a) or section 3.3(c), and no
additional event of default under section 3.3(b) has occurred, Tenant shall
return to Landlord the amount setoff under section 3.3(b).
If the lease Term terminates on August 31, 2002, the Landlord
shall provide a letter of credit or such other security as may be required by
the NJDEP, in the amount of the difference between (a) $200,000 and (b) the
amount of the Landlord's L/C in existence on August 31, 2002, which amount
shall be provided in two (2) equal annual installment commencing on August
31, 2002. Upon the exercise of Landlord's Put Option as set forth in section
9.7 or upon the exercise of Tenant's Purchase Option as set forth in section
9.6, Landlord shall be released from its obligation to provide Landlord's
L/C.
3.4 Late Charges; Interest on Late Payments. Without limiting
any other right of Landlord hereunder, there shall be due and owing from
Tenant a late charge and an interest charge on any Annual Base Rent and
Additional Rent provided for hereunder which is not paid by Tenant when due.
The late charge shall be equal to 3% of any amount not paid when due and the
interest charge shall be calculated at the Default Rate, each such
calculation to be made from the date when due. Both charges shall be payable
on demand of Landlord with respect to any Annual Base Rent not received by
the 10th day of each month and with respect to any other Additional Rent not
received within 10 days after its due date.
4. TENANT AND LANDLORD WORK PROVISIONS.
4.1 Landlord's Work. Landlord shall deliver the Premises on the
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Commencement Date in the condition contemplated by the Agreement.
4.2 Tenant Work and Repairs. Tenant shall keep and maintain, or
cause to be kept and maintained, the buildings and other improvements now or
in the future constructed on the Premises in good repair and condition. To
fulfill the foregoing obligation and its other covenants under this lease,
including Section 4.8, Tenant shall make or cause to be made all reasonably
required repairs and replacements of every kind and character, interior and
exterior, structural and nonstructural, ordinary and extraordinary, including
the roof, walls, plumbing, heating, ventilation, air conditioning, electrical
equipment and other systems on or supplying the Premises, lights and
lighting, all glass including plate glass, stanchions and fences, roadways
(other than public streets), sidewalks, parking lots and other paved areas,
and such other public areas the maintenance and repair of which public areas
are the responsibility of the property owner by law. Tenant will not call
upon Landlord, during the Term of this lease, for the making of any repairs,
replacements, alterations or other work whatsoever. All Tenant's Work, shall
(a) be performed in a good and workmanlike manner, and (b) be at least
substantially equal in quality and usefulness to the original work.
4.3 No Liens. If any mechanics' or construction lien shall at
any time be filed against Landlord's or Tenant's interest in any part of the
Premises by reason of work, labor, services or materials performed directly
or indirectly by, through or under or furnished directly or indirectly to
Tenant or to anyone holding the Premises through or under Tenant, Tenant
shall forthwith cause the same to be discharged of record or bonded to the
reasonable satisfaction of Landlord. If Tenant shall fail to cause the lien
to be so discharged or bonded after being notified of the filing thereof,
then in addition to any of its other rights or remedies Landlord may
discharge the same by paying the amount claimed to be due, and the amount so
paid by Landlord together with interest thereon at the Default Rate and all
costs and expenses, including reasonable attorneys' fees, incurred by
Landlord in procuring the discharge of such lien shall be due and payable by
Tenant to Landlord as Additional Rent upon demand of Landlord. Landlord's
consent to or acquiescence in any Tenant's Work shall not constitute an
approval by Landlord of Tenant's contracts for such work.
4.4 Trade Fixtures. All trade fixtures and apparatus (as
distinguished from leasehold improvements) owned by the Tenant and installed
in the Premises shall remain the property of Tenant and shall be removable at
the expiration of the Term, provided Tenant repairs and restores any damage
to the Premises relating to such installation or removal. In no event shall
Tenant be responsible for restoration of Tenant's Work or for repairing
floor, wall or ceiling finishes.
4.5 Tenant Alterations.
4.5.1 General. The Tenant shall have the right to make
improvements, alterations and additions to the Premises so long as it
gives Landlord at least 30 days prior written notice thereof and
obtains Landlord's consent and otherwise complies with this section
4.5. No consent by Landlord shall be required if the cost of the work
is less than $175,000 in any instance or series of related instances.
The cost of such improvements, alterations or additions shall be the
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sole responsibility of the Tenant. Tenant may, at its cost and
expense, paint or decorate any part of the interior of the Premises.
Any improvements, alterations or additions to the Premises shall upon
their completion become part of the Premises and the property of the
Landlord and shall be surrendered with the Premises upon termination of
this lease without any compensation being due therefor by Landlord.
However, Tenant shall be entitled to remove any trade fixtures or other
alterations or additions, so long as it repairs any damage to the
improvements on the termination of this lease. If Tenant plans to make
any improvements, alterations or additions to the Premises that are not
consistent with the present use or reasonable continuing use of the
Premises and which is a Permitted Use, Landlord may, prior to the
commencement of an improvement, alteration or addition, give notice to
Tenant that Landlord may require Tenant to remove any such improvement,
alteration or addition at the end of the Term and require Tenant to
restore the Premises to its condition immediately before the
improvement, alteration or addition was made, and require Tenant to
repair any damages such improvement, alteration, or addition may have
caused. Landlord's consent where required in this section 4.5 shall
not be unreasonably withheld, delayed or conditioned.
4.5.2 General Standards. Whenever Tenant makes any
alterations or repairs or does any other Tenant's Work in, to, on or
about the Premises as provided for in this lease:
(a) Tenant shall do the work in a good and
workmanlike manner and in compliance with all applicable laws,
ordinances and codes, and all applicable governmental rules,
regulations and requirements, and in accordance with the standards, if
any, of the Board of Fire Underwriters or other organization exercising
the functions of a board of fire underwriters whose jurisdiction
includes the Premises;
(b) Tenant will pay for all work promptly and in a
manner consistent with good business practices and Tenant will, prior
to the commencement thereof, provide Landlord with reasonable
assurances of Tenant's ability to pay for Tenant's work and in the
absence of such proof Tenant shall provide payment and performance
bonds in form and substance reasonably satisfactory to Landlord
covering such work;
(c) before commencing any work Tenant shall notify
Landlord of its intention to do so, and shall (i) obtain, provide
Landlord with copies of all permits and authorizations therefor that
may be required by law for doing the work; and (ii) execute,
acknowledge and deliver to Landlord in a form reasonably approved by
Landlord an agreement under which Tenant shall indemnify Landlord
against any claims arising from the work, including the removal of any
lien filed against the Premises, or Landlord's or Tenant's interest
therein, or the threat or notice of any claim, as a result of such work;
(d) the work shall be commenced as promptly as is
practicable under then existing circumstances and once commenced shall
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be pursued diligently to completion, subject to delays arising out of
causes beyond the reasonable control of Tenant, and upon completion
Tenant shall deliver to Landlord a copy of "as built" plans;
(e) the casualty and comprehensive general liability
insurance provided for in section 5 shall be extended, if necessary, to
apply to the work during the course of construction and after
completion, and a certificate naming Landlord as additional insured
shall be provided to Landlord;
(f) Tenant shall carry or cause its contractors, if
any, to carry worker's compensation insurance as required by law in
connection with the work and provide certificates thereof to Landlord
prior to the commencement of any work;
(g) Tenant shall at all times maintain in full force
and effect all permits and authorization required for such work and
obtain an official final certificate of occupancy or amended
certificate of occupancy upon completion of the work in each instance
if, under local practice, such certificates are issued by a
governmental department or officer having jurisdiction; and
(h) thereafter during the Term, Tenant shall bear
the entire risk of loss, repair, replacement and compliance with law
responsibilities for such alterations.
4.6 Casualty Loss. If any building or any other improvement on
the Premises or any part thereof shall be damaged or destroyed by fire,
explosion, lightning, vandalism or by any other casualty or cause
("Casualty"), Tenant shall (a) give prompt notice thereof to Landlord and (b)
at Tenant's own cost and expense, and whether or not insurance proceeds shall
be sufficient for the purpose, cause to be repaired, restored, replaced
and/or rebuilt such building or other improvement to substantially the same
condition and character as existed immediately prior to the Casualty;
provided, however, that Tenant may make such changes as it may elect in
conformance with and subject to the provisions of this lease, provided the
building shall, in the reasonable opinion of Landlord after the completion of
such changes, have substantially the same commercial utility and value as it
had prior to the Casualty. Such restoration, repair, replacement, rebuilding
or alteration shall be commenced promptly and prosecuted with reasonable
diligence. All insurance proceeds payable on account of any such Casualty,
less the actual cost, fees and expenses, if any, incurred in connection with
adjustment of the loss ("Net Insurance Proceeds") shall be payable to a bank,
trust company or other entity as shall be designated by Landlord, to hold as
trustee (the "Insurance Trustee") for disposition hereunder. Provided that
Tenant complies with the requirements of section 4.6(a) and (b), Tenant shall
have the right to adjust all losses, provided that, with the respect to any
losses exceeding $175,000, the Landlord's consent shall be obtained. All Net
Insurance Proceeds shall be applied to the payment of the cost of the
demolition, restoration, repair, replacement, rebuilding or alteration,
including the costs of temporary repairs or for the protection of property
pending the completion of permanent restoration, repairs, replacements,
rebuilding or alterations (all of which temporary and permanent repairs,
replacement, rebuilding or alterations are hereinafter collectively referred
to as "Restoration"), and shall be paid out from time to time as Restoration
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progresses upon the written request of Tenant which shall be accompanied by
the following:
(a) A certificate signed by Tenant, dated not more
than 30 days prior to such request, and if the Restoration cost is
expected to exceed $175,000, signed by a licensed architect, setting
forth the following:
(i) That the sum then requested either has
been paid by Tenant or is justly due to contractors,
subcontractors, materialmen, engineers, architects or other
persons who have rendered services or furnished materials for the
Restoration therein specified, the names of such persons, a brief
description of such services and materials, the several amounts so
paid or due to each of said persons in respect thereof, that no
part of such expenditures has been made the basis, in any previous
or then pending request, for the withdrawal of insurance money or
has been made out of the proceeds of insurance received by Tenant,
and that the sum then requested does not exceed the value of the
services and materials described in the certificate. Tenant
shall, from time to time, upon request provide proof of payment of
all sums previously requisitioned by Tenant;
(ii) That except for the amount, if any,
stated pursuant to the foregoing clause (a) (i) in such
certificate to be due for services or materials, there is no
outstanding indebtedness known to the persons signing such
certificate, after due inquiry, which is then due for labor,
wages, materials, supplies or services in connection with such
Restoration which, if unpaid, might become the basis of a
vendor's, mechanic's, laborer's, contractor's or materialman's
statutory or similar construction lien upon such Restoration, the
Premises or any part thereof or upon Landlord's or Tenant's
interest therein; and
(iii) That the cost, as estimated by the
persons signing such certificate, of the Restoration required to
be done subsequent to the date of such certificate in order to
complete the same, is not expected to exceed the insurance money,
plus any amount which either has been deposited by Tenant to
defray such cost and remaining in the hands of the Insurance
Trustee after payment of the sum requested in such certificate,
plus the unexpended or undisbursed portion of any amount which has
been committed in writing to Tenant by a third party lender for
purposes of Restoration. Tenant will provide Landlord with
reasonable assurances of Tenant's ability to pay for Tenant's work
and in the absence of such proof Tenant shall provide payment and
performance bonds in form and substance reasonably satisfactory to
Landlord covering such work
(b) Evidence reasonably satisfactory to Landlord to
the effect that there has not been filed with respect to the
Landlord's interest in the Premises or any part thereof any
construction, vendor's, mechanic's, laborer's, materialman's,
contractor's or other lien, or any notice thereof, which has not
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been discharged of record or bonded, except such as will be
discharged by or concurrently with the payment of the amount then
requested. Upon compliance with the foregoing provisions of this
section, the Insurance Trustee shall, out of such remaining Net
Insurance Proceeds, pay or cause to be paid to Tenant or the
persons named in such certificate the respective amounts stated
therein to have been paid by Tenant or to be due to such other
persons, as the case may be. If the Net Insurance Proceeds at the
time held by the Insurance Trustee shall be insufficient to pay
the entire cost of Restoration, Tenant will pay the deficiency or
provide a lender's commitment to fund the deficiency as needed.
Upon receipt by Landlord of satisfactory evidence required by
clauses (a) and (b) of this section that the Restoration has been
completed and paid for in full, that all requirements of this
lease relating to the Restoration have been complied with and that
there are no liens of the character referred to herein, any
balance of the Net Insurance Proceeds at the time held by the
Insurance Trustee shall first be paid to Tenant to the extent of
amounts deposited by Tenant pursuant to clause (a)(iii) above,
with any balance then paid to Landlord.
4.7 No Abatement of Rent. No destruction of or damage to the
Premises or any part thereof by fire or any other casualty shall permit
Tenant to surrender this lease or shall relieve Tenant from its obligations
to pay all Base Rent and Additional Rent under this lease or from any of its
other obligations under this lease. Tenant waives any rights now or
hereafter conferred upon it by statute or otherwise to quit or surrender this
lease or the Premises or any part thereof, or to any suspension, diminution,
abatement or reduction of Rent on account of any such destruction or damage.
Each party expressly waives any rights now or hereafter conferred upon it
pursuant to N.J.S.A. 46:8-6, 46:8-7, or otherwise to quit or surrender this
lease or the Premises or any part thereof, or to terminate this lease, or to
any suspension, diminution, abatement or reduction of rent, on account of any
such damage or destruction. If there is a Casualty during the last two years
of the Term, the Tenant may terminate this lease, provided that Tenant's
notice of termination shall be accompanied by an assignment of the proceeds
of the casualty insurance required by section 5.1 relating to the Premises.
4.8 Compliance with Laws. Tenant shall suffer no waste or
injury in or about the Premises and shall comply with or cause to be complied
with all laws applicable to the use and occupancy of the land, buildings and
other improvements upon the Premises, including the making of any structural
or other repairs or alterations that may be required in order to comply with
said laws. In addition, Tenant shall effect or cause to be effected the
correction, prevention and abatement of nuisances, violations or other
grievances in, upon or connected with the Premises, including the land,
buildings and other improvements thereon, and shall also promptly comply with
or cause to be complied with all rules, orders, requirements and regulations
of the Board of Fire Underwriters or persons exercising such powers and all
insurers of the Premises.
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5. INSURANCE PROVISIONS.
5.1 Casualty Insurance. Tenant shall keep the buildings and
other insurable improvements on the Premises insured under permanent policies
and/or "builder's risk" policies, as the case may be, against loss or damage
by fire and risks embraced within "all risk coverage" available in the
locality where the Premises are located, in an amount sufficient to prevent
Landlord or Tenant from being a coinsurer under the applicable policy, but in
any event in an amount not less than 100% of the full insurance value. The
term "full insurance value" as used herein means the actual replacement cost
(excluding foundation, footings and excavation costs) as defined in the
standard "replacement cost" provision or endorsement. Tenant shall also
maintain in effect boiler explosion and casualty insurance and plate glass
insurance in amounts reasonably acceptable to the Landlord and rental
insurance covering at least one year's Rent.
5.2 Liability Insurance. Tenant shall obtain and maintain
comprehensive general liability insurance with coverage of not less than
$1,000,000.00 combined single limit, for each occurrence and in the
aggregate, for bodily injury to or death of persons, and for property
damage. Tenant shall also obtain and maintain independent contractors and
blanket contractual liability endorsements, as well as such other and
additional insurance and endorsements as reasonably prudent owners of
comparable facilities generally maintain and as reasonably requested from
time to time by Landlord.
5.3 Additional Insurance. Landlord and Tenant shall, at the
request of Landlord, consult with each other as to the scope of coverage and
adequacy of the policy limits of the insurance required by the provisions of
this section 5 from time to time during the Term and Tenant shall increase
the scope of coverage and/or the policy limits to the extent reasonably
required by Landlord after such review. Tenant will obtain additional
coverage and in such amounts as reasonably required by Landlord provided that
such coverage (and in such amounts) is customarily obtained by owners and
operators of similar properties.
5.4 Certificates. On or prior to the date hereof or after any
request by Landlord and at least 30 days prior to the expiration date of any
insurance policies, Tenant shall deliver to Landlord certificates evidencing
that the insurance required by this lease is in effect. Prior to
commencement of construction of any of any alterations or improvements,
Tenant shall deliver to Landlord certificates evidencing the insurance
required by sections 4 and 5 is then in effect. All insurance policies shall
provide for 30 days advance notice in writing to Landlord prior to
cancellation.
5.5 Endorsements. All such policies shall name Landlord as an
additional insured and as loss payee, as applicable, as its interest under
this lease may appear. All insurance obtained by Tenant shall be deemed
"primary" over any other collectible insurance maintained by Landlord. All
policies of insurance shall be issued by insurers authorized to conduct that
type of insurance business in New Jersey, and having at all times a
policyholders rating of "A" or better and a financial rating of "AAA" or
better in the then-current edition of Best's Insurance Guide. If Tenant
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shall not comply with this section and without waiving any Event of Default,
Landlord may cause insurance as aforesaid to be issued, and in that event
Tenant agrees to pay the premiums for such insurance upon Landlord's demand
as Additional Rent, together with interest at the Default Rate until the
premium cost is reimbursed to Landlord.
5.6 Indemnity. Tenant shall defend, indemnify and save harmless
Landlord and Landlord's owners, principals, directors, officers,
representatives, agents and employees ("Indemnified Persons") against and
from losses, liabilities, obligations, damages, penalties, claims, costs,
charges and expenses (including reasonable attorney's fees) which may be
suffered by any Indemnified Person or asserted by third persons against any
Indemnified Person relating to the Term or any time that Tenant may have been
given access to all of or any portion of the Premises, out of or in
connection with any or all of the following:
(a) The activities of Tenant or any of its agents, contractors,
subcontractors, servants, employees, assigns, subtenants,
licensees or invitees in or about the Premises;
(b) Any negligent or otherwise wrongful act or omission on the
part of Tenant or any of its agents, contractors,
subcontractors, servants, employees, assigns, subtenants,
licensees or invitees;
(c) Any work or thing done in, on or about the Premises by or
at the instance of Tenant or any of its agents,
contractors, subcontractors, servants, employees, assigns,
subtenants, licensees or invitees, including the assertion
of any construction liens or claims relating thereto; and
(d) Any failure on the part of the Tenant to perform or comply
with any of the covenants, agreements, terms, provisions,
conditions or limitations contained in this lease on its
part to be performed or complied with.
If any action or proceeding is brought against any Indemnified Person by
reason of any such claim, upon written notice from any Indemnified Person,
Tenant shall at Tenant's expense resist or defend such action or proceeding
by counsel approved by the Indemnified Person in writing, which approval the
Indemnified Person shall not unreasonably withhold. The provisions of this
Section 5.6 shall survive the Termination Date.
5.7 No Liability of Landlord. Except as provided in the
Agreement or under section 8 hereof, Landlord, whether as landlord, owner,
contractor or in any other capacity, shall not be liable for any damage or
injury which may be sustained by Tenant or any other person claiming under or
through Tenant as a consequence of the failure, breakage, leakage or
obstruction of the water, plumbing, steam, gas, sewer, waste or soil pipes,
roof, drains, leaders, gutters, valleys, down spouts or the like, or of the
electrical, ventilation, air-conditioning, gas, power, conveyer,
refrigeration, sprinkler, heating or other systems, elevators or hoisting
equipment, if any, or any other condition relating to the Premises; or by
reason of the elements; or resulting from acts, conduct or omissions on the
part of Tenant or of Tenant's agents, employees, guests, licensees, invitees,
assignees, subtenants or successors, or on the part of any other tenant,
person or entity.
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5.8 Increase in Insurance. Tenant will not do or suffer to be
done, or keep or suffer to be kept, anything in, upon or about the Premises
which will contravene Tenant's or Landlord's policies, if any, insuring
against loss or damage by fire or other hazards (including public liability)
or which will prevent Tenant or Landlord from procuring such policies from
companies acceptable to Landlord. If anything done, omitted to be done or
suffered by Tenant to be done or kept in, upon or about the Premises shall
cause the rate of fire or other insurance on the Premises to be increased
beyond the minimum rate from time to time applicable thereto for the
customary uses thereof, Tenant will pay the amount of any such increase as
Additional Rent.
5.9 Waivers of Subrogation. Tenant shall include in each of its
policies insuring against loss, damage or destruction by fire or other
insured casualty either (a) a waiver of the insuror's right of subrogation
against the other party (and, in case of Tenant's policies, against any
additional insured) or (b) should such waiver be unobtainable, (i) an express
agreement that such policy shall not be invalidated if the insured waives or
has waived before the casualty the right of recovery against any party
responsible for a covered casualty or (ii) any other form of permission from
the insuror for the release of such responsible party and, in such event the
insured shall so waive its right of recovery or release the responsible
party. If such waiver, agreement or permission shall not be obtainable
without additional charge or at all, the insured party shall so notify the
other party promptly. If such waiver, agreement or permission shall be
obtainable at additional charge, then the Tenant agrees to pay such charge.
The provisions of this paragraph shall not by implication require Landlord to
purchase any insurance. If Landlord purchases insurance of the type
described in this Section 5.9, the provisions of this section shall apply.
6. CONDEMNATION PROVISIONS.
6.1 Awards to Landlord. If the Premises shall be acquired,
taken or condemned by any authority having the power of eminent domain or
conveyed under a threat of eminent domain (a "Taking"), Landlord shall be
entitled to collect the entire award that may be made as a result of the
Taking, with the award to be payable to Landlord pursuant to the following
provisions of this section 6. Tenant agrees to execute any and all further
documents that may be required in order to facilitate collection of the award.
6.2 Total Taking. If at any time during the Term of this lease
there shall be a Taking of the whole of the Premises, or of such major part
that the remaining portion of the Premises is not capable, in Tenant's
opinion, of being used for the Permitted Use (a "Total Taking"), this lease
shall terminate and expire on the date of the Taking and all Base Rent and
Additional Rent payable by Tenant under this lease shall be apportioned and
paid to the date of the Total Taking. In the event of a Total Taking,
Landlord shall have the exclusive right to the proceeds of any award.
6.3 Partial Takings. If at any time during the Term there
shall be a Taking of the Premises other than a Total Taking (a "Partial
Taking"), this lease shall continue in full force and effect as to the
Premises not Taken. Tenant shall repair or replace the building or other
improvements affected by the Partial Taking, and the portion of any award
relating to the value of any Land so taken which shall, for purposes of such
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valuation, be considered vacant, unencumbered and unimproved, shall belong to
Landlord and the balance of the award shall be payable to the Insurance
Trustee and shall be applied to the cost of any required Restoration of the
buildings and other improvements on the Premises, substantially in the same
manner and subject to the same conditions as apply to the use of Casualty
insurance proceeds. If the costs of Restoration shall exceed the net award
available to Tenant, Tenant shall pay the deficiency. Any balance remaining
in the hands of the Insurance Trustee after payment of the costs of
Restoration as aforementioned, or if Tenant does not elect to apply the award
to Restoration as set forth above, the entire net award of the Partial
Taking, shall be paid to Landlord as if a Total Taking had occurred.
6.4 Adjustment of Rent. In the event of a Partial Taking, this
lease shall continue but the Base Rent shall be recalculated from the date of
the Partial Taking by multiplying the Base Rent by a fraction, the numerator
of which is equal to the fair market value of the Premises immediately after
the Taking and the denominator is the fair market value of the Premises
immediately prior to the Taking. Any Base Rent becoming due and payable
hereunder between the date of any the Partial Taking and the date of
determination of the amount of the Rent reduction, if any, to be made in
respect thereof shall be paid at the rate theretofore payable hereunder, or
the reduced rate, if any, which Landlord has offered or stated to be the
reduced Rent rate under this section.
6.5 Temporary Taking. If the temporary use of the whole or any
part of the Premises shall be taken by any lawful power or authority, by the
exercise of the right of condemnation or eminent domain, or by agreement
between Tenant and those authorized to exercise such right, Tenant shall give
prompt notice thereof to Landlord, the Term of this lease shall not be
reduced or affected in any way, Tenant shall continue to pay in full the Base
Rent and Additional Rent herein reserved, without reduction or abatement, and
Tenant shall be entitled to receive for itself any award or payment made for
such use.
6.6 Definitions. The terms "Taking," "condemnation" or similar
terms as herein used shall mean the acquisition by a public or quasi-public
authority having the right to take the same by condemnation or by power of
eminent domain or otherwise, regardless of whether such taking is the result
of actual condemnation or voluntary conveyance.
7. DEFAULT AND REMEDIES.
7.1 Events of Default. If before or during the Term there shall
occur any of the following events ("Events of Default"):
(a) if Tenant shall make a general assignment for the benefit
of creditors, or shall admit in writing its inability to
pay its debts as they become due, or shall file a petition
in bankruptcy, or shall have an order for relief entered
against it or be adjudicated a bankrupt or insolvent, or
shall file a petition seeking any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law, or shall file
an answer admitting or not contesting the material
allegations of a petition against it in any such
proceeding, or shall seek or consent to or acquiesce in the
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appointment of any trustee, receiver or liquidator of
Tenant or any material part of its assets; or
(b) if, within 60 days after the commencement of any proceeding
against Tenant seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or
similar relief under any law, such proceeding shall not
have been dismissed, or if, within 60 days after the
appointment without the consent or acquiescence of Tenant
of any trustee, receiver or liquidator of Tenant, or of any
material part of its assets, the appointment shall not have
been vacated; or
(c) if the interest of Tenant in the Premises shall be sold
under execution or other legal process; or
(d) if Tenant shall fail to pay any installment of Annual Base
Rent or Additional Rent on its due date and the failure
continues for 10 days after Landlord gives Tenant written
notice thereof ; or
(e) if Tenant shall fail to perform or observe any requirement,
obligation, agreement, covenant or condition of this lease,
other than the payment of any installment of Annual Base
Rent or Additional Rent, and the failure shall continue for
30 days after Landlord gives Tenant written notice thereof
(if the failure is of a nature such that it cannot be
remedied within 30 days, then there shall not be an Event
of Default if Tenant diligently commences to remedy the
failure within the 30-day period and prosecutes the same to
completion with diligence, and in any event within 90 days);
THEN AT ANY TIME FOLLOWING ANY OF SUCH EVENTS OF DEFAULT, Landlord,
without waiving any other rights herein available to Landlord at law or in
equity, may either (i) give Tenant notice of termination of this lease or
(ii) without terminating this lease, give Tenant notice of Landlord's
intention to re-enter and take possession of the Premises. The giving of
either of such notices to Tenant shall terminate Tenant's right to possession
of the Premises under this lease, without prejudice to the rights of Landlord
to exercise all other available legal remedies and without discharging Tenant
from any of its liabilities hereunder.
7.2 Damages. If Landlord elects to terminate Tenant's right to
possession of the Premises under section 7.1 following an Event of Default,
Landlord may re-enter and take possession of the Premises, with or without
legal process, whether by force or otherwise, and Tenant shell be obligated
to pay to Landlord as damages upon demand, and Landlord shall be entitled to
recover of and from Tenant, (a) all Annual Base Rent and Additional Rent
payable to the date of termination of Tenant's right to possession, plus (b)
the cost to Landlord of all reasonable legal and other expenses and costs
(including attorney's fees) incurred by Landlord in obtaining possession of
the Premises, in enforcing any provision of this lease, in preserving the
Premises during any period of vacancy, in making any repairs as Landlord may
reasonably deem necessary or advisable in operating and maintaining the
Premises, and in reletting the Premises, including all reasonable brokerage
commissions therefor, plus (c) either (i) in the event of Landlord's giving
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notice of its intention to re-enter and take possession without terminating
this lease, damages (payable in monthly installments, in advance, on the
first day of each calendar month following the giving of such notice and
continuing until the date originally fixed herein for the expiration of the
then current Term of this lease) in amounts equal to the Base Rent and
Additional Rent herein reserved, less the net amount of rent, if any, which
may be collected and received by Landlord from the Premises for and during
the balance of the Term; Landlord may relet the Premises, or any part or
parts thereof (but in no event shall Landlord be obligated to do so), for a
term or terms which may at Landlord's option be less than or exceed the
period constituting the balance of the Term hereof, and Landlord may grant
concessions or charge a rental in excess of that provided in this lease
(Tenant shall have no right to any excess); or (ii) in the event of
Landlord's giving notice of termination of this lease, an award for
liquidated damages in an amount which, at the time of the termination, is
equal to the excess, if any, of the installments of Base Rent and the
aggregate of all sums payable hereunder as Additional Rent (for such purpose
considering the annual amount of Additional Rent to equal the amount thereof
payable for the 12 months immediately preceding the termination, or the
annualized portion of Additional Rent payable from the Commencement Date to
the date of the termination if this lease then shall have been in effect for
less than 12 months) reserved hereunder for the period which would otherwise
have constituted the unexpired portion of the then current Term of this
lease, plus the value of all other considerations to be paid or performed by
Tenant during such period, over the fair rental value of the Premises, as of
the date of such termination, for such unexpired portion of the then current
Term of this lease, said liquidated damage amount to be discounted at the
then "generic" prime rate of interest as set forth in the most recently
published Wall Street Journal to determine its present value at the time of
the award. If the Entire Premises or any part thereof be relet by Landlord
for the unexpired Term or any part thereof before presentation of proof of
liquidated damages to any court, commission or tribunal, the amount of rent
reserved upon such reletting shall be deemed to be the fair and reasonable
rental value for the part or the whole of the Premises so relet during the
term of the reletting. Prior to Tenant's full payment of any liquidated
damages awarded to Landlord, Tenant shall continue to pay punctually to
Landlord all Base Rent and Additional Rent to the same extent and at the same
time as if this lease had not been terminated and receive full credit for
such payments against the award for liquidated damages. If Landlord shall
elect to re-enter and take possession without terminating this lease,
Landlord shall have the right at any time thereafter to terminate this lease
for the previous default, whereupon the provisions of this subsection with
respect to termination will thereafter apply.
7.3 Multiple Actions. Landlord may sue for and collect any
amounts which may be due pursuant to the provisions of section 7.2 from time
to time as Landlord may elect, but no such suit shall bar or in any way
prejudice the rights of Landlord to enforce the collection of amounts due at
any time or times thereafter by like or similar proceedings. All legal fees
and expenses incurred by Landlord in enforcing its rights under this lease
shall be deemed Additional Rent and due and payable by Tenant upon demand.
If Landlord brings any summary action for dispossession of Tenant for failure
to pay Rent, Landlord's attorney's fees and legal expenses shall be added to
and included as part of the Rent due and owing by Tenant with respect to the
periods in default. Tenant expressly waives service of any notice of
intention to re-enter that may be required by law, and waives any and all
rights to recover or regain possession of the Premises, or to reinstate or to
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redeem this lease, or other right of redemption as permitted or provided by
or under any law now or hereafter in force and effect.
7.4 No Remedy Exclusive; No Waiver. No remedy conferred upon or
reserved to Landlord in this lease is intended to be exclusive of any other
remedy herein or by law provided, but each shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter
existing at law, in equity or by statute. The receipt and acceptance by
Landlord of Annual Base Rent or Additional Rent with knowledge of the default
by Tenant in any of Tenant's obligations under this lease shall not be deemed
a waiver by Landlord of the default. Nothing contained in this lease shall
limit or prejudice the right of Landlord to prove for and obtain in
proceedings for bankruptcy or insolvency an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, the damages are to be proved, whether or
not the amount be greater than, equal to, or less than the amount of the loss
or damages referred to above. No waiver by Landlord of any Event of Default
or any default by Tenant in any covenant, agreement or obligation under this
lease shall operate to waive or affect any subsequent Event of Default or
default in any covenant, agreement or obligation hereunder, nor shall any
forbearance by Landlord to enforce a right or remedy upon an Event of Default
or any such default be a waiver of any of its rights and remedies with
respect to such or any subsequent default or in any other manner operate to
the prejudice of Landlord.
8. ENVIRONMENTAL PROVISIONS.
8.1 Additional Definitions. The terms "Environmental Laws,"
"Hazardous Substances," "Material," "Person," "Release," "Environmental
Approvals," "Governmental Authorities" and "Remedial Orders" defined in
Article IV of the Agreement shall have the same meanings when used in this
lease. Remedial Orders shall include the "Administrative Consent Order"
referred to in section 9.9 hereof.
8.2 Landlord's Responsibility. Landlord shall be and remain in
full compliance with the Remedial Orders and Environmental Laws and otherwise
be fully responsible for the existence and remediation of any Hazardous
Substances affecting the Premises as of the Commencement Date ("Existing
Conditions").
8.3 Landlord Indemnity. Except for matters for which Tenant is
responsible pursuant to Section 8.4 below, Landlord hereby agrees to save,
defend with counsel reasonably satisfactory to Tenant, indemnify and hold
harmless Tenant and its principals, officers, directors, trustees, agents and
employees, from and against any and all claims, losses, liabilities, damages
and expenses (including reasonable cleanup costs and attorneys fees arising
under this indemnity) which may arise directly or indirectly from any use or
any Release of Hazardous Substances by Landlord on or under the Premises, and
losses of and claims against Tenant resulting from (i) Landlord's failure to
comply strictly with the provisions of this section 8, with respect to
Existing Conditions, including the Remedial Orders and the Administrative
Consent Order and (ii) any negligence or misconduct by Landlord, its
employees, agents or contractors, including any negligence in carrying out
required remediation activities.
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8.4 Tenant's Responsibility. The Premises shall not be used
and/or occupied to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer or process Hazardous Substances, except for the
use, in accordance with law, of such substances as are customary in
connection with the Permitted Use. Tenant shall comply with all applicable
Environmental Laws in connection with its use of the Premises. The Tenant
shall not permit during the Term any intentional or unintentional action or
omission of the Tenant or any other occupant, user and/or operator of the
Premises, resulting in the Release of Hazardous Substances into the waters or
onto the lands of the State of New Jersey, or into the air or the waters
outside the jurisdiction of the State of New Jersey where damage may result
to the air, lands, waters, fish, shellfish, wildlife, biota, air or other
resources owned, managed, held in trust or otherwise controlled by, or within
the jurisdiction of, the State of New Jersey. In addition, Tenant shall be
liable for any losses, damages or claims, including claims arising from
personal injury, caused by or resulting from (i) any excavation activities
conducted by Tenant at the Premises, and (ii) any use by Tenant, its
employees or invitees of any water on the Premises, including well water,
ground water or tap water.
8.5 Tenant Indemnity. Tenant hereby agrees to save, defend
with counsel reasonably satisfactory to Landlord, indemnify and hold harmless
Landlord and its principals, officers, directors, trustees, agents and
employees, from and against any and all claims, losses, liabilities, damages
and expenses (including reasonable cleanup costs and attorneys fees arising
under this indemnity) which may arise directly or indirectly from (i) any use
or any Release by Tenant of Hazardous Substances on or under the Premises,
(ii) any excavation activities undertaken by Tenant at the Premises, (iii)
any use by Tenant, its employees or invitees of any water on the Premises,
including well water, ground water or tap water, (iii) the negligence or
misconduct of Tenant, its employees, agents or contractors and (iv) losses of
and claims against Landlord resulting from Tenant's failure to comply
strictly with the provisions of this section 8, including claims for personal
injury, but in any event only with respect to the Term of this lease and any
other period of possession of the Premises by Tenant.
8.6 ISRA Compliance. In connection with the termination of this
lease or Tenant's operations hereunder or the change of ownership or other
status of Tenant or other person acting by, through or under Tenant or
Landlord, or the sale of the Premises by Landlord, the Tenant shall obtain
ISRA clearance, which for the purpose of this lease means that Tenant shall
either (a) obtain from the NJDEP a "Letter of Non-Applicability," or (b)
submit to and obtain the approval by the NJDEP of a "Negative Declaration" or
(c) obtain the issuance by NJDEP of a "No Further Action Letter" pursuant to
ISRA and applicable regulations, guidance and guidelines implementing ISRA
("ISRA Requirements") and the Environmental Requirements. As part of its
obligation to obtain either a "Letter of Non-Applicability," a "Negative
Declaration" or a "No Further Action Letter" ("ISRA Compliance"), Tenant
shall prepare and submit to NJDEP a General Information Notice and perform
and report to NJDEP on, as appropriate, a Preliminary Site Assessment, a Site
Investigation, a Remedial Investigation and a Remedial Action Workplan.
Tenant shall also, as part of its compliance with ISRA Requirements, obtain
and maintain a remediation funding source in form and amount acceptable to
NJDEP. The Tenant agrees not to submit any Remedial Action Workplan (or its
regulatory equivalent) which would return the Premises to the Landlord at the
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end of the Term in a condition which includes the presence of Hazardous
Substances which were not Existing Conditions. In any event and
notwithstanding any provision to the contrary herein, with respect to
Existing Conditions the Landlord shall have the sole and exclusive
responsibility to comply at its own cost and expense with any Environmental
Laws, including ISRA, in connection with the Premises, the termination of
this lease, any sale or other change in status of Landlord or Tenant, the
cessation of Tenant's operations on the Premises or in connection with a
change in ownership of Landlord's interest in the Premises.
8.7 Other Laws' Survival. Whenever the terms ISRA and similar
terms and regulatory and statutory references are used in this lease, they
shall be deemed to include any similar, predecessor, future or successor
regulatory and statutory references and/or terms under past or future laws as
may apply to the Premises and its use and occupancy under this lease.
Landlord's and Tenant's obligations under this section 8 shall survive the
termination of this lease.
9. MISCELLANEOUS.
9.1 Bind and Inure. This lease and the covenants and conditions
herein contained shall (a) inure to the benefit of and be binding upon
Landlord, its successors and assigns, and (b) inure to the benefit of Tenant
and only such successors or assigns of Tenant whose subletting or assignment
has been carried out in accordance with this lease.
9.2 Notices. All notices from Tenant to Landlord shall be
directed to Landlord's Notice Address. All notices from Landlord to Tenant
shall be directed to Tenant's Notice Address. Either party may designate in
writing a substitute address for notices, and thereafter notices shall be
directed to the substitute address. Every notice shall be deemed to have been
given or served at the time that the same shall be telecopied,
hand-delivered, deposited with a nationwide overnight courier service or
deposited in the United States mails, by registered or certified mail,
postage prepaid, return receipt requested, in the manner aforesaid.
9.3 Broker. Except as disclosed in the Agreement, Landlord and
Tenant respectively represent and warrant to each other that no broker has
been involved in connection with the consummation of this lease or the
granting of the purchase option or the put option and that no commission
shall be paid to any broker in consequence of the lease, the purchase option
or the put option, or the exercise of the foregoing options. Each party
agrees to indemnify the other from and against any loss, damage or expenses
(including litigation costs and reasonable attorneys' fees) by reason of any
claim for compensation or commission by any broker based upon an allegation
of relations or negotiations between the claimant and the indemnitor
inconsistent with the representations and warranties herein made. This
representation, warranty and covenant shall survive the Termination Date.
9.4 Integration. This writing is intended by the parties as a
final expression of their agreement and as a complete and exclusive statement
of the terms thereof, all negotiations, considerations and representations
between the parties having been incorporated herein. No course of prior
dealings between the parties or their affiliates shall be relevant or
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admissible to supplement, explain or vary any of the terms of this lease.
Acceptance of or acquiescence in a course of performance rendered under this
or any prior agreement between the parties or their affiliates shall not be
relevant or admissible to determine the meaning of any of the terms of this
lease. No representations, understandings, or agreements have been made or
relied upon in the making of this lease other than those specifically set
forth herein. This lease can only be modified by a writing signed by all of
the parties hereto or their duly authorized agents.
9.5 Authority. If Landlord or Tenant is a corporation,
partnership or limited liability company, the undersigned officer, partner,
member or manager hereby warrants and certifies to the other party that such
party is an entity in good standing and duly organized under the laws of the
state of its organization and is authorized to do business in New Jersey.
The undersigned officer, partner, member or manager hereby further warrants
and certifies to the other party that he or she, as such officer, partner,
member or manager is authorized and empowered to bind the entity to the terms
of this lease by his or her signature thereto.
9.6 Tenant's Purchase Option. Tenant shall have the option to
purchase the Premises from Landlord. If the option is exercised on or after
the 1st anniversary of the Commencement Date, the purchase price shall be
equal to $405,039.00; if exercised on or after the 2nd anniversary of the
Commencement Date, the purchase price shall be equal to $358,913.00; if
exercised on or after the 3rd anniversary of the Commencement Date, the
purchase price shall be equal to $309,905.00; if exercised on or after the
4th anniversary of the Commencement Date, the purchase price shall be equal
to $256,573.00; if exercised on or after the 5th anniversary of the
Commencement Date, the purchase price shall be equal to $200,357.00; and if
exercised on the 6th anniversary of the Commencement Date, the purchase price
shall be equal to $138,376.00. Tenant may exercise its option to purchase
the Premises only by delivering to Landlord a written notice of its intention
to exercise the option ("Tenant Exercise Notice") at least 60 days prior to
the closing date desired by Tenant. The Tenant Exercise Notice must be
accompanied by an updated Title Report and Survey, together with written
notice of any title objection disclosed thereby or otherwise known to Tenant
and which Tenant believes it is not required to take title "subject to." If
Tenant exercises its option hereunder, Landlord shall deliver insurable
title, subject only to the exceptions as set forth in the Survey and Title
Report, not including any exceptions which Landlord agrees to discharge as
set forth in section 2.2 hereof. Landlord shall take no action after the
date hereof which would create any encumbrance or title question.
Notwithstanding Tenant's exercise of its option hereunder, this lease shall
remain in full force and effect until the closing of title. Tenant may not
exercise this option if, either at the time of the Tenant Exercise Notice or
at the time of closing of title, there exists any Event of Default or any
event which would become an Event of Default after the giving of notice
and/or the lapse of time. The closing of title shall terminate this lease and
the date thereof shall be deemed the Termination Date. TIME IS OF THE ESSENCE
WITH RESPECT TO THE GIVING OF THE TENANT EXERCISE NOTICE
HEREUNDER STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 9.6. If this lease shall terminate for any reason prior to Tenant's
exercise of its option to purchase hereunder, the Tenant's option shall also
terminate.
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9.7 Landlord's "Put" Option. Landlord shall have the option to
require that Tenant purchase the Premises from Landlord on the 6th
anniversary of the Commencement Date for a purchase price equal to
$138,376.00. Landlord may exercise its option only by delivering to Tenant a
written notice of its exercise of this right ("Landlord Exercise Notice") at
least 60 days prior to the Termination Date, accompanied by proof that
environmental remediation of the Premises has been completed to such an
extent that Tenant would not have any material liability for further
environmental remediation and the Premises has been removed from the National
Priorities List established under CERCLA. The Landlord Exercise Notice must
be accompanied by an updated Title Report and Survey showing no changes
except for the discharge of the exceptions set forth in section 2.2 hereof.
If Landlord exercises its option hereunder, Landlord shall deliver insurable
title, subject only to the exceptions as set forth in the Survey and Title
Report, not including any exceptions which Landlord agrees to discharge as
set forth in section 2.2 hereof. Landlord shall take no action after the
date hereof which it knows or should know would create any encumbrance or
title question. Notwithstanding Landlord's exercise of its option hereunder,
this lease shall remain in full force and effect until the closing of title.
Landlord may not exercise this option if, either at the time of the Landlord
Exercise Notice or at the time of closing of title, there exists any default
by Landlord hereunder, under any Remedial Orders or under the Agreement. The
closing of title shall be on the Termination Date. TIME IS OF THE ESSENCE
WITH RESPECT TO THE GIVING OF THE LANDLORD EXERCISE NOTICE
HEREUNDER STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 9.7. If this lease shall terminate for any reason prior to Landlord's
exercise of its Landlord's option hereunder, the option shall also terminate.
9.8 Tenant Right to File Applications. Tenant shall have the
right to file site plan and other land use applications with respect to the
Premises prior to the expiration of the purchase option, provided that no
such activities by Tenant shall impose any present or future financial or
other burdens, conditions or other encumbrances on the Premises or Landlord.
Tenant shall bear the entire cost of any such applications and Landlord shall
provide any necessary consent thereto.
9.9 Remedial Order Restriction. This lease and any sublease,
assignment, sale or other transfer of any interest in the Premises is and
shall be subject to the following provisions, each of which is set forth in
an Administrative Consent Order dated December 7, 1992, as amended, affecting
the Premises and shall be included in the recorded memorandum of this lease:
(a) At least ninety (90) calendar days prior to the date of any
alienation, Landlord shall notify the NJDEP in writing of the proposed
alienation, the name of the grantee, the extent of the alienation, and a
description of the grantor's continuing obligations, if any, which grantee
has agreed to perform.
(b) At least ninety (90) calendar days prior to transfer of
ownership of the Premises, Landlord shall verify to the NJDEP that such
notice of alienation has been given.
(c) Any contract to alienate the Premises shall require the
grantee to allow the implementation and continuation of all activities and
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obligations pursuant to the Administrative Consent Order and to allow
Landlord, the NJDEP and its authorized representatives access to the Premises
for purposes of such activities and obligations. No alienation shall affect
Landlord's obligations under the Administrative Consent Order.
(d) Landlord shall include in any instrument of conveyance,
including a deed, title, lease, easement or license of or for the Premises, a
written notice that the Premises is the subject of the Administrative Consent
Order. Any such instrument of conveyance shall be subject to the
requirements set forth in the Administrative Consent Order regarding the use
of the Premises and deed restrictions.
The Administrative Consent Order shall be binding, jointly and severally, on
the Landlord, its successors, assignees and any trustee in bankruptcy or
receiver appointed pursuant to a proceeding in law or equity. The use and
access restrictions set forth in the Administrative Consent Order shall run
with the land and be for the benefit of and enforceable by the NJDEP and any
citizen which is or may be damaged as a result of violations of the use and
access restrictions. The use and access restrictions shall provide actual
and constructive notice to any subsequent grantee of the locations and
concentrations of all contaminants which remain at the Premises and of the
use and access restrictions imposed. Within thirty (30) calendar days after
Landlord's receipt of a written request from the NJDEP, Landlord shall record
the restrictions with the Morris County Clerk, Morris County, State of New
Jersey, and provide the NJDEP with a copy of this Administrative Consent
Order stamped "Filed" by the Morris County Clerk.
9.10 Cross-Estoppel Certificates. Each party agrees that at any
time and from time to time at reasonable intervals, within 10 days after
written request by the other party, the party will execute, acknowledge and
deliver to the other party and/or to its assignee, mortgagee or other secured
party as may be designated, a certificate stating: (i) that this lease is
unmodified and in full force and effect (or if there have been modifications,
that this lease is in full force and effect as modified, and identifying the
modification agreements, or if this lease is not in full force and effect the
certificate shall so state); (ii) the date to which Rent has been paid under
this lease; (iii) whether or not there is any existing default by Tenant in
the payment of Rent or other sum or money under this lease, and whether or
not there is any other existing default by either party under this lease with
respect to which a notice of default has been served, and if there is any
such default, specifying the nature and extent thereof; (iv) whether or not
there are any set- offs, defenses or counterclaims against enforcement of the
obligations to be performed by the party under this lease; and (v) such other
matters relating to this lease as may be reasonably requested by the other
party or any of its designees.
9.11 Tenant's Recourse. Except for claims which Tenant may have
against Landlord arising under Section 2.6.2, Article 8 or Section 9.6 of
this lease, Tenant shall look solely to the Premises and Landlord's equity
therein for the payment of any damages or satisfaction of any liabilities or
obligations of Landlord, and no judgment obtained by Tenant shall be
enforceable against Landlord or any property of Landlord, other than the
Premises.
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10. DEFINED TERMS: INTERPRETATIONS.
10.1 Defined Terms. Terms identified in the heading, recitals
and in other provisions of this agreement shall have the meanings assigned to
them either wherever initially capitalized in this agreement or as set forth
below.
Additional Rent. Any and all charges or amounts other than
Base Rent payable by Tenant, whether to Landlord or directly to other
persons, under the various sections of this lease.
Agreement. The Asset Acquisition Agreement between the
parties dated as of February 26, 1996.
Annual Base Rent or Base Rent. The Base Rent, payable in
monthly installments in accordance with section 1.3.
Default Rate. A fluctuating rate of interest per annum
equal to the Prime Rate plus 4%.
Events of Default. Events of Default shall have the
meanings assigned in section 7.1.
Force Majeure. Any cause beyond a party's reasonable
control, including acts of God, strikes, labor troubles, shortage of
materials or services, governmental pre-emption in connection with a national
or local emergency or by reason of any rule, order or regulation of any
governmental agency or by reason of the conditions of supply and demand which
have been or are affected by war, hostilities or similar emergency.
Permitted Use. Permitted Use shall have the meaning set
forth in section 1.4.
Premises. The Premises commonly known as 108 Lake Denmark
Road, Rockaway, New Jersey, as shown on the site map annexed as Exhibit A
hereto. The Premises includes the buildings, driveways, parking areas and
other improvements located thereon. The Premises includes all trade and
other fixtures located at the Premises on the date hereof.
Prime Rate. A fluctuating rate of interest per annum as
published from time to time by The Wall Street Journal as the generic "prime
rate" of interest.
Rent. All Base Rent and Additional Rent provided for
herein.
Rental Year. The first Rental Year for the Premises shall
commence on the Commencement Date and shall end at the close of the 12th full
calendar month following the Commencement Date; thereafter each Rental Year
shall consist of successive periods of 12 calendar months. Any portion of
the Term remaining at the end of the last full Rental Year shall constitute
the final Rental Year and Rent shall be apportioned therefor. Landlord
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reserves the right to change the Rental Year from time to time.
Taxes. Any real estate tax, special or general assessment,
real estate rental receipt or gross receipt tax, unforeseen and foreseen,
including any other charge imposed with respect to the Premises or leases or
rents payable with respect thereto, by federal, state or local authorities.
If at any time during the term of this lease under the laws of the State of
New Jersey or any political subdivision thereof a tax or excise on rents is
levied or assessed against Landlord or the Base Rent as a substitution in
whole or in part for or as an addition to taxes assessed or imposed on land
and buildings or on land or buildings, such substitute tax shall be
calculated as if the Premises were the only real property owned by the
Landlord, and the same shall be deemed to be included within the term
"Taxes." In no event shall Taxes include inheritance, estate or transfer
taxes. Landlord agrees to pay any special or general assessments in the
maximum number of installments permitted by the taxing authority and Taxes
shall only include those installments which are allocable to the Term.
Tax Year. Tax Year means each 12 month period (deemed for
the purposes of this section to have 365 days) established as the tax year by
the taxing authorities having lawful jurisdiction over the Premises.
Termination Date. The date provided in this lease for the
end of the Term, whether as a result of the expiration of this lease, an
Event of Default or otherwise.
10.2 Interpretations. Unless otherwise specified, the following
rules of construction shall be applicable for all purposes of this lease and
all documents or instruments supplemental hereto:
10.2.1 All references herein to numbered sections,
subsections, schedules or exhibits are references to the sections and
subsections hereof, and the schedules and exhibits attached hereto.
10.2.2 The terms "include," "including" and similar terms
shall be construed as if followed by the phrase "without being limited
to."
10.2.3 The terms "Premises" and "improvements" and like
terms shall be construed as if followed by the phrase "or any part
thereof."
10.2.4 Singular words include the plural and plural words
include the singular.
10.2.5 The term "person" shall include natural persons,
firms, partnerships, trusts, corporations, limited liability companies
and any other public and private legal entities.
10.2.6 The term "provisions," when used with respect
hereto or to any other document or instrument, shall be construed as if
preceded by the phrase "terms, covenants, agreements, requirements,
conditions and/or."
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10.2.7 The terms "hereto," "herein," "hereof," "hereunder"
and similar terms shall refer to this agreement in its entirety, unless
the context clearly indicates otherwise.
10.2.8 Any table of contents or section, subsection,
schedule and exhibit captions are used for convenience and reference
only and in no way define, limit or affect the construction of the
provisions hereof.
10.2.9 No inference in favor of any party shall be drawn
from the fact that any other party has drafted any portion hereof.
10.2.10 All recitals set forth in, and all schedules and
exhibits to, this agreement are incorporated in this agreement.
10.2.11 The terms "lease" or "sublease" shall mean "lease,
sublease, tenancy, subtenancy, letting, subletting, license or
sublicense" and the term "Tenant" or "tenant" shall mean "subtenant,
lessee, sublessee, licensee, sublicensee or occupant."
10.2.12 Words importing any gender or number shall be
deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or item requires.
10.2.13 This lease shall be construed, governed, and
enforced under the laws of the State of New Jersey.
10.2.14 If any provision of this lease shall to any extent
be invalid or unenforceable, the remainder of this lease, or the
application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not
be affected thereby and each term and provision of this lease shall be
valid and be enforced to the fullest extent permitted by law.
10.2.15 The term "date hereof" shall mean the date a
completely executed copy of this lease has been delivered to the
Landlord or its attorney. All time periods hereunder shall commence
and be measured starting on the first calendar day following the date
hereof which is not a Saturday, Sunday or holiday on which national
banks are closed for business within the State of New Jersey.
10.2.16 The term "law" shall mean and include any present
or future statute, ordinance, rule, regulation, code, order, opinion or
similar governmental action or directive, including any executive,
court or administrative order or decision enforcing or interpreting any
of the foregoing. References to any particular statutes, ordinances,
rules or regulations shall be deemed to include any predecessor,
successor or replacement statutes, ordinances, rules or regulations.
10.2.17 The submission of this agreement for examination
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does not constitute an offer, reservation of or option for the
Premises, and this agreement shall become binding and effective only
upon execution and delivery by all parties.
10.2.18 This agreement is intended by the parties as a
final expression of their agreement and as a complete and exclusive
statement of the terms hereof. All negotiations, considerations and
representations between the parties have been incorporated herein. No
course of prior dealing between the parties or their principals, agents
or affiliates shall be relevant or admissible to supplement, explain or
vary any of the terms of this agreement. Acceptance of or acquiescence
in a course of performance rendered under this or any prior agreement
between the parties or their principals, agents or affiliates shall not
be relevant or admissible to determine the meaning of any of the terms
of this lease. No representations, understandings or agreements have
been made or relied upon in the making of this agreement other than
those specifically set forth herein. This agreement cannot be modified
orally, but only by a writing signed by all of the parties hereto or
their duly authorized agents.
10.2.19 This agreement may be executed in any number of
counterparts (and by facsimile signature pages), all of which taken
together shall constitute the original hereof. When counterparts have
been executed by and delivered to all parties hereto, or their counsel,
they shall have the same effect and if the signatures were all on the
same copy hereof.
IN WITNESS WHEREOF, the undersigned have caused their duly
authorized representatives to set their hands and affix their seals as of the
date first above written.
RTI INC., Landlord
By: /s/ Theo Muller
Theo Muller, President
STERIGENICS EAST CORPORATION,
Tenant
By: /s/ Edward M. Miller
Edward M. Miller, Vice-President
LIST OF EXHIBITS
Exhibit A - Description of Premises
Exhibit B - Extension Option Rider
Exhibit 2.1 Form of Memorandum of Lease
(30)
<PAGE>
EXHIBIT A
[Description of Premises]
(31)
<PAGE>
EXHIBIT B
EXTENSION OPTION RIDER
The lease dated August 8, 1996 ("Lease") between RTI INC.
("Landlord") and STERIGENICS EAST CORPORATION ("Tenant") is modified as
follows:
1. All defined terms and interpretations set forth in the Lease
shall be fully applicable to this Rider.
2. Tenant shall have one (1) option, exercisable by notice to
Landlord at least 12 months prior to the expiration of the then remaining
Term, to extend the Term for a period of 5 years upon the same terms and
conditions as are contained in the Lease. No option shall be exercisable by
Tenant unless at the time of exercise and at the beginning of the renewal
Term (a) the Lease is then in full force and effect, (b) there has been no
Event of Default thereunder during the Term (whether or not waived by
Landlord or cured by Tenant) and (c) there is no event which, upon a lapse of
time or the giving of notice, or both, would become an Event of Default.
TIME IS OF THE ESSENCE for the exercise of any option hereunder.
RTI INC., Landlord
By:_______________________________
Theo Muller, President
STERIGENICS EAST CORPORATION,
Tenant
By:________________________________
Edward M. Miller, Vice-President
(1)
<PAGE>
EXHIBIT C
GUARANTY
In order to induce RTI, Inc., ("Landlord") to enter into a lease
dated August 8, 1996, ("Lease") with STERIGENICS EAST CORPORATION ("Tenant")
for the Premises located in the Township of Rockaway, County of Morris, State
of New Jersey, and as more particularly described on Exhibit A to the Lease
("Premises"), the undersigned ("Guarantor") in consideration of the sum of
Ten ($10.00) Dollars and other good and valuable consideration, the receipt
and sufficiency whereof is hereby acknowledged, irrevocably and
unconditionally guarantees to Landlord the due, prompt and punctual payment
and the prompt performance by the Tenant of all of its obligations pursuant
to the Lease, including, without limitation, Tenant's obligations, if any,
under Section 9.7 of the Lease ("Obligations"), all irrespective of the
validity, binding effect, legality or enforceability of the Lease or whether
the Lease shall have been duly executed by Tenant, any other circumstance
which might now or hereafter or otherwise constitute a legal or equitable
discharge or defense of a guarantor. Guarantor shall, upon demand, pay,
perform or observe any term, covenant or condition of the Lease in the same
place and stead as Tenant. Capitalized terms defined in the Lease and not
defined herein shall have the same meanings when used herein.
Guarantor is the parent corporation of Tenant and acknowledges that
the lease of the Premises to Tenant will provide substantial direct and
indirect benefits to Guarantor.
Guarantor agrees further that this Guaranty and Guarantor's
liability hereunder shall not be impaired or affected by any assignment,
subleasing, modification, supplement, extension or amendment of the Lease,
nor by any modification, release or other alteration of any of the
Obligations hereby guaranteed, nor by any other agreements or arrangements
whatever with the Tenant or anyone else. This Guaranty is an absolute,
unconditional and irrevocable guaranty of payment and performance (and not
merely of collection). The liability of Guarantor, as set forth above, is
co-extensive with that of Tenant and this Guaranty shall be enforceable
against Guarantor without the necessity of any suit or proceedings on
Landlord's part of any kind or nature whatsoever against Tenant and without
the necessity of any notice of non-payment, non- performance or
non-observance, or any notice of acceptance of this Guaranty, or any other
notice or demand to which Guarantor might otherwise be entitled, all of which
Guarantor hereby expressly waives.
Guarantor hereby expressly waives any right of contribution from or
indemnity against Tenant, whether at law or in equity, arising from any
payments made by Guarantor pursuant to the terms of this Guaranty, and
Guarantor acknowledges that Guarantor has no right whatsoever to proceed
against Tenant for reimbursement of any such payments. In connection with
the foregoing, Guarantor expressly waives any and all rights of subrogation
or otherwise to any rights of Landlord against Tenant, and Guarantor hereby
waives any rights to enforce any remedy which Landlord may have against
Tenant. In addition to and without any way limiting the foregoing, Guarantor
hereby subordinates any and all indebtedness of Tenant now or hereafter owed
(1)
<PAGE>
to Guarantor to all Obligations of Tenant to Landlord, and agrees with
Landlord that Guarantor shall not demand or accept any payment of principal
or interest from Tenant and shall not claim any offset or other reduction of
Guarantor's obligations hereunder because of any such indebtedness.
Guarantor hereby expressly agrees that this Guaranty shall be a
continuing guaranty and that the validity or this Guaranty and the
obligations and liability of Guarantor hereunder shall in no way be
terminated, affected, diminished or impaired by reason of (a) the assertion
of or the failure by Landlord to assert against Tenant any of the rights or
remedies reserved to Landlord pursuant to the terms, covenants and conditions
of the Lease, (b) any assignment of the Lease or subletting of the Premises,
(c) any renewal or extension of the Lease or any modification thereof,
whether pursuant to the Lease or by subsequent agreement of Landlord and
Tenant, (d) any extension of time that may be granted by Landlord to Tenant,
(e) any consent, indulgence or other action, inaction or omission under or in
respect of the Lease, or (f) any dealings or transactions or matter or thing
occurring between Landlord and Tenant, (g) any bankruptcy, insolvency,
reorganization, arrangement, assignment for the benefit of creditors,
receivership or trusteeship affecting Tenant or Tenant's successors or
assigns whether or not notice thereof is given to Guarantor, (h) any
modification, amendment, revision, supplement or other change to the Lease,
whether or not made with the consent of Guarantor, or (i) any matter or thing
whatsoever, whether or not specifically mentioned herein, other than full
payment and performance of all of the Obligations.
Guarantor also agrees to indemnify Landlord and hold Landlord
harmless against all obligations, demands and liabilities, by whomever
asserted, and against all losses in any way suffered, incurred or paid by
Landlord as a result of or in any way arising out of, or following, or
consequential to a breach by Tenant of any of its Obligations and to pay all
costs and expenses, including reasonable attorneys' fees, of any proceeding
by Guarantor to enforce the Lease or this Guaranty.
Guarantor expressly waives the following: notice of acceptance
hereof; presentment and protest of any instrument, and notice thereof; notice
of default; and all other notices to which such Guarantor might otherwise be
entitled.
Guarantor represents and warrants to Landlord as follows:
A. The execution, delivery and performance by Guarantor of this
Guaranty have been duly authorized by all necessary corporate action.
B. Guarantor is not in material default in the terms and
conditions of any material agreement to which it is a party or by which it is
bound, such as would materially and adversely affect its ability to carry out
the terms, covenants and conditions of this Guaranty.
C. Guarantor has the full power, authority and legal right to
execute and deliver, and to perform and observe the provisions of, this
Guaranty including the payment of all moneys hereunder. This Guaranty
(2)
<PAGE>
constitutes the legal, valid and binding obligation of Guarantor enforceable
in accordance with its terms, except as enforcement thereof may be limited by
(a) bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally or (b) the nonavailability of equitable
or legal remedies which are discretionary with the courts.
D. Guarantor is not in violation of any decree, ruling judgment,
order or injunction applicable to it, nor any law, ordinance, rule or
regulation of whatever nature which taken alone or in the aggregate, would
materially and adversely affect its ability to carry out any of the terms,
covenants, and conditions of this Guaranty. There are no actions,
proceedings, or investigations pending or, to the best of Guarantor's
knowledge, threatened against or affecting Guarantor (or any basis therefor
known to Guarantor) before or by any court, arbitrator, administrative agency
or other governmental authority or entity, which, taken alone or in the
aggregate, if adversely decided, would materially and adversely affect its
ability to carry out any of the terms, covenants and conditions of this
Guaranty.
E. Tenant is a wholly-owned subsidiary of Guarantor and
accordingly Guarantor has a substantial financial interest in Tenant and its
performance under the Lease.
No failure or delay on the part of Landlord in exercising any right,
power or privilege under this Guaranty shall operate as a waiver of or
otherwise affect any such right, power or privilege, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
Guarantor agrees at any time and from time to time during the Term,
within 10 days after written request from Landlord, to execute, acknowledge
and deliver to Landlord or to a third party a statement in writing certifying
that this Guaranty is unmodified and in full force and effect (or if there
have been modifications, that the same is in full force and effect as
modified and stating the modifications). Landlord and any such third party
shall have the right to rely upon the contents of any such written statement
of Guarantor.
Guarantor acknowledges and agrees that all disputes arising
directly or indirectly, out of or relating to this Guaranty, and all actions
to enforce this Guaranty, may be dealt with and adjudicated in the state
courts of New Jersey or the Federal courts sitting in New Jersey; and hereby
expressly and irrevocably submits the person of Guarantor to the jurisdiction
of such courts in any suit, action or proceeding arising, directly or
indirectly, out of or relating to this Guaranty. So far as is permitted
under applicable law, this consent to personal jurisdiction shall be
self-operative and no further instruction or action, other than service of
process in one of the manners specified in this Guaranty, or as otherwise
permitted by law, shall be necessary in order to confer jurisdiction upon the
person of Guarantor in any such court.
Provided that service of process is effected upon Guarantor in
one of the manners hereafter specified in this Guaranty or as otherwise
permitted by law, Guarantor irrevocably waives, to the fullest extent
permitted by law, and agrees not to assert, by way of motion, as a defense or
otherwise, (a) any objection which it may have or may hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such
court as is mentioned in the previous paragraph, (b) any claim that any such
(3)
<PAGE>
suit, action or proceeding brought in such a court has been brought in an
inconvenient forum, or (c) any claim that it is not personally subject to the
jurisdiction of the above-named courts. Provided that service of process is
effected upon Guarantor in one of the manners hereafter specified in this
Guaranty or as otherwise permitted by law, Guarantor agrees that final
judgment from which Guarantor has not appealed or may not appeal or further
appeal in any such suit, action or proceeding brought in such a court of
competent jurisdiction shall be conclusive and binding upon Guarantor and
may, so far as it is permitted under applicable law, be enforced in the
courts of any state or any Federal court and in any other courts to the
jurisdiction of which Guarantor is subject, including, without intending any
limitation, as to the Guarantor, the courts of New Jersey by a suit upon such
judgment and that Guarantor will not assert any defense, counterclaim, or set
off in any such suit upon such judgment.
Guarantor agrees to execute, deliver and file all such further
instructions as may be necessary under the laws of the State of New Jersey,
in order to make effective the consent of Guarantor to jurisdiction of the
state courts of New Jersey and the Federal courts sitting in New Jersey.
Guarantor hereby consents to process being served in any suit,
action or proceeding of the nature referred to in this Guaranty by the
mailing of a copy thereof by registered or certified mail, postage prepaid,
return receipt requested to Sterigenics International, 4020 Clipper Court,
Fremont, CA 94538-6540, Attn: James F. Clouser, or to any other address of
which Guarantor shall have given written notice to Landlord (said notice
being actually received). Provided that service is made in accordance with
this Section or otherwise as permitted by law, Guarantor irrevocably waives,
to the fullest extent permitted by law, all claim of error by reason or any
such service and agrees that such service (a) shall be deemed in every
respect effective service of process upon Guarantor in any such suit, action
of proceeding and (b) shall, to the fullest extent permitted by law, be taken
and held to be valid personal service upon and personal delivery to Guarantor.
Should Landlord be obligated by any bankruptcy or other law to
repay to Tenant or Guarantor or to any trustee, receiver or other
representative of either of them, any amounts previously paid, then this
Guaranty shall be reinstated in the amount of such repayment. Landlord shall
not be required to litigate or otherwise dispute its obligation to make such
repayments if it in good faith and on the advice of counsel believes that
such obligation exists.
In the event that this Guaranty shall be held ineffective or
unenforceable by any court of competent jurisdiction, Guarantor shall be
deemed to be a tenant under the Lease with the same force and effect as if
Guarantor were expressly named as a joint tenant therein with joint and
several liability.
All remedies afforded to Landlord by reason of this Guaranty are
separate and cumulative remedies and it is agreed that no one of such
remedies, whether exercised by Landlord or not, shall be deemed to be in
exclusion of any other remedy available to Landlord and shall not limit or
prejudice any other legal or equitable remedy which Landlord may have.
(4)
<PAGE>
If any provision of this Guaranty or the application thereof to
any person or circumstance shall to any extent be held void, unenforceable or
invalid, then the remainder of this Guaranty or the application of such
provision to persons or circumstances other than those as to which it is held
void, unenforceable or invalid shall not be affected thereby and each
provision of this Guaranty shall be valid and enforced to the fullest extent
permitted by law.
As a further inducement to Landlord to make and enter into the
Lease and in consideration thereof, Guarantor hereby waives trial by jury and
the right thereto in any action or proceeding of any kind or nature, arising
on, under or by reason of or relating to, this Guaranty or any agreement
collateral hereto.
No waiver or modification of any provision of this Guaranty nor
any termination of this Guaranty shall be effective unless in writing and
signed by Landlord, nor shall any waiver be applicable, except in the
specific instance for which it is given.
If the Guarantor is a corporation or partnership, attached hereto
is a true, certified copy of corporate resolutions of the Guarantor pursuant
to which its entering into this Guaranty has been authorized by all requisite
corporate or partnership action. If this Guaranty is signed by more than one
party, the parties' liabilities shall be joint and several.
Each individual signing below represents and warrants to Landlord
that he is authorized to execute this Guaranty on behalf of Guarantor or
other entity for which he signed and that said corporation or entity is bound
thereby.
This Guaranty, all acts and transactions hereunder, and the
rights and obligations of the parties hereto shall be binding upon successors
and assigns of Guarantor, may not be changed or modified orally, and shall
inure to the benefit of Landlord's successors and assigns.
STERIGENICS INTERNATIONAL,
INC. (Guarantor)
By: /s/ Edward M. Miller
Edward M. Miller,
Vice-President
(5)
<PAGE>
CORPORATE ACKNOWLEDGEMENT
STATE OF NEW YORK:
ss.:
COUNTY OF NEW YORK:
BE IT REMEMBERED, that on this 8th day of August, 1996, before me,
the subscriber, a notary public of the State of New York, personally appeared
Edward M. Miller, who, being by me duly sworn on his oath, deposed and made
proof to my satisfaction that he is the Vice President of Sterigenics
International, and the person who has signed the within instrument; and I
having first made known to him the contents thereof, he did acknowledge that
he signed and delivered the same as such officer on behalf of the corporation
as its voluntary act and deed, made by virtue of authority from its board of
directors, for the uses and purposes therein expressed.
/s/ ___________________________
Notary Public
(Apply Raised Seal and Stamp indicating
expiration date of Commission)
(6)
